Orchard profitability — strategies and management

July 2012 | Australian Fruitgrower article | Future Orchards® business management resource

Orchard profitability depends on the interaction between productivity, fruit quality, market returns and the cost of producing and handling the crop. This Australian Fruitgrower resource brings those factors together and encourages growers to look beyond gross tonnes when assessing whether an orchard block is performing well.

High production is valuable when it is converted into marketable fruit at the size, colour and quality required by the market. A block with strong gross yield but poor packout can generate a very different financial result from a block that produces a higher proportion of Class 1 fruit. For this reason, orchard management decisions around crop load, pruning, thinning, nutrition, irrigation and harvest need to be considered in terms of their effect on saleable production rather than yield alone.

Costs also need to be interpreted carefully. Cutting expenditure per hectare does not automatically improve profit if production or quality falls. Many orchard costs are spread across the kilograms produced, meaning that a well-managed high-yielding block may have a higher expenditure per hectare but a lower cost per kilogram and a stronger return.

The article sits within the wider Future Orchards® emphasis on benchmarking and block-level analysis. Comparing varieties and blocks for yield, packout, price, labour and post-harvest costs helps identify where management changes are likely to improve the financial result and where redevelopment may be a better option than continuing to carry an underperforming block.

For growers, the practical message is to link orchard management with business performance. Production targets, market requirements and costs should be monitored together so that technical decisions can be assessed by their contribution to long-term profitability rather than by isolated production measures.