What are the production costs of 1kg of oranges?


Thoughts of a young farmer

  • Resources: Water to irrigate, petrol for the tractor, electricity for the irrigation system to work, fertiliser and around 150 other things you need throughout the year.
  • Salaries: Salaries and social security of the entire team throughout the 12 months of the year (it doesn’t matter whether we sell anything or not). Moreover, there are costs in case someone resigns due to illness or parental leave. This season for instance, two babies were born already and two are on their way. I will be father of my second daughter in June. The oranges of Naranjas del Carmen are very fruitful!
  • Harvest: The oranges are each picked by hand. At 5.30 am the alarm goes off so that we have enough time to harvest all oranges, that will be shipped on that day.
  • Packaging and order preparation: This includes detecting and sorting out oranges that are not in good conditions and packing the fruit in the cardboard boxes to be shipped to their destination. Moreover, we print and stick the shipping labels on the boxes and add the dedication to the orders in case it is a gift.
  • Giving oranges as a gift: In case one of the oranges goes bad along the journey, we always put some additional fruits into the box.
  • Selling the oranges: The fees of Paypal, the bank, Visa, Mastercard, American Express and the rest of the financial institutions regulating the payment.
  • Maintenance of the web: Servers, computers and some apps that are supposed to make our lives easier, which we have to pay indifferently of whether we sell an orange or not.
  • Shipment and transport: These are the costs that bother us most. They include the organization of the shipment of the fruits from the tree directly to any household all over Europe. This should all be done as efficiently and environmentally friendly as possible taking care that nothing gets damaged along the journey. These costs depend on the respective delivery country.
  • Write-offs for the planting and the growth of the trees: During the first five years we spend more resources on the orange trees than we receive. However, not generating any money does not mean that they do not generate satisfaction. Following the growth of a tree is like following the growth of a child.
  • Incidents and reclamations: Although we always give our best, there are things that can go wrong and that people complain about. Often it is not that easy to determine the source of the problem, whether it happened while preparing the order or along the journey. Yet, we are the only ones responsible for finding a solution as fast as possible.
  • Bad years: My uncle Manolo always said: “During 10 years working in agriculture, there are 2 good ones, 5 normal ones, 2 bad ones and 1 very bad one. You never know when it will be the case, you only know that it will happen.”

There are so many variables and the only confirmation I have is that there do not exist two oranges that are alike. Every farmer will have different production costs, because two farmers will never cultivate their fields the same way applying the same philosophy. I admit that there were moments when I felt offended hearing “I really like your oranges, but the ones from the supermarket cost only … €/kg”. The fruits might look the same, even have a similar taste. They will, however, never be comparable to one another. I think that every farmer or producer knows what I am talking about.

Our actions always have consequences. The mere fact of paying a price that is too low is directly related to the salary of those cultivating and picking the fruits for instance. And at that point we do not talk about the application of organic farming or not. We talk about who cultivates them and under which social conditions. Choose how to act and act the way you think.

Gonzalo Úrculo

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