eFarmer.us Strawberry Business plan December 2008 copyright eStudy.us 2008

eFarmer.us Overview Preferred to cool weather Familiar with American farmers (America is the number one strawberry producer in the world) California produces over 80% of the U.S strawberry crop In the early 1800s, strawberry cultivars were brought to America from Europe Total U.S. production of strawberries reach 1.05 million tons each year

eFarmer.us Market Opportunities U.S is the largest strawberry producer and the number two exporter in the world Direct marketing – Roadside Stands – Farmer’s Markets – Pick Your Own Wholesale marketing for large producers. Requires expertise in postharvest physiology, refrigeration and transportation About 25 percent of U.S production goes to the frozen market Export market for large producers

eFarmer.us Market Opportunities in Kentucky Quality of Kentucky-grown strawberries is far superior to berries that are shipped in Strawberry acreage has decreased in the past 10 years, which provides excellent market opportunities for new growers The increasing demand for strawberries has kept fresh market prices relatively stable Experiencing decline in the demand for Pick Your Own and increase demand for already-pick products Outlets for strawberries in Kentucky Pick Your Own Farmer’s Markets Produce Auctions Restaurants Ice cream makers

eFarmer.us Marketing Fact Sheet US Strawberry Production Data Acres Harvested46,46047,35045,70047,60048,40049,000 Production (1000 cwt)18,31419,00816,50918,84520,81121,000 Fresh market production13,05214,33312,59714,06315,68616,000 Price ($/cwt) Fresh market price Value ($1,000)1,145,8761,045,4131,069,2591,162,1901,321,2701,302,000 Fresh market value971,114930,125954,4131,003,1451,176,8161,184,000

eFarmer.us Nutrition Waterg Copper, Cu mg0.071 Energykcal Manganese, Mn mg0.418 Energykj Selenium, Se mcg1.008 Proteing0.878 Vitamin C, ascorbic acid mg Total lipid (fat)g0.533 Thiamin mg0.029 Carbohydrateg Riboflavin mg0.095 Fiber, total dietaryg3.312 Niacin mg0.331 Ashg0.619 Pantothenic acid mg0.490 Calcium, Camg20.16 Vitamin B-6 mg0.085 Iron, Femg0.547 Folate mcg Magnesium, Mgmg Vitamin B-12 mcg0.000 Phosphorus, Pmg Vitamin A, IU IU Potassium, Kmg Vitamin A, RE mcg4.320 Sodium, Namg1.440 Vitamin E mg0.202 Zinc, Znmg0.187

eFarmer.us Production Characteristics Strawberries require a fairly long-term commitment since they are normally harvested during the second, third and fourth season after planning Plants should be replaced after the fourth year Be on time and correct when preparing soil. Fertilize, order plants, plant, weed, de-bloom, pick and perform other operations Establishing site higher than the immediate surrounding area to reduce the chance of spring frost damage Well-drained soil as least 8 inches deep and more is required Optimum soil pH is between 5.0 and 7.0

eFarmer.us Production Characteristics Strawberries cannot tolerate drought and require irrigation. Most growers use sprinklers for irrigating because they also help prevent frost and freezing injury Selecting good cultivars (Earliglow and Allstar plants are recommend for Kentucky) The best time to plant strawberries in Kentucky is early spring Approximately 5,000 vigorous, disease-free mother plants will be required per acre Removing blooms the firs season is necessary to encourage the early production A strong colony of bees is recommended to pollinate

eFarmer.us Production Characteristics When plants arrive – Open package and inspect for disease, insects – Check the order for correct cultivar – Put in a cool, sheltered place and keep the roots moist – Do not store strawberry plants in the same cooler with fruit Preparing the soil – Rotation – Plowing – Fumigating – Fertilizing

eFarmer.us Production Characteristics Planting – Plant as early as the ground can be worked in March or early April – The common spacing is 3.5 feet between rows and 2.5 feet between plants in the row – Remove large, diseased or yellow leaves to reduce moisture loss and avoid infection – Cut the roots back if they are too long – Keep root moist at all time – Machine setting is faster than hand planting but has difficulty to get the plants at the proper depth the roots spread out

eFarmer.us Production Characteristics Post-Planting Care – Cultivating – Controlling weeds – Removing blooms – Irrigating – Mulching – Protection from frosts – Pollination – Pets management

eFarmer.us Production Characteristics Harvesting – The harvesting season generally begins in May and last two or three weeks – Because berries ripen rapidly, pick them every other day and handle as little as possible – Most cultivars grow in normal conditions produce six to seven pickings – Adequate labor to handle picking is critical – Roundly 350 to 400 pick-your-own customers are needed to harvest one acre of strawberries – Strawberries can be picked by machine but are then only suitable for processing – Refrigeration is required for processing products

eFarmer.us Production Characteristics Renovation and After-Harvest Care – Determine if the planting is worth renovating – Apply 2,4-D and Sinbar at renovation for week control – Mow four to five days after 2,4-D application if needed – Fertilize with 50 to 60 pounds of actual nitrogen per acre plus phosphorus and potassium – Subsoil the reduce soil compaction – Reduce row to 8 to 10 inches wide – Thin plants to 5 to 6 inches apart within the row – Cultivate to remove weeds – Apply a pre-emergence herbicide – Irrigate to active the herbicide and promote plant growth

eFarmer.us Production Opportunities Cost Capital requirements – Storage – Refrigeration – Machinery, fuel, lubrication, and repair costs – Fumigation (with extreme pest populations) – Land rent, property taxes, insurance… – Interest Labor requirements costs for hiring workers are the market rate for agricultural labors Land opportunity cost (lease value of land)

eFarmer.us Revenue Estimates No revenue until the second growing season Revenue sources – Revenues are different with price and yield variation – No secondary revenue sources

eFarmer.us Product cost Pre-harvest variable cost Boron Lime Labor Ryegrass Irrigation Fumigrant Fuel, lube, repairs Plastic mulch Interest Drip tape Bareroots plantsHarvest and marketing cost Transplant Pre-pick Pre-plant fertilizer Container Herbicide Advertisement Pollination Fungicides - pest controlFixed costs Miticides Machinery Insecticide Irrigation Post-plant fertilizer Land Sulphur Overhead and Management

eFarmer.us Cost and Returns Sample cost and returns per acre Gross returns31,875 3, pound ,875 Operating costs26,949 Transplant1,323 Fertilizes1,114 Irrigation704 Insect & disease control778 Materials163 Assessment fees237 Harvest materials6,938 Harvest labor1,500 Machine labor639 Non-machine labor12,399 Fuel, lube, repairs273 Interest881 Cash overhead costs2,544 Insurance, taxes, land rent, etc2,544 Non-cash overhead513 Buildings, machinery, equipment513 Total costs30,006 Net returns1,869

eFarmer.us Risk Assessment Market price is variable Severe winter temperatures or late spring frost can destroy crops Susceptible to many insects, pests and diceases Labor, marketing and transportation represent risks Once strawberries ripen, they must be harvested immediately Financial risk: no positive cash flow until the second year

eFarmer.us Risk Assessment – Payoff Table Hired harvest labor Yield (Pounds) $/lb $0.80-$1,006-$949-$893-$836-$723-$666-$609 $0.90-$511-$409-$308-$206-$3$99$201 $1.00-$16$131$277$424$717$864$1,011 $1.10$479$671$862$1,054$1,437$1,629$1,821 $1.20$974$1,211$1,447$1,684$2,157$2,394$2,631 $1.30$1,469$1,751$2,032$2,314$2,877$3,159$3,441 $1.40$1,964$2,291$2,617$2,944$3,597$3,924$4,251 $1.50$2,459$2,831$3,202$3,574$4,317$4,689$5,061 $1.60$2,954$3,371$3,787$4,204$5,037$5,454$5,871 $1.70$3,449$3,911$4,372$4,834$5,757$6,219$6,681 $1.80$3,944$4,451$4,957$5,464$6,477$6,984$7,491 $1.90$4,439$4,991$5,542$6,094$7,197$7,749$8,301 $2.00$4,934$5,531$6,127$6,724$7,917$8,514$9,111

eFarmer.us Risk Assessment – Payoff Table Pick your own Yield (Pounds) $/lb $0.50-$16$131$277$424$717$864$1,011 $0.75$1,222$1,481$1,740$1,999$2,517$2,777$3,036 $1.00$2,459$2,831$3,202$3,574$4,317$4,689$5,061 $1.25$3,697$4,181$4,665$5,149$6,117$6,602$7,086 $1.50$4,934$5,531$6,127$6,724$7,917$8,514$9,111 $1.75$6,172$6,881$7,590$8,299$9,717$10,428$11,136 $2.00$7,409$8,231$9,052$9,874$11,517$12,339$13,161

eFarmer.us Summary Market Opportunities Pick Your Own Farmer’s Markets Produce Auctions Restaurants and ice cream markers Advantages of Centeral Kentucky Climate Suitable land Familiar to Kentucky farmers Providing an excellent opportunity to grow another high-income- per-acre crop

eFarmer.us References Market Opportunities – – Nutrition – Marketing fact sheet – Production characteristics – –

eFarmer.us Revenue, return and cost – – Risk assessment – References