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UF FLAG IFAS PALMM



Budgeting costs and returns
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026156/00002
 Material Information
Title: Budgeting costs and returns
Series Title: Economic information report
Portion of title: Budgeting costs and returns for Indian River citrus production
Budgeting costs and returns for for <sic> Indian river citrus production
Physical Description: v. : ; 27 cm.
Language: English
Creator: University of Florida -- Food and Resource Economics Dept
Publisher: Food and Resource Economics Dept., Agricultural Experiment Stations and Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Creation Date: 1975
Frequency: annual
regular
 Subjects
Subjects / Keywords: Citrus fruit industry -- Economic aspects -- Periodicals -- Florida -- Indian River County   ( lcsh )
Citrus fruits -- Periodicals -- Florida -- Indian River County   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
serial   ( sobekcm )
 Notes
General Note: Title varies slightly: <1992-93>- Budgeting costs and returns for Indian River citrus production.
General Note: Description based on: 1978-79; title from cover.
Funding: This collection includes items related to Florida’s environments, ecosystems, and species. It includes the subcollections of Florida Cooperative Fish and Wildlife Research Unit project documents, the Sea Grant technical series, the Florida Geological Survey series, the Coastal Engineering Department series, the Howard T. Odum Center for Wetland technical reports, and other entities devoted to the study and preservation of Florida's natural resources.
 Record Information
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000313321
oclc - 08042665
notis - ABU0054
lccn - sn 82000632
System ID: UF00026156:00002

Table of Contents
    Front Cover
        Front cover
    Abstract
        Abstract
    Table of Contents
        Page i
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
    Bibliography
        Page 8
Full Text
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grapfrut intbeIndian River area of.Florida are presented
for the' second cosute year' The format presented May-L #
be used by individual growers to budget costs and returns.
M t utilizing: individual data on .sec.ific groves. ,$
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TABLE OF CONTENTS


INTRODUCTION. . . . .

METHOD . . . . .

THE GROVE SITUATION . . .
Age and Production Per Tree . .
Calculations of Production Per Acre .

COSTS OF INPUTS . . . ...

SPRAY PROGRAM . . . .

COSTS AND RETURNS . . . .

BIBLIOGRAPHY. . . . .


Page












. . . 4
. .. .

. . .. .. 2


LIST OF TABLES


Table
1 Costs of inputs supplied on a custom basis used in
calculating costs . . . . .

2 Costs of chemicals used in calculating costs. . .

3 Spray program used in budget based on custom rates and
application of two 500-gallon tanks per acre. . .

4 Estimated annual per acre costs and returns for a
mature White Seedless grapefruit on Sour Orange
rootstock, Indian River area, Florida, 1975-76. .

5 Schedule of production practices in Indian River
groves . . . . . .












BUDGETING COSTS AND RETURNS:
INDIAN RIVER CITRUS PRODUCTION, 1975-76



R. P. Muraro and Ben Abbitt


INTRODUCTION


Current data on costs and returns are needed by citrus

growers in order to formulate realistic budgets for their

operations. Budget analysis provides the basis for many grower

decisions. For example, budget analysis can be used to calculate

potential profits from an operation, to determine cash

requirements for an operation, and to determine break-even prices.

This paper presents a budget synthesized from current data

and will serve as a format for growers to develop costs and

returns from their individual records.

METHOD


The data presented here were developed by surveying custom

operators, input suppliers, growers, and colleagues at the

Agricultural Research and Education Center in Lake Alfred. The

assumptions made as to a particular grove situation are thought

to be typical of a healthy, mature, sour-orange-rooted, white

seedless grapefruit grove in the Indian River area of the state.

R. P. MURARO is a Farm Management Extension Agent stationed
in Polk County. BEN ABBITT is an Extension Farm Management
Economist stationed at the Agricultural Research and Education
Center, Lake Alfred.

1









The generation of costs and returns procedure is designed to be

applicable to any grove situation. A grower, realtor, or land

appraiser can substitute individual grove costs and expected

returns into the budget format and develop a budget for a

particular grove.


THE GROVE SITUATION


It is difficult to define a "typical" grove; therefore, it

is necessary to state the assumptions under which a budget was

constructed. Specific production practices vary from grove to

grove. Many combinations of practices and various tree combi-

nations seem to accomplish production of acceptable yields and

returns.

In the following budget, good management and cultural

practices are assumed. Beyond this general assumption, the

following specifics are assumed.



1. A 20-year-old irrigated grove;
2. Variety is white seedless on sour orange rootstock;
3. Tree loss is 3 percent annually;
4. Trees are pulled and replaced when production falls
below 50 percent of expected yield;
5. Production is for fresh use; and
6. Tree-spacing is 70 trees per acre.


Age and Production Per Tree
Situation Boxes/tree
3% pulled and reset 0
3% 1 year old 0
3% 2 years old 0
3% 3 years old 0.5
3% 4 years old 1.1
57% 5-19 years old 4.4
3% producing 50% of expected yield 3.75
25% mature producing 7.5








Calculations of Production Per Acre
70 x 0.03 x 0.5 = 1.05
70 x 0.03 x 1.1 = 2.31
70 x 0.57 x 4.4 = 175.56
70 x 0.03 x 3.75 = 7.88
70 x 0.25 x 7.50 = 131.25
Boxes/acre = 318.05



COSTS OF INPUTS


Costs for various production input items are the average

of data reported by custom operators and suppliers of fertilizer,

chemicals, and other inputs in a January, 1976 survey. These

costs are shown in Tables 1 and 2. On-tree prices for all uses

of white seedless grapefruit as reported by the Florida Crop

and Livestock Reporting Service were used.



Table 1.--Costs of inputs supplied on a custom basis used in
calculating costs


Item

Labor
Mowing (9'-10' rotary)
Mowing (sickle)
Herbiciding
Topping

Hedging (1-side)
Hedging (2-side)
Removing trees (plus driver)
(front end loader)
Power saw w/o operator
Tractor and driver

Truck and driver
Water truck
Mound builder
Rotary ditcher
Irrigation, flood

Fertilize, bulk
Spray, dilute


Unit

Hr.
Hr.
Hr.
Hr.
Hr.

Hr.
Hr.

Hr.
Hr.
Hr.

Hr.
Hr.
Hr.
Hr.
In.

Acre
Tank


Cost


Low High Avg.

2.80 $ 4.00 $ 3.44
8.75 12.50 10.05
8.00 11.50 9.70
8.00 13.50 10.14
120.00

22.50 26.00 24.25
120.00

14.80 16.55 .15.94
1.00 5.00 3.13
4.00 7.65 6.62

11.00
7.50 8.25 7.88
7.75 10.00 12.50
8.75
1.64

2.50
8.00 15.00 10.00


Your Cost

$


_ _


$


$




4


SPRAY PROGRAM


The spray program presented here is believed to be of the

type followed by a majority of growers. It is not the exact

program outlined in the 1976 Spray and Dust Schedule, nor is

it necessarily the most economical spray program. Most growers

in the Indian River area produce grapefruit for the fresh

market and their spray program is formulated to produce a fruit

of this quality. Table 3 outlines the spray program which is

used for calculations in the budget which follows.


Table 2.--Costs of chemicals

Item

Copper, tri-basic
Zinc, 36% zn
Manganese-sulfate
Chlorobenzilate
Ethion

Delnav
Benlate
Oil, 97%
Sticker
Sulphur dust

Krovar II
16-0-16 fertilizer
16-0-16-4 MgO fertilizer
8-2-8 fertilizer


used

Unit

Lb.
Lb.
Lb.
Gal.
Gal.

Gal.
Lb.
Gal.
Gal.
Ton

Lb.
Ton
Ton
Ton


in calculating

Cost

$ .86
.32
.10
17.91
12.29

23.91
8.30
.94
6.25
105.00

5.15
96.36
103.07
67.52


costs

Your Cost

$______


COSTS AND RETURNS

Table 4 shows the estimated costs and returns based on data

presented earlier and with a custom-caretaker providing grove

management. This table, as do the others, has a column reserved

for the individual grower to insert data from a particular grove.


costs
Your Cost

$




5



This will allow a comparison of the grower's costs and returns

with those of the hypothetical case presented.

Two items of cost which are not included in the budget

are ad valorem taxes and interest on grove investment. These

costs vary from grove to grove depending on age, location, soil

and time of purchase or establishment. They should both be

considered in arriving at a net return (total return minus costs).



Table 3.--Spray program used in budget based on custom rates
and application of two 500-gallon tanks per acre

Item Amount/Acre Cost Your Cost

Dormant Application
Copper 3 pounds $ 2.58 $
Manganese 7 pounds .70
Zinc 7 pounds 2.24
Sticker 1 pint .78
Application 2 tanks 20.00
Total $26.30

Post Bloom Application
Chlorobenzilate 2.5 pints $ 5.60 $
Application 2 tanks 20.00
Total $25.60

Summer Oil Application
Oil 8 gals. $ 7.52 $
Copper 3 pounds 2.58
Application 2 tanks 20.00
Total $30.10

Miticide Application
Delnav 5 pints $14.95 $
Sticker 1 pint .78
Application 2 tanks 20.00
Total $35.73




Shown in Table 5 are production practices for Indian River

citrus and a range of times during the year when they would likely be

performed.








Table 4.--Estimated annual per acre costs and returns for a mature White Seedless grapefruit
on Sour Orange rootstock, Indian River area, Florida, 1975-76

Item Description Amount Your Cost


I. Revenue

II. Expenses
Spray Program
Fertilizer
Material
Application
Weed Control
Mow Middles
Mow Under Trees
Pull Vines
Herbicide
Pruning (Maintenance)
Topping
Hedging
Removing Brush
Irrigation (Flood)
Tree Replacement and Care
Remove Trees
Prepare Site
Plant Resets
Water
Fertilizer
Management

III. Total Specified Costs

IV. Return to Land and Trees


318 boxes @ $1.41


From Table 3


16-0-16, 625 Ibs.
2 @ $2.50

5 times per year
4 times per year
By hand
2 lbs. Krovar II, incl. appl.




6 appl., total 18 in./year

2.1 trees per acre
Use of mound builders
Including 2.1 trees per acre

Including application
5% of gross sale


$30.11
5.00

$25.13
19.40
5.26
14.23

$ 3.53
2.53
13.71


$16.08
6.25
11.70
11.90
4.81


$448.38


117.73


35.11




64.02



19.77
31.28





50.74
22.42

$341.07

$107.31


- -- ----





Grove practice


Date performed


Comments


Mowing middles

Mowing under trees

Pull vines and
general grove work

Herbicide (vine control)

Topping

Hedging & remove brush

Remove trees


Irrigation


Clean ditches

Young trees

Fertilize


Dust (sulphur)

Spray (dilute)


Five times each year

Four times each year


Throughout year



February thru June

February thru June

Winter months


Throughout year


Twice each year

Throughout year

Twice each year
(February & August)

September or October

Dormant, Post bloom
Summer oil, and Fall
miticide


----


a This is a suggested schedule of practices. Actual practices would not necessarily
be done on the exact schedule shown here.


Table 5.--Schedule of production practices in Indian River grove
Table 5.--Schedule of production practices in Indian River groves


--- ------


-I---^--`---I-~'


-- C-


One-way mowing

One-way mowing


Primarily winter months

After pulling vines

After fruit is harvested

After fruit is harvested

When other grove practices
are not being performed

Average six irrigation applica-
tions per year (18.0 inches/yr.)

Fall and summer

As needed

At leadt 130 pounds of nitrogen
applied per acre each year

As needed


Two tanks per acre;
500 gallons per tank







There are two benefits to developing such a table for an

individual grove. First, it shows what work is needed and

when, so that operations can be planned well in advance.

Second, it is a must if an annual cash flow analysis is to be

developed to plan financing. The individual grower can achieve

benefits by developing a plan for a particular grove.



BIBLIOGRAPHY


[1] DuCharme, E. P. "Tree Loss in Relation to Young Tree
Decline and Sand Hill Decline of Citrus in Florida."
Proceedings of the Fla. State Hort. Soc. 84:48-52
(Oct. 1970).

[2] Florida Citrus Spray and Dust Schedule 1975. Univ. of
Fla. Coop. Ext. Serv. Cir. 393A, Feb. 1975.

[3] Muraro, Ronald P. "Comparative Citrus Budgets." Bartow:
Polk County Ext. Serv., Mar. 1976.

[4] Muraro, Ronald P. "Summary Custom Rate Survey for Nine
Indian River Citrus Caretakers." Bartow: Polk Count
Ext. Serv., Mar. 1976.

[5] Muraro, Ronald P. "Cost of Resetting a Citrus Grove."
Bartow: Polk County Ext. Serv., Sept. 1976.

[6] Reitz, H. J., C. D. Leonard, et al. Recommended
Fertilizers and Nutritional Sprays for Citrus. Univ.
of Fla. Agr. Exp. Sta. Bull. 536C, Dec. 1972.







There are two benefits to developing such a table for an

individual grove. First, it shows what work is needed and

when, so that operations can be planned well in advance.

Second, it is a must if an annual cash flow analysis is to be

developed to plan financing. The individual grower can achieve

benefits by developing a plan for a particular grove.



BIBLIOGRAPHY


[1] DuCharme, E. P. "Tree Loss in Relation to Young Tree
Decline and Sand Hill Decline of Citrus in Florida."
Proceedings of the Fla. State Hort. Soc. 84:48-52
(Oct. 1970).

[2] Florida Citrus Spray and Dust Schedule 1975. Univ. of
Fla. Coop. Ext. Serv. Cir. 393A, Feb. 1975.

[3] Muraro, Ronald P. "Comparative Citrus Budgets." Bartow:
Polk County Ext. Serv., Mar. 1976.

[4] Muraro, Ronald P. "Summary Custom Rate Survey for Nine
Indian River Citrus Caretakers." Bartow: Polk Count
Ext. Serv., Mar. 1976.

[5] Muraro, Ronald P. "Cost of Resetting a Citrus Grove."
Bartow: Polk County Ext. Serv., Sept. 1976.

[6] Reitz, H. J., C. D. Leonard, et al. Recommended
Fertilizers and Nutritional Sprays for Citrus. Univ.
of Fla. Agr. Exp. Sta. Bull. 536C, Dec. 1972.