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 Abstract
 Acknowledgement
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Budgeting costs and returns
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Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00026157/00005
 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: 1979
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: UF00026157:00005

Table of Contents
    Front Cover
        Front cover
    Abstract
        Abstract
    Acknowledgement
        Abstract
    Table of Contents
        Table of contents
        Table of Contents 2
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
    Reference
        Page 12
Full Text


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Bud ting osts an Returns:

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ABSTRACT


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


Key words:
and returns.


citrus, central Florida, budgeting, costs


ACKNOWLEDGEMENT


Appreciation is expressed to Bob Terry, Florida Crop and
Livestock Reporting Service, for the pricing information (pre-
liminary). Thanks is extended to Mrs. Jane Wilson for typing
the final draft.


I I n
















ABSTRACT


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


Key words:
and returns.


citrus, central Florida, budgeting, costs


ACKNOWLEDGEMENT


Appreciation is expressed to Bob Terry, Florida Crop and
Livestock Reporting Service, for the pricing information (pre-
liminary). Thanks is extended to Mrs. Jane Wilson for typing
the final draft.


I I n



















TABLE OF CONTENTS


Page


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 . . .


. . .


. . . 8

S -. . . 9


. . . .


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 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, 1975-76--1979-80 ..


r











7 Estimated annual per acre costs and returns and
5-year average costs and returns (inflated to
1980 dollars) for a mature, round orange grove
producing citrus for processing in central
Florida, 1975-76--1979-80. . . 9

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
















BUDGETING COSTS AND RETURNS:
CENTRAL FLORIDA CITRUS PRODUCTION, 1979-80


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.


R. P. MURARO is Area Farm Management Economist, Food and
Resource Economics Department, 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 stiuation are thought to be typical of a healthy, ma-
ture, 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


-- - --cr--r-- ;r- -r- ..?,-,? r -









Table l.--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
1980, 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 programs.
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.










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 8.50 17.00 11.58
Dusting, ground Acre 4.00 7.50 5.47
Fertilizing (bulk) Acre 3.25 8.00 5.01
Dolomite application Acre 3.25 6.50 4.80
Dolomite application Ton 3.00 9.00 5.44
Chopping Acre 4.50 7.50 5.78
Discing (9'-10') Acre 4.50 7.50 5.78
Topping Hour 160.00 180.00 170.00
Topping (double boom) Hour 280.00
Hedging, 2-sides--tractor drawn Hour 40.00 50.00 42.71
Hedging, 2-sides--self propelled Hour 160.00 180.00 170.20
Front-end loader Hour 17.35 35.00 32.86
Bulldozer Hour 25.00 35.00 30.06
Truck and driver Hour 7.00 15.75 .12.25
Tractor and driver Hour 8.00 24.25 12.35
Chain saw Hour 2.00 5.78 3.55
Labor Hour 4.00 7.00 5.20
Herbicide Acre 5.00 8.00 7.07


-.-^----*-*r~arurri~l~la ~~---r-i------- -










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


Item Unit Cost Your cost

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

Chlorobenzilate Pint 2.43
Neutral copper, 53% cu Lb. 1.03
Zinc, 36% zn Lb. 0.41
Borates Lb. 0.36
Manganese, 24-27% mg Lb. 0.15
Ethion Pint 2.06
Vendex Lb. 13.50
Oil Gal. 1.71
Kelthane Pint 1.19
Sulphur Lb. 0.085
Sticker Pint 0.74
Paraquat Gal. 41.68
Krovar II Lb. 5.95
Princep Lb. 3.05
16-0-16 Ton 113.58
8-0-8 Ton 80.82
Dolomite Ton 11.23










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

Post bloom application
Kelthane 16 pints 19.04
Zinc 15 lbs. 6.15
Borates 1.25 lbs. 0.45
Manganese 15 lbs. 2.25
Sticker 1 pint 0.74
Application 2 tanks 23.16
Total 51.79

Summer oil application
Ethion 6 pints 12.35
Oil 6 gals. 10.26 _
Copper, 53% cu 3 lbs. 2.97
Application 2 tanks 23.16
Total 48.74

Fall miticide application
Sulphur 70 lbs. 5.95
Application, ground $5.47/acre 5.47
Total 11.42
Grand total 111.95

Supplemental miticide application
Kelthane 6 pints 7.14
Sticker 1 pint 0.74
Application 2 tanks 23.16
Total 31.04
= ,.....


7T'







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


Item


Description


I.
II.


Revenue
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
Total Specified Costs
Return to Land and Trees


Amount Your cost
----------Dollars--------
1,182.15

111.95


47.25
10.02

3.74
1.92

11.90
7.07


333 boxes @ $3.55

From Table 4

16-0-16, 832 lbs.
2 @ $5.01

1/3 ton @ $11.23
1 ton every third year

Krovar II, 2 lbs./acre

Twice/year
Twice/year

($170/hr 5.5 A/hr) 3 yrs
($170/hr + 8.5 A/hr) 2 yrs
Custom rate
13.2 inches/year

1.4 trees/acre

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

5% of gross sales


57.27


5.64


18.97
11.56
11.56

10.30
10.00
5.78
137.42


54.74
59.11


494.30.
687.85


15.60

9.95
14.14
7.68
7.37


III.
IV.


alncludes $73.00 per acre of fixed cost; operating costs are $64.42 per acre.
bOther 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 $31.04 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, 1979-80, and a five-year average are presented
in Table 6. These same costs and returns, inflated to 1980
dollars, are presented in Table 7.

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, 1975-76--1979-80.

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

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
1979-80 3.55 333 1,182.15 494.30 687.85
5-yr. avg. 3.27 333 1,088.91 401.94 686.97
aEstimated at time of printing and are not published
prices.









Table 7.--Estimated annual per acre costs and returns and 5-year
average costs and returns (inflated to 1980 dollars)
for a mature, round orange grove producing citrus for
processing in central Florida, 1975-76--1979-80

Total Net return
Consumer Price Gross specified to land
Year price index /box Yield revenue costs and trees

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

1975-76 144.7 $2.89 333 962.37 491.91 470.46
1976-77 135.9 2.58 333 859.14 470.47 388.90
1977-78 126.3 4.99 333 1,661.67. 497.75 1,163.92
1978-79 113.3 5.61 333 1,868.13 493.01 1,375.12
1979-80 100.0 3.55 333 1,182.15 494.30 687.85
5-yr. avg. -- 3.92 333 1,306.69 489.49 817.20

aConsumer price index for each year inflated to 1980 price (1980 =
100). 1980 consumer price index estimated to be 246.7.


Shown in Table 8 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
1
been summarized annually and averaged in varying time spans.

1Dr. 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 8.--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
done on the exact schedule shown here.


practices would not necessarily be


.'iF 7






11



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 reported is tih grow-
ing season 1977-78 in Economic Information Report 116. Annual
cost and return histories are recorded as five-year averages
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 the author.










REFERENCES


Brooke, D. L. and R. Clegg Hooks. "Citrus Costs and Returns
in Florida, Season 1977-78 with Comparisons." Economic
Information Report 116. Food and Resource Economics
Department, IFAS, Gainesville, Florida. August 1979.


Brooke, Donald L. and Ben Abbitt. Factors to Consider in
Purchasing a Citrus Grove. Florida Cooperative Exten-
sion 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. 84:48-52. October 1970.


Florida Citrus Spray Guide 1980. University of Florida
Cooperative Extension Service Circular 393-F. January
1980.


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." Lake Alfred
Agricultural Research and Education Center. March 1980.


Muraro, Ronald P. "Summary Custom Rate Survey for Interior
Citrus Caretakers." Lake Alfred Agricultural Research
and Education Center. March 1980.


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
$798 or $0,53 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.