Hidden costs of packing fruit uncovered

APAL has received a grant from the Victorian Government to help growers and packers understand the full cost of packing apples and pears and identify ways to optimise their operations while continuing to deliver premium quality fruit.

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The Packhouse Optimisation Project will help growers and packers identify ways to improve the efficiency of their fruit packing sheds.

“The real cost of packing is a bit of an unknown quantity for many growers, which makes it hard for them to identify how they could become more efficient,” says APAL CEO John Dollisson.

“The aim of the project is to provide growers with the financial information they need to make informed decisions about upgrades, refurbishments, starting a new packing shed on a green-field site, or, possibly, amalgamation.

“We hope that this project helps growers identify ways to continue delivering premium quality fruit but in a more efficient manner, so that they are more competitive locally and internationally as the industry looks to increase exports of apples and pears.”

The Packhouse Optimisation Project will analyse the cost of packing, by developing a robust financial model of growers’ packing sheds. The project will be undertaken in Victoria with learnings shared nationally.

“There are more than 100 packing sheds in Australia that pack apples and pears,” adds John. “With a few notable exceptions, the equipment and machinery used is quite old and may be coming to the end of its working life.

“This older equipment is less likely to use the more modern cost-saving technological advantages such as electronic defect sorting and robotic pallet handling. Its replacement may cost several million dollars and the relatively small volumes of fruit processed may not justify the risk or the expense associated with updating the machinery.

“Growers need reliable cost breakdowns of their operations and models to help them forecast the effects of packing shed changes so they can determine what option will work best for them.”

In general, packing infrastructure is oversupplied across the apple and pear industry as few packing sheds work more than one shift, even during the peak of the season, and many only work for a few days per week during the off season.

“The industry paradigm is that packing is a profitable income stream hence the investment in smaller packing plants and the retention of these plants, but this project will dig deeper to help growers understand the full profitability and costs of their packing sheds,” says John.

As part of the project, specialised rural consultants from AgBiz Assist Ltd, who have years of practical experience as rural financial counsellors, will help growers put the right data into the model and interpret the analysis arising from it. All financial data from individual businesses involved in the project will remain confidential and only accessible to the business itself.

Thirteen growers and packers have committed to the project, however, there is still limited room for a small number of additional growers and/or packers based in Victoria to join. There is a fee to join the project.

Growers and packers interested in joining this project may contact APAL consultant Russell Soderlund on 0400 117 360 or russell.soderlund@bigpond.com to discuss joining the project.

APAL’s Packhouse Optimisation Project is funded by the Victorian Department of Economic Development, Jobs, Transport and Resources through Regional Development Victoria’s ‘Food Source Victoria’ program.

 

By |September 15th, 2016|News, Packhouse Optimisation Project|

About the Author:

APAL is an industry representative body and non-profit membership organisation that supports Australia’s commercial apple and pear growers.