Tag Archives: Investing in Trees

Fruit Tree as an Investment

I am slowly but surely working on turning my lawn into food, and most of that food I would like to be Perennials, specifically, perennial trees.  Trees can be expensive, my apple trees cost me $23 plus shipping.  When ordering lots of trees and shrubs at a time, this really adds up quickly.  One way to curb your costs is to start your root stock from seed and then grafting scion wood on to it.  I have not tried that yet, but I will (and I’ll tell you all about it!!).

I’ve had shipments of trees (and blueberry bushes) that cost over $200.  And if I could probably spend another $1,000.  Is this being ridiculous?  Absolutely not.  This is an investment, no different than investing in CDs, Real Estate, or the stock market.  Although, I would argue that this investment will over more “earnings” than most investments in your portfolio and less risk.

It is a pet peeve of mine when people refer to items they are buying as an investment.  For example, “I have to go invest in some lip stick”.  No, you don’t. Your lipstick will never make a return upon it’s initial purchase price.  So when I say that a tree is an investment, I’m prepared to back it up.

I’m going to go through an actual cost analysis so we can determine the cost versus real output of this investment.  Let’s take an Apple tree for example, and assume that we already own the land.  I bought an apple tree for $23 plus shipping for a total of $30.  I planted it for free, the water was free, and I used a half a bale of straw to bed it down, if I figure I use about a half a bale a year, so we’ll add this in to our figures.  Also note, I am not calculating my time in for this, as I really enjoy the time outdoors.  This is my recreation.

According to the Stark Brothers’ website, I should be getting fruit within two to five years after planting.  I would like to take a highly conservative look at this, so we’ll say 5 years. So we’ll have five years of straw (assuming I don’t use leaves, or other mulch found elsewhere), plus the initial planting cost. (5 years x $1.25/year) + $31.25 = $37.50.

I have had some trouble finding data on yields from apple trees.  I’m finding a whole lot of “it depends.”  The variables include soil type, sun exposure, type of tree, and density of plantings.  Asking how many apples you can expect to harvest is similar to asking  how much can I expect my salary to be my first year working?  There is a huge range of salaries that people earned their first year working.  There’s no way of giving one hard number for this, even a range would be deceiving.  Is your first year working as a bus boy or an attorney?  So, suffice it to say, there is a huge range of apple yield possibilities.

However, a member on the forums at permies.com told me his production model includes 10 pounds in year four and increases until it plateaus at 200 pounds a year at year 13 and continues at this yield for 40 years.  Let’s assume we’re getting 20 pounds a year so we can be SUPER conservative.

A hard and fast number I do know is the amount we spent on our organic apples that were pick your own at an Organic Apple Festival.  We got a half a bushel for $35 and a full bushel for $60.  A half bushel weighs about 20 pounds.

These numbers are telling me that we will pay-off our initial investment at year 6.  That means that from year 6 forward we are getting a return on investment, and at 100% per year of initial investment.  This is only looking at the apples.  When it comes time to retire your apple tree (cut it down), you can use the wood to heat your home or chip it up to smoke meats.  A five-pound bag of apple wood chunks goes for about $10.  And you don’t have to pay taxes on any of this.

So, your initial investment in an apple tree will have a return on investment through it’s production of apples, through the wood and apple chips for smoking.  You will also have the benefits of increasing soil health, decreasing erosion, increasing the beauty on your property, and providing increased habitat for animals.  Oh, and the blooms of your apple tree will help to feed the bees.

Purchasing a risk-free CD will leave you with a less than 5% ROI, and the stock market is highly volatile, so you may lose some money or you may make some.  I’m pretty dang sure you won’t be making 100% of your initial investment every year after 5 or 6 years.

And if you apple tree is a complete failure?  Cut it down and use it for wood.

Looking at tree purchases from this perspective shows you that this is a wise way to invest your money.  I will continue to add trees to my investment portfolio as the years go on and I hope you do, too.