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					Economics of VIF with Inline
and PIC EC in Strawberries
           Rachael E. Goodhue
  Agricultural and Resource Economics
      University of California, Davis
  Chloropicrin and Inline TM Field Dose-
 response Study Under VIF and Standard
Tarp: Soil Pest Control at Watsonville and
                Oxnard, CA

    Husein Ajwa (distribution), Greg Browne
   (Phytopthora), John Duniway (Verticillium),
  Steve Fennimore, Oleg Daugovish (Weeds),
  Rachael Goodhue (economics), Frank Martin
   (Pythium), Becky Westerdahl (nematodes),
     USDA-ARS and University of California,
                     Davis.
                     Objective
• To compare the costs and returns of chloropicrin
  and Inline under VIF and standard film
• To determine the sensitivity of the relative
  profitability of using VIF and STD to key
  economic parameters:
  –   VIF price, relative to STD price
  –   Price of all plastic
  –   Field labor for weeding and harvest
  –   Price of fresh strawberries
               Treatments
For VIF and STD,
• Chloropicrin and Inline each applied at five
  rates: 50, 100, 200, 300, and 400 lbs/acre.
• Control left untreated
• Methyl bromide/chloropicrin 67-33 applied
  at 350 lbs/acre.
                   Approach
• Yield and weeding time data collected in field
  trials
• Fumigant and film prices provided by industry
  members and suppliers
• University of California cost studies provided
  information on other costs
  – http://coststudies.ucdavis.edu
• Using above information, calculated profits for
  each treatment
• Compared VIF and STD profits for each rate of
  each fumigant
         Costs and Returns
• Costs evaluated by treatment
  – VIF and standard film (STD)
  – Fumigant
  – Hand weeding
  – Harvesting labor and materials
• All other costs were assumed to be
  constant across treatments
• Return evaluated by treatment
  – Yields
Costs: PIC 200-STD 2003-2004 Total Costs $30,663
                 Profits $7,593




                                            Hand Weeding

                                            Fumigation Materials and
                                            Application
                                            STD Film

                                            Other Cultivation

                                            Harvest

                                            Overhead
Costs: PIC 200-VIF 2003-2004 Total Costs $31,586
                 Profits $9,131




                                            Hand Weeding

                                            Fumigation Materials and
                                            Application
                                            STD Film

                                            Other Cultivation

                                            Harvest

                                            Overhead
                  Caveat
• Results are only as good as the data
  – Field trial conditions may differ from field
    conditions
  – Cost studies are compiled using information
    from a number of growers, and not from a
    random sample.
  – Fumigant and film prices are compiled using
    information from various sources and not from
    a random sample of suppliers or growers.
  – Prices change over time
                Response
• Conduct sensitivity analysis with respect to
  key prices. If results do not change
  substantially, then it suggests that the
  findings are robust to the value of the price
  in question
                     Results
• Report Watsonville only (MBA)
• Two years of field trial data
  – 2002-2003
  – 2003-2004
• Results differ by year.
• 2003-2004 more profitable overall, due to higher
  yields
• 2003-2004 more cases where VIF more
  profitable than STD
  – Second graph plots profit difference (VIF – STD)
                                                   Profits by treatment: Base case
                                                   MBA 2002-2003 and 2003-2004


       $12,000



       $10,000



        $8,000
U SD




        $6,000



        $4,000



        $2,000



           $0
                 PIC-50   PIC-100   PIC-200   PIC-300   PIC-400 CONTROL INLINE-50       INLINE-   INLINE-   INLINE-   INLINE-   MBPIC-
                                                                                          100       200       300       400      350
                                                                    Treatment

                                                    02-03 VIF   03-04 VIF   02-03 STD    03-04 STD
                                                VIF profit - STD profit: Base case
                                                  MBA 2002-2003, 2003-2004


      $4,000

      $3,000


      $2,000

      $1,000


USD       $0

      -$1,000


      -$2,000

      -$3,000


      -$4,000
                                                                         CO NTRO L


                                                                                     IN LIN E-50


                                                                                                   IN LIN E-100


                                                                                                                  IN LIN E-200


                                                                                                                                 IN LIN E-300


                                                                                                                                                IN LIN E-400


                                                                                                                                                               MBPIC -350
                PIC -50


                          PIC -100


                                     PIC -200


                                                 PIC -300


                                                              PIC -400




                                                                         Treatment


                                                            2002-2003        2003-2004
         2002-2003 Results
• VIF less profitable than STD for Inline,
  MB-PIC, PIC 200, PIC 400
• VIF more profitable than STD for PIC 50,
  PIC 100, PIC 300, and CONTROL.
                                                 Profits by Treatment: Base Case
                                                           MBA 2002-2003


       $9,000

       $8,000

       $7,000

       $6,000

       $5,000
U SD




       $4,000

       $3,000

       $2,000

       $1,000

          $0
                                                                                   0
                                                                    L




                                                                                              00


                                                                                                           00


                                                                                                                       00


                                                                                                                                    00


                                                                                                                                               50
                 50



                           0


                                    0


                                             0


                                                        0




                                                                               -5
                                                                 O
                       10


                                20


                                         30


                                                     40




                                                                                            -1


                                                                                                        -2


                                                                                                                     -3


                                                                                                                                 -4


                                                                                                                                              -3
                C-




                                                                R


                                                                              NE
                      C-


                               C-


                                        C-


                                                   C-




                                                                                         NE


                                                                                                      NE


                                                                                                                  NE


                                                                                                                               NE



                                                                                                                                          IC
                                                             NT
            PI




                                                                         LI
                               PI




                                                  PI
                      PI




                                        PI




                                                                                                                                         BP
                                                                                       LI


                                                                                                   LI


                                                                                                                LI


                                                                                                                            LI
                                                            CO



                                                                        IN


                                                                                    IN


                                                                                                 IN


                                                                                                             IN


                                                                                                                          IN


                                                                                                                                      M
                                                                     Fumigant

                                                                        VIF    STD
                                                VIF profit - STD profit: Base Case
                                                          MBA 2003-2003


      $2,000

      $1,500

      $1,000

        $500

          $0

       -$500
USD
      -$1,000

      -$1,500

      -$2,000

      -$2,500

      -$3,000

      -$3,500
                                                                         CO NTRO L


                                                                                     IN LIN E-50


                                                                                                   IN LIN E-100


                                                                                                                  IN LIN E-200


                                                                                                                                 IN LIN E-300


                                                                                                                                                IN LIN E-400


                                                                                                                                                               M BPIC -350
                PIC -50


                          PIC -100


                                     PIC -200


                                                   PIC -300


                                                              PIC -400




                                                                         Treatment
 2002-2003 Results: Film Costs
• Profit difference declines/becomes more
  negative with
  – Increase in price of VIF
  – Increase in price of all plastics
  – Large percentage increases (100%) do not
    alter which film is more profitable, and have
    relatively small effects on total profits.
     • Exception: Inline, with 100% increase in price of
       VIF, has a small negative profit difference.
2002-2003 Results: Labor Costs
• An increase of up to 25% in the field labor
  wage did not change which film was more
  profitable for a given treatment
• Effect of increase on profit difference
  varied by treatment.
• Higher wages increase hand weeding
  costs, harvesting costs
  – Higher harvesting costs reduce the increase
    in returns due to higher yields.
         VIF profit - STD profit as a function of an increase in the field labor w age (0% to 25%)
                                               MBA 2002-2003


      $2,000

      $1,500

      $1,000

        $500

          $0

       -$500
USD
      -$1,000

      -$1,500

      -$2,000

      -$2,500

      -$3,000

      -$3,500
                                                                       CO NTRO L


                                                                                   IN LIN E-50


                                                                                                 IN LIN E-100


                                                                                                                IN LIN E-200


                                                                                                                               IN LIN E-300


                                                                                                                                              IN LIN E-400


                                                                                                                                                             M BPIC -350
                 PIC -50


                           PIC -100


                                      PIC -200


                                                 PIC -300


                                                            PIC -400




                                                                       Treatment
          2002-2003 Results:
           Strawberry Price
• Changes in the price of fresh strawberries
  did not change which film was more
  profitable for a given treatment.
• Price increases increased the value of
  higher yields.
  VIF profit - STD profit as a function of changes in the fresh straw berry price (-25% to 25%) MBA
                                               2003-2003


     $3,000

     $2,000


     $1,000

         $0


USD -$1,000

    -$2,000

    -$3,000

    -$4,000

    -$5,000
                                                                     CO NTRO L


                                                                                 IN LIN E-50


                                                                                               IN LIN E-100


                                                                                                              IN LIN E-200


                                                                                                                             IN LIN E-300


                                                                                                                                            IN LIN E-400


                                                                                                                                                           M BPIC -350
               PIC -50


                         PIC -100


                                    PIC -200


                                               PIC -300


                                                          PIC -400




                                                                     Treatment
         2003-2004 Results
• VIF less profitable than STD for
  CONTROL.
• Negligible profit differences for PIC 300,
  MBr-PIC 350.
• VIF more profitable than STD for PIC 50,
  PIC 100, PIC 200, PIC 400, and all Inline
  applications.
                                                   Profits by treatment: Base case
                                                            MBA 2003-2004


       $12,000



       $10,000



        $8,000
U SD




        $6,000



        $4,000



        $2,000



           $0
                 CONTROL   PIC-50   PIC-100   PIC-200   PIC-300   PIC-400 INLINE-50   INLINE-   INLINE-   INLINE-   INLINE-   MBPIC-
                                                                                        100       200       300       400      350
                                                                    Treatment

                                                                      VIF   STD
                       -$500
                               $0
                                    $500
                                           $1,000
                                                    USD $1,500
                                                                 $2,000
                                                                          $2,500
                                                                                   $3,000
                                                                                            $3,500



            CO NTRO L


                PIC -50


               PIC -100


               PIC -200


               PIC -300


               PIC -400
                                                                                                              MBA 2003-2004




Treatment
             IN LIN E-50
                                                                                                     VIF profit - STD profit: Base case




            IN LIN E-100


            IN LIN E-200


            IN LIN E-300


            IN LIN E-400


            M BPIC -350
 2003-2004 Results: Film Costs
• Profit difference declines/becomes more
  negative with
  • Increase in price of VIF
  • Increase in price of all plastics
• Increase in the price of VIF or all film
  makes VIF less profitable for PIC 400 and
  MBrPIC 350. Profit difference now
  negative.
  – non-negligible for VIF price increase.
  VIF profits - STD profits as a function of an increase in the price of VIF (0% to 100%), with STD price
                                                 unchanged
                                              MBA 2003-2004


      $3,500

      $3,000

      $2,500

      $2,000

      $1,500
USD
      $1,000

        $500

          $0

       -$500

      -$1,000
                C O NT R O L




                                                                                               IN LI N E -5 0


                                                                                                                IN LI N E -1 00


                                                                                                                                  IN LI N E -2 00


                                                                                                                                                    IN LI N E -3 00


                                                                                                                                                                      IN LI N E -4 00


                                                                                                                                                                                        M B P IC -3 50
                               P IC -5 0


                                           P IC -1 00


                                                        P IC -2 00


                                                                     P IC -3 00


                                                                                  P IC -4 00




                                                                                  Treatment
             VIF profit - STD profit as a function of an increase in price for VIF and STD plastic
                                                MBA 2003-2004


    $3,500


    $3,000


    $2,500


    $2,000


USD $1,500


    $1,000


     $500


       $0


     -$500
              CO NTRO L




                                                                                IN LIN E-50


                                                                                              IN LIN E-100


                                                                                                             IN LIN E-200


                                                                                                                            IN LIN E-300


                                                                                                                                           IN LIN E-400


                                                                                                                                                          M BPIC -350
                          PIC -50


                                    PIC -100


                                               PIC -200


                                                          PIC -300


                                                                     PIC -400




                                                                     Treatment
2003-2004 Results: Labor Costs
• An increase of up to 25% in the field labor
  wage
  – Led to the profit difference becoming positive
    for CONTROL at a 15% increase
  – Did not change which film was more profitable
    for other treatments
• The profit difference increased for PIC
  300 and Inline 50 with the wage increase,
  and decreased for all other treatments.
   VIF profit - STD profit as a function of an increase in the field labor wage rate (0% to 25%) MBA 2003-
                                                      2004


    $3,500


    $3,000


    $2,500


    $2,000


USD $1,500


    $1,000


     $500


       $0


     -$500
              CO NTRO L




                                                                                IN LIN E-50


                                                                                              IN LIN E-100


                                                                                                             IN LIN E-200


                                                                                                                            IN LIN E-300


                                                                                                                                           IN LIN E-400


                                                                                                                                                          M BPIC -350
                          PIC -50


                                    PIC -100


                                               PIC -200


                                                          PIC -300


                                                                     PIC -400




                                                                     Treatment
            2003-2004 Results:
             Strawberry Price
• Price increases increased the value of higher
  yields.
• CONTROL, PIC 300 and MBrPIC 350 had both
  negative and positive profit differences.
• Changes in the price of fresh strawberries did
  not change which film was more profitable for
  other treatments.
• Profit difference declined with price increases for
  CONTROL, PIC 300.
• Profit difference increased with price for all other
  treatments.
   VIF profit - STD profit as a function of changes in the fresh strawberry price (-25% to 25%) MBA 2003-
                                                      2004


    $5,000



    $4,000



    $3,000



USD $2,000



    $1,000



        $0



    -$1,000
               CO NTRO L




                                                                                 IN LIN E-50


                                                                                               IN LIN E-100


                                                                                                              IN LIN E-200


                                                                                                                             IN LIN E-300


                                                                                                                                            IN LIN E-400


                                                                                                                                                           M BPIC -350
                           PIC -50


                                     PIC -100


                                                PIC -200


                                                           PIC -300


                                                                      PIC -400




                                                                      Treatment
                   Conclusion
• In most year-fumigant-rate comparisons,
  whether VIF or STD use resulted in higher
  profits did not change as a result of changes in
  key prices.
   – Suggests results robust to changes in economic
     variables
• However, relative profitability of treatments
  differs by year
   – Suggests results not robust with respect to changes
     in other variables
   – Yield differences a key determinant of profitability.
                                                        Yield MBA 2002-2003, 2003-2004


             7,000


             6,000



             5,000


             4,000
trays/acre




             3,000


             2,000


             1,000


                0
                     PIC-50   PIC-100   PIC-200   PIC-300      PIC-400 CONTROL INLINE-50        INLINE-   INLINE-   INLINE-   INLINE-   MBPIC-
                                                                                                  100       200       300       400      350
                                                                            Treatment

                                                            02-03 VIF   03-04 VIF   02-03 STD    03-04 STD
                                                                trays/acre




                                    -800
                                           -600
                                                  -400
                                                         -200
                                                                0
                                                                             200
                                                                                   400
                                                                                         600
                                                                                               800




                             PIC -50


                            PIC -100


                            PIC -200


                            PIC -300


                            PIC -400




02-03 diff
                         CO NTRO L




03-04 diff
             Treatment
                          IN LIN E-50


                         IN LIN E-100
                                                                                                     VIF Yield - STD Yield MBA 2002-2003, 2003-2004




                         IN LIN E-200


                         IN LIN E-300


                         IN LIN E-400


                         M BPIC -350
                                                VIF profit - STD profit: Base case
                                                  MBA 2002-2003, 2003-2004


      $4,000

      $3,000


      $2,000

      $1,000


USD       $0

      -$1,000


      -$2,000

      -$3,000


      -$4,000
                                                                         CO NTRO L


                                                                                     IN LIN E-50


                                                                                                   IN LIN E-100


                                                                                                                  IN LIN E-200


                                                                                                                                 IN LIN E-300


                                                                                                                                                IN LIN E-400


                                                                                                                                                               MBPIC -350
                PIC -50


                          PIC -100


                                     PIC -200


                                                 PIC -300


                                                              PIC -400




                                                                         Treatment


                                                            2002-2003        2003-2004
 VIF Returns - STD Returns as a function of an increase in the price of VIF (0% to 100%), w ith STD
                                        price unchanged
                                         MBA 2002-2003



     $2,000


     $1,000


         $0


USD -$1,000


    -$2,000


    -$3,000


    -$4,000
                                                                     CO NTRO L

                                                                                 IN LIN E-50


                                                                                               IN LIN E-100


                                                                                                              IN LIN E-200


                                                                                                                             IN LIN E-300


                                                                                                                                            IN LIN E-400


                                                                                                                                                           M BPIC -350
               PIC -50


                         PIC -100


                                    PIC -200


                                               PIC -300


                                                          PIC -400




                                                                     Treatment
  VIF Returns - STF Returns as a function of an increase in the price of plastics (0% to 100%), w ith
                                       STD price unchanged
                                          MBA, 2002-2003


     $2,000


     $1,000


         $0


USD -$1,000


    -$2,000


    -$3,000


    -$4,000
                                                                      CO NTRO L


                                                                                  IN LIN E-50


                                                                                                IN LIN E-100


                                                                                                               IN LIN E-200


                                                                                                                              IN LIN E-300


                                                                                                                                             IN LIN E-400


                                                                                                                                                            M BPIC -350
                PIC -50


                          PIC -100


                                     PIC -200


                                                PIC -300


                                                           PIC -400




                                                                      Treatment

				
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