ENHANCING PRODUCER PROFITABILITY WITH VEGETABLE PRODUCTION IN THE TEXAS HIGH PLAINS

In the Ogallala Aquifer, the Texas High Plains’ primary water source, withdrawals continue to exceed the aquifer’s limited recharge. Producers are compensating with water-conserving production techniques such as transitioning to more efficient irrigation technology, implementing conservation tillage practices, reducing the amount of irrigation applied, and alternating the crops they plant. Given the current condition of the semi-arid region, alternative production methods are necessary to enhance farm profitability. One alternative being considered by producers is the production of high-value crops. High-value crops, including vegetables, can increase overall producer profitability. Initial project experiments have demonstrated the potential for viable vegetable production; however, no studies exist to prove the economic viability of these crops in the Texas High Plains. This study analyzes the economic feasibility of producing high-value vegetables so producers may make an informed decision regarding the incorporation of vegetable production into their existing operation. This information will benefit not only producers faced with declining water availability but also small landowners considering more productive uses of their land. Tomatoes, jalapeño peppers, and sweet corn were produced in an open field at the USDA-ARS CPRL/Texas A&M AgriLife Vegetable Production Lab in Bushland, Texas using surface drip irrigation both with and without the use of black plastic mulch. Field production data including water use, labor hours, input costs, and yields were collected through personal communication with research faculty. Additional data were collected from the Texas A&M AgriLife Extension crop budgets, the United States Department of Agriculture’s Agriculture Marketing Service, the United States Department of Agriculture’s Economic Research Service, and a review of existing vegetable production literature. These data were compiled to create enterprise budgets including revenue, variable costs, fixed costs, and total profit for each vegetable with mulch and without mulch under surface drip irrigation, on a per-acre basis. Economic data for traditionally irrigated corn, cotton, and wheat were obtained from the Texas A&M AgriLife Extension crop budgets. Several economic measures, including return on investment, profit per acre-inch of irrigation water applied, and breakeven prices were analyzed to provide producers with the information needed to make decisions. In addition, sensitivity analyses were conducted to evaluate how changes in crop prices and labor hours would affect producer profit. An online survey was distributed to producers implementing vegetable production within the study region to identify current management practices. Innovative production systems such as high tunnel systems and greenhouses offer several benefits to these producers, specifically protection from the harsh environment. Additionally, survey respondents provided information regarding higher revenue possibilities that exist through other marketing outlets including farmer’s markets, local grocery stores, and restaurants. Implementing vegetable production in an existing enterprise is an alternative that can help increase or maintain overall producer profits, especially for producers faced with declining water availability. Despite the high investment and high labor costs, the results indicate vegetable production in the Texas High Plains has great profit potential. It is important to note that conservative estimates of revenue were utilized in this study. In addition, because specialty crops are not eligible for Agricultural Risk Loss Coverage, Price Loss Coverage, or Marketing Assistance Loan programs, producers should consider the risk associated with field production and methods to reduce the risk. Further research should be conducted to evaluate the economic feasibility of vegetable production in high tunnel systems and the use of other locally-grown fruits and vegetables to enhance farm profitability.