Official faults cherry research for lack of critical data

By DAN WHEAT

Capital Press

WENATCHEE, Wash. -- Washington State University Extension released a new study on the cost of growing Sweetheart cherries, but it should have included packing costs that growers pay, a tree fruit industry official said.

"It's a great value to know grower (orchard production costs) but in the bottom line for growers you need warehouse (packing) costs," said Dan Kelly, assistant manager of the Washington Growers Clearing House Association, which tracks tree fruit prices.

"A study should include warehouse costs because that's a real cost," Kelly said.

Karina Gallardo, one of three authors of the study and an agricultural economist at the WSU Tree Fruit Research and Extension Center in Wenatchee, said the warehouse costs were excluded because they had been in similar prior WSU studies.

Without it being in prior studies there was no basis of what categories to include, she said, adding she would like to include warehouse costs in the future to be more complete.

Washington growers needed to make $3,138 per ton on a minimum yield of 2 tons per acre to break even growing Sweetheart cherries in 2009, according to the study, which was released Aug. 23.

With certain assumptions on orchard structure and horticulture, the study estimated total production cost at $10,120 per acre on a 6-year-old cherry block.

The study averaged fixed costs of land, irrigation, machinery, taxes, insurance and depreciation. Variable costs included soil preparation, planting, pruning, fertilizers, beehives, picking and equipment maintenance. Production costs and returns are highly variable, Gallardo noted.

Growers broke even at less than $3,138 per ton on a 2-ton per acre yield if they looked only at short-term costs, Gallardo said. Assuming the same long-term costs and with average yield estimated at 7 tons an acre for 2009 by the National Agricultural Statistics Service and an average Sweetheart price of $2,660 a ton estimate by the clearing house, costs were $9,479 per acre and the break-even price was $1,354 a ton or $13.54 a 20-pound box, or 68 cents a pound, Gallardo said.

From the same sources, assuming a 5-ton average yield and $4,660 average price in 2010, Gallardo said costs were $8,197 an acre and the break-even was $1,639 per ton, $16.39 a box or 82 cents a pound.

Probably $6 to $8 a box could be added to that for packing or warehouse costs, Kelly said.

"Warehouse costs vary from shed to shed and by variety. Rainier cherries cost more because of how they're packed," he said.

The study estimated returns from $2,500 to $4,500 per ton on 2 to 12 tons per acre. With the low end showing a loss of $1,274 per acre and the high end a net return of $41,315 an acre.

It was the first WSU cost analysis on Sweetheart, a popular late-variety cherry. Prior analyses were done on Bings in 2007, 2003 and 1998.

Growers, bankers, marketers and horticulturists find cost analyses useful. WSU Extension plans to release cost analyses of organic Gala apple and Bartlett and d'Anjou pears by the end of the year.