Tree fruit growers can receive premiums for delivering certain extra-early varieties of peaches, but peach farmers may net roughly $800 more per acre from late-harvest processing peaches versus extra-early harvest varieties, according to new cost studies released by the University of California's (UC) Agricultural Issues Center and Cooperative Extension (UCCE).
Profitability depends on many factors, yet based on the UC study Sacramento and San Joaquin Valley growers can begin to profit at yields above 17 tons per acre based on the 2016 contracted price of $545 per ton for the early harvest varieties. Late variety peach prices of $490 per ton will require yields above 18 tons, based on the study’s hypothetical figures.
To help farmers make decisions on which peach varieties to plant, UC researchers present sample costs to produce extra-early harvested cling and freestone peaches and late harvested cling and freestone peaches for processing in the Sacramento and San Joaquin Valley in these studies.
Although processors pay more for extra-early harvested peach varieties than late-harvest peaches, researchers found that yields are higher for late-harvest varieties while costs for hand thinning fruit are lower.
“Peaches harvested early in the season have less time to grow compared to peaches that get to hang on the tree another month or more,” said Roger Duncan, UCCE farm advisor in Stanislaus County who co-authored the studies.
“Therefore, more fruit has to be removed so the remaining fruit can size. That means it costs you more to produce less,” Duncan said.
The analyses are based upon hypothetical well-managed farming operations using practices common to the region. The costs, materials and practices shown in these studies do not apply to all farms.
Growers, UCCE farm advisors and other agricultural associates provided input and reviewed the methods in the study.
Both studies assume a 100-acre farmer-owned operation with 40 acres of cling peaches. The remaining acreage for both hypothetical farms is planted in other mature tree crops. The estimated economic life of the extra-early harvested cling peach orchard and the late harvested cling peach orchard is 18 years.
Some of the major differences between the two studies are return price, yield and fruit thinning cost. The extra-early harvested varieties have a price of $545 per ton, a yield of 17 tons per acre, and a thinning cost of $1,445 per acre. The late harvested varieties have a price of $490 per ton, a yield of 20 tons per acre, and a thinning cost of $1,177 per acre.
Asked if a small farm could save on fruit thinning expenses by doing it themselves, Duncan replied, “I guess it would be possible for a small family operation to do the thinning themselves, but not likely. It can take 20 to 40 minutes to thin a single tree. If there are 151 trees per acre, you can see that it would take one skilled person over a week to thin one acre.”
The authors describe the assumptions used to identify current costs for production material inputs, cash and non-cash overhead. Ranging analysis tables show net profits over a range of prices and yields. Other tables show the monthly cash costs, the costs and returns per acre, hourly equipment costs, the whole farm annual equipment, investment and business overhead costs and the operations with equipment and materials.
Free copies of both 2017 peach studies are available on the UC Davis Department of Agricultural and Resource Economics website. Sample cost-of-production studies for many other commodities are also available.
The cost study program is funded by the UC Agricultural Issues Center and UCCE, both part of the UC Division of Agriculture and Natural Resources and UC, Davis' Department of Agricultural and Resource Economics.
For additional information,contact: Jeremy Murdock, Agricultural Issues Center, (530) 752-4651; Janine Hasey, UCCE farm advisor, Sutter/Yuba counties, (530) 822-7515;, or Roger Duncan at (209) 525-6800.