Rising orchard costs lower margins.
Several new studies that look at the enterprise budgets of standard and high-density sweet cherry orchards and the economics of establishing a high-density sweet cherry orchard in the Pacific Northwest document what most growers know—it costs a lot to put in a new orchard. But seeing the numbers on paper shows just how tight profit margins are these days and underscores the importance of getting things right when planting a new orchard.
Updated orchard economic reports released by Oregon State University during 2012 include Orchard Economics: Establishing and Producing High-Density Sweet Cherries in Wasco County (an update from a 2008 study), and Enterprise Budget Cherries, Sweet, Fresh Market, Standard-Density, North Central Region and Enterprise Budget Cherries, Sweet, Fresh Market High-Density, North Central Region.
The studies are designed to help growers understand the costs and risks involved with planting a high-density orchard and estimate individual per-acre costs of standard and high-density orchards.
The studies were authored by OSU’s Rebecca Sullivan, agricultural economics instructor, student Tyler West, Clark Seavert, ag economist, and Lynn Long, extension horticulturist for Wasco County.
Long has been involved with cherry orchard economic studies for years. What surprised him the most from the recent studies was just how much the cost of production has gone up in the last decade.
“Maybe because I’ve been around for so long, but I can remember when it cost 40 cents a pound to raise cherries,” Long said. “Now it’s almost double that.” Rising costs of labor, fuel, machinery, supplies, and other items have all contributed to increased production costs.
“What it all means is that unless you’re on top of your game, it’s going to be difficult to make money in cherries,” Long said, adding that there’s no room for error. “In order to be successful, growers need to take advantage of every opportunity and use all the tools in their tool box.”Free copies of the OSU reports are at the following sites: Orchard Economics: Establishing and Producing High-Density Sweet Cherries in Wasco County—arec.oregonstate.edu/oaeb/ files/pdf/AEB0032.pdf; Enterprise Budget for Cherries, Sweet, Fresh Market, High-Density, North Central Region—arec.oregonstate.edu/oaeb/ files/pdf/AEB0031.pdf; Enterprise Budget for Cherries, Sweet, Fresh Market, Standard-Density, North Central Region—arec.oregonstate.edu/ oaeb/files/pdf/ AEB0030.pdf