574 Capital Investment Analysis of Adopting Zero Runoff Subirrigation Systems in Greenhouse Operations

Abstract

Adoption of technology to achieve environmental stewardship and remain competitive is a high priority for greenhouse businesses. Zero runoff subirrigation (ZRS) technology offers great promise to manage fertilizer inputs while improving production efficiency. This study applied economic engineering methodology to quantify costs and returns associated with adopting ZRS systems and compare profitability of producing crops using alternative ZRS systems for greenhouse operations in the northeastern and north central United States. The production models showed that using ZRS systems to grow greenhouse crops can be profitable if growers select a system best suitable for their crop choices. Among the four ZRS systems studied (ebb-and-flow rolling benches, Dutch movable trays, flood floors and trough benches), the Dutch movable tray system returned the highest profit per square foot week (SFW) greenhouse area for small potted plant production ($0.244/SFW), and the flood floor system returned the highest profit when producing large potted plants ($0.002/SFW) and bedding crop flats ($0.086/SFW). The trough bench system was least profitable had the lowest profit for the two applicable crop categories—small potted plants ($0.183/SFW) and large potted plants (–$0.006/SFW). Sensitivity analysis showed that changes of cost variables generally did not affect the profitability rankings for alternative ZRS systems. Except for labor costs, as the hourly wage increased, the Dutch movable tray system gained advantages for small potted plant and large potted plant production. Among selected costs variables, changes in labor costs and tax rate had the highest impact on the profitability of small potted plant production, and changes in labor costs and initial investment costs had the highest impact on the profitability of large potted plant and bedding crop flat production.