UC Davis Agricultural and Resource Economics

ARE at AAEA: Daniel Tregeagle: The Optimal Management of Orchards

July 31, 2018

Time: 11:30 a.m. Tuesday, Aug. 7
Location: Exhibit Hall B South

Abstract

A fundamental issue in perennial crop economics is finding the optimal time to replace trees in an orchard. Orchards have two key characteristics: they consist of trees of multiple vintages, and the trees have a hump-shaped yield curve. We present the first analysis of optimal tree replacement in an orchard that has both characteristics. Our results show that cyclical production is optimal in the long-run, and that optimally managed orchards converge to the long-run cycle surprisingly quickly. Our results have implications for orchard valuation, orchard planting, and orchard conversion. We are also the first to provide comparative statistics on the long-run cycle radius.

*This is information about one of the 17 people from ARE with a presentation at the 2018 AAEA Annual Meeting Aug. 5–7 in Washington, D.C.

 

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