Research and Extension Deportment of Agriculturol Economics

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1 JtI/I~STATE Kansas State University Research and Extension Deportment of Agriculturol Economics -GIANNINI foundation OF AGRICULTURAL ECONOMICS 10,) IRRIGATEIl EQUIPMENT COST SURVEY IN KANSAS by /' Holly M. Biggf, Leah J. Tsoodle, and Christine A. WilsoK MARCH 2002 ~aff Paper No

2 1 oil nuugat~equwment COST SURVEY IN KANSAS by./ Holly M. Biggf, Leah J. TsoojIle, and Christine A. Wilso6 MARCH 2002.:J:aff Pa per No The authors are Extension Assistant and Extension Associate, Department of Agricultural Economics, Kansas State University, Manhattan, Kansas ; and Assistant Professor, Department of Agricultural Economics, Purdue University, West Lafayette, Indiana. The authors would like to thank Kevin Dhuyvetter and Marty Albright for their valuable comments on this paper. Contribution No D from the Kansas Agricultural Experiment Station, Kansas State University, Manhattan, KS Department of Agricultural Economics Kansas State University, Manhattan, KS Publications and public meetings by the Department of Agricultural Economics are available and open to the public regardless of race, sex, national origin, disa~ility, religion, age, sexual orientation, or other non-merit reasons.

3 IRRIGATION EQUIPMENT COST SURVEY IN KANSAS HOLLY M. BIGGE LEAH J. TSOODLE and CHRISTINE A. WILSON February 2002

4 IRRIGATION EQUIPMENT COST SURVEY IN KANSAS HOLLY M. BIGGE LEAH J. TSOODLE and CHRISTINE A. WILSON February 2002

5 IRRlGATION EQUIPMENT COST SURVEY IN KANSAS The Land Use Value Project in the Department of Agricultural Economics at Kansas State University (KSU) conducted an Irrigation Equipment Cost Survey in 2001 by contacting businesses involved in selling and servicing irrigation systems. The survey was conducted primalily over the phone. In some cases, forms were faxed to dealers for completion. Fifty well and equipment dealers, and 34 engine dealers across Kansas were contacted. Ten dealers did not respond. Due to the fact that the majority of irrigation done in Kansas is in the western part of the state, the majority of dealers were located there. Survey questions pertained to different components of irrigation systems (e.g., well, pump, underground pipe, pivot) with regards to expected useful life and cost. The survey responses in 2001 reflect data for the 2000 calendar year, but will be reported as 2001 data, since that was the year of the survey. All data were reviewed by irrigation specialists. From the survey results, data were summarized in this paper to increase the information available on irrigation equipment costs. Similar surveys were conducted in 1997 and 1994; each of these surveys collected data for the calendar year in which they were conducted. The data from both of these surveys are reported and comparisons made between the 1997 and 2001 surveys. Sources of Irrigation Equipment Costs Well Useful life for a well was 16 years in the 2001 survey compared to 20 years in the 1997 survey (Table 1). The well has a depreciable life of 7 years for income tax purposes. Eight well depths were used in gathering costs for new wells in They were 50', 100',200',300',400',500', 600', and 700' (Table 2). Well costs appear to have decreased except for the 300' well depth, which was basically unchanged from values reported in PUlllp/Gearhead In the 2001 survey, useful life for a pump/gearhead was 18 years compared to 15 years in the 1997 survey (Table 1). The pump/gearhead has a depreciable life of7 years for income tax purposes. Eight well depths were again used in gathering costs for new equipment in 2001 (Table 3). According to survey results, pump and gearhead costs for shallower wells increased, but costs for deeper wells decreased. Underground Pipe Useful life for underground pipe was 29 years in the 2001 survey compared to 30 years in the 1997 survey (Table 1). For income tax purposes, underground pipe has a depreciable life of 7 years. For 1,320 feet of underground pipe, the 2001 survey showed a cost of$3,993. This was an increase of23% from the 1997 survey cost of$3,234 (Table 4). FUITOW Flood System/Gated Pipe F or a nutow flood system, useful life was 23 years in the 2001 survey compared to 20 years in the 1997 survey (Table 1). The furrow flood system has a depreciable life of 7 years for income tax purposes. For 2,640 feet of the conventional furrow flood system, the 2001 survey cost of 2

6 $8,811 reflected an increase of29% over the 1997 survey cost (Table 4). The Surge Furrow Flood System cost in the 2001 survey for 2,640 feet was $12,249, which was an increase of 19% from the 1997 survey (Table 4). Tailwater Reuse System Useful life for a tailwater reuse system was 30 years in the 2001 survey which was the same as the 1997 suryey (Table 1). For income tax purposes, tailwater reuse systems have a depreciable life of 15 years. The 2001 survey showed the tailwater reuse system to cost $15,000. This was a 50% increase from the 1997 survey cost of$10,015 (Table 4). Land Leveling According to 2001 survey results, the useful life for land leveling was an infinite period oftime (Table 1), but for income tax purposes land leveling has a depreciable life of 15 years. The 2001 survey showed land leveling to cost $87.50 an acre. This was an increase of 15% from the 1997 survey cost of $76.25 (Table 4). Sprinkler System For a center pivot system, useful life was 22 years in the 2001 survey compared to 25 years in the 1997 survey (Table 1). For income tax purposes, a center pivot is depreciable over 7 years. For a system used to irrigate a quarter section (approximately 130 acres irrigated), the 2001 survey cost was $35,567. This reflected a 6% decrease from the 1997 survey data (Table 4). Underground Pipe and Wiring Useful life for underground pipe and wiring (UG P & W) associated with a sprinkler system averaged 29 years in the 2001 survey compared to 30 years in the 1997 survey (Table 1). UG P & W has a depreciable life of7 years for income tax purposes. For 1,320 feet of pipe, the 2001 survey cost ofug P & W was $8,745. This cost reflected an increase of 58% over the 1997 survey cost (Table 4). Engines Power unit infonnation was collected for both flood and sprinkler irrigation systems because of differences in system power requirements. For deeper wells, sprinkler systems require more lift due to greater system pressure. Therefore sprinkler systems generally require an engine with more horsepower than required for a flood system for those deeper wells. Table 5 shows the specific horsepower and total dynamic head (TDH) associated with each well depth for each engine type. Natural Gas Engines In the 2001 survey, useful life for a natural gas engine was 9 years compared to 10 years in the 1997 survey (Table 1). This engine has a depreciable life of 7 years. Eight well depths were used in gathering costs for all engines in 2001 (Tables 6 and 7). The survey indicated that from 1997 to 2001 natural gas engine costs increased for both flood and sprinkler systems. 3

7 Diesel Engines Useful life for a diesel engine was 8 years in the 2001 survey compared to 10 years in the 1997 survey (Table 1). The diesel engine has a depreciable life of7 years. The survey indicated that new diesel engine costs both increased and decreased for flood and sprinkler systems according to well depth (Tables 6 and 7). As a general rule, the cost of the larger engines (i.e., deeper wells) tended to decrease, whereas, the cost of the smaller engines (i.e., shallower wells) tended to increase relative to 1997 reported values. Electric Motor For an electric motor, useful life was 15 years in the 2001 survey which was the same as the 1997 survey findings (Table 1). Electric motors have a depreciable life of7 years. The survey responses indicated that from 1997 to 2001, new electric motor costs associated with most well depths decreased for both flood and sprinkler systems (Tables 6 and 7). 4

8 Table 1. Irrigation Equipment Depreciable and Useful Life Results Depreciable 1994 Average 1997 Average 2001 Average Life Useful Life Useful Life Useful Life Equipment in Years in Years in Years In Years Well Pump/Gearhead Underground Pipe Furrow Flood System Center Pivot Tailwater Reuse System Land Leveling 15 infinite infinite infinite Nat. Gas/Propane Engine Diesel Engine Electric Motor Table 2. Summary of Well Costs Well Depth Average Average Average $ CHANGE % CHANGE 50' $4,625 $5,570 $4,520 ($1,050) -19% 100' 6,400 7,705 7,165 (540) -7% 200' 11,340 13,160 12,195 (965) -7% 300' 16,170 17,180 17, % 400' 20,850 22,770 22,180 (590) -3% 500' 25,690 27,700 27,170 (530) -2% 600' 30,530 32,680 32,195 (485) -1% 700' 35,370 37,610 37,190 (420) -1% Note: Data for the 50' well was not collected directly in the 1994 survey; this data was calculated using the ratio of the ' well data. This ratio was applied to the ' well data to get th e ' well data. 5

9 -~. j: ~. Table 3. Summary of Pump and Gearhead Costs.'\~j: Well Depth Average Average Average $ CHANGE % CHANGE 50' $8,330 $9,275 $11,940 $2,665 29% 100' 10,630 11,835 13,695 1,860 16% 200' 14,320 17,280 18,505 1,225 7% 300' 21,170 22,535 23, % 400' 27,410 28,730 28,115 (615) -2% 500' 34,900 34,160 32,925 (1,235) -4% 600' 40,680 40,170 38,085 (2,085) -5% 700' 45,860 45,950 42,960 (2,990) -7% Note: Data for the 50' well was not collected directly in the 1994 survey; this data was calculated using the ratio of the ' well data. This ratio was applied to the ' well data to get the ' well data. f Table 4. Summary of Irrigation Equipment Costs "" ~, $ % Average Average Average CHANGE CHANGE Underground Pipe (1,320 feet) $3,102 $3,234 $3, % Conventional Furrow Flood System (2,640 feet) 6,360 6,845 8,811 1,966 29% Surge Furrow Flood System (2,640 feet) 9,680 10,315 12,249 1,934 19% Tailwater Reuse System 10,010 10,015 15,000 4,985 50% Land Leveling ($/acre) % Sprinkler System 36,450 37,870 35,567 (2,303) -6% UG Pipe & Wiring (1,320 feet) 5,280 5,544 8,745 3,201 58% 6

10 Table 5. Horsepower Requirements by Well Depth and Energy Type Flood System Center Pivot System Total Dynamic Required Total Dynamic Required Well DaRth,Head (TDH) Horsepower Head (TDH) Horsepower Natural Gas 50' ' ' ' ' ' ' ' ' Diesel 50' ' ' ' ' ' ' ' Electric 50' ' ' ' ' ' ' ' Note: Based on a Flow Rate of 800 Gallons per Minute. Pump Efficiency = 75% Engine Derating = 65% Electric Motor Efficiency = 90% Sprinkler has 50 more TDH due to greater system pressure. Flood Irrigated Acres = 155 Sprinkler Irrigated Acres = 130 7

11 Table 6. Summary of Flood Irrigation Engine Costs " Natural Gas Well Depth Average Average ' Average $ Change % Change 50' $2,825 $3,025 $3,300 $275 9% 100' 2,960 3,170 4, % 200' 3,210 3,340 4, % 300' 3,940 4,375 5, % 400' 7,840 8,215 10,790 2,575 31% 500' 14,450 16,665 24,665 8,000 48% 600' 19,320 21,300 24,665 3,365 16% 700' 23,830 26,700 34,400 7,700 29% "'.,..,, Diesel 50' $4,600 $4,560 $4, % 100' 5,660 5,615 5,415 (200) -4% 200' 5,770 5,640 6, % 300' 7,960 8,145 8, % 400' 10,000 11,150 9,570 (1,580) -14% 500' 11,820 13,520 12,650 (870) -6% 600' 14,250 18,885 16,505 (2,380) -13% 700' 17,520 19,610 21,235 1,625 8% Electric 50' $1,435 $1,420 $1,010 (410) -29% 100' 2,040 2,020 1,515 (505) -25% 200' 2,920 2,580 2,165 (415) -16% 300' 4,240 3,935 4, % 400' 5,720 5,995 5,655 (340) -6% 500' 7,810 7,040 5,390 (1,650) -23% 600' 10,570 9,815 6,585 (3,230) -33% 700' 10,570 9,815 9,790 (25) 0% Note: Data for the 50' well was not collected directly in the 1994 survey; this data was calculated using the ratio of the ' well data. This ratio was applied to the ' well data to get the ' well data. 8

12 Table 7. Summary of Sprinkler Irrigation Engine Costs Well Depth Average AveraQe Average $ Change % Change Natural Gas 50' $2,825 $3,025 $3, % 100' 2,960 3,170 4, % 200' 3,670 3,835 4, % 300' 6,230 5,860 6, % 400' 12,410 11,625 13,735 2,110 18% 500' 18,180 20,585 24,665 4,080 20% 600' 21,420 26,700 34,400 7,700 29% 700' 23,830 26,700 34,400 7,700 29% 1 Diesel Electric 50' $4,600 $4,560 $4, % 100' 5,660 5,615 5,415 (200) -4% 200' 6,580 6,745 7, % 300' 8,610 9,720 8,825 (895) -9% 400' 11,610 13,345 11,445 (1,900) -14% 500' 14,250 17,635 14,265 (3,370) -19% 600' 16,580 18,885 18,330 (555) -3% 700' 18,350 21,010 21, % 50' $1,435 $1,420 $1,010 (410) -29% 100' 2,040 2,020 1,515 (505) -25% 200' 3,460 3,230 2,890 (340) -11% 300' 5,440 5,765 3,590 (2,175) -38% 400' 6,490 5,995 6, % 500' 7,810 7,040 9,435 2,395 34% 600' 10,570 9,815 7,185 (2,630) -27% 700' 11,180 11,800 10,920 (880) -7% No te: Data for the 50' well was not collected directly in the 1994 survey; this data was calculated llsjng the ratio of the ' well data. This ratio was applied to the ' well data to get the ' well data. 9

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