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Western SARE Project Number, FW06-042

Harvest Frequency, Yield, and Economics of Summer Squash

Enterprise Budget 

Information from the producer survey helped me formulate an enterprise budget for market squash production that should be useful to other market gardeners.   I modified an enterprise budget for summer squash from the University of Kentucky Cooperative Extension Service, using 2007 costs in an initial example for the budget. 

I particularly like the UK vegetable enterprise budgets because they separate production and marketing costs first, then fixed costs such as insurance and taxes on the land (but not mortgage costs, although they can be added if relevant), and finally unpaid family labor.  Market growers often have other income sources paying the mortgage, and often their labor is uncompensated.  For some market gardeners, covering the variable production and marketing costs is enough.  Others may want to be sure their profit offsets some of their taxes and insurance costs, but not necessarily their labor.  Others hope to pay their family wages and still have enough profit to increase their operations.

Because market gardeners often grow a variety of crops, it can be confusing to separate the contribution of one crop to revenue and costs.  To deal with this problem, I modified the UK enterprise budget so that most costs are multiplied by the percentage of total garden that is planted in squash, or by the percentage of the total income that can be attributed to squash. Market gardeners and small farmers may want to keep track of these percentages.   For example, my squash patch was estimated to be 10% of my entire garden.  Therefore, the cost of compost for my squash patch was 10% of the total cost of compost, and the cost of new sprinklers was multiplied by 10%.  Similarly, the cost of travel to the market, and market fees were multiplied by 0.16, the proportion of squash sales in my total sales. 

On the other hand, the cost of squash seed was not multiplied by the proportion of the garden planted in squash or by the proportion of squash sales in total sales.  Rather, the cost of seed packets was divided by 2, the estimated number of years that I will be able to use the seeds in my garden.

I  left a number of categories on the budget that were not currently relevant to my operations, though they may be relevant to other market growers.  These include hired labor, and pollination costs. 

Finally, at the bottom I added a line for the amount that I saved by eating what I grow instead of purchasing produce at a supermarket.  This is, of course, the original inspiration for having a market garden!

Note that this budget could be modified for other crops that are grown by a market gardener to explore and compare their profitability.

Here is what my 2007 budget looks like in the MSExcel worksheet:
SQUASH, SUMMER:  Squash % of sales: Squash % of garden area # markets with squash sales
Estimated Costs and Returns 16%   10%   9  
2007                  
    QUANTITY PERCENT UNIT $/UNIT TOTAL    NOTES
        of garden         
GROSS RETURNS       or sales        
  Summer Squash    396   pounds $1.12 $443.52  
   
VARIABLE COSTS                
PRODUCTION:                
  Soil amendments  (Sulfer, P, etc.) 2 10% bag $16.00 $3.20  
  Fertilizer / compost     2 10% truckload $75.00 $15.00  
  Seed       15 100% .5 packets $1.75 $26.25   15 varieties, 1/2 package used per year
  Sprinkler system parts   1 10% total purchases $120.00 $12.00  
  Pesticides (Rodent bombs) 1 10% total purchases $37.00 $3.70  
  Cover crop seeds     1 10% order $77.00 $7.70  
  Pollination     0   hive $0.00 $0.00   I get free service from native bees!
  Fuel and Lube, tiller     3 10% gallons $3.00 $0.90  
  Repairs   none this year 1 16% total costs $0.00 $0.00  
  Irrigation district fees annual fee 1 16% total fee $220.00 $35.20   I use % of sales rather than garden area
  Hired Labor none this year 0   hours $8.00 $0.00  
Total Production Cost           $103.95  
                 
HARVESTING AND MARKETING:            
  Market dues     1 16% fee $35.00 $5.60  
  Stall Fees   1 6%

gross returns

$443.52 $26.61   6% of sales each week
  Travel to market   9 16% markets $25.20 $36.29   $0.45 per mile, 56 miles round trp
  Market service fees   9 16% markets $3.00 $4.32   Fixed fee charged weekly by Farmers' Market
  Power to run refrigerator   9 75% weeks $2.08 $14.06   See ** below
  Bags       9 50 each $0.05 $22.50   ~50 bags used per week
  Scale certification and maintenance 1 16% total cost $78.70 $12.59  
Total Harvest and Marketing Cost         $121.97  
                 
Annual Interest Rate         4.0%      These two lines is most important if you've taken
Interest on borrowed operating capital (or opportunity capital)       $2.20   a short term loan to pay for your variable costs.
TOTAL VARIABLE COST           $228.12   Or, it's interest you lost by using your own cash.
RETURN ABOVE VARIABLE COSTS         $215.40  
   
FIXED COSTS                
  Depreciation on Machinery and Equipment  (Tiller, fridge, scale) 16%

$50.00

$8.00  
  Depreciation on Irrigation System     16%

 $100.00

$16.00  
  Irrigation annual fee         16% $220.00 $35.20   I use % of sales rather than garden area
  Taxes on Land         16% $1,589.00 $254.24  
  Taxes on personal property       16% $30.64 $4.90  
  Insurance, market         16% $112.50 $18.00  
TOTAL FIXED COSTS           $336.34  
                 
TOTAL EXPENSES             $564.46  
                 
RETURN TO OPERATOR LABOR, LAND, CAPITAL, AND MGT     -$120.94  
                 
Operator and Unpaid Family Labor 65   hours $6.50 $422.50  
                 
RETURN TO LAND, CAPITAL, AND MANAGEMENT       -$543.44  
                 
Savings on our shopping bill from eating squash from our garden and freezing some for the winter    
# meals

45

$3.00

$135.00

 What would vegetables cost if I did not eat mine?

-$408.44

  amount lost in 2007
 
 
modified from               **75% because the refrigerator is left on for the week mostly for squash
University of Kentucky, College of Agriculture, Cooperative Extension Service.     6.2 cents per kwh, 168 hrs per week, .2 kw used by refrigerator per hour, estimated.
                This is a very high estimated energy usage, but the refrigerator is old.

This enterprise budget tells me that in 2007 my sales of squash paid for the variable costs of growing the squash, but not the fixed costs or anything extra for my labor.  One could say that paid $408 for the privilege of growing and selling squash.

2007 was a particularly bad year for my market operation because a family emergency in the spring prevented me from getting my summer garden planted until the middle of July, so I missed much of the market.  Also, the average price per pound was considerably lower than I intended, probably because some squash did not sell (squash that I used, or donated to the Parma Senior Center and Ronald McDonald House).

However, can use the enterprise budget to consider what combinations of yield, price of squash, and costs of growing squash will result in a profit, to improve my squash marketing in the future.

Download the excel file and put in your data to see if your market garden nets a profit. 
Download a pdf of the enterprise budget report.

Table of Contents  


What changes will result in a profit from squash in my market garden?

In a normal year I would like profits from my squash to pay for both variable and fixed costs, as well as something for my unpaid labor.  Is this possible in a small market garden?

I used the enterprise budget spreadsheet to consider how the price at which I sell squash, and the amount that I sell, affect profit from my squash patch.  I assumed that I would be able to get an earlier start growing squash so that I am able to sell it at market for12 weeks instead of 9.  I assumed that other crops in my garden bring in a total of $3000.  I also assumed that I could increase my yield of squash from about 400 to 600 lbs squash per year without using more space in my garden, and without adding any additional cost inputs.  I assumed that an increase to 800 lbs squash per year would require me to increase my squash patch to 15% of my garden, while an increase in yield to 1000 lbs would require 20% of my garden space.  Finally, I assume that my labor does not increase as a result of the greater yields (probably not a realistic assumption)

Here I plot the results.  Click on the graph to see a larger image.

This graph shows that I can't make a profit from 400 lbs of squash even if it sells for $4.00 per pound, a price that would be too expensive for most customers at the Nampa Farmers' Market.  If I can grow and sell 600 lbs of squash, I would profit if it sells for more than $2.75 per pound.  This might be possible for mini squash, because it sold for at least that price per pound in 2006 (see squash sales)

If I can increase my sales to 800 or 1,000 lbs of squash per year, I break even at more affordable prices of about $2.15 and $1.75 respectively.  The higher my squash yield, the faster the profits go up if the price goes up, assuming I am able to find customers for the extra squash. 

I estimate that I could get a yield of 800 lbs of squash by planting 80 hills of squash (about double the size of my 2006 study) and harvesting about 12 weeks of squash.  I would need to increase my customer base to sell the increased yield, a reasonable expectation in our area where interest in local foods is increasing.


For a yield of 800 lbs per year, I plotted the variable costs, fixed costs, unpaid labor costs and profits as the price of squash increases.  Surprisingly, the fixed costs increase as the price per pound increases.  This is because squash sales make up a larger proportion of the revenue as squash price increases.  Therefore, squash sales compensate for a larger proportion of the fixed costs with increasing price per pound. 

 

 

 

 

The bottom line is that I should be able to increase my price and my yield enough to not only pay my expenses, but also make some profit with mini squash.

 

 

 

 

 

Are you a market gardener or small farmer who sells summer squash?  Is this information is useful to you?

Are you a customer who buys summer squash at Farmers' Market?  Does this information help you understand your market's squash prices?

Contact me.


Table of Contents   
Comparison with published research  
Observations and recommendations

Top of Page     Leafcutting bees & alfalfa    The Solitary Bee Web   
Binderboard
   New Mexico Native Bee Pollinator Project  Nampa Farmer's Market   About Dr. Strickler
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Copyright December 21, 2007, Karen Strickler.  All rights reserved.
updated February 6, 2008