How do your returns stack up?
Growers can anonymously share their packout data online.
Orchardists Gery and Sherry Amos of Wapato, Washington, founded PackerData.com to give growers better
You just got your check from your warehouse for the previous year’s crop, and you can’t help wondering what the grower next door received, or whether your deal would have been better if you’d taken your fruit to a different packer.
What to do…? You could take your packout statement down to the coffee shop and pass it around…. But your crop is unique and how much could you really learn by comparing packouts with other growers when packers report prices and costs differently?
Or, you could call another packer, get the field horticulturist to come to your orchard, and do some back-of-the-envelope calculations to figure out if you’d be better off taking your fruit there.
Robert Wilkes, who runs a marketing communications company in Bellevue, Washington, says either of the above ideas are better than nothing, but there’s another way. You go to a Web site and enter your packout data. You can then compare it with data entered by other growers. The site allows you to run “what if” reports showing how much you would have received if you had taken the very same fruit to another packer of your choice within 200 or 300 miles of your orchard.
Wilkes came up with the idea after getting to know pear growers Sherry and Gery Amos of Wapato, Washington.
The Amoses have a 15-acre orchard that Sherry operates while Gery has a full-time job outside the orchard. He has worked for many years in sales and marketing of fresh and processed foods. Wilkes did some marketing work for Gery when he worked at RainSweet in Salem, Oregon, and the two became friends. Then Wilkes began going to their orchard to help out every harvest time.
Then Wilkes began going to their orchard to help out every harvest and learned from them what it was like to be a grower.
The Amoses explained how the grower works all year, pruning, thinning, and spraying. After harvest, the fruit goes off to the warehouse, where it is stored, sorted, graded, and packed. Eventually, the packer or its marketing agent sells the fruit.
The grower then receives a packout statement showing his or her returns. It shows how the packer graded the fruit that was delivered, how it was packed, and how it was sold and for how much. It also lists all the charges. With apples, it might list a charge for the MCP (1-methylcyclopropene) treatment. Sales and marketing fees might be included with other costs or listed separately. The grower receives a check for the receipts minus the costs.
The packer makes money on volume, through the charges, but the grower’s income is very much dependent on the selling price, Wilkes noted. If the prices are good and the grower has an abundant crop, or the fruit hits the market at just the right time, the grower can have a good year. If not, then there might not be much left for the grower.
“His life is more up and down, more of a roller-coaster ride,” Wilkes observed. “There’s more consistency and predictability in the life of the packer than the life of the grower.”
Typically, a grower works with one or two packers and has little information about others. It’s hard to know who will want his business and get him a better deal both in prices and costs, Wilkes said.
Gery said growers are marketers as well, although they might not realize it. After they’ve grown their crops, getting them packed and sold is really a marketing function, but there’s been no way for growers to analyze what’s the best way to market their crop.
To address this, Wilkes and the Amoses went into partnership to develop the packerdata.com Web site, with the help of information management interns from the University of Washington.
Packerdata.com is not just designed for growers looking for a new packer, Gery said. Many growers are happy with their packers, and some are in cooperatives where they have capital invested. However, they could still benefit from being aware of costs and revenues industrywide and seeing how their packer stacks up, he believes.
Packerdata.com is not meant to be confrontational to packers, Wilkes stressed. “We’re creating a service to help the grower have more economic parity to see what’s going on in other packers. This is not meant to embarrass any packer. If the packer’s doing fair business, he’s got nothing to fear.
“The packers are our friends,” he added. “We don’t have a business without packers, and packers don’t have a business without growers. I think the relationship between the packers and the growers is strong and is important.”
After registering on the site, growers can enter packout data into the system’s database by fruit, variety, size, grade, package type, and pool timing, and note whether it is organic or conventional. It is set up to take data on apples, pear, and cherries, and is being programmed for soft fruit. What the system does, that an individual grower would find difficult to accomplish, is convert growers’ data into standard units—whether the packout is reported in wooden bins, plastic bins, or pounds, for example—so meaningful comparisons can be made.
Grower data are kept anonymous. Wilkes said he recognizes that growers who have good relationships with their packers don’t want to do anything to jeopardize that.
The site was launched July 1. Wilkes said he expects growers to begin using the site as their 2010 crop returns come in.
Dan Kelly, assistant manager of the Washington Growers Clearing House Association, said the concept is great, but there would have to be enough large, medium, and small growers reporting on each warehouse for the information to be meaningful. With a small number of growers reporting, the data could be skewed.
Roger Pepperl, marketing director at Stemilt Growers, Inc., Wenatchee, said it’s a good thing for growers to be informed about the financial aspects of their business, as long as fair comparisons are made. Warehouses don’t all pack the same Extra Fancy grades, and some don’t pack a premium grade.
A grower’s packout for a single season is a snapshot of what is happening at that moment, and growers should examine returns over time before thinking of moving to a different packer, Pepperl suggested. “I think there’s some benefits to loyalty and longevity. People who do day trading don’t always make money in the long run.”
For more information on Packerdata.com or a demonstration, go to www.packerdata.com. Wilkes will give a presentation on the program on December 6 during the Washington State Horticultural Association's annual meeting at the Yakima Convention Center.