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3 Economic Analysis Using an Enterprise Budget A substantial investment in capital and management resources is necessary to grow crops in a greenhouse environment. Profitability can be addressed through an enterprise budget. ―Enterprise budgets represent estimates of receipts (income), costs, and profits associated with the production of agricultural products‖ (AGRALT 94, p.1). Costs are divided into variable and fixed costs. Variable costs are production costs that only occur if the production is started. Fixed costs occur whether or not a production is started. The enterprise budget in this paper is based on a lettuce-only production and shows how an optimal lettuce production system contributes to the profit. The enterprise budget model from SMITH et.al. 07 is used as a basic model and modified based on the construction and operating costs accrued at the CHSR greenhouse facility. The applied model considers an optimized lettuce-only production. It does not analyze the current production layout at the resort. These modifications and adjustments make the model more applicable for rural communities. 3.1 Capital Costs The 60ft x 72ft greenhouse can be purchased as a kit1 for $18,355 plus shipping. The kit contains a frame, ventilation system, sheeting, double layered roof and end walls (POLYTEX 07). The twin walls allow for air to be blown between the layers for better insulation than a single layer construction. The floor heating system, water tank and the concrete slab are not included in the kit and get priced separately, as does the electric installation. These additional fixed costs total $17,590. This includes the white floor paint that allows for maximum light reflection. The hydroponic equipment and environment controller cost $30,000. Costs for buying property, necessary licenses, construction labor and a packaging plant vary throughout different projects. The model in this study does not include costs to purchase property or licenses. An on site warehouse and packaging plant, which would be necessary in an optimal production layout, is estimated at $16,600. Labor and equipment costs to erect the greenhouse structure are estimated at $13,000. 1 The kit consists of two 30ft x 72ft greenhouses. 5PDF Image | ECONOMICS OF GREENHOUSE PRODUCTION IN ALASKA
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