| The projected strawberry production costs in this publication have been
prepared to assist you in developing your own production costs. The capital costs and
cash input costs associated with growing strawberries are substantial. Detailed planning
is necessary when budgeting for capital expenditures and also for the annual operating
costs. The importance of good financial planning is evident by noting the capital required
for 5 acres of strawberries may be in the vicinity of $25,000 and the annual operating
(cash input) costs may be approximately $12,000 in the establishment year of the planting
plus and an additional $7,000 in the first production year before income flow begins.
The budgets should be used as a guide only as each particular situation may indicate
higher or lower input costs than those listed. Figures used are an average of a small
number of producers with varied sizes of farms and equipment and may not be representative
of the average of all producers in Manitoba. In addition, the range of high figures shows
a great variability in situations and production methods. No one producer showed all the
costs to be in the low figures in the column, and similarly, no one producer showed
all the costs to be in the high column.
The prospective producer should seek competent professional advise in the formulation
of production and financial plans.
The material contained herein is based on information believed to be accurate but not
guaranteed.
Study Methods
This study looks at strawberry production, in a U-Pick situation, as a series of
operations assigned to the years in which they occur. The production cycle is:
| Year 1 |
- Summer fallow (SMF) |
| Year 2 |
- Planting and establishment |
| Years 3, 4, 5, & 6 |
- Producing (fruiting) |
| Year 7 |
- Alternate crop (e.g. plowdown of a cereal) |
Some producers are on shorter production cycles having only 3 producing
years while others might be longer with 5 or maybe 6 producing years.
Economics of scale are important as capital costs of machinery and equipment are spread
over more units of production.
Formulas used for Investment Cost and Depreciation Cost of Machinery:
| Investment Cost Formula: |
Original Cost + Salvage Value
2 |
x |
Investment Rate |
|
| Depreciation Formula: |
Original Cost - Salvage Value
Useful Life |
|
