GREEN PEAS. in the Columbia Basin

Transcription

1 FOR FURTHER NFORMATON CONTACT GRANT- ADAMS AREA EXTENSON SERVCE EPHRATA, WASHrlGTON EM 2949 JUNE 1968 COST: a RETURNS GREEN PEAS n the Columba Basn COOPERATVE EXTENSON SERVCE COLLEGE OF AGRCULTURE WASHNGTON STATE UNVERSTY PULLMAN n cooperaton wth the Unted States Department of Ag rculture ssued n furtherance of the Acts of May 8 and June 3, 1914, by the Washngton State Unversty Cooperatve Extenson Servce, John P. Mller, Drector

2 June 1968 E.M GREEN PEAS ESTMATED PER ACRE COSTS AND RETURNS COLUMBA BASN, WASHNGTON by Samuel M. Doran and Raymond E. Hunter>'< The land devoted to green pea producton n the Columba Basn r.creased substantally between 1963 and 1967, as shown n the table below. Peas are one of the major vegetable crops grown n the Basn. Green Pea Producton n the Columba Basn Acres n Ave. Yeld Ave. Prce Ave. Value Year Green Peas Eer Acre Eer Ton Eer Acre (tons) , $ $ llo , ' , , Data from u. s. Bureau of Reclamaton annual crop reports. Green peas are an early maturng crop. Some farmers gror another crop on the land after the peas are harvested. Peas are also grown as a companon or nurse crop for sprng seeded alfalfa, pasture, or clover. Most of the green peas are grown on a contract bass for process ng. They are usually frozen. The prce receved ranges from about $5 to $1 per ton, dependng on tenderness of the peas at harvest and the processng frm. Most contracts specfy that the grower purchase the pea seed from the processor. The processoy also desgnates the tme of seedng. Harvest costs are generally pad by the processng frm. OBJECTVE OF THS ENTERPRSE STUDY The study was conducted to provde cost of producton nformaton for Columba Basn farmers, those n the busness of processng peas, and to nform representatves of credt organzatons and agences who help fnance the producton of peas. The nformaton may also be used to compare green pea costs and returns wth those for other crops grown n the area. * Extenson Farm Manag ement Specalst, Pros ser, and Grant-Adams Area Extenson Agent, respect vel y.

3 E.M Page 2 The data n the tables llustrate expected ncome and expenses per acre when 3 acres of Columba Basn land on a typcal 15-acre surface rrgated farm s used to grow green peas. METHOD OF OBTANNG COST AND RETURN DATA The data were compled from nformaton suppled by a selected group of green pea growers and processor representatves. The costs and returns nformaton n the tables B! averages, but represent the consensus of the group about the costs and returns normally expected for the area. Therefore, growers should use the nformaton only! basc gude untl more factual data are avalable from ther own records. Space s provded n each table so operators can nsert ther own data as they become avalable. TABLE 1. COSTS AND RETURNS SUMMARY Returns: The actual prce receved for green peas s determned by ther tenderness at harvest. The 1967 prces ranged from less than $5 per ton to $1 per ton for the crop standng n the feld. Durng the years 1963 to 1.6 tons per acre. perenced every year. and 1967, average yelds for the Basn ranged from 1.4 However, yelds as hgh as 3. tons per acre are ex- Expenses: Crop expenses were computed by determnng the usual producton practces and the assocated costs for labor, materals, and machnery use. The cash and non-cash overhead costs were then added to the producton costs to determne total costs per acre. Ths study assumed that another crop was grown on the land after the peas are harvested. Therefore only a porton of certan producton and overhead costs were charged aganst the crop. Fertlzer and pest control consttutes the operators' major cash costs. Harvest costs are normally pad by the processors Cash Overhead: Only a porton of the real estate and personal property TAXES and rrgaton WATER assessment was charged to peas, snce t was assumed a second crop would be grown. A charge of 5 percent of cash costs was ncluded as GENERAL OVERHEAD, to cover such untemzed expenses as utltes, nsurance, travel, offce costs, etc. No charge was made for RENT snce a charge was made for land taxes and nterest on the nvestment n land. Those who rent land should adjust ther costs accordngly. The fnancal stuaton of the operator wll determne whether NTEREST ON OPERATNG CAPTAL should be a cash or non-cash cost. t would be a cash expense when the operator borrows the money; a non-cash opportunty cost when he uses hs own money for operatng expenses.

4 E.M Page 3 Non-Cash Costs: The non-cash costs are for SEED, for OPERATOR'S LABOR and the charges due to NVESTMENT OVERHEAD. NVESTMENT OVERHEAD conssts of DEPRECATON of equpment and buldngs, and NTEREST ON AVERAGE NVESTMENT n equpment, buldngs, and land. Detals of the nvestment overhead charges are shown n TABLE 2. Return for Operator's Labor and Management: The non-cash charge for OPERATOR'S LABOR ($8.65 per acre) was ncluded n TOTAL COSTS. Therefore that amount was deducted from total costs when determnng the operator's labor and management ncome. TABLE 2. CAPTAL NVESTMENT ncluded s a lst of equpment and buldngs normally used for seed pea producton. t was assumed that all the tems are used for other enterprses on the farm, so only a porton of ther annual deprecaton and nterest on nvestment was charged to the pea enterprse. Also shown are expected cash costs per hour for the varous tems of equpment. TABLE 3. MONTHLY CASH FLOW The cash expenses and ncome, taken from TABLE 1, are shown by operaton and the expected month of occurance. Ths table s provded for farmers who budget ther labor and fnancal needs, to determne credt needs by month. Seedng and harvest of green peas s scheduled by the processor over several weeks to spread ther work load. Therefore the ncome and expense schedule vares wdely wthn and among dfferent areas of the Basn. TABLE 4. COSTS PER ACRE AND PER TON The growers ndcated the prncpal factors that affect green pea yelds are weather, rrgaton and pest control practces, and tmelness of harvest. They usually plan for good yelds. Therefore ther producton costs seldom change wth yeld The non-cash and total costs nclude charges for seed and operator's labor. Costs are shown for yelds rangng from 1. to 3. tons per acre. TABLE 5. OPERATOR'S RETURN AT SELECTED YELDS AND PRCES Table 5 shows expected per acre return to the operator for hs labor and management at selected yelds and prces. The yelds were vared from 1. to 3. tons per acre. Prces were vared from $55 to $12 per ton. The data ndcate the cash value of 1-1/2 tons of green peas s suffcent to justfy usng the resources needed to grow the crop at 1967 prces when the land produces a second crop or when the peas are grown as a nurse crop. However, 1-1/2 tons per acre of peas may not be proftable at 1967 prces when only one crop s produced per year.

5 E.M Page 4 TABLE 1. ESTMATED COSTS AND RETURNS PER ACRE COLUMBA BASN, WASHNGTON (1967) / - _.- f. Hours.- c-machnery Materals per Labor!/ Fuel and and Acre Repars Other RETURNS y -,.ov y y 1.5 $85. per ton COSTS PreElant1/ Dtch cleanup, repar/ >'( Fertlze (4N, 5P 2 o 5, 5Zn) 1).>'< custom apply tr " 1. 5>'< Plow '"' Dsc and pack Plant to Harvest Plantng]/ drll rental hoo., Corrugate rrgate, 5x 5" f{. so Weed control (chemcal) -6, nsect control (chemcal)/ 1. * Harvest Pad by the processor Cash Overhead2/ Taxes/ 3.oo - Rent }.-t)o Water/. 8 General Overhead ( of costs) 2. nt. on Oper. Captal (4 to) 1. TOTAL CASH COSTS '2.;J.o Seed ( b-?5 )1/ 2-'1-;-8-2 Operator's Labor 8.65 nvestment Overhead-/ 6 Deprecaton 5.67 nt. on Ave. nvestment 2.96 TOTAL NON-CASH COSTS TOTAL COSTS PER ACRE NET RETURN TO OPERATOR'S LABOR & MANAGEMENT Total ' ' ' l.54! ! 1.24 ; ' 1.6 ' 4.8! 1.49! ; 3. ' ::J. ::JO &Z Cost based on 3 acres of peas on a 15-acre surface rrgated farm. durng the year. *These operatons usually hred. 1/Labor charged at $1.75 per hour. 2/Consult your county agent or feldman for local recommendatons on specfc cultural practces. ]/Seed costs borne by processor untl after harvest. 4/Some processors pay part of the cost of nsect control practces. Your Estmate y Also on two crops grown /Rounded to the nearest dollar. /Only a porton of annual charges for taxes, water, equpment, land, etc., are charged to the peas snce t s assumed another crop s grown the same year.

6 .,. E.M Page 5 Tractor,LJO]p, Desel Plow, bottom\ Dsc, Tandem, 1 Packe,,, Schmzer Corrugator, Rotary rrgaton equpment se Rr-ee $8, 1,4 1, ) -8Q r;').'j TABLE 2. CAPTAL NVESTMENT-!/ flfe Percent Method Salvage Annual Costs _, Due to to Value Peas De rec.j:.f De rec. nt. l"'lo $1,5 1el.; W' SL $ 65. $ H 5' SL D %e 65 1 "' SL SL ) 1 25 SL 3.75 l : SL SL Annual Costs Your Estmate De rec. nt. $ $ Cash Costs Per Hour Fuel e ars Total $.6 $.86 $ /Pckup Shed and Shop Shop Equpment 1 J>RtLL 12 Land, 3 $55 l 2,7 b, 2,, Y q(}() 1Ja 1,85-1 :3 ysl 1,5 1 4sL ,- 15D , 1 SL ,, /O SL 116, s1{ 2'>' 3 "' OS;', TOTAL YOUR TOTAL PER ACRE ' 1 -' - ' ' "" YOUR COST *Expected co per mle of operaton 1/Based on acres of peas on a L&rr-acre farm. t s assumed two crops are grown durng the year. 1/Straght lne (SL) method of deprecaton used; the numbers (1) ndcate years of expected use. 1/nterest on land nvestment charged at 6.5 percent.

7 .. '._,. E.M Page 6 TABLE 3. MONTHLY CASH FLOW OPERATON TOTAL J F M A M J J A s N D $ $ $ Preplant (., o l ' pack ov $ $ $ $ $ $ 1$ 1$ :! $ $ Plant to Harvest l o.12 1! Plantng : drll rental 1. 1.! Cult., corrug..74.1s 1.59! rrgate Weed control ' nsect control ' ' Harvest l! Cash Overhead Taxes Rent Water 5. s.oo General Overhead nt. on Oper. Captal 1. 1.oo 1 TOTAL CASH COSTS YOUR CASH COSTS NCOME "5f) YOUR NCOME NET CASH YOUR NET CASH l

8 E.M Page 7 TABLE 4. ESTMATED COST PER ACRE AND PER TON AT SELECTED YELDsl/ 2 ) Yeld, Tons per Acre CASH COSTS $ $ $ $ Preplant Plant to Harvest Cash Overhead TOTAL CASH COSTS PER ACRE TOTAL CASH COSTS PER TON NON-CASH Seed Operator's Labor nvestment Overhead Deprecaton nterest on nvestment TOTAL NON- CASH COSTS PER ACRF1/ TOTAL NON- CASH COSTS PER TON Your 3. Estmate $ $ TOTAL COSTS PER ACR]:./ TOTAL COSTS PER ToN!/ /These costs and returns assume the land s used to produce another crop after pea harvest. l/ncludes non-cash costs for operator's labor, seed, and the nvestment overhead. TABLE 5. OPERATOR'S LABOR AND MANAGEMENT RETURNS PER ACRE AT SELECTED YELDS AND PRCE ':t Prce Per Ton $ :g 5 Yeld. Tons per Acre Your 1:":"" Estmate $ $16.15 $43.65 $ ' ' oo costs and returns assume the land s used to produce another crop after pea harvest. hese