BEST PRACTICES: ECONOMIC ANALYSIS OF COFFEE FARMING
ECONOMICS OF COFFEE FARMING
USING THE CTAHR SPREAD SHEET
Stuart Nakamoto, CTAHR agricultural economist, demonstrated a highly detailed spread sheet (developed by Dr. Kent Fleming) that could help make decisions on whether or not to farm coffee in a given year, if one has data on costs per tree such as pruning, fertilizing, irrigation, and reliable information on coffee prices. After he walked us through his spread sheet, (copies available on the CTAHR website), questions included:
C: The information is all pre-tax but profitability has to figure in tax consequences of various decisions.
A: This is true but it is simpler not to take post-tax profitability into account.
C: The “costs” and “value” do not take social and environmental costs of various planting and other farming decisions into account.
A: This is true. If you want to fund a graduate student at $15,000 a year for two years, we can get you some estimates there.
Q: What if you sell parchment instead of cherry.
A: Yes, you can do that with this model but you have to remember to change all the figures, such as needing fewer truckloads than if you sell cherry.
C: The model does not take into account inelasticities in farming. For example, there is an upper limit on how many trees per acre you can plant without changing almost all the other cost figures.
A: This is true. You have to know these things.