Resources / Horticulture / Cost of production
Horticulture · Financial · Breakeven

Cost of production

$1.15/kg

Total operating expenditure divided by kilograms of fruit produced — your financial breakeven per kilo, independent of what the market does at sale. In horticulture, harvest and packing labour is the largest single line, so productivity and yield both move it.

Worked example · Operating cost per kg produced
$1.15 / kg Labour $0.46 Packing $0.24 Inputs $0.18 Water $0.09 Overheads $0.18
Operating cost per kg produced
The benchmark

Orchard operating costs are dominated by labour — pruning, thinning and picking — with published Goulburn Valley figures putting overheads alone around $11,000/ha and thinning as high as $6,000/ha, so cost per kilo swings hard with yield and packout.

APAL — Orchard Costs ↗
What it signals

It is the key tool for managing volatility: it shows how far the price can fall before a crop stops paying, and whether a high-input, high-touch season actually bought enough extra premium fruit to lower the cost per kilo rather than just raise the spend.

Data required to calculate
Total operating expenditure$Fruit producedkg

Silo pulls each of these from the sources the operation already uses, and keeps the figure current automatically.

How to improve it
01

Lift Class 1 packout so labour and overhead spread across premium fruit.

02

Mechanise and streamline pruning, thinning and picking where possible.

03

Spread fixed costs across more tonnes through yield and block renewal.

Questions & answers

What is cost of production?

Total operating expenditure divided by kilograms of fruit produced — your financial breakeven per kilo, independent of what the market does at sale. In horticulture, harvest and packing labour is the largest single line, so productivity and yield both move it.

What data do you need to calculate cost of production?

You need: Total operating expenditure ($), Fruit produced (kg). Silo pulls each of these from the sources the operation already uses and keeps the figure current automatically.

What is a good cost of production benchmark?

Orchard operating costs are dominated by labour — pruning, thinning and picking — with published Goulburn Valley figures putting overheads alone around $11,000/ha and thinning as high as $6,000/ha, so cost per kilo swings hard with yield and packout.

How do you improve cost of production?

Lift Class 1 packout so labour and overhead spread across premium fruit. Mechanise and streamline pruning, thinning and picking where possible. Spread fixed costs across more tonnes through yield and block renewal.

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