i. 



ECONOMIC CONSIDERATIONS REGARDING FUTURE STORING AND PACKHTG FACILITIES 

 FOR APPLE GROWERS IN THE ENTIAT, WASHINGTON AREA 



y >^ „...:,.,. /V 



Wendell M. McMillan "rjstr- r^'i; -^.-rr/; 



Marketing Division 

 Farmer Cooperative Service '-'^ = '• 



•■While the Rocky Reach Dam on the Columbia River is expected to bring 

 benefits of irrigation and hydroelectric pox^er to the area, its con- 

 struction has also created a pressing problem for apple growers in the 

 area around Entiat, Wash. Water backing up behind the dam will flood out 

 all the present apple storage facilities and packinghouses in Entiat, as 

 v;ell as the commercial area of the town itself. Since the present storage 

 and packing facilities can be used only for 1959 crops and must be vacated 

 by July 1960, growers are faced with the immediate problem of deciding 

 on the best way to provide for packing, storing, and marketing their 

 fruit after that time. 



Recognizing this as a complex problem, the Boards of Directors of the two 

 apple cooperatives --Entiat-Wenoka Growers, Inc., and Entiat Warehouse 

 Company, Inc. — formally requested the assistance of Farmer Cooperative 

 Service, U, S. Department of Agriculture, Washington, D. C. This request 

 was made at the suggestion of the Chelan County Agricultural Agent, in 

 cooperation with the extension and research staff members of the State 

 College of Washington. •' - ••-'-' ., , :;^..-. 



This report, prepared in response to this request, has as its purpose 

 the presentation of an economic evaluation of various alternatives facing 

 growers in the Entiat area. By presenting advantages and disadvantages 

 of different alternatives, we believe that growers will be in a better 

 position to make a sound decision regarding their problem. 



IThile this is an economic evaluation, that is, it is based on an exami- 

 nation of costs and returns to growers, we recognize that there are 

 important noneconomic or intangible factors that need consideration. 

 These include, for example, the particular financial and production sit- 

 uation of individual growers, attitudes and opinions of growers regarding 

 the operating methods of their cooperative, and feelings regarding the 

 future of the community. The importance of these intangibles must be 

 weighed by the groxi7ers in addition to the economic factors involved. 



Since the aroount of time available for study of this problem was severely 

 limited, this analysis is based largely on a review of available research 

 studies having an application to this problem, and on information ob- 

 tained from persons qualified in such areas as financing, taxation, and 

 engineering. In addition, we made personal contacts to a limited extent 

 in the Entiat area to obtain information from the managers and various 

 directors of the tv7o cooperatives, as well as from other persons. >^'> 



This report hae been prepared to serve as the basis for discussion by the 

 directors, and later on by the growers, in consultation with the cooper- 

 atives' legal, accounting, and financial advisors as well as representatives 



