Economic viability of deficit irrigation in the Western US

In many arid regions of the world, population growth, groundwater depletion, and uncertain supplies have caused water for agricultural production to become increasingly scarce. Deficit irrigation (DI) provides a potential response to water scarcity, but no consensus exists on its economic viability. In this paper, we develop an agro-economic model that connects plant growth-stage-specific evapotranspiration (ET) targets with farm profitability. We use the model to determine the economic conditions under which ET targets of less than 100% are optimal for profit-maximizing maize farmers in Colorado. With 2015 input costs, as maize grain prices increase beyond $0.19 kg−1, DI can become optimal during the late vegetative growth stage but requires a water cost greater than U.S. $0.21 m−3. Under some output price and water cost combinations, DI in the maturation stage also becomes optimal. These results suggest that producers could respond to increasing water scarcity with deficit irrigation, but only in a range of water costs that depends on output price and production costs.