Better data analysis and usage can improve profitability of Ontario apple growers, study shows

August 27, 2015

The results of a recently released value chain study show that making better use of existing data can help Ontario apple growers improve long term competitiveness and profitability.

The study, completed by the Value Chain Management Centre for the Norfolk Fruit Growers’ Association (NFGA), reveals how information and traceability systems can result in more informed management decisions that can let producers make more money and everyone in the value chain reduce costs.

“We collect a tremendous amount of information here from running a packing operation and our goal was to determine how we can use that information more efficiently and take it back to the grower level,” says Tom O’Neill, general manager of the NFGA, an organization that stores, ships and markets apples for its members. “We want to use it to help growers understand the requirements of the marketplace and the costs associated with that.”

The NFGA receives fruit from its members according to individual blocks – or areas – in each grower’s orchard. The fruit is also packed according to those same blocks and the NFGA’s system collects data on apple varieties, packages and blocks for each grower.  Analysis of that information can show an individual grower the cost of each package of fruit from his orchard and which is providing the best return.

For example, if a grower grows Honey Crisp apples in two different blocks in the same orchard but apples from one block are providing a higher return, that data will help determine what production changes – in pruning, picking or nutrient application for example – might need to be made to make both blocks equally profitable.

“Mother Nature controls a lot of what goes on in the orchard, but there are things that we can influence so growers can make more money,” says O’Neill. “We can make the production side more efficient if we can measure the costs from orchard to retail and illustrate to growers how changing what they do in the orchard can help reduce those costs.”

The NFGA has a web portal where growers can log in to see their data. With the study results, the organization is now moving ahead with getting more of its members to use the portal and illustrating the potential impact that using the information it provides can have on an apple operation.

Key findings from the report:

There are strong relationships in place between growers, NFGA and retailers that can be used more strategically to better align management decisions with market demands.
The greatest opportunity for growers to increase their profitability is to improve the effectiveness of their orchard management techniques.

Most factors affecting profitable apple production occur in the orchard. Apple marketers can’t turn a poor quality apple, for example, into a marketing success. Although consumers are interested in buying local, they expect the quality of local apples to be as good as that of imported ones.
None of the opportunities identified in the report require any capital investment by growers. Instead, the focus is on using existing information and traceability systems more effectively.

The complete report can be accessed at http://vcm-international.com/wp-content/uploads/2013/11/Collaborating-to-Increase-the-Profitability-of-Ontario-Apple-Producers-November-2013.pdf.

Investment in this project was provided by Agriculture and Agri-Food Canada through the Canadian Agricultural Adaptation Program (CAAP). In Ontario, this program is delivered by the Agricultural Adaptation Council.

Story by Lilian Schaer for Ontario Apple Growers