efarmer.us strawberry business plan december 2008 copyright estudy.us 2008...

eFarmer.us

StrawberryBusiness planDecember 2008

copyright eStudy.us 2008 [email protected]

eFarmer.useFarmer.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


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


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 KentuckyPick Your OwnFarmer’s MarketsProduce AuctionsRestaurants Ice cream makers


Marketing Fact Sheet

US Strawberry Production Data

1999 2000 2001 2002 2003 2004

Acres Harvested 46,460 47,350 45,700 47,600 48,400 49,000

Production (1000 cwt) 18,314 19,008 16,509 18,845 20,811 21,000

Fresh market production 13,052 14,333 12,597 14,063 15,686 16,000

Price ($/cwt) 62.50 55.00 64.70 61.60 63.90 62.00

Fresh market price 74.40 64.90 75.80 71.30 75.50 74.00

Value ($1,000) 1,145,876 1,045,413 1,069,259 1,162,190 1,321,270 1,302,000

Fresh market value 971,114 930,125 954,413 1,003,145 1,176,816 1,184,000


NutritionWater g 131.861 Copper, Cu mg 0.071Energy kcal 43.200 Manganese, Mn mg 0.418Energy kj 181.440 Selenium, Se mcg 1.008Protein g 0.878 Vitamin C, ascorbic acid mg 81.648Total lipid (fat) g 0.533 Thiamin mg 0.029Carbohydrate g 10.109 Riboflavin mg 0.095

Fiber, total dietary g 3.312 Niacin mg 0.331Ash g 0.619 Pantothenic acid mg 0.490Calcium, Ca mg 20.16 Vitamin B-6 mg 0.085Iron, Fe mg 0.547 Folate mcg 25.488

Magnesium, Mg mg 14.400 Vitamin B-12 mcg 0.000Phosphorus, P mg 27.360 Vitamin A, IU IU 38.880Potassium, K mg 239.040 Vitamin A, RE mcg 4.320Sodium, Na mg 1.440 Vitamin E mg 0.202Zinc, Zn mg 0.187


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


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


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


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.useFarmer.usProduction Characteristics

• Post-Planting Care– Cultivating– Controlling weeds– Removing blooms– Irrigating– Mulching– Protection from frosts– Pollination– Pets management


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


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


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)


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


Product costPre-harvest variable cost •Boron•Lime •Labor•Ryegrass •Irrigation•Fumigrant •Fuel, lube, repairs•Plastic mulch •Interest•Drip tape•Bareroots plants Harvest and marketing cost•Transplant •Pre-pick•Pre-plant fertilizer •Container•Herbicide •Advertisement•Pollination•Fungicides - pest control Fixed costs•Miticides •Machinery•Insecticide •Irrigation•Post-plant fertilizer •Land•Sulphur •Overhead and Management


Cost and ReturnsSample cost and returns per acre

Gross returns 31,8753,750 12-pound trays @ 8.50 31,875Operating costs 26,949Transplant 1,323Fertilizes 1,114Irrigation 704Insect & disease control 778Materials 163Assessment fees 237Harvest materials 6,938Harvest labor 1,500Machine labor 639Non-machine labor 12,399Fuel, lube, repairs 273Interest 881Cash overhead costs 2,544Insurance, taxes, land rent, etc 2,544Non-cash overhead 513Buildings, machinery, equipment 513Total costs 30,006Net returns 1,869


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


Risk Assessment – Payoff TableHired harvest labor

Yield (Pounds)

$/lb 5500 6000 6500 7000 8000 8500 9000

$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


Risk Assessment – Payoff Table

Pick your ownYield (Pounds)

$/lb 5500 6000 6500 7000 8000 8500 9000

$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


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


References• Market Opportunities

– http://www.uky.edu/Ag/NewCrops/introsheets/strawberryintro.pdf– http://info.ag.uidaho.edu/pdf/CIS/CIS0931.pdf

• Nutrition– http://www.sweetberryfarm.com/

• Marketing fact sheet– http://www.uky.edu/Ag/NewCrops/strawberries2005.pdf

• Production characteristics– http://www.ca.uky.edu/agc/pubs/ho/ho16/ho16.pdf– http://attra.org/attra-pub/strawberry.html


• Revenue, return and cost– http://coststudies.ucdavis.edu/files/strawberryorgcc06.pdf– http://www.ces.uga.edu/Agriculture/agecon/budgets/printed/strawpub.pdf

• Risk assessment– http://www.uky.edu/Ag/NewCrops/strawberries.pdf

References

efarmer.us strawberry business plan december 2008 copyright estudy.us 2008...

Documents