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