6. Limited Irrigation & Your Bottom Line
âą Get the most $$$ per inch of water.
No Till Limited Irrigation Experiment
â Gary Hergert, UNL
â PREC since 2005
â Corn (5,10,15â)
â Wheat, Dry Edible Beans, Canola (4,8,12â)
âŠirrigation timings are based on crop development,
precipitation and ET dataâŠthe bulk of the water is applied
around the reproductive period.
16. Limited Irrigation & Your Bottom Line
0.0
20.0
40.0
60.0
80.0
100.0
0 5 10 15
RelativeYield
Inches of Irrigation
Wheat
Non-
irrigated
yield
Max
Total
Yield
Diminishing
Returns â still
gaining yield.
Each inch of
water = less
yield than the
previous inch.
17. Limited Irrigation & Your Bottom Line
0.0
20.0
40.0
60.0
80.0
100.0
0 5 10 15
RelativeYield
Inches of Irrigation
Wheat
19. Yield to Net Income
Net Income = (Yield*Price)-(fixed costs)-(variable costs * yield)
Yield = Water Response Curves
Fixed cost = most costs associated with production
ïŒ Depreciation, insurance, overhead, labor
Variable Cost = costs estimated on a per unit basis
ïŒ Hauling, drying, fertilizer
20. 2014 Nebraska Crop Budgets
âą Western Nebraska Budgets
â Corn, wheat, dry beans, millet, peas,
and sunflower
â Available online
http://cropwatch.unl.edu/economics/bud
gets
21. 2014 Crop Budgets
âą Input costs mostly up
â Except nitrogen and glyphosate
herbicides
âą 2013 land values higher
â Expected to be steady or lower in 2014
âą Fixed Cost
âą Variable Cost
â Fertilizer
â Hauling
â Drying
22. Futures PricesâŠ
Irrigated Corn
180 bu. Yield
NT Wheat
90 bu. Yield
2/24/14 Futures $4.65/bu. â Dec â14 $6.83 â Sept. â14
Local December Basis
â07-â12
- $0.32 -$1.11
Forecasted local price $4.33/bu. $5.72/bu.
âą Strong basis during 2013/14
âą USDA Outlook 2013/14
http://www.usda.gov/oce/forum/2014_Speeches/Ash.pdf
â Corn $4.50/bu.
â Winter Wheat $6.80/bu.
23. 2013/14 W. NE Corn Basis
-1.00
-0.50
0.00
0.50
1.00
1.50
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Western NE Corn Basis
2007/08-2012/13 Average Basis 2013/14
24. Estimating Dry Bean Price
âą Discovered 4:1 Dry Bean/Corn
relationship
Read Article Here http://panhandle.unl.edu/agecon_6
âą Estimate local corn price $4.33/bu.
Quick Math
4.33/56=0.0773âŠ*4*100=$30.93/cwt
26. Limited Irrigation & Your Bottom Line
0.0
20.0
40.0
60.0
80.0
100.0
0 5 10 15
RelativeYield
Inches of Irrigation
Wheat
27. -200
-150
-100
-50
0
50
100
0 5 10 15 20
NetIncome
Inches of Irrigation
Profitable
Area of
Production
Limited Irrigation & Your Bottom Line
Max
Net
Income
Modified from original presentation, contact Jessica Johnson 308-632-1247 for details.
28. -200
-150
-100
-50
0
50
100
0 5 10 15 20
NetIncome
Inches of Irrigation
LogicalAreaofProduction
Limited Irrigation & Your Bottom Line
Max
Net
Income
Max
Avg.
Income
Diminishing
Returns â still
gaining Profit.
Each unit of
water = less
income than the
previous unit.
Modified from original presentation, contact Jessica Johnson 308-632-1247 for details.
30. Comparing Curves
Wheat Corn Dry Beans
Profitable Area
of Production
7â-19â 15â-19â 6â+
Max Average
Income per
Inch
12â
99% of relative
Yield
17â
100% of
relative Yield
11â
98% of relative
yield
Max Net
Income
13â 17â 14â
*Based on limited irrigation watering technique, UNL cost estimates, and futures prices on the day of calculation.
Modified from original presentation, contact Jessica Johnson 308-632-1247 for details.
31. Other Tools
âą Water Optimizer
http://agecon.unl.edu/wateroptimizer/
download.html
âą IRRICOST Irrigation Cost Estimate
Workbook
http://lancaster.unl.edu/ag/crops/irrig
ate.shtml
32. Office: 308-632-1247
go.unl.edu/pagecon
jjohnson@unl.edu
PanhandleAgEcon
Extension is a Division of the Institute of Agriculture and Natural Resources at the University of Nebraska-
Lincoln cooperating with the Counties and the U.S. Department of Agriculture.
University of Nebraska-Lincoln Extension educational programs abide with the non-discrimination policies
of the University of Nebraska-Lincoln and the United States Department of Agriculture.
Get current Panhandle price & basis information
TEXT â@UNLPRECâ to 651-968-8358
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March 4, 2014