Masters Theses

Date of Award

12-1985

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Merton B. Badenhop

Committee Members

Luther Keller, John Day

Abstract

The primary objective of this research was to study the cost-price relationship of producing and marketing the red maple as a representative shade tree. Average production costs were estimated and compared with estimated average prices for 198A. A literature review was made to describe the economic issues of pricing in the nursery industry and also the results of past cost of production studies of ornamental species. A study was made of the growth requirements of the red maple. From interviews with nurserymen in Middle Tennessee, a production system was synthesized and modeled to grow red maples. Method 1 grew the trees from seed up to five years and harvested half of them selectively in each of the last two years. Method 2 grew the trees from seed up to six years and harvested about one-third of them selectively in each of the last three years. All the trees were balled and burlapped at harvest. The costs of production were estimated with an enterprise budget using a model small nursery. The nursery was assumed to have 50 acres and the capacity to grow the red maples and various other species of ornamentals on 40 acres of field space. The assumption was made that the model represented conditions of nurseries in Tennessee and USDA Climatic Zones 7 and 8 in 1984. The average cost of production for all the trees harvested from an acre was the lowest, and the average net returns per tree were the highest for Method 1, the shorter production system. Average prices per tree were estimated to be higher than the average cost per tree for all sizes of trees grown by either method. The difference between the average price per tree and the average cost per tree was the highest for the 10' - 12' trees grown by Method 2, and the lowest for the 12'- 14' trees grown by Method 2. The cost-price differential decreased for the larger trees due to higher harvest costs and to fewer trees remaining in the field. Limitations on the results of this study were recognized. The large amount of soil removed from a field with a balled and burlapped harvest represents a cost of production which was not accounted for. Variations in the number of trees selectively harvested from a field each year greatly affects the average cost per tree for each tree size. The model harvest schedule used in this study is just one of many possible systems. It is difficult to know how the assumptions of the model nursery and production system used in this study actually compare with the average for all small nurseries growing red maples in the South.

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