Estimating the Incremental Gross Margins due to Irrigation Water in Southern Alberta

In this study, the gross margins (above variable costs) are estimated in Canadian dollars of 16 important irrigated crops in Southern Alberta over the years 2004 to 2008. The residual method is then used to estimate the total incremental gross margins (gross margins from irrigated crops minus estimated gross margins from dryland crops had irrigation not been available) of using water to irrigate agricultural crops in four sub-basins in Southern Alberta over those years. The annual incremental gross margins averaged $244 million (in 2008 Canadian dollars) per year and varied from a low of $218 million in 2007 to a high of $271 million in 2005. On a per hectare planted basis, the annual average gross margin from irrigated cropping was $590 and the incremental gross margin was $495. The average annual gross margin and incremental gross margin per 1000 m3 were $225 and $191, respectively.