John L. Adrian, Chris C. Montgomery, Bridget K. Behe, Patricia A. Duffy, and Kenneth M. Tilt

Alabama's nursery industry has experienced dramatic growth in recent years to become a market driven system generating substantial economic activity characterized by diverse product sizes, types, and forms. Increased competition has caused producers and users of landscape products to seek ways to improve efficiency. An alternative production method, the pot-in-pot system, has received attention because it offers several advantages over conventional systems.

To evaluate the feasibility of this alternative production system, AAES economists and horticulturalists conducted an economic analysis of pot-in-pot production, compared to the conventional methods of in-field and above-ground-container production. Overall, pot-in-pot production seems to be a viable alternative, especially for small nurseries.

With the pot-in-pot system, liners (young plants) are transplanted into pots filled with soil-less media, similar to the above-ground system. However, instead of placing these pots into a holding area on top of the ground, they are placed into second containers of the same size, known as socket pots. Before the insert pots are added, socket pots are buried in the ground with only the top two or three inches protruding above the soil. Plants are then grown to desired sizes and marketed in the insert pots. In above-ground production, the containers remain on top of the ground, while with in-field production, liners are transplanted directly into the soil.

Costs were evaluated for a 15-acre nursery with a 10-acre production area on a three-year growing cycle for production of crapemyrtle. Cost estimates were derived from southeastern commercial operations that use the various production methods, estimates from horticultural researchers, and existing budgets for container nurseries. Using this information, along with other variables that are considered the best management practices for the industry, researchers analyzed the relative feasibility of each production practice. Collecting these data was a preliminary step toward programming a computer model to perform an in-depth analysis of the nursery industry.

In-field production included primary and secondary soil tillage of the ten acres, followed by fertilization based on soil test recommendations. Bare-root liners were purchased and planted, and a drip irrigation system was used to provide water and fertilizer. Plants were scheduled for harvest in the winter of the third growing season.

Above ground container production began with propagation of cuttings in one-gallon containers and growth for one year in polyethylene-covered greenhouses. Plants were then transplanted to three-gallon containers and moved outside where overhead irrigation was utilized. After another year, plants were transplanted to l0-gallon containers and were staked using three-foot sections of rebar, or metal stakes. Plants were harvested during the third spring.

Pot-in-pot production used the same initial cutting procedure for propagation and cultural practices as above-ground production. However, plants were transplanted directly from one-gallon to l0-gallon containers. Elimination of the three-gallon stage allowed a larger number of plants to be produced. Also, no stakes were needed since placing the socket pots in the ground provides all the support necessary. This system also requires less labor and equipment. A drip irrigation system was used to water and fertilize the plants. Plants were harvested in the spring after two years of growth in the l0-gallon containers.

Most equipment (tractors, trucks, sprayers, etc.) was the same for all three production methods. Essential equipment for in-field production was a moldboard plow, disking harrow, single-row transplanter, and a tree spade. Improvements on the production area, including such items as grading, tree removal, and building access roadways, waterways, and holding ponds were estimated at $1,200 per acre for the infield system, $3,670 for above-ground, and $1,429 for pot-in-pot.

Of the total capital requirements (see table), land and improvements accounted for 13% of in-field system expenditures; 20%, above-ground; and 14%, pot-in-pot. Buildings accounted for 18% for in-field production; 25%, above-ground; and 23%, pot-in-pot. Machinery and equipment added another 69% to in-field costs; 55%, above-ground; and 63%, pot-in-pot. The pot-in-pot system had the highest initial total capital and total fixed costs levels (see table) primarily because of higher costs associated with purchasing and installing the socket pots. Other disadvantages of this system include potential drainage problems within socket pots and the possibility of root elongation into the socket pot and surrounding soil. Also, containers may stick together, and the insert pot bottom may sag, causing an uneven base. However, this system generated the lowest per-plant cost because of less-intensive, labor-saving cultural practices and the ability to grow more plants on the available space. Total cost per harvested plant was $18.91 for the pot-in-pot system, compared to $23.29 for in-field and $21.79 for above ground.

Pot-in-pot production offers several advantages over above-ground-container production. For example, the root-zone is insulated from extreme temperature variations, the plants remain in place throughout the winter, trickle irrigation reduces water usage, and extensive staking is eliminated.

When compared with in-field production, the pot-in-pot system is superior in terms of year-round harvest capability, reduced harvest labor cost, and decreased root loss at harvest. Also, in shipping and handling, pot-in-pot material is less bulky and cumbersome than in-field-produced material.

Adrian and Duffy are Professors of Agricultural Economics. Montgomery is a former Graduate Research Assistant, Behe is an Associate Professor; and Tilt is a Professor of Horticulture.