| | Introduction
The origin of the Alberta Greenhouse Crops Industry goes back over hundred years. It was in 1905 when Dutch and German settlers began plant production under protection cultivation. Since 1970, Alberta Agriculture, and Rural Development (ARD) has committed material resources to the development and growth of this industry in Alberta. Full text of the 49 page report is available in pdf format.
The greenhouse industry in Alberta has gone through several adjustments; therefore, the need was felt to develop costs and returns based on current conditions so the industry can change accordingly. Because of changing economic conditions, previously compiled information on the greenhouse industry in the late nineties had become more or less obsolete. The cost of natural gas, electricity and other greenhouse supplies became major concerns during the fall of 2000 and continues from these one. This study based on actual costs and returns from forty three (43) greenhouse operators across the province, provides more current data on costs and returns for major greenhouse crops.
Significant increases in the price of electricity and greenhouse supplies created some serious economic difficulties for greenhouse operators in the province. Realizing these difficulties, the provincial government announced energy assistance programs for the greenhouse industry as well1.
Major greenhouse crops grown include vegetables, bedding plants, potted flowers and ornamentals, cut flowers, herbs, perennials and tree seedlings. More recently, particularly over the last decade, a number of greenhouse operations have switched to producing tree seedlings under contract for the forestry industry. During the last decade, the greenhouse industry in Alberta has grown rapidly. This growth in the greenhouse industry has been prompted by consumer demand for fresh and quality produce. Alberta has the advantage in terms of lower taxes and input costs which also contributed to this growth. However, recent rapid increases of natural gas and electricity prices have somewhat dampened further expansion prospects for this industry in the short run.
The greenhouse industry in Canada represents the fastest growing sub-sector in horticulture with over $2.3 billion in sales. In 2001, area under glass and plastic in Canada was 17.8 million square meters (1 781 hectares). Despite high energy costs it increased by about four percent to over 18.5 million square meters (1 851 hectares), in 2002. In 2005, greenhouse area in Canada was estimated at just under 19.9 million square meters (1 989 hectares). In 2008, greenhouse total area reported by Statistics Canada was 21.8 million square meters, (2 184 hectares) an increase of almost 10 percent over in 2005.
As mentioned above, greenhouse area in Canada continues to grow year after year. In 2010, greenhouse area was estimated at about 22.9 million square meter (2 287 hectares), an increase of almost 15 percent over the area in 2005.
The size of Alberta’s greenhouse industry, under both glass and plastic, was about 557 620 square meters (56 hectares) in 1990. In 2005, the area under cover in Alberta has increased to over 1.169 million square meters (117 hectares), an increase of over 116 percent during the last fifteen years or about 7.5 percent increase on average per year. A recent survey of the greenhouse industry across the province estimated greenhouse area (under cover) at 1.23 million m2 (121 hectares).
Alberta greenhouse industry is ranked fourth in the country when compared to the other provinces. Ontario continues to lead the greenhouse industry with 13.3 million square meters (1 330 hectares) area, followed by British Columbia at 4.9 million square meters (49 hectares) and Quebec at 2.7 million square meters (267 hectares). In percentage terms, Ontario accounts for 53 percent of all greenhouse area in Canada, with British Columbia at 21 percent and Quebec at 12 percent. Alberta accounts for about five (5) percent of the greenhouse area in Canada.
Approximately 99 percent of the greenhouse area in Alberta is under commercial production, with the balance confined to institutions such as universities, research stations and colleges. Most of the Alberta’s greenhouse operations are highly diversified and are equipped with most modern equipment to achieve production efficiencies. The gross revenue generated by the greenhouse industry in 2010 was estimated at around $160 million, with an investment or total value of assets of about $275 million.
This report provides the most current information on greenhouse production costs and returns for the major greenhouse crops (bedding plants/ornamentals, cut flowers, cucumbers, peppers, tomatoes and tree seedlings).
Objectives of the Study
The major objectives of the study were:
- Determination of the structure of the greenhouse industry in Alberta.
- Estimation of greenhouse production costs and returns by major crops.
- Identification of the main factors influencing production and marketing of greenhouse crops in Alberta.
- Identification of major problems experienced by greenhouse producers in Alberta.
The Study Sample
A questionnaire specifically designed for greenhouse operations was used to obtain the required information from a selected sample of greenhouse operators across the province. Forty (40) greenhouse operators were interviewed to obtain production costs and returns information on bedding plants/ornamentals, cut flowers, cucumbers, peppers, and tomatoes for the 2008 crop. Vegetable producing greenhouses (cucumbers, peppers and tomatoes) were divided into two groups, i.e. Medicine Hat/Redcliff and North-Central to compare natural gas and other costs between the two groups. In case of peppers there were only two (2) producers from Medicine Hat/Redcliff group; therefore their information is not included in the report for data confidentiality purpose.
Method of Analysis
After completion of the questionnaire, raw data were reviewed to make sure that no information was missing before entering it for analytical purposes. In the past, we used a mainframe computer program “SPSS” (Statistical Package for the Social Sciences) to analyze both the individual farm reports as well as computing group averages. A Paradox 9 program (micro-computer database) was used to analyze the greenhouse data. This program is very versatile and allows changes and updates in many of the cost allocations.
Each greenhouse operation was analyzed separately. The study sample was divided by crop groups. In order to preserve confidentiality of the data obtained, no group averages were developed for greenhouse crops with less than three participants. Data collected for the 2008 crop year was updated to 2010 crop year by using farm input price indices (FIPIs) and prices received for various crops.
For more information please contact:
Nabi Chaudhary
Senior Economic Analyst - Crops
Economics Unit
Ph: (780) 422-4054
Fax: (780) 427-5220
Email: nabi.chaudhary@gov.ab.ca
1. Alberta government announced a one-time gas rebate of $0.40 per square foot during 2000 and 2001. Another natural gas rebate program was announced in the fall of 2003. This program expired on March 31, 2009.
Source: Agdex 821-59. September 2011. |
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