MSU Extension Irrigation

Two Circle Towable System Example

Estimating Annual Irrigation Operation Costs – 3-10

A 660' towable system watering two circles and end gun with actual irrigated area of 70 acres installed at a cost of $43,000 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

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

($43,000 - 10,000)/10 = $3,300

(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% * ($73,000 + $20,000)/2 = $46,500

6.5% * $46,500= $3,023

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

pivot cost * 4% =

$43,000 * 4% = $1,720

well cost * 2% =

$30,000 * 2% = $ 600

Taxes: no personal property tax in Michigan

the addition irrigation equipment should not increase property taxes

Insurance: estimated at 0.5% * average investment value

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

0.5% * ($73,000 + $20,000)/2= $46,500

0.5% * ($40,500) = $233

Total Ownership Cost = $4,300 + $3,023 + $2,320 + $233 = $9,876

$9,876 / 70 acres = $141.09 /irrigated acre/year

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:

$3.50/acre in. * 6 in.* 70 acres = $1,470 annually

$3 to $5.50/acre in. range

Labor cost: recommend use of actual labor bills

Range of $1 to $3.50/acre in.

$2 * 6 acre in. * 70 acres = $840 annually

Total Operating cost annually = $2,310

Grand Total Estimated Annual Cost = $9,876+ $2,310 = $12,186

$12,186 / 70 acres = $174.09/acre at 6"