Many businesspeople (nowadays more than existing farmers) are attracted to walnut production after seeing appealing feasibility studies. Unfortunately, very few of them take action based on facts.
Like in any long-term time-series cash-flow models based on growth coefficients, it is very likely if not inevitable to construct misleading financial feasibility studies unless you check and re-check your facts on certain vital assumptions. There are a few classic mistakes commonly used in long-term business plans, which I have seen over that are being pumped by commercial-minded advisors:
Productivity:
Almost most of the business plans I have seen (outside of US and Chile) are based on annual productivity per plant. Such statements are very common: like "a 5-year-old walnut plant will produce 5 kg, a 7-year plant will produce 15 kg, a 10-year-old plant will produce 30 kg..."
The problem becomes more obvious when you start multiplying these per tree productivity figures by the number of plants per ha in different plantation densities. (Example, 7 x 5 plantation, 286 plants). While these figures may be possible for a single tree, they are unrealistic in representing productivity in a large commercial walnut orchard setting. I have seen several business plans by first-time walnut plantation owners, that started with record-breaking productivity assumptions that they will not even get close to. The deviation between what they claim and what is possible becomes even greater when these so-called advisors begin talking about dense plantation designs for which they use even much greater multipliers, such as 700 plants per Ha.
Today, a well-planned, well-built, well-managed commercial walnut orchard should begin with a full-mature productivity goal of 6 tons/ha, also commonly known as "cruise production". This is a challenging but possible productivity level that many commercial orchards should reach in US to be financially viable. As explained in previous chapters, your level of long-term productivity is more closely related with how you planned and structured your orchard rather than how you managed it in a particular year. In other words, achieving these productivity targets depends on your initial planning and building your orchard. All decisions and execution components you have put together in the first few years of your project defines your orchard's long-term potential, while your management practices in a particular year defines how much of this potential you will achieve during the next two harvest ahead of you.
Another important consideration in the success of your orchard is how soon you will achieve your cruise productivity levels. Under normal conditions, a commercial orchard should reach it cruising productivity levels on its 8-10 years, depending on your soil fertility, rootstock selection, plantation density and obviously your management practices. Typically, your orchard should begin commercial level (500-1,000 kg/ha) production on its 4-5 year.
Plantation Density:
Plantation density, the distance between your trees and your tree lines is another concept which I believe is over emphasized. Especially considering per-tree productivity figures couple with scenarios of higher density plantation creates seriously misleading productivity figures. Independent from your plantation density, the plantation canopy (the leaf area of a plantation when viewed from above) is limited by the plantation area. And the productivity is directly limited with the amount of leaf area that is the source of photosynthesis, the chemical activity of a plant. While the density will not influence the cruise production levels, it has three important effects in a commercial orchard:
How soon you will reach to the cruise production figures. The denser the earlier.
Your initial set-up cost. The denser, the more plants, more initial cost.
Your management practices and costs. The denser, higher costs, more fertilizer, heavier pruning, or even removal of trees at a certain age.
While I have seen more densely planted orchards reaching their cruise productivity levels sooner, they have significantly higher setup and management costs due to their frequent pruning needs. In essence, I can say three approaches to plantation density:
The outdated model assumes very low density, with usual distances of 10 x 10, or having 100 plants per ha. In such a density, plants will take at least 7-8 years to start touching each other, therefore a very low land utilization.
The more mainstream model comes with more moderate distancing, a very common one is about 7 x 5 meters, needing about 286 plants for ha. I believe this a very balanced compromise between timing to reach cruise production, initial and running costs.
Do not fall into the mistake of believing extraordinary results that come quickly and easily. There is no easy way nor a method to do it faster. One or two years lost during deeper investigation, self-education or putting the right resources together, will in fact save you a lot of time and money.
One other perspective that I try to give to new growers is to have them envision themselves and their orchards in 6-8 years and try to identify areas of their operation that they will have difficulty with. A good example is to envision yourself in a harvesting operation that will take place in 8 years. Tons of walnut being removed from soil, harvesters, tractors, and operators crowding the area. Doing this may help you avoid planting in a very steep area that will be very difficult to harvest.
Oct. 2, 2022
Lisbon
Next: Ep. 4 - Issues, considerations
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