Can It Pay To Irrigate Pasture in Wisconsin?

Alex CrockfordUniversity of Wisconsin-Extension Langlade County

Agricultural AgentBrian Nischke

Golden Sands Resource Conservation and Development Technician

Thomas S. KrieglUniversity of Wisconsin Center for Dairy Profitability

University of Wisconsin-Extension

See http://cdp.wisc.edu for more information

National Farm Business Management ConferenceOverland Park, Kansas,

June 9 - 13, 2013

_______________________________________________Introduction• Pasture can be economical source of feed.

• Can irrigation pay in areas where most crops are grown without irrigation?

• Can irrigation pay on “low value” crops?

• 2012 increased interest in irrigation.

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Golden Sands Resource, Conservation & Development Inc. (RC&D)

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

Paul Onan’s 75 cow dairy farm near Stevens Point, Wisconsin in 2009.

Paul Onan installed a new six-inch well drilled 103 feet deep. The well can supply as many as three pod lines.

Theoretically, one pod line could water 20 acres if used constantly.

To help answer questions:

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Daily Moves 1 2 3 4Watering Hours per Move 6 6 6 6Inches of Water per Acre per Move 1 1 1 1Theoretical Acres Watered per Move with 1 K-Line 0.75 0.75 0.75 0.75Theoretical Acres Watered per Day with 1 K-Line 0.75 1.5 2.25 3Theoretical Acres Watered per Week with 1 K-Line 5.25 10.5 15.75 21Onan per Acre Annual Ownership Cost with 1 K-Line* $343 $172 $114 $86Theoretical Acres Watered per Move with 2 K-Lines 1.5 1.5 1.5 1.5Theoretical Acres Watered per Day with 2 K-Lines 1.5 3 4.5 6Theoretical Acres Watered per Week with 2 K-Lines 11 21 31.5 42Onan per Acre Annual Ownership Cost with 2 K-Line** $214 $107 $71 $54

Table 2*

Combinations of Intensity of Use and Land Area Irrigated per Day/per Week and Impact on per Acre Annual Ownership Cost Using One or Two 12-Pod K-

Lines

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Measured in 2009 & 2010 Irrigated and non-irrigated:• rainfall• quantity yield• quality yield

First pass July 1, 2009Last pass Sept 24, 20097.75 passes not all continuous

Production Response

Typical application rate 1” – 1 ½ “ in 12 hoursStark Contrast

_______________________________________________Production Response30 year Average Rain June 15th-Sept 30th 15.5 inches

2009 Rain June 15th-Sept 30th 7.5 1.5 TDM increase

2010 Rain June 15th-Sept 30th 24.5 no response

2011 weather similar to 2010, but not measured

2012 weather worse than 2009, but not measuredWatered continuously on 30 acres from June 15th to early

August 2012 8-9 passes (plus 2 passes after August 1st) Yield increase likely higher than 2009

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System Investment Cost Initial Cost4-500 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 $5,800.00 Investment Cost 103’ Well $6,755.00

Total Investment In Well, Pump And Water Delivery Equipment

$22,183.00

Investment in Paul Onan’s Irrigation System

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Per acre & acre inch cost based on 10, 20, 30, and 40 acres watered

• Depreciation – 20 years• Interest• Repairs• Taxes• Insurance

Land cost & time value of money not included

Analyzing Annual Ownership Cost

_______________________________________________Operating costs based on actual costs in 2009

• plus unpaid labor• plus interest on operating cost• operating cost per “pass,” per acre, and per

acre inch• Seven to eight “passes” in 2009

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Several factors limited the production response and economic performance in 2009.

• Delays in implementation• Inexperience• Research requirements

Since data was only collected for two years, eight potential scenarios were examined to evaluate the economic performance of the irrigation system over a longer period of time.

Potential Economic Impact of Irrigating Based on Eight Scenarios

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1. 1.5 ton DM yield gain at 150 RFV from 20 acres – the original reported 2009 results

2. 1.5 ton DM yield gain at 150 RFV from 40 acres3. 1.5 ton DM yield gain (half at 150 RFV and half at

vegetative stage) from 20 acres4. 1.5 ton DM yield gain (half at 150 RFV and half at

vegetative stage) from 40 acres

Four more 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.

Potential Economic Impact of Irrigating Based on Eight Scenarios

_______________________________________________MIRG by Dairy Increases Pasture Value•Practical Way to harvest forage at high

value vegetative stage

•Vegetative stage tall grasses – 10-14 inches

•High protein-- high energy feed

•Milk value of yield increase

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Scenario # Acres Irrigated

Yield Increase

Ton

Value of Yield

Increase

Ownership Cost

*Operating Cost *Total Cost Gain From

Irrigating

Ton/Acre $/Acre $/Acre $/Acre $/Acre $/Acre(2009 Results) 1 20 1.5 $258.75 $107.06 $82.34 $189.40 $69.35

2 40 1.5 $258.75 $53.53 $82.34 $135.87 $122.883 20 1.5 $409.78 $107.06 $82.34 $189.40 $220.384 40 1.5 $409.78 $53.53 $82.34 $135.87 $273.915 20 1.75 $301.85 $107.06 $103.59 $210.65 $91.206 40 1.75 $301.85 $53.53 $103.59 $157.12 $144.737 20 1.75 $478.11 $107.06 $103.59 $210.65 $267.468 40 1.75 $478.11 $53.53 $103.59 $157.12 $320.99

2

Potential Economic Impact of Irrigating Based on Eight Scenarios

* Operating costs are higher in Scenarios 5-8 due to additional rounds of irrigating.

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A B C D E

1 20 69.35 126.68 2 of 32 40 122.88 73.15 1 of 2.683 20 220.38 126.68 1 of 2.744 40 273.91 73.15 1 of 4.745 20 91.2 126.68 3 of 56 40 144.73 73.15 1 of 37 20 267.46 126.68 1 of 38 40 320.99 73.15 1 of 5.39

Scenario Acres

Net Gain from Irrigation $/acre

in Dry Year (2009)

Per Acre Ownership and Operating Cost in One Year of No

Years of Response Needed for

Irrigation to Break

Years of response needed for irrigation to break even in eight scenarios.

*Column E = Ratio of Column C to Column D

Column C in scenario 1 represents the economic gain in 2009.

Column D in scenario 1 represents the annual cost in 2010.

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1. Increasing the yield response increases the economic benefit

2. Increasing the use of the system up to full capacity increases the economic benefit

3. Using forage at the highest quality level increases the economic benefit.

Collectively, the scenarios illustrate three factors that can improve the economic performance of the irrigation system, which include:

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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. Irrigation won’t pay for everyone. However, 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.

Conclusions

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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.

Recommendations and Precautions

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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.

Recommendations and Precautions (cont.)

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. The National Resource Conservation Service (NRCS) Report: Irrigation Water Requirements: Crop Data Summary. http://www.nrcs.usda.gov/wps/portal/nrcs/detailfull/national/water/manage/?&cid=nrcs143_010855 I an excellent source of this information.

9. With this knowledge, try to project your potential costs and gains before investing. Your County Agricultural Agent can help find the information.

Recommendations and Precautions (cont.)

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Can It Pay To Irrigate Pasture in the Midwest or

Northeast USA? Thomas S. Kriegl

University of Wisconsin Center for Dairy ProfitabilityUniversity of Wisconsin-Extension

Brian NischkeGolden Sands Resource Conservation and Development

TechnicianAlex Crockford

University of Wisconsin-Extension Langlade County Agricultural Agent

See http://cdp.wisc.edu for more information

6th National USDA Small Farm ConferenceMemphis, TN

September 18-20, 2012

Onankg

DM/ha* lb DM/ac tons/acreNon-irrigated 1140 1016 0.51Upland irrigated 4371 3895 1.95

Lowland irrigated 4512 4005 2Average irrigated 4441 3950 1.98

Pasture Response to Irrigation Summer 2009 Consumable Tons DM/Acre

*Kilograms of dry matter per hectare

Onankg

DM/ha* lb DM/ac tons/acreNon-irrigated 4153 3705 1.85Upland irrigated 3767 3361 1.68Lowland irrigated 4453 3973 1.99Average irrigated 4110 3667 1.83

Pasture Response to Irrigation Summer 2010 Consumable Tons DM/Acre

*Kilograms of dry matter per hectare