COST OF PRODUCTION
The cost of producing almonds involves a number of variable factors, including overhead charges, such as the cost of the land, equipment, taxes, insurance and depreciation; and also the cost of maintenance and handling. Maintenance includes such costs as pruning, plowing, cultivating, spraying and irrigation. Handling includes harvesting, hulling, hauling, and warehousing. Tabulations of estimates in [tables II to VIII] are based on information collected during the years 1913 to 1916, inclusive, from a large number of growers in practically all the almond districts of the state, and represent as accurately as possible with the data at hand the average costs which actually exist throughout California.
Cost of the Land.—The estimates given in [table II] are to be taken as only partially indicative of conditions which actually exist in the various districts mentioned. These figures do not give the entire range of prices but indicate some of the more common values placed upon the land.
TABLE II
Value of Almond Land in California
| District— | Bare land | Land in bearing orchard |
|---|---|---|
| Best Sacramento Valley land | $200-$400 | $400-$600 |
| Other good interior valley lands | 150- 300 | 400- 500 |
| Sacramento Valley, foothill sections | 75- 150 | 200- 400 |
| Contra Costa County | 100- 300 | 250- 500 |
| Santa Clara and San Benito counties | 300- 600 | 500- 800 |
| Paso Robles district | 50- 150 | ........ |
| Banning district | 400- 800 | 600-1000 |
| Averages for California | $250 | $500 |
Equipment.—It has been found impossible to gather accurate figures upon cost of equipment in almond orchards, and especially so in view of the present abnormal economic conditions, but the list given in [table III] will give an idea of the equipment required. In addition, there will be other small items the grower will need which are not mentioned here.
TABLE III
Almond Orchard Equipment
| Plows |
| Harrows (spike-tooth and spring-tooth) |
| Disc Cultivator |
| Weed cutter |
| Clod masher |
| Roller |
| Hoes, shovels, etc. |
| Pruning tools |
| Brush burner |
| Spray outfit |
| Wagon |
| Barns, sheds and other buildings |
| Harvesting equipment: |
| Almond sheets |
| Poles |
| Lug boxes |
| Hulling machine |
| Sorting tables and bins |
| Drying trays |
| Sacks for transportation to warehouse |
| Orchard heating equipment ($25-$30 per acre) |
| Horses or tractors |
| Harness |
Average Overhead Charges.—[Table IV] shows the average overhead charges for almond orchards. Interest and depreciation on buildings are not included because of the great variation in their character, so that an extra charge must be figured on these items by the individual grower.
TABLE IV
Average Overhead Charges per Acre
| Taxes and insurance | $4.00 |
| Interest | 30.00 |
| Depreciation on working equipment | 4.00 |
| Total | $38.00 |
Cost of Production.—[Table V] shows the average cost of production for bearing orchards of varieties in all districts, based on personal observation and cost records from a large number of orchards mentioned previously. Wherever cost is dependent upon tonnage the average yield of 700 pounds per acre is used as the basis for computation. Depreciation on buildings and trees, time spent by teams in idleness, feed consumed during such times and other minor items are too variable to safely estimate, but must be considered.
TABLE V
Average Cost of Production of all Bearing Orchards in California
| Per acre | ||
|---|---|---|
| Maintenance: | ||
| Pruning | $3.00 | |
| Plowing | 2.75 | |
| Harrowing | .75 | |
| Cultivation and weed cutting | 3.00 | |
| Spraying | 3.00 | |
| Irrigation | 2.00 | |
| Handling: | ||
| Harvesting, hulling, etc. | 20.00 | |
| Warehousing (including bleaching), @ ¼c per lb. | 1.75 | |
| Miscellaneous expense for maintenance and handling | 2.00 | $38.25 |
| Overhead charges | 38.00 | |
| Total cost per acre | $76.25 | |
| Cost per pound for maintenance and handling | $0.055 | |
| Cost per pound for overhead charges | 0.054 | |
| Total cost per pound | $0.109 |
Returns.—Prices paid to growers have fluctuated considerably, due to the great variation in both the California and European crops from year to year. [Table VI] shows the average prices per pound paid to the growers for the four principal varieties marketed through the Exchange since its organization.
TABLE VI
Net Prices Realized by the Exchange Members for Different Varieties for the Years 1910 to 1916, Inclusive, in Cents per Pound
| Year | Nonpareil | I.X.L. | Ne Plus Ultra | Drake | Crop tons |
|---|---|---|---|---|---|
| 1910 | 14.00 | 13.00 | 12.00 | 10.00 | 3,500 |
| 1911 | 16.50 | 15.50 | 14.50 | 12.00 | 1,450 |
| 1912 | 13.25 | 12.25 | 11.25 | 9.50 | 3,000 |
| 1913 | 17.25 | 16.25 | 15.25 | 13.25 | 1,100 |
| 1914 | 18.00 | 15.00 | 14.50 | 11.50 | 2,250 |
| 1915 | 13.00 | 12.00 | 11.00 | 9.25 | 3,500 |
| 1916 | 17.25 | 14.75 | 13.75 | 13.00 | 3,400 |
| Average | 15.61 | 14.11 | 13.18 | 11.22 | 2,571.4 |
[Table VII] shows the average price per pound paid to the growers for all almonds (unshelled) regardless of quality and variety, based upon the entire crop handled by the Exchange during the years 1910 to 1916, inclusive. From these figures the average return per pound for all varieties for seven years based on the crop tonnage for each year, 1910 to 1916, inclusive, has been found to be 13.09 cents per pound.
TABLE VII
Average Prices per Pound Paid Growers for all Unshelled Almonds for the Years 1910 to 1916, Inclusive
| Year | Price per pound, cents | California crop, tons |
|---|---|---|
| 1910 | 12.0 | 3,300 |
| 1911 | 13.5 | 1,450 |
| 1912 | 11.0 | 3,000 |
| 1913 | 15.5 | 1,100 |
| 1914 | 14.05 | 2,250 |
| 1915 | 10.75 | 3,500 |
| 1916 | 13.97 | 3,400 |
| Average | 13.09 | 2,571.4 |
The relation of yields, returns and profits from the growers’ standpoint is one which every person must consider before entering the business. In view of the extravagant claims which have been made as to the enormous profits realized by the average grower, the figures in [tables II to VIII] have been worked out and presented here. The summation of the relation of yields, returns and cost of production to the profits for the average grower of almonds is shown in [table VIII].
TABLE VIII
Relation of Average Yields, Costs and Returns, to Profits
| Average yield per acre | 700 pounds | |
| Average returns to grower per acre | $97.30 | |
| Average cost of production per acre | 76.25 | |
| Average profit per acre | $21.05 |
Depreciation on buildings and trees, and other unfigured costs, are too variable to estimate, but they must come from these profits.