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

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

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

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

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

Updated Results Updated Results Average Probability of a Cash Shortfall 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%

Updated Results Updated Results Ending Cash Reserves 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

Projected Variability in Net Farm Income

TTU Lubbock Mesonet Site – 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 ac/in with 4-5 gpm per acre capacity Well irrigated pivots and drip had significantly higher net returns Observations From 2011

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

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

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

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

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

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

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

TTU Lubbock Mesonet Site – 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 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

TTU Lubbock/Reese Mesonet Site – 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 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

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

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

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

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

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

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

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

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

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

GPM*GPM/AcreInches/Acre/DayInches/Acre/ Season (24/7)* What Does It Take To Apply Inches of Irrigation? * Assumes 125 acre pivot and irrigating season from April 15 to September 15

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

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

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

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

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

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

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

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

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

Insurance Coverage Ratio Irrigation Capacity Usage

Contact Information: Texas A&M AgriLife Research and Extension Center and Extension Center 1102 East FM 1294 Lubbock, TX (806) 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