Abstract
Specialty crops are considered high-risk, high-reward, yet growers face differing, and relatively larger risk exposure when compared to traditional row crops. With traditional row crops, economies of scale and scope are key factors to increasing economic profitability. However, increasing economic profit for specialty crop operations present challenges which limit grower ability to easily take advantage of scale and scope economies. The authors discuss production, finance, regulatory, price, and human resource risks unique to U.S.-grown specialty crops. We apply our economic risk assessment framework to analyze U.S. edamame and present strategies to manage and mitigate risks faced by growers. We conclude that edamame may represent a profitable alternative crop in the U.S., and suggest future research topics are needed to optimize yields and meet market demand.
Highlights
Across the last two centuries, global farm operations have taken advantage of two economic principles—the economies of scale and scope
We present an application of our agricultural risk assessment framework to U.S edamame production
We present an economic risk assessment framework and an application to U.S edamame production
Summary
Across the last two centuries, global farm operations have taken advantage of two economic principles—the economies of scale and scope. Enterprise budgets provide growers with the ability to understand the opportunity cost of choosing to grow one crop relative to the best alternative use of available time and resources This type of tool is a powerful planning tool for growers interested in edamame as a potential crop in their operation, and may be adjusted to capture the specific farm characteristics (Morgan et al, 2016). Edamame market prices decrease at an increasing rate, and growers must decide to stop harvesting when the market price falls below their operational costs To mitigate this financial risk exposure, growers may stagger production and consider early varieties/plantings to take advantage of the higher early-season prices. Labor risk will continue to be a critical issue in U.S edamame production, as in all of specialty crop enterprises
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