Good Fruit Grower

December 2012

Issue link:

Contents of this Issue


Page 35 of 79

Orchard Economics Yields are critical Even with a high-value variety like Honeycrisp, high yields are important. by Geraldine Warner n economic study of the costs of establishing, pro- ducing, and packing Honeycrisp apples in Wash- ington State underlines the importance of high yields. Dr. Karina Gallardo, agricultural economist at Washington State University, who compiled the study in 2011, calculates that a grower needs a net yield of at TABLE 1 Honeycrisp returns per acre Estimated per-acre returns for Honeycrisp apples at various prices and yields after the orchard reaches full production. Prices are gross returns. To calculate net returns, deduct packing charges of $167 a bin from the f.o.b. price per bin. (Negative numbers are in red.) Net yield (bins/acre) 20 25 30 35 40 45 50 350 400 450 F.O.B. price (dollars per bin) 500 7,169.51 6,169.51 5,169.51 4,169.51 7,020.03 5,770.03 4,520.03 3,270.03 6,870.56 5,370.56 3,870.56 2,370.56 6,721.08 4,971.08 3,221.08 1,471.08 6,571.61 4,571.61 2,571.61 571.61 6,422.13 4,172.13 1,922.13 6,044.01 3,544.01 1,044.01 327.87 1,455.99 SOURCE: Karina Gallardo, Washington State University 550 600 650 3,169.51 2,169.51 1,169.51 2,020.03 770.03 870.56 479.97 629.44 2,129.44 278.92 2,028.92 3,778.92 1,428.39 3,428.39 5,428.39 2,577.87 4,827.87 7,077.87 3,955.99 6,455.99 8,955.99 least 45 bins per acre (without culls) and a price of $500 f.o.b. ($333 after packing charges are deducted) to make a profit when the planting reaches maturity. Amortized establishment costs are included in her calculations. The study is based on a hypothetical 10-acre block with 1,452 trees per acre on Malling 9-size rootstocks and makes the following assumptions: • The irrigation system consists of overhead cooling and undertree drip sprinklers, with two separate submain lines. • A pond is installed in year one, as it is used for irrigation during the first two years. • Workers use ladders, not platforms. • Interest on investment represents a 5 percent opportunity cost to the enterprise. Karina Gallardo • The productive life of the orchard is 15 years, with a five-year establishment phase and ten years of full production. TABLE 2 Honeycrisp production costs Estimated variable costs per acre for producing Honeycrisp in a mature orchard with net production of 43 bins per acre. Orchard activities Pruning and training Green fruit thinning Chemicals Fertilizer Beehives General farm labor Irrigation/electric charges Harvest Picking labor Checkers, tractor drivers, etc Hauling Maintenance/repairs Machinery repair Fuel & lube Wind machine and alarm repair Mainline, pump, and pond Overhead Interest Total variable costs Assumes an 825-pound bin. Does not include warehouse charges. SOURCE: Karina Gallardo, WSU Gallardo assumes net production (packable fruit) of 11 bins per acre in year three, 25 in year four, 40 in year five, and 43 at full production. The packout rate used in the study was 72 percent, which is higher than the average that growers actually experienced in 2011. The full study, "2011 Cost Estimates of Establishing, Producing, and Packing Honeycrisp Apples in Washing- ton," can be downloaded at CEPublications. An Excel spreadsheet version of the enterprise budget can be found at the WSU School of Economic Sciences Extension Website at prise_Budgets.Growers can modify certain values and use the Excel Workbook to evaluate their own production costs and returns. • 36 DECEMBER 2012 GOOD FRUIT GROWER $250 645 1,200 350 45 215 200 1,680 420 480 140 140 30 50 793 624 $7,262

Articles in this issue

Links on this page

Archives of this issue

view archives of Good Fruit Grower - December 2012