Hail net investments: do they pay?

September 2007 | Prepared by Ron Gordon | Future Orchards® Orchard Walk notes

Hail netting can protect marketable yield, but its value depends on capital cost, orchard productivity and the probability and commercial impact of hail. Ron Gordon’s Future Orchards® notes provide a financial framework for deciding whether the investment is justified.

The analysis models netting costs at different establishment prices and yields. Under the worked assumptions, netting costing $50,000 per hectare required an improvement of about $106 per bin at 100 bins per hectare to break even, falling to about $84 per bin at 127 bins per hectare. Lower-cost structures reduce the required return improvement.

The notes also emphasise that hail damage is not simply a yield-loss issue. Even where fruit can be packed, visible hail can reduce market acceptance and price, particularly in oversupplied markets.

The resource is most useful as a decision template: growers can substitute their own yield, capital, finance, maintenance, market and hail-risk assumptions to test whether netting is economically defensible for a specific block.