Orchard Business Analysis 2015–2016
30 January 2017 | APAL | Australian Fruitgrower article
The 2015–2016 Orchard Business Analysis provides a detailed snapshot of productivity and financial performance across Australian apple and pear businesses. AgFirst collected physical and financial data from 27 orchards in Stanthorpe, Orange, Batlow, the Goulburn Valley, southern Victoria, South Australia, Tasmania and Western Australia, using the results to update the Future Orchards® industry model.
The model is designed to provide more than a single annual benchmark. It gives the industry a productive and financial snapshot, tracks trends over time, provides a comparison point for individual orchards, allows different production or market scenarios to be modelled and supports international benchmarking. For this study the model orchard was based on a 115-hectare property with 40 hectares planted to pome fruit, reflecting the increasing scale of businesses in the dataset.
Yield improved strongly. Average gross yield rose 27% from 37.4 t/ha in 2014 to 47.4 t/ha in 2015 — the largest increase recorded since the Orchard Business Analysis began in 2008. The 2016 forecast remained similar at 47.3 t/ha. Since 2010, gross yield had increased by about 14 t/ha, while Class 1 productivity rose from just over 20 t/ha to an estimated 33 t/ha in 2016.
The article also shows why gross yield cannot be considered in isolation. Class 1 packout averaged 66% in 2015 and was forecast to increase to 70% in 2016. Pink Lady performance varied enormously between businesses, with forecast 2016 yields ranging from 21 t/ha to 108 t/ha and Class 1 packout ranging from hail-affected zero through to 95%. This variation highlights the opportunity available to businesses performing below the industry average.
Financial results were influenced by the interaction between yield, packout, returns and costs. The high-yielding 2015 crop did not produce a stronger financial result because packouts and returns were lower while costs increased. In contrast, the 2016 forecast combined similar gross volume with better packout and slightly improved returns, producing a more favourable profitability outlook.
For growers, the Orchard Business Analysis is most useful as a benchmarking tool. It helps identify whether performance problems are primarily related to production, fruit quality, price or cost structure and provides a basis for setting realistic improvement targets at both business and block level.
