Impact of Alternative Energy Prices, Tenure Arrangements and Irrigation Technologies on a Typical Texas High Plains Farm

摘要

Irrigation is a major contributing factor in crop production on the Texas High Plains. A recursive linear Programming model for a typical Texas High Plains irrigated farm was developed to evaluate expected impact of price changes, tenure and new technology. Model results indicate that irrigated would be terminated when the price of natural gas reached about $7.00 per mcf. Annual returns (above variable and fixed costs) were reduced by about as much as 30 percent, and the present value of returns to water was reduced by as much as 80 percent as the natural gas price was increased annually by $0.25 per mcf (from $1.50 per mcf). The economic life of deep groundwater was shortened by as much as 18 years. Renter-operators are even more vulnerable to rising natural gas prices than are owner-operators. Substantial economic gains appear feasible through improved pump efficiency. Results indicate that irrigation can be extended by 11 or more years with 50 percent improved distribution efficiency.