Cost of Producing, Harvesting and Marketing Field Grown Tomatoes in the Southeastern United States May 2012

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1 Cost of Producing, Harvesting and Marketing Field Grown Tomatoes in the Southeastern United States May 2012 Budgeting Program Developed By: Olya Sydorovych Researcher, Department of Agricultural and Resource Economics North Carolina State University, Raleigh, NC Frank Louws Professor, Department of Plant Pathology North Carolina State University, Raleigh, NC Chris Gunter Assistant Professor, Department of Horticultural Science North Carolina State University, Raleigh, NC Questions or Comments: Olya obsydoro@ncsu.edu This budget presents the estimated costs of producing and harvesting tomatoes in the Southeastern United States. The cost estimates are presented on a per acre basis. It was also assumed that the management would be near optimal and that all currently recommended practices by the Agricultural Extension Service would be followed. This budget is only a guide and is not meant to be a substitute for growers calculating their own costs and estimating their own breakeven yields. Costs vary from grower to grower due to market conditions, labor supply, age and condition of the machinery and equipment, managerial skill, and many other factors. Since every situation is different, it is recommended that every grower estimate their individual production, harvesting and marketing costs based on their own production techniques, price expectations, local supply of labor, and market situation. It is also recommended that growers develop a marketing plan and have a marketing strategy before investing in a commercial operation. Production of high value produce is a risky business and the risk increases without a stable marketing outlet. In extreme cases, growers have experienced financial losses when they were not able to find a suitable market outlet and/or when they did not meet the buyer s expectations. The spray schedule in this budget is based on a typical year, however, as any grower knows, each year is different and therefore your pests and means of control will likely vary from what is listed. Mention of a product or vendor does not constitute a guarantee or warranty of the product, nor does it imply recommendation of one product over another. Other products may be suitable depending on soils, weather conditions, farm history, and pest pressures. The values in the blue cells of the spreadsheets with red tabs are input values that users can either accept or replace with their own estimates. The values in all other cells are calculated based on the inputted values. Users can receive a quick estimate of their costs and returns by entering their own estimates for the selected "key" values displayed in blue cells in the Assumptions worksheet, while those who would like more detailed estimates can fill in the blue cells in the Machinery, Materials, Labor, and/or ProductionSequence worksheets.

2 KEY ASSUMPTIONS FOR ESTIMATING TOMATO PRODUCTION COSTS AND RETURNS Marketing Assumptions: Projected Base Yields 96,646 lbs/acre Marketable Percent of Base Yield 80.0% Pounds 77, lb Boxes 3,093 Culled Jumbo and XL fruit 33, % Large fruit 24, % Medium and small fruit 19, % Percent of Base Yield 20.0% Pounds 19,329 Selected Input prices: Market Prices $/25 lb Box Jumbo and XL fruit $9.50 Large fruit $8.15 Medium and small fruit $7.00 Culled Fruit $/Pound $ Production Labor Owner Expense Base Wage Total Business Expense Employee Expense Base Wage Total Business Expense Harvest Labor Cost Gasoline price Diesel price $14.00 $/hour $15.72 $/hour $7.50 $/hour $8.47 $/hour $3.00 $/25lb box $3.50 $/gal $3.95 $/gal Loan Interest Rate 7.00% Insurance Rate 0.80% Tax Rate 0.80% Fuel and Lubricant Costs Machinery and Vehicle by Fuel Type Fuel Price ($/gal) Fuel Used per Hour (gals) Lubricants as a Percent of Fuel Cost Average Mileage per Gallon Average Speed Fuel Cost/Hour Lubricant Cost/Hour Total Fuel & Lube Cost/Hour Tractor 30 hp (D) $ % $5.93 $0.12 $6.04 Tractor 60 hp (D) $ % $9.88 $0.20 $10.07 Utility Vehicle (G) $ % $1.48 $0.03 $1.51 1/2 Ton Pickup (G) $ % $11.67 $0.23 $11.90

3 ESTIMATED TOMATO PRODUCTION COSTS PER ACRE (Marketable Yield = 77,317 pounds, or 3,093 25lb boxes) Equipment Materials Labor Total Your Month Type of Operation Costs Costs Costs Costs Costs February Attend Grower Meetings Total February $ $25 $40.68 $ March Plow Field Disc Field Subsoil Field Total March $45.84 $ $32.04 $77.87 April Preplant Fertilizer Assemble Irrigation System Bedding and Fumigation , Total April $ $1, $ $1, May Purchase Plugs Fertilize Plugs Transplant Plugs Replant 2% Drip Irrigation , Staking String x Prune Weekly Sprays Post-Emergent Herbicide Total May $ $1, $ $3, June Drip Irrigation , Weekly Sprays Post-Emergent Herbicide Total June $ $ $ $1, July Drip Irrigation , Weekly Sprays Harvest 9, , Total July $ $ $9, $10, October Remove Plastic Dispose Plastic Disk Field Apply Lime Plant Rye for Cover Crop Total October $95.83 $72.00 $ $ Annual Administrative Costs Real Estate Taxes Management Fee 1 1 Net Land Rent Miscellaneous Internet service 4 4 Overhead (Utilities, legal fees, etc.) Total Annual Administrative Costs $ $ $ $ Seasonal Costs 1/2 Ton Pick-up Operating Capital 7 7 Total Seasonal Costs $32.30 $7 $20.34 $ TOTAL ANNUAL COSTS $2, $4, $11, $18,076.25

4 ESTIMATED TOMATO PRODUCTION COSTS PER ACRE SUMMARY ESTIMATED LABOR PER ACRE SUMMARY Month Equipment Material Labor Total Percent Your Month Labor Percent Your Costs Costs Costs Costs Total Costs (Hours) Total Estimate ( Dollars per Acre ) January % January % February % February % March % March % April , , % April % May , , % May % June , % June % July , , % July 3, % August % August % September % September % October % October % November % November % December % December % Annual Charges % Seasonal Charges % Seasonal Charges % Total per Year 3, % Total per Year $2, $4, $11, $18, %

5 Returns per Acre for Commercial Tomato Production Yield Sale Gross Annual Production Costs Total Net Price Revenue Equipment Materials Labor Production Returns (Lbs/Acre) ($/Lb) Costs Dollars per Acre ($/A) ($/A) 96,646 $26,064 $2,311 $4,250 $11,516 $18,076 $7,988 77,317 33,301 $0.380 $12,654 24,748 $0.326 $8,068 19,078 $0.280 $5,342 19,329 $0 $0

6 Costs of Owning and Operating the Machinery and Equipment Required for the Production of Tomatoes Machinery Description Purchase Price Salvage Value Years of Life Annual Hours of Use Annual Depreciation Capital Recovery Interest Insurance Taxes Total Ownership Cost / Year Repair & Maintenance Cost Annual Fuel & Lubricant Costs Total Annual Operating Costs Annual Total Cost/Yr Machinery Description Tractor, 60hp 60 HP 24,400 5, , , , , , Tractor, 60hp Boom Sprayer 1 55 gal Boom Sprayer PTO Blast Sprayer gal 6, PTO Blast Sprayer Plastic Mulch Lifter 2, Plastic Mulch Lifter ' Tine Chisel Plow 7' 3, ' Tine Chisel Plow ' Disc 2 row - 40"/row 5, ' Disc Subsoiler Subsoiler Rotary Spreader 1, Rotary Spreader Grain Drill 5,000 1, Grain Drill Rototiller 3, Rototiller Utility Trailer single axe 2, Utility Trailer Plastic Layer / Fumigator - 7,000 1, Plastic Layer / Fumigator Fumigation Rig (modified) 7, Fumigation Rig (modified) Fertilizer Injector Fertilizer Injector Fertilizer Injector (modified) Fertilizer Injector (modified) Drip Irrigation Syst. & Pump** - 13, , , Drip Irrigation Syst. & Pump** Vehicle Description Purchase Price Salvage Value Years of Life Annual Hours of Use Annual Depreciation Capital Recovery Interest Insurance Taxes Total Ownership Cost / Year Repair & Maintenance Cost Annual Fuel & Lubricant Costs Total Annual Operating Costs Annual Total Cost/Yr Vehicle Description 1/2 Ton Pickup - 25,000 5, ,000 1, , , , , /2 Ton Pickup Total Annual Cost to Farm Business 5, , , Fixed Fixed Variable Variable Total Total

7 Costs of Materials Used in Tomato Production Material Rate/ Unit Cost/ Cost/ Cost/ Annual Acre Unit Acre Cost Fumigant Chloroplicrin 15 lbs $3.25 $ $ Total Fumigants $ Fertilizers & Nutrients lbs $0.17 $ $ lbs $0.83 $0.83 $0.83 Calcium nitrate (applied daily, monthly rate) lbs $0.25 $ $ Potassium nitrate (applied daily, monthly rate) lbs $0.75 $ $ Total Fertilizers & Nutrients $ Herbicides Paraquat 1.50 pt $5.25 $ $15.75 Sencor 0.50 lbs $11.80 $5.90 $5.90 Poast 1.00 pt $9.87 $9.87 $9.87 Total Herbicides $31.52 Insecticides Thrips Spintor 6.00 oz $5.250 $ $94.50 Aphid Dimethoate 0.75 pt $5.850 $4.39 $4.39 Fruit Worm Asana 6.00 oz $0.71 $ $34.08 Total Insecticides $ Fungicides Early Blight Quadris 6.00 oz $2.71 $ $65.04 Early Blight Bravo Ultrex 1.50 lbs $8.17 $ $49.02 Late Blight Maneb 2.00 lbs $7.00 $ $56.00 Late Blight Actiguard 1.00 oz $5 $ $30 Bacterial Kocide lbs $5.25 $ $ Total Fungicides $ General Tomato Plugs ,000 $10 $55 Tomato Plugs to replant (2%) ,000 $10 $11.00 Plastic film ' roll $ $ Drip tape ft $ $ String 3.00 box $3.30 $9.90 Stakes 2,75 each $0.20 $55 Rye Seeds (cover crop) 1.00 bushel $17.00 $17.00 Annual Grower Meeting 1.00 each $25 $25 Custom Lime Application 1.00 ton $55.00 $55.00 Total General $2, Harvest Labor Picking Labor 25 lb box $3.000 Annual Administrative & Seasonal Costs Real Estate Taxes acre $ Management Fee acre $10 Net Land Rent acre $100 Miscellaneous acre $ Internet Service acre $40 Utilities, Legal, Accounting, Etc. acre $ Operating Capital acre $70

8 LABOR COST WORKSHEET (Fill in blue cells as appropriate) Owner Name Owner - Operation Title: Boss Required Payroll Expenses: 1. Wages: a. Hrs/Wk: 40 x Weeks: 52 b. Total Hrs: 2080 x $/HR: $14.00 Employer Costs $29,12 2. Employer Share of OASDI: 6.20% of first $90,000 1, Employer Share of HI: 1.45% Unemployment Insurance State 1.20% of first $16, Federal 0.80% of first $7, Workman's Compensation Insurance: $3.79 per $ Total Required Payroll Expenses: (Lines ) $32, Fringe Benefits: 6. Cash Bonuses: 7. Insurance: a. Health b. Medical c. Life d. Dental e. Eye Care f. Other: g. Other SUBTOTAL 8. Retirement Plan: 9. Uniforms: 10. Travel Allowance: 11. Transportation 12. Tuition Assistance or Continuing Education 13. Company Vehicle 14. Other 15. Other 16. Other 17. Other 18. Total Value of Fringe Benefits: (Lines 6 thru 17) 19. TOTAL PAYROLL EXPENSES: (Line ) $32, Paid Hours Not Worked: a. Holidays 0.0 Days x 8 Hours = Hrs. b. Vacation 0.0 Days x 8 Hours = Hrs. c. Sick 0.0 Days x 8 Hours = Hrs. 21. Total hours paid but not worked: 22. Total Hours on the Job: Hrs TOTAL COST PER HOUR ON THE JOB: (Line 19/Line 22) $15.72 LABOR COST WORKSHEET (Fill in blue cells as appropriate) Employee Name: J Doe - Employee Title: Employee Required Payroll Expenses: 1. Wages: a. Hrs/Wk: 40 x Weeks: 52 b. Total Hrs: 2080 x $/HR: $7.50 Employer Costs $15,60 2. Employer Share of OASDI: 6.20% of first $90, Employer Share of HI: 1.45% Unemployment Insurance State 1.20% of first $16, Federal 0.80% of first $7,

9 4. Workman's Compensation Insurance: $3.79 per $ Total Required Payroll Expenses: (Lines ) $17, Fringe Benefits: 6. Cash Bonuses: 7. Insurance: a. Health b. Medical c. Life d. Dental e. Eye Care f. Other: g. Other SUBTOTAL 8. Retirement Plan: 9. Uniforms: 10. Travel Allowance: 11. Transportation 12. Tuition Assistance or Continuing Education 13. Company Vehicle 14. Other 15. Other 16. Other 17. Other 18. Total Value of Fringe Benefits: (Lines 6 thru 17) 19. TOTAL PAYROLL EXPENSES: (Line ) $17, Paid Hours Not Worked: a. Holidays 0.0 Days x 8 Hours = Hrs. b. Vacation 0.0 Days x 8 Hours = Hrs. c. Sick 0.0 Days x 8 Hours = Hrs. 21. Total hours paid but not worked: Hrs 22. Total Hours on the Job: TOTAL COST PER HOUR ON THE JOB: (Line 19/Line 22) $8.47

10 Tomato MB Base Production Sequence. Month Type op. Equipment Materials used Labor used Summary Cumulative Descr. hrs cost/hr eqcost price unit qty matcost hrs cost/hr cost costs costs February February Attend Grower Meeting $ $ $8.47 $40.68 $ Total February $ $ $ $ March March Plow Field 60 HP-WT & 7' Tine Chisel Plow $ $ $8.47 $ $ Disc Field 60 HP-WT & Disc $ $ $8.47 $5.593 $ Subsoil Field 60 HP-WT & Subsoiler $ $ $8.47 $ $ Total March $ $ $ $ April April Preplant Fertilizer 60 HP-WT & Rotary Spreader $ $ $8.47 $7.627 $ $0.170 lbs 75 $ $ Assemble Irr Syst Utility Trailer & Hand Labor $1.450 $ $8.47 $ $ Bedding and Fumigation 60 HP-WT & Fumigator $ $ $8.47 $ $ Chloropicrin $3.250 lbs 15 $ $ Plastic film $ ' roll 3.50 $ $ Drip tape $ ft 1.50 $ $ Total April $ $1, $ $1, $1, May May Purchase Plugs $100 1, $ $8.47 $8.475 $ Fertilize Plugs Fertilizer Injector $0.220 $ $8.47 $8.475 $ $0.830 lbs 1.00 $0.830 $0.830 Transplant plugs 60 HP-WT & Water Wheel $ $ $8.47 $ $ Replant 2% Hand Labor $100 1, $ $8.47 $8.475 $ Drip Irrigation Drip System & Fertilizer Injector $9.368 $ $8.47 $ $1, Calcium Nitrate $0.250 lbs $ $ Pottasium Nitrate $0.750 lbs $ $ Staking $0.200 each 275 $ c/100ft $ $ String x2 Hand Labor $3.300 box 3.00 $ c/100ft $ $ Prune Hand Labor c/100ft $ $ Weekly sprays 60 HP-WT & PTO Blast Sprayer $ $ $8.47 $ $ Aphid Dimethoate $5.850 pt 0.75 $4.388 $4.388 Thrips Spintor $5.250 oz 6.00 $ $ Fruit Worm Asana x3 $0.710 oz $ $ Early Blight Quadris $2.710 oz 6.00 $ $ Early Blight Bravo Ultrex $8.170 lbs 1.50 $ $ Late Blight Maneb x3 $7.000 lbs 6.00 $ $ Late Blight Actiguard x2 $50 oz 2.00 $100 $100 Bacterial Koside 101 x3 $5.250 lbs 9.00 $ $ Post-Emergent Herbicide 60 HP-WT &Boom sprayer $ $ $8.47 $5.593 $ Paraquat $5.250 pt 1.50 $7.875 $7.875 Sencor $ lbs 0.50 $5.900 $5.900 Total May $ $1, $ $3, $4, June June Drip Irrigation Drip System & Fertilizer Injector 60 $9.368 $ $8.47 $ $1, Calcium Nitrate $0.250 lbs $ $ Pottasium Nitrate $0.750 lbs $ $ Weekly sprays 60 HP-WT & PTO Blast Sprayer $ $ $8.47 $ $ Thrips Spintor $5.250 oz 6.00 $ $ Fruit Worm Asana x3 $0.710 oz $ $ Early Blight Quadris $2.710 oz 6.00 $ $ Early Blight Bravo Ultrex x2 $8.170 lbs 3.00 $ $ Late Blight Maneb $7.000 lbs 2.00 $ $ Late Blight Actiguard x3 $50 oz 3.00 $150 $150 Bacterial Koside 101 x4 $5.250 lbs $ $ Post-Emergent Herbicide 60 HP-WT &Boom sprayer $ $ $8.47 $5.593 $ Paraquat $5.250 pt 1.50 $7.875 $7.875 Poast $9.870 pt 1.00 $9.870 $9.870 Total June $ $ $ $1, $6, July July Drip Irrigation Drip System & Fertilizer Injector $9.368 $ $8.47 $ $1, Calcium Nitrate $0.250 lbs $ $ Pottasium Nitrate $0.750 lbs $ $ Weekly sprays 60 HP-WT & PTO Blast Sprayer $ $ $8.47 $ $ Thrips Spintor $5.250 oz 6.00 $ $ Fruit Worm Asana x2 $0.710 oz $8.520 $8.520 Early Blight Quadris x2 $2.710 oz $ $ Early Blight Bravo Ultrex $8.170 lbs 1.50 $ $ Late Blight Actiguard $50 oz 1.00 $50 $50 Bacterial Koside 101 $5.250 lbs 3.00 $ $ Harvest Hand Labor $3.00 $9, $9, Total July $ $ $9, $10, $17, October October Remove Plastic 60 HP-WT & Lifter & Hand Labor $ $ $8.47 $ $ Dispose Plastic Pickup Truck $ $ $8.47 $ $ Disk Field 60 HP-WT & Disc $ $ $8.47 $ $ Apply Lime Custom $ ton 1.00 $ $ Plant Rye for Cover Crop 60 HP-WT & Grain Drill 10' $ $ $ bushel 1.00 $ $8.47 $ $ Total October $ $ $ $ $17, Annual Administrative Costs + Taxes Annual Taxes Real Estate Taxes $ acre 1.00 $ $ Management Management Fee $10 acre 1.00 $10 $10 Land Cost Net Land Rent $100 acre 1.00 $100 $100 Miscellaneous Miscellaneous $ acre 1.00 $ $ Internet Service $40 acre 1.00 $40 $40 Overhead Utilities, Legal, Accounting, Etc $ acre 1.00 $ $ Total Annual Administrative Costs + Taxe $ $ $17, Seasonal Costs Seasonal Pick-up 1/2 Ton Pick-up $ $ $8.47 $ $ Operating Capital $70 acre 1.00 $70 $70 Total Seasonal Costs $ $ $ $ $18, TOTAL COSTS $ 2, $ 4, $ 11, $ 18, $18,