EM8526 Cost Blueberry

EM 8526 Revised January 2005
Blu eb err y E c o n o m i cs
The Costs of Establishing and Producing Blueberries
in the Willamette Valley
Blueberry Economics:
The Costs of Establishing and Producing Blueberries
in the Willamette Valley *
Bart Eleveld, Bernadine Strik, Karen DeVries, and Wei Yang
INTRODUCTION
Willamette Valley1 blueberry production has In the next section of this study, enterprise
increased dramatically between 1991 and budgets for blueberry establishment and
2004. Figure 1, on the next page, shows that production are developed to estimate
in 1990 there were 1,450 acres of blueberries economic costs and returns. The Mississippi
harvested in the Willamette Valley. By 2003, State Budget Generator, Version 6.0, was
the acreage of harvested blueberries had used to design these budgets. (1) Enterprise
increased to 3,000. This represents a 107 budgets include variable costs for items such
percent increase in acreage over a 14-year as fertilizer, labor, and fuel, as well as such
period. The relationship of blueberry prices fixed costs as depreciation, interest, and land
per pound to total production in the charges. These budgets are useful in
Willamette Valley is illustrated on the next comparing the economic profitability of
page in Figure 2. The price for each year blueberries with alternative farm and non-
represents the average price received in the farm investments.
Willamette Valley. The average reflects
hand-picked and machine-picked blueberries The cash-flow section of the study examines
for fresh and processed markets. This study only the cash requirements of establishing a
estimates costs for a well-managed, newly new blueberry planting. In this section, cash
established, 20-acre blueberry planting in the expenses include operating expenditures for
Willamette Valley.1 items such as fertilizer, labor, and fuel. In
addition, purchases of capital assets are
This study was carried out primarily for the included to illustrate the total cash flows
benefit of new and potential blueberry required for a new blueberry planting. Cash-
producers. However, established growers, flow analysis is used strictly to examine the
especially those who are expanding their flow of funds in the blueberry planting and
acreage, also may find this a useful tool for provides no information as to profitability.
budgeting and comparison purposes. The The basic idea of a cash-flow budget is to
objectives of the study are to estimate the allow a manager to plan for financing and
economic costs and returns associated with gain control over the cash position of the
blueberry production and the cash flows blueberry enterprise.
required to establish a new blueberry planting
in the Willamette Valley. While these two
objectives sound similar, they require two
very different approaches.
*
Bart Eleveld, Extension agricultural economist; Bernadine Strik, Extension horticulture specialist; Karen DeVries,
student assistant, Oregon State University; and Wei Yang, Extension horticulturist, NWREC.
Page 2
Oregon Blueberry Harvested Acreage
1990 - 2003
3500
3000
2500
Harvested Acres
2000
1500
1000
500
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Year
Figure 1. Harvested acres of blueberries in the Willamette Valley, 19902003.

Source: Extension Economics Office, Dept. of Ag. & Res. Econ., 2004.
Oregon Blueberry Production and Price

1990 - 2003
35000 100
90
30000
80
25000
Weighted Ave. Price (Cents/lb)
70
Production (thous. lb)
60
20000
50
15000
40
10000 30
20
5000
10
0 0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Year
Production (000 lbs) Weighted Ave. Price Fresh & Processed (cents/lb)
Figure 2. Production and prices of blueberries in the Willamette Valley, 19902003.

Source: Extension Economics Office, Dept. of Ag. & Res. Econ., 2004.
Page 3
ASSUMPTIONS
Many individuals were involved in this study, dropped or unharvested fruit, so we set the
including growers, university researchers, and mature yield at 16,000 lb. per acre. The yields
Extension staff. Throughout the study, a and markets assumed for the early production
number of broad assumptions were made to years in this study are as follows:
provide a common basis for analysis. The
following costs, practices, and materials will Table 1. Progression of blueberry yields
not be applicable to all situations in every through the establishment period.
production year. Cultural practices, materials, Year Total Fresh Processed
and production costs vary by grower, and (lb.) (lb.) (lb.)
differences can be significant. The practices 3 3,600 3,600 0
and inputs in this publication serve as a guide. 4 7,200 7,200 0
5 10,800 10,800 0
6 14,400 14,400 0
First, the ground was idle (summer fallow)
Full (hand) 18,000 16,200 1,800
and is prepared in the fall (year 0) and planted
Full (mach) 16,000 0 16,000
the following spring. Land is assumed to be
shifted from other agricultural production to
Hand harvest is used predominantly for
blueberries. We assume that a water delivery
establishment years to capture higher values
system that includes water rights already
of fresh market berries. The yields assumed
exists on the land. To revise and maintain the
are considered a good average for blueberry
irrigation system will cost $1,100 per acre.
plantings with similar operations performed
Also, all prices for capital assets and
and resources used in the Willamette Valley.
resources are in 2004 dollar values. This land
is leased on a long-term basis for $400 per
All labor used in establishment and
acre, on a cash-rent basis.
production is valued at $10 per hour. This
wage rate may be thought of as the net cost to
The field is 20 acres in size with a plant
growers for hired labor paid a cash wage of
spacing of 3 feet by 10 feet, allowing for
$7.50 per hour, with an additional $2.50 per
machine harvest. The blueberry planting is
hour for payroll expenses (withholding taxes,
expected to be in full production for 25 years
recordkeeping, preparing W-2 forms, etc.).
following 6 years of establishment. For the
mature planting, there are two separate
Alternatively, this wage rate can represent the
budgets. One budget is for fields that are
opportunity cost of labor provided by the
harvested by machine only. The other budget
blueberry grower. The individuals engaged in
is for fields that are hand picked. For the
various blueberry operations could have been
machine harvest budget, 100 percent of the
employed elsewhere for $10 per hour. In
production is sold to the processor. For the
either case, labor is a resource used and must
hand-picked budget, 90 percent of production
be paid. The cash-flow analysis assumes all
goes to the fresh market and 10 percent of
labor is hired as a cash expense.
production is machine harvested for clean-up
and goes to the processed market. The mature
Machinery and equipment operation costs are
yield for hand harvest culminates at 18,000 lb.
based on agricultural engineering estimates
per acre, with the yields in establishment
(2). Purchase prices, salvage values, useful
starting from 20 percent of the mature level in
lives, annual hours of use, and field capacities
year 3, increasing to the mature yield in 20
were obtained from growers and machinery
percent annual increments. In machine
dealers. This budget assumes that the
harvesting it is assumed there is more
producer owns a 35-horsepower tractor, a flail
Page 4
chopper, a harrow, a manure spreader, a Real interest rates are appropriately used in
rototiller, a side dresser, an airblast sprayer, evaluating the costs and returns of
and a wagon. Ripping, plowing, bed shaping, establishing blueberries over a 7-year time
loading sawdust mulch, grass planting, and period when price levels are held constant.
machine harvesting are all custom-hired jobs. Operating capital interest is treated as a cash
expense. Intermediate and long-term capital is
A pickup truck is driven 2,500 miles per year assumed to be provided by the owner, so
for various tasks related to the blueberry interest on this capital is treated as a non-cash
planting. The pickup costs the operation $135 expense.
per acre per year, not including the drivers
labor. A general overhead charge of $20 per Using these general assumptions, enterprise
acre is included each year to cover office budgets are developed in the next section for
supplies, seminars, and bookkeeping each of the blueberry establishment and early
expenses related to the blueberry planting. production years, plus a typical full-
production year (for both the hand-picked
Interest rates used are 8 percent for operating and the machine-picked) that will be
capital and 7 percent for intermediate and representative of the 25 years of full
long-term capital. These represent real interest production.
rates, which are determined by subtracting
inflation rates from nominal interest rates.
ENTERPRISE BUDGETS
An enterprise budget includes all the costs broken down by machinery, labor, and
and returns associated with producing one operating input expenses for each operation.
enterprise in some particular manner (2). In The budgets also are given in an income and
this study, blueberries are the enterprise, and expense format in Appendix Tables 1.D
separate budgets are developed for through 9.D,1 in which product and inputs are
establishment, early production, and a typical grouped by category instead of by operation.
full production year for both a machine- and Each enterprise budget is for a calendar year,
hand-picked field. The budgets are presented and all budgets are prepared as of the end of
in an operations format in Appendix Tables their respective years. Each budget is
1.A through 9.A, in which each operation is discussed in detail below.
listed in the order it is performed. Costs are
1
This unconventional numbering system is used
because it conforms with the Mississippi State
Enterprise Budgeting program used to produce the
tables.
Page 5
FIELD PREPARATION YEAR 0
Summer fallow ground is diverted to year; this is accomplished using rented pipe
blueberry production from other agricultural with risers.
uses the year preceding the planting of
blueberry bushes. We refer to this Sawdust generally is used as a pre-plant soil
establishment year as Year 0 because the amendment and as a mulch in blueberry
bushes are not planted at this time. The plantings. Growing blueberries without mulch
budget for Year 1 includes the first growing is an option. However, we will use sawdust in
year for the bushes; Year 2 is the second this budget, at a cost of $40 per unit (7.5
growing year; and so on. Some production cubic yards of sawdust), as it is more
begins in Year 3, with full production in Year common. Three and one-half inches of
7. Costs for Year 0 are shown in Appendix sawdust are applied in 3-foot wide strips on
Tables 1.A and D. 10-foot centers over the entire field and
incorporated 10 inches deep. Preplant
The land selected for blueberries must be well fertilizer (16-16-16) is banded onto the rows
drained. If tiling is needed, it will cost and also is incorporated with a rototiller.
approximately $500 per acre; none is
considered in this study. With good soil Operating capital interest is charged on
conditions and plant maintenance, plantings variable costs, based on dates the expenses
may produce for 25 years or more. Plantings were incurred and assuming that all operating
on poorly drained soils generally do poorly credit is repaid by the end of the year. This
and are prone to root problems. This study charge is included to reflect the cost of
also assumes that the land has deeded water borrowing operating capital, or an opportunity
rights and is equipped with a water delivery cost if the owner uses equity capital.
system.
Total variable cash expense in Year 0 is
In this study, a 20-acre site is chosen and land $1,9262 per acre. The remaining costs are
preparation starts in August of the year fixed, and include cash and non-cash
preceding planting, beginning with an expenditures. Cash-fixed expense includes
herbicide spray for weed and grass control. insurance on machinery and equipment.
A custom operator rips, plows, and works the Machinery and equipment needed in Year 0
site three times with a culti-packer (drag and include a 35 horsepower tractor with a loader,
roll). Three drag-and-roll trips are required. a spreader, a rototiller, a drag-harrow, a two-
Next, soil analyses are obtained for base wheel trailer, a half-ton pickup, and a spin
nutrients and nematodes. These tests cost $90 spreader for fertilizer. Total fixed cost is
for the 20-acre site. If the pH is outside the $510 per acre, and total cost in Year 0 is
ideal range for blueberries (4.2 -5.5) then the $2,435 per acre.
soil pH will require adjustment with either
sulfur or lime. This budget assumes that the
pH is acceptable. We also are assuming no
fumigation is necessary.
The permanent irrigation system is not

installed until establishment Year 1, after the
blueberries are planted. However, the site
must be irrigated during the field preparation
2
Costs and returns are rounded to the nearest dollar in
this narrative.
Page 6
ESTABLISHMENT YEAR 1
Year 1 is the planting year. Before planting, with 3-foot risers at a cost of $1,100 per acre.
the plant spacing must be determined. At this An overhead system cools the plants as well
time, the field is flagged to mark the planting as irrigating them and can supply greater
rows, and raised beds are formed. As amounts of water during hot summers. It also
indicated in the assumptions, we will plant at a can help in providing frost protection to the
3-foot by 10-foot spacing (which will give us plants in late winter or early spring.
1,452 plants per acre). This is a 33 percent
increase in the number of plants over the The permanent irrigation system is capitalized
previously published budget. This is due to (or amortized) over 30 years, with no salvage
the decrease in plant spacing. For information value, resulting in a capital recovery
on other spacings, refer to PNW 215, (depreciation plus interest) charge of $88.65
Highbush Blueberry Production Guide (3). per acre per year.
Costs for Year 1 are shown in Appendix
Tables 2.A and D. Irrigation is started as needed in summer, with
1 to 1.5 inches of water applied every week. A
The grower must choose between bare root typical season will consist of two applications
and container plants, each of which typically per week for a total of 17 waterings (sets).
are 2 years old. We assume an average cost Beginning in Year 1, general irrigation
per plant of $2.60; patented or hard-to-obtain maintenance and miscellaneous repairs and
cultivars may cost more. Containerized plants supplies cost $88 per acre per year. This cost
take longer to plant. For this study, we applies to all future years of blueberry
assume that bare-root stock is planted. production in this study.
Approximately 55 bushes may be hand-
planted per hour. This means planting Ammonium sulfate is hand-applied to each
requires 26.4 hours of labor per acre. After plant at a rate of 1 oz. per plant, or
planting, a trip between the rows with a drag approximately 91 lb. per acre (0.2 oz. N per
is necessary to level it out. plant, or 18 lb. actual N per acre). The
fertilizer is applied three timesin April ,
The area between the rows is planted with a May, and Junefor a total of 54 lb. N/ac.
companion grass seed. Before the grass Labor is 1 hour per application per acre.
emerges, an herbicide is strip-sprayed along
the blueberry rows to kill any unwanted A 2-inch deep sawdust mulch, 3 feet wide on
grass. Additional weed control in the rows, 10-foot centers, is then applied to the field.
when needed, is performed using a backpack Each 1 inch of sawdust applied to the field
sprayer with a hooded wand, applying 3 oz. represents 40 cubic yards (5.3 units) of
of herbicide per acre. The grass strips are sawdust per acre. Year 1 operations end with
mowed 3 times in Year 1 and 10 times a year a dormant spray of a copper fungicide at the
thereafter. rate of 2 lb. per acre.
During this year, a decision is made on how General labor, miscellaneous, management,
the field is going to be irrigated. The two and operating expenses are included as
common choices are an above-ground, solid- discussed for the Year 0 budget. Total
set sprinkler system, or a drip system. The variable cost for Year 1 is $6,436 per acre.
cost is about the same, and personal Fixed costs at $626 are nearly the same as
preference or experience generally guides this Year 0 for all costs except machinery and
decision. We used an above-ground system equipment depreciation, interest, and
Page 7
insurance and interest on investment. opportunity cost will be calculated in a
Machinery and equipment expenses increase summary table that simultaneously calculates
due to increased machinery use during the the interest opportunity costs on previous
year. Total cost in Year 1 is $7,062. years expenses and at the same time
calculates the amortized capitalization cost for
The budgets for the individual establishment the entire establishment process, which must
years do not show or reflect an interest cost be recovered during all the years the mature
for the expenses invested in previous stand is in production (see Tables 2 and 3).
establishment years. This legitimate
The enterprise budget for Year 2 is shown in Weeds are controlled in the planting by
Appendix Tables 3.A and D. The bushes are mowing and by using a backpack sprayer to
pruned to remove unwanted canes and flower spot-kill weeds in the blueberry rows.
buds. The clippings are then flail-mowed.
Pruning in Year 2 uses hand labor at the rate The sequence and amount of water applied
of 10 hours per acre. Fall and late-winter through irrigation is the same as in Year 1.
copper sprays are used to control disease. We The remaining operations and variable costs
assume a plant loss of 2.5percent or 36 plants are the same as Year 1, including general
per acre. These are replanted using 1.33 labor, miscellaneous expenses, management,
hours of labor per acre. and operating-capital interest. Total variable
cost in establishment Year 2 is $757 per acre.
Ammonium sulfate is hand-applied at the rate
of 1.5 oz. per plant (this is 0.3 oz. of N per Fixed costs are calculated the same as in Year
plant or 27 lb. N/ac. per application) or 136 1. No new equipment is purchased in Year 2.
lb. of fertilizer product per acre per Total fixed cost in Year 2 is $625 per acre.
application. The fertilizer is applied three The total budgeted cost for establishment
timesin April, May, and June (for a total of Year 2 is $1,382 per acre.
0.9 N/plant). Adjust N based on plant
growth/needs, as fresh sawdust can tie up
nitrogen.
During the third establishment year, a trellis The same basic cultural operations are
system is constructed consisting of wooden performed as in Year 2, with the following
end-posts with metal in-row posts and two exceptions: The dormant copper sprays are
wires, at a cost of $700 per acre for materials, applied in October and February at an
plus 30 hours of labor per acre to install. The increased rate of 6 lb. per acre. Because of
materials cost is amortized over a 30-year life, increased plant size, pruning now takes 40
for an annual depreciation and interest cost of hours per acre.
$56.41. This trellis will improve machine
harvest efficiency and also has been shown to There may be three to five spring fungicidal
be of advantage in hand-picked fields of some sprays to control mildew, mummy berry, and
cultivars. botrytis. The rate is 2 lb. of material per spray
application, with the weather determining the
Page 8
number of sprays. This study will assume this study, scare-eye balloons and a propane
four spring applications. cannon are used. When production begins,
200 12-quart picking buckets need to be
Fertilizer is still applied three times per year purchased. These can be purchased for $2.50
as before, but now it is banded with a side- each and are treated as an operating expense
dress applicator. Ammonium sulfate (or urea, in Year 3. We also will replace 25 percent of
depending on pH) is applied at a total rate of the picking buckets during each production
100 lb. of nitrogen per acre (assuming year. Cost of hand harvest is 40 cents per
sawdust mulch is used), or 475 lb. of product pound, which includes labor, field
per acre. This is split into three management, and so on.
applicationseach in April, May, and June.
Again, adjust fertilizer N based on plant needs One assumption made was that 100 percent
or growth, as fresh sawdust can tie up N. of the blueberries would be sold to the fresh
Every 4 to 5 years, a soil nutrient analysis market. The selling price of the blueberries is
should be taken to monitor soil pH and 85 cents per pound for this mid-season
nutrients. Also, tissue analysis is done every cultivar, net of any brokerage or
other year to determine whether the plants are transportation costs. This study assumes that
deficient in any nutrients. Currently, tissue the growers find their own markets.
analysis is $32.50 per sample. Two or three
tissue analyses should be taken from the site. A description of the variable costs for Year 3
If a problem is suspected, then more samples is shown in Appendix Table 5.A and D. Total
should be analyzed. We will assume two variable cost for Year 3 is $3,029 per acre,
tissue analyses for this study. with harvest costs accounting for about 50
percent of that amount, at $1,440 per acre.
Production begins in Year 3, so beehives have Total fixed cost is $719 per acre. Total
to be rented to ensure adequate pollination. operating and establishment cost in Year 3 is
Three hives per acre are required, at a cost of $3,747 per acre. Income from blueberry sales
$30 per hive. Bird control also begins in Year of $3,060 reduces that figure to $687 (net
3. Various control methods may be used; in projected return = $-687).
ESTABLISHMENT YEARS 46
The operation and maintenance of the adequate pollination. Field management

blueberry planting in Years 4 to 6 are very should be maintained, and any plant disorder
similar to the changes implemented in Year 3. or insect problem should be taken care of
Appendix Tables 5, 6, and 7A and 5, 6, and immediately.
7D show the costs and returns of
establishment for years 4, 5, and 6, There are several changes from year to year
respectively. A change that takes place as the as the planting matures. The main change is
blueberry planting matures is the increase in the increase in yield, as indicated previously.
the nitrogen fertilizer requirement to 115 lb. Income and harvest costs reflect the increase
N in Year 4; 120 lb. N in Year 5; and 140 lb. in production. Also, sawdust mulch is applied
N in Year 6. As in previous years, adjust on the planting at a rate of 2 inches, or 11
fertilizer N based on plant needs or growth. units, every third year. Since sawdust was last
Pruning costs gradually increase from year applied in establishment year 1, it should be
3 through year 6, taking 45 hours, 50, and 55 applied again in establishment year 4. This
hours from years 4 through 6, respectively. rate continues throughout full production.
Three beehives per acre are needed to ensure
Page 9
Total cost for Years 4, 5, and 6 is $6,171, economic cost of establishing a blueberry
$6,510, and $8,051, respectively, per acre. planting. Notice the line labeled Interest
This cost is offset by returns of $6,120, carryover from previous years. The sum of
$9,180, and $12,240 per acre, respectively, for the six amounts is equal to $4,467, but it
a net annual gain of -$51, $2,670, and $4,189 really amounts to more than that because the
per acre respectively. Now it is time to add in interest compounds from one year to the next
the opportunity cost for having the capital tied in the Cumulative gain (loss) row. When
up for 7 years of establishment before full the cumulative loss from the last year of
production begins. establishment ($9,225) is amortized over the
life of the stand in full production (25 years),
Tables 2 and 3 show the accumulation of the result is an annual payment ($792) that
gross revenues, expenses (including the will pay off or recoverwith interestthe
interest or opportunity cost of investing in the net loss or investment of the establishment
blueberry planting), and net returns through period. This annual payment is factored into
the 7 years of establishment. Table 2 adds a the profit calculation in both Tables 2 and 3 to
representative full production year for a hand- arrive at the net annual profit during the full
picked field, and Table 3 does the same for a production or mature years, to be discussed
machine-picked field. The budgets and below.
practices for these full production years will
be described in the next section of the Table 2 is extracted from an Excel
narrative. spreadsheet that is available from the authors
of this bulletin. This spreadsheet is a tool that
Total establishment cost is $9,225 per acre at allows its user to search for either the price or
the end of the 7-year establishment period. yield that will allow producers to break even,
This amount is the same whether the mature or just exactly cover all costs, over the
planting is machine-picked or hand-picked in productive life of the planting.
full production, and it represents the total
Page 10
Table 2. Summary of establishment cost and full production, hand-picked blueberries, Willamette Valley.
Page 11
Table 3. Summary of establishment cost and full production, machine-picked blueberries, Willamette Valley.
Page 12
MATURE YEARS
The final enterprise budgets for mature years harvest cost of 37 cents per pound in hand-
are shown in Appendix Tables 8 and 9, A and picked, machine harvest (and transportation)
D. These budgets present the typical costs costs only 13 cents per pound. Returns over
and returns expected from a well-managed, variable costs for machine harvest are $4,052
mature, 20-acre blueberry planting. per acre. Assuming all variable costs are paid
in cash, the return over variable cost
There are two different mature-year budgets. amounts represent funds available to pay
The machine-picked budget assumes that all fixed costs of insurance, depreciation, interest,
fruit is machine-harvested and sold in the taxes, and the cost recovery or amortization of
processed market. The hand-picked budget the blueberry establishment.
assumes that 90percent of the production is
hand-picked and sold in the fresh market, and The total fixed cost of $1,519 per acre is the
the remaining 10 percent is cleaned up by same for both harvesting methods, since the
machine harvest and sold to a processor. harvesting machinery is custom-hired, not
owned. The amortized establishment cost of
In both budgets, annual irrigation $762 per acre is based on the net
requirements are assumed to be 30 inches of establishment cost of $9,225 per acre,
water per year (two sets per week for amortized at 7 percent for 25 yearsthe
2 inches of water per week). Also, the estimated life of the blueberry planting.
2 inches (11 units) of sawdust mentioned in This charge represents the annual payment
establishment year 4 needs to be applied required to repay a loan taken out to establish
every 3 years, but since we calculate only one an acre of blueberries. If the establishment
budget to represent every full production year, costs are paid using the owner's capital, the
this cost is annualized in these budgets. charge represents an annual recovery of the
principal invested in establishing the planting
Pruning is now assumed to take 48 hours for and the foregone interest the owner could
machine-picked fields and 60 hours per acre have earned in alternative investments made
for hand-picked fields. Nitrogen fertilization instead of establishing blueberries.
has been increased to 160 lb. N/acre divided
into three applications, as described for The net projected return over all costs is
previous years. The long-term yield expected $4,242 per acre for hand-picked and $2,533
from hand-harvested fields is 18,000 pounds for machine-picked. This indicates that a
per acre; for machine harvested fields, 16,000 blueberry yield of 9 tons per acre for hand-
pounds per acre. The expected price received harvested or 8 tons for machine-harvested
is 85 cents per pound for fresh berries and 50 blueberries is sufficient to pay the full costs
cents per pound for processed berries. Total of production for either harvesting
return expected is $8,000 per acre for the technology. The ultimate market for the
machine-picked field and $14,670 per acre blueberries, either fresh or processed, will
for the (90%) hand-picked budget. Total determine the amount of money to be made or
variable cost for the hand-picked budget is lost in producing a blueberry planting.
$8,910 per acre. The return over variable cost
is $5,761 per acre. For machine-picked Our fixed costs include interest on operating
berries, although the returns are significantly capital at 8 percent and on all durable capital,
lower, this is largely offset by a greatly including cumulative establishment costs, at
reduced harvest cost. Instead of an average 7 percent. In addition, we have included
Page 13
expenses for all labor and capital. If you are for break-even price, holding assumed yields
willing to accept a lower rate of return on constant, or visa versa. The numerical search
your capital, or you value your labor and procedure shows that a fresh market price of
management at lower rates, you may achieve a 64.4 cents per pound would allow the
long-term economic profit earlier from your producers to just exactly cover all their costs.
blueberry planting. Also, the prices or yields This analysis assumes the price for processed
you achieve may increase or reduce your berries will decline proportionately in the
returns. Throughout this study, we attempted same percentage from starting assumptions as
to use conservative estimates of costs and the fresh market berries.
include all typical operations. We did not
include an opportunity cost for management Since production of the baby crop starts well
in our budget. Thus the net expected return before full production years, the yield break-
just quoted represents a residual return to even calculation must assume that baby crop
management and the willingness to bear risk. yields change proportionately with mature
crop yields. Keeping this in mind, the long-
Your costs may be lower than those budgeted run yield required to break even, assuming the
in this study, again allowing you to achieve a price remains at the originally assumed level,
larger long-term profit. Finally, this analysis is 9,917 lb. per acreonly a little over one-
ignores any tax advantages associated with half of the assumed yield. The reader may
owning a blueberry planting. wonder why the break-even yield is
proportionately so much lower relative to the
A 10-foot row spacing was selected so that assumed level than the break-even price
machine picking could be utilized. Machine relative to its initially assumed level. The
picking is a more cost-efficient method to reason is that varying the blueberry price has
harvest blueberries, but the berries can be sold no affect on costs of production. When yields
only to a fruit processor, which results in a are allowed to vary, however, remember that
lower price received. Use of this row spacing harvest costs are proportional to yield. Thus,
allows flexibility between harvesting methods. when yield is reduced, variable costs of
production will go down as well. Figure 4
A positive aspect of this analysis is that below shows the cumulative gain curve when
blueberry returns are greater than variable either price or yield is set at its break-even
costs beginning in Year 3 of establishment. level. By definition, the full cost-recovery line
Figure 3 below shows graphically the comes back to exactly zero at the end of the
accumulation of net returns at assumed prices productive life of the planting.
and yields. The lower line includes all For machine-picked berries, break-even
opportunity costs, including interest, for processed berry price is 38.3 cents per pound,
funds invested or tied up in the process of and the break-even yield is 10,531 lb. per
establishing the planting. The upper line acre.
includes only the recovery of principal
expended in establishment and not any The template used for Tables 2 and 3 also
opportunity cost or interest. The principal calculates some standard investment analysis
costs are recovered in the first full production measures for the planting, which take into
year, and when the interest opportunity costs account the time value of money. In other
are included, full recovery of costs occurs in words, funds invested or committed today are
the second year of full production. unavailable for investment in alternative
investments and must earn an opportunity
As mentioned earlier, the Excel templates cost.
shown in Tables 2 and 3 are designed to solve
Page 14
The internal rate of return measure The equivalent rates are somewhat lower for
calculates the interest rate that makes the machine-picked berries.
present value (or time-discounted value) of all
costs or negative returns exactly equal to the An alternative investment evaluation is to
present value of all positive returns over the calculate how many dollars the investor would
entire life of the investment. For the hand- be equally willing to accept today rather than
picked berries, this rate of return is 21.4 realizing the budgeted costs and returns from
percent if one can assume that all net-positive the proposed investment. This is called a
returns can be re-invested at the same 21.4 Net Present Value (NPV). At the assumed
percent as is realized in the project. This may opportunity cost of 7 percent, the NPV for
be unrealistic for many producers. An hand-picked berries is $30,784; for machine-
alternative measure, sometimes called the picked. it is $18,383. These figures also may
real rate of return, calculates the interest be converted into an annual payment (or
rate earned if net positive returns can be re- annuity) that would be an acceptable
invested only at the specified discount rate (7 alternative to the proposed investment. For
percent in this case). That real rate of return is hand-picked, the annual equivalent is $2,434;
11.9 percent for the hand-picked blueberries. for machine-picked it is $1,454.
Page 15
Figure 3. Cumulative net returns, hand-picked blueberries at assumed prices and yields.
Figure 4. Cumulative net returns, hand-picked blueberries at break-even price or yield.
Page 16
CASH-FLOW ANALYSIS
The enterprise budgets presented indicate the requirement could range from the property
economic costs and returns of establishing tax payment, if it is debt free, to the loan
and producing 20 acres of blueberries. These service payment (principal and interest) plus
costs include cash costs as well as non-cash property tax, if it is being financed. Cash
costs. The costs of fixed assets were spread fixed costs per acre are multiplied by 20 acres
over their useful lives in the form of to calculate total cash fixed costs for the
depreciation and interest. blueberry planting.
In analyzing the feasibility of establishing a The remaining cash expenditures are used to
new blueberry planting, estimated cash-flow purchase machinery and equipment. The
requirements also are important for planning machinery and equipment purchases are
cash needs and borrowing. Most lenders concentrated in the first 3 years of
require a projected cash-flow statement to establishment. Annual cash flows are
accompany loan applications. calculated by subtracting operating costs, site
preparation expenditures, and machinery and
A summary of the total cash flows required to equipment purchases from total returns in
establish 20 acres of blueberries is shown in each year. The lighter-colored bars in Figure
Appendix Table 10 and represented here 3 indicate that a cash deficit occurs in the first
graphically in Figure 3. This cash-flow 4 years. Outside cash will have to be provided
projection summarizes the cash income and by the owner or through financing not only
expenditures throughout the establishment during these 4 years, but well beyond, until
period and a few years into full production. the operation can catch up to accumulated
Returns are received beginning in Year 3 and cash deficits.
increase each year following. Returns per acre
are multiplied by 20 acres to estimate total The cumulative cash flow shows the total cash
returns. flow in each year, including all previous cash
flows. For this 20-acre planting, Appendix
Operating costs are taken from the enterprise Table 10 and the associated darker color bars
budgets for Years 0 through 6 of in Figure 4 show that the cash drain is at its
establishment as well as the full production highest, almost $322,000, in establishment
years. We have assumed that all variable year 3 (16,100/acre). It is not until the second
costs, including labor and management, are full year of production that a positive
cash expenses. Your variable cash expenses cumulative balance is achieved. Bear in mind
may be less than the values shown if you that if funds need to be borrowed to cover this
provide all or part of the labor and cash-flow deficit, the interest payments on the
management required. Variable costs for the debt will add to the cash requirement and
blueberry planting are calculated by extend the length of time required to get back
multiplying the variable costs per acre for to zero.
each year by 20 acres.
Obviously, anyone considering establishment
Cash fixed costs also are taken from the of a blueberry planting will need access to a
enterprise budgets. These are the costs considerable amount of cash.
incurred for land-lease payments. If you
already own your own land, this cash
Page 17
Figure 5. Annual and cumulative cash requirements for a 20-acre blueberry planting.
SUMMARY
Establishing a blueberry planting requires a production level with prices at assumed levels.
large investment of time and money. Based If production is fixed at the 18,000 lb.
on a number of assumptions, we estimate that assumed level, a fresh market price of 64.4
economic establishment costs amount to cents per lb. will totally cover all costs. These
approximately $9,225 per acre for a 20-acre results point out that management of the
blueberry planting. Before full production is planting and marketing the blueberries will be
achieved in Year 7, well over $300,000 in cash the keys to paying off the establishment
will be needed to finance the blueberry costs.
planting establishment costs.
In this study, income taxes are ignored. All
After the blueberry planting reaches full costs and returns are estimated on a before-
production, selling 90 percent fresh at 85 tax basis. If you are considering blueberries,
cents and 10 percent to the processor at 50 check with an agricultural tax accountant to
cents per pound will result in positive net determine potential tax implications for your
projected returns over all economic costs. situation, and incorporate these factors into
Selling 100 percent of berries to the your own cost-and-return analysis.
processor at 50 cents per pound also will
result in a positive net projected return over all The analysis shows that blueberries are
economic costs. Using our assumptions, full potentially a very profitable crop. Perhaps that
production costs will be covered at a 9,917 lb. explains the nearly continuous increase in
Page 18
Oregon and Northwest blueberry acreage management, as presented in this publication,
over the past several decades. However, it to obtain the yields presented here. The
should be noted that this study assumes that blueberry industry ultimately must recognize
the land selected for establishment is ideal. If that productive American agriculture has the
installation of drain tiles, fumigation, pH capability of producing the profit out of any
adjustment, or a water delivery system are commodity. In order to keep this ride going,
required, costs will increase considerably. new and expanded markets for the crop will
Also, growers will need very good have to be developed.
Page 19
REFERENCES
1. Agricutural and Resource Economics Department. Oregon Agricultural Information

Network, Web site. Oregon State University Extension Service, 2004.
http://ludwig.arec.orst.edu/econinfo/ .
2. Cross, Tim, and Bart Eleveld. Understanding and Using Enterprise Budgets, Oregon State
University Extension Service publication EM 8354 (Corvallis, 1988). No charge for single
copy; order from Dept. of Agricultural and Resource Economics, Oregon State University,
Ballard Extension Hall 213, Corvallis, OR 97331-3601.
3. Doughty, Chas. C., E. Blain Adams, and Lloyd W. Martin, Highbush Blueberry Production
In Washington and Oregon. Washington, Oregon, and Idaho Extension Service publication
PNW 215. Single copy $1 plus 25 cents shipping and handling; order from Publication
Orders, Extension and Experiment Station Communications, Oregon State University, 422
Kerr Administration, Corvallis, OR 97331-2119.
4. Laughlin, David, and Stan Spurlock. Mississippi State Budget Generator (Computer
Program). Department of Agricultural Economics, Mississippi State University. Program
and documentation available from Web site at:
http://www.agecon.msstate.edu/laughlin/msbginfo.php
Page 20
APPENDIX
Page 21
Table 1.A Estimated resource use and costs for field operations, per acre
Blueberry Establishment
Year 0, Oregon State University
_______________________________________________________________________________________________________________________________________________
POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

OPERATION/ SIZE/ POWER UNIT PERF TIMES -------------- -------------- ------------- ----------------------- TOTAL
OPERATING INPUT UNIT SIZE RATE OVER MTH DIRECT FIXED DIRECT FIXED HOURS COST AMOUNT PRICE COST COST
_______________________________________________________________________________________________________________________________________________
------------dollars----------- dollars ---------dollars---------
Herbicide Spray 1.00 Aug

Sprayer Airblast 35 0.763 3.23 4.23 1.94 4.24 0.84 10.08 23.72
OPERATOR LABOR hour
Herb. Roundup gal. 0.2500 80.00 20.00 20.00
Ripping 1.00 Sep
Ripping acre 1.0000 10.00 10.00 10.00
Plowing 1.00 Sep
Plowing acre 1.0000 10.00 10.00 10.00
Drag and Roll 3.00 Sep
Drag and Roll acre 3.0000 6.00 18.00 18.00
Soil Test 0.10 Sep
Hand Labor hour 0.01 0.10 0.10
Soil Test Analysis test 0.1000 4.50 0.45 0.45
Irrigate 1.00 Oct
Irrigation Electrici set 4.0000 4.50 18.00 18.00
Pipe Rental unit 0.5000 10.00 5.00 5.00
Spread Sawdust 1.00 Oct
Sawdust unit 19.0000 40.00 760.00 760.00
Loader Rental acre 1.0000 800.00 800.00 800.00
Pre-Plant Fertilizer 1.00 Oct
Manure Spreader 25 65 0.330 9.29 0.25 1.10 0.36 4.36 15.00
Pre-Plant Fertil ton 0.1250 187.00 23.38 23.38
Inc. Fertilizer 1.00 Oct
Rototiller 4 ft. 35 1.000 12.48 5.53 2.29 14.75 1.10 13.20 48.25
General Overhead 1.00 Nov
General Overhead acre 1.0000 20.00 20.00
20.00
Annual Rent each 1.00 Jan 400.00 1.0000 400.00
Pickup Truck each 1.00 Dec 79.94 0.0250 79.94
Application 1 mile 1.00 Dec 54.58 8.33 99.99 250.0000 154.57
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 25.00 9.76 59.06 500.03 10.74 128.73 1,684.83 2,407.41
INTEREST ON OPERATING CAPITAL 36.33
UNALLOCATED LABOR 0.00
TOTAL SPECIFIED COST 2,435.49
_______________________________________________________________________________________________________________________________________________
Page 22
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________
Pre-Plant Fertilizer 1.00 Mar

Manure Spreader 25 65 0.330 9.29 0.25 1.10 0.36 4.36 15.00
Pre-Plant Fertil ton 0.1250 187.00 23.38 23.38
Rototill Rows 1.00 Mar
Rototiller 4 ft. 35 1.000 12.48 5.53 2.29 14.75 1.10 13.20 48.25
Mark Fields 1.00 Mar
Field Flags bundle 10.0000 1.00 10.00 10.00
Plant Stock 1.00 Mar
Hand Labor hour 26.40 264.00 264.00
Plant Stock plant 1,452.0000 2.60 3,775.20 3,775.20
Bed Shaping acre 1.0000 250.00 250.00 250.00
Drag Field 1.00 Mar
Harrow 6 ft. 35 0.500 10.37 2.77 0.07 0.34 0.55 6.60 20.15
Plant Grass 1.00 Apr
Grass Seed acre 1.0000 13.00 13.00 13.00
Planter Rental acre 1.0000 5.00 5.00 5.00
Strip Spray 1.00 Apr
Pre-Emerge Herbicide acre 1.0000 30.00 30.00 30.00
Irrigate 1.00 Apr
Fertilizing 3.00 Apr
Establishment Fertil ton 0.1282 138.00 17.70 17.70
Sawdust Mulch 1.00 Apr
Sawdust unit 11.0000 40.00 440.00 440.00
Loader Rental #2 acre 1.0000 700.00 700.00 700.00
Spot Spray 1.00 May
Roundup Appl. appl. 1.0000 4.80 4.80 4.80
Mow Strips 3.00 Jul
Flail Chopper 35 0.429 13.70 7.13 1.31 2.86 1.41 17.02 42.02
Copper Spray 1.00 Nov
Bordeaux appl. 1.0000 6.80 6.80 6.80
General Overhead 1.00 Dec
General Overhead acre 1.0000 20.00 20.00 20.00
Tractor 1.00 Dec
Wagon utility 35 1.000 12.48 5.53 0.10 0.37 1.10 13.20 31.68
Overhead Irrigation each 1.00 Dec 88.65 1.0000 88.65
Application 1 acre 1.00 Dec 36.67 3.00 30.00 1.0000 66.67
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 81.28 29.42 99.15 596.49 52.61 555.23 5,372.38 6,733.95
_______________________________________________________________________________________________________________________________________________
Page 23
Establishment Year 2, Oregon State University
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________
Prune and Rake 1.00 Feb

Hand Labor hour 10.00 100.00 100.00
Copper Spray 2.00 Feb
Bordeaux appl. 2.0000 6.80 13.60 13.60
Replant 1.00 Mar
Plant Stock plant 36.0000 2.60 93.60 93.60
Fertilizing 3.00 Mar
Establishment Fertil ton 0.2040 138.00 28.15 28.15
Mow Strips 10.00 Apr
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Irrigate 1.00 May
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 28.87 37.77 99.61 586.98 32.84 360.11 236.65 1,349.99
_______________________________________________________________________________________________________________________________________________
Page 24
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Hand Labor hour 40.00 400.00 400.00
Bordeaux appl. 2.0000 6.80 13.60 13.60
Fungicide 2.00 Mar
Fungicide appl. 1.0000 3.90 3.90 3.90
Fungicide 2.00 Mar
Fungicide Type #2 appl. 1.0000 7.90 7.90 7.90
Fertilizer Sidedress 3.00 Mar
Side Dresser 5 ft. 35 0.166 2.12 2.77 0.33 0.78 0.55 6.60 12.60
Fertilizer(Sidedress) ton 0.2376 138.00 32.79 32.79
Beehives 1.00 Apr
Beehives hive 3.0000 30.00 90.00 90.00
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Irrigate 1.00 Jun
Tissue Analysis Lab 1.00 Jul
Tissue An. Lab test 0.2000 32.50 6.50 6.50
Bird Control 1.00 Jul
Bird Control acre 1.0000 41.50 41.50 41.50
Fresh Harvest 1.00 Jul
Picking Labor lb. 3,600.0000 0.40 1,440.00 1,440.00
Buckets bkt. 5.0000 2.50 12.50 12.50
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
Trellis each 1.00 Dec 56.41 1.0000 56.41
Application 1 acre 1.00 May 30.00 300.00 1.0000 300.00
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 43.91 57.46 107.72 661.13 95.42 993.72 1,749.99 3,613.93
_______________________________________________________________________________________________________________________________________________
Page 25
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Hand Labor hour 45.00 450.00 450.00
Bordeaux appl. 2.0000 6.80 13.60 13.60
Fungicide 2.00 Mar
Fungicide appl. 1.0000 3.90 3.90 3.90
Fungicide 2.00 Mar
Side Dresser 5 ft. 35 0.166 2.12 2.77 0.33 0.78 0.55 6.60 12.60
Beehives 1.00 Apr
Beehives hive 3.0000 30.00 90.00 90.00
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Sawdust unit 11.0000 40.00 440.00 440.00
Irrigate 1.00 Jun
Picking Labor lb. 7,200.0000 0.40 2,880.00 2,880.00
Buckets bkt. 5.0000 2.50 12.50 12.50
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
Trellis each 1.00 Dec 56.41 1.0000 56.41
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 40.68 53.23 105.77 656.89 69.58 733.63 4,334.87 5,925.07
_______________________________________________________________________________________________________________________________________________
Page 26
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Hand Labor hour 50.00 500.00 500.00
Bordeaux appl. 2.0000 6.80 13.60 13.60
Fungicide 2.00 Mar
Fungicide appl. 1.0000 3.90 3.90 3.90
Fungicide 2.00 Mar
Fungicide Type#2 appl. 1.0000 7.90 7.90 7.90
Side Dresser 5 ft. 35 0.166 2.12 2.77 0.33 0.78 0.55 6.60 12.60
Beehives 1.00 Apr
Beehives hive 3.0000 30.00 90.00 90.00
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Irrigate 1.00 Jun
Picking Labor lb. 10,800.0000 0.40 4,320.00 4,320.00
Buckets bkt. 5.0000 2.50 12.50 12.50
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
Trellis each 1.00 Dec 56.41 1.0000 56.41
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 40.68 53.23 105.77 656.89 74.61 783.93 4,630.68 6,271.18
_______________________________________________________________________________________________________________________________________________
Page 27
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Hand Labor hour 55.00 550.00 550.00
Bordeaux appl. 2.0000 6.80 13.60 13.60
Fungicide 2.00 Mar
Fungicide appl. 1.0000 3.90 3.90 3.90
Fungicide 2.00 Mar
Side Dresser 5 ft. 35 0.166 2.12 2.77 0.33 0.78 0.55 6.60 12.60
Beehives 1.00 Apr
Beehives hive 3.0000 30.00 90.00 90.00
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Irrigate 1.00 Jun
Picking Labor lb. 14,400.0000 0.40 5,760.00 5,760.00
Buckets bkt. 5.0000 2.50 12.50 12.50
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
Trellis each 1.00 Dec 56.41 1.0000 56.41
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 40.68 53.23 105.77 656.89 77.91 816.93 6,077.22 7,750.72
_______________________________________________________________________________________________________________________________________________
Page 28
Blueberry Full Production Machine
Full production years (machine), Oregon State University
_______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Hand Labor hour 48.00 480.00 480.00
Bordeaux appl. 4.0000 6.80 27.20 27.20
Fungicide 4.00 Mar
Fungicide appl. 4.0000 3.90 15.60 15.60
Fungicide 1.00 Mar
Side Dresser 5 ft. 35 0.166 2.12 2.77 0.33 0.78 0.55 6.60 12.60
Beehives 1.00 Apr
Beehives hive 3.0000 30.00 90.00 90.00
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Sawdust unit 3.6300 40.00 145.20 145.20
Irrigate 1.00 Jun
Processed Harvest 1.00 Jul
Machine Harvest lb. 16,000.0000 0.10 1,600.00 1,600.00
Load and Ship lb. 16,000.0000 0.03 480.00 480.00
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
Trellis each 1.00 Dec 56.41 1.0000 56.41
Am. Establishment each 1.00 Dec 791.64 1.0000 791.64
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 47.15 61.68 109.65 1,457.01 74.89 790.09 2,824.95 5,290.53
_______________________________________________________________________________________________________________________________________________
Page 29
Blueberry Full Production (hand-harvested)
Full production years (hand-harvested), Oregon State University
______________________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Hand Labor hour 60.00 600.00 600.00
Bordeaux appl. 4.0000 6.80 27.20 27.20
Fungicide 4.00 Mar
Fungicide appl. 4.0000 3.90 15.60 15.60
Fungicide 1.00 Mar
Side Dresser 5 ft. 35 0.166 2.12 2.77 0.33 0.78 0.55 6.60 12.60
Beehives 1.00 Apr
Beehives hive 3.0000 30.00 90.00 90.00
Flail Chopper 35 0.429 18.18 23.78 4.37 9.54 4.72 56.72 112.59
Spot Spray 1.00 Apr
Sawdust unit 3.6300 40.00 145.20 145.20
Irrigate 1.00 Jun
Picking Labor lb. 16,200.0000 0.40 6,480.00 6,480.00
Buckets bkt. 5.0000 2.50 12.50 12.50
Processed Harvest 1.00 Jul
Machine Harvest lb. 1,800.0000 0.10 180.00 180.00
Load and Ship lb. 1,800.0000 0.03 54.00 54.00
Tractor 1.00 Dec
Wagon utility 35 1.000 4.23 5.53 0.10 0.37 1.10 13.20 23.43
Trellis each 1.00 Dec 56.41 1.0000 56.41
Am. Establishment each 1.00 Dec 791.64 1.0000 791.64
------- ------- ------- ------- ------ ------- ------- --------
TOTALS 47.15 61.68 109.65 1,457.01 86.89 910.09 7,471.45 10,057.03
_______________________________________________________________________________________________________________________________________________
Page 30
Table 1.D Estimated costs and returns per acre
_______________________________________________________________________
ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

_______________________________________________________________________
dollars dollars
INCOME
---------
TOTAL INCOME 0.00 _________
DIRECT EXPENSES
Chemical Spray
Herb. Roundup gal. 80.00 0.2500 20.00 _________
Custom Charges
Ripping acre 10.00 1.0000 10.00 _________
Plowing acre 10.00 1.0000 10.00 _________
Drag and Roll acre 6.00 3.0000 18.00 _________
Soil Test Analysis test 4.50 0.1000 0.45 _________
Pipe Rental unit 10.00 0.5000 5.00 _________
Loader Rental acre 800.00 1.0000 800.00 _________
Supplies
Irrigation Electrici set 4.50 4.0000 18.00 _________
General Overhead acre 20.00 1.0000 20.00 _________
Sawdust
Sawdust unit 40.00 19.0000 760.00 _________
Fertilizer
Pre-Plant Fertilizer ton 187.00 0.1250 23.38 _________
OPERATOR LABOR
Tractors hour 12.00 2.3032 27.64 _________
Pickup Truck hour 12.00 8.3325 99.99 _________
Hand Labor
Special Labor hour 10.00 0.1100 1.10 _________
DIESEL FUEL
Tractors gal. 1.10 3.6601 4.02 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
LEASE
Tractors acre 1.00 8.2500 8.25 _________
REPAIR & MAINTENANCE
Implements acre 4.48 1.0000 4.48 _________
Tractors acre 4.48 1.0000 4.48 _________
Pickup Truck mile 0.12 250.0000 31.25 _________
INTEREST ON OP. CAP. acre 36.33 1.0000 36.33 _________
---------
TOTAL DIRECT EXPENSES 1,925.70 _________
RETURNS ABOVE DIRECT EXPENSES -1,925.70 _________
FIXED EXPENSES
Implements acre 20.09 1.0000 20.09 _________
Tractors acre 9.76 1.0000 9.76 _________
Pickup Truck each 3,197.55 0.0250 79.94 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
TOTAL FIXED EXPENSES 509.79 _________
---------
TOTAL SPECIFIED EXPENSES 2,435.49 _________
RETURNS ABOVE TOTAL SPECIFIED EXPENSES -2,435.49 _________
_______________________________________________________________________
Page 31
_________________________________________________________________________

_________________________________________________________________________
dollars dollars
INCOME
---------
DIRECT EXPENSES
Chemical Spray
Pre-Emerge Herbicide acre 30.00 1.0000 30.00 _________
Roundup Appl. appl. 4.80 1.0000 4.80 _________
Bordeaux appl. 6.80 1.0000 6.80 _________
Custom Charges
Bed Shaping acre 250.00 1.0000 250.00 _________
Planter Rental acre 5.00 1.0000 5.00 _________
Loader Rental #2 acre 700.00 1.0000 700.00 _________
Supplies
Field Flags bundle 1.00 10.0000 10.00 _________
Sawdust
Sawdust unit 40.00 11.0000 440.00 _________
Fertilizer
Pre-Plant Fertilizer ton 187.00 0.1250 23.38 _________
Establishment Fertil ton 138.00 0.1282 17.70 _________
Plants
Plant Stock plant 2.60 1,452.0000 3,775.20 _________
Grass Seed acre 13.00 1.0000 13.00 _________
OPERATOR LABOR
Tractors hour 12.00 6.2115 74.54 _________
Hand Labor
Overhead Irrigation hour 10.00 3.0000 30.00 _________
DIESEL FUEL
Tractors gal. 1.10 9.1317 10.03 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
LEASE
Tractors acre 1.00 8.2500 8.25 _________
Implements acre 7.90 1.0000 7.90 _________
Tractors acre 13.50 1.0000 13.50 _________
Overhead Irrigation acre 36.66 1.0000 36.67 _________
---------
RETURNS ABOVE DIRECT EXPENSES -6,435.75 _________
FIXED EXPENSES
Implements acre 27.90 1.0000 27.90 _________
Tractors acre 29.42 1.0000 29.42 _________
Overhead Irrigation each 88.64 1.0000 88.65 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
---------
_______________________________________________________________________
Page 32
_______________________________________________________________________

_______________________________________________________________________
dollars dollars
INCOME
---------
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 2.0000 13.60 _________
Supplies
Fertilizer
Establishment Fertil ton 138.00 0.2040 28.15 _________
Plants
Plant Stock plant 2.60 36.0000 93.60 _________
OPERATOR LABOR
Tractors hour 12.00 7.5071 90.09 _________
Hand Labor
DIESEL FUEL
Tractors gal. 1.10 10.5100 11.56 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 8.36 1.0000 8.36 _________
Tractors acre 17.31 1.0000 17.31 _________
---------
TOTAL DIRECT EXPENSES 757.16 _________
RETURNS ABOVE DIRECT EXPENSES -757.16 _________
FIXED EXPENSES
Implements acre 18.39 1.0000 18.39 _________
Tractors acre 37.77 1.0000 37.77 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
---------
_______________________________________________________________________
Page 33
_________________________________________________________________________

_________________________________________________________________________
dollars dollars
INCOME
Blueberries Fresh lb. 0.85 3,600.0000 3,060.00 _________
---------
TOTAL INCOME 3,060.00 _________
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 2.0000 13.60 _________
Fungicide appl. 3.90 1.0000 3.90 _________
Fungicide Type #2 appl. 7.90 1.0000 7.90 _________
Custom Charges
Bird Control acre 41.50 1.0000 41.50 _________
Picking Labor lb. 0.40 3,600.0000 1,440.00 _________
Supplies
Beehives hive 30.00 3.0000 90.00 _________
Tissue An. Lab test 32.50 0.2000 6.50 _________
Buckets bkt. 2.50 5.0000 12.50 _________
Fertilizer
Fertilizer(Sidedress) ton 138.00 0.2376 32.79 _________
OPERATOR LABOR
Tractors hour 12.00 11.4182 137.03 _________
Hand Labor
Trellis hour 10.00 30.0000 300.00 _________
DIESEL FUEL
Tractors gal. 1.10 15.9855 17.59 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 16.47 1.0000 16.47 _________
Tractors acre 26.32 1.0000 26.32 _________
---------
RETURNS ABOVE DIRECT EXPENSES 31.31 _________
FIXED EXPENSES
Implements acre 36.13 1.0000 36.13 _________
Tractors acre 57.46 1.0000 57.46 _________
Trellis each 56.41 1.0000 56.41 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
---------
RETURNS ABOVE TOTAL SPECIFIED EXPENSES -687.28 _________
_________________________________________________________________________
Page 34
_________________________________________________________________________

_________________________________________________________________________
dollars dollars
INCOME
---------
TOTAL INCOME 6,120.00 _________
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 2.0000 13.60 _________
Fungicide appl. 3.90 1.0000 3.90 _________
Custom charges
Picking labor lb. 0.40 7,200.0000 2,880.00 _________
Supplies
Beehives hive 30.00 3.0000 90.00 _________
Buckets bkt. 2.50 5.0000 12.50 _________
Sawdust
Sawdust unit 40.00 11.0000 440.00 _________
Fertilizer
OPERATOR LABOR
Tractors hour 12.00 10.5779 126.94 _________
Hand Labor
DIESEL FUEL
Tractors gal. 1.10 14.8091 16.29 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 14.52 1.0000 14.52 _________
Tractors acre 24.39 1.0000 24.39 _________
---------
RETURNS ABOVE DIRECT EXPENSES 658.83 _________
FIXED EXPENSES
Implements acre 31.89 1.0000 31.89 _________
Tractors acre 53.23 1.0000 53.23 _________
Trellis each 56.41 1.0000 56.41 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
---------
RETURNS ABOVE TOTAL SPECIFIED EXPENSES -51.29 _________
_________________________________________________________________________
Page 35
__________________________________________________________________________

__________________________________________________________________________
dollars dollars
INCOME
---------
TOTAL INCOME 9,180.00 _________
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 2.0000 13.60 _________
Fungicide appl. 3.90 1.0000 3.90 _________
Custom Charges
Picking Labor lb. 0.40 10,800.0000 4,320.00 _________
Supplies
Beehives hive 30.00 3.0000 90.00 _________
Buckets bkt. 2.50 5.0000 12.50 _________
Fertilizer
OPERATOR LABOR
Tractors hour 12.00 10.5779 126.94 _________
Hand Labor
DIESEL FUEL
Tractors gal. 1.10 14.8091 16.29 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 14.52 1.0000 14.52 _________
Tractors acre 24.39 1.0000 24.39 _________
---------
RETURNS ABOVE DIRECT EXPENSES 3,379.96 _________
FIXED EXPENSES
Implements acre 31.89 1.0000 31.89 _________
Tractors acre 53.23 1.0000 53.23 _________
Trellis each 56.41 1.0000 56.41 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
---------
RETURNS ABOVE TOTAL SPECIFIED EXPENSES 2,669.84 _________
__________________________________________________________________________
Page 36
__________________________________________________________________________

__________________________________________________________________________
dollars dollars
INCOME
---------
TOTAL INCOME 12,240.00 _________
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 2.0000 13.60 _________
Fungicide appl. 3.90 1.0000 3.90 _________
Custom Charges
Picking Labor lb. 0.40 14,400.0000 5,760.00 _________
Supplies
Beehives hive 30.00 3.0000 90.00 _________
Buckets bkt. 2.50 5.0000 12.50 _________
Fertilizer
OPERATOR LABOR
Tractors hour 12.00 10.5779 126.94 _________
Hand Labor
DIESEL FUEL
Tractors gal. 1.10 14.8091 16.29 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 14.52 1.0000 14.52 _________
Tractors acre 24.39 1.0000 24.39 _________
---------
FIXED EXPENSES
Implements acre 31.89 1.0000 31.89 _________
Tractors acre 53.23 1.0000 53.23 _________
Trellis each 56.41 1.0000 56.41 _________
Annual Rent each 399.99 1.0000 400.00 _________
---------
---------
__________________________________________________________________________
Page 37
Blueberry Full Production Machine
Full production years (machine), Oregon State University
__________________________________________________________________________

__________________________________________________________________________
dollars dollars
INCOME
Blueberries Processed lb. 0.50 16,000.0000 8,000.00 _________
---------
TOTAL INCOME 8,000.00 _________
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 4.0000 27.20 _________
Fungicide appl. 3.90 4.0000 15.60 _________
Custom Charges
Machine Harvest lb. 0.10 16,000.0000 1,600.00 _________
Load and Ship lb. 0.03 16,000.0000 480.00 _________
Supplies
Beehives hive 30.00 3.0000 90.00 _________
Sawdust
Sawdust unit 40.00 3.6300 145.20 _________
Fertilizer
OPERATOR LABOR
Tractors hour 12.00 12.2585 147.10 _________
Hand Labor
DIESEL FUEL
Tractors gal. 1.10 17.1619 18.88 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 18.40 1.0000 18.40 _________
Tractors acre 28.27 1.0000 28.27 _________
---------
FIXED EXPENSES
Implements acre 40.37 1.0000 40.37 _________
Tractors acre 61.68 1.0000 61.68 _________
Trellis each 56.41 1.0000 56.41 _________
Annual Rent each 399.99 1.0000 400.00 _________
Am. Establishment each 791.63 1.0000 791.64 _________
---------
TOTAL FIXED EXPENSES 1,518.69 _________
---------
__________________________________________________________________________
Page 38
Blueberry Full Production (hand-harvested)
Full production years (hand-harvested), Oregon State University
__________________________________________________________________________

__________________________________________________________________________
dollars dollars
INCOME
Blueberries Processed lb. 0.50 1,800.0000 900.00 _________
---------
TOTAL INCOME 14,670.00 _________
DIRECT EXPENSES
Chemical Spray
Bordeaux appl. 6.80 4.0000 27.20 _________
Fungicide appl. 3.90 4.0000 15.60 _________
Custom Charges
Picking Labor lb. 0.40 16,200.0000 6,480.00 _________
Machine Harvest lb. 0.10 1,800.0000 180.00 _________
Load and Ship lb. 0.03 1,800.0000 54.00 _________
Supplies
Beehives hive 30.00 3.0000 90.00 _________
Buckets bkt. 2.50 5.0000 12.50 _________
Sawdust
Sawdust unit 40.00 3.6300 145.20 _________
Fertilizer
OPERATOR LABOR
Tractors hour 12.00 12.2585 147.10 _________
Hand Labor
DIESEL FUEL
Tractors gal. 1.10 17.1619 18.88 _________
GASOLINE
Pickup Truck gal. 1.40 16.6650 23.33 _________
Implements acre 18.40 1.0000 18.40 _________
Tractors acre 28.27 1.0000 28.27 _________
---------
FIXED EXPENSES
Implements acre 40.37 1.0000 40.37 _________
Tractors acre 61.68 1.0000 61.68 _________
Trellis each 56.41 1.0000 56.41 _________
Annual Rent each 399.99 1.0000 400.00 _________
Am. Establishment each 791.63 1.0000 791.64 _________
---------
TOTAL FIXED EXPENSES 1,518.69 _________
---------
RETURNS ABOVE TOTAL SPECIFIED EXPENSES 4,241.81
__________________________________________________________________________
Page 39
Table 10. Cash-flow requirements for 20-acre blueberry planting, Willamette Valley.
Establishment Years Full Production Years

0 1 2 3 4 5 6 7 8 9
Gross revenue/acre 3,060 6,120 9,180 12,240 14,760 14,760 14,760
Total revenue 61,200 122,400 183,600 244,800 295,200 295,200 295,200
Variable cost/acre 1,926 6,435 757 3,029 5,461 5,800 7,340 8,910 8,910 8,910
Cash fixed cost/acre 400 400 400 400 400 400 400 400 400 400
Variable cost 38,520 128,700 15,140 60,580 109,220 116,000 146,800 178,190 178,190 178,190
Cash fixed cost 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000
Total cash costs 46,520 136,700 23,140 68,580 117,220 124,000 154,800 186,190 186,190 186,190
Investments
Tractor 36,250
Spreader 3,625
Rototiller 7,975
Drag harrow 365
Side dresser 1,450
Wagon 725
Pickup truck 25,000
Irrigation 22,000
Trellis 14,000
Annual cash flow -121,910 -158,700 -23,140 -21,380 5,180 59,600 90,000 109,010 109,010 109,010
Cumulative cash flow -121,910 -280,610 -303,750 -325,130 -319,950 -260,350 -170,350 -61,340 47,670 156,680
Page 40
2005 Oregon State University. This publication was produced and distributed in furtherance of the Acts of Congress of
May 8 and June 30, 1914. Extension work is a cooperative program of Oregon State University, the U.S. Department of
Agriculture, and Oregon counties. Oregon State University Extension Service offers educational programs, activities, and
materialswithout discrimination based on race, color, religion, sex, sexual orientation, national origin, age, marital
status, disability, or disabled veteran or Vietnam-era veteran status. Oregon State University Extension Service is an Equal
Opportunity Employer.
Published January 1993. Revised January 2005.

EM8526 Cost Blueberry

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EM 8526 Revised January 2005

Figure 1. Harvested acres of blueberries in the Willamette Valley, 19902003.

Oregon Blueberry Production and Price

Figure 2. Production and prices of blueberries in the Willamette Valley, 19902003.

The permanent irrigation system is not

The operation and maintenance of the adequate pollination. Field management

Figure 4. Cumulative net returns, hand-picked blueberries at break-even price or yield.

1. Agricutural and Resource Economics Department. Oregon Agricultural Information

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Herbicide Spray 1.00 Aug

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Pre-Plant Fertilizer 1.00 Mar

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

POWER UNIT COST EQUIPMENT COST ALLOC LABOR OPERATING/DURABLE INPUT

------------dollars----------- dollars ---------dollars---------

Prune and Rake 1.00 Feb

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

ITEM UNIT PRICE QUANTITY AMOUNT YOUR FARM

Establishment Years Full Production Years

Published January 1993. Revised January 2005.

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