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IA releases economic impact study

The Irrigation Association has released its irrigation economic impact study: Economic Impact of the Irrigation Equipment and Services Industry. This study was produced in partnership by the Irrigation Association and the Irrigation Innovation Consortium.

Irrigation economic impact study released

The Irrigation Association has released its irrigation economic impact study: Economic Impact of the Irrigation Equipment and Services Industry. This study was produced in partnership by the Irrigation Association and the Irrigation Innovation Consortium.

The 2020 economic impact study focused on determining the economic impact of irrigation manufacturing, distribution, consulting, design, installation and maintenance of irrigation technologies and products in the United States, for both agricultural and landscape. This follows up a similar study conducted in 2010 that confirmed the size and importance of the irrigation industry but contained little analysis about important economic drivers and other value-added aspects related to irrigation.

According to the study’s principal researcher, George Oamek, PhD, of Headwaters Corporation, the 2020 economic impact study went deeper than its predecessor, this time analyzing economic drivers and other value-added aspects.

“At the time the study was done in 2010, the industry was kind of at a low point due to the recession that had occurred recently,” Oamek says. “The question (for the updated study) was, did we catch the industry then at a low point or an average point?”

Completing this new study wasn’t a traditional process of obtaining data and numbers. Because a good portion of the irrigation industry is privately held and companies prefer to stay anonymous, Oamek and his fellow researchers listened to anecdotes from about a dozen of the industry’s leaders. These anecdotes revealed trends experienced among the industry.

 

Landscape sector impacts

When considering the landscape side of the economic impact study, Oamek noted that the irrigation industry moves with the economy. Seemingly major factors like water conservation issues, regional droughts and policies created to solve these environmental complications failed to make a notable impact on the landscape side of the irrigation industry. At the helm of the landscape sector is the housing shortage and boom in construction to fill that void.

“I think we can state with some degree of confidence that the proportion of new housing that has the automatic sprinklers and some sort of accommodation for irrigation for landscaping is increasing over time,” Oamek says. “Landscaping really adds to the value of the house… You don’t put in an expensive landscape system without putting in an irrigation system to accompany it.”

 

Crop prices affect ag sector

Regarding the agriculture side of the study, Oamek noted that demand for irrigation equipment is booming due to high crop prices. The first generation of center pivots are starting to wear out, so farmers are looking at high-tech replacements with remote capabilities.

Crop prices pull the strings on the agriculture side of irrigation, Oamek says. From 2012 to 2014, crops saw a surge in prices. This resulted in an increased demand in agriculture equipment. Crop prices tanked following its early 2010s boost, and equipment demand also dropped. But even before the recent resurgence in crop prices, Oamek notes demand for ag equipment was still rising.

“The driver for the irrigation equipment for crops is crop prices, and crop prices are on a real high right now,” Oamek says. “There’s a huge pent-up demand for replacement irrigation equipment and new precision irrigation equipment all over, from what I can tell.”

The 2020 survey revealed a healthy industry with an about $9 billion direct economic impact and a $23.3 billion impact when including indirect induced impacts. There are over 70,000 jobs across the industry, which grows to 167,000 jobs when including secondary impacts.

The study was officially released during the Irrigation Show and Education Week in San Diego in December 2021. The full study and the executive summary are available for review online at www.irrigation.org/economic-impact-study.

 

Save the date!

Last year, we reunited the industry. This year, we are leading the way in taking irrigation to new heights. The 2022 Irrigation Show and Education Week will be an unparalleled event offering unique education opportunities, access to the latest in irrigation technology and networking within a community of peers, all in one place.

This year’s show is planned for Dec. 5-9 in Las Vegas, Nevada – known as the Entertainment Capital of the World. With best-in-class exhibitors, expert educators and co-location with the National Ground Water Association, the best of the best will be at the 2022 Irrigation Show and Education Week. You won’t want to miss your opportunity to walk away with meaningful connections and a better understanding of the direction of the industry. Watch for more information to come at www.irrigationshow.org. We can’t wait to see you in Vegas!