Document ID: EPA-HQ-OPP-2005-0123-0328
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-05-02T04:00Z

SEQ CHAPTER \h \r 1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON D.C., 20460

  SEQ CHAPTER \h \r 1 

OFFICE OF

PREVENTION, PESTICIDES AND TOXIC SUBSTANCES

MEMORANDUM

SUBJECT:	Assessment of the Benefits of Soil Fumigation with Methyl
Bromide, Chloropicrin, and Metam Sodium in Stone Fruit Production 
(DP#337490)

FROM:	T J Wyatt, Agricultural Economist

		Economic Analysis Branch

		Leonard Yourman, Plant Pathologist

		Biological Analysis Branch

		Biological and Economic Analysis Division (7503P)

THRU:	Timothy Kiely, Chief

		Economic Analysis Branch

		Arnet Jones, Chief 

		Biological Analysis Branch 

		Biological and Economic Analysis Division (7503P)

TO:		Andrea Carone, Chemical Review Manager, 1,3-Dichloropropene

		Steve Weiss, Chemical Review Manager, Methyl Bromide

		Special Review Branch

		

		Nathan Mottl, Chemical Review Manager

		Reregistration Branch 1

		Veronique LaCapra, Chemical Review Manager

		Registration Branch 2

		John Leahy, Senior Policy Advisor

		Special Review and Reregistration Division (7508P)

Product Review Panel:  April 11, 2007

Summary

Soil fumigation prior to replanting an orchard of stone fruit provides
substantial benefits by decreasing mortality of young trees, improving
growth and speeding maturity, and increasing yields throughout the
lifespan of the orchard.  Fumigation targets a suite of soil pests,
including various nematodes and soil fungi.  Methyl bromide and
chloropicrin are critically important for control of soil pathogens,
especially in California and the Pacific Northwest.  In the northeastern
and southern production areas, 1,3-dichloropropene provides good control
of nematodes, which are the major pest in these regions.

Methyl bromide penetrates heavy or damp soils better than
1,3-dichloropropene and provides better pest control.  In these
orchards, fumigation with methyl bromide and chloropicrin contributes
about $4.5 million annually in terms of increased production compared to
what would be possible using 1,3-dichloropropene with chloropicrin
instead.  On lighter soils where 1,3-dichloropropene with chloropicrin
is used, chloropicrin provides another $13.4 million annually in
increased production compared to using 1,3-dichloropropene followed by
an application of metam sodium.  In addition, use of metam sodium is
more expensive, because it cannot be applied simultaneously with 1,3-D. 
Metam sodium is not currently used to a large extent, although on
appropriate soil types without nematode problems it can effectively
control soil pathogens.

Soil fumigation, in general, make investments in orchards viable. 
Orchards are costly to establish and maintain for several years prior to
production.  Without the benefits provided by soil fumigation, future
revenue might not justify the costs for about half the stone fruit
acreage, particularly sweet cherries in the Pacific Northwest.  Thus,
substantial benefits accrue to consumers in the form of increased supply
of fresh and processed fruit and lower prices.

Background

As part of the Registration Eligibility Decision (RED) process, EPA is
assessing the risks and benefits of the use of several soil fumigants
(basamid, chloropicrin, metam potassium, metam sodium, and methyl
bromide).  This document presents the assessment of the benefits
provided by the soil fumigants in the production of stone fruit
(apricot, cherry, peach and nectarine, plum and prune).  Conceptually,
the benefits of a pesticide like a soil fumigant are the improvements in
production and/or reductions in cost resulting from the pesticide’s
use.  The benefits of a pesticide are shared between the users of the
pesticide, e.g., fruit producers, and consumers of fresh and processed
fruit.  Consumers benefit because higher production and/or lower costs
translate into a cheaper and more abundant supply of fruit.

This document is an assessment of the benefits of soil fumigants.  As
such, it compares the current situation in which fumigants are available
for use, subject to existing label restrictions, to the situation that
is estimated to occur were the fumigants are not available.  This is
somewhat different from an assessment of the impacts of regulation, as
no specific regulatory scheme is considered.

Stone Fruit

Stone fruit include apricots, cherries, peaches, nectarines, plums, and
prunes.  They are cultivated throughout the U.S., but there are several
important regions of commercial production.  California produces over
90% of the nation’s apricots, plums and prunes and nearly 75% of the
peaches and nectarines (USDA NASS, 2002-2006).  Cherries are generally a
more northern crop with sweet cherry production concentrated in the
Pacific Northwest and tart cherry production in the northeast.  Table 1
presents a summary of acreage, production, and value for select regions.

Table 1.  Stone fruit acreage, production and value, 2001 – 2005
average.

Region	Bearing Acres	Production

(1000 tons)	% U.S. Production	Yield

(tons/acre)	Value

($1000)	Price

($/ton)

Apricot

  California	16,200	78.7	93.3	4.9	27,600	350

Cherry, Sweet

Pacific Northwest 1	38,840	154.5	65.6	4.0	245,990	1,590

  California	24,800	58.7	24.9	2.4	97,580	1,660

  Northeast 2	8,830	19.1	8.1	2.2	13,390	700

Cherry, Tart

  Northeast 3	32,120	93.8	82.2	2.9	49,430	530

  West 4	6,200	20.3	17.8	3.3	10,450	520

Nectarine

  California	36,500	271.2

7.4	115,500	425

Peach

  California	67,440	923.3	74.2	13.7	259,100	280

  South 5	34,790	144.7	11.6	4.2	85,300	590

  Northeast 6	24,470	109.3	8.8	4.5	81,100	740

Plum/Prune

  California	110,000	307.2	95.2	2.8	192,000	625

Pacific Northwest 1	3,200	13.2	4.1	4.1	4,500	340

California	254,940	1,639.1	43.2

691,780

	Pacific Northwest 1	48,700	216.6	5.7

291,300

	U.S.	423,800	3,793.6

	1,255,800

	Source:	USDA NASS (2002-2006b).  Totals include acreage, production and
value of stone fruit not specifically listed and from other states.

1	Idaho, Oregon, and Washington.

2	Michigan and New York.

3	Michigan, New York, Pennsylvania, and Wisconsin.

4	Colorado and Utah.

5	Alabama, Georgia, Louisiana, North and South Carolina, Tennessee,
Virginia and West Virginia.

6	Connecticut, Maryland, Massachusetts, New Jersey, New York and
Pennsylvania.

Fumigant Use

Orchards of major stone fruit crops require periodic replanting. 
Orchards are replanted when the natural productive life of orchard trees
ends, or when the economic situation changes such that customer demand
for new varieties or new crop price projections warrants replacing
existing orchards.  Soils may be fumigated prior to planting.  Because a
typical orchard may be productive for 10-25 years or longer, plantings
may represent a small fraction of bearing acreage, but small changes in
plantings will have large impacts on production in later years.

Data on both plantings and fumigant use are sparse.  A major difficulty
of both public and private data sources is the sporadic nature of use. 
Because a grower may not replant a portion of his or her orchard every
year and what is planted is small compared to bearing acreage, surveys
may overlook relatively important use of soil fumigants.  The following
tables present BEAD’s best estimates, which combine a number of
sources including USDA and state reports, reports of trade associations
and EPA proprietary data.

Table 2 presents estimated use of methyl bromide, compared to acres
planted.  Use of methyl bromide is largely concentrated in California
and is particularly important in sweet cherry and prune.  Some methyl
bromide use occurs in the Pacific Northwest, but these areas have not
requested a Critical Use Exemption for continued use under the Montreal
Protocol.  Continued availability of methyl bromide for orchard replant
outside California is, therefore, unlikely.  Nearly 3,000 acres of stone
fruit have been treated with methyl bromide annually over the past five
years, out of approximately 10,000 acres planted.  However, the
percentage of area treated is likely to decline under the Montreal
Protocol.

Table 2.  Annual methyl bromide usage on stone fruit, 2001-2005.

State/Region	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied
Rate 3

(lb/acre/year)

Apricot

California	730 4	10	1.9	2,500	186.7

Cherry

California	1,350 4	1,270	94.0	45,400	35.7

Michigan	960	no reports

Oregon	730	60	8.1	388,000	409.5

Utah	140 4	no reports

Washington	1,650	130	7.7	28,300	325.5

Peach/Nectarine

California	6,130	1,010	16.5	38,200	37.7

Michigan	190	no reports

South Carolina	1,200 4	no reports

Plum/Prune

Plum, California	1,000 4	20	2.4	3,300	140.4

Prune, California	910	640	70.0	20,000	31.3

Source:	California Agricultural Statistics Service (2001-2006), Cal DPR
(2000-2005), California Tree Fruit Agreement (2005), MI Dept. of Ag
(2004), USDA NASS (2006a/b), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.

3	Effective or broadcast-equivalent rate.

4	Acres planted estimated under assumption that sufficient acres are
planted to maintain 2005 bearing acreage given a 20-year lifespan of an
orchard, i.e., one-twentieth (1/20) of bearing acres in 2005, in
California and Utah, and for a 12-year lifespan in South Carolina.

Table 3 presents estimated use of chloropicrin.  Estimating the use of
chloropicrin presents significant challenges because it is almost always
used in combination with methyl bromide or 1,3-dichloropropene.  In
fact, methyl bromide is only used in combination with chloropicrin. 
However, California data (Cal DPR, 2000-2005) does not reflect this,
indicating substantial underreporting of chloropicrin use.  It may be
that some pesticide use reports do not distinguish between products
and/or only report the primary fumigant used.  BEAD has attempted to
correct for this, but the estimated acres treated, around 3,500 acres
annually, could still be biased downward.  Application rates may
similarly be biased downward.

As a result of the phase-out of methyl bromide, there has been a
substantial shift in Pacific Northwest from methyl bromide to
chloropicrin alone or in mixtures with 1,3-dichloropropene (Northwest
Horticultural Council, 2007).  In response to BEAD queries, the
Northeastern IPM Center indicated that little or no fumigation is
conducted on orchards in that region (Jess, personal communication,
2007)

Table 3.  Annual chloropicrin usage on stone fruit, 2001-2005.

State/Region	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied
Rate 3

(lb/acre/year)

Apricot

California	730 4	20	2.9	500	26.1

Cherry

California	1,350 4	1,350	100.0	11,200	8.3

Michigan	960	30	3.0	1,800	62.0

Oregon	730	580	80.0	39,000	68.0

Utah	140 4	no reports

Washington	1,650	1,320	80.0	53,000	40.0

Peach/Nectarine

California	6,130	1,270	20.7	34,000	26.6

Michigan	190	no reports

South Carolina	1,200 4	no reports

Plum/Prune

Plum, California	1,000 4	50	4.7	2,000	43.2

Prune, California	910	870	94.8	3,000	3.2

Source:	California Agricultural Statistics Service (2001-2006), Cal DPR
(2000-2005), California Tree Fruit Agreement (2005), Northwest
Horticultural Council (2007), MI Dept. of Ag (2004), USDA NASS
(2006a/b), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.

3	Effective or broadcast-equivalent rate.

4	Acres planted estimated under assumption that sufficient acres are
planted to maintain 2005 bearing acreage given a 20-year lifespan of an
orchard, i.e., one-twentieth (1/20) of bearing acres in 2005, in
California and Utah, and for a 12-year lifespan in South Carolina.

Estimates of metam sodium use are shown in Table 4.  For the most part,
metam sodium is not an important fumigant for stone fruit, although it
may be used as a follow-up treatment to 1,3-D.  There are reports of
significant use in Utah, but this may be a function of the survey and
the methodology for extrapolating results, given the sporadic nature of
fumigation.  Data also show use in Michigan, but the North Central IPM
Center reports that there is little orchard fumigation (personal
communication, 2007).  Metam sodium appears to have some importance in
the Pacific Northwest.

Table 4.  Annual metam sodium usage on stone fruit, 2001-2005.

State/Region	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied
Rate 3

(lb/acre/year)

Apricot

California	730 4	< 10	0.1

Cherry

California	1,350 4	no reports

Michigan	960	130	14.0	21,000	159.7

Oregon	730	10	1.6	3,000	249.1

Utah	140 4	110	76.1	32,000	296.1

Washington	1,650	150	9.2	49,000	320.0

Peach/Nectarine

California	6,130	20	0.2	3,000	191.5

Michigan	190	no reports

South Carolina	1,200 4	no reports

Plum/Prune

Plum, California	1,000 4	no reports

Prune, California	910	no reports

Source:	California Agricultural Statistics Service (2001-2006), Cal DPR
(2000-2005), California Tree Fruit Agreement (2005), Northwest
Horticultural Council (2007), MI Dept. of Ag (2004), USDA NASS
(2006a/b), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.

3	Effective or broadcast-equivalent rate.

4	Acres planted estimated under assumption that sufficient acres are
planted to maintain 2005 bearing acreage given a 20-year lifespan of an
orchard, i.e., one-twentieth (1/20) of bearing acres in 2005, in
California and Utah, and for a 12-year lifespan in South Carolina.

Finally, Table 5 presents estimates for use of 1,3-dichloropropene. 
1,3-dichloropropene is the dominant fumigant in southern states,
represented by South Carolina.  However, it does not appear to be
commonly used in northern states.  In California, 1,3-dichloropropene
use is increasing as growers shift from using methyl bromide.

Table 5.  Annual 1,3-dichloropropene usage on stone fruit, 2001-2005.

State/Region	Planted Acres 1	Acres Treated 2	% Acres Treated	lb Applied
Rate 3

(lb/acre/year)

Apricot

California	730 4	20	2.9	7,000	320.2

Cherry

California	1,350 4	210	15.5	63,000	300.8

Michigan	960	50	4.8	10,000	222.7

Oregon	730	no reports

Utah	140 4	no reports

Washington	1,650	no reports

Peach/Nectarine

California	6,130	1,580	25.8	366,000	230.9

Michigan	190	no reports

South Carolina	1,200 4	820	70.0	124,000	152.1

Plum/Prune

Plum, California	1,000 4	160	16.3	40,000	247.1

Prune, California	910	220	24.2	70,000	319.7

Source:	California Agricultural Statistics Service (2001-2006), Cal DPR
(2000-2005), California Tree Fruit Agreement (2005), Northwest
Horticultural Council (2007), MI Dept. of Ag (2004), USDA NASS
(2006a/b), and EPA proprietary data.

1	Acres planted are for calendar year following fumigation.

2	Acres treated for California may be underestimated.  Substantial
acreage is reported simply as “pre-plant fumigation” or
“uncultivated agricultural land,” some of which could be for orchard
crops.

3	Effective or broadcast-equivalent rate.

4	Acres planted estimated under assumption that sufficient acres are
planted to maintain 2005 bearing acreage given a 20-year lifespan of an
orchard, i.e., one-twentieth (1/20) of bearing acres in 2005, in
California and Utah, and for a 12-year lifespan in South Carolina.

Given the use patterns, this analysis will focus primarily on the use of
methyl bromide and chloropicrin in California and on the use of
chloropicrin in the Pacific Northwest.  Northeastern states do not
appear to be using soil fumigation when replanting stone fruit orchards
although anecdotal reports suggest that metam sodium and 1,3-
dichloropropene may be used.  Southern states typically rely on
1,3-dichloropropene, which EPA is not currently reviewing.  Metam sodium
may be used in Utah and Colorado, but the data are subject to a high
degree of uncertainty.

Target Pests

The primary reason for fumigation is to insure planting into soils with
minimal pest infestation.  In many orchard sites, soil-borne nematodes
and/or pathogens, and a poorly understood disease complex called orchard
replant “problem” or “disorder” are threats to establishing
healthy, long-bearing orchards (McKenry, 1999).  Table 6 indicates the
key pests associated with stone fruit crops in major production areas in
the U.S.

Table 6.  Target pests for fumigants in stone fruit production.

Region / Crop	Key Pests

California

Peaches, Nectarines, Apricots 1	Replant disorder (disease complex)
Interactions between pests (nematodes and/or pathogens) and
environmental factors.

Nematodes: Meloidogyne spp. (root knot); Mesocriconema xenoplax (ring);
Xiphinema americanum (dagger); Pratylenchus vulnus and other spp. (root
lesion); and Tylenchulus (citrus)

Pathogens: Armillaria, and possible other fungi, depending on orchard
location and conditions, may contribute to orchard replant disorder.

Sweet cherries 2	Nematodes (major pests): Meloidogyne incognita and M.
javanica (root knot); Pratylenchus penetrans, and P. vulnus (root
lesion); Pathogens: Armillaria; Phythophthora rots

Plums / Prunes 3	Nematodes: Mesocriconema (ring); Xiphinema (dagger);
Pratylenchus (root lesion); Meloidogyne spp. (root knot)

Pacific Northwest

Sweet Cherries 4	Replant disorder (disease complex): Interactions
between pests (nematodes and/or pathogens) and environmental factors;
Nematodes:  Mesocriconema (ring); Xiphinema (dagger); Pratylenchus (root
lesion); Pathogens: Armillaria, and possible other fungi, depending on
orchard location and conditions, may contribute to orchard replant
disorder; Insects: ten-lined June beetles

South

Peaches 5	Peach Tree Short Life (disease complex, interactions between
nematodes and/or pathogens and environmental factors).  Nematodes:
Meloidogyne (root knot); Mesocriconema (ring) and lesion (Pratylenchus
vulnus). On replant sites, nematodes are key risk factors influencing
orchard health and productivity 

Northeast

Michigan 6

(Tart cherries)	Nematodes: Xiphinema americanum (dagger); Pratylenchus
penetrans (root lesion)

1 	UC Pest Management Guidelines—Peach Nematodes, 2006; UC Pest
Management Guidelines—Apricot Nematodes, 2006; McKenry, 1999.

2 	UC Pest Management Guidelines—Cherry Nematodes, 2006.

3 	UC Pest Management Guidelines—Plum Nematodes, 2006.

4 	Oregon State University Plant Disease Control-Cherry, 2006.

5 	Crop Profile for Peaches in Georgia and South Carolina, 2004.

6 	Crop Profile for Tart Cherries in Michigan, 2003.

Orchards with replant problem have several visible effects—the first
and most apparent is poor tree growth during the early years of
establishment (rejection component), and in some cases, a slow and
detrimental decline in root health and plant growth caused primarily by
pathogenic nematodes and fungi, which can lead to premature tree death. 
Interactions with environmental features such as soil composition,
damage from insects, nutrient deficiency or wind blow-down are less well
documented, but anything that limits early root growth can predispose
the trees to greater damage from subsequent agents.

The replant disorder can be of varying severity depending on pest
pressure, orchard location, type of crop, soil texture, soil moisture,
pH, or other factors.  Planting nematode-tolerant rootstock is an
important management tool that is available for all stone fruit trees. 
However, rootstocks are generally only tolerant to one type of nematode
while orchards may harbor several species (e.g., UC Pest Management
Guidelines for Peach Nematodes, 2006).  In orchards with several
nematode species at high population concentrations, fumigation may be
necessary.  Replant disorder effects can sometimes be reduced by
planting a cover crops (such as wheat) for a few years, but the delayed
productivity may not be economically feasible for some growers. 
Generally, it is desirable to establish orchards on land previously
planted with different crops (e.g., planting stone fruit trees after an
apple orchard) to avoid severe replant problems, although economic
considerations and availability of land may conflict with this
recommendation.

The analysis of pests suggests that choice and use of fumigant is
relatively specialized.  In California and the Pacific Northwest,
nematodes and fungal pathogens are treated with methyl bromide or 1,3-D
and/or chloropicrin.  In the South, fungal pathogens appear to be a
lesser concern and 1,3-D is generally sufficient.  Nematodes appear to
be the primary problem in the Northeast, but apparently not a
sufficiently large problem to warrant the use of fumigation.

Orchard Replant Practices

Typically, the first steps in the re-establishment of an orchard are
removal of old trees and “ripping” or deep tillage of the soil,
followed by a fallow period or cover crop.  The length of the fallow
depends on soils, climate, and past pest problems, but is typically one
to two years.  The practice reduces “orchard rejection,” a component
of the orchard replant problem when trees fail to survive due to an
unknown cause (Caprile and McKenry, 2006; McKenry, 1999).  Fallow is
generally not sufficient to reduce nematode infestation but improves
tree growth.  The ground is then fumigated.  Fumigation kills or reduces
pests and remnant roots of previous plantings, especially for
deep-rooted trees, that harbor pests.

California

Methyl bromide in combination with chloropicrin is used on approximately
20% of stone fruit orchard replant sites (this includes peach,
nectarine, apricot and cherry crops grown in California), under a
critical use exemption (CUE) label (California Grape and Tree Fruit
League, 2006).  Methyl bromide has been nominated for use on stone fruit
crops with a critical use exemption at a rate of 182 lb/acre.  The ratio
of methyl bromide to chloropicrin is usually 98:2 (i.e., 3-4 lb/acre
chloropicrin).  Text Box 1 provides typical characteristics of a methyl
bromide/chloropicrin fumigation.  Growers have been granted a CUE for
use of methyl bromide for a portion of replant acreage, primarily high
clay-content soils, where alternatives are not effective.  This
situation appears to pertain to prunes and cherries in particular.

Text Box 1.  Methyl Bromide/Chloropicrin Fumigation Characteristics,
California Stone Fruit.

Rate:	40-50 lb a.i methyl bromide/acre (broadcast equivalent) [see Table
2]; 182 lb methyl bromide/treated area with 3-4 lb chloropicrin/acre

Method of Application:  Shank, deep injected, i.e., more than 20 inches;
strip treatment

Fumigation Period:  Fall, for planting the following spring 

Surface Sealing:  Tarp

Field Size:	15-20 acres

Area Treated/Day:  15-20 acres

In lighter soils, growers usually use 1,3-D with chloropicrin at 17 or
35%.  This situation is relatively more common with peach and plum. 
Application rates depend on soil moisture and the product must be
applied to soils with a moist surface.  For soils with less than 12%
moisture, a rate of 330 lb 1,3-D/acre is used (Caprile and McKenry,
2006; UC Pest Management Guidelines, Peach Nematodes, 2006; UC Pest
Management Guidelines, Apricot Nematodes, 2006).  The product is shanked
in at least 20 inches deep.  If moisture is higher (12-19%), strip
treatments are conducted, generally (for clay loam soils) with a
Buessing shank with 2-3 narrow wings.  Strip treatments occupy
approximately 65% of an acre.  Treatments are usually done from
mid-September to mid-November.  Tarps or soil seals are generally used. 
Text Box 2 summarizes this information.

Text Box 2.  Chloropicrin Fumigation Characteristics, California Stone
Fruit.

Rate:	45-50 lb chloropicrin/acre (broadcast equivalent); 65-175 lb
chloropicrin/treated area

Method of Application:  Shank, deep injected, i.e., more than 20 inches;
strip treatment

Fumigation Period:  Fall, for planting the following spring 

Surface Sealing:  Tarp

Field Size:	20-25 acres

Area Treated/Day:  20-25 acres

Metam sodium or, rarely, metam potassium must be distributed into the
soil with water and is only accomplished in course-textured soils (i.e.,
this treatment will not be effective in clay soils) (Caprile, 2006). 
Metam sodium may be effective as a surface treatment, via incorporation
or as a drench, in conjunction with a1,3-D and chloropicrin treatment. 
Metam sodium can reduce populations of nematodes to a 5-foot depth if
applied as a drench in large volumes of water, but it does not penetrate
and kill plant roots deeper than 3.5 feet (UC Pest Management
Guidelines, Peach Nematodes, 2006; UC Pest Management Guidelines,
Apricot Nematodes, 2006).  Rates exceeding 100 lb/acre are not
recommended for stone fruit (Van Sickle, 2007).  Metam sodium is best
applied in springtime or to pre-moistened soil, but is not often used in
California.

Pacific Northwest

Because of the methyl bromide phase-out under the Montreal Protocol,
orchard managers in the Pacific Northwest have largely transitioned to
1,3-D and chloropicrin products, according to results of a survey
conducted by the Northwest Horticultural Council (Carter, 2007).  About
80% of orchard plantings use chlorpicrin in some form.  The typical rate
of chloropicrin is 50 lb/acre with a maximum rate of 195 lb/acre for
high pest pressure situations.  Application of chloropicrin products is
shanked without tarping to depths of 16-20”.  The soil is sealed after
application with a disc/cultipacker.  The shanking depth depends on soil
type and moisture.  See Text Box 3.

Text Box 3.  Chloropicrin Characteristics, Pacific Northwest Stone
Fruit.

Rate:	50 lb a.i./acre, effective broadcast rate; 195 lb/treated acre

Method of Application:  Shank injection, 16-20 inches in depth.

Fumigation Period:  Early to late spring (Feb – June) or early to late
fall (Sept – Dec)

Surface Sealing:  Soil compaction 

Field Size:	

Area Treated/Day:  5 acres/tractor

Alternative Control Measures

To some extent, the soil fumigants are interchangeable, although their
relative efficacy depends on soil conditions.  Where both nematodes and
soil pathogens are a problem, three treatments are possible:  methyl
bromide with chloropicrin, 1,3-D with chloropicrin, and 1,3-D with metam
sodium.  On the lightest soils, all will have similar efficacy.  On
heavier soils, however, metam sodium will not penetrate as well and
there will be less control of soil pathogens.  Similarly, on the
heaviest soils, the methyl bromide/chloropicrin combination is most
efficacious as it penetrates best.  Where nematodes are the primary
problem, 1,3-D alone is likely to be sufficient.  Finally, where soil
pathogens, but not nematodes, are the problem, chloropicrin or metam
sodium alone may be used.  Chloropicrin will be more efficacious on
heavier soils, however.

California has set township caps for 1,3-D, which impose a maximum
amount that can be used in a given area per year.  Stone fruit producers
must compete with many other users for an allotment.  These restrictions
could severely limit use of 1,3-dichloropropene as an alternative on
additional acreage in California.

Besides fumigation, there are other approaches to controlling orchard
replant disease.  One method is to select land that has not recently
been planted in stone fruit or a related species, including some nut
crops.  This is not often an option, however, due to limited land area
available to growers and agro-climatic conditions that tend to be
conducive to limited tree crops.

Research conducted to identify rootstocks that can withstand important
nematode species is ongoing (McKenry et al., 2006).  Stocks may be
resistant, which means they may be infested and damaged, but do not
allow nematode populations to increase, or immune, which means the
rootstocks are not attacked by nematodes.  Resistance or immunity may be
quite specific, which requires identifying the critical species and
selecting the appropriate stock based on the pest pressure at individual
orchard sites.  For example, according to the UC Pest Management
Guidelines—Cherry Nematodes (2006), both Mazzard and Mahaleb varieties
are susceptible to cherry rasp leaf virus and to the lesion nematode. 
Mazzard is immune to one kind of ring nematode, M. incognita, and
resistant to another, M. javanica, while Mahaleb is resistant to M.
incognita and susceptible to M. javanica.   Another variety, Stockton
Morello, is immune to M. incognita but susceptible to P. vulnus. 
However, varieties with resistance to soil pathogens have not been
identified.

McKenry et al. (2006) recommendations for orchard replant without
fumigation include a five-step approach: 1) Glyphosate herbicide to cut
stumps, followed after 60 days with trunk removal; 2) fallow one full
year; 3) soil ripping or backhoeing as needed; 4) replanting on a
rootstock without Nemaguard parentage (a rejection to this rootstock has
emerged after several generations of Prunus spp. on this rootstock); 5)
starter fertilizer at planting time followed with 1.4 lb/acre NPK
fertilizer per tree in mid April and again in early August.  However,
this protocol may not be effective in replant sites with soil pathogens.

It should also be noted that organic production does not preclude the
use of fumigation to establish an orchard.  Organic production typically
requires three years without use of synthetic chemicals, including
fertilizers and pesticides, prior to obtaining certification.  This
allows organic growers to fumigate at planting to improve establishment
and then transition to organic production during the non-bearing period
of growth.

Benefits of Fumigation

Planting orchards with stone fruit trees requires a large investment of
resources as well as numerous choices to establish a long-bearing and
productive orchard.  Many of the pests associated with these crops and
fumigation requirements are similar from crop to crop and location to
location.  However, management of these pests differs depending on
particular crop, soil type, climatic region, availability and cost of
orchard land, availability of resistant rootstock to specific key pests,
and local regulatory restrictions of some fumigants.  In general, when
fumigation is deemed necessary, few choices are available to the orchard
manager.

BEAD assesses the benefits of fumigation with a particular chemical by
comparing production under alternative approaches for controlling
orchard replant disease.  We focus on three cases that are broadly
representative of stone fruit production with high fumigant use:

Prune production in California.  This represents a heavy soil
environment where methyl bromide and chloropicrin are used.  We compare
this use to fumigation with 1,3-D and chloropicrin, 1,3-D and metam
sodium, and 1,3-D alone to evaluate the benefits of methyl bromide and
chloropicrin.

Peach production in California.  This represents a relatively lighter
soil where 1,3-D and chloropicrin are typically used.  We compare this
to fumigation with 1,3-D and metam sodium and 1,3-D alone to evaluate
the benefits of chloropicrin.

Cherry production in Washington.  This represents the situation in the
PNW where 1,3-D and chloropicrin are currently the primary fumigants. 
We compare this to fumigation with 1,3-D and metam sodium to evaluate
the benefits of chloropicrin.

BEAD is not assessing a specific situation where metam sodium is the
current fumigant of choice, although this does pertain to some cases in
the PNW where nematodes are not a problem.  We will draw on findings for
all three case studies to characterize the benefits of metam sodium.

The benefits of fumigation for orchard replant can be measured by future
yields (orchard crops require several years to bear fruit) when fruit
production may be adversely affected by poor tree growth and high pest
populations.  In addition, fumigant treatments result in healthier young
trees.  The effects of orchard replant problem and nematode damage to
young seedlings are experienced within the first three years of orchard
establishment, and are commonly observed within the first year.  Costs
associated with individual tree replacement include delayed fruit
production as newly replanted trees lag behind previously planted ones. 
In more severe cases, when replant disorder or high nematode populations
are not properly managed at the time of orchard establishment, the
entire orchard of trees might be lost.  Because of the long life of an
orchard, optimal soil preparation, along with appropriate rootstocks, is
a priority for successful fruit production.

BEAD typically uses a partial budget analysis to estimate the impacts of
changes in production practices.  That is, we evaluate the consequences
on a typical acre of the crop grown, rather than attempt to assess the
impacts in the context of a whole enterprise, which could include
multiple crops under cultivation.  This approach allows the Agency to
compare estimated losses to net operating revenue, which is defined as
the difference between gross revenue and variable operating costs, on a
per-acre basis.  The analysis ignores fixed costs, which are highly
dependent on land ownership and the size and diversity of the grower’s
operation, and therefore difficult to define on a per-acre basis.  As
such, this analysis may understate the impacts as a percentage of the
grower’s income.

An analysis of a single year, however, does not capture the full benefit
of fumigation.  Establishing an orchard involves considerable costs,
including the maintenance of the orchard during the non-bearing years. 
This investment literally bears fruit in the future.  Therefore, another
approach to evaluating the benefits fumigation is to calculate the net
present value of the orchard under different streams of costs and
returns.  Net present value (NPV) is a way of comparing different
investments by summing the discounted costs and returns over time to
calculate the value of the investment.  The formula for NPV is:

 

where t is the time period (year), T is the last year the orchard is in
production and r is the discount rate.  This analysis uses a rate of 7%
to represent the private discount rate.  Since revenues and costs are
not adjusted for future inflation, all measures are in real terms.

Since the choice of discount rate is somewhat arbitrary, BEAD also
presents the internal rate of return (IRR), which is the discount rate
that makes NPV = 0.  One interpretation of this value is that it
represents the maximum rate of return on an investment that an
individual must be willing to accept before the investment would be
considered.  That is, if the IRR is 5%, only individuals willing to
accept a rate of return less than 5% would find the investment
worthwhile.

California Prune

Replacing methyl bromide with 1,3-D, while maintaining the use of
chloropicrin, is estimated to result in a 4% decrease in yields during
production (Carpenter et al., 2000).  Other information suggests that
without the use of chloropicrin, i.e., 1,3-D alone, yield losses could
range from 15-25% (Carter, 2007).  BEAD assumes that replacing
chloropicrin with metam sodium would result in an intermediate yield
loss.  Yield losses are due to soil pathogens that infect the trees at
an early age, stunting their growth.  Table 7 presents the expected
differences in production and revenue for California prune, where
operating costs are taken from Buchner et al. (2001).  Harvest costs are
assumed to be directly proportional to yield.  Differences in net
operating revenue for even small changes in yield can be substantial. 
This analysis suggests that the benefits of methyl bromide alone are
approximately $50/acre.  The benefits of chloropicrin are even more
substantial at around $100/acre.  This is because methyl bromide can
only be used in combination with chloropicrin as part of the strategy to
reduce methyl bromide use under the Montreal Protocol.  Currently, metam
sodium provides few benefits for stone fruit producers on heavier soils
because of the availability of more effective alternatives.  In the
absence of methyl bromide and chloropicrin, however, metam sodium
provides substantial benefits over 1,3-D alone, about $90/acre.

Table 7.  Gross revenue, operating costs, and net operating revenues,
California prune orchard at full production.

	Methyl bromide + chloropicrin	1,3-D + chloropicrin

(% change) 1	1,3-D + metam

(% change) 1	1,3-D alone

(% change) 1

Yield (dried ton/acre)	1.8	1.7

(-4.0%)	1.7

(-8.0%)	1.5

(-15.0%)

Price  ($/ton)	1,125	1,125	1,125	1,125

Gross Revenue  ($/acre)	2,025	1,944

(-4.0%)	1,863

(-8.0%)	1,721

(-15.0%)

Operating Costs  ($/acre)	842	842	842	842

Harvest Costs  ($/acre)	767	736

(-4.0%)	705

(-8.0%)	652

(-15.0%)

Net Operating Revenue  ($/acre)	416	366

(-12.1%)	316

(-24.2%)	227

(-45.3%)

Source:	USDA NASS (2002-2006), Bruchner et al. (2001), BEAD
calculations.  Figures may not sum due to rounding.

1	Percent change in comparison to methyl bromide with chloropicrin.

The analysis in Table 7 does not consider the investment producers must
make in establishing an orchard and maintaining it through several
non-bearing years.  Table 8 presents the information on net operating
revenue, NPV, and IRR for a prune orchard under the four treatment
options.  Field preparation costs are similar for any type of
fumigation, but fumigation costs differ according to the mix of
chemicals and the cost of application.  Chemical costs are average
per-acre cost of products, which incorporates typical application rates.
 Chloropicrin can be applied with methyl bromide and 1,3-D, but use of
metam sodium requires two applications, which makes it more expensive. 
Trees are planted the following spring and costs are identical
regardless of fumigant.  BEAD assumes that some trees must be replanted
the following year.  We assume that 2% are replanted following
fumigation with 1,3-D and methyl bromide (Bruchner et al., 2001); 3% are
replanted with 1,3-D and chloropicrin; 5% are replanted under the 1,3-D
and metam sodium regime; and 8% are replanted if 1,3-D alone is used. 
The higher replant rates represent the lower survival rate if nematodes
are controlled but soil pathogens are not and amount to two or four
trees.  Trees begin to produce in the fourth year, initially at 20% of
production, climbing to full production in the seventh year (Bruchner et
al., 2001).  However, orchards fumigated with 1,3-D alone do not begin
production until the fifth year, representing delayed maturity due to
pathogens that weaken the young tree.  Returns during full production
are shown in Table 7.  Finally, orchards fumigated with 1,3-D alone are
assumed to last one year less than those fumigated with chloropicrin or
metam sodium.

Table 8.  Net operating revenue, net present value (NPV), and internal
rate of return (IRR) of a prune orchard.

Year	Stage	Methyl bromide + chloropicrin	1,3-D + chloropicrin	1,3-D +
metam sodium	1,3-D alone

0	Field Preparation	-250	-250	-250	-250

	Fumigation 1	-1,020	-820	-1,007	-935

1	Establishment	-1,270	-1,270	-1,270	-1,270

2	Non-bearing 2	-403	-412	-432	-461

3	Non-bearing	-524	-524	-524	-524

4	Initial production 3	-541	-551	-561	-524

5	Partial production 5	-414	-434	-454	-579

6	Partial production 6	1	-33	-66	-489

7	Full production 6	416	366	316	-125

8-40	Full production 7	416	366	316	227

NPV (7% discount rate)	-354	-619	-1,255	-1,451

IRR	6.3%	5.7%	4.5%	3.3%

Source:  Buchner et al. (2001), and BEAD calculations.  Net operating
revenues are not discounted; negative numbers represent costs greater
than income.  Net present value is calculated assuming 7% discount rate.

1	Fumigation costs include chemical costs and application costs.  Methyl
bromide and 1,3-D can be applied with chloropicrin as a single product,
but 1,3-D and metam sodium must be applied separately.

2	In addition to operating costs, non-bearing costs include replanting
trees.

3	Initial production is 20% of full production.  On-set of production is
delayed one year if 1,3-D is used alone.

4	Production in the fifth year is 40% of full for combination
treatments.  Production is 20% of full production with 1,3-D alone.

5	Production in the sixth year is 67% of full for combination
treatments.  Production is 40% of full production with 1,3-D alone.

6	Production is 67% of full production with 1,3-D alone.

7	Production ceases one year earlier with 1,3-D alone.

Assuming a 7% rate of interest, prune production does not appear to be a
good investment using any of the fumigation options.  It may be that the
information we have on production costs are somewhat high.  Relatively
speaking, however, methyl bromide provides substantial benefits over
1,3-D while chloropicrin provides substantial benefits over metam
sodium.  Failure to adequately control soil pathogens substantially
reduces the return to investing in a prune orchard.  If it were not for
the availability of methyl bromide and chloropicrin, farmers would be
unlikely to invest in stone fruit production on heavier soils; the
internal rate of return is 4.5% or less for the other two treatment
options, making them less attractive than most savings accounts.

This result would also apply to cherry, peach and nectarine, and plum
grown on heavier soils.  BEAD estimates that nearly 30% of acres planted
to stone fruit are currently treated with methyl bromide (see Table 2),
although area treated is likely to decline under the Montreal Protocol. 
Assuming that 20% of acreage will be treated in the future, the benefits
of methyl bromide would eventually accrue to about 51,000 bearing acres.
 Assuming about $50/acre, methyl bromide adds about $2.5 million
annually to the value of California stone fruit production.  The value
of chloropicrin is about twice that of methyl bromide, in part because
without chloropicrin, methyl bromide could probably not be used either. 
Currently, metam sodium provides little benefit to producers on heavy
soils.  However, if chloropicrin and methyl bromide were not available,
control of soil pathogens would depend on metam sodium.  Despite a
relative lack of efficacy, metam sodium would still provide benefits of
over $4.5 million annually on these soils.

California Peach

On lighter soils, methyl bromide with chloropicrin and 1,3-D with
chloropicrin provide similar control over the replant disorder.  As
methyl bromide availability has decreased under the Montreal Protocol,
the price has climbed and the 1,3-D combination may be a more economical
option, assuming that 1,3-D can be obtained given township caps. 
Without the use of chloropicrin to control soil pathogens, i.e., 1,3-D
alone, yield losses could range from 15-25% (Carter, 2007).  BEAD
assumes that replacing chloropicrin with metam sodium would result in a
yield loss of about 4%, because metam sodium does not penetrate as
deeply into the root zone, even with lighter soils.  Table 9 presents
the expected differences in production and revenue for California peach.
 Peach yield and price are averages for 2001-2005, for freestone peaches
sold in the fresh market (USDA NASS, 2002-2006).  Freestone varieties
yield somewhat less than do clingstone varieties, but garner a higher
price.  Table 9 probably overstates gross revenue, however, since the
entire production may not meet fresh market standards.  Operating costs
are taken from Day et al. (2004).  According to Day et al., harvest
costs consist of a per-acre labor cost and hauling and marketing charges
that are proportional to yield.  Day et al. also include a packing
charge, but this amounts to over $4,000/acre, nearly doubling total
production costs and negative returns even with full production.  BEAD
has left out those costs, which may bias our results to suggest that
peach production is more profitable than it is.

Table 9.  Gross revenue, operating costs, and net operating revenues,
California peach orchard at full production.

	1,3-D + chloropicrin

	1,3-D + metam

(% change) 1	1,3-D alone

(% change) 1

Yield (ton/acre)	10.6

	10.2

(-4.0%)	9.0

(-15.0%)

Price  ($/ton)	620	620	620

Gross Revenue  ($/acre)	6,572

	6,309

(-4.0%)	5,586

(-15.0%)

Operating Costs  ($/acre)	2,723	2,723	2,723

Harvest Costs  ($/acre)	1,764

	1,725

(-2.2%)	1,620

(-8.1%)

Net Operating Revenue  ($/acre)	2,086

	1,861

(-10.8%)	1,243

(-40.4%)

Source:	USDA NASS (2002-2006), Day et al. (2004), BEAD calculations. 
Figures may not sum due to rounding.

1	Percent change in comparison to 1,3-D with chloropicrin.

As in the case study above, differences in net operating revenue for
even small changes in yield can be substantial, although peach
production appears viable under different soil fumigation options.  This
analysis suggests that the benefits of chloropicrin are over $200/acre
compared to metam sodium.  Metam sodium currently provides few benefits
for stone fruit producers, except for those with very light or coarse
soils, because chloropicrin disperses more thoroughly through most soils
and soil conditions.  In the absence of chloropicrin, however, metam
sodium provides substantial benefits over 1,3-D alone, about $600/acre.

Table 10 presents the analysis of net operating revenue, NPV and IRR for
peach production in California, following the same approach as with
prune production.  Replant rates in Year 2 are 2% or three trees for
1,3-D and chloropicrin (Day et al., 2004), 4% for 1,3-D followed by
metam sodium, and 8% for 1,3-D alone.  Trees begin producing in the
third year, except when 1,3-D alone is used.  Lack of control over soil
pathogens is assumed to weaken the trees and delay maturity by one year.
 This carries through the next several years so that full production is
not reached until the eighth year, instead of the seventh.  The orchard
is assumed to last 25 years when treated with chloropicrin or metam
sodium, but 24 years when 1,3-D alone is used.

Table 10.  Cash flow, net present value (NPV), and internal rate of
return (IRR) of a peach orchard.

Year	Stage	1,3-D + chloropicrin	1,3-D + metam sodium	1,3-D alone

0	Field Preparation	-463	-463	-463

	Fumigation 1	-751	-1,285	-685

1	Establishment	-1,747	-1,747	-1,747

2	Non-bearing 2	-724	-747	-793

3	Initial production 3	-416	-456	-969

4	Partial production 4	535	438	-567

5	Partial production 5	1,371	1,218	173

6	Partial production 6	1,699	1,506	798

7	Full production 7	2,086	1,861	974

8-25	Full production 8	2,086	1,861	1,243

NPV (7% discount rate)	12,209	9,923	3,854

IRR	24.9%	20.8%	13.3%

Source:  Day et al. (2004), and BEAD calculations.  Net operating
revenues are undiscounted; negative numbers represent costs greater than
income.  Net present value is calculated assuming 7% discount rate.

1	Fumigation costs include chemical costs and application costs.  1,3-D
and chloropicrin can be applied as a single product, but 1,3-D and metam
sodium must be applied separately.

2	In addition to operating costs, non-bearing costs include replanting
trees.

3	Initial production is 18% of full production.  On-set of production is
delayed one year if 1,3-D is used alone.

4	Production in the fourth year is 43% of full for combination
treatments.  Production is 18% of full production with 1,3-D alone.

5	Production in the fifth year is 68% of full for combination
treatments.  Production is 43% of full production with 1,3-D alone.

6	Production in the sixth year is 86% of full production.  Production is
68% of full with 1,3-D alone.

7	Production is 86% of full with 1,3-D alone.

8	Production ceases one year earlier with 1,3-D alone.

Assuming a 7% discount rate, establishing an acre of peaches would be
valued at over $12,000 and return almost 25% annual interest if 1,3-D
with chloropicrin is used for control of soil pests.  Replacing
chloropicrin with metam sodium reduces the value of the investment
nearly 20%.  This implies substantial benefits accrue to stone fruit
producers from the use of chloropicrin.  Currently, metam sodium is not
widely used, except in situations where nematodes are not a problem and
soils are conducive to its application.  However, it is clear that stone
fruit producers derive substantial benefits from the availability of
some form of control for soil pathogens.  Improved survivability of the
trees, quicker maturity, and increased yields may almost triple the
returns on establishing an orchard, as seen by comparing the NPV for an
orchard established with 1,3-D alone and that for an orchard established
with 1,3-D followed by metam sodium.

On average, at least 3,500 acres of stone fruit are treated each year
with chloropicrin (see Table 3).  Assuming that about 2,000 acres
represent area considered under the California prune scenario, about
1,500 acres, or 15% of planted acres, rely on chloropicrin.  This
represents over 38,000 bearing acres.  The added production resulting
from the use of chloropicrin amounts to about $8.4 million annually. 
While metam sodium is not generally used at present, were chloropicrin
not available, the control of soil pathogens provided by metam sodium
would be worth about $26.4 million annually in increased production.

Washington Cherry

The Washington cherry case is very similar to that of California peaches
in that the primary fumigation approach is to use chloropicrin with or
without 1,3-D, depending on the presence of nematodes.  Metam sodium
could be used in place of chloropicrin, in a separate application
following 1,3-D, but would generally be less effective since it
doesn’t penetrate to the depth that chloropicrin does.  Complete lack
of control of soil pathogens is estimated to reduce yields by 15-25%
(Carter, 2007), while use of metam sodium is assumed to result in a
yield difference of about 4%.  Table 11 presents the expected
differences in production and revenue without chloropicrin or metam
sodium.  Yields and prices are averages for 2001-2005, from USDA NASS
statistics (2002-2006).  Production costs are from Hinman and Watson
(2003).  Fixed costs are not included, nor are establishment costs. 
Establishment costs are considered in the NPV analysis below.

Table 11.  Gross revenue, operating costs, and net operating revenues,
Washington cherry orchard at full production.

	1,3-D + chloropicrin

	1,3-D + metam

(% change) 1	1,3-D alone

(% change) 1

Yield (ton/acre)	4.0	3.8

(-4.0%)	3.4

(-15.0%)

Price  ($/ton)	1,590	1,590	1,590

Gross Revenue  ($/acre)	6,360	6,106

(-4.0%)	5,406

(-15.0%)

Operating Costs  ($/acre)	2,646	2,646	2,646

Harvest Costs  ($/acre)	1,240	1,190

(-4.0%)	1,054

(-15.0%)

Net Operating Revenue  ($/acre)	2,474	2,269

(-8.3%)	1,706

(-31.0%)

Source:	USDA NASS (2002-2006), Hinman and Watson (2003), BEAD
calculations.  Figures may not sum due to rounding.

1	Percent change in comparison to 1,3-D with chloropicrin.

This analysis suggests that the benefits of chloropicrin to producers of
stone fruit are substantial.  Use of pick to establish the orchard
yields benefits of about $200/acre annually during the productive life
of the orchard.  While fumigation with metam sodium is not currently the
general practice, it is used by itself on lighter soils if nematodes are
not a problem.  Control over soil pathogens provides substantial
benefits.  Comparing 1,3-D with metam sodium to 1,3-D alone, net
operating revenue is more than $500/acre greater, each year.

Table 12 presents the cash flow, NPV and IRR analysis for Washington
cherry production.  Replant rates in Year 2 are 2% or six trees (Hinman
and Watson, 2003), which is assumed to represent the best control by
fumigating with 1,3-D and chloropicrin.  BEAD assumes a replant rate of
3% for 1,3-D followed by metam sodium, and 5% for 1,3-D alone.  Trees
begin producing in the fourth year, except when 1,3-D alone is used. 
Lack of control over soil pathogens is assumed to weaken the trees and
delay maturity by one year.  This carries through the next several years
so that full production is not reached until the seventh year, instead
of the sixth.  The orchard is assumed to last 20 years when treated with
chloropicrin or metam sodium, but 19 years when 1,3-D alone is used.

Table 10.  Net operating revenue, net present value (NPV), and internal
rate of return (IRR) of a Washington cherry orchard.

Year	Stage	1,3-D + chloropicrin	1,3-D + metam sodium	1,3-D alone

0	Field Preparation	-112	-112	-112

	Fumigation 1	-645	-1,185	-633

1	Establishment	-2,755	-2,755	-2,755

2	Non-bearing 2	-1,355	-1,371	-1,404

3	Non-bearing	-1,679	-1,679	-1,679

4	Initial production 3	-500	-550	-1,679

5	Partial production 4	939	816	-754

6	Full production 5	2,474	2,269	478

7-20	Full production 6	2,474	2,269	1,706

NPV (7% discount rate)	9,783	7,905	1,948

IRR	19.5%	16.7%	9.7%

Source:  Hinman and Watson (2003), and BEAD calculations.  Net operating
revenues are not discounted; negative numbers represent costs greater
than income.  Net present value is calculated assuming 7% discount rate.

1	Fumigation costs include chemical costs and application costs.  1,3-D
and chloropicrin can be applied as a single product, but 1,3-D and metam
sodium must be applied separately.

2	In addition to operating costs, non-bearing costs include replanting
trees.

3	Initial production is 33% of full production.  On-set of production is
delayed one year if 1,3-D is used alone.

4	Production in the fifth year is 60% of full for combination
treatments.  Production is 33% of full production with 1,3-D alone.

5	Production in the sixth year is 60% of full production with 1,3-D
alone.

6	Production ceases one year earlier with 1,3-D alone.

Assuming a 7% discount rate, an acre of cherries would be valued at
nearly $10,000 at establishment if 1,3-D with chloropicrin is used for
control of soil pests.  Replacing chloropicrin with metam sodium reduces
the value of the investment over 20%.  This implies substantial benefits
accrue to producers of sweet cherries in the Pacific Northwest from the
use of chloropicrin.  Currently, metam sodium does not appear to be
widely used, except in situations where nematodes are not a problem and
soils are conducive to its application.  However, it is clear that
producers derive substantial benefits from the availability of some form
of control for soil pathogens.  Improved survivability of the trees,
quicker maturity, and increased yields vastly increase the returns on
establishing an orchard, as seen by comparing the NPV for an orchard
established with 1,3-D alone with the NPV for an orchard established
with 1,3-D followed by metam sodium.

The Northwest Horticultural Council estimates that 80% of planted acres
are treated with chloropicrin (Carter, 2007).  This means about 39,000
acres of stone fruit in the PNW ultimately rely on chloropicrin to
provide good establishment and good production.  In total, the increased
production due to soil fumigation with chloropicrin is worth nearly $8.0
million annually.  This assumes metam sodium is available to replace
chloropicrin.  Without some form of control for soil pathogens, stone
fruit production may not be viable on a substantial proportion of acres
currently cultivated.  The PNW accounts for nearly two-thirds of sweet
cherry production in the U.S.  Thus, the benefits of soil fumigation
include an abundant supply of fresh fruit, at lower prices than would be
found without fumigation.

Conclusions

Soil fumigation with methyl bromide and/or chloropicrin for control of
soil pathogens provide substantial benefits to producers of stone fruit
and, quite possibly, to consumers as well.  While relatively few acres
are treated each year, good orchard establishment contributes to fruit
production throughout the life of the orchard.  Methyl bromide alone
contributes about $4.5 million annually in improved yields in
California, assuming that prune production is a good representation of
most stone fruit production on heavier soils.  The value of methyl
bromide depends on availability of chloropicrin, since methyl bromide is
currently used in combination.  The benefits of chloropicrin amount to
about $13.4 million annually in California, and another $8.0 million
annually in the Pacific Northwest.  This represents about 2.3% and 2.7%
of the total value of stone fruit production in California and the
Pacific Northwest, respectively.  The estimate of the benefits of
chloropicrin is in comparison to production with metam sodium, which is
less effective on most soils because it does not penetrate as well.  In
addition, use of metam sodium is more costly because it cannot be
applied simultaneously with 1,3-D for nematode control.  Considering the
costs of establishment and production over the life of the orchard,
methyl bromide and chloropicrin can increase the value of investing in
an orchard by 25% over metam sodium.

Soil fumigation in general makes fruit production viable on nearly half
the acreage currently cultivated.  If soil pathogens cannot be
adequately controlled, the costs of establishing an orchard would likely
outweigh the value of future revenue.  Thus, the benefits of soil
fumigation to control the orchard replant disorder are increased stone
fruit production in the U.S. and lower consumer prices.

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27, 2007.

 The Office of Management and Budget suggests using a 3% and 7% rate
when evaluating the cost and benefits of government regulation.  We use
the higher rate here since the attractiveness of the investment depends
on the private discount rate, not the social rate.

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