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 Abstract
 Acknowledgement
 Table of Contents
 Main
 Reference














Budgeting costs and returns
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00026157/00004
 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: 1978
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: UF00026157:00004

Table of Contents
    Front Cover
        Front cover
    Abstract
        Abstract
    Acknowledgement
        Acknowledgement
    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
        Page 10
    Reference
        Page 11
Full Text














ABSTRACT


Estimated costs and returns of growing round oranges in
the central Florida citrus area are presented for the fifth
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, central Florida, budgeting, costs
and returns.















ACKNOWLEDGEMENT


Appreciation is expressed to Mark Belcher, Statistical
Analyst, Florida Citrus Mutual, for the pricing information
(preliminary). Thanks is extended to Mrs. Jane Wilson for
typing the final draft.










TABLE OF CONTENTS


TABLE OF CONTENTS


INTRODUCTION . . .

METHOD OF DATA COLLECTION ..

THE GROVE SITUATION .
Age and Production Per Tree.

COSTS OF INPUTS . .

SPRAY PROGRAM . . .

COSTS AND RETURNS .

ADDITIONAL SOURCES OF INFORMATION

REFERENCES . . .


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1

1

2
2

3

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8

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11


LIST OF TABLES


Table
1 Calculation of production per acre 3

2 Costs of inputs supplied on a custom basis used
in calculating costs . 4

3 Costs of chemicals used in calculating costs 5

4 Spray program used in budget based on custom
rates and application ol two 500-gallon tanks
per acre 0 . a . 0 0 6

5 Estimated annual per acre costs and returns for
a mature, round orange grove producing citrus
for processing in central Florida. . 7

6 Estimated annual per acre costs and returns and
5-year average costs and returns for a mature,
round orange grove producing citrus for process-
ing in central Florida, 1974-75--1978-79 . 8

7 Schedule of production practices in central
Florida citrus groves. . .. .. 10













BUDGETING COSTS AND RETURNS:
CENTRAL FLORIDA CITRUS PRODUCTION, 1978-79


Den Abbitt and R. P. Muraro


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.



BEN ABBITT is Area Economist, Food and Resource Economics
Department, University of Florida, AREC, Lake Alfred, FL 33850.
R. P. MURARO is President, FACTS-AG, Inc., Lakeland, FL 33801.






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 0.0
2% 1 year old 0.0
2% 2 years old 0.0
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 6.1








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 this survey. These average costs are
shown in Tables 2 and 3.
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.


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 1979,
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.


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

Item Unit Low High Average Your cost


Dilute spray
Dusting, ground
Fertilizing (bulk)

Dolomite application
Chopping
Discing (9'-10')
Topping
Hedging, 2-sides
Hedging, 2 sides--double boom

Front-end loader
Bulldozer
Truck and driver
Tractor and driver
Chain saw
Labor
Herbicide


Tank
Acre
Acre

Acre
Acre
Acre
Hr.
Hr.
Hr.

Hr.
Hr.
Hr.
Hr.
Hr.
Hr.
Acre


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

8.50 16.00 10.10
3.50 7.00 4,78
3.25 6.00 4.26

2.75 5.65 3.95
4.00 5.50 4.79
3.50 6.50 5.14
155.00

35,00 45,00 39.38
155.00

15.00 32.50 25,64
17.00 30.00 23.88
6.00 15.00 10,72
8.50 15.00 11.59
2.00 5.78 3.55
3.25 6.00 5.15,
4.50 7.00 5.74


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


Item Unit Cost Your cost


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

Chlorobenzilate Pint 2.11

Neutral copper, 53% cu Lb. 0.96

Zinc, 36% zn Lb. 0,33

Borates Lb. 0.36
Manganese, 24-27% mg Lb. 0.10

Ethion Pint 1.87

Oil Gal. 1.17
Kelthane Pint 1.13

Sulphur Lb. 0.06

Sticker Pint 0.85

Krovar II Lb. 5.76 '

16-0-16 Ton 103.61

Dolomite Ton 14.93


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Table 4.--Spray program used in budget based on custom rates and
gallon tanks per acre


application of two 500-


Item Amount/acre Cost Your cost
--------Dollars---------


Post bloom application
Chlorobenzilate
Zinc
Borates
Manganese
Sticker
Application
Total

Summer oil application
Ethion
Oil
Copper, 53% cu
Application
Total

Fall miticide application
Sulphur
Application, ground
Total


2 pints
15 Ibs.
1.25 Ibs.
15 Ibs.
1 pint
2 tanks


6 pints
8 gals.
3 Ibs.
2 tanks




70 Ibs.
$4.74/acre


Grand total


Supplemental miticide application
Ethion
Sticker
Application
Total


5 pints
1 pint
2 tanks


4,22
4.95
0.45
1,50
0.85
20.20
32.17


11,22
9.36
2.88
20,20
43.66



4.20
4.78
T798
84.81



9.35
0.85
20,20
30.40


30A0- 4..--


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------
--


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

Item Description Amount Your cost
----------Dollars--------

I. Revenue 333 boxes @ $4.95 1,648,35
II. Expenses
Spray program From Table 4 84.81
Fertilizer
Material 16-0-16, 832 Ibs. 41.60
Application 2 @ $4,26 8,52 50.12
Dolomite
Material 1/3 ton @ $14.93 4.93
Application 1 ton every third year 1.32 6,25
Weed control
Material Krovar II, 2 lbs./acre 11.52
Application 5.74 17.26
Discing Twice/year 10.28
Chopping Twice/year 9.58
Pruning (maintenance)
Topping ($155/hr +. 5.5 A/hr) + 3 yrs 9.40
Hedging ($155/hr + 8.5 A/hr) + 2 yrs 9.12
Chopping brush Custom rate 4.79
Irrigation 13.2 inches/year 103,88a
Tree replacement and care
Pull trees and remove 1.4 trees/acre 12.18
Prepare site, plant and
ring (Includes trees) 9.35
Water Avg. 14 waterings) 13.23
Fertilizer (Includes application) 5.69
Bank and unbank 6,78 47,23
Management 5% of gross sales .. 82,42
III. Total Specified Costs 435.14 _
IV. Return to Land and Trees 1,213,21


'-1


Sancludes $73.00 per acre of fixed cost; operating costs are $30.88 per acre,

Other methods to estimate a management cost are used in the industry. Other selected
methods will give different return to land and trees than reported here.


', *", -^ *-*







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 $30.40 to operating costs. Ad valorem taxes in
Polk County last year would have added another $20-$30 per
acre.
Costs for freeze protection were not included. A crew
standing by to light heaters one night in one season would
result in an extra cost of approximately $25.00 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.
Estimated annual costs and returns for processed, round
oranges in central Florida have been collected and published
the past four years. Estimated cost and return histories for
these years, 1978-79, and a five-year average are presented
in Table 6.


Table 6.--Estimated annual per acre costs and returns and
5-year average costs and returns for a mature,
round orange grove producing citrus for process-
ing in central Florida, 1974-75--1978-79

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

-------------Dollars-------------
1974-75 $1.50 333 499.50 324.32 175.18
1975-76 2.00 333 666.00 339.95 326.05
1976-77 1.90 333 632.70 346.19 286.51
1977-78 3.95 333 1,315.35 394.10 921.25
1978-79 4.95 333 1,648.35 435.14 1,213.21
5-yr. avg. 2.86 333 952.38 367.94 584.44
aEstimated at time of printing and are not published prices.


- rr.


i







Shown in Table 7 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 partic-
.ular grove.

ADDITIONAL SOURCES OF INFORMATION


Since 1931, through the cooperation of Florida 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 spans.
Annual cost and return histories can be made available upon
request.
The most recent time span (consecutive years) that these
annual cost and return figures have.been averaged is the five
growing seasons 1971-76. These annual cost and return
histories are recorded in Factors to Consider in Purchasing a
Citrus Grove. Copies 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.










Table 7.--Schedule of production practices in central Florida


citrus groves


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


aThis is a suggested schedule of practices. Actual practices would
done on the exact schedule shown here.


not necessarily be


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II

REFERENCES


Brooke, D. L. "Citrus Costs and Returns in Florida,
Season 1975-76 with Comparisons." Economic
Information Report 76. Food and Resource Economics
Department, IFAS, Gainesville, Florida. August 1977.


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."
Proceedings of the Fla. State Hort.. Soc. 84:48-62.
October 1970.


Florida Citrus Spray Guide 1979. University of Florida
Cooperative Extension Service Circular 393-E.
January 1979.


Harrison, D. S. and R. C. J. Koo. Sprinkler Irrigation
Systems for Citrus. University of Florida Agr. Ext.
Rpt. AE 73-15 (Rev.), Gainesville, Florida. August
1974.


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


Muraro, Ronald P. "Summary Custom Rate Survey for
Interior Citrus Caretakers." Bartow: Polk County
Extension Service. March 1978.


Reitz, H. J., C. D. Leonard, et al. Recommended Fertilizers
and Nutritional Sprays for Citrus. University of
Florida Agr. Exp. Sta. Bull. 536C. December 1972.






This public document was promulgated at an annual cost of
$2,000 or $1.33 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.