Harvest Cost and Value of Citrus Operations with Alternative Technology: Real Options Approach

Abstract

The prospect of immigration policy reform has renewed growers’ concerns of serious labor shortages and cost increases. These concerns are more serious for specialty crop agriculture, not only because it is highly labor intensive, but also it requires labor in a very short period, particularly at harvest time. Two representative approaches of the investment valuation have been applied to the case of harvesting mechanization for the model citrus grower in Florida. Specifically, we applied the NPV approach and the real options approach (ROA) to processed-market Hamlin orange operations in Southwest Florida.Real options, NPV, mechanization, immigration policy, harvest cost, citrus operations, Agribusiness, Agricultural Finance, Farm Management, Labor and Human Capital, Risk and Uncertainty, Q14 – Agricultural Finance, J43 – Agricultural Labor Markets,