MSU Extension Irrigation

Traveler System

Traveler System Example

Estimating Annual Irrigation Operation Costs – 3-10

Traveler irrigation system with actual irrigated area of 80 acres installed at a cost of $19,000 for traveler, $3,000 for piping and installation with a power and water source and connecting equipment cost of $30,000.

A standard procedure is outlined on page 7 of MSU Extension Bulletin E-2131, “Custom Work Rates in Michigan”. The following would be modification of the DIRTI #5 pricing system.

Ownership Cost

Depreciation: (original cost - salvage value)/years of use

(traveler cost + installation cost - salvage value)/10 years=

($22,000 - 11,000)/10 = $1,100

(well cost - salvage value)/20 years =

($30,000 - 10,000)/20 = $1,000

Interest: interest rate * average investment value

6.5% * (original cost + salvage value/2) =

6.5% * ($52,000 + $11,000/2) =

6.5% * $31,500 = $2,048

Repair: estimated to between 2 to 5% of original cost

well cost * 2% =

$30,000 * 2% = $ 600

traveler cost * 3% =

$22,000 * 5% = $1,100

Taxes: no personal property tax in Michigan

the addition of irrigation equipment should not increase property taxes

Insurance: estimated at 0.5% * average investment value

0.5% * (original cost + salvage value/2) =

0.5% * ($52,000 + $11,000/2) =

0.5% * ($ 31,500) = $158

Total Annual Ownership Cost $2,100 + $2,048 +$1,700 + $158 = $6,006

$6,006 / 80 acres = $75.08 /irrigated acre/year

Annual Operating Cost (per acre) or total actual annual cost

These costs are best handled annually, calculated using actual costs at the end of season.

Power: use actual fuel or power bill is recommended

Estimated power cost:

$5.00/ acre in. * 6 in.* 80 acres = $2,400 annually

$3 to $5.50/acre in. range

Labor cost: recommend use of actual labor bills

Range of $1 to $3.50/acre in.

$3.50 * 6 acre in. * 80 acres = $1,680 annually

Total Operating cost annually $ 2,400 + $1,680 = $ 4,080

Grand Total Estimated Annual Cost

$6,006 + $ 4,080 = $10,086 / 80 acres = $126.08 /acre at 6"