Understanding the Cost of Production

Utilizing technology in the orchard

McNab Orchards was founded in Ardmona, in Victoria’s Goulburn Valley in 1915 and is now managed by the family’s fourth and fifth generation. McNab Orchards comprises 70 hectares on which the family grows a combination of apples, pears and plums. Where McNab Orchards originally used to grow canning varieties for the SPC cannery in Shepparton, they now exclusively produce fresh fruit varieties. Most apples (Gala, Granny Smith and Pink Lady), pears (Williams and Packham) and plums (Angelino and Queen Garnet) are sold to Australian food retailers with a small portion sold to wholesalers and fruit exporters. The family employs two full time staff, with casual labour hired throughout the season for pruning, picking and other operations.

Mitch McNab joined the family business in 2010 as the fifth generation after graduating from RMIT, and immediately showed a keen interest in adopting new technology on the family farm. Mitch explains: “I completed a Nuffield Farming Scholarship in 2016 researching the application of robotics in agriculture, and am also interested in any other kinds of technology that can help us make improvements in our orchards. From utilizing our inputs better to saving costs, improving yields or negating problems like a lack of casual labor available, I believe that the range of technologies now available for agriculture can be helpful in many different ways.”

Adopting new technology

One of the technologies that Mitch introduced to the orchards soon after joining the family business was Agworld, which helps create a better understanding of the cost of production according to Mitch: “The margins in fruit production have been steadily declining over the last 30 to 40 years and our profitability is now mainly volume driven. What this means for us is that we need to have a better handle on the margins we achieve in certain varieties, as this helps us ensure that we’re not overspending but still get the quality of fruit needed to get the return that we aim for.”

Both full time employees and Mitch McNab have access to Agworld and utilize the platform for their daily operations, says Mitch: “Our agronomist with Fruit Growers Victoria uses Agworld to create recommendations together with myself, which we then turn into work orders and allocate to whoever will complete that job. Having this collaborative aspect available to our business made Agworld the standout option when we looked at the different data platforms available for our orchard, as it allows us to have our employees involved as well instead of putting all the administrative burden back on myself or our office staff.”

“Especially when we’re in the busy part of the season, it’s important to keep track of which jobs have been completed and which jobs still need to be taken care of. Agworld helps us with this by giving me a simple overview of the orchard and which jobs haven’t been completed yet. Sometimes we’re pruning, harvesting, packing, planning and dealing with other issues all on the same day, so it’s important to know what everyone is doing in the orchard and making sure we keep a handle on our agronomic practices, logistics, and the costs involved in everything. Having our staff enter data into Agworld helps me a lot with this as it ensures that I have an up-to-date overview available at all times.”

Mitch continues: “Agworld helps us control our costs in different ways as it provides us with visibility into what we have used and what we will need to buy in the season ahead for example. Because we create our plans in Agworld, we have a pretty good idea of the products that we’ll need during the season and so my father is able to get quotes from ag chem retailers before the season starts, which helps us buy our inputs for the best price possible. With the margins on fruit a lot smaller now than they were in the past we need to minimize our costs wherever possible, and Agworld helps us achieve this in a couple of different ways.”

Traceability

While only a small portion of the fruit from McNab’s Orchard ends up getting exported, the traceability requirements for these exports are very strict according to Mitch: “We export part of our plums into China, for which the protocols require us to have a really strong traceability program of our chemical applications, where the fruit was harvested from, who harvested it, at which date it got harvested, etc. Because we record all this information in Agworld, the reports that we can create in Agworld ensure that we can provide ample information to the auditors throughout the auditing process so that we meet the standards to be able to export that fruit without issues.”

Mitch concludes: “Traditionally, fruit growers in Australia have had a very big reliance on the domestic market, and so to start exporting more isn’t quickly or easily achieved. Because our total fruit yields as a country are increasing every year I reckon we’ll have to start exporting more as a nation, although it’s going to take a pretty big shift as an industry, almost a generational push, to achieve this. For every export market we deal with though we have to be able to provide traceability information for our fruit, which makes it so important to use an agdata platform like Agworld to keep track of everything we do on a day-to-day basis.”