While down from 2011, Michigan peach acreage is currently steady at about 2,250 bearing acres, with processing peach varieties accounting for around 25% of the total. Peaches remain an important part of growers' crop portfolios, helping to spread the cost of tree fruit assets over more productive acres and providing work for laborers during summer gaps.
As of 2024, the costs of establishing peach orchards are estimated at $9,167 per acre for processor orchards and $10,107 per acre for fresh orchards, with higher costs when high-density approaches are used. The ongoing costs of production, including operating costs, harvest costs, land control, and an allocation for establishment costs, total $5,355 per acre for processor production and $7,587 per acre for fresh production. While operating costs are similar, harvest costs are substantially higher for fresh peaches.
© MSU
About 75% of total production costs are variable, making Michigan peach production sensitive to input and labor cost fluctuations. Labor accounts for 40% of fresh peach and 45% of processor peach production costs. A 10% increase in labor prices would therefore raise total costs by about 4% for fresh and 4.5% for processor production.
Fresh peach production is generally divided into two categories. The first is farm-packed peaches, sold wholesale directly to retailers or farm market businesses. Profits in this category are strong at current yields and prices but depend heavily on labor availability and marketing capacity. The second category is peaches sold to packers. Revenues in this case cover economic costs and provide some profits, though typically less than direct marketing. However, working with packers offers benefits, such as generating income from fruit beyond what farms can market themselves. Many farms use a mix of both categories, and the report provides cost and profit analysis for each.
Processor peach production revenues are currently sufficient to cover operating, harvest, and overhead costs such as crop insurance and food safety expenses. However, processor peach revenues do not generate profits once establishment and land control costs (rent or land payments) are included.
The budgets developed for Michigan peach production are based on averages from focus groups and grower input. Adjustments should be tailored to each farm's circumstances. To support this, the report includes tables broken down by cost categories, along with sensitivity analyses for different yields and prices.
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