I’ve been thinking about the value of water and what this resource means to our communities. Since we’ve tapped into this resource we have experienced significant economic growth in our agricultural community, primarily with center pivot irrigation.
So what is the economic value of the water? If we look at the economic benefit to producers we could figure increased yields in our crop production.
There is increased economic value in producing irrigated crops as opposed to dryland farming. I’m going to make an assumption that on average we show an additional profit of $300 per acre on each center pivot after all expenses are factored in.
I don’t know how accurate that assumption is, but if I’m close that gives the value of water of $39,000 per center pivot. If you think I’m too optimistic with my profit levels, put your own numbers in the equation.
There is also economic stimulus beyond what the producer receives with the addition of water. More agribusiness is generated because we have the availability of irrigation on some of our acres.
Increased sales in fertilizer, seed, machinery, etc. are a direct result of irrigation in agriculture. There is no doubt that we’re blessed with a valuable resource that we need to manage so that we don’t deplete this resource.
Another way to look at the value of water is to look at it as a resource we could sell, much the same as coal, natural gas, or oil. There is no doubt that water is growing in demand as the population growth in the western U.S. continues. You can be sure that these population centers are looking elsewhere for access to water to meet the demands of expanded growth in areas such as the Front Range of Colorado.
This idea got me to thinking about the value of water as a commodity. All of us have purchased bottled water from a convenience store. The value of water in a bottle from a grocery store is around 17 cents per pint when you purchase a case of water. This figures out to be about $1.36 per gallon of water.
What would the profit look like if we could sell our water for a penny a gallon? The amount of water required to apply an inch of water to an acre of corn is 27,154 gallons. If we apply 12 inches of water to that same acre of corn it amounts to 325,848 gallons of water.
If you raise a 130-acre center pivot of corn and apply those same 12 inches, it takes 42,360,240 gallons of water. If we could sell that same amount of water for a penny a gallon, we would generate $423,602.40 of income off the water we used to raise a pivot of corn.
When you look at the value of water, there may be possibilities we haven’t considered in agriculture. We need to continue utilizing our water resource to keep the economy of western Nebraska intact.
With the use of better water conservation practices like no-till crop production and soil moisture monitoring we can be the generation that stops the depletion of our groundwater resource.