Blueberry Cost, Returns, & Budgets

Summary

Blueberries offer good long-term profitability potential for Kentucky producers willing to invest the time, capital and management necessary for establishing productive blueberry acreage. Blueberries have the advantage of having lower establishment costs than other berry crops, especially those requiring trellis systems for production. Once established, properly managed blueberry bushes can produce for many years.

Market Overview

Berries have been a superstar of the U.S. produce industry since the 1990s, and U.S. demand for all berries continues to be strong. Many Kentucky direct farm marketers have realized the potential for marketing high-value crops like berries at farmers markets, on-farm markets and direct to restaurants and groceries.

There is also potential for Kentucky producers to tap into a wholesale market window for blueberries, with some premium fresh prices possible between the market window falling in between fresh production from Florida (April–May) and Michigan (late June–July). Kentucky blueberry producers in southern and western Kentucky, where blueberry harvest can start at the first of June, could potentially sell into this wholesale market window.

Blueberries can also be easily frozen, and there have been some small-scale efforts in the state to explore local and regional markets for frozen product.

Blueberries are popular at Kentucky farmers markets, where prices around $4 per pint were reported through 2018. (These are average prices, and local markets may vary considerably.) Farmers markets and on-farm stands have been profitable markets in many locations, especially near population centers.

There is good potential for Kentucky producers wishing to wholesale to regional grocery chains, institutions and restaurants. Producers located near Kentucky’s produce auctions have also investigated this market channel for blueberries. A conservative retail/wholesale price estimate is reflected in the blueberry profitability estimates in Table 1.

Table 1. Estimated Blueberry Profitability for 1 Acre

(8,500 pints in full production year)

Kentucky producers already engaging in on-farm marketing, such as orchards and roadside stands, have found Pick Your Own (PYO) blueberries to be a complementary, profitable crop to add to their existing market basket of crops. Blueberries can help on-farm marketers add an earlier “feature” crop, before brambles and tree fruits. Though PYO eliminates much of the harvest labor and expenses associated with harvest, marketers may also incur more risk due to on-farm liability concerns.

Table 2. Retail/Wholesale Blueberry Profitability

(Return to owner land, capital, and management — full production year, USD per acre)

Table 3A. Pick Your Own Profitability (Retail Price = $1.75 per Pint)

(80% PYO, 20% retail; USD per acre)

 

Table 3B. Pick Your Own Profitability (Retail Price = $2.25 per Pint)

(80% PYO, 20% retail; USD per acre)

Budget Assumptions

Pre-Planting:
Standard cultural practices for cover crop establishment are followed. Assumes 650 pounds of sulfur is applied to lower soil pH.

Planting:
University of Kentucky recommended cultural practices (fertilization, pesticides, cultivation, etc.) are followed. Labor estimates were developed using data from current growers.

Equipment costs (irrigation and machinery) are estimated using 2008 university standards and 2018 fuel costs.

Plant population is assumed at 605 plants per acre. This population is well-suited for PYO production; wholesale-focused operations may prefer higher densities.

Sawdust mulch is applied during planting year, first fruiting year, and every other year thereafter.

A trickle irrigation system is assumed installed during planting year. Irrigation costs vary depending on system and water source.

Pesticides:
Assumes two fungicide applications annually for two years (phyophthora), and insecticide applications for major pests such as plum curculio.

Additional Cost Assumptions

Harvest:
Berries are sorted into 1-pint plastic clamshells. A 10% marketing cost of gross sales is assumed. Refrigeration costs are shared across two acres.

Labor:

• Hired labor: $12.50/hour
• Operator labor: $15/hour

Fixed Costs – Pest Control:

• $220 annually for bird/wildlife control

Other Fixed Costs:

• Refrigeration: $550 annually
• Irrigation: $258 annually

Machinery costs calculated using Iowa State machinery cost generator.

Suggested Citation

Ernst, M. (2019). 2019 Blueberry Cost and Return Estimates (CCD-BG-2). Lexington, KY: Center for Crop Diversification, University of Kentucky College of Agriculture, Food and Environment.

 

Updated April 2019
CCD-BG-3
Author: Matt Ernst

Overview

This budget presents estimated costs and returns for one acre of highbush blueberries in Kentucky using a pick-your-own (PYO) marketing model. Budgets are organized by production stage from establishment through full production. Totals may vary slightly due to rounding of labor hours.

This budget shows estimated costs and returns per acre. Costs are divided into variable (annual operating) and fixed (long-term investment) categories. Returns reflect a mix of pick-your-own and wholesale/retail marketing.

Soil Buildup Year Summary

This year represents initial site preparation and soil improvement with no revenue and a net negative return.

Production Costs (Variable)

Total production cost: $715.67
Return above variable costs: ($715.67)

Fixed Costs

Total fixed cost: $31.47
Total costs: $747.14

Labor and Returns

Planting Year Summary

This year reflects major establishment investments, including plants, irrigation, and labor, resulting in continued negative returns.

Production Costs (Variable)

Total production cost: $4,147.95
Return above variable costs: ($4,147.95)

Fixed Costs

Total fixed cost: $305.40
Total costs: $4,453.35

Labor and Returns

Year After Planting Summary

This year reflects continued maintenance costs with no significant production revenue.

Production Costs (Variable)

Total production cost: $1,132.28
Return above variable costs: ($1,132.28)

Fixed Costs

Total fixed cost: $284.76
Total costs: $1,417.05

Labor and Returns

First Production Year Summary

Initial production begins, but total costs still exceed returns.

Gross Returns

Total gross returns: $1,650.00

Production Costs (Variable)

Total production cost: $2,179.96
Return above preharvest variable costs: ($529.96)

Fixed Costs

Total fixed cost: $307.52
Total preharvest costs: $2,487.48

Harvest and Marketing

Total harvest and marketing variable costs: $295.00
Total harvest costs: $295.00
Total costs: $2,782.48

Labor and Returns

Second Production Year Summary

Production increases significantly, and positive returns begin.

Gross Returns

Total gross returns: $4,950.00

Production Costs (Variable)

Total production cost: $1,429.00
Return above preharvest variable costs: $3,521.00

Fixed Costs

Total fixed cost: $303.09
Total preharvest costs: $1,732.10

Harvest and Marketing

Total harvest and marketing variable costs: $885.00
Total harvest costs: $885.00
Total costs: $2,617.10

Labor and Returns

Third Production Year Summary

Production continues to increase, generating strong positive returns.

Gross Returns

Total gross returns: $9,900.00

Production Costs (Variable)

Total production cost: $1,702.45
Return above preharvest variable costs: $8,197.55

Fixed Costs

Total fixed cost: $307.52
Total preharvest costs: $2,009.97

Harvest and Marketing

Total harvest and marketing variable costs: $1,806.60
Total harvest costs: $2,356.60
Total costs: $4,366.57

Labor and Returns

Full Production Year Summary

Full production reflects mature yields and strong positive returns.

Gross Returns

Total gross returns: $14,025.00

Production Costs (Variable)

Total production cost: $1,740.15
Return above preharvest variable costs: $12,284.85

Fixed Costs

Total fixed cost: $307.52
Total preharvest costs: $2,047.67

Harvest and Marketing

Total harvest and marketing variable costs: $2,544.10
Total harvest costs: $3,094.10
Total costs: $5,141.77

Labor and Returns

Reviewed by

John Strang and Tim Woods, UK Extension Specialists

Suggested Citation

Ernst, M. (2019). Highbush Blueberries, Kentucky, Pick Your Own Marketing. CCD-BG-3. Lexington, KY: Center for Crop Diversification, University of Kentucky College of Agriculture, Food and Environment.

Updated April 2019
CCD-BG-4
Author: Matt Ernst

Overview

This budget presents estimated costs and returns for one acre of highbush blueberries in Kentucky using a wholesale/retail marketing model. Budgets are organized by production stage from establishment through full production. Totals may vary slightly due to rounding of labor hours.

This budget shows estimated costs and returns per acre. Costs are divided into variable (annual operating) and fixed (long-term investment) categories. Returns reflect wholesale/retail sales with operator harvest.

Soil Buildup Year Summary

This year represents initial site preparation and soil improvement with no revenue and a net negative return.

Production Costs (Variable)

Item	Quantity	Unit	Cost per Unit	Total
Soil test	2	assays	$15.00	$30.00
Sulfur	650	pounds	$0.35	$227.50
Herbicide	2	quarts	$9.00	$18.00
Grass seed	10	lbs	$2.35	$23.50
Fertilizer (10-10-10)	800	lbs	$0.45	$360.00
Variable machinery costs	1	acre	—	$35.83
Interest	—	—	—	$20.84

Total production cost: $715.67
Return above variable costs: ($715.67)

Fixed Costs

Item	Quantity	Unit	Total
Fixed machinery and equipment costs	1	acre	$31.47

Total fixed cost: $31.47
Total costs: $747.14

Labor and Returns

Category	Value
Return to operator labor, land, capital, and management	($747.14)
Operator and unpaid family labor (1.66 hrs @ $15.00)	$24.90
Total operator and unpaid family labor	$24.90
Return to land, capital, and management	($772.04)

Planting Year Summary

This year reflects major establishment investments, including plants, irrigation, and labor, resulting in continued negative returns.

Production Costs (Variable)

Item	Quantity	Unit	Cost per Unit	Total
Herbicide (burndown)	1	quarts	$9.00	$9.00
Plants	605	plants	$3.25	$1,966.25
Peat moss	14	bales	$25.00	$350.00
Fertilizer	61	lbs	$0.60	$36.60
Mulch (sawdust)	1	acre	$250.00	$250.00
Herbicide (planting)	1	lbs	$135.00	$135.00
Herbicide (midseason)	2.5	pints	$11.13	$27.83
Insecticide	2	lbs	$6.60	$13.19
Seed grass	10	lbs	$2.35	$23.50
Fall herbicide	8	lbs	$14.00	$112.00
Hired labor	58	hours	$12.50	$725.00
Irrigation	6	months	$41.33	$248.00
Variable machinery costs	1	acre	$130.76	$130.76
Interest	1	acre	$120.81	$120.81

Total production cost: $4,147.95
Return above variable costs: ($4,147.95)

Fixed Costs

Item	Quantity	Unit	Total
Fixed machinery costs	1	acre	$48.26
Fixed costs on irrigation system	1	year	$257.14

Total fixed cost: $305.40
Total costs: $4,453.35

Labor and Returns

Category	Value
Return to operator labor, land, capital, and management	($4,453.35)
Operator and unpaid family labor (10.63 hrs @ $15.00)	$159.45
Total operator and unpaid family labor	$159.45
Return to land, capital, and management	($4,612.80)

Year After Planting Summary

This year reflects continued maintenance costs with no significant production revenue.

Production Costs (Variable)

Item	Quantity	Unit	Cost per Unit	Total
Fungicide	5	gallons	$15.18	$75.90
Fungicide	10	gallons	$33.00	$330.00
Plants (replantings)	15	plants	$3.25	$48.75
Fertilizer	122	lbs	$0.60	$73.20
Herbicide	16	lbs	$14.00	$224.00
Insecticide	2	lbs	$6.60	$13.19
Irrigation	6	months	$41.33	$248.00
Variable machinery costs	1	acre	$23.76	$23.76
Hired labor	5	hours	$12.50	$62.50
Interest	1	acre	$32.98	$32.98

Total production cost: $1,132.28
Return above variable costs: ($1,132.28)

Fixed Costs

Item	Quantity	Unit	Total
Fixed machinery costs	1	acre	$27.62
Fixed costs on irrigation system	1	year	$257.14

Total fixed cost: $284.76
Total costs: $1,417.05

Labor and Returns

Category	Value
Return to operator labor, land, capital, and management	($1,417.05)
Operator and unpaid family labor (10.35 hrs @ $15.00)	$155.25
Total operator and unpaid family labor	$155.25
Return to land, capital, and management	($1,572.30)

First Production Year Summary

Initial production begins, but total costs still exceed returns.

Gross Returns

Product	Quantity	Unit	Price	Total
Blueberries	1000	pts	$2.25	$2,250.00

Total gross returns: $2,250.00

Production Costs (Variable)

Item	Total
Fungicide	$503.38
Fungicide	—
Fertilizer (ammonium sulfate)	$115.80
Herbicide	$187.00
Insecticide	$23.26
Irrigation	$248.00
Mulch	$250.00
Pest control	$220.00
Pollination	$100.00
Variable machinery costs	$44.02
Hired labor	$425.00
Interest	$63.49

Total production cost: $2,179.96
Return above preharvest variable costs: $70.04

Fixed Costs

Item	Total
Fixed machinery costs	$50.38
Fixed costs on irrigation system	$257.14

Total fixed cost: $307.52
Total preharvest costs: $2,487.48

Harvest and Marketing

Item	Total
Hired labor	$500.00
Plastic clamshells	$150.00
Marketing costs (10% gross)	$225.00
Refrigeration costs	$36.60
Fixed cost of refrigeration system	$550.00

Total harvest and marketing variable costs: $911.60
Total harvest costs: $1,461.60
Total costs: $3,949.08

Labor and Returns

Category	Value
Operator and unpaid family labor (18.70 hrs @ $15.00)	$280.50
Return to land, capital, and management	($1,699.08)

Second Production Year Summary

Production increases significantly, and positive returns begin.

Gross Returns

Product	Quantity	Unit	Price	Total
Blueberries	3000	pts	$2.25	$6,750.00

Total gross returns: $6,750.00

Production Costs (Variable)

Item	Total
Fungicide	$173.38
Fertilizer (ammonium sulfate)	$152.40
Herbicide	$187.00
Insecticide	$41.46
Irrigation	$248.00
Pest control	$220.00
Pollination	$100.00
Variable machinery costs	$40.14
Hired labor	$225.00
Interest	$41.62

Total production cost: $1,429.00
Return above preharvest variable costs: $5,321.00

Fixed Costs

Item	Total
Fixed machinery costs	$45.95
Fixed costs on irrigation system	$257.14

Total fixed cost: $303.09
Total preharvest costs: $1,732.10

Harvest and Marketing

Item	Total
Hired labor	$1,500.00
Plastic clamshells	$450.00
Marketing costs (10% gross)	$675.00
Refrigeration costs	$36.60
Fixed cost of refrigeration system	$550.00

Total harvest and marketing variable costs: $2,661.60
Total harvest costs: $3,211.60
Total costs: $4,943.70

Labor and Returns

Category	Value
Operator and unpaid family labor (19.95 hrs @ $15.00)	$299.25
Return to land, capital, and management	$1,507.05

Third Production Year Summary

Production continues to increase, generating strong positive returns.

Gross Returns

Product	Quantity	Unit	Price	Total
Blueberries	6000	pts	$2.25	$13,500.00

Total gross returns: $13,500.00

Production Costs (Variable)

Item	Total
Fungicide	$173.38
Fertilizer	$189.00
Herbicide	$187.00
Insecticide	$41.46
Irrigation	$248.00
Mulch	$125.00
Pest control	$220.00
Pollination	$100.00
Variable machinery costs	$44.02
Hired labor	$325.00
Interest	$49.59

Total production cost: $1,702.45
Return above preharvest variable costs: $11,797.55

Fixed Costs

Item	Total
Fixed machinery costs	$50.38
Fixed costs on irrigation system	$257.14

Total fixed cost: $307.52
Total preharvest costs: $2,009.97

Harvest and Marketing

Item	Total
Hired labor	$3,000.00
Plastic clamshells	$900.00
Marketing costs (10% gross)	$1,350.00
Refrigeration costs	$36.60
Fixed cost of refrigeration system	$550.00

Total harvest and marketing variable costs: $5,286.60
Total harvest costs: $5,836.60
Total costs: $7,846.57

Labor and Returns

Category	Value
Operator and unpaid family labor (19.95 hrs @ $15.00)	$299.25
Return to land, capital, and management	$5,354.18

Full Production Year Summary

Full production reflects mature yields and strong positive returns.

Gross Returns

Product	Quantity	Unit	Price	Total
Blueberries	8500	pts	$2.25	$19,125.00

Total gross returns: $19,125.00

Production Costs (Variable)

Item	Total
Fungicide	$173.38
Fertilizer	$225.60
Herbicide	$187.00
Insecticide	$41.46
Mulch	$125.00
Irrigation	$248.00
Pest control	$220.00
Pollination	$100.00
Variable machinery costs	$44.02
Hired labor	$325.00
Interest	$50.68

Total production cost: $1,740.15
Return above preharvest variable costs: $17,384.85

Fixed Costs

Item	Total
Fixed machinery costs	$50.38
Fixed costs on irrigation system	$257.14

Total fixed cost: $307.52
Total preharvest costs: $2,047.67

Harvest and Marketing

Item	Total
Hired labor	$4,250.00
Plastic clamshells	$1,275.00
Marketing costs (10% gross)	$1,912.50
Refrigeration costs	$36.60
Fixed cost of refrigeration system	$550.00

Total harvest and marketing variable costs: $7,474.10
Total harvest costs: $8,024.10
Total costs: $10,071.77

Labor and Returns

Category	Value
Operator and unpaid family labor (19.95 hrs @ $15.00)	$299.25
Return to land, capital, and management	$8,753.98

Reviewed by

John Strang and Tim Woods, UK Extension Specialists

Suggested Citation

Ernst, M. (2019). Highbush Blueberries, Kentucky, Wholesale/Retail Marketing. CCD-BG-4. Lexington, KY: Center for Crop Diversification, University of Kentucky College of Agriculture, Food and Environment.