Optimal Usage of WaterTAIA Lubbock Regional Meeting

Jay YatesExtension Program Specialist IIIRisk ManagementLubbock, TX

• Declining capacity• Increased efficiency• Increasing energy costs• Varieties with higher potential yields

Texas Southern High Plains Irrigation Situation

• Looked at the following cotton alternatives:– Fully irrigate 120 acre pivots with 300 gpm each– Irrigate 1/2 pivots, treat the rest as dryland– Irrigate 2/3 pivots, treat the rest as dryland– Drill new wells to irrigate entire pivots on owned land with

600 GPM• Drilling 4 new wells for the 4 pivots on owned land at a cost of

$40,000 each• Water ½ pivots on rented ground

* None of the alternatives included DCP Program Direct Payments

FARM Assistance Analysis

2012-2021 2013-2022Baseline – Water whole pivots with 300 gpm per pivot 299.19 % 213.77%

Alternative 1 – Water half pivots, plant the rest to dryland cotton 345.47% 255.93%

Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 327.73% 239.18%

Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 507.44% 440.38%

Updated Results% Change in Real Net Worth

2012-2021 2013-2022Baseline – Water whole pivots with 300 gpm per pivot 187,730 132,680

Alternative 1 – Water half pivots, plant the rest to dryland cotton 216,480 157,930

Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 205,580 147,890

Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 301,380 256,810

Updated ResultsAverage Net Farm Profit

Updated ResultsAverage Probability of a Cash Shortfall

2012-2021 2013-2022Baseline – Water whole pivots with 300 gpm per pivot 10.6% 23.1%

Alternative 1 – Water half pivots, plant the rest to dryland cotton 8.2% 18.3%

Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 9.5% 20.5%

Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 8.4% 10.9%

Updated ResultsEnding Cash Reserves

2012-2021 2013-2022Baseline – Water whole pivots with 300 gpm per pivot 1,081,630 697,960

Alternative 1 – Water half pivots, plant the rest to dryland cotton 1,277,590 875,970

Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 1,202,500 805,260

Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 1,859,920 1,551,340

Projected Variability in Net Farm Income

“Whiskey is for drinkin’, water is for fightin’ over” Mark Twain

• TTU Lubbock Mesonet Site– 45.75” Cumulative Reference ET from 4/15 – 9/15– 2.36” Rainfall during the same period– 98 days of 95 degrees or more– 58 days of 100 degrees or more

• Official Lubbock record of 48 breaks old record from 1934 of 29

• 3 bale cotton in 2011 took from 21-35 ac/in with 4-5 gpm per acre capacity

• Well irrigated pivots and drip had significantly higher net returns

Observations From 2011

Petersburg, TexasDryland planted May 4 – Picture taken August 25, 2011

Shallowater, TexasPre-watered Only Planted May 4 – Picture taken August 25, 2011

North of Petersburg, Texas Yield .9 BPASub-Surface Drip, 1.5 GPM per acre – Picture taken August 25, 2011

Petersburg, Texas Yield 1.5 BPASub-Surface Drip, 2.5 GPM per acre – Picture taken August 25, 2011

Lubbock, Texas Yield 3.3 BPASub-Surface Drip, 4.1 GPM per acre – Picture taken August 25, 2011

Sandhill, Texas Yield 3.5 BPASub-Surface Drip, 4.5 GPM per acre – Picture taken August 25, 2011

South of Shallowater, Texas Yield 3.95 BPASub-Surface Drip, 6 GPM per acre – Picture taken August 25, 2011

• TTU Lubbock Mesonet Site– 41.13” Cumulative Reference ET from 4/15 – 9/15– 6.24” Rainfall during the same period– 69 days of 95 degrees or more– 25 days of 100 degrees or more

• Official Lubbock record prior to 2011 was 29 from 1934• Official Lubbock record of 24 tied for 5th most with 1924

• 3 bale cotton in 2012 took only slightly less irrigation than 2011

• Well irrigated pivots and drip had significantly higher net returns

Not Much Better in 2012

• TTU Lubbock/Reese Mesonet Site– 42.09” Cumulative Reference ET from 4/15 – 9/3

• Would expect another 2.5” over next 2 weeks based on forecasts, making 2013 as high of ET as 2011

– 7.82” Rainfall during the same period• Normal rainfall is 11.24” for this period• 33 of top 36 driest periods on record for Lubbock come between 9/15 and

4/15. (That’s why winter wheat is not as successful here)

– 48 days of 95 degrees or more– 13 days of 100 degrees or more

• Still warmer than average (~10 days/year), but closer to average temperature compared to the past 2 years.

Not as Hot and Dry in 2013But still above average

• Interviewed area farmers• Collected data from AgriLife Research &

Extension Projects

Comparative Profit Analysis 2011

• 31 Cotton Farm Sites– 17 Sub-Surface Drip (all on 80” centers)– 13 Center Pivots• 2 MESA• 1 LESA• 10 LEPA

– 1 Furrow– GPM/Acre ranging from 1.5 to 6.0

The Study Group

2011 Cotton Yields vs. Water Applied

Cotton Yield lbs/acre

Inches of Water Applied per Acre

2011 Returns Above Direct Costs at $0.90/lb vs. Water Applied at $9/in

Returns AboveDirect Costs

Inches of Water Applied per Acre

> 4 gpm/ac

2011 Cotton Net Profit at $0.90/lb vs. Water Applied at $9/in

Returns AboveDirect Costs

Inches of Water Applied per Acre

> 4 gpm/ac

2011 Returns Above Direct Costs at $0.52/lb vs. Water Applied at $9/in

Returns AboveDirect Costs

Inches of Water Applied per Acre

2011 Cotton Net Profit at $0.52/lb vs. Water Applied at $9/inReturns Above

Direct Costs

Inches of Water Applied per Acre

2011 Returns Above Direct Costs at $0.90/lb vs. Water Applied at $15/in

Returns AboveDirect Costs

Inches of Water Applied per Acre

2011 Cotton Net Profit at $0.90/lb vs. Water Applied at $15/in

Returns AboveDirect Costs

Inches of Water Applied per Acre

GPM*

GPM/Acre Inches/Acre/Day Inches/Acre/Season (24/7)*

187.5 1.5 0.0795 12.25250 2 0.1061 16.33

312.5 2.5 0.1326 20.42375 3 0.1591 24.50

437.5 3.5 0.1856 28.58500 4 0.2121 32.67

562.5 4.5 0.2386 36.75625 5 0.2652 40.83

687.5 5.5 0.2917 44.92750 6 0.3182 49.00

What Does It Take To Apply 20-25 Inches of Irrigation?

* Assumes 125 acre pivot and irrigating season from April 15 to September 15

• In 2011 with virtually no sub-soil moisture or rainfall during the growing season, it took at least 4 gpm/acre to make a profitable cotton crop.

• Long term analysis shows that systems with the ability to deliver less than 3 gpm/acre would be more profitable cutting irrigated acreage back to that level.

• Irrigation profitability is more sensitive to lower cotton prices than higher energy prices.

• Expected price level for 2013 would indicate that profitable irrigated yields are still attainable.

Conclusions

1. Personal Preference2. Risk Avoidance3. Potential Profitability4. Long Term Sustainability

Factors Affecting Planting Decisions

• Irrigated Acres – 125• Total Cropland Acres – 160• Irrigation Capacity – 350 GPM• Number Days to Irrigate – 120• Acre-inches per Irrigated Acre - 18

Comparative Farm Scenarios 2013

• Scenario 1– Cotton – Irrigated (950 lb APH, 65%) – 125 ac.– Cotton – Dryland (250 lb APH, 65%) – 35 ac.– Percent Irrigation Capacity Used – 67%– Return Over Direct Expenses - $61,852– Insurance Coverage Ratio – 109%

Comparative Farm Scenarios 2013

• Scenario 2– Corn – Irrigated (185 bu APH, 65%) – 62.5 ac.– Sorghum – Irrigated (75 bu APH, 65%) – 62.5 ac.– Sorghum – Dryland (30 bu APH, 65%) – 35 ac.– Percent Irrigation Capacity Used – 93%– Return Over Direct Expenses - $26,015– Insurance Coverage Ratio – 89%

Comparative Farm Scenarios 2013

• Scenario 3– Sesame – Irrigated (675 lb APH, 65%) – 125 ac.– Sesame – Dryland (450 lb APH, 65%) – 35 ac.– Percent Irrigation Capacity Used – 62%– Return Over Direct Expenses - $79,040– Insurance Coverage Ratio – 80%

Comparative Farm Scenarios 2013

• Scenario 4– Corn – Irrigated (185 bu APH, 65%) – 80 ac.– Sunflowers – Dryland (556 lb APH, 65%) – 80 ac.– Percent Irrigation Capacity Used – 86%– Return Over Direct Expenses - $32,036– Insurance Coverage Ratio – 86%

Comparative Farm Scenarios 2013

• Scenario 5– Corn – Irrigated (185 bu APH, 65%) – 80 ac.– Cotton – Dryland (250 lb APH, 65%) – 80 ac.– Percent Irrigation Capacity Used – 86%– Return Over Direct Expenses - $26,910– Insurance Coverage Ratio – 85%

Comparative Farm Scenarios 2013

• Scenario 6– Corn – Irrigated (185 bu APH, 65%) – 80 ac.– Sesame – Dryland (450 lb APH, 65%) – 80 ac.– Percent Irrigation Capacity Used – 86%– Return Over Direct Expenses - $34,900– Insurance Coverage Ratio – 91%

Comparative Farm Scenarios 2013

Comparative Farm Scenarios 2013

55% 60% 65% 70% 75% 80% 85% 90% 95%70%

75%

80%

85%

90%

95%

100%

105%

110%

115%

1

2

3

45

6

InsuranceCoverage Ratio

Irrigation Capacity Usage

Contact Information:Texas A&M AgriLife Research and Extension Center1102 East FM 1294Lubbock, TX 79403

(806) 746-6101

jayates@ag.tamu.edu

http://lubbock.tamu.edu http://agrilife.org/southplainsprofit http://agrilife.org/southplainscottonhttps://www.facebook.com/FARMAssistance

Jay YatesExtension Program Specialist IIIRisk Management

FARM Assistance Analyst

South Plains Cotton Update every Thursday at 1:00 – 2:30 p.m. during West Texas Ag Life on