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Greenhouse Sweet Potato Slip Production Budget for Mississippi

Filed Under:
Publication Number: P3359
View as PDF: P3359.pdf

In Mississippi, sweet potato slips are grown in greenhouses to increase the production of virus-tested and true-to-type sweet potato material in accordance with certification standards set forth by the Mississippi Crop Improvement Association (see these standards at www.mcia.msstate.edu). Since 1999, the Mississippi Agricultural and Forestry Experiment Station’s Pontotoc Ridge-Flatwoods Branch Experiment Station near Pontotoc has provided this service. Due to increased demand for virus-tested sweet potato material, there is an interest among producers to grow their own virus-tested material in greenhouses. However, producing sweet potato slips in greenhouses can be expensive and very labor-intensive, so it is important to conduct an economic analysis before jumping into this venture.

The demand for virus-tested slips depends on the number of acres dedicated to sweet potato production in the region and the relative proportion of acreage planted to virus-tested slips. The production of greenhouse-grown, virus-tested slips is one step in the production of certified seed roots. Producers should first determine the demand for seed roots, either for their own farming enterprise or to sell to other producers. The estimated demand for seed roots can be used to determine how many greenhouse-grown slips are needed using the following equation:

Desired # of 20-bu bins × 73 = # of greenhouse slips required

This equation assumes that an estimated 73 greenhouse-grown slips are required to produce one (20-bushel) bin of seed roots based on the following conditions:

  • 13,068 slips are required to plant 1 acre with 40 inches between rows and 12 inches between plants.
  • After greenhouse-grown slips are established, 10 field cut slips can be taken from each plant.
  • Yield = 18 (20-bushel) bins of seed roots per acre.

The next step is to estimate the costs associated with producing greenhouse-grown sweet potato slips. This publication estimates these costs based on a 30-by-96-foot greenhouse and a production goal of 60,000 slips. Budget estimates reflect average capital and operating expenses. You may experience different production costs and demands from those assumed in the budget; therefore, customize the budget to reflect your particular situation.

Capital Investment

The greenhouse costs are based on a 30-by-96-foot “hoop house” greenhouse structure that includes a galvanized steel frame, end wall, ground stakes, and double cover of 6 mil clear UV film. The heating system includes a properly vented propane heater and strategically placed interior fans to help circulate air throughout the greenhouse. The electrical system consists of waterproof electrical outlets spaced 15 feet apart for each row of aluminum benches, along with a 200-amp breaker box.

Table 1 describes the estimated capital investment required to build a greenhouse with these specifications. Estimated assembly costs are included in the budget, but these will change depending on whether you hire someone to do the work or do it yourself. A smaller greenhouse would incur less initial investment cost as well as lower overall production costs, but a higher per-unit production cost (increased $/slip). For more information on components of a greenhouse for sweetpotato slip production, see MSU Extension Publication 3368 Environmental Control for Greenhouse-Grown Sweetpotato Slips.

Table 1. Estimated capital requirements for greenhouse sweet potato slip production in Mississippi, 2019.*

Item

Description

Number

Units

Cost/unit ($)

Total initial cost ($)

Estimated life (yr)

Greenhouse structure**

30 by 96 feet

2,880

sq ft

2.19

6,307

20

Electrical system

200-amp breaker box, wire, conduit, and waterproof outlets

1

ea

646

646

20

Ventilation fans

48-inch, 1 HP

2

ea

1,130

2,260

5

Thermostat

120V, digital

1

ea

143

143

3

Heaters

Propane, 150,000 BTU

2

ea

1,095

2,190

10

Benches

Aluminum

47

ea

553

25,991

20

LED lights

Vegetative growth lights

90

ea

230

20,700

10

2-gallon sprayer

Weed management of greenhouse floor

1

ea

41

41

3

Pots

7 by 7 inches

200

ea

1

200

3

Pots

13 by 9 inches

12

ea

2

24

3

Cutting supplies

Metal garden scissors

3

ea

60

60

5

Irrigation system

Sprinkler system with polyethylene pipe, solenoid valves, and 2 GPH sprinkler drops

1

ea

1,510

1510

5

Ground cover

Woven polypropylene

2,880

sq ft

0.10

288

5

Personnel door

Aluminum, 42-inch

1

ea

382

382

20

Insect screen

1,600

sq ft

0.30

480

5

Assembly cost***

95

hr

15

1,425

20

Utility hookup****

Electric, gas, water

1

ea

529

529

20

Total

63,176

*Land and site preparation are not included in this budget.

**Structure includes frame, end walls, stakes, and 6 mil plastic double layer.

***Assembly costs may vary depending on location and how involved the owners are in the assembly process.

****Costs may increase if a water well or propane storage tanks are needed.

Production Budgets

The production budgets are based on information and experience gathered by faculty and staff at the Pontotoc Ridge-Flatwoods Branch Experiment Station. The production system is based on producing sweet potato slips for sale or transplanting during the sweet potato planting season.

Production Costs

Several steps must be completed to maintain slip production, as depicted here:

  1. tissue culture plants to potted mother plants (MSU-Pontotoc)
  2. slips from mother plants to potted daughter plants (MSU-Pontotoc)
  3. slips from daughter plants to pots and/or benches (producer)
  4. slips from greenhouse transplanted to the field (producer)

Through summer of 2020, the first three steps in this process will be the responsibility of MSU. Beginning in the fall and winter of 2020, MSU will establish mother plants used to produce potted daughter plants and/or rooted daughter plugs, and producers will be responsible for steps three and four of the process. This budget only calculates expenses associate with step three of this process. Table 2 summarizes the yearly costs associated with step three. Daughter plants purchased from MSU can be cut and planted into pots or directly into greenhouse benches lined with landscape fabric and filled with potting soil. Once the initial daughter plants have grown, they can be propagated repeatedly until the greenhouse is full.

Table 2. Estimated yearly production costs for greenhouse sweet potato slip production in Mississippi, 2019.

Item

Description

Number

Units

Cost/unit ($)

Total cost ($)

Fertilizer

25-lb bags

10

ea

25

250

Potting soil

3-cf bags

203

ea

12

2,436

Irrigation

Gallons

70,200

gal

0.02

1,404

Insecticides

Various

360

360

Green shield

Sanitizer

91

oz

0.43

39

Landscape fabric

Bench liner

1

ea

100

100

Pots

1 gallon

200

ea

1

200

Total hired labor

Plant propagation

132

hr

11

1,452

Total owner hours

Plant management

66

hr

22

1,452

Inspection fee

MCIA

1

ea

500

500

Total production costs ($)

8,193

Annual Ownership Costs

Annual ownership costs are presented in Table 3. Costs include depreciation, interest on investment, insurance, taxes, and overhead costs. Depreciation was estimated using the straight-line depreciation method, with assets being divided by their life expectancies to calculate the annual cost for depreciation. Interest on investment was calculated by using a rate of 5.25 percent charged on one-half of the initial cost of assets (it is assumed that one-half of the initial capital investment was financed with debt). Insurance and taxes are estimated at 2 percent of the initial cost of the assets. Overhead costs include heating, water, and electricity expenses.

Table 3. Estimated annual ownership costs for greenhouse sweet potato slip production in Mississippi, 2019.

Item structure

Depreciation ($)

Interest ($)

Insurance and taxes ($)

Total ($)

Greenhouse structure w/double covering

315

166

126

607

Electrical system

32

17

13

62

Ventilation fans

452

59

45

556

Heaters

219

57

44

320

Benches

1300

682

520

2,502

LED lights

2070

543

414

3,027

Irrigation system

302

40

30

372

Ground cover

58

8

6

72

Personnel door

19

10

8

37

Insect screen

96

13

10

119

Assembly cost

71

37

29

137

Utility hookup

26

14

11

51

Auxiliary equipment: Pots

50

4

3

57

Auxiliary equipment: Pots

8

1

1

10

Auxiliary equipment: Cutting supplies

12

2

1

15

Auxiliary equipment: 2-gallon sprayer

14

1

1

16

Total greenhouse and equipment costs ($)

4,987

1,649

1,258

7,894

Overhead item: Heating

9,075

Overhead item: Electricity

778

Total overhead costs ($)

9,853

Total annual ownership costs ($)

17,747

Labor Costs

Table 4 shows the labor cost breakdown associated with slip production. Labor costs are estimated at a wage rate of $22 per hour for the greenhouse owner and $11 per hour for all hired labor. Wage rates are estimated from average labor rate reports from the United States Department of Agriculture for 2018. Labor requirements are estimated based on the average time needed for multiple slip cuttings from daughter plants to fill growing benches in a 30-by-96-foot greenhouse. It is assumed that the owner will primarily supervise hired labor; if they are physically involved, labor costs will need to be adjusted accordingly.

Table 4. Estimated labor cost breakdown for greenhouse sweet potato slip production in Mississippi, 2019.

Activity

Total hired labor hours

Hired labor wage ($)

Owner hours*

Owner wage ($)

Total cost ($)

Cutting and planting slips

120

11

60

22

2,640

Total labor costs ($)

2,640

*It is assumed that the owner will spend half the time required for the transfer process supervising hired labor.

Total Annual Costs and Breakeven Points

Table 5 presents the estimated total annual costs and breakeven points for different levels of slip production. The total annual costs include total yearly production costs from Table 2 and total annual ownership costs from Table 3. The breakeven point reflects the price needed to cover all production costs (including overhead). For instance, if a grower produces 60,000 slips, he/she must receive 43 cents per slip in order to cover yearly costs. Any price below the breakeven point will result in a loss, and any price above this point will result in additional revenue. Estimated breakeven points for producing 40,000, 60,000, and 80,000 slips are included and assume that production costs remain the same regardless of how many slips are produced.

Table 5. Total estimated yearly costs and breakeven points* for greenhouse sweet potato slip production in Mississippi, 2019.

Total annual costs (production and ownership costs including overhead)

$25,940

Approximate breakeven point for producing 40,000 slips ($/slip)

0.65

Approximate breakeven point for producing 60,000 slips ($/slip)

0.43

Approximate breakeven point for producing 80,000 slips ($/slip)

0.32

*It is assumed that production costs remain the same regardless of the amount of slips produced.

Additional Considerations

LED lights represent a substantial initial investment and are not required to produce sweet potato slips. However, supplemental LED lighting does improve production efficiency, especially during winter months with long nights and cloudy days.

It is likely that growers producing greenhouse-grown sweet potato slips would also plant the slips into a certified field, conduct an in-field cutting to increase acreage of G1 slips, and sell certified G1 seed roots to others or use them on-farm.


Publication 3359 (POD-01-20)

By Evan Gregory, Graduate Research Assistant, Agricultural Economics; Stephen Meyers, PhD, Assistant Professor, Department of Horticulture and Landscape Architecture, Purdue University; Callie Morris, Research Associate, Jeff Main, Research Associate, and Mark Shankle, PhD, Research Professor, North Mississippi Research and Extension Center–Pontotoc Ridge-Flatwoods Branch Experiment Station; Elizabeth Canales, PhD, Assistant Professor, and Alba Collart, PhD, Assistant Extension Professor, Agricultural Economics.

Copyright 2020 by Mississippi State University. All rights reserved. This publication may be copied and distributed without alteration for nonprofit educational purposes provided that credit is given to the Mississippi State University Extension Service.

Produced by Agricultural Communications.

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Extension Service of Mississippi State University, cooperating with U.S. Department of Agriculture. Published in furtherance of Acts of Congress, May 8 and June 30, 1914. GARY B. JACKSON, Director

Department: Agricultural Economics

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