Case Study

Assessing the economic benefits of supplementary irrigation – Central Qld

Energy is one of the fastest growing costs for irrigated sugarcane growers, with electricity from pumps accounting for a significant portion of total farm input costs. Industry and advisor feedback suggest high energy prices have stifled timely use of irrigation water, at the expense of sugar cane yield and cane gross margins. To model the impact of an additional 1ML/Ha, the crop Gross Margin (GM) was calculated to identify the contribution to farm total GM and the Farm Economic Analysis Tool (FEAT) was used to investigate the economic outcomes of additional irrigation water. As sugar cane price increased, so too did the marginal benefit of applying irrigation water. As energy prices eased, reflecting a lower marginal cost of pumping – per hectare gross margin responded positively, with the low-cost solar option turning a profitable gross margin at even the lowest sugar cane price.