Masters Theses

Date of Award

12-1985

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

S. Darrell Mundy

Committee Members

John R. Brooker, Robert P. Jenkins, Dennis Deyton

Abstract

Agricultural research in Tennessee and surrounding states has generally been geared primarily toward traditional agriculture. A farmer, in evaluating a specialty crop like applies as an alternative enterprise is then faced with the problem of acquiring timely data that are relevant to his/her situation and assimulating the information into a format that is flexible enough to accept and evaluate various technologies and markets.

Therefore, this study determined the resource requirements for 12 apple orchard-market combinations. They consisted of one standard, two semi-dwarf, and one dwarf orchard, each differentiated by tree density and rootstocks with each operating under the conditions found in the wholesale, farmers, and pick-your-own markets. The net returns over time from each orchard-market combination were compared and analyzed. Also, selected economic characteristics of each orchard-market combination were compared to alternative agricultural enterprises.

A computerized spreadsheet was used to develop the orchard-market budgets. All inputs and prices were obtained by personal interviews with farmers, farm chemical and implement dealers, and university and extension personnel. All applicable orchard and marketing operations were performed in accordance with recommended practices.

The 12 orchard-marketing combinations were economically evaluated utilizing six approaches. They consisted of undiscounted returns, breakeven analysis, benefit-cost ratios, accumulated net present values, internal rates of return, and annuity values.

Using the six comparison criteria, the Standard orchard was consistently ranked as having the least earning potential and the Dward orchard was consistently ranked as having the greatest. The two Semi-dwarf orchards gave mixed results. However, most of the comparative criteria indicated the more intensive Semi-dwarf II orchard had more earning potential than the less intensive Semi-dwarf I orchard.

The six comparison criteria consistently ranked the Wholesale market as having the least earning potential and the Pick-Your-Own market consistently had the greatest, followed closely by the Farmers market.

The Standard orchard and the Wholesale market were the most sensitive to economic changes. The Dwarf orchard and the Pick-Your- Own market were the least sensitive to a change in the economy such as in interest rates.

Generally, the net returns per hour of labor and per acre for the apple orchard-marketing combinations were competitive when compared to alternative agricultural enterprises. Also, the annual labor requirements per acre for the orchard-marketing combinations were competitive with the alternative enterprises.

Potential producers wanting to maximize profits should consider a semi-dwarf or dwarf orchard. A standard orchard should only be considered by growers wishing to direct market a variety not found on dwarfing rootstocks. Growers should be aware that even though the economic risks seem to decrease as the complexity and intensiveness of the orchard changes from the Standard to the Dwarf orchards, literature indications are that the technological risks seem to increase. All other things being the same, the degree of earning potential from an apple orchard is dependent on how the apples are marketed.

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