ID-129
Tobacco production in Kentucky has undergone numerous changes in recent years. Perhaps the most dramatic of these changes has been the introduction of float plants. Since its inception, the float system has grown rapidly in both technology and acceptance by producers. Today, tobacco float plants are produced across the state under a variety of conditions in greenhouses and outdoor float systems. New practices, technologies, and problems are continuing to develop in float plant production. Tobacco producers have responded to these changes by altering the way they select and use transplant systems. As farmers consider these new methods of plant production, the need for economic evaluation arises.
This publication compares the cost of three transplant production systems used by small- to moderate-sized tobacco operations. These systems include conventional plant beds, outdoor plug and transfer, and outdoor direct seeding. All costs necessary to prepare plants for field transplanting are evaluated in this publication. Specific annual costs are categorized as operating costs, labor costs, and capital costs.
Supplies or inputs that must be purchased each year for transplant production.
The value associated with all labor tasks whether provided by hired or unpaid operator/family labor. Labor costs include all tasks required to prepare transplants for field setting.
The annual ownership costs assigned to land, buildings, and machinery. Capital costs include depreciation, interest, insurance, and storage costs for all assets used in plant production.
For this analysis, a 10-acre transplant production level was established as a baseline for comparison. However, the costs represented in this publication are valid for a wide range of small- to moderate-sized tobacco producers. The three 10-acre transplant systems evaluated are listed below.
Input requirements and production practices for each of the three transplant systems are described in Table 1. The inputs used for each system are separated into the three cost categories specified earlier: operating, labor, and capital.
| Table 1. Description of Three 10-Acre Burley Transplant Systems | |||
| Six 12'x100 Plantbeds | Three 9'1"x29'10" Plug & Transfer Float System | Three 9'1"x32'1" Direct Seeding Float System | |
| ANNUAL OPERATING EXPENSES | |||
| Supplies | Bed covers, straw | Plastic liner, Bed cover | Plastic liner, Bed cover |
| Seed/Miniplugs | 6 -1/6th oz. pks. conventional seed | 73,000 mini-plugs | 9-10,000 pks. of primed pelleted seed |
| Fertilizer/Chemicals | 10-10-10 fertilizer, fumigant, fungicide, pesticide | pesticide, fungicide | 20-10-20 water soluble fertilizer, pesticide, fungicide |
| Soiless Media | ------------------------- | 18 3-cu.-ft. bags fortified media | 20 3-cu.-ft. bags unfortified media |
| Machinery/Utilities | Repairs, maintenance, fuel, oil | Repairs, maintenance, fuel, oil, electricity for heat source | Repairs, maintenance, fuel, oil, electricity for heat source |
| ANNUAL LABOR TASKS | |||
| Bed Site Preparation | Plow and disk beds | Install heat source and plastic liner, fill with water | Install heat source and plastic liner, fill with water |
| Establishing Plant System | Fumigate, seed, straw, and cover beds | Fill trays, transfer mini-plugs (1,000/hr), and place trays in bed | Add fertilizer to beds, fill dibble and seed trays (50/hr.), place trays in bed |
| Irrigation | 4 times w/tank and pump | ------------------------- | ------------------------- |
| Clipping | Twice w/weed clipper | Twice w/lawnmower and frame | Three times w/lawnmower and frame |
| Observation/Spraying | Observe weekly, spray 1 time | Observe weekly, spray 2 times | Observe weekly, spray 3 times |
| Plant Pulling | Pull plants and load | Load plants | Load plants |
| Clean Up/Bed Destruction | Disk beds | Clean trays and sanitize with 10% chlorine bleach solution, remove liner | Clean trays and sanitize with 10% chlorine bleach solution, remove liner |
| ANNUAL CAPITAL EXPENSES | |||
| Land | Beds and access, 0.33 ac | Beds and access, 0.038 ac | Beds and access, 0.042 ac |
| Tractor | 60 hp | ------------------------- | ------------------------- |
| Plow | 3-16" moldboard | ------------------------- | ------------------------- |
| Disk | 8' disk harrow | ------------------------- | ------------------------- |
| Water Tank (for irrigation) | 500 gallon | ------------------------- | ------------------------- |
| Transfer Pump (for irrigation) | 2 hp gas powered | ------------------------- | ------------------------- |
| Wagon (for irrigation) | 16', 8 ton running gear | ------------------------- | ------------------------- |
| Fumigation Equipment | Manual applicators | ------------------------- | ------------------------- |
| Seeding System | Drop type spreader | ------------------------- | Air seeder, dibble board, and vacuum unit |
| Irrigation System | Manual w/tank and pump | ------------------------- | ------------------------- |
| Water Bed Frame | ------------------------- | 179 ft. treated lumber, 3/4" PVC pipe, etc. | 186 ft. treated lumber, 3/4" PVC pipe, etc. |
| Float Trays | ------------------------- | 312 242-float trays | 336 253-float trays |
| Supplemental Heat | ------------------------- | 2 100-watt bulbs/acre of plants | 2 100-watt bulbs/acre of plants |
| Clipping Equipment | Weed clipper | Lawnmower and frame | Lawnmower and frame |
| Spraying Equipment | 3 gal. hand sprayer | 3 gal. hand sprayer | 3 gal. hand sprayer |
In order to provide a fair and consistent evaluation of each transplant system, certain prices and assumptions are required. For this study, the following assumptions are noted: The wage rate is $6.00 per hour for both hired and family/operator labor.
| Table 2: Cost For Outdoor Direct Seeding Systems Under Various Tray Sizes and Usable Plant Rates (in dollars per thousand) | ||||||
| Tray Size | Usable Plant Rate | |||||
| 65% | 70% | 75% | 80% | 85% | 90% | |
| 200 | 30.53 | 28.46 | 26.66 | 25.10 | 23.71 | 22.48 |
| 242 | 25.50 | 23.79 | 22.31 | 21.01 | 19.87 | 18.85 |
| 253 | 24.46 | 22.82 | 21.41 | 20.17 | 19.08 | 18.10 |
| 288 | 21.68 | 20.24 | 18.99 | 17.91 | 16.94 | 16.09 |
Table 3 (page 4) is a list of the costs per acre for the inputs and production practices specified in Table 1 (page 2). These costs are estimated for the 1997 growing season. Growers are encouraged to adjust values to reflect their own prices and expectations. Direct seed, plug and transfer, and conventional plants vary substantially in cost distribution. Operating costs for outdoor direct seedbeds and conventional plant beds are relatively comparable at $60.22 per acre and $68.10 per acre, respectively. Conventional bed costs are higher due to increased costs of supplies, fertilizer/chemical requirements, and machinery repairs and maintenance. At $152.78 per acre, the operating cost for an outdoor plug and transfer system is more than twice the cost of the other systems. Higher operating costs in the plug and transfer system are mainly attributable to purchased miniplugs, which represent almost 72 percent of total operating expenses.
| Table 3. Cost/Acre of Three 10-Acre Burley Transplant Systems | ||||
| Conventional Plantbed System ($/Acre) | Plug and Transfer Float System ($/Acre) | Direct Seeding Float System ($/Acre) | Your Farm ($/Acre) | |
| ANNUAL OPERATING EXPENSES | ||||
| Supplies | $26.80 | $14.26 | $15.12 | |
| Seed/Mini-plugs | $4.67 | $110.53 | $20.18 | |
| Fertilizer/Chemicals | $21.68 | $0.14 | $1.86 | |
| Soilless Media | ---- | $19.45 | $16.28 | |
| Machinery Repairs & Maintenance/Utilities | $12.65 | $3.23 | $4.75 | |
| Operating Interest | $2.30 | $5.17 | $2.03 | |
| SUBTOTAL | $68.10 | $152.78 | $60.22 | |
| ANNUAL LABOR TASKS | ||||
| Bed Site Preparation | $2.63 | $3.23 | $3.49 | |
| Establishing Plant Bed | $24.50 | $47.72 | $7.85 | |
| Irrigation | $8.75 | ---- | ---- | |
| Clipping | $9.31 | $6.09 | $9.77 | |
| Observation,Taking Plastic Cover On/Off | $1.75 | $1.76 | $3.49 | |
| Spraying | $3.50 | $1.62 | $3.49 | |
| Plant Pulling | $52.50 | ---- | ---- | |
| Clean Up/Bed Destruction | $0.88 | $4.82 | $5.15 | |
| SUBTOTAL | $103.82 | $65.24 | $33.24 | |
| ANNUAL CAPITAL EXPENSES | ||||
| Land | $3.21 | $0.37 | $0.41 | |
| Tractor | $6.17 | ---- | ---- | |
| Plow | $0.19 | ---- | ---- | |
| Disk | $0.87 | ---- | ---- | |
| Water Tank & Transfer Pump (for irrigation) | $2.30 | ---- | ---- | |
| Wagon (for irrigation & bed setup) | $2.64 | ---- | ---- | |
| Fumigation Equipment | $2.29 | ---- | ---- | |
| Spraying Equipment | $0.16 | $0.07 | $0.16 | |
| Seeder | $0.42 | ---- | $9.68 | |
| Water Bed Frame | ---- | $5.35 | $5.77 | |
| Float Trays | ---- | $13.70 | $14.65 | |
| Supplemental Heat Source | ---- | $2.84 | $3.06 | |
| Clipping Equipment | $1.70 | $1.11 | $1.78 | |
| Interest | $1.99 | $2.37 | $3.55 | |
| Storage & Insurance | $0.60 | $0.71 | $1.07 | |
| SUBTOTAL | $22.54 | $26.52 | $40.13 | |
| TOTAL COST/ACRE | $194.46 | $244.54 | $133.59 | |
| TOTAL COST/THOUSAND | $27.78 | $34.93 | $19.07 | |
Labor costs vary dramatically across all three transplant production systems. Both outdoor float systems have substantially lower labor costs per acre than conventional plant beds and are lowest for the outdoor direct seed system. Compared to conventional plant beds, labor costs are reduced by 37 percent in the plug and transfer system and by 68 percent in the direct seed system. Higher labor costs in conventional beds result from pulling plants for field setting. This task accounts for 50 percent of the total labor costs in this system. Labor costs are higher in plug and transfer systems than in direct seed systems due to the plugging and transferring process. This task comprises 70 percent of total labor expenses for this system.
Direct seeding transplant production is more capital intensive than both of the other systems. Annual capital expenses for direct seeding are $40.13 per acre, almost twice as high as conventional plant beds and plug and transfer systems. Higher capital costs in this system are attributable to seeding equipment depreciation and more intensive use of other capital inputs, such as clipping equipment.
Choosing a transplant system is not a simple decision. Often a system that fits one farming operation is not suitable for another. Some factors to consider in making a decision include cost, risk, labor and management requirements, and producer preferences.
For most tobacco producers, cost per acre is the primary factor behind their choice of transplant systems. Costs differ not only for each system but also across farm operations. For this reason, producers should consider their own input costs and expectations when evaluating transplant costs. Table 3 provides a separate column for producers to evaluate the costs of their current transplant production system against alternative transplant systems.
Risk is a factor that can dramatically affect transplant cost. Generally, risk increases from plant beds to float systems and is highest in the outdoor direct seed float system. Elevated risks in the float system are attributable to increased disease/insect pressure, management requirements, and the effects of adverse weather on float plants. These risks can potentially affect the usable plant rate and plant quality. Producers should consider that higher levels of management are required to offset the increased risks in float plant production.
Risk management is essential in outdoor direct seeding systems. The success of this system is highly dependent on weather conditions and management within the first 15 days after seeding. If beds are not adequately protected, a hard spring shower can dramatically reduce the usable plant rate by washing away or burying tobacco seeds. Table 2 below presents the cost per thousand in the outdoor direct seeding system under various usable plant rates and tray sizes. Producers who are considering direct seeding in outdoor beds should evaluate not only inputs that will reduce risk, such as various float bed covers, outdoor structure designs, and preventive fungicide applications, but also their ability to manage risk under this system.
Increased risk in direct seeding is a major reason why many tobacco producers choose and continue to use outdoor plug and transfer systems. This system allows producers to employ the labor saving advantages of float plants but with lower risk than outdoor direct seeding.
Another factor to consider is the labor requirements for each system. Float plants have lower labor requirements than conventional plant beds. Within float plant systems, outdoor direct seedbeds have lower labor requirements than outdoor plug and transfer beds. Producers who are experiencing labor shortages or time constraints should consider the labor saving advantages of these systems to their farming operation. Many growers cite the inability to find experienced plant pullers as a major advantage of the float system. Float plants also provide greater flexibility to the producer. Tobacco growers can store unused plants back on the waterbed or hold plants until field conditions are suitable for transplanting.
For many producers, the timing of labor is almost as important as the amount of labor required. With plant beds, a majority of the labor requirements occur when producers are pulling plants for transplanting. However, float plants tend to transfer a majority of the labor requirements from planting season in May and June to March and April. This may allow producers to finish transplanting in a more timely fashion or to work on other farm tasks that occur during May, such as hay harvesting. Figure 1 exhibits how labor timing varies across the three transplant systems during the growing season.
Personal preferences of tobacco producers may also affect transplant system choice. Many producers use the plug and transfer system because they want to have some control over the plant production process and do not necessarily want to buy finished plants from transplant dealers. Generally, but not always, the three systems evaluated in this publication follow the descriptions displayed in Table 4. Producers should consider these factors as well as any other pertinent information when comparing alternative transplant systems for their farming operation.
| Table 4: General Characteristics of Outdoor Direct Seed, Outdoor Plug and Transfer, and Conventional Transplant Systems. | ||||
| System | Cost | Risk | Mgmt. | Labor |
| Outdoor Direct Seed | Lowest | Highest | Highest | Lowest |
| Outdoor Plug & Transfer | Highest | Medium | Medium | Medium |
| Conventional Plantbeds | Medium | Lowest | Lowest | Highest |
Figure 1: Timing of labor requirements for each transplant system
Figure 2: Distribution of costs for each transplant production system (in dollars per 1,000 transplants)
