HomeMy WebLinkAbout; ; Economic Analysis of Agricultural Viability - 60 Acre Parcel - Lusk; 1977-05-04LUSK 60 ACRE PARCEL - REPORT SYNOPSIS
Net farmable acreage = 25 acres
Pole Tomatoes would result in a negative return of 50% Field flowers would result in a negative return of 50%
General agriculture wouldn't be an economically feasible use
of the parcel.
Green houses ----- not viable
If parcel were placed in a Williamson Act preserve, the resulting
tax savings wouldn't be of sufficient size to permit profitable operations.
Feasible agricultural use of land Viability of agriculture:
"Capability to sustain production without degradation or loss of
production resources, i.e. maintenance of self-sustaining operation
preserving land ... labor ... capital."
Decline of ag in Carlsbad area while accentuated and acceleratedby
urbanization wasn't counter to the natural trend.
Using present Soil Classification:
20 acres are "fair" for flowers & truck crops
20 acres are r'goodlr for tomatoes 34 acres are rated "good" for flowers 5 acres are "fair" for truck crops & tomatoes:
-. and good for flowers However, 27 acres that encompass soil rated "good" for tomatoes ish t practical for cultivation. Removal of this 27 acres portion (45% of the acreage) greatly reduces the agricultural potential of the site.
Only 25 net farmable acres remain
'I Not enough agricultural activity to attract or maintain a competi- tive and desirable community support system."
Comparable disadvantage for ag production:
* labor costs water return on investment
Econodc feasiblity of the greenhouse operation on the study site is negative
The Williamson Act.. .
,.
1
i
L. .
&. -
ECONOMIC -ANALYSIS OF
AGRICULTLI VIABILITY OF A PARCEL OF LAND IN CARLSBAD , CALIFORNIA
Prepared for:
John D. Lusk and Son 17550 Gillette Avenue Imine, California 92713
By :
Gordon E. Wbota, Fh.D., ,. James W. Wheyland Caryl S. Foster Elizabeth L. Lakinger"
..
. . Copley International Corporation 7817 Herschel Avenue La Jolla, California 42037
May 4, 1977
EXECUTIVE SUMMARY
.. .
The purpose of this study.was to determine the economic
feasibility of agricultural use for a 60-acre parcel in the
City of Carlsbad, California. The ma j or findings include :
Soils on the site are submarginal to marginal. The topography of the site is unfavorable. In combination these two factors rzduce the net farmable acreage for general agriculture to approximately 25 acres.
While the climate of the maritime areaclimate in which the site is located is very favorable for culture of certain crops, it is not unique. Similar clinates and lsnds producing competing crops are located from South Carolina through Texas and on both coasts of Mexico.
" ..
"
Significant negative returns on investment can be expected from growing the highest value crops which would be suitable. Pole tomatoes would result in a negative return of 50% while field flowers would have a negative return in excess of 56%.
General agricultural feasibility is also adversely affected by continually increasing water costs, declining community support systems, and higher labor costs than in areas competing with.San Diego county,.
General agriculture would.not be an economically feasible use of the parcel studied.
Greenhouse operations would.be adversely zffected by rapidly risirig building costs and higher interest rates than were available in the past. The effect of these factors would'be to greatly increase the capital investment necessary to start a greenhouse operation on the study site, as well as elevating debt servicing expenses.
.”
Markets for the flower and green plant crops grown in greenhouses have bee= stagnant or declining recently. Foreign imports are capturing an in- creasing share of the market. The market share held by foreign competitors is increasing at an annual.rate more than four times greater than the rate at which the total market is growing.
. It is estimated that monthly expenses of a new greenhouse operation on the study site would exceed , revenues by the following amounts for specific crops: carnations $14,300; roses $8,700; chrysanthemums $7,000; and green plants $2,000.
Intensive agriculture (greenhouse operations) would not be an economically viable use of the study site. Since green plants are near a breakeven level, if . , ... ’ . the presently depressed market were to improve.this crop might again become feasible. No evidence is available which would lead to a forecast of such an improvement.
.. .. .. ..
If the parcel were placed in a Williamson Act perserve, the resulting tax savings would not be of sufficient size to permit profitable operations either in greenhouse or general agricultural usage.
.. In an area from Carlsbad to Solana Beach approx-
imately 1,700 acres which have been used for agri- culture exist in the maritime areaclimate. Additional
. .. I. acreage is zoned agricultural. .-
The City of Carlsbad has already placed 350 acres within its city limits in agricultural preserves under the Williamson Act.
Since only limited data were available on the present
structure of the floriculture industry in San Diego County,
a survey of greenhouse operators and field flower growers
’. .+
was conducted. Because of the differences in their operations
a separate questionnaire was..utilized for each of these
types of growers. The major findings of the survey are
presented below.
Greenhouse Operators - Most greenhouse operations are located in the North County.
._
. ..
Carnations and green plants are the primary crops grown.
The bulk of greenhouse operations are on less than six acres of land.
Most greenhouse operators own their land; few rent.
Most greenhouse operators believed that a 60-acre operation for their type of production would be feasible in the maritime areaclimate.
The optimal greenhouse size was thought to be approximately 150,000 to 300,000 square feet.
land prices or land rents in the lcaritime and coastal areaclimates.
Greenhouse operators were unwilling to meet current
. Most operators would not lease greenhouse land for
Most growers felt their industry would expand or stay the same.
The most severe problems .facing greenhouse operations are inflating input costs and competitive imports from South America.
more than 15 years.
A majority of respondents indicated that the Williamson Act .favorably affected their profitability.
Fiel'd Flower Growers
A wide variety of crops are grown by field flower growers, including ornamentals, gladiolus, bedding plants, carnations, and miscellaneous bulbs.
Acreages involved are generally small, less than 20 acres.
The majority of growers indicated it would not be economically feasible to use a 60-acre parcel in the maritime areaclimate for their operations.
The majority believed market factors and labor availability to be unfavorable for culture on such a 60-acre parcel. However, capital availability and agricultural support systems were rated favorable.
The highest land prices which would be paid for-..a .: field flower operation ranged from $6,000 to $15,000 in the mar.itime areaclimate..
0. Feasible rental rates were believed to be less than $300 per acre. .*
...
TABLE OF CONTENTS
1.
2.
3.
4.
5.
6.
. 7.
INTRODUCTION ................ 1-1
GENERAL AGRICULTURE ............ 2-1
INTENSIFIED AGRICULTURE .......... 3-1
IMPACT OF WILLIAMSON ACT ........... 4-1
SURVEY RESULTS ............... 5-1
AGRICULTURAL LAND AVAILABILITY ........ 6-1
CONCLUSIONS ................. 7-1
APPENDIX A
APPENDIX B
APPENDIX c
1. INTRODUCTION
The purpose of this report is to present an economic
assessment of the agricultural viability of a parcel of land
in Carlsbad, California. This economic analysis was requested
by John D. Lusk and Son, an applicant before the San Diego
Coast Regional Commission f0r.a permit to construct a planned
residential development on the property.
The California Coastal Act of 1976 requires that lands
suitable for agricultural use shall not be converted to no%-
agricultural uses unless continued or renewed agricultural use
is not feasible.* In response to this requiremezt, this study
assesses the economic feasibility of renewing agricultural use
on a specific site in Carlsbad, California.
This site may be generally described as a 59.98 acre parcel
of land which is north of Poinsettia Lane, west of Interstate 5,
and east of A.T.6rS.F. Railroad right-of-way. The land is regis-
tered under San Diego County Assessor's Parcel No. 214-150-16.
This economic assessment is divided into six remaining
segments. First, the economic viability of general agriculture,
which consists of crops that grow in an open field environment,
is considered. Second, an assessment is made of crops that
*Section 30242, California Coastal Act of 1976.
1-1
-.
._
.-
grow in a controlled environment, i.e., a greenhouse. This
form of production may also be termed intensified agriculture.
Because of basic differences in the related production factors
and the market, each of these forms of agricultural activity
has been analyzed separately for the specific aforementioned
site in Carlsbad. Third, an assessment is made of the impact
of the Williamson Act on both greenhouse and open field agri-
cultural practices within the area. Fourth, the results and
implications of a survey of open field and greenhouse operatora
within the immediate region are presented. Fifth, a measure-
..
, .-
ment of agricultural acreage within the maritime and coastal
area climates near the Carlsbad site is made. Finally; the
findings of this study are summarized.
.- In addition, supporting documentation is presented in
.-
the appendices. Appendix A presents data regarding com-
parative agricultural market information. Appendix B
documents the soil issues relating to this specific site.
Appendix C presents the survey methodology and the survey
instruments employed.
1-2
... ..
2. GENERAL AGRICULTURE
PURPOSE
Discussions of agricultural production, particularly in
areas pressured by competiticn for the land resource, tend to
be carried on amid an aura of misconception and speculation.
The conclusions drawn are often based on fragmented informa-
.tion or assumptions which are not supported by fact. Even
with the increasing awareness of agriculture's importznce to
society, there appears to be a remarkable lack of understand-
ing of the factors which allow feasible agrfcultural use of
land.
The purpose of this portion of the report is to examine
the viability of general agriculture, including floriculture,
on the parcel under study. To do so it is necessary to
define and value those factors affecting the viability of
the individual agricultural operation. These factors
include land, labor, capital, and management. The relation-
ship of each factor to prevailing production cost and price
structure then must be assessed to determine viability.
Viability is defined as the capability to sustain production
without degradation or loss of production resources, in other
words, maintenance of a self-sustaining operation preserving
land, labor, and capital.
2- 1
APPROACH
It must be recognized that the factors and relationships
affecting production are all interrelated, one to the other.
No single factor is all important. If one factor is
relatively strong when compared to, another, this strength
will compensate for the weaker factor. Then, in the final
analysis, viability must be determined from the cumulative
effect of all the factors relating to production. The
approach used to determine this cumulative effect for the
land under study is accomplished through the use of typical
production standards adjusted to the specific parcel. The
result of the application of these standards is a baseline
from which the decision to cormnit resources to an agricul-
tural operatiori can be made.
LOCATION AND DESCRIPTION
The specific parcel of land is located west of Inter-
state 5 and is bounded on the south by Poinsettia Lane and
its unimproved extension, and on the west by the Atcheson,
Topeka & Santa Fe Railroad right of way. Its eastern
boundry is a tree line of eucalyptus on a north-south ridge,
while its northern boundry is an irregular unimproved dirt
road.
The parcel contains approximately 59.64 2 acres net
of easements, is irregular in shape and is identified by
the County Assessor's parcel number of 214-150-16. It is
2-2
currently assessed at a fair market value of $1,370,000, or '
approximately $23,000 per acre. The property is located
within the city' of Carlsbad. Its water supply is provided
. by the Carlsbad Municipal Water District. Water delivery is
at the midpoint of northerly boundry.
This parcel is located in a transitional land use area.
Contiguous to the parcel on the south is an area developed
as a mobile home park. On the west, beyond the railroad and
highway is a field currently in floral production and a
mobile home park. To the north, contiguous to the parcel, .
is a cultivated field while to the east and south the parcel
is adjacent to fallow land of small acreage. Within the
nearby area are retail and industrial facilities. The
.
general character of the locality might be described as
residential, agricultural, and comercial.
BACKGROUND
The Northern San Diego County area encompassing San
bieguito, Carlsbad, and Oceanside has followed a historical
pattern which. has been typical for the coastal plain of San
Di.ego County and Southern California generally. ' From the
1920's through the late 1940's, the agriculture industry
was confined to dairy and commercial livestock raising, dry
farming, and some citrus orchards. With the outbreak of
World War 11, a major reorientation of San Diego County's
economy took place. While the agriculture industry expanded,
2-3
-
it grew at less than half the rate of manufacturing and govern-
ment. There was also a transition away from commercial live-
stock raising toward more intensive dairy, .poultry, ana swine
production within the livestock sector. Dry farming decreased;
produce and flower production begain to expand within the
farming sector. The 1940's and early 1950's were the golden
age of agriculture in the area.
As urban pressures began to build in the 1950's, general
agriculture in the region began a protracted decline. The
commercial livestock industry led this retrogression. As
competition for land resources became more aggressive, agri-
culture within the area tended to become more intensive and
integrated. However, as some of the more productive areas
were converted to urban uses, economic pressures forced more
and more growers out of business, into more marginal areas,
or to relocation in areas with a more favorable competitive
cost structure.
The decline of agriculture within the area; while accen-
tuated and accelerated by urbanization, was not counter to the
national trend. The cost-price squeeze experienced by all
.. -
.. -
-
U.S. agriculture was most severe from the post-Korean War
period to the mid- to late-1960's. Farm production expenses
increased nationally 34 percent, while net national farm
income decreased 15.5 percent over the 16-year period from
1953 to 1968. California's experience was even more severe.
Farm production expenses increased 44.4 percent, while net farm
2-4
income decreased 9.5 percent. The result was a 53.9 percent
comparative loss, contrasted to a 49.5 percent loss nationally.*
The combination of these factors has given rise to the
current status of the agricultural community. Fewer and fewer
growers are involved in production. Remaining growers neces-
sarily must engage in more intensive and more integrated opera-
tions. These factors have given rise to the development of
the floral industry of the County. Indeed, many of the early
floral producers entered the business after experiencing poor
'returns from the production of other crops.
The trend continues toward larger and more capital intense
land usage, as cost structure disadvantages relative to inter-
regional and international sources continue to exert pressures
on local producers. This effect is compounded by increasing
price competition from these areas. This trend can be high-
lighted by citing gladiolus production as an example. Prior to
1950, there was a group of perhaps 40 to 50 small gladiolus
growers planting about 400 acres of flowers per year. Today
there are only two growers. Between them they plant over 800
acres of gladiolus each year and produce a crop with a value
of $2,025,000.*
._ *Farm Income State 'Estimates, 1949-73, Economic Research
Service, U.S . Department of Agriculture, FIS 224 Supplement, September, 1974.
.- MSeward T. Besemer, Importance of the Floral Industry to San Dieno County, Cooperative Extension, University of California, Om.-Econ, CP-265-200-6/74.
a
The high dollar value crop characteristic of intensified
griculture requires significant commitments of capital and
labor. The magnitude of required capital investment and the
. specialty nature of the crops increase farm risk substantially.
Thus, the modern grower is quite vulnerable to unforeseen
adverse situations, such as transportation strikes, energy
crisis, water shortages, etc.
RESOURCES
Any discussion of agricultural production must begin with
an inventory of resources. The characteristics and nature of
the resources dictate the type of agricultural activity that
may be .feasibly conducted at a specific location. In addition,
the costs associated with a specific type of agricultural pro-
duction are determined to a significant degree by the extent
and existence of these resources.
Climate
The study site is located within the'maritime areaclimate. .
The maritime areaclimate is defined as the belt of land
immediately along the ocean, having a varying width of a few
hundred yards to five or six miles, where climate is dominated
by ocean conditions. This is also identified as areaclimate
111. It is common to the Pacific Coast from Oregon south.
L
The coastal areaclimate lies directly inland from the maritime
_. . areclimate. The coastal areaclimate in the vicinity of the
study site is- eight to ten miles wide. Ocean conditions
2-6
"
e
..
i.
influence climate 75 percent to 85 percent of the time. This
is areaclimate 11.
The transitional areaclimate, areaclimate.II1, is a region
where both marine influences and continental climatic influences
occur from time to time. In San Diego County it is characterized
by regions in coastal valleys.*
Since climatic differences and plant adaptations go hand
in hand, all geographically determined areas that are climat-
ically different are associated with specific plant groupings.
However, large numbers of plants can be grown in more than one
areaclimate. These regions are defined as plantclimate areas.
The study site falls into the subtropical plantclimate,
further defined as the citrus area. This is a plantclimate
rea that lies to the west of the Peninsula Range. Citrus is
planted' as high as the 2,300 foot elevation, in general, and
higher on some south and southwest facing slopes. Avocados
and many ornamentals such as lantana and poinsettia are found
within this plantclimate area.* Areaclimates I & 11, maritime
and coastal, and to a lessor extent 111, transitional, com-
prise this plantclimate area.
Thus it can be seen ,that the study parcel competes with
respect to climatic factors with other land that is within
*Climates or San Diego County, Agrichltur'al' Relationships,
University of California Agricultural Extension Service,
November, 1970.
*California Plant Climates, University of California
Agricultural Extension Service, 1967.
2- 7
areaclimate I, I1 and the warmer portions of 111. While the
maritime climate is desirable for some species of flowers, the
climate of the site is not particularly unique in terms of
plantclimate
From the point of view of general agriculture, the coastal
climate category of land competes successfully with the maritime
climate. The coastal climate is common to California, since it
generally occurs from Santa Barbara County southward. Similar,.
but colder, coastal climates occur from Monterey County to
Santa Barbara County. This successful competition of the
coastal areaclimate with the maritime is especially true for
vegetable crops. Both the Santa Barbara area and the Monterey
area compete directly in the marketplace with local production.
Production competition occurs from areas of similar coastal
climates which exist from South Carolina through Texas, as
,. '.well as Baja California, Baja California Sur, Sinaloa, azzd
. .. Tamaulipas, Mexico.* For example, Table A-1 .and Table A-2 in
Appendix A consider the market tomato crop which is the leading
vegetable crop in the San Diego region.* As these tables
indicate, there is substzntial competition from competing
areas for San Diego's most viable vegetable crop. Likewise,
. ..
.. .
I_
.. *E. V. Jess and M. J. Machado, Trends in Production and Marketing of California Fresh Market Tomatoes, Division ot Agricultural Sciences, University of California, 75 BL/18/1.
2-8
Table A-3 in Appendix A indicates interstate competition for
selected floral and foliage crops.* As might be expected,
Florida competes directly with this region in all categories
except carnations, which. finds Florida at a comparative
disadvantage due to its climate tending more toward the. .
tropical than subtropical. Table A-4 of Appendix A is indic-
ative of the pressures being exerted by international compe-
tition. This trend is likely to become increasingly severe
in the years ahead.
In terms of vegetable production, the study site pro- . ..
vides no comparative advantage, and because of cloud cover
may present a disadvantage for some crops. As Figure 1 below ._..
..
San Diego County reflects a great deal of climate indicates,
adaptability w<th respect to vegetable production sites. In
addition, the dispersion is substantially greater when food . ".
crops such as subtropical fruits are considered, Thus, from
the standpoint of food production in open agriculture, the
climate may be said to be favorable, but af.fords no particular
advantage over land located in areaclimate 11.
As is the case with vegetable production, San Diego County
reflects a great deal of climate adaptability with respect to
floral production. Figure 2 reflects this adaptability.
*Flowers and Foliage Plants ,' Production 'an'd Sales' '1974
and '19/b Intentions ,tor 19/6 Crop Reporting Board, Statistical trtment of Agriculture SpCu 6-1 (76)
.-
Makh 1976 .. .
I
2- 9
...
In terms of floral production,' the 'climate is well suited
to carnation and gladiolus culture and other crops where a cool,
moist, well ventilated climate is desirable. Other floral
crops would find the cloud cover, humidity and narrow diurnal
temperatures less favorable than the climates of more inland areas.
"
*-mates - of San Di'ego County, op . cit. , p. 26.
-.
2-10
Figure 2
Regional 'Cut Fl'owe'r and Nursery Production*
The site then would be best utilized for th.e .floral crops
mentioned above, and would compete with production from the
cooler (westerly) areaclimate 11. This is illustrated by the
groupings within areaclimate 1 and the westerly portion of
areaclimate I1 indicating the two climates are utilized inter-
changeably.
Topography
The site may be described as forming a swale running from
north to south, dissecting the site slightly to the west of
the midpoint. The westerly portion of the site is gently
sloping toward this depression with a slope of 1-3% -: The
easterly portion exhibits a more moderate slope of 1-9% -,
particularly toward the southeasterly extremity. The site is
afforded- some protection by a ridge laying to the west, while
+
4-
its easterly boundry falls almost to another ridge line. The
swale which results from the slopes on the property is boggy
and poorly drained. This' area comprises roughly 27 acres,
or 45% f. of the total land area.
Soils
Using the soil classification map*, an approximate
percentage breakdom of the soil types was determined. (Refer
to Appendix A.)
As can be seen from Appendix A, the site contains three
soil series, represented by one phase in each of the series.
These phases are: Chesterton fine sandy loam, comprising an
*Soil Survey San Diego Area, California, U.S.D.A. - SCS&FS, UCAES, U.S.D.I., December 1973, Part I & 11
i
2-12
area of approximately 5 acres, (8.28%) ; Huerhuero loam, with
an area of approximately 20 acres (34.76%) ; and Marina loamy
coarse sand, the dominant soil on the site, comprising approxi-
mately 34 acres (56.96%). A detailed description of the soils
is provided in Appendix B.
The three soil phases are not prime agricultural soils, as
defined by an examination of the Soil Conservation Service
Land-Capability Classification and the soil rating system,
"Storie Index", the accepted standards for agricultural soil.
evaluation. Table 2.1 classifies the study parcel using these
standards .
Table 2.1
Inventory of Soil Capability and Ratings percentage distribution ... . ... ..
Site Rating Distribution Capability and Percent Percentage Gouping Index Rating Distribution by Class and Grade
Class I Grade 1 80 to 100 0 Class I1 Grade 2 60 to 80 0 Class 111 Grade 3 40 to 60 41 @ 34.76%
54 @ 56.96% 91.72% Class IV Grade 4 20 to 40 34 @ 8.28% 8.28%
Source: Soil Survey San Diego Area, California, USDA - SCS&FS, UCAES, USDI, December 1973, Part I & 11
L_
The impart of the soil resource as it pertains to agricul-
- " tural usage is to impose cropping limitations in its use. These
result from the lack of suitability of the soils to a broad
range of crops. If the crops are not well adapted to the soils,
.-
,
2- 13
reduced yields will result. An examination of crop suitability
. "
. -.
"
.-
highlights these limitations.* Using soils as the only criteria,
20 acres are rated fair for flowers and truck crops and good
for tomatoes; 34 acres rated good for flowers, fair for truck
crops and unsuited for tomatoes; 5 acres rated fair for truck
crops and tomatoes, good for flowers.
Unfortunately, upon physical examination of the site, it
was found that, by measurement, 27 acres which encompasses
all of the soil phase rated good €or tomatoes, is not practi-
cably suited for cultivation due to its topographical location
in the middle of the site in the bottom of the swale. The soil
is poorly drained and appears to remain wet from adjacent
irrigation and residential surface runoff. The situation would
be difficult and quite costly to correct, as the basin has been
. created at the southerly portion of the swale by the retaining
wall of the mobile home park. It appears, however, this condi-
tion is of long standing, pre-dating the mobile home park.
After observing the vegetation on this portion of the study
site, and inspecting the surface area, it appears the land has
not been in .cultivation for many years, if ever.
The removal of this 27 acre portion, or 45% of the acreage,
greatly reduces the agricultural potential of the site. When
the class IV soils are removed, only 27.6 gross farmable acres
remain, or approximately 25 net farmable acres, some 42% of the
entire parcel. Considering then, the additional soil constraints
-
! * Soil Survey, loc cit . .Table 2 ..1
2-14
of limited crop adaptability placed on a grower for the remain-
ing acreage, the soil resources become a definite limiting
factor since the ground is suited, for all practical purposes,
. only to a narrow range of floral crops such as gladiolus or
carnations. From a general agricultural stadpoint, the soil
resource would have to be classified as submarginal to marginal.
The practical effect of limitations imposed by the soil
characteristics results in an inability to respond to changing
cost/price structures. This lack of flexibility on essentially
one crop area inevitably results in increased risks and capital
requirements brought about by external market influences.
Because of the inability to optimize returns through the use
of alternate cropping programs, capital availabi.lity for soils
management improvement is only reluctzntly codtted due to
the lack of certainty of repayments. This is the reason for
.. the tendency to selectively use certain parcels and exclude
others within the coastal area. The study si'te would be typical
..
. .. -
of this type of usage.
" Comni.ty Aspects
The community support systems €or general a,griculture can
be summarized as exhibiting negative to neutral characteristics.
These characteristics are th.e result o'f:
Limited scale of agricultural operation within the area
relative to competing areas
Declining marketing facilities with increased reliance on facilities outside the area
_.
2-15
Higher costs for farm equipment, supplies, and chemicals than in competing areas
.- .
.= Nonavailability of advance contracting for crops due to lack of area processors.'
The fragmented and diverse nature of the floral industry
In combination, this lack of community support systems subjects
area growers to total market risk as well as production risk,
while growers in major competing areas can elect to substan-
tially reduce these risks. Simply stated, there is not. enough
agricultural activity to attract or maintain a competitive and
,. . . desirable community support system.
OPERATIONAL FACTORS
Production Considerations
In order for a parcel of land to be farmed, it is neces-
. sary to reflect upon a series of basic production considerations
.- and decisions. The boundries within which these considerations ._
must be made are necessarily based upon the natural resource
I. . . base. The existance of favorable natural resources .. does not
necessarily indicate economic viatiility.* Therefore, the
previous examination of the physical characteristics must be .
amplified by analyzing the cumula.tive economic impact of these , ._
.. resources. The producer must evaluate earnings potential con-
. .. sidering alternate crop returns. Most,high valued crops require
:.
.- ....
*Trl&le R. Hedges,' 'Farm Management Dec.isi'ons, Englewood
._ Cliffs (Prentice-Hall, Inc., 1963).
rotation and intensive management due to nutrient depletion
and infestation by nematodes, fungus, viral, or bacterial
organisms.
A review of the crops grown within the County reveals that
there is only one consistantly high valued vegetable crop, pole
tomatoes.* Unfortunately, 'the site is not well suited to
tomatoes due to soils and related topographical constraints.
The soil mechanics and. cultural problems which result are
identified as surface layer ,texture and the water permeability
rate. Drip irrigation could be used to alleviate the problem.
Unfortunately the installation costs for small acreage creates
the additional problem of increasing overhead expense. Margi-
nal operations do not warrant this type of eeenditure since
there is a high likelihood that the costs cannot be recovered.
Next to soils the greatest limiting factor is scale, i.e.,
the size of the operation. With a parcel of 28 2 gross fann-
able acres, the net farmable acreage would be limited to
about 25 acres. This is a constraint on alternate cropping. ,
The small scale of the farmable acreage puts the property at
an economic disadvantage for general agriculture. Thus, the
effective limitations on the use of the property likely cannot
be overcome by a favorable climate.
*Agricultural Crop and Na'tur'al Resourc'es' Rep'ort ,. County of San Diego, Department of Agriculture Weights & Measures, various years.
2-17
Economic Factors
A single overriding consideration in agricultural econo-
mics. is the principle of comparative advantage as it governs
competition and specialization.* For food crops, San Diego
is at a comparative disadvantage despite its climate resource.
The' floral industry likewise suffers a comparative disadvantage
with many competing areas, principally Florida and producers
outside the United States. However, the climate resource is
presently more effective in mitigating these for floral crops
than is the case with food crops.
The three primary reasons for comparative disadvantage
are :
Comparative labor costs outside California
Regional water costs
Level of return-on-investment
The effect of this has been to continuously reduce the acreage
devoted to general agriculture in San Diego County, a fact
frequently cited by the Deputy Agricultural Commissioner. The
County does not have and cannot support a competitive agricul- #
tural support system. This fact is made evident by the very
low multiplier of 1.2 for both agricultural production and
services," which is indicative of leakage from the area.
*Hedges, " loc. c'it.
**Copley International Corporation, Economic' ' ac'f As s'e s s - ment Model for San Diego County, produced under a rd l?.'oulXktion Grant to the County oi San Diego, forthcoming.
2-18
Labor costs water costs and return-on-investment are of suf-
ficient importance to be dealt with in some detail.
Labor Costs. The San Diego area's specialty crops are
. extremely labor intezlsive. In addition to the common and
ordinary cultural practices, the need exists for skilled hand
labor. The largest proportion of production costs is related
to labor although the effect of any definitive contracts which
may have been entered into in San Diego County are not known,
the terms of the 1976 labor contract negotiated with the
United Farm Workers in Ventura County calls .for gross wage
.costs of $3.97 per hour for unski'lled labor. This represents
a 76 percent increase in labor costs from the rate paid in
San Diego County during most of 1975. Since farm unionization
is largely restricted to California, the major competing areas
such as Texas, Florida, and Mexico may gain a substantial com-
parative advantage.
Water. A second limiting cultural factor is water. A
. ..
.-
successful, intensive, open field culture requires a well-
managed irrigation program. Depending on the available
ground moisture, 2.2 'to 3.5 acre feet of water per crop acre
are required for production. For the site in question, two
conditions cause difficulty -- water control and water perme-
ability. Water control problems are created by the topography
of the site, while water permeability problems result from
the soils present on the site. If water were available at an
2-19
inexpensive rate, these problems could be mitigated. However,
water costs for the Carlsbad area place this parcel at a
further comparative disadvantage. Table 2.2 indicates the
degree, of this disadvantage.
Table 2.2
._
,.
._
Sample Wa'ter Costs of Comp'eting' Areas
Difference/Acre Foot Cost/Acre Foot . Dollars and Percent
Carlsbad Municipal Water District Ventura County Merced County Monterey County
Imperial County
72.54 10. ool
5.572 2.50 est.
3.50
-0- -0-
62.54 , 86.21 70.04 96.55 66.97 92.32 69.04 95.18
No direct Cost. Cost is estimated as expense of delivery to field and water district tax on real property.
$5.00 per acre foot plus .57c booster cost.
Source: ,Carlsbad Municipal Water District, University of California Agricultural Extension Service, Ventura Co., Merced Go., Monterey Co., Imperial Co.
The water rates quoted in Table 2.2 are those in effect in
early 1976. Significantly, the problem of water is destined to
become increasingly serious. The principal cause for this
situation is the deficit of local water resources forcing San
Diego County to rely on water importation. This in turn implies
involvement with :
Increased energy costs for water transport and pumping
Additional expenditure related to the completion of the remaining 44 percent of the California Water Project
2-20
- More stringent water quality standards
* Decrease in the Colorado River entitlement, and
Elimination of the agricultural rebate if legal actions now in process are successful
It has been consenratively forecast that agricultural water
rate increases of 40 percent or more are likely by the end of
the present decade.
open field operations were considered to determine feasibility.
In the first instance, data were collected for the most viable
San Diego agricultural crop, i.e., pole..tomatoes. These data
for Ventura, Monterey, and Imperial Counties, interviews with
major agricultural bank appraisers. in San Diego, and from San
Diego tomato growers themselves. This information served as
the basis for the analysis presented in Table 2.3. These
figures are conservative in that they were developed for a
. larger scale operation, i. e., 100 acres, than is possible on
the Carlsbad site.
..
As Table ,2.3 indicates, the cost picture for agricultural
production is multi-faceted. No single factor would serve as
the sole determinant of investment yield. For example, the
argument that if taxes were' reduced the profit picture would be
dramatically enhanced is not supportable. What is consistently
overlooked is that agricultural viability is dependent upon the
interrelationships of each of the several factors.
2-21
Table 2.3
Cost per Acre Pole Tomatoes
Cultural Operation
Harvest Operation Cash Overhead Capital Investment Overhead
Labor
(exclusive of water)
(exclusive of land)
'Cultural Harvest Water Taxes* Cost of Capital in land ownership**
Total
*Net farmable acres = 25 ($342,500
Dollars Percent
778 5.4 3,483 1,228 24.3 8.6
264 1.8
692 4.8 1,862 13.0 203 1.4 1,453 10.1
' '4,384 ' . 3'0'. 6
14,347 100.0%
AV x .lo607 = $36,330 4 25 NFA)
*($342,500 AV x 4 = $l,370,000 FMV, at an opportunity cost of 8%. = $109,600 + 25 NFA)
Given the cost figures cited in Table 2.3, a breakeven price
would be 28.7 cents per pound for a yield of 25 tons of tomatoes
per acre. As past price history would indicate, a price greater
than 19 cents* per pound has occurred only 13 percent of the
time for San Diego tomatoes over the last 24 years. Given such
a revenue picture, the rate of return .on investment for the
Carlsbad site is expected to be a negative 50 percent over a
nine-year period.
..... ..
*In constant dollars.
2-22
The economics of tomatoe production clearly indicate a
decision against food production with the land value and scale
being the determining factors.
The development of cost figures with respect to open field
floriculture is more difficult, since little published data
are available. Gladiola were used as a representative floral
crop as this was the last agricultural use of the site. The
cost presented are estimates developed from published data*,
correlated to survey findings and checked for reasonableness
with Mr. James R. Breece, Farm Advisor for San Diego County,
. specializing in nursery crops, turf, landscaping and deciduous .
fruits.
Given the cost figures cited in Table 2.4, and utilizing
the average yield over the last 10 years -for California*, of
33,380 spikes sold per acre, a breakeven price of 28.8~ would
be required. A review of the accompanying California price
data reveals the average price, over the same ten year period
to have been 11.6c**. The highest historical price having
been 15.2~. On this basis the expected return on investment
. ,. .. ... .
tion Report 61, September 1976.
*Flowers and Foli'age. Plants ,' Produc.tion' 'and Sales, Crop Reporting Board, Statistical Reporting Service, U.S. Department of Agriculture, Years 1956-1976.
**In constant dollars.
Table 2.4
' Floral Product'ion
' Dollars ' Per'cent
Cultural Operation
Harvest Operation,
Cash Overhead Capital Investment Overhead
Labor
(exclusive of water)
including Marketing
(exclusive of land)
Cultural Harvest Sort Water Taxes* Cost of Capital in land ownership*
493
592 1,095
237
240 900 30 203 1 , 453
",384
Total 9,627
5.1
6.1 11.4
2.5
2.5 .9 .3 0.3 -2 .1 15.2
'"5.5
100.0%
. *25 net farmable acres
*$342,500 AV x 4 = $1,370,000 FMV, at an opportunity cost of 8% { 25 NFA
would result in a negative 56.3% over a nine 'year period.
Floral production, from an economic standpoint, once again
would dictate a negative decision. As was -the case with
tomatoes, the land value is the dominant reason, followed by
the effect of other conparitive disadvantages.
EVALUATION OF VIABILITY
# The evaluation of the site for general agriculture can lead
to only one conclusion. General agriculture, even on a high
.- value crop, is not feasible. This results from a series of
factors that include:
2-24
Submarginal to marginal soil types limiting cropping alternatives
'Topography which presents cultural and soil mechanic problems resulting in reduced net farmable acreage
Climate, which while the main strength of the area, still must compete with similar climates for most crops thus mitigating this strength
Lack of size so that the scale of an agricultural operation would not represent an economic unit for most crops when considering the needs for rotation and cropping ,flexibility
I
Continually increasing cost of water and its economic impact
. 0 A lack of comparative advantage when ranked-with com- peting areas due to declining comnity support systems
An almost certain negative rate of return which would erode any capital committed to general agriculture
Increasing labor costs relative to other competing areas
In light of these findings, it is concluded that the study site
is unsuited, from an economic.standpoint, to general agriculture.
2-25
3. INTENSIFIED AGRICULTURE
_. .
...
The second agricultural alternative to explore in eonnec-
tion with the proposed site is intensified agriculture or con-
trolled environment growing. By definition, an "intensified
agricultural operation" is an activity that gets more produc-
tion out of a square foot of land area than could normally be
expected using "natural" growing techniques. It is apparent
that certain crops respond to intensified farming techniques
while other crops do not. That is, the increased yield gene-
rated by these crops economically compensates the grower for
the increased costs incurred in "forcing" those extra yields.
Food crops generally do not economically lend themselves to
controlled environment farming techniques. Ornamental horti-
culture--flower growing and foliage plant production--is viably
undertaken in controlled endronment operations.
Controlling the environment for a crop is accomplished
through a number of "systems," the most obvious .and important
of which is the greenhouse structure itself. It has been
assimed in this report that a standard A-frame greenhouse
structure with concrete support would be used in greenhouse
operations. Heating, lighting, and, to a lesser extent, cool-
ing, are important aspects of environmental control which
3-1
require the use of energy. Moisture, nutrients, and pest con-
trol are additional systems necessary for intensified agricul-
tural operations.
NATURE OF THE INDUSTRY
Flowers hnd green plants are grown in San Diego County on
a year-round basis. Either ground beds, raised beds, or pots
are used. Crops are generally timed to coincide with major
flower holidays as much as possible, although weekly production
schedules are maintained to accommodate cash flow and market
stabilization needs. Depending upon crop type .and time of year,
'a crop takes approximately three to four months to reach maturity.
Cut flower crops are harvested immediately upon bloom and shipped
directly to wholesale florists throughout the United States and
Canada. Potted plant growers have more leeway in terms of tim-
ing the marketing of their crops; however, efficient operations
denand marketing as soon after maturation as possible.
The major greenhouse crops in San Diego County are carna-
tions, chrysanthemims, roses, and potted plants. Carnations
require the least amount of capital investment and, correspond-
ingly, have the lowest rate of return. Green plants require the
highest investment in facility and, until recently, resulted
in the highest rate of return. Recent market conditions (mid-
1976 to the present) have hurt local green-plant growers.
Chrysanthemums and, to a lesser extent, roses have enjoyed a
more stable growth rate, a relatively constant return on invest-
ment, and a mid-value range in terms of initial capital outlay.
The marketing of flowers and green plants in San Diego
. County is primarily handled by the individual growers. Telephone
contacts are made with wholesale florists throughout the U.S.
and. shipments are made via air freight or refrigerated truck.
The industry is characterized by a relztively large number
of small growers (two acres or less). The few larger growers
in San Diego County (ten acres or more) produce the vast
majority of flowers and green plants shipped out of the County.
The trend in the industry is toward the gradual elimination of
the small grower in the face of increasing competition in their
. markets. Larger growers are well placed to realize the econo-
mies of scale necessary to remain competitive as well as serve
the growing needs of large mass-merchandising outlets. Mass-
perchandising today accounts for a significant percentage of
flower and green plant sales.
COST ANALYSES
Results from a survey on intensified agricultural opera-,
tions in San Diego County indicate that the average size of
greenhouse operations is 5.75 acres..* Approximately 70 percent
of the acreage is taken up by greenhouse structures, while the
remaining 30 percent is reserved for office and storage space,
*See survey results in Chapter 5
3-3
as well as a packing and shipping facility. If the entire
parcel of land under study were devoted to greenhouse flower
production, 10 such operations could be conducted at the site.
. Using standard costs developed by the University of California
Agricultural Extension Service and other industry information,
a general cost picture for new entrants into the industry can
be constructed. It should be noted, that new entrants .into the
field would incur su3stantially greater costs than they. would
have had even five years ago. Construction, land, and labor
costs have risen rapidly, .over this time period. Consequently,
a much greater capital outlay is required by the new entrant
at this time than would have been the case only a short time
ago.
Assuming total greenhouse ..space would encompass 4 acres
(70 percent) of the average 5.75 acre operation, a range of
capital investment for plant facility of from $653,000 (carna-
I tions) to $836,000 (greenplants) is indicated. For carnations
this would consist of little more than a standard greenhouse
structure with a watering and fertilizing system. For green
plants, the estimate includes those items plus heating and
cooling systems, mechanized pot-handling equipment, and tables .
and benches for crop support.
Another $61,000 of capital outlay for a processing facility
and offices would be indicated for a 4 acre operation. Also,
tools, farming equipment, office equipment, packing equipment,
3-4
and assorted items could easily add $20,000 to $40,000 to the
initial investment. Finally, permits, plans, and land prepara-
tion would add an additional amount to total start-up costs.
Once such a facility is ready, inventories of stock plants
need to be purchased, a labor crew hired, operating supplies
purchased, and debt service paid until first crops reach
maturity. These expenses continue until the crop is harvested,
markets are located, product is sold, and accounts receivable
collected. In general, it would not be unreasonable to allow
a six-month operating expense accumulation to accrue prior to
realization of cash income from sales. Table 3.1 shows the
estimated expense breakdown by crop, based on recent and
. revised industry InformatTon.
SALES ANALYSIS
There are few reliable indicators of gross sales in the
ornamental horticulture industry. Sales levels for a particu-
lar operation are a function of product mix, quality, timing,
yields, sales efforts, market conditions, and access to market.
Wide variances between different firms in each of these vari-
ables is the rule rather than the exception. It must also be
remembered that intensified agricultural techniques attempt to
"force" crops to unnatural yields and out-.of-season maturation.
While environmental factors of production are adequately manipu-
lated on the average, slight unexpected climatic changes can and
do significantly affect timing, yields, and quality of crops on
3-5
Table 3.1
Expens'e Breakdown by Crops
..
._ . . . Amount 6 Months Short-Term Capital Not Operating Total Cash Expenditure' Financ.ed2 . Expenses Necessary
Carnations $ 935,700 $187,100 $197,400 $384,500 Roses 1,111,700 222,300 225,000 447,300
Chrysanthemums 1,132,000 226 , 400 226,800 453,200 Green Plants 1,212,000 242,400 275,400 517,800
'Includes land at $200,000; a packing-shipping complex at $61,000; basic greenhouse with watering and fertilizer systems at $635,000; and necessary specialized equipment.
'Financing for new greenhouse operations is difficult to arrange at this time due to uncertainties in the industry. Area bankers involved in lending to the horitcultural industry in Encinitas are looking for well-capitalized ventures backed by a high level of actual industry experience. Assurrring finaming could be, arranged, it would in all probability involve a fluc- .tuating interest rate, a maximum 80% financing, and a m.zdm term of 15 years. It is possible that more favorable terms could
1 be arranged through established banking connections outside of ,the area of the proposed site.
31ncludes debt service at 10% interest and monthly operating
. ._ ..'$6,630; Roses and Chrysanthemums - $7,600; Green plants - $9,450.
expenses by crop per acre estimated as follows: Carnations -
.... . .. . I .. .
Sources : Dodge. Buil'ding Cost Cal'cula'tor 'and' Val'ua'tion .Guide,
McGraw-Hill Information Sys terns Company, edition 25, January-March, .1977.
Farnham, Delvert S. and Philip S. Parsons,. Develop- ment Costs -' 'Greenhouse Carnat.ions arid Roses, university oi Caliiornia Agricultural Extension Service, August 1972. (Operating costs were inflated using the Agricultural Price Index to reflect current costs.)
Copley International Corporation
an erratic bas.i:s, S'imilarly, the .climate in the eastern U .St
can have a dramatic effect on 'the narketability'of San Diego
grown products. The recent Florida freeze caused prices to
3-6
soar in the face of unmet demand, The extreme cold weather of
the East, however, created a situation where it was impossible
to ship the product to those demand centers. In short, the
perishability of many of the crops plus the vagaries of climate
can combine to create an unpredictable factor in estimating
future income.
In any event, given the uncertainties inherent in sales
forecasting mentioned above, generalizations concerning income
can be made based on the assumption of "normal" circumstances.
The sales picture for various. crops has changed, in some cases
'drastically, since published data were 'last available. On the
average, however, the following gross sales chart can be esti-
mated. (See Table 3.2).
Table 3.2
Gross .Sales Annual Gross S les Per' Square' Foo't 1 . . s.b..'ec.t. .site. 4 .
Carnations $1.28 . $223,000 Roses 2.00 348,500
Chrysanthemums 2.12 369,400
. Green Plants .3.02 527,076
'Chrysanthemums and'green plants gross sales per square
foot figures were adjusted to reflect trend data based on present market conditions.
'Assumption of 4 acres of greenhouse space available for
every 5.75 acres .
Source : ' Fl'owers. 'and' Fo'liag'e. PIan.t's','' Pro'duc'ti'on 'an'd 'Sales , 19 /b and 19 /6, Intentions tor 19 /./, u .so Depart-
ment of Agriculture, Crop Reporting Board, March 1977.
Copley Internation Corporation
3-7
!I .. .
._
,.
..
INCOME ANALYSIS
Comparing the monthly operating expense data with the
monthly gross sales projections, and giving no consideration
of the total short-term cash requirements a monthly chart can
be constructed. (See Table 3.3).
Table 3.3
Monthly Income by Crop
Monthly Monthly
' Expenses , 'Sales
Carnations $32,900 .$18,600 Roses 37,700 29,000
. Chrysanthemum 37,800 30 800 Green Plants 45,900 43,900
Source: Copley International Corporation
Monthly .... Income '(Los's)
An analysis of the above chart indicates a negative cash
flow indefinitely for all four crops. These findings, partic-
ularly in the case of green plants, can be attributed to the
fact that new entrants would incur substantial construction
costs. Since 1972 general consthction costs in San Diego
County have increased by 10.8 percent annually. In addition,
potential new .investors would have to pay a much higher price
for land in the maritime areaclimate than if th.e operation were
inland. When conpared to a few years ago both of these factors
greatly increase the initial investment required to start. up a
greenhouse operation. This increase gives rise to higher monthly
debt service charges which have an adverse impact on the profit-
ability of each crop.
SAWTOOTH GREENHOUSE STRUCTURES
In the preceding cost-revenue analysis, it was assumed
that a standard A-frame greenhouse structure would be utilized
for housing the intensified agricultural operations. The Dodge
Building Cost Calculator and Valuation Guide indicates that such
a structure would entail total construction costs of' $3.75 per
square foot. Alternatively, since the specific parcel of land
is located close to the ocean, it is conceivable that a. less
expensive (50 cents per square foot) structure--a sawtooth
greenhouse--could be used in place of the standard A-frame.
This would serve to reduce the capital invesment required and
consequently improve the profitability of an average size green-
house operation.
Despite the obvious cost-savings generated by using the
sawtooth, the use of this type of greenhouse has steadily
declined in the San Diego area. The primary reasons for this
development can be enumerated as follows:
I. Lack of Flexibil'ity. This type of greenhouse is only
suitable to the growing of carnations..* Thus, there is a built-
in lack of flexibility with this design. Increases in market
demand for various other crops, especially chrysanthemums and
roses, cannot be taken advantage of by the grower using a saw-
tooth greenhouse. Accordingly, unable to develop a diversified
... ..... .
*Seward T. Besener, "Commercial Production of Cut Flowers and Potted Plants in San Diego County," University .of California Agricultural Extension Services, September 1976, p. 3.
3-9,
crop mix, the sawtooth user is extremely vulnerable to fluctu-
ating prices in the carnation market and, thus, a higher risk
of loss than other flower growers.
2. Lack of Winter Heating. The coastal area where the
subject site is located occasionally experiences a frost.*
Whi.le this may only occur for one to two nights every three or
four years, affected growers may lose'a significant percentage
of their spring holiday crops when a freeze does occur.* For
this reason, many of the larger carnation growers have a supple-
mental, emergency heating system. In addition, the use of
supplemental heating even during -above freezing weather has
proved to be an aid in controlling the timing of carnation bloom-
ing for holiday harvest. However, the sawtooth design does not
lend itself to 'kinter heating adaptation.***
Carnation Profitability
Assuming that sawtooth greenhouse structural. form is used
in place of the standard A-frame, significant reduction is
achieved in the initial capital investment required. By using
the sawtooth structure, the investment in plant facility con-
struction is reduced from $635,000 to $87,000 and a corresponding
*op . cit . , Climates of San Diego county, P* 40
MSeward T. Besemer, "Carnation Culture in San Diego," University of California Agricultural Extension Service, August 1975, p. 1.
MSeward T. Besemer , "Coxmercial Production of Cut Flowers and Potted Plants in San Diego County," University of California Agricultural Extension Service, September 1976, p. 3.
I_ 3- 10
reduction in the total capital expenditure is achieved from
$935,700 to $387,700. Assuming the same interest rate of lo%,
the montLly interest charge is only $1,700 compared to $6,200
incurred with the more expensive A-frame. When the reduced
interest charge is added to the monthly operating expense for
the carnation crop the total monthly operating expense is
approximately $28,400. As can be seen in Tzble 3.4, these
revised estimates still result in a monthly loss of $9,800.
Thus, even utilizing a sawtooth structure does not produce a
profitable carnation operation.
Table 3.4
Carnation- Profitability
. A-Frame Sawtooth
Monthly Sales Revenue $ 18,600 $18,600
Monthly Expenses
Total Monthly Expenses '32 ;goo '28,400
Net Income (Loss) $ (14 , 300) . . $ (9,800)
Interest Expense $ 6,200 $ l,700 Operating Expense '2'6 , '7'0 0 ' '26','7'00
From the preceding analysis it is clear that the use of a
sawtooth greenhouse structure would not permit a sufficient
improvement in the profitability of carnations to make the crop
economically viable. Even if it is assumed that the two con-
straints previously discussed--the lack of flexibility and
inability to heat in winter--are not applicable to the study
site, in the final analysis, the cost savings generated by using
3-11
sawtooth greenhouses would be insufficient to prevent a nega-
, . .. tive cash flow from the carnation crop.
SPECIAL INDUSTRY CONSIDERATIONS
Labor -
The single most significant variable in production cost for
greenhouse operations is labor. At this point in time in
California, it is also the most volatile. Labor accounts for
between 30 percent to 50 percent of total. production cost for
most greenhouse-grown crops in San Diego County. The trend in
recent. years has been a sharp increase in the wage' levels of
the California agricultural worker. The prevailing wages of
approximately $3.00 per hour in San Diego County are double the
average wage rates of just four years ago. Additionally, the
very real possibility of unionization of the greenhouse indus-
try (several San Diego County firms have already become union-
ized) underlines the probability of continued wage increases in
the near future.
Traditionally, California agriculture has enjoyed a rela-
tively constant supply of labor, primarily due to the close
proximity of the State ot the large labor pool of Mexico. More
restrictive quotas on legal immigration from Mexico, however,
as well as increased efforts on several fronts to stem the tide
of illegal immigration, have placed this traditional -source of
this source of labor from entering the agriculture job mark.et.
3-12
Energy
The economic viability of an "intensified agricultural
operation" depends quite heavily on both the availability and
cost of energy. A special consideration affecting the future
feasibility of greenhouses in San Diego County is the extent
to which natural gas , electricity, propane, gasoline, and diesel
fuel -dl1 be available for ornamental horticulture. Given future
.. availability, will the cost be compatible with prices con-
sumers night be willing to pay for flower and plant products?
The cost of natural gas has risen by an average of 20 percent
per year for the last five years. Growers of a certain size in
San Diego County have had natural gas service curtailed during
selected cold weather periods in each of the last three years.
The uncertainty surrounding the energy situation, coupled with
the dependency upon energy which is a characteristic of the
flower and green plant industry, dictates that caution must
certainly be advised at this time concerning investing in an
intensified agriculture operation.
Environmental Consideratfons -
, .-
The ornamental horticulture industry finds itself both
praised and damned by those who have become aware of and con-
cerned for t5e environment. While agriculture in general and
. floriculture in particular are looked upon as socially desirable
" industries, the use of pesticides and herbicides have been
viewed with increasing alarm. The grower of today finds himself
..
.-
and effective pesticide. Regulations concerning the use of
- these chemicals promise to be even more restrictive in the near
future. Unfortunately, it remains a fact that future crop
r-. yields and quality will directly reflect the arsenal of chemical
aids left available to the grower in the face of these increased
efforts to clean up. the environment.
i
,- .
,_ . .
Market 'Considerations
Depending upon specific crops grown, the California grower
of flowers and plants has either experienced negative, stable,
or extremely rapid growth over the last five years. It is dif-
ficult to project trends, however, due to the rapidly changing
competitive and cultural climate affecting the market. As
mentioned earlier, weather conditions affecting competitor. pro-
ducers in other areas of the U.S. and foreign countries, for
example, can have a drastic short-range effect on market
demands for San Diego County flowers and plants. In the long .
run, however, the factors that will affect the markets for a
greenhouse operation are social trends and .foreign competition.
Recent months have witnessed a drastic cutback in the
sales levels for green plants in the U.S. This followed almost
three years of exceptional growth for this segment of the indus-.
try. The reason for this .slump is open to speculation. It has
been postulated that the public has become satiated with house
plants or that amateur propagation has replaced purchased plants.
Another social trend, difficult to assess yet easily recog-
. .. .
,i
nized, is the gradual lessening in the importance of funerals,
.-
I 3-14
or, more specifically, flowers at funerals. This trend could
have a serious effect upon cut flower producers of the future.
The importance of weddings in the future is another social factor
. which could significantly affect the greenhouse flower grower.
A second social trend, alluded to earlier, has been the
extremely rapid growth of mass-merchandising centers (super-
markets, discount chains, department stores) in terms of their
importance as a sales point for ornamental horticultural pro-
ducts. While this, overall, has an expansionary effect upon
the total market, it also has had a negative effect upon the
profit picture of small retail florists -- the traditional
marketplace for the bulk of San Diego County grown cut flowers
and green plants. The trend toward mass-merchandising indicates
the growing importance of volme production coupled with lower
profit margins per unit. Efficiencies of size will probably
play a much greater role in the profitability of future green-
house operations.
."
. . ..
..
. .. Foreign conpetition has already had a significant effect
upon domestic markets for cut flowers. As can be seen in Table
A-4 (see Appendix A) the market share held by foreign competi-
._
- tion is increasing at an annual rate of more than four times
greater than that of the total market. These inroads are
particularly significant when it is realized th.at as short a
time ago as 1970 the foreign share of the market amounted to
only one-half of one percent of the total. Given the probability
of further increases in labor costs locally, foreign-produced "
, \
3-15
flowers will undoubtedly continue to increase their market
penetration, particularly in the markets of the Eastern United
States .
Other Considerations
Water availability for intensive agricultural usage is an
uncertainty in the future. At the present time some farmers in
California have had 60% reductions in the amount .of water made
available for their crops. The uncertain duration of the present
drought is of serious concern to the prospective greenhouse
investor.
EVALUATION OF VIABILITY
. "
L -.
In examining the economic feasibility of the study site for
intensive agriculture, numerous factors impacting greenhouse
operations have been examined. Rapidly rising building costs
and higher interest rates have significantly changed the capital
investment and debt service which would be required for a new
greenhouse operation. Revenues, on the other hand, have been
characterized by significant fluctuations in selling prices.
Growth in sales of green plants; for example, increased
dramatically during recent years. However, this was followed
.-
by a drastic cutback in sales levels and prices realized over
" the past several months. Other greenhouse crops during the same
period of years experienced either stagnant or declining markets.
At the present time it is estimated that a new greenhouse opera-
tion could not be profitable in the maritime areaclimate if the
3- 16
crops raised were among the four major categories grown in San
Diego County.
The uncertainty surrounding other input factors further
clouds the future of greenhouse operations in this areaclimate.
The most important of these factors are labor avzilability and
cost, water availability and cost, and energy. In addition,
competition from foreign flower producers has soared since 1973.
Trends would indicate a continued increase of this competitive
pressure in the future.
-
As. a consequence of the cost and selling price estimates
contained in this analysis and in light of future uncertainties,
the present outlook for an economically feasible greenhouse
operation on the study site is negative. Of the crops studied
only green plants were near a breakeven level. If the market ..
ere to improve in the future, this crop mi.ght once again prove
feasible .
3-17
.-
L_
,._
4. IMPACT OF WILLIAMSON ACT
The government of the State of California, as well as local
governments, have become increasingly aware of the cost pres-
sures which were discussed in Chapter 11, Background. California
ranks nationally as the nation's leading agricultural state.*
Agriculture is California's leading industry. Further, as was
indicated in Chapter 11, the State's farm expenses increased
by a margin of nearly 31% more than the expenses of the nation
as a whole- in the past-Korean War period. A portion of this
rise in the expense component was property tax. By law, the
County Tax Assessor must tax land at i.ts "Fair Market Value".
This assessment method can result in property tax assessments
exceeding the total value of agricultural production from a
particular parcel. In an effort to help stabilize the State's
agricultural economy, the legislature provided enabling legis-
lation empowering county and city governments to tax producing
agricultural lands on a productive basis (income capitalization)
as opposed to fair market value. This enabling legislation is
*Principal Crop and Livestock Commo'di ti'es , California Department of Food and Agriculture, 1975, page 2.
*Farm Income State Estimates, 1949-73, Loc Cit.
4-1
".
I.
..
C.
..
,
known as the "California Land Conservation Act of 1960, or as
the Williamson Act ."*
THE LAW
The following discussion provides a brief summary of the
purpose, intent and criteria of the enabling legislation --
the Williamson Act -- and the implementing policy for the City
of .Carlsbad.* This discussion is presented only as a means
of providing general background so that the reader kight have
a clearer understanding of the scope and nature of the law, as
it might impact the agricultural economic viability of the
study site. This discussion should not be construed to be an
abstract' of the law. Neither is it completely comprehensive
nor intended to be a detailed analysis which would be beyond
the scope and purpose of this study. Emphasis here is on the
pr.obable .economic impact and.not interpretation of the law.
The legislature found that the presemation of prime
agricultural land is necess..ary: to discourage premature and
unnecessary conversion of prime agricultural land is of benefit;
agricultural lands have value as open space to existing or
*Government Code, Chapter 7 Agricultural Land, Article 1-6, . .- Sections 51200 - 51295, as amended.
1 .U-
L
4-2
pending metropolitan developments; and land within a scenic
highway corridor or a wildlife habitat, because of its beauty,
is of great importance. Therefore, it is in the pubiic interest
to protect agricultural land.
Such lands may be placed in an agricultural preserve. An
agricultrual preserve is defined as an area devoted to &:her
agricultural use, open space u,se, recreational use, compatible
' use, or any combination of these uses.
Several criteria for the creation of a preserve are listed
in the Council Resolution of the City of Carlsbad. They are:
.public benefit; "non urban land uses" to include flood plains;
open space; and minimum preserve size and ownership. In addi-
tion, unreasonable tax burden may not be placed on other
property owners from the resulting reduction of assessed value.
The size and ownership criteria .indicate that generally 20
- -. acres is the minim size to be considered. Ownership within
., 4 the preserve nust meet minim sizes as well. Examples are,
15 acres for truck crops and field flowers, and 8 acres for
"hot 'house" flowers. Exceptional circumstances can warrant
reductions of the requirements as they pertain to size. Once
in a preserve, only agricultural uses are permitted, and land
cannot be divided beyond a minimum determined by the Board 'of
Supervisors.
The property owner and the
setting forth terms, rights and
city. enter hto a contract
obligations : The Act provides
for a minimum 10 year contract period. San Diego County pro-
..
vides for an automatic renewal of one year until notice of
non-renewal is provided. If the contract is cancelled by the
. owner, a fee is payable equal to 100% of the unencumbered
assessed valuation during the first five year period, adjusted
from that amount by a reduction of 5%, for each year after
five years which the contract has remained in effect, but never
less than 50% of the assessed valuation.
.Of particular interest is the definition of "prime agri-
cultural land" which is:
* All land which qualifies for rating as class I or class 11, SCS land use capability classifications
Land which qualifies for a rating of 80 through 100 in the Storie Index Rating
Land used in the production of livestock, food, and fiber with a carrying capacity of one animal unit per acre
Land planted to fruit or nut bearing trees, vines, bushes or crops with a nonbearing period of less than five years and which will normally produce $200 per acre per year during their commercial bearing period
Land that produces fron,unprocessed agricultural plant products an annual gross value not less than $200/acre, three of five years
If particular importance is the provision which states
with respect to cancellation "The uneconomic character of an
existing agricultural use shall likewise not be sufficient
reason for cancellation of the contract. The uneconomic
character of the existing use may be considered only if there
. ..
!
f.. .
i "
is no other reasonable or comparable agricultural use to which
the land may be put" .*
ASSESSMENT APPROACH
The County of San Diego provides for assessment based on
the assessors determination of agricultural value, which is
then capitalized at a predetermined rate. The prevailing tax
rate is then applied.
The assessment procedure, as it pertains to truck crop,
floricul.ture and greenhouses is conducted in the following
manner.** The County tax assessor determines the agricultural
value of che land. Generally in these types of crops the
agricultural rental value is used. To this is added
the Replacement Cost (New) of all improvements, less deprecia-
tion for age and condition (residential improvenents on the
property are excluded in "this computation and taxed at their
Fair Market Value for both land and improvements). The result-
ing value is then capitalized, the result being the "Fair
Agricultural Value". The Fair Agricultural Value is then
divided by 4 to dete-ne the "Assessed Agricultural Value"
to which the prevailing tax rate is applied.
*Government Code; Loc cit, Article 5, Section 51282(b)
W. William Christman, Appraisor, San Diego County Assessors Office.
4-5
The capitalization rate is derived utilizing three com-
ponents. The rate so derived can and usually does change as
often as annually. The three components are: the state
mandated rate; called the "Safe Rate" which reflects the
average rate at which state obligation bonds have been sold;
a "risk rate" which varies from .5% to 2%, as determined by
the.nature of crop income risk reflected in the determination.
of the Fair Agricultural Value. This is normally 1% for the
type
is a
rate
of crops considered within the study; the final component
"Tax Rate Adjustment", derived by dividing the area tax
by 4.
The capitalization rate likely to be used if applied to
the site would be as follows: 6.75 Safe Rate + 1 Risk Rate +
2.65 Tax Adjustment Rate or a Capitalization Rate of 10.4%.
ECONOMIC IMPACT
By applying the assessor's approach to the study site,
the resulting economic impact on general agricultural and
controlled environment usage can be quantified.
General Agriculture, per Acre Basis Annual Costs:
Pole Tomatoes
Total Cost of Production
Total Cost of Production
Cost Savings Apportioned
Savings as a percentage
outside a preserve '$ 14,347
within a preserve 12,926
to placing in preserve 1,421
of total cost 9.9%
I
4-6
'Floriculture
Total Cost of Production
Total Cost of Production
Cost Savings Apportioned
Savings as a percentage
outside a preserve $ 9,627
within a preserve 8,212
to placing in preserve 1,415
of total cost 14.7%
Controlled Environment, Gross Annual Costs:
Carnations
Total Cost of Production outside a preserve Total Cost of Production within a preserve Cost Savings Apportioned to placing in preserve Savings as a percentage of total cost
Roses
Total Cost of Production outside a preserve Total Cost of Production within a preserve Cost Savings Apportioned to placing in pre.serve Savings as a percentage of total cost
Chrysanthemums
Total Cost of Production outside a preserve Total Cost of Production within a preserve Cost Savings Apportioned to placing in preserve Savings as a percentage of total cost
$394,800
391,384
3,416
0.9%
$450,000
446,800
3,200
0.7%
$453,600
450,660
2,940
. 0.7%
i
I ,
4- 7
Green Plants
i
i ..
Total Cost of Production outside a preserve Total Cost of Production within a preserve Cost Savings Apportioned to placing in preserve Savings as a percentage of total cost
$550,800
546,360
4,440
0.8%
These results reflect a relative advantage to land with
few or no improvements when compared to highly improved land
placed under the Act. As controlled environment culture
represents a tax valuation skewed heavily toward capital
improvements, the beneficial impact is inverse to the degree
to which' improvements have been placed on the parcel.
Applying the foregoing results to general agriculture
it is seen the economic impact is inconsequential, reducing
the anticipated loss from 50 to 43% for pole tomatoes, and
56 to 49% for floriculture. '
The impact on controled environment is insignificant.
Even though taxes were reduced 18 to 25%, i.t translates into
savings of less than 1% in the overall conclusion. As is
evident from the provisions of the Williamson Act, the law is
designed to be inclusive of nearly any conceivable agriculture
usage. It is of note that the site qualifies only in the last
general provision. This is perhaps indicative of the impact
of the quantified economic impact of the Act upon the- agricul-
tural viability of the parcel. The inclusion of the site in
4-a
10-15% for general agriculture
0.7 - 0.9% for general agricu1tur.e
It can be fairly stated that placement of the site into an
agricultural preserve will not afford adequate cost relief to
allow a viable agricultural operation.
It is appropriate to point out that according to the study
prepared 'for the Carlsbad Chamber of CoAerceJr the establish-
ment of agricultural preserves within the City of Carlsbad will
have a substantial adverse effect on tax revenues. Since the
City currently has 350 acres under the Act, there may be a
reluctance to accept additional parcels as agricultural pre-
serves under the "unreasonable burden on other property
hers" criteria.
4-9
5. SURVEY RESULTS
INTRODUCTION
The purpose of this section is to identify the results
of a survey of open field and greenhouse operators.. The
survey was conducted in order to allow operators within
the industry an opportunity to provide 'current data. The
survey ellicits information pertaining K'O :
The structure of the industry
The feasibility of operating on the 60 acre Carlsbad parcel
. Optimal greenhouse operations
4 Land prices and rents
General industry considerations including .the Williamson Act
This survey of area operators .appears to be the only one
of its kind.
Two separate survey instruments were .employed.. The
first quest-ionnaire was designed for greenhouse operators,
The second questionnaire was designed for open field flower
growers, Copies .of these questionnaires and the precise
survey methodology are contained in Appendix C of this report..
5-1
I
GREENHOUSE OPERATORS
The greenhouse operators surveyed were primarily in the
Encinitas - Carlsbad area. Those greenhouse firms which res-
ponded to the questionnairearepresent an estimated 35% of the
total operations in the area. However, since the operations
were identified by the use of an available Dun & Bradstreet
listing which only considers firms with eqloynent greater
than five individuals, the percentage of total sales should
be in excess of the 35% level.
Industry Structure
The greenhouse operations appear to be a North Sa= Diego
agricultural activity. Approximately 88% of the firms are
Table 5.1
Locations of Operations
Location
Carlsbad Encinitas Other North County Rest of San Diego County
Percentage
15% 49% 24% 12% -
Source :
100%
Survey, Copley International Corporation.
located in North County with 64% in Carlsbad and Encinitas
alone. It is interesting to note thai the bulk of the firms
in the other North County category, i. e. , 24%, are clearly
not in the maritime areaclimate. These firms are located
in Vista, Pallbrook, and Valley Center. A special tabulation
shows that 21% of all the firms are located outSi.de the
maritime areaclimate.
I 5-2
..
Greenhouse operations within the region produce a mix
of flowers. Table 5.2 summarizes the primary crop of area
greenhouses. The bulk of the primary greenhouse activities
Table 5.2
Primary Greenhouse Crops
Crop Percentage
Carnations 36.4% Green plants 27.3% Chrysanthemums 12.1% Roses 6.1% Orchids 6.1% All others 12.0%
100.0%
Source: Survey, Copley International Corporation.
in the region are accounted for in terms of carnations and
green plants. However, some greenhouses have secondary
crops. Table 5.3 summarizes the secondary crops involved.
As this table indicates, by far the largest percentage, i. e. ,
63.6% of the greenhouse operations do not have a secondary
crop. However, the remaining 36.4% produce a secondary
greenhouse crop. In addition, 15.2% of the operations
produce a third crop while 9.1% produce even a fourth crop.
5-3
Table 5.3
Secondary Greenhouse Crop
..
Crop Percentage
Green plants 15.2% Carnations 6.1% Chrysanthemums 3.0% All other 12.1% None 63.6%
100.0%
Source: Survey, Copley International Corporation.
The size involved in re.giona1 greenhouse operations is
relatively modest. Table 5.4 summarizes the distribution
of total acreage. Almost 70% of the greenhouse operations
. Table 5.4
Acres
1- 2 3- 4 5 6 7- 8 9 - 12 13 - 20 21 or more
Total Acreage
Percent
18.2% 18.2% 18.2% 15.2% 9.1% 9.1% 6.1% -6.0%
100.0%
Source: Survey, Copley International Corporation.
are on six or less acres of land. Only 12.1% of the
greenhouses indicated acreage in excess of twelve acres.
Table 5.5 summarizes the s4uare footage for these operations.
5-4
Table 5.5
Greenhouse Square Footage
Square Footage
Less than 25,000
. 25,000 - 49,999
50,000 - 149,999
150,000 - 299,999
300,000 - 499,999
500,000 - 749,999 Don ' t know Refused
Percent
12.1% 12.1% 21.2% 27.3% 6.1% 3.0% 15.2% 3.0%
100.0%
Source: Survey, Copley International Corporation.
As Table 5.5 indicates, over 72% of the greenhouses have
less than 300,000, square feet. Thus, the greenhouse
operations are not large by field agricultural standards.
The bulk of the greenhouse operators own the land on
which their greenhouses are situated. An 87.9% indicated
that they owned the land. The remaining 12.1% leased a
portion of the land while owning the remaining portion.
For those greenhouse operators who lease a portion of the
land for their activity, rents ranged from $100 per acre
to $4800 per acre. However, the total acreage leased and
.owned for those who leased a part of their land was less than
6 acres. None of the lease arrangements were based on a
share rent.
Sixty Acre Parcel
The majority, 72.7%, . of the greenhouse operators were
of the opinion that a 60-acre greenhouse operation in the
maritime climate would be economically feasible. However,
.
5-5
t.
.. I,
24.25 disagreed and 3% did not know. In general, those
indicating favorable economic feasibility suggest a wooden
"A" frame structure with hard plastic or fiberglass panels
and with controlled temperature capabilities. Suggested
crops include a variety of green plants and/or a variety
of flowers.
However, the growers appear to be divided in terms .of
their opinions regarding funding from a lending institution
for the purchase of a 60-acre parcel. Approximately 42.4%
of the operators indicate that funds would be available to
them for purchase of such a 60-acre parcel. Alternatively,
45.5% indicated that lending institution funds would not
be available to .them for such a purchase. The remaining
12.1% did not know if lending institution funds were or
were not available to them.
In addition, each respondent was asked to rate market
and production factors in relation to the purchase of such
a 60-acre parcel for a greenhouse operation. Table 5.6
summarizes their responses. As this table indicates,
greenhouse operators appear to be evenly split over the
issue of whether market factors are favorable or unfavorable.
A similar split is apparent in terms of the availability of
capital. However, the largest majority of growers indicated
that labor availability and agricultural support systems
i
were favorable to such an operation.
5-6
Table 5.6
Market and Production Factors
"
Don' t Know Factors Favor.able Unfavorable or Refused Total
Market factors 45.5% 45.5% 9.0% 100.0% Availability of Capital 42.4% 39.4% 18.2% 100.0% Availability of Labor 78.8% 18.2% 3.0% 100.0% Agricultural Support System 90.0% 6.1% 3.0% 100.0%
Source: Survey, Copley International Corporation'.
An Optimal Greenhouse Operation
The greenhouse operators were asked questions with respect
to the optimal size of a greenhouse. They were also asked
the relationship of an optimal greenhouse to areaclimates,
and cost advantages and disadvantages of maritime , coastal,
and transitional areaclimates.
Table 5.7 summarizes the size of an optimal greenhouse
operation described by San Diego County operators. As this
table indicates, the majority of operators responded that
an optimal greenhouse would be less than 300,000 square feet
or less,than seven acres. However, 21% of the operators did
not know what an optimal greenhouse size might be. Only 15%
indicated an optimal size in excess of 500,000 square feet
or 11.4 acres.
When asked whether they would be willing to operate an
optimal'size greenhouse in the maritime areaclimate, 75.8%
of the operators answered affirmatively. When asked why
5-7
Table 5.7
Optimal Greenhouse Size
Square Feet of Greenhouse
Less than 25,000 25,000 - 49,999 50,000 - 149,999 150,000 - 299,999 300,000 - 499,999 500,000 - 999,999 One million or more Don' t know
Percentage
15% 19% 6% 12% 12%
6% 9% 21%
100%
-
Source: Survey, Copley International Corporation.
they wocld be willing to operate in the maritime areaclimate,
major reasons for favorability included: .
: Mild weather and no frost
Better air circulation
Favorable heating and cooling expenses
However, the 21.2% who responded negatively blamed:
High humidity, winds, and salty air
Too much moisture from the ocean
Coastal restrictions
for their unwillingness to operate in the maritime areaclimate.
When asked whether they would be willing to operate an
optimal size greenhouse in the coastal areaclimate, 81.8%
answered affirmatively, major reasons for these affirmative
responses include:
Ocean influenced climate
Mild weather, no frost
Cool summer breezes
5-8
Best climate to grow
I
!
.__.
!.
Land expense less
The 18.2% who responded negatively blamed
Temperature fluctuations
Heating and cooling expenses
Energy expenses
for their unwillingness to operate in the coastal areaclimate.
When asked whether they would be willing to operate an
optimal size greenhouse in the transitional areaclimate, 36%
of the operators answered affirmatively. Major reasons- for
these affirmative responses include:
Can grow any kind of plant
' Availability of labor
Cheaper land
Less restrictions
Water availability
The 63.6% who responded negatively blamed:
Heating and cooling costs
Wind protection costs
for their unwillingness to operate in the transitional area-
climate.
When operators were asked if there were any cost ad-
vantages due to locating a greenhouse in the maritime climate
as opposed to the coastal climate, 69.6% responded affirm-
atively while 30.3% responded negatively. Major reasons for
cost advantages include:
5-9
i
. * Transportation costs
Heating and cooling costs
Labor availability
Water savings
However, when operators were asked if there were any
disadvantages due to locating a greenhouse in the maritime
climate as opposed to the coastal climate, 78.8% responded
affirmatively while 21.2% responded negatively. Major
reasons for cost disadvantages include:
Land costs
Capital requirements ..
Higher taxes
Greater probability of plant disease
Coastal Commission restrictions
In terms of both cost advantages and disadvantages, the
percentage of estimated cost variability was quite large.
Land Price, Rent and Location
Regional greenhouse operators were asked a series of
hypothetical questions dealing with land price, rent, lease
agreements, and location. Again questions were asked in
relation to areaclimates.
Operators were asked to indicate the highest price
per acre that they were willing to pay for greenhouse land
if starting a new greenhouse operation. Table 5.8 summarizes
their responses by areaclimate. As this table indicates,
!-
t.
I
5-10
Table 5.8
Highest Payable Price Per-Acre.
Climate Average Price
Maritime Coastal Transitional
$20,776 $15,483 $ 9,500
Source: Survey, Copley International Corporation.
the average price of greenhouse land which operators are
willing to buy drops significantly as the location moves away
from the ocean.
Operators were then asked to indicate the lowest price
per acre for which greenhouse land is available by areaclimate.
Table 5.9 summarizes their responses. When a comparison is
Table 5.9
Lowest Available Price Per Acre
Climate Average Price
Maritime $28,636 Coastal $18,058 Transitional .$ 8,690
Source: Survey, Copley International Corporation.
made between Tables 5.8 and 5.9, it is apparent that operators
are unwilling to match their perception of the market in
terms of land prices for greenhouse use. Specifically, the
price operators are willing to pay is significantly lower
”
than the price that they perceive the market will demand
for the land.
Analogous questions were asked pertaining to rental of
land. Table 5.10 summarizes the results. It is interesting
Table 5.10
Greenhouse Land Rental Lowest Rent Highest Rent Number of Acres Per Acre Climate Per Acre Leased Available
Maritime $676.00 31 $2,048.00 Coastal $496.00 28 $1,854.00 Transitional $398.00 75 $ 360.00
Source: Survey, Copley International Corporation.
to note that only in the case of transitional areaclimates
is the lowest rent for which land is available conceived
to be lower than what operators are willing to pay. In
'. addition, there appears to be little difference between the
acreage that would be leased in the maritime climate and
a leasehold in the coastal climate, l.e., 31 acres versus .
28 acres.
Although few of the greenhouse operators have a lease-
hold, they were asked what the maxim number of years for
which they would sign a greenhouse lease. Table 5.11
summarizes their responses. As the table indicates, 64%
of the operators indicated that a leasehold period of 15
years or less would be desireable. Somewhat surprisingly,
21.2% of the operators indicated that a leasehold period
less than 10 years would be favorable.
5-12
Table 5.11
Leasehold Length
"
\
Years
Less than 1 1- 3 4- 6 10 - 12 13 - 15 More than 15 Refused
Percentage
3.0% 9.1% 9.1% 24.2%
-. . 18.2% 33.3% 3.0%
100.0%
Source: Survey, Copley International Corporation.
As an alternative to fixed rental rates for the lease-
hold, operators were asked if they would agree to a share
rent arrangement. Only 30.3% responded affirmatively while
69.7% responded negatively. Of those operators who responded
favorable, the average rent which 'they indicated they were
willing to pay amounted to 14.2% of gross sales. It appears
that greenhouse operators are generally unwilling to agree
to share rent arrangements. Those who are willing indicate
a relatively low share rent. For example, the Property
Department of the City of San Diego requires a 25% share
rent minimum on City-owned agricultural leaseholds.
The final hypothetical question asked greenhouse operators
if they would move their operations to San Diego County given
they were operating outside the county. An overwhelming
majority, 84.8%, indicated they would consider such a move.
Only 15..2% indicated they would not consider such a move if
they were producing in some other area.
5-13
i
i
Industry Considerations
Greenhouse operators were asked about the future ex-
pansion or contraction of the industry. Table 5.12 summarizes
their responses. As the table indicates, most operators
believe that the industry will expand or stay the same.
Of those who expect expansion, the estimated rate of
expansion is thought to be approximately 10.9%. For those
indicating contraction, the estimated rate is approximately
27.4%
Table 5.12
Future of the Greenhouse Industry
Average Rate 'Probable Future Percentage of Expansion
Expand 42.4% 10.9% Stay the same '39.4% Contract 18.2% -27.470
"-
Source: Survey, Copley International Corporation.
Operators were then asked to identify the most severe
problem facing San Diego County greenhouse operators. Table
5.13 summarizes their responses. The two most significant
problems appear to be rising input costs and competitive
imports from South America. Significant increases in the
the greenhouse were
rising input cost.
also appear to be a
the major problems associated with
Competitive imports from South America
major problem in the minds of operators.
5-14
Table 5 ..13
Most Severe Problems
,-
,?.
,".
. . ..
Response Category
Input costs Imports from South America . Land useage and land costs Taxes Government
Labor availability Nature Transportation
regulation
Percentage
30.3%
27.2%
12.1% 12.1%
6.1% 6.1% 3.0%
3 0%
100.0%
Source: Survey, Copley International Corporation.
Finally, operators were asked to assess fie signfr'icance
of the Williamson Act. Table 5.14 summarizes their responses.
Table 5.14
Williamson Act
Impact of Act
Favorable Unfavorable No effect Don' t know or refused
Percentage
57.6% 6.0% 18.2%
18.2%
' 100.0%
Source: Survey, Copley International Corporation.
".
The major reason given for favoring the Williamson Act was
that the provisions of the Act lowered property taxes, i.e.,
21.2%. However, more than 40% of the operators did not in-
dicate the rationale underlying their responses.
5-15
FIELD FLOWER GROWERS
..
..-
I,
In San Diego County there are significantly fewer
growers of field,flowers than there are greenhouse growers.
Consequently, the total number of responses to the survey
conducted among firms growing flowers in open fields was
very limited. Five firms responded to the survey. Because
of this snall number, answers to certain questions cannot
be reported without disclosing data on individual firms.
Since respondents were assured that no individual data
would be disclosed, the survey results reported in this
section are less comprehensive than was the case for green-
house flower growers. 3t should be noted that, in spite
of the small number in the sample of fi.eld flower operations,
these firms represent a significant proportion of all such
growers in the County.
Structure
.
Each of the firns responding had a significantly different
mix of crops which are grown. All grow ornamentals. Other
crops which are field grown include gladiolas, bedding plants,
carnations, and miscellaneous bulbs.
‘ Represented in the sample were firms operating only in
San Diego County as well as ndulti-county operations. Acreages
involved were generally small -- less than 20 acres --
although larger acreages were included. Both owners of the
land and leasees were represented among the respondents.
For land cultivated under lease, the rental was based on
”
the number of acres leased. Rental rates were well under
.- $200 per acre.
Feasibility of Cultivating a Sixty Acre Parc.el
*. When asked whether, in their opinion, a 60-acre field
flower operation in the maritime areaclimate wo.uld be
economically feasible, the majority of respondents said it
would not. Those holding the view that such an operation
would be feasible indicated that they would cultivate bulbs
or nursery stock on such a parcel. They also believed that
financing from a lending institution could be obtained to
undertake such an operation.
.-
..
When asked to rate market factors as favorable or un-
favorable for such an operation, the majority believed them
to be unfavorable. Labor availability was similarly rated.
With regard to the availability of capital and of the
agricultural support system the majority rated these factors
as favorable.
Respondents were asked to indicate the maximum distance
to a water source which they would consider for their floral
product'ion. Responses ranged from "one nile" to "located on
the parcel'' being cultivated.
Optimal Field Flower Operation
The optimal size for a succe.ssfu1 field flower operation
given the respondent's crop mix, type of production, and the
present state of the market was considered to range from a
5-17
low of 10 acres to a high of 400. No concensus regarding
optimal size was exhibited by the responses.
Respondents were asked about their willingness to operate
an optimal sized field flower operation in various area-
climates. The majority indicated a willingness to operate
in either the maritime or coastal areaclimate. The reasons
for this willingness with regard to the maritime areaclimate
included the climate itself -- warm winters and cool summers --
and the fact that it is close to freeways in San Diego County.
The coastal areaclimate was favored because of its good
climate -- lack of frost and constant humidity. The avail-
.I
,.
r'
ab'ility of low priced land was also a favorable factor. The
transitional areaclimate was rejected by the majority of
respondents because of climatic conditions. The summers
were felt to be too hot and the winters too cold for field
1 ,.
! flower culture. Respondents who felt this areaclimate
L..
,~. would be satisfactory indicated that the higher elevations
L. would permit the culture of certain plants.
All respondents believed that there were advantages to
L.... locating field flower operations in the maritime area-
climate as opposed to the coastal climate. Factors ident-
ified as advantageous were the ideal temperatures of the
L :. maritime areaclimate, the ocean breeze, the ability to
."
operate twelve months of the year, and the fact that less
watering is required than in the coastal areaclimate. The
closeness to transportation facilities was also mentioned
i.. as a factor. A majority of respondents also indicated that
5-18
there are disadvantages to the maritime areaclimate for
field flower operations. Some flower varieties exhibit
slower growth in this area. The high humidity of the area-
climate was also considered as disadvantageous along with the
concentrations of people in the urban portions of the region.
Land Prices and Rental Rates
Respondents were than asked several hypothetical questions.
Among these was the highest price per acre the respondents-
would pay to start a new floral operation. For the maritime
areaclimate the range of responses was $6,000 to $15,000 per
acre. In contrast, the range for the coastal areaclimate
was $4,500 to $12,000, and the transitional $3,500 to $8,000.
The range of per acre prices which respondents felt
were the lowest at whick such land could presently.be pur-
chased differed sharply from the prices they were hypothe-
tically willing to pay in the maritime areaclimate. The
?9"' ':& .*&present land prices identified ranged from $10,000 per acre .a to $65,000 per acre. For the coastal and transitional
>;,
'+ .S areaclimates this divergence was not evident. Respondents
. ._ . $4 felt that floral land would be available in these areas
at prices ranging from $4,000 to $12,000 per acre in the
coastal areaclimate and $4,250 to $12,000 in the transitional.
When asked the highest annual rent the respondent would
be able to pay, the majority indicated that a rent of $300
or less per acre would be the maxim-. One respondent named
- a much higher figure, however. No significant difference
', was exhibited between the rental figures for the maritime
5-19
._
and coastal areaclimates. However, rental rates,for the
transitional areaclimate were much lower. The highest
rent for this region was $125 per acre.
Respondents were asked to indicate how many acres in
each areaclimate could be economically leased given the land
rents each had stated could be paid. The responses were
inconclusive since most respondents had no opinion.
In contrast to the variation exhibited between the amount
respondents would be willing to pay to purchase floriculture
land and the price at which it could be purchased, when the
lowest rent at which land is available was considered, the
rates differed only slightly. In the maritime areaclimate
respondents felt such land could be leased for $150 or less.
Similar figures were mentioned for the coastal and tran-
sitional areaclimates.
When asked the maximum period for which the respondent
would sign a land lease, nearly all indicated ten to twelve
years. The majority would not consider a share rent lease,
and those who would had no opinion regarding the percentage
of gross sales which would be acceptable for such a lease.
A majority of respondents ind’icated that if they were
not presently operating their field flower culture in
San Diego County that they would consider moving to this
location. The balance of the respondents would not consider
such a move.
Respondents were asked whether they anticipated that
the floral industry will expand, stay the same, or contract
5-20
in the near future. Opinion was fragmented, with some
respondents expecting each of these trends to occur.
Production Costs
Such a wide variation in responses was elicited when
.. respondents were asked to provide production costs per
acre that no report of this information is possible.
Individual data could be disclosed by such a report.
When asked to provide a percentage distribution of
costs by activity the following ranges were observed.
Activity
. Land preparation (before planting) Pre-harvest
Range of Percentage of Cost
5% to 30%
(planting, growing) 20% to 60% Harvest 10% to 30% Marketing 8% to 27% Overhead 8% to 18%
I Problems Facing San Diego Floral Operators
Respondents were asked to identify the most severe problem
facing the San Diego floral operators. No concensus was
achieved by the responses. Problems mentioned were taxes,
water, the lack of land availability, and the lack of labor
availability.
When asked about the probable effect of the Williamson
Act on the profitability of the respondent's operation, no
concensus was exhibited by the answers. More respondents
said it would have no effect than gave other answers however.
! "
5-21
I
SUMMARY
The survey of greenhouse operators provides insight
on the industry's structure, the Carlsbad parcel in question,
operating methods, and major industry considerations.
Salient features of the greenhouse
may be summarized as follows:
operator survey results
- Most greenhouse operations are located in North County.
Carnations and green plants are the major primary crops grown.
The bulk of greenhouses are on less than six acres of land.
The bulk of greenhouses are less than 300,000 square feet.
. Most greenhouse operators own theirland; few rent.
Most greenhouse operators indicated that a 60-acre greenhouse operation in the maritime climate was feasible.
The optimal greenhouse size is thought to be approximately 150,000 - 300,000 square feet.
Greenhouse operators were unwilling to meet current land prices or land rents in the maritime and coastal areaclimates .
Most operators would not lease greenhouse land for more than 15 years.
Most operators indicated that the industry would expand or stay the same.
The most severe problems facing greenhouse operations are inflating input costs and 'competitive imports from South America.
A majority of respondents indicated that the ,Williamson Act favorably effected- their profitability
i
5-22
The major features of the field flower survey may be sum-
marized as follows:
Growers produce a mix of crops.
Acreages involved are generally small, i.e., less than 20 acres.
The majority of growers indicated it would not be economically feasible to use the 60-acre parcel in the maritime areaclimate for this activity.
The majority believed market factors and labor availability to be unfavorable for such an operation. However, capital availability and the agricultural s.upport system were rated favorably.
The highest land prices which would be paid for a field flower operation ranged from $6000 to $15,000 in the maritime areaclimate.
Feasible rent rates were noted at less than $300 per acre.:
This summarizes the major findings of both the greenhouse
and field flower surveys.
5-23
6. AGRICULTURAL LAND AVAILABILITY
INTRODUCTION
The aim of this portion of the study is to examine the
availability of agricultural land that is similar to the .
' . study site. In order to assure comparability only a re-
stricted geographical area was included in this analysis.
The northern boundary of this geographical area includes the
City of Carlsbad, while the southern boundary encompasses
Solana Beach. The eastern boundary of the geographical area
chosen for this analysis is defined by the extent of the
County of San Diego Integrated Planning Office's land use map.
Areaclimates for the County of San Diego have been de-
fined by the University of California Agricultural Extension
Service.' There are two areaclimates which are particularly
applicable to this study. The first is the maritime area-
climate. In San Diego County, this areaclimate occupies a
narrow strip of land along the ocean, It varies in width
from a few hundred yards to five or six miles inland depending
upon the tcpography of the near-ocean terrain. The second
areaclimate which bears upon this study is the coastal .
'Climates of S-an Diego County, Agr'icultural Relation-
ships, University of California Agricultural Extension
Service, November 1970.
I
areaclimate. .It lies adjacent to and immediately inland
from the maritime areaclimate. This areaclimate also varies in
width -- from about 10 to 30 miles. Its width is defined by
elevation and distance inland from the weather modifying
influence of the ocean and associated summer fogs. Both of
these areaclimates are continuous from north,to south along
the San Diego County coast.
As was discussed in Chapter since plant adaptations
are closely related to climate variations, these areaclimates
generally define the possible agricultural uses to which
land in these geographical regions may be put. Both the
maritime and coastal areaclimates are subtropical with regard
to the plant culture which they permit and are, therefore,
largely interchangeable.
METHODOLOGY
To determine the agricultural acreage available in the
restricted geographical area described above it was necessary
to map the parcels which have been devoted to agricultural
use. Mr. Bob Kelsey of the Integrated Planning Office, County
of San Diego, pyovided the basic map data which is presented
as a separate submission with this report. The Mapping Section
of the Department of Transportation provided the District
Zoning maps on which the data are recorded.
Due to the large size of the District Zoning Map, only a
portion of the coastal areaclimate is included in this analysis.
As was noted above this areaclimate may extend up to 30 miles
6-2
inland. For the geographical region under consideration, the
extent of the coastal areaclimate is approximately 8 to 10
miles inland. All of the maritime areaclimate in the geo-
graphical region studied has been included in this analysis.
The acreage shaded in green on the map represents parcels
of land which have been in agricultural use. It should be
noted, from the map, that acreage in excess of that which has
seen agricultural use is available through agricultural zoning.
However, to present a conservative approach to the land avail-
ability question, only that acreage which has actually been
devoted to agriculture has been included in this analysis.
Following completion of the map, the acreage shown in green
was measured and the measurements converted to acreage esti-
mates. ’
FINDINGS
As is shown in Table 6.1 the total acreage in the maritime
and coastal areaclimates in the geographical region studied
amounts to 2,313 acres. The general location of this acreage
is indi.cated by the names of the map sections on which it is
shown.
Sirice the parcel of land to which this study is addressed
is located in the maritime areaclimate, separate acreage esti-
mates have been made for that region. A total of about 1,668
acres of land have been devoted to agricultural use in the
maritime areaclimate near the study site. Also, as was
6-3
Table 6.1
Total Agricultural Acreage
(By Areaclimate)
Coastal Areaclimate*
Acreage (Nearby Portion Only) Total Acreage
Maritime Areaclimate* Acreage
Map Sections Acres % Acres x Acres x
Southeast Carlsbad
Section North 1 45 1 27.0 109 17 .O 560 24.0
Southeast Carlsbad
Section North 2 468 28.0 0 00.0 . 468 20.0
Leucadia
Section 3
Encinitas
Section 4
Cardiff
Section 5
Solana Beach
Section 6
426 26.0 232 36 .O 658 28.0
137 b8.0 240 37 .O 377 16.0
154 9.0
32 2.0
48 7 .O 202 9 .,o
16 2.0 48 2.0
To tal 1,668 100.0 645 100.0 2,313 100.0
Source: Integrated Planning Office, County of San Diego.
University of California, Agricultural Extension Service.
Copley International Corporation
*Maritime areaclimate is defined as the belt of land immediately along
the ocean, having a varying width of a few hundred yards to five or six
miles, where climate is dominated by ocean conditions. . The study site is
contained within this region.
climate. The coastal areaclimate in the vacinity of the study site is
eight to ten miles wide. Ocean conditions influence climate 75 percent
to 85 percent of the time.
.. ..
Coastal areaclimate lies directly inland from the Maritime area-
6-4
indicated above, additional land, not included in this esti-
mate, is available though agricultural zoning.
Based on this analysis, a total of approximately 2,300
acres of agricultural land is available in the vacinity of
the study site. Nearly 1,700 acres of this land is in the
same areaclimate as the parcel analyzed in this report.
The study site of approximately 60 acres represents 3.5%
of this agricultural acreage total.. However, as a propor-
tion of the agriculture land available in subtropical areas
,of San Diego County, the study site is not highly significant.
6-5
7. CONCLUSIONS
This report has examined in considerable detail the
economic feasibility of both general and intensified agri-
culture for a 60-acre parcel of land within the City of
Carlsbad, California. The purpose of this examination
was to determine whether agriculture is an economically
feasible use for the study parcel.
GENE= AGRICULTURE
With regard to general agriculture, including the
culture of field grown flowers and bulbs, it must be con-
cluded that such operations could not be economically
feasible. The climate of the area is its main strength.
However, the climate is not unique to San Diego County,
existing from South Carolina through Texas and along the
Mexican coastal plain both on the Pacific and the Gulf
coasts.. Crops grown in the area of the study site must
compete in the marketplace with crops grown in other similar
climates, thus, mitigating this strength. Submarginal to
marginal soil types on the study site limit cropping
alternatives. The topography presents both cultural and
soil mechanic probleas which reduce the net farmable
acreage of the parcel. Of the 60 acres on the parcel, a
net farmable total of only about 25 acres is actually .
available. These problems coupled with continually
7-1
increasing
and higher
conclusion
feasible.
water costs, declining community support systems
labor costs than in competing areas, lead to the
that general agriculture would not be economically
INTENSIFIED AGRICULTURE
An examination of the feasibility of an intensified
agricultural operation produced similar results. Four
flower crops were examined in detail. These were carnations,
roses, chrysanthemums, and green plants. Each was examined
from the perspective of a new operation beginning at the
present time. Higher interest rates than were experienced
in the past would increase the cost of debt service for a
new facility. In addition, building costs have risen
rapidly increasing the capital investment required to start
a new operation on the study site. As a consequence the
monthly expenses of such an operation are considerably
higher than would have been experienced only a few years
ago. The market for such crops, on the other hand, has
been characterized by significant fluctuations for some
crops and by stagnant or declining performance for others.
Imports from foreign sources are a growing factor affecting
greenhouse operator's revenues. It is estimated that
monthly expenses would exceed monthly revenues for such an
operation by as much as $14,300 if the crop grown were
carnations. The monthly loss which would be incurred by
growing roses would be $8,700 and for chrysanthemums would
be $7,000. Only green plants are near a breakeven level at
7-2
a monthly loss of $2,000. The conclusion must be reached
that intensive agriculture would not be an economically
' viable use for the study site. If the presently depressed
market for green plants were to improve, it is possible
that this crop might once again become feasible. However,
no evidence presently exists which would lead to such a
forecast.
SURVEY FINDINGS
Since only limited data were available on the present
structure of the floriculture industry in San Diego County,
a survey of greenhouse operators and field flower growers
was conducted. The survey provided information on industry
structure, the opinions of growers concerning the feasi-
bility of conducting their existing operation on a 60-acre
parcel in the maritime areaclimate, and land prices and rents.
Major crops for greenhouses were carnations and green plants.
Most greenhouse operations were located in the North County
area and are on less than six acres of land. The bulk of
greenhouses have less than 300,000 square feet and most
operators own their land. In excess of 70% of the operators
felt that their type of culture could feasibly be done on
a 60-acre parcel. However, greenhcuse operators were un-
willing to meet current land prices or land rents in the
maritime or coastal areaclimates. Field flower growers
produce a wide variety of flowers, bedding plants, and bulbs.
Acreages invqlved are generally small, less than 20 acres.
Unlike the greenhouse operators, these growers felt that
7-3
it would not be feasible to use a 60-acre parcel in the
..
maritime areaclimate. Field flower growers were also un-
willing to meet current land prices in the maritime area-
climate. Problems identified by both groups centered on
taxes, labor availability, and water costs. Greenhouse
operators also considered imports from South America
to be a problem.
. WILLIAMSON ACT
The State of California's Williamson Act permits
agricultural land to be placed in a preserve and taxed at
. a rate based on "fair agricultural value" rather than
"fair market value ." In cases where agricultural lands
are under pressure from urbanization, this permits a re-
duction in the assessed value and a consequent decrease ..
in taxes. In order to determine whether placing the 60-acre
study site in an agricultural preserve would make agri-
cultural use economically feasible, the effect of the
.Williamson Act was examined. Although tax savings would be
realized from such an action, for each of the crops analyzed
in this study ,the saving was insufficient to produce profits
instead of losses from their culture. For greenhouse
operations the tax saving represented less than one percent
of total cost for each crop'. General agriculture would
achieve a greater percentage saving -- about 10% for pole
tomatoes and about 15% for floriculture -- but in the face
of sizeable negative returns, losses would still occur.
The negative return estimated for pole tomatoes is 50%
7-4
and for floriculture in excess of 56% without Williamson
Act tax reductions.. It should be noted that the greenhouse
operators surveyed felt that the effect of the Williamson
Act on their operations would be favorable while field flower
growers did not.
' LAID AVAILABILITY
In order to determine the effect on agricultural land
availability in the maritime areaclimate of land use other
than agriculture for the study parcel, estimates were made
of.the extent of such land. It wasafound that in an area
including the City of Carlsbad on the north and Solana Beach
on the south, approximately 1,700 acres of land has been
devoted to agriculture. The 60-acre study parcel represents
3.5% of this total. However, it should also be noted that
the City of Carlsbad has already placed 350 acres within
its city limits in Williamson Act agricultural perserves.
SUMMARY
In summary, it was found that soils, topography, and
costs made the study site not feasible for agricultural
usage from an economic point of view. Three hundred and
fifty acres of land have already been preserved for agri-
cultural usage within the City of Carlsbad. . In addition,
1,700 acres of land devoted to agriculture exists in the
maritime areaclimate within the region bounded by Carlsbad
and Solana Beach.
7-5
APPENDIX A
SUPPORTING DATA
i
Table A-1
Identification and Relative Importance of U.S.
.Competing Tomato Production Areas By Quarter
Compared to San Diego County
Harvested Acreage/Relative Percentage
1973 1974
Winter (Total Acreage)
Florida
Spring (Total Acreage)
Alabama
Arkansas
San Diego County
California (balance)
Florida
Georgia
Louisiana
South Carolina
Texas
Summer (Total Acreage)
22 States
San 'Diego County
California (balance)
- Fall (Total Acreage)
Alabama
San Diego County
California (balance)
Florida
Indiana
New York
Pennsylvania
Texas
12,200 11,900
100.0% 100.0%
35,200 30,900
5.7%
1.1
2.0
8.5
50.0
2.6
2.0 16 -5
11.6
.78.4%
1.7
19.9
27,100
1.1%
9.7 41.6
40.2
1. 1.
1.5
1.1
3.7
8.4%
5.2
3.8
10.5
38.5
4.5
2.9
17.8
8.4
76.2%
1.1
22.7
20,100
2.5%
12.6
36.6
42.3
' 0.0
1.5
1.0
3.5
Source: Marketing California Tomatoes; 1973 Season, Tables 14 and 15, 1974
Season, Tables 14 and 15; Federal-State Market News Service
California
Balance U.S.
Bahamas
Canada
Central America
Mexico
West Indies
Total
Jan.
54
1866
0
0
0
2093
8
402 1
-
-
Table A-2
Cars and Car Lot Equivalents of Tomato Shipments, United States, California,
and Imports as Index to Importance of Competing Areas, 1974
(40,000 lbs. Truck Conversion Factor)
Feb. Mar. & May June
0 0 1 214 1697
1006 2140 2113 3316 2347
23 19 10 1 0
0 1 0 0 0
"
0 0. 3 2 0
3399 21 17 2256 2867 1006
10 17 3 5 1
4438 4294 4386 6405 5051
""P
July
3574
360
0
3
0
174
2
4113
-
Aug. Sept.
2699 3146
176 141
0 0
2 1
0 0
63 27
3 4
2943 3319
"
"- Oct. NO~. Dec.
3524 1496 399
20 1148 2992
0 '0 0
0 0 0
0 0 0
112 395 256
0 1 5
3656 3040 3652
"-
Total
16 , 804
17,625
53
7
5
14 , 765
59
49,318
Percent
34.1%
35.7
0.1
0.0
0.0
29.9
0.1
100.0%
The above figures indicate nothing other than interstate shipments, and obviously do not reflect
intrastate shipments, production, or consumption. They do, however, form a basis of comparison and
thus an indication of Mexico's importance as a competing growing area. Mexico's percentage by month
of total shipments was as follows:
"- Jan. Feb. Mar. & May June July Aug, Sept. &
52.1 76.6 49.3 51.4 44.8 19.9 4.2 2.1 0.8 3.1 13.0 7.0
Source:' Marketing California Tomatoes, 1974 Season, Table 2, Federal-State Market Hews Service.
Table A-3
Identificationand Relative Importance of U.S. Competing Floral and Foliage Plant
Production Areas Compared to San Diego County
(Gross Wholesale Value of Sales As Percent of Market Share)
Other Cut Flowers
(Including Roses Carnations
1974 1975
Total Gross Wholesale Value
In 1,000 Dollars
San Diego County
California (balance) Colorado
Connecticut Florida
Illinois
Indiana
loua
Maryland
Massachusette
Michigan
Minnesota
Missouri
New Jersey New York
North Carolina
Oh io Oregon
Pennsylvania
Tennessee
Texas
Washington
Wisconsin
Other
$48,592
100.0%
9.9% 42.2
31.7
0.6
0.9
0.5
0.4
0.1
0.2
2.8
0.5
0.2
0.3
1.0
0.8
1.3
1.9
0.0 3.8
0.2
0.0
0.0
0.2
0.5
$50,140
100.0%
12.8%
42.5
31.3
0.6
0.7
0.3
0.4
0.1
' 0.2
2.2
0.5
0.0
0.3
0.9
0.6
0.8
1.7
0.0
3.3
0.0
0.0 0,d
0.0
0.8
(a) 1974 total shown under "Other Cut Flowers''
Gladiolus
1974 1975
..
$18,763
100.0%
11.3
5.7
0.0
0.0
63.9 4.1
0.6
0.0
0.7
0.2 2.3
0.0
0.0
6.2
0.1
2.8
0.4
0.0
0.2
0.0
0.0 0.0
0.0
1.5
$17,604
100.0%
11.9
0.9
0.0
0.0
66.3
3.8
0.9
0.0
0.9
0.3
2.4
0.0
0.0
9.3
0.1
1.6
0.4
0.0
0.2
0.0
0.0
0.0
0.0
1.0
and 'Chrysanthemums)
1974 1975
$401,485
100.0%
4.3
28.3
6.0
0.9
10.4
3.9
4.2
0.9
0.8 4.2
' 2.7
1.4
1.4 2.0
4.4
3.2
5.1
1.2
7.3
0.8
1.9
1.3
1.1
2.3
$417,954
100 IO%
3.6
30.6
5.8 0.6
10.8
3.6
4.3
1.1
0.8
3.3
2.9
1.4
1.4
2.0
4.3
2.7
5.2
0.8
7.2
0.8
2.2
1.4 1.1
2.1
Foliage Plants
1974 1975
$113,503 $187,183 100.0% 100.0%
(a) 9.1
26.9 15.3
0.8 1.4 0.4 .0.4
42.7 46.6
1.9 2.0
0.7 0.4
0.7 0.8
1.5 1.3
2.8 2.3
2.7 2.4
0.7 1.2
0.2 0.2
1.9 1.9
3.0 2.1
0.0 0.0 3.5 3.7
0.4 0.5
2.8 2.7
0.0 0.0
3.9 3.3
1.0 0.9 1.2 1.0
0.3 0.5
Source: Agricultural Crop and Natural Resources 'Report 1975, County of San Diego, Department of Agriculture, Weights and
Measures, p. 10; Flowers and Foliage Plants, Production and Sales, 1974 and 1975, Intentions for 1976, Crop Reporting
Board, Statistical Reporting Service, U.S. Department of Agriculture, SpCr6-1(76), Table 1, pp.. 4 and 5.
I ,i ."
1
Table A-4
Annual Wholesale Value of Cut Flowers and Foliage
Imported to the United States Compared to
Annual Wholesale Value at United States Production*
Imports as a
Percentage of
Total Market
Wholesale**
Value of U.S.
Production
Wholesale**
Value of
Imports
Percent
Change
Percent
Change Year
$702,520*** 3.5% $25,356.30 1976
1975
1974
1973
. 1972
197 1
1970
4.4% 28.0%
672,881
582,343
521,387
490,888
445,006
424,191
2.9 19,812.00
15.5 0.2
158.1
3.3 19,764.00
11.7
1.4 7,656.60
90.0
47.2
23.2
6.2
0.8 4,029.70
10.3
0.6 2,737.70
4.9
0.5 2,219.60
Compound 41.62
Annual
Growth Rate
7.5% 32.0%
*Figures do not include shipments from non-production value from Puerto
Rico . i
**In 1,000 dollars.
***Includes seven additional floriculture crops plus five additional states:
Alabama, Arkansas, Georgia, Kansas, and Virginia. No data for years
prior to 1976 are available for these additional crops or states.
.- . Source: Mrs. Ware, U.S. Department of Commerce, Bureau of the Census,
Foreign Trade Office, Washington, DC; Flowers and Foliage Plants,
Production and Sales, Crop Reporting Board, U.S. Department of
Agriculture, Statistical Reporting Service, various years.
!
i
APPENDIX B
SOILS
APPENDIX B
SOILS
General Description - Marina Series -2.
The Marina series area consists of somewhat excessively drained, very deep, loamy, coarse sands derived from weakly consolidated to noncoherent ferruginous eolian sand. These soils are on old beach ridges and have slopes of 2 to 30 per- cent. The elevation ranges froin near sea level to 300 feet. The mean annual pre- cigitation is between 12 and 14 inches, and che mean annual air temperature between 60 and 62' F. The frost-free season is 330 to 350 days. The winter growing season has only light frost. The vegetation is mostly chamise, sumac, black sagebrush, flattop buckwheat, and annual grasses and forbs.
In a representative profile the surface layer is brown and dark yellowish-brown, medirrn acid and slightly acid loamy coarse sand about 10 inches thick. me subsoil is brown and strong-brotm, neutral and mildly alkaline loamy coarse sand about 47 inches thick. The substratum is yellow, moderately alkaline coarse sand,
Marina soils are used for avocados, citrus, tomatoes, flowers, truck crops, recreational areas, and housing developments.
Site Specific Description: Marina Loamv Coarse Sand - 34 Acres 2 (56.90%)
Marina loamy coarse sand, 2 to 9 percent slopes ("IC) -- This undulating to gently rolling soil is on ridges. The slope is dominantly 4 percent.
The A horizon ranges from brown or dark yellowish brown to yellowish brown ir. color, from loamy coarse sand to loamy sand in texture, and from 6 to 14 inches in thickness. The B horizon'ranges from brown eo light brown to strong brown in color, from loamy coarse sand to loamy sand in texture, and from 27 to 47 inches in thick- ness.
Included with this soil in mapping are small areas of Carlsbad soils, Chesterton soils, and Corralitos soils.
Fertility is medium. Permeability is rapid. The available water holding capa- city is 4 to 5 inches. Runoff is slow to medium, and the erosion hazard slight to moderate. The rooting depth is more than 60 inches.
This soil is used for avocados, citrus, tomatoes, flowers (pl. 111) , truck crops, recreational areas, and housing developments.
Capability Unit IIIs-4(19) - Storie Index Rating 54
This unit consists of very deep, somewhat excessively drained soils on alluvial fans and beach ridges. Slopes are 2 to 9 percent. These soils are in the Corralitos and Marina series. They are loamy coarse sands to loamy sands.
These soils have medium fertility. They are very friable and easy to work. The available water holding capacity is 3.7 to 5 inches in the 60 inches of rooting depth. Permeability is rapid. Runoff is slow to medium, and the erosion hazard slight to moderate. The hazard of soil removal or deposition is only slight.
avocados, citrus, and alfalfa. The specialty crops are mainly flowers and nursery stock. Citrus needs protection from frost, except in areas near the coast. The response to nitrogen is good, and the response to phosphorus,is usually favorable. The supply of potassium is usually adequate, but deficiencies in trace elements, particularly zinc, affect some crops.
If well managed, the soils in this unit are suited to truck and specialty crops,
Wind erosion is very slight but damages young tender plants in exposed locations unless cover is adequate. Cover crops, crop residue management, and other organic additions help in controlling wind and water erosion. Cross-slope cultivation re- duces the erosion hazard. Sprinklers are used for irrigating. Furrows are not suitable because infiltration and permeability are rapid and too much water is lost from the root zone through deep percolation.
General Description - Huerhuero Series
The Heurhuero series consists of moderately well drained loans that have a clay subsoil. These soils developed in sandy marine sediments. They have slopes of 2 to 30 percent. The elevation ranges from 10 to 400 feet. The mean annual pregipitatien is between 10 and 12 inches, and the mean aanual air temperature between 60 and 62 F. The frost-free season is 300 to 350 days. The winter growing season has only light frost. The vegetation in uncultivated areas is mainly tarweed, wild oats, starthistle, red brone, Russian-thistle, and annual grasses and forbs.
In a representative profile the surface layer is brown and pale-brown, strongly acid and medium acid loam about 12 inches thick. The upper part of the subsoil is . brown, moderately alkaline clay. It extends to a depth of about 41 inches. Selow this, and extending to a depth of more tkan 60 inches, is brown, mildly alkaline clay loam and sandy loam (pl. 111).
Huerhuero soils are used mainly for range, truck crops, tomatoes, and flowers. Small acreages are used for housing developments.
Site Specific Description: Huerhuero Loam - 20 Acres 2 (34.76%)
Huerhuero loam, 2 to 9 percent slopes (HrC) -- This soil is gently sloping and undulating. Low broad-based hummocks, localiy called mima;nounds, occur in undis- turbed areas. The slope is dominantly 2 to 5 percent.
The A horlzon ranges from pale brown or strong brown to yellowish brown or grayish brown in color, from sandy loam to loan; in textu-e, and from 5 to 30 inches in thickness. The B horizon ranges from brown to dark brown or strong brown, yellowish brown or reddish brown in color, from clay to heavy clay loam that grades to sandy loam in the lower layers, ana from 45 to 67 inches in thickness. The lower part of this horizon typically contains lime mottles. The C horizon is stratified sand to loamy sand. The depth to the C horizon ranges from 50 to 72 inches.
Included with this soil in mapping are small areas of Las Flores soils, Stockpen soils, and Olivenhain soils. Also included are areas of alluvium derived from neta- basic and metasedimentary rock; areas of alluvium, near Twin Oaks Valley and Harmony Grove, that range from loam to silt loan-in texture; and small areas of loamy alluvial land-Huerhuero complex.
Fertility is low to medium. Permeability is very slow. The available water holding capacity is 4 to 5.5 inches; some moisture is available from the clay sEb- soil. Runoff is slow to medium, and the erosion hazard slight to moderate. The rooting depth is 20 to 43 inches.
This soil is used mainly for range, irrigated track crops, tomatoes, and flowers. Small rcreages are used for housing developments.
Capability Unit IIIe-3(19) - Storie Index Rating 41
This unit consists of moderately deep to deep, moderately well drained soils that have a very sloslly permeable subsoil. These are soils of the Bonsall, Fallbrook, Huerhuero, and Piacentia series. They are on foot slopes, marine terraces, terraces, alluvial fans, and uplands. Slopes are 2 to 9 percent. The surface layer is gravelly clay loam to loamy fine sand. The subsoil is heavy clay loam to clay.
!
Fertility is low to high. Runoff is slow to medium, and the erosion hazard slight to moderate. The available water holding capacity is 3.5 to 6 inches in the 18 to 44 inches of rooting depth. Mixing the clayey subsoil with the coarser tex- tured surface soil and land shaping, other than minor smoothing, should be avoided. Exposed subsoil material is difficult to bring into a reasonably productive state. Tillage pans do not form readily.
The soils in this unit are suited to flowers and tomatoes. Huerhuero soils are also used for truck crops. Some areas are used for range. Tomatoes are grown com- mercially under intensive management and fertilization. Small acreages of small grain and forage crops are dryfarmed. Nitrogen is needed for all crops. The response to phosphorus varies. The supply of potassium is adequate.
If exposed, the surface soil erodes rapidly in moderately sloping areas during rainy periods in winter. Grawing cover crops, leaving crop residue on the surface during rainy periods, and tilling across the slope are necessary measures in erosion control. Provision for handling runoff from adjacent soils is needed in places. Both sprinklers and furrows are used for irrigating.
General Description - Chesterton Series
The Chesterton series consists of moderately well drained fine sandy loms that have a sandy clay subsoil. These soils formed in material weathered in place from soft ferruginous sandstone. They are on ridges and in swales and have slopes of 2 to 15 percent. The elevation ranges from 50 to 400 feet. The mean annual precipitation is bgtween 10 and 12 inches, and the mean 2nnual air temperature between 60' and 62 F. The frost-free season is 330 to 350 days. The winter grow- ing season has only slight frost. The vegetation is mostly chmise, sumac. black sage, flattop buckwheat, and annual grasses and forbs.
In e representative profile the surface layer is brown, dark-brawn, and reddish-
' yellow, medium acid fine sandy loam about 19 inches thick. The subsoil is brown,
I medium acid to strongly acid sandy clay mottled with red and gray. This layer is about 15 inches thick. A hardpan occurs at a depth of about 34 inches.
Chesterton soils are used for truck crops, flowers, tomatoes, and grain crops.
i
Site Specific Description: Chesterton Fine Sandy Loam - 5 Acres * (8.28%)
Chesterton fine sandy loam, 2 to 5 percent slopes (CfB) -- This soil is gently 'sloping. Slopes are slightly concave. They average 2 percent.
The A horizon ranges from brdwn to dark brown and reddish yellow in color, from fine sandy loam to laorny fine sand ill texture, and from 12 to 24 inches in thickness. This horizon is 10 to 30 percent iron concretions. The B horizon ranges from 16 to 21 inches in thickness. Depth to the hardpan ranges from 28 to 34 inches.
Included with this soil in mauping are small areas of Carlsbad soils, Huerhuero soils, and Marina soils. Also included is 140 acres of nearly level soils, north of Oceanside and south of Agua Hedionda.
This soil is moderately fertile. The available water holding capacity is 2.5 to 5 inches; some moisture is slowly avaialable from the sandy clay subsoil. Perme- ability is very. slow, and runoff Is slow. The erosion hazard is slight in cultivated areas. The rooting depth is 12 to 24 inches.
This soil is used from truck crops, tomatoes, flowers, barley, and range.
Capability Unit IVe-3(19) - Storie Index Rating 34
The soils in this unit are moderately well drained and shallow to moderately deep. They have a very slowly permeable, dense clay subsoil. These are soils of the Bonsall, Chesterton, Huerhuero, Las Flores, znd Placentia series. They formed on uplands, alluvial fans, and terraces. Slopes are 2 to 15 percent. The surface
. layer is loam to loamy fine sand. The subsoil ranges from heavy clay loam to clay. Few roots penetrate below a depth of 40 inches.
These soils have low to medium fertility. The available water holding capzcitg is 2.5 to 5.5 inches. Runoff is slow to medium, and the erosion hazard slight to moderate.
All but the Bonsall and Las Flores soils are used for flowers and tomatoes and a few selected crops. They are not generally suited to citrus. Under good manage- ment, citrus can be grown in areas where the subsoil is a lighter clay. Truck crops are limited to Chesterton and Las Flores soils. Under intensive management and fer- tilization, tomatoes can be grown commercially. Small acreages are used for dry- farmed small grain and forage crops. The response to nitrogen and phosphorus is favorable. The supply of potassium is adequate.
Care is needed in cultivated areas to avoid mixing the clay subsoil with the coarser textured surface material. Pans do not form readily. The erosion hazard increases in clean-tilled areas. In most areas the soils are moderately eroded. Tilling on the contour, growing cover crops, and leaving crop residue on =he surface
' during rainy periods keep soil losses at a minimum. Both sprinklers and contour furrows are used for irrigating. Care is needed in irrigating to avoid perching the water table above the very slowly permeable subsoil.
Source: Soil Survey, San Diego County Area, California, United States Departmert of Agriculture, SCS&FS, in Cooperation with UWS, USDI, BIA, DON, and USMC, December 1973, Parts I and 11.
APPENDIX C
SURVEY METHODOLOGY
SAMPLE DESIGN
The sample of field flower growers and greenhouse opera-
tors in San Diego County was a result of two processes. First,
the greenhouse operation SIC.code, 181, and the floraculture
SIC codes, 191 and 192, were checked against a list of San
Diego County businesses which was provided for CIC by Dun &
Bradstreet. Second, the greenhouse and floraculture establish-
ments which qualified for the sample according to SIC code were
checked against the 1977 Haines Crisscross Directory to verify
owners ' names, addresses, and telephone numbers.
' DATA COLLECTION
The interviewing for this study was conducted by profes- -
sional CIC interviewers. All interviews were from a telephone
room and were monitored during the interview period. .
The interviews were conducted during a two-day period
between 8:OO a.m. and 5:OO p.m. Each sample number was
attempted four times before it was discarded. Out of a sample
of 45 greenhouses and field flower growers, 38 interviews were
completed.
The respondents were assured that all survey data would
be kept confidential, except in its aggregate forms, and that
c-1
questicnnaires would be destroyed at the end of the study. In
addition, the survey results will be available to the interview-
ees upon request.
DATA PROCESSING
All questionnaires were edited after interviewing for con-
.sistency. Any onissions or inconsistencies were fol-lowed up by
another call to the respondent to clarify the answer.
The coded questionnaires were entered in a DECsystem 10
computer via a reEote teletype monitor. Analysis of the survey
data were based on the Statistical Package.for the Social
. Sciences, SPSS , * frequency program.
The questionnaires used to collect the agricultural data.
for this study are included for review at the end of this
appendix. There are 33 greenhouse owners and 5 field flower
growers surveyed.
*Norman H. Nie, C. Hadlai Hull, Jean G. Jenkins, Karin Steinbrenner, and Dale H. Bent, Statistical Package for the Social Sciences, 2nd Edition (New York: McGraw-Hill Book - - "-. Company, 1Y />).
c-2
CARLSBAD AGRICULTURAL FEASIBILITY STUDY
Greenhouse Questionnaire
Introduction:
Hello, Mr. /Mrs. . My name is of Copley International
Corporation. We are conducting a survey in your area and I'd like to ask you
a few questions.
lA. What crops do you produce?
fB. What percentage of your total production does each represent?
Crop Percentage of Total
1. ,
2.
3.
4.
5.
6. DK
7. Refused
2A. How many total acres are used for your greenhouse operation?
1. Total acres
2. DK
3. Refused
2B. What is the square footage of th'e greenhouse alone?
Square feet
DK
Ref used -.
3A. Do you own or lease the land?
1. own
2. Lease
3. Refused !
Page 1
3B. (IF LEASED) What -, the approximate annual rent p. -d?
1. Amount
2. DK
3. Refused
3C. On what basis is the rent computed? (CIRCLE CORRECT ANSWER)
1. Square footage
2.. Acre
3. Percentage of gross sales
4. Other (SPECIFY)
5. DK
6. Refused
4A. In your opinion, would a greenhouse operation developed on a 60-acre area
located in the maritime climate zone be economically feasible?
1. Yes
’ 2. No
3. DK
4. Refused
4B. (IF YES): Describe the type of greenhouse you would envision for such
a parcel?
4C. If you were to purchase such a parcel, do you feel that funding from a
lending institution would be available to you?
1. Yes
2. No
3. DK
4. Refused
Page 2
- 5. .Please rate the following factors as favorable or unfivorable in relation to
the purchase of a 60-acre parcel?
Favorable Unfavorable
. Current market
factors
Availability of
' capital
. . Availability of
labor
Agricultural support
system (equipment
suppliers, raw materiai
suppliers, etc.)
DK Ref used
6. Given your crop mix, type of operation, and the present state of the market, what
do you think is the optinal greenhouse size measured in square feet?
1. Square feet
2. DK
3. Refused
7. Would you be willing to operate an optimal size greenhouse in any of the following
areas?
1. .'Maritime climate Yes Why?
(near the coast)
..
N6 -why not ? -
2. Coastal climate
(slightly inland)
Pes Why?
NO Why not? -
3. Transitional climate Yes Why?
(inland valley) -.
i
Page 3
8A. Are there any cost advantages due to locating a greenhouse operation in the
maritime climate as opposed to the coastal climate?
"
. ..
1. Yes
2. No
3. DK
4. Refused
8B. (IF YES): What kind of cost advantages are there?
8C. By what percentages does each affect your annual costs?
8B
Advantage
8C
Percentage of Savings
,A. Are there any cost disadvantages due to locating a greenhouse operation in the
.- maritime climate as opposed to the coastal climate?
1. Yes
2. No
3. DK
4. Refused
9B. (IF YES): What kinds of disadvantages?
9C. By what percentage would each affect your annual costs?
9B Disadvantage 9CPercent of Cost Increases
...
I
Page 4
Some hypothetical questions follow:
1.0. What do you consider to be the highest price per acre that you would pay for
greenhouse land for your kind of production if you were to start a new greenhouse
in the following regions?
Price
1. Maritime climate
2. Coastal climate
3. Transitional climate
11. Thinking about the land market, what do you feel is the lowest price per acre at 'which greenhouse land is available in the following areas?
Price
1. Maritime climate
2. Coastal climate
3. Transitional climate
12A. Considering the land rental market, what do you feel is the highest annual price
per acre that you would be able to pay for greenhouse land to be leased for your
.kind of production in the (READ CHOICE) ?
Price -
1. Maritime climate
2. Coastal climate
3. Transitional climate
12B. Given the above prices, how much acreage do you feel could be leased eco-
nomically for your type of greenhouse production in the following areas?
Acres Leased
1. Maritime climate
2. Coastal climate
3. Transitional climate
i
Page 5
”
13. What do you feel is the lowest price per acre at which rental land is available
for greenhouse production in the (RG CHOICES)?
- Price
.1. Maritime climate
2. Coastal climate
3. Transitional climate
14A. If you were leasing, what is th
sign a greenhouse land lease?
1. Less than 1 year
2. 1-3 years
3. 4-6 years
4. 7-9 years
5. 10-12 years
le maximum period in years for which you would
6. 13-15 years
7. 16-19 years
8. 20 or more years
9. DK
10. Ref used
14B. Would you consider a share rent lease?
1. Yes - (GO TO 14C)
2. No
3. DK
4. Refused
- -
14C. What percentage of your gross sales would you consider for a share rent lease?
. 1. Percentage
. 2. DK
3. Refused
15. If you were not presently operating your greenhouse in San Diego County, would
you consider moving your operations here from another state or county?
1. Yes
2. No
3. DK
4. Refused
Page 6
16.
17.
18.
In general, do you feel the greenhouse industry will expand, stay the same, or
-contract in the near future?
1. Expand By what percent?
2. Stay the same
3. Contract By what percent?
What do you consider to be the most severe problem facing San Diego County
greenhouse operators?
For your kind of operation, do you feel the Williamson Act would have a favorable,
unfavorable, or have no effect on your profitability?
1.
2.
3.
4.
5.
..... ... Favorable effect - Why?
....... .......................
..
..... ............... Unfavorable effect - Why?
No effect
DK
Ref used
-
-
Page 7
CMLSBAD AGRICULTURAL FEAS IBILITY STUDY
FIELD FLOWERS QUESTIONNAIRE
Hello, Mr./Mrs. - . My name is of Copley
International Corporation. We are conducting a survey in your area, and I'd like to
ask you a few questions.
QA) Are you engaged in the production of field flowers, seeds, or bulbs?
Yes (CONTINUE WITH Q1. )
No (TERMINATE. )
~ ~ ~~
Ql) What crops do you produce?
42) What percentage of your total production does each represent?
(Q1) (42) Crop Percentage of Total
43) Do you farm at any other location?
Yes (ASK: Where?)
NO
DK
Refused
44) How many acres are used for your field flower operation?
Page 1
95) Do you own or lease the land?
Own (SKIP TO 46.)
Lease (ASK Q5A AND Q5B. )
DR "_
~~~ Refused
Q5A) Is the land leased on an annual or seasonal basis? What is the
the approximate annual (seasonal) rent paid?
Annual Seasonal
Amount Paid
DK
Ref used
Q5B) On what basis is the rent computed?
Square footage
Acreage
Percentage of gross sales
Other (SPECIFY)
DK
Refused
-6) In your opinion, would a field flower operation developed on a 60-acre parcel
located in the maritime zone be economically feasible?
Pes
No DK
Ref used
(ASK Q6A
(SKIP TO
(SKIP TO
(SKIP TO
Q6A) What kind of operation would you envision for such a parcel?
Q6B) If you were to purchase such a parcel, do you feel that funding from a
lending institution would be available to you?
L. Yes
No
DK
Refused
Page 2
47) Please rate the following factors as favorable or unfavorable in relation to
. such a parcel.
Favorable Unfavorable DK Refused
Market factors
Availability of capital
Availability of labor
. Agricultural support system
48) .What would be the maximum distance to a water source which you would consider for your floral production?
DK
Ref used
. Q9) Given your crop mix, type of production, and the present State of the market,
what do you think is the optimal size, in acres, for a successful operation?
DK
Ref used
QlO) Would you by willing to operate an optimal size field flower operation' in any
of the following areas?
Maritime Climate
Yes (ASK: Why?)
No (ASK: Why not?)
Coastal Climate
Yes (ASK: Why?)
"
No ('ASK: Why not?
Transitional Climate
Yes (ASK: Why?)
No (ASK: Why not?)
Page 3
Qll) Are there any advantages to locating a field flower operation
' climate as opposed to the coastal climate?
Yes (ASK Q11A.) No (SKIP TO 412.) DK (SKIP TO 412.) Refused (SKIP TO 412.)
Q11A) What kinds of advantages .are there?
in the maritime
412) Are there any disadvantages to locating a field flower operation in the maritime
climate as opposed to the coastal climate?
Yes (ASK Q12A. ) No (SKIP TO 413.) DK (SKIP TO 413.) Refused (SKIP TO 413.)
41211) What kinds of.disadvantages are,there?
Some hypothetical questions
413) What do you consider
new floral operation
i
follow.....
to be the highest price per acre you would pay to start a
in the following areas? (READ LIST.)
Price
Maritime Climate
Coastal Climate
Transitional Climate
Page 4 ..
Thinking about the land market, what do you feel is the lowest price per acre
at which floral land is available in the following areas? (READ LIST.)
Price
Maritime Climate
Coastal Climate
Transitional Climate
Considering the land rental market, what do you feel is the highest annual
price per acre that you would be able to pay to lease land for field flower
production in the following areas? (READ LIST.)
Price
Maritime Climate .
Coastal Climate
Transitional Climate
Q15A) Given the above prices, how much acreage do you feel could be leased
economically for your type of production in the following areas?
(READ LIST.)
Acres
Maritime Climate
Coastal Climate
Transitional Climate
What do you feel is the lowest price per acre a.t which rental land is available
for floral production in the following areas? (READ LIST.
Price
Maritime Climate
Coastal Climate
Transitional Climate
Page 5
417) If you were leasing, what is the maximum period, in years, for which you
would sign a land lease?
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
A crop season
1-3 years
4-6 years
7-9 years
10-12 years
13-16 years ,
17-19 years
20 years or more
DR
Refused
Q17A) Would you consider a share rent lease?
Yes (ASK Q17B.)
No (SKIP TO Ql8.) DK (SKIP TO Q18.) Refused (SKIP TO 418.)
Q17B) What.percentage of your gross sales would you consider for a share
rent lease?
DK
Refused
418) If you were not presently operating your field flower operation in San Diego
County, would you consider moving it here from another state 01: county?
Yes
No
DK
Refused
.-
Q19) In general, do you feel the floral industry will expand, stay the same, or
contract in the near future?
Expand (ASK: By what percent?)
Stay the same
Contract (ASK: By what percent?)
DK
Ref used
Page 6
Land preparation (before planting)
Pre-harvest (planting, growing)
Harvest
Marketing
Overhead \
423) For your kind of operation, do you feel the Williamson Act would have a favorable,
unfavorable, or no effect on your profitability?
1. Favorable (ASK: Why?)
2. Unfavorable (ASK: Why?)
3. No effect (ASK: Why?)
4. DK
5. Refused
Thank you very much. For verification, I have your name and business address.
Interviewer:
.lte: !
,. Telephone No.
.