1. 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 Extension Center, School of Economic Sciences, Wenatchee
Template I-Green curve

2. Content Budget Process Where to find these studies? Assumptions made
Study components
Summary of findings
Use 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

6. Where is it?

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 rootstock
Block size: 10 acres
Orchard size: 150 acres
Irrigation system
Overhead and under tree drip sprinklers
Public irrigation district
Architecture
Two dimensional system (planar canopy), randomly trained w/18-in radius from tree center
In-row space: 10 feet
Between row: 16 feet
Life of planting: 25 years
Density: 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)
800
1,600
2,400
3,200
4,000 2
-6,379
-4,779
-3,179
-1,579 21 4
-6,060
-2,860
340
3,540
6,740 6
-5,742
-942
3,858
8,658
13,458 8
-5,424
976
7,376
13,776
20,176 10
-5,106
2,894
10,894
18,894
26,894 12
-4,788
4,812
14,412
24,012
33,612
[1] 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 rootstock
Block size: 40 acres
Orchard size: 160 acres
Irrigation system
Overhead and under tree drip sprinklers
Public irrigation district
Architecture
Two dimensional system (planar canopy), randomly trained w/18-in radius from tree center
In-row space: 4 feet
Between row: 10 feet
Life of planting: 15 years
Density: 1,089 trees per acre

13. Estimated Net Returns per Acre at Various Prices and Yield - Gala
Price ($/bin)
Yield (bins/acre)
200
225
250
275
300 35
-3,193
-2,318
-1,443
-568
306 40
-2,381
-1,381
-381
618
1,618 45
-1,569
-444
680
1,805
2,930 50
-757
492
1,742
2,992
4,242 55
1,430
2,805
4,180
5,555 60
867
2,367
3,867
5,367
6,867
[1] Includes amortized establishment costs. [2] 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 orchard
Orchard size: 40 acres
Irrigation system
Micro sprinkler on tubing on every row and 14-ft spacing in the tree row
Public irrigation district
Architecture
In-row space: 7 feet
Between row: 15 feet
Operating period: 20 years
Density: 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 Pears
Cost per Acre
Break-even Return per Bin 1.
Total Variable Costs
$5,344.24
$167.01 2.
Total Cash Costs[1] = Total Variable Costs + Land and Property Taxes + Insurance + Fees and Dues
$6,175.24
$192.98 3.
Total Cash Costs + Depreciation of Irrigation System, Machinery, Equipment and Building
$6,650.24
$207.82 4.
Total Cost = Total Cash Costs + Depreciation + Interest[2] + Management Cost
$9,684.13
$302.63
[1] If there are other cash costs on an individual's orchard, these costs must be identified
and included in the cash cost break-even return calculation.
[2] 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)
200
225
250
275
300 20
-5,111.05
-4,611.05
-4,111.05
-3,611.05
-3,111.05 32
-3,284.13
-2,484.13
-1,684.13
-84.13 40
-2,066.18
-1,066.18
-66.18
933.82
1,933.82 50
706.25
1,956.25
3,206.25
4,456.25 60
978.68
2,478.68
3,978.68
5,478.68
6,978.68
[1] Assumes 1,100 lb/bin.

20. REMEMBER: Use of These Budgets
Growers
Starting point for comparison and creation of own budgets
Policy makers
Educational tool for understanding the different cost centers in tree fruit production
Lenders and investors
Illustration on operating loans and projected costs and returns
Other researchers
Financial 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 satisfaction
Increased fruit consumption and health
Decreased pesticide use
Increased industry profitability, competitiveness, and sustainability
This project is supported by the Specialty Crops Research Initiative of USDA’s National Institute of Food and Agriculture

22. Thank You R. Karina Gallardo
3/31/2017
Thank You
R. Karina Gallardo
Washington State University Tree Fruit Research and Extension Center, School of Economic Sciences
1100 N. Western Ave. Wenatchee, WA
Phone: (509) 663–8181 x 261
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