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October 1977
J1/7
Costs and Returns from Hothouse
Tomato Production in Florida
Food and Resource Economics Department
Agricultural Experiment Stations
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611
D. L. Brooke
and G. B. Wall
Economics Report 87
ABSTRACT
Interest in hothouse tomato production is increasing in central,
north and west Florida. A survey of eight growers indicated require-
ments of 504 hours for production and 208 for harvesting and marketing
7,425 pounds of tomatoes from 900 plants in a 3,000-square foot house.
Returns to labor were $1.97 per hour and house construction cost was
$2.18 per square foot.
Key words; Economics, hothouse tomatoes.
TABLE OF CONTENTS
INTRODUCTION . . .
DESCRIPTION OF GROWERS . .
INVESTMENT AND ANNUAL FIXED COSTS . .
Investment . . . .
Annual charges . . .
OPERATING EXPENSES AND LABOR REQUIREMENTS
Production . . . .
Harvesting and marketing .
Labor requirements . . .
* .. . .
..
* .............. .
NET RETURNS ...... .. . . . 7
Effect of yield and price on net returns . 8
SUMMARY . . . .... . . . 10
LIST OF TABLES
Table e
1 Estimated man hour requirements and construction costs for
a 3,000-square foot tomato hothouse, Florida, 1975-77 .. 3
2 Schedule of fixed costs for a 3,000-square foot tomato hot-
house, Florida, 1975-77. . . . . 3
3 Estimated expenses of growing a crop of tomatoes in a 3,000-
square foot hothouse using 900 plants, Florida, 1976-77 5
4 Estimated man hour requirements for producing, harvesting and
marketing a crop of tomatoes in a 3,000-square foot hothouse,
using 900 plants . . . . . 7
5 Estimated net return to land and labor from a crop of tomatoes
in a 3,000-square foot hothouse, Florida, 1975-77 . 8
6 Effects of varying yields and prices on returns per hour's
labor in producing a crop of tomatoes in a 3,000-square foot
hothouse using 900 plants, Florida, 1975-77 . .. .. 10
COSTS AND RETURNS FROM HOTHOUSE TOMATO PRODUCTION IN FLORIDA
D. L. Brooke and G. B. Wall
INTRODUCTION
Tomatoes have been produced hydroponically in Florida for many years,
but with little economic success. Gradually the rock-bed hydroponic tomato
culture was discontinued. Changes in technology, however, with the intro-
duction of quonset type plastic covered hothouses and new methods of bed
culture has revived interest in hydroponic type culture.
The purpose of this publication is to furnish information on the
possible costs and returns from hothouse tomato production in Florida.
Fixed and variable costs are presented along with estimates of the amount
of labor required to produce and harvest a winter-spring crop of about 6
months duration. Effects of varying prices and production levels on
returns to land and labor are also presented.
Data were obtained by interview method from eight growers in north
and west Florida. Summaries of the data were used to develop estimates
of costs and returns for production of tomatoes in a 3,000-square foot
polyethylene covered quonset type hothouse containing 900 plants.
DESCRIPTION OF GROWERS
Interviews were conducted in Clay, Duval, Nassua, Taylor and Okaloosa
counties. Only one producer was engaged in any othe agricultural activity,
two were retirees; two had other businesses; and three were professionally
employed.
The hothouses ranged from 2,400 square feet to 3,720 square feet and
averaged 3,210 square feet. Two producers had houses 24 x 100 feet, two
D. L. Brooke is an economist and G. B. Wall is an assistant economist
in the Food and Resource Economics Department.
COSTS AND RETURNS FROM HOTHOUSE TOMATO PRODUCTION IN FLORIDA
D. L. Brooke and G. B. Wall
INTRODUCTION
Tomatoes have been produced hydroponically in Florida for many years,
but with little economic success. Gradually the rock-bed hydroponic tomato
culture was discontinued. Changes in technology, however, with the intro-
duction of quonset type plastic covered hothouses and new methods of bed
culture has revived interest in hydroponic type culture.
The purpose of this publication is to furnish information on the
possible costs and returns from hothouse tomato production in Florida.
Fixed and variable costs are presented along with estimates of the amount
of labor required to produce and harvest a winter-spring crop of about 6
months duration. Effects of varying prices and production levels on
returns to land and labor are also presented.
Data were obtained by interview method from eight growers in north
and west Florida. Summaries of the data were used to develop estimates
of costs and returns for production of tomatoes in a 3,000-square foot
polyethylene covered quonset type hothouse containing 900 plants.
DESCRIPTION OF GROWERS
Interviews were conducted in Clay, Duval, Nassua, Taylor and Okaloosa
counties. Only one producer was engaged in any othe agricultural activity,
two were retirees; two had other businesses; and three were professionally
employed.
The hothouses ranged from 2,400 square feet to 3,720 square feet and
averaged 3,210 square feet. Two producers had houses 24 x 100 feet, two
D. L. Brooke is an economist and G. B. Wall is an assistant economist
in the Food and Resource Economics Department.
had houses 30 x 100 feet and four had houses 30 x 124 feet. All were
quonset types with 1 inch to 1-1/4 inch conduit pipe covered with a double
layer of plastic separated by air. All were heated by oil or gas forced-
air systems employing two heaters of approximately 140,000 BTU. All were
cooled by dual 48 inch electric fans pulling air across wet aspen pads.
All growers sold tomatoes to chain stores and usually made two
deliveries per week. Several of the growers sold tomatoes at the pro-
duction site. None engaged in road-side marketing.
INVESTMENT AND ANNUAL FIXED COSTS
investment is the purchase price and construction cost of the hot-
house and its components. Fixed costs are annual charges to cover
depreciation, interest on the investment, taxes and insurance.
Investment
The initial investment in materials ranged from about $4,400 for a
2,400 square foot house to more than $9,100 for a 3,720 square foot house.
Estimated materials cost were $6,532 for a 30 x 100 foot hothouse (Table 1).
Labor to construct and cover the house and build troughs cost about $882
with some growers reporting over $1,200 for labor. Had labor been charged
at minimum wage scales, the total investment would have been considerably
greater.
House construction, trellis construction, wiring, heater installation
and plumbing took an estimated 260 hours. Covering the house with plastic
occupied about 40 hours while constructing troughs consumed some 60 man
hours. Growers estimated a range of 208 hours for the smaller house to
720 hours for one of the larger houses.
Annual charges
Growers estimated a useful life of 10 years on the building and equipment
two years for the cover and five years for the troughs made of lumber and
lined with plastic. Annual charges for depreciation were $917 (Table 2).
Interest on investment was charged at 9 percent, insurance at .5 percent and
taxes at 1.5 percent of the average value of the hothouse,
Table 1.--Estimated man hour requirements and construction costs for a
3,000-square foot tomato hothouse, Florida, 1975-77
mMan Cost
Man
hours Labora Other Total
Building cost (including
heat, plumbing, fans,
trellis) 260 $ 682.00 $6,022.00 $6,704.00
Polyethylene cover 40 80.00 270.00 350.00
Troughs 60 120.00 240.00 360.00
Total 360 $ 882.00 $6,532.00 $7,414.00
a$2.00 per hour or actual.
Table 2.--Schedule of fixed costs for 3,000-square foot tomato hothouse,
Florida, 1975-77
Cost
Item Lengthost
life Total Annual Cropa
Depreciation:
Building 10 years $6,704.00 $ 670.40 $ 446.93
Polyethylene cover 2 years 350.00 175.00 116.67
Troughs 5 years 360.00 72.00 48.00
Total $7,414.00 $ 917.40 $ 611.60
Interest on investment (9% of average value) $ 333.63 $ 222.42
Insurance (1/2.of 1% of average value) $ 18.54 $ 12.36
Taxes (1-1/2% of average value) $ 55.60 $ 37.07
Total fixed expense $1,325.17 $ 883.45
under an assumption of 1.5 crops in 12 months.
bAverage value $3,707.
Growers agreed that it was difficult to grow two full crops per year.
Experience to date indicates the months of July, August and September are
too hot for tomato plants to produce well in hothouses, even if they
survived. The winter-spring crop usually lasts five to seven months
from planting to harvest.1 Thus, it was assumed 1.5 crops would be pro-
duced in a 12 month period. As a result the fixed costs of $883 per crop.
OPERATING EXPENSES AND LABOR REQUIREMENTS
Operating expenses are separated into two categories, 1) production
and 2) harvesting and marketing. Labor requirements for all aspects of
the operation are also discussed in this section.
Production
Peat moss, vermiculite, dolomite, superphosphate, potassium nitrate,
gypsum, micro nutrients, iron, borax and manganese sulfate are mixed to-
gether in prescribed proportions and placed in troughs (to a depth of
five to six inches) to serve as a growing medium for the plants. Some of
this mixture is lost with each crop when plants are removed. This material
is usually replaced after four or five successive crops. The cost of that
material (reduced to a crop basis) is about $160 (Table 3).
Plants are raised in jiffy pots or cellulose growing blocks so they
can be transferred directly to the troughs. The pots, mix, seed, fertilizer
and other chemicals cost about $37 for 900 plants or about 4 cents each.
Plants may be purchased from other sources (with cost slightly more per
plant). The number of plants per 3,000-square foot house ranged from 600
to 1,400 plants.
Liquid feeding of nutrients is accomplished through the irrigation
(pvc) pipe in each trough. Growers may purchase premixed formulas or,
with some knowledge of chemicals and their reactions, may purchase the
proper ingredients and mix their own. Feeding practices varied among
growers. The majority fertilized six days and flushed the lines with
clear water on the seventh day.
1Technology is changing rapidly and a 12 month growing season may
soon be possible.
Table 3.--Estimated expenses of growing a crop of tomatoes in a 3,000-
square foot hothouse using 900 plants, Florida, 1976-77
Item Description Amount
Trough mixa Peat, vermiculite dolomite $ 160.65
Plants Seed, jiffy mix, pots, fertilizer 37.02
Fertilizer Nitrogen, potash, potassium, minors 134.56
Spray materials Insecticides and fungicides 45.21
Twine and plant
ties Binders or nylon twine, plastic ties 95.19
Fuels Heating fuel and electricity 673.83
Miscellaneous Replacement parts, pollinator batteries,
cleaning chemicals, etc. 69.39
Interest 9% for 6 months on production items 54.71
Total $1,270.56
a0ne filling plus 10% replacement per crop. Mixture is assumed to
last through four crops.
Recent advances favor culture of plants in flexible black polyethylene
tubes with recirculation of nutrients. Pumps aerate the growing solution
for 10 minutes of each quarter hour. Such a practice requires low benches
to support the tubes and requires no trough mix. Purchasing new tubes for
each crop is presently cheaper than the cost per crop of trough mix.
Tomatoes are subject to damage or attack by viruses, bacteria, fungi
and many types of insects. Careful attention must be given plants during
the whole production period to prevent losses by one or more diseases and
insects. Removal of dead leaves and other plant parts, temperature and
humidity control and general cleanliness all help prevent the incidence
of these pests. Insecticide and fungicide costs were about $45 per crop.
This included some cleaning agents used in walkways.
Most growers were using 170 pound test nylon twine tied to trellis
wires to support the growing plant. Nylon does not rot and can be reused
several times. Plastic clips or plant ties, which clipped to the twine
and encircled the stalk, held plants in place. As growth continued, leaves
and branches were removed from the base portions of the stalk as they
become unproductive. The plant stem was then lowered to give the tomato
producing area room to grow. Plant ties could be lowered, as well, continuing
to provide support. Four to six ties or clips were used per plant.
Fuel oil (#2) or butane gas was used for heating. Average cost for fuel
was about $250 per crop. Electricity to operate fans, pumps, lights, etc.
averaged $70 to $80 per month. Temperatures between 60 and 800 are optimum
for tomato production.
Production expenses of $1,270 per crop were calculated. Grower esti-
mates ranged from $800 to over $2,000 per crop.
Harvesting and marketing
Growers harvested two to three times per week in order to pick tomatoes
at their optimum (pink) stage of maturity for sale to the stores. The
picking period for the winter-spring crop ranged from 61 to 133 days and
averaged 101 days for the eight growers interviewed.. About 76 hours of
labor was required to pick the crop. Growers picked about 97 pounds of
tomatoes per hour.
Washing, grading and packing of fruit was accomplished just outside
the house or in a nearby building. Culls, misshapen, overripe and small
fruit were discarded and salable fruit were placed in used fiberboard
cartons (usually of 20 pound capacity) for transport. Grading and packing
required 84 hours of labor.
All growers delivered tomatoes directly to individual chain store
outlets, normally two deliveries per week. Deliveries plus collections
required 36 hours per crop. Truck or car expense was charged at 15 cents
per mile of travel.
Growers paid no commissions or handling charges to brokers or others.
Hence, their marketing costs were minimal when compared to a large scale
commercial grower who must market through established packing and sales
firms. However, the hothouse tomato producer should be certain he has a
market outlet before he raises the crop. Nothing is so disheartening as
a good crop rotting on the vine for lack of a sales outlet.
Labor requirements
Among the production operations, tying and trellising the vines was
the most labor consuming (Table 4). Pruning was second and pollinating
third, followed closely by fertilizing and irrigating. Production required
an average of 504 hours and ranged from 456 to more than 1,000 hours for
900 plants. Harvesting and marketing averaged 208 hours and ranged from
72 to 356 hours.
Table 4.--Estimated man hour requirements for producing, harvesting and
marketing a crop of tomatoes in a 3,000-square foot hothouse,
using 900 plants
Operation Man hours
Filling troughsa 21.0
Raising plants 21.0
Setting plants 30.0
Fertilizing, irrigating 78.0
Spraying 24.0
Tying, trellising 127.5.
Pruning 90.0
Pollinating 84.0
Clearing house 28.5
Harvesting 76.5
Grading and packing 84.0
Harvest clean up 12.0
Marketing 36.0
Total 712.5
alnitial fill plus renovation converted to a crop basis.
NET RETURNS
Yield estimates ranged from 4.9 to 14.1 pounds per plant. This
translates to a range of 4,410 to 12,690 pounds for 900 plants. Average
production was 7,425 pounds or 8.25 pounds per plant. Average price was
$0.50 per pound with a range of $0.38 to $0.59. Gross returns averaged
$3,712.50.
Table 5 shows the estimated net return to land and labor with marketing
costs (containers and hauling) estimated to be $0.0204 per pound. With a
yield of 7,425 pounds and an average price of $0.50 per pound, net return
to land and labor was $1,407.23. This is a return of $0.19 per pound or
$1.97 per hour's labor used in the production of the crop.
Table 5.--Estimated net return to land and labor from a crop of tomatoes
in a 3,000-square foot hothouse,a Florida, 1975-77
Item
Gross revenue
Amount
$3,712.50
Variable expenses:
Cultural expenses
Marketing costs (7,425 Ibs. @ $0.0204)
Total variable expenses
Revenue over variable expenses
$1,270.56
151.47
$1,422.03
$2,290.47
Fixed expenses:
Depreciation
Interest (9% of investment)
Taxes and insurance
Total fixed expenses
Net return to land and labor
$ 611.60
222.42
49.43
$ 883.45
$1,407.02
aBased upon average production as reported by eight growers and
applied to a 3,000-square foot hothouse.
Effect of yield and price on net returns
Gross revenue depends upon salable yield and price. The farmer has
no control over the market price except through the quality of fruit he
_ I I
offers for sale. Good quality will always return higher prices. The
farmer can influence quality and yield. The better care he takes of the
plants, the more likely he is to have high yields of good quality fruit.
Most of the costs of production will be the same regardless of output.
However, the time required for picking and preparing the fruit for market
is affected by yield. [1]
The average time required to harvest and prepare a pound of fruit was
found to be 1.686 minutes (.0281 hours) or about 36 pounds per hour.
Effects of varying yields and prices on returns per hour's labor with a
$0.0204 per pound marketing charge2 are shown in Table 6. At a price of
$0.30 per pound and a yield of 7,000 pounds in a 3,000-square foot house
a grower could earn a minus $0.28 per hour's labor. At a price of $0.60
per pound and the same yield he would earn $2.72 per hour's labor. If
production was increased to 11,000 pounds in the same house, returns per
hour of total labor would be increased to $5.19 per hour for those pro-
ducers similar to the average conditions observed.
These estimates were determined by the following procedure, taken
from [1]: PY 2,154.01 .0204Y
Net revenue per hour =
504 + .0281Y
Where:
P = average price of fruit (cents per pound)
Y = yield (pounds)
$2,154.01 = total cost of production
.0204Y = cost of marketing
504 = total hours except harvesting and preparing for market
and marketing
.0281 = time to harvest and prepare a pound of fruit.
Table 6.--Effects of varying yields and prices on returns per hour's labor
in producing a crop of tomatoes in a 3,000-square foot hothouse
using 900 plants, Florida, 1975-77
Price Yield of tomatoes (Ibs.)
per 5,000 7,000 9,000 11,000 13,000
pound (5.6) (7.8) (10.0) (12.2) (14.4)
------------------ Dollars per hour's labor --------------------
$0.30 $-1.17 $-0.28 $0.48 $1.13 $1.70
.40 -.40 .72 1.67 2.49 3.20
.50 .38 1.72 2.86 3.84 4.69
.60 1.15 2.72 4.05 5.19 6.19
.70 1.93 3.72 5.24 6.54 7.69
aSalable total with pounds per plant in parentheses.
SUMMARY
Based on the results of interviews with eight producers located in
five counties in Florida, producing tomatoes in plastic hothouses offers
some opportunity to increase net income. Under conditions similar to the
average of these individuals, net return to labor would be around $1.97 per
hour if a charge of $0.0204 per pound is made for marketing. Average yields
might be expected to be around 7,400 pounds per house using 900 plants in a
3,000-square foot hothouse. That output equals 8.25 pounds per plant or 2.48
pounds per square foot of house space. This discussion refers to the winter-
spring crop only, with 100 or more days of fruit production. A fall crop can
be produced, but yields are generally lower and harvest periods shorter.
Growers expressed amazement at how much time and care was required to
produce the crop. All agreed that a consistently available market was
essential and that good quality fruit sold well.
The initial cost of the house simulated herein would be around $6,532
(labor excluded) or $2.18 per square foot. Under current inflationary
conditions and energy shortages, costs can be expected to increase.
REFERENCE
[11 Liner, H. L. and Banadyga, A. A., "Costs and Returns from Producing
Greenhouse Tomatoes in North Carolina," No. Car. Agr. Ext. Serv.
Circular 558, Jan. 1974.
This public document was promulgated at an annual cost of $866.00 or
$1,15 per copy to furnish data on the economics of hothouse tomato
production in Florida.
Food and Resource Economlcs--750
DLO:sh
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