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Labor Cost and Value of Citrus Operations with Alternative Technology: Enterprise DCF Approach

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  • Iwai, Nobuyuki
  • Emerson, Robert D.
  • Roka, Fritz M.

Abstract

The prospect of immigration policy reform has renewed growers’ concerns of serious labor shortages and cost increases given that a large portion of the workforce is unauthorized for U.S. employment. This concern of labor shortages and cost increases is more serious for specialty crop agriculture which is highly labor intensive. Specialty crop growers may address the problem in various ways, but likely options include adoption of mechanical harvesting. In the current paper we study the citrus industry case and estimate the value for two operational modes (hand and mechanical harvesting) using the enterprise discounted cash flow (DCF) approach. Further we implement a simulation to forecast how the value for each operational mode would change with a change in cost scenario.

Suggested Citation

  • Iwai, Nobuyuki & Emerson, Robert D. & Roka, Fritz M., 2009. "Labor Cost and Value of Citrus Operations with Alternative Technology: Enterprise DCF Approach," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46836, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saeana:46836
    DOI: 10.22004/ag.econ.46836
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    File URL: https://ageconsearch.umn.edu/record/46836/files/saea09_jan15_.pdf
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    References listed on IDEAS

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    1. J. Edward Taylor, 1992. "Earnings and Mobility of Legal and Illegal Immigrant Workers in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 889-896.
    2. Sabrina Isé & Jeffrey M. Perloff, 1995. "Legal Status and Earnings of Agricultural Workers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 375-386.
    3. Emerson, Robert D., 2007. "Agricultural Labor Markets and Immigration," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 22(1), pages 1-10.
    4. repec:cdl:agrebk:677103 is not listed on IDEAS
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    1. Iwai, Nobuyuki & Emerson, Robert D. & Roka, Fritz M., 2009. "Harvest Cost and Value of Citrus Operations with Alternative Technology: Real Options Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49942, Agricultural and Applied Economics Association.

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