Cost Estimation of Producing Tomato, Lettuce and Strawberry in the Open Field and in High Tunnels in Washington State Suzette P. Galinato WSU IMPACT Center, School of Economic Sciences March 14, 2012

Study Objectives 1.Estimate costs of physical capital, materials, and labor required to produce a given crop in the field or in high tunnel – tomato, lettuce, strawberry (June-bearing, annual); 2.Provide growers with a procedure and a tool for analyzing the profitability of crop production; and 3.Develop an Excel workbook with flexibility to change assumptions for further analysis.

Objective 1: Estimate production costs Assumptions for field-grown crops InputTomatoLettuceStrawberry Productive area1 acre Growing seasonFeb – SepApr – OctSep – July Harvest seasonAug – SepJun – OctJune – July Use agric. plastic mulchYesNoYes In-row spacing24 inches10 inches8.5 inches Between-row spacing60 inches36 inches60 inches Density5,500 plants26,000 heads17,500 plants Marketable yield/ac30,360 lbs19,500 heads11,550 lbs Marketable yield/sq. ft.0.70 lb0.45 head0.27 lb

Assumptions for crops grown in high tunnel - General High tunnel is add-on to an already existing farm enterprise. Only expenses related to the high tunnel are included in the production scenario. High tunnel has end walls; a 3-season structure set up in mid- April and taken down in September (strawberry) or November (lettuce, tomato). Only one type of crop (lettuce, strawberry or tomato) is being produced in the high tunnel. Objective 1: Estimate production costs

Assumptions for crops grown in high tunnel - Specific InputTomatoLettuceStrawberry High tunnel size20’ x 96’ 28’ x 96’ Productive area480 sq. ft.1,597 sq. ft.1,440 sq. ft. Growing seasonFeb 1–Oct 1Feb 1–mid AugSep–Sep Harvest seasonJune/July–Oct 1Apr–mid OctJun–Sep Use agric. plastic mulchNo Yes In-row spacing12 inches10 inches12 inches Between-row spacing42 inches10 inches12 inches Density480 plants2,300 plants960 plants Marketable yield7,200 lbs1,725 heads1,164 lbs Marketable yield/sq. ft.15 lbs1.08 heads0.81 lb Objective 1: Estimate production costs

Results CropEstimated Costs ($/ft 2 ) Open FieldHigh Tunnel Lettuce$0.43$1.77 Strawberry$0.66$2.90 Tomato$0.59$12.72 CropPrice Estimated Net Returns ($/ft 2 ) Open FieldHigh Tunnel Lettuce$2/head$0.47$0.39 Strawberry$2/lb-$0.13-$1.29 Tomato$3/lb$1.50$32.26 Objective 1: Estimate production costs

Summary of Results 1.In general:  Total production costs (TC) of high tunnel system > TC of open field system  Yield/ft 2 in high tunnel > Yield/ft 2 in the field 2.Higher crop yield boosts the net returns of high tunnel over that of open field production only in the case of tomato grown in high tunnel. Objective 1: Estimate production costs

Objective 2: Develop a procedure and tool for analysis Fact Sheet – provides:  Narrative – assumptions about production, and definition of cost categories like interest and depreciation costs, and key results. (PDF document).  Spreadsheets – data underlying the calculation of production costs (Excel document).

Objective 3: Develop an Excel workbook Instructions for using the spreadsheets Budget assumptions Crop enterprise budget: Estimated costs (Total Costs = Variable Costs + Fixed Costs) and returns Data underlying production cost calculation:  Physical capital requirements  Interest costs and depreciation costs  Plastic mulch requirement and weight calculators (in OF tomato and OF & HT strawberry budgets) Components

Objective 3: Develop an Excel workbook Snapshot of Enterprise Budget

Objective 3: Develop an Excel workbook Snapshot of Enterprise Budget

Important Notes about Crop Enterprise Budgets Estimated costs and returns are based on assumed production scenarios. Provides baseline data. A useful tool for analyzing the profitability of producing a particular crop.

Tasks Accomplished to Date Completed working drafts of budgets for: tomato, lettuce and strawberry (open field and high tunnel); and Submitted budgets of field-grown tomato and lettuce to WSU Extension for publication as WSU Fact Sheets. (Status – under review)

Tasks to Accomplish Submit remaining crop budgets to WSU Extension Publications and finalize all drafts after peer review. Post fact sheets and plastic mulch requirement and weight calculators in SCRI Project and IMPACT websites.

Thank you.