Since 1990, UCCE researchers have used a farm budget software program to analyze the data and present results in several formats detailing costs for cultural and harvest practices, monthly cash costs and business and investment overhead costs. The studies also include an analysis estimating net returns to growers for several yield and price scenarios. Representative costs for food safety and environmental quality programs have been incorporated into more recent studies as they have evolved to become standard business practices. The resulting production and economic information is specifically designed to assist growers, bankers, researchers and government agencies with business and policy decisions. The first economic analysis of fresh market strawberry production for Santa Cruz and Monterey counties was performed in 1969; at least one subsequent analysis has been conducted every decade since then. Though the level of detail and data included in each study has changed over time, some interesting trends can be noted. Annual land rent climbed from $150 per acre in 1969 to $2,700 in 2014, representing 2.5% and 5.5% of total production costs, respectively. The cost of soil fumigation for conventional strawberry production increased from $350 per acre in 1969 to $3,302 in 2010, representing 5.5% and 6.9% of total production costs, respectively. Production year water use gradually decreased from 80 acre-inches per acre in 1969 to 36 acre-inches by 1996 as drip irrigation became the standard. The amount of water used to bring a crop to harvest has remained roughly the same since that time; however, growers and researchers continue to investigate methods to increase water use efficiency even further. In some areas, grow bag soil types and fields, growers have been able to reduce per acre water use by several acre-inches more .

When the above costs and water usage are assessed on a per ton rather than a per acre basis, production practice cost increases are less notable, and water savings even greater. Labor-intensive practices such as hand weeding and harvest are consistently shown as costly line items relative to other operations. Representative yields for conventionally produced fresh market strawberries rose from 20 tons per acre in the 1969 study to 30 tons in 2010, an increase of 50%. Even higher yields are discussed for some varieties and production conditions; county production statistics confirm that higher yields are indeed possible . Representative yields for organic strawberries, studied over a much shorter time period, rose from 15 tons per acre in 2006 to 17 tons in 2014, an increase of 13%. As more research is directed towards organic agriculture in general and strawberries in particular, yields will likely increase even more with time. Recent efforts include improvements in cultivar breeding, cultural practices and disease management, especially soil pathogen management. The most recent economic analyses for conventional, second year conventional and organic strawberry production were performed in 2010, 2011 and 2014, respectively. Second year conventional strawberries, or those producing a crop for a second year after having produced the first without replanting, represent about 15% of the total strawberry acreage in the area. Similarities and differences in total, cultural and pest management costs for the three management approaches are shown in figures 1 to 3. Total costs for conventional strawberries were $47,882 per acre and include expenses for all practices from land preparation to harvest . For the second year conventional strawberry crop, total costs were lower at $32,798 per acre, reflecting a reduction in expenditures for land preparation and reduced harvest costs because of lower yield. For organic strawberries, total costs were $49,044 per acre, slightly higher than for conventional production, mostly due to higher soil fertility input costs.

Harvest, a labor-intensive practice, clearly represents the lion’s share of total costs, at 58% in organic production, 60% in conventional production and 67% in second year conventional berries. Cultural costs represent 26% of total costs in the conventional and organic systems, but only 15% for second year strawberries because there were no associated planting costs, and because pest management costs were lower . Looking more closely at pest management, soil fumigation is the highest cost category for conventional production at $3,302 per acre, with weed control, another labor-intensive practice, the highest cost in second year and organic strawberries at $1,212 and $2,506 per acre, respectively . However, for organic strawberries the cost to control insects ran a close second at $2,488 per acre, which was dominated by control for lygus bug with a bug vacuum, and two-spotted spider mite with the release of predatory mites. By comparison, estimated costs for insect control in conventional strawberries were lower at $702 per acre and still lower at $579 in second year conventional berries. Raspberry and blackberry production were not routinely studied in years prior to 2003. Since then, several primocane-bearing raspberry and floricane-bearing blackberry cost and return analyses have been performed, with the most recent studies conducted in 2012 and 2013, respectively. Both studies detail establishment and first year production and harvest costs for not-yet-fully-mature crops. For raspberries, first year of production includes a $12,460 per acre construction, management and investment cost for protective tunnels. Costs for a mature raspberry crop are analyzed in the second production year and total $48,210 per acre . For blackberries, costs for a mature crop are shown for the second through fifth production years, and total $43,406 per acre per year. Harvest costs again represent the vast majority of total costs, at 81% and 71% of total costs for raspberries and blackberries, respectively.

For raspberries, cultural costs represented a much smaller share of total costs at $4,656 per acre, roughly half of which was for trellis and tunnel management. Blackberry cultural costs totaled $5,709 per acre, of which over half was for pruning and training canes. Each study also includes an analysis of potential net returns to growers above operating, cash and total costs for a range of yields and prices. When evaluating net returns above total costs, gains are shown for higher yield and price points; losses are also documented at many lower yields and prices . Farms with productive soils, experienced managers, optimal production conditions and robust market plans generally realize higher net returns. In contrast, farms with less-than-optimal production conditions, reduced yields, poor fruit quality or inexperienced managers may contribute to lower net returns. Results from the strawberry analyses show that on a per acre basis, organic strawberries tend to be more profitable than conventional berries, even with lower yields. Organic price premiums explain the result; in this example price per tray for organic strawberries ranged from $12 to $18, while price per tray for conventional berries ranged from $7.30 to $11.30. Prices for second year conventional strawberries were slightly lower still to account for a portion of the crop that was diverted to the freezer market. Net returns for both caneberries were mostly positive. Other noteworthy entries in all recent berry studies include per acre costs for pest control advisers , management of invasive pests and food safety and regulatory programs for water and air quality. Though each alone represents a relatively small portion of total costs, they provide readers with insights into the changing nature of berry production activities and costs over time.Cultural practices in the berry industry have evolved to address changes in soil, water and pest management needs. New varieties have been developed to enhance yield and quality attributes. Based on historical trends, and to meet both industry needs and consumer demands, grow bag gardening we expect to see new varieties continually developed over time. Businesses have responded to consumer and market demands for fresh, safe and organic products by implementing food safety programs and/or transitioning more lands to organic production. Water and air quality programs have been developed to comply with state regulatory requirements. In the past, growers customarily hired those with expertise in financial and market management; they now also enlist the support of experts in food safety, organic agriculture and environmental quality to assist with farm management. But challenges remain, and management of key agricultural risks — including those for production, finances, marketing, legal and human resources — have become increasingly important. Invasive pests pose significant management and regulatory constraints and increase production, financial and market risks. Two recent examples are light brown apple moth and spotted wing drosophila . LBAM infestations can lead to loss of part or all of the crop because of field closure from regulatory actions, increasing production and financial risk. SWD presents substantial market risk to growers in that its larvae can infest fruit and render the crop unsaleable. Growers minimize the risk of loss from these two organisms with the routine use of PCAs. PCAs monitor fields more frequently than growers alone would be able to do, identify pests and recommend actions, for example, the use of pheromone mating disruption for LBAM and field sanitation for SWD. Since their introduction, the soil fumigants CP and MB have unquestionably contributed to the expansion of the berry industry.

However, the full phaseout of MB as a pest management tool — it will no longer be available for use in berry production after 2016 — presents both production and financial risks. While a substantial research commitment has been made to finding alternatives to MB, nothing has yet come close to offering the same level of protection from the large-scale loss to soil pathogens or the gains in productivity associated with the application of CP and MB as synergistic preplant fumigants. We anticipate that the berry industry will adapt to the MB phaseout by using alternative fumigants and preplant soil treatments, but these are likely to carry a higher level of risk for berry production in the short term and may lead to a decrease in planted acreage and production. However, this may also stimulate an even more robust research agenda directed towards soilborne diseases and plant health to minimize disruption to the industry. Reliance on fumigants as the primary strategy for pest management is almost certainly a thing of the past. Instead, adoption of integrated approaches, including alternatives to fumigants, to manage diseases, weeds and other pests will be key to sustaining berry production over the longer term . Social and demographic changes in Mexico — the source of a majority of the area’s agricultural labor — have resulted in markedly lower immigration rates into the United States, a shrinking labor pool and upward competition and wage pressures for the agricultural workers who remain . In recent years, growers have reported difficulty in securing and retaining sufficient numbers of workers to ensure timely and effective farm operations. The lower production figures seen in strawberries in 2014 may in part have been the result of an insufficient labor pool from which to draw . However, no known regional employment or wage data are available to specifically document this. Some growers minimize labor risk by paying higher wages and providing year-round employment when possible. However, these strategies can be difficult for some businesses to justify economically. Arguably, the area’s berry industry, and agriculture more generally, increasingly face political risk. Immigration legislation that may assist with the current labor challenge languishes at the federal level, with major policy changes unlikely before 2017 . Farming practices are under ever more scrutiny by consumers, local municipalities and state and federal agencies. Soil fumigants and pesticide use have been the focus of many intense debates and discussions, especially in Santa Cruz and Monterey counties. At the time of this writing, several new regulations related to pesticide application notifications, pesticide and fumigant application buffer zones and worker safety have been proposed by the California Department of Pesticide Regulation or the U.S. Environmental Protection Agency but have not yet been finalized. It is anticipated that implementation will begin in 2017, with full compliance required in 2018. And, as California struggles through a fifth year of drought, water use, quality and cost has become a more robust part of the local, state and federal discourse, with directives issued and new legislation proposed. Compliance with each new directive or regulation presents production and logistical challenges for growers and can be costly to manage. Although it is unlikely that regulatory pressures will lessen in the future, there is every expectation that growers will continue to adjust business practices to meet or exceed any new requirements or standards.