Pricing Powdery-mildew-resistant Dogwoods: Simulated Impacts on the Nursery-industry Supply Chain

Abstract

<jats:p>The University of Tennessee developed a flowering dogwood tree (<jats:italic>Cornus florida</jats:italic>) that is resistant to powdery mildew (<jats:italic>Microspaera pulchra</jats:italic>). A simulated cooperative game was created to estimate a university fee and predict the behavior of nursery growers and nursery product retailers. The simulation suggests a university fee of $3.51, leading to an average retail price premium for the resistant tree of $10.41. At this price level the simulation predicts that 62 percent of all retail dogwood trees sold would be powdery mildew resistant. Based on 1998 sales of 1.475 million dogwood trees nationwide, 914,500 were predicted to be the powdery mildew resistant varieties, resulting in $3.2 million in revenue for the university. Given this level of sales and markup pricing, the cost of the trees will rise in subsequent stages of the distribution channel, and revenues will increase as well. The simulation suggests nursery revenue will increase by nearly $4 million and costs by $3.2 million, resulting in a net nursery gain of $0.8 million. Similar computations for the retail level are $9.5 million in revenue and a net increase of $5.5 million.</jats:p>

Broad-sense heritability and genetic gain for powdery mildew resistance in multiple pseudo-F2 populations of flowering dogwoods (Cornus florida L.)

“…However, most of the commercially available dogwood cultivars are susceptible to powdery mildew with an exception of a few that are resistant. It is estimated that growers can save approximately $0.148 per tree and $593 per acre by planting powdery mildew resistant dogwood cultivars that do not require routine fungicide applications (Gardner et al, 2004;United States Department of Agriculture, 2002). Furthermore, a survey has shown that consumers are willing to pay $13.35 more for powdery mildew resistant dogwood cultivars than the susceptible cultivars (Gardner et al, 2004).…”

“…It is estimated that growers can save approximately $0.148 per tree and $593 per acre by planting powdery mildew resistant dogwood cultivars that do not require routine fungicide applications (Gardner et al, 2004;United States Department of Agriculture, 2002). Furthermore, a survey has shown that consumers are willing to pay $13.35 more for powdery mildew resistant dogwood cultivars than the susceptible cultivars (Gardner et al, 2004). Unfortunately, the few powdery mildew resistant cultivars that are available commercially including 'Cherokee Brave' (Hagan et al, 1998;Mmbaga and Sauve, 2004;Windham et al, 1998), 'Jean's Appalachian Snow', 'Karen's Appalachian Blush', and 'Kay's Appalachian Mist' (Windham et al, 2003) are not resistant across multiple environments and their resistance has not been stable over time (Mmbaga and Sauve, 2004).…”