An Economic Impact and Investment Analysis of Armillaria Root Rot in the United States Peach Industry
Date of Award
Master of Science (MS)
Applied Economics and Statistics
Peach production in the United States has decreased over the last decade due to increased disease prevalence. Armillaria root rot (ARR) is a lethal root fungus that affects many stone fruits, including peaches, often leading to rapid decline/death of trees and abandonment of orchards. This thesis is divided into four chapters which focus on answering four key questions that, to the best of my knowledge, have not been addressed in previous industry research.
The second chapter determines the magnitude of ARR disease prevalence in the United States and producers’ maximum willingness to pay (WTP) for a theoretical ARR-resistant rootstock. Results from a nationwide survey of peach producers indicate that 100% of participants reported having crop loss due to ARR over the past two years. Producers also have an average premium WTP of $2.16 per tree for a rootstock that shows high disease resistance. With an assumed tree price of $6.00 per tree, this implied that producers were willing to pay 36% more for the large increase in ARR resistance.
The third chapter examines the economic impact of ARR on the national peach industry and an investment analysis of implementing the root collar excavation (RCE) method in peach orchards. Data was obtained from California, Florida, and South Carolina enterprise budgets and analyzed using a net present value (NPV) method paired with stochastic variables of disease impact year and impact rate. Findings suggest that ARR can decrease the national profitability of growing peaches by an average of $3,740 per acre. Additional findings indicate that implementing the RCE method on ARR-infected sites could increase profits per acre by an average of $657 nationwide.
Herrin, Gracie, "An Economic Impact and Investment Analysis of Armillaria Root Rot in the United States Peach Industry" (2022). All Theses. 3949.