Escape the cost-income wedge

A focus on yield and quality is indispensable to profitable pome-fruit farming. By Anna Mouton.

“The good news is that there are some brilliant orchards — and growers — that are making a lot of money,” said Graeme Krige, technical adviser, and general manager of Fruitmax Agri. But he also had bad news for his audience. “Cost inflation is expected to outstrip income inflation for the foreseeable future.”

Krige believes that production costs may reach R500 000 per hectare in the next eight seasons. This means that an orchard making R50 000 per hectare today will cease to be profitable 5–7 years from now.

South African pome-fruit growers did well over the past two decades thanks to increased yields. More total tonnes equal more Class 1 cartons — even if the relative percentage of Class 1 fruit stays the same. Export income in ZAR terms has also grown faster than income from local sales. This has led to a widening gap in potential farm-gate income from exports compared to local sales.

According to Krige, local sales are at best marginally profitable at current market prices and production costs. Juice and processing make a loss. “But there’s a massive difference in income potential when you go from local to export in the preferred counts with the preferred specs,” he said. “More than 300% — up to 400% on some varieties.”

There are three strategies to combat the cost-income wedge: increase yields, increase quality, and control costs. Krige advocates for increasing quality. “Why do I prefer to focus here? Because there’s room for improvement.”

Based on recent Hortgro statistics for average crop distribution, only 45 out of every 100 apples are exported. Krige sees an opportunity to maximise on-tree Class 1 fruit without significantly compromising yields.

The rules of orcharding

“Plants are amazing — they photosynthesise, they fix dry matter, they use light,” said Krige. “That’s what you’re farming with — light.” His first rule of orcharding is that it is impossible to achieve high yields without adequate light interception.

Krige showed data from several studies demonstrating that potential yields are directly proportional to light interception at interception levels up to about 70%. This relationship is especially important for spur leaves.

The second rule of orcharding states that light distribution is critically important to achieving and maintaining high fruit quality. Unequal light distribution is especially problematic in large complex canopies. Some apples are overexposed and suffer sunburn, whereas others are underexposed and have other quality problems such as poor colour. Light distribution is also critical for bud quality.

Krige identified several trends for the near future. “I see an increase in planting density — trees per hectare or stems per hectare. I see taller trees, maybe even trees that are higher than their row width, depending on the canopy. I see narrow, simple, light-friendly canopies.”

Productive rootstocks were also on his list. “Of course, they must be matched to the site, the scion, and the system.”

Lastly, Krige envisions an increase in nets and reflective materials, probably used together.

“I think there are multiple orchard systems that can achieve this,” said Krige. “There are only two things you need to do — you need to intercept light, and you need to distribute light.”

Optimise existing orchards

“You’re not going to wake up tomorrow and all your 4.5 x 1.5 orchards have disappeared,” said Krige. “In fact, they largely need to finance the changes we’re talking about. But passenger orchards have got to go.” Growers should seek to remedy the causes of poor performance. If there is no remedy, remove the orchard.

For remaining orchards, growers need to identify ways to boost fruit quality while maintaining yields. Krige recommends setting goals, such as increasing the Class 1 bicolours in the preferred counts from an orchard to 50 tonnes per hectare.

“Very important — talk to your marketer and figure out what your target fruit is per variety,” emphasised Krige. “What size and colour spec are making the most money in your area on your farm for every variety?”

Setting the desired crop load in the orchards as early as possible will ensure that thinning is completed early. “Utilise chemical thinning and plan to finish hand thinning by the first week of December,” advised Krige. “That gives you the capacity to do other things, like summer pruning. It’s a good time to do it and it’s very important for fruit quality.”

It goes without saying that integrated pest management has to be in place and compatible with the requirements of export markets.

The future starts today

Growers that have already ordered trees should still seek to optimise. “Sometimes it’s not too late to make changes,” said Krige. “If there’s an improved strain, please don’t plant the less improved one — these orchards need to stand in the ground for twenty or even thirty years.”

The density and system have to match the site and rootstock-scion combination. Krige warned against sticking to inefficient tree spacing. “Don’t say you’ve prepared four hectares, and now you’re going to plant M.9s at low density because you have the trees. For goodness’ sake, please plant the rest later.”

He also stressed that newly planted orchards must be net-ready. Rapid climate changes mean that a net might become essential for high-quality fruit production during the lifetime of an orchard.

When thinking longer-term about orchards, Krige voiced some concerns. “I’m seeing high-density orchards being established on very, very vigorous rootstocks.”

The risk with these orchards is a downward spiral of greater vigour leading to reduced productivity leading to greater vigour. Excessively vigorous canopies also reduce fruit quality due to poor light distribution and require costly interventions to rectify the situation.

Krige encouraged growers to rather establish fewer hectares but with a greater focus on earlier production, earlier and higher maximum yields, and more Class 1 fruit on the tree.

“There are orchards this year, even with all the challenges, grossing very close to R1 million per hectare,” he said. “We have the tools. If we take 10 tonnes per hectare from local to export, and 5 tonnes from juice to local, we increase the value of our industry by approximately R1.8 billion in one year — that’s quite something.”

Image: Graeme Krige, Fruitmax Agri. Supplied by Echo Media.