Breakeven Evaluation of Irrigation System in Tennessee

Conflict over water use in the southeastern US is increasingly common as communities and industries fund themselves without adequate water supplies. However, agricultural water use in the southeastern states has received relatively little attention despite rapid growth in the use of irrigation by the region’s farmers. This study determines the breakeven prices for dryland and irrigated crops produced in the Tennessee River Basin and Hiwassee-Mississippi watersheds. The analysis focuses on five major crops produced in the region: corn, soybean, cotton, wheat and sorghum. Tillage practices considered are conventional, reduced, and no-till. Irrigation technologies include furrows, center pivot, and big-gun/traveler systems. Water sources include surface and wells. Center pivot systems are currently the dominant irrigation practice in the region. We hypothesize that gravity-based systems are more profitable under certain conditions. Well installation costs largely determine the profitability of irrigation practices in the study area. Key differences will be driven by the relative price of commodities, the production portfolio of producers, and energy, labor, and installation costs. Repair expenses for irrigation systems are insensitive to different well depths, but sensitive to the type of irrigation system implemented. These findings will be useful for producers augmenting their operations with irrigation systems.