Badenhop, Merton B.

Taylor, Reed D.

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COMPARATIVE COSTS OF OVERWINTERING CONTAINER-GROWN NURSERY STOCK By Reed D. Taylor and Merton B. Badenhop• Department of Agricultural Economics and Rural Sociology The Ohio State University Columbus, Ohio 43210 ESO 1174 *Associate Professor, Department 0£ Agricultura~ Economics and Rural Sociology, Ohio State University and Professor, Department of Agricultural Economics and Rural Sociology, University 0£ Tennessee. July 15, 1985 ,-Comparative Costs of Overwintering Container-Grown Nursery Stock By Reed D. Taylor and Merton B. Badenhop• INTRODUCTION Practically all plants grown in containers as well as field-grown plants harvested in the autumn £or spring sales in U.S.D.A. Plant Hardiness Zones 5 and 6 su££er damage or death i£ not protected. Costs 0£ overwintering plant material contribute signi£icantly to the expense 0£ producing nursery products in Northern Plant Hardiness Zones. Nurserymen in the Southern region have not traditionally been as concerned about overwintering plants as nurserymen in the Northern regions. However, losses due to death or damage 0£ plants in the Southern Plant Hardiness Zones when not protected can also be considerable. OBJECTIVES The obJectives of this study, summaries of which are reported in this paper, were to: 1. Model a series 0£ overwintering systems that would accomodate all species of plants being overwinterea in U.S.D.A. Plant Hardiness Zones 5, 6, 7, and 8. •Associate Professor, Department 0£ Agricultural Economics and Rural Sociology, Ohio State University, and Professor, Department 0£ Agricultural Economics and Rural Sociology, University of Tennessee. 2 2. Design physical facilities including land areas and structures required to accommodate the identified systems. 3. Develop cost budgets for each of the delineated overwintering systems. MATERIALS AND METHODS Data were obtained from wholesale nursery suppliers in the respective areas in 1984. Prices reflect quantities of materials based on container nurseries containing 17 total acres, 350,000 square feet 0£ growing area and 210,000 square feet 0£ overwintering space. Overwintering space included either 156 structureless enclosures, 356 polyhuts, 156 polyhouses, or a combination of the three. It was also assumed that £or overwintering, plants would be placed container to container. Cost budgets did not include ground preparation, graveling, or irrigation fixtures. It was assumed that they snould be charged to "grow-on" rather than overwintering costs. Costs were established £or all £actors directly attributea to overwintering including management and invested capital. In economic terms input costs associated with £actors of proauction by owner/operators are often re£erred to as "oppor"t.unity costs" or the income the investment would have received if invested elsewhere. For example. owners could be employed as managers at other nurseries. and money invested in land, buildings, • 3 irrigation systems, and equipment could have earned interest elsewhere. Annual costs are normally divided between £ixed and variable costs. Fixed costs are those that would have been incurred by a nursery regardless 0£ the level of production. They include such items as depreciation, interest on investment, taxes, insurance, general overhead, and interest on general overhead. Variable costs, on the other hand, are directly attributed to the level of production. They include items normally consumed during a given years' production such as chemicals or fertilizers. Di££erences in overwintering costs were in£luenced by both the sophistication 0£ the system and in cost estimating. For the same type 0£ system, cost estimates £or overhead and hourly labor were the main reasons £or higher costs in Zones 5 and 6. For this study, general overhead £or Zones 5 and 6 were assessed by taking the figure S95,025 developed in 1982 £or an earlier study Cl> using £igures for the same sized nursery and in£lating it by 10% to Sl04,527. For Hardiness Zones 7 and 8 the figure $59,286, calculated in 1982 was inflated by 10% to $65,215 ( 2) • Twenty-five percent 0£ these figures CS25,132 for Zones 5 and 6 and S16,304 for Zones 7 and 8> were assigned to overwintering. General overhead costs make up a ma)or portion of a nurseries overwintering £ixed costs. These overhead costs can be classified as: utilities, licenses and bonds, advertising and printing, insurance for personnel, travel, pro£essional £ees, administrative and management, and miscellaneous. 4 Structureless systems. Structureless systems incur general overhead plus variable costs. For a 14' x 96' enclosure in Zones 5 and 6 total annual costs ranged from S333.46 where plants are simply consolidated without additional protection, to S534.92 where plants are consolidated and surrounded by bales of straw <Table 1>. On a per sq. £t. basis the costs ranged £ram 25 to 40 cents; per one-gallon container from 8 to 14 cents; per two-gallon container £ram 15 to 24 cents; and per three-gallon container from 22 to 35 cents <Taole 2). In Zones 7 and 8 costs per enclosure ranged £rom $225.11 to $379.58 <Table 1>. On a per sq. £t. basis, costs ranged from 17 to 28 cents; per one-gallon container £ram 6 to 10 centa; per two-gallon container £rom 10 to 17 cents; and per three-gallon container £rom 15 to 25 cents <Table 2>. Polyhut sys~ems. It was estimated that it would cost S120.24 to construct a 6' x 96' polyhut in Zones 5 and 6 and $95.95 in Zones 7 and 8. In Zones 5 and 6 annual fixed costs on a per polyhut basis were estimated at $109.61 and $74.07 £or Zones 7 and 8. Total annual costs of overwintering plants in polynu~s di££erentiated by Zones are shown in Table 1. In Zones 5 and 6 costs per polyhut ranged from S246.80 where plants were Just placed in polyhuts without additional protection to $286.61 where plants were directly covered with both a thermal blanket and one layer 0£ polyethylene <Table 1). On a per sq. £t. basis costs ranged from 43 to 50 cents; per one-gallon container from 15 to 5 17 cents; per two-gallon container from 25 to 29 cents; and per three-gallon container £ram 38 to 44 cents <Table 2>. In Zones 7 and 8 costs per polyhut were Sl82.24 <Table 1). On a per sq. ft. basis the cost was 32 cents; per one-gallon container 11 cents; per two-gallon container 19 cents; and per three gallon container 28 cents <Table 2>. Polyhouse - single cover sytems. Construction costs £or a 14' x 96' polyhouse covered with a single layer of polyethylene were estimated to be Sl,131.58 for Zones 5 and 6 and Sl,013.00 for Zones 7 and 8. In Zones 5 and 6 annual fixed costs on a per polyhouse basis were estimated at 5487.28 and £or Zones 7 and 8 at S387.38. Total annual costs of overwintering plants in polyhouses covered with a single layer of polyethylene are shown in Table 1. In Zones 5 and 6 they ranged from S751.76 where plants are consolidated within the polyhouse, but with no additional covering, to S815.08 where plants were covered with both a thermal blanket and one layer of polyethylene. On a per sq. £t. basis costs ranged £rom 56 to 61 cents; per one-gallon container from 22 to 24 cents; per two-gallon container £rom 38 to 41 cents; and per three-gallon container £ram 57 to 61 cents <Table 2>. In Zones 7 and 8 few nurseries use overwintering protection more sophisticated than a polyhouse covered with a single layer of polyethylene and without additional interior plant protection. Costs £or this type of system were $601.55 <Table 1). On a per sq. £t. basis. cost was 45 cents; per one-gallon container 17 cents: £or a two-gallon container 30 cents; and per three-gallon container they were 45 cents <Table 2>. Polyhouse - double cover - in£lated systems. Construction costs for a 14' x 96' polyhouse covered with air inflated polyethylene were estimated at Sl,161.58 £or Zones 5 and 6 with annual fixed costs estimated at S495.38. This system is selaom used in Zones 7 and 8 and was not budgeted £or those Zones. Total annual costs £or this system £or Zones 5 ana 6 are delineated in Table 1. They ranged £rom S812.36 £or a system without additional plant covering to S875.68 where plants were directly covered with both a thermal blanket and one layer of polyethylene film. On a per sq. ft. basis, costs ranged from 60 to 65 cents; per one-gallon container £rem 23 to 25 cents; per two-gallon container from 41 to 44 cents; and per three-gallon container from 61 to 66 cents <Table 2). Polyhouse - inflated covering - Heated. This was the most sophisticated system budgeted, but is not normally used in Zones 7 and 8 for overwintering. In Zones 5 and 6 est1matea construction costs were Sl,842.68 £or a 14' x 96' polyhouse with annual fixed costs of S650.35. T6tal annual costs for this system were Sl,238.94 (Taole ll. On a per sq. ft. basis, costs were 92 cents; per one-gallon container 36 cents; per two-gallon container 62 cents; and per three-gallon container 93 cents. 7 SUMMARY Costs of 18 different overwintering systems were analyzed. Sixteen systems were considered to be used on a regular basis by nurserymen in U.S.D.A. Plant Hardiness Zones 5 and 6, and eight in Zones 7 and 8. Total annual costs per sq. ft. varied from 25 to 92 cents in Zones 5 and 6 and from 17 to 45 cents in Zones 7 and 8. In Zones 5 and 6 they varied from 25 to 40 cents for structureless systems, from 43 to 50 cents in polynuts, from 56 to 61 cents in polyhouses covered a single layer of polyethyiene, from 60 to 65 cents in polyhouses covered with air inflated polyethylene. and were 92 cents in a heated, air inflated polyhouse. Total annual sq. ft. costs for Zones 7 and 8 varied from 17 to 28 cents in structureless systems, were 32 cents in polyhuts, and were 45 cents in polyhouses covered with a single layer of polyehtylene. Cost differentials for similar overwintering systems were due primarily to higher overheaa and hourly labor costs in Zones 5 and 6 as compared with Zones 7 and 8. In general, overwintering costs varied directly with the degree of protection desired. Most plant species usually require more overwintering protection in northern than in sourtnern Hardiness Zones. In some instances it may cost from 50 to 100% more to overwinter a plant in Zone 5 ana 6 as comparea with Zones 7 and 8. 8 IMPLICATIONS 1£ the cost 0£ consolidating plants in a structureless system is considered the simplest and least expensive system, the costs that were generated will allow the nurseryman to analyze costs required £or £urther protection. The basis includes the portion 0£ overwintering overhead as well as direct costs associated with the simplest system. For example, the basic cost 0£ overwintering a one-gallon container in Zones 5 and 6 would be 8 cents. One £urther method 0£ analysis would determine the added costs 0£ going £rom the simplest system to each 0£ the more sophisticated classi£ications. To go £rom the basis, in Zones 5 and 6, to a polyhut would cost an additional 7 cents per one-gallon container; to a single layer polyhouse, 14 cents; to an air 1n£lated polyhouse, 15 cents; to an air in£lated and heated polyhouse, 28 cents. Starting with the simplest system <no additional covering 0£ plants> in a classi£ication, it would cost £rem 1 to 2 cents more per one-gallon container to cover plants with polyethylene, and an additional 1 to 2 cents to add a thermal blanket. While it was £airly expensive to add protection oy moving up to a more sophisticated class1£1cation <excep~ion would be going £rom a single layer to an air in£la~ed polyhouse), it was relatively inexpensive to aaa protection within a class1£ication by covering plants directly with either last years' polyethylene, a tnermal blanket, or both. It should also be noted that all costs were based on container to container placement £or overwintering. This is not always possible £or all .. plant types. particularly older, or larger plants. Where plant to plant placement 1s used more space will be required, hence costs will also be higher. 1. LITERATURE CITED Badenhop, M.B. and T.D. Phillips. 1983. Costs 0£ Producing and Marketing Container-Grown Woody Landscape Plants: The P:fitzer Juniper. Southern Coop. Ser. Bull 259. 2. Taylor, Reed D., Harold H. Kneen, David E. Hahn and Elton M. Smith. 1983. Costs 0£ Establishing and Operating Container Nurseries Di:f:ferentiated by Size of Firm and Species of Plant in U.S.D.A. Climatic Zone Six. Series Bull. 301. Southern Coop. r 10 TABLE 1.--Sualllary of Annual Total Costs (Dollars) of Overwintering Nursery Plants Differentiated by System and U.S.D.A. Plant Hardiness Zone. U.S.D.A. Plant Hardiness Zone System s & 6 7 & s Structure less (14' x 96') 1. Plants consolidated - no covering or 333.46 225.11 wrapping 2. Plants consolidated - surrounded NIA 238.76 with lined craft paper 3. Plants consolidated - surrounded with 534.92 379.58 bales of straw 4. Plants consolidated - covered with 405.27 291.11 one layer of poly film 5. Plants consolidated - covered with NIA 291.65 thermal blanket 6. Plants consolidated - covered with 447.30 331.21 thermal blanket and poly Polyhut (6' x 96') 7. No plant covering 246.80 182.24 8. Plants covered with 1 layer poly film 267.98 NIA 9. Plants covered with thermal blanket 286.61 NIA .. Table 1 Cont • 10. No plant covering 11. Plants covered with poly film 12. Plants covered with thermal blanket 13. Plants covered with thermal blanket and poly film 11 Polyhouse - Single Cover (14' x 96') 751.76 773.05 807.98 815.08 14. No plant covering 15. Plants covered with poly film Polyhouse - Double Cover - Inflated (14' x 96') 812.36 833.65 16. Plants covered with thermal blanket 17. Plants covered with thermal blanket and poly film 868.59 875.68 Polyhouse - Double Cover - Inflated and Heated (14' x 96') 18. No plant covering - Polyhouse heated 1,238.94 601.55 NIA NIA NIA NIA NIA NIA NIA NIA ,- -• 0 \ 12 TABLE 2.--Suanary of Total Annual Costs (Cents) of Overwintering Nursery Plants Differentiated by System, U.S.D.A. Plant Hardiness Zone, Square Foot and Container Size U.S.D.A. Plant Hardiness Zone 5 & 6 7 & 8 Costs per container Costs per container Syste111 Sq. Ft. 1-gal. 2-gal. 3-gal. Sq. Ft. 1-gal. 2-gal. 3-gal. Structure less (14' x 96')* 1. Plants consolidated - no cover or 25 8 15 22 17 6 10 15 wrapping 2. Plants consolidated - surrounded NIA NIA NIA NIA 18 6 11 16 with lined Kraft paper 3. Plants consolidated - surrounded with 40 14 24 35 28 10 17 25 bales of stra.1 4. Plants consolidated - covered with 30 10 18 27 22 7 13 19 one layer poly film 5. Plants consolidated - covered with NIA NIA NIA NIA 22 7 13 19 thermal blanket 6. Plants consolidated - covered with 33 11 20 30 25 8 15 22 thermal blanket and poly ,,.. r .. ' ' " 13 Table 2 Cont. Polyhut (6' x 96')** 1. No plant covering 43 15 25 38 32 11 19 28 8. Plants covered with 1 layer poly film 47 16 28 41 NIA NIA NIA NIA 9. Plants covered with therlnal blanket 50 17 29 44 NIA NIA NIA NIA Polyhouse - Single Cover (14' x 96') 10. No plant covering 56 22 38 57 45 17 30 45 11. Plants covered with poly film 58 22 39 58 NIA NIA NIA NIA 12. Plants covered with ther111al blanket 60 23 40 61 NIA NIA NIA NIA 13. Plants covered with thermal blanket 61 24 41 61 NIA NIA NIA NIA and poly film Polyhouse - Double Cover - Inflated (14' x 96') 14. No plant covering 60 23 41 61 NIA NIA NIA NIA 15. Plants covered with poly film 62 24 42 63 NIA NIA NIA NIA 16. Plants covered with thermal blanket 65 25 43 65 NIA NIA NIA NIA 17. Plants covered with thermal blanket 65 25 44 66 NIA NIA NIA NIA and poly film Polyhouse - Double Cover - Inf lated and Heated (14' x 96') 18. No plant covering - Polyhouse heated 92 36 62 93 NIA NIA NIA NIA *A 14' x 96' enclosure equals 1344 sq. ft. and would accomodate 3926 1-gal. containers, 2270 2-gal., and 1510 3-gal. **A 6' x 96' polyhut equals 576 sq. ft. and would accomodate 1682 1-gal. containers, 972 2-gal. 1 and 647 3-gal. ***A 14' x 96' polyhouse equals 1344 sq. ft. and would accomodate 3460 1-gal. containers, 2000 20 gal., and 1330 3-gal. Polyhouses would have a two foot aisle down the center and therefore would not hold as many containers as a container to container enclosure. 

Comparative Costs of Overwintering Container-Grown Nursery Stock

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Comparative Costs of Overwintering Container-Grown Nursery Stock

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