Economics of Saskatoon Berry Production - A Ten Acre Enterprise

 
 
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  Economics and Competitiveness
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Abstract:
The purpose of this publication is to provide potential saskatoon berry entrepreneurs with an estimate of capital investment, and annual costs and returns for a ten acre saskatoon berry enterprise. These estimates vary from one operation to another, therefore budgets must be adapted to reflect the costs and practices of any proposed berry operation.

Introduction:
Diversification has become a common word in the agricultural industry, as producers are looking to add value to their business operations and improve their income. Some of these producers are currently grain farmers who have shown interest in getting into small fruit production. Other interested people may be new producers to the agricultural industry or those that own an acreage and would like to find an enterprise that would generate some revenue. A small fruit enterprise could be one of the alternatives.

Tables 1 and 2 (pages 7 and 8), provide an estimate of the costs and returns of saskatoon berry production, based on the original data from saskatoon berry producers in Alberta. Data gathered from these producers was aggregated to develop group averages, which was later updated to reflect rising costs, inflation and changes in production practices. These cost and return budgets are estimates only, and are intended as a guide. The users of this information must keep in mind that these figures are based on the production and management expertise of the participants. Users of this guide may adapt these amounts to the costs and practices that better represent their proposed berry operation. Each producer should carefully estimate his/her own capital investment and annual costs and returns before making an investment decision.

Table 1 is the saskatoon production investment schedule, which lists the equipment requirements for a ten acre orchard. Table 2 provides a summary of costs and returns for a ten acre saskatoon enterprise. In this table, each year is treated as a separate crop. During the first three years, costs are incurred and no returns are realized. By year 4, the saskatoon harvest begins and so do the returns, indicated by the Contribution Margin that becomes positive in that year. Based on the assumptions for this enterprise, Gross Operating Loss/Profit becomes positive by year 5, and net profitability would be realized in year 6, as accumulated expenses from the previous years have been covered and the accumulated net returns become positive. From this year forward, overall profitability of the saskatoon enterprise continues to increase.

In conclusion, a saskatoon berry operation offers a viable opportunity for farm and crop diversification, especially when used in conjunction with other business ventures that can absorb the overhead and other costs in the early years. These early years include the seedling and early production stages, before saskatoon plants are able to produce substantial volumes of fruit.

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For more information about the content of this document, contact Emmanuel Laate.
This document is maintained by Shukun Guan.
This information published to the web on March 19, 2008.
Last Reviewed/Revised on November 12, 2015.