CULTURAL PRACTICES AND SAMPLE
COSTS FOR ORGANIC VEGETABLE PRODUCTION
ON THE CENTRAL COAST OF CALIFORNIA
- Authors
- Acknowledgments
- Abstract
- Overview of production practices
- Costs and returns
- References
- Ordering information
- List of figures (not available online)
- Common Production Practices Harvest and Packing Methods
- A Hypothetical Crop Rotation
- List of tables (not available online)
- Each of tables 1-17 includes for each crop:
- Total Costs Per Acre
- Operating Input Costs
- Monthly Cash Costs Per Acre
- Operating Input Costs
- Cabbage
- Cauliflower
- Cucumbers
- Garlic
- Leaf Lettuce
- Romaine Lettuce
- Red Onions
- Yellow Onions
- Non-staked Snap Peas
- Non-staked Snow Peas
- Green Bell Peppers
- Red Bell Peppers
- Sweet Corn
- Large Variety Winter Squash
- Small Variety Winter Squash
- Barley Cover Crop
- Vetch Cover Crop
- Yield and Return Ranges for Selected Central Coast Organic Vegetable Crops
- Whole Farm Annual Equipment, Investment, and Business Overhead Costs for a Diversified Organic Vegetable Operation
- Hourly Equipment Costs for a Diversified Organic Vegetable Operation
Karen Klonsky
Extension Economist
Agricultural Economics Department
University of California, Davis
Laura Tourte
Postgraduate Researcher
Agricultural Economics Department
University of California, Davis
David Chaney
Annual Cropping Systems Analyst
Sustainable Agriculture Research
& Education Program
University of California
Pete Livingston
Staff Research Associate
Agricultural Economics Department
University of California, Davis
Richard Smith
Farm Advisor
Monterey, San Benito and Santa Cruz
Counties
ACKNOWLEDGMENTS
This study is based on intensive interviews with Central Coast organic growers. U.C. Cooperative Extension specialists, organic market specialists, and CCOF personnel also assisted in the review process. Appreciation is expressed to Michael Halperin of Frazier Lake Farm and other individuals who provided information and assistance. This study was funded by the University of California's Sustainable Agriculture Research and Education Program (SAREP) and Giannini Foundation.
Organic vegetable farms on the Central Coast region of California are generally intensive operations. That is, two and sometimes three crops may be harvested off the same acreage each year. Many approaches exist for growing and marketing organic vegetables. This publication describes the range of soil management practices, pest management, crop rotations, cover crops, and harvest and packing methods currently used by organic growers on the Central Coast of California. Marketing options and state and federal regulations governing organic commodities are also discussed. A general sequence of operations, equipment requirements, resource use, costs, yield and return ranges are presented for thirteen vegetable crops and two cover crops. The vegetables included are cabbage, cauliflower, cucumbers, garlic, lettuce (leaf and romaine), onions (red and yellow), snap peas, snow peas, bell peppers (green and red), sweet corn, and winter squash (large and small varieties). Barley and vetch are the two cover crops detailed.
Introduction
The Central Coast region is one of the most highly concentrated areas of organic vegetable production in California. The region's agricultural base, climate, proximity to nearby urban areas, and access to a variety of market channels has supported significant growth in this industry in recent years.
There are many approaches and methods for growing and marketing organic vegetables. This overview is meant to guide the reader through the critical topics and issues that growers need to address. Some of the most important variables affecting the characteristics of a particular farm are its size, soil type and fertility, available water resources, the selection and rotation of crops, labor and equipment requirements, and market options. This narrative will highlight a number of different organic vegetable crops and two cover crops currently grown on the Central Coast. They are: barley (cover crop), cabbage, cauliflower, cucumbers, garlic, lettuce, onions, peas, peppers, sweet corn, vetch (cover crop), and winter squash. Additional crops are often included in a grower's operation for greater diversification.
The overview is divided into several sections. The first section describes the general sequence of operations for the production of organic vegetables. Following this description, three additional sections provide more detail about crop diversification and rotation, cover crops, and pest management. In the final two sections, we address the marketing of organic vegetables and the current status of regulations governing organic commodities.
Production Practices
Organic vegetable farms on the Central Coast region of California are generally intensive operations. That is, two and sometimes three crops may be harvested off the same acreage each year. For each crop, cultural operations begin with land preparation. First, the soil is disced once or twice. After this initial discing, land is chiseled one or two times, followed by one or two additional discings. The number of passes for each operation depends on the amount of residue of the previous crop to be turned under as well as the tilth of the soil. Land leveling is not performed on a yearly basis.
Soil amendments such as manure, composted manure, and gypsum are often spread by a custom operator or by the grower during land preparation to manage soil fertility, add soil organic matter, and increase nutrient levels for the next crop. Manure and composted manure can provide nitrogen, phosphorus, and potassium for crop production. Gypsum adds calcium and sulfur for crop production and can be used to improve soil tilth with soils high in sodium. Soil amendments are generally added if warranted by appropriate sampling. In addition, grower experience, cropping sequence, and cost will help determine the material to be used as well as the exact application rate. Other soil fertility management techniques include crop diversification, rotation, and cover cropping.
After the ground has been worked and any soil amendments added, beds are listed. Depending upon management technique and equipment complement, this operation is either done by the grower or by a custom operator. Weed seeds that have been brought to the surface during the ground work are germinated with a preplant irrigation. A subsequent preplant cultivation reduces or eliminates these weeds. A variety of implements may be used; rolling cultivators and sled-type cultivators are most common.
Following these practices, beds are shaped and a vegetable crop planted. Bed size can range from 30 to 60 inches from furrow to furrow depending on the crop to be planted and the desired plant density. A grower's equipment com-plement may also factor into the decision of bed size. Central Coast organic vegetable producers commonly plant on 40-inch beds. Vegetable crops are direct seeded, hand planted, or machine transplanted depending upon the crop itself, the time of year, the crop's ability to compete with weeds, and the targeted market. If it is available, organic growers must purchase and plant seed that has not been fungicide-treated. Under organic regulations, seed that has been insecticide-treated may not be used. Transplants must be grown in accordance with the California Organic Foods Act of 1990 in addition to specific organic certification rules and regulations (where applicable). For additional information, refer to the Regulations of Organically Grown Commodities section.
Initial land preparation is similar for most crops. After this time, the di-versification of crops necessitates that a number of different production practices be utilized by organic growers. Figure 1 includes information on various planting methods, irrigation, pest management practices, and harvest and packing methods for several different organic vegetable crops currently grown in the Central Coast. The grower's experience and management style, soil type, the existing pest complex, and each crop's unique cultural requirements factor into the variation. For example, the number of mechanical cultivations for each crop can range from two to seven depending on the planted crop and weed densities. Pest management materials may be applied to some vegetable crops for pest reduction and/or control; other crops may not require any applications. In addition, harvest and packing methods may vary depending on a grower's labor and equipment complement, as well as whether or not any packing facilities are available.
The irrigation delivery method, number of applications, and total irrigation amount varies depending on specific crop requirements, soil type, the amount of water stored in the soil profile, and water availability. A crop's rooting depth and growing season greatly affect the water needs. For example, shallow rooted crops and crops grown over the summer months generally require more frequent irrigation than deeper rooted crops or crops grown in the winter months. Soils with high levels of organic matter may be better able to retain moisture and therefore decrease the amount of applied water. Furrow or sprinkler irrigation is most often used by organic vegetable growers in the Central Coast. Surface and subsurface drip irrigation systems may also be used by some growers, however these systems require a larger capital investment initially.
Crop Diversification and Rotation
Crop diversification and rotation are essential elements of organic vegetable operations. Diversification can enhance economic stability by allowing the risks of production agriculture to be spread over a greater number of crops. Ideally, the crop mix should be complementary in nature; that is, all practices should be performed in a timely manner without competition for labor, equipment, and management expertise. In reality, this may not always be possible because of factors beyond a grower's control, such as unusual weather conditions, pest infestations, or peak work periods. Diversification may also mean that a grower will need additional resources such as specialized farm machinery.
Rotations are characterized by cropping sequences that alternate a variety of vegetable crops and often include a cover or green manure crop. Because of the importance of soil fertility and soil organic matter, organic vegetable growers are increasingly planting some acreage to cover crops. A crop rotation's purpose is to continually recycle nutrients, break pest cycles, and maintain a balance between soil organic matter accumulation and decomposition. Organic matter is particularly important for improving soil structure and water holding capacity, and for providing nitrogen and other nutrients for crop production.
Individual organic vegetable growers may have differing strategies for planting and rotating a variety of crops. Cropping history and grower experience will factor into the determination of each year's rotation. Other considerations include:
1. The ease of each crop's cultivation.
2. The compatibility of each crop in terms of labor, equipment, and seasonal timing.
3. The availability of nutrients. Crops with greater nutrient requirements may produce higher yields when following a cover crop or a crop with lower nutrient needs. Also, crops with different root growth patterns may be better able to utilize residual nutrients that a previous crop was unable to capture.
4. The existing pest complex including weeds, disease, and arthropods (insects, spiders and mites). Selection of a crop that competes well with weeds, or planting disease-resistant cultivars may help overcome some of these difficulties.
5. The crop value and access to markets.
6. The ability to provide year-round employment for farm workers.
Additionally, most growers will nor plant related crop species on the same acreage in the same year. Often this rule is extended for longer periods of time depending on the specific vegetable crop and cropping history. However, when production land is high in value or when growers use limited rotations, some crops (most commonly lettuce) may be grown back-to-back on the same land.
Figure 2 includes information on a rotation plan for several different organic vegetable crops currently produced on the Central Coast. Although not shown in the figure, a number of different rotation schemes are feasible, including staggered plantings. For example, crops such as cabbage, cauliflower, lettuce, and sweet corn may not be planted on large acreages, but rather in smaller blocks on a weekly basis. Staggered plantings are noteworthy in that they enable growers to harvest over a greater period of time; markets therefore receive a more consistent supply. Staggered plantings may also mitigate the effects of market gluts that can result in lower returns for growers.
Cover Crops
Cover crops can be beneficial for intensive organic vegetable production in a number of ways. Water penetration and infil-tration can be improved by root growth of a cover crop and by returning organic matter to soils. Increased organic matter may improve the soil's ability to retain moisture. If leguminous cover crops are grown, soil nitrogen can be increased through nitrogen fixation. Grasses are particularly helpful in promoting soil structure and soil aggregate stability because of their fibrous root systems. Microbial activity, often sti-mulated by cover crop root exudates and organic matter additions to soils, has also been shown to promote aggregate stability. As microbes decompose organic matter, nutrients are released. Weed suppression for subsequent crops may be another benefit. Furthermore, cover crops can provide a favorable envi-ronment to attract and sustain beneficial arthropods.
Planting cover crops in intensive organic vegetable operations may result in some negative impacts. Cover crops may attract some arthropod pests to production areas. Fall planted cover crops prevent ground from being worked up to allow for spring planting flexibility. Cover crops also require additional inputs such as seed, irrigation water, and labor. In addition, revenue-producing vegetable crop acreage is reduced when a cover crop is grown. However, some growers view the cost of planting and maintaining a cover crop as the cost of producing nitrogen and/or improving soil quality for the long-term.
Selection of a particular cover crop species should take into account the growing needs of the cover crop itself as well as the previous and subsequent vegetable crops, the soil type, and any irrigation requirements. In this region commonly planted cover crops include, but are not limited to, legumes such as vetch and bell beans and certain annual grasses such as barley, rye, and oats. Growers may use a grass/legume mixture to obtain benefits that are unique to each cover crop type. Cover crops may be planted on a year-round basis depending upon how they fit into a grower's rotation scheme. Vegetable crops that follow a cover crop may not require a compost or manure application to supply nutrients for crop production. Growers in some areas may find that certain cover crop species and mixes are not suitable for their soils and conditions. Often, the most suitable cover crop in each situation is determined by observation and experimentation over a period of years.
Pest Management
Most pesticides that are currently used by producers of conventionally grown vegetables are not approved for use by organic vegetable growers. However, grower experience indicates that fewer disease and insect problems exist overall in organic systems. Organic growers may also be willing to tolerate more pest pressure in the field than conventional growers. Nevertheless, when necessary, some treatments such as natural pesticides and biological controls are used to decrease pest damage and reduce short-run economic risks. These treatments, in conjunction with crop diversification, rotation and cultural practices usually reduce and/or control disease, weed, and insect problems. When pest management materials are used, application rates will vary depending on the specific crop and the extensiveness of a pest infestation. Growers should be certain that any materials used are in compliance with the rules and regulations of state and organic certification agencies. For additional information refer to the Regulations of Organically Grown Commodities section.
Diseases. Important diseases that have occurred in organic vegetable production areas of the Central Coast include: Pythium, Rhizoctonia and Fusarium on onions and squash, viruses such as beet yellows on lettuce and cabbage, and fungal diseases such as downy mildew (Peronospora destructor) on onions and powdery mildew (Leveillula taurica) on peppers. Techniques to minimize the incidence of disease in organic vegetable crops include:
1. Planting high quality disease-resistant cultivars.
2. Avoid planting at certain times of the year because of severe disease incidence.
3. Improving field drainage and/or modifying irrigation methods. Moist and wet fields provide a favorable environment for disease. Sprinkler irrigation should be avoided on some crops such as onions and garlic.
4. Mechanical and hand cultivations to remove weeds that may harbor disease.
5. The control of disease-transmitting insects (aphids and beetles) by such means as insecticidal soap sprays and diversified plantings for biological control.
6. Sanitation of equipment when moving from field to field.
7. Crop rotations.
Weeds. Optimal weed control in organic vegetable systems in the Central Coast often results from the integration of a number of weed control techniques. Weeds are largely managed by tillage with a sled or rolling cultivator. Each cultivation's timing is dependent on the season the vegetable crop is planted, the amount of soil moisture, the crop's stage of growth, and the crop's ability to compete effectively with weeds. Hand weeding is often used in addition to mechanical cultivations.
Flame weeders are also being utilized by growers to reduce weed populations. Weeds are not actually burned back by flaming; they are killed by desiccation when the plant's cells burst upon exposure to the high temperatures that a flame weeder produces. Flame weeding is most effective when used on broadleaf seedling weeds and is generally not useful in eliminating volunteer grasses with protected growing points. Since no soil disruption occurs with flame weeding, additional weed seeds are not brought to the soil surface for germination.
Plastic or organic mulches may also be used by some growers to block light and prevent weed seed germination. Vegetable crops are customarily planted directly through mulches to keep weed populations low throughout the growing season. Water usage may decrease when mulches are used because moisture retention generally increases. The use of some mulching materials may be restricted by registration and/or certification agencies.
Insects. Insect pests that are prevalent in organic production systems in the Central Coast include a number of different aphid species, flea beetles (Epitrix and Phyllotreta spp), the spotted cucumber beetle (Diabrotica undecim-punctata undecimpunctata), corn ear-worm (Heliothis zea), the cabbage looper (Trichoplusia ni), and the imported cabbage worm (Pieris rapae). These insects attack a variety of vegetable crops, feeding on plant foliage, stems, flowers, and fruits. Economic damage is therefore caused by reduced plant growth, weakened and scarred plants and fruit, and ultimately, decreased yields.
Methods used to reduce or manage caterpillar populations include spray applications of the bacteria Bacillus thuringiensis and the botanical insecticide Pyrellin E.C.® Applications of insecticidal soap and Pyrellin E.C.® are sometimes used for aphid control. In addition, Pyrellin E.C.® may be helpful in controlling some beetle pests. Insecticidal soaps are derived from plant oils or animal fats and are currently allowed for use by organic growers. Pyrellin E.C.® is a formulated insecticide that is derived from a combination of two plant extracts, pyrethrum and rotenone. Pyrethrin is currently an acceptable method of insect control in California organic farming provided it does not contain the synergist piperonyl butoxide. However, the use of some botanical insecticides has been associated with a decrease in beneficial arthropod populations so is generally applied only when pest pressure is severe.
Pheromone traps may be used by some growers to monitor pest populations. Pest management may also include the release of biological control agents to augment that which may already exist in the field. For example, release of beneficial wasps of the genus Trichogramma may help control corn earworm. Additionally, some growers maintain insectary plantings in or near fields to provide a habitat and food source for beneficial arthropods.
Marketing
The marketing of organically produced vegetables presents Central Coast growers with a number of challenges. Total supply, consumer demand, pricing, perishability of the product, and market structure are all factors that contribute to a grower's ability to sell his/her product. Therefore, production and market risks both affect the profitability and economic viability of organically grown vegetables. In all cases, the risks associated with organic vegetable operations should not be minimized.
Organic vegetables, like many fresh market commodities, are a highly peri-shable product. Growers must harvest, pack, and sell their products in an expedient manner to receive satisfactory returns. Therefore, from a marketing perspective vegetables carry a greater risk than such storable commodities as nuts and grains. Some organic vegetable growers may reduce this risk by planting crops such as winter squash, onions, garlic, and potatoes which may be stored for longer periods of time.
Commodities that are produced orga-nically can often be sold for a premium price over conventionally grown products. However, the industry is extremely competitive and returns to growers are dictated by the total supply, consumer demand, and the available organic outlets. Market saturation often occurs. Growers may then be forced to accept lower returns and/or market their product without the organic designation at conventional prices.
Although research indicates that organic vegetable production has expanded considerably in the 1980's and 1990's, there is some debate as to whether consumer demand and market outlets geared toward organic produce have expanded at the same rate. A product's price and appearance, consistency of the supply, and market location and accessibility may influence a consumer's willingness to purchase organic commo-dities. Organic agriculture's perceived benefits, including food and farm worker safety, improved nutritive values, and positive environmental effects may also influence a consumer's decision to purchase organic products. Within the State of California, the Central Coast enjoys somewhat of a marketing edge. Its juxtaposition to the San Francisco Bay Area, with its coordinated market channels and its large contingent of environmentally conscious consumers allows growers some ease and flexibility in selling their products. Market channels within the Bay Area include produce brokers, wholesalers, retailers, and direct markets. All are integral in facilitating the handling and distribution of organic vegetables grown in the Central Coast. Los Angeles also supports a large organic market and is relatively close in proximity to the Central Coast. It may therefore provide an additional market-ing avenue for organic vegetable growers in the region.
Regulation of Organic Commodities
As of January 1, 1992 all growers who choose to produce and market organic commodities must register on a yearly basis with the State of California under the California Organic Foods Act of 1990. Enforced under this act are the provisions of Article 4.5 (commencing with Section 26569.20) of Chapter 5 of Division 21 of the California Health and Safety Code and of the California Food and Agricultural Code commencing with Section 46000. These provisions contain rules and regulations that must be adhered to by all producers, processors and handlers of organic commodities. The act states that prior to January 1, 1995, producers of organic commodities may not apply prohibited materials or substances to annual or two-year crops for a minimum of twelve months prior to seed planting or twelve months prior to the appearance of flower buds for perennial crops to qualify as organic. From January 1, 1995 through December 31, 1995, this rule increases to a twenty-four month period of prohibition. On or after January 1, 1996 the restriction increases to thirty-six months.
State registration fees are estimated by the registrant's total gross sales from the previous year. If no sales occurred in the previous year, fee remittance is based on the projected gross receipts. First year registrants must pay a one-time only assessment equal to one and one-half times the yearly state registration fee.
The federal Organic Foods Production Act of 1990 (OFPA) became effective on October 1, 1993. However, due to budget and time constraints, final recommen-dations for the law's implementation has not been completed. Therefore, even though the law is now in place, imple-mentation and enforcement will be delayed for at least one year. Nonetheless, growers would be wise to follow federal regulations and production standards (in addition to state regulations) at this time. The OFPA is administered through the United States Department of Agriculture.
The OFPA preempts California's state law except in those cases where the state applies to the USDA for approval of stricter standards. Two differences between the state and federal laws are noteworthy. First, the federal law stipu-lates that organic foods must not be produced on land to which a prohibited substance has been applied for a minimum of three years immediately preceding harvest of the crop to qualify as organic. Second, federal law states that growers must be certified by a federally accredited certifying agent on an annual basis if yearly gross sales total more than $5,000. This federal requirement should not be confused with, and is separate from, state registration.
In 1992 only one-third of the registered organic farmers in California were certified by a certification agency. Appro-ximately ninety percent of those certified were certified through California Certified Organic Farmers (CCOF). In addition to CCOF, five other organizations actively certify growers in the state. They are: Farm Verified Organic (FVO), the Organic Crop Improvement Association (OCIA), the Organic Growers and Buyers Association (OGBA), Quality Assurance International (QAI) and Scientific Certification Systems (SCS). Each agency should adhere to all state and federal laws regulating organic commodities, and in addition may enforce standards and procedures specific to their own agencies. The above organizations are registered with the State of California. However, none are currently accredited by the USDA since the USDA's certification program has not yet been implemented.
The practices described for the hypo-thetical farm used in this study are considered common for the central coast of California. Sample costs given for labor, materials, equipment, and custom and contract services are based on 1992-1993 prices. The use of trade names is not an endorsement or a recommendation, nor is criticism implied by omission of similar products. A blank Your Cost column is provided to enter your actual costs on tables that include information on operations and inputs. While every effort is made to model a production system based on real world practices, this report cannot fully represent the costs and practices that are specific to each operation, or the variations that exist between growers within the region. Therefore, this study should be interpreted as a representative operation only and not as a statistical average.
The Cost Of Production Assumptions and three tables for each of the selected organic vegetable crops in this study follow the general information. In addition, three tables for each of two cover crops are included as a part of this report.
- The three table types are:
- a. Costs To Produce
- b. Operating Input Costs
- c. Monthly Cash Costs Per Acre
- b. Operating Input Costs
- The vegetable and cover crops are:
- Barley (cover crop)
Cabbage (green)
- Cauliflower
- Cucumbers
- Garlic
- Lettuce (leaf and romaine)
- Onions (red and yellow)
- Peas (non-staked snap and snow)
- Peppers (green and red bell)
- Sweet Corn
- 'Lana' Woolypod Vetch (cover crop)
- Winter Squash (large and small varieties)
- Cauliflower
This study reflects the practices and costs associated with an intensive production system for various organic vegetable crops and two cover crops currently grown in the Central Coast region. They are: barley (cover crop), cabbage (green), cauliflower, cucumbers, garlic, lettuce (leaf and romaine), onions (red and yellow), peas (non-staked snap and snow), peppers (green and red bell), sweet corn, vetch (cover crop), and winter squash (large and small varieties
The farm in this report is assumed to be registered and certified as organic. To be registered and certified organic, a transition period is required for any farm changing from conventional practices to organically acceptable methods. State registration and certification agency rules and regulations that are specific to organic commodities must be adhered to during this time period. Crops grown in transition years may not be sold or labeled as organic. Commodities that are pro-duced organically can often be sold for a premium price over conventionally grown products. However, the supply of organic products, market competition, and consumer demand can affect grower returns.
The following is a description of general assumptions pertaining to sample production costs for the diversified organic vegetable operation analyzed in this study. The costs are based on common practices used by Central Coast growers and may not be applicable to all situations. Production practices and management techniques are generally individualized to meet the specific needs of each grower. These costs are represented on an annual per acre basis.
Land. The total farm size is 115 acres. In this study, land is rented by the grower at an annual cost of $500 per acre. This figure can be highly variable and depends on the parcel location. Additional factors affecting the cost to rent organic vegetable production land may include soil type and water availability. Land is assumed to be level, with well drained soils of moderate depth and fertility.
Two crops are harvested off of 45 of the 115 acres of land each year for a total of 160 production units. Therefore, all cash and non-cash overhead costs are spread evenly over 160 producing acres rather than the physical 115 acre land base.
Production Practices. Production practices for each crop in this study are listed in table type a. Costs To Produce. These tables show the order in which the operations are performed, as well as the hours per acre to perform each operation. Labor and custom rates, material and fuel and repair costs are also included in these tables. Input costs can be found in table type b. Operating Input Costs. In addition, the sequence of operations and the monthly cash costs for each crop can be found in table type c. Monthly Cash Costs Per Acre.
In this report no crop varieties are specified. Crops are assumed to be planted on 40-inch beds. Seed and transplant costs are within a range of costs for different open-pollinated and hybrid vegetable cultivars. Varietal planting decisions should ultimately be based on the crop's compatibility to the climatic region, the disease-resistance capability, yield potential, overall quality at harvest, and the cultivar's marketability.
To manage soil tilth, fertility, and nutrient levels, some soil amendments are applied to production lands. Material and application rate options are shown in the following table. Soil amendments are generally added if warranted by appropriate sampling. Refer to table type b. Operating Inut Costs for the specific material and application rates used in this study.
Crop Irrigation Requirements. Each crop has different irrigation requirements depending on the rooting depth and the crop itself, the soil type, andthe growing season. In this study crops are irrigated by sprinkler or furrow (gated pipe) irrigation. Water is pumped from underground wells. Because the land is rented, the land owner is assumed to be responsible for well and under-ground irrigation system maintenance and repair. Costs for irrigation pipe are located in Table 19 under investments.
Irrigation rates and water costs for each crop in this study can be found in table type a and table type b following the assumptions. Individual situations may vary.
| Soil Amendment Materials | |||
|---|---|---|---|
| Material | Number of Applications* | Application Rate/Acre | When Applied |
| Manure | 1 per crop | 3-10 tons | With land prep. |
| Composted Manure | 1 per crop | 3-10 tons | With land prep. |
| Gypsum | 1 per year | 1/2 to 1-1/2 tons | With land prep. |
| Compost-Gypsum | 1 per crop | 3-6 tons | With land prep. |
| Blend (75%-25%) |
* May be reduced or omitted depending on crop sequence.
Cover Crops. In this report, two winter annual cover crops are sown each year in the fall on a total of 40 acres of the vegetable production land. The planted cover crops are assumed to be 'Lana' woolypod vetch and barley. Twenty acres of each species is assumed to be planted.
To prepare the ground for seeding of the cover crop, land is disced once in the fall after the vegetable harvest. Following this practice, land is chiseled one time and disced two additional times. Seed is then drilled at a rate of 75 pounds per acre for barley or 40 pounds per acre for vetch. The cover crop is sprinkler irrigated with approximately three inches of water for germination. After this irrigation, cover crop growth is dependent on moisture in the soil profile and fall and winter rains. In late March, the cover crop is mowed once and incorporated into the soil by discing. The timing of these operations is dependent on the planting schedule for the following vegetable crop. Costs for the cover crop incorporation (discing) are included as land preparation costs for the subsequent vegetable crop.
The cost to produce each cover crop on a per acre basis is calculated in table types a., b. and c. in Tables 16-17. The total cost to produce 40 acres of cover crops ($3,256) is calculated by multiplying the cost per acre for each of the two cover crops by 20 acres and then summing the two totals. In this study, the cover crop is considered an investment for the farm and is shown in Table 19 under investments. This investment is spread over the 160 revenue-generating acres to better reflect the actual cost of producing organic vegetables. The amount is also shown on an annual per acre basis for each crop in table type a and table type b under non-cash overhead costs.
Pest Management. In this study, disease incidence and invertebrate and vertebrate pest damage are assumed to be low. However, these may vary on a year to year basis depending on pest popu-lations and management techniques. Weed populations are reduced through a variety of techniques including mechanical cultivations, hand and flame weedings. Refer to table type a and table type b following this section for pest control measures pertinent to this study. Individual situations may vary.
Harvest. In this report, most harvest operations are performed by the grower without custom or contract labor. Exceptions are windrowing garlic and topping onions, which are performed by contract labor. Onions are sorted, sized and graded by farm workers on a specialized machine. All other operations reflect hand harvest and field or shed packing. Labor hours for harvest, sorting, grading, and packing will vary on a year to year basis depending on crop and field conditions. Many crops included in this study can be planted and harvested at varying times throughout the year. Refer to table type a and table type c for the labor costs and individual harvest dates pertinent to this study.
For information on custom or contract harvesting, contact the farm advisor or companies contracting for vegetables in the area of interest. If contract or custom labor is used, equipment for the required operations should be deleted from the equipment list. Labor, fuel, repairs, depreciation and interest on investment should be also be subtracted as a cost of production. Custom charges, then, would be added to harvest costs.
Yield & Return. Table type a shows a reasonable yield for each crop contained in this study factoring in crop damage and loss over a period of years. For example, lettuce yields may vary greatly on a season to season basis. Under good conditions, yields of 850 boxes (24 count) are possible for some varieties. However, when pest and disease infestations are high, economics may dictate that the crop be disced under rather than harvested. Intermediate yield levels of 575 boxes for leaf lettuce and 525 boxes for romaine lettuce were used to calculate cost per box (Table 5a and 6a).
Yield and return ranges for each vegetable crop are included in Table 18. Yield and Return Ranges for Selected Central Coast Organic Vegetable Crops. These figures represent the high and low yields and returns that are possible in a production year given such factors as pest damage and market competitiveness. The return figures reflect the amount received by growers after cooling and/or marketing fees have been subtracted (refer to the marketing section below).
Marketing. In the Central Coast, there are a number of marketing options for growers of organically produced vegetables. Depending on farm size, amount produced and marketing plan, growers may choose to sell their products through organic produce brokers, wholesalers, or direct markets in surrounding areas.
This study assumes that growers market their products through local organic produce brokers. Growers pack, label, and transport their products to brokers (generally directly after harvest). Produce brokers then act as the intermediary between producers and buyers; that is, they facilitate cooling (where applicable), handling, sales, and distribution of the product for a fee or commission. Marketing through a produce broker does not necessarily guarantee that a product is or will be automatically sold. In some cases growers may have their products returned. However, this marketing method is often preferred by growers with greater expertise and interest in production rather than marketing.
Labor. Basic hourly wages for workers are $6.50 and $6.15 per hour for machine operators and field workers, respectively. Adding 34% for SDI, FICA, insurance and other benefits increases the labor rates shown to $8.71 per hour for machine labor and $8.24 per hour for non-machine labor. The labor hours for operations involving machinery are 20% higher than the operations to account for extra labor involved in equipment setup, moving, maintenance and repair. Wages for managers are not included as a cash cost. Any returns above total costs are considered returns to management and risk.
Investment. The investments shown in Table 19. Whole Farm Annual Equipment, Investment, and Business Over-head Costs for a Diversified Organic Vegetable Operation, are those that are allocated to the entire vegetable farm. Annual investments shown in table type a and table type b represent depreciation and opportunity cost for each investment on an annual per acre basis.
Business Overhead. County taxes are calculated as 1% of the average value of equipment and any buildings or improvements. Investment insurance is charged at 0.5% of the average value of all assets over their useful life. Liability insurance covers accidents on the farm and costs $300 per year. Sanitation services are estimated at $82.50 per month on a year-round basis. Office and business costs are estimated at $85 per acre for the farm. These expenses include office supplies, telephones, bookkeeping, accounting, legal fees, business trips, subscription fees, and road preparation and maintenance.
Assessments. In this study, a stepped scale organic grower's registration fee of $1,000 is assessed by the State of California on the gross sales amount of $1,086,944. The gross sales amount is calculated by multiplying the yield of each crop by the price received for each crop and the number of planted acres for each crop. This is only an estimate of potential fees and will vary depending on yields and returns. Contact the County Agricultural Commissioner in your area for further details.
The grower is assumed to be certified by California Certified Organic Farmers (CCOF). Annual membership fees are $125. Inspection fees are $125. Assessment fees are .5% of a grower's gross sales and are included as a cost of production. Total CCOF assessments for the farm are $5,434. These fees are specific to this study. Fees are based on the production amount, the number of acres and parcels contained in an operation as well as whether or not the farm is totally organic. Therefore, individual situations may vary.
Interest. Interest on operating capital is based on cash costs and is calculated monthly until harvest at a nominal interest rate of 9% per year. Interest is also charged on investment at a real interest rate of 4% per year to account for income foregone that could be received from an alternative investment (opportu-nity cost) and is based on the average value of equipment and any buildings. The real interest rate indicates the return for the use of capital and does not include any adjustment for inflation. Nominal interest rates contain a factor for inflation.
Equipment Costs. In allocating the equipment costs per acre, the following calculations were made and shown in Table 19. Whole Farm Annual Equipment, Investment, and Business Over-head Costs for a Diversified Organic Vegetable Operation: (a) Original Cost of equipment is the cost of the new equip-ment plus sales tax. (b) Depreciation is straight line with a 10% salvage value. (c) Interest on investment is calculated as the average value per acre of the equipment during its useful life multiplied by a real interest rate of 4%. Average value per acre equals new cost plus salvage value divided by two divided by the number of acres. (d) The Total Investment Costs are calculated as 35% of the depreciation and the interest costs for all new equipment to reflect a mix of the new and used equipment. These values are also used in table type a. All of this equipment is used on the 115 acre vegetable operation.
Fuel and Repair. The fuel and repair cost per acre for each operation in table type a is determined by multiplying the total hourly operating cost for each piece of equipment in Table 20 by the number of hours per acre for that operation. Prices for on-farm delivery of gasoline and diesel are $0.98 and $0.71 per gallon, respectively.
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This publication is currently out of print, but photocopies are available for $10.00 from the Department of Agricultural Economics, UC Davis, (530) 752-2745.