AVOCADO ECONOMICS: AN EVALUATION O F COSTS AND RETURNS

B. W . Lee Ventura County Farm Advisor

This r e p o r t i s based on t h e suppos i t i on t h a t you a r e i n t e r e s t e d n o t on ly i n growing avocados, b u t a l s o i n making money while doing i t . This r e p o r t w i l l p o i n t o u t some f a c t s and f i g u r e s , do a l i t t l e e x p l a i n i n g , and g e n e r a l l y inform you i t ' s n o t going t o be ea sy , A s of 1972, t h e l a t e s t yea r f i g u r e s a r e v a i l a b l e , t h e r e were 25,640 a c r e s of avocados i n C a l i f o r n i a , 6,000 of which w e r e nonbearing, r e s p r e s e n t i n g a 30 p e r c e n t i n c r e a s e i n p roduc t ion acreage i n t h e nex t 4 yea r s . I n a d d i t i o n , about 1500 a c r e s a r e being p l an t ed each yea r . The b a s i s of t h i s r e p o r t i s n o t how much money y o u ' l l make growing avocados b u t how much y o u ' l l have t o make t o s t a y i n bus iness .

The f i r s t impor tan t c o n s i d e r a t i o n i s t h a t a f ive-uear-old avocado orchard has an investment v a l u e of $7,822 p e r a c r e . This r e p r e s e n t s money s p e n t p l u s money t h a t cou ld have been earned i f i n i t i a l money was i n v e s t e d e lsewhere a t 7 pe rcen t i n t e r e s t .

The second impor tan t c o n s i d e r a t i o n i s t h e annual c o s t of

C\ produc t ion f o r a mature orchard which i s $ 1 , 2 9 3 p e r a c r e . This - i nc ludes a 7 p e r c e n t r e t u r n on investment p l u s a charge f o r grower 's l a b o r . The $1,293 r e p r e s e n t s what t o t a l c o s t s would be of a l l work done by someone e l s e o r t h e grower r ece ived $3.00 p e r hour i nc lud ing f r i n g e b e n e f i t s f o r h i s l a b o r . A grower 's l a b o r must be considered because he could work f o r someone e l s e and r e c e i v e a t l e a s t t h i s wage f o r h i s t ime. When f i g u r i n g c o s t s , a grower should n o t f a i l t o cons ide r t h e c o s t of h i s own t i m e , I f you can show r e t u r n s e q u a l l i n g $1,293 p e r a c r e , you w i l l be cover ing a l l cash c o s t s p l u s a l lowing f o r d e p r e c i a t i o n of equipment p l u s a 7 pe rcen t r e t u r n on a l l t h e money you have inves t ed . What i s l e f t i s n e t management income o r p r o f i t . I f t h e money t o develop and o p e r a t e t h e orchard was borrowed, t h i s 7 p e r c e n t r e p r e s e n t s t h e i n t e r e s t you would be paying on t h e loan . I f t h e i n t e r e s t charge i s h ighe r t han 7 p e r c e n t , you w i l l have t o a d j u s t o r s t r i v e t o match your r e t u r n s accord ing ly . Before w e s e e how t h e r e t u r n s match up l i t i s necessary t o e x p l a i n how t h e f i g u r e s of $7,822 and $1,293 were der ived .

UC Cooperative Extension

(I

Refer t o t h e a t t a c h e d AVOCADO ORCHARD DEVELOPMENT C0,STS FOR P\ VENTURA COUNTY.

TOTAL LABOR AND FIELD POWER $ 1 ) o o o o c o o o o c o o e o o o c a o o o o o o e m o o $278

This i nc ludes t h e fo l lowing: l and p r e p a r a t i o n , o rchard l a y o u t , p l a n t i n g , i r r i g a t i o n , f e r t i l i z a t i o n , weed c o n t r o l , p e s t c o n t r o l , t r e e c a r e (mulching, p r o t e c t o r s , s t a k i n g , t i e i n g , p r u n i n g ) , and miscel- laneous i t ems such a s e r o s i o n c o n t r o l and r e p a i r s ,

TOTAL MATERIALS (2).....,.....0.00.0COO00E00eOO~JJ.C.0C.e0 $522

This i n c l u d e s t h e fol lowing: t r e e a t $4,00 each, mulching m a t e r i a l s , t r e e p r o t e c t o r s , wate r , f e r t i l - i z e r , weed o i l , p e s t c o n t r o l m a t e r i a l s , and misce l laneous s u p p l i e s ,

TOTAL CASH CULTURAL COSTS ( 3 ) ~ . . 0 0 0 . 0 0 . , 0 0 . 0 0 e 0 . . 0 e . . . 0 0 e ~ . $800

Th i s i n c l u d e s l a b o r , f i e l d power, and materials f o r t h e f i r s t y e a r ,

TOTAL CASH OVERHEAD COSTS ( 4 ) . . . 0 . 0 0 . . . . . . 0 . c ~ 0 D O ~ 0 0 0 0 0 D ~ 0 e $196

Cash overhead c o s t s i nc lude g e n e r a l expense i t ems such as pos tage , t e lephone , i n su rance , o f f i c e , p u b l i c a t i o n s , membership dues , l a b o r a t o r y f e e s , e t e . ; management charge o r t h e f e e pa id t o a grove manager supe rv i s ing t h e development of a grove f o r a grower, county p rope r ty t a x e s , and maintenance and r e p a i r c o s t s f o r b u i l d i n g and equipment.

TOTAL PREHARVEST CASH COSTS ~ 5 ~ ~ 0 0 0 . . ~ ~ 0 0 ~ 0 ~ ~ ~ ~ ~ D D 0 ~ 0 0 0 0 0 e E $996

his inc ludes a l l cash c o s t s f o r l a b o r , m a t e r i a l s t a n d cash overhead expenses. Because t h e r e i s no f r u i t c r e d i t s t o apply a g a i n s t t h e s e c o s t s , t h i s f i g u r e r e p r e s e n t s t h e NET CASH COSTS f o r t h e f i r s t y e a r ,

TOTAL INVESTMENT COSTS

The investment c o s t s i nc lude d e p r e c i a t i o n on i r r i g a t i o n system, b u i l d i n g s , and equipment, ~ e p r e c i a t i o n i s f i g u r e d by d i v i d i n g t h e p e r a c r e c o s t s by y e a r s of l i f e , Trees a r e n o t dep rec i a t ed u n t i l they s t a r t t o produce, g e n e r a l l y t h e 4 th o r 5 th yea r . T o t a l f i r s t y e a r d e p r e c i a t i o n f o r above i t ems i s $ 1 1 9 ,

UC Cooperative Extension

TOTAL NET ALL COSTS ( 9 ) . ~ . . . . . . . 0 . . . . . . . . . . . e e . . .......... $1,465

For sake of un i fo rmi ty , most farm a d v i s o r s develop- i n g c o s t d a t a f o r avocados u s e an assumed land va lue of $3,000 p e r a c r e . W e r e a l i z e , of cburse , most l and can n o t be purchased f o r t h a t and t h a t each p a r c e l of l and has two v a l u e s - - i t s a g r i c u l t u r a l va lue and i t s s p e c u l a t i v e va lue . I n t e r e s t on investment i s based only on t h e a g r i c u l t u r a l va lue and no t on some f u t u r e u se f o r t h e land .

TOTAL INVESTMENT VALUE ( 1 2 ) . . * . a . . . a . e . . . . . e . . . . . . . . ; . . . ~ $5,466

The t o t a l investment va lue ( i nc lud ing l a b o r , f i e l d power, m a t e r i a l s , overhead c o s t , l and a t $3,000, t r e e s , i r r i g a t i o n system, b u i l d i n g and equipment a t $1,120) f o r t h e f i r s t 5 y e a r s i s a s fo l lows:

F r u i t c r e d i t s f o r f o u r t h and f i f t h yea r p roduc t ion a t .25 and .50 f i e l d box ( 1 0 and 20 pounds) r e s p e c t i v e l y a t 20 c e n t s p e r pound has been appl ied .

ANNUAL COSTS

A f t e r s ee ing how we g o t $7,822 investment v a l u e p e r a c r e , you have a p r e t t y good i d e a as t o how easy it i s t o spend $1,293 p e r a c r e p e r yea r t o r a i s e a crop.

Refer t o t h e a t t a c h e d AVOCADO PRODUCTION COSTS FOR VENTURA COUNTY,

TOTAL CULTURAL COSTS.....o.....,..eeO.B................. $162

This i n c l u d e s l a b o r and m a t e r i a l s f o r t h e fo l lowing c u l t u r a l p r a c t i c e s . F e r t i l i z a t i o n : app ly ing 150 pounds of a c t u a l n i t r o g e n p e r a c r e i n two app l i ca - t i o n s , a z inc f o l i a g e spray p l u s t h e c o s t of having a l e a f a n a l y s i s . I r r i g a t i o n : app ly ing 2.5 ac re - f e e t of wate r i n 12 a p p l i c a t i o n s . P e s t Control : applying s n a i l b a i t , r a t po ison , gopher t r a p s , and chlordane f o r a n t c o n t r o l . Weed c o n t r o l : applying one a p p l i c a t i o n of r e s i d u a l h e r b i c i d e p l u s two s p o t sp rays of c o n t a c t m a t e r i a l s . Pruning i n c l u d e s removing deadwood, s k i r t pruning, and t r e e shaping.

UC Cooperative Extension

Orchard t h i n n i n g i s r e q u i r e d between t h e 8 t h and' 12 th year and t h e t o t a l cost of $720 p e r f a c r e f s p r o r a t e d over 10 yea r s f o r an.annua1 c o s t of $72 p e r - a c r e . Miscel laneous inc ludes t r e e c a r e , e r o s i o n c o n t r o l , p rops , e tc ,

TOTAL OVERHEAD C O S T S o o . o o . e o a o ~ e o a e e o e o o o m o c o o o o o a e s o o e o $231

his i n c l u d e s taxes a t $110 p e r - a c t e , maintenance and r e p a i r s , g e n e r a l expense, and management charge, I t e m s inc luded i n t h e s e have a l r e a d y been d i scussed ,

TOTAL PRE-HARVEST CASH C O S T S ~ o o e ~ o a ~ c a o e . . o o e o o o o o o o o o G ~ o o $ 5 5 9 .

TOTAL INVESTMENT O V E R H E A D , , o , ~ o o . , o o o o m 5 0 0 0 C O O e O o ( I ~ O O O o o 0 $734

This i n c l u d e s d e p r e c i a t i o n a t $334 and i n t e r e s t on investment a t $400, The i n ~ e s t m e n t . s c h e d u l e i s g iven on page 2 of t h e s tudy ,

You now know about how much y o u . a r e going t o spend p e r acre p e r year t o raise avocadosj L e t ' s f i n d o u t i f y o u s r e going t o make any p r o f i t , Remember, you have a l r e a d y r ece ived a f a i r r e t u r n on your investment and a moderate wage f o r your l abo r . To make a p r o f i t , y o u ' l l have t o make more than $1,293 p e r acreo How much,you make i s dependent upon y i e l d and r e t u r n s p e r pound.

Yield v a r i e s cons ide rab ly from y e a r t o y e a r and orchard t o orchard , Commercial p roduc t ion may range from 3,000 t o 12,000 pounds p e r acre, E x c e l l e n t o rchards ~ n d e r ~ f a v o r a b l e c o n d i t i o n s produce more, The fo l lowing c h a r t i l l u s t r a t e s v a r i a b i l i t y i n y e a r s on t r e e - r e t u r n s due t o y i e l d and p r i c e r e g a r d l e s s o f v a r i e t y ,

On-Tree P r i c e * Yield p e r Acre i n Pounds p e r Pound 3,000 5,000 6,000 7,000 8,000 10,000 12,000

r *Net t o grower a f t e r h a r v e s t c o s t s and marketing o r d e r assessment of 4,5%

UC Cooperative Extension

1 YIELD PER ACRE FROM SELECTED MATURE HIGH-YIELDING COMP.IETZCIAL AVOCADO ORCHARDS I N CALIFORNIA J

Var ie ty & No. 5-year '.(

Orchard No. Acres2 1965-66 1966-67 1967-68 1968-69 1969-70 Average High Low

Hass

8 4 14,000 11,325 7,925 15,800 7,750 11,667 ( 6 y r ) 15,800 7,750

9 5 27,800 480 8,840 22,520 6,520 13,368 (10 y r ) 27,800 480

10 10 14,600 6,520 12,200 15,000 10,520 10,280 (6 y r ) 15,000 6,520

11 10 20,960 9,400 14,440 13,480 5,640 12,320 (6 y r ) 20,960 5,640

12 20 18,209 7,444 8,408 10,063 6,423 10,109 18,209 6,423

13 10 20,995 4,057 14,260 1,813 2,635 8,752 20,995 1,813

14 16 12,667 5,850 6,060 6,717 8,696 7 , 998 12,667 5,850

15 46 17,143 6,218 9,020 7,135 6,484 7,898 (11 y r ) 17,143 6,218 I

U1 I 1.. Sample orchards loca ted i n San Diego, Riverside, Orange, and Ventura Counties

2. Number of a c r e s i n sample orchard

3. Except as noted

Source: Grower r eco rds

(Taken from ~ x p a n s i o n i n t h e ~ a l i f o r n i a avocado indus t ry , Agr i cu l tu ra l Extension, U. C., ~ i v e r s i d e 1973)

UC Cooperative Extension

From t h e c h a r t abou t 6,500 pounds a t 20 c e n t s p e r pound w i l l r e t u r n $1,300 p e r a c r e . T o p r o j e c t how much your p roduc t ion w i l l . be i s n o t e a s y , b u t you can do t h r e e t h i n g s : (1) check t h e s ta te ave rages , ( 2 ) check t h e county average , and ( 3 1 i n t e r p o l a t e accord ing t o known producing o r cha rds i n your a r e a ,

(1) S t a t e average 1965-72 - 5 /45? pounds p e r a c r e (2 ) County average 1968-72 - 5,860 pounds p e r a c r e (3 ) Good producing o r cha rds - see c h a r t a t t a c h e d .

The Hass v a r i e t y i s t h e major v a r i e t y p l a n t e d i n Ventura County. High y i e l d i n g Hass o r cha rds from t h e c h a r t ranged from a low average of 7,898 (11 y e a r s ) t o a h igh of 13,368 (10 y e a r s ) pounds p e r a c r e . The low average o r cha rd ranged from 6,218 pounds on t h e low t o 17,143 pounds on t h e h igh . The h igh average o r cha rd ranged from 480 pounds on t h e low t o 27,800 on t h e h igh.

P r i c e p e r pound i s l i k e w i s e d i f f i c u l t t o p r o j e c t . The avocado does f a l l o w t h e supply-demand curve i n r e l a t i o n t o supply . A l a r g e supply r e s u l t s i n lower r e t u r n s . A s m a l l supply r e s u l t s i n l a r g e r r e t u r n s , I n Ventura County r e t u r n s pe r pound from 1968 t o 1972 w e r e 23.0, l 5 , 0 , 33.0, 22.3, and 54.1 c e n t s p e r pound r e s p e c t i v e l y . The average was 29.4 c e n t s p e r pound,

The University of California's Agricultural Extension Programs are available to all , without regard to race, color, or national origin.

Co-operative Extension Work in Agriculture and Home Economics, Division of Agricultural Sciences, University of ~alifornia and United States Department of Agriculture co-operating. Distributed in furtherance of the Acts of Congress of May 8, and June 30, 1914. George B. Alcorn, Director, California Agricultural Extension.

UC Cooperative Extension

AVOCADO ORCHARD DEVELOPMErIT COSTS

VENTLIRA COUIVTY

Sample c o s t s have been e s t ima ted on t h e b a s i s of a new 10-acre p l a n t i n g i n Ventura County. Hass v a r i e t y , p l a n t e d 18 x 22' ox 110 trees p e r a c r e , r e l a t i v e l y f r o s t - f r e e s i t e , permanent p l a s t i c i r r i g a t i o n sys tem, and n o n - t i l l e d .

Water c o s t s v a r y , depending on source. Range i s from $10 t o $60 p e r ac r e - foo t . Average f o r county i s $18 p e r at ire-foot .

Assessed v a l u e s and t a x r a t e s va ry by d i s t r i c t s . Range i s from $75 t o $135 p e r a c r e . Tree v a l u e s a r e u s u a l l y added a f t e r t h e f o u r t h yea r .

F r u i t c r e d i t v a r i e s , depending on y i e l d s and p r i c e s . ? Assumed y i e l d s are .25 and .5 f i e l d boxes p e r tree f o r f o u r t h

and f i f t h y e a r s r e s p e c t i v e l y . On-tree p r i c e 20 c e n t s p e r pound.

I n i t i a l c a p i t a l o u t l a y i s e s t i m a t e d a t $4,120 p e r a c r e based on an assumed land c o s t of $3,000 p e r a c r e and $1,120 p e r a c r e f o r t h e i r r i g a t i o n sys tem, pickup, b u i l d i n g , and equipment. The i n i t i a l c o s t of t h e i r r i g a t i o n system i s e s t ima ted a t $650 p e r a c r e i n s t a l l e d . A t t h e beginning of the t h i r d y e a r , t h e s p i t t e r heads a r e u s u a l l y r ep l aced w i t h r o t a t i n g s p r i n k l e r s a t an a d d i t i o n a l c o s t of S l Q O p e r a c r e . For s i m p l i f i c a t i o n , i r r i g a t i o n system c o s t s a r e shown as an i n i t i a l c o s t on ly .

I n t e r e s t on investment f o r t h e f i r s t y e a r e q u a l s 7 p e r c e n t of t h e t o t a l c o s t p e r a c r e ( l i n e 5 ) p l u s 7 p e r c e n t of l and va lue and undeprec ia ted ba l ance of i r r i g a t i o n system, equipment, and b u i l d i n g , I n t e r e s t f o r remaining y e a r s e q u a l s 7 p e r c e n t of p r io r -yea r t o t a l inves tment v a l u e (12 ) .

Investment i n trees a t end of yea r e q u a l s accumulated n e t c o s t s (11) of p r i o r y e a r s .

Investment v a l u e f o r i t e m s i s o r i g i n a l c o s t , less accumulated d e p r e c i a t i o n .

The Unlveraity of Callfomida Agricullural Extenalon Programs are avallable to dl, without regord to race, color, or nationd odgln.

Co-operativa ~xtanmion Work in Agriculture and Home Economics, Division of Agricultural Sciences, university of California and united States Department of Agriculture co-operaring. Distributed in furtherance of the Act. of Ongra88 of May 8, and June 30, 1914. George B. Alcorn, Director, California Agricultural Extension. UC Cooperative Extension

AVOCADO ORCHARD DEVELOPMENT COSTS

VEmm COUNTY

DOLLARS PER ACRF: 1st yr . 2nd yr . 3rd y r . 4 t h y r . 5 t h Y r .

Labor and F i e l d Power Land prepara t ion Orchard layout 20 - - - - Plant (d ig , p l a n t , mulch, wrap) 8 2 3 1 - - Irrigation 60 4 5 36 36 3 6 F e r t i l i z a t i o n 18 12 6 6 6 Weed con t ro l (hoe, o i l , he rb ic ide ) 18 12 9 9 9 Pes t con t ro l 12 9 6 6 6 Tree ca re and pruning 18 15 15 15 18 Miscellaneous (e ros ion con t ro l , e t c . ) 15 12 9 6 6

(1) Tota l Labor and Power $ 278 $ 108 $ 82 $ 78 $ 8 1

Mate r i a l s Trees (110 t r e e s / a c r e @ $4.00) $ 440 16 4 - - Mulch 20 - - - - Tree p r o t e c t o r s 11 - - - - Water a/ 12 18 2 4 36 4 8 ~ e r t i l y z e r 3 6 10 13 20 Weed o i l and he rb ic ides 2 0 23 23 23 2 3 Pes t i c ides 6 4 4 6 8 Miscellaneous ( supp l i e s ) 10 10 10 10 10

( 2 ) To ta l Ma te r i a l s $ 522 $ 77 $ 75 $ 88 $ 109

(3) To ta l Cash Cu l tu ra l $ 800 $ 185 $ 157 $ 166 $ 190

Cash Overhead General expense Management charge 3 6 36 36 36 3 6 Taxes b/ 60 60 60 80 110 MainteKance and r e p a i r 20 20 20 20 20

(4) To ta l Cash Overhead $ 196 $ 135 $ 132 $ 153 $ 185

(5) To ta l Preharvest Cash Costs $ 996 $ 320 $ 289 $ 319 $ 375 - (6) Less F r u f t C r e d i t s d - - - $ 220 $ 440

(7) Net Cash Costs $ 996 $ 320 $ 289 $ 99 $ 65+

Investment Costs Depreciat ion d/ $ 119 $ 119 $ 119 $ 119 $ 119 I n t e r e s t on investment 350 383 432 482 516

(8) T o t a l Precash Costs $ 469 $ 502 $ 551 $ 601 $ 635

(9) To ta l Net A l l Costs $1,465 $ 822 $ 840 $ 700 $ 570

(10) Accumulated To ta l N e t Costs $1,465 $2,287 $3,127 $3,727 $4,297

(11) Accumulated N e t Cash Costs $ 996 $1,316 $1,605 $1,704 $1,639

INVESTN3NT VALUE: AT END OF YElAR Land @ $3,000 Trees I r r i g a t i o n System $650) - $1,120 $1,001 $ 882 $ 763 $ 644 $ 525 Equipment and bldgs. 470)

(12) To ta l Investment Value $5,466 $6,169 $6,890 $7,371 $7,822

B. W. Lee, R,. C. Rock 1/1974 - 5 0 0 ~

UC Cooperative Extension

AVOCADO PRODUCTION COSTS

VENTURA COUNTY

BASIS FOR STUDY

The f i g u r e s l i s t e d i n t h i s sample c o s t of product ion s tudy a r e based on assumed condi t ions . The t y p i c a l p r a c t i c e s a r e l i s t e d , with sample c o s t s given f o r l abo r , m a t e r i a l s , and equipment. These a r e no t average c o s t s , b u t a r e intended a s guide l ines . Ind iv idua l orchards may vary cons iderably from t h e s e f i g u r e s i n t h e i r c o s t s and r e tu rns .

Sample Costs i n t h i s r e p o r t a r e based on a t y p i c a l mature commercial ten-acre owner-operated orchard of mainly Hass avocados p lan ted 18 x 22 f e e t o r 110 t r e e s per ac re on a moderate s lope h i l l s i d e with permanent p l a s t i c p ipe s p r i n k l e r i r r i g a t i o n system and with no f r o s t p r o t e c t i o n equipment.

Wage Rate i s $3.00 per hour i nc lud ing f r i n g e b e n e f i t s .

Pruning c o n s i s t s of removing s k i r t l imbs t o al low f o r water d i s t r i b u t i o n from s p r i n k l e r s and removal of broken branches, deadwood, suckers , and c u t t i n g wild growth t o con t ro l shape.

Orchard Thinning of temporary t r e e s i s r equ i r ed a s t r e e s crowd. The f i r s t t h inn ing a t 8 t o 12 yea r s of age removes h a l f t h e t o t a l t r e e s . Addi t iona l t h inn ing may be r equ i r ed 4 t o 6 years l a t e r .

Harvest Costs vary from 1% t o 4 c e n t s per pound, depending on t r e e s i z e , y i e l d per t r e e , t e r r a i n , e t c .

Marketing i s through independent o r coopera t ive packinghouses. An assessment of 4.5 t o 5 percent of t h e va lue of crop a t roads ide i s made f o r s a l e s promotion and product ion research .

YIELDS AND FETURNS

Yield v a r i e s cons iderably among orchards and from year t o year. Commercial product ion may range from 3,000 t o 12,000 pounds pe r acre . Exce l len t orchards under favorable condi t ions produce more. The fo l lowing c h a r t i l l u s t r a t e s v a r i a b i l i t y i n g ros s on- t ree r e t u r n s due t o y i e l d and p r i c e changes f o r a l l v a r i e t i e s .

On-Tree Pr ice* Yield per Acre i n Pounds per Pound 3,000 5,000 6,000 7,000 8,000 10,000 12,000

$0.10 $ 300 $ 500 $ 600 $ 700 $ 800 $ 1,000 $ 1,200

* Net t o grower a f t e r h a r v e s t c o s t s and marketing o rde r assessment of 4.9%

VENTURA COUNTY YIELDS AND RETURNS

Acreage Ave. Yield Year To ta l Bearing Lbs/Acre 1968 3,372 2,785 8,350 1969 3,867 2,947 7,150 1970 3,638 3,070 5,000 1971 4,296 3,155 5,200 1972 4,862 3,279 3,600

Average 5,860

Gross T o t a l Cents/Lb Value

23.0 $ 3,883,000

UC Cooperative Extension

INVESTMENT SCIIEDULE a

Deprec ia t ion and i n t e r e s t on investment a r e inc luded i n t h i s study. An annual charge f o r i n t e r e s t on investment i s c a l c u l a t e d on t h e money inves t ed i n l and , trees, bui ldings, ,+

r and equipment. The charge i s a t a r a t e of 7 pe rcen t on assumed a g r i c u l t u r a l l and va lue of $3,000 per a c r e p l u s h a l f l i f e on t r e e s , equipment, and bu i ld ings . *d

Deprec ia t ion and i n t e r e s t pe r a c r e a r e c a l c u l a t e d from t h e fol lowing investment schedule.

Expected Per-Acre Cos ts Item L i f e Investment Deprec ia t ion I n t e r e s t

Land - - - ........................ $210.00 Trees ( l lO/acre) ............ 20 yea r s $4,297 $214.85 150.39 I r r i g a t i o n System ........... 10 yea r s 650 65.00 22.75 Pickup. ..................... 5 yea r s 150 30.00 5.25 Bui ld ings and miscel laneous. 20 y e a r s 120 4.00 4.20 Weed sprayer , hand t o o l s . . . . 10 y e a r s 200 20.00 7.00

To ta l Investment Schedule $5,417 $333.85 $399.59

COST ANALYSIS PER ACRE

C u l t u r a l Operat ions Labor Mater ia l and Eauiwment T o t a l

F e r t i l i z e r Nitrogen - 2 t i m e s , 1 . 5 l b s N/tree ...... $ 6 Zinc spray and l e a f a n a l y s i s ............ 9

I r r i g a t i o n - 12 t imes , water 2.5 ac - f t / a c r e 36 Pes t c o n t r o l - s n a i l s , rodents , a n t s . . .... 9 Weed Cont ro l

Herbicide ............................... 3 Spot o i l - 2 t imes ...................... 6

Pruning - s k i r t , dead wood, shaping ....... 9 ...... Orchard t h inn ing - 10-year p r o r a t i o n 48

Miscellaneous - t r e e ca re , e ro s ion , e t c . . . 36

T o t a l C u l t u r a l Costs $162

Overhead Costs

................................................................... Taxes $ 110 ................................................ Maintenance and r e p a i r s 4 0

General Expense ........................................................ 45 Mana.gement Charge ...................................................... 36

T o t a l Cash Overhead Cos ts $ , 231

To ta l Preharves t Cash Costs $ 559

Investment Overhead

........................................................... Deprec ia t ion $ 334

To ta l Cash Cos ts Plus Deprec ia t ion $ 893

I n t e r e s t on Investment................................................. $ 400

T o t a l Preharves t Costs $1,293 r- B. W. Lee Robert C. Rock 1/1974 - 6 0 0 ~

UC Cooperative Extension

AVOCADO CASH FLOW CHART

VENTURA COUNTY

THIS CHART IS BASED ON THE AVOCADO PRODUCTION COSTS

DATA SHEET TO SHOW APPROXIMATE MONTHLY OUTFLOW OF

EXPENSES DURING THE PRODUCTION YEAR,

A g r i c u l t u r a l E x t e n s i o n U n i v e r s i t y of C a l i f o r n i a

684 Buena V i s t a S t r e e t Ven tu ra , C a l i f o r n i a 93001

UC Cooperative Extension

m

O~

IJ

-I

O

m

om

t-

0

. m

m

mm

m

rl

m

d

Id C,

0

B

m

t-

mm

o

mt

-o

.

I r-

m m

m

rl

00

0

00

0

00

0

00

0

00

00

00

0

00

00

0

... . .

. w

om

w

o

co w

mm

(U

mm

(V

rl

ma

m

d

dr

-d

'm

ilt

m

t-

m m

01

mr

-o

00

00

0

0

0

0

oo

ln

w

rl

d' Q

.m

m

d

ilt

I rl

mm

m

rl

rl

ilt

"iJ U

0

om

w

rl

m d

N

G-

m

I e

r- a

d

K-

0 0

In

0 0

I I

I *

a

I I

I

1 I

b

w

0

m

rl

G-

m

Q~

IJ

-I

O

r- o

mr

-0

(U

m

mm

m

Id

9

ilt

mm

oc

om

o

mb

00

c0

a)

e

mm

mo

(n

c~

r

lw

m

d' m

m

mm

o

t-

mt

-0

I

LD

mm

m

d

ilt

co

ma

o

mw

co

mm

O

co

co

om

m

44

.4

V

t

- I

I I

II

I

I I

I I

I m

mm

* . .

. . . .

. . e

.

. . . .

. . . .

. . 3

.

. . . .

. . . .

. . . .

. . X

**

. .

. . o

m*

(

U.

.

. . .

c.

. .

X*

*

3E :

8

.d .

C*

.

(U

l"

r

lx

C

07

0:

:

rig

*

d

d

(V

C

5

0

oa

l .d

0

a

&I

C

*.

&I

FI5

d

.G

al d

I

d*

Id

OI

0

..

4J

4J

-4

.4

E-I C

id

N

*-d

CIl

ad

9

C

du

o

.A

&I

&I ~

J&

IS

I

o 0

-d

@

ad

o

CL

4r

lE

.c

r

lo

al

u

mo

o u

ufg

. ,

.d

Q4

J

C

@Q

CI

4~

id

1d

.d

.

rlr

dr

b

.IJ

aa

la

c

;

5 0

;d

cN

4

gz

m

&I

h

H

3

P,

OC

3 6

UC Cooperative Extension