Fresh peach

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Pre-plant year

Estimated cost of establishment — no yield

Variable costs
Variable costs	Cost per acre ($)
Labour: machine operator, 4 hrs	97
Custom ploughing	38
Fertilizer 15-15-15, 50 kg	51
Cover crop seed	14
Machine repair, maintenance	37
Fuel	93
Consulting fees	100
Tile drainage	2,682
Land leveling	No value
Miscellaneous (soil test)	8
Interest on operating capital	120
Land rental	No value
Total variable costs	3,240

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	63
Machine: interest on investment	28
Other overhead	708
Land ownership	No value
Measurable fixed costs	799

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	4,039

Operation costs

Operation 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)	0.5	12	16	14	42
Total machine operator	4.0	97	130	102	329

Planting year

Estimated cost of establishment — no yield

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 16 hrs	324
Labour: machine operator, 13.6 hrs	329
Trees (242 trees per acre)	3,509
Custom planting	484
Fertilizer 15-15-15, 50 kg	51
Insecticides	70
Fungicides	5
Herbicides	146
Cover crop seed	14
Machine repair, maintenance	153
Fuel	340
Interest on operating capital	708
Consulting fees	100
Irrigation	367
Miscellaneous (tree paint)	65
Land rental	No value
Total variable costs	6,666

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	219
Machine: interest on investment	98
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	1,733

Total measurable costs
Variable costs	Cost per acre ($)
Total measurable costs	8,399

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	7	142	No value	No value	142
Weed control — hoeing	3	61	No value	No value	61
Painting trees	6	122	No value	No value	122
Total hand labour	16	324	No value	No value	324

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pick up trees	0.5	12	15	8	35
Discing (2x)	2.0	48	70	62	180
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	73	43	150
Pesticide spraying (4x)	1.6	39	69	59	167
Subsoiling/aerating (1x)	0.7	17	22	14	52
Orchard maintenance	2.0	48	65	36	149
Total machine operator	13.6	329	494	354	1,177

Second year

Estimated cost of establishment — no yield

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 10 hrs	203
Labour: machine operator, 13.9 hrs	336
Trees (1% replacement)	82
Fertilizer 27-0-0, 50 kg	62
Fertilizer 0-0-60, 40 kg	40
Insecticides	106
Fungicides	23
Herbicides	146
Cover crop seed	14
Machine repair, maintenance	158
Fuel	351
Interest on operating capital	916
Consulting fees	100
Irrigation	367
Miscellaneous (leaf analysis)	5
Land rental	No value
Total variable costs	2,910

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	222
Machine: interest on investment	101
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	1,739

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	4,649

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	10	203	No value	No value	203
Total hand labour	10	203	No value	No value	203

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
Discing (1x)	0.7	17	24	22	63
Cultivating (3x)	1.4	34	43	28	106
Fertilizing (2x)	1.4	34	43	34	111
Seeding cover crop (1x)	0.5	12	16	14	42
Mowing (4x)	2.8	68	104	78	250
Weed spraying (2x)	1.4	34	73	43	150
Pesticide spraying (5x)	2.0	48	86	74	209
Subsoiling/aerating (1x)	0.7	17	22	14	52
Orchard maintenance	2.0	48	65	36	149
Total machine operator	13.9	336	510	362	1,208

Third year

Estimated cost of establishment — 3.3 ton yield (33%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 59.5 hrs	1,261
Labour: machine operator, 23.45 hrs	567
Fertilizer 27-0-0, 75 kg	92
Fertilizer 0-0-60, 60 kg	60
Insecticides	284
Fungicides	194
Herbicides	146
Cover crop seed	14
Machine repair, maintenance	242
Fuel	559
Interest on operating capital	1,402
Production insurance	258
Consulting fees	100
Irrigation	367
Packing	1,056
Bins	185
Miscellaneous (leaf analysis)	5
Food safety	26
Land rental	No value
Total variable costs	6,819

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	328
Machine: interest on investment	150
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,225

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	9,044

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (3.3 ton x $2033 per ton)	6,709
Total variable costs	6,819
Contribution margin	-110

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	15	304	No value	No value	304
Thinning	17	344	No value	No value	344
Harvest (picking)	28	613	No value	No value	613
Total hand labour	60	1,261	No value	No value	1,261

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
Discing (1x)	0.5	12	17	16	45
Cultivating (3x)	2.1	51	65	43	158
Fertilizing (2x)	1.4	34	43	34	111
Seeding cover crop (1x)	0.7	17	23	19	59
Mowing (6x)	4.2	102	156	118	375
Weed spraying (2x)	1.4	34	73	43	150
Pesticide spraying (8x)	3.2	77	138	119	334
Distribute & collect containers	5.0	121	118	55	294
Delivery	1.3	30	49	22	101
Subsoiling/aerating (1x)	0.7	17	22	14	52
Orchard maintenance	2.0	48	65	36	149
Total machine operator	23.5	567	801	536	1,904

Fourth year

Estimated cost of establishment — 6.6 ton yield (66%)

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 119 hrs	2,523
Labour: machine operator, 29.65 hrs	718
Fertilizer 27-0-0, 100 kg	123
Fertilizer 0-0-60, 80 kg	81
Insecticides	284
Fungicides	194
Herbicides	146
Cover crop seed	14
Machine repair, maintenance	278
Fuel	672
Interest on operating capital	1,649
Production insurance	516
Consulting fees	100
Irrigation	367
Packing	2,112
Bins	356
Miscellaneous (leaf analysis)	5
Food safety	26
Land rental	No value
Total variable costs	10,163

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	370
Machine: interest on investment	170
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,287

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	12,450

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (6.6 ton x $2033 per ton)	13,418
Total variable costs	10,163
Contribution margin	3,255

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	30	608	No value	No value	608
Thinning	34	689	No value	No value	689
Harvest (picking)	55	1,227	No value	No value	1,227
Total hand labour	119	2,523	No value	No value	2,523

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
Discing (1x)	0.7	17	24	22	63
Cultivating (3x)	2.1	51	65	43	158
Fertilizing (2x)	1.4	34	43	34	111
Seeding cover crop (1x)	0.5	12	16	14	42
Mowing (6x)	4.2	102	156	118	375
Weed spraying (3x)	2.1	51	73	43	167
Pesticide spraying (8x)	3.2	77	138	119	334
Distribute & collect containers	9.3	224	218	102	544
Delivery	2.5	61	97	44	201
Subsoiling/aerating (1x)	0.7	17	22	14	52
Orchard maintenance	2.0	48	65	36	149
Total machine operator	29.7	718	950	605	2,273

Total establishment cost

Total establishment cost	Cost per acre ($)
Pre-plant	4,039
Planting	8,399
Second year	4,649
Third year	6,980
Fourth year	8,366
Total	32,434

Excludes harvest costs and does not include revenues for years 3 and 4.

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	1,702

(Amortized over remaining 15 years of orchard life)

Mature year

Annual estimated cost of production — 10 ton yield

Variable costs
Variable costs	Cost per acre ($)
Labour: hand, 183 hrs	3,819
Labour: machine operator, 34.7 hrs	840
Fertilizer 27-0-0, 125 kg	154
Muriate of potash, 100 kg	101
Insecticides	284
Fungicides	194
Herbicides	146
Cover crop seed	14
Machine repair, maintenance	314
Fuel	779
Interest on operating capital	895
Production insurance	782
Consulting fees	100
Irrigation	367
Packing	3,200
Bins	528
Miscellaneous (leaf analysis)	5
Food safety	26
Land rental	No value
Total variable costs	12,548

Fixed costs
Fixed costs	Cost per acre ($)
Machine: depreciation	414
Machine: interest on investment	190
Cold storage	331
Other overhead	1,416
Land ownership	No value
Measurable fixed costs	2,352

Total measurable costs
Total measurable costs	Cost per acre ($)
Total measurable costs	14,900

Contribution margin (no land costs included)
Contribution margin (no land costs included)	Cost per acre ($)
Gross revenue (10 ton x $2033 per ton)	20,330
Total variable costs	12,548
Contribution margin	7,782

Operation costs

Hand labour
Hand labour	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Pruning	45	911	No value	No value	911
Thinning	50	1,013	No value	No value	1,013
Harvest (picking)	85	1,896	No value	No value	1,896
Raking brush	3	61	No value	No value	61
Total hand labour	183	3,819	No value	No value	3,819

Machine labour and machine costs
Machine labour and machine costs	Labour (hours)	Labour ($)	Machine^{footnote 1[1]} ($)	Fixed ($)	Total ($)
Brush chopping	1.5	36	51	34	121
Discing (1x)	0.7	17	24	22	63
Cultivating (3x)	2.1	51	65	43	158
Fertilizing (2x)	1.4	34	43	34	111
Seeding cover crop (1x)	0.5	12	16	14	42
Mowing (6x)	4.2	102	156	118	375
Weed spraying (3x)	2.1	51	73	43	167
Pesticide spraying (8x)	3.2	77	138	119	334
Distribute & collect containers	12.5	303	294	138	734
Delivery	3.8	92	146	66	303
Subsoiling/aerating (1x)	0.7	17	22	14	52
Orchard maintenance	2.0	48	65	36	149
Total machine operator	34.7	840	1093	678	2,611

Breakeven and profitability worksheet

Fresh market peach — 10.0 ton/acre yield
Year	Yield (%)	Revenue	Variable costs	Fixed costs	Total costs	Net cash flow	Accumulated profit/acre
Pre-plant	0%	0	3,240	799	4,039	-4,039	-4,039
Planting	0%	0	6,666	1,733	8,399	-8,399	-12,438
2	0%	0	2,910	1,739	4,649	-4,649	-17,087
3	33%	6,709	6,821	2,225	9,046	-2,337	-19,424
4	66%	13,418	10,165	2,287	12,452	966	-18,459
5	100%	20,330	13,296	2,352	15,647	4,683	-13,776
6	100%	20,330	12,754	2,352	15,105	5,225	-8,551
7	100%	20,330	12,171	2,352	14,522	5,808	-2,743
8	100%	20,330	11,542	2,352	13,894	6,436	3,693
9	100%	20,330	10,866	2,352	13,217	7,113	10,806
10	100%	20,330	10,137	2,352	12,488	7,842	18,647
11	100%	20,330	9,352	2,352	11,704	8,626	27,274
12	100%	20,330	8,507	2,352	10,858	9,472	36,746

Breakeven in year 8 (does not include land costs)

Footnotes

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

Updated: May 24, 2024

Published: May 23, 2024