Economics of fumigation in tomato production: the impact of methyl bromide phase-out on the Florida tomato industry

Abstract

The Florida tomato industry is facing challenges of increased production costs and decreased yields resulting from the methyl bromide (MBr) phase-out under the Montreal Protocol for environmental concerns. MBr and several accepted alternative soil fumigant systems are analyzed in this study from an economic perspective. This article focuses on identifying optimal fumigant systems by analyzing the cost effectiveness and economic risk associated with MBr and several other commercially available soil fumigant systems using data collected from scientific field trials. The results obtained show that a 67:33 formulation of MBr: chloropicrin is the most cost-effective treatment, and no alternative fumigant systems investigated can substitute MBr cost-effectively in Florida tomato production. The analysis indicated that switching from MBr (67:33) to the new industry standard PicChlor 60 approximately resulted in a loss of $3,569 per acre in gross revenue and $1,656 per acre in profit using market prices in the 2013/14 season. Higher market prices would further increase the loss.

Weather Uncertainty and Efficacy of Fumigation in Tomato Production

“…MBr phase-out has caused broad technological shocks [11], which, together with intense competition from Mexico [18,[20][21][22] and labor shortages [23][24][25], has significantly impacted the U.S. tomato industry. Several alternative fumigants have reached the market which include Pic, DMDS, 1,3-D and Kpam.…”

“…The expected utility method was used, which incorporates risk factors to explicitly account for the variation of net profits of treatments. Specifically, the power utility function, which is the most widely used utility function in empirical analysis [11], was used to evaluate the treatment under a certain weather condition, that is,…”

“…where E (•) is the expectation operator. Following Cao et al [11], an average tomato grower in Florida is assumed to have 28 ha land and $3,420,056 farm equity (W 0 ). The first step is to calculate the average expected utility of fumigation treatments with r = 2 under weather conditions during the trial period (2008-2011), which will demonstrate treatment ranking with limited weather variability observed over 2008-2011.…”

“…An economic evaluation of fumigants based on limited-year trials is not reliable because fumigation efficacy varies over time. Several studies have examined economic effects of fumigant alternatives on vegetable production in the U.S. using partial budgeting analysis [8,9] or stochastic dominance analysis [10,11]. The recommended fumigant alternatives in these studies are not necessarily economically sustainable or viable given that experiments were only conducted under fixed or limited variation in weather conditions.…”

Constructing a Southwest Florida Tomato Enterprise Budget

“…Per-acre yield has been relatively steady over the past three years, but a record high price of $18.99 per carton resulted in a 27 percent increase in total value from 2017/18 to 2018/19. Yield per acre (25-pound cartons) averaged 1,343 cartons per acre from 2002/03 to 2013/14, but most noticeable is the decline since 2006/07 (Figure 1), thought to be due to methyl bromide being phased out of use at that time (Cao et al 2019;Wu et al 2019…”