USE PACKOUTS TO EVALUATE ORCHARD PRACTICES
by
R. Thomas Schotzko*
(This article was first published by the Good Fruit Grower magazine, Vol. 55, No.4, February 15, 2004, pp. 12-13. It was reproduced with their permission.)
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By analyzing packout records, growers can evaluate the economic benefits of various orchard practices.
Grower packout records, cull analyses reports, and pool closing forms (account sales reports) continue to be the grower's best friend in terms of quantifying what is seen in the orchard with respect to grade, size, and cullage. Further, the pool closing form is the only hard evidence a grower receives that truly reflects what consumers want and are willing to pay. The f.o.b. price is that evidence, or market signal.
As we all
know, the prices, costs, and the bottom line (for growers and warehouses)
are affected each year by the size and quality of that crop. Because
of year to year variability and the longer term adjustments that are
occurring in the market, looking at the same information, but averaged
over several years, may help growers better evaluate orchard practices.
The Gala and Fuji prices used in the tables are averages by grade and size for the period 1997 to 2001 and are calculated from Washington Growers Clearing House Association data. The increase in Gala production has caused the season average f.o.b., as calculated by the Clearing House, to decline from $22 in 1996 to $17 in 2001. There also appears to have been some change in the range of prices by size that affects the bottom line.
A sample
pool closing form was used to generate each of the numbers in the
tables. Two grades were used for both varieties, Washington Extra
Fancy and Washington Fancy. All of the various Washington Extra
Fancy categories were included in one Extra Fancy grade. The second
grade included Washington Fancy and U.S. Extra Fancy.
The tables below show the receipts per acre for different levels of grade, size, cullage and yield. For the Gala table, the size distributions used a peak size of 125 for the small fruit, peak size 113 for medium fruit and peak size 100 for the large category.
Receipts per acre
These tables show the farm-gate receipts per acre for fruit with alternative characteristics. For example, 30 bins per acre of Gala peaking on size 125 with 70% Washington Extra Fancy and 10% cullage would have brought back to the orchard $2,613 per acre. The corresponding figure for Fuji would be $2,447 (recognizing that this return is based on peak size 113).
The effects of yield are estimated using similar rows at different yield levels. For example, 40 bins per acre of large Gala with 80% Extra Fancy fruit and 10% culls returns about $4,596 per acre. Thirty bins of the same fruit only generate about $3,447 per acre. The difference of $1,149 represents the amount of money that could have been spent, including harvest costs to improve yields by ten bins and be no worse off. If, however, the apples are small, an additional ten bins only increases returns $929 ($3,716 - $2,787).
The impact of culls on per-acre receipts comes from comparing two numbers in the same column. At a yield of 40 bins of large fruit with 80% Extra Fancy and 20% culls, per-acre receipts are $3,985. If the culls are reduced to 10%, the returns increase to $4,596. Dividing the difference of $611 by ten gives the economic threshold for that acre. In other words, as long as the cost to reduce cullage one percentage point is less than $61, it makes economic sense to incur that cost. If the cost is greater than $61, it does not pay to work on that cull factor.
Economic
thresholds vary from one block to another. At 50 bins per acre that
same fruit (large, 80% Extra Fancy with 20% versus 10% culls) has
an economic threshold of$76 ($5,744 - $4,981 = $763 and then dividing
by 10). Conversely, that threshold for small, poorly colored fruit
in low volume (30 bins, 70% Extra Fancy and 20% culls) is only $36.
It just makes good economic sense to put more effort into those
blocks that are yielding the best fruit.
... For complete article download pdf.
*Tom Schotzko is an Extension Economist emeritus at Washington State University
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