Economic feasibility of conversion to mobile drip irrigation in the Central Ogallala region

Abstract

As groundwater levels continue to decline in the Ogallala Aquifer, stakeholders, policymakers, and producers encourage the adoption of new irrigation technology in an effort to conserve groundwater, extend the economic life of the aquifer, and enhance profitability. One such technology currently receiving attention in the Central Ogallala region is the mobile drip irrigation (MDI) application system. This study compares MDI to low elevation spray application irrigation by evaluating the changes in variable cost per hectare to calculate the payback period for a MDI system under three levels of investment cost for grain and fiber crops representing three levels of water use while holding yield constant. Using a 3% discount rate, under the medium level of investment cost ($371 per hectare), a discounted payback period of 4.9, 9.0, and 6.3 years is required for corn, cotton, and sorghum/wheat, respectively. As the cost per hectare to convert an existing center pivot drops to $185 per hectare, the payback period also drops to 2.3, 4.2, and 3.0 years, respectively. Thus, producers growing higher water use crops are able to recover the costs of the conversion to MDI through increased water use efficiency quicker than producers growing medium and lower water use crops.