Strategic planning raises orchard profitability

28 March 2014 | Written by AgFirst | Future Orchards® Australian Fruitgrower article

This Future Orchards® article shows how strategic planning, monitoring and disciplined management can lift the income potential of orchard businesses. It uses two Focus Orchards — one in Tasmania and one in Western Australia — to demonstrate how long-term plans can be translated into redevelopment, production and management decisions.

At Top Qual’s Calthorpe orchard in northern Tasmania, managed by Brad Ashlin, the management team identified unprofitable “passenger blocks” and progressively replaced them with higher-value varieties. Variety selection considered both the ability to produce high marketable yields and the likelihood of maintaining strong consumer demand and premium returns. Jazz™, Royal Gala and Envy™ were selected as key redevelopment varieties.

The article highlights why marketable yield is central to profitability. Higher saleable production increases revenue and can also reduce the cost per unit because many orchard costs, including pest and disease management and pruning, are spread across more kilograms. At the same time, redevelopment creates capital and cash-flow pressure, making early production from young trees especially important.

OrchardNet data is used to illustrate the large difference in young-block performance. Average accumulated production for Jazz blocks to fourth leaf was around 51 t/ha, while the upper-quartile average exceeded 100 t/ha. This wide spread demonstrates how establishment, canopy development and management can materially affect how quickly redevelopment begins to repay its cost.

Calthorpe’s planting system was designed around uniform, intensively planted canopies that staff could manage using simple instructions. Trees were planted at about 3,300 trees per hectare on a spindle system, while the business was also considering 2D systems. Top Qual grows its own nursery trees, prepares soil before planting and focuses strongly on building canopy quickly after establishment.

The broader lesson is that redevelopment should not be separated from business planning. Variety, orchard system, nursery-tree quality, capital, labour, production targets and market demand all need to work together. Regular monitoring then allows growers to check whether the plan is delivering the intended outcome and adjust before underperformance becomes entrenched.