Presentation on theme: "3/31/2017 What Does it Cost to Grow Cherries, Gala Apples and Anjou Pears? Recent Grower-Based Studies R. Karina Gallardo WSU-Tree Fruit Research and."— Presentation transcript:
1 3/31/2017What Does it Cost to Grow Cherries, Gala Apples and Anjou Pears? Recent Grower-Based StudiesR. Karina GallardoWSU-Tree Fruit Research and Extension Center, School of Economic Sciences, WenatcheeTemplate I-Green curve
2 Content Budget Process Where to find these studies? Assumptions made Study componentsSummary of findingsUse of budgets
3 Budget Process Convene a group of growers The budgets are not a survey Representation of location, size of operations, and experience
4 Budget Process (2) Determine the production scenario Puts everyone on the same page when it comes to our assumptions
5 Budget Process (3) Costs depend on the assumptions Numbers are a reflection of expected costs under a strict set of assumptions
7 Cost Estimates of Establishing and Producing Sweetheart Cherries are available in both Excel and PDF
8 Assumptions for Sweet Cherry Study Sweetheart on Mazzard rootstockBlock size: 10 acresOrchard size: 150 acresIrrigation systemOverhead and under tree drip sprinklersPublic irrigation districtArchitectureTwo dimensional system (planar canopy), randomly trained w/18-in radius from tree centerIn-row space: 10 feetBetween row: 16 feetLife of planting: 25 yearsDensity: 272 trees per acre
9 Summary of Costs Sweetheart Cherries by Categories ($/acre) Fixed Costs
10 Estimated Net Returns per Acre at Various Prices and Yield – Sweetheart Cherries Price ($/ton)Yield (tons/acre)8001,6002,4003,2004,0002-6,379-4,779-3,179-1,579214-6,060-2,8603403,5406,7406-5,742-9423,8588,65813,4588-5,4249767,37613,77620,17610-5,1062,89410,89418,89426,89412-4,7884,81214,41224,01233,612 Includes amortized establishment costs.
11 Cost Estimates of Establishing and Producing Gala apples are available in both Excel and PDF
12 Assumptions for Gala Study Gala on 9 series Dwarf rootstockBlock size: 40 acresOrchard size: 160 acresIrrigation systemOverhead and under tree drip sprinklersPublic irrigation districtArchitectureTwo dimensional system (planar canopy), randomly trained w/18-in radius from tree centerIn-row space: 4 feetBetween row: 10 feetLife of planting: 15 yearsDensity: 1,089 trees per acre
13 Estimated Net Returns per Acre at Various Prices and Yield - Gala Price ($/bin)Yield (bins/acre)20022525027530035-3,193-2,318-1,443-56830640-2,381-1,381-3816181,61845-1,569-4446801,8052,93050-7574921,7422,9924,242551,4302,8054,1805,555608672,3673,8675,3676,867 Includes amortized establishment costs.  Assumes pack-out of 20 packs/bin (all grades) and 925 lb/bin
14 Summary of Costs By Categories ($/acre) Fixed Costs
15 Cost Estimates of Establishing and Producing Anjou Pears WILL SOON be available
16 Assumptions for Anjou Study 12-year old pear orchardOrchard size: 40 acresIrrigation systemMicro sprinkler on tubing on every row and 14-ft spacing in the tree rowPublic irrigation districtArchitectureIn-row space: 7 feetBetween row: 15 feetOperating period: 20 yearsDensity: 350 trees per acre; 25% of the planted trees are pollenizer trees (Bartlett)
17 Break-even Return per Bin Break-even Return per Bin to Cover Production Cost – Anjou PearsCost per AcreBreak-even Return per Bin1.Total Variable Costs$5,344.24$167.012.Total Cash Costs = Total Variable Costs + Land and Property Taxes + Insurance + Fees and Dues$6,175.24$192.983.Total Cash Costs + Depreciation of Irrigation System, Machinery, Equipment and Building$6,650.24$207.824.Total Cost = Total Cash Costs + Depreciation + Interest + Management Cost$9,684.13$302.63 If there are other cash costs on an individual's orchard, these costs must be identifiedand included in the cash cost break-even return calculation. Interest costs include some actual cash interest payments.
18 Summary of Costs By Categories ($/acre) Fixed Costs
19 Estimated Net Returns per Acre at Various Prices and Yield - Anjou Price ($/bin)Yield (bins/acre)20022525027530020-5,111.05-4,611.05-4,111.05-3,611.05-3,111.0532-3,284.13-2,484.13-1,684.13-84.1340-2,066.18-1,066.18-66.18933.821,933.8250706.251,956.253,206.254,456.2560978.682,478.683,978.685,478.686,978.68 Assumes 1,100 lb/bin.
20 REMEMBER: Use of These Budgets GrowersStarting point for comparison and creation of own budgetsPolicy makersEducational tool for understanding the different cost centers in tree fruit productionLenders and investorsIllustration on operating loans and projected costs and returnsOther researchersFinancial feasibility of new technologies
21 Increased consumer confidence and satisfaction Apples, cherries, peaches, strawberries, and related fruit crops provide health and enjoyment for all Americans. Yet the U.S. fruit industry is competing in a world of globalized trade and technology. Consumers are increasingly quality-demanding and safety-oriented.To address these challenges scientists have united to develop and implement new technology to accelerate the pace and reduce the cost of delivering new varieties uniquely designed for consumer satisfaction and industry sustainability. The $14.4 million RosBREED project, funded by the USDA-NIFA Specialty Crop Research Initiative and matching funds, is providing plant breeders of fruit crops in the Rosaceae family with much-needed DNA-based diagnostics for plant field performance and fruit quality. Although just a little over a year old, RosBREED breeding programs are already reaping significant resource savings using this new diagnostic capability. Breeders have enriched their plant material with the genetic predisposition for consistent fruit quality after storage (apple) and for reliable cropping of large, delicious fruit (cherry). Investing in diagnostic screening for fruit quality characters was an easy decision for the breeders as these traits are critical to grower profitability because of consumer demand. However, what traits should be the next targets for this new technology? To help answer this question, RosBREED socio-economists are surveying growers, market intermediaries, and consumers to determine high value traits and preferences. Improved flavor and texture, enhanced nutritional quality, and plant disease resistance are all potential targets. Newly developed apple, cherry, peach, and strawberry varieties improved with these high priority attributes will assist all sectors of the supply and demand chain to meet future challenges through:Increased consumer confidence and satisfactionIncreased fruit consumption and healthDecreased pesticide useIncreased industry profitability, competitiveness, and sustainabilityThis project is supported by the Specialty Crops Research Initiative of USDA’s National Institute of Food and Agriculture
22 Thank You R. Karina Gallardo 3/31/2017Thank YouR. Karina GallardoWashington State University Tree Fruit Research and Extension Center, School of Economic Sciences1100 N. Western Ave. Wenatchee, WAPhone: (509) 663–8181 x 261Template I-Green curve