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ISHS Acta Horticulturae 1137: International Symposium on Innovation in Integrated and Organic Horticulture (INNOHORT)

A tool to help determine the financial viability of organic apple production in the southern United States

Authors:   J. Popp, H.G. Rodríguez, C. Rom, H. Friedrich, J. McAfee
Keywords:   enterprise budget, risk analysis, profitability, sensitivity analysis
DOI:   10.17660/ActaHortic.2016.1137.41
Abstract:
Apple (Malus ×domestica) is one of the most preferred fresh fruits in the US in terms of production and value of production. Organic apple production is concentrated in five states of the southern US where climate conditions allow growing high-quality fruit. Nonetheless, limited experience and lack of information available on the economic impacts of different regional organic practices and the potential returns available from organic apple production have prevented a broader organic agriculture development. A new user friendly predictive interactive decision support tool for organic apple production was recently developed to assist producers, researchers and educators in making economically sound decisions that can contribute to the growth of organic apple production acreage across southern US. This tool focuses on the economic impact of production decisions by estimating expected operating costs, fixed costs, total costs and total returns. However, this unique orchard scale tool encompasses not only budgeting, but allows the further analyses associated with breakeven, sensitivity and risk assessments. Organic apple costs and returns are often difficult to estimate in budget preparation because they are numerous and variable. Consequently, this computer based application was preloaded with production practice, cost and price information. So, it needs minimal information to run but yet it is flexible enough to allow appropriate adjustments to reflect specific production and a specific resource situation. All these features are important because it allows making more informed production, marketing and financial decisions about an actual or potential production operation if yield, price and cost values are actually different than expected.

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