An economic analysis of dryland fruit production Opuntia ficus-indica in Santiago del Estero, Argentina

Abstract

An economic analysis was conducted for nonirrigated cactus-fruit production in Santiago del Estero,Argentina, using three market price/volume options: 1) low price (US$120 per ton) high volume for juice production, 2) intermediate price (US$2000 per ton) for the domestic fresh fruit market, and 3) a high price(US$4000 per ton) low-volume scenario for the international fresh-fruit market. The economic analyses were made in Excel and included the flexibility to assume various labor rates, hours of operation,and percentage sales of fruits for the three price/volume market options. The operation included prices for herbicides, fertilizers, insecticides for control of cactoblastis, cleaning and packaging, refrigeration, and freight to the national or international markets. Yield data from 8-year-old existing plantations was used to establish a goal of 23.4 kg of fruit per plant (156 fruits) which, at a 2-m by 5-m spacing, would yield 23,400 kg ha. At full production in year 8 the production costs for the fruit were estimated to be US$0.08, 0.95, and 2.25 kg for fresh fruits destined for the juice industry, domestic and international market,respectively. The internal rate of return assuming 100% of the fruits went to the juice market (which did not require refrigeration) was estimated to be 20%. In order to recoup the costs for refrigeration, at least 20% of the fruit would have to be sold to the national or domestic market to achieve an IRR of 20%.However, when 90% of the market was sold to the domestic or international market, an IRR of 50% was achieved. Because great quantities of cactus fruits are produced in a short time of 6 to 8 weeks and the postharvest shelf life is only about 4 weeks, it is critical to develop alternative markets for the fresh fruits to ensure a market for all the fruits. The best scenario would seem to be to fully develop the market for the juice industry and at the same time seek opportunities to sell significant quantities on the national or international market, which would result in large increases in the IRR.At full production in year 8 the production costs for the fruit were estimated to be US$0.08, 0.95, and 2.25 kg for fresh fruits destined for the juice industry, domestic and international market,respectively. The internal rate of return assuming 100% of the fruits went to the juice market (which did not require refrigeration) was estimated to be 20%. In order to recoup the costs for refrigeration, at least 20% of the fruit would have to be sold to the national or domestic market to achieve an IRR of 20%. However, when 90% of the market was sold to the domestic or international market, an IRR of 50% was achieved. Because great quantities of cactus fruits are produced in a short time of 6 to 8 weeks and the postharvest shelf life is only about 4 weeks, it is critical to develop alternative markets for the fresh fruits to ensure a market for all the fruits. The best scenario would seem to be to fully develop the market for the juice industry and at the same time seek opportunities to sell significant quantities on the national or international market, which would result in large increases in the IRR.for fresh fruits destined for the juice industry, domestic and international market, respectively. The internal rate of return assuming 100% of the fruits went to the juice market (which did not require refrigeration) was estimated to be 20%. In order to recoup the costs for refrigeration, at least 20% of the fruit would have to be sold to the national or domestic market to achieve an IRR of 20%.However, when 90% of the market was sold to the domestic or international market, an IRR of 50% was achieved. Because great quantities of cactus fruits are produced in a short time of 6 to 8 weeks and the postharvest shelf life is only about 4 weeks, it is critical to develop alternative markets for the fresh fruits to ensure a market for all the fruits. The best scenario would seem to be to fully develop the market for the juice industry and at the same time seek opportunities to sell significant quantities on the national or international market, which would result in large increases in the IRR.