Greenhouse-grown Colored Peppers: A Profitable Alternative for Vegetable Production in Florida?

ADDITIONAL INDEX WORDS. Capsicum annuum, budget analysis, economics, imports, price, sensitivity analysis, soilless culture, return to capital and management, return on investment SUMMARY. The increase in U.S. demand for colored bell peppers (Capsicum annuum) has been satisfi ed with increased supplies from imports and increased domestic production. Greenhouse-grown peppers of red, orange, and yellow colors were imported during the period 1993–2002 at wholesale fruit market prices that were three to fi ve times greater than fi eld-grown fruits. With high market prices and a suitable environment for growing colored peppers under inexpensive greenhouse structures [<$40/m2 ($3.7/ft2)], up to 14 ha (34.6 acres) of greenhouses produced bell peppers in Florida in the year 2002. To estimate the profi tability of a bell pepper greenhouse enterprise, a budget analysis was used to calculate the returns to capital and management. Production costs of greenhouse-grown peppers were estimated assuming the use of current technology applied in commercial greenhouse crops in Florida and in experimental crops at the University of Florida. Production assumptions included a crop of nonpruned plants grown in soilless media in a highroof polyethylene-covered greenhouse [0.78 ha (1.927 acres)] located in north-central Florida. For a fruit yield of 13 kg·m–2 (2.7 lb/ft2), the total cost of production was $41.09/m2 ($3.82/ft2), the estimated return was $17.89/m2 ($1.66/ft2), and the return over investment was 17.1%. A sensitivity analysis indicated that fruit yields should be greater than 7.8 kg·m–2 (1.60 lb/ft2) in order to generate positive returns based on a season average wholesale fruit price of $5.29/kg ($2.40/lb). For this price, a range of possible fruit yields [5–17 kg·m–2 (1.0–3.5 lb/ft2)] led to returns ranging from –$9.52 to 30.84/m2 (–$0.88 to 2.87/ft2), respectively. The estimates indicate that production of greenhouse-grown peppers could represent a viable vegetable production alternative for Florida growers.