This document provides budget comparisons for various dryland crops in Nebraska and calculates the value of irrigation. It finds that the value of irrigation varies by commodity and year, depending on yield increases from irrigation and price changes during drought. Irrigation provides the highest value for crops like corn, sugarbeets, and beans. The value of irrigation for the Nebraska Panhandle was estimated at $104.9 million without drought and $175.3 million with drought in 2012.

1. DRYLAND BUDGET COMPARISON
& VALUE OF IRRIGATION
Jessica Johnson – Asst. Extension Educator, Agricultural Economics
Updated: 2/21/2013

2. Dryland Budget Comparison

3. Budget Calculation
Developed from:
2013 Nebraska Crop Budgets
Robert Klein, Western Nebraska Crop Specialist
Roger Wilson, Farm Management/Enterprise Budget Analyst
Including: Land, Depreciation, Interest, Taxes, Overhead

10. Crop Budgets
 Reviewed by:
 Mark Watson, Dryland Producer
 Gary Hergert, UNL Nutrient Management & Soil
Quality Specialist
 Robert Wilson, UNL Weeds Specialist
 Gene Kizzire, UNL Research Technician (Farm Manager)
 Jim Schild, UNL Extension Educator

11. Factors Influencing Budgets

12. Prices
↓ Fertilizer
↑or = Seed
↑or = Herbicide
↑or = Fungicide
↑ Real Estate
↑ Crop Insurance Premiums
“Electrical Connect Fees” were changed to “Electricity Fixed”

13. Land Values
0
500
1000
1500
2000
2500
2012$/Acre
Dryland Cropland (No Irrigation Potential) Northwest Dryland Cropland (Irrigation Potential) Northwest
Center Pivot Irrigated Cropland Northwest

14. Land Values
Nebraska Farm Real Estate Market Highlights, 2011-2012

15. Type of Land – Average Value
Northwest North
2011/2012
2011/2012
% Change
2011/2012
2011/2012
% Change
Dryland Cropland - No Irrigation
Potential
545/660 21% 800/1050 31%
Dryland Cropland - Irrigation
Potential
550/680 24% 1200/1625 35%
Grazing Land - Tillable 340/410 21% 740/880 19%
Grazing Land - NonTillable 280/330 18% 390/450 15%
Hayland 550/620 13% 785/950 21%
Gravity Irrigated Cropland 1980/2440 23% 2050/2625 28%
Gravity Irrigated Cropland 1975/2535 28% 2955/3970 34%
All Land Average 635/520 22% 706/875 24%
2011-2012 Values and Recent Trends by Land Class

16. Factors Driving Land Value
• Availability of Money – profits from farming
• Low interest rates
• Lack of land for sale
• Returns on land are still favorable

17. Insurance Rates
Budget County
Coverage Option, Producer
Premium Amount $/Acre
12-Corn Cheyenne 70% Revenue Protection $16.70
13-Wheat Kimball 70% Group Risk Income
Protection- Harvest Revenue
Option
$8.00
14-Wheat Kimball
15-Peas N/A N/A
16-Millet Cheyenne 70% APH 90 $13.89
17-Sunflowers Kimball 70% Revenue Protection $27.02

18. Budget Estimates

19. Dryland Corn, Wheat
Corn, No-till
55bu. Yield
Budget #12
Wheat, No-
Till Fallow
55bu. Yield
Budget # 13
Wheat Clean
Till Fallow
45bu. Yield
Budget # 14
Field Operations $59.85 $66.31 $79.61
Materials &
Services
$149.72 $121.15 $90.72
Interest on
Capital &
Overhead
$57.55 $56.97 $56.44
Cost Per Acre $267.12 $244.43 $226.77
Cost per bu. $4.86 $4.44 $5.04

20. Dryland Peas, Millet, Sunflower
Peas
35bu. Yield
Budget #15
Millet
22cwt. Yield
Budget # 16
Sunflower
11cwt. Yield
Budget # 17
Field Operations $44.13 $64.71 $59.09
Materials &
Services
$78.92 $68.30 $134.83
Interest on
Capital &
Overhead
$55.59 $55.60 $57.12
Cost Per Acre $178.64 $188.64 $251.04
Cost per unit $5.10 $8.57 $22.82

21. Dryland Comparison
3 Year
Avg. Price
Total Cash
Receipts
Cost of
Production
Revenue
per acre
Millet $9.52cwt. $209.44 $188.64 $20.80
Corn $5.25bu. $288.75 $267.12 $21.63
Wheat Clean Till
Fallow $5.58bu. $251.10 $226.77 $24.33
Wheat No-Till
Fallow $5.58bu. $306.90 $244.43 $62.47
Sunflower $29.07cwt. $319.77 $251.04 $68.73
Peas – Whole $14.53cwt. $305.13 $178.64 $126.49
(1) Production Costs - J. Johnson 2012 No-Till Budget Packet (2) USDA NASS Quickstats Nebraska Price Received 2010-2012 Measured in $/cwt. (3) USDA NASS
Quickstats for Idaho, Montana, North Dakota, Washington Dry Edible Peas - Price Received 2010-2012 Measured in $/cwt.
Assume 60lbs./bu. of Peas, 1 cwt. of Peas = 1.67 bu.
(3) $14.53/cwt. ÷ 1.67=$8.70/bu.
Assume 50lbs/bu. of Millet, 1 cwt. of millet = 2 bu.
(4) $9.52/bu. X 2 = $19.04/cwt.

22. Value of Irrigation

23. Value vs. Cost of Irrigation
… the cost of water as an input for
production is the cost required to pump
and distribute water
…value of the water can be attributed to
the difference in irrigation revenue vs.
dryland revenue.
Source: A.Giri & B.Johnson “The Value of Irrigation in a Drought Regime: The Case of 2012” Cornhusker Economics 9/19/2012

24. Value Irrigation
Irrigation value is dependent on the
commodity for which the irrigation is
used. The more valuable the
commodity or the greater the
difference between irrigated and non-
irrigated revenue, the more valuable
the irrigation.

25. Value Irrigation
Just as the value of a field crop
changes as supply and demand
change, so does the value of
irrigation water.

26. Calculation
 Yield
 Price
 Production Cost
 Irrigation Need
Without Drought
Irrigated Non-
Irrigated
With Drought
Non-
Irrigated Irrigated

27. -
Irrigated Revenue
Non Irrigated Revenue
$ Attributed to Irrigation
X
Irrigated Yield
Price
-
Total Cash Receipts
Irrigated Production Costs
Irrigated Revenue
X
Non- Irrigated Yield
Price
-
Total Cash Receipts
Non- Irrigated Production
Costs
Non-Irrigated Revenue
1
2
3
4
÷
$ Attributed to Irrigation
Irrigation Needed
$/in of Irrigation
X
$ Attributed to Irrigation
Acres of Production
$/in of Irrigation

28. Quantifying Drought
Drought originates from a deficiency of precipitation over an
extended period of time--usually a season or more--resulting
in a water shortage for some activity, group, or environmental
sector.
– National Drought Mitigation Center
Drought Monitor
annual % of drought >average annual % of drought
2000-2011for the U.S. and Nebraska
Drought Years:
2002, 2003, 2004, 2006

29. Quantifying Drought
Drought originates from a deficiency of precipitation over an
extended period of time--usually a season or more--resulting
in a water shortage for some activity, group, or environmental
sector.
– National Drought Mitigation Center
Drought Monitor
annual % of drought >average annual % of drought
2000-2011for the U.S. and Nebraska
Drought Years:
2002, 2003, 2004, 2006

30. 2012 Value of
Corn Irrigation
Without Drought With Drought
Irrigated Non-Irrigated Irrigated Non-Irrigated
Yield bu. 1 160 57 154 32
Price bu. 2 $5.25 $5.25 $7.05 $7.05
Total Cash Receipts $/acre $840.00 $299.25 $1,085.70 $225.60
Production Costs $/acre 3 $625.60 $296.97 $602.14 $166.72
Revenue $/acre $214.40 $2.28 $483.56 $58.88
Attributed to
Irrigation
$/acre
$212.12 $424.68
Inches of Water
Required, ET
4 27.25 27.25
Average Inches of
Rain
11.63 7.81
Irrigation Needed 15.62 19.44
$/inch of irrigation $13.58 $21.85
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) 3 year average Monthly Panhandle Crop Report 12/12, USDA NASS QUICKSTAT Price received
Measured in $/bu. (3) Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No Till Dryland (4) D. Yonts, "Crop Water Use in Western
Nebraska" NEBGUIDE G1465
$/inch of Irrigation

31. 2012 Value of
Corn Irrigation
Without Drought With Drought
Irrigated Non-Irrigated Irrigated Non-Irrigated
Yield bu. 1 160 57 154 32
Price bu. 2 $5.25 $5.25 $7.05 $7.05
Total Cash Receipts $/acre $840.00 $299.25 $1,085.70 $225.60
Production Costs $/acre 3 $625.60 $296.97 $602.14 $166.72
Revenue $/acre $214.40 $2.28 $483.56 $58.88
Attributed to
Irrigation
$/acre
$212.12 $424.68
# of acres in
Panhandle District
69,330 69,330
Value of Irrigation
in the Nebraska
Panhandle
$14,706,279.60 $29,443,064.40
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) 3 year average Monthly Panhandle Crop Report 12/12, USDA NASS QUICKSTAT Price received
Measured in $/bu. (3) Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No Till Dryland (4) D. Yonts, "Crop Water Use in Western
Nebraska" NEBGUIDE G1465
$/inch of Irrigation

32. Assumptions
 Assume that without irrigation, production of Dry
Beans and Sugarbeets would not exist. Thus the
Irrigation Revenue = $/acre Attributed to Irrigation.
 Total number of acres would not change

33. $/inch of Irrigation
Commodity
Without
Drought
With Drought
Wheat $4.21 $10.17
Corn $13.58 $26.24
Sugarbeets $51.45 $38.09
Great Northern
Beans
$42.03 $38.86
Pinto Beans $42.97 $57.93

34. 3A: $/inch of Irrigation
Commodity
Without
Drought
With Drought
Wheat $4.21 $10.17
Corn $13.58 $26.24
Sugarbeets $51.45 $38.09
Great Northern
Beans
$42.03 $38.86
Pinto Beans $42.97 $57.93

35. Commodity Without Drought With Drought
Great Northern Beans $10,126,020.02 $19,504,398.25
Pinto Beans $9,929,522.96 $27,880,265.00
Corn $14,706,279.60 $29,443,064.40
Wheat $10,337,918.91 $44,809,410.00
Sugarbeets $59,890,850.54 $53,712,042.76
Total $104,990,592.03 $175,349,180.41

36. Thank You!
Jessica Jo Johnson
Agricultural Economics – Asst. Extension Educator
Phone: 308-632-1247
Email: jjohnson@unl.edu
Twitter: PanhandleAgEcon
Website: http://panhandle.unl.edu/panhandle_ag_econ
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.

37. 2012 Value of
Wheat Irrigation
Without Drought With Drought
Irrigated Non-Irrigated Irrigated Non-Irrigated
Yield bu. 1 62 35 60 30
Price bu. 2 $5.58 $5.58 $8.05 $8.05
Total Cash Receipts $/acre $345.96 $195.30 $483.00 $241.50
Production Costs $/acre 3 $292.64 $168.35 $283.20 $144.30
Revenue $/acre $53.32 $26.95 $199.80 $97.20
Attributed to
Irrigation
$/acre
$26.37 $102.60
Inches of Water
Required, ET
4 17.9 17.9
Average Inches of
Rain
11.63 7.81
Irrigation Needed 6.27 10.09
$/inch of irrigation $4.21 $10.17
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) Prices 3 year average - Monthly Panhandle Crop Report 12/12, 2011/12 USDA NASS QUICKSTAT
Price recieved Measured in $/bu. (3) Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No Till Dryland (4) D. Yonts, "Crop Water Use in
Western Nebraska" NEBGUIDE G1465
$/inch of Irrigation

38. 2012 Value of
Wheat Irrigation
Without Drought With Drought
Irrigated Non-Irrigated Irrigated Non-Irrigated
Yield bu. 1 62 35 60 30
Price bu. 2 $5.58 $5.58 $8.05 $8.05
Total Cash Receipts $/acre $345.96 $195.30 $483.00 $241.50
Production Costs $/acre 3 $292.64 $168.35 $283.20 $144.30
Revenue $/acre $53.32 $26.95 $199.80 $97.20
Attributed to
Irrigation
$/acre
$26.37 $102.60
# of acres in
Panhandle District 392,033 392,033
Value of Irrigation
in the Nebraska
Panhandle
$10,337,918.91 $40,222,620.00
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) Prices 3 year average - Monthly Panhandle Crop Report 12/12, 2011/12 USDA NASS QUICKSTAT
Price recieved Measured in $/bu. (3) Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No Till Dryland (4) D. Yonts, "Crop Water Use in
Western Nebraska" NEBGUIDE G1465
Total Value of Irrigation

39. 2012 Value of Dry
Bean Irrigation
Great Northern Beans Pinto Beans
Without
Drought
With Drought
Without
Drought
With Drought
Yield bu. 1 21.74 20.68 22.29 22.35
Price bu. 2 $34.13 $41.54 $34.11 $47.09
Total Cash Receipts $/acre $741.99 $859.05 $760.31 $1,052.46
Production Costs $/acre 3 $584.81 $556.29 $599.60 $601.22
Revenue $/acre $157.18 $302.76 $160.71 $451.25
Inches of Water
Required, ET
4 15.6 15.6 15.6 15.6
Average Inches of
Rain
11.86 7.81 11.86 7.81
Irrigation Needed 3.74 7.79 3.74 7.79
$/inch of irrigation $42.03 $38.86 $42.97 $57.93
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) 3 year average price - Monthly Panhandle Crop Report 12/12 , 2011/12 Annual Average Price (3)
Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No Till Dryland (4) D. Yonts, "Crop Water Use in Western Nebraska" NEBGUIDE G1465
$/inch of Irrigation

40. 2012 Value of Dry
Bean Irrigation
Great Northern Beans Pinto Beans
Without
Drought
With Drought
Without
Drought
With Drought
Yield bu. 1 21.74 20.68 22.29 22.35
Price bu. 2 $34.13 $41.54 $34.11 $47.09
Total Cash Receipts $/acre $741.99 $859.05 $760.31 $1,052.46
Production Costs $/acre 3 $584.81 $556.29 $599.60 $601.22
Revenue $/acre $157.18 $302.76 $160.71 $451.25
# of acres in
Panhandle District 64,423 64,423 61,785 61,785
Value of Irrigation
in the Nebraska
Panhandle
$10,126,020.02 $19,504,398.25 $9,929,522.96 $27,880,265.00
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) 3 year average price - Monthly Panhandle Crop Report 12/12 , 2011/12 Annual Average Price (3)
Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No Till Dryland (4) D. Yonts, "Crop Water Use in Western Nebraska" NEBGUIDE G1465
Total Value of Irrigation

41. 2012 Value of
Sugarbeet
Irrigation
Without
Drought
With Drought
Yield bu. 1 23.36 20.95
Price bu. $66.70 $66.70
Total Cash Receipts $/acre $1,558.03 $1,397.30
Production Costs $/acre 2 $628.38 $563.56
Revenue $/acre $929.65 $833.74
Inches of Water
Required, ET
3 29.7 29.7
Average Inches of
Rain
11.63 7.81
Irrigation Needed 18.07 21.89
$/inch of irrigation $51.45 $38.09
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No
Till Dryland (3) D. Yonts, "Crop Water Use in Western Nebraska" NEBGUIDE G1465
$/inch of Irrigation

42. 2012 Value of
Sugarbeet
Irrigation
Without
Drought
With Drought
Yield bu. 1 23.36 20.95
Price bu. $66.70 $66.70
Total Cash Receipts $/acre $1,558.03 $1,397.30
Production Costs $/acre 2 $628.38 $563.56
Revenue $/acre $929.65 $833.74
# of acres in
Panhandle District 64,423 64,423
Value of Irrigation
in the Nebraska
Panhandle
$59,890,850.54 $53,712,042.76
Sources: B. Johnson & A. Giri Cornhusker Economics ‘Value of Irrigation in a Drought Regime: the case of 2012”
Data: (1) Irrigated and Non-Irrigated Yields & Acreage, USDA NASS QUICK STATS (2) Production Costs - J. Johnson 2012 No-Till Budget Packet - 1. Corn, Strip Tillage Continuous 12. Corn, No
Till Dryland (3) D. Yonts, "Crop Water Use in Western Nebraska" NEBGUIDE G1465
Total Value of Irrigation