THE TRUTH ABOUT OGR

Our strategy and commitment to the industry is for our business and our growers to have long term profitability and business sustainability.

A key driver for business sustainability is return crop; your chosen harvest strategy will impact on this.

Deciding on your harvest strategy includes the consideration of many factors.  These are outlined below.

Once you have gained clarity on these factors, you are able to make an informed decision about your preferred harvest timing and marketing choice (on-consignment, Pool 1, or Pool 2).

Factors influencing harvest timing:

• What is my tree health status?
• What is the average fruit size I am seeing or predicting to have?
• What type of pruning (structural/shaping) and when do I want to do this? (Ideally major structural before flowering)
• What about my orchard’s contour relative to potential weather will impact ease of harvest/damage to soil/roots?
• What are my cashflow requirements?
• What are my average picking costs?
• What are the market insights from the sales and marketing team?
• What will the impact be on my return crop?

Case study
To assist you in determining the best harvest strategy for your orchard we have modelled a scenario below.

The grower in the below scenario has considered the below and decided to put 70% into Pool 1 and 30% into Pool 2.

• What is my tree health status? – High crop load and good bud development, overall health is looking good but some trees showing signs of stress.
• What is the average fruit size I am seeing or predicting to have? – Estimate 20-30% would be 30 count or smaller – some fruit on the smaller side so wanting to allow some of that to size for a late season pick. Will consider fruit thinning next season.
• What type of pruning (structural/shaping) and when do I want to do this? – Consistency of fruit set for the following season (21/22) is influenced by pruning decisions this season so the grower wants to target some high vigour trees for shape and some poorer performing trees will have significant restructure. Some tree’s/branch’s will be targeted to be strip picked.
• What about my orchard’s contour relative to potential weather will impact ease of harvest/damage to soil/roots? – Generally flat, so can potentially pick when soils are a little wetter.
• What are my cashflow requirements? – Off orchard income means that this factor does not impact highly.
• What are my average picking costs? – Smaller orchard therefore fixed cost (equipment drop-off etc) will be spread over a low volume. Say 10% increase with split pick which is offset by pool average premium and/or fruit size growth.
• What are the market insights from the sales and marketing team? – Indications are that there will be strong pricing in the post-Christmas Australian market.
• What will the impact be on my return crop? – Do not want trees to carry significant crop load into Christmas because of known negative impact to return crop.

The below table summarises the example grower’s key decisions factors based on their observations over the last three years about how their orchard will perform in terms of fruit drop, fruit size and pack out. For each orchard, this decision will be different, but we hope that the below table will assist you and your Just Avocados Grower Services team member in coming up with the right harvest strategy for you.

Definitions/notes

• Fruit drop: Percentage of fruit likely to be lost due to natural abscission or weather-related events. Highly variable between orchards but based on Just Avocados Grower Services team observations over time. As we go deeper into the season it would be logical to assume that fruit drop will increase. It is also logical that we would increase our exposure to the risk of high wind events.
• Average marketable packout: Percentage of fruit meeting export and Tag 2 grade(s), figures gained from monthly average figures as seen through Just Avocados woodland Road packshed 2019-20 season. Typically, average marketable packout declines as we go deeper into the season.
• Average size: Size of fruit, figures gained from monthly average as seen through Just Avocados Woodland Road packshed 2019-20 season. The industry is working on some fruit growth model’s currently.
• Price % change: How the price will vary throughout the season relative to the start of the season.
• Implied relative revenue: The weighted average of the above factors

Late harvest impact on tree health and return crop
The New Zealand avocado industry needs a consistent supply of avocados year on year and one tool growers have to promote return crop is harvesting the majority of the crop prior to flowering.

Erica Faber Just Avocados’ Technical Manager is a strong advocate for this approach, saying that hanging fruit late starves the tree of what it needs to produce the subsequent season’s crop.

“The tree only has so many resources to go around and when holding the majority of the crop late, the fruit becomes the dominant metabolic sink and where most of the resources move to. Inadequate carbohydrate reserves to the flowers and fruitlets results in either poorer fruit set or higher fruitlet drop.

“If there is not enough resource, a large majority of the flowers end up being determinate which means not only will the fruit be exposed to sunburn and sizing affected but there will be no spring flush emerging which is next year’s flowering wood.

“As this cycle perpetuates where resources get exhausted one year and then built up again when there is little crop only to overflower the next year, irregular bearing becomes intensified and harder to manage,” explains Erica.

As part of our Truth About OGR service, we have developed the OGR AT A GLANCE report that identifies Orchard Gate Return (OGR) for a completed season for individual orchards. This report identifies the returns from both the local market and the export market.

Analysing this information is the first step in understanding your orchard’s long-term profitability and business sustainability.

In the report, you will quickly get an understanding of your orchard’s performance in terms of kg’s per ha vs. the pool, export pack out vs. the pool, overall $/tray returns, and reject analysis.

All of these factors have a very strong bearing on the long-term profitability of your orchard. 

The table below demonstrates what the “average” OGR is against what it could be if you were doing 25 tonnes/ha i.e. the “Top Growers”. Take a look and see where you sit.  If there is potential to do better then contact us to discuss the influences on your profitability – use our contact form or call 027 472 9490.

OGR AT A GLANCE – EXAMPLE INDIVIDUAL ORCHARD REPORT

We have also developed a profitability guide which highlights the key factors YOU CAN MANAGE to maximise your total orchard profitability. These include orchard management, managing tree height and timely harvest strategy.

Want to see the impact on your orchard?

Enter your details below to get your copy of The Truth About OGR – Profitability Guide