Economic Analysis of Codling Moth Control Alternatives in Apple Orchards

Transcription

1 Farm Business Management Reports EB1789 Economic Analysis of Codling Moth Control Alternatives in Apple Orchards E.R Williamson RJ. Folwell A. Knight J.F. Howell COOPERATlVE EXTENSION Washington State ~ University -

2 ECONOMIC ANALYSIS OF CODLING MOTH CONTROL ALTERNATIVFS IN APPLE ORCHARDS by E.R. Williamson, R.J. Folwell, A. Knight, and J.F. Howell 1 INTRODUCTION Codling moths are one of the most damaging of apple pests. Without proper control, codling moth larvae will bore through the skin of apples into the fruit. The entry sites of these larvae are called "codling moth stings." The presence of codling moth stings on an apple cause that fruit to be downgraded or culled when the apples are sorted. A high percentage of low grade or cull apples in a particular crop can cause economic hardships on apple producers as prices paid for these types of apples are significantly lower than prices paid for better grades. An uncontrolled population of codling moth can infest up to 90% of the fruit in a particular orchard. Given the economic consequences of codling moth infestations, it is beneficial for apple producers to implement control practices. The most popular form of codling moth control is the use of azinphosmethyl based insecticides such as Guthion or Azinphos applied as cover sprays. Often, other insecticides such as Phosphamidon are applied with azinphosmethyl cover sprays. As a firming agent, calcium chloride is often applied with a cover spray as well as some sort of buffering agent. While conventional means of control such as that described above provide effective control in most cases, there are disadvantages to these practices. Perhaps the most pressing reason that producers are considering alternative methods of codling moth control is that consumers are increasingly uneasy about the insecticides used in food production. The Alar scare in the late 1980s was an example how consumer perceptions can affect a market. disadvantages of conventional control methods are the increasing resistance of codling moth to the chemicals used for control, worker safety considerations in applying cover sprays, and the rising cost of the chemicals, labor, and equipment needed to apply cover sprays. The disadvantages, and liability potential of conventional control methods have led researchers to study other methods of codling moth control. The most effective alternative to conventional controls so far is the use of a sex pheromone to disrupt codling moth mating. Several types of sex pheromone emitters have been developed for use in orchards. The most widely used emitter is the Isomate-C type emitter which is similar to a plastic twist tie which has been embedded with the pheromone. The ties are placed in the apple trees at BIOFIX. 2 The plastic membrane 1 Former graduate student; Professor of Agricultural Economics, Washington State University; Entomologist, Agricultural Research Service, USDA; Entomologist, Ron Britt Associates, Yakima, WA. Work was funded by the ARS, USDA. 2 Pheromone traps are used to catch codling moth and determine. BIOFIX. BIOFIX is defined as the first daily catch of three to four adult codling moth in a particular year. 1

3 of the emitter allows small amounts of pheromone to escape from the emitter into the general area around it. In theory, the presence of the pheromone attracts male codling moths, subsequently preventing them from mating with the females. Without mating, the damaging larvae are never born. With mating disruption little or no cover sprays are used to control codling moth. Some of the other chemicals applied with azinphosmethyl cover sprays are also decreased when mating disruption is employed. Decreases in non-codling moth insecticides and sprays are mainly due to increases in beneficial insects in pheromone treated orchards, and fewer opportunities to apply sprays which may not be entirely needed but are used for insurance against some pests, etc. However, where the population of codling moth is high, it might be necessary to use some additional cover sprays to supplement the pheromone control or to use all the conventional sprays where the populations are extreme. This report is intended to help growers, suppliers, and others concerned with the Washington apple industry compare the economic effects of switching from a conventional codling moth control program to a program based on mating disruption. While all of the practices outlined may not fit all conditions, they represent current trends in both cover spray use and pheromone use. The base budget used in this research was taken from Hinman, EB1720 published by Washington State University (see references). SOURCE OF DATA The basic approach used in analyzing the alternative control techniques was to develop enterprise budgets. These budgets were then used in a partial budgeting framework to analyze the alternative available. BUDGET ASSUMPTIONS The following assumptions were used in the budgets compiled for the original economic analysis of conventional control of codling moth vs. mating disruption. While some of the assumptions may not be material to the scope of this report, they give an indication of the circumstances underlying the analysis presented here. 1. The representative orchard is 60 acres of red delicious apples in full production. 2. The trees are on a 10 x 20 foot spacing resulting in 218 trees per acre. 3. Irrigation water is applied by a permanent under tree irrigation system. 4. The current value of the orchard is $12,000 per acre, and the amortized establishment cost is $765 per acre per year. 2

4 5. The current value of the employee housing, workshop, and machine shed is $80, All depreciable assets such as buildings and machinery are valued at current replacement cost. This valuation method may overstate current costs. 7. Property taxes on the orchard are $90 per acre per year. 8. Machinery labor costs $12.50 per hour, labor for thinning and placing the pheromone costs $7.50 per hour, and picking labor costs $10.50 per hour. 9. The orchard is located in an apple growing area of central Washington. 10. The assumed interest rate is 9 percent for machinery and operating capital. 11. Management cost is 7 percent of the gross revenue. 12. Overhead costs are assumed to be 7.5 percent of the variable costs of the orchard. These costs would include taxes, depreciation, interest, insurance, and housing costs for tractors and equipment. 13. Pheromone ties are applied at the rate of 400 ties per acre. The ties require two hours of labor per acre for installation and 400 fastening clips per acre. 14. The pheromone ties cost $0.33 each and the fastening clips cost $0.01 each for a combined cost of $136 per acre. 15. The pheromone ties are applied in early April. PRODUCTION PRACTICES UNDER EACH CONTROL TYPE This analysis focuses on the changes in production practices and chemical usage to determine the difference in costs between using mating disruption or conventional control of codling moth. To determine the changes that might occur in your operation when switching to mating disruption, it is helpful to know the production practices which should not change. Table 1 outlines the production practices which did not change in the examples presented in this report. 3

5 Table 1. Production Practices Followed Under Both Conventional and Pheromone Control Scenarios. Variable Quantity Month Type of Operation Inputs Used Per Acre January Prune and Thin Hand Labor 21 hours March Rake None NA March Chop Brush None NA March Fertilizer Calcium Nitrate 400 pounds March Dormant Spray Zinc Sulphate 8 gallons March Delayed Dormant Superior Oil 5 gallons Spray Lorsban 4EC 2 quarts Solubor 4 pounds April Growth Regulator Promalin 1.5 pints April Pollination Rented Hive 1.5 hives May Thinning NAA 1.2 ounces Regulaid 1 pint May Post Bloom NAA.5 ounce Carbaryl.5 pound Regulaid 1 pint May Frost Control None NA June Hand Thinning Thinning Labor 35 hours July Herbicide Round Up.33 quart September Stop Drop Spray NAA (aerial) 2 ounces September Bin Distribution None NA September Picking Picking Labor 40 hours September Loading None NA September Hauling None NA September Picking Supervision 40 hours October Herbicide Soli cam 1 pound October Fertilizer Ammonium Nitrate 100 pounds October Mouse Control Strychnine Milo 3 pounds As Needed Irrigate Picking Labor 1 hour As Needed Mow Cover Machine Labor 2.2 hours As Needed Gopher Control Strychnine Milo.5 pound Seasonal Clean Up None NA NOTE: The names of the chemicals used are registered trademarks of private companies. NA denotes not applicable. 4

6 OPERATIONS mat CHANGE The variation in costs between conventional codling moth control and mating disruption are directly related to the production practices which change when switching from one method to the other. When switching to pheromone control, there are two main production practices which -change. First, the number of cover sprays usually declines and is accompanied by a corresponding decrease in the amount of insecticides and other chemicals used. Second, placement of the pheromone ties is added which triggers a need for more labor at application time (usually in April). Table 2 compares the number of cover sprays applied and insecticides used in a typical orchard under conventional control, as well as in a pheromone treated orchard. The third column in the table shows the differences between the pheromone and conventionally treated orchard. You will notice that while cover sprays of insecticides are reduced by three trips in the pheromone treated orchard, two additional cover sprays of calcium chloride are needed. since that chemical was usually added to an insecticide cover spray. Table 2. Differences in Cover Sprays and Insecticides Used Under Conventional and Pheromone Control of Codling Moth in a Typical Orchard. Conventional Pheromone Item Control Control Difference Number of Cover Sprays CaCl Cover Sprays Guthion (lbs) Azinphos (lbs) Phosphamidon (pints) Lorsban 50WP (lbs) Sevin (lbs) Penncap-M (gallons) Vydate (pints) Sorba Spray (quarts) The numbers shown above are typical and are based on data gathered from a group of central Washington producers. These numbers may not reflect your particular situation. Table 3 is provided to enter the estimates for your operation. 5

7 Table 3. Estimated Differences in Cover Sprays and Insecticide Use for Your Operation. Item (a) Conventional Control (b) Pheromone Control (b-a) Difference Number of Cover Sprays CaCl Cover Sprays Guthion (lbs) Azinphos (lbs) Phosphamidon (pints) Lorsban 50WP (lbs) Sevin (lbs) Penn cap-m (gallons) Vydate (pints) Sorba Spray PARTIAL BUDGETING Once the differences in operations and input uses have been determined, the change in costs of switching to mating disruption can be evaluated using partial budgeting. Partial budgeting is a method of analysis which examines the differences between two alternatives instead of preparing a complete budget for each alternative and then comparing the total cost. The changes are evaluated as increased costs, reduced returns, reduced costs, and increased returns. Increased costs and reduced returns are both negative effects of the proposed change, while reduced costs and increased returns are positive effects. To this point, differences in returns have not been discussed. In the basic research performed on mating disruption, there was no significant difference found between yields of apples in conventionally treated orchards and pheromone controlled orchards. There was also found to be no significant difference in cullage rates or packout results. This is likely due to the fact that orchards under pheromone control are still monitored very closely for codling moth problems. Some pheromone controlled orchards with a high population pressure of codling moth required up to three cover sprays with Guthion or Azinphos. With continued monitoring and cover spraying when needed, no differences in cullage rates would be expected. However, when 6

8 additional cover spraying is needed, the costs of pheromone control quickly exceed the benefits. It should be noted, however, that under low codling moth population pressure many orchards using pheromone required no cover spraying at all. Due to these findings, analysis of returns will not be included in the partial budgeting analysis. All of the reduced and increased costs needed to perform the partial budgeting analysis are directly related to the information in Table 2 or Table 3 for your particular information. The categories of reduced and increased costs are chemicals, labor, machinery, and pheromone inputs. The partial budget analysis for the example orchard is presented in Table 4. Chemicals The dollar amounts of chemicals in the partial budget above were determined by multiplying the amount of a particular chemical applied by the price per unit of that chemical. For instance, Azinphos was priced at $6.70 per pound. In the conventional control scenario, 3.5 pounds were used. In the pheromone control scenario, only 2.5 pounds were used. Dollar value of Azinphos in the conventional control scenario is $23.45 (3.5 lbs. x $6.70/lb.), and under the pheromone control scenario it is $16.75 (2.5 lbs. x $6.70/lb.). Table 5 shows the input prices used in the partial budget. Your costs of these chemicals may be more or less than the amounts shown. Machinery The costs of fuel and lubrication of a 50 h.p. tractor and a blast sprayer were estimated at $1.47 per hour of operation. Repair costs for the same spraying outfit were estimated at $1.50 per hour. It was calculated that an average cover spray requires about 0.44 machine hour per acre. Therefore, fuel and lube cost for cover spraying under conventional control was $2.59 (0.44 hours x $1.47/hour x 4 cover sprays); Similarly cover sprays under pheromone control cost $0.65 (0.44 hour x $1.47/hour x 1 cover spray). Repair costs were calculated in the same manner except that they cost $1.50 per hour instead of $1.47. The machinery costs of calcium chloride cover sprays are the same as an insecticide spray. There are no calcium chloride cover sprays under conventional control, since calcium chloride is usually applied in the insecticide cover sprays. More Sorba Spray is used in conventional control because a buffering agent is needed when applying calcium chloride with an azinphosmethyl cover spray. As stated in the budget assumptions, labor for operating machinery was estimated to cost $12.50 per hour. It is estimated that 10% more man hours are required to apply a cover spray than machine hours. More man hours are required because the sprayer must be regularly fllled, adjusted, cleaned, etc., while the machine is not running. Machine labor cost for cover sprays is calculated as follows (machine hours x 1.10 x $12.50/hour x no. of cover sprays). 7

9 Table 4. Per Acre Partial Budget for Conventional and Pheromone Control Scenarios. (a) (b) (a-b) Pheromone Conventional Item Control Control Difference ($) ($) ($) REDUCED COSTS: Chemicals Guthion Azinphos Phosphamidon 7.rf) Lorsban (50WP) Sevin Sorba Spray Subtotal Machinery Cover Spray Labor CaCl Cover Spray Labor Cover Spray Fuel, Oil, Lube CaCl Cvr Sp Fuel, Oil, Lube Cover Spray Repairs CaCl Cover Spray Repairs Subtotal TOTAL REDUCED COSTS INCREASED COSTS: Lil2Qr Pheromone Placing Labor Subtotal Ph~rQmQn~ In~yts Pheromone Ties Pheromone Tie Fasteners Subtotal TOTAL INCREASED COSTS Net Effect (Increased CostS + Reduced Costs)

10 Table 5. Chemical Prices Used for Partial Budgeting Analysis. Chemical Unit Price Per Unit Guthion pound $5.35 Azinphos pound $6.70 Phosphamidon pint $14.17 Lorsban (50WP) pound $7.50 Sevin pound $2.68 Penncap-M gallon $26.00 Sorba Spray quart $3.00 Labor for placing the pheromone strips in the trees was estimated to cost $7.50 per hour with the procedure taking about 2 hours per acre. Therefore, under the pheromone control scenario, $15.00 is the estimated increase in labor costs to apply the pheromone. Pheromone Inputs The pheromone ties were used at ~ rate of 400 ties per acre. In a typical orchard that would be about 2 ties per tree. At last report, the ties cost $0.33 each and the fastening clips for them cost about $0.01 each. Therefore, the increased costs of using pheromone control are $ (400 ties/acre x $0.33/tie) and the cost of the fasteners is $4.00 (400 fasteners/acre x $0.01/tie). Net Effect The net effect shown at the bottom of the partial budget is $ This means that under the assumptions given for both control methods, the cost of switching from conventional to pheromone control would be an additional $76.06 per acre. Although this example shows a cost increase, it is important that each producer evaluate this decision based on his or her own set. of circumstances. Many factors could alter the outcome of this analysis. For instance if chemical prices were higher, pheromone prices lower, or if calcium chloride was not used the pheromone control alternative would appear more attractive. On the other hand, lower chemical prices or higher pheromone prices would make the conventional control alternative appear better. The analysis 9

11 is also highly dependent on the number of cover sprays (and the chemicals applied in those cover sprays) under each control alternative. The partial budgeting form in Table 6 can help incorporate the information from your operation to aid in deciding whether mating disruption is an economically viable alternative for your particular circumstances. In addition to economic viability producers should consider existing codling moth population pressure, labor availability for application of the pheromone strips, and any environmental considerations which might merit the use of an alternative control method when making this decision. BREAK-EVEN ANALYSIS When the result of the partial budgeting procedure shows an increase in costs to switch to pheromone control as our example did, break-even analysis may be useful to examine changes in a key cost area. Break-even analysis can answer "what if" questions such as "how much of a decrease in the price of pheromone strips is required for there to be no difference in costs between pheromone and conventional control?" To determine the answer to this question the difference in costs ($76.06 in our example) is divided by the number of pheromone strips ($ strips per acre). The answer, $0.19, tells us that a 19-cent drop in the price of pheromone strips would cause the economic differences between the two control types to be eliminated. This type of analysis can be used on other factors such as amount of azinphosmethyl used, or spraying trips eliminated as well. SUMMARY Alternatives to conventional codling moth control methods are available. When deciding whether to use an alternative method of control, the economic consequences of adopting the new control method should be analyzed. This report demonstrates how to use partial budgeting and break-even analysis when considering switching from conventional to pheromone control of codling moth. Partial budgeting and break-even analysis can be used when considering other alternatives, but one must be sure that the appropriate changes (and costs of those changes) are isolated. The changes shown for a switch to pheromone control are felt to encompass the main production and cost changes that a typical orchard would experience. The example analysis can be used as a guideline, but for the most accuracy, specific estimates pertaining to your operation should be made. The forms provided in this report should be helpful in conducting your own analysis \folwell\mothl.exb \be 10

12 Table 6. Partial Budgeting Form. (a) Conventional Item Control ($) REDUCED COSTS: Chemicals Guthion Azinphos Phosphamidon Lorsban (SOWP) Sevin Sorba Spray Subtotal Machinery Cover Spray Labor CaCI Cover Spray Labor Cover Spray Fuel, Oil, Lube CaCI Cvr Sp Fuel, Oil, Lube Cover Spray Repairs CaCI Cover Spray Repairs TOTAL REDUCED COSTS INCREASED COSTS: Labor Pheromone Placing Labor Subtotal Pheromone Inputs Pheromone Ties Pheromone Tie Fasteners Subtotal TOTAL INCREASED COSTS Net Effect (Increased Costs + Reduced Costs) (b) Pheromone Control ($) (b-a) Difference ($) Note: Estimated machinery costs are available in EB1720, Washington State University. Please see references. 11

13 REFERENCES Clements, Mark. "Clements Report. Unpub. Wash. State U., Pullman, March, Hinman, Herbert R., et al., 1992 Estimated Cost of Pro<lucin~: Red Delicious Apples in Central Washin~:ton. EB1720, Coop. Ext., Wash. State U., Pullman, Howell, J. Franklin. "Evaluation and Results of the Commercial Use of Isomate-C for Control of Codling Moth in Apple and Pear Orchards in the Yakima Valley Washington, Yakima: Superior Ag Products Inc., Sept., Howell, J. Franklin. "Two Years of Commercial Use of Isomate-C to Disrupt Mating for Control of Codling Moth." Yakima: Superior Ag Products Inc., Dec., Knight, Alan. Evaluation of Matin~: Disruption for Control of Codlin~: Moth. Yakima: U.S. Department of Agriculture, Ag. Res. Serv., Knight, Alan Evaluation of Matin~: Disruption for Control of Codlin~: Moth Year 2. Yakima: U.S. Department of Agriculture, Ag. Res. Serv., Williamson, Eric R. The Economics of Matin~: Disruption of Codlin~: Moth in Washin~:ton Apple Orchards. Unpublished MA thesis, Wash. State U., Pullman, May,

14 Issued by Washington State University Cooperative Extension, Harry B. Burcalow, Interim Director, and the U.S. Department of Agriculture in furtherance of the Acts of May 8 and June 30, Cooperative Extension programs and policies are consistent with federal and state laws and regulations on nondiscrimination regarding race, color, national origin, religion, gender, age, disability, and sexual orientation. Evidence of noncompliance may be reported through your local Cooperative Extension office. June Subject Codes 232, 329, 363. A EB1789