Economics of pruning quickly add up
22 February 2019
By Steven Falivene
International markets will become more competitive in the future and Australian citrus fresh market growers need to be highly efficient in maximising returns.
Pruning is widely accepted as a way to improve pack outs and returns of fresh market citrus.
However some growers are not sure that the financial benefits are enough to warrant changing from a predominantly mechanical hedging program to a hand pruning program.
To help growers make better-informed decisions for their pruning practices Steven Falivene, NSW DPI Citrus Development Officer, has conducted a cost-benefit analysis.
The cost-benefit analysis uses the recently updated NSW DPI 20 year development citrus budgets that are available on the NSW DPI website as a PDF handbook and growers can also download the Excel spreadsheets to conduct their own analysis.
The exercise will compare a fresh market navel orchard using mechanical hedging once every five years (averaged annual mature tree cost of $308/ha/y) to an orchard that is annually hand pruned and hedged once every 10 years (mature tree annual cost of $1,199/ha/y). The results are presented in figure 1.
Net present value (NPV) results are best results to analyse because they bring all of the money in future years to the same value as the current year (i.e. receiving $100 now is of greater value than being promised to receive $100 in 10 years time).
If the orchard was hand pruned and no added price occurred the NPV cost is $4,808/ha over a 20 year period. Most growers are reporting that pruning increases their fruit price at least $100 per tonne. When the fruit price is increased from $550/t to $650 per tonne, the NPV net returns are increased $16,207/ha.
In summary, hand pruning is a very good investment with over a threefold increase on returns (i.e. Invest $5000 and receive $16,000 back).
For the Australian citrus industry to remain economically viable it is reliant on premium pricing. Pruning is a key practice to achieve premium pricing.
There is an opportunity to further explore and understand the details of pruning and the economic responses that different styles of pruning deliver (i.e. chunk pruning vs window pruning) in Australian conditions.
These type of studies will help growers exploit every opportunity of efficiency gains for the long-term economic sustainability of the Australian citrus industry.
Steven Falivene is Citrus Development Officer with NSW DPI. He will be speaking at the 2019 Citrus Technical Forum in Adelaide on March 6-7. To register visit www.citrusaustralia.com.au/events or call (03) 5023 6333.
Graph: 20-year cumulative citrus cashflow analysing navel pruning scenarios.