Economic Feasibility of Table Grape Production in Kentucky
The local foods movement and alternatives to traditional agriculture are gaining considerable interest, not only in Kentucky, but throughout the country. This research provides information that may aid farmers in the decision to invest or not in the alternative agricultural enterprise of viticulture. The primary objective of the research was to determine the expected profitability for a 1-acre table grape vineyard in Kentucky. Data on production relationships, costs, and returns came from the Western Kentucky University demonstration vineyard, published enterprise budgets, and market observations. Annual pro-forma budgets were estimated for a 20-year planning horizon. It was assumed that the vineyard would not yield until the third year and that full production would begin in the fourth year and continues through the 20th year. It was further assumed that the farmer would market production via local farmers’ markets, school districts, and wholesale markets. Two pre-tax net present values were estimated using a 5% discount rate. The first assumed no compensation to family labor, which indicated a break-even point in the 4th year, a benefit-cost ratio of 2.39, and net present value of $91,059. The second analysis assumed compensation for family labor and indicated a break-even point in the 6th year, a benefit-cost ratio of 1.54, and a net present value of $54,724. Excluding taxation, the results indicate that table grape production in Kentucky is potentially economically viable.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.saea.org/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:saea13:143084. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.