STUDIES IN ECONOMICS OF APPLE CROWING 



BY BUDGET ANALYSIS 



by H. C. Woodworth and G. F. Potter 



\ detailed study was made of twelve fruit farms, and two bulletins 

 were published : one in 1931 on costs and management of fruit farms 

 and the other in 1934 on fruit farm organization.* In these studies, it 

 early became evident that certain fundamental and important problems 

 could not be approached by the usual method. A study based on a brief 

 period ignores important biological processes. The entire cycle of the 

 orchard's life needs to be examined. 



Thus, in connection with the studies already published, additional data 

 were collected and organized and used in exploring orchard management 

 problems by a budget type of analysis. For instance, comparisons were 

 made as to the relative profitableness of three systems of orchard plant- 

 ings which involve (1) permanent trees only, (2) permanent and semi- 

 permanent trees, and (3) permanent, semi-permanent and filler trees. 

 The relative value of trees at different ages and the effect of late bear- 

 ing were examined by the same procedure. 



The results of these explorations have been used in extension work for 

 a number of years, but publication has awaited an opportunity to check 

 the data and re-examine the methods used. 



In the last two years, some new data have been collected and the other 

 data have been re-examined, refined, and adjusted to new practices and 

 again used to study orchard problems. 



Problem 



The orchardist in setting out apple trees is projecting a business enter- 

 prise several decades into the future. In addition to making the initial 

 investment in land, trees, materials and labor in starting the orchard, 

 he has begun a program that involves continuing annual investments and 

 expanding operations for many years. It is of course impossible to pre- 

 dict the many new and difficult problems to be encountered in a long 

 production period. On the other hand it seems important to discuss 

 some of the factors that probably will concern the orchardist. 



On the financial side, the usual approach has been to determine the 

 cost of growing trees to a ten-year age, crediting the sale of apples to the 

 cost of growing the trees. Thus it is arbitrarily assumed that the first 

 ten years is a process of growing a tree, and that from then on the process 

 is growing apples. But the apple tree passes through a biological life 

 cycle. It grows and develops over a long period, matures and then grad- 

 ually declines. 



Even though the final product is apples, the orchardist directs his re- 

 sources toward the growing of joint products, trees and apples, in ever- 



* Bulletin 257, Studies in Economics of Apple Orcharding, I. An Apple Enterprise Study — 

 Costs and Management, H. C. Woodworth and G. F. Potter, New Hampshire Agricultural 

 Experiment Station. 



Bulletin 279, Studies in Economics of Apple Orcharding, II. A Study of Farm Organization 

 on 12 Fruit Farms, H. C. Woodworth and G. F. Potter, New Hampshire Agricultural Experiment 

 Station. 



