Fresh market high density pear

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Pre-plant year

Estimated cost of establishment — no yield

Variable costs
Variable costs	Cost per acre ($)
Labour: machine operator, 4.2 hrs	102
Custom ploughing	38
Fertilizer 15-15-15, 50 kg	51
Cover crop seed	14
Machine repair, maintenance	39
Fuel	98
Interest on operating capital	171
Consulting fees	100
Tile drainage	3,996
Land leveling	No value
Miscellaneous (soil test)	8
Land rental	No value
Total variable costs	4,617

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	66
Machine: interest on investment	30
Other overhead	708
Land ownership	No value
Measurable fixed costs	804

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	5,421

Operation costs

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Subsoiling (1x)	0.7	17	22	14	52
Discing (2x)	1.4	34	49	44	126
Cultivating (1x)	0.7	17	22	14	53
Fertilizing (1x)	0.7	17	22	17	56
Seeding cover crop (1x)	0.7	17	23	19	59
Total machine operator	4.2	102	137	108	346

Planting year

Estimated cost of establishment — no yield

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 83.5 hrs	1,691
Labour: machine operator, 13.6 hrs	329
Trees (908 trees per acre)	10,896
Custom Planting	908
Fertilizer 15-15-15, 50 kg	51
Insecticides	158
Fungicides	99
Herbicides	146
Permanent cover crop	24
Machine repair, maintenance	154
Fuel	334
Interest on operating capital	2,261
Consulting fees	100
Irrigation (initial setup)	1,515
Miscellaneous (leaf analysis, tree paint)	70
Land rental	No value
Trellis material and installation	8,272
Total variable costs	27,007

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	222
Machine: interest on investment	99
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	1,737

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	28,744

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	3	51	No value	No value	51
Weed control	2	41	No value	No value	41
Tree painting	27	547	No value	No value	547
Tree training	52	1,053	No value	No value	1,053
Total hand labour	83.5	1,691	No value	No value	1,691

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pick up trees	1.0	24	30	15	70
Discing (2x)	1.4	34	49	44	126
Cultivating (3x)	2.1	51	65	43	158
Fertilizing (1x)	0.7	17	22	17	56
Seeding cover crop (1x)	0.5	12	16	14	42
Mowing (3x)	2.1	51	78	59	187
Weed spraying (2x)	1.4	34	71	43	148
Pesticide spraying (6x)	2.4	58	98	89	245
Orchard maintenance	2.0	48	65	36	149
Total machine operator	13.6	329	494	359	1,182

Second year

Estimated cost of establishment — 1 ton yield (2.5%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 441 hrs	8,936
Labour: machine operator, 15.9 hrs	385
Trees (2% replacement)	303
Fertilizer 27-0-0, 30 kg	37
Fertilizer 0-0-60, 30 kg	30
Insecticides	158
Fungicides	99
Herbicides	146
Machine repair, maintenance	174
Fuel	398
Interest on operating capital	3,321
Production insurance	53
Consulting fees	100
Irrigation	345
Packing	260
Bins	53
Miscellaneous (leaf analysis)	5
Food safety	26
Land rental	No value
Total variable costs	14,830

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	241
Machine: interest on investment	111
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	1,768

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	16,598

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (1 ton x $1821 per ton)	1,821
Total variable costs	14,830
Contribution margin	(13,009)

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	8	162	No value	No value	162
Tree training	430	8,708	No value	No value	8,708
Harvest (picking)	3	67	No value	No value	67
Total hand labour	441	8,936	No value	No value	8,936

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Re-planting trees	2.0	48	66	37	151
Cultivating (2x)	1.4	34	43	28	106
Fertilizing (2x)	1.4	34	43	34	111
Seeding permanent cover (1x)	0.5	12	16	14	42
Mowing (4x)	2.8	68	104	78	250
Weed spraying (2x)	1.4	34	65	43	142
Pesticide spraying (6x)	2.4	58	92	89	239
Distribute & collect containers	1.0	24	29	14	67
Delivery	1.0	24	49	22	95
Orchard maintenance	2.0	48	65	36	149
Total machine operator	15.9	385	572	395	1,352

Third year

Estimated cost of establishment — 5.5 ton yield (22%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 83 hrs	1,744
Labour: machine operator, 16.4 hrs	397
Trees (1% replacement)	151
Fertilizer 27-0-0, 40 kg	49
Fertilizer 0-0-60, 40 kg	40
Insecticides	253
Fungicides	158
Herbicides	146
Machine repair, maintenance	179
Fuel	421
Interest on operating capital	2,925
Production insurance	470
Consulting fees	100
Irrigation	345
Packing	1,430
Bins	251
Miscellaneous (leaf analysis, 2 hives)	205
Food safety	26
Land rental	No value
Total variable costs	9,289

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	237
Machine: interest on investment	110
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,094

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	11,383

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (5.5 ton x $1821 per ton)	10,016
Total variable costs	9,289
Contribution margin	726

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	12	243	No value	No value	243
Tree training	30	608	No value	No value	608
Thinning	10	203	No value	No value	203
Harvest (picking)	31	691	No value	No value	691
Total hand labour	83	1,744	No value	No value	1,744

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Re-planting trees	1.0	24	33	18	75
Fertilizing (2x)	1.4	34	43	34	111
Mowing (4x)	2.8	68	104	78	250
Weed spraying (2x)	1.4	34	65	43	142
Pesticide spraying (6x)	2.4	58	92	89	239
Distribute & collect containers	3.4	82	100	47	229
Delivery	2.0	48	97	44	189
Orchard maintenance	2.0	48	65	36	149
Total machine operator	16.4	397	599	389	1,386

Fourth year

Estimated cost of establishment — 9 ton yield (36%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 204.5 hrs	4,246
Labour: machine operator, 20.9 hrs	506
Trees (1% replacement)	151
Fertilizer 27-0-0, 50 kg	62
Fertilizer 0-0-60, 50 kg	50
Insecticides	533
Fungicides	339
Chemical thinning	254
Herbicides	146
Machine repair, maintenance	221
Fuel	520
Interest on operating capital	4,013
Production insurance	769
Consulting fees	100
Irrigation	345
Packing	2,340
Bins	396
Miscellaneous (leaf analysis, 2 hives)	205
Food safety	26
Land rental	No value
Total variable costs	15,222

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	292
Machine: interest on investment	137
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,176

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	17,398

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (9 ton x $1821 per ton)	16,389
Total variable costs	15,222
Contribution margin	1,167

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	16	314	No value	No value	314
Tree training	122	2,471	No value	No value	2,471
Thinning	16	324	No value	No value	324
Harvest (picking)	51	1,137	No value	No value	1,137
Total hand labour	204.5	4,246	No value	No value	4,246

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Fertilizing (2x)	1.4	34	43	34	111
Mowing (4x)	2.8	68	104	78	250
Weed spraying (3x)	2.1	51	65	43	159
Pesticide spraying (10x)	4.0	97	153	148	398
Distribute & collect containers	5.6	136	165	77	377
Delivery	3.0	73	146	66	284
Orchard maintenance	2.0	48	65	36	149
Total machine operator	20.9	506	741	483	1,729

Fifth year

Estimated cost of establishment — 14.25 ton yield (57%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 475 hrs	9,779
Labour: machine operator, 26.8 hrs	649
Fertilizer 27-0-0, 75 kg	92
Fertilizer 0-0-60, 60 kg	60
Insecticides	533
Fungicides	339
Chemical thinning	254
Herbicides	146
Machine repair, maintenance	279
Fuel	679
Interest on operating capital	5,789
Production insurance	1,218
Consulting fees	100
Irrigation	345
Packing	3,705
Bins	634
Miscellaneous (leaf analysis, 2 hives)	205
Food safety	26
Land rental	No value
Total variable costs	24,831

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	356
Machine: interest on investment	168
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,271

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	27,102

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (14.25 ton x $1821 per ton)	25,949
Total variable costs	24,831
Contribution margin	1,118

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	16	324	No value	No value	324
Tree training	358	7,250	No value	No value	7,250
Thinning	22	446	No value	No value	446
Harvest (picking)	78	1,739	No value	No value	1,739
Raking brush	1	20	No value	No value	20
Total hand labour	475	9,779	No value	No value	9,779

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Fertilizing (2x)	1.4	34	43	34	111
Mowing (5x)	3.5	85	30	98	312
Weed spraying (3x)	2.1	51	65	43	159
Pesticide spraying (10x)	4.0	97	53	148	398
Distribute & collect containers	8.8	213	259	121	593
Delivery	5.0	121	243	109	473
Orchard maintenance	2.0	48	65	36	149
Total machine operator	26.8	649	958	590	2,197

Sixth year

Estimated cost of establishment — 18.75 ton yield (75%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 255 hrs	5,445
Labour: machine operator, 32.3 hrs	782
Fertilizer 27-0-0, 85 kg	105
Fertilizer 0-0-60, 70 kg	71
Insecticides	533
Fungicides	339
Chemical thinning	254
Herbicides	146
Machine repair, maintenance	348
Fuel	819
Interest on operating capital	5,532
Production insurance	1,603
Consulting fees	100
Irrigation	345
Packing	4,875
Bins	832
Miscellaneous (leaf analysis, 2 hives)	205
Food safety	26
Land rental	No value
Total variable costs	22,359

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	434
Machine: interest on investment	203
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,384

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	24,743

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (18.75 ton x $1821 per ton)	34,144
Total variable costs	22,359
Contribution margin	11,785

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	22	446	No value	No value	446
Tree training	53	1,073	No value	No value	1,073
Thinning	41	830	No value	No value	830
Harvest (picking)	137	3,055	No value	No value	3,055
Raking brush	2	41	No value	No value	41
Total hand labour	255	5,445	No value	No value	5,445

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Summer hedging	1.0	24	52	46	122
Fertilizing (2x)	1.4	34	43	34	111
Mowing/brush chopping (6x)	4.2	102	156	118	375
Weed spraying (3x)	2.1	51	65	43	159
Pesticide spraying (10x)	4.0	97	153	148	398
Distribute & collect containers	11.6	281	341	160	782
Delivery	6.0	145	292	131	568
Orchard maintenance	2.0	48	65	36	149
Total machine operator	32.3	782	1,167	716	2,665

Seventh year

Estimated cost of establishment — 23.125 ton yield (93%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 203 hrs	4,392
Labour: machine operator, 37 hrs	895
Fertilizer 27-0-0, 100 kg	123
Fertilizer 0-0-60, 80 kg	81
Insecticides	533
Fungicides	339
Chemical thinning	254
Herbicides	146
Machine repair, maintenance	394
Fuel	950
Interest on operating capital	4,700
Production insurance	1,988
Consulting fees	100
Irrigation	345
Packing	6,013
Bins	1,030
Miscellaneous (leaf analysis, 2 hives)	205
Food safety	26
Land rental	No value
Total variable costs	22,513

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	482
Machine: interest on investment	226
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,455

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	24,968

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (23.125 ton x $1821 per ton)	42,111
Total variable costs	22,513
Contribution margin	19,598

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	22	446	No value	No value	446
Tree training	0	0	No value	No value	0
Thinning	41	830	No value	No value	830
Harvest (picking)	137	3,055	No value	No value	3,055
Raking brush	3	61	No value	No value	61
Total hand labour	203	4,392	No value	No value	4,392

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Summer hedging	1.0	24	52	46	122
Fertilizing (2x)	1.4	34	43	34	111
Mowing/brush chopping (6x)	4.2	102	156	118	375
Weed spraying (3x)	2.1	51	65	43	159
Pesticide spraying (10x)	4.0	97	153	148	398
Distribute & collect containers	14.3	346	421	197	964
Delivery	8.0	194	389	175	758
Orchard maintenance	2.0	48	65	36	149
Total machine operator	37.0	895	1,344	797	3,036

Total establishment cost

Total establishment cost	Cost per acre ($)
Pre-plant	5,421
Planting	28,744
Year 2	16,109
Year 3	8,843
Year 4	13,259
Year 5	20,591
Year 6	15,462
Year 7	14,179
Total establishment cost	122,609

Excludes harvest costs and does not include revenues for years 2 to 7.

Does not include land costs.

Annual cost to recover establishment costs

Annual cost to recover establishment costs	Cost per acre ($)
Annual cost to recover establishment costs	1,538

(Amortized over remaining 40 years of orchard life)

Mature orchard

Annual estimated cost of production — 25 ton yield (100%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 203 hrs	4,392
Labour: machine operator, 38.2 hrs	924
Fertilizer 27-0-0, 115 kg	141
Fertilizer 0-0-60, 90 kg	91
Insecticides	533
Fungicides	339
Chemical thinning	254
Herbicides	146
Machine repair, maintenance	401
Fuel	978
Interest on operating capital	1,434
Production insurance	2,137
Consulting fees	100
Irrigation	345
Packing	6,500
Bins	1,109
Miscellaneous (leaf analysis, 2 hives)	205
Food safety	26
Land rental	No value
Total variable costs	20,055

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	492
Machine: interest on investment	231
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,470

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	22,525

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (25 ton x $1821 per ton)	45,525
Total variable costs	20,055
Contribution margin	25,470

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	22	446	No value	No value	446
Tree training	0	0	No value	No value	0
Thinning	41	830	No value	No value	830
Harvest (picking)	137	3,055	No value	No value	3,055
Raking brush	3	61	No value	No value	61
Total hand labour	203	4,392	No value	No value	4,392

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Summer hedging	1.0	24	52	46	122
Fertilizing (2x)	1.4	34	43	34	111
Mowing/brush chopping (6x)	4.2	102	156	118	375
Weed spraying (3x)	2.1	51	65	43	159
Pesticide spraying (10x)	4.0	97	153	148	398
Distribute & collect containers	15.5	375	456	214	1,045
Delivery	8.0	194	389	175	758
Orchard maintenance	2.0	48	65	36	149
Total machine operator	38.2	924	1,379	814	3,117

Breakeven and profitability worksheet

Fresh market high density pear — 25.0 ton/acre yield
Year	Yield (%)	Revenue	Variable costs	Fixed costs	Total costs	Net cash flow	Accumulated profit/acre
Pre-plant	0%	0	4,617	804	5,421	(5,421)	(5,421)
Planting	0%	0	27,007	1,737	28,744	(28,744)	(34,165)
2	3%	1,821	14,830	1,768	16,598	(14,777)	(48,942)
3	22%	10,016	10,291	2,094	12,385	(2,369)	(51,311)
4	36%	16,389	15,529	2,176	17,706	(1,317)	(52,628)
5	57%	25,949	23,900	2,271	26,172	(222)	(52,850)
6	75%	34,144	21,357	2,384	23,740	10,403	(42,447)
7	93%	42,111	21,433	2,455	23,888	18,222	(24,225)
8	100%	45,525	20,712	2,470	23,182	22,343	(1,882)
9	100%	45,525	18,801	2,470	21,271	24,254	22,372
10	100%	45,525	16,744	2,470	19,214	26,311	48,684
11	100%	45,525	14,528	2,470	16,997	28,528	77,211
12	100%	45,525	12,141	2,470	14,611	30,914	108,126

Breakeven in year 9 (Does not include land costs)

Footnotes

footnote[1] Back to paragraph Includes maintenance, fuel and repair.

Updated: May 24, 2024

Published: May 23, 2024