Consider drought-motivated irrigation purchases carefully
Hot, dry summers sometimes result in quick irrigation investment decisions that may be regretted
July 24, 2018 - Author: Lyndon Kelley
Watching your crops suffer in drought conditions can be a powerful motivator to buy irrigation equipment. If you’re looking into making an irrigation equipment investment, answer these two question before spending a dollar:
- Is it feasible in that you have the water supply and the land base/configuration to allow irrigation?
- Will the irrigation increase the average yield of the crops in the rotation to generate the additional dollar to pay for the system and additional annual operating cost associated with irrigation?
The irrigation water supply is often a challenge overlooked in the heat of the moment during a drought. Without adequate water for your irrigation system, your investment becomes less valuable and often becoming discounted used equipment. In Michigan, constructing a large volume water withdrawal without a registration could result in large fines. The Michigan large volume water registration process may take minutes to months depending on the current status of the watershed you will be pulling from. In Indiana, the required registration process is a phone call to the Indiana Department of Natural Resources and is not likely to become a limiting factor for a quick irrigation investment.
Water supplies need to be adequate for the production area. Michigan and Indiana water use by most field crops and vegetable crops will near 0.25 of an inch per day for at least a few weeks each year. To adequately irrigate the 0.25-inch daily crop removal, your irrigation water supply needs the capacity to pump 5 gallons per minute per acre. At times of peak need, a 500 gpm pump will run 24 hours a day seven days a week to replace the water used by 100 acres of crops.
Irrigation investments often have a long life but also require a long investment time period to work financially. Irrigation can often lift an average yield of 65-70 bushes on a five-year average on sandy and sandy loam soils. Loam soils with higher water holding capacities will often not increase average yield enough to justify irrigation investments. Often, new irrigation investments that start in July will rarely come online in time to greatly increase yield. Much of yield potential is set by mid-July, making the concept of rescuing the year a fallacy.
Hot, dry summers are good times to sell used equipment. Producers with little experience can be lured into an investment that can be better done with more planning. Be leery of used equipment that commonly shows up for sale in a dry summer. Parts from a wrecked pivot span can look very good if you’re not accustom to working on them. Patching and straightening pipe and bracing can leave structural challenges and leaks. The high cost of labor and repair parts often results in a cost near the price of new. A traveler can be a low cost, used purchase, but a replacement hose can easily be two to three times the cost of the salvaged gun and cart.
Typically, the prices on new irrigation equipment are at their highest in July and mid-August. Through fall, September rebates and incentives help to reduce cost. Field/fence row clearing and underground piping are other reasons fall and winter are typical irrigation expansion seasons.
Irrigation investments need to be profitable. Long-term yield increases or new irrigated crop option profit levels need to be greater than the annual ownership and operating cost of the irrigation system. The lowest annual ownership and operating cost for irrigation systems are $130 per irrigated acre or more and can easily double or triple with smaller field sizes, irregular-shaped fields, limited availability of water and the lack of three phase electric. For more information on Irrigation investments economics, including annual ownership and operating cost, visit the Irrigation Costs section on the Michigan State University Extension website.
Whether you’re new to irrigation or just looking for some insight before going further, take a look at “Checklist for Irrigation Planning,” MSU’s irrigation fact sheet number #11.