Apple Growing Part 8

Plowing $2.00 $3.00 Manure, 10 to 20 loads at $1, or their equivalent in commercial fertilizer 10.00 20.00 Hauling manure 5.00 10.00 Pruning and hauling brush 5.00 10.00 Disking or harrowing twice 1.00 1.50 Disking or harrowing 3d or 4th time .50 1.00 Cultivating two to four times .50 1.00 Spraying once with L.S. dilution 1 to 9--material 2.00 4.00 Spraying once, L.S., labor 1.00 1.50 Spraying second time with L.S. dilution 1 to 40, labor and material 1.50 2.50 Spraying third time with same 1.50 2.50 ------ ------ Total cost $30.00 $57.00

CHAPTER XII

THE COST OF GROWING APPLES

Two factors have always operated to deter many persons from taking up fruit growing as a business or even as a side issue on the farm, and they will probably continue to be an obstacle for more time to come.

These are the comparatively large investment required and the necessarily long period of waiting before paying returns can be obtained. Farmers who have not gone into the business of fruit growing because they could not afford this heavy investment or to wait so long for returns have been wise. Others who, though lacking the necessary capital, still have planted heavily have learned to their sorrow the importance of capital in the business both for the original investment and to carry the enterprise. And yet with sufficient capital and the proper conditions there is no more attractive or profitable line of agriculture than fruit growing.

Who knows what it costs to grow an orchard to bearing age? Or what it costs to produce a barrel of apples? We venture to say that very few persons do. Because of the large investment both in fixed and in working capital it is most important to know these costs. Moreover an accurate knowledge of the financial conditions and facts in any business is of first importance to intelligent management. For these reasons every grower ought to keep careful records of the cost and income from each field or orchard every year in order to determine as accurately as possible what his crops have cost him per unit and per acre and what rate of interest he has realized on his investment. As farming becomes more intensive compet.i.tion increases, costs multiply, and the margin of profit on any given unit becomes smaller. It therefore becomes increasingly necessary to have accurate records on the cost of production.

FACTORS IN THE COST OF PRODUCTION.--The value of records depends on their accuracy and on their completeness. There are a great many factors which enter into the cost of production. For convenience these may be cla.s.sified as cash costs and labor costs. Labor charges should include the work of both men and teams at a rate determined by their actual cost or by a careful estimate. Man labor costs are easily reckoned, as they are either simple cash or cash plus board and certain privileges, the value of which should be estimated in cash.

The value of horse labor is more difficult to determine. It is made up of interest on valuation, depreciation, stable rental, feed, care, etc. A fair estimate of this cost is $10 a month or $120 a year for a horse. Cash costs are interest on the investment and on the equipment in machinery, etc., or rental of the same, taxes, a proper share of the general farm expenses such as insurance and repairs of buildings, telephone, etc., the cost of spraying material, packages, fertilizers, etc.

There are many ways of keeping such a record. Any method which accomplishes the result in a convenient and accurate manner is a good one. It will usually be found necessary to keep a cash account or day book, entering all items in enough detail to make possible their later distribution to the proper field or crop, and also to keep a diary of all labor. Any form of diary will answer the purpose, but one which has ruled columns at the right side of the page in which to indicate the crop or field worked upon, and the number of hours worked is more convenient and therefore more desirable.

AN EXAMPLE.--For a number of years the author has kept such records on his farm in western New York. As an ill.u.s.tration of the method and in order to give the reader a general idea as to what the costs above referred to are likely to be we venture to give the following tables.

It must be remembered, however, that practically everyone of the above mentioned factors varies with the conditions under which the orchard is managed and that these figures are not _an_ average but _one_ average and on one farm. True averages are arrived at only by bringing together a large number of figures. In any case, the question of cost is essentially an individual problem on every farm. These figures are of value only as an example of the method and the cost on one farm under its own special conditions.

The orchard for which the following figures were given was set in the spring of 1903, and the records begin with that year and end with 1910, covering a period of eight years in all. Throughout this period other crops have been grown between the tree rows, thereby offsetting to a large extent the cost of growing the orchard. Forty trees at the north end of the orchard are pears, but they have received substantially the same treatment as the apples and have not affected the cost. In 1904, 211 plum trees were set as fillers one way. The apple trees were set 36 by 36 feet apart, so that, filled one way, the trees stand 18 by 36 feet apart. The orchard is ten rows wide and forty-seven long, containing in all 467 trees.

BRINGING TO BEARING AGE.--The first of the following tables is given as a sample of one year's records, that of 1907, on this orchard in order to show both the manner in which the costs were made up and what the items amounted to in one year:

FIELD A--1907. FIFTH YEAR

Total Hours Cost Cost hours Total per acre per per Operation Man Horse cost Man Horse acre 100 Mulching 3 6 $1.05 .455 .91 $0.16 $0.22 Pruning 11 ... 1.65 1.67 ... .25 .35 Cultivating 1 7 7 1.75 1.06 1.06 .26 .38 Cultivating 2 10 10 2.50 1.51 1.51 .38 .54 Cultivating 3 6 6 1.50 .91 .91 .23 .32 Plowing in fall 47 94 16.45 7.12 14.25 2.50 3.52 Banking trees 12 ... 1.80 1.82 ... .27 .39 Harrowing 21 42 7.35 3.18 6.36 1.11 1.58 --- --- ------ ----- ----- ----- ----- Total lab. cost. 117 165 $34.05 17.73 25.00 $5.16 $7.30

4 loads manure at $1.50 6.00 .91 1.29 Equipment charge 1.15 .174 .25 Taxes 5.29 .801 1.13 Interest 38.48 5.83 8.23 ------ ------- ------ Total cost $84.97 $12.875 $18.20

INCOME, COST AND PROFIT ON BEANS--FIELD A--1907

Income Cost Profit 75 bushels at $1.50 $112.50 3 tons pods at $6 21.00 $133.65 $94.50 $38.85

LOSS ON FIELD A--1907

Total Per acre Net income from beans $38.85 $5.89 Cost of orchard 84.97 12.87 ------ ------ Loss $46.12 $6.98

A summary of the cost of the orchard, the net income from the crop, the income from the orchard and the profit and loss by years for the eight years follows:

SUMMARY OF COSTS FOR EIGHT YEARS, FIELD A

Net Income Crop income from Cost of 6.6 acres Year grown from crop orchard orchard Profit Loss 1903 Corn $ 15.17 ... $109.87 ... $ 94.70 1904 Beans 42.57 ... 216.16 ... 173.59 1905 Beans 43.13 ... 83.78 ... 40.65 1906 Beans 120.90 ... 80.14 $40.76 ...

1907 Beans 38.85 ... 84.97 ... 46.12 1908 Corn 37.68 ... 64.22 ... 26.54 1909 Oats and strawberries 100.61 $27.88 84.73 43.76 ...

1910 Wheat 60.70 38.65 96.35 3.00 ...

------- ------ ------- ------ ------- Totals $459.61 $66.53 $620.22 $87.52 $381.60

Net loss on field for eight years $294.08 Average annual loss 38.76 Total cost an acre, exclusive of income 124.27 Total cost an acre, including income 44.55 Total net cost a hundred trees 62.97 Total net cost an apple tree 1.37 Total net cost an apple tree, exclusive of income 3.80 Total labor cost an acre 35.09 Total cash cost an acre 89.19

We find that this orchard has cost $124.27 an acre during the eight years of its life, but that the $79.72 an acre of crops grown in the orchard has brought this cost down to $44.55 an acre. It is safe to say that the orchard would have cost even more than it did had it not been for the crops, for many operations charged directly to the crops would of necessity have been charged to the trees. The cost a hundred trees does not mean much, as it often happens that not all the trees are covered by an operation and as the number of trees an acre greatly affects these costs.

We have another and younger orchard upon which a record has been kept.

This orchard of five acres contains 126 standard apple trees, "filled" both ways with 375 peach trees. It was set in the spring of 1908, so that the trees have grown four seasons. The permanents (apples) are set 36 by 40 feet apart, so that, with the peaches between, the trees stand 18 by 20 feet apart. A crop of beans has been grown between the tree rows each season. The first season a full seven rows, twenty-eight inches apart, were planted in the wider s.p.a.ce; the second and third season six rows, and the last season only four rows.

The crop has been very good each year until the last. One application of manure, one crop of clover and one seeding of rye have been plowed under, and in addition a liberal amount of commercial fertilizer has been used with each crop. This year the peach trees bore their first crop. The record of the four years is as follows:

SUMMARY OF THE COST OF A FOUR-YEAR-OLD APPLE AND PEACH ORCHARD

Net Income Crop income from Cost of Year grown from crop orchard orchard Profit Loss

1908 Beans $63.37 ... $130.12 ... $62.75 1909 Beans 66.70 ... $85.03 ... 18.33 1910 Beans 79.81 ... 83.39 ... 3.58 1911 Beans 53.20 $46.05 61.95 $37.30 ...

------- ------ ------- ------ ------ Totals $267.08 $46.05 $360.49 $37.30 $84.66

Total cost an acre, exclusive of income $72.10 Total cost an acre, including income 9.47 Total net cost a hundred trees 4.73 Total net cost an apple tree .376 Total net cost an apple tree, exclusive of income 2.86

These figures show a still lower cost of growing trees to bearing age.

After paying all expenses connected with the growing of the trees, including the interest on the land at $150 an acre, and deducting the net profit from the crops of beans and the sales from the first crop of peaches we find that the growing of the trees has cost us $9.47 an acre, or 37 cents an apple tree at four years old. Had no crop been grown in the orchard it would have cost us at least $62.89 an acre after deducting the income from the first peach crop. The peach trees are now at full bearing age, and should show a good profit from this time on. Possibly at five and certainly at six years of age this orchard will entirely have paid for itself. The only possible further charge which could be made against this orchard is the crop income which might have been obtained from the land had the trees not been there. We estimated that the presence of the trees cut down the crop of beans from the land 30 per cent. As the average net income from beans was $13.35 an acre this would amount to $4 an acre a year--an insignificant sum.

IN BEARING.--Having given the reader an idea of the probable cost of bringing an orchard to bearing age, it may be well also to give the cost of producing apples in a mature apple orchard. Our bearing apple orchard consists of 6.1 acres containing 234 trees. About one-half of the trees, or 110, are 36 years old. The remainder are nearly 50 years of age. As they are all in one block and handled together, the charges cannot well be separated. One hundred and thirty-four of the trees are Baldwins, 44 Twenty Ounce, 40 Tompkins County Kings, and the remainder odd varieties. For the whole period of ten years the orchard has had very good care and attention.

A cover crop was not sown every year, but when it was used the charge was made against the orchard. The manure charge, omitted because of uncertainty as to the exact amount applied and as to its real value, is the only thing lacking in this table.

Two or three sprayings have been made every year. Until 1909, Bordeaux mixture and Paris green were used, but since then the commercial brands of lime sulphur and a.r.s.enate of lead have taken their place, nearly doubling the cost of the spray material. The average cost of the material for spraying has been $2.50 per acre, or nearly three and one-half cents per barrel of apples harvested. In 1910 this cost was $3.92 per acre and seven cents a barrel.

TABLE SHOWING THE ITEMS OF EXPENSE IN PRODUCING APPLES IN A SIX ACRE ORCHARD

-------+------+--------+-------+-------+-------+-------+--------+-------- 5% Cover Spraying int. Equip. O'vh'd Labor Total Year crop mat. Bar. on inv. charge charge cost cost -------+------+--------+-------+-------+-------+-------+--------+-------- 1902 $6.64 $117.88 $27.45 $25.00 $2.97 $339.45 $519.39 1903 11.22 164.92 28.88 25.00 2.88 249.55 482.56 1904 10.50 109.90 30.50 25.00 3.93 180.55 360.38 1905 $6.10 12.45 88.80 30.50 25.00 3.40 158.06 324.31 1906 14.85 112.35 33.06 25.00 4.78 211.76 401.80 1907 10.00 16.85 79.80 35.56 25.00 4.89 192.30 364.40 1908 9.75 205.45 37.76 30.09 5.09 293.50 583.55 1909 8.68 19.26 196.35 41.97 38.98 5.91 280.78 591.93 1910 23.89 116.90 45.75 32.39 5.58 175.26 399.77 1911 10.50 27.08 206.38 45.75 32.39* 5.53* 275.00* 602.63 -------+------+--------+-------+-------+-------+-------+--------+-------- 10 yr. av. $15.25 $139.87 $35.73 $28.37 $4.78 $235.62 $463.07 Av. per acre 2.50 22.93 5.86 4.65 .78 38.63 75.92 Av. per bbl .036 .327 .084 .066 .011 .552 -1.08

* Partly estimated, records not yet complete.

The cost of the package has varied from 28 to 38 cents and has averaged about 32 cents, or $22.93 per acre. Of course the latter amount varies greatly with the crop.

Interest has in all cases been figured at five per cent., but as the price of the land has varied from $90 an acre at the beginning of the period to its present valuation of $160,00 an acre, due both to its improvement and to a general increase in the price of land, the amount of interest has also varied. The same is true of the equipment charge which has steadily increased each year. The average valuation of the land for the ten-year period was $117.15 an acre. This means an annual interest charge of $5.86 per acre, or 8 cents a barrel. The equipment charge, which is interest, repairs, and depreciation on the machinery used in the orchard, amounts to more than 6 cents a barrel, or $4.65 per acre. Taxes and insurance on the buildings distributed per acre for the farm average $.78 per acre, or a trifle over one cent per barrel. These costs have also increased in the last few years.

Labor is the largest single item. For the first four years this was estimated on the basis of the cost for the last six years, for which more careful records were kept. It is computed at its actual cost to us on the farm, which was 15 cents an hour for men and 13 cents an hour for horses. This amounts to $4.25 per day for man and team. The cost of the labor to grow, pick, pack, and market a barrel of apples was 55 cents, or $38.63 per acre with an average yield of 70 barrels per acre.

To sum up these items of cost we find that taking the average of ten years with an annual crop of 427 barrels, or 70 per acre, on 6.1 acres of old apple orchard that the costs per barrel have been as follows: spray material, $.036; packages, $.327; interest on the land, $.084; use of equipment, $.066; taxes, $.011; labor, $.552; and a total of $1.08 per barrel. If the estimated cost of manure, six cents a barrel be added, the total will be $1.14. As we have said, these costs per barrel vary with the crop. When our yield was 100 barrels per acre the cost per barrel was only $.99, but when it was 34 barrels per acre this cost rose to $1.73 per barrel. In 1910 we grew a crop of 55 barrels per acre for $1.20 per barrel.

It may be of interest to some to know what the income and profit were on this orchard. For this purpose we give the following table showing the yield, income, cost, and net profit for each of the ten years, and the average:

Yield in Income Income Cost Net Profit bbls. bbls. inc. culls per bbls. inc. culls Year per A. only and drops bbl. alone and drops 1902 103 $1.96* $1.46* $.83 $1.13 $.63 1903 71 1.90 2.23 1.11 .79 1.12 1904 51 1.66 1.78 1.15 .51 .63 1905 49 2.30 2.68 1.10 1.20 1.58 1906 53 1.96 2.25 1.25 .71 1.30 1907 34 3.49 4.10 1.73 1.76 2.37 1908 96 2.03 2.32 .99 1.04 1.33 1909 92 3.00 3.38 1.06 1.94 2.32 1910 55 2.69 3.03 1.20 1.49 1.83 1911 100 2.06 2.32 .99 1.07 1.33 ---------------------------------------------------------------------- 10 yr.

av. 70 2.15 2.47 1.08 1.07 1.39

* In arriving at these incomes different divisors were used. Two hundred barrels of the crop were sold in bulk and these were not used in getting the average income from barrels only, but were used in getting the average income including culls and drops.

Partly estimated, records not yet being complete for the season.