Good Fruit Grower

December 2012

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QUALITY FRUIT DESERVES A QUALITY RIDE! TABLE 2 Warehouse packing charges Charges per bin In-charge Air-ride suspension conversions Hydraulic lift conversions. Flatbed re-arching, re-decking, shortening and air hitches. New and used straddle trailers, all sizes. New and used parts. CARRIER Repairs and custom fabrication. TRANSPORTS, INC. 509-452-0136 STRADDLE TRAILER MANUFACTURING AND REPAIR After Hours: JIM KUNZ 509-949-5904 Charges per box Industry charge Marketing charge General packing charge Total Total packing charges per bin $77.50 $0.33 $0.88 $4.68 $5.88 $183.74 (Assumes 850 pounds per bin, 40 pounds per box, and an 85 percent packout rate). SOURCE: Karina Gallardo, WSU With an f.o.b. price of $400 per bin (before packing charges are deducted), the estimated net profit would be $1,698 per acre. The costs are based on a hypothetical 25-acre block of Red Delicious within a 300-acre diversified orchard. Trees are on Malling 106 rootstocks and are spaced 4 by 12 feet apart (900 trees per acre). The life of the orchard is esti- mated to be 30 years. The amount of capital required in the year of planting is almost $550,000 for the block. The study's author, Dr. Karina Gallardo, estimates that the planting would produce 12.75 bins per acre of pack- able fruit in the third year, 25.5 in the fourth year, 42.5 in the fifth year, and 59.5 bins each year thereafter. TABLE 3 Machinery and building costs Estimated costs for machinery, equipment, and buildings for a 300-acre diverse orchard Purchase Number Total price of units cost Housing for manager $110,000 Machine shop/ shed with pesticide storage $50,000 Tractor, 70HP, 4WD $32,500 Tractor, 40HP, 4WD $25,000 Four-wheeler Weed spray boom & tank Rotary mower (9 feet) Flail mower $8.000 Fork lift Bin trailer Pickup Ladder, 8 feet Shop equipment** $4,000 Speed sprayer $20,000 $7,000 $7,000 $8,000 $25,000 $6,000 $20,000 $100 Miscellaneous* $20,000 $5,000 1 1 5 2 3 4 1 1 1 2 3 1 50 $110,000 $50,000 $162,500 $50,000 $12,000 $80,000 $7,000 $7,000 $50,000 $18,000 $20,000 $5,000 $20,000 $5,000 Assumes that machinery and equipment is purchased new. * Includes two portable toilets, box blade, straight blade, quick connect loader, gopher baiter, soil aerator, utility trailer and two ladder trailers. ** Includes compressor, welder, pressure washer, and tools. SOURCE: Karina Gallardo, WSU The labor rate is assumed to be $12 per hour (includ- ing taxes) for hand labor and $13 for tractor and machin- ery operators. The picking rate was assumed to be $16 a bin. Gallardo said growers who are only able to cover their cash costs (variable costs) cannot be financially stable in the long run, because sooner or later they will need to buy equipment or modernize the orchard. Gallardo did a similar study for Honeycrisp apples last year, which showed a potential profit at $6,464 per acre, based on a net yield of 43 bins per acre and an f.o.b. price of $650 (before packing charges are deducted). Costs for thinning, chemicals, fertilizer, picking and hauling, and machinery repair were all higher for Honey- crisp than for Red Delicious, resulting in variable costs totalling $7,262 per acre. Fixed costs were significantly higher across the board for Honeycrisp and totalled $4,211 per acre. However, packing costs were lower ($10,014 per acre) because of fewer boxes packed per bin. Dale Goldy, assistant general manager with Stemilt Ag Services, said Red Delicious are a lot more forgiving and produce more consistently than other varieties, but some of the lower production costs are offset by additional expenses for the harvest management tools ReTain (aminoethoxyvinylglycine) and Harvista (preharvest MCP treatment). The full economic study and an Excel spreadsheet of the enterprise budget for Red Delicious, as well as data underlying the calculations, are available at the WSU School of Economic Sciences Extension Web site at Growers can modify certain values and use the Excel Workbook to evaluate their own production costs and returns. • 46 DECEMBER 2012 GOOD FRUIT GROWER

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