Irrigation Industry Meets New Year With Optimism

A solid economy, rising crop prices and housing growth made 2006 a strong year for the irrigation industry, and 2007 is anticipated with optimism and a growing focus on conservation for landscape and agriculture.

“There are going to be more and more outside limitations, either by water providers or governments, to the freedom to use water,” said Tom Kimmell, senior projects manager for the Irrigation Association. “Regulation hasn’t impacted our industry that much, but it will in the long term.”

On the turf and landscape side of the irrigation industry, a weakening housing market has potential to slow the market after a strong 2006. Commerce Department figures showed home construction late in 2006 at its lowest level in almost eight years.

“The landscape is usually one of the last things completed on a new home, so there is a lag time before a slowdown in housing begins to show in the results of the irrigation manufacturers, distributors and contractors,” said Jeff Carowitz of Strategic Force Marketing.

Kimmell said several factors may soften the impact of the construction slowdown on the irrigation industry. Irrigation is most affected by changes in the high-end housing market, as well as commercial construction, which is on an upswing in most communities.

Tom Barrett, marketing vice president for The Kenney Corp., Indianapolis, said contractors are preparing for changes in the market by becoming more conservation oriented and by organizing regionally under the umbrella of larger groups and associations.

Ken Mills, general manager at Rain Bird Corp., said the Environmental Protection Agency’s WaterSense initiative will increase pressure for contractors to demonstrate proficiency through certification and increase professionalism in the industry.

High energy costs, the move to ethanol for energy independence, a generally strong agricultural economy, a new farm bill, food safety and labor issues will be significant factors for agriculture and agricultural irrigation in 2007.

High energy and fertilizer prices provide incentive for growers to invest in technology that reduces the cost of labor and inputs, said Dirk Lenie, vice president of Lindsay Corp. High steel and zinc prices also impact manufacturing costs for irrigation systems.

Claude Corcos, national sales manager for The Toro Co., said commodity crops are expected to be more profitable for growers in the center of the country. When crops are profitable, farmers are more willing to invest in products that improve yields. Profitability for high value fruit, nut and vegetable crops continue to be good for growers, who continue to develop new ground and invest in irrigation.

Pressurized irrigation systems have accounted for a larger portion of new agricultural irrigation systems than ever before, and that trend is expected to continue, Corcos said.

Congress is likely in 2007 to pass a new farm bill with an emphasis on conservation and energy that could impact agriculture for years to come.