How does your orchard stack up?

20 September 2016 | Written by AgFirst | Orchard Business Analysis article

This Orchard Business Analysis article asks Australian apple and pear growers to compare their own results with the performance of the industry model orchard. AgFirst compiled financial and production records from 26 representative businesses and used them to create a 40-hectare apple and pear model orchard that growers could use as a benchmark rather than as a description of any single business.

The analysis showed a substantial lift in model yield. Average gross yield increased 28% from 37.4 t/ha in 2014 to 47.9 t/ha in 2015, the highest yield recorded by the model since the first Orchard Business Analysis in 2008. Class 1 yield also reached a record 31.6 t/ha in 2015, although Class 1 packout was around 66%, continuing the longer-term pattern of packouts generally remaining within a 65–70% range.

Price movements show why yield and packout need to be considered alongside market returns. The 2014 selling season delivered an average wholesale Class 1 price of $2.29/kg, up 11% on 2013. In the higher-volume 2015 season, participating growers were forecasting an average Class 1 price of $2.01/kg, illustrating the way market supply and demand can influence the value of increased production.

Costs of production were also rising. Total costs per hectare in 2015 were about 16% higher than the previous year. The article notes that low-cropping seasons can create sharp increases in cost per kilogram because fixed and overhead expenses are spread across fewer kilograms, while high production years can raise total costs per hectare through greater labour and post-harvest activity.

For growers, the key value of the model is diagnostic. Comparing yield, packout, price and costs against the industry benchmark can help show whether a business is already performing strongly or where the largest opportunities for improvement lie. The analysis encourages growers to benchmark individual blocks as well as the whole business so that management effort is directed to the factors most likely to improve marketable yield and profit.