The Economics of Greenhouse Vegetables Raymond Joe Schatzer ...

in Table 1. We estimated the bed culture system would require an investment of $51,929 and the
bag culture system would require $51,098. Our estimate of total annual fixed costs for the bed
culture system is $8,334 and for the bag culture system is $7,604. The bed culture system has
higher fixed costs because it requires a higher investment in growing medium every two years.
The bag culture system has a higher requirement in the watering system every ten years.
We assumed that the utilities, amount of twine used, clips used, insecticides used,
medium used for growing the transplants, and the management charge would not vary by crop or
culture system. The costs of these inputs, which amount to $11,625 per year, are provided in
Table 2. We assumed the rest of the variable inputs would vary by either production system or
crop.
In Tables 3 and 4 we summarize our assumptions about the schedule of operations and
planning assumptions for the four production systems. We assume the Fall yield of tomatoes per
plant per week is one-half the Spring yield and the bag culture yield in 12.5 percent higher than
the bed culture yield. We assume the Fall yield of cucumbers per plant per week is twice the
Spring yield and the bag culture yield is 27.8 percent higher than the bed culture yield.
Table 5 summarizes the variable costs of producing a Fall and Spring crop of tomatoes
and cucumbers using the bed culture system and Table 6 summarizes them for the bag culture
system. The total variable costs for producing tomatoes with the bed culture system is $22,530
and with the bag culture system is $23,397. For producing cucumbers, the total variable costs
with the bed culture system is $26,603 and with the bag culture system is $28,746. An income
statement for each production system is provide in Table 7 along with the break-even price per
pound. At the assumed base yield and prices, the expected return to risk for tomatoes for the bed
culture system is $15,544 and for the bag culture system is $20,922. The return to risk is the
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