• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Table of Contents
 List of Tables
 Introduction
 General description
 Decision situation
 Specified costs and requiremen...
 Uncertain factors
 Making the decision
 Worksheet
 Decision form
 Sample printout
 Reference














Group Title: Economics report - University of Florida Food and Resource Economics Dept. ; 76
Title: University of Florida economics of citrus irrigation game
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00027703/00001
 Material Information
Title: University of Florida economics of citrus irrigation game
Series Title: Economics report - University of Florida Food and Resource Economics Dept. ; 76
Physical Description: Book
Language: English
Creator: Niles, James A.
Publisher: University of Florida Agricultural Experiment Station
Publication Date: 1976
 Record Information
Bibliographic ID: UF00027703
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 27687830

Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Table of Contents
        Page i
    List of Tables
        Page ii
    Introduction
        Page 1
    General description
        Page 1
    Decision situation
        Page 2
        Page 3
    Specified costs and requirements
        Page 4
        Page 5
        Page 6
        Page 7
    Uncertain factors
        Page 8
        Page 9
    Making the decision
        Page 10
        Page 11
    Worksheet
        Page 12
        Page 13
        Page 14
    Decision form
        Page 15
    Sample printout
        Page 16
    Reference
        Page 17
Full Text














TABLE OF CONTENTS


LIST OF TABLES .


Page

ih


INTRODUCTION


. . . . . . . 1


GENERAL DESCRIPTION . . . . .

DECISION SITUATION . . . . .

Decision 1: Irrigation System . . .
Decision 2: Size of System . . .
Decision 3: Level of Irrigation . . .

SPECIFIED COSTS AND REQUIREMENTS . . .

Installation Costs . . . .
Seasonal Costs . . . . .
Labor Costs . . . . .
Non-Labor Variable Costs . . .
Water Requirements . . . .
Fixed Costs . . . . .

UNCERTAIN FACTORS . . . . .

Water Requirements . . . .
Yields . . . . . .
Prices . . . . . .

fMAKING THE DECISION . . . .

Decision Form .. . .. ... . .

WORKSHEETS . . . . . .

DECISION FORM . . . . . .

SAMPLE PRINTOUT . . . . .


REFERENCES ..


. . . . . 17












LIST OF TABLES


Page


Installation costs of specified irrigation systems

Labor requirements per application per acre .

Other variable (non-labor) cost per application
per acre . . .. .........

Water requirements per application. . .

Fixed cost per year per acre . . .

Water requirements per year . . .

A yield response to irrigation for Hamlin oranges


. .


Table


. I I












UNIVERSITY OF FLORIDA ECONOMICS
OF CITRUS IRRIGATION GAME*

James A. Niles

INTRODUCTION


Management decision games are designed for educational purposes.
It is the purpose of this game to emphasize the economics of the
decisions made in selecting an irrigation system for Florida citrus
groves. Computerized games are designed to approximate real situations.
Even thouL9g no game can exactly represent the actual situation, games
should be viewed as a means to improve the manager's decision-making
abilities.
This game is established for a specific grove situation in Florida.
However, it should be of value to citrus managers in other citrus
producing areas since the same type of decisions must be made. The
analyses required would be the same with the specific cost and return
information unique to eacharea.
This game was developed as a teaching exercise for the Second
International Citrus Short Course: Featuring Water Relations held in
Gainesville, October 13-17, 1975. The purpose of this report is to
illustiate an approach to teaching decision-making. Information on
running the game is provided in [3].


GENERAL DESCRIPTION

The game, which draws heavily on previous irrigation system re-
search, requires the analysis of the options available for irrigating


*Appreciation is expressed to Dalton Harrison, Agricultural
Engineering Department, for his assistance in developing this game and
to Sheriar Irani for the computer programming.


JAMES A. NILES is assistant professor and extension economist,
Food and Resource Economics Department, University of Florida,
Gainesville, Florida.












UNIVERSITY OF FLORIDA ECONOMICS
OF CITRUS IRRIGATION GAME*

James A. Niles

INTRODUCTION


Management decision games are designed for educational purposes.
It is the purpose of this game to emphasize the economics of the
decisions made in selecting an irrigation system for Florida citrus
groves. Computerized games are designed to approximate real situations.
Even thouL9g no game can exactly represent the actual situation, games
should be viewed as a means to improve the manager's decision-making
abilities.
This game is established for a specific grove situation in Florida.
However, it should be of value to citrus managers in other citrus
producing areas since the same type of decisions must be made. The
analyses required would be the same with the specific cost and return
information unique to eacharea.
This game was developed as a teaching exercise for the Second
International Citrus Short Course: Featuring Water Relations held in
Gainesville, October 13-17, 1975. The purpose of this report is to
illustiate an approach to teaching decision-making. Information on
running the game is provided in [3].


GENERAL DESCRIPTION

The game, which draws heavily on previous irrigation system re-
search, requires the analysis of the options available for irrigating


*Appreciation is expressed to Dalton Harrison, Agricultural
Engineering Department, for his assistance in developing this game and
to Sheriar Irani for the computer programming.


JAMES A. NILES is assistant professor and extension economist,
Food and Resource Economics Department, University of Florida,
Gainesville, Florida.







a Florida citrus grove. Each individual or team participant must
decide: (1) the type of irrigation system to install, (2) the size of
the system (number of acres), and (3) the level of irrigation (appli-
cation rate).
The decisions are made only once and the outcome is projected over
a 5 year planning horizon. The costs of installation, costs of operating
with specified water ard labor requirements for the different systems
and sizes are given. Uncertainty is introduced into the game with
seasonal water requirements, fruit yield per acre, and fruit price varying
in each of the 5 seasons.
The objective is to maximize average return per acre minus irri-
gation expenses over the 5 year planning horizon.

DECISION SITUATION


The grove is a 240 acre mature Hamlin grove located on the Ridge
in Florida. The soil is Lakeland fine sand with a moisture holding
capacity of 3.5 inches in a soil root zone of about 5 feet. The tree
spacing is 25' by 25'. The source of water is a centrally located well
with a depth of 200 feet and 100 feet of casing and a pumping lift of
90 feet.

Decision 1: Irrigation System


You have a choice of 6 irrigation systems or no irrigation as
described below. These systems will be designated A through G:

A. Permanent overhead sprinklers. Sprinklers are spread at
75' x 75' in a triangular pattern, operate at medium
pressure (50-55 psi) and are supported by 21' galvanized
risers. Application rate is .12 inch per hour.

B. Permanent undertree sprinklers. Pop-up sprayheads or
foggers. Risers are 6"-12". Laterals may be above or
below ground with sprinklers located under every tree.
Operation is at low pressure (30-40 psi).








C. Self-propelled guns. Drawn by an auxiliary motor or
hydraulic power units, guns move down rows at ground
speeds of about 12 inches per minute, giving a gross
application of 2.2 inches. Water discharge is above
trees, covering a circle approximately 440 feet in
diameter. Extremely high pressure (70-85 psi).

D. Portable guns. Same type gun as self-propelled system
except is portable and must be manually moved between
sets. Applies approximately 1.0 acre-inch per hour.

E. Portable perforated pipe. Aluminum pipe with perforations
capable of applying 0.20 to 2.00 inches per hour. Moved
manually. Low pressure (8-10 psi).

F. Drip irrigation system. Automatic timing system with
four emitters per tree. System is run to apply 36
gallons per tree per day. System requires low pressure
(15-25 psi).

G. No irrigation system.

The yield response in this game does not vary with the irrigation
system selected. This means that the same yield will. be achieved
with different systems if the same level of irrigation is chosen.


Decision 2: Size of System

For the purpose of this game, the possible sizes of the irrigation
system in the grove are 40, 60 and 80 acres. Since the total acreage
in the grove is 240 acres, there will be 6 units of the 40 acre size,
4 units of the 60 acre size, or 3 units of the 80 acre size. If no
irrigation system is selected in Decision 1, there is no size of system
specified.


Decision 3: Level of Irrigation

The application rate decisions follow those described by Koo [2].
One of the following levels must be selected:











I. No irrigation.

II. Irrigation at depletion of 2/3 of the readily available
moisture in the surface 5 feet of soil.

III. Irrigation at depletion of 1/3 of the readily available
moisture from January through June, but 2/3 for the
remainder of the year.

IV. Irrigation at depletion of 1/3 of the readily available
moisture throughout the year.

V. Drip irrigation.


In making the above three decisions, a number of factors must be
considered. In the following sections, the known costs and requirements
and information on the uncertain factors are presented as well as a
suggested method of analysis.


SPECIFIED COSTS AND REQUIREMENTS


One of the most important factors to consider is the cost of irri-
gation. The expected costs of irrigation should be evaluated with
respect to the expanded revenues to see if irrigation is economically
justified.

Installation Costs


Table 1 lists the installation costs for the different irrigation
systems and sizes. These costs are for the complete system, including
distribution system, pump, well, pipe, traveler, and power unit where
applicable.





5



Table 1--Installation costs of specified irrigation systems.


System 40 acres 60 acres 80 acres

dollars/acre - -

A 1,100' 1,000 1,200
B 550 600 750
C 375 275 350
D 275 260 300
E 275 250 300
F 410 450 475
G* 0 0 0


*In all following tables the
since they are all zero.


values for system G are deleted


Seasonal Costs

The costs of irrigation are composed of variable and fixed cost
components. Variable costs are determined by the labor requirements,
cost of labor, and length of operation. Fixed costs will be the same
each year but do vary considerably among systems. The distribution of
costs between variable and fixed will likely have a strong influence
on the system decision.


Labor Costs


Seasonal labor costs will vary depending upon the system, size
and the number of applications. Table 2 presents the labor requirements
per application.
For the purpose of this game, an application with system F (drip
irrigation) is defined as lasting one weel: (7 days). This enables
comparisons with other systems where one application is completed in
slightly over one week. LABOR COSTS $2.50 PER HOUR.





6



Table 2.--Labor requirements per application per acre


System 40 acres 60 acres 80 acres

- - man-hours - - - -

A .10 .10 .10
B .10 .10 .10
C .42 .40 .44
D 2.05 2.64 2.31
E 4.00 3.78 4.03
F* .30 .30 .30

*RequireiImeInts per week of operation.


Non-Labor Variable Costs


The costs of electricity or fuel for the pump, grease, oil and
maintenance are a major component in many systems. Table 3 gives the
non-labor variable costs per application for the system-size combina-
tions.

Table 3.--Other variable (non-labor) cost per application per acre


System 40 acres 60 acres 80 acres

dollars er acre - - -

A 4.35 3.56 2.29
B 3.81 3.12 2.01
C 4.55 6.11 5.94
D 3.95 3.74 4.33
E 2.50 2.36 1.45
F* .59 .59 .59

*Cost per week of operation.










Water Requirements


Cost comparisons are frequently made on a per acre-inch of water
applied basis. Table 4 lists the amount of water applied during each
application for the systems considered. There is no cost for the
purchase of water since the source of water is from a well.


Table 4.--Water required per application


Sy stem


Acre-Inches Required


A 2.2
B 2.2
C 2.2
D 2.2
E 2.2
F* .65


*Acre-inches per week of operation.




Fixed Costs


The fixed costs per season for the different system-size Combina-
tions are listed in Table 5. For simplicity and the purposes of this
game a 10 year life has been assumed with no salvage value.










Table 5.--Fi:.ei .--,;. I r year per acre


System 40 acres 60 acres 80 acres


- - dollars/acre - - --


A 110 100 120
B 55 60 75
C .; 28 35
D 28 26 30
E 28 25 30
F 41 45 48


I~NERcAIN FACTORS


Also iipuMi :.,rt: in citrus irrigation decisions are the expected
supplemental water ..'quirements, the yield response to irrigation,
and fruit prices. T.':sr actors are not completely controllable
and add uncertainty to the situ.-iion.


Waer Reui rements


Appro..i .ately 46 inches .(,f W'.atr are required for mature citrus
groves in Florida. Much of this .an be met by rainfall. However,
supplinemetal irrio~g .i, may be desirable because of the rainfall distri-
bution. Supplemien;:ta water I.Quirieme.ts for this game are developed
from Koo's research [I]., Over the 6 vear period the minimum, maximum
and average nu,'ber of applications are shown in Table 6. The drip
irrigation syste:iw: I :,- u ..iiiud to utilize the same number of weeks of
operation as Option IV.









Table 6.--Water requirements per year


Level of Irrigation


I II III IV

- number of applications - -

Minimum 0 2 4 6

Maximum 0 5 9 14

Average 0 3 6 9




Yields

To economically justify the expenses of supplemental irrigation
it is necessary that yield be increased such that additional revenues
more than offset additional costs. The yield response used in this
game is based on Koo's research, reported in [3]. The minimum,
maximum and average yields for the 6 year study report are shown in
Table 7. Again drip irrigation was taken at level IV.


Table 7.--A yield response to irrigation for Hamlin oranges


Level of Irrigation


I II III IV


o:s/ i - - --

Mi immum 400 511 630 637

Maximum 875 952 1,050 1,071

Average 607 722 818 827









The effect of irrigation on pounds solids per box is not considered
in this game. A constant 5.69 pounds solids per box or 1.26 gallons of
FCOJ per box is utilized.

Prices


The two components which determine revenues are yield and price.
Even though yield may be increased, in certain years the realized
price may be such that revenues do not cover the increased irrigation
costs. On-tree prices used in this game are selected at random from
a normal distribution with the following characteristics:

mean = $1.93 per box
standard
deviation = $ .68 per box

As a result of these assumptions the probability that the price will
fall between $2.61 and $1.25 is 67 percent.

MAKING THE DECISION


The organization of the individual team, division of the responsi-
bilities, and the analysis to be conducted is left up to the team
members. Regardless, decisions must be made for the system, size and
level of irrigation. A suggested approach is to explore the effect of
the level of irrigation and the system of irrigation at different sizes
and assumed values of prices, number of applications and yield. Work-
sheet A presents a framework for the comparison of the levels of irri-
gation. A partial budgeting approach can then be followed to analyze
the net return after irrigation costs. A completed Worksheet A is
included for system A, size of 60 acres, and an on-tree price of $2.00
per box. Worksheet B extends the analysis to the comparison of the alter-
native types of irrigation systems, specifying the size and level of
irrigation. Worksheet C is a summary of the analysis conducted in
Worksheets A and B enabling a comparison of both the level of irrigation
and system.








Decision Form


Once the decisions have been made, indicate the selection on the
decision form, using your assigned team number and a team name of your
choice. Only numerical entries should be made within the boxes. A
sample decision form is shown for permanent overhead sprinklers (pg. 15).
Your decisions will be inputed into the computer which will simu-
late the results of your particular set of decisions. The five year
summary shows the mean of each variable listed as well as the indi-
vidual values over the five year period. The standard deviation
measures the variability between years.







WORKSHEET


Worksheet A: Comparison of Levels of Application



Assumptions


System Perman tt overhead sprinklers

Size 60 Acres

Price $2.00


Level of Application


I II III IV


lumber of Application 3 6 9
Acre-Inches Applied _.-__ 13,2 19.8
Yield Q _Z 72.. 818 827



Cost per Acre

--- ---- --- -dollars --- -- ---

Variable Irrigation Costs
Labor 0 .75 1.50 2.25
Other variable costs 0 10.68 21.36 32.04
Fixed Costs for Irrigation 0. 100.00 100.00 100.00
Total Irrigation Costs 0 111.43 122.86 134.29

Gross Returns $1 12- 14.00 1636.00 1654.00

Return Minus Irrigation Costs _iJ2 _4__ 1332.57 151_314 1519.71

.... .- .__




13


WORKSHEET


Worksheet B:


Comparisons of Types of Irrigation Systems


Assumptions


Size
Level of Irrigation
Number of Supplemental Irrigations
Acre-Inches of Water Applied
Yield
Price


60 acres
III
6
13.2
818
$2.00


Type of Irrigation System


Costs per Acre: A B C D E F*

- - dollars ----- --


Variable Irrigation Costs
Labor
Other Variable Costs
Fixed Costs for Irrigation


Total Irrigation Cost


1.50
21.36


1.50
18.72


6.00
36.66


100.00 60.00 28.00


39.60
22.44
26.00


56.70
14.16
25.00


122.86 80.22 70.66 88.04 95.86


Gross Return

Return Minus Irrigation
Costs


1636.00 1636.00


1513.14 1555.78


1636.00 1636.00 1636.00


1565.34 1547.06 1540.14


*Drip irrigation would be included only


in analysis for Level IV.


- --1----1--~--~'-"11--_1111-_1-______~ ____~





14

WQRKSHFET



Worksheet C: Sui. riry Analysis of Gross Returns Minus Irrigation Costs

Assumptions


Size 60 Acres

Price $2.00

Yield Average






System I II In. IV

dollars -- - --.
A 1214;00 2,7 1513.14 1519.71

B ___. 1555. 78

C ,_____5 34

D ____ _____7.6

E 4. 1 O,.4. ____,_

F* t


*Drip irrigation was Assured to be equivalent to Level IV.








TEAM NUMBER 1


TEAM IDENTIFICATION U of F

(Up to 10 letters)


DECISION FORM

On this form, indicate the selection of your decisions.


Decision 1


= permanent overhead
= permanent undertree
= self-propelled guns
= portable gun
= portable pipe
= drip irrigation system
= no irrigation


Indicate decisions with
numerical response in
boxes below


(CC 20)


Decision 2


acre units
acre units
acre units
system


Decision 3

1. I = no irrigation
2. II = irrigate at 2/3 depletion
3. III = irrigate at 1/3 depletion,
January-June, 2/3 remainder
4. IV = irriqate at 1/3 ipl l-'n

5. V = drip



If you select "7" in Decision 1 please
check that you have also selected "4"
for Decision 2 and "1" for Decision 3.


D2


(CC 30)


D 3


3


(CC 40)




UNIVERSITY OF FLORIDA ECONCMICS O1- IRRIGATION DECISION GAME
TEAM 1 U CF F




SU'4.WAPY OF DECISIONS


IRRIGATION SYSTFM
SIZE
APPLICATION RATE
INSTALLATION COST


OVERHEAD PERMANENT SPRINKLER
60 ACRES
1/3 DEPLETICN JAN-JUNE-2/3 REMAINDER
1000.00 PER ACRE


TEAM


1 U OF F


YIELO / ACRE
YIELD ABOVF No1PR GATION
NUMBER OF !PoTGATIONS
HOLRS OF OnpFRATIC.
WATEr< REQU'EC (ACPE-INCHES
LAcBO REQUIRED(M-N HRS/AC)


CURTR

NA T E_
CTiER VARIAAL=
TOTAL VAR ABLE


NET AFTpE IPPIGATION
FRGM IRRIGATION


r ._---- I


,' 561

86&.00
13.20
.tUsC"


PER
ACRE
1i 50
0.


3305 POUNDS SGLIOS
671 POUNDS SDLIDS


PER
*PPLICAT CiN
C.25


2.03 PER BGX

PER ACRE
1179.43
1056.57
116. 68


PER
ACRE-INCH


57


9.31 .


0.357 PER POUNDS SQOIOS

PER BOX
2.03
1.82
0.99


YIELD / ACPE (BOXES)
YIELD ABOVE NOIFPRIGATION(EX)
WATER REQUIRED (ACRE-INCHES)
LABOP PEQUIPFD(MAN HRS/AC)
LAb6R COST (s)
TOTAL VAPIAELE COST ($)
FIXED CCST (5)
TOTAL CCST (S)
PRICE ( /.'. )
GPCSS RETURN ($/AC;.E
ADDED RETURN ($/ACRE)
NET RET. AFTER IRRTG. ($/AC)


'X OF
T TAL
I,22

17239
1 aT'e.T


FIVE


SUMMARY


YEAR


2


860,00
323,00
19.80
C.90
2.25
34.29
100 .00
134.29
1.58
1358.80
376*05
1224.51


561.00
118.00
13.20
0.60
1.50
22.86
100.000
122.868
2.03
1179.43
116.68
1056.57


932.00
212.00
11.00
0.50
i .25
19.05
S100 .0
119.05
1 .62
1509.84
224.39
1390.79


?EAN


630.00
230.00
13.20
0.60
1.50
22.8
100.00
122.86
2. 89
1820.70
541.84
1697.84


10501C.
175 CC

0.40
1 CC
15.24
100 C00
115.24
1.22
1281 .CC
98.26
1165.76


810 .60
211.60O
C .60
1.5C

100.OC
122 .e6
1.E7
1429 .95
271.44
13C7 .09


STC DEV

!99.89
75.58
4,12
0,19
0_47
7.13

7.13
0.64
249.55
187.23
249.63













REFERENCES


[1] Koo, R.C.J. "Effects of Frequency of Irrigations on Yields
of Orange and Grapefruit," Proceedings of the Florida
State Horticultural Society, 76, pp. 1-5.

[2] _. "Water Requirements of Citrus and Response
to Supplemental Irrigation," Proceedings of the Second
International Citrus Short Course, Gainesville: Univer-
sity of Florida, 1976.

[3] Niles, James A. and Sheriar Irani. Administrator's Manual for
University of Florida Economics of Irrigation Game,
Florida Cooperative Extension Service, Gainesville:
December 1975, 9pp.

[4] Reuss, L.A. Yield Response and Economic Feasibility of Sprinkler
Irrigation of Citrus, Central Florida, Department of
Agricultural Economics, Economics Mimeograph Report E.C.
69-10. Gainesville: University of Florida, 1969.




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