Fruit Crops: A Summary of Research 1998

Research Circular 299-99

The Effect of Apple Fruit Bruising on Total Returns

Richard C. Funt, Ewen A. Cameron, and Nigel H. Banks

Introduction

Apple growers produce and market a crop that requires a large investment in labor, equipment, and chemicals. Success in the orchard is a combination of good management and sound business practices. Depending on farm size, many apple growers are able to perform most of the labor requirements, except for harvesting and packing. Many growers hire labor at harvest time and transport the harvested fruit to a packing house. Prior to harvest, the grower has some control over the condition of the fruit including color, size, firmness, and freedom from pest and disease damage. At harvest, the hired labor plays an important economic role in the total returns that the grower receives. Apples at harvest can be bruised by labor, transport to the packing house, and the grading and packing operation.

Apples for the fresh export market in New Zealand (NZ) provide the greatest sales volume and highest returns for the grower. The fruit is required to be free of blemishes (maximum 6%), diseases, disorders, insects, bruises, and other spoiled characteristics. In 1991, bruising cost growers of export apples 25 million New Zealand dollars (2). In a competitive world market, bruising can affect future sales if strict marketing standards do not eliminate bruised apples at the packing house. Therefore, the future of the New Zealand apple industry is dependent on a quality product, which results from excellent marketing standards in addition to growers who can achieve profitable pack out of exported fruit.

Objectives

The objectives of this study were to:

• Determine the average loss in revenue from the bruising of six apple cultivars that have field inspections or no field inspections during harvest.
• Determine the loss in revenue from bruising in low- and high-priced apples.
• Make recommendations for reducing apple fruit bruising and lowering harvest costs.

Orchard and Labor Descriptions

A farm size of 10.6 hectares (ha) was chosen to demonstrate the effect of bruising. This is the same farm size used by the Ministry of Agriculture and Fisheries (MAF) to develop an estimate of costs and returns (9). In the Hawkes Bay fruit region there are 861 orchards with a total of 6,600 ha for an average acreage of 7.7 ha of apples and pears (10). Orchard size does vary among the fruit-producing regions in New Zealand, but Hawkes Bay produces more than 50% of all apples (1).

'Braeburn,' 'Fuji,' and 'Royal Gala' apple cultivars were selected as high-priced cultivars. Harvesters of 'Royal Gala' and 'Fuji' were considered to be paid an hourly rate (NZ $8.00/hr)1 since these fruits have four to five pickings per season (13). Because of multiple pickings per season, it was estimated that a harvester could average two to three bins (24 cartons, 18.5 kg/carton) per day at an average cost of $0.98 to $1.33 per carton (Table 1). Therefore, at 2.5 bins per day an average cost is $1.11 per carton (Table 2). For Braeburn, the harvesting cost was considered to have 50% of the fruit harvested at the hourly rate (similar to 'Royal Gala' and 'Fuji') and 50% at a contract rate of $22 per bin (13) (Table 2). Therefore, Braeburn's cost is $1.10 per carton.

'Red Delicious,' 'Premier Red Delicious,' and 'Granny Smith' apple cultivars were selected as low-priced cultivars. Harvesters of 'Red Delicious,' 'Premier Red Delicious,' and 'Granny Smith' could pick an average of three bins per day at $20 per bin for a cost of $0.83 per carton (Table 2). Generally, these apples had fewer pickings per season, and more fruit were harvested at each picking.

The cost of field supervision (inspection) of bruised apples was calculated to be $10.00/hour for an eight-hour day (Table 2). It was estimated that the inspector would average 32 bins per day.

The cost of grading apples used in this analysis was reported by one packer (3). Another packer had a flat fee of $0.13/kg. As the percent of total apples packed decreases, the cost of grading increases as calculated (Table 3). It is assumed that as the number of bruised or defective fruit increases, additional labor is hired or the speed of the grader is reduced to accommodate a low packout. Therefore, total grading costs increased as bruising and other defects increased. The unit cost of packaging is the same regardless of the percent packout.

Apple prices received by growers were obtained from reports of the MAF Monitoring Reports and Financial Budget Manuals for 1990 to 1994 (7, 8, 9). Apple prices for processing were estimated from the Financial Budget Manuals (4). Prices received over a four-year period were averaged. Based on MAF estimates of production, the percent of production and percent of return per cultivar were calculated for 1993 and 1994.

Results

The actual cost to harvest an 18.5 kg. carton of apples at an hourly rate is dependent on the number of bins harvested per day (Table 1). As the number of bins harvested increased, the price per carton decreased.

It was estimated that a harvester could average two and one-half bins per day. This equals an average cost of $1.11 per carton for 'Royal Gala' and 'Fuji' (Table 2). Braeburn's cost is $1.12 per carton. 'Red Delicious,' 'Premier Red,' and 'Granny Smith' were all harvested at the $20 for 24 carton bin rate for a cost of $0.83/carton.

The cost of supervision was an additional $0.10/carton when a supervisor (inspector) was used in the comparison of supervised to non-supervised harvesters (Table 2). The total cost to pick a carton of apples with supervision was $1.21 per carton. Further, as bruising increased, the grading cost increased $0.21 per carton for 60 from 69 percent packout and $0.42 for 50 to 60 percent packout (Table 3). For every 1% increase in bruising, grading costs increased $0.02 to $0.04 per carton.

As the number of bruised fruit increases, the total packout decreases. The average return for 'Royal Gala,' 'Fuji,' and 'Braeburn' (high-priced apples) over a four-year period from 1990-91 to 1993-94 was $22.82 per carton. The average return for 'Red Delicious,' 'Premier Red,' and 'Granny Smith' (low-priced apples) was $9.64 per carton (Table 4). The return per bin (of high-priced apples) for 50% to 70% was $274 to $383 and for low-priced apples it was $116 to $162 (Table 5). For every 1% increase in packout, there is a $5.48 increase in returns per bin of high-priced apples and $2.31 for low-priced apples. As packout increases by 1%, the amount of processed apples may decrease by 1%. However, this was not included.

The net returns (returns minus costs) for each 1% increase in packout due to reduced bruising for high-priced fruit and supervised harvest labor would be $4.31 per bin ($5.48 - 1.11 - 0.10 + 0.04 = $4.31), $4.41 nonsupervised, and $1.42 and $1.52 for low-priced fruit and supervised and nonsupervised harvest labor, respectively.

Returns per ha of land are a product of yield, packout (percent of grade and size), and price received. Based on reports and estimates for a 10.6 ha apple orchard, high-priced apples such as 'Braeburn' can produce 24 to 27% of the volume but returned 35 to 36% of the revenue (Table 6). In 1993 and 1994, the price received for 'Braeburn' was 43 and 32%, respectively, higher than the average price for all apples. 'Royal Gala' is similar to 'Braeburn' in percentage of packout but in 1993 'Fuji' had a very low packout (32%) and below-average price ($9.48) was received. Packout for Fuji in 1994 was higher than in 1993. In 1993 'Red Delicious,' 'Premier Red Delicious,' and 'Granny Smith' accounted for 4 to 20% of the production, but for only 2 to 9% of the revenue (Table 7). Similar, but lower, levels of production and revenue for these cultivars were recorded for 1994. However, 'Granny Smith' had the lowest packout and price of low-priced cultivars in 1993 and 1994. Before 1993, a higher price was received for 'Granny Smith' than for 'Red Delicious' or 'Premier Red Delicious' (Table 4).

Discussion

Apple bruising is caused by the impact of one fruit touching another fruit in the picking container, by the impact of fruit hitting the bottom of the apple bin, and by fruit to fruit impact as they roll from the top to the bottom of the pile in the bin. Apples are also bruised during transport and grading. Managers in the orchard and at the packing house can influence the occurrence and rate of bruising by controlling events and conditions in the distribution system (12). It is believed that 40% of bruising occurs in the orchard. An additional 40% is caused by the grading operation, with the remaining 20% coming from other causes from transporting apples from the field to grading operation (2). Further, Banks recommends that growers can control bruising by instructing harvesters how to place fruit into picking containers, how to release the fruit into field bins, and how to fill the bins evenly across the bin area to avoid having fruit roll from the top to the bottom of the pile of apples. Padding of the field bin can reduce bruising in the bottom layer of fruit by 30 to 60% (2). In this study, the reduction of bruising at harvest by 1% could increase the net returns by $1.42 to $4.41 per bin for low- or high-priced fruit, respectively.

Field supervision is a practice in some New Zealand orchards where each harvester's bin is checked for bruising and in some cases for fruit size and color. The supervisor can indicate to other harvesters that the amount of bruising (above 2 to 3%) is unacceptable, and the harvester can be released from work if bruising is not reduced. Some growers may pay a bonus to those persons who can pick apples with low amounts of bruising.

Harvest labor accounts for 41% of total wages, and all wages account for 42% of the total costs to produce apples in New Zealand (7, 8, 9). Total wages paid to employees increased 9.7% between 1990-91 and 1992-93, but decreased in 1993-94 due to hail-damaged fruit which were not harvested. However, average yields per ha are some of the highest in the world. Due to strict export requirements, an average of 58% packout is considered to be below average, but certain cultivars such as 'Fuji' are responsible for this. In Washington State, USA, red color sports of 'Delicious' are expected to have a 76% packout and 'Golden Delicious' 62%. Sixty percent is considered to be the average packout in Washington (6). All apple growers must understand the effect of returns on packout in order to be competitive in a global economy.

In New Zealand, where the export market is of extreme importance, strict standards are paramount to maintain worldwide reputation. The Apple and Pear Marketing Board, therefore, allows no more than 6% of the final pack to have bruises or defects. As any one defect or spoilage increases, it puts the other defect under greater pressure to be reduced. Therefore, the Apple and Pear Marketing Board oversees the quality control programs of packing houses through weekly inspection. Generally, bruising is 0.6% and total defects are less than 6.5%. While packing houses are eliminating most of the bruised apples, growers and the Marketing Board need to encourage packing houses to make adjustments (reduce height differences, provide padding, reduce collision, reduce speed, etc.) or purchase new improved equipment in the short term to decrease the amount of bruised fruit.

Also, the authors are concerned that growers may face a reduced amount of locally available and experienced harvesters in the near future. With the expansion of new orchards and vineyards and the need to pack fruit for export during the harvest season, the labor required for seasonal work will increase. Currently, nonagricultural wages are also increasing up to 20%, and therefore competition for labor may require an increase in harvesters' hourly or contract rate. However, growers are shifting from trees that require ladders to dwarf-sized trees that require no ladders for harvesting or pruning.

Dwarf trees will increase the number of bins harvested per hour. In the United States, where harvesters are paid by the piece rate, labor studies indicate that persons using ladders can harvest nine to 10 bushels (19.1 kg/bu) per hour compared to a harvest of 11.5 bushels per hour without ladders (11). Increasing the number of units per hour decreases the harvesting cost per unit when harvesters are paid by the hour. New Zealand growers also expect fewer number of pickings on dwarf trees, which will also increase efficiency (5). It is possible that, as wages increase, orchard systems, harvest supervision, and techniques to reduce bruising (such as use of padding) can hold total harvesting costs to a minimum, ensuring constant or increasing returns over the next five to 10 years.

Literature Cited

1. Agriculture New Zealand. 1994. Personal communication.
2. Banks, N. H., C. M. Mowatt, C. J. Studman, and L. Boyd. 1994. pp. 1-14. In: Proceedings of the Fruit Crops Unit Information Day. N. H. Banks, Ed. Massey University, Palmerston North, New Zealand.
3. Burtt, E. S. and P. H. Fleming. 1993. pp. A-60 and B-118. In: Financial budget manual. Dept. of Farm Management, Lincoln University, Canterbury, New Zealand.
4. Burtt, E. S. and P. H. Fleming. 1994. pp. A-38 to A-62. In: Financial budget manual. Dept. of Farm Management, Lincoln University, Canterbury, New Zealand.
5. ENZA Tech. Support Group. 1994. Orcharding in the Year 2010. pp. 28-35. In: Proceedings of ENZA New Zealand (International). Pipfruit Growers' Conference, Hastings, New Zealand.
6. Funt, R. C., T. A. Baugher, H. W. Hogmire, and W. C. Kleiner. 1992. Profitability of different apple orchard systems in the eastern United States. The Ohio State University. Ohio Agricultural Research and Development Center. Department of Horticulture and Crop Science Series 624.
7. MAF. 1992. Farm monitoring report. pp. 44-50. In: National report. Ministry of Agriculture and Fisheries, Wellington, New Zealand.
8. MAF. 1993. Farm monitoring report. pp. 39-46. In: National report. Ministry of Agriculture and Fisheries, Wellington, New Zealand.
9. MAF. 1994. Farm monitoring report. pp. 44-51. In: National report. Ministry of Agriculture and Fisheries, Wellington, New Zealand.
10. New Zealand Apple and Pear Marketing Board. 1994. Personal communication.
11. Ricks, D. J. 1966. Worker productivity in apple picking. Rural Manpower Center Report No. 1. Department of Agricultural Economics. Michigan State University.
12. Schoorl, D. and J. E. Holt. 1983. Profit, price, and performance in horticultural distribution. pp. 11-22. In: Proceedings. Seminar at Tickling Hall. E. W. Hewitt and G. C. Western, Eds. D.S.I.R., Auckland, New Zealand.
13. Taylor, Lincoln and Associates Ltd. 1994. Personal communication.