<%BANNER%>
HIDE
 Front Cover
 Abstract
 Acknowledgements
 Table of Contents
 Main
 Reference














Budgeting costs and returns
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026157/00009
 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: 1983
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: UF00026157:00009

Table of Contents
    Front Cover
        Front cover
    Abstract
        Page i
    Acknowledgements
        Page i
    Table of Contents
        Page ii
        Page iii
    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 tenth 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.



NOTE: Several of the budget costs items have been revised to reflect
current applications being used by growers--e.g., dilute tank is
now 2X (modified dilute). The previous years' costs presented
in this report have also been revised to reflect the changes.




ACKNOWLEDGEMENT


Appreciation is extended to Mrs. Jane Wilson for typing the final
draft.















ABSTRACT


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



NOTE: Several of the budget costs items have been revised to reflect
current applications being used by growers--e.g., dilute tank is
now 2X (modified dilute). The previous years' costs presented
in this report have also been revised to reflect the changes.




ACKNOWLEDGEMENT


Appreciation is extended to Mrs. Jane Wilson for typing the final
draft.


















TABLE OF CONTENTS


ABSTRACT. . .

ACKNOWLEDGEMENT. ..

INTRODUCTION. . .

METHOD OF DATA COLLECTION .

THE GROVE SITUATION ..

Age and Production Per

COSTS OF INPUTS . .

SPRAY PROGRAM . ..

COSTS AND RETURNS .

REFERENCES. . .


* S S S S S S S *S

* S S S S S S

* S S S S S S S S

* S S S S S S


* a 0

Tree.


* S S S S

* S ** S S 5 0 5 S


. . S S * .*
* S S S S S S 5 'S 'S S S S 5 'S 5 5 5
o o o o .o
o o o o . o.o. o -. o o.
e ., D o -o e o o -o o


Page

i

i

1

1

1

2

3

3

7

11


LIST OF TABLES


Table

1 Calculation of production per tree. . .

2 Costs of inputs supplied on a custom basis used in cal-
culating costs. . . . . .

3 Costs of chemicals used in calculating costs. .

4 Spray program used in budget based on custom rates and
application of one 500-gallon tank (2X) 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 processing in central Florida,
1979-80--1983-84. . ..... . 9

7 Estimated annual per acre costs and returns and 5-year
average costs and returns (inflated to 1984 dollars) for
a mature, round orange grove producing citrus for pro-
cessing in central Florida, 1979-80--1983-84. . 9

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















BUDGETING COSTS AND RETURNS:
CENTRAL FLORIDA CITRUS PRODUCTION, 1983-84


Ronald 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.
These 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 February and March.


THE GROVE SITUATION


It is difficult to define a "typical" grove; therefore, it is
necessary to state the assumptions under which a budget was


RONALD P. MURARO is assistant professor of food and resource
economics and area farm management economist. He is stationed at the
Agricultural Research and Education Center, Lake Alfred.










constructed. The assumptions made as to a particular grove situation
are thought to be typical of a healthy, mature, rough lemon-rooted
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 25-year-old Prove, 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
38% 5-24 years old 4.4
2% producing 50% of expected yield 4.0
50% 25 years old 8.0









Table l.--Calculation of production per tree


3 yrs.
4 yrs.
5-24 yrs.
Prod. 50% of
exp. yield
25 yrs.


Total no. Proportion No. ea.
all ages ea. agea age ----- No. ------
70 x 0.02 = 1.4 x 0.6 = 0.84
70 x 0.02 = 1.4 x 0.9 = 1.26
70 x 0.38 = 26.6 x 4.4 = 117.04


0.02
0.50


a


aProportion adds up to 0.94 (94
were non-bearing (see page 2).


= 1.4
= 35.0


x
x
Total


4.0
8.0
boxes


S 5.60
= 280.00
= 404.74


percent) as 6 percent of the trees


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 1984, 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 modified dilute (2X)
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.


1











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


Item Unit Low High Average Your cost


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

Spray (2X) Tank 20.00 32.00 27.72
Dusting, ground Acre 5.00 8.75 7.25
Fertilizing (bulk) Acre 4.50 11.50 6.15
Dolomite application Ton 5.50 10.00 7.37
Chopping Acre 5.50 10.00 7.26
Discing (9'-10') Acre 5.50 10.00 7.45
Topping (single boom) Hour 225.00 250.00 233.00
Topping (double boom) Hour -- 350.00
Hedging, 2-sides--tractor drawn Hour 40.00 90.00 59.30
Hedging, 2-sides--self propelled Hour 200.00 235.00 215.00
Front-end loader Hour 35.00 50.00 40.56
Bulldozer Hour 35.00 51.75 40.29
Truck and driver Hour 13.70 21.25 16.90
Tractor and driver'- Hour 14.00 25.60 17.28
Power saw without operator Hour 4.00 8.00 5.47
Labor Hour 5.00 9.00 6.76
Herbicide Hour 16.00 25.00 19.18









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


Item Unit Cost Your cost


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

Chlorobenzilate Pint 3.42
Copper, TriBasic Lb. 0,94
Zinc Lb. 0.40
Borates Lb. 0.46
Manganese Lb. 0.17
Ethion Pint 2.35
Vendex, 4L Pint 16.78
Oil Gal. 2.28
Kelthane, MF Pint 3.42
Sulphur Lb. 0.14
Sticker Pint 0.98
Roundup Gal. 85.04
Krovar II Lb. 7.48
16-0-16 fertilizer Ton 143.03
8-2-8 fertilizer plus minors Ton 115.95
Dolomite (delivered) Ton 17.70








Table 4. Spray program used in budget based on custom rates and application of one 500-gallon tank (2X)
per acre


Item Amount acre Costa Your cost

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

Post bloom application
Kelthane, MF 6 pints 22.56
Zinc 15 Ibs. 6.60
Borates 1.25 Ibs. 0.63
Manganese 15 Ibs. 2.81
Sticker 1 pint 1.08
Application (2X) 1 tank 27.72
Total 61.40
Summer oil application
Ethion 7.5 pints 19.39
Oil 5 gals. 12.54
Copper 3 Ibs. 3.10
Application (2X) 1 tank 27.72
Total 62.75
Interim miticide application
Sulphur 70 Ibs. 10.70
Application, ground $7.25 acre 7.25
Total 17.95
Grand total 142.10

Supplemental fall miticide application
Vendex, 4L 1.25 pints 23.08
Sticker 1 pint 1.08
Application (2X) 1 tank 27.72
Total 51.88


supervision charge is


aAssumes all materials are custom applied; therefore, a 10 percent handling and
added to the material cost.


1 ~I_~_ _I










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 $51.88 to
operating costs.
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; hende, if known, they should be included in the
expense column in Table 5.
Fixed costs were not included in the budgeted costs since these
costs would vary from one grove operation to another. However, for
guidelines, ad valorem taxes in Polk County would add another $40 to
$50 per acre. Annual debt payment may cost as high as $400 per acre
($3,000 average debt per acre @ 12 percent interest). Promotion and
insurance are other costs not included and will vary widely among
different grove operations.
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, 1983-84, and a
five-year average are presented in Table 6. These same costs and
returns, inflated to 1984 dollars, are presented in Table 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
particular grove.


I






8



















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 323 boxes @ $6.25a 2,018.75

II. Expenses
Weed control
General grove work 5.37
Herbicide (2 applications) 1/2 treated acre, Krovar II
includes application 65.21
Discing Twice/year 14.90
Chopping Twice/year 14.52 100.00
Spray programb From Table 4 142.10
Fertilizer
Material 16-0-16, 1,125 lbs. 88.11
Application { 2 @ $6.15 12.30 100.41
Dolomite
Materialb 1/3 ton @ $17.70 5.90
Application $7.37/ton @ 1/3 2.46 8.36
Pruning (maintenance)
Topping ($233/hr. 4 8.0 A/hr. $29.13) # 3 yrs. 9.71
Hedging ($215/hr. 4 11.0 A/hr. $19.55) + 2 yrs. 9.78
Chopping brush Custom rate 6.00 25.49
Tree replacement and care (1 thru 4 yrs.)
Pull trees and remove 1.4 trees/acre 11.34
Prepare site, plant and ring (Includes trees) 17.63
Water (Avg. 10 waterings) 8.40
Fertilizer (Includes application) 10.01
Tree wraps, sprout, etc. (Year of planting) 6.80 54.18
Irrigation (operating costs) 13.2 inches/year 115.39c
Management 52 of gross sales 100.94

III. Total specified costs 646.87

IV. Return to land and trees 1,371.88


aDue to the freeze of December 25th and 26th, 1983, box yield was reduced 20% (404 boxes @ 80% 323 boxes);
price per box is preliminary.
Assumes all material custom applied; therefore, a 10 percent handling and supervision charge is added to
material cost.

cDoes not include $59.54 per acre of fixed depreciation cost.

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









Table 6.--Estimated annual per acre costs
average costs and returns for a
producing citrus for processing
1979-80--1983-84


and returns and 5-year
mature, round orange grove
in central Florida,


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

1979-80 $3.90 404 1,575.60 523.39 1,052.21
1980-81 4.54 323b 1,466.42 572.16 894.26
1981-82 4.15 323b 1,340.45 588.27 752.18
1982-83 5.54 404 2,238.16 647.09 1,591.07
1983-84 6.25a 323 2,018.75 646.87 1,371.88

5-yr. avg. 4.88 355 1,732.40 595.56 1,136.84

aEstimated at time of printing and is not a published price.


b
Yield reduced due
and 1983.


to January or December freeze during 1981, 1982


CFixed costs such as taxes, debt payment,
included.


and insurance are not


Table 7.--Estimated annual per acre costs and returns and 5-year
average costs and returns (inflated to 1984 dollars) for a
mature, round orange grove producing citrus for processing in
central Florida, 1979-80--1983-84


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

1979-80 127.5 $4.97 404 2,007.88 667.32 1,340.56
1980-81 115.5 5.24 323 1,692.52 660.84 1,031.68
1981-82 108.8 4.52 323 1,459.96 640.04 819.92
1982-83 105.4 5.84 404 2,359.36 682.03 1,677.33
1983-84 100.0 6.25 323 2,018.75 646.87 1,371.88

5-yr. avg. -- 5.36 355 1,902.80 659.42 1,243.38

aConsumer price index for each year inflated to 1984 price (1984 =
100). 1984 consumer price index estimated to be 314.6.











Table 8.--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
Summer oil X
Fall X X
Fertilizer (custom) X X X
Dolomite (custom) X or X
Weed control
Chemical X or X or X
Mechanical X X X X
Hand (pulling vines) X X
Pruning
Hedging (custom) X or X
Topping (custom) X or X
Irrigation X X X X X X
Tree replacement
Pull trees X
Prepare sites X X
Plant resets X X
Ring X X
Water X X
Fertilizer X X X X X X
Weed control X X X X


aThis is a suggested schedule of practices. Actual
exact schedule shown here.


practices would not necessarily be done on the


~---.-~--~.-~-r..^-~-----~~~..~~










REFERENCES


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 (Oct. 1970), pp. 48-52.

Florida Citrus Spray Guide 1984. Univ. of Fla. Coop. Ext. Svc. Cir.
393-J. Gainesville: Jan. 1984.

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.

Muraro, Ronald P. "Comparative Citrus Budgets." Lake Alfred
Agricultural Research and Education Center AREC Report. Lake
Alfred, FL: Apr. 1984.

"Cost for Establishing, Planting, and Maintaining a Citrus
Grove through Four Years of Age" Lake Alfred AREC Report. Lake
Alfred, FLt Dec. 1981.

S"Cost of Planting and Maintaining Reset Citrus Trees through
Four Years" Lake Alfred AREC Report. Lake Alfred, FL: Dec.
1981.

S"Summary Custom Rate Survey for Interior Citrus Caretakers."
Lake Alfred AREC Report. Lake Alfred, FL: Apr. 1984.

Muraro, Ronald P., and J. Fred Kurras. "Estimating the Damage to
Citrus Trees and Resulting Value Loss Due to the January, 1982
Freeze," Florida Food and Resource Economics No. 39 (Mar.-Apr.
1982). University of Florida: Gainesville.

Reitz, H. J., C. D. Leonard, et al. Recommended Fertilizer and
Nutritional Sprays for Citrus. Univ. of Fla. Ag. Exp. Sta. Bull.
536C. Gainesville: Dec. 1972.












This public document was promulgated at an annual cost of $321.51 or 25.7
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.