Feasibility Assessment of Commercial Pawpaw Operations

The production of pawpaw fruit (Asimina triloba) continues to carry high economic potential but remains underutilized on a commercial scale. Recent research efforts have focused on industry-wide strategies to build awareness among consumers, expand the market through product diversification, and foster collaboration among peer producers to improve agricultural practices and gain processing scale (Signorini & Francino, 2024). However, practical answers are needed to questions regarding the economic feasibility of growing pawpaw commercially. This fact sheet communicates key revenue and cost factors that existing and new pawpaw growers need to consider when estimating the long-term feasibility of operating commercial pawpaw orchards. A user-friendly Microsoft Excel spreadsheet accompanies this document, allowing practitioners to simulate deviations from initial assumptions. Instructions on how to use the spreadsheet are presented in the first tab of the Excel file.

Figure 1 (click to download Excel file). Feasibility analysis tool for pawpaw orchards. File created by The Ohio State University.

Primary and secondary data were used to build the feasibility analysis spreadsheet included in this fact sheet. Primary data was collected from an industry-wide survey (245 valid and usable responses) and in-depth interviews with pawpaw-related business owners located in midwestern states, including Indiana, Kentucky, Michigan, Missouri, Ohio, Pennsylvania, and West Virginia (43 individuals). The interviews included orchard visits and continuing conversations with producers, which allowed the identification of patterns in managerial decisions and field practices. Secondary data was obtained from multiple sources, as described below. The resulting spreadsheet and initial analysis, as reported in the downloadable Excel file, assumes the most common set of parameters observed in the field. The reported analysis also uses current (November 2025) non-research data for key agricultural inputs and assets. This data was obtained from reliable online references or via phone calls with sales representatives of dealerships and local distributors.

The following bullet points present the secondary data sources and the rationale for our assumptions, where applicable. The economic performance results of a 20-year pawpaw orchard are also reported using four financial indicators:

1. Net present value.
2. Internal rate of return.
3. Payback.
4. Annualized return-on-investment.

Net present value is the net economic value of a given project over its lifespan.

Internal rate of return is the discount rate at which the net present value equals zero.

Payback refers to the time required to recover an investment at a predefined discount rate.

Annualized return on investment is the ratio of average returns during productive years compared against the sum of expenses and investments in the initial years of the project. These results can be retrieved from the cash flow tab of the Excel file.

Breakeven fruit prices for assumed yields are provided later in this fact sheet, as well as net returns (positive or negative) for slight up and down variations in price-yield combinations.

Secondary data sources:

• The U.S. Bureau of Labor Statistics for agricultural wages (U.S. Bureau of Labor Statistics, 2024). The labor cost used in the analysis was computed based on the May 2024 hourly wage for agricultural equipment operators in Ohio (occupation code 45-2091), reported in the most recent edition of the Occupational Employment and Wage Statistics. The wage considered is $25.41 per hour plus benefits (25%).
• Ag Decision Maker tables from Iowa State University Extension and Outreach. Field capacity and fuel requirements of farm machines were computed based on parameters presented in two Iowa State Extension files (Hanna, 2005; Hanna, 2016). Estimates on field capacity, labor, and fuel requirements were provided for every mechanized operation identified via interviews.
• Fuel (diesel and gasoline) prices were retrieved from the AAA gas price report (AAA, 2025). We used Ohio average fuel prices for the initial feasibility assessment, with diesel and gasoline prices at $3.66 per gallon and $3.02 per gallon, respectively.
• Time and labor requirements for non-mechanized operations (e.g., pruning, training, and harvesting) were estimated based on interview responses only. Note that harvesting operations are assumed to be manual operations with the support of a rough-terrain vehicle (RTV) or a tractor-pulled trailer.
• The farmland opportunity cost was computed based on Ohio’s farmland leasing estimates, reported annually by the Ohio State University Extension Farm Office (Ohio State University Extension Farm Office, 2025). For the purposes of this analysis, the opportunity cost of land was equal to the most recent state average farmland lease rate of $235 per acre.
• Dealerships, local input distributors, and laboratories were consulted via websites or phone calls to verify current prices (November 2025) for machinery, fence supplies, irrigation materials, cover crop seed, fertilizer, chemicals, and laboratory analyses.

(Selected) Initial Assumptions:

• The initial analysis considers a 3-acre pawpaw orchard, with trees spaced 15 feet between rows and 8 feet between plants.
• The price of young, grafted trees is assumed to be $60 per plant.
• The initial analysis assumes that 10% of the planted trees decay or die within two years, leading to replanting operations in years 2 and 3.
• The representative orchard features a drip irrigation system, which draws water from an existing water source on the property (e.g., pond, lake, or well). The irrigation system for a representative orchard is powered by an electric pump, with a water source 18 feet lower than the orchard level. The pawpaw trees are assumed to be in a flat parcel. Watering operations for establishing the inter-rows lawn occur from year 1 through 4 and are independent from the drip irrigation system.
• The cost of water is assumed to be zero.
• To control herbivorous mammals and birds, tree protection cages are used in years 1 through 4. In year 5 onwards, a three-dimensional perimeter fence replaces the cages to allow harvest operations and better access for traffic in the orchard.
• The initial investment in machinery and equipment is approximately $74,000, and includes a small tractor, an RTV for field management, a fertilizer spreader, a mower, an orchard atomizer, and other small tools.
• Machinery, equipment, and fence maintenance costs are assumed to be 2% of the initial value.
• Depreciation of machinery and equipment is computed based on the Modified Accelerated Cost Recovery System (MACRS), using a 7-year property, half-year convention method. The Internal Revenue Service (IRS) determines the annual depreciation rates for the 7-year recovery period.
• The annual insurance rate is assumed to be 2% of the original value of the self-propelled machinery. Insurance was not considered for other pieces of equipment.
• Pawpaw trees are assumed to start bearing fruit in the fifth year of the crop, with 25% production in the first two seasons. From the third production season onward (seventh year), the plants are assumed to produce 25 pounds per tree.
• The average price of fruit sold is assumed to be $4 per pound—the same amount received by the grower.
• Other assumptions are presented in the ‘EntryParameters’ tab of the spreadsheet.
• All assumptions made for the initial feasibility analysis can be changed to better represent the reality of interested individuals.

Results

The net present value (NPV) computed at a 10% discount rate suggests a positive return of approximately $205,000 over the course of a 20-year investment plan. While the spreadsheet offers NPV results at different discount rates, looking closely at the 10% rate is appropriate because this rate is reasonably above the current cost of capital at 6.14% (current loan rates). Examining the results at a 5% discount rate is also plausible, as this rate suggests slightly more risk than the U.S. Treasury Bill at 3.79%, which is considered a risk-free investment by financial analysts. The NPV at a 5% discount rate is approximately $508,000.

The payback computed at a 10% discount rate is 10 years—a good result compared to other producing-focused agricultural enterprises. Internal rate of return (IRR) at 17.8% represents the discount rate that equals NPV to zero. In other words, the IRR is the maximum discount rate that investors could tolerate before the enterprise turns negative.

The annualized return-on-investment (ROI) is computed at 35.6%. The indicator is calculated based on the ratio of average annual returns during the productive years (years 5 through 20) and the investment plus initial operational and fixed costs. This result compares well against investing in other agricultural enterprises.

Finally, breakeven analysis results—computed based on NPVs at a 10% discount rate—suggest that a 3-acre pawpaw orchard remains economically feasible with price-yield combinations ranging from 10 pounds per tree at $6.00 per pound to 30 pounds per tree at $2.00 per pound. This analysis continues to rely on the data and assumptions presented above. Discrete yield and sale price were the only parameters changed for this analysis.

Feasibility simulations to better capture the reality of individual pawpaw producers are possible using the provided spreadsheet.

Limitations of the Study

Extreme-weather events, pests, and diseases that impact crops without approved protection inputs pose a significant risk for pawpaw producers. Pawpaws are known for having a brief harvest window and a reduced shelf life if appropriate post-harvest cooling and storage are not used. Extreme weather conditions can cause operational challenges during harvest, storage, and processing times. Moreover, droughts and spring frosts may compromise production at critical stages of crop development. Currently, the absence of registered crop protection products for pawpaws may expose producers to severe diseases, such as bordered leaf spot (Phyllosticta sp.) and black spot (Diplocarpon sp.). Important pests like the peduncle borer (Talponia plummeriana) and the Asian ambrosia beetle (Xylosandrus crassiusculus) do not have registered products for use on pawpaws. These diseases and pests, along with others, may impact fruit quality and yield, potentially resulting in revenue discounts. Until the registration of new or existing crop protection products is extended to pawpaws, production revenue will be at risk of losses.

It is worth noting that research on best agricultural practices is ongoing at leading pawpaw institutions like The Ohio State University, Ohio University, and Kentucky State University. The parameters used for feasibility assessment will continue to evolve as research advances and commercial growers validate the applicability of results. Continue to refer to these institutions and extension professionals in your area.

References

AAA Fuel Prices. (2025). State gas price averages.
gasprices.aaa.com/?state=OH

Hanna, M. (2016). Estimating the field capacity of farm machines.  Iowa State University Extension and Outreach.
extension.iastate.edu/agdm/crops/pdf/a3-24.pdf

Hanna, M. (2005). Fuel required for field operations. Iowa State University Extension and Outreach.
extension.iastate.edu/agdm/crops/html/a3-27.html

Ohio State University Extension Farm Office. (2025). Cash rents and farmland values. The Ohio State University College of Food, Agricultural, and Environmental Sciences.
farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents

Signorini, G., & Francino, S. (2024). A mixed methods qualitative approach outlining a strategic and operational agenda for the pawpaw value chain in the eastern US. International Food and Agribusiness Management Association, 27(2), 1–22.
DOI:10.22434/ifamr.1042

U.S. Bureau of Labor Statistics. (2024). Occupational employment and wage statistics. United States Department of Labor.
data.bls.gov/oes/#/area/3900000

Ward, B. (2025). Western Ohio cropland values and cash rents 2024–25 survey results. Farm Office, Ohio State University Extension.
farmoffice.osu.edu/blog/wed-07232025-318pm/western-ohio-cropland-values-and-cash-rents-2024-25-survey-results