20 



University of New Hampshire 



[Sta. Bull. 323 



Inventory Value of Apple Trees 



Because the orcluu'dist is produeinp- joint products, trees and fi-uit. 

 in varying: proportions from year to year, one of wiiieh remains as in- 

 ventory, the financial status of the orchard is often indefinite. Some or- 

 chardists are carrying a larg-e proportion of young trees and naturally a 

 large part of the expense is directed toward the development of trees. 

 A few orchardists have only old trees which will soon have no value. It 

 is obvious Ihat the orchardist who is taking out what he can from a de- 

 clining orchard has a different problem than the operator who is carry- 

 ing sufficient young trees to maintain Ihc bearing capacity of the or- 

 chard. 



The actual sales value of a definite orchard will depend on many fac- 

 tors, such as site, trees per acre, varieties, location with respect to mar- 

 kets and other orchards, the price of apples, and the size, age, and de- 

 velopment of the trees. Both the seller and the buyer may give some 

 attention to the future i)roduction possibilities. 



In an open competitive market, with many orchard sellers and buj^ers. 

 the selling price of the orchards by age classes would probably register 

 I'oughly the general opinions as to the value of the orchard for produc- 

 tive i)urposes. However, few men buy or sell an orchard in a lifetime, 

 and their economic analysis of the problem is largely rough guessing. In 

 addition, the orchai'd sold is likely to be of mixed ages instead of a one 

 age group. 



In exploring the inventory value of apple trees by a budget method, 

 the emphasis is on the relative value at different ages of different types, 

 and no attempt is made to suggest actual values. 



There is no intent to forecast the future of the apple industry. 

 The shape of the curves of value is based on the standard cost curve 

 and standard income curve in figures 4 and 7, and the same assumptions 

 are made. No one should feel secure in using such curves for inventory 

 pui'poses over a period of years without constant adjustment to changes 

 ill the a]ipl(> outlook. 



10 



15 



20 



40 



25 30 35 



Age of Trees 

 Figure \1.- — Inventory Vai.i k I'ek Tkke Dekivkd from Discounted 

 Future Net Returns, and Tree Costs for First 10 Years for 



Permanent Trees. 



