horticulture - practical farmers of iowapfi’s cooperators’ program gives farmers practical...

Page 1 of 4 October 2014PRACTICAL FARMERS OF IOWA www.practicalfarmers.org

Horticulture

Winter Greens Production: Sales Revenue and Energy Costs

working together, always learning

PRACTICAL

Staff Contact:Liz Kolbe – (515) 232-5661liz@practicalfarmers.org

Cooperators:•Lee Matteson and Rose Schick – Nevada

Funding By:CERES

Web Link:http://bit.ly/pfi_horticulture

Research

Lee Matteson and Rose Schick (left) operate Lee’s Greens in Nevada, Iowa. They use an insulated germination room (right) to start tomatoes and herbs for indoor production.

In a NutshellWe compare the energy use of winter high tunnel production to the product revenue during the first season of operation.

• Greenhousesandhightunnelsallowfarmerstoextendthegrowingseason.

• Greenhousesandhightunnelscanincreaserevenuepersquarefoot.

• Managedproperly,theincreasedrevenuecanoffsettheexpenseofadditionalinfrastructure.

• Inthefirstwinterofproduction,Lee’sGreenswasabletokeeptheirrevenueabovetheirenergycosts.

• Propanewasthebulkoftheenergyexpenditure.

ProjectTimeline:September2013–January2014

About the Cooperators

Lee’sGreens,locatedinNevada,IA,isownedandoperatedbyLeeMattesonandRoseSchick.MattesonandSchickbothhaveacademicandpracticalbackgroundsinindoorhorticulturalproduction;thewinterof2013-2014wastheirfirstatLee’sGreens,theirnewjointventure.Inadditiontospecializinginwintergreenstheywillhaveearlygreenhousetomatoesandinfutureyears,outdoorproductionoffruitsandvegetables.

Background

GreenhousesandhightunnelsallowfarmerstopushthelimitsofIowa’sseasons,gettinganearlystartandalateendtotheproductionwindow.Practical

Farmersandotheragriculturalresearchprogramshavestudiedtheeconomicreturnsandproductionfeasibilityforavarietyofcropsingreenhouses(Worley,2009-2012).Overwhelmingly,thesestudiesfindthatusingahightunnelorgreenhousecanincreaserevenuepersquarefoot,andifmanagedproperlytheincreasedrevenuecanoffsettheexpenseofadditionalinfrastructure(Butler,2013;ChaseandNaeve,2012;BlomgrenandFrisch,2007;McLaskey,2011).

LeeMattesonandRoseSchickofLee’sGreensarepushingtheirgreenhousesharderthanmost,producingleafygreensfordirectmarketsincentralIowathroughoutthewinter.Thewinterof2013-2014wasLee’sGreens’firstyearinproduction,andwasalsothecoldestwinter(bysummationofheatingdegree

days)since1978(ISU,2014).Thebitingcoldcoincidedwithanunprecedentedspikeinpropaneprices,whichpeakedat$4.70/galinIowaduringJanuary2014,morethandoublinganyseasonalpriceforthelast10years(USEIA,2014).

Lee’sGreenssharedtherevenuedatafromtheirfirstwinterinproductionwithPracticalFarmersalongwiththeirmonthlyexpensesforpropane,water,andelectricityusedfortheirgerminationroomandfourgreenhouses,whichoccupyover12,000ft2.

Theobjectiveofthisprojectwastocomparetheenergyuseofwinterhightunnelproductiontotheproductrevenueduringthefirstseasonofoperation.

Page 2 of 4 October 2014PRACTICAL FARMERS OF IOWA www.practicalfarmers.org

Method

MattesonandSchickprovidedPracticalFarmerswiththeirmonthlyrevenuebycropandCSAsharesaswellasmonthlyenergyspendingdatafromSeptember2013–January2014.Propanewasreportedbybulkpurchase,whichlinedupwithmonthlyreportingofelectricity,water,andrevenue.Thefourgreenhousesaredripirrigatedandheatedthroughthesoil;electricityusedatthefarmwasforthelightsinthesmall,insulatedgerminationroominthepackhouse.

Results and Discussion

Forthreeofthefivemonthsdatawasreported,Lee’sGreensrevenuefromleafygreensoutpacedtheexpensesfromwater,electricity,andpropane(Figure 1).ThelargestmarginwasinOctober,with$5,139ofnetrevenue.ThelargestmonthofrevenuecameinNovember,with$8,204(Figure 2).Lettucemixledsaleseverymonth,followedconsistentlybyspinachandredkale;arugulaandCSAsharessaleseachmadeamonthlystandoutinOctoberandNovember,respectively.SalesofCSAsharesinNovemberareparticularlynotablebecauseitisrevenueforfutureproducedeliveries;thusthehighNovemberrevenuemayhavecontributedtothelowerreportedrevenueinDecemberandJanuary.Becausethisyearwastheirfirstinproduction,thefirstmonthofreportedexpenseshadnorevenue–infutureyearsthatrevenuegapwillbefilled.

Theenergyexpendituresweredominatedbypropanepurchases.Figure 3showsthemagnitudeofdifferencebetweenpropane,electricity,andwater;thecostofpropaneinJanuarywasmorethanalltheotherenergyexpenditurescombined.Thissignificantjumpinexpensewasduetothehistoricallycoldwinterandhighpropaneprices.InJanuary2014Lee’sGreenshadtobuyanadditional900gallonsofpropaneat$4.64/gal(Figure 4).IfpropanepriceshadnotspikedastheydidinJanuary,Lee’sGreenswouldhavesavednearly$3,000ontheirpropanepurchasethatmonth.

Thoughnotincludedintheanalysis,Lee’sGreens’deliverymileagetotaled6,170miles,equalto$3,455infederalmileagereimbursement($0.56/mi).Intermsofenergyused,however,thepropaneuseforthewinterwasanestimated15timesthatofgasolinefordeliveries.

Infutureyearsthewintergreenswillbeprecededbyatomatocrop,whichisexpectedtoproducehigherrevenuewith

lessenergycostthanthewintergreens,furtherincreasingtheannualrevenuemargin.

Conclusions and Next Steps

Intheirfirstwinterofproduction,Lee’sGreenswasabletokeeptheirrevenueabovetheirenergycosts.Propanewasthebulkoftheenergyexpenditure,unsurprisingduringoneofthecoldestwintersinIowa’shistorycoupledwithrecordpropaneprices.“Thisyearkindofthrewusforaloop,withthehighpropaneprices,”saidco-ownerandgrowerRoseSchick.

$-

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

$7,000.00

$8,000.00

$9,000.00

$10,000.00

Sep-13 Oct-13 Nov-13 Dec-13 Jan-14

Total Energy Expense and Sales Revenue

ExpensesRevenue

Figure 1

$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

$3,500.00

Oct-13 Nov-13 Dec-13 Jan-14

Revenue by Crop

LettuceMix

Spinach

RedKale

Arugula

GreenKale

SwissChard

Radishes

CSA

Romaine

Figure 2

“Wedidacouplelittletrickstosavesomemoneyonpropane–wecleanedoutsomebedsthatweredoneandjustleftthemcold,thendelayedplantingtheearlytomatoesbytwoweeks,”saidMatteson.“OurgoalfortomatoeswastohitthefirstofMay,givingusallofMayandJunebeforeanyoneelsegetstomatoes.Youcanplantearlier[thanFebruary],butthecoldandlightwillholdthemback.”

Anothertricktoefficientuseofheatingisthesizeandshapeofthegreenhouse.“Withheating–thelargerthehouse,thebetter,”saidMatteson.Lee’sGreens’greenhousesareaswideaspossible(34’)

Page 3 of 4 October 2014PRACTICAL FARMERS OF IOWA www.practicalfarmers.org

withoutrequiringadditionalsupports.“Whenthehousesaresmaller,thecoldstartscreepinginfromthesidesduetoalargersurfaceareatovolumeratio,”saidMatteson.

Intheirfirstyearofproduction,Lee’sisdoingafewadditionalthingstoincreasecashflow,includingjams,herbsinthegerminationroomandsummervegetables,buteventuallytheyhopetomoveexclusivelytowardfruitsandoff-seasongreenhouseproduction.They’realsotrialing15differenttomatovarieties–grafted,artesian,heirloomandgreenhousevarieties.SaidMatteson,“We’vestruggledwithheirloomvarietiesinthegreenhouse.Theygetpowderymildew,theycrack–youdon’tgetnearlytheproduction.Restaurantswantthem,sowe’retryingafewgraftedvarietiesthisyear.”

SchickandMattesonareunfazedbyacomplexbedrotationscheduleandexpandingproduction.“Wecandoit,”said

$-

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

$7,000.00

$8,000.00

$9,000.00

Sep-13 Oct-13 Nov-13 Dec-13 Jan-14Water $113.49 $138.79 $46.04 $29.18 $48.36

Electric $72.20 $182.75 $252.47 $359.69 $393.71

Propane $0.00 $0.00 $3,875.28 $2,198.01 $8,262.36

Energy Expenditure by SourceFigure 3

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

Nov-13 Dec-13 Jan-14

Propane $/GalFigure 4

Schick,“wejustneedtoseeifit’sgoingtomakeusanymoney!”Todothat,theyemphasizebuildingrelationshipswithchefsandgettingchefsandbuyersuptoseetheirproduction.“It’simportantforchefstounderstandhowwe’regrowingthesegreensinthewinterandwhywestartrunningout.Theycanseewherewe’vejustharvestedandthatitwilltakesometimetogrowback.InSeptemberandOctoberweweregrowingarugulain1.5-2weeks;fromDecembertoFebruaryittakes4-6weeks,”saidMatteson.Schickechoed,“InJanuaryyoucanreallytellthingswon’tgrowasfastduetothedarkness.That’sthehardthingaboutworkingwithchefs–justasyougetthemhookedonyourproduct,thingsstartslowingdownandprettysoonwe’resaying,‘thanksforyourbusiness…hopeyourememberusnextyear!’”

Freshly harvested lettuce shares a bed with swiss chard (above). Below, beds have early tomatoes interplanted with lettuce, and green and red lettuce planted in the inside rows.

Page 4 of 4 October 2014PRACTICAL FARMERS OF IOWA www.practicalfarmers.org

References

Worley,Sally.2011.BlueGateFarmHighTunnels:Take3.PracticalFarmersofIowa.http://bit.ly/pfi_horticulture.

Worley,Sally.2012BlueGateHighTunnelsRecordKeepingProject:Winter,Season3.PracticalFarmersofIowa.http://bit.ly/pfi_horti-culture.

Worley,Sally.2010BlueGateHighTunnels:Take2.PracticalFarmersofIowa.http://bit.ly/pfi_horticulture.

Worley,Sally.2009HighTunnels:AreTheyLucrative?PracticalFarmersofIowa.http://bit.ly/pfi_horticulture.

Butler,Bryan.SuccessBasicsinHighTunnelProduction:ThreeMarylandCaseStudies.UniversityofMaryland,2013.

Chase,Craig,andLindaNaeve.2012.VegetableProductionBudgetsforaHighTunnel.Ames,IA:IowaStateUniversityExtension.http://store.extension.iastate.edu/Product/Vegetable-Production-Budgets-for-a-High-Tunnel-PDF.

Blomgren,Ted,andTracyFrisch.2007.HighTunnels:UsingLow-costTechnologytoIncreaseYields,ImproveQuality,andExtendtheSeason.UniversityofVermontCenterforSustainableAgriculture.http://www.uvm.edu/~susagctr/resources/HighTunnels.pdf

McLaskey,Steve.2011.FeasibilityofUnheatedLargeGutter-connectGreenhousesforWinterOrganicVegetableProductioninIowa.LeopoldCenterforSustainableAgriculture,IowaStateUniversity.

IowaStateUniversityofScienceandTechnology,IowaEnvironmentalMesonet.2014.ClimodatReports,Iowa,CentralDivision.http://mesonet.agron.iastate.edu/climodat/index.phtml?network=IACLIMATE&station=IAC005&report=18

U.S.EnergyInformationAdministration.2014.WeeklyIowaPropaneResidentialPrice.http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPLLPA_PRS_SIA_DPG&f=W

PFI Cooperators’ Program

PFI’sCooperators’Programgivesfarmerspracticalanswerstoquestionstheyhaveabouton-farmchallengesthroughresearch,record-keeping,anddemonstrationprojects.TheCooperators’Programbeganin1987withfarmerslookingto save money throughmore judicious use of inputs. If you are interested in conducting an on-farm trial contact

StefanGailans@515-232-5661orstefan@practicalfarmers.org.