August 2019 - 30

PRODUCTION
Size MATTERS
Perennials:
How can larger starting materials increase your profitability?
BY PAUL PILON
w
e've all heard the expression " size
matters, " but many growers overlook
the value or savings larger starting
materials provide when planning their perennial
programs. So many of us are fixated at the
upfront costs of starting materials that we
often lose sight of the true costs of producing
a perennial crop. As you'll soon learn, when it
comes to profitability, size does matter.
LAYING THE FOUNDATION
To demonstrate how larger starting materials,
albeit more costly upfront, can increase
profitability, it's important to consider a couple
of key factors to determine the actual costs
of production. The first factor is the time
factor or the number of weeks a crop will be
in production. The next factor is the overhead
costs or the costs associated with the space
required for producing them.
Overhead is the cost associated with being in
business. Although I can't cover how overhead
is calculated in great detail here, I'd like to
establish a general idea of what overhead costs
are for many perennial producers. In order to
do so, it's important to explain the concept of
" square foot weeks " as the cost associated with
each square foot in production per week.
Square foot weeks are essentially derived
by taking all a business's overhead costs
30 AUGUST 2019 GPNMAG.COM
and dividing them by the total square feet
of production space and then dividing this
number by the number of weeks that space
is being utilized for production. The value
for square foot weeks varies from business
to business and usually falls somewhere
between $0.20 per square foot week for less
sophisticated facilities and $0.40 per square foot
week for state of the art facilities.
To keep things simple and ease of
demonstration, I'll use an overhead cost of
$0.30 per square foot per week in the following
examples. For simplicity, I'd also like to assume
Coreopsis 'UpTick Gold & Bronze'
FINAL CONTAINER
Input Size
Input Cost (w/royalty)
Plants Per Pot
Pots Per Square Foot
Input Cost Per Square Foot
Overhead (Cost /Sq. Ft/Week)
Grow Time (# of Weeks)
Square Foot Weeks (SFW) Cost
that the crop spacing is 1.5 containers per
square foot in these examples. Now let's dive
in to see how the costs of inputs and time
affects profitability.
COREOPSIS 'UPTICK GOLD & BRONZE'
For this example, let's compare the costs of
producing a one gallon crop of coreopsis UpTick
when using 72-cell or 21-cell liners and planting
them in the spring.
As you can see, the 21-cell liner costs $0.73
more per plug than the smaller 72-cell size.
However, the larger sized starting materials
SPRING PLANTED TRADE GALLON
72-cell
$1.01
1
21-cell
$1.74
1
1.5
$1.52
$0.30
11
$3.30
Total Cost/ Sq. Ft (Input + SFW) $4.82
Total Cost Per Container
1.5
$2.61
$0.30
7
$2.10
$4.71
Cost Advantage: $0.11 Less Per Sq Ft
$3.21
$3.14
Cost Advantage: $0.07 Less Per Pot
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August 2019

Table of Contents for the Digital Edition of August 2019
