Historic, archived document Do not assume content reflects current scientific knowledge, policies, or practices. Kee ey? ab \e ERS-562 COST OF HARVESTING, PACKING AND STORING APPLES FOR THE FRESH MARKET WITH REGIONAL AND SEASONAL COMPARISONS REPRINTED FROM THE FRUIT SITUATION JULY 1974 U.S. DEPARTMENT OF AGRICULTURE ECONOMIC RESEARCH SERVICE COSTS OF HARVESTING, PACKING AND STORING APPLES FOR THE FRESH MARKET WITH REGIONAL AND SEASONAL COMPARISONS by Joseph Podany and Hilarius Fuchs Agricultural Economists Economic Research Service Commodity Economics Division ABSTRACT: Harvesting, storing and packing costs for fresh apples during the 1972/73 season were obtained in a regional survey of apple grower-packers and packers. These results were compared with costs from a similar survey conducted during the 1969/70 season. Total harvesting cost in 1972/73 varied from 46 cents per bushel for Winesap apples in the Northwest to 75 cents for McIntosh in the Northeast. In all major production regions except the Northeast, a comparison of the surveys indicated lower or constant charges for regular and controlled atmosphere storage. Total packing and selling charges during the 1972/73 season for tray packed Red Delicious apples ranged from $1.30 per carton in the Lake States to $1.83 in the Northwest. KEY WORDS: Apples, costs, harvesting, storing, packing, selling. This article reports the findings of a regional mail survey of fresh apple grower-packers and packers for the 1972/73 season. The respondents, contacted during the summer of 1973, were chosen from a list of firms which had provided complete and consistent information in a similar survey performed during 1970'. Data on costs of harvesting, storing, packing and selling fresh apples were collected in both surveys for the major U.S. apple production regions—the Northeast, Appalachia, Lake States and the Northwest. The 1970 survey also included information for California, whereas the 1973 survey did not. "ERS publications resulting from or related to the survey have included: (a) Regional Costs of Harvesting, Storing and Packing Apples, ERS-496 reprinted from the Marketing and Transportation Situation, November 1971; (b) An Interregional Intertemporal Activity Analysis Model of the U.S. Apple Industry, a paper presented at the 70th Annual Meeting of the American Society for Horticultural Science, North Carolina State University, Raleigh, August ,20, 1973; and (c) Harvesting, Storing, and Packing Apples for the Fresh Market: Regional Practices and Costs, MRR 1009, September 1973. The 1970 and 1973 surveys differed in two other respects: (1) no varietal information was obtained in 1970; in 1973, costs for Red Delicious apples were requested in each region as well as for McIntosh apples in the Northeast, Jonathans in the Lake States, and Winesap in the Northwest, and (2) the 1973 survey concentrated on obtaining a more detailed breakdown on harvesting and packing costs. Therefore, the data from the two surveys are not directly comparable but, where _ possible, comparisons are included to indicate the nature of changes in costs. Regional cost estimates in this report are weighted averages derived from the respondents’ cost and volume statistics. Harvesting costs and storage charges were weighted by each firm’s total sales of apples while packing costs and selling charges were weighted by the individual firm’s volume packed of the particular varieties surveyed. Harvesting Costs Harvesting expenditures include costs associated with picking, bins (rental or depreciated value) and hauling apples from the orchard to the packing or TFS-191, JULY 1974 17 storage facility. Picking is further subdivided into picking labor, supervision and fringe benefits (i.e., social security payments and the cost of providing housing for temporary workers). In the 1973 survey, total harvesting costs varied from 46 cents per bushel for Winesap apples-in the Northwest to 75 cents for McIntosh in the Northeast (table 1), adifference of 29 cents per bushel. Harvesting costs for Red Delicious apples in these same two regions differed by 27 cents. The data indicate virtually no variations in harvesting costs between varieties within any region. The only exception was a 1-cent spread in picking labor costs in some regions that may be attributed to the handling characteristics of the varieties. Regional differences in harvesting costs are to be expected. These result from the types of trees harvested (standard, semi-dwarf and dwarf), the availability of and demand for picking labor, andthe amount of labor housing necessary. High density plantings of semi-dwarf and dwarf trees (relatively more prevalent in the Northwest) lend themselves to more efficient picking since workers are able to harvest a greater proportion of apples from the ground. Picking costs are tempered by a number of factors which vary by region. These factors include: the size of the apple crop, alternative crop picking opportunities, and the mix of types of labor (local versus migrant) ordinarily used within a locale. Much of the variation in harvesting costs between the Northwest and Northeast is a result of differences in fringe benefits. Growers in the Northeast apparently have made rather large investments in labor housing in recent years to furnish living facilities for their migrant picking labor force (about 80 percent of pickers in the Northeast were migrants in the 1969/70 apple crop year). The Northwest relies much more heavily on local labor (only about 56 percent were migrants in 1969/70) and thus incurs a much smaller total housing fringe benefit cost. A comparison of picking costs per bushel with those for the 1969/70 season is as follows: Picking cost per bushel Percent- age increase 1969/70 | 1972/73 Abso- All Deli- lute apples increase Region Cents Cents Percent Northeast ...... 36 55: 19 53 Lake States ..... 37 47 10 27 Appalachia ..... 33 36 3 9 Northwest ...... All regions experienced increases in picking costs. The Appalachia area, which relies heavily on Jamacian labor, had the smallest increase. An increase in labor housing costs as well as higher picking rates accounted for most of the Northeast’s53 percent rise in total picking costs between 1969/70 and 1972/73. Bin rental (or depreciation) costs are rather uniform among the regions at 7 to 8 cents per bushel except in the Northeast where they areabout 10 cents (table 1). No 1969/70 figures are available for comparison. Hauling costs approximated those in 1969/70 with the Northeast hauling expenditure being considerably above those in other regions. If the bin and hauling costs are added for each of the regions, total hauling costs are higher in the Northeast relative to other regions. Storage Charges Fresh apples are stored in two types of cold storage facilities: regular atmosphere (RA) and controlled atmosphere (CA). Although CA is about twice as expensive as RA storage, it has become increasingly popular and currently represents slightly more than one-third of all apples placed in storage. The popularity of CA _ storage results from _ its effectiveness in maintaining apple quality during Table 1.—Apple harvesting costs per bushel by variety, four major production regions, 1972/73 season Picking Region labor Cents Cents Cents Northeast Red Delicious 5.2.4.6 s 30 14 9 Macintosht..5 scsi 33404 0 14 9 Lake States Red Delicious . 2.4... 37 4 5 Jonathan® si4:s 66 awd ar 4 5 Appalachia Red Delicious: .72-s-