Report: Economics of greenhouse prod. (CA)

Alberta’s greenhouse crops industry ranks fourth in the country after Ontario, British Columbia and Quebec. In 2017, the size of Alberta’s industry under both glass and plastic was approximately 1.53 million square metres (153 hectares or 378 acres). Vegetables accounted for about 47 per cent of the greenhouse area (176.6 acres) followed by bedding plants, potted flowers and ornamentals at 40 per cent (152.9 acres) and the remaining 13 per cent or 48.5 acres constituted tree seedlings. Of the 176.6 acres for vegetables, 90 acres were cucumbers, 52.6 were tomatoes, 27 were peppers, five acres lettuce and the remaining two acres were eggplant and other crops.

There are about 230 greenhouse operations in Alberta. The industry supports over 2,000 full-time and over 2,500 part-time jobs. Approximately 99 per cent of the greenhouse area in Alberta is under commercial production, with the balance confined to institutions such as universities, research stations and colleges. Most of Alberta’s greenhouse operations are highly diversified and are equipped with the most modern equipment to achieve production efficiencies.

Greenhouse operators across the province were interviewed to obtain 2017 production costs and returns information on cucumbers, tomatoes, peppers, bedding plants/ornamentals and tree seedlings. In total, forty-seven (47) completed questionnaires covering a total production area of approximately 4,278,624 square feet or 98 acres was surveyed. The information collected was analyzed and individual reports were mailed to study participants for their review and feedback before finalizing the group averages contained in this report. To preserve confidentiality, group averages were only developed for greenhouse crops with three or more participants. This report details the blended or weighted average data from growers who provided their information.

The results show that average investment cost per square metre ranged from $112.75 for cucumber to $321.01 for bedding plants/ornamentals producing greenhouses in Alberta. The total production costs ranged from a low of $71.55 per square metre for tree seedlings to $139.15 per square metre for bedding plants/ornamentals. The most significant cost items for the 2017 crop were labour (hired and operator), material inputs (growing media, seed/cuttings, fertilizer and chemicals, trays, boxes and other packaging materials), marketing and natural gas.

Estimated gross margins were positive for all crops except peppers, which had a negative margin of -$5.03 per square metre. Greenhouses producing bedding plants/ornamentals showed the highest gross margin per square metre at $35.28 followed by tree seedlings at $23.84. Average returns to unpaid labour, investment and equity were positive for all crops except peppers. The results show that margins have become slim for the majority of producers when compared with previous studies.

Based on the results of the 2017 study, the gross revenue generated by the provincial greenhouse industry in 2017 was estimated at approximately $179.9 million with an investment or total asset value of about $328.5 million. The report can assist growers in making profitable management decisions. In addition, the information in the report will serve as a guide to government when developing and evaluating programs and policies for industry. New producers can also use this information to increase their understanding of greenhouse production costs and returns.

Click here to read the full report.

02/21/2019 - Alberta Agriculture and Forestry, Government of Alberta

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