STUDIES IN ECONOMICS 

 OF APPLE ORCHARDING 



By H. C. WOODWORTH and G. F. POTTER 



In a previous publication* the writers have presented findings on man- 

 agement, methods and costs of producing apples from the viewpoint of 

 an orchard enterprise study. This type of study can bring out rough 

 comparisons of costs of different practices and is especially valuable in 

 studying methods of producing one crop. However, many of the costs 

 considered, whether in terms of hours of labor or of money, are not addi- 

 tional out-of-pocket expenses. If, for instance, a certain orchard farm 

 organization requires a permanent crew of two men, the expenses con- 

 cerned with these two men occur whether their time is employed advan- 

 tageously or not. Hours used at peak demands and at slack periods have 

 not the same value. 



Obviously, certain problems of orchard management must be studied 

 from the viewpoint of farm organization. It is from this angle that an 

 analysis of problems based on the data from the same 12 farms as in the 

 previous study is now attempted. 



On a few farms the only product of any consequence was apples. 

 Here all the costs may be considered as entering into apple production. 

 On one such farm the average cash outlay for a three-year period (not 

 including wages of management or interest on the investment) was $1.51 

 per box. During this period the estimated loss in inventory of trees, 

 equipment and consumable supplies was about 24 cents per box, bringing 

 the operating costs to $1.75 per box. The average selling price of the 

 apples was $1.99, leaving 24 cents per box for wages of managementf and 

 interest on the investment. In this case wages paid to regular help dur- 

 ing periods when there was little or no orchard work to do created a 

 considerable overhead. 



The majority of the farms were diversified, and it is impossible to de- 

 termine what share of the overhead expenses is chargeable to apples. A 

 general financial statement covering all enterprises is, therefore, given 

 herewith. Because individual records are confidential, the statements for 

 the several farms are grouped together. 



* Woodworth, H. C. and Potter, G. F. — New Hampshire Bulletin 267. 



1 Wages of management" is used here in a technical sense to indicate returns on 

 managing ability. All pliysical labor has been included in labor cost at the 

 rates actually paid. Since hired help did all the physical and routine work on this 

 farm, it was possible to determine the actual labor cost of operating the farm. 

 However, the proprietor of this orchard had brought together the factors of pro- 

 duction and planned the project to obtain something more than merely interest on 

 money and return on hired labor. "Wages of management" is used here to ex- 

 press this return which the operator has expected for services of initiating the 

 orchard project and in guiding the use of production factors. 



