The Dollars and Cents Questions!

Consider the financial, equipment, and management requirements before you take the plunge!

If you are already farming and the new orchard is an expansion of your existing operation, then making the decision to expand into fruit production may be a fairly straight forward decision.  Basic business issues can be broken down into three main categories:

  • Do I have the necessary financial and capital resource for the long term? Planting orchards is a long term investment, none of which will really start being paid back until you start picking your first crops. Even then, it will be several crop-years down the road before your initial tree and establishment costs are re-couped. There are no hard and fast figures, but some of the state extension services have spreadsheets which may help you plan.
  • As a general rule of thumb:
  • The dwarfer the trees, the sooner they come into production (usually 2-4 years for full dwarf apples and cherries) and the more trees you have to plant per acre (usually from 600 to 1200 in many systems). These systems require trellising or other support systems,
  • Semi-dwarf apples and most pears, peaches, plums, apricots, nectarines and prunes can be planted in moderate distances and in the range of 150-400 trees per acre, with a mean probably being in the 200-250 trees per acre range. Peach, nectarine, plum, prune, and apricot production can start as early as the third year, but 3-4 years is more normal. Apples and pears may take a year longer averaging 3-5 years. Most systems of this type require little if any support.
  • Semi-standard apples and cherries on standard roots will probably be planted in the 125-175 trees per acre range. Look for production starting in the 4-5 year age range. These low density system almost never require any support.
  • A good round, ballpark number to use as a price per tree is the $10-$12 range, depending on the type and grade of the tree and whether or not there are any royalties.
  • Trellising and support systems can add somewhere in the range of 30-50% of the cost of the trees.
  • Figure on investing up to a buck or two per tree each year for care, maintenance, and training. Higher density systems will probably require less than lower density systems, since they are a little more efficient to work with in many ways.
  • After you have run some of these numbers through your head, try running them past your spouse or partner too! Often times they have a little different set of priorities. Now ask yourself the question: "Do I have the necessary resources to do this? Intestinal fortitude, spousal support, and the bucks? Can I foresee a return on my investment, whether it be in direct profits from the fruit or indirect from diversifying your operation and making it less reliant on my current main crops?"
  • Very few farmers are realistically going to be able to internally cash-flow the investment required, without having some possible adverse affect on their other operations. Maintain good communication with your banker, because you may need him. When I was a Bank Director, I learned that most bankers don't care IF the loans are ever paid back, but they sure do want to FEEL that the loan is safe and CAN be paid back over time. They don't make any profit on money sitting in savings accounts! They make it by loaning it to farmers and other people who they feel are smart operators and that they trust. Hopefully that means you!
  • Equipment Questions:
  • Can I use any of my existing equipment? It is much easier on the pocketbook if you can use much of the equipment you already own. Since efficient orchards tend to be compact, smaller equipment is the best. If you can get your tractors and other equipment down a 6-8 foot clearance, then you should be able to use it in the orchard. A little rule of thumb for spacing rows of trees is to allow 6-8 feet for tractor clearance. This usually works out to adding 6-8 feet to the in-row spacing, to get the between row spacing.
  • What other essential equipment do I need and what is the cost or availability? The very basic equipment needed for a small orchard is:
  • A smaller tractor (30-60 hp is usually enough)
  • An air-blast sprayer for fungicide, insecticide, and plant growth regulator applications. Even organic growers will usually need sprayers, as they will still usually need to control insects and diseases with organically approved materials. If you are beginning, looking for used equipment can help as buying new can run into real bucks!
  • Usually a mower of some kind. 3pt hitch mowers from 6-10 feet wide would be sufficient. Pull behinds are good too. Don't get one too wide so that you have a possibility of hitting trees. The most efficient would be one which can mow the entire aisle, plus under the trees to the weed spray strip. Second best is one about half as wide, so that you make two passes, up and down, the row.
  • Some means to get the fruit out of the orchard--- trailers, boxes, etc.
  • Maybe a weed sprayer that can lay down a strip of herbicide under the trees. Usually any ordinary hydraulic sprayer with fan-type nozzles can be retro-fitted to work in an orchard as long as it is not too wide.
  • Almost every other kind of equipment that is commonly used in orchards is "optional". Buy it as you can afford it. This would include tree planters, augers, power pruning systems, "Brownie's" or pruning lifts, brush sweepers, hedgers, etc. Check to see if you can borrow it from someone, and put off buying until it becomes a real necessity.
  • Government Regulations and Compliance Questions: If you already are in any kind of business, then you know the frustrations of dealing with local, state and federal governments. Check with your local extension service for further information on some of the laws are regulations that may apply to your fruit growing enterprise. Some things that might impact your plan would be:
  • Pesticide Application Certification (needed to apply restricted pesticides. Lots of the best pesticides are restricted in the orchard.
  • Organic Certification procedures if you are thinking of going that direction.
  • Sales Tax Licensing--- depending on how you market and the laws of your State.
  • Registration for Employment Taxes if you hire anyone.
  • Child Labor Laws
  • Food Service type licenses if you have Roadside Markets dealing with any kind of prepared foods.