Enterprise Budget for Blueberries Released

A 20-acre conventional blueberry farm will spend $24,186 an acre before the operation reaches full bearing potential. And in that seventh year of production, at today’s prices, the operation will see per-acre net returns of under $850.

Conversely, an organic blueberry farm of the same size will have spent $25,629 per acre to bring a farm to full bearing potential, but will see net returns of $10,551 per acre.

That’s according to the latest enterprise budget for blueberries. Compiled by Oregon State University’s College of Agricultural Sciences, it’s the first for the crop since 2011.

Released in March, the enterprise budget was co-authored by Scout Sutton, an agricultural business management research student, and OSU Agricultural Economist James Sterns, a professor in the Department of Applied Economics.

Sterns said low prices that have beset the industry in recent years was a big reason why net returns were relatively low in the conventional operation’s enterprise budget.

“If there is one thing that jumps out when you do an enterprise budget, it is that the price that you are getting for your product can really drive returns,” Sterns said. “If you got the blueberry price up a little bit in the conventional, you are going to get much more positive results.”

Conversely, Sterns said, if the premium being paid for organic blueberries were to slip, that too would bring the net returns of the two production systems more in line.

Sterns added that an enterprise budget is based on a hypothetical farm and not true to any individual producer. “Every producer that looks at this enterprise budget needs to modify it to their specific situation,” he said.

As in the 2011 enterprise budget, OSU economists used 20-acres as the standard size for a blueberry farm, despite the increase in large-acreage blueberry operations in Oregon since then.

“There were a lot of changes between 2011 and 2019,” Sterns said, “but we felt like a 20-acre farm was reasonable. There is such a huge distribution of sizes. You have a few big players and a lot of smaller players. There are actually a lot of people who have 5 and 10 acres out there.

“We used 20 acres in 2011 and that seemed to stand the test of time, and we thought that was a reasonable assumption to move forward with in 2019, knowing full well that that number may not be the best number for all growers,” Sterns said.

One difference between the 2011 and 2019 enterprise budgets is the latest iteration includes a section on compliance. Sterns said he and Sutton decided to add the section after floating a draft by producers. “We came back from those conversations realizing that we need to add something on compliance,” he said. “That is something that has become important for producers of all sizes.”

The compliance section includes costs of conducting everything from regulatory trainings for food safety to the costs of meeting requirements of private, third-party certification programs.

“Compliance costs have really ballooned,” Sterns said, “and really are something you can’t ignore and that you need to include as you think about, do I want to go out and establish a blueberry operation.”

Sterns said he and Sutton derived at figures for prices, acreages and pounds of production from analyzing reports of the Oregon Blueberry Commission and the USDA’s National Agricultural Statistics Service and from talking to growers and others in the industry.

Among the many changes that have occurred since the last OSU enterprise budget for blueberries is a dramatic increase in production acreage. Just between 2011 and 2017, harvested blueberry acreage increased nearly 50 percent, going from just under 8,000 harvested acres in 2011 to 11,700 acres in 2017.

In the budget’s introduction, the authors noted that in the last 25 years, blueberry acreage in Oregon has increased 500 percent, going from 1,950 acres in 1995 to 11,700 in 2017.

To access an online version of the budget, go to: https://appliedecon.oregonstate.edu/oaeb