Economic Considerations of Producing Organic Strawberries Under Two Different Production Systems

The vast majority of the strawberries grown in Arkansas are sold in local markets. The rapid increase in the number of Farmers’ Markets in Arkansas and the region combined with increasing demand by consumers for local produce has created lucrative opportunities for strawberry growers. Local strawberry growers are able to provide fresh and flavorful berries without spoilage and quality problems encountered when berries are shipped long distances. With new advances in plastic mulch and protected culture technologies, Arkansas growers have more opportunities to extend the strawberry season to meet the year-round demand.

For the past three years, the University of Arkansas has evaluated extended season strawberry production using high tunnels. Our recent studies at the University of Arkansas, Fayetteville have yielded up to 2.25 lb./plant (compared to 1.0 – 1.5 lb./plant field production) and provided harvest from late fall through winter and into spring using a high tunnel plasticulture production system. This technology is adaptable throughout the South Central and Southeast United States.

In this poster, we are presenting a decision support tool that allows strawberry growers evaluating the economic sustainability of two production systems (e.g., high tunnel and field production systems) by estimating and comparing the expected risk-return tradeoff of each system. The economic sustainability of each system will be evaluated by creating interactive strawberry budgets which allow three different economic analyses: 1) break-even analysis 2) sensitivity analysis and 3) risk analysis. These analyses will help to highlight any economic tradeoffs (for example between fruit quality and price received) that may exist when choosing between different off-season production systems.

The interactive organic strawberry budget will be created using visual basic for applications (VBA-code) including numeric and graphical representations. This interactive tool will allow the user to select interest rate, planting density, high tunnel dimensions, expected yield, expected market prices, marketing venue (i.e., fresh market or processed market) and production practices; a detailed budget will be then calculated automatically. After creating the budget, the user can estimate breakeven, sensitivity and risk analyses. These analyses would provide the producer with much needed economic metrics by displaying the eventual real effects of alternative conditions and courses of action by highlighting risk-return tradeoffs that may exist between expected fruit quality and expected market prices. Comparisons among total costs, gross revenues and net returns will assist organic strawberry producers to make better planning, marketing and financial decisions.