Financial Considerations - Florida Greenhouse Vegetable Production Handbook, Vol 11
G. J. Hochmuth, W. D. Thomas, M. S. Sweat, and R. C. Hochmuth2
One of the most important points a new grower needs to know is that greenhouse vegetable production is very costly. It is costly to establish the greenhouse facility, and additional costs are incurred during the crop production, harvesting, and shipping phases. All of these costs are incurred before any financial return is realized.The cost of establishing the operation will depend on many factors. These factors include the size and number of the greenhouses, type of production system to be used, method of marketing, need for associated facilities such as packing facilities and vehicles, availability of supplies and support services, and amount and quality of labor.A typical 4000 square-foot greenhouse will cost between $30,000 and $50,000 to establish and equip. Costs will vary depending on source of materials, on whether or not a concrete floor will be installed, on cost of the specific production system used, and on whether the owner or a private contractor will do the construction. Erecting numerous stand-alone houses is not as cost-effective as erecting two or three gutter-connected houses, but for most, the single, stand-alone house may be the only way to get started.The prospective grower must determine a source of capital and whether or not the payments are affordable if the operation is financed. Remember, a greenhouse operation will require a considerable initial investment.Production systems differ in cost. Hydroponic or nutrient film technique (NFT) systems are costly to install, but the system is reusable for many seasons. Other soilless production systems are slightly less complex to install but the grower must renew supplies every one to two crops. These soilless systems include perlite, rockwool, bag culture, peat trough culture, etc. The least expensive cultural system involves growing plants directly in the greenhouse floor soil. Usually this is the native soil of the greenhouse location. This system is least likely to succeed in Florida because of the buildup of disease organisms and nematodes in the soil. Growing in the native soil in Florida would most likely be very challenging, if not impossible. Production costs (supplies, fuel, overhead, packing, shipping, labor) will amount to about $5,000 to $10,000 for each 4000 square-foot house for a crop such as tomato or cucumber. Major supplies required for production will include fertilizer, heating fuel, pH and conductivity meters, seeds, starting blocks for seedlings, pesticides, sprayer, trellis string and plant clips, harvesting containers, packing boxes, and wrapping materials.
Figure 1. Maintaining accurate records is important for successful and profitable greenhouse operations.Overhead costs include electricity for lights, pumps, heaters, and fans. Other overhead expenses will be incurred for insurance, taxes, and other similar expenses. Cooling the greenhouse is a major cost factor in Florida because some ventilating and cooling will be needed nearly every day of the production season, even in the winter.Labor requirements depend on the size of the operation and whether or not family members will be able to maintain the house(s). If outside labor is needed, it is crucial that the labor be well trained and very dependable. A typical 4000 square-foot house will require approximately 25 hours of labor per week just to maintain the crop. This maintenance includes fertilizing, irrigation system monitoring, pollinating the crop, pruning and tying the plants, spraying for disease and insect control, sanitation, and general greenhouse structure and systems management. A grower should not expect to pay only minimum hourly wages to hire a person with the qualifications for this type of work. Worker dependability cannot be overemphasized.Although costs of establishing the operation are extremely high, the return from the crop can be good. Profitability depends on how successfully the individual manages the operation and markets the crop. For example, tomato crops should yield between 25 and 30 pounds of U.S. No.1 fruit per plant. At a price of $1.00 per pound, this type of operation could gross between $25,000 and $30,000 per house (1200 plants). Yields and returns on this order of magnitude have only been achieved by the most experienced growers in Florida. Currently, yields are more on the order of 15 pounds per plant for most growers. Therefore, the potential grower must be realistic in setting income goals for a greenhouse operation. It is especially critical if the operation is to be financed by a lending institution.
More Information
For more information on greenhouse crop production, please visit our Web site at http://nfrec-sv.ifas.ufl.edu.For the other chapters in the Greenhouse Vegetable Production Handbook, see the documents listed below:
Florida Greenhouse Vegetable Production Handbook, Vol 1
Introduction, HS 766
Financial Considerations, HS767
Pre-Construction Considerations, HS768
Crop Production, HS769
Considerations for Managing Greenhouse Pests, HS770
Harvest and Handling Considerations, HS771
Marketing Considerations, HS772
Summary, HS773
Florida Greenhouse Vegetable Production Handbook, Vol 2
General Considerations, HS774
Site Selection, HS775
Physical Greenhouse Design Considerations, HS776
Production Systems, HS777
Greenhouse Environmental Design Considerations, HS778
Environmental Controls, HS779
Materials Handling, HS780
Other Design Information Resources, HS781
Florida Greenhouse Vegetable Production Handbook, Vol 3
Preface, HS783
General Aspects of Plant Growth, HS784
Production Systems, HS785
Irrigation of Greenhouse Vegetables, HS786
Fertilizer Management for Greenhouse Vegetables, HS787
Production of Greenhouse Tomatoes, HS788
Generalized Sequence of Operations for Tomato Culture, HS789
Greenhouse Cucumber Production, HS790
Alternative Greenhouse Crops, HS791
Operational Considerations for Harvest, HS792
Enterprise Budget and Cash Flow for Greenhouse Tomato Production, HS793
Vegetable Disease Recognition and Control, HS797
Vegetable Insect Identification and Control, HS798
Footnotes
1. This document is HS767, one of a series of the Horticultural Sciences Department, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida. Original publication date December 1990. Revised February 2001. Reviewed February 2008. Visit the EDIS Web Site at http://edis.ifas.ufl.edu.
2. G.J. Hochmuth, professor of Horticultural Sciences and center director, North Florida Research and Eduction Center - Quincy; W.D. Thomas, extension agent IV - Columbia County; M.S. Sweat, county extension director agent IV - Baker County; and R.C. Hochmuth, extension agent IV - North Florida Research and Education Center - Suwannee Valley Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, 32611. The Florida Greenhouse Vegetable Production Handbook is edited by George Hochmuth, professor and center director, NFREC-Quincy and Robert Hochmuth, extension agent IV, NFREC-Suwannee Valley , Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL 32611
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