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Regular reviews of orchard performance are an important aspect of managing a profitable orchard.
Once the crop has been harvested, when yield and packout data come in the necessary data on performance will be at hand to enable the exercise to be done.
The initial review should be a broad-brush approach, working on the 80:20 rule to identify the areas where it will be worthwhile to do more detailed analysis.
This initial analysis should look at crop outturn on a variety by block basis to establish the level at which each part of the orchard is producing. The analysis will be more meaningful if your own data can be benchmarked against an industry database. This will put your orchard performance into perspective with other orchards producing similar varieties. Incidentally, there is a lot of myth surrounding orchard performance. Once you delve into actual orchard performance, you quickly find out that outstanding performance often talked about is the exception rather than the rule.
Once a benchmark has been established, the parts of the operation likely to respond to improvement will become more obvious and can be looked at objectively.
We had an instance last year where a client was ready to pull out a block of apples based on "emotional" feeling about its contribution to the orchard income. Objective analysis quickly showed that the block in question was not only covering all its direct costs and share of overheads, but was also making a small contribution to profit. Further analysis also showed that the block had a biennial cropping pattern, with the year the emotional feeling of non-performance was being based on being an "off" crop year. The alternative full crop year properly managed would do considerably better.
If you look at the 80:20 rule in regard to costs, just two major items make up more than 80% of your cash expenses. These are post harvest costs at over 57%, and wages including picking at 25.5%. Even the spray bill, which gets considerable attention when fruitgrowers look at their costs, only accounts for 6% of the cash expenses.
The major one, post harvest cost is largely beyond your control. Even so, there is one aspect you can influence and that is packing charge. This is determined by the quality of the fruit that you deliver to the packhouse. It is not unusual to see more than 20% spread between highest and lowest packout, which translated into dollar terms represents around 77 cents per carton which is within 15 cents of the spray bill.
Now, fruit quality is determined by the standard of crop husbandry throughout the growing season, and how well the picking is managed.
Analysis of packouts, and in particular reject analysis reports will identify the main defects that lowered packout. To put these in perspective, it is best to express the defects as percentage of total crop rather than just at their levels as reported in the reject analysis.
Labour is the other area on the cost side worth looking at in detail. Here, harvesting is the big one accounting for almost 60% of labour cost. Here too, lifting fruit quality is going to reduce cost per export carton. The same shift in percentage packout mentioned above will reduce harvest cost per export carton by around 54 cents.
In the operations of harvesting and packing, a lift in export packout potential of 20% has the effect of lowering labour and packing costs by around $1.30 per export carton. On a 20,000-carton export crop, an overall improvement in packout of 20% would add some $26,000 to the margin between costs and returns. This is before any value is allocated to the additional fruit being packed out.
Relative to the benefits that can be gained from improving fruit value, these cost savings are small beer.
Yield and quality are the real things to focus on. At, say, an average of $10 fruit value per export carton at the orchard gate, lifting yield by 10% on a 20,000-carton crop is going to bring in an extra $20,000. The same result can be achieved by holding yield but lifting packout, or fruit value by 10%.
Careful orchard husbandry throughout the year commencing with pruning is the key to obtaining the productivity and quality gains which exist on most orchards.
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