There are many cases of vertical integration, but apples that make it to a grocery store in the US are typically sold four times: by the grower to a packer, by the packer to a distributor (often through a marketing company), by the distributor to the retailer, and finally by the retailer to the consumer. The first three sales could all be considered wholesale deals. It is true that pickers receive far too little money for their labor, but your figure of $1/lb at any of these wholesale points is too high. You can look at current spot prices for packer-to-distributor sales here. These prices are listed mostly by the carton, which are about 40lbs typically. Prices at this point do go over $1/lb occasionally for high grades of certain varieties, but keep in mind that this price is after the packing house has taken their cut.
Fair enough, but I think even with a $0.50 spot price we’re looking $3 million in gross revenue, of which the workers can be expected to receive roughly $125,000. Other inputs, like fertilizers, pesticides, herbicides, mulch, etc. don’t grow on trees and can get expensive, and a quick google suggests the farmer’s margin is anywhere from 10-35%, so it’s possible Pryor is taking home the high six figures from these trees.
Hey I just like talking about the price of tree fruit. It’s never boring, that’s for sure. I couldn’t tell you exactly what kind of money growers are making. Enough to have a lobby in Congress I guess.
Mulch does grow on trees, it is trees. Fertilizer and herbicides mostly get used on annual crops.
I would estimate that the picking labor is close to ½ of all the production labor for apples, though. Source: I worked on an apple orchard once.
At a conservative picking estimate from the article of 10,000 pounds a day, or $5000 of product realized at the end of production, we would have maybe $2000 in property tax and vehicle operating costs and pesticides combined, then 12 labor hours that went into planting, straightening, weed-eating, deploying pesticides on, and pruning the apple trees for the 8 hours it took to pick them clean. It’s still 20 labor hours for $3000 of product.
But 12k pounds a day is insane. IIRC it was a good day if I managed 1000 pounds an hour.
There are many cases of vertical integration, but apples that make it to a grocery store in the US are typically sold four times: by the grower to a packer, by the packer to a distributor (often through a marketing company), by the distributor to the retailer, and finally by the retailer to the consumer. The first three sales could all be considered wholesale deals. It is true that pickers receive far too little money for their labor, but your figure of $1/lb at any of these wholesale points is too high. You can look at current spot prices for packer-to-distributor sales here. These prices are listed mostly by the carton, which are about 40lbs typically. Prices at this point do go over $1/lb occasionally for high grades of certain varieties, but keep in mind that this price is after the packing house has taken their cut.
Fair enough, but I think even with a $0.50 spot price we’re looking $3 million in gross revenue, of which the workers can be expected to receive roughly $125,000. Other inputs, like fertilizers, pesticides, herbicides, mulch, etc. don’t grow on trees and can get expensive, and a quick google suggests the farmer’s margin is anywhere from 10-35%, so it’s possible Pryor is taking home the high six figures from these trees.
Hey I just like talking about the price of tree fruit. It’s never boring, that’s for sure. I couldn’t tell you exactly what kind of money growers are making. Enough to have a lobby in Congress I guess.
Mulch does grow on trees, it is trees. Fertilizer and herbicides mostly get used on annual crops.
I would estimate that the picking labor is close to ½ of all the production labor for apples, though. Source: I worked on an apple orchard once.
At a conservative picking estimate from the article of 10,000 pounds a day, or $5000 of product realized at the end of production, we would have maybe $2000 in property tax and vehicle operating costs and pesticides combined, then 12 labor hours that went into planting, straightening, weed-eating, deploying pesticides on, and pruning the apple trees for the 8 hours it took to pick them clean. It’s still 20 labor hours for $3000 of product.
But 12k pounds a day is insane. IIRC it was a good day if I managed 1000 pounds an hour.