Orchard structure will be a critical factor in the success of the tree fruit industry of the future because orchards will need to be compatible with emerging technologies, says Oregon State University agricultural economist Clark Seavert.
For this reason, orchard renewal should be a key part of a grower’s business model, Seavert told growers at the International Fruit Tree Association’s annual conference in Pasco, Washington. However, in an instant poll, a third of the respondents said they had no orchard renewal plan.
Seavert conducted the survey during a workshop on economics, horticulture, and technology held in conjunction with the IFTA conference. Most of the 83 who took the survey were growers or grower-packers.
In the survey, 71 percent of growers said they did not use platforms. The greatest barrier to adopting platforms was reported to be orchard architecture, followed by the cost of the platform. Respondents said the main reasons they would want to use orchard platforms or other orchard-assist equipment were to improve productivity, remove ladders from the orchard, and expand the labor pool.
Seavert commented that if a platform can create efficiencies, the cost might be justified, but it has to fit the orchard system for it to work and pay off. Growers who are getting ready for technology will be more competitive.
“Orchard renewal is going to be key to our business model, and getting our systems ready for those new technologies. I think the orchard architecture is going to be very, very important to the success of the industry.”
Seavert asked what growers felt were the key drivers for orchard renewal and expansion or adoption of technology. Seventy-one percent said improved profitability was the number-one factor.
The main reason given for renewing orchard was to plant new varieties (35%) followed by declining fruit quality (23%), new technology (17%) and declining yields (16%).
For their next planting, most growers planned to focus on training as the area where they would cut costs the most, with a smaller number looking for cheaper trees. The majority of growers (57%) planned to finance orchard renewal out of current cash flow.
Seavert said there are three components of successful orchard renewal:
- price of the commodity (which is affected by grade and size)
- yield (when the trees come into production and how much they produce)
- establishment costs
“People all the time are talking about how it costs too much to plant a particular system, when, in fact, you should put the emphasis into price and yield and focus on making money, not cutting costs,” he said.
Profitability is affected by a combination of price, yield, and costs, always in that order, he stressed, and he used figures from a recent Washington State University study of the costs of establishing and producing Gala apples in Washington to illustrate that.
The study assumed that trees were planted on a four- by ten-foot spacing on a five-wire vertical trellis system. Yields began in year four with 35 bins per acre, rising to full production of 50 bins per acre in year five. The return was assumed to be $250 per bin.
Seavert calculated that a 20 percent increase in price would increase net returns over the first ten years by $29,074 per acre; a 20 percent increase in yield would boost returns by $10,675 per acre; and a 20 percent reduction in costs (no fumigation, fewer trees, cheaper trellis and irrigation systems, and reduced pruning and training costs) would result in a gain of only $6,345 per acre over the ten-year period.
The Gala study can be downloaded free from https:// pubs.wsu.edu/ItemDetail.aspx?ProductID=15371.