Masters Theses

Date of Award

12-1977

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

John R. Brooker

Committee Members

Tom Klindt, Billy Trevena

Abstract

The purpose of this study was to evaluate the potential of commercial vegetable production in East Tennessee. Specific objectives were; 1) to develop input-output coefficients, potential volume and harvest dates for vegetable crops which can be grown in Claibome County, 2) to develop Investment and operating costs and to establish profitability criteria for technically feasible single product and multiproduct packinghouses for suitable vegetables outlined in objective 1, and 3) to evaluate the market potentials for the vegetables used in the packinghouse feasibility models outlined in objective 2. Enterprise budgets and harvest dates were developed synthetically for six vegetables which 1) could be processed in a packinghouse operation, 2) were suited physically to the study area and 3) were familiar to the farmers in the area. From these six vegetables, tomatoes, bell peppers, winter squash, and cabbage were selected because of 1) the potentially high net returns they could provide the farmer and 2) the advantageous product mix which could be channeled into a packinghouse operation. Packinghouse budgets were developed for the final four vegetables listed above by updating budgets originally developed in 1968. Capital values were calculated and then compared to initial investments of various single product and multiproduct packinghouse combinations to determine profitability. Packinghouses found to be profitable were then evaluated with the potential vegetable production in the study area taken into consideration. The goal, here, was to find the smallest profitable packinghouse which the vegetable production of the region could realistically support. The smallest profitable single product tomato packinghouse examined required 32 acres of tomatoes. The smallest profitable two product—tomato and bell pepper—packinghouse required 32 acres of tomatoes and 31.3 acres of bell peppers. The smallest profitable three product—tomato, bell pepper and winter squash—packinghouse combination required 32 acres of tomatoes, 15.7 acres of bell peppers and 27.3 acres of winter squash. Market potential for tomatoes and bell peppers was first examined to determine if the volume of vegetables handled by the smallest profitable packinghouse models would affect the price of these products in the major markets. The volume handled was found to be insignificant and it was determined that these packinghouse models face a perfectly elastic demand function. Second, tomato and bell pepper unload data were analyzed to partially identify Tennessee's competitive position in regard to any possible transportation cost advantage held by Tennessee. The potential for increasing Tennessee's share of the tomato market is substantial and was found to be greater than the potential for marketing bell peppers.

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