Berry Production: Using Interactive Budgeting Tools to Assess Costs, Revenues and Risks

Monday, July 28, 2014
Ballroom A/B/C (Rosen Plaza Hotel)
H. German Rodriguez, Program Associate , University of Arkansas, Fayetteville, AR
Jennie H. Popp, Co-Director , Dept. of Agriculture Economics and Agribusiness, University of Arkansas, Fayetteville, AR
Curt R. Rom, Co-Director, Center for Agricultural and Rural Sustainability , Horticulture, Dale Bumpers College, Fayetteville, AR
Heather Friedrich , Horticulture, University of Arkansas, Fayetteville, AR
Freeman Luke , University of Arkansas, Fayetteville, AR
The rising consumer preference for fresh blackberries, raspberries, and blueberries combined with improvements in cultivars, management practices, production systems and refrigerated transportation innovations have encouraged berry producers to invest in new or expanded berry operations (Geisler and Isaacs, 2012; Geisler and Morgan, 2012; Geisler, Morgan, and Huntrods, 2013).

Investing in early and/or late season production cultivars and high tunnel production technologies can offer producers the opportunity to improve overall profitability by targeting fresh market windows, as the relatively short shelf life and delicate handling requirements of the mature fruits are well-suited to direct-to-consumer marketing and sales. Consequently, tools that help producers in assessing costs, revenues and risks and in conducting breakeven, sensitivity and risk analyses are important components for planning and for financial management of berry production in Arkansas and across the south.

University of Arkansas is responding to this need by developing interactive decision tools for berry production. These tools, for blackberries, raspberries, blueberries and strawberries are being developed in Microsoft Excel using VBA interfaces for simplified data entry. These interfaces allow the tools to be user friendly and flexible.

The interactive tools act in part like enterprise budgeting tools as they calculate total revenues, total costs and net returns associated with different production practices (including field and high tunnels) and different cultivars. Producers can estimate several budgets by using the tools’ default input and output price values, or by entering their own price values or by combining both. However, the tools provide additional decision support through their ability to conduct breakeven analyses, sensitivity analyses and risk assessments. Allowing comparisons among different cultivars and production systems (field and high tunnels) can assist berry producers in making better planning and financial decisions.

References

Geisler, M. and Isaacs, J.S. 2012. Raspberries. USDA - Agriculture Marketing Resource Center. Accessed on 03/03/2014. < http://www.agmrc.org/commodities__products/fruits/raspberries/>

Geisler, M. and Morgan, K. 2012. Blackberries. USDA - Agriculture Marketing Resource Center. Accessed on 03/03/2014. <http://www.agmrc.org/commodities__products/fruits/blackberries/>

Geisler, M., Morgan, K., and Huntrods, D. 2013. Blueberries profile. USDA - Agriculture Marketing Resource Center. Accessed on 03/03/2014. <http://www.agmrc.org/commodities__products/fruits/blueberries-profile/>

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