I have always wondered how long it takes an irrigation pivot to pay for its self? Alot of farmers in my area have irrigation, but most are irrigating poorer fields. I have pretty good soil on the ground I recentlly bought but its a 65 acre mostlly square field and I wonder if it would be a good investment to look into irrigating it in the future. Its a big investment, some say they wouldnt spend the money and some say they wont farm without it. Im probably only thinking about it becuase its so hot and dry around here right now, but if we have another hot and dry summer this year it would make the 4th dry summer in a row for this area. Im sure a Nebraska farmer could answer this question but any advice is appreciated
The initial cost is only part of the equation. Think about were your are going to get the water. I'm afraid the government is going to start restricting how we all use water on our farms
That is a good question. If you are in a area where you would not need to run it many hours to get a big bump in yield it would be like having an insurance policy. If most years you would only get a small yield increase it may be expensive insurance.
Another consideration is in a few years you may not be allowed to put in more irrigated acres. That has already happened here and not because of declining ground water, but because Nebraska Public Power has managed to obtain a water permit on the Niobrara river for more cu ft of water than the average flow. The dept of natural resources allowed them to move two permits from up river to another down river dam. Our ground water levels have actually increases in the last few years. Other areas are short on water, could it happen where you live.
A few years ago, I put in a pivot, kept a bunch of yearlings and grazed on it, and the price of yearlings went way up and I effectively paid for the used pivot in one year. I moved and put up the pivot myself and layed underground pipe my self. I would not have kept the yearlings if I had not had the extra grazing, however I did not expect to make the profit of the yearlings that I did that year!!
What will it cost to get water, Deep or shallow well. 65 acres in fairly small for a pivot which will make the cost per acre considerably more than a larger pivot, probably 5 towers vs 7 towers for a 130 acre. You may be able to get fairly cheap interest on a new pivot, my brother put one in on a lease to own deal that ended up with real cheap interest through the pivot dealer, not so lucky on the well which he had to do through his banker.
Do you have electricity or natural gas available or would you be using diesel? In my area diesel cost several times as much as electric. If electric, would it get shut off at times of high demand, and if so would you have enough water to make it through those times. My pivots, this time of year, are never shut down and if the power co shut me down in the middle of the day, it would be a disaster. My water permit (Nebraska) does not all quite enough cfs of water per acre to have any extra.
Thanks for the advice. This time of year often gets me wondering whether it may be worth investing in irrigation. I farm in the tri state area of Michigan, Indiana and Ohio on the Michigan side. Our problem in alot of years is the rain that moves through Iowa and Wisconsin disapates over the cool water of lake Michigan. We have many farmers in this area that put up pivots and are now in the seed corn business, It pays well but I dont really share that desire. Sounds like there are many variables to consider. I see guys around here running them often with all the hot dry weather we have had and wonder if its really worth it. Again thanks for the reply.
Timing means a lot, when it comes to irrigation purchases. I put in one on a quarter section, about seven years ago, and I think it has already paid for itself. Right away I got the income tax deductions for the well and the piviot, and if my marginal tax rate was about 50% for that year(s)...the initial cost of $80000 drops to about $40,000 or $50,000. And I know that I have grown well over that amount of extra crops in the last seven years, maybe not quite enough to pay for inputted interest expense, too....but it covered the diesel and the initial balance after depreciation tax savings quite well. But crops went up, and the irrigation cost was locked in. If I had to put in a new irrigator today, it would not get done for that kind of money.
I am thinking about adding another pivot , too. It is nice to know that you can turn the rain on when you wish. It really gives you the peace of mind to forward contract at good prices.
Red, what does your dry land corn and beans usually yield in comparison to irrigated?
45 to 50 bushel beans, and 175 to over 200 bushel corn is what ground in my area that is not sand yields. The sand spot would maybe average 30 bushels , over a number of years, and the corn maybe 120. With irrigation , you get uniform yields, like the better clay based ground. Most of what I farm doesn't need irrigation, if anything, it could use more tiling.