Dec 23, 2022

Costs exceed returns for Michigan tart cherry growers

The costs of growing tart cherries in Michigan exceeds market returns, new research shows.

Michigan tart cherry growers must spend 44 cents a pound to produce the fruit, according to the report from Michigan State University Extension.

On average, Michigan tart cherry growers received 18 to 32 cents a pound returns from 2017 to 2021, according to the USDA. Notably, prices averaged 18 cents a pound 2017 to 2019, but increased in 2020 and 2021 following smaller harvests.

The report, conducted by specialists at Michigan State University Extension and the Cherry Marketing Institute, is based on information gathered at a grower focus group meeting, numerous grower spray records, third-party data, plus information provided from input and service suppliers.

Because the majority of tart cherries are grown in northwest Michigan, researchers based their calculations on the region’s 7,733-pound yield average. Costs related to the operation and harvest of bearing tart cherry acreage are currently 26.5 cents a pound. Costs related to orchard establishment and land control are an additional 12.6 cents/lb. Including tart cherry assessments of about 1.17 cents/lb., leads to an overall cost of 40 cents/lb.

However, when applying the average Michigan yield of 7,043 pounds to the study’s cost findings, operation and harvest costs become 28.8 cents/lb., and orchard establishment and land control costs another 13.9 cents/lb., for a total of 44 cents/lb., after assessments.

Researchers note they added to the calculation the caveat that the growers involved in their study tend to harvest higher than average yields, so the study’s total cost data may be considerably higher than the average farmer’s as well, according to the report.

“Based on spray application records, we found that crop protection costs were similar to those from the previous cost of production study, despite increased pest pressure from spotted wing drosophila,” the researchers said. “However, we hypothesize that this could be a result of growers being conservative with sprays during 2020 and 2021 due to knowledge of low yields due to spring freeze events. Harvest costs have dropped slightly, due to faster equipment.”

Input costs are generally higher across the board and supply chain disruptions are often making input availability difficult, according to the report. “While many crop protection input costs have not changed substantially, some important protectants are difficult to find, and herbicides are scarce and expensive,” researchers said.

“Steel, crop protectant, equipment, and fertilizer suppliers are currently reluctant to give price quotes because prices are volatile and subject to change. Labor costs, especially hourly manual labor, are also high.”

The report, which includes updated management costs with spotted wing drosophila, earlier leaf spot controls and increased fertilizer prices, is the most recent version since 2015.

The study received input from regional growers to report on the latest costs for all aspects of managing Michigan’s tart cherries. The study collected and examined two years of spray records and relied on third party data and information collected from agribusiness representatives and industry leadership. Information was compiled during the 2020-2022 growing seasons.

“This informed document is valuable for growers to plan for future management strategies,” the study’s authors said. “Growers also use this cost of production to plan future orchards, remove older blocks and develop sustainable orchard profiles for their farms.

“Cost of production is particularly important for growers to understand their true costs of growing tart cherries, and they can use this document to gauge profitability and/or losses during a season. In addition to higher costs for inputs in recent years, growers will also note significant changes in labor costs, another aspect of agriculture that has increased in recent years.”