1. Optimal Usage of Water TAIA Lubbock Regional Meeting Jay Yates Extension Program Specialist III Risk Management Lubbock, TX

2. Declining capacity Increased efficiency Increasing energy costs Varieties with higher potential yields Texas Southern High Plains Irrigation Situation

3. Looked at the following cotton alternatives: – Fully irrigate 120 acre pivots with 300 gpm each – Irrigate 1/2 pivots, treat the rest as dryland – Irrigate 2/3 pivots, treat the rest as dryland – Drill new wells to irrigate entire pivots on owned land with 600 GPM Drilling 4 new wells for the 4 pivots on owned land at a cost of $40,000 each Water ½ pivots on rented ground * None of the alternatives included DCP Program Direct Payments FARM Assistance Analysis

4. 2012-20212013-2022 Baseline – Water whole pivots with 300 gpm per pivot 299.19 %213.77% Alternative 1 – Water half pivots, plant the rest to dryland cotton 345.47%255.93% Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 327.73%239.18% Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 507.44%440.38% Updated Results Updated Results % Change in Real Net Worth

5. 2012-20212013-2022 Baseline – Water whole pivots with 300 gpm per pivot 187,730132,680 Alternative 1 – Water half pivots, plant the rest to dryland cotton 216,480157,930 Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 205,580147,890 Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 301,380256,810 Updated Results Updated Results Average Net Farm Profit

6. Updated Results Updated Results Average Probability of a Cash Shortfall 2012-20212013-2022 Baseline – Water whole pivots with 300 gpm per pivot 10.6%23.1% Alternative 1 – Water half pivots, plant the rest to dryland cotton 8.2%18.3% Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 9.5%20.5% Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 8.4%10.9%

7. Updated Results Updated Results Ending Cash Reserves 2012-20212013-2022 Baseline – Water whole pivots with 300 gpm per pivot 1,081,630697,960 Alternative 1 – Water half pivots, plant the rest to dryland cotton 1,277,590875,970 Alternative 2 – Water two-thirds pivots, plant the rest to dryland cotton 1,202,500805,260 Alternative 3 – Drill new wells to irrigate entire pivots with 600 gpm 1,859,9201,551,340

8. Projected Variability in Net Farm Income

10. TTU Lubbock Mesonet Site – 45.75 Cumulative Reference ET from 4/15 – 9/15 – 2.36 Rainfall during the same period – 98 days of 95 degrees or more – 58 days of 100 degrees or more Official Lubbock record of 48 breaks old record from 1934 of 29 3 bale cotton in 2011 took from 21-35 ac/in with 4-5 gpm per acre capacity Well irrigated pivots and drip had significantly higher net returns Observations From 2011

11. Petersburg, Texas Dryland planted May 4 – Picture taken August 25, 2011

12. Shallowater, Texas Pre-watered Only Planted May 4 – Picture taken August 25, 2011

13. North of Petersburg, Texas Yield.9 BPA Sub-Surface Drip, 1.5 GPM per acre – Picture taken August 25, 2011

14. Petersburg, Texas Yield 1.5 BPA Sub-Surface Drip, 2.5 GPM per acre – Picture taken August 25, 2011

15. Lubbock, Texas Yield 3.3 BPA Sub-Surface Drip, 4.1 GPM per acre – Picture taken August 25, 2011

16. Sandhill, Texas Yield 3.5 BPA Sub-Surface Drip, 4.5 GPM per acre – Picture taken August 25, 2011

17. South of Shallowater, Texas Yield 3.95 BPA Sub-Surface Drip, 6 GPM per acre – Picture taken August 25, 2011

18. TTU Lubbock Mesonet Site – 41.13 Cumulative Reference ET from 4/15 – 9/15 – 6.24 Rainfall during the same period – 69 days of 95 degrees or more – 25 days of 100 degrees or more Official Lubbock record prior to 2011 was 29 from 1934 Official Lubbock record of 24 tied for 5 th most with 1924 3 bale cotton in 2012 took only slightly less irrigation than 2011 Well irrigated pivots and drip had significantly higher net returns Not Much Better in 2012

19. TTU Lubbock/Reese Mesonet Site – 42.09 Cumulative Reference ET from 4/15 – 9/3 Would expect another 2.5 over next 2 weeks based on forecasts, making 2013 as high of ET as 2011 – 7.82 Rainfall during the same period Normal rainfall is 11.24 for this period 33 of top 36 driest periods on record for Lubbock come between 9/15 and 4/15. (Thats why winter wheat is not as successful here) – 48 days of 95 degrees or more – 13 days of 100 degrees or more Still warmer than average (~10 days/year), but closer to average temperature compared to the past 2 years. Not as Hot and Dry in 2013 But still above average

20. Interviewed area farmers Collected data from AgriLife Research & Extension Projects Comparative Profit Analysis 2011

21. 31 Cotton Farm Sites – 17 Sub-Surface Drip (all on 80 centers) – 13 Center Pivots 2 MESA 1 LESA 10 LEPA – 1 Furrow – GPM/Acre ranging from 1.5 to 6.0 The Study Group

22. 2011 Cotton Yields vs. Water Applied Cotton Yield lbs/acre Inches of Water Applied per Acre

23. 2011 Returns Above Direct Costs at $0.90/lb vs. Water Applied at $9/in Returns Above Direct Costs Inches of Water Applied per Acre

24. 2011 Cotton Net Profit at $0.90/lb vs. Water Applied at $9/in Returns Above Direct Costs Inches of Water Applied per Acre

25. 2011 Returns Above Direct Costs at $0.52/lb vs. Water Applied at $9/in Returns Above Direct Costs Inches of Water Applied per Acre

26. 2011 Cotton Net Profit at $0.52/lb vs. Water Applied at $9/in Returns Above Direct Costs Inches of Water Applied per Acre

27. 2 011 Returns Above Direct Costs at $0.90/lb vs. Water Applied at $15/in Returns Above Direct Costs Inches of Water Applied per Acre

28. 2011 Cotton Net Profit at $0.90/lb vs. Water Applied at $15/in Returns Above Direct Costs Inches of Water Applied per Acre

29. GPM*GPM/AcreInches/Acre/DayInches/Acre/ Season (24/7)* 187.51.50.079512.25 25020.106116.33 312.52.50.132620.42 37530.159124.50 437.53.50.185628.58 50040.212132.67 562.54.50.238636.75 62550.265240.83 687.55.50.291744.92 75060.318249.00 What Does It Take To Apply 20-25 Inches of Irrigation? * Assumes 125 acre pivot and irrigating season from April 15 to September 15

30. In 2011 with virtually no sub-soil moisture or rainfall during the growing season, it took at least 4 gpm/acre to make a profitable cotton crop. Long term analysis shows that systems with the ability to deliver less than 3 gpm/acre would be more profitable cutting irrigated acreage back to that level. Irrigation profitability is more sensitive to lower cotton prices than higher energy prices. Expected price level for 2013 would indicate that profitable irrigated yields are still attainable. Conclusions

31. 1.Personal Preference 2.Risk Avoidance 3.Potential Profitability 4.Long Term Sustainability Factors Affecting Planting Decisions

32. Irrigated Acres – 125 Total Cropland Acres – 160 Irrigation Capacity – 350 GPM Number Days to Irrigate – 120 Acre-inches per Irrigated Acre - 18 Comparative Farm Scenarios 2013

33. Scenario 1 – Cotton – Irrigated (950 lb APH, 65%) – 125 ac. – Cotton – Dryland (250 lb APH, 65%) – 35 ac. – Percent Irrigation Capacity Used – 67% – Return Over Direct Expenses - $61,852 – Insurance Coverage Ratio – 109% Comparative Farm Scenarios 2013

34. Scenario 2 – Corn – Irrigated (185 bu APH, 65%) – 62.5 ac. – Sorghum – Irrigated (75 bu APH, 65%) – 62.5 ac. – Sorghum – Dryland (30 bu APH, 65%) – 35 ac. – Percent Irrigation Capacity Used – 93% – Return Over Direct Expenses - $26,015 – Insurance Coverage Ratio – 89% Comparative Farm Scenarios 2013

35. Scenario 3 – Sesame – Irrigated (675 lb APH, 65%) – 125 ac. – Sesame – Dryland (450 lb APH, 65%) – 35 ac. – Percent Irrigation Capacity Used – 62% – Return Over Direct Expenses - $79,040 – Insurance Coverage Ratio – 80% Comparative Farm Scenarios 2013

36. Scenario 4 – Corn – Irrigated (185 bu APH, 65%) – 80 ac. – Sunflowers – Dryland (556 lb APH, 65%) – 80 ac. – Percent Irrigation Capacity Used – 86% – Return Over Direct Expenses - $32,036 – Insurance Coverage Ratio – 86% Comparative Farm Scenarios 2013

37. Scenario 5 – Corn – Irrigated (185 bu APH, 65%) – 80 ac. – Cotton – Dryland (250 lb APH, 65%) – 80 ac. – Percent Irrigation Capacity Used – 86% – Return Over Direct Expenses - $26,910 – Insurance Coverage Ratio – 85% Comparative Farm Scenarios 2013

38. Scenario 6 – Corn – Irrigated (185 bu APH, 65%) – 80 ac. – Sesame – Dryland (450 lb APH, 65%) – 80 ac. – Percent Irrigation Capacity Used – 86% – Return Over Direct Expenses - $34,900 – Insurance Coverage Ratio – 91% Comparative Farm Scenarios 2013

39. Insurance Coverage Ratio Irrigation Capacity Usage

40. Contact Information: Texas A&M AgriLife Research and Extension Center and Extension Center 1102 East FM 1294 Lubbock, TX 79403 (806) 746-6101 jayates@ag.tamu.edu http://lubbock.tamu.edu http://agrilife.org/southplainsprofit http://agrilife.org/southplainscotton https://www.facebook.com/FARMAssistance Jay Yates Extension Program Specialist III Risk Management FARM Assistance Analyst South Plains Cotton Update every Thursday at 1:00 – 2:30 p.m. during West Texas Ag Life on