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Economics of Drip Irrigation: MAC Demonstration Project

Economics of Drip Irrigation: MAC Demonstration Project. Russell Tronstad 520-621-2425 tronstad@ag.arizona.edu Dept. of Agricultural and Resource Economics. Crop Yield Water Applied. =. Engineering Efficiency. Output Input. Engineering Eff. =. Revenue( yield, quality )

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Economics of Drip Irrigation: MAC Demonstration Project

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  1. Economics of Drip Irrigation: MAC Demonstration Project Russell Tronstad 520-621-2425 tronstad@ag.arizona.edu Dept. of Agricultural and Resource Economics

  2. Crop Yield Water Applied = Engineering Efficiency Output Input Engineering Eff. =

  3. Revenue(yield, quality) Cost(system, water, fumigation fertilizer, mgmt., leaching,…) = Economic Efficiency Value Output Value Input Econ. Eff. =

  4. Economic Efficiency Bundle of Resources Highest Valued Output Machinery Labor Fertilizer Water Land Value Output Value Input Economic =

  5. Water Use Dynamics / Time

  6. Flood Irrigation -- Laser Leveled Efficient?

  7. Efficiency of SDI vs. Flood?

  8. Comparison Values for SDI • Ownership / Installation Costs (5 actual, 3 hypothetical configurations) • Annual Operating Costs • Water Use • Yield / Revenue Impacts

  9. 5 plots / 8 Different Systems Broccoli: 6% discount rate Bed Irrig. Installation Annualized Cost PlotConfig.Freq.Cost20-yr life10-yr life #1 80" drip bed high $2,050.00 $178.73 $278.53 #2 40" drip bed high $1,833.00 $159.81 $249.05 #3 80" drip bed low $1,947.00 $169.75 $264.53 #4 Furrow furrow -- -- -- #5 40" drip bed low $1,730.00 $150.83 $235.05 hypothetical mobile unit & furrow configurations #3M 80" drip bed low $1,547.00 $134.87 $210.19 #4F Furrow 4”/irrig -- -- -- #5M 40" drip bed low $1,330.00 $115.96 $180.70

  10. 5 plots / 8 Different Systems Watermelons: 6% discount rate Bed Irrig. Installation Annualized Cost PlotConfig.Freq.Cost20-yr life10-yr life #1 80" 3-line high $2,050.00 $178.73 $278.53 #2 80” 2-line high $1,833.00 $159.81 $249.05 #3 80" 3-line low $1,947.00 $169.75 $264.53 #4 Furrow furrow -- -- -- #5 80" 2-line low $1,730.00 $150.83 $235.05 hypothetical mobile unit & furrow configurations #3M 80" 3-line low $1,547.00 $134.87 $210.19 #4F Furrow 4”/irrig -- -- -- #5M 80" 2-line low $1,330.00 $115.96 $180.70

  11. Yield Differences Broccoli, 2002-03: Bed Irrig. Yield % change PlotConfig.Freq.(ctn./ac)from furrow #1 80" drip bed high 905 7.5% #2 40" drip bed high 926 10.0% #3 80" drip bed low 911 8.2% #4 Furrow furrow 842 -- #5 40" drip bed low 862 2.4% hypothetical mobile unit configuration #3M 80" drip bed low 911 8.2% #4F Furrow 4”/irrig. 842 -- #5M 40" drip bed low 862 2.4%

  12. Yield Differences Watermelons, 2003: Bed Irrig. Yields /cwt. % change PlotConfig.Freq.SeededSeedlessfurrow #1 80" 3-line high 204 320 182% #2 80” 2-line high 169 256 128% #3 80" 3-line low 160 235 112% #4 Furrow furrow 102 84 -- #5 80" 2-line low 160 142 62% hypothetical mobile unit configuration #3M 80" 3-line low 160 160 112% #4F Furrow 4”/irrig 102 84 -- #5M 80" 2-line low 235 142 62%

  13. Water Use & Cost ($36/ac-ft) Broccoli, 2002-03: Bed Irrig. Actual Water PlotConfig.Freq.Used (af:$/ac) #1 80" drip bed high 1.83: $65.70 #2 40" drip bed high 1.78: $63.90 #3 80" drip bed low 1.83: $65.70 #4 Furrow furrow 1.88: $67.80 #5 40" drip bed low 1.78: $63.90 hypothetical mobile unit & furrow configurations #3M 80" drip bed low 1.83: $65.70 #4H furrow 4”/irrigation 3.33: $120 #5M 40" drip bed low 1.78: $63.90

  14. Water Use & Cost ($36/ac-ft) Watermelons, 2003: Bed Irrig. Actual Water PlotConfig.Freq.Used (af:$/ac) #1 80" 3-line high 2.47: $89.08 #2 80" 2-line high 2.25: $80.99 #3 80" 3-line low 2.47: $89.08 #4 Furrow furrow 2.35: $84.60 #5 80" 2-line low 2.25: $80.99 hypothetical mobile unit & furrow configurations #3M 80" 3-line low 2.47: $89.08 #4F Furrow 4”/irrig 5.33: $192 #5M 80" 2-line low 2.25: $80.99

  15. Return Difference ($/ac) from Furrow (actual): 20 yr. life of SDI, Broccoli Bed Irrig. Price ($/carton) PlotConfig.Freq.$5.00$7.38$10.00 #1 80" drip bed high -$ 6.07 $ 143.87 $ 308.93 #2 40" drip bed high $ 58.39 $ 258.31 $ 181.83 #3 80" drip bed low $ 17.61 $ 181.83 $ 362.61 #4 Furrow furrow -- #5 40" drip bed low -$ 89.43 -$ 41.83 $ 10.57 hypothetical mobile unit & furrow configurations #3M 80" drip bed low $ 32.49 $ 196.71 $ 377.49 #4F Furrow 4” / irrig -$ 52.20 -$ 52.20 -$ 52.20 #5M 40" drip bed low -$ 74.56 -$ 26.96 $ 25.44

  16. Return Difference ($/ac) from Furrow (actual): 10 yr. life of SDI, : Broccoli Bed Irrig. Price ($/carton) PlotConfig.Freq.$5.00$7.38$10.00 #1 80" drip bed high -$105.87 $ 44.07 $ 209.13 #2 40" drip bed high -$ 30.85 $ 169.07 $ 389.15 #3 80" drip bed low -$ 77.17 $ 87.05 $ 267.83 #4 Furrow furrow -- #5 40" drip bed low -$ 173.65 -$ 126.05 -$ 73.65 hypothetical mobile unit & furrow configurations #3M 80" drip bed low -$ 42.83 $ 121.39 $ 302.17 #4F Furrow 4” / irrig -$ 52.20 -$ 52.20 -$ 52.20 #5M 40" drip bed low -$ 139.30 -$ 91.70 -$ 39.30

  17. Return Difference ($/ac) from Furrow (actual): 20 yr. life of SDI: Watermelons Bed Irrig. Price ($/cwt.) PlotConfig.Freq.$5.00$7.78$10.50 #1 80" 3-line high $1,402 $ 2,422 $3,420 #2 80" 2-line high $ 981 $ 1707 $ 2,417 #3 80" 3-line low $ 834 $ 1469 $ 2,091 #4 Furrow furrow -- #5 80" 2-line low $ 294 $ 624 $ 947 hypothetical mobile unit & furrow configurations #3M 80" 3-line low $ 849 $ 1484 $ 639 #4F Furrow 4” / applic -$ 107 -$ 107 -$ 107 #5M 40" 2-line low $ 309 $ 639 $ 962

  18. Return Difference ($/ac) from #4F (same yields): 20 yr. life of SDI: Watermelons Bed Irrig. Price ($/cwt.) PlotConfig.Freq.$5.00$7.78$10.50 #1 80" 3-line high -$ 21 -$ 21 -$ 21 #2 80" 2-line high -$ 2 -$ 2 -$ 2 #3 80" 3-line low -$ 12 -$ 12 -$ 12 #4 Furrow furrow $ 107 $ 107 $ 107 #5 80" 2-line low -$ 88 -$ 88 -$ 88 hypothetical mobile unit & furrow configurations #3M 80" 3-line low $ 3 $ 3 $ 3 #4F Furrow 4” / applic -- -- -- #5M 40" 2-line low -$ 73 -$ 73 -$ 73

  19. Break-Even Water Cost with Same Yield: #4F (4”/irrig): and 20 yr. drip life for Broccoli Bed Irrig. All SDI 1/2 SDI PlotConfig.Freq.Costs on Broc.Costs on Broc #1 80" drip bed high $ 107.99 $ 48.61 #2 40" drip bed high $ 97.31 $ 45.92 #3 80" drip bed low $ 102.02 $ 45.62 #4 Furrow furrow #5 40" drip bed low $ 91.53 $ 43.03 hypothetical mobile unit & furrow configurations #3M 80" drip bed low $ 92.14 $ 47.33 #4F Furrow 4” / applic -- -- #5M 40" drip bed low $ 81.96 $ 44.68 costs same except water

  20. Break-Even Water Cost with Same Yield: 4” per irrigation: and 10 yr. drip life for Broccoli Bed Irrig. All SDI 1/2 SDI PlotConfig.Freq.Costs on Broc.Costs on Broc #1 80" drip bed high $ 174.30 $ 81.76 #2 40" drip bed high $ 154.69 $ 74.61 #3 80" drip bed low $ 165.00 $ 77.11 #4 Furrow furrow #5 40" drip bed low $ 145.69 $ 70.11 hypothetical mobile unit & furrow configurations #3M 80" drip bed low $ 142.18 $72.35 #4F Furrow 4” / irrig -- -- #5M 40" drip bed low $ 123.60 $ 65.50 costs same except water

  21. Break-Even Water Cost with Same Yields: 4” per irrigation: and 20 yr. drip life for Watermelons Bed Irrig. All SDI 1/2 SDI PlotConfig.Freq.Costs on Wat.Costs on Wat. #1 80" 3-line high $ 43.46 $ 12.16 #2 80”2-line high $ 36.58 $ 10.64 #3 80" 3-line low $ 40.31 $ 10.59 #4 Furrow furrow #5 80" 2-line low $ 64.54 $ 40.06 hypothetical mobile unit & furrow configurations #3M 80" 3-line low $ 35.10 $ 11.49 #4F Furrow 4” / irrig -- -- #5M 80" 2-line low $ 59.71 $ 40.88 costs same except water

  22. Break-Even Water Cost with Same Yields: 4” per irrigation: and 10 yr. drip life for Watermelons Bed Irrig. All SDI 1/2 SDI PlotConfig.Freq.Costs on Wat.Costs on Wat. #1 80" 3-line high $ 78.41 $ 29.64 #2 80”2-line high $ 65.55 $ 25.13 #3 80" 3-line low $ 73.51 $ 27.19 #4 Furrow furrow #5 80" 2-line low $ 91.88 $ 53.73 hypothetical mobile unit & furrow configurations #3M 80" 3-line low $ 61.48 $ 24.67 #4F Furrow 4” / irrig -- -- #5M 80" 2-line low $80.73 $ 51.40 costs same except water

  23. Value of Output for SDI • Quality / Price Enhancements? • Yield Increase? • Harvesting / Delivery Schedule? • Ground Water Quality?

  24. Key Considerations • Tough to justify SDI on water savings alone in Central AZ -- two crops/yr. may help? • Yield or Price Enhancements -- is it marketable yield?? • Actual vs. Hypothetical water use • Time Horizon: 20, 10, 5 years?

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