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Greenhouse Tomato Budgets for Mississippi

Filed Under:
Publication Number: P2766
View as PDF: P2766.pdf

Growing greenhouse vegetable crops and growing tomatoes hydroponically are popular among small producers who want to diversify their farms and landowners looking for extra income. Before breaking ground for a new greenhouse, you should understand how much time and work is involved. In fact, raising greenhouse tomatoes requires about the same amount of time and effort as raising dairy cattle or poultry. The grower needs to be present to complete daily duties and chores. Leaving the tomato plants without care for a day or two could lead to substantial crop loss.

While hydroponic techniques are used for a variety of crop plants, tomatoes are the crop most commonly grown hydroponically for sale. Worldwide, other vegetables grown hydroponically in greenhouses include cucumbers, peppers, lettuce, eggplant, spinach, melons, various herbs, and other specialty crops. Flowering crops and some fruit crops, such as strawberries and raspberries, are also well suited to hydroponics. You can grow other crops using hydroponic methods, but you must think about how well the crop will sell. If there is little demand for the crop in your area, sales will be poor. In Mississippi, tomatoes are in high demand, so they are the best vegetable crop for businesses to grow in greenhouses.

Corporate owners with 20 or more acres in greenhouse tomato production manage most of the greenhouse tomato acreage in the United States. However, most of the greenhouse tomato growers in this country farm them on less than one acre of floor space. In Mississippi, the average greenhouse tomato grower has 2.4 freestanding or gutter-connected bays, totaling about 6,000 square feet. Greenhouse tomato acreage has been increasing since the mid-1990s. Much of the expansion was caused by a changing consumer preference for the best quality vegetables. Greenhouse tomatoes are harvested when they are ripe (or at least well on the way to a red-color stage), so they have a good flavor. Greenhouse tomato varieties are more uniform in size, shape, and color, and they are more resistant to diseases than field-grown tomato varieties. These are some of the reasons for their higher value.

In many cities, consumers are not concerned about the higher price of greenhouse tomatoes; however, they do expect high quality. Greenhouse tomatoes are never picked green and gassed with ethylene to promote ripening, a common practice with field-grown winter tomatoes in the extreme southern United States, Mexico, and Central America.

Every greenhouse crop has special needs that traditional field crops do not have. Also, the greenhouse favors the breeding and rapid spread of some diseases and pests. Tomatoes are not an easy crop to grow in a greenhouse, and success depends on how well the grower can manage the crop and make the right decisions at the right time.

Information about greenhouse tomatoes is scarce compared to information about field vegetables, so it can be difficult to get help from county Extension agents or other trained personnel. An interested grower should read publications, attend short courses and seminars, and visit other growers to learn from their experiences.

This publication estimates the costs associated with starting a greenhouse tomato business. Figures in this budget reflect average experiences of various systems and are geared toward the typical Mississippi grower. The budget includes capital and operating expenses associated with production of greenhouse tomatoes. If your circumstances differ from the circumstances assumed in this budget, recalculate the estimated budget to reflect your situation. Production information is not included in this publication. Growers seeking production information can refer to the following MSU Extension publications:

Initial Capital Investment

The polyethylene-covered Quonset-type structure is the most common greenhouse in Mississippi and is the type talked about in this budget. This type of structure is the least expensive to build and has few cross members, letting in more light.

Polyethylene greenhouses use two layers of plastic to cover the structure. Air is forced between the layers of plastic to create a 4- to 6-inch airspace, which forms an excellent insulation barrier. Several other types of coverings exist, including acrylic sheets, polycarbonate plastic, and fiberglass. Each of these coverings has some advantages, but they cost more than polyethylene.

Construction Costs

Greenhouse building costs vary, depending on the materials and equipment you use. When selecting materials, be careful not to sacrifice quality to keep costs low. Also be careful not to spend too much or buy more greenhouse than you need. Choose a greenhouse frame with the right load-bearing strength and useful life expectancy. Galvanized steel tubing and aluminum tubing are strong, economical materials for a greenhouse frame.

Greenhouse flooring can greatly affect cost. The floor in this budget is made of a ground cloth, black plastic, and pea gravel for walkways. This type of flooring is the most common among Mississippi growers. Other floor choices are bare ground, wall-to-wall gravel, concrete walkways, or wall-to-wall concrete, depending on what you want and can afford. This budget assumes that water and natural gas are available to the greenhouse. If water or gas is not available, add the expenses of digging a well or buying gas storage tanks to the budget.

You must also consider the advantages and disadvantages of buying automated equipment for the greenhouse. Automated equipment costs more but reduces labor requirements. If you lack reliable labor, you may want to invest in more automated equipment. The equipment package used in this budget reflects what is common for Mississippi growers. Table 1 presents the estimated capital requirement of $22,983 for one 24-foot by 96-foot Quonset-type greenhouse equipped for typical tomato production in Mississippi. This is equivalent to an investment of $9.98 per square foot of greenhouse.

Production Budgets

The production budgets were based on interviews with several growers in Mississippi, greenhouse tomato industry suppliers, researchers, and Extension specialists familiar with greenhouse tomato production in Mississippi. The engineering, or “synthesis,” method was used to describe the production system and to estimate current costs for that system.

Fixed Costs

The cost items in this budget follow generally accepted classification of fixed costs. Fixed costs are shown in Table 2 and represent a lump sum of total annual ownership costs divided proportionately among the production crops typical for Mississippi greenhouse tomato production. The fixed costs include interest on investment, depreciation, insurance, taxes, and some common overhead expenses.

Depreciation was estimated using the straight-line method with no salvage value. Assets were divided by their useful life expectancies to determine an annual cost for depreciation. Interest on investment was calculated by charging a rate of 5.25 percent on one-half of the initial cost of depreciable assets. Insurance and taxes were estimated to be 2 percent of the initial cost of depreciable assets.

Ownership costs also include general overhead expenses that are not directly related to producing the crop.

In this publication, overhead expenses include heating, water, electricity, telephone, lab fees, and repair and maintenance. Annual ownership costs for one 24-by-96 greenhouse totaled $7,080.

Variable Costs

Tables 3–6 present the variable costs of a spring crop, a fall crop, and a continuous crop of greenhouse tomatoes. The variable costs associated with crop production are all inputs that directly relate to producing tomatoes. The cultural practices in these budgets are typical of two tomato crops per year or one continuous crop for one greenhouse in Mississippi. Input prices are current prices of local and regional suppliers.

Interest on operating capital was charged at a rate of 5.25 percent on one-half of the total direct expense for each crop. Direct cost of producing a spring crop of tomatoes totaled $3,640, and the direct cost of producing a fall crop totaled $2,936. Direct cost of producing one continuous crop of tomatoes was $5,828.

Total Cost of Production

Total production cost is the sum of direct costs plus annual ownership costs (Table 7). The total estimated annual cost of producing two tomato crops (spring and fall) in a 24-foot by 96-foot greenhouse is $13,656, while the total estimated annual production cost for one continuous crop is $12,908. Given the total cost of production and assuming a conservative yield level of 8,000 pounds in the spring, 6,000 pounds in the fall, or 14,000 pounds for a continuous crop, a tomato price of around $1 per pound is needed to break even: that is, to cover all the direct and fixed/overhead costs.

Table 1. Estimated capital requirements for greenhouse tomato production, Mississippi, 2020. 1

Item structure

Description

Unit

Number

Cost

per unit

Total

initial cost

Useful

life (years)

Greenhouse package 2

24 ft. x 96 ft.

sq. ft.

2304

2.34

5,392.00

20

Personnel door

Aluminum 42 in.

each

1

410.00

410.00

20

Heater system

Gas 145,000 BTU

each

2

1,095.00

2,190.00

10

Cooling fans

48”, 1 HP

each

2

1,170.00

2,340.00

5

Cooling pads

48” x 12” x 6”

each

24

40.50

972.00

3

Pump and plumbing

wet wall 300 gal

each

1

680.00

680.00

5

Inlet shutters

33” x 33” motorized

each

4

193.00

772.00

7

Electrical

wiring package

each

1

627.20

627.20

20

Irrigation/fertigation

drip system

each

1

4,438.66

4,438.66

7

Ground cover

woven plastic

sq. ft.

2304

0.08

181.98

0

Pea gravel

 

cu. yd.

7.5

36.00

270.00

0

Bags (four plants per bag)

 

each

100

0.82

82.00

0

Pine bark soil media

 

cu. yd.

6.5

22.00

143.00

0

Subtotal greenhouse structure

$18,499

Auxiliary Equipment 

Backpack sprayer

pump type

each

1

94.99

94.99

3

Thermostat

single stage

each

2

142.50

285.00

3

Respirator

 

each

1

83.95

83.95

3

Pollinator

 

each

1

259.00

259.00

3

Thermometer

hi/lo type

each

1

22.00

22.00

2

Transplant benches

wood

each

2

39.20

78.40

10

Meters

EC/pH combo

each

2

264.00

528.00

3

Backup generator

gasoline

each

1

999.00

999.00

10

Subtotal auxiliary equipment

$2,350

Assembly and installation 3

 

hour

95

$ 16.69

$1,585

 

Utility hookup (electrical, gas, and water) 4

 

 

 

 

$549

 

Total

$22,983

Cost per square foot

$9.98

1 Land and site preparation was not included in the budget. This cost will vary depending on location.

2 Greenhouse package includes frame, end walls, 6-mil plastic double layer, base locking rail, and inflation kit.

3 Installation cost may vary significantly depending on location and owner’s ability and involvement.

4 Cost may increase if water well is required for water supply and if LP gas storage tanks must be purchased.

 

Table 2. Estimated annual ownership costs for greenhouse tomato production, Mississippi, 2020.

Item Structure

Depreciation

Interest

Insurance

and taxes

Total

Greenhouse frame

270

142

108

519

Aluminum personnel door

21

11

8

39

Heater system

219

57

44

320

Cooling fans

468

61

47

576

Cooling pads

324

26

19

369

Pump and plumbing

136

18

14

167

Inlet shutters

110

20

15

146

Electrical

31

16

13

60

Irrigation/fertigation

634

117

89

839

Auxiliary Equipment 

Backpack sprayer

32

2

2

36

Thermostat

95

7

6

108

Respirator

28

2

2

32

Pollinator

86

7

5

98

Thermometer

11

1

0

12

Transplant benches

8

2

2

11

Meters

176

14

11

200

Backup generator

100

26

20

146

Total greenhouse and equipment

$2,749

$530

$403

$3,682

General overhead

Heating

 

 

 

1,012

Electricity

 

 

 

806

Telephone

 

 

 

739

Repairs and maintenance

 

 

 

370

Lab fees

 

 

 

470

Total general overhead

$3,398

Total annual ownership costs

$7,080

 

Table 3. Summary of spring, fall, and one crop input costs.

Item

Spring

Fall

One continuous crop

Labor

1,707

1,335

2,726

Seed

261

261

261

Fertigation

452

425

833

Fungicide

220

165

331

Insecticide

39

29

59

Boxes

780

585

1,365

Other

163

136

225

Total

$3,622

$2,936

$5,800

Cost per square foot

$1.57

$1.27

$2.52

 

Table 4. Estimated resource use and direct costs for spring crop, tomatoes, greenhouse, Mississippi, 2020.

Operation/operating unit

Month

Unit/size

Quantity

Cost/unit

Total cost

Labor (potting)

November

hour

1

11.74

11.74

Potting mix

November

3 cu. ft.

1

11.60

11.60

Seeding trays

November

each

6

1.40

8.40

Transplant cell packs

November

each (72 ct.)

6

1.70

10.20

Labor (seeding)

November

hour

3

11.74

35.22

Seed

November

each

480

0.54

261.12

Labor (watering)

November

hour

1.65

11.74

19.37

Fertilizer

November

pound

0.71

2.41

1.71

Electricity

November

day

7

0.58

4.06

Labor (watering)

December

hour

8.25

11.74

96.86

Fertilizer

December

pound

3.54

2.41

8.53

Electricity

December

day

35

0.58

20.30

Labor (watering)

January

hour

2

11.74

23.48

Labor (transplanting)

January

hour

2

11.74

23.48

Labor (pollination)

January

hour

2

11.74

23.48

Labor (pruning)

January

hour

4

11.74

46.96

Fungicide

January

ounce

32

0.69

22.04

Insecticide

January

ounce

9

0.60

5.36

Labor (stringing)

January

hour

2

11.74

23.48

Twine

January

bundle

0.4

25.95

10.38

Clips

January

box

0.4

56.50

22.60

Labor (pollination)

February

hour

5

11.74

58.70

Labor (pruning)

February

hour

4

11.74

46.96

Fungicide

February

ounce

64

0.69

44.09

Insecticide

February

ounce

12

0.60

7.14

Labor (pollination)

March

hour

5

11.74

58.70

Labor (pruning)

March

hour

4

11.74

46.96

Fungicide

March

ounce

80

0.69

55.11

Insecticide

March

ounce

15

0.60

8.93

Labor (harvest)

March

hour

4.05

11.74

47.55

Labor (grade/pack)

March

hour

6.15

11.74

72.20

Labor (pollination)

April

hour

5

11.74

58.70

Labor (pruning)

April

hour

4

11.74

46.96

Fungicide

April

ounce

64

0.69

44.09

Insecticide

April

ounce

12

0.60

7.14

Labor (harvest)

April

hour

8.1

11.74

95.09

Labor (grade/pack)

April

hour

12.3

11.74

144.40

Labor (pollination)

May

hour

2.5

11.74

29.35

Labor (pruning)

May

hour

4

11.74

46.96

Fungicide

May

ounce

64

0.69

44.09

Insecticide

May

ounce

12

0.60

7.14

Labor (harvest)

May

hour

8.1

11.74

95.09

Labor (grade/pack)

May

hour

12.3

11.74

144.40

Labor (pruning)

June

hour

1

11.74

11.74

Fungicide

June

ounce

16

0.69

11.02

Insecticide

June

ounce

6

0.60

3.57

Labor (harvest)

June

hour

6.75

11.74

79.25

Labor (grade/pack)

June

hour

10.25

11.74

120.34

Labor (misc.)

Jan. – June

hour

17

11.74

199.58

Fertigation

Jan. – June

application

1

441.28

441.28

Boxes

April – June

each

400

1.95

780.00

Subtotal

$3,547

Interest on operating capital

$75

Total direct costs

$3,622

 

Table 5. Estimated resource use and direct costs for fall crop, tomatoes, greenhouse, Mississippi, 2020.

Operation/operating unit

Month

Unit/size

Quantity

Cost/unit

Total cost

Labor (potting)

July

hour

1

11.74

11.74

Potting mix

July

3 cu. ft.

1

11.60

11.60

Seeding trays

July

each

6

1.40

8.40

Transplant cell packs

July

each (72 ct.)

6

1.70

10.20

Labor (seeding)

July

hour

3

11.74

35.22

Seed

July

each

480

0.54

261.12

Labor (watering)

July

hour

1.65

11.74

19.37

Fertilizer

July

pound

0.71

2.41

1.71

Electricity

July

day

7

0.58

4.06

Labor (watering)

August

hour

8.25

11.74

96.86

Fertilizer

August

pound

3.54

2.41

8.53

Electricity

August

day

35

0.58

20.30

Labor (watering)

September

hour

2

11.74

23.48

Labor (transplanting)

September

hour

2

11.74

23.48

Labor (pollination)

September

hour

2

11.74

23.48

Labor (pruning)

September

hour

4

11.74

46.96

Fungicide

September

ounce

32

0.69

22.04

Insecticide

September

ounce

9

0.60

5.36

Labor (stringing)

September

hour

2

11.74

23.48

Twine

September

bundle

0.25

25.95

6.49

Clips

September

box

0.25

56.50

14.13

Labor (pollination)

October

hour

5

11.74

58.70

Labor (pruning)

October

hour

4

11.74

46.96

Fungicide

October

ounce

64

0.69

44.09

Insecticide

October

ounce

12

0.60

7.14

Labor (pollination)

November

hour

5

11.74

58.70

Labor (pruning)

November

hour

4

11.74

46.96

Fungicide

November

ounce

80

0.69

55.11

Labor (harvest)

November

hour

7.74

11.74

90.87

Labor (grade/pack)

November

hour

11.95

11.74

140.34

Insecticide

November

ounce

15

0.60

8.93

Labor (pollination)

December

hour

5

11.74

58.70

Labor (pruning)

December

hour

4

11.74

46.96

Labor (harvest)

December

hour

10.26

11.74

120.45

Labor (grade/pack)

December

hour

15.85

11.74

186.03

Fungicide

December

ounce

64

0.69

44.09

Insecticide

December

ounce

12

0.60

7.14

Labor (misc.)

July – Dec.

hour

15

11.74

176.10

Fertigation

Sept. – Dec.

application

1

414.40

414.40

Boxes

Oct. – Dec.

each

300

1.95

585.00

Subtotal

$2,875

Interest on operating capital

$61

Total direct costs

$2,936

 

Table 6. Estimated resource use and direct costs for one continuous crop, tomatoes, greenhouse, Mississippi, 2020.

Operation/operating unit

Month

Unit/size

Quantity

Cost/unit

Total cost

Labor (potting)

August

hour

1

11.74

11.74

Potting mix

August

3 cu. ft.

1

11.60

11.60

Seeding trays

August

each

6

1.40

8.40

Transplant cell packs

August

each (72 ct.)

6

1.70

10.20

Labor (seeding)

August

hour

3

11.74

35.22

Seed

August

each

480

0.54

261.12

Labor (watering)

August

hour

1.65

11.74

19.37

Fertilizer

August

pound

0.71

2.41

1.71

Electricity

August

day

7

0.58

4.06

Labor (watering)

September

hour

8.25

11.74

96.86

Fertilizer

September

pound

3.54

2.41

8.53

Electricity

September

day

35

0.58

20.30

Labor (watering)

October

hour

2

11.74

23.48

Labor (transplanting)

October

hour

2

11.74

23.48

Labor (pollination)

October

hour

2

11.74

23.48

Labor (pruning)

October

hour

4

11.74

46.96

Fungicide

October

ounce

32

0.69

22.04

Insecticide

October

ounce

9

0.60

5.36

Labor (stringing)

October

hour

2

11.74

23.48

Twine

October

bundle

0.6

25.95

15.57

Clips

October

box

0.6

56.50

33.90

Labor (pollination)

November

hour

5

11.74

58.70

Labor (pruning)

November

hour

4

11.74

46.96

Fungicide

November

ounce

64

0.69

44.09

Insecticide

November

ounce

12

0.60

7.14

Labor (pollination)

December

hour

5

11.74

58.70

Labor (pruning)

December

hour

4

11.74

46.96

Fungicide

December

ounce

80

0.69

55.11

Labor (harvest)

December

hour

7.74

11.74

90.87

Labor (grade/pack)

December

hour

11.95

11.74

140.34

Insecticide

December

ounce

15

0.60

8.93

Labor (pollination)

January

hour

5

11.74

58.70

Labor (pruning)

January

hour

4

11.74

46.96

Labor (harvest)

January

hour

10.26

11.74

120.45

Labor (grade/pack)

January

hour

15.85

11.74

186.03

Fungicide

January

ounce

64

0.69

44.09

Insecticide

January

ounce

12

0.60

7.14

Labor (pollination)

February

hour

5

11.74

58.70

Labor (pruning)

February

hour

4

11.74

46.96

Fungicide

February

ounce

80

0.69

55.11

Insecticide

February

ounce

15

0.60

8.93

Labor (harvest)

February

hour

4.05

11.74

47.55

Labor (grade/pack)

February

hour

6.15

11.74

72.20

Labor (pollination)

March

hour

5

11.74

58.70

Labor (pruning)

March

hour

4

11.74

46.96

Fungicide

March

ounce

64

0.69

44.09

Insecticide

March

ounce

12

0.60

7.14

Labor (harvest)

March

hour

8.1

11.74

95.09

Labor (grade/pack)

March

hour

12.3

11.74

144.40

Labor (pollination)

April

hour

2.5

11.74

29.35

Labor (pruning)

April

hour

4

11.74

46.96

Fungicide

April

ounce

64

0.69

44.09

Insecticide

April

ounce

12

0.60

7.14

Labor (harvest)

April

hour

8.1

11.74

95.09

Labor (grade/pack)

April

hour

12.3

11.74

144.40

Labor (pruning)

May

hour

1

11.74

11.74

Fungicide

May

ounce

16

0.69

11.02

Insecticide

May

ounce

6

0.60

3.57

Labor (harvest)

May

hour

6.75

11.74

79.25

Labor (grade/pack)

May

hour

10.25

11.74

120.34

Labor (pruning)

June

hour

1

11.74

11.74

Fungicide

June

ounce

16

0.69

11.02

Insecticide

June

ounce

6

0.60

3.57

Labor (harvest)

June

hour

6.75

11.74

79.25

Labor (grade/pack)

June

hour

10.25

11.74

120.34

Labor (misc.)

Aug. – June

hour

22

11.74

258.28

Fertigation

Oct. – June

application

1

823.20

823.20

Boxes

Dec. – June

each

700

1.95

1,365.00

Subtotal

$5,679

Interest on operating capital

$121

Total direct costs

$5,800

 

Table 7. Summary of costs and break-even price for spring, fall, and one crop.

 

Spring crop

Fall crop

One continuous crop

Direct cost

3,640

2,936

5,828

Fixed and overhead cost 1

4,036

3,044

7,080

TOTAL COST

7,676

5,980

12,908

Expected yields (pounds)

8,000

6,000

14,000

Cost per square foot

$3.33

$2.60

$5.60

Yield (pounds per square foot)

3.47

2.60

6.08

Price (dollars per pound) needed

to cover production (Direct) costs

$0.46

$0.49

$0.42

Price (dollars per pound) needed to break even

(to cover Direct + Fixed and overhead costs)

$0.96

$1.00

$0.92

1 For spring and fall crops, the rate of greenhouse utilization during the year is assumed at 57 percent and 43 percent, respectively. Thus, 57 percent of the annual fixed and overhead costs are allocated to the spring crop, and 43 percent are allocated to fall crop. Note, however, that if you only have a spring crop during the year, then the fixed and overhead cost allocated to the spring crop would be the entire annul cost which is estimated at $6,979.


Publication 2766 (POD-08-20)

Elizabeth Canales Medina, PhD, Assistant Professor, Agricultural Economics; and Richard Snyder, PhD, Professor and Extension Vegetable Specialist, Central Mississippi Research and Extension Center.

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Department: Agricultural Economics

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Authors

Portrait of Dr. Rick Snyder
Extension/Research Professor
Greenhouse Tomatoes and other vegetables, Field Vegetables, Mushrooms

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Portrait of Dr. Rick Snyder
Extension/Research Professor
Greenhouse Tomatoes and other vegetables, Field Vegetables, Mushrooms

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