The Cost of Irrigation Ownership and Operating Costs through Irrigation Budgets for South Georgia

Irrigation is a tool for managing production risk in row crop production in South Georgia. Irrigation, which is widely adopted by row crop producers in the state, enables them to generate higher and more consistent yields than non-irrigated production. Even with the likelihood of increased yield, there are additional costs associated with owning and operating an irrigation system. Costs associated with owning an irrigation system are the fixed cost that include the depreciation, intermediate interest, and tax & insurance costs. Operating costs are the variable costs including costs of operational energy, repairs and maintenance, and labor costs. To help producers estimate their costs, four center pivot irrigation budgets were created: two for a pivot covering 65 acres and two for a pivot covering 160 acres, with either an electric or diesel energy source. Each budget is based in a spreadsheet using Microsoft Excel. The spreadsheet is comprised of three main parts: total investment costs, annual ownership costs (fixed cost) and annual operating costs (variable cost) per acre. The budget calculates the annual operating costs in per acre inch basis. A total annual cost of the irrigation system is the summation of annual ownership costs and annual operating costs. The default values in the budgets can be modified to reflect investment and energy costs specific to the individual producer to help them more accurately estimate their costs.