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Budgeting costs and returns
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Permanent Link: http://ufdc.ufl.edu/UF00026157/00002
 Material Information
Title: Budgeting costs and returns
Series Title: Economic information report
Portion of title: Budgeting costs and returns for Central Florida citrus production
Budgeting costs and returns for for <sic> Central Florida 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: 1976
Frequency: annual
regular
 Subjects
Subjects / Keywords: Citrus fruit industry -- Economic aspects -- Periodicals -- Florida   ( lcsh )
Citrus fruits -- Marketing -- Periodicals -- Florida   ( lcsh )
Genre: governmental publication   ( marcgt )
serial   ( sobekcm )
 Notes
General Note: Title varies slightly: <1992-93>- Budgeting costs and returns for Central Florida Citrus Production.
General Note: Description based on: 1978-79; cover title.
 Record Information
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000313320
oclc - 08042638
notis - ABU0053
lccn - sn 82000631 /g
System ID: UF00026157:00002

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 9
Full Text
A, R. P. Muraro Economic Informati

Ben Abbitt Report;
UP

J UL 15 I

i.F.AS.- Uni. of VFo0d.


Budgeting Costs and Returns:

Central Florida Citrus Production,

1976-77


Food and Resource Economics Department
Florida Agricultural Experiment Stations
Florida Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611


June 1977


on
73













ABSTRACT


Estimated costs and returns of growing round oranges in
the central Florida citrus area are presented for the third
consecutive year. The format presented may be used by indi-
vidual growers to budget costs and returns utilizing individual
data on specific groves.

Key words: citrus, central Florida, budgeting, costs and
returns.














TABLE OF CONTENTS


INTRODUCTION. . . .

METHOD OF DATA COLLECTION . .

THE GROVE SITUATION . .
Age and Production Per Tree .

COSTS OF INPUTS . . .

SPRAY PROGRAM . . .

COSTS AND RETURNS . . .

BIBLIOGRAPHY . . .


LIST OF TABLES


Table

1 Calculation of production per acre . .

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

3 Costs of chemicals used in calculating costs .

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

5 Estimated annual per acre costs and returns for a
mature round orange grove producing citrus for
processing in Central Florida. . . .

6 Schedule of production practices in Central
Florida citrus groves. . . . .


Page





2
2

3

4

5

9
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. . 3



. . 5

. . 9













BUDGETING COSTS AND RETURNS:
CENTRAL FLORIDA CITRUS PRODUCTION, 1976-77


R. P. Muraro and Ben Abbitt

INTRODUCTION


Due to the manner in which data become available, there is

always a time lag between the collection of production costs

and returns information and when they are analyzed and published.

Hence, production costs in one year are understood to relate to

the crop which is harvested the following season.

In order to obtain current data for various decision-making

purposes, a budget may be constructed by developing a list of

production practices and their costs. 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 data can then be

used as a basis for management decision making.


METHOD OF DATA COLLECTION

The data presented here were developed from surveying

custom operators, input suppliers, and from discussions with

colleagues at the Agricultural Research and Education Center

in Lake Alfred. This annual survey is conducted in January.

R. P. MURARO, Farm Management Extension Agent, Polk County,
Bartow, FL 33830. BEN ABBITT, Area Economist, Food and Resource
Economics Department, University of Florida, AREC, Lake Alfred,
FL 33850.

___________________________________





-2-


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, rough

lemon-rooted round orange grove in the ridge area, or central

part of the state.

Specific production practices vary from grove to grove.

Many combinations of practices and various tree combinations

accomplish the production of acceptable yields and returns.

The generation of costs and returns data is designed to be

applicable to any grove situation. A grower can substitute

his individual grove costs and expected returns into the budget

format and develop a budget for a particular grove. A "your

cost" column is provided for this purpose.

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 grove, irrigated;
2. Type is round orange on rough lemon rootstock;
3. Tree loss is 2 percent annually;
4. Trees are pulled and replaced when production
falls below 50 percent of expected yield;
5. Production is for processing only; and
6. Tree spacing is 70 trees per acre.


Age and Production Per Tree

Situation Boxes/tree
2% pulled and replanted 0
2% 1 year old 0
2% 2 years old 0
2% 3 years old 0.6
2% 4 years old 0.9
28% 5-19 years old 3.6
2% producing 50% of expected yield 3.0
60% 20 years old -1




-3-


Table 1.--Calculation of production per acre

Trees Percentage age Boxes/tree Total boxes

70 0.02 0.6 0.84
70 0.02 0.9 1.26
70 0.28 3.6 70.56
70 0.02 3.0 4.20
70 0.60 6.1 256.20
Total boxes/acre 333.06


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.



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

Item Unit Low High Average Your cost
- -Dollars- -----

Dilute spray Tank 8.00 16.00 9.81 $
Dusting, ground Acre 2.50 5.00 3.98
Fertilizing (bulk) Acre 2.50 4.65 3.34

Dolomite application Acre 2.50 4.00 3.39
Chopping Acre 3.25 6.50 4.58
Discing Acre 3.00 5.00 4.06
Topping Hr. 125.00
Hedging, 2-sides Hr. 29.50 125.00 45.64

Front-end loader Hr. 19.00 25.00 23.00
Bulldozer Hr. 15.00 22.00 18.50
Truck and driver Hr. 6.50 12.00 8.77
Tractor and driver Hr. 7.00 12.00 9.00
Chain saw Hr. 1.44 4.50 3.04
Labor Hr. 3.00 4.00 3.72


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.




-4-


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

Item Unit Cost Your cost

Dollars- --
Chlorobenzilate Pint 1.96 $
Neutral copper, 53% cu Lb. .70
Zinc, 36% zn Lb. .33
Borates Lb. .34
Manganese, 24-27% mg Lb. .09
Ethion Pint 1.61

Oil Gal. .86
Kelthan Pint 1.84
Sulphur Lb. .05
Sticker Pint .72
Krovar II Lb. 5.33
16-0-16 Ton 101.35
Dolomite Ton 11.88



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 1977 Spray and Dust Schedule, nor is

it necessarily the most economical spray program. Most

growers of fruit for processing use at least two sprays and

one dust in their insect and disease control program. These

costs are presented in the budget.

Table 4 outlines this program as a post bloom, a summer

oil, and a fall miticide application. The first two are dilute

sprays while the third is a ground application of sulphur.

Table 4 shows a supplemental miticide application that may

be used when additional control for rust mite is needed.





-5-


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

Post bloom application
Chlorobenzilate 2 pints $ 3.92 $
Zinc 15 Ibs. 4.95
Borates 1.25 Ibs. .43
Manganese 15 Ibs. 1.35
Sticker 1 pint .72
Application 2 tanks 19.62
Total $30.99


Summer oil application
Ethion 6 pints $ 9.66 $
Oil 8 gal. 6.88
Copper, 53% cu 3 lbs. 2.10
Application 2 tanks 19.62
Total $38.26


Fall miticide application
Sulphur 70 Ibs. $ 3.50
Application, ground $0.3/lb. 3.98
Total $ 7.48

Grand Total $76.73


Supplemental miticide application
Ethion 5 pints $ 8.05
Sticker 1 pint .72
Application 2 tanks 19.62
Total $28.39


COSTS AND RETURNS

Table 5 shows the estimated costs and returns based on

data presented earlier, and with a custom-caretaker providing

grove management. Several items of cost were not included in

Table 5. For instance, a supplemental miticide (Table 4)

would add $28.39 to operating costs. Ad valorem taxes in Polk

County last year would have added another $20-$30 per acre.









Table 5.--Estimated annual per acre costs and returns for a mature round orange
citrus for processing in Central Florida


grove producing


Item Description Amount Your Cost


333 boxes @ $1.90


II. Expenses
Spray program
Fertilizer
Material
Application
Dolomite
Material
Application
Weed Control
Material
Application
Discing
Chopping
Pruning (maintenance)
Topping
Hedging
Chopping brush
Irrigation
Tree replacement and care
Pull trees and remove
Prepare site, plant
and ring
Water
Fertilizer
Bank and unbank
Management

III. Total specified costs

IV. Return to land and trees


From Table 3

16-0-16, 832 Ibs.
2 @ $3.34

1/3 ton @ $11.88
1 ton every third year

Krovar II, 2 Ibs./treated acre

Twice/year
Twice/year

($125/hr. + 8.5 Acre/hr.) + 3 years
($45.64/hr. + 4 Acre/hr.) + 3 years
Custom rate
13.2 inches/year

1.4 trees/Acre

(Includes trees)
(Avg. 14 waterings)
(Includes application)

5% of gross sales


$632.70


$ 76.73


$42.57
6.68

$ 3.96
1.13

$10.56
3.41


$10.14

8.65
11.90
5.00
3.80


49.25


5.09


13.97
8.12
9.16

4.90
3.80
4.58
99.46a


$ 39.49
31.64

$346.19

$286.51


aIncludes $73.00 per acre of fixed costs; operating costs are $26.46 per acre.


I. Revenue









Costs for freeze protection were not included. A crew

standing by to light heaters two nights in one season would

result in an extra cost of approximately $12.00 per acre. The

cost of setting up and removing heaters and the amount of fuel

necessary for one or two nights is not included in this cost.

In addition, a wide variation may exist in the cost of fuel

from one area to another. Individual growers are in a better

position to estimate these "firing" costs. Firing costs are

a cost of production; hence, if known they should be included

in the expense column in Table 5.

Shown in Table 6 are production practices for Florida

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.








Table 6.--Schedule of production practices in Central Florida citrus grovesa

Month

Practices Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

Spray program
Post bloom X X
Summer oil X X
Fall X X X
Fertilizer (custom) X X
Dolomite (custom) X X X X
Weed control
Chemical X X
Mechanical X X X X X X X X
Hand (pulling vines) X X X
Pruning
Hedging (custom) X
Topping (custom) X
Irrigation X X X X X
Tree replacement
Pull trees X X
Prepare sites X X
Plant resets X
Ring X
Water X
Fertilizer X X X X X X X X
Weed control X


a This is a suggested schedule of practices. Actual
on the exact schedule shown here.


practices would not necessarily be done




--9-


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. 84:48-62 (Oct. 1970).

[2] Florida Citrus Spray and Dust Schedule 1977. Univ. of Fla.


Coop. Ext. Serv. Cir. 393C, Jan. 1977.


[3] Harrison, D. S. and R. C. J. Koo. Sprinkler Irrigation Systems
for Citrus. Univ. of Fla. Agr. Ext. Rpt. AE 73-15 (Rev.)
Gainesville: Aug. 1974.

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

[5] Muraro, Ronald P. "Summary Custom Rate Survey for Interior
Citrus Caretakers." Bartow: Polk County Ext. Serv., Mar.
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.


This public document was promulgated at an annual cost of $1,943 or
$1.50 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.