United States 

Department 

of Agriculture 

www.ers.usda.gov 

 A Report from the Economic Research Service

Abstract 

Specialized fruit and tree nut farms represent a substantial segment of the U.S. fruit 

and tree nut industry. By nature of the commodities produced and the markets targeted, 

these specialized farms require substantial investments in production inputs. Using 

data from USDA’s Agricultural Resource and Management Survey (ARMS), this report 

investigates the major expense components of specialized fruit and tree nut farms in 

the United States from 1998 to 2006. Based on 3-year averages, the analysis compares 

farm expenses by farm size and across regions. Total cash expenses were highest in 

the West where the highest concentration of specialized fruit and tree nut farms are 

located, including a majority of the largest and most highly specialized farm operations. Labor was the largest cash expense for fruit and tree nut farms, followed by 

fertilizer and other agricultural chemical inputs.

Keywords: Fruit, nuts, tree nuts, farms, costs, production expenses, value of production, 

cost of production, farm size, region, labor, fertilizer, fuel, interest payments

Acknowledgments

The authors extend their appreciation and thanks to USDA staff members Nora Brooks, 

Gary Lucier, and Janet Perry of the Economic Research Service (ERS); John Love of 

the World Agricultural Outlook Board; John Jinkins of the Farm Service Agency; 

and Karen Klonsky of the University of California-Davis and Jose Pe~na of Texas A&M 

University for their valuable comments and suggestions. They also gratefully acknowledge the support provided by Daniel Pick of ERS and the editorial and design efforts 

extended on their behalf by Angela Anderson. 

Agnes Perez, acperez@ers.usda.gov

Mir Ali, mirali@ers.usda.gov

Specialized U.S. Fruit and Tree

Nut Farm Production Expenses

FTS-337-01

June 2009

Contents

Approved by USDA’s 

World Agricultural 

Outlook Board

Defi ning Specialized Fruit and 

 Tree Nut Farms. . . . . . . . . . .2

Specialized Fruit and Tree Nut 

 Farms Becoming Fewer 

 and Larger . . . . . . . . . . . . . . 3

Farm Presence Largest 

 in the West. . . . . . . . . . . . . . .5

Very Large Farms Generate 

 More Than Half of Fruit 

 and Tree Nut Crop Value . . .7

Specialized Fruit and Tree Nut 

 Farm Expenses . . . . . . . . . . .9

What Could Alter Future 

 Agricultural Production 

 Expense Profi les? . . . . . . . .16

Conclusions . . . . . . . . . . . . . .17

References . . . . . . . . . . . . . . .18

Glossary . . . . . . . . . . . . . . . . .19

Appendix Tables . . . . . . . . . .21
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In the United States, about 5 percent of all farms rely, to some extent, on fruit 

and tree nut production for a portion of their income (2007 Census of Agriculture). Of these farms, the ones depending on fruit and tree nut sales for 

at least half the value of their farm production are referred to in this report 

as specialized fruit and tree nut farms. These specialized farms serve as the 

focus of a sectorwide trend analysis of fruit and tree nut production expenses 

in the United States. 

Using annual data from USDA’s Agricultural Resource and Management 

Survey (ARMS), this report investigates the major expense components of 

specialized fruit and tree nut farms in the United States from 1998 to 2006. 

Based on 3-year averages (1998-2000, 2001-03, and 2004-06), the analysis 

compares farm expenses by farm size and across regions. Due to sample size 

limitations, the regional groupings were adjusted from the four traditional 

geographic regions (Northeast, Midwest, South, and West) assigned by the 

U.S. Census Bureau (fi g. 1). The Northeast and the Midwest were combined 

into a single region (North) to gain statistical signifi cance, forming three 

major regions—North, South, and West. 

ARMS classifi es farms into four size groups based on the value of production: small (less than $40,000 in production value), medium ($40,000-

$249,000 in production value), large ($250,000-$999,999 in production 

value), and very large ($1,000,000 or more in production value). 

Defi ning Specialized Fruit and Tree Nut Farms

Figure 1

States included in each census region*

*Midwest and Northeast regions combined (North region) for this report to add statistical

significance to the analysis.

Source: Prepared for ERS using data from U.S. Department of Commerce, U.S. Census Bureau, 

Geography Division, www.census.gov/geo/www/us_regdiv.pdf.

South

Midwest

West

Northeast

The Agricultural 

Resource Management 

Survey (ARMS)

The farm-level data for this article 

was derived from the USDA’s Agricultural Resource Management 

Survey (ARMS) conducted annually. 

ARMS is the only national survey 

that provides information on a broad 

range of issues about agricultural 

resource use, production practices, 

farm costs and fi nancial conditions, 

and the economic well-being of 

America’s farm households—all 

collected in a representative sample. 

In addition to indepth analysis of 

individual sectors, such as fruit and 

tree nuts, the survey also allows 

comparisons among various farm 

sectors (Livezey and Ali).

The ARMS is an annual survey 

designed and conducted jointly by 

ERS and the National Agricultural 

Statistics Service (NASS). More 

information about the ARMS can 

be found at www.ers.usda.gov/

Briefi ng/ARMS.
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Specialized fruit and tree nut farms make up the vast majority of all U.S. 

farms engaged in fruit and tree nut production and provide a major portion 

of total U.S. fruit and tree nut production. Of the average 76,498 farms 

that produced fruit and tree nuts between 2004 and 2006, 82 percent were 

specialized fruit and tree nut farms (table 1). These specialized farms rely 

heavily on their fruit and/or tree nut crops for their farm income, even though 

they may also be engaged in other forms of agricultural production. During 

2004-06, more than 95 percent of the farm income for these specialized fruit 

and tree nut farms was generated from fruit and tree nut sales. 

According to data derived from ARMS, the average number of specialized 

fruit and tree nut farms in the United States in 2004-06 (average of 62,959) 

declined by 20 percent from 1998-2000 (app. tables 1 and 3). Farm numbers 

declined across all three regions—North, South, and West. Small farms 

continue to dominate, representing more than half the average number of 

specialized fruit and tree nut farms during 2004-06 (app. table 7). These 

small specialized fruit and tree nut farms, however, are also becoming 

fewer, having declined by 35 percent from (average of 52,984) 1998-2000 

to 2004-06 (average of 34,315). On the other hand, the number of medium, 

large, and very large farms rose during the same period, with very large 

farms showing the biggest gain, increasing 51 percent to an average 2,602 

farms (app. tables 5 and 7). 

The characteristics of these specialized fruit and tree nut farms over the last 

several years partially mirrors the general trend in U.S. fruit and tree nut 

farms reported in the census of agriculture. While the number of specialized 

fruit and tree nut farms declined between 1998-2000 and 2004-06, all U.S. 

farms growing tree fruit, vine fruit, berries, and tree nuts increased from 

85,973 in 1997 to 112,690 in 2007. Farms with orchards increased 2 

percent over the same period, while orchard acreage declined 6 percent 

to 5.04 million acres. Data from the 2007 Census of Agriculture also indicated 

that small, family operations continue to dominate all U.S. fruit and tree nut 

farms. These small farms, however, generate only about 5 percent of all fruit 

and tree nut sales. Most fruit and tree nut sales come from fruit and tree nut 

farms with at least $50,000 in sales, with over 60 percent of the total sales 

coming from the largest of these farms—those with at least $1 million in sales. 

Specialized Fruit and Tree Nut Farm 

 Becoming Fewer and Larger
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Table 1

Average farm expenses for all U.S. fruit and tree nut farms, by farm type, 2004-06

Item Nonspecialized Specialized All

Number of farms 13,539 62,959 76,498

Average acres per farm 484 122 186

Harvested acres 169 67 85

 Harvested fruit and tree nut acres 21 59 52

 Share in fruit and tree nuts (percent) 12.4 88.4 61.5

Gross value of production ($/farm) 362,413 218,978 244,363

Dollars per farm

Variable cash expenses 226,515 144,621 159,115

 Livestock related 1 22,011 1,309 4,973

 Seed and plants 17,812 4,113 6,538

 Fertilizer and chemicals 31,930 21,557 23,393

 Labor 83,904 69,441 72,000

 Fuels and oils 13,121 6,545 7,709

 Repairs and maintenance 13,687 8,241 9,205

 Machine-hire and custom work 10,169 9,839 9,897

 Utilities 11,005 8,150 8,655

 Other variable expenses 2 22,878 15,426 16,744

Fixed cash expenses 38,788 25,720 28,033

 Real estate and property taxes 5,269 6,180 6,019

 Interest 9,104 8,991 9,011

 Insurance premiums 5,271 4,559 4,685

 Rent and lease payments 19,144 5,991 8,319

Total cash expenses 265,303 170,342 187,148

Total noncash and imputed expenses 57,955 41,628 44,517

 Depreciation 17,112 12,095 12,983

 Labor, noncash benefi ts 704 488 526

 Charge to operator and unpaid labor 30,692 20,978 22,697

 Charge to management 9,446 8,067 8,311

Total economic (long-term) expenses 323,258 211,969 231,666

Selected fi nancial ratios Percent

 Cash expense ratio 76.50 75.69 75.89

 Economic expense ratio 89.61 87.25 87.82

Note: Nonspecialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for less than 50 percent of total farm 

production value.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
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The West has the highest concentration of specialized fruit and tree nut farms 

in the United States, averaging 63 percent of the total (39,590 farms) during 

2004-06 (fi g. 2 and app. table 3). The South had more than a third (13,371 

farms) the number found in the West, holding a 21-percent share, while the 

North (consisting of farms from the Midwest and Northeast) had the fewest, 

with a 16-percent share. Specialized fruit and tree nut farms in the North 

generally had fewer acres per farm than either the U.S. average or that of the 

other two regions (app. table 3). Harvested fruit and tree nut acres per farm in 

the North averaged only about half the U.S. average, while those in the South 

and West were between 5 and 10 percent larger than all specialized fruit and 

tree nut farms. 

Fruit and tree nut crops account for a larger percentage of harvested acres 

on specialized fruit and tree nut farms in all regions (app. table 4). On a per 

farm basis, fruit and tree nut harvested acres among specialized fruit and tree 

nut farms in the North averaged about 30 acres during 2004-06, or about 76 

percent of their total harvested acres (app. table 3). In the South and West, 

harvested fruit and tree nut acres averaged slightly over 60 acres each and 

accounted for 88-90 percent of total harvested area per farm. While the share 

of fruit and tree nut acres to total harvested acres per farm are almost similar 

to that for the South and West, the West contributes a much greater portion 

of the U.S. fruit and tree nut production value because of the high concentration of specialized fruit and tree nut farms in the region (fi g. 2). In 2004-06, 

specialized fruit and tree nut farms in the West accounted for 82 percent 

Farm Presence Largest in the West

Figure 2

Regional distribution of specialized fruit and tree nut farms, 2004-06 

Source: ERS calculations based on USDA's Agricultural Resource Management Survey (ARMS).

0

20

40

60

80

100

Percent

Percent of farms

Share of production value

North South West

 Region

16

7

21

11

63

82
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of fruit and tree nut crop value, while those in the South accounted for 11 

percent and those in the North for 7 percent. 

Specialized fruit and tree nut farms are more heavily concentrated in the 

western United States. This region is comprised of 11 States, including California, Washington, and Oregon, which are among the top fruit-producing 

States (including tree nuts for California and Oregon). In 2007, these three 

States accounted for more than 60 percent of the country’s fruit- and nutbearing acreage, contributing to about three-quarters of the U.S. fruit and 

tree nut production value, based on statistics obtained from USDA’s National 

Agricultural Statistics Service (NASS). California is the chief producer of 

fruit and tree nuts, with about half of the country’s combined fruit- and nutbearing acreage and nearly 60 percent of total fruit and tree nut crop value in 

2007. California not only grows the bulk of the country’s grapes (table, wine, 

and raisin-type grapes), strawberries, peaches, nectarines, avocados, kiwifruit, walnuts, and pistachios, but also serves as a major producer of apples, 

pears, plums, sweet cherries, blueberries, and raspberries. Based on NASS 

data, grapes and strawberries are among the highest valued fruit crops in the 

country—valued at over $3 billion and almost $2 billion annually from 2005 

to 2007—representing more than a quarter of U.S. fruit and tree nut crop 

value. Virtually the entire U.S. almond crop, averaging $2.3 billion annually 

and over 10 percent of the U.S. fruit and tree nut crop value during 2005-07, 

is also produced in California. Second only to Florida in citrus production, 

California is also the primary source of citrus fruit for the higher valued fresh 

fruit market. Florida’s citrus crop may have been twice the volume of California’s crop between 2005 and 2007, but the value of California’s citrus crop, 

averaging $1.1 billion annually, almost matched Florida’s at $1.5 billion.

Although Florida ranks second in fruit- and tree-nut-bearing acreage, a 

greater share of Washington’s fruit and tree nut acreage produces crops sold 

to the higher valued fresh market, boosting their value. Washington ranks 

second to California in fruit and tree nut production value, followed by 

Florida. Washington accounted for about 10 percent of U.S. fruit- and treenut-bearing acreage in 2007, half of which produced apples. Washington is 

the largest apple-producing State, harvesting more than half of the U.S. apple 

crop. Over 75 percent of Washington’s apple production during 2005-07 went 

to the fresh market. In terms of value, the fresh market accounted for over 95 

percent of the more than $1 billion in apple crop value in Washington during 

2005-07. The State also ranked fi rst in quantity of apples produced for the 

processing sector. Pears, sweet cherries, grapes, raspberries, and blueberries 

are also among Washington’s contributions to U.S. fruit and tree nut production. Oregon is also a major producer of these commodities, ranking fourth in 

U.S. fruit and tree nut production value in 2007.
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The share of specialized fruit and tree nut sales to gross value of production per farm for each of the four class sizes (small, medium, large, and very 

large) were all over 96 percent. While small farms accounted for more than 

half of all specialized U.S. fruit and tree nut farms during 2004-06, larger 

farms generated a greater share of fruit and tree nut crop value (fi g. 3). 

Only about 4 percent of specialized fruit and tree nut farms between 2004 

and 2006 were classifi ed as very large, but these very large farms provided 

58 percent of the total production value of fruit and tree nuts. Small farms 

contributed just 3 percent of total fruit and tree nut production value. Between 

2004 and 2006, medium and large farms made up a signifi cant share of 

specialized fruit and tree nut farms (30 percent and 11 percent, respectively). 

Farms in these two size classes averaged 15 percent and 25 percent, respectively, of total fruit and tree nut production value. 

Small farms also dominated specialized fruit and tree nut farm populations 

in each of the three major regions (North, South, and West) during 2004-06 

(table 2). While small farm shares of specialized fruit and tree nut farms within 

regions were higher in the South (77 percent) and in the North (55 percent), the 

West still accounted for the largest number of small specialized fruit and tree 

nut farms during 2004-06. Between 2004 and 2006, the West housed more 

than half of the small specialized fruit and tree nut farms in the country and 

almost 70 percent of medium specialized fruit and tree nut farms. Large and 

very large farms are also highly concentrated in the West, accounting for over 

80 percent of large and very large specialized farms during 2004-06. 

Specialized fruit and tree nut farms in the West are very commodity specifi c, 

with 92 percent producing only one commodity (table 2). In the North and 

South, most of the specialized fruit and tree nut farms are more diversifi ed. 

Twenty-four percent of the specialized fruit and tree nut farms in the South 

and 22 percent in the North produce two or more commodities. 

Very Large Farms Generate More Than 

 Half of Fruit and Tree Nut Crop Value
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Table 2

Specialized fruit and tree nut farms, 2004-06 

Item United States North South West 

Percent of farms

Number of commodities produced:

 One commodity 86.4 77.7 76.1 92.2

 Two commodities 9.5 9.3 19.3 6.2

 Three or more commodities 4.1 13.1 4.6 1.6

 

Farm size:

 Small 54.5 54.6 77.4 46.7

 Medium 30.3 38.6 16.0 33.1

 Large 11.0 5.2 4.9 14.6

 Very large 4.1 1.5 1.7 5.6

Note: Farm size is measured by the production value of all commodities produced on a farm.

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).

Figure 3

Size distribution of specialized fruit and tree nut farms, 2004-2006 

Note: Farm size is measured by the production value of all commodities produced on a farm.

Source: ERS calculations based on USDA's Agricultural Resource Management Survey (ARMS).

0

10

20

30

40

50

60

Percent

Percent of farms

Share of production value

Small Medium Large Very large

 Farm size

55

3

30

15

11

25

4

58
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Variable Expenses Account 

for the Bulk of Total Production Costs

Growers incur variable cash expenses for crop production inputs, such as 

labor, fertilizer and chemicals, seeds and plants, and fuels. These expenses 

tend to vary with acreage and output. On average, the annual variable cash 

expense across all specialized U.S. fruit and tree nut farms from 1998 to 

2006 was $114,066 per farm, or 83 percent of each farm’s average total cash 

expenses (app. table 4). Annual variable expenses per farm rose 52 percent 

between 1998-2000 and 2004-06, led by increased outlays for fuels and oils, 

seeds and plants, labor, and fertilizers and other agricultural chemicals (app. 

tables 1 and 3). Average cash outlays for fuels and oils per farm more than 

doubled from 1998-2000 to 2004-06, and expenses for seeds and plants rose 

more than 80 percent. Labor and chemical input cost increases were also 

substantial, rising 59 percent and 42 percent, respectively. 

In addition to variable cash expenses, specialized fruit and tree nut farms also 

incur fi xed cash expenses, such as real estate and property taxes, interest, 

insurance premiums, rent, and lease payments. Combined with average 

variable cash expenses, the total cash expense for these farms averaged 

$170,342 per farm during 2004-06 (app. table 3). In comparison, nonspecialized fruit and tree nut farms incurred 56 percent higher average total cash 

expenses per farm during the same period because of the larger harvested 

crop acreage required to operate these farms (table 1). Acreage in fruit and 

tree nut production, however, amounted to 12 percent of total harvested acres 

per farm for these nonspecialized farms compared with 88 percent for the 

specialized farms. Total cash expenses for nonspecialized fruit and tree nut 

farms averaged $265,303 per farm during 2004-06, with higher expenses for 

all variable expense items than those incurred by specialized fruit and tree 

nut farms, including more substantial livestock-related expenses.

Labor and Agricultural Chemicals 

Top Cash Expense List 

As a critical input in fruit and tree nut production, labor is by far the biggest 

cash expense for specialized U.S. fruit and tree nut farms, accounting for 41 

percent of total cash outlays per farm during 2004-06 (fi g. 4). Labor’s share 

of total cash outlays per farm rose with farm size—29 percent for small 

specialized fruit and nut farms, 33 percent for medium farms, and 42-44 

percent for large and very large farms. Throughout the fruit and tree nut 

production cycle, farm labor is required to carry out the various fi eld/orchard 

operations that, for most fruit and tree nuts, include grafting, transplanting 

(in the case of strawberries), thinning, pruning, irrigating, pest management, 

fertilization, and harvesting. Some farms also have onsite packing facilities, 

so some manual labor is also required to sort, pack, and grade fruit and nuts 

immediately after harvesting. With continued production demand in the U.S. 

fruit and tree nut industry, the industry often experiences shortages of agricultural labor. While mechanization may often be regarded as one option to 

Specialized Fruit and Tree Nut Farm Expenses
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relieve some of the demands for farm labor, it has not been widely adopted in 

the U.S. fruit and tree nut industry. 

The fresh market is a very important niche for U.S. fruit growers. While 

about a third of all the fruit produced in the United States enters the fresh 

market, it represents more than half the value of U.S. fruit production. When 

selling to the fresh market, fruit growers must comply with stringent quality 

requirements, making these crops more costly to produce. For example, 

skilled hired labor, especially in harvesting and packing, is necessary to avoid 

the risk of fruit damage and to ensure that specifi c criteria for appearance 

are met to maintain or increase customer base. For those reasons, most freshmarket fruit are harvested by hand. 

Generally, fruit are sorted and graded and those that do not meet freshmarket quality standards move to the processing sector. In some cases, 

however, like for cranberries, clingstone peaches, wine-type or raisin-type 

grapes, and most Florida citrus, the processing sector serves as the primary 

market. Quality requirements for fruit sold to processors are not as stringent 

as those for the fresh market; even so, most fruit is still harvested by hand. 

On the other hand, mechanical harvesting systems are used extensively for 

tree nuts, which are generally processed. Because many fruit and tree nut 

harvest seasons overlap, access to a reliable and affordable labor pool is vital 

to the U.S. fruit and tree nut industry. 

Based on 2007 Census of Agriculture data, fruit and tree nut farms employed 

23 percent of all the hired farmworkers in the United States and accounted 

for 16 percent of total wages for hired farm labor. Fruit and tree nut growers 

Figure 4

Cash expenses for specialized fruit and tree nut farms, by share, 2004-06 

Note: Specialized fruit and tree nut farms are defined as farms where fruit and tree nuts account

for at least 50 percent of total farm production value.

Source: ERS calculations based on USDA's Agricultural Resource Management Survey (ARMS).

Labor

41%

Fertilizer and chemicals

13%

Seeds and plants

2% Other cash expenses

13%

Interest and insurance

8%

Rent and lease payments

3%

Custom work and utilities

11%

Repairs

5%

Fuel and oil

4%
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have larger cash outlays for hired farmworkers than for custom work. More 

than 60 percent of fruit and tree nut farm wages were for hired workers. 

Agricultural chemicals (including fertilizers) were the second biggest cash 

expense for specialized fruit and tree nut farms (not including organic farms), 

accounting for 13 percent of total cash expenses. This expense is followed by 

machine-hire and custom work (6 percent) and repairs and maintenance (5 

percent). Unlike most vegetable and melon crops, where annual planting is 

required, fruit and tree nut farm expenses for seeds and transplants trail other 

farm cash outlay items. After an orchard is established, it generally takes 

about 3-4 years for the trees to reach bearing age, and a typical orchard’s 

longevity extends 15-20 years after reaching full production. 

Cash Expenses Are Highest in the West

Specialized fruit and tree nut farms in the West incurred the highest total 

cash outlays per farm during 2004-06 because this region has the highest 

concentration of specialized fruit and tree nut farms and the biggest representation of medium to very large farms for this type of farm operation. Total 

cash expenses of specialized fruit and tree nut farms in the West averaged 

$220,145 per farm during 2004-06 (app. table 3), more than twice those for 

the South ($87,258) and North ($84,240). Total cash expenses were consistently lowest for specialized fruit and tree nut farms in the North during each 

of the three periods, likely because of smaller harvested acreage devoted to 

fruit and tree nuts in the region and smaller farm size, on average. 

On a per acre basis, however, total specialized fruit and tree nut farm cash 

expenses were lowest in the South during both 1998-2000 and 2004-06. 

Total cash expenses in the South are spread across a larger average area per 

farm than in the North and West, driving down the region’s per acre cost. 

Total specialized fruit and tree nut farm cash expenses in the South averaged 

$578 per acre in 2004-06 compared with $795 in the North and $1,897 in 

the West. Specialized fruit and tree nut farms in the North, however, had the 

biggest gains in per acre total cash expenses between 1998-2000 and 2004-

06, increasing by about 64 percent compared with 35 percent in the South 

and 34 percent in the West. 

Increasing Cost of Manufactured Inputs 

Manufactured, or energy-based, inputs represent over 20 percent of total 

cash expenses across all specialized fruit and nut farms in the United States. 

Inputs, such as fertilizer and other agricultural chemicals, fuels and oils, and 

utilities, all fall under this input category. Between 2004 and 2006, manufactured input costs incurred by specialized fruit and tree nut farms averaged 

$36,252 per farm, up 46 percent from those of 1998-2000 (table 3). More 

than half of these expenses consisted of fertilizer and other agricultural 

chemicals, such as pesticides, insecticides, and herbicides. Cost increases, 

however, were highest for fuels and oils, with the average cost per farm more 

than two times higher. Much higher farm expenditure gains for fuels and 

oils are largely an offshoot of higher unit costs for petroleum-based fuels, 

such as diesel and gasoline, as refl ected by a 103-percentage-point increase 

in the average index of prices paid by farmers for fuels between 1998-2000 

and 2004-06 (USDA, NASS, Agricultural Prices Summary, 2005 and 2007). 
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Table 3

Manufactured inputs on specialized fruit and tree nut farms 1

Period Fuels Fertilizer 

and farm size and oils and Utilities 2 Total

chemicals 

Dollars per farm

1998-2000:

 Small 517 2,110 917 3,544 

 Medium 2,889 13,527 6,322 22,738 

 Large 14,311 57,622 24,032 95,966 

 Very large 45,025 291,215 131,985 468,226 

 All 3,048 15,138 6,727 24,910 

2004-06:

 Small 1,102 2,215 1,408 4,725 

 Medium 4,373 12,216 5,402 21,990 

 Large 15,408 53,292 17,800 86,500 

 Very large 70,588 260,432 91,455 422,474 

 All 6,545 21,557 8,150 36,252 

Percent change

Change:

Small 113 5 54 33

Medium 51 -10 -15 -3

Large 8 -8 -26 -10

Very large 57 -11 -31 -10

All 115 42 21 46

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts 

account for more than 50 percent of total farm production value. Farm size is measured by the 

production value of all commodities produced on a farm.

1 See the text for farm size defi nitions.

2 Due to data-handling limitations, includes other utilities in addition to electricity.

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey 

(ARMS).

Cash outlays for all agricultural chemicals also increased by 42 percent, and 

utility expenses rose by 21 percent. 

Comparing expenses across the four farm size classes, chemical input 

expenses as a share of total cash costs per farm were relatively consistent for 

medium, large, and very large farms at 13 percent during 2004-06 (app. table 

7). The share for small farms (those with less than $40,000 in production 

value) was slightly lower, at 10 percent. On a per farm basis, however, small 

specialized fruit and tree nut farms experienced a 5-percent increase in their 

average cash outlays for agricultural chemicals from 1998-2000 to 2004-06, 

while those for medium, large, and very large farms declined (table 3). 

As with most of the U.S. agricultural sector, higher prices for oil and natural 

gas over the past few years have translated to higher costs to fruit and tree nut 

growers for manufactured inputs. For instance, because natural gas is used 

to convert atmospheric nitrogen to synthetic fertilizer, the higher natural gas 

prices in recent years, coinciding with increased global demand for fertilizer, have driven up nitrogen fertilizer prices in the United States. Except for 

the small but growing organic fruit and nut production sector in the country, 

U.S. fruit and tree nut growers, along with vegetable growers, are some of 
13

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the heaviest users of agricultural chemical inputs in farm production. With 

declining overall fruit and tree nut bearing acreage over the years, grower 

practices, such as the adoption of improved varieties, soil fertilization, pest 

management, and orchard-fl oor management, have contributed to higher 

yields and achieving the quality attributes that today’s consumers demand. 

Specialized fruit and tree nut farms in the West had 25 percent higher 

manufactured input expenses per farm during 2004-06 than the national 

average (app. table 3). Of these specialized farms, 92 percent produce only 

one commodity. Sixty percent of all specialized fruit and tree nut farms are 

located in the West, including most of the large and very large specialized 

U.S. fruit and tree nut farms (over 80 percent each class).

Specialized fruit and tree nut farms in the North and South are much more 

diversifi ed, wherby nearly a quarter of the farms in each of these regions 

produces more than one agricultural commodity, including livestock that 

requires no direct use of fertilizer and herbicides. Other farms that grow 

more than one crop could be growing nonfruit/nut crops, such as cover and 

forage crops, that would also not require intensive use of fertilizers and other 

chemical inputs. 

Fixed Cash Expenses Rise

Farms also incur fi xed cash expenses, such as real estate and property taxes, 

interest payments, insurance premiums, and rent and lease payments. On 

a per farm basis for specialty fruit and tree nut farms, fi xed cash expenses 

contributed to 15 percent of their total cash outlays during 2004-06. The 

average fi xed cash outlays of specialty U.S. fruit and tree nut farms have 

gone up, increasing 30 percent from 1998-2000 to 2004-06 compared with 

an increase of 52 percent for variable costs (app. tables 1 and 3). Fixed cash 

outlays rose for all expenditure items except for interest payments, which 

declined 6 percent. The national average trend for fi xed cash outlays of 

specialized fruit and tree nut farms, however, does not depict the trend seen 

across the different farm size classes and across regions. Average fi xed cash 

outlays rose only among small farms from 1998-2000 to 2004-06 and for 

large farms from 2001-03 to 2004-06. On a regional scale, average fi xed cash 

outlays over the period 1998-2000 to 2004-06 rose 24 percent in the West 

and 54 percent in the North, but fell 3 percent in the South. 

Interest payments represent the largest fi xed cash expenditure item for 

specialized fruit and tree nut farms. Interest expenses cover the cost of 

carrying both real estate and nonreal estate debt. Averaging $8,991 per farm 

during 2004-06, interest payments for specialty fruit and tree nut farms 

amounted to about 5 percent of total cash expenses for these farms and 

were higher than the average interest expenses incurred by all U.S. farms 

and ranches ($4,654 per farm). Similar to the vegetable and melon industry, 

much of the U.S. fruit and tree nut industry is concentrated in urban fringe 

and coastal areas, which raises land rent and interest on real estate debt. 

Interest expenses for specialized fruit and tree nut farms generally decline as 

farm size increases, with 8 percent of small farm cash expenses consisting 

of interest payments versus 4 percent for very large farms. This discrepancy 

suggests that large farms may have the capacity to self-fi nance some portion, 

if not all, of their operations.
14

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Financial Viability of Specialized Fruit 

and Tree Nut Farms

Two fi nancial measures were applied during this analysis to see how well 

specialized fruit and tree nut farms in the United States control their production expenses for the immediate and long-term future. A farm may be fi nancially viable in the short run, such as for a year, if it is able to cover its variable 

expenses, or it may survive for more than a year if its revenues can cover total 

cash expenses. Some options for farms would be to tap cash reserves, borrow 

against assets, or use off-farm income to pay their total cash outlays. In the long 

run, however, a farm may be deemed fi nancially viable only when it is able to 

cover economic costs—that is total cash expenses plus an allowance for depreciation and imputed returns to management, land, and operator and unpaid labor. 

One of the indicators used to measure the fi nancial strength of specialized U.S. 

fruit and tree nut farms is the cash expense ratio. This ratio measures how much 

a farm operation must spend for production inputs and overhead items for each 

dollar of income it produces. Cash expense ratio is calculated by dividing total 

cash expenses by gross cash farm income. Based on this measure, specialized 

fruit and tree nut farms were found to be fi nancially secure in the short run, 

spending $76 on inputs and overhead items for every $100 of income produced 

during 2004-06. The cash expense ratio for specialized fruit and tree nut farms 

is the same as what was spent by nonspecialized fruit and tree nut farms ($77), 

as reported by 2004-06 ARMS data, and by all U.S. farms and ranches ($77) 

(http://www.ers.usda.gov/Briefi ng/ARMS/). 

Figure 5 shows the amount spent on production inputs and overhead items 

for every $100 that a farm earns differs very little between very large farms 

($74), large farms ($72), and medium farms ($75). By contrast, small farms 

spent more than they earned, incurring $113 in cash expenses for every $100 

of income, which suggests that small specialized fruit and tree nut farms are 

subsidized by off-farm income. Specialized fruit and tree nut farms in the 

South are the most heavily represented by small farms (77 percent of farms in 

the region), which may explain why the region had the highest cash expense 

ratio across regions.

The second measure of fi nancial viability is the economic cost ratio, which 

measures how much a farm must spend over the long run for all costs (cash, 

noncash, and imputed expenses). This ratio is calculated by dividing total 

economic costs by gross farm income. Using this ratio, the analysis showed 

that specialized fruit and tree nut farms in the United States incurred $87 in 

total economic costs for every $100 of income they earned during 2004-06. 

The economic cost ratio was 3 percent lower than what was estimated for 

nonspecialized fruit and tree nut farms ($90) and 11 percent below those 

for all U.S. farms and ranches ($98), based on 2004-06 ARMS data. It is, 

however, very close to the economic cost ratio for specialized vegetable 

and melon farms, which was estimated at $88 for every $100 of gross farm 

income (Ali and Lucier, 2008). Small specialized fruit and tree nut farms 

were the most vulnerable to longrun unprofi tability. Based on the economic 

cost ratio calculations across farm size classifi cations, small farms were the 

only class producing income that was not suffi cient to cover total economic 

costs—spending $120 in the long run for every $100 of income. Specialized 

fruit and tree nut farms in the West—the region with the highest concentra-
15

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Economic Research Service/USDA

tion of large and very large farms—had the lowest economic cost ratio (fi g. 

6). The highest economic cost ratio was in the North and, although the region 

had fewer small farms than in the South, it had the least representation by 

large and very large specialized fruit and tree nut farms.

Figure 5

Cash expense ratio for specialized fruit and tree nut farms, 

by farm size, 2004-06

Source: ERS calculations based on USDA's Agricultural Resource Management Survey (ARMS).

0

20

40

60

80

100

120

Percent

United States Small Medium Large Very large

 Farm size

76

113

75 72 74

Figure 6

Economic cost ratio for specialized fruit and tree nut farms, 

by region, 2004-06

Source: ERS calculations based on USDA's Agricultural Resource Management Survey (ARMS).

0

20

40

60

80

100

120

Percent

 United States North South West

 Region

87

103

94

85
16

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Currently, several issues could affect which fruit and tree nut crops are 

produced and which production methods are used. These issues include 

immigration, labor, environmental concerns (particularly those relating to 

agricultural chemical use and climate change), and diet and health. As a 

consequence of these concerns, modifi cations in farming operations could 

change the production expense profi le of specialized fruit and tree nut farms. 

For example, if the labor available to fruit and tree nut growers were further 

constrained, fresh-market production of some crops might be reduced, some 

production might shift to processing, or there could be more incentive to 

move toward mechanization. Adopting any of these changes could reduce 

overall labor requirements. Labor is the leading expense item for fruit and 

tree nut growers and is most intensively used in fresh-market production. 

New research may show an interest in advancing mechanization technology 

for specialty crops through the Specialty Crop Research Initiative, established 

in the 2008 Farm Bill. If mechanization becomes more prevalent in fruit and 

tree nut production, not just in harvesting, but also in the performance of 

other orchard or vineyard tasks, some of labor’s share of production expenses 

would be shifted to fuel costs, and capital expenditures would increase.

Should environmental regulations force reductions in use of chemical fertilizers and pesticide, there likely will be more widespread adoption of organic 

farming methods or increased use of integrated pest management systems 

to control weeds, prevent disease spread, and enhance soil nutrients. Both of 

these shifts in production methods will also alter the share of chemical inputs 

in the expense mix. 

Horticultural crops, such as fruit, are more sensitive to climate change than 

are grains and oilseeds (Backlund, Janetos, and Schimel, 2008). Geographic 

shifts in production resulting from poor crop adaptation to warming/drying 

climates pose a threat to growers. Another risk associated with climate 

change is reduced water supplies from mountain snowpack and premature 

snowmelt runoff, specifi cally in the western United States where most fruit 

and tree nuts are produced. Should these conditions occur more often and in 

combination with environmental regulations that restrict water use, growers 

will face higher crop irrigation costs and/or be forced to reduce orchard 

acreage. 

Growing concern about the obesity problem in our country has strengthened 

the emphasis on increasing public awareness of the benefi ts of following a 

healthy diet. If consumers were to strictly abide by nutritional recommendations that encourage fi ve to nine servings of fruit and vegetables per day, the 

United States would need to expand production and/or increase imports. For 

the fruit and tree nut sector, increased productivity may be achieved through 

acreage expansion, high-density plantings, and/or use of new varieties that 

offer better yield performance or adaptability to certain geographic and/or 

climatic conditions. A move toward increased acreage could further boost 

land costs, while higher density planting refl ects higher fi xed capital costs 

because, unlike annual crops, tree fruits, nut trees, and vineyards remain 

productive for a number of years.

What Could Alter Future Agricultural 

 Production Expense Profi les?
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Specialized fruit and tree nut farms—those who rely on fruit and tree nut 

sales for at least half the value of their farm production—comprise a vast 

majority of all the farms producing these crops in the United States. Because 

of fruit and tree nut farms’ heavy dependence on labor and energy-based 

inputs to produce their crops, these specialized farms face growing pressure 

from rising production costs, primarily associated with recent labor shortages 

and rising fuel prices. Between 1998-2000 and 2004-06, before the current 

national and global economic crisis, average cash outlays for fuels and oils 

per farm more than doubled, while cost increases for labor and chemical 

inputs rose by 59 and 42 percent, respectively. Despite steep increases in 

input costs, however, specialized U.S. fruit and tree nut farms were able to 

remain fi nancially viable, more so than all U.S. farms and ranches, in general. 

This is especially true for the larger specialized fruit and tree nut farms 

(those with $40,000 or higher in production value like medium, large, and 

very large farms) that have a greater presence in the West. 

While there is no clear indication as to when the economic situation will turn 

around, market fl uctuations on a complex mix of economic (e.g., fuel prices, 

housing market, value of the U.S. dollar, commodity prices) and natural 

(weather) factors will continue to challenge fruit and tree nut growers, likely 

inducing structural and technological changes in their business approaches 

that will help them maintain their competitive position. Fuel prices have 

begun to climb again after dropping from the record highs this past summer, 

and, when the economic situation improves, a rebound in the housing market 

will bring growth again in construction jobs, likely pulling workers back to 

construction and away from agriculture. 

Access to farm credit may be a challenge due to current uncertainties in the 

credit market. Export growth has been instrumental in the success of the U.S. 

fruit and tree nut industry over the last several years, providing a key market 

outlet for growers and boosting grower prices. With other world economies 

also softening, demand for U.S. exports may be dampened by the current 

strengthening of the U.S. dollar. Low demand from exports could divert products to the domestic market and, with current consumer confi dence down, 

may also mean lower commodity prices paid to growers, increasing the fi nancial challenges faced by specialized fruit and tree nut farms. More than half 

of these specialized farms are small operations—found to be most vulnerable to shortrun and longrun fi nancial losses. One may note, however, that 

the business of growing fruit and tree nut crops is quite different from that 

of most other agricultural crops. Because fruit and tree nut orchards, along 

with vineyards, remain commercially productive for many years, production 

decisions are more likely based not just on 1 year’s fi nancial performance, but 

on expectations over several years. Fruit and tree nut growers are, therefore, 

more likely to weather short-term economic hardships by tapping into potential profi tability associated with increasing fruit and tree nut demand.

Conclusions
18

Specialized U.S. Fruit and Nut Farm Production Expenses / FTS-337-01

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Ali, Mir, and Gary Lucier. Production Expenses of Specialized Vegetable 

and Melon Farms, VGS-328-01, U.S. Department of Agriculture, Economic 

Research Service, September 2008, http://www.ers.usda.gov/Publications/

VGS/2008/09Sep/VGS32801/VGS32801.pdf.

Backlund, Peter, A. Janetos, and D. Schimel. The Effects of Climate Change 

on Agriculture, Land, Resources, Water Resources, and Biodiversity, U.S. 

Climate Change Science Program, Synthesis and Assessment Product 4.3, 

May 2008, http://www.usda.gov/oce/global_change/fi les/SAP4_3/Front_

Matter.pdf.

Livezey, Janet, and Mir Ali. “ARMS Data Allow Comparisons Across 

Diverse Farm Types,” Amber Waves, Volume 5, Issue 2, U.S. Department of 

Agriculture, Economic Research Service, April 2007, http://www.ers.usda.

gov/AmberWaves/April07/DataFeature/.

U.S. Department of Agriculture, Economic Research Service. Agricultural 

Resource Management Survey (ARMS) Briefi ng Room, http://www.ers.usda.

gov/brieifi ng/ARMS/.

U.S. Department of Agriculture, National Agricultural Statistics 

Service. Agricultural Prices 2005 Summary, Pr 1-3 (06)b, July 2006, 

http://usda.mannlib.cornell.edu/usda/nass/AgriPricSu//2000s/2006/

AgriPricSu-07-21-2006_revision.pdf.

U.S. Department of Agriculture, National Agricultural Statistics 

Service. Agricultural Prices 2007 Summary, Pr 1-3 (08)a, July 2008, 

http://usda.mannlib.cornell.edu/usda/nass/AgriPricSu//2000s/2008/

AgriPricSu-07-31-2008 revision.pdf.

U.S. Department of Agriculture, National Agricultural Statistics Service. 

Citrus Fruits Final Estimates 2003-2007, Statistical Bulletin Number 1009, 

December 2008, http://usda.mannlib.cornell.edu/usda/nass/SB997/sb1009.

pdf.

U.S. Department of Agriculture, National Agricultural Statistics Service. 

Noncitrus Fruits and Nuts Final Estimates 2002-2007, Statistical Bulletin 

Number 1011, December 2008, http://usda.mannlib.cornell.edu/usda/nass/

SB985/sb1011.pdf.

U.S. Department of Agriculture, National Agricultural Statistics Service. 

2007 Census of Agriculture, http://www.agcensus.usda.gov/Publications/2007/index.asp.

U.S. Department of Agriculture, National Agricultural Statistics Service. 

2002 Census of Agriculture, http://www.agcensus.usda.gov/Publications/2002/index.asp.

References
19

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Cash expenses: variable cash expenses plus fi xed cash expenses.

Cash-expense ratio: measures how much a farm operation must spend for 

inputs and overhead items for each dollar of income it produces. Ratio = 

(Total cash expenses / Gross cash farm income)*100. 

Economic cost ratio: measures how much a farm operation must spend over 

the long run for all cost items (cash, noncash, and imputed expense). Ratio = 

(Total economic (long-term) expenses / Gross farm income)*100. 

Economic (long-term) expenses: cash expenses plus noncash and imputed 

expenses, such as depreciation, cash labor benefi ts, charges to operators and 

other unpaid labor, and charges to management.

Farm size: based on the value of production from all commodities produced 

on a farm. Small farms (production value less than $40,000), medium farms 

($40,000-$249,999), large farms ($250,000-$999,999), and very large farms 

($1,000,000 or more).

Fixed cash expenses: expenses that do not vary directly with output, but 

remain constant. Examples include real estate and property taxes, interest, 

insurance payments, mortgage, rent, and lease payments.

Gross cash farm income: income from livestock, crops (including net 

Commodity Credit Corporation loans), Government payments (including 

commodity marketing loan gains and certifi cate-exchange gains), custom 

work and machine hire, fee income from crops and livestock removed under 

production contracts, land rental fees, and other farm-related income. 

Gross farm income: gross cash income plus net change in value of crop, 

livestock, feed, fertilizer inventory, and accounts receivable, value of farm 

products consumed or used on-farm, and gross imputed rental value of farm 

operator dwelling. 

Imputed expenses: charges for unpaid labor and management. Examples 

include work done by the farm operator, partners, and family members in 

conjunction with the production of commodities where there is no payment 

for services. Though unpaid labor does not generally receive a wage, it does 

have an economic cost. Compensation for unpaid labor and management is 

based on the opportunity cost of off-farm work or the return available in the 

next best alternative use of laborers’ and managers’ time and skills.

Noncash expenses: may include charges on depreciable assets and noncash 

benefi ts provided to labor, such as housing. Depreciation is the charge suffi -

cient to maintain production capacity of machinery, equipment, buildings, 

and purchased breeding livestock. Depreciation may be regarded as a discretionary expense in any particular year. It may be deferred when income is 

low, but ultimately must be paid to maintain the capital stock so that over the 

long term, the operation remains in business. 

Glossary
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Nonspecialized fruit and tree nut farms: farms where fruit and tree nuts 

account for less than 50 percent of total farm production value.

Production value: total value from all products produced on a farm, 

excluding the value of intermediate products, such as corn fed to livestock. 

Regions: defi ned by the U.S. Census Bureau as North (Northeast and 

Midwest combined), South, and West. 

Specialized fruit and tree nut farms: farms where fruit and tree nuts 

account for at least 50 percent of total farm production value.

Variable cash expenses: expenses that change in proportion to the activity 

of the farm. In agriculture, these expenses are primarily the money spent for 

inputs used during the production process, including seed and plants, fertilizer, chemicals, machine hire and custom work, fuels and oils, repairs, hired 

labor, utilities, livestock-related expenses (such as livestock purchases, feed, 

veterinary care, grazing fees, and bedding), supplies, transportation, storage, 

and general business expenses.
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Average regional farm expenses for specialized fruit and tree nut farms

 Appendix table 1: 1998-2000

 Appendix table 2: 2001-03

 Appendix table 3: 2004-06

 Appedix tables 4: 1998-2006

Average farm expenses for specialized fruit and tree nut farms, by farm size

 Appendix table 5: 1998-2000

 Appendix table 6: 2001-03

 Appendix table 7: 2004-06

 Appendix table 8: 1998-2006

Appendix Tables
22

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Appendix table 1

Average regional farm expenses for specialized fruit and tree nut farms, 1998-2000

Region

Item United States North South West

Number of farms 78,710 12,902 21,286 44,522

Average acres per farm 120 102 143 113

Harvested acres 59 34 52 70

 Harvested fruit and nut acres 54 28 48 65

 Share in fruit and nuts (percent) 91.7 82.7 90.9 93.3

Gross value of production ($/farm) 130,062 63,081 70,363 178,014

Dollars per farm

Variable cash expenses 95,016 40,431 51,218 131,773

 Livestock related 1 749 455 721 848

 Seed and plants 2,237 838 1,310 3,086

 Fertilizer and chemicals 15,138 6,510 11,858 19,206

 Labor 43,771 19,759 17,083 63,490

 Fuels and oils 3,048 1,649 1,463 4,211

 Repairs and maintenance 6,243 3,489 3,266 8,465

 Machine-hire and custom work 9,369 1,148 10,952 10,995

 Utilities 6,727 1,538 1,201 10,872

 Other variable expenses 2 7,732 5,045 3,364 10,599 

Fixed cash expenses 19,780 9,037 9,891 27,622

 Real estate and property taxes 4,321 2,345 2,610 5,712

 Interest 8,936 3,169 4,738 12,614

 Insurance premiums 3,226 2,017 1,689 4,311

 Rent and lease payments 3,298 1,506 855 4,985 

Total cash expenses 114,796 49,469 61,109 159,395

Total noncash and imputed expenses 33,340 24,202 22,099 41,363

 Depreciation 14,301 8,512 10,068 18,002

 Labor, noncash benefi ts 605 363 57 937

 Charge to operator and unpaid labor 11,656 12,406 8,568 12,915

 Charge to management 6,778 2,921 3,406 9,508

 

Total economic (long-term) expenses 148,136 73,671 83,208 200,758 

Selected fi nancial ratios

Percent 

 Cash expense ratio 81.40 85.34 84.96 80.45

 Economic expense ratio 98.42 112.53 108.79 95.35

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
23

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Appendix table 2

Average regional farm expenses for specialized fruit and tree nut farms, 2001-03

Region

Item United States North South West

Number of farms 65,960 8,801 13,124 44,036

Average acres per farm 110 118 123 104

Harvested acres 65 48 65 68

 Harvested fruit and nut acres 59 41 60 62

 Share in fruit and nuts (percent) 91.0 84.0 93.3 91.4

Gross value of production ($/farm) 178,294 103,168 92,158 218,980

Dollars per farm

Variable cash expenses 107,634 58,901 66,817 129,539

 Livestock related 1 691 523 — 857

 Seed and plants 2,444 1,779 2,323 2,613

 Fertilizer and chemicals 15,298 9,395 13,875 16,901

 Labor 51,999 26,844 — 64,812

 Fuels and oils 3,778 3,088 — 4,282

 Repairs and maintenance 5,679 6,138 3,226 6,318

 Machine-hire and custom work 9,527 1,159 13,012 —

 Utilities 7,126 2,113 1,407 9,832

 Other variable expenses 2 11,093 7,863 4,304 13,761 

Fixed cash expenses 22,909 13,621 9,091 28,884

 Real estate and property taxes 4,937 4,269 2,916 5,673

 Interest 9,599 3,920 3,221 12,635

 Insurance premiums 3,369 3,126 — 3,785

 Rent and lease payments 5,004 2,306 817 6,791 

Total cash expenses 130,544 72,522 75,908 158,422

Total noncash and imputed expenses 37,553 33,011 21,414 43,270

 Depreciation 13,753 10,243 6,567 16,596

 Labor, noncash benefi ts 464 601 229 506

 Charge to operator and unpaid labor 15,638 17,530 10,550 16,776

 Charge to management 7,698 4,637 4,068 9,391 

Total economic (long-term) expenses 168,097 105,533 97,322 201,693

Percent

Selected fi nancial ratios

 Cash expense ratio 76.84 72.32 82.46 76.54

 Economic expense ratio 91.65 93.98 98.90 90.46

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

— = Insuffi cient data for legal disclosure or standard error is greater than 75 percent of the estimates.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
24

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Appendix table 3

Average regional farm expenses for specialized fruit and tree nut farms, 2004-06

Region

Item United States North South West

Number of farms 62,959 9,998 13,371 39,590

Average acres per farm 122 106 151 116

Harvested acres 67 39 70 72

 Harvested fruit and nut acres 59 30 62 65

 Share in fruit and nuts (percent) 88.4 76.4 87.9 90.2

 

Gross value of production ($/farm) 218,978 97,013 118,642 283,664

Dollars per farm

Variable cash expenses 144,621 70,359 77,674 185,985

 Livestock related 1 1,309 379 815 1,712

 Seed and plants 4,113 2,681 2,246 5,105

 Fertilizer and chemicals 21,557 9,671 18,296 25,660

 Labor 69,441 33,258 27,474 92,751

 Fuels and oils 6,545 4,647 3,720 7,978

 Repairs and maintenance 8,241 5,619 4,125 10,294

 Machine-hire and custom work 9,839 1,706 14,596 10,286

 Utilities 8,150 2,479 1,734 11,749

 Other variable expenses 2 15,426 9,918 4,668 20,449 

Fixed cash expenses 25,720 13,881 9,584 34,160

 Real estate and property taxes 6,180 4,146 3,196 7,702

 Interest 8,991 4,464 2,122 12,454

 Insurance premiums 4,559 3,638 2,188 5,592

 Rent and lease payments 5,991 1,634 2,078 8,413 

Total cash expenses 170,342 84,240 87,258 220,145

 

Total noncash and imputed expenses 41,628 43,012 25,266 46,804

 Depreciation 12,095 11,237 5,319 14,601

 Labor, noncash benefi ts 488 373 156 629

 Charge to operator and unpaid labor 20,978 27,160 16,533 20,917

 Charge to management 8,067 4,243 3,258 10,657 

Total economic (long-term) expenses 211,969 127,252 112,524 266,949

Percent

Selected fi nancial ratios

 Cash expense ratio 75.69 71.5 80.20 75.55

 Economic expense ratio 87.25 103.36 94.14 84.78

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
25

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Appendix table 4

Average regional farm expenses for specialized fruit and tree nut farms, 1998-2006

Region

Item United States North South West

Number of farms 69,210 10,567 15,927 42,716

Average acres per farm 117 108 140 111

Harvested acres 63 40 61 70

 Harvested fruit and nut acres 57 32 55 64

 Share in fruit and nuts (percent) 90.4 81.2 90.6 91.7

Gross value of production ($/farm) 172,346 84,912 89,859 224,731

Dollars per farm

Variable cash expenses 114,066 54,997 62,906 147,754

 Livestock related 1 901 450 617 1,118

 Seed and plants 2,872 1,681 1,850 3,548

 Fertilizer and chemicals 17,135 8,308 14,213 20,408

 Labor 54,169 25,983 22,406 72,984

 Fuels and oils 4,340 2,994 2,393 5,400

 Repairs and maintenance 6,670 4,896 3,496 8,292

 Machine-hire and custom work 9,562 1,327 12,538 10,489

 Utilities 7,285 1,994 1,407 10,786

 Other variable expenses 2 11,133 7,364 3,987 14,729 

Fixed cash expenses 22,576 11,838 9,585 30,075

 Real estate and property taxes 5,080 3,447 2,858 6,313

 Interest 9,163 3,786 3,589 12,572

 Insurance premiums 3,675 2,836 1,951 4,526

 Rent and lease payments 4,656 1,769 1,187 6,665

 

Total cash expenses 136,642 66,835 72,491 177,829

 

Total noncash and imputed expenses 37,192 32,580 22,797 43,699

 Depreciation 13,458 9,852 7,777 16,468

 Labor, noncash benefi ts 525 432 132 694

 Charge to operator and unpaid labor 15,748 18,482 11,342 16,714

 Charge to management 7,461 3,814 3,547 9,823

 

Total economic (long-term) expenses 173,833 99,415 95,289 221,528

Percent

Selected fi nancial ratios

 Cash expense ratio 77.78 75.45 82.59 77.32

 Economic expense ratio 91.98 102.86 100.78 89.67

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
26

Specialized U.S. Fruit and Nut Farm Production Expenses / FTS-337-01

Economic Research Service/USDA

Appendix table 5

Average farm expenses for specialized fruit and tree nut farms, by farm size, 1998-2000

Farm size

Small Medium Large Very large

Less than $40,000- $250,000- $1,000,000 or 

Item $40,000 $249,999 $999,999 more

Number of farms 52,984 18,263 5,739 1,724

Average acres per farm 35 147 425 1,409

Harvested acres 13 59 249 875

 Harvested fruit and nut acres 12 55 219 816

 Share in fruit and nuts (percent) 92.4 93.8 88.2 93.2

Gross value of production ($/farm) 9,550 98,842 481,246 2,995,814

Dollars per farm

Variable cash expenses 11,597 89,869 384,963 1,748,283

 Livestock related 1 101 689 3,132 13,389

 Seed and plants 302 2,977 8,662 32,519

 Fertilizer and chemicals 2,110 13,527 57,622 291,215

 Labor 3,680 34,699 197,542 860,233

 Fuels and oils 517 2,889 14,311 45,025

 Repairs and maintenance 1,611 6,795 22,432 88,888

 Machine-hire and custom work 1,114 15,923 28,751 129,164

 Utilities 917 6,322 24,032 131,985

 Other variable expenses 2 1,245 6,050 28,479 155,866

 

Fixed cash expenses 4,342 17,316 81,033 316,492

 Real estate and property taxes 1,388 4,898 15,273 51,894

 Interest 2,050 6,887 36,367 150,968

 Insurance premiums 741 3,687 15,300 34,534

 Rent and lease payments 163 1,845 14,093 79,097

 

Total cash expenses 15,939 107,186 465,996 2,064,776 

Total noncash and imputed expenses 11,953 36,103 121,840 366,811

 Depreciation 2,213 13,750 68,030 212,822

 Labor, noncash benefi ts 39 831 4,069 4,068

 Charge to operator and unpaid labor 8,966 15,337 21,854 21,401

 Charge to management 736 6,185 27,887 128,520

 

Total economic (long-term) expenses 27,892 143,289 587,836 2,431,587

 Percent

Selected fi nancial ratios

 Cash expense ratio 116.41 85.88 81.08 74.20

 Economic expense ratio 140.06 107.09 98.68 85.03

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
27

Specialized U.S. Fruit and Nut Farm Production Expenses / FTS-337-01

Economic Research Service/USDA

Appendix table 6

Average farm expenses for specialized fruit and tree nut farms, by farm size, 2001-03

Farm size

Small Medium Large Very large

Less than $40,000- $250,000- $1,000,000 or 

Item $40,000 $249,999 $999,999 more

Number of farms 39,898 17,748 6,223 2,092

Average acres per farm 30 100 252 1,291

Harvested acres 14 67 159 714

 Harvested fruit and nut acres 13 63 144 638

 Share in fruit and nuts (percent) 91.1 93.7 90.5 89.3

 

Gross value of production ($/farm) 10,972 110,459 487,849 3,024,347

Dollars per farm

Variable cash expenses 13,415 82,806 279,059 1,605,392

 Livestock related 1 170 652 2,159 6,590

 Seed and plants 682 1,548 5,490 34,596

 Fertilizer and chemicals 1,869 13,090 41,683 211,668

 Labor 4,822 32,516 142,119 849,030

 Fuels and oils 616 3,466 11,556 43,599

 Repairs and maintenance 1,119 5,807 17,194 57,307

 Machine-hire and custom work 1,442 7,250 23,487 —

 Utilities 1,492 9,143 15,153 73,587

 Other variable expenses 2 1,204 9,333 20,217 187,484

 

Fixed cash expenses 5,175 20,046 60,480 273,681

 Real estate and property taxes 2,184 4,339 12,762 39,242

 Interest 2,093 9,269 23,503 —

 Insurance premiums 818 3,741 10,008 29,112

 Rent and lease payments 80 2,698 14,206 91,107

 

Total cash expenses 18,591 102,852 339,539 1,879,073 

Total noncash and imputed expenses 13,366 37,508 85,757 355,863

 Depreciation 2,115 10,305 35,434 200,498

 Labor, noncash benefi ts 80 344 1,983 4,284

 Charge to operator and unpaid labor 10,417 20,947 26,815 36,935

 Charge to management 754 5,913 21,525 114,145

 

Total economic (long-term) expenses 31,956 140,360 425,296 2,234,935

 Percent

Selected fi nancial ratios

 Cash expense ratio 119.58 76.30 74.89 73.18

 Economic expense ratio 125.14 100.99 86.24 84.34

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

— = Insuffi cient data for legal disclosure or standard error is greater than 75 percent of the estimates.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
28

Specialized U.S. Fruit and Nut Farm Production Expenses / FTS-337-01

Economic Research Service/USDA

Appendix table 7

Average farm expenses for specialized fruit and tree nut farms, by farm size, 2004-06

Farm size

Small Medium Large Very large

Less than $40,000- $250,000- $1,000,000 or 

Item $40,000 $249,999 $999,999 more

Number of farms 34,315 19,095 6,947 2,602

Average acres per farm 42 89 270 1,026

Harvested acres 12 47 165 667

 Harvested fruit and nut acres 11 40 149 593

 Share in fruit and nuts (percent) 89.2 84.2 90.4 89

 

Gross value of production ($/farm) 10,095 104,694 500,737 3,059,645

Dollars per farm

Variable cash expenses 16,721 77,643 337,487 1,807,684

 Livestock related 1 — 799 3,368 13,962

 Seed and plants 498 2,508 6,505 57,183

 Fertilizer and chemicals 2,215 12,216 53,292 260,432

 Labor 6,329 31,362 166,421 922,122

 Fuels and oils 1,102 4,373 15,408 70,588

 Repairs and maintenance 1,902 6,284 20,120 74,479

 Machine-hire and custom work 967 6,135 21,049 124,081

 Utilities 1,408 5,402 17,800 91,455

 Other variable expenses 2 2,083 8,566 33,523 193,384

 

Fixed cash expenses 5,240 16,460 60,633 270,516

 Real estate and property taxes 2,237 4,986 12,447 50,205

 Interest 1,728 6,105 24,806 83,723

 Insurance premiums 1,085 3,761 11,571 37,489

 Rent and lease payments 191 1,608 11,810 99,099

 

Total cash expenses 21,961 94,103 398,120 2,078,200

 

Total noncash and imputed expenses 17,988 41,404 86,700 234,663

 Depreciation 2,015 8,945 33,666 110,544

 Labor, noncash benefi ts 124 304 — 4,947

 Charge to operator and unpaid labor 14,917 26,504 30,185 35,765

 Charge to management 933 5,651 21,728 83,408

 

Total economic (long-term) expenses 39,949 135,507 484,820 2,312,864

Percent

Selected fi nancial ratios

 Cash expense ratio 113.16 75.04 72.10 74.37

 Economic expense ratio 120.10 98.86 84.12 79.90

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

— = Insuffi cient data for legal disclosure or standard error is greater than 75 percent of the estimates.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).
29

Specialized U.S. Fruit and Nut Farm Production Expenses / FTS-337-01

Economic Research Service/USDA

Appendix table 8

Average farm expenses for specialized fruit and tree nut farms, by farm size, 1998-2006

Farm size

Small Medium Large Very large

Less than $40,000- $250,000- $1,000,000 or 

Item $40,000 $249,999 $999,999 more

Number of farms 42,399 18,368 6,303 2,139

Average acres per farm 35 112 311 1,215

Harvested acres 13 57 189 738

 Harvested fruit and nut acres 12 52 169 668

 Share in fruit and nuts (percent) 91.1 91 89.5 90.5

 

Gross value of production ($/farm) 10,143 104,611 490,580 3,030,997

Dollars per farm

Variable cash expenses 13,550 83,358 332,667 1,725,798

 Livestock related 1 154 715 2,899 11,405

 Seed and plants 474 2,354 6,825 43,197

 Fertilizer and chemicals 2,062 12,932 50,786 252,806

 Labor 4,753 32,840 167,868 881,677

 Fuels and oils 706 3,589 13,807 54,926

 Repairs and maintenance 1,535 6,299 19,859 72,752

 Machine-hire and custom work 1,177 9,738 24,189 131,134

 Utilities 1,230 6,911 18,820 96,517

 Other variable expenses 2 1,458 7,979 27,613 181,384

 

Fixed cash expenses 4,846 17,899 66,774 283,896

 Real estate and property taxes 1,867 4,748 13,408 47,085

 Interest 1,976 7,383 27,886 111,723

 Insurance premiums 858 3,730 12,188 33,965

 Rent and lease payments 145 2,038 13,292 91,122

 

Total cash expenses 18,395 101,256 399,442 2,009,694

 

Total noncash and imputed expenses 14,024 38,392 97,055 309,658

 Depreciation 2,128 10,975 44,678 167,333

 Labor, noncash benefi ts 75 491 2,299 4,495

 Charge to operator and unpaid labor 11,026 21,013 26,547 32,288

 Charge to management 795 5,912 23,531 105,542 

Total economic (long-term) expenses 32,420 139,649 496,497 2,319,352

Percent

Selected fi nancial ratios

 Cash expense ratio 116.31 78.96 75.87 73.96

 Economic expense ratio 128.25 102.23 89.49 82.67

Note: Specialized fruit and tree nut farms are defi ned as farms where fruit and tree nuts account for more than 50 percent of total farm 

production value. Farm size is measured by the production value of all commodities produced on a farm.

1 Includes expenses related to the production of farm animals, such as livestock purchases, feed, livestock leasing, medical supplies,

 veterinary, custom, pasturing, grazing, and bedding. 

2 Includes supplies, transportation, storage, general business expenses, and registration fees. 

Source: ERS calculations based on USDA’s Agricultural Resource Management Survey (ARMS).