Transportation: Searching For Payback

Every now and then, the media will report that gas prices have dropped, but we’re all still remembering the good old days when you could get one gallon for less than $1. Search online, and you’ll find all kind of opinions on gas prices. Some media stories even try to convince us that high gas prices are good (because they spur online spending and ethanol research). But mostly, gas prices are a burden, especially for small businesses.

Our columnist Tim Higham shared some comparative equations in a recent edition of our Benchrunner e-newsletter. “A grower shipping 400 truck loads (averaging 1,250 miles per truck) each year is paying $83,333 more for fuel [compared to 1997 prices], just to ship the product,” he says This doesn’t include the increased costs you pay to your suppliers for their increased fuel costs.

A USA Today article reports 20 percent of 1,200 owners and managers of small businesses have delayed purchasing vehicles and other high-price items because gas costs more. And that USA Today article was written back in 2005, when the average fuel price was $2.27 per gallon, according to the Energy Information Administration (EIA), part of the U.S. Department of Energy. EIA expects the average for this summer to be $2.95. 

Finding Profit Elsewhere

So what are some options for squeezing extra money out of production to pay for that higher transportation? Check our our Payback Primer on page 49. Senior Staff Editor Laura Drotleff talked favorite pieces of equipment with growers, while I heard suppliers’ thoughts and advice on return on investment for big equipment purchases.

Return on investment is personal and philosophical. What’s your approach? Look for the newest machine with the most modern capabilities? The one that provides the quickest payback?

For some ideas come wintertime, build a virtual greenhouse with Agricultural Research Service’s Plant Pathologists Jim Locke, Jonathan Frantz and Charles Krause. Their Virtual Grower software, downloadable from http://www.ars.usda.gov/services/software/download.htm?softwareid=108, lets growers experiment with different heating types and their effects. You enter location, the size of your greenhouses, building materials and heating schedule, and then compare costs using several types of heating methods. The Virtual Grower is a work in progress, so check it out and send suggestions to the guys at ARS. Get some ideas for your operation and help out others.

Leave a Reply

More From Finance/Operations...
Biocontrols in a Greenhouse

May 22, 2018

Register Now for Award-Winning Online Greenhouse Growing Courses

Learn about production cost and profit, as well as the basic behind plant science, via two online classes being offered by the University of Florida.

Read More
Lean-Event-at-Smith-Gardens-feature

May 3, 2018

How Companies Can Work Together to Solve Problems and Become More Efficient

Pacific Northwest Lean consortiums show what growers can achieve when they work together to solve problems and improve labor efficiencies.

Read More
Greenhouse-Space-Tracking

April 27, 2018

Five Keys to Accurate Greenhouse Production Costing

There are several steps you can take to make sure you understand the true costs of running your business.

Read More
Latest Stories
Biocontrols in a Greenhouse

May 22, 2018

Register Now for Award-Winning Online Greenhouse Growin…

Learn about production cost and profit, as well as the basic behind plant science, via two online classes being offered by the University of Florida.

Read More
Lean-Event-at-Smith-Gardens-feature

May 3, 2018

How Companies Can Work Together to Solve Problems and B…

Pacific Northwest Lean consortiums show what growers can achieve when they work together to solve problems and improve labor efficiencies.

Read More
Greenhouse-Space-Tracking

April 27, 2018

Five Keys to Accurate Greenhouse Production Costing

There are several steps you can take to make sure you understand the true costs of running your business.

Read More

April 26, 2018

ForwardGro Advances Medical Cannabis in Maryland With F…

Building on roots in agriculture, this new medical cannabis facility continues to implement process improvement to provide quality medical-grade product for the patients who need it.

Read More

January 31, 2018

Online Education Empowers Employees to Succeed

See how UF/IFAS online certificate courses helped employees at Costa Farms get ahead with their jobs.

Read More
Money-feature

January 25, 2018

Why It’s Critical to Understand Your Real Costs o…

It’s time to stop guessing and start calculating when it comes to finding out what your real cost of production is, and pricing products accordingly.\

Read More
Tax-Money

January 23, 2018

Learn How the New Tax Law Will Affect Your Greenhouse B…

AmericanHort will co-host a free “Comprehending the New Tax Law: webinar on Wednesday, Jan. 31, with K-Coe Isom, a national tax consulting leader.

Read More

January 15, 2018

Missouri Greenhouse Grower John Tomasovic Dies

The patriarch of Tomasovic Greenhouses & Nursery, Inc. in Des Peres, MO, was a legend in the plant industry, and widely involved in many associations.

Read More

January 15, 2018

Perennials Icon Louis Stacy Dies

The founder of the former Stacy's Greenhouses in York, SC, passed away on Wednesday, January 10, 2018.

Read More
Charlie Hall Feature Image

January 9, 2018

AmericanHort Launches New Video Series on Profit Margin…

This week, AmericanHort is kicking off a four-part video series that offers perspectives on managing profit margins from AmericanHort’s Chief Economist, Dr. Charlie Hall.

Read More
Tax-Money

January 9, 2018

What You Need to Know About the New Tax Bill

The United Fresh Produce Association, which represents the needs and interests of fruit and vegetable growers, recently updated its members on how the recent passage of the Tax Cuts and Jobs Act might affect their businesses. Many of the insights provided by United Fresh also apply to greenhouse growers and nurseries.

Read More
Doug Cole, Owner of D.S. Cole Growers

January 4, 2018

D.S. Cole Growers Blazes Its Own Path to Growth

Known for its commitment to sustainability and innovation, this grower is one of the pioneering trailblazers changing the way horticulture does business.

Read More

December 31, 2017

Ag Exemption for New Trucking Regulation Still Under Re…

The Federal Motor Carrier Safety Administration’s trucking electronic logging device mandate, which took effect on December 18, includes an Hours of Service exemption that may or may not apply to greenhouses and nurseries.

Read More
Tillandsia Air Plants (Plantiflor)

December 15, 2017

Bonsall Nursery Devastated By California Wildfire

Rainforest Flora lost its main greenhouses and outdoor growing property in the Lilac Fire in San Diego.

Read More

December 9, 2017

Southern California Wildfires Narrowly Miss Most Grower…

Here’s an update on horticulture businesses in the areas affected by the California wildfires.

Read More

December 5, 2017

Skagit Horticulture Builds New, Inclusive Business With…

By merging two large-scale producers, Skagit Gardens and Northwest Horticulture, the new company has realized its strengths through focused divisions that emphasize efficiency and success.

Read More

December 4, 2017

Raker-Roberta’s Young Plants Debuts as Roberta’s Finali…

On December 1, Eric Wallien of Roberta’s Inc. in Waldron, IN, officially purchased C. Raker & Sons in Litchfield, MI. The new identity of the company is now Raker-Roberta’s Young Plants, according to a Dec. 1 letter to Raker’s customers, suppliers, and business partners from Vice President Susie Raker-Zimmerman. “There have been minimal changes in management and we will be providing the same products and services on which we have built our reputation in the industry,” Raker-Zimmerman said in the letter, which also announced the name change and new logo. The sale of C. Raker & Sons was announced in September . A series of events affecting Raker’s financial situation caused the need for the operation to find an alternate solution. Roberta’s had been a customer of Raker’s since 2011, and the fourth generation, family owned grower-retailer was a fan of Raker’s commitment to quality. The agreement to purchase C. […]

Read More

October 10, 2017

Sharpen Your Skills in Cost Management and Profitabilit…

The University of Florida is offering a new online course on costing and profitability. The course will take growers through the process of how to accurately evaluate cost of production, labor efficiency, pricing, and equipment investment decisions.

Read More