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March 31, 2005

Irrigated Crop Budgets Updated and Available

Projected budgets for irrigated crops in North Dakota have been updated for the 2005 growing season, according to Dwight Aakre, farm management economist for the North Dakota State University Extension Service.

“These budgets were prepared to be a source of information for producers, lenders and others that have a need for estimating the costs of growing irrigated crops,” Aakre says. Budgets for alfalfa, alfalfa seeding, corn grain, corn silage, dry beans, potatoes, malting barley, soybeans and spring wheat are included in the reports.

The budget reports are available at county offices of the NDSU Extension Service or on the Web at

“The budgets for irrigated crops consistently show potatoes as having the most profit potential, followed by alfalfa,” Aakre says. “Once again, corn, both grain and silage, project the poorest returns.”

The budgets were prepared from the perspective of the landowner. The land charge is based on average rent for dryland. In addition, land taxes are charged at the average for the region. The investment in irrigation equipment, well and piping is recaptured, apart from the land.

The ownership cost is handled the same as machinery investment. A 10 percent residual value is assumed, with the balance of the investment depreciated over its full, useful life. Useful life varies by component, but averages about 20 years for the total system. Straight-line depreciation is used. Interest is charged on an average annual investment of 5 percent.

Electricity rates used for irrigation reflect off-peak or controlled electric rates, plus demand and other charges for all crops except potatoes. The rate used for potatoes is the regular rate, plus demand and other charges. Due to the high value of the potato crop, the potential loss due to the unavailability of power when needed more than offsets the additional electricity charge. The potato budget also includes a charge for trucking to the processor based on the latest custom rate survey, which is 71 cents per hundredweight.

Labor is not included as an expense item. Therefore, the bottom line represents a return to labor and management.


Source: Dwight Aakre, (701) 231-7378,
Editor: Rich Mattern, (701) 231-6136,



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