Ex ante Economic Evaluation of Technologies for Managing Postharvest Physiological Disorders: The Case of ‘Empire’ Apples in New York State

Abstract

Recently there has been much progress in the development of technologies that use biomarkers to detect and manage postharvest physiological disorders for apples in long-term storage. Such technologies have the capacity to alleviate fruit loss by allowing storage operators to more effectively manage the disorder by adjusting stock distribution. The technology may also reduce costs for storage materials and associated management activities. However, as is common for many new technologies that have not yet been adopted commercially in agriculture, the net economic value of the technology is not well understood and is difficult to assess ex ante. In horticultural markets that include quality (and price) differentiated products, technologies that affect grading are expected to impact revenues in nontrivial ways. Here we develop a framework to assess the likely range of economic implications associated with the adoption of the biomarker technology that allows a greater share of fruit to be marketed in a higher grade and may influence the costs of storing fruit. Results indicate that 10% increases in the share of higher quality fruit lead to increased profits of between 0.99% and 3%. A scenario that leads to a 10% increase in the share of fruit in higher grades and a 10% decrease in material costs for storage would increase profits by ≈4.4%. Our analysis and results are specific to the case of biomarker use to manage postharvest disorders for ‘Empire’ [Malus sylvestris (L.) Mill var. domestica Borkh.] apples, yet the framework can be used with cultivar-specific price and yield information to assess the ex ante economic implications of adopting the technology more generally.