206 Risk Analysis of Adopting Zero Runoff Subirrigation Systems in Greenhouses Using Monte Carlo Simulation

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  • 1 Dept. of Floriculture and Ornamental Horticulture
  • 2 Dept. of Floriculture and Ornamental Horticulture
  • 3 Dept. of Agricultural and Biological Engineering, Cornell University, Ithaca, NY 14853

Although zero runoff subirrigation (ZRS) technology has great promise to manage fertilizer inputs while improving production efficiency in greenhouse operations, high initial investment costs and inadequate technical background are major impediments for initiating the change. In a world of uncertainty, greenhouse operators face the challenge of making an optimal investment decision to satisfy environmental compliance expectations and meet the companies' financial goals. Using Monte Carlo simulation, cost risk was analyzed to compare the relative risks of investing in alternative ZRS systems for greenhouse crop production. An investment model was defined for greenhouse production with alternative ZRS systems. Each cost variable was allowed to vary based on a probability distribution. Random numbers were generated to determine parameters for the probability distributions for the uncertain variables. The simulation process was repeated 300 times for each production model. Simulation results showed that among the four ZRS systems studied (ebb-and-flow benches, Dutch movable trays, flood floors, and trough benches), the Dutch movable tray system returned the highest average profit for small potted plant production and the flood floor system returned the highest average profit for large potted plant and bedding crop flat production. Risk of the production models were compared by the variability of simulation results. The Dutch movable tray system is the least risky for small potted plant production, and the flood floor system is the least risky for large potted plant and bedding crop flat production. Despite its low initial costs of adoption, the trough bench system was least competitive as a ZRS technology for a greenhouse operation because of the relative low profitability and high risk of production due to volatile profitability.

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