Ex ante economic evaluation of technologies for managing postharvest physiological disorders

Authors: RICKARD, BRADLEY - Cornell University; Rudell, David; WATKINS, CHRISTOPHER - Cornell University

Submitted to: HortScience
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 12/18/2015
Publication Date: 6/9/2016
Citation: Rickard, B.J., Rudell Jr, D.R., Watkins, C.B. 2016. Ex ante economic evaluation of technologies for managing postharvest physiological disorders. HortScience. 51(5):537-542.

Interpretive Summary: Apple postharvest disorders contribute to significant annual economic losses for U.S. apple producers. One potential way to mitigate some of these losses is to strategically market apples according to assessed risk of developing a disorder during storage, thereby avoiding losses. One way of achieving this would be to use tools that use metabolite or gene expression to monitor postharvest risk prior to and during storage. Whether such a system is economically viable is also a concern in adopting any novel technology such as biomarker based risk assessment for apple storage. Here, we report an economic analysis of just such a system using and Ex Ante approach. A conservative estimate indicates that employment this system could yield modest improvements upward of 0.99% to 3%. A more optimistic scenario increasing the number of fruit in higher grades while decreasing material costs in addition to mitigating losses indicates profits could increase upwards of 4.4%.

Technical Abstract: Recently there has been much progress in the development of technologies that use bio-markers to detect and manage post-harvest physiological disorders for apples in long-tern storage. Such technologies have the capacity to alleviate fruit loss by allowing storage operators to more effectively market the crop. The technology may also reduce costs for storage materials and associated management activities. However, as is common for many new technologies that have not yet been adopted commercially in agriculture, the net economic value of the technology is not well understood and is difficult to assess ex ante. In horticultural markets that include quality (and price) differentiated products, technologies that affect grading are expected to impact revenues in non-trivial ways. Here we develop a framework to assess the likely range of economic implications associated with the adoption of the bio-marker technology that allows a greater share of fruit to be marketed in a higher grade and may influence the costs of storing fruit. Results indicate that modest improvements in the share of higher quality fruit lead to increased profits of between 0.99% and 3%. A more optimistic scenario that increases the share of fruit in higher grades and decreases material costs in storage would increase profits by approximately 4.4%. Our analysis and results are specific to the case of bio-marker use to manage post-harvest disorders for ‘Empire’ apples, yet the framework can be used with varietal-specific price and yield information to assess the ex ante economic implications of adopting the technology more generally.