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3.3 Revenue and Total Profit The model assumes a conservative 32 day growing period. Assuming all available space was committed to the lettuce production operation, 148,100 plants per year could be harvested and sold locally, making long distance transportation unnecessary. This number already takes a 5% production loss into account. $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Price of lettuce in relationship to heating cost Price of lettuce ($) break even price of lettuce Figure 5: Price of Lettuce in Relationship to Heating Cost Figure 5 shows the relationship between cost of heat and the price of lettuce. The model assumes a price of $1.50 per gallon of heating oil. At this level the heating cost is $9.38 per MMBTU. The break even price to cover the total cost of production is $2.01. Lettuce production breaks even at $1.84 if heat is considered free. If the current price of heating oil were charged towards the greenhouse operation, the break even price would be $2.26. In general, a $0.50 price increase per gallon of heating fuel relates to a $0.05 price increase per head of lettuce with all other variables staying constant. 10 Cost of heat ($/MMBTU) $1.84 $1.95 $2.06 $2.18 $2.26 $2.34 $2.46 $2.57PDF Image | ECONOMICS OF GREENHOUSE PRODUCTION IN ALASKA
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