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Budgeting costs and returns
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Permanent Link: http://ufdc.ufl.edu/UF00026156/00004
 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: 1977
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.
 Record Information
Source Institution: 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: UF00026156:00004

Table of Contents
    Front Cover
        Front cover
    Abstract
        Abstract
    Table of Contents
        Table of Contents
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
    Reference
        Page 10
Full Text

R. P Murr Economic nformion
R. P.: Murcro Economic Iniorrni;rjo


3en Abbitt


Report 91


it:


and Relurns:


Indian River Citrus Production,

19 77-7 8


"' i


"j,

" -. ,
/5 /


ood and Resource Economics Department
agricultural Experiment Stations and-
ooperative Extension Service
stitute of Food and Agricultural Sciences
.versity of Florida, Gainesville 32611


July 1978


I


B ucgei'ing


Costs










ABSTRACT


Estimated costs and returns of growing white seedless
grapefruit in the Indian River area of Florida are presented
for the fourth consecutive year. The format presented may
be used by individual growers to budget costs and returns
utilizing individual data on specific groves.

Key words: citrus, Indian River, budgeting, costs .and
returns.











TABLE OF CONTENTS



INTRODUCTION . . .


METHOD OF DATA COLLECTION ..

THE GROVE SITUATION ....
Age and Production Per Tree


COST OF INPUTS. .

SPRAY PROGRAM .

COSTS AND RETURNS .


ADDITIONAL SOURCES OF INFORMATION


. 10


LIST OF TABLES


1 Cs.lcula.tion of production per acre . 3

2 Costs of inputs supplied on a custom basis
i:ed in calculating costs ... . 4

3 Costs of chemicals used in calculating
costs . . . .. 4

4 Spray program used in budget based on
custom rates and application of two 500-
gallon tanks per acre . . 5

5 Estimated annual per acre costs and returns
for a mature white seedless grapefruit on
sour orange rootstock, Indian River area,
orida .. . . . 6

6 Estimated annual per acre costs and returns
for a mature, white seedless grapefruit
grove producing citrus for fresh fruit
packing in Indian River area, 1974-75--
1977-78 . . . . 7

7 Schedule of production practices in Indian
River groves . .. .. . 9


Page
1


3
. . . 1

. . . 2
. . 3


S 3

S 3


. 8












BUDGETING COSTS AND RETURNS:
INDIAN RIVER CITRUS PRODUCTION, 1977-78


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 brea-k-even prices.

This paper presents a budget constructed from current

data an. -ill serve as a format for growers to develop

costs and returns from their individual records.


METHOD OF DATA COLLECTION

The data presented here were developed by surveying

custom. : operators, input suppi ers, growers, and colleagues

at the Agricultural Research and Education Center in Lake

Alfred. This annual survey is conducted in January.





R. P. MURARO, Farm Mranagement Extension Agent, Polk
County, Bartow, FL 33830. ,BEN AB]BITT, Area Economist,
Food and Resource Economics Departmen.t, University of
Florida, AREC, Lake Alfred, FL 33850.








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. 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.

Specific production practices vary from grove to grove.

Many combinations of practices and various tree combinations

seem to accomplish production of acceptable yields and

returns. 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.

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. Vari-ety is white seedless on sour
orange rootstock;

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.




3


Age and Production Per Tree

Situation

3% pulled and reset
3% 1 year old
3% 2 years old
3% 3 years old
3% 4 years old
57% 5-19 years old
3% producing 50% of'expected yield
25% mature producing


Boxes/tree

0.0
0.0
0.0
0.5
1.1
4.4
3.75
7.5


Table 1.--Calculation of production per acre

Trees Percentage age Boxes/tree Total boxes


70 0.03 0.50 1.05
70 0.03 1.10 2.31
70 0.57 4.40 175.56
70 0.03 3.75 7.88
70 0.25 7.50 131.25
Total boxes/acre 318.05



COSTS OF INPUTS

Costs for various production inputs are the average

of the data obtained from the survey. These average

costs are shown in Tables 2 and 3.


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 Florida Citrus Spray Guide 1978,

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 4 outlines the spray

program which is used for calculations in the.budget which

follows.













Table 2.--Costs of inputs supplied on a custom basis used in
calculating costs


Cost
Unit Low High


Avg. Your cost


------------Dollars-------------


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

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


Truck and driver
Water tru :
Mound builder
Rotary ditcher
Irrigation, flood

Fertilize, bulk
Spray, dust
Dust, serial


3.58
9.50
8.00
9.00


Hr.
Hr.
Hr.
Hr.
Hr.

Hr.
Hr.


Hr. 11.00
Hr. 2.50
Hr. 7.50


Hr.
Hr.
Hr.
Hr.
In.


Acre
Tank
Lb.


--- 50.00
11.70


8.00
8.00





8.00


4.50
10.50
12.50
14.00


21.00
6.00
11.00

11.00
11.00





11.00


Table 3.--Costs of chemicals used in calculating costs

Item Unit Cost Your cost

---------Dollars-- -----

Copper, tri-basic Lb. .84
Zinc, 335 zn Lb. .35
Manga.ese-su.lfate Lb. .10
Chlorobenzilate Gal. 16.40
Ethio. Gal. 13.36

Keithane Gal. 16.00
Bonla;e Lb. 7.91
Oil, 97% Gal. .96
Sticker Gal. 6.06
Sulphur dust Ton 111.80

Krovar II Lb. 5.08
16-0-16 fertilizer Ton 97.20
16-0-16-4 MgO fertilizer Ton 105.74
8-2-8 fertilizer Ton 66.46


Item


3.95
10.00
10.25
f0.42
45.00


16.88
4.70
8.88

9.63
9.63
13.99
10.87
1.85

3.00
9.50
3.50









Table 4.--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
Manganese
Zinc
Sticker
Application
Total

Post bloom application
Chlorobenzilate
Application
Total

Summer oil application
Oil
Copper
Application

To- !l

Mit icide a-plication
Ke it ane
Sticker
Applicaoion
Total


3 lbs.
7 lbs.
7 Ibs.
1 pint
2 tanks




2.5 pints
2 tanks




8 gals.
3 lbs.
2 tanks




5 pints
1 pint
2 tanks


COSTS AND RETURNS

Table 5 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. 'This will allow a comparison

of the grower's costs and returns with those of the

hypothetical case presented.


2.52
.70
2.45
.76
19.00
25.43


5.13
19.00
24.13


7.68
2.52
19.00
29.20



10.00
.76
19.00
29.76


- -- ------------I-I


------Dollars------









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

to land and trees (total return minus costs).

Estimated annual costs and returns for mature, fresh,

white seedless grapefruit on sour orange rootstock in the

Indian River area have been collected and published the

past three years. Estimated cost and return histories for

these years and 1977-78 are presented in Table 6.


Table 6.--Estimated annual per acre costs and returns .for
a mature, white seedless grapefruit grove
producing citrus for fresh fruit packing in
Indian River area, 1974-75--1977-78.


Total Net return
Gross specified to land
Year Price/boxa Yield revenue costs and tre s

197-75 1.90 318 60.1.20 331..05 273.15
1975-75 1.41 318 448.38 341.07 107.31
1976-77 2.00 318 636.00 364.11 271.89
1077-7- 1.75 318 556.50 358.91 197.59


"Estima ed at time of printing and are not published prices.


Shown in Table 7 are production practices for Indian

River citrus and a range of times during the year when

they would likely'be performed. 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 can be

helpful if an annual cash flow analysis is developed

to plan financing. The individual grower can achieve

benefits by developing a plan for a particular grove.


ADDITIONAL SOURCES OF INFORMATION


Since 1931, through the cooperation of Florica

citrus growers, the Florida Agricultural Experiment Station

and the Florida Cooperative Extension Service have conducted

annual studies of citrus grove costs and returns. These

data have been summarized annually and averaged in varying

time scans. Annual cost and return histories can

be made available upon request.

The most recent time span (consecutive years) that

these .nnualicost--and return figures have been averaged

is the five growing seasons 1971-76. These annual cost

and return histories and preceding histories are recorded

in Factors to Consider in Purchasing a Citrus Grove.

Conies of this circular can be obtained at your County

Cooperative Extension Service Office or by writing

either author.












Dr. Donald L. Brooke, Professor in the Food and
Resource Economics Department, University of Florida,
IFAS, Gainesville, has conducted this annual study in
recent years.




10


REFERENCES


Brooke, Donald L. and Ben Abbitt. Factors to Consider
in Purchasing a Citrus Grove. Florida Cooperative
Extension Service Circular 437. University of
Florida, IFAS, Gainesville, Florida.. 1978.


DuCharme, E. P.. "Tree Loss in Relation to Young Tree
Decline and Sand Hill Decline of Citrus in Florida."
Proc. Fla. State Hort. Soc. 84:48-52. (October 1970).


Florida Citrus Spray Guide 1978. University of Florida
Cooperative Extension Service Circular 393D.
January 1978.


Muraro, Ronald P. "Comparative Citrus Budgets."
Polk County Extension Service. March 1976.


Bartow:


Muraro, Ronald P. "Summary Custom Rate Survey for-Nine
Indian River Citrus Caretakers." Bartow: Polk
County Extension Service. March 1976.


Muraro, Ronald P.' "Cost of Resetting a Citrus Grove."
Bartow: Polk County Extension Service. September 1976.


Reitz, H. J., C. D. Leonard, et. al. Recommended
Fertilizers.and Nutritional Sprays for Citrus.
University of Florida Agricultural Experiment
Stations Bulletin 536C. December 1972.












This public document was promulgated at an annual
cost of $372''or $.34 per copy to furnish the
citrus industry with 'current data on cost of
production for the Food and Resource Economics
Department, Institute of Food and Agricultural
Sciences, and the University of Florida.