Establishment Cost. Costs to establish the orchard are used to determine capital recovery expenses,
depreciation, and interest on investment for the production years. Establishment cost is the sum of the costs for
land preparation, planting, trees, cash overhead and production expenses for growing the trees through the first
year that lemons are harvested minus any returns from production. The Total Accumulated Net Cash Cost on
Table 1, in the third year represents the establishment cost. For this study the cost is $3,951 per acre or $39,513
for the 10-acre orchard. The establishment cost is spread over the remaining 37 years of the 40 years the
2010 Lemons Costs and Returns Study San Joaquin Valley South UC Cooperative Extension 11
orchard is in production. Establishment costs in this study are based on typical basic operations, but can vary
considerably, depending upon terrain, soil type, local regulations, and other factors. For example, development
on marginal soils will require additional land preparation and soil amendments. Management/Development
companies will have additional labor costs.