Economics of Drip Irrigation MAC Demonstration Project Russell

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

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

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

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

Water Use Dynamics / Time

Flood Irrigation -- Laser Leveled Efficient?

Efficiency of SDI vs. Flood?

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

5 plots / 8 Different Systems Broccoli: 6% discount rate Plot #1 Bed Config. 80" drip bed Irrig. Installation Freq. Cost high $2, 050. 00 #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 $150. 83 $235. 05 -$1, 730. 00 Annualized Cost 20 -yr life 10 -yr life $178. 73 $278. 53 hypothetical mobile unit & furrow configurations #3 M 80" drip bed low $1, 547. 00 $134. 87 $210. 19 #4 F Furrow 4”/irrig -- -- -- #5 M 40" drip bed low $1, 330. 00 $115. 96 $180. 70

5 plots / 8 Different Systems Watermelons: 6% discount rate Plot #1 Bed Config. 80" 3 -line Irrig. Installation Freq. Cost high $2, 050. 00 #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 $150. 83 $235. 05 -$1, 730. 00 Annualized Cost 20 -yr life 10 -yr life $178. 73 $278. 53 hypothetical mobile unit & furrow configurations #3 M 80" 3 -line low $1, 547. 00 $134. 87 $210. 19 #4 F Furrow 4”/irrig -- -- -- #5 M 80" 2 -line low $1, 330. 00 $115. 96 $180. 70

Yield Differences Broccoli, 2002 -03: Plot #1 Bed Config. 80" drip bed Irrig. Freq. high Yield (ctn. /ac) 905 % change from furrow 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 #3 M 80" drip bed low 911 8. 2% #4 F Furrow 4”/irrig. 842 -- #5 M 40" drip bed low 862 2. 4%

Yield Differences Watermelons, 2003: Plot #1 Bed Config. 80" 3 -line Irrig. Freq. high Yields /cwt. % change Seeded Seedless furrow 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 #3 M 80" 3 -line low 160 112% #4 F Furrow 4”/irrig 102 84 -- #5 M 80" 2 -line low 235 142 62%

Water Use & Cost ($36/ac-ft) Broccoli, 2002 -03: Plot #1 Bed Config. 80" drip bed Irrig. Freq. high Actual Water Used (af: $/ac) 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 #3 M 80" drip bed low 1. 83: $65. 70 #4 H furrow 4”/irrigation 3. 33: $120 #5 M 40" drip bed low 1. 78: $63. 90

Water Use & Cost ($36/ac-ft) Watermelons, 2003: Plot #1 Bed Config. 80" 3 -line Irrig. Freq. high Actual Water Used (af: $/ac) 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 #3 M 80" 3 -line low 2. 47: $89. 08 #4 F Furrow 4”/irrig 5. 33: $192 #5 M 80" 2 -line low 2. 25: $80. 99

Return Difference ($/ac) from Furrow (actual): 20 yr. life of SDI, Broccoli Plot #1 Bed Config. 80" drip bed Irrig. Freq. high Price ($/carton) $5. 00 $7. 38 $10. 00 -$ 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 #3 M 80" drip bed low $ 32. 49 $ 196. 71 $ 377. 49 #4 F Furrow 4” / irrig -$ 52. 20 #5 M 40" drip bed low -$ 74. 56 -$ 26. 96 $ 25. 44

Return Difference ($/ac) from Furrow (actual): 10 yr. life of SDI, : Broccoli Plot #1 Bed Config. 80" drip bed Irrig. Freq. high Price ($/carton) $5. 00 $7. 38 $10. 00 -$105. 87 $ 44. 07 $ 209. 13 #2 40" drip bed high -$ 30. 85 $ 169. 07 $ 389. 15 #3 80" drip bed low -$ 77. 17 $ 267. 83 #4 Furrow furrow #5 40" drip bed low $ 87. 05 -- -$ 173. 65 -$ 126. 05 -$ 73. 65 hypothetical mobile unit & furrow configurations #3 M 80" drip bed low -$ 42. 83 $ 121. 39 $ 302. 17 #4 F Furrow 4” / irrig -$ 52. 20 #5 M 40" drip bed low -$ 139. 30 -$ 91. 70 -$ 39. 30

Return Difference ($/ac) from Furrow (actual): 20 yr. life of SDI: Watermelons Plot #1 Bed Config. 80" 3 -line Irrig. Freq. high Price ($/cwt. ) $5. 00 $7. 78 $10. 50 $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 #3 M 80" 3 -line low $ 849 $ 1484 $ 639 #4 F Furrow 4” / applic -$ 107 #5 M 40" 2 -line low $ 309 $ 639 $ 962

Return Difference ($/ac) from #4 F (same yields): 20 yr. life of SDI: Watermelons Plot #1 Bed Config. 80" 3 -line Irrig. Freq. high Price ($/cwt. ) $5. 00 $7. 78 $10. 50 -$ 21 #2 80" 2 -line high -$ 2 #3 80" 3 -line low -$ 12 #4 Furrow furrow $ 107 #5 80" 2 -line low -$ 88 hypothetical mobile unit & furrow configurations #3 M 80" 3 -line low $3 $3 $3 #4 F Furrow 4” / applic -- -- -- #5 M 40" 2 -line low -$ 73

Break-Even Water Cost with Same Yield: #4 F (4”/irrig): and 20 yr. drip life for Broccoli Plot #1 Bed Config. 80" drip bed Irrig. Freq. high All SDI Costs on Broc. $ 107. 99 1/2 SDI Costs on Broc $ 48. 61 #2 40" drip bed high $ 97. 31 $ 45. 92 #3 80" drip bed low $ 102. 02 $ 45. 62 #4 Furrow furrow costs same except water #5 40" drip bed low $ 91. 53 hypothetical mobile unit & furrow configurations $ 43. 03 #3 M 80" drip bed low $ 92. 14 $ 47. 33 #4 F Furrow 4” / applic -- -- #5 M 40" drip bed low $ 81. 96 $ 44. 68

Break-Even Water Cost with Same Yield: 4” per irrigation: and 10 yr. drip life for Broccoli Plot #1 Bed Config. 80" drip bed Irrig. Freq. high All SDI Costs on Broc. $ 174. 30 1/2 SDI Costs on Broc $ 81. 76 #2 40" drip bed high $ 154. 69 $ 74. 61 #3 80" drip bed low $ 165. 00 $ 77. 11 #4 Furrow furrow costs same except water #5 40" drip bed low $ 145. 69 hypothetical mobile unit & furrow configurations $ 70. 11 #3 M 80" drip bed low $ 142. 18 $72. 35 #4 F Furrow 4” / irrig -- -- #5 M 40" drip bed low $ 123. 60 $ 65. 50

Break-Even Water Cost with Same Yields: 4” per irrigation: and 20 yr. drip life for Watermelons Plot #1 Bed Config. 80" 3 -line Irrig. Freq. high All SDI Costs on Wat. $ 43. 46 1/2 SDI Costs on Wat. $ 12. 16 #2 80” 2 -line high $ 36. 58 $ 10. 64 #3 80" 3 -line low $ 40. 31 $ 10. 59 #4 Furrow furrow costs same except water #5 80" 2 -line low $ 64. 54 hypothetical mobile unit & furrow configurations $ 40. 06 #3 M 80" 3 -line low $ 35. 10 $ 11. 49 #4 F Furrow 4” / irrig -- -- #5 M 80" 2 -line low $ 59. 71 $ 40. 88

Break-Even Water Cost with Same Yields: 4” per irrigation: and 10 yr. drip life for Watermelons Plot #1 Bed Config. 80" 3 -line Irrig. Freq. high All SDI Costs on Wat. $ 78. 41 1/2 SDI Costs on Wat. $ 29. 64 #2 80” 2 -line high $ 65. 55 $ 25. 13 #3 80" 3 -line low $ 73. 51 $ 27. 19 #4 Furrow furrow costs same except water #5 80" 2 -line low $ 91. 88 hypothetical mobile unit & furrow configurations $ 53. 73 #3 M 80" 3 -line low $ 61. 48 $ 24. 67 #4 F Furrow 4” / irrig -- -- #5 M 80" 2 -line low $80. 73 $ 51. 40

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

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?