PROJECTED COSTS FOR SELECTED LOUISIANA VEGETABLE CROPS - 1997 SEASON

in Louisiana (Bracy et al.; Parish et al.). However, these technologies and yields have not yet been
tested over a period of years under Louisiana farming conditions. This set of Extension budgets is
identified through appropriate title description.

While the adoption of advanced technology as presented in these Extension budgets offers
higher expected yields and returns, the investment introduces additional financial risk and may require
greater marketing effort and skills.

Labor Charge and Availability for Vegetable Production

To reflect the recently enacted increase in the minimum wage, and anticipated increases and
wage rate increases in general among farm workers, hourly labor has been charged at $7.50. This
is an increase from last year when operator and skilled hired labor was charged at $6.00 per hour, and
other hired labor, including some harvest labor, was charged at $5.00. These charges also loosely
account for social security and workman's compensation insurance expenses. Crop harvest
operations are charged as piecework when that is the typical industry practice.

Budget Description

These budgets may be grouped into the following categories:

1) Market Channel - fresh and processing markets.

2) Seasonal - spring and fall cabbage for fresh market.

3) Machinery size - one-row, four-row, and six-row equipment.

(4) Technology level - Extension budgets usually assume technology that exceeds the
level typically found on Louisiana farms.

Productive inputs are summarized under direct and fixed expense headings. For each crop,
an “estimated operation costs per acre” table details the sequence of operations; operating inputs
including machinery, labor and material; total cost for each input; and total specified expenses. A
second table provides a summary of estimated costs per acre by major input headings, and summed
as total direct expenses and total fixed expenses. In a third table, alternative yields and prices above
and below a base level are used to illustrate the impact of price and yield levels on returns above total
direct expenses. The quantity of harvest labor and packing supplies included varies with level of
output.

A summary of base prices and yields, direct and total expenses, and returns above total direct
expenses is presented in Table 1. Base prices for the state are generally those reported by the
Louisiana Cooperative Extension Service in its annual overview of the state’s agriculture.

Cautions Regarding Risk in Marketing and Producing Vegetables

Vegetable yields and fresh market prices may vary widely from year to year. As noted above,
many vegetable budgets assume that produce will be sold fresh to consumers or to wholesalers who
deal with fresh produce. A fresh market oriented producer can expect low price in years when weather
is favorable and/or production expands for other reasons, because the local market is particularly

H-2

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