CAN IT PAY TO IRRIGATE PASTURE IN THE NORTH EAST PART OF THE U.S.A?1
Brian Nischke, Alex Crockford, Thomas Kriegl2
See http://cdp.wisc.edu for more information
National Farm Business Management Conference
Overland Park, Kansas,
June 9 - 13, 2013
Introduction
Even in normal years, lack of moisture can substantially reduce pasture yields, in the northeast
quarter of the U.S. Since pasture is often the most economical source of feed, owners of grazing
livestock have asked if it can pay to irrigate pasture in this part of the country.
To help answer that question, Golden Sands RC&D supported by a Grazing Lands
Conservation Initiative (GLCI) grant (Research project 545, Feasibility of Dairy Pasture
Irrigation on Wisconsin's Central Sands) purchased two 12-pod K-line irrigation lines for
installation on Paul Onan’s 75 cow dairy farm near Stevens Point, Wisconsin in the spring of
2009. The research project used K-line irrigation because of its relative affordability and
flexibility for use in managed pastures. Mr. Onan installed a new six-inch well drilled 103 feet
deep. The well can provide 100 gallons per minute with 100 psi at the well head and 50 psi at the
last pod at the end of each of three pod lines. Theoretically one pod line could deliver an inch of
water per week to 20 acres if used constantly.
The Research Project
Twenty acres of Mr. Onan’s farm received regular irrigation during the study. A digital pasture
plate meter was used to measure weekly pasture yields. Forage samples were also collected and
analyzed for quality. There were no additional fertilizer applications made to the research plots
before or during the project beyond manure deposited by the cows.
The research project concluded on September 1, 2010.
Production Response
The summer of 2009 was very dry. Total rainfall amounts for Paul Onan’s farm were 7.25 inches
from June 15 to September 30, versus the normal of 15.5 inches for the region. Un-watered
pastures became dormant near the end of June.
Total rainfall amounts on the Onan Farm were 24.5 inches from June 15 to September 30, 2010,
making irrigation unnecessary.
In 2009, irrigated plots produced an additional 1.5 tons of dry matter forage per acre.
Economic Analysis of Actual Performance in 2009 and 2010
The investment in the new well, electric service, electric pump, two 12-pod K-lines plus piping
from the well to the K-lines was annualized over their expected life of 20 years. A longer
annualizing period makes it easier to justify an investment on an annual basis but lengthens the
time in which the investment is recovered.
The ownership costs of depreciation, interest, repairs, taxes and insurance were also included in
annual fixed or ownership costs per acre and per acre inch (of water) based on 10, 20, 30, and 40
acres irrigated.
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No cost was charged for land or other equipment since such costs exist with and without
irrigation, nor was time value of money considered.
Actual operating costs accumulated in irrigating 20 acres in 2009 plus some unpaid labor and
interest opportunity cost were used to calculate operating costs per acre and per acre inch and
were combined with the annual ownership costs to determine total costs.
Table 1: Investment in Paul Onan’s Irrigation System
System Investment Cost
Initial Cost
4-500 ft rolls 3” supply pipe
$2,500.00
1200ft-40mm K-line tubing
$1,215.00
24 K-line Pods with sprinklers
$2,288.00
Miscellaneous K-line Parts
$725.00
Installation Labor and Sales Tax $2,900.00
Total Cost Of Irrigation
Equipment
$9,628.00
Investment Cost Pump
Investment Cost 103’ Well
$5,800.00
$6,755.00
Total Investment In Well,
Pump And Water Delivery
Equipment
$22,183.00
The entire increased forage yield resulting from irrigation was assumed to be consumed by
the lactating dairy cows and was initially assigned the value of 150 relative feed value
(RFV) hay. The total annual per acre cost was subtracted from the calculated value of the
increased yield.
The approximate annual total cost of owning ($107.06/acre) and operating ($82.34/acre) the
system in 2009 was $189.40 per acre (based on 20 acres), but returned 1.5 tons dry matter (DM)
per acre of dairy quality forage valued at $258.75 (1.725 as fed tons X $150/ton) for a
$69.35/acre net return.
In 2010, the ownership ($107.06/acre) and operational costs ($19.62/acre) of the pod-line system
were $126.68 per acre, representing a loss from no gains in production. The cumulative loss of
pod-line irrigation two years into operation was approximately $57.33 per acre, per year.
Research data was not kept after 2010, but since 2011 weather was much like 2010 and 2012
was one of the driest and warmest years on record, it is reasonable to assume the 2011
economic response to be the same as 2010 and the 2012 economic response greater than 2009.
“What If” Economic Analysis with Higher Value Forage and if System Used to Full
Potential in 2009 and Beyond
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Several factors limited the production response and economic performance in 2009. If, in another
dry year like 2009, the farm crew committed themselves to:
 Productively applying the irrigation knowledge gained in 2009;
 Start watering before visible plant stress and adequately irrigate 40 acres;
 Since a goal in managed grazing is to harvest forage at the higher feed value vegetative
stage (valued at $373.85 per ton DM based on milk value), the production response is
potentially more valuable than what was calculated initially. Therefore, assume
consumption of half of the yield increase in the vegetative stage ($373.76 per ton DM)
and half at 150 RFV ($150 per ton DM);
Then the economic performance of other dry seasons could improve over the economic
performance initially calculated for 2009. To see the potential for greater economic performance,
eight scenarios were examined. The first four scenarios include:
1.
2.
3.
4.
1.5 ton DM yield gain at 150 RFV from 20 acres – the original reported 2009 results
1.5 ton DM yield gain at 150 RFV from 40 acres
1.5 ton DM yield gain (half at 150 RFV and half at vegetative stage) from 20 acres
1.5 ton DM yield gain (half at 150 RFV and half at vegetative stage) from 40 acres
The next four scenarios repeat the above scenarios with a yield response of 1.75 ton DM
yield gain per acre, assuming irrigation started two weeks earlier (and longer) as hindsight says it
should have in 2009.
It’s obvious that when moisture is severely limited on a droughty soil as it was for Paul Onan in
2009, his level of investment in irrigation equipment can produce enough of a yield response to
more than pay the cost of irrigation in that year, but can it pay for itself over the 20-year
amortization period? And how many non-response years can be subsidized by the economic
gains of a dry year like 2009 in each of the eight potential scenarios?
Table 2: Years of response needed for irrigation to break even in eight scenarios.
Net Gain from Irrigation
Scenario Acres $/acre in Dry Year (2009)
1
20
69.35
2
40
122.88
3
20
220.38
4
40
273.91
5
20
91.2
6
40
144.73
7
20
267.46
8
40
320.99
Per Acre Ownership and
Operating Cost in One
Year of No Response
126.68
73.15
126.68
73.15
126.68
73.15
126.68
73.15
Years of Response
Needed for Irrigation to
Break Even *
2 of 3
1 of 2.68
1 of 2.74
1 of 4.74
3 of 5
1 of 3
1 of 3
1 of 5.39
*Column E = Ratio of Column C to Column D
Using Scenario 1 in table 2 as an example, the added value of increased yield per acre was
$69.35 in 2009. The per acre ownership and operating cost experienced in 2010 was $126.68 or
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nearly double the gain achieved in 2009. Consequently, it would take two years similar to 2009
to offset the irrigation costs in a no response year like 2010.
Because the other scenarios used more of the irrigation system’s capacity, their economic
performance is better than scenario one. The other scenario results are possible in years as
droughty or worse than 2009.
Conclusions
1. Without a production response, no investment in irrigation would pay.
2. Paul Onan’s Rosholt sandy loam soil has a relatively low water holding capacity.
Therefore an irrigation yield response is more likely from it than from many other
Wisconsin soils.3
3. Since Paul Onan experiences 2009 conditions (or worse) at least once every three years
and since the gain projected for several scenarios appear doable, it is likely that Paul
Onan’s irrigation system will pay for itself sooner than its 20-year amortization period.
Recommendations and Precautions
1. Inexperienced irrigation managers usually wait too long before starting to irrigate and
forfeit some yield response.
2. The operating cost for two acre inches was $21.25 in 2009. It would only take a dry
matter yield increase of 283 lbs. of dry matter valued at $150 per ton to pay the operating
cost for the two inches of water.
3. More fertilizer will likely be required to consistently achieve higher yields from irrigation
over a period of several years.
4. Like any other capital investment, an irrigation system is more likely to pay for itself if
used close to full capacity.
5. Even if irrigation will pay for itself, look to see if there would be another way to invest
those dollars for a higher return.
6. This study happened to use the K-Line system. The same economic principles apply
regardless of the irrigation equipment or system used.
7. This study did not attempt to measure any environmental impacts associated with
irrigation.
8. Before investing in an irrigation system, learn as much as you can about the principles of
irrigation, the characteristics of your soils, and your micro climate. With this knowledge,
try to project your potential costs and gains before investing. Your County Agricultural
Agent can help find the information.
Endnotes
Adapted from “Does It Pay To Irrigate Pasture In Wisconsin?” by Brian Nischke, Alex Crockford, and Tom Kriegl
Golden Sands Resource Conservation and Development Technician
University of Wisconsin-Extension Langlade County Agricultural Agent
University of Wisconsin-Extension and Center for Dairy Profitability Farm Financial Analyst
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The water holding capacity of several soils and much additional information about irrigation management is found in a NRCS 754
page irrigation guide found at the following website:
http://www.nrcs.usda.gov/wps/portal/nrcs/detailfull/national/water/manage/?&cid=nrcs143_010855 .
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