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Economics of Tomato and Pepper Production

Cost-effective production and marketing of tomato and pepper crops

Tomatoes and peppers are expensive crops to grow, but they also offer the potential for considerable profit if marketing and production issues are properly managed.  The first thing to consider when producing tomatoes or peppers is your final market.  Many marketing opportunities are available for both tomatoes and peppers.  Tomato offer several options because they come in a variety of fruit colors (red, yellow, orange, and purple) and types (including sizes and shapes).  Peppers are good options because they come in multiple mature fruit colors (green, red, yellow, orange, purple, and brown), shapes, and varying hotness (from sweet to very hot).  Producing a variety of types will enable you to offer your customers a wide selection to meet their tomato and pepper preferences.

Growing high quality produce requires close attention to all aspects of production, harvest, and post-harvest handling.  In production this means selecting varieties that are well-suited for your production conditions and managing soil fertility, irrigation, weeds, insects, and diseases.  Weed control can be achieved with herbicides, plastic mulch, and a good crop-rotation system.  Insects can be a major problem in both tomato and pepper production. Monitoring insect populations with traps and regular scouting will help you determine if you should use insecticides and how often you should spray.  Several diseases can cause crop losses and fruit disorders can be caused by extremes in soil moisture or weather conditions.   Plant diseases and fruit disorders can be managed by using fungicides, planting disease-resistant varieties, maintaining proper plant nutrition, rotating crops, and growing in sites with good air and water drainage.

Because tomatoes and peppers are labor intensive crops, managing labor is an important consideration.   The busiest times are at planting and harvest.  Harvesting fresh-market tomatoes and peppers is very labor intensive because these crops require multiple pickings.  To ensure marketing a high-quality product, growers should check their produce for size, color, and defects after harvest.  Cooling the tomatoes and peppers after harvest to remove field heat will dramatically improve shelf life and reduce waste.

Detailed budgets for tomatoes and pepper can be found on the Agricultural Alternatives website (http://extension.psu.edu/business/ag-alternatives/fruit-vegetables/).  Interactive PDF budget files are also available that allow you to make changes to generate your own estimates.  These budgets utilize custom hire for some of the field work. Hiring custom operators and labor may be a more viable option for small-scale or beginning producers, especially when considering the large capital expenditures required for equipment. You should also investigate renting specific pieces of equipment like plastic mulch layers. Producers who own equipment should substitute equipment costs for custom-hire costs.


About the Researcher:

Jayson K. Harper, professor of agricultural economics, has been at Penn State University since 1989.  His extension and research interests are in the area of risk management and crop production economics.   Work on horticultural crops has included the crop insurance, cost of production, alternative apple and peach production systems, high tunnel production systems, irrigation, mechanical harvesters, hydroponic vegetable production, fruit quality, evaluation of  vegetable production systems, tree fruit IPM, and assessing the economic impact of plum pox virus.  He has led the Penn State Small and Part-time Farming Project since 1992, which includes the publications in the Agricultural Alternatives series.

Contact Information:
Phone:  814-863-8638
Email:  jkh4@psu.edu

Other Links:

Tomato Production Website - http://extension.psu.edu/business/ag-alternatives/fruit-vegetables/tomato-production

Pepper Production Website - http://extension.psu.edu/business/ag-alternatives/fruit-vegetables/pepper-production