Looking for More Yield?
Develop Your Farm with Center Pivot Irrigation
With today’s tight margins, it only makes sense to spread your fixed costs over more bushels. While bigger isn’t always better, utilizing your resources to produce more units may help your bottom line. What are some ways you can make changes in your operation to have more yield to sell?
The following example was prepared to encourage you to think about irrigating land that you already own vs buying more land. There are many intangibles and each operation is different, so there is not a single perfect answer.
Should I buy more land?
Or
Should I irrigate dry ground I already own?
Analysis Summary - Buying 40 Acres vs Irrigate 120 Acres Owned Land
Assumptions:
· 150 Bu Dryland Corn, 200 Bu Irrigated Corn, Corn Price $4 / Bu
· Pivot Project Cost 3 – 40 Acre Machines $190,500, 1- 120 Acre Machine $130,500
· Land Cost $5,000 / Acre , Taxes $2,500 / Year
· Loan Terms: Land 20 years at 4%, Pivots 7 Years at 4.99%
· Marginal Costs to grow 150 Bu corn $450 / Acre, Increased inputs to grow 200 Bu are $26 / Acre
· $20,000 down payment on either land or pivot project
Results After 20 years:
· Buying land and growing dryland corn with 150 Bu/ Ac yield = ($191,780)
· Buying 3 – 40 Acre Pivots, water 105A and get 200 Bu / Ac yield = $94,682
· Buying 1 – 120 Acre Pivot, water 101A and get 200 Bu / A yield = $152,333
*This is an example for discussion purposes only, not a recommendation.
Conclusion
Buying More Land Vs. Irrigating Owned Dryland Acres
While the example prepared tends to show a lot of red ink, the important takeaway here is the long-term impact of increasing management of your land base.
Timing & Control
In addition to showing a significant net positive impact by providing water to your crop, you also gain control. I think we can all agree that Michigan generally gets sufficient moisture throughout the year, but often mother nature mistimes her application to annual crops. The good news is our rivers, lakes and aquafers get replenished. This allows us to use our water reserves and apply them as our crops need them.
The example assumes that dry land corn will regularly produce 150 bushels per acre with the proper inputs and good management. History has shown us that every few years we will have a very dry growing season, negatively impacting yields without supplemental moisture. This not only costs us yield, but often price as well. Having more consistent production by irrigating, creates opportunity in the marketing year by having confidence we will have a crop to sell.
Better Utilization of Inputs
Proper timing of water applications improves the utilization of many fertilizers which are only available in solution. Incorporating an injection pump into your irrigation system can reduce passes across your field and improve timing of your fertilizer application. This practice has shown to increase yields and lower costs. Many pesticides are activated with post application moisture, which will increase effectiveness and improve yield. While you can find data to deny or support the various figures, such as cost, yield and interest rates, I think you can determine the spread of these two scenarios is significant.
About the Author
Pete is the marketing manager for Michigan Valley Irrigation, having joined the company in 2016. He was raised on a dairy farm in western New York and graduated from Cornell University with a B.S. in agricultural economics. His entire working career of over 37 years has been involved in agriculture. A farmer helping farmers. When away from Michigan Valley he operates, Joyful Noise Farm, a small livestock and produce farm and spends time with his family.
