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PRODUCTION PAPERS

Agroeconomic Analyses of Drip Irrigation for Sugarbeet Production

^a Dep. of Plant Sci., College of Agric., Univ. of Wyoming, Laramie, WY 82071-3354
^b Dep. of Renewable Resources, College of Agric., Univ. of Wyoming, Laramie, WY 82071-3354
^c Dep. of Agric. and Applied Econ., College of Agric., Univ. of Wyoming, Laramie, WY 82071-3354

Corresponding author (ssharmas{at}csufresno.edu). Current address for corresponding author: Water Manage. Res. Lab., USDA-ARS, 2021 S. Peach Ave., Fresno, CA 93727-5951

Received for publication January 28, 1999. Sugarbeet (Beta vulgaris L.) is a major cash crop in Wyoming where overuse of water and agrochemicals is a concern in furrow-irrigated areas. Drip irrigation, an alternative technology, is not well developed for row crops within the state. Therefore, our objective was to evaluate the economic feasibility of implementing drip irrigation practice for sugarbeet production. Capital budgeting analyses, including net present value (NPV) and rate of return (ROR), were used for 10 to 40 ha. Sensitivity analyses were conducted with drip system size and life span, interest rate, water price, and weed control cost. Sugarbeet and sugar yields were higher under drip irrigation than furrow irrigation at P = 0.05. The drip system investment cost decreased with increasing size. Total variable costs for drip irrigation were lower than those for furrow irrigation. Sugarbeet returns were $2080 and $2310 ha^-1 for furrow and drip irrigation practices, respectively. Higher returns and shorter payback time were observed for large conversion areas. The sensitivity was more pronounced with small-scale farming. Increasing interest rates caused delays in positive return and profit and contributed to larger differences in payback time between drip system sizes. For all conversion sizes, ROR increased with system lifetime. Higher profitability was observed for areas with increased water prices and weed control costs. The overall findings indicated that sugarbeet production under drip irrigation would be most profitable for a 40-ha area with payback periods ranging from 7 to 10 yr.

Abbreviations: AAEA, American Agricultural Economics Association • F_crt, critical variance ratio • F_obs, observed variance ratio • IC, investment cost associated with purchase of drip irrigation equipment • IRR, internal rate of return • mIRR, modified internal rate of return • NPV, net present value • OC, operating costs • PB, payback year • ROR, rate of return • TREC, Torrington Research and Extension Center