It is about that time of the year again. What has been a relentless winter for most of the U.S. is slowly giving way to green sprouts and flowering buds. Spring is in the air, and gardening season is upon us.
Don’t be fooled by my introductory rhetoric, however. I am not a gardener. Last year was our first attempt, and even in the temperate, lush Portland climate, there wasn’t a green thumb between the two of us.
Our poor results last year were a big motivator for this post. I was hoping to find out that gardening isn’t worth it, but sadly, it appears that it (barely) is, or at least can be if you plan well. Last year we planted beets, pole beans, cherry tomatoes, and squash in a small raised bed. The only crop we harvested reliably was the squash.
The beets never came up, the beans were eaten by insects, and the tomatoes got a nasty case of blossom end rot from irregular watering and/or low calcium levels. The clear message was that gardening is not easy, at least not for us. But we still might try it again this year because, well, practice makes perfect, and my wife loves summer gardens and the idea of being more self-sufficient.
For this example, I assumed a 400 square-foot garden plot. As Eliot fairly points out below, this is a big-ass garden. The reason I went with 400 is that most of the studies I used as sources were above 500 square feet.
To be fairer to urban dwellers such as myself, I also ran the numbers for a 100 square foot garden, which are at the bottom of this post.
- 10-Year NPV: $1,633
- 10-Year ROI: 37%
- 10-Year Payback: 0.9 years
So a 400-square-foot garden saves you $1,600 over 10 years. This is only $160 per year on an average annual basis, which isn’t that exciting, especially considering that the ROI is a measly 37% and the garden is pretty big! A low ROI means that you have to invest a lot of money just to earn a little bit of additional revenue. It ties up your free cash more so than something with a higher ROI. But the point of the whole thing is that it DOES save you money to grow your own fruits and vegetables. Gardening costs are high, but retail prices are higher.
As a reminder, my analysis includes labor/time costs. So I’m estimating about 1/10 of an hour for every square foot, or 40 hours of work for the year in this example. I valued my gardening time at $6.00 per hour versus my normal estimate of $10.00 per hour because gardening isn’t ALL work. I like being outside, watering my plants, watching them grow, etc., but there are still a lot of other things I would rather be doing.
Time accounts for roughly 55% of total cost. For the person that doesn’t find gardening to be a chore at all (time costs = $0 per hour), the value of this example would increase 230% to almost $3,700 over 10 years (see “Hard Value W/Growth” line above).
Gardening costs are a complex topic, so take all of this with a grain of salt (not the gospel, more of a directional guide). There are as many ways to build a garden as there are fruits and vegetables to grow in it. Some gardens will be more expensive than others because of climates, crop needs, pest control etc. And the final “retail” value of your crops will vary significantly depending on what crops you decide to grow.
My main source of information for this example was a blog post by an Oregon State University Master Gardener, Gail Langellotto. The blog post references six different gardening cost studies. The value per square foot of these studies are wildly different, with the lowest value at $0.28 and the highest at $1.53, almost six times as valuable as the lowest. That is a 600% variance!
That being said, there were some common winners in the studies that Gail referenced, meaning that these crops are the most likely to succeed and will save you the most money:
- salad greens
Personally, I sort of want to throw in the towel on our garden. I’m okay with paying a little extra for variety and the flexibility to buy my produce as needed (or maybe join a CSA). There are also probably a lot of other things I could do with my time that have an ROI greater than 37%. Additionally, organic food is a value of ours, and growing an organic garden seems much harder. Heck, our non-organic homegrown vegetable produce from last year probably had more chemicals per pound than the non-organic commercial produce at the grocery store. Paying a little extra for a lot less chemicals doesn’t seem to be a bad deal either. And finally, to top it off, the downside risks of growing your own food are a lot higher.
As I mentioned above, last year we lost about 75% of our crops. That is an expensive season. I’m sure we could research more and be more disciplined this year, but the risks would still be there. It is similar to the rent vs. own debate. You might pay a premium to rent, but at least you can better plan your costs and avoid major downside risks such as having to replace a roof or redo the basement after major water damage.
Either way, knowing how to grow my own food does seem like one of those essential life skills that I should have, and I do like the idea of at least getting good at gardening before I decide to quit. Not to mention it will make my wife happy. I’m not committing one way or the other, but at least I have the quantitative perspective now to help decide 🙂
The bottom line for me is that a garden can be marginally profitable, but there are a ton of other ways to spend my time and money that would provide more value. I might still garden, but financial factors probably won’t be the main reason.
- New garden plot costs of $0.10 per square foot ($40 here) once every 10 years (ex: wood frame for raised bed) (average of various studies sourced below)
- Annual garden plot costs of $0.50 per square foot ($200 here) (ex: fertilizer, mulch)(average of various studies sourced below)
- Time costs of 0.10 hours per square foot ($240 per year) (yahoo, personal experience, JD Roth)
- Retail value of garden produce = $1.25 per square foot ($500 here) (average of various studies sourced below).
- If you don’t garden, you have to spend an extra 4 minutes per week on your grocery store trips at $10 per hour for the entire year (estimate). (Looking back at this assumption, it is a little generous to the pro-garden argument.)
Sources and methodology:
The most comprehensive source is the OSU Master Gardener post I mentioned above. Gail cites 6 different gardening studies. Of those studies, I liked JD Roth and Roger Dorian’s posts the best. I also explored one additional blog post from Sharon Rawlette to help with estimates.
Basically what I did with all these sources is that I inflated all the older studies’ costs and revenues up to today’s dollars. Then I averaged the per square foot costs and revenues to come up with my numbers. Each of these studies was done a little differently, which means there is some inevitable noise in the data. I isolated a few of the studies to figure out one-time setup costs, and I got my time estimates from J.D. Roth, my own personal experience, and yahoo questions.
I tended to round up for most of theses variables, so the average annual running costs per square foot might have been $0.45 per square foot and the fixed costs might have been $0.06, but I rounded those to $0.50 and $0.10 because they are cleaner numbers. Plus there was already a ton of variance between each study, and on top of that, a newbie gardener is probably going to be pretty cost-inefficient for the first few years. My net yield numbers (revenue minus costs) are pretty much right in line with Gail’s calculated average of $0.74 (I’m at $0.75).
So there you have it. Happy planting.
So, as I mentioned above, 400 square feet is a lot of space. I would imagine there are some economies of scale with larger gardens, but there are also drawbacks that I didn’t quantify.
First, you may not have that much space. Second, you might end up with way too much food and have to spend extra time preserving, pickling, canning, freezing, and/or fermenting your extra produce just so that none of your hard work goes to waste. This could add a lot of time to your gardening endeavors on a per square foot basis, acting sort of as a reverse economy of scale.
So how about a smaller, 10×10 (100 sq. ft.) garden? This seems like it could be closer to the right amount of food without having to preserve extras, and more realistic for first time gardeners.
Here are the numbers for a 100-square-foot garden:
So the ROI doesn’t change; it is still a measly 37%, and now the dollar savings (including time costs) are even smaller. For me this further strengthens the argument that, similar to brewing beer, you should garden because you like it, not because it will save you money.
For someone that doesn’t care about the time costs and simply likes gardening or wants to learn (or might even pay to learn), it saves closer to $100 per year on average.
I did tweak a few assumptions here besides the area of the garden. I assumed that your time costs would increase 10% on a per square foot basis because of economies of scale (ex: still need a spade regardless of how big your area is), so 0.11 hours per square foot, or 11 hours for the year. I also assumed that the alternative scenario of grocery store shopping time drops by about 50% because the equivalent amount of groceries needed to replace your garden produce is smaller.
Feel free to download the spreadsheet and mess with the numbers on your own because this is sort of a tricky one, but most of the signs point to a mediocre return on investment on a percentage and total dollar basis.