IDEAS home Printed from https://ideas.repec.org/p/ags/aaea26/404710.html

The Profitability of Water Management Technologies for Corn Production in North Carolina

Author

Listed:
  • Trovillion, Alexander P.
  • Piggott, Nicholas E.
  • Poole, Chad A.

Abstract

Water management technologies−including center pivot irrigation, subsurface drip irrigation, tile drainage, and open ditch drainage−require substantial upfront capital investments, yet their economic viability in the humid southeastern United States remains poorly understood. Previous research has largely evaluated irrigation and drainage technologies independently; this study jointly assesses both strategies for corn production in North Carolina’s northern coastal region, the Blacklands. This study develops and applies a farm-scale profitability framework in which corn yield responses to eighteen water management strategies are simulated using DRAINMOD (Skaggs, 2013), calibrated against field trial data, and integrated with empirical cost estimates through a novel grid search-based numerical optimization approach spanning 20 years of historical data (2005-2024). We find that drainage is the primary driver of profitability in the poorly drained Blacklands. Open ditch drainage with no land leveling or irrigation yields the shortest payback period (0.91 years), the highest net present value ($235,096.81), and the highest internal rate of return (32.52%), while subsurface drip irrigation combined with tile drainage and no land leveling generates the highest mean annual per-acre profit ($337.85). An important economic finding is that the profit-maximizing level of water management is generally less intensive than the agronomic optimum, highlighting the need to account for investment and operating costs in technology adoption decisions. These results are consistent with stakeholder sentiment and indicate that excess water is the primary limiting hydrological factor in the Blacklands. The framework in this study is designed to be transferable across North Carolina’s diverse agronomic regions as additional calibration data become available, and it has the potential to generate spatially differentiated profitability estimates that can help producers, policymakers, and stakeholders make more informed investment decisions.

Suggested Citation

  • Trovillion, Alexander P. & Piggott, Nicholas E. & Poole, Chad A., 2026. "The Profitability of Water Management Technologies for Corn Production in North Carolina," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404710, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404710
    DOI: 10.22004/ag.econ.404710
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/404710/files/177650_193782_115232_AAEA_Paper_06_01_26_FINAL.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.404710?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Boggess, W. G & Amerling, C. B., 1983. "A Bioeconomic Simulation Analysis of Irrigation Investments," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 15(2), pages 85-91, December.
    2. DeJonge, Kendall C. & Kaleita, Amy L. & Thorp, Kelly R., 2007. "Simulating the effects of spatially variable irrigation on corn yields, costs, and revenue in Iowa," Agricultural Water Management, Elsevier, vol. 92(1-2), pages 99-109, August.
    3. Boggess, William G. & Amerling, C.B., 1983. "A Bioeconomic Simulation Analysis Of Irrigation Investments," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 15(2), pages 1-7, December.
    4. Robertson, J. Douglas & Musser, Wesley N. & Tew, Bernard V., 1982. "Lease Versus Purchase Of A Center-Pivot Irrigation System: A Georgia Example," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 14(2), pages 1-6, December.
    5. Dalton, Timothy J. & Porter, Gregory A. & Winslow, Noah G., 2004. "Risk Management Strategies in Humid Production Regions: A Comparison of Supplemental Irrigation and Crop Insurance," Agricultural and Resource Economics Review, Cambridge University Press, vol. 33(2), pages 220-232, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Smith, S. Aaron, "undated". "Probability of Irrigated Corn Being Profitable in a Humid Region," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162470, Southern Agricultural Economics Association.
    2. Kiker, Clyde F. & Bauman, Eric, 1984. "Producer Gas Fueled Irrigation: Evaluating The Potential Of A Technology," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 16(2), pages 1-8, December.
    3. Bosch, Darrell & Taylor, Daniel & Ross, Blake, "undated". "An Evaluation of Potential Riparian Irrigation Expansion with Uncertain Water Supplies," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 269927, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D., 2014. "The impact of field size and energy cost on the profitability of supplemental corn irrigation," Agricultural Systems, Elsevier, vol. 127(C), pages 61-69.
    5. Musser, Wesley N. & Tew, Bernard V., 1984. "Use Of Biophysical Simulation In Production Economics," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 16(01), pages 1-10, July.
    6. Kiker, Clyde F. & Lieblich, Mark S., 1986. "Financial Analysis Of On-Farm Grain Drying," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(2), pages 1-11, December.
    7. Boggess, William G., 1987. "On Risk Modeling And Its Implications For Economic Analysis: A Discussion," Regional Research Projects > 1987: S-180 Annual Meeting, March 22-25, 1987, San Antonio, Texas 272334, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    8. Musser, Wesley, 1986. "Capital Budgeting Analysis Of Uncertainty In Irrigation Investments," Regional Research Projects > 1986: S-180 Annual Meeting, March 23-26, 1986, Tampa, Florida 272003, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    9. McCarl, Bruce A. & Musser, Wesley N., 1985. "Modeling Long Run Risk In Production And Investment Decisions," Regional Research Projects > 1985: S-180 Annual Meeting, March 24-27, 1985, Charleston, South Carolina 271799, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    10. Boggess, William G. & Anaman, Kwabena A. & Hanson, Gregory D., 1985. "Importance, Causes, And Management Responses To Farm Risks: Evidence From Florida And Alabama," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-12, December.
    11. Dillon, Carl R. & Mjelde, James W. & McCarl, Bruce A., "undated". "Comments On Development And Use Of Biophysical Simulation Models," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270723, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Dillon, Carl R. & Mjelde, James W. & McCarl, Bruce A., 1989. "Biophysical Simulation In Support Of Crop Production Decisions: A Case Study In The Blacklands Region Of Texas," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(01), pages 1-14, July.
    13. Boggess, William G., 1984. "Risk Aspects of Irrigation Decisions," Regional Research Projects >1984: S-180 Annual Meeting, March 25-28, 1984, New Orleans, Louisiana 307237, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    14. Watkins, K. Bradley & Mapp, Harry, 1992. "A Risk and Water Quality Analysis of Alternative Irrigation Technologies Under Different Irrigation Management Strategies," WAEA/ WFEA Conference Archive (1929-1995) 321394, Western Agricultural Economics Association.
    15. Bernardo, Daniel J. & Whittlesey, Norman K. & Saxton, Keith E. & Bassett, Day L., 1987. "An Irrigation Model For Management Of Limited Water Supplies," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(2), pages 1-10, December.
    16. Kanakasabai, Murali & Dillon, Carl R. & Skees, Jerry R., 2001. "Microeconomic Evaluation Of Farm Risk Management Decisions In Kentucky," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36178, Western Agricultural Economics Association.
    17. Oriade, Caleb A. & Dillon, Carl R., 1997. "Developments in biophysical and bioeconomic simulation of agricultural systems: a review," Agricultural Economics, Blackwell, vol. 17(1), pages 45-58, October.
    18. Dillon, Carl R. & Shearer, Scott A. & Mueller, Thomas, 2001. "A Mixed Integer, Nonlinear Programming Model Of Innovative Variable Rate Planting Date With Polymer Seed Coatings," 2001 Annual meeting, August 5-8, Chicago, IL 20572, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Zewdie, Markose Chekol & Van Passel, Steven & Cools, Jan & Tenessa, Daregot Berihun & Ayele, Zemen Ayalew & Tsegaye, Enyew Adgo & Minale, Amare Sewnet & Nyssen, Jan, 2019. "Direct and indirect effect of irrigation water availability on crop revenue in northwest Ethiopia: A structural equation model," Agricultural Water Management, Elsevier, vol. 220(C), pages 27-35.
    20. Kemeze, Francis Hypolite, 2018. "The Impact of Agricultural Insurance on the Demand for Supplemental Irrigation: A Randomized Controlled Trial Experimental Evidence in Northern Ghana," Monographs: Applied Economics, AgEcon Search, number 302442.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea26:404710. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.