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Value Added Apples

Posted by Todd Parlo 
Value Added Apples
March 05, 2013 01:13PM
This concept of the value added is becoming increasingly attractive to us. Not because it simply adds a little money to the price per pound (it does), but because it has the ability to completely change orchard management here, but I will get to that in a second. First, let's look at some rough numbers. We have gotten up to 1.65 a pound wholesale for dessert level apples- or 69.30 a bushel. We estimate cider at 10 a gallon x 3/bushel or 30.00 a bushel. Sliced frozen apples, our new plan, at 4/# wholesale and considering 50% waste = 84.00. I have not run numbers on organic dried apples, but retail in our area it is 5.75 for 3 ounces (23.00/#) for non-organic. Yes, that is alot of slicing labor or pressing/jug costs, but the financial return when you consider orchard labor is at least in the ballpark. With a bit of management we feel we can get fruit at least of a peelable roundness and not too insect damaged.

Now, if we knew we were going to process the fruit anyway, how would that impact our management? Might that mean 0 fungicide application. Perhaps an attack geared more toward apple maggot (which muddles most of the flesh), and less on codling moth and sawfly who are more orderly, leaving more flesh intact. Even hail damage here last year, since it was early enough, left about 75% of the flesh in decent shape. That is a lot of labor saved that we can exchange for processing labor. Now we can add up the cost of sprays. Then the carbon footprint of all those influxes. Then the exposure to farm workers and the ecosystem. That, I think, is the real balance sheet.

So, since most of the fruit gets processed anyway (most of world consumption of fruit is in the processed form), couldn't this be the answer for real organic food? I for one can eat exactly one apple at a sitting, but I have been known to eat 3 slices of pie (provided there is good cheddar in the vicinity). Add to that the modern love affair with prepared food, we might meet them halfway.

Walden Heights Nursery & Orchard
Zone 3 in Vermont
Re: Value Added Apples
July 27, 2013 10:09AM
Todd raises some really good points in that post. We think the most profitable thing we can do is to produce perfect apples for fresh eating. But there is always a percentage that don't make the grade, and with value adding, they can really be worth something. A lot depends where and how we are selling.

For example, direct retailing at a Farmers' Market or farm gate, versus supplying a local retailer versus selling through a packing shed/wholesaler. When selling at a Farmers Market, the more lines we have (eg. fresh apples 1st grade, fresh apples 2nd grade, dried apple, apple juice (cloudy and clear, 1 litre and 2 litre), cider vinegar, apple cider jelly) the more sales we will make. Which makes it more worthwhile being there. But we can't sell all we produce at Farmers' Markets, so we also deliver to local retailers (independently owned supermarkets, organic shops and green grocers). But we can't sell all the remaining crop this way either, so we send fruit in bulk bins to a distant packing shed where they are stored and then sold in even more distant cities.

Some approximate figures:
1st grade apples sold at Farmers Markets...... $ 5.50 per kg
1st grade apples delivered to local retailers..... $ 4.00 per kg
400kg bins fruit (say 75% 1sts, 25% 2nds)....... $ 1.75 per kg
2nd grade apples sold at Farmers Markets...... $ 3.00 per kg
Dried apple ($6.00 per 100g pack) .......... $60.00 per kg (= $6.00 per kg fresh)
Apple juice sold at Farmers Market........ $ 6.50 per litre (= $3.80 per kg fresh)
Apple juice delivered to local retailers....... $ 4.50 per litre (= $2.65 per kg fresh)
Cider vinegar ($8.00 per 500 ml)........ $16.00 per litre (=$9.40 per kg fresh)

The returns for dried apple, apple juice and cider vinegar are good, but there is a high labour cost and/or capital cost for equipment to make the processing efficient. Not to mention packaging costs. It takes us 10kg of fresh apples to make 1kg of dried apple. We get a 60% recovery with our "rack and cloth" press, so it takes 1.7kg of apples to make 1 litre of juice.

How do you work out the best combination?

Kalangadoo Orchard
On the “other side” in South Australia



Edited 3 time(s). Last edit at 07/27/2013 06:19PM by Michelle & Chris McColl.
Re: Value Added Apples
August 26, 2013 10:28AM
Thanks for great breakdown in your values chart, it is very helpful. We are going through the farm viability program this year, which really concentrates on keeping these figures.

Here, however is where it gets complicated for us (and probably others). There is a difficulty when considering two other factors- labor qualities, and expenses/labor in producing various grades.

In the first sense, labor quality I mean the type of work as it relates to ease, timing, and likability(for lack of a better term). Timing is an issue for us in that spraying continually is frankly not really likely when we are running a nursery and homeschooling a kid. We have the hours available, but not the drop everything and" go spray 'cause holy cow it is gonna rain" scenario. Time in the evening to press cider or slice apples while listening to the Red Sox is more likely, even if the labor "cost" is higher. A more difficult thing to calculate. Also, I would rather boil cider for snowcones while reading a book than spraying with 40 pounds on my back, a quality of work distinction. Others will have a different opinion on which is higher quality work, the point here is that it is different farmer to farmer and we all should sit down and think about what makes us happier.

On the second point, we are trying to add up the expense in labor and materials, and environmental impact of the two approaches, namely more dessert fruit versus value added. All contribute to labor and materials, and it can get complicated, but we will post ours as well when we are finished.

What is fascinating for me is the variation this will likely play not just farm to farm, but more greatly region to region. In locals like yours (Michelle and Chris) and in the American northwest it is likely easier (not easy mind you) to get a higher percentage of dessert grade. In the northeastern US it is very difficult organically without disease resistant cultivars. It muddies the waters, also when we are trying to add up whether it is more environmentally friendly to buy a shipped apple with less inputs than a local apple with heavy ones. It may apply to the tougher growing regions like ours that should perhaps tolerate more blemishes in dessert fruit.

Walden Heights Nursery & Orchard
Zone 3 in Vermont
Re: Value Added Apples
August 29, 2013 09:03PM
Thanks for all this input, and sharing of your considerations in how to decide what to do related to orcharding.
Lots of possibilities... and lots of fruit... mostly northern varieties of pears. 25 year old trees that are really rocking this year. So lots of fruit and one after another of the 13 vrieties seems to be coming into ripeness .... so shake rattle and roll 'em on to the press. From there to the carboy...... We'll see what comes together when the pressure reduces. The idea of jelly makes sense... tho' canning is lots of work and hot amidst the summer heat....... Your thoughts give me pause to think
Thank you!

Morninglory Farm
Zone 3b* in Ontario
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