# Economics — Complete Model (Base + Pilots + Processing)

**Live model:** [Ulu Farm Model — 5641 Kahiliholo Rd — Numbers & Modeling (9 tabs)](https://docs.google.com/spreadsheets/d/1_Ts3cv2FE7I2-gc5SMdk4d3pAvxY3hWs2jRyDJWScYo/edit) — Source of truth. This md mirrors the sheet. All dollars USD 2026 @ $35/hr field, $30/hr factory. ISO plain language.

## How to read
- **Base = ulu flour + bridging intercrop only.** Base is what we promise. Base pays the mortgage.
- **Full = Base + vanilla 0.5ac + matcha 0.25ac + full intercrop sold.** Full is what we can learn. Pilots are options, not promises.
- **Processing = factory that turns flour/fruit into chips/bars/loaf.** Processing is separate scope, 688 hr @ $30/hr, $195k revenue. Do not add processing to farm field cum — see note.

## 1 — Field: ulu flour is the core commodity
Flour is simple. Flour stores. Flour ships. Buyers exist. Flour carries base.

| Year | Fresh ulu (lb) 40 trees | Flour rev @ $16.50-18/lb | Intercrop base $ | Total base income | Inputs | Labor $35/hr | Net | Cum |
|---|---|---|---|---|---|---|---|---|
| Y0 | 0 | 0 | 0 | 0 | 0 | $1,960 (56 hr) | -$1,960 | -$87,460* |
| Y1 | 0 | 0 | $2,500 | $2,500 | $750 | $2,170 (62 hr) | -$420 | -$2,380 |
| Y2 | 0 | 0 | $3,500 | $3,500 | $600 | $1,820 (52 hr) | $1,080 | -$1,300 |
| Y3 | 2,000 | $7,260 | $660 | $7,920 | $600 | $2,590 (74 hr) | $4,730 | $3,430 |
| Y4 | 4,000 | $14,520 | $2,500 | $17,020 | $600 | $2,590 | $13,830 | $17,260 |
| Y5 | 6,000 | $21,780 | $2,500 | $24,280 | $650 | $2,730 (78 hr) | $20,900 | $38,160 |
| Y6 | **16,000** mid 400 lb/tree | $58,080 | $2,500 | $60,580 | $700 | $3,360 (96 hr) | $56,520 | **$94,680** |
| Y7 | 16,000 | $58,080 | $2,500 | $60,580 | $700 | $3,360 | $56,520 | $151,200 |
| Y10 cum | 64,000 | — | — | $358,120 | $6,700 | $30,660 | $320,760 | $320,760 |

\* Y0 cum -$87,460 = $85k point upfront + $1,960 labor. Upfront $85k = $77k low / $129k high weighted low (see 1-Upfront Costs tab). Base uses 400 lb/tree mid (research mid 300-500, guide 546, conservative 250 = $38.8k). At 250 lb/tree base = $38.8k/yr mature; at 546 lb/tree = ~$78k flour.

**Plain note:** Base is flour at wholesale $16.50-18/lb (conservative). Retail flour $35/lb direct = $112k on same 3,200 lb flour. Retail needs brand. Wholesale is proven. We model wholesale.

## 2 — Full with pilots: what we can learn
Pilots are Y3 gate decisions. We do not count them until they pass gate. Full = Base + pilots + full intercrop sold (Tab 9).

| Year | Vanilla net 0.5ac (Tab7) | Matcha net 0.25ac+bridge (Tab8) | Full intercrop add (Tab9) | Full net | Full cum |
|---|---|---|---|---|---|
| Y1 | -$6,600 | +$700 | $0 | -$6,320 | -$93,780 |
| Y2 | -$6,600 | +$700 | $0 | -$4,820 | -$98,600 |
| Y3 | -$6,600 | +$700 | $0 | -$1,170 | -$99,770 |
| Y4 | -$5,000 | +$700 | +$1,500 | +$11,030 | -$88,740 |
| Y5 | +$2,000 | +$1,700 | +$5,500 | +$30,100 | -$58,640 |
| Y6 | **+$5,400** | +$3,000 | +$25,500 | **+$90,420** | **$31,780** |
| Y7 | +$5,400 | +$3,000 | +$25,500 | +$90,420 | $122,200 |
| Y10 cum | — | — | — | — | **$393,460** |

**Economics in plain language:**
- Vanilla 0.5ac (350 vines, shade house $22k + vines $5k + mist $4k = $31k setup, hand pollinate 120 hr/yr): Y5 mature 40 kg cured × $300/kg = $12k rev, $6.6k care → $5.4k net. Low $28 kg×$170 = -$1,840; high 56 kg×$419 = +$16,864. Gate Y3: need 100 vines flowering or abandon. Learning value > cash — teaches curing for cacao.
- Matcha 0.25ac (1,000 bushes + bark pH 5.0 + stone mill $5.5k = $15k setup): Bridge Y1-5 buy 20 kg tencha @ $50/kg mill to 18 kg matcha @ $150/kg → +$1,700/yr net. Own Y5+ 15 kg → Y7 35-50 kg × $120-300/kg → $3k-12k net. Risk: Kauai pH 6.5 must hold 5.0 with sulfur/pine bark — test quarterly.
- Intercrop full (1.0ac pigeon pea 700-1,200 lb×$5-7 = $5k + 0.8ac turmeric 6,400 lb×$3-5 = $23k = $28k gross) vs base $2.5k: add $25.5k at steady state. But turmeric dig = 80 hr hand harvest @ $35 = $2,800 extra labor not yet in Cash Flow base — net add is ~$22k after labor.

**Impact:** Full pilots pull break-even from Y6 base $9k cum to $31k full; Y10 cum $320k base → $393k full (+$73k). Full requires 180 extra hr/yr (vanilla 120 + matcha 60) and pH management. Base is durable alone.

## 3 — Processing: factory is separate
Processing turns field into product. 4 lines: A Chips fried slices direct (13,200 bags, oil+pouch $0.95, $102k contribution) — not from flour; B Dried/roasted; C Vanilla/cacao prestige; D Community. 688 hr @ $30/hr = $20,640 labor + $28k inputs = $195,110 revenue → $146,350 contribution ($284/hr revenue, $213/hr contrib). CapEx $51k fryer+slicer+dehydrators+freezer, payback <1 yr. Chips/bars are brand risk (need channel, shelf, reorder); flour is commodity risk (proven buyer). Do not add $195k to field cum — factory has its own P&L.

## 4 — Upfront: what we pay Y0
- Core farm $85k point ($77k low / $129k high): greenhouse $15k + container farm store $40k + processing core $12k + orchard $3k + contingency 10%.
- Pilots $46k extra if Y0: vanilla $31k + matcha $15k = $123k total with pilots. We plan core only Y0, pilots phased Y1 if gate passes — so base break-even uses $85k, not $123k.

## 5 — Intercropping: why it matters beyond dollars
Pigeon pea 2.5 T/ac dry matter × 50 lb N/T = 125 lb N/ac, plus 2-3 yr woody root channels 6-8 ft that drain clay pan 240 PSI pore (daikon 240 PSI bio-pore, sunn hemp 3-5 ft tap fixes 80-120 lb N/ac in 60d). LER 1.58-1.77 = 58-77% more food from same land vs sole ulu (peer trial: 1:1 maize:pigeon pea LER 1.77). SOC +8-22%, runoff -40%, pest -10-50%. Biodrill saves $2,500-5,000 whole-field tillage + $600 fertilizer + $400 weed control. Mucuna smothers Guinea grass on worst 0.3ac. Base $2.5k understates value — soil value is N + pore + weed suppression that lets 8" topsoil behave like 20".

## 6 — Risks and gates
- Vanilla: fails if not enough flowers Y3 or disease >30% — labor 120 hr hand pollination in 4-hr window Feb-May is real. Hawaii production fell to grouping with other tropical specialties (USDA confidentiality) — market is agritourism + premium direct, not wholesale bulk.
- Matcha: fails if pH drifts >5.5 — Kauai 6.5 default — needs quarterly test + bark/sulfur. Own yield only Y5+; bridge tencha margin thin but teaches milling.
- Turmeric: fails if bore drainage not verified — turmeric rots in perched water — need pit <150 PSI 0-6" <300 PSI 6-18".
- Ulu: biennial bearing can swing ±30% — sheet flat 16k assumes even — diversify cultivars for year-round (see NTBG cultivar guide).

Live tabs: [7-Vanilla Pilot](https://docs.google.com/spreadsheets/d/1_Ts3cv2FE7I2-gc5SMdk4d3pAvxY3hWs2jRyDJWScYo/edit#gid=2024427946) · [8-Matcha Bridge](https://docs.google.com/spreadsheets/d/1_Ts3cv2FE7I2-gc5SMdk4d3pAvxY3hWs2jRyDJWScYo/edit#gid=1059805931) · [9-Intercrop Detail](https://docs.google.com/spreadsheets/d/1_Ts3cv2FE7I2-gc5SMdk4d3pAvxY3hWs2jRyDJWScYo/edit#gid=584791989) · [3-Cash Flow Y0-Y10](https://docs.google.com/spreadsheets/d/1_Ts3cv2FE7I2-gc5SMdk4d3pAvxY3hWs2jRyDJWScYo/edit#gid=665211858)

## 7 — Manager pay: phased hire (flour alone does not pay a manager, factory or veg does)

Flour at $16.50-18 wholesale is proven. Flour alone at mid-road 400 lb/tree pays $60.6k/yr. A full-time manager costs $70k + 25% burden = $87,500/yr. Flour alone cannot carry that.

| Scenario | Annual labor cost | What it covers | Y6 net (mid 16k lb) | Break-even | Y10 cum | When to hire |
|---|---|---|---|---|---|---|
| A Contractor base 96 hr @ $35/hr | $3,360 | Field 96 hr only | $56,520 → $94,680 cum Y6 | Y6 base $9k / full $31k | $320k base / $393k full | Y0-5 keep contractor |
| A-full Contractor 356 hr pilots | $12,460 | 356 hr all pilots | $90,420 → $31,780 cum Y6 | Y6 full | $393k full | Y0-5 pilots as contractor test |
| B Part-time keeper 0.5 FTE | $43,750 | $35k + 25% burden | $16,130 base; $62,130 full | Y6 still | $180k base / $280k full | Y0-5 → Y6 if pilots proven |
| C Full-time manager $87,500 | $87,500 | $70k + 25% = $87,500 — 2080 hr, farm uses 1044 hr (356 field + 688 factory) | Base -$27,620 → no break-even flour-only; Full +$18,380 → Y9 | Base never; full Y9; base+veg Y7 | Negative base; full ~$50k; factory+base $206k → $118k leftover | Y6+ ONLY if factory $146k contrib OR 1ac veg $65k net proven |
| D Full-time + intensive veg 1ac salad | $87,500 | Same manager + 1ac mesclun $100k gross → $65k net | Base+veg $37,380 → Y7 $80k; Full+veg $83,380 → Y6 | Y7 base+veg; Y6 full+veg | $250k+ base+veg | Choose veg OR pilots — not additive |

**Phased rule — plain language:**

- **Y0-5: Hire contractor or part-time keeper 0.5 FTE $43,750.** Do not hire full-time $87,500. Base flour $60k cannot carry full-time. Test pilots and factory first.
- **Y6+: Promote to full-time $87,500 ONLY if one is proven:** (1) Factory 688 hr → $195k revenue $146k contribution covers manager, OR (2) Intensive veg 1ac → $65k net with wash-pack cooler + hotel contracts. Otherwise keep 0.5 FTE $43,750 and break-even holds Y6.
- **Flour is commodity lower risk** ($16.50-18 wholesale → $35 retail $112k upside). Chips/bars are brand higher risk (needs channel). Manager is brand cost — pay from factory/veg, not flour alone.

Live tab: [10-Manager Scenarios](https://docs.google.com/spreadsheets/d/1_Ts3cv2FE7I2-gc5SMdk4d3pAvxY3hWs2jRyDJWScYo/edit#gid=355427549) — burden = FICA 7.65% + SUTA 2.4% + HI TDI 0.9% + health $6.3k + PTO $4.2k = 25%.