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The Washington fruit growing journal "Goodfruit Grower" is at present running a series of articles covering strategies for surviving the present depressed state of the apple industry.
Below are some production and establishment costs mentioned for their industry. These have been converted to New Zealand dollars using $NZ1.00 = $US0.45 as the exchange rate.
Establishing a new orchard year one costs $64,000 per hectare. The comparable cost in New Zealand is $40,000 per hectare.
For a new orchard to be worth planting and give a positive return on capital, the US fruitgrower requires an on-orchard return of 83 cents NZ per kilogram. Here in New Zealand, our data shows that an on-orchard return of 40 cents NZ per kilogram will give a comparable level of return.
At present in Washington, their main variety, Red Delicious, is only returning 42 cents NZ/kg to the orchard, with apples in general only returning 62 cents NZ/kg tto the orchard.
In Washington only Fuji, Braeburn and Cameo returned on orchard prices which were sufficient to justify new planting investment.
New Zealand's on-orchard development costs are lower because of our lower cost structure and, more particularly, higher yield from our orchards. High early yields are a very significant factor in the reduction of orchard establishment costs, because they provide early cash flow against which to offset running costs.
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