The Most Profitable Liner Size?
Rising energy costs may have set a new standard for selecting the most cost effective liner size, according to research.
June 23, 2008
Should you purchase rooted cuttings in small, medium or large liners to grow on in finished containers? Our research to address this question is based on calibrachoa liners produced by eight commercial growers and research greenhouses in Colorado, Michigan, New Hampshire and New Jersey as part of the Young Plant Research Center program.
Mini liners (144-count or smaller) are now available with lower shipping costs and space requirements in propagation compared with a standard (84- or 105-count) liner. If your goal is to minimize initial plant material cost with good post-transplant performance, mini liners can be the answer. If you have a high shipping cost for bought-in liners or low overhead and/or heating costs during the transplant to finishing phase, this also favors small cell size. A four-week-old mini liner is likely to finish in a similar time as an 84-count liner of the same age, thereby providing cost savings. If liners are older than four weeks old, however, 84-count or larger liners may finish more quickly.
If you aim to shorten the time from transplant of the rooted cutting through to a finished flowering plant, use a large liner (50-count or larger). Large cell volume is less limiting on shoot growth, will root out quickly in the pot, and finish time can be reduced by two to three weeks compared with a standard liner. A 50- or 32-count liner is more expensive to ship and propagate (in time, space and media) than an 84-count liner, but can result in an extra turn of finished plants or the option of opening up a greenhouse later in the season.
High oil costs have heightened interest in fuel savings with larger liners. Is it worth paying more for a large liner than a standard liner? To answer this question, we ran an economic analysis. Our model could be manipulated to vary assumptions, but we will present one scenario here and you can adapt this approach to your greenhouse cost structure.
Heat use data were obtained for a 30-foot-wide x 100-foot-long x 12-foot-high double-polyethylene greenhouse located in several U.S. locations, with 70°F/65°F day/night, using a USDA greenhouse energy model(http://www.ars.usda.gov/Research/docs.htm).
Labor and overhead costs of 26 cents per square foot of bench space per week, not including heating fuel, were based on a financial survey of New York commercial greenhouses by Cornell University (http://hortmgt.aem.cornell.edu/programs/hortbusiness.htm) updated for inflation.
We further assumed a price for #2 heating oil of $2.43/gal, the average U.S. residential price from Oct. 2005 to March 2006, which may be reasonable for small finished-plant growers.
Figure 1 shows, for Columbus, Ohio, that the most costly heating months are December, January and February (white bars). Costs are expressed in square foot weeks (SFW) of floor space.
To scale up to an entire 30x100-foot greenhouse, the USDA energy model found that the January heating bill in Ohio would be around $1,770. To translate to a few other locations, the January bill would be $720 in Jacksonville, Fla., $1,238 in Greenville, S.C. and $2,225 in Grand Rapids, Mich. On average across several locations, the month of January consistently is around 1/5 to 1/4. February is a little less than 1/5 and March is around 1/8 of the annual heating cost.
Our research found that using large liners could reduce production time of calibrachoa in 4.5-inch pots or 12-inch hanging baskets by two to three weeks compared with standard-sized liners.
If an Ohio grower was able to open a greenhouse two weeks later by using a large liner in either January, February or March, the fuel saving per greenhouse would be around $800, $750 or $500 respectively. Therefore, moving the planting date later into the spring, after the coldest heating months, has a great benefit in fuel saving.
However, it is also important to remember that fuel is only a portion of the production cost. For example, research by Dr. Uva at Cornell University found that heating, electricity and gas in New York greenhouses during 2005 would account for around 10.5 percent, 2.4 percent and 0.8 percent of sales, respectively. In comparison, labor and other overhead costs accounted for 51 percent of sales. Therefore, later planting would provide labor and overhead savings, beyond just heating fuel (Figure 1, green bars).
Shorter production time is somewhat offset by the higher price of a large or pre-finished liner. Can fuel or other cost savings offset (and justify) a higher price for a large liner? The bottom line: if the savings in SFW costs to finish a large liner exceed the extra purchase price of that large liner, it is more profitable than a small liner.
Let's take the case where a large liner costs 20 cents more than a small liner. The SFW savings per finished pot would need to be more than 20 cents for a 4.5-inch pot (1 cutting/pot) or $1 for a 12-inch basket (5 cuttings/pot). If a 4.5-inch pot is spaced at 9x9 inches (0.63 square feet) and a 12-inch basket is spaced at 24x24 inches (4 square feet), a two-week saving in crop time equals 1.26 SFW or 8 SFW. The labor, overhead and fuel cost per SFW (from Figure 1) is 40 cents in January and February. Two weeks shorter crop time is worth 50 cents for the 4.5-inch pot or $3.20 for the 12-inch basket (1.26 or 8 x 40 cents). In both cases, it is easy to justify using a large liner.
Paul Fisher is an Associate Professor and Extension Specialist in the Dept. of Environmental Horticulture, University of Florida, P.O. Box 110670, Gainesville, FL 32611; e-mail Paul.Fisher@unh.edu; telephone 352-392-1831.
The author would like to thank the Young Plant Research Center's partners: Blackmore Co., Center Greenhouses, D.S. Cole Growers, Ellegaard, Four Star Greenhouses, Glass Corner Greenhouses, Greencare Fertilizers, Kube-Pak Corp., Lucas Greenhouses, Pleasant View Gardens, Premier Horticulture, Quality Analytical Laboratories, Sun Gro Horticulture and Welby Gardens.
Paul Fisher is an associate professor and Extension specialist in the Environmental Horticulture Department at the University of Florida. You can eMail him at firstname.lastname@example.org.