When we need to increase, or more commonly maintain, profit, the only way to do so is by increasing revenue or decreasing expenses. The standard reaction is to target the most obvious expenses—labor, fuel costs, plant materials or drop unprofitable crops and product lines.
While that sounds simple enough, every business owner knows that actually doing this is much more difficult and time consuming than it seems. The solution—make your best guess as to which expenses can be reduced and which crops are unprofitable.
So where to start? The simplest method, of course, is the one many folks already use. If there is money in the checkbook at the end of the year, the business made money and is doing all right. Unfortunately, the days when that was enough to run a business are limited. Variable Costs The first step in cost accounting for a business is typically to divide expenses into two categories: Variable and Fixed.
Variable expenses, also called direct or allocated expenses in some situations, are those that vary with the amount of crop you are growing. Variable expenses typically include pots, plugs, seed, substrate, labels, chemicals, etc. Many growers commonly do this on a per unit basis pot, flat, basket, bunch ; see Fig.
Most of the calculations are fairly straight forward with the exception of labor. While determining the cost of a crop is most accurate if you are able to allocate labor per unit of crop, labor can be lumped with fixed expenses initially.
Dividing labor costs among the various crops, species and units i. Fixed Costs Fixed costs are those expenses that have to be paid whether or not a crop is produced, including depreciation, insurance, marketing, management salaries, etc. One shorthand method for handling fixed costs is to calculate the amount of variable costs per unit container or bunch and multiply that number by 1.Tokusatsu dvd
Unfortunately, in most operations, however, the total amount of fixed costs need to be determined. The total fixed costs are divided by the total amount of useable space in the greenhouse by the number of weeks the space is used.
Calculate the amount of space required by each pot and the amount of time that pot is in the greenhouse. Oh, if only it were that easy. The problem with this method is that while it is more accurate than guessing, no greenhouse operation is able to keep its space constantly filled. The above example used a mythical greenhouse in never-never land that had all of its benches filled with crops all year long.
We do this by estimating the actual amount of space we are using in the greenhouse, which is illustrated in Fig. Estimate the percentage of space usage for each month and multiply by the number of weeks in the month. Finally, add all of the figures for each month together.
Finally, add the estimated fixed cost to the variable cost to get the final cost per pot. There are other ways to get the cost even more accurate but that would be a topic for another article. InMegan Bame completed her Masters thesis on cost accounting in the floriculture industry.
Values are presented three different ways for useable bench and floor space: 1 using the 52 weeks method described above, 2 using the estimated space method described above, and 3 plus the amount of space allocated to overhead hanging baskets and using the 52 weeks method.Retrofitting existing greenhouses provides the lowest-cost option for large-scale cannabis cultivation.
Much of the conversation around the growth of large-scale cannabis cultivation in North America has centered on the massive indoor operations built by the industry giants.
However, we are now seeing cannabis companies across the region find that by building or retrofitting existing greenhouses they can achieve the same product quality at much cheaper costs. In the pre-legalization past, cannabis greenhouses were a rare sight for the simple reason that indoor operations were more discrete at a time when the business was relegated to an underground market. This is why indoor cultivation is now commonly seen as the standard growing method, and part of why misconceptions about the greenhouse growing method are common.
Among the most prevalent of these misconceptions is the idea that greenhouse-grown cannabis is less consistent in quality.
In reality, modern cannabis greenhouses offer much of the cost-efficiency of outdoor operations while still incorporating a large part of the environment control capabilities found in indoor growing facilities. This is especially the case when greenhouse grows are paired with cutting-edge cultivation infrastructure and the expertise of experienced growers. Today, most industrial cannabis production falls into three categories: indoor, greenhouse and hybrid.
Indoor growing operations are fully enclosed, warehouse-like buildings, relying entirely on artificial light and environment control. The cost for the extensive amount of artificial light required in an indoor operation alone can be a massive expensive.Brenda geiger model
Greenhouses provide a cost-efficient alternative to an indoor growing facility. Commonly used as a way to protect plants from the elements and provide some climate control since the early 20th century, a greenhouse is an enclosed structure with a transparent roof and walls that allows the light and heat of the sun in while creating a microclimate for optimal growth.
In addition to greenhouses and indoor growing spaces, a third option that has gained popularity in recent years mixes elements of the two. Hybrid greenhouses have the permanently constructed walls of an indoor operation with the transparent ceilings of a greenhouse.
These structures offer the durability and much of the insolation of warehouses while still allowing growers to utilize free, efficient solar light. Of the three options, traditional greenhouses are still the most cost effective.
Greenhouses are not permanent structures, which means that in most cases they receive construction and expansion permits much faster than fixed structures. Greenhouses are significantly less expensive to construct than warehouses or hybrid greenhouses with their permanent steel and concrete structures.
Greenhouses can arrive to the site largely prefabricated, needing only to be assembled, which saves significantly on construction labor costs. Direct sunlight on a clear day provides light levels of about 1, to 1, micromoles per square meter per second, compared to to micromoles per square meter per second from a 1, watt high pressure sodium lamp. This can save growers as much as 50 to 90 percent in energy costs depending on the time of year and other factors.
Not to be overshadowed by the cost savings, that saved electricity significantly lowers the environmental footprint of a growing operation. A study by Evan Mills, a senior scientist in energy technologies at the Lawrence Berkeley National Laboratory, found that indoor cannabis grow operations accounted for one percent of energy use in the United States.
While having only emerged relatively recently in the legal cannabis space, greenhouses have been used for general commercial plant cultivation for hundreds of years. This means that there is a wealth of development options, expertise and preexisting setups for cannabis growers to utilize. While the needs of cannabis plants may be different from those of tomatoes or flowers traditionally grown in greenhouses, retrofitting existing greenhouse setups for cannabis is not a particularly expensive or time-consuming project in comparison to building new infrastructure.
Retrofitting also spares companies from the expense and time committed to the building permitting process.At the end of the day, what matters most to the person growing the weed is getting as much yield as possible. Therefore, growing indoors allows you to pinpoint and maintain the ideal environment for all of your plants to produce the highest yield. In the end, you could save just as much money growing outdoors as you would be making getting extra bud with ideal indoor climates.
The most costly aspect of growing indoors is running the grow lights during the hours that the sun would beat on the plant if it were outside. Having an exposed ceiling like a greenhouse allows you to forgo using grow lights for most of, if not the whole day.
Another leg up from growing cannabis inside of a greenhouse is that you can still control the temperatures like indoor cultivators. Being indoors, you can add heaters to combat colder outdoor climates to grow cannabis all year long.5 kg per Square Meter or 1 Pound per Square Foot
By using propane heat or natural gas, you can increase carbon dioxide levels to promote even more growth. From there, how you control the elements inside of the greenhouse itself, such as humidity and temperature, may also have a lasting effect.
In a piece by the CannabisBusinessTimesthe news source estimated the average yield per square foot. They surveyed cultivators who run greenhouses that got as high as 60 grams per square feet to as low as 20 grams per square feet.
While that is a big swing from one end of the spectrum to the other, the average was pretty close to the lower end. If you are looking to get a significant return on investment when it comes to your greenhouse, then you need to put a little money into your greenhouse.
The cover is critical because it plays an integral role in heat retention. This allows for leaves under the canopies of cannabis plants to get more nutrients from natural sunlight. Seeing as you can control the elements inside of a greenhouse, you can make the most of your yields by getting a cover that blocks out UVB rays. If you live in an area where Degrees F is commonplace, then invest in some shade cloths. While you will be shading them from the sun, you will also create a sauna for your cannabis crops.
When it's time to cover up, opt for a material that will reflect the sunlight into the atmosphere. One of the benefits of growing cannabis in a greenhouse is offsetting high electrical costs of running grow lights.Even George Washington saw the potential of this plant; ginseng profits helped finance the Revolutionary war against the British. If you have a small vacant plot and a touch of patience this plant can reap huge rewards.Greater noida authority plots for sale
Why patience? Because growing ginseng can take up to six years, as you will have to wait until the roots have fully-matured to harvest them for consumption. With ginseng, early birds most definitely do not get the worm.
The fungus among us grow practically anywhere in the right conditions. They also yield an incredibly high return per square foot. Of the two options, oysters are especially productive. They can produce up to 25 pounds per square foot of growing space area each year. Unlike trees and many shrubs, this plant matures quickly and can bring in huge profits for growers. And maturing fast is an understatement; bamboo has been known to grow over two feet in one 24 hour period. Bamboo is growing in popularity as a landscaping plant, and growers say their product is only increasing in demand each year.
You may assume bamboo only grows in tropical climates, but these towering plants also thrive in hardy, sub-freezing weather. While the culinary uses of this plant are limited, landscapers are increasingly using bamboo as a hedge, screen, or shade plant. Growers can prosper from incorporating herbs into their garden. The herbs in highest demand are fresh culinary herbs for grocery stores and restaurants.
One way to offer them is as a 4-herb windowsill size garden that is purchased ready-to-snip. Growers may also snip and package themselves — dried or undried — for patrons looking for instant enjoyment. For growers with capital to invest upfront, medicinal marijuana or legally-grown in Washington and Colorado can be as profitable as Apple stores.
As more states follow in the footsteps of Washington and Colorado, and the taxation for this crop is figured out on a state-by-state basis the market price may diminish slightly. For those ahead of the curve now!Peter Tasgal. He was also an investment banker for over 10 years. In FebruaryI published an article comparing the cost of growing and delivering greens on a conventional farm, to growing them in a container farm.
My conclusion was that the consumer can get both a hyper-local and superior product from a container farm. However, it will be approximately 10 times more costly to grow and deliver. Unless the industry can change the consumer mindset to pay the significant differential much like what Starbucks did to the brewed coffee marketcontainer farming is likely to remain a niche industry. Efficient deployment of further technology and capital into each of these growing structures will allow the farms to get ever closer to fulfilling consumer demands.
What Is the Average Yield for Hydroponic Year-Round Tomatoes?
As illustrated below, I researched a prominent domestic greenhouse grower, BrightFarms, and a prominent domestic vertical farm grower, AeroFarms. Currently, BrightFarms has several greenhouses and recently announced it is building additional greenhouses in Massachusetts, New York and California. Each of these greenhouses will besquare feet and produce in the range of 2 million pounds of greens per year.
AeroFarms operates a 70, square foot vertical farm in Newark, NJ which can also produce in the range of 2 million pounds of greens per year.
Per AeroFarms website, this vertical farm is the largest in the world in terms of annual capacity. My research indicates the following costs per pound to grow and deliver greens grown in each of the following formats including depreciation :. A typical head of bibb or butter lettuce weighs less than half a pound. Although greenhouse or vertical farming is three to five times more expensive than growing on a conventional outdoor farm, it still allows for competitive pricing to the consumer with other vegetables and sides.
What is Preferable — Greenhouse or Vertical Farm? Greenhouses and vertical farms each have different benefits that should be prioritized based on location, product type, access to capital, human resources and other requirements. Prior to my research on the two farm types, I hypothesized that vertical farms had a higher upfront cost and a lower ongoing growing cost compared to greenhouses.
Due in large part to advancements in technology, my research ended up showing something different than my hypothesis. BrightFarms stated that each of the new greenhouses would employee 55 people. The same cost is used for both greenhouse and vertical farm analysis to maintain consistency. Some may argue the costs of power are more in a vertical farm, as there is no natural light.
However, based on location there may be higher costs in a greenhouse for cooling or heating. In either case, the people costs are likely to far outweigh all other costs. My comparative analysis and research above between costs of growing in a greenhouse versus a vertical farm shows an unexpected conclusion. Whereas the initial hypothesis was that the ongoing costs of growing in a vertical farm would be less than those of growing in a greenhouse, the research and analysis shows today it is more expensive to grow in a vertical farm.
The upfront costs of a vertical farm are more than 2x those of a greenhouse on a per pound of production basis, but no higher. The all-in costs of growing in a greenhouse or vertical farm today are relatively close, yet each is still multiples of the all-in cost of growing on a conventional outdoor farm. Technological innovation is happening in all areas of farming and will bring down all costs and improve the quality of product over time.
Which form of farming is likely to have the most innovation is unclear. If technology is available today to farm locally grown and competitively priced produce in greenhouses and vertical farms, why are these farms not more prevalent in the market today.
Key factors are outlined below:. Price: As stated above, it is still 3 to 5 times more costly to grow in a greenhouse or vertical farm compared to conventional farming. Investors and Capital Returns: Growing a wide range of products in greenhouses and vertical farms, regionally, across the United States, and around the world is going to cost billions of dollars. To-date those levels of capital have not been available in the market.Knowing and calculating your yield not only allows you to track your progress as a grower and set personal benchmarks, it will allow you to better evaluate efficiencies, make adjustments to increase yield and compare your grow operation to others in the industry.
To do that, though, everyone needs to be measuring their yield the same way. Here are some common, and not as common, yield formulas:. The industry benchmark, this formula allows you to get the most basic measure of your yield. Your square footage is simply the length of your canopy coverage multiplied by its width. Divide your total dried product weight by the square footage, and you will get your yield per square foot.
The bigger the number, the better the yield. Still, it is the most commonly used measure to compare crop yields.Shotty lymph nodes neck
To calculate your canopy in cubic feet, simply multiply your square footage from metric 1 above by your canopy height. To calculate your yield, divide your total grams of dried product by your cubic footage. This formula takes into consideration canopy height, which can greatly impact results compared to calculating yield with square footage only, especially if you are cultivating using vertical farming.
This formula allows you to calculate your yield relative to your total light power. To calculate, simply divide your dry weight by your lamp wattage. This formula allows you to measure your yield relative to your lamp strength, and can account for energy efficiency or inefficiency for different lighting sources. This is the industry standard measure that allows you to calculate your energy costs over your yield. To do this, you first need to calculate your daily energy usage: Multiply your total wattage by the number of light operating hours in a day.
Then, multiply your kilowatt hours per day by the number of days your canopy has spent under lights. For example, using the above figures of 14,Wh, or This measure will allow you to easily compare your yield relative to your energy costs, making it a useful tool to compare various lighting systems.
First, the research explored the types of lighting cultivators are employing during various growth stages. However, respondents were able to select multiple types of lighting, and the percentages for each type of lighting indicate that many growers are using more than one type of lighting during propagation. Again, based on the percentages for each lighting type, many growers indicated that they use more than one type of lighting during this growth stage as well. Three types of lighting — HPS, T5 and LED — were explored in the research for their use during any stage of growth, whether propagation, veg or flowering.
Yield is the holy grail of cannabis cultivation. Measuring yield per square foot, he believes, is one of the more important stats to track, if even informally, but looking at yield per strain also is important.
Ours have been more of a focus on a variety of plants and [their] marketability than anything else. As they harvest plants, I write down its tag, its wet weight, its waste weight, its bud weight, all those things. I see a lot of really cheap concentrates in the market, so I really want to look at my return on investment.
Another metric that some cultivators feel is even more important to measure than yield per square foot is yield per watt of light ; however fewer measure this than yield per square foot. Jacob White of R. We add up the total yield of all primary and secondary bud and divide by the number of watts illuminating the room.
Because of variation in yield between strains, we have varying amounts of plants in each flowering room to compensate.
Calculating Crop Costs
In the last 10 harvests, we are averaging even higher at 1. We keep track to see how we are doing. We tend to look at, well, this month we got X number of grams from that setup, and last month we got 10 percent more or less. If we had 4, watts of light, how many grams did we get?Like any other greenhouse crop, growing greenhouse tomatoes is more than just planting some seeds and raking in the money.
Here are a few suggestions to get you on your way. The production of greenhouse vegetables can be a lucrative business for the greenhouse grower who wants to diversify his or her business. Most greenhouse vegetables in the United States are raised hydroponically, i. Of all the possible vegetables that can be grown in a greenhouse, and there are many possibilities, tomatoes are by far the most widely grown.
This is due to both the market demand everybody likes tomatoes and to the better availability of technical information for tomatoes.
Worldwide, other vegetables grown in greenhouses include cucumbers, peppers, lettuce, eggplant, spinach, melons, various herbs and other specialty crops. Some fruit crops — for example, strawberries and raspberries — are also well-suited to hydroponics. While you can grow many crops using hydroponic methods, it is important to remember the marketability of the crop.
If a crop does not have a strong market in your geographic region, sales will be weak. In the United States in general, tomatoes have the strongest market demand; therefore, they are the best choice of greenhouse vegetable crops for most regions of the country. Before breaking ground for a new greenhouse, however, you must understand the major time commitment and amount of work involved with greenhouse tomatoes. In fact, the time and effort required to raise greenhouse tomatoes is more similar to a dairy or poultry operation than to any field-grown vegetable or fruit crop because the grower needs to be present for daily responsibilities and chores.
Leaving the tomato plants alone for a day or two without care could lead to a crop loss. Large corporate owners with 20 or more acres in greenhouse tomato production constitute about half of all the greenhouse tomato acreage in the United States.
Numerically, however, most of the growers in this country are quite small, with less than 10, square feet of floor space each. For example, in Mississippi, the average greenhouse tomato grower has 2.
Greenhouse tomato acreage has been on the rise since the mid s. Much of the expansion is explained by a changing consumer preference toward the best quality vegetables. Greenhouse tomatoes are harvested vine ripened, or at least well on the way to a red color stage, to ensure good flavor. Tomatoes grown under controlled greenhouse conditions are more uniform in size, shape and color and have a better resistance to diseases than do field-grown tomatoes.
In many urban areas, consumers are not concerned with the higher price of greenhouse tomatoes, since they get quality in return. Greenhouse tomatoes are never picked green and gassed with ethylene to promote ripening, a common practice of field-grown winter tomatoes in the extreme southern United States, Mexico and Central America.
The information database for greenhouse tomatoes is small when compared to field vegetables, often making it difficult to obtain assistance from county extension agents or other trained personnel.
The prospective grower, therefore, must be well prepared in advance by obtaining and reading publications, attending short courses and seminars, and visiting other growers to learn from their experiences.
The best advice for selecting the type of tomatoes you'd like to grow is to choose the best variety on the market. Your crop's potential will be limited if you choose an inferior variety.
While the cost of high quality hybrid seed is not low 20 to 25 cents per seed, depending on quantityit is still one of the best investments for the dollar that a grower can make. The quality of tomato varieties has risen sharply in the past 10 years due to the breeders at commercial seed companies producing better varieties.
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