How to Start an Orchard that Makes over $100K/Year!

  • by Brandon Boushy
  • 4 months ago
  • Blog
  • 0

Ever wondered how to start an orchard but don’t know where to begin? We got the chance to learn about Swans Trail Farms and how they started an orchard. 

Nate Krause was kind enough to take the time to talk about how his family converted a dairy farm they purchased in 1984 into a favorite destination for picking your own apples, strawberries, and pumpkins. 

They also host the Washington State Corn Maze, weddings, corporate picnics, and school field trips.

This guide will walk you through the process of starting an orchard, including:

  1. What is an orchard?
  2. Types of fruit trees
  3. Resources necessary
  4. Orchard design
  5. Planting, growing, and harvesting fruit trees
  6. Licensing and legal requirements
  7. Funding your orchard
  8. Hiring Employees
  9. Marketing

Let’s get you on the path to starting an orchard.

1. What is an orchard?

Visitors standing in an orchard farm

An orchard is the intentional planting of trees or shrubs for the purpose of fruit or nut production. Large gardens may also be considered backyard orchards.

Let’s look at some of the common types of orchards.

2. Types of Fruit Trees

When considering how to start an orchard, the first thing you’ll need to do is decide what kind of fruits, vegetables, and/or nuts you want to plant in the orchard.

According to the USDA, the top fruits eaten in the United States per person are:

  1. Apples
  2. Oranges
  3. Bananas
  4. Grapes
  5. Strawberries
  6. Watermelon
  7. Pineapple

Each of these has different soil and nutrient requirements. You’ll need to have the soil analyzed in your area to establish which fruits will grow best, or better yet do it yourself with one of these testing kits.

Here’s a guide on the nutrient levels and other information needed for apples. Yara.us offers similar information for other fruit trees and crops.

A chart about the nutrient levels of fruits

3. Resources necessary when starting an orchard

The resources necessary when starting an orchard are mostly limited by your location. You’ll need the following:

  • Land
  • Water
  • Time
  • Money
  • Knowledge

Land

Planting an orchard will obviously require land. The cost of land varies dramatically based on location. You can find farmland at LandandFarm.com to get prices in your area if you don’t own land for a small orchard yet.

One of the most common questions about apple orchards is “how many apple trees should I farm per acre?” Apple farming will normally consist of 400-2500 trees/acre and a yield that varies based on the type of apple tree:

  • Miniature trees: 1/4–1 bushel (1 bushel = 32 quarts = approximately 40-50 lb = around 126 medium apples)
  • Dwarf trees: 1–4 bushels
  • Semi-Dwarf trees: 5–10 bushels
  • Standard trees: 10–20 bushels (all figures from Starkbros. The Stark Bros article includes statistics for other common fruits.)

That means an apple orchard yield per acre can range from 12,600-6.3 million medium apples per acre depending on the size of the trees and other conditions, like the weather.

Water

An apple farmer is going to need water because without it fruit trees won’t grow and bear fruit. The water requirements vary based on the type of tree, but apple trees tend to need about an inch of rain a week.

If you don’t have enough rain, you’ll need to water them. Make sure not to overwater them or it can create root rot, infections, or nutrient depletion.

Nate told us this was a problem when he first started. Here’s what he had to say:

One of the biggest mistakes is not enough research when we first put in our trees. We planted them in a wet spot, and trees do not like wet soil, so we ended up losing half our crop.

Time

Starting an orchard is not a get-rich-quick scheme.

Nate told us:

We started selling apples 4 years after planting the trees. Trees need a long time before making money. Our first real harvest wasn’t until around year 8. Waiting for your first-year yield is the longest part of the process.

He also told us that he works “60 hours in the maintenance season and over about 75 hours during harvest.” This is in addition to the rest of his family and the up to 200 employees he has during the fall.

The orchard business is definitely a time-consuming business. Make sure you are prepared for that.

See how long it took others to start and grow their farm here:

How much does it cost to start a fruit orchard?

Nate told us:

Our initial budget was not that much. We spent about 1000.00 on trees the first year. Each year we would add more trees with the profit we made. We already had the land, and our fields had the right nutrients to grow apple trees. If you did not have the land or were having to recondition your fields, you would be looking at a larger sum of money.
We did not need to fund this part of our business because we started out so small and built off it every year. We never spent money we did not have. It is important to us not to get a loan. If we were to start off with the 5,000 trees we have now, we would have had to take out a loan.

He also estimates that if you are starting from scratch, you will probably need to invest around $70-80k  to start a fruit tree orchard. It doesn’t sound like this includes the funds to cover living until your first harvest, so starting a home orchard may be a good first step in planting fruit trees.

Knowledge

I’ve wondered how to start an orchard because I love the taste of fresh fruit straight off the tree. My brother has an orange tree, and he brings me 10 every time he comes to Vegas, but I’ve never farmed, so I had to do some research to write this article. If you’re in the same boat, you will definitely need to gain some knowledge.

Some of the things you’ll want to understand to get started include:

  • Types of apple trees and other fruit trees- We discussed this some earlier, but make sure to use the links in the blog for more information.
  • Apple orchard spacing- We’ll cover this next.
  • How to plant an apple orchard- keep reading as we’ll cover this too.
  • Soil conditions- We provide information earlier. You may need soil preparation tools or to supplement the apple orchard with other crops to provide nutrients. Alternatively, you can compost.
  • The weather’s impact on the orchard trees- Nature.com has a study with a lot of great references included. Make sure to utilize it.
  • Recognizing disease- The University of California has some good resources on pests and diseases impacting orchards.
  • The annual planting, growing, harvest, and storage process.
  • The business aspects- USDA.gov is a great resource for the business aspects of farming.

4. Orchard Designing

An image showing the measurement for orchard design

Nate told us:

Make sure you understand the basics of growing before you put them in the ground.

Because of that, I’m going to go into more detail on how to design an orchard. Penn State Extension (PSE) offers the following recommendations when planning a fruit tree orchard layout:

  • Start with a site assessment
  • Plant on the upper side of 4-8 percent slope on rolling or elevated land
  • Avoid low lying areas because frost damage can occur
  • Avoid tops of hills due to excessive winds
  • Soil should have at least 3 feet of aerated loam for roots to grow and water to drain
  • Plant North-South rows for best results
  • Space trees in a manner where tree height is (1/2 row spacing plus 3 feet)
  • Include grasses that prevent voles, broadleaf weeds, and soil-borne diseases. If planting the grass in the same year, leave 4 foot wide strips for trees. If planting grass 1 year in advance, you do not need the strips for planting the orchard’s fruit trees because it gives the grass time to grow roots before having to compete with the trees for water
  • Use wind-breaking plants like willows or alders because they develop leaves early and last throughout the harvest season
  • Make sure the trees will be somewhere that gets 6-8 hours of full sunlight per day to maximize fruit production

The concepts can be applied to a home orchard, a pie tree orchard, little tree orchards, and even a backyard orchard layout.

5. Planting, Growing, and Harvesting Fruit Trees

Now that you are armed with the knowledge of how to start an orchard, it’s time to start planting the fruit trees. What kind of fresh fruit will you be growing?

Apples? Plums? Cherries? Peaches? Pears?

No matter what kind of orchard fruit you choose, the process of planting fruit trees, growing them, and harvesting the apples or other fruit from the fruit trees is going to be a long process.

Assuming you have followed all the other steps in this guide, you have already analyzed the soil, established what fruits will grow well with the local soil, and considered where to plant each orchard tree and other vegetation.

According to the previously referenced PSE article, you’ll want to order the virus-tested fruit trees 2-3 years before you plant them. This is good practice whether you are starting a home orchard or have a full farm because it gives the root system time to mature before planting the fruit tree in the local soil.

Depending on your climate, you’ll want to plant your fruit trees in the early spring, or even fall/winter if the local climate is mild on trees. The main thing is the trees need 6-8 hours of full sunlight, and to remember that they will struggle if the ground freezes.

Once you are ready to dig the hole, you want to dig a hole that is approximately two times the depth and width of the roots. This allows you to fill in around the plant roots with the freshly dug up soil or compost that you will be filling the hole with.

You’ll want three stakes connected to the trees to help them grow and prevent the planted trees from being torn out of the ground by strong winds.

After planting, you are going to be caring for the fruit trees until harvest time in the fall. During the first few years, I would not expect much fruit from a tree.

When does apple picking start?

A lady in an apple orchard picking apples

Harvesting on an orchard will typically start around September.

During harvest season, you’ll probably need to hire some employees to assist you with the harvest. Looking through articles on how much a person can harvest in a day, I came across this article that claims new employees may only be able to pick about 3,000–5,000 lb per day, but that experienced pickers can pick between 12,000–20,000 lb per day.

I think it is important to reiterate that Nate told us:

We were able to start selling apples 4 years after planting. It is a very long process, and you don’t start really making money until around year 8. Waiting for your first-year yield is the longest part of the process.

 That means you’ll need other sources of revenue for the business until you can start selling fruit from the tree.

How can my business earn revenue while I am waiting for the fruit tree to mature?

When wondering how to start an orchard, you may need to consider other sources of revenue for your business. The first 4–8 years, you have to wait before your first profitable harvest can be a challenge.

Fortunately, Nate gave us some tips to grow the business while you are waiting for the fruit trees to produce enough fruit.

Besides selling apples, strawberries, and pumpkins, he also has a thriving business hosting events like weddings, corporate events, and a fall festival. Events like these can bring in business before the harvest season and be great marketing for your business.

Based on the website, it appears that the weddings and corporate events start at around $1,500/day and go up based on the services desired.

The fall festival is where they make most of their money though. Nate told us:

It accounts for about 80% of our income.

As you can see, there are plenty of ways to grow the business while you are waiting for the fresh fruit to grow.

6. Licensing and Legal Requirements

Now that you’ve learned about how to start an orchard, let’s look at the licensing and legal requirements the business will need to comply with. Like every business, an orchard will need to meet certain requirements including:

  • Business Formation
  • Getting an EIN from the IRS
  • Getting a state/local business license
  • Unemployment Insurance
  • Workman’s Comp

We go into more detail on starting a business in our video:

Business Formation

You need to establish the legal structure for your apple orchard. For best results, hire legal representation that has experience starting a business, like an attorney, accountant, or tax specialist. They’ll help you get your business started quickly so you can focus on caring for your trees and other tasks.

Licenses, permits, and tax forms

Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your business needs. Keep reading for information on different legal structures.

Sole proprietorship

A sole proprietorship is the easiest way to start an orchard, but the structure doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your orchard and your home. I wouldn’t recommend this structure as you have work and materials that can cause injuries to employees or customers.

To start a sole proprietorship, fill out a special tax form called a Schedule C. Sole proprietors can also join the American Independent Business Alliance.

Limited Liability Corporation (LLC)

An LLC is the most common business structure used in the United States because the company protects the owner’s personal assets. It’s similar to partnerships and corporations but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements. People may register in specific states due to the cost of doing business. Delaware and Nevada are common states to file an LLC because of their business-friendly laws. Here’s a blog on the top 10 states to get an LLC.

This will typically be the best setup when starting a franchise due to the protection of legal assets and the ease of setting up the company.

Partnerships and corporations

Partnerships and corporations are typically for massive organizations or legal firms. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC. Investopedia has good information about partnerships and corporations here.

Apply for an EIN

Every business operating in the United States needs an employer identification number. It’s like a social security number for your business. Apply for it on the IRS website. It’s used on tax forms when filing taxes and to tie employees’ pay to the proper employer.

State/Local Business Licenses

Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your business needs. Keep reading for information on different legal structures.

Unemployment Insurance

The U.S. Chamber of Commerce has a ton of information on unemployment and also offers links to each state agency that handles state unemployment. You’ll have to pay $420 per employee on a federal level plus any state UI.

Workman’s Compensation

Workman’s compensation is basically insurance against injury or disability. Each state has different requirements. Check your state requirements.

7. Funding Your Orchard

Man at with a monitor on his desk

Funding an orchard can be done like any other business. The primary ways of funding are:

  • Personal funds
  • Loan from family or friends
  • Business partner(s) – inc.com has a great blog on considerations about a partnership
  • Grants for starting an apple orchard – USDA has a ton of resources for funding
  • Business loans- Check out our partners

8. Hiring Employees

There is a ton of work to do on an orchard. Whether it is planting a new crop, fertilizing the land, harvesting, or making pies out of produce, you’ll need some employees.

You can find employees using different resources:

No matter how you look for employees, you’ll want to make sure they understand what the job will require.

Nate recommends pay for performance. This means paying based on the accomplishment of objectives. For instance, you might want to pay $16.67/1,000 lb picked. This helps tie performance and pay together. The good employees will stay, and the bad won’t make enough to want to keep doing it.

9. Marketing

Nate told us:

Our best form of marketing is having school field trips come out during the weekday. When the child is there, we give them a great experience, and they go home and tell their family what a great time they had, and more than likely, we will see them on the weekend.

Marketing can be done using a multistep process:

  • Identify target market
  • Find the best ways to reach them
  • Market to them

Identify your target market

An orchard will have different target markets based on where they are and how they intend to sell their fruit. Some of the common target markets for orchards would include:

  • Consumers (Nate’s target market)
  • Grocery stores
  • Restaurants
  • Distributors
  • Other businesses

You can choose to target only one or you may choose to target multiple demographics.

Find the Best Way to Reach your Target Market

Each target market can be reached through different channels. As Nate pointed out, he found school field trips led to high conversion of customers. You can also go to farmers’ markets to sell your fruit.

This works for consumers, but what about businesses?

Kroger has a ton of information about how to become a supplier. Major corporations will normally have this information readily available if you search “How do I become a supplier for (company name)?”

You can also use social media or Google Ads to reach your target market. I strongly suggest hiring a professional to manage them as there are a ton of strategies. Without a marketing background, you might spend a ton of money with little results. Check out Upwork.com to hire marketing specialists.

It may be easier to find local businesses to buy your fruit. You can normally talk to the owner of a local restaurant pretty easily. You can let them sample your fresh produce and establish a supplier relationship.

Just make sure when working with businesses that you can meet the contracts. The contracts will normally include price, quantity, delivery schedule, and payment terms. Check out this blog on supplier contracts.

Market to Your Target Audience

A black notebook with a pair of eyeglasses and a cup of coffee on a desk

Regardless of who you market to and how you do it, you have to get the marketing in front of your audience. According to the SBA, you should expect to spend 8-10% of revenue on marketing to grow your business. Make sure to factor this into your costs.

You’ll want to make sure to have a website and social media so your audience can interact with you.

You can get a website from the following companies:

To learn more about building websites, check out our blog about website design.

You should also sign up with Google My Business so that people can find information about your orchard directly from Google. Just a heads up—this is an intensive process that takes several weeks due to the code that is physically mailed to you.

Influencers

Running an orchard can be hard work but highly rewarding. Follow these farming  influencers to learn how they succeed:

Conclusion

Based on the research, starting an orchard is best for those who have land and some farming experience. If you don’t have experience and the land, it’s going to be a slow path to profitability.

While running an orchard can be rewarding, you’ll need to make a living before the plants reach maturity, so don’t quit your day job too quickly. Once it reaches maturity, you’ll be able to make a great living though.

We hope you’ve found the information helpful. Make sure to subscribe to our mailing list to get updated on other great business opportunities.

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