Aug 29, 2022

UC study breaks down costs of growing organic strawberries

Thinking about commercially growing organic strawberries on California’s Central Coast?

To help prospective and current growers evaluate financial feasibility, the University of California has estimated costs to produce and harvest organic strawberries for fresh market in Santa Cruz, San Benito and Monterey counties.

“This revise of the last cost-of-production study incorporates the newest in labor costs along with updates on cultural techniques,” study co-author Mark Bolda, UC Cooperative Extension strawberries and caneberries advisor in Santa Cruz, San Benito and Monterey counties, said in a news release.

The new study, “Sample Costs to Produce and Harvest Organic Strawberries in the Central Coast Region-2022,” has been released by UC Agriculture and Natural Resources and UC-Davis Department of Agricultural and Resource Economics.

The analysis is based on a hypothetical well-managed organic strawberry farm using practices common to the region, but the costs, materials and practices shown in this study will not apply to all farms. Growers, UC Cooperative Extension farm advisors and specialists, pest control advisers and others provided input and reviewed the methods and findings of the study.

“Current growers can use it as a baseline to compare with their own cost and returns estimates to make sure they have an accurate picture of the profitability of their organic strawberry enterprise,” co-author Brittney Goodrich, UC Cooperative Extension agricultural economics specialist, said in the release. “Many agricultural lenders use these studies as a baseline to determine whether to approve operating or investment loan requests from current and potential strawberry growers.”

The researchers assume a farm operation size of 30 contiguous acres of rented land, with strawberries are planted on 27 acres. The study includes a list of suitable strawberry varieties for the region, but no specific variety is used in the study. The crop is harvested by hand and packed into trays containing eight 1-pound clamshells from April through early October, with peak harvest in June through August.

The authors describe the assumptions used to identify current costs for production material inputs and cash and non-cash overhead. Ranging analysis tables show net profits over a range of prices and yields. Other tables show the monthly cash costs, the costs and returns per acre, hourly equipment costs, and the whole farm annual equipment, investment and business overhead costs.

The study’s expanded section on labor includes information on California’s new minimum wage and overtime laws.

“It’s reached a wider audience this time through presentations of the material to students at Cal Poly [San Luis Obispo] and also a group of USDA officials at the California Strawberry Commission,” Bolda said in the release.

“All of this just underlines the value of these studies to California growers and others working in agriculture,” he said.

Free copies of this study and other sample cost of production studies for many commodities are available. To download the cost studies, visit the UC Davis Department of Agricultural and Resource Economics website at https://coststudies.ucdavis.edu.

This cost and returns study was funded by the UC Davis Department of Agricultural and Resource Economics.

For additional information or an explanation of the calculations used in the studies, contact Jeremy Murdock, UC Davis Department of Agricultural and Resource Economics, at [email protected] or UC Cooperative Extension’s Bolda at (831) 763-8025.