 -Nominating Party: The United States of America

FILE NAME: USA CUN13 Soil ORCHARD rEPLANT Open Field 

Brief descriptive Title of Nomination:

Methyl Bromide Critical Use Nomination for Preplant Soil Use for Orchard
Replant in Open Fields (Submitted in 2011 for the 2013 Use Season)

Crop name (open field or protected): Orchard Replant Open Field

Quantity of methyl bromide Nominated:

Year	Nomination Amount

2013	6,230 kg



NOMINATING PARTY CONTACT DETAILS:

Contact Person:	John Thompson

Title:	Division Director

Address:	Office of Environmental Policy

	U.S. Department of State

	2201 C Street, N.W. Room 2658

	Washington, D.C. 20520

	U.S.A.

Telephone:	(202) 647-9799

Fax:	(202) 647-5947

E-mail:	  HYPERLINK "mailto:thompsonje2@state.gov" 
thompsonje2@state.gov 

Following the requirements of Decision IX/6 paragraph (a)(1) The United
States of America has determined that the specific use detailed in this
Critical Use Nomination is critical because the lack of availability of
methyl bromide for this use would result in a significant market
disruption.     . ( Yes       ( No

					

Signature			       	Name					Date

Title:      			

(Details on this page are requested under Decision Ex. I/4(7), for
posting on the Ozone Secretariat website under Decision Ex. I/4(8).) 

This form is to be used by holders of single-year exemptions to reapply
for a subsequent year’s exemption (for example, a Party holding a
single-year exemption for 2005 and/or 2006 seeking further exemptions
for 2007).  It does not replace the format for requesting a critical-use
exemption for the first time.

In assessing nominations submitted in this format, TEAP and MBTOC will
also refer to the original nomination on which the Party’s first-year
exemption was approved, as well as any supplementary information
provided by the Party in relation to that original nomination.  As this
earlier information is retained by MBTOC, a Party need not re-submit
that earlier information.   



CONTACT OR EXPERT(S) FOR FURTHER TECHNICAL DETAILS:

Contact/Expert Person:	Jack Housenger	

Title:	Director	

Address:	Biological and Economic Analysis Division	

	Office of Pesticide Programs

	U.S. Environmental Protection Agency

	1200 Pennsylvania Avenue, N.W. Mailcode 7503P

	Washington, D.C. 20460

	U.S.A.	

Telephone:	(703) 308-8200		

Fax:	(703) 308-7042	

E-mail:	Housenger.Jack@epa.gov

		

LIST OF DOCUMENTS SENT TO THE OZONE SECRETARIAT IN OFFICIAL NOMINATION
PACKAGE:

1.  PAPER DOCUMENTS:  

Title of paper documents and appendices	No. of pages	Date sent to Ozone
Secretariat

















2.  ELECTRONIC COPIES OF ALL PAPER DOCUMENTS:  

*Title of each electronic file (for naming convention see notes above)
No. of kilobytes 	Date sent to Ozone Secretariat

USA CUN13 Soil orchard replant Open Field 















* Identical to paper documents



METHYL BROMIDE CRITICAL USE RENOMINATION FOR Preplant Soil Use (OPEN
FIELD OR PROTECTED ENVIRONMENT)

ORCHARD REPLANT

SUMMARY OF THE NEED FOR METHYL BROMIDE AS A CRITICAL USE 

The U.S. nomination for critical use of methyl bromide for orchard
replant in 2013 is for a portion of replant sites in California where
alternatives are not suitable, either because of regulatory restrictions
or physical characteristics, such as unacceptable soil type or moisture
or topography.  For 2013, five requests for critical use exemptions were
received—stone fruit, table & raisin grapes, wine grapes, almonds, and
walnuts.  These areas represent a small portion of the entire orchard
replant in California.  

The USG has reviewed all factors affecting transition rates in this
sector.  Based on this assessment the transition rate has been greatly
increased for most portions of this sector.  For the area covered in
this nomination, the USG believes that the narrative discussion included
in this document is technically valid.  The USG has nominated amounts of
methyl bromide based only on those sub-sectors that cannot transition
away from methyl bromide at the accelerated rate.

Methyl bromide continues to be a critical tool for sites that are not
amenable to other treatments due to features such as soil type or soil
moisture, or regulatory restrictions, or activity against certain pests,
such as Armillaria root rot (e.g., Zasada et al., 2010; UC Pest
Management Guidelines, 2008).  In addition, new regulations to reduce
volatile organic compound emissions may cause a delay of fumigation
beyond October into November and December in some locations (e.g. San
Joaquin Valley) when soils are colder.  This may result in reduced
efficacy of the primary alternative 1,3-D.  Township caps also limit the
use of 1,3-D.  Iodomethane registration is pending in California.  DMDS
is not currently registered in California and does not have a label for
orchard replant.

2.	summarize why key alternatives are not feasible

Alternatives are considered not feasible where 1) they have not been
sufficiently tested or protocols have not been sufficiently developed
for their use, 2) costs are excessive, 3) application difficulties exist
due to such factors as hilly terrain or equipment requirements, 4) areas
of environmental sensitivity or characteristics reduce their efficacy,
5) regulatory restrictions prevent their use, 6) pest pressure is to
such an extent that alternatives are not effective.  

There is a critical need for methyl bromide where there are legally
mandated township caps for 1,3-D, or because surface moisture
requirements cannot be met (e.g., soils cannot be adequately dried prior
to use of 1,3-D).  New regulations to reduce volatile organic compound
emissions may reduce the efficacy of 1,3-D by requiring a delay in
fumigation to November or December when soils are colder.  The best
alternatives currently registered for orchard replant are 1,3-D or 1,3-D
with chloropicrin, and/or metam-sodium, especially in coarse-textured
soils (e.g., Browne et al., 2010; Wang et al., 2010; Beede et al.,
2010).  Under certain soil and moisture conditions (less than 12% to 1.5
meters) 1,3-D is an effective management tool for replant disease and is
currently used to replant the majority of orchard and vineyard sites. 
Preliminary results with steam to disinfest soils for replant (e.g.,
Browne et al., 2010; Fennimore and Goodhue, 2009) and other non-chemical
treatments are undergoing multi-year trials to assess efficacy and
costs.  Iodomethane, which may be an effective alternative, was
registered in December 2010in  California but at lower use rates than
the rest of the U.S. and with buffer distances up to 10 fold greater
(e.g., Browne et al., 2010; Cabrera et al., 2010).  DMDS is not
registered in California and the federal label does not include orchard
replant at this time.

3.	is the use of methyl bromide covered by A certification STANDARD?

Methyl bromide is not covered by a certification standard for orchard
replant.

4.	If part of the crop area is treated with methyl bromide, indicate the
reason why methyl bromide is not used in the other area, and identify
what alternative strategies are used to control the target pathogens and
weeds without methyl bromide there. 

The current best alternatives for orchard replant are formulations of
1,3-D or 1,3-D with chloropicrin, and/or metam-sodium, especially in
light soils (e.g., Browne et al., 2010; Wang et al., 2010; Beede et al.,
2010; B Caprile and McKenry, 2006; Wang et al., 2009).  These
alternatives are used effectively under optimal soil temperature and
moisture conditions (high moisture at surface and less than 12% at
depths to 1.5 meters) and methyl bromide is not critical.  There is a
critical need for methyl bromide in orchards in California where
alternatives cannot be used, either because of township caps for 1,3-D,
local permit requirements for chloropicrin, buffer zone limitations, or
surface moisture requirements cannot be met.  If rain does not occur,
growers without sprinkler systems have difficulty applying water for
1,3-D application.

5.	Would it be feasible to expand the use of these methods to cover at
least part of the crop that has requested use of methyl bromide? What
changes would be necessary to enable this?

According to Browne et al. (2010) orchardists have shifted heavily
towards use of 1,3-dichloropropene instead of methyl bromide, but this
transition does not apply to orchards with high clay content and
orchards with township cap restrictions.  Previously, McKenry et al.
(2007, 2006) and Caprile and McKenry (2006) have reported on methods
that can help to replant many orchard sites without methyl bromide.  One
requirement is the use of nematode-tolerant rootstocks, which are
currently being tested (e.g., Zasada et al., 2010; Beede et al., 2010;
McKenry and Buzo, 2009).

Regulations to meet air quality standards for ground level ozone are
likely to change fumigation practices.  Pesticides that have been
identified as volatile organic compounds (VOC) react with nitrous oxides
(NOx) to form ozone.  In California, the most at-risk period for
fumigation has been identified as May 1 through October 31. 

Several areas in California, including the San Joaquin Valley and some
areas of Ventura County, will be subject to new regulations.  The San
Joaquin Valley contains about two-thirds of the almond and stone fruit
land, and about one-half of the walnut land.  All sources of NOx and
VOCs are being evaluated by the California Department of Pesticide
Regulation (CDPR), which has the authority to regulate the use of soil
fumigants.  CDPR has issued a rule to reduce the emissions, including
restrictions on timing and methods of fumigation.  For example, for
orchard replant, the only method of application allowed for methyl
bromide or chloropicrin is HDPE-tarped, deep-shank, broadcast
fumigation.  Strip applications are not allowed in the May-October
period.  In the past, most orchard replant fumigations occurred during
this period.  Use of 1,3 D, however, may not be impacted as much as
other soil treatments.

6.	SUMMARY OF RECENT RESEARCH 

Research in California continues to highlight methods for orchard
replant to improve tree survival and orchard health.  Future nematode
control (one of the most important pests in replant situations) without
methyl bromide will depend on integrating various techniques including
cultural practices, genetic resistance, and alternative pesticides
(Zasada et al., 2010). Recent research results for this sector were
outlined in presentations to the 2010 Annual International Research
Conferences on Methyl Bromide Alternatives and Emissions Reductions
(Browne et al., 2010; Klonsky et al., 2010; Wang et al., 2010; Cabrera
et al., 2010; Beede et al., 2010).  In addition, presentations to the
2009 research conferences provided results in ongoing projects (Beede et
al., 2009; Browne et al., 2009; McKenry and Buzo, 2009; Klonsky et al.,
2009; Fennimore and Goodhue, 2009; Wang et al., 2009).  

Almonds and Stone Fruit: Research including USDA Pacific Area-wide Pest
Management Program for Integrated Alternatives to Methyl Bromide has
been ongoing for stone fruit and almond (Browne et al., 2010; Browne et
al., 2009; Browne et al., 2008; Fennimore and Goodhue, 2009; Klonsky et
al., 2009; McKenry and Buzo, 2009).  Objectives of the area-wide
research are 1) To develop and demonstrate optimized integrated pest
management (IPM) strategies for control of almond and stone fruit
replant disease without MB; 2) To provide comprehensive economic
assessments of alternatives replant management strategies; 3) Conduct
educational outreach facilitation adoption of effective methyl bromide
alternatives in almond and stone fruit industries.  Stone fruit and
almond replant trials continue since their establishment in 2006.  

Research in 2010 included two new almond replant trials and continued
monitoring of tree growth, yield, and pest data from six almond and
peach trials (Browne et al., 2010).  Among the results of the research
were: 1) Prunus replant disease (PRD) was prevented by soil treatments
of chloropicrin with 1,3-D, PicClor 60, or iodomethane; 2) These
treatments were more effective than methyl bromide or 1,3-D without
chloropicrin; 3) Adequate to optimal PRD management was achieved with
spot treatments requiring treating only 10-17% of the orchard area; 4)
GPS-controlled spot fumigation is available for commercial use; 5) Drip
spot treatments have shown promise, but may require different
formulations to incorporate into current irrigation systems; 6) Crop
rotations with sudan grass can improve replanted orchard growth, but
this may not be an economical strategy; 7) There is a great need for
improved rootstocks that will help reduce or eliminate the need for
pre-plant fumigation; 8) Alternatives that resulted in at least
comparable yield to methyl bromide generally cost less (Klonsky et al.,
2010).

Fennimore and Goodhue (2009) estimated costs of steam disinfestation of
soils for almond replant with a commercial steam applicator from Italy
and steam injection.  The machine can disinfest an 8 x 1.5 m plot per
heating, which could treat up to 0.66 ha per day.  In addition,
researchers are planning to test a tractor-pulled augur and a system to
inject steam into soils.  If research supports acceptable efficacy,
costs of the sterilizing machine are estimated to be $2196 per acre
($5425 per ha) compared to $2500 per acre ($6175 per ha) for methyl
bromide treatment.  The steam augur system was estimated to cost $341
per acre ($842 per ha) for planting 90 trees.  Experiments to measure
efficacy of steam disinfestation are planned.

McKenry and Buzo (2009) studied the possibilities of a “starve and
switch” approach to almond replant and management of Prunus replant
disease.  Herbicides are used to kill remnant roots of previous
plantings to destroy nematode nutrients and switch to a tolerant or
resistant rootstock.  While costs appear to be acceptable, the
availability of acceptable rootstocks for almond replant is lacking.

Grapes: Multi-season field trials, as part of the USDA Pacific Area-wide
Pest Management Program, continue to identify methods to manage vineyard
pests (Wang et al., 2010; Wang et al., 2009; Wang et al., 2008; Wang et
al., 2007).  Trials conducted to identify effective fumigation for
nematode control revealed that various treatments with 1,3-D +
chloropicrin were at least comparable to methyl bromide-treated soil
(Wang et al., 2010).  No nematodes were found in any of the fumigated
plots over a year after fumigation.  Unfumigated plots had populations
of ring, pin, stubby-root and dagger nematodes.  

Trials targeting citrus nematode were conducted 1) to determine nematode
sensitivity to DMDS, 2) to evaluate the effect of time of exposure, soil
moisture, and temperature on DMDS efficacy, and 3) to compare the
effectiveness of DMDS in two different soil types (Cabrera et al.,
2010).  Results of experiments suggest that at higher doses soil type
and soil temperature were not important factors for DMDS efficacy.  At
higher doses nematodes were killed after short exposure.  The
experiments did not appear to combine DMDS with chloropicrin, which will
be the commercially available formulation.  

Recent treatments were mustard cover crop, methyl bromide shanked at 448
kg/ha under HDPE, 1,3-D + 35% chloropicrin shanked with no tarp at 610
and at 305 kg/ha with no tarp or with VIF, and InLine drip at 305 kg/ha
with no tarp or VIF.  Preliminary results indicated that control of
total Pythium spp. was successful in all fumigated plots except InLine
without tarps.  Total Fusarium was significantly reduced on by methyl
bromide.  Live citrus nematodes were only found in the untreated plots. 
No other species of nematodes were found alive in any fumigated plot. 
Pruning weight (a measure of plant health) was highest in the soils
treated with methyl bromide, 1,3-D + 35% chloropicrin (high rate), 1,3-D
+ 35% chloropicrin (low rate with VIF), and InLine with VIF.  In
addition, VIF significantly reduced fumigant emissions.

Walnuts: According to the request from the California Walnut Commission,
“walnut growers appear to be shifting to tree site or strip
applications, a short-sighted change driven by economic pressure.”  

Results of research on walnut was recently reported (Beede et al., 2010;
Beede et al., 2009; Beede et al., 2008) and is an ongoing attempt to: 1)
identify cost-effective commercial fumigant alternatives to methyl
bromide including nematode control, 2) test new application
technologies, and 3) initiate outreach to growers for walnut production,
and 4) test clonal vs. seedling plant material.  Soils treated with
1,3-D with and without chloropicrin gave effective nematode control. 
Clonal rootstocks were larger than the Paradox trees (Beede et al.,
2010). 

Research continues to indicate that the continued use of the common
rootstock Paradox is not advisable.  Research continues to search for
resistance to ring and lesion nematode pests.  Various treatments
(different rates and application methods) with 1,3-D, chloropicrin, and
methyl bromide were evaluated.  Conclusions from recent research (Beede
et al., 2010; Beede et al., 2009) confirm previous findings that 1,3-D
and chloropicrin show comparable pathogenic nematode management
potential to methyl bromide.  

New trials were set-up in 2010 to compare rootstocks against the
rejection and nematode components of the replant disease.  Research
toward a better rootstock is annually summarized in Annual Walnut
Research Reports (available at   HYPERLINK
"http://walnutresearch.ucdavis.edu/"  http://walnutresearch.ucdavis.edu/
).

7.  ECONOMIC FEASIBILITY OF ALTERNATIVES  

In this study net revenue is calculated as gross revenue minus operating
costs.  This is a measure of the direct losses of income that may be
suffered by the users.  It should be noted that net revenue does not
represent net income to the users.  Net income, which indicates
profitability of an operation of an enterprise, is gross revenue minus
the sum of operating and fixed costs.  Net income should be smaller than
the net revenue measured in this study.  Fixed costs were not included
because it is often difficult to measure and verify.

The economic analysis of the orchard replant application compares data
on yields, crop prices, revenues and costs using methyl bromide and
using alternative pest control regimens in order to estimate the costs
from the loss of methyl bromide availability.  The alternatives
identified as technically feasible - in cases of low pest infestation
– are different combinations of chloropicrin, metam sodium and 1,3- D.


The critical use nomination (CUN) for this sector does not include areas
where soil conditions are ideal and township caps do not restrict the
use of 1,3-D.  This CUN only applies to areas where township caps or
certain soil types do not permit the use or effective use of 1,3-D. 
Where 1,3-D is not permitted there are no effective nematicide
alternatives to methyl bromide.  Trees that survive are not likely to be
as healthy and could suffer yield losses.  If a nematode infestation
causes the death of trees, then replacement trees would also suffer the
same infestation unless there use of an effective nematicide, or
possibly several years of fallow.

Without effective fumigation growers who replant orchards can face
losses from:

•	Delayed planting

•	Fallow

•	Additional use of herbicides

•	Tree loss

•	Replant costs to replace tree losses

•	Loss of trees replanted

•	Yield loss of fruit or nuts

•	Delayed achievement of full yield potential

•	Earlier loss of productivity of whole orchard

If the alternatives do not work as effectively as methyl bromide, then
it is possible that other losses could occur, such as additional
replanting, higher yield losses, and shorter lifespan of the whole
orchard or vineyard reducing the ability to amortize the initial
investment costs.

The benefits of fumigation for orchard or vineyard replant can be
measured by future yields (orchard crops require several years to begin
bearing) when production may be adversely affected by poor tree growth
and high pest populations.  In addition, fumigant treatments result in
healthier young plants.  Other fumigants besides methyl bromide are used
for fumigation, but in some cases, such as where there are heavy soils
or township caps on 1,3-D, these alternatives may not be available.  

The effects of orchard replant disease 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 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 or vineyard might be lost.  Because of the long life of these
perennial crops, optimal soil preparation, along with appropriate
rootstocks, is a priority for successful production.

Typically, the alternatives to methyl bromide would be evaluated using a
partial budget analysis to estimate the impacts of changes in production
practices.  That is, the consequences on a typical hectare of the crop
grown are evaluated, 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-hectare
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-hectare 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. 
The returns to this investment occur 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 a private discount rate or an individual’s trade-off of
money between time periods.  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 Walnuts and Almonds

The current practice for walnut replant is to fumigate with methyl
bromide and chloropicrin.  An alternative is to use 1,3-D with
chloropicrin, but 1,3-D does not penetrate heavier soils as well as
methyl bromide and may not provide as effective control of nematodes and
soil pathogens.  Some growers may not be able to obtain permission to
use 1,3-D under California township caps, but in this case that
possibility is not considered.  Comparing methyl bromide and 1,3-D, both
with chloropicrin, for establishing an orchard will be the basis for
evaluating the benefits of methyl bromide.  

Replacing methyl bromide with 1,3-D, is estimated to result in a 4%
decrease in yields during production (Carpenter et al., 2000).  Yield
losses are due to soil pathogens that infect the trees at an early age,
stunting their growth.  Table 1 presents the expected differences in
production and revenue for California walnut, where operating costs are
taken from Buchner et al. (2002).  Elements of harvest costs are assumed
to be directly proportional to yield and we adjust costs accordingly.

Table 1.  Gross revenue, operating costs, and net operating revenues,
California walnuts orchard at full production.

	Methyl bromide + Chloropicrin	1,3-D + Chloropicrin

(% change) 1

Yield (kg/hectare)	1,505	1,445

(-4.0%)

Price  ($/kg)	1.43	1.43

Gross Revenue  ($/hectare)	5,315	5,101

(-4.0%)

Operating Costs  ($/hectare)	1,403	1,403

Harvest Costs  ($/hectare)	895	867

(-2.8%)

Net Operating Revenue  ($/hectare)	3,018	2,660

(-11.9%)

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

1 Percent change in comparison to methyl bromide with chloropicrin.

The analysis from Table 1 indicates that even relatively minor changes
in yield can have large effects on net operating revenue.  A 4% change
in yield results in a 12% change in net operating revenue.  The analysis
suggests that methyl bromide is worth about $150/hectare each year in
terms of improved yield during the lifespan of the walnut orchard. If
growers did not have access to methyl bromide or 1,3-D (because of
township caps, for example), the consequences would be far more dire.  

The analysis in Table 1 does not consider the investment producers must
make in establishing an orchard and maintaining it through several
non-bearing years.  Table 2 presents the information on the net
operating revenues, NPV and IRR for a walnut 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-hectare cost of products, which incorporates typical application
rates.  Tree planting costs are identical regardless of fumigant.  BEAD
assumes that some trees must be replanted the following year.  We assume
that 4%, or two trees, are replanted following fumigation with methyl
bromide and chloropicrin (Buchner et al., 2002) but 6% are replanted
with 1,3-D and chloropicrin.  The higher replant rates represent the
lower survival rate if nematodes are controlled but orchard replant
disorder or pathogens are not.  Trees begin to produce in the fourth
year, initially at 10% of production, climbing to full production in the
eighth year (Buchner et al., 2002).  Returns during full production are
shown in Table 2.  

Table 2.  Net operating revenue, net present value (NPV), and internal
rate of return (IRR) of a walnut orchard.

Year	Stage	Methyl bromide + chloropicrin	1,3-D + chloropicrin

1	Field Preparation	-585	-585

	Fumigation 1	-3,127	-1,855

	Establishment	-3,789	-3,789

2	Non-bearing 2	-978	-1,018

3	Non-bearing	-897	-897

4	Initial production 3	-637	-657

5	Partial production 5	-417	-457

6	Partial production 6	-106	-165

7	Partial production 6	1,331	1,213

8	Full production 7	3,018	2,660

9-25	Full production 7	3,018	2,660

NPV (7% discount rate)	9,495	9,495

Internal Rate of Return	13.8%	13.9%

Sources:  Buchner et al. (2002), 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.  

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

3 Initial production is 10% of full production.  

4 Production in the fifth year is 20% of full for combination
treatments.  

5 Production in the sixth year is 30% of full for combination
treatments.  

6 Production in the seventh year is 60% of full production for
combination treatments.  

Assuming a 7% discount rate, establishing a walnut orchard, fumigating
with methyl bromide and chloropicrin, yields future returns valued at
almost $9,500/hectare today.  This is about $530 more per hectare than
an hectare treated with 1,3-D and chloropicrin, although the lower
initial cost of fumigating with 1,3-D and chloropicrin means that the
internal rate of return on the two investments are approximately equal. 
The IRR for an orchards treated with methyl bromide or 1,3-D are
similar, and close to 14%.  

These results would also apply almonds grown on heavier soils. Where
almonds are replanted after an existing almond orchard, poor vegetative
growth has been observed and tree mortality has been estimated as high
as 50% (Browne et al., 2006).  This would be the case where no fumigant
is used on replant sites.  With a one year fallow, but no fumigant
treatment, a 25-40% yield loss might be experienced (depending on
rootstock) with a 24-35% reduction compared to methyl bromide treatment
(Carpenter et al., 2000).

BEAD estimates that nearly 43% of almond hectares planted and 86% of
walnut plantings are currently treated with methyl bromide.  The
benefits of methyl bromide would eventually accrue to almost 97,000
bearing hectares of almonds and 74,000 hectares of walnut.  At full
production, additional yield is valued at about $370/hectare, therefore
methyl bromide adds about $63.3 million annually to the value of
California nut production.  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.  Without these fumigations, some orchards would
probably not be established at all; thus these figures may understate
the full value of the methyl bromide.  

California Stone Fruit

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.

We assess the benefits of fumigation with methyl bromide by comparing
production under alternative approaches for controlling orchard replant
disease.  In this case, we focus on prune production in California that
is broadly representative of stone fruit production with high fumigant
use.  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.  This result would also
apply to cherry, peach and nectarine, and plum grown on heavier soils. 
We assume in this analysis that 1,3-D is available for use as a
fumigant, which will not necessarily be the case, due to township caps
in California.  If neither methyl bromide or 1,3-D are available, the
consequences are expected to be more dire.  

Replacing methyl bromide with 1,3-D, while maintaining the use of
chloropicrin, is estimated to result in a 4% decrease in prune yields
during production (Carpenter et al., 2000).  Yield losses are due to
soil pathogens that infect the trees at an early age, stunting their
growth.  Table 3 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 $125/hectare. 

Table 3.  Gross revenue, operating costs, and net operating revenues,
California prune orchard at full production.

	Methyl bromide + chloropicrin	1,3-D + chloropicrin

(% change) 1

Yield (dried ton/hectare)	4.4	4.2

(-4.0%)

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

Gross Revenue  ($/hectare)	5,002	4,802

(-4.0%)

Operating Costs  ($/hectare)	2,080	2,080

Harvest Costs  ($/hectare)	1,894	1,818

(-4.0%)

Net Operating Revenue  ($/hectare)	1,028	904

(-12.1%)

Sources: USDA NASS (2002-2006), Buchner 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 3 does not consider the investment producers must
make in establishing an orchard and maintaining it through several
non-bearing years.  Table 4 presents the information on net operating
revenue, NPV, and IRR for a prune orchard under the 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-hectare cost of
products, which incorporates typical application rates.  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 methyl
bromide an chloropicrin (Buchner et al., 2001); 3% are replanted with
1,3-D and chloropicrin; The higher replant rate represents 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 (Buchner et al., 2001).  Returns during full production are
shown in Table 4.  

Table 4.  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

0	Field Preparation	-618	-618

	Fumigation 1	-2,519	-2,025

1	Establishment	-3,137	-3,137

2	Non-bearing 2	-995	-1,018

3	Non-bearing	-1,294	-1,294

4	Initial production 3	-1,336	-1,361

5	Partial production 5	-1,023	-1,072

6	Partial production	2	-82

7	Full production	1,028	904

8-40	Full production	1,028	904

NPV (7% discount rate)	-874	-1,529

Internal Rate of Return	6.3%	5.7%

Sources: 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.  

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.  

5 Production in the sixth year is 67% of full for combination
treatments.  

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.  Failure to adequately control soil pathogens substantially
reduces the return to investing in a prune orchard.  This result would
also apply to cherry, peach and nectarine, and plum grown on heavier
soils.  

8.  RESULTANT CHANGES TO REQUESTED EXEMPTION QUANTITIES

Table 5. Nomination Amount: 

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 The USG does not request methyl bromide for use in areas of low to
moderate pest pressure.  Only cases where key pests are present at
moderate to high levels require methyl bromide for pest pressure.

 The United States Office of Management and Budget suggests using a 3%
and 7% rate when evaluating the cost and benefits of government
regulation, where 7% is an estimate of the before-tax rate of return to
private capital (OMB, 2003).

USA CUN13 Soil Orchard Replant Open Field		Page   PAGE  1  of   NUMPAGES
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