Front Cover
        Front Cover
    Abstract
        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
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
    Reference
        Page 26

R. Clegg Hooks
Richard L. Kilmer


Estimated


Economic Intormation


Report 93


Costs of Packing


and


Citrus,


Season


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


Selling Fresh Florida


1976-77


June 1978















ABSTRACT


Packing costs have increased steadily over the past 17 seasons and
the trend continued through the 1976-77 season. Packing costs for two
4/5-bushel cartons of Florida oranges and grapefruit were estimated at
$2.60 and $2.55, an increase of 17.1 and 12.3 percent over 1975-76.
Tangerine and tangelo packing costs for two 4/5-bushel cartons were
estimated at S2.95 and $2.81, an increase of 13.9 percent for tangerines
and 22.1 percent for tangelos. The 1976-77 estimates were based on
accounting information obtained from 36 Florida packinghouses.


Key words: Fresh
fresh fruit, container


citrus
costs,


packing costs, packinghouses cost trends,
labor costs.


ACKNOWLEDGEMENTS


We wish to express our appreciation to the participant Packinghouses
for their excellent cooperation, and to Ms. Earlene Lee for her clerical
and secretarial assistance.














TABLE OF CONTENTS


LIST OF TABLES . .

SUMMARY . . .

SAMPLE FIRMS . .

DATA COLLECTION . .

WEIGHTED AVERAGE PACKING AND

COST TRENDS . .

SELECTED REFERENCES .


BULK HANDLING


. .


COSTS



. .


LIST OF TABLES

Table
1 Distribution of citrus handled by class of fruit, 36
Florida packinghouses, 1976-77 season . . .

2 Distribution of the sample packinghouses by total volume
packed compared with the industry distribution of firms
in Florida by total volume packed, 1976-77 season . .

3 Percent of total fruit received which was packed for
shipment by kind of fruit and packinghouse location; 35
packinghouses, 1976-77 season . . . .

4 Volume of citrus handled and total packing and selling
cost by type of container, 36 Florida packinghouses,
1976-77 season . . . . . .

5 Weighted average costs of packing and selling Florida
oranges per 1 3/5-bushel equivalent by type of container,
1976-77 season .. . . . . . .

6 Weighted average costs of packing and selling Florida
grapefruit per 1 3/5-bushel equivalent by type of container,
1976-77 season . . . . . .


Page

. ii

. 1

. 1

S2

S6

S12

. 18


Page

S3



S4



S4



S5



. 7



S9








LIST OF TABLES, continued


Table Page
7 Weighted average costs of packing and selling Florida
tangelos and tangerines per 1 3/5-bushel equivalent
by type of container, 1976-77 season . . .. 11

8 Weighted average costs of handling bulk Florida citrus,
1976-77 season . . . . ... . .13

9 Weighted average costs of handling Florida citrus
eliminations, 1976-77 season . . . ... 14

10 Percentage change in the items that make up the total
cost of packing 1 3/5-bushel Florida oranges and grape-
fruit in two 4/5-bushel cartons, 1976-77 over 1975-76 . 15

11 Total cost per 1 3/5-bushel equivalent for packing and
selling Florida citrus by type of pack, 1959-60
through 1976-77 seasons . . . . ... 16

12 Value of packed 4/5-bu. cartons of Florida oranges and
grapefruit relative to packing costs, years, 1967-68
through 1976-77 seasons, 1 3/5-bushel equivalent boxes . 17












ESTIMATED COSTS OF PACKING AND SELLING
FRESH FLORIDA CITRUS, 1976-77 SEASON


R. Clegg Hooks and Richard L. Kilmer


SUMMARY


Packing costs for two 4/5-bushel cartons of Florida oranges and
grapefruit are estimated at $2.601and $2.55, respectively, for the
1976-77 season. The estimates are 17.1 and 12.3 percent above 1975-76
season estimates. Tangerine packing costs for two 4/5-bushel cartons
are estimated at $2.95, up 13.9 percent from previous season estimates,
and the cost to pack two 4/5-bushel cartons of tangelos was $2.81, an
increase of 22.1 percent.
Packing costs have increased steadily over the past 17 seasons
with the greatest increases shown in direct and indirect operating
expenses.
The 1976-77 estimates are based on accounting information obtained
from 36 Florida packinghouses.

SAMPLE FIRMS


The 36 sample Florida packinghouses packed 13,734,206 equivalent



1Beginning with the 1975-76 season, tangelo packing costs were
reported separately from orange packing costs. This change in re-
porting will case packing costs for oranges to increase relatively
less than if tangelo packing costs had continued to be included in
oranges. This is predicated on information in this report which shows
average tangelo packing cost to be greater than average orange
packing cost (Table 4).



R. CLEGG HOOKS is an assistant in Agricultural Economics and
RICHARD L. KILMER is an Assistant Professor in Food and Resource Economics.






1 3/5-bushel boxes or approximately 47 percent of total Florida fresh
fruit shipments [2]. As indicated in Table 1, the sample firms
provided information on a total of over 58 million boxes (including
eliminations and direct-to-cannery fruit) or 23.3 percent of total
Florida citrus production [2,p.7].
The distribution of firms by size category shown in Table 2
indicates that the proportion of existing larger firms represented
in the sample is greater than the proportion of smaller firms in the
sample. The average volume packed per packinghouse for all 173
Florida packinghouses operating during the 1976-77 season was 169,048
equivalent 1 3/5-bushel boxes [2], while the average sample packing-
house packed 381,506 equivalent 1 3/5-bushel boxes. This was 62.9
percent of the total volume that went through houses with the balance
composed of eliminations (Table 3). The number and type of firms in
the sample are restricted by availability of accurate data and firms'
willingness to provide information.


DATA COLLECTION


Most of the firms provided information from their auditors' per-box
cost analysis reports. The average costs of packing the more important
containers reported by the sample firms are shown in Table 4.
For those firms that did not allocate costs to different types of
fruit or packages, per-box cost distributions are based on information
provided by houses that keep more detailed records. Quite often
auditors' reports did not show labor costs for labor categories and it
was necessary to distribute total per-box labor costs into the cate-
gories shown in the following tables. Again the labor cost distribution
was based on information available from packinghouses showing costs
for each labor category.
In general, the firms tended to use similar methods for allocating
materials, general and administrative, and selling expenses, but labor
and other direct operating expenses were allocated by various methods.
Two different auditing philosophies were reflected by the labor
and direct operating cost allocations shown in the auditors' reports.







Table l.--Distribution of citrus handled by class of fruit,
36 Florida packinghouses, 1976-77 season


Class of fruit


Total volume


1 3/5-bushel equivalent


11 East Coast packinghouses
Packed fruit b
Cannery fruit through house
Total through house
Direct, grove-to-cannery
Total

25 Interior packinghouses
Packed fruit
Cannery fruit through house
Total through house
Direct, grove-to-cannery
Total

36 packinghouses
Packed fruit
Cannery fruit through house
Total through house
Direct, grove-to-cannery
Total


3,679,576
1,972,517
5,652,093
1,164,805
6,816,898


10,054,630
6,113,988
16,168,618
35,198,512
51,367,130


13,734,206
8,086,505
21,820,711
36,363,317
58,184,028


aGrove-to-cannery fruit data were not obtained from
14 houses; had these been included, it would have increased
the volume going directly to cannery. One firm did not
supply information on eliminated fruit.
bCannery fruit through the house is fruit with accept-
able internal quality but does not meet fresh market size
or external appearance standards. Cannery fruit through
the house is often called eliminated fruit or eliminations.







Table 2.--Distribution of the sample packinghouses by total volume
packed compared with the industry distribution of firms
in Florida by total volume packed, 1976-77 season


Number of Percentage of
Total volume Number of packinghouses
1 3/5 bushel packinghouss included in in the industry
equivalent in Florida included in
thethe sample


Less than 50,000 79 1 1.3
50,001 100,000 16 2 12.5
100,001 200,000 20 5 25.0
200,001 300,000 21 11 52.4
300,001 400,000 11 4 36.4
400,001 600,000 19 7 36.8
Greater than 600,000 7 6 85.7

Total 173 36 20.8

aCalculated from [2].


Table 3.--Percent of total fruit
packed for shipment by
packinghouse location;
1976-77 season


received which was
kind of fruit and
35 packinghouses,


East Coast Interior All
nd of fruit houses houses houses


Percent Percent Percent

Oranges 50.3 57.1 56.9
Grapefruit 66.4 63.2 64.7
Tangerines 58.3 67.0 66.8
Tangelos 70.0 66.8 67.3

All fruit 65.1 61.2 62.3




5

Table 4.--Volume of citrus handled and total packing and selling cost by type of
container, 36 Florida packinghouses, 1976-77 season


Total weighted
Commodity and Sample Total average packing
type of container firms volume and selling
cost per box


---1 3/5-bushel

2,537,472
503,332
873,202
56,306

210,812
45,173
49,749
62,583
49,823
6,853
92,975
4,488,280

4,314,270
1,000,901
670,587
403,418
59,984
29,154
28,183
22,497
135,766
6,664,760


Oranges
4/5-bu. fiberboard carton
5-1b. poly. bag in master carton
5-1b. vexar bag in master carton
4/5-bu. fiberboard carton--export
4/5-bu. fiberboard carton--white
heavy duty
8-1b. poly. bag in master carton
8-1b. vexar bag in master carton
Bulk in truck sales
Field box
2/5-bu.'carton
Miscellaneous containers
Total packed oranges
Grapefruit
4/5-bu. fiberboard carton
4/5-bu. fiberboard carton--export
5-1b..poly. bag in master carton
5-1b. vexar bag in master carton
Field box
8-1b. poly. bag in master carton
8-1b. vexar bag in master carton
Bulk in truck sales
Miscellaneous containers
Total packed grapefruit
Tangerines
4/5-bu. fiberboard carton
4/5-bu. fiberboard carton-white
heavy duty
4/5-bu. Bruce box--flat
Miscellaneous containers
Total packed tangerines
Tan elos
4/5-bu. fiberboard carton
4/5-bu. fiberboard carton-white
heavy duty
4/5-bu. Bruce box--flat
5-1b. poly. bag in master carton
5-1b. vexar bag in master carton
Miscellaneous containers
Total packed tangelos
Miscellaneous varieties
Miscellaneous containers
Total packed fruit
Bulk fruit through house to cannery
Oranges
Grapefruit
Tangerines
Tangelos
Miscellaneous varieties
Total bulk through house


611,680

291,548
346,990
173,919
1,424,137

660,550

234,768
79,992
26,316
33,490
31,818
1,126,934

30,095
13,734,206

3,294,327
3,534,251
682,025
515,376
60,526
8,086,505


equivalent----

$2.60
3.20
3.51
3.19

2.89
3.15
3.30
1.58
1.87
3.35
3.18
$2.87

$2.55
2.81
3.20
3.59
1.39
3.08
3.25
1.38
2.73
2.71


$2.95

3.14
3.88
3.23
$3.25

$2.81

2.98
3.29
3.56
3.56
3.41
$2.98

$4.80
$2.85

$ .42
.23
.54
.32
.12
$ .34







One philosophy is based on the premise that all labor and other direct
operating costs should be allocated to the packed fruit. The other
philosophy is based on the premise that at least some of the direct
operating costs (unloading, grading, etc.) should be borne by the
2
eliminations.
Of the 36 firms in the sample, 17 firms supplied information
consistent with the first philosophy, 18 firms supplied information
consistent with the second philosophy and one firm did not report
elimination handling costs. No correction or adjustment of either
auditing system was made so that the averages shown in the following
tables reflect both auditing philosophies. The procedures used in
calculating the averages shown in this report are the same as those
used in previous reports in this series.
In all tables, administrative expense includes management and
office salaries, office expense, auto and travel, interest paid,
telephone and telegraph. Selling includes sales salaries, travel,
telephone and telegraph, and brokerage. Other items include Florida
citrus advertising tax, federal-state inspection, precooling, coloring
and waxing, and various industry assessments.


WEIGHTED AVERAGE PACKING AND BULK HANDLING COSTS


The weighted average costs of packing and selling Florida citrus
in various types of containers are presented in Tables 5, 6 and 7.
Detailed costs are shown for only the more important containers listed
in Table 4. Costs for the 4/5-bushel fiberboard carton for Interior
and East Coast houses are shown separately.
The costs shown are the weighted average costs for the sample
packinghouses, i.e., the total monetary costs of each item for all
houses were divided bythe total number of boxes packed. The use of
weighted averages tends to result in a lower estimated cost than
would the simple average because larger houses, which usually have


2Eliminations are fruit intended for fresh use but not packed
because of exterior appearance or size. Most eliminations are sent
to processing plants.






Table 5.--Weighted average costs of packing and selling Florida oranges
per 1 3/5-bushel equivalent by type of container, 1976-77 season

4/5-bu. fiberboard box
Type of container
East Interior All Export
Coast houses houses all houses

Number of packinghouses 6 24 30 6

Average volume packed 2,7 9,2 ,
(1 3/5-bushel equivalent) 25,736 99,293 84,582 9,384

Item of cost ------$ per 1 3/5-bushel equivalent-------
Materials
Containers 0.6993 0.6892 0.6898 0.8218
Other materials 0.0363 0.0238 0.0246 0.0763
Total materials 0.7356 0.7130 0.7144 0.8981
Labor
Receive, truck, dump 0.0916 0.0818 0.0824 0.0705
Cratemaking & labeling 0.0791 0.0826 0.0824 0.0984
Foremen, graders, others 0.2814 0.2045 0.2091 0.2635
Packing 0.2263 0.1696 0.1731 0.1733
Truck, check, load 0.1677 0.1205 0.1234 0.1232
Payroll taxes, comp. ins. 0.1716 0.1022 0.1064 0.1295
Total labor 1.0177 0.7612 0.7768 0.8584
Other direct operating
Power, lights, water 0.0719 0.0516 0.0528 0.0680
Repairs & maintenance 0.2951 0.1389 0.1484 0.2341
Misc. supplies & expense 0.0702 0.0543 0.0553 0.0728
Total other direct 0.4372 0.2448 0.2565 0.3749
Indirect operating
Insurance--fire & casualty 0.0842 0.0223 0.0261 0.0325
Taxes & licenses 0.0336 0.0245 0.0250 0.0563
Depreciation & Rent 0.2213 0.1380 0.1430 0.2777
Total indirect operating 0.3391 0.1848 0.1941 0.3665
Total packing expense 2.5296 1.9038 1.9418 2.4979
Administrative 0.1731 0.1652 0.1657 0.1606
Selling 0.1978 0.1924 0.1927 0.2087
Other items 0.3254 0.3015 0.3030 0.3265
Total costs 3.2259 2.5629 2.6032 3.1937

Range in total costs--low 2.6669 2.0699 2.0699 2.6069
--high 3.3206 3.9528 3.9528 4.0150
Standard deviation 0.1225 0.4202 0.4380 0.6403
Continued






Table 5.--Weighted average costs of packing and selling Florida orangesa per 1 3/5
bushel equivalent by type of container, 1976-77 season--Continued

5-1b. poly. 8-1b. poly. 5-1b. vexar 8-1b. vi
Type of container bag in bag in bag in bag ii
master master master master
carton carton carton cartoi

Number of packinghouses 23 15 23 17

Average volume packed
1 35-bushel equivalent) 21,884 3,011 37,965 2,925
(1 ,/5-bushel equivalent)

Item of cost ---------$ per 1 3/5-bushel equivalent-------------
Materials
Containers 1.1925 1.3081 1.4843 1.391
Other materials 0.0283 0.0335 0.0290 0.026
Total materials 1.2208 1.3416 1.5133 1.417(
Labor
Receive, truck, dump 0.0665 0.0543 0.0771 0.052
Cratemaking & labeling 0.0882 0.0881 0.0938 0.087;
Foremen, graders, others 0.2309 0.2320 0.2134 0.183'
Packing 0.2791 0.2503 0.2861 0.261
Truck, check, load 0.1134 0.1170 0.1145 0.101
Payroll taxes, comp. ins. 0.1285 0.1109 0.1157 0.098
Total labor 0.9066 0.8526 0.9016 0.785:
Other direct operating
Power, lights, water 0.0544 0.0479 0.0506 0.045
Repairs & maintenance 0.1461 0.1629 0.1467 0.1371
Misc. supplies & expense 0.0573 0.0509 0.0559 0.055
Total other direct 0.2578 0.2617 0.2532 0.238
Indirect operating
Insurance--fire & casualty 0.0220 0.0195 0.0217 0.0201
Taxes & licenses 0.0241 0.0194 0.0232 0.021i
Depreciation & Rent 0.1302 0.0890 0.1225 0.115
Total indirect operating 0.1763 0.1279 0.1674 0.156
Total packing expense 2.5615 2.5838 2.8355 2.597
Administrative 0.1628 0.1393 0.1944 0.244
Selling 0.1916 0.1624 0.1930 0.191
Other items 0.2827 0.2653 0.2871 0.268
Total costs 3.1986 3.1508 3.5100 3.302

Range in total costs--low 2.6519 2.7789 2.9669 2.802
--high 4.6594 4.4024 5.0587 4.721
Standard deviation 0.4155 0.2898 0.4135 0.405

aSee footnote 1, page 1.







Table 6.--Weighted average costs of packing and selling Florida grapefruit
per 1 3/5-bushel equivalent by type of container, 1976-77 season


4/5-bushel fiberboard box
Type of container
SEast Interior All Export
Coast houses houses all houses

Number of packinghouses 11 23 34 16

Average volume packed
(1 3/5-bushel equivalent) 218,630 83,014 126,890 62,556

Item of cost ------$ Per 1 3/5-bushel equivalent--------
Materials
Containers 0.7755 0.6783 0.7325 0.8588
Others materials 0.0229 0.0316 0.0267 0.0657
Total materials 0.7984 0.7099 0.7592 0.9245
Labor
Receive, truck, dump 0.0575 0.0470 0.0529 0.0586
Cratemaking & labeling 0.0794 0.0776 0.0786 0.0648
Foremen, graders, others 0.2116 0.1431 0.1812 0.2045
Packing 0.1849 0.1421 0.1660 0.1768
Truck, check, load 0.1424 0.1077 0.1270 0.1199
Payroll taxes, comp. ins. 0.1503 0.0883 0.1229 0.1316
Total labor 0.8261 0.6058 0.7286 0.7562
Other direct operating
Power, lights, water 0.0467 0.0413 0.0443 0.0495
Repairs & maintenance 0.1655 0.0868 0.1307 0.1354
Misc. supplies & expense 0.0390 0.0598 0.0482 0.0477
Total other direct 0.2512 0.1879 0.2232 0.2326
Indirect operating
Insurance--fire & casualty 0.0447 0.0138 0.0310 0.0360
Taxes & licenses 0.0156 0.0173 0.0164 0.0152
Depreciation & Rent 0.1280 0.0961 0.1139 0.1236
Total indirect operating 0.1883 0.1272 0.1613 0.1748
Total packing expense 2.0640 1.6308 1.8723 2.0881
Administrative 0.2250 0.2202 0.2229 0.2252
Selling 0.2119 0.1991 0.2062 0.2035
Other items 0.2675 0.2332 0.2523 0.2901
Total costs 2.7684 2.2833 2.5537 2.8079

Range in total costs--low 2.3160 1.8706 1.8706 2.0815
--high 3.2680 3.3412 3.3412 3.5058
Standard deviation 0.2865 0.3925 0.4147 0.2745

Continued







Table 6.--Weighted average
per 1 3/5-bushel
--Continued


costs of packing and selling Florida grapefruit
equivalent by type of container, 1976-77 season


5-1b. poly. 8-1b. poly. 5-1b. vexar 8-1b. vexar
bag in bag in bag in bag in
Type of container
Type of container master master master master
carton carton carton carton

Number of packinghouses 26 15 22 17

Average volume packed
(1 3/5-bushel equivalent) 25,791 1,943 18,337 1,657
(1 3/5-bushel equivalent)


Item of cost
Materials
Containers
Other materials
Total materials
Labor
Receive, truck, dump
Cratemaking & labeling
Foremen, graders, others
Packing
Truck, check, load
Payroll taxes, comp. ins.
Total labor
0ther direct operating
Power, lights, water
Repairs & maintenance
Misc. supplies & expense
Total other direct
Indirect operating
Insurance--fire & casualty
Taxes & licenses
Depreciation & Rent
Total indirect operating
Total packing expense
Administrative
Selling
Other items
Total costs


$ Per 1 3/5-bushel equivalent----------


1.2163
0.0384
1.2547

0.0561
0.0943
0.2189
0.2560
0.1184
0.1336
0.8773

0.0582
0.1182
0.0766
0.2530

0.0209
0.0225
0.1269
0.1703
2.5553
0.2271
0.1976
0.2228
3.2028


1.3166
0.0346
1.3512

0.0519
0.0893
0.1891
0.2293
0.1186
0.0983
0.7765

0.0421
0.1316
0.0656
0.2393

0.0171
0.0178
0.0843
0.1192
2.4862
0.1904
0.1752
0.2240
3.0758


1.5423
0.0664
1.6087

0.0581
0.1027
0.2195
0.2712
0.1187
0.1290
0.8992

0.0569
0.1338
0.0673
0.2580

0.0200
0.0221
0.1122
0.1543..
2.9202
0.2573
0.1818
0.2265
3.5858


1.4112
0.0331
1.4443

0.0542
0.0981
0.2177
0.2367
0.1077
0.1062
0.8206

0.0456
0.1455
0.0578
0.2489

0.0169
0.0192
0.0735
0.1096
2.6234
0.2592
0.1585
0.2070
3.2481


Range in total costs--low 2.4772 2.5008 2.7926 2.5809
--high 4.3101 4.4729 4.8677 4.6089
Standard deviation 0.5078 0.3683 0.4594 0.3577








Table 7.--Weighted average costs of packing and selling
Florida tangelos and tangerines per 1 3/5-bushel
equivalent by type of container, 1976-77 season

Tangelos Tangerines
Type of container
4/5 bushel 4/5 bushel
carton carton

Number of packinghouses 12 18

Average volume packed 55,045 33,982
(1 3/5-bushel equivalent)

Item of cost $ per 1 3/5-bu. equivalent
Materials
Containers 0.7464 0.7765
Other materials 0.0216 0.0250
Total materials 0.7680 0.8016
Labor
Receive, truck, dump 0.0838 0.0784
Cratemaking & labeling 0.0826 0.0975
Foremen, graders, others 0.2652 0.3209
Packing 0.1801 0.2337
Truck, check, load 0.1438 0.1293
Payroll taxes, comp. ins. 0.1426 0.1602
Total labor 0.8981 1.0201
Other direct operating
Power, lights, water 0.0762 0.0739
Repairs & maintenance 0.1656 0.2052
Misc. supplies & expense 0.0633 0.0673
Total other direct 0.3051 0.3464
Indirect operating
Insurance--fire & casualty 0.0293 0.0334
Taxes & licenses 0.0359 0.0383
Depreciation & Rent 0.1797 0.1540
Total indirect operating 0.2449 0.2257
Total packing expense 2.2161 2.3938
Administrative 0.1398 0.1057
Selling 0.2019 0.2082
Other Items 0.2558 0.2381
Total Costs 2.8136 2.9458

Range in total costs--low 2.0814 2.4078
--high 3.9598 4.5051
Standard deviation 0.4815 0.4030







lower costs, influence the average more than smaller houses.
Not all of the houses pack every container listed in Table 4.
The cost estimates presented in Tables 5, 6 and 7 are weighted averages
for the firms packing that container. Because the sample houses and
weights (volumes) change with each container, some of the cost differ-
ences among containers can be attributed to the composition of firms
packing each container. The costs of handling and selling bulk fruit
are shown in Table 8. The weighted average costs allocated to elimi-
nations are shown in Table 9.


COST TRENDS


Changes in the reported costs of packing oranges and grapefruit
in 4/5-bushel cartons from the 1975-76 to 1976-77 season are shown in
Table 10. Total packing and selling costs for oranges and grapefruit
in 4/5-bushel cartons increased about 18 and 12 percent. Specifically,
material costs increased one percent for oranges and grapefruit while
labor costs increase 20 and 18 percent for oranges and grapefruit.
Other direct operating costs, indirect operating costs, administrative
costs and selling costs increased significantly over past year.
Trends in orange and grapefruit packing costs for the past 17
seasons are reported in Table 11. In general, packing costs have
increased over time; however, the rate of cost rise increased in the
past year when compared with the change between the 1974-75 and 1975-76
seasons.
The relationship between average packing costs and the average
FOB value ofpacked fruit for 4/5 bushel cartons of oranges and grape-
fruit in the Interior and Indian River regions for the past 10 seasons
is shown in Table 12. The changes in the ratio have been cyclical.
The value of fruit has shown greater variability than costs which
have tended to increase over time.








Table 8.--Weighted average costs of handling bulk Florida
citrus, 1976-77 season

Bulk in truck sales
Type of container a
Oranges Grapefruit

Number of packinghouses 6 7

Average volume packed
(1 3/5-bushel equivalent) 10,430 3,213

Item of cost $ per 1 3/5-bu. equivalent
Materials
Containers 0.0 0.0
Other materials 0.0037 0.0018
Total materials 0.0037 0.0018
Labor
Receive, truck, dump 0.0619 0.0627
Cratemaking & labeling 0.0177 0.0152
Foremen, graders, others 0.1941 0.1544
Packing 0.0829 0.0717
Truck, check, load 0.1066 0.1037
Payroll taxes, comp. ins. 0.0851 0.0758
Total labor 0.5483 0.4845
Other direct operating
Power, lights, water 0.0312 0.0264
Repairs & maintenance 0.2004 0.1540
Misc. supplies & expense 0.0150 0.0091
Total other direct 0.2466 0.1895
Indirect operating
Insurance--fire & casualty 0.0439 0.0252
Taxes & licenses 0.0216 0.0109
Depreciation & Rent 0.1067 0.0547
Total indirect operating 0.1722 0.0908
Total packing expense 0.9708 0.7666
Administrative 0.0904 0.1654
Selling 0.1999 0.1906
Other items 0.3146 0.2622
Total costs 1.5757 1.3848

Range in total costs--low 0.4883 0.4564
--high 2.2944 1.7844
Standard deviation 0.1735 0.2280

aSee footnote 1, page 1.







Table 9.--Weighted average costs of handling Florida citrus eliminations,
1976-77 season

Bulk through house to cannery

Orangesa Grapefruit Tangerines Tangelos

Number of packinghouses 32 33 26 16

Average volume packed 102,947 107,098 26,231 32,211
(1 3/5-bushel equivalent)

Item of cost --------$ Per 1 3/5-bushel equivalent-------
Materials
Containers 0.0 0.0 0.0 0.0
Other materials 0.0021 0.0005 0.0006 0.0
Total materials 0.0021 0.0005 0.0006 0.0
Labor
Receive, truck, dump 0.0654 0.0102 0.0396 0.0252
Cratemaking & labeling 0.0023 0.0041 0.0062 0.0081
Foremen, graders, others 0.0640 0.0117 0.0829 0.0250
Packing 0.0 0.0 0.0 0.0
Truck, check, load 0.0044 0.0033 0.0052 0.0042
Payroll taxes, comp. ins. 0.0237 0.0057 0.0395 0.0140
Total labor 0.1598 0.0350 0.1734 0.0765
Other direct operating
Power, lights, water 0.0156 0.0048 0.0246 0.0116
Repairs & maintenance 0.0756 0.0180 0.1257 0.0571
Misc. supplies & expense 0.0178 0.0091 0.0202 0.0150
Total other direct 0.1090 0.0319 0.1705 0.0837
Indirect operating
Insurance--fire & casualty 0.0170 0.0037 0.0234 0.0089
Taxes & licenses 0.0087 0.0028 0.0149 0.0089
Depreciation & Rent 0.0451 0.0145 0.0685 0.0391
Total indirect operating 0.0708 0.0210 0.1068 0.0569
Total packing expense 0.3417 0.0884 0.4513 0.2171
Administrative 0.0723 0.1352 0.0858 0.0945
Selling 0.0 0.0 0.0 0.0
Other items 0.0041 0.0014 0.0041 0.0045
Total costs 0.4181 0.2250 0.5412 0.3161

Range in total costs--low 0.0502 0.0502 0.0502 0.0502
--high 1.4431 1.0610 1.2461 0.8896
Standard deviation 0.2808 0.1214 0.3852 0.2877

aSee footnote 1, page 1.





Table 10.--Percentage change in the items that make up the total cost of packing 1 3/5-bushel
Florida oranges and grapefruit in two 4/5-bushel cartons, 1976-77 over 1975-76


Volume packed _Orangesa Grape rui t
(1 3/5-bu. equivalent) 1976-77 1975-76 Change 1976-77 1975-76 Change

$ per 1 3/5-equivalent Percent $per 1 3/5-eguivalent Percent

Materials
Containers 0.6898 0.6850 0.6 0.7325 0.7254 1.0
Other materials 0.0246 0.0222 10.8 0.0267 0.0263 1.5
Total materials 0.7144 0.7082 0.9 0.7592 0.7517 1.0
Labor
Receive, truck, dump 0.0824 0.0491 67.8 0.0529 0.0468 13.0
Cratemaking & labeling 0.0824 0.0680 21.2 0.0786 0.0714 10.1
Foremen, graders, others 0.2091 0.1810 15.5 0.1812 0.1520 19.3
Packing 0.1731 0.1572 10.1 0.1660 0.1359 22.1
Truck, check, load 0.1234 0.1101 12.1 0.1270 0.1202 5.7
Payroll taxes, comp. ins. 0.1064 0.0839 26.8 0.1229 0.0912 34.8
Total labor 0.7768 0.6493 19.6 0.7286 0.6175 18.0
Other direct operating
Power, lights, water 0.0528 0.0391 35.0 0.0443 0.0397 11.6
Repairs & maintenance 0.1484 0.1014 46.4 0.1307 0.0945 38.3
Misc. supplies & expense 0.0553 0.0424 30.4 0.0482 0.0410 17.6
Total other direct 0.2565 0.1829 40.3 0.2232 0.1752 27.4
Indirect operating
Insurance--fire & casualty 0.0261 0.0151 72.8 0.0310 0.0265 17.0
Taxes & licenses 0.0250 0.0174 43.7 0.0164 0.0145 13.1
Depreciation & rent 0.1430 0.0962 48.6 0.1139 0.0993 14.7
Total indirect operating 0.1941 0.1287 50.8 0.1613 0.1403 15.0
Total packing expense 1.9418 1.6691 16.3 1.8723 1.6847 11.1
Administrative 0.1657 0.1031 60.7 0.2229 0.1846 20.7
Selling 0.1927 0.1640 18.1 0.2062 0.1795 14.9
Other items 0.3030 0.2793 8.5 0.2523 0.2223 13.5
Total costs 2.6032 2.2155 17.5 2.5537 2.2711 12.4

asee footnote 1, page I.








Table l1.--Total cost per 1 3/5-bushel equivalent for packing and
selling Floridaacitrus by type of pack, 1959-60 through
1975-77 seasons

4/5-bu. 5-1b. poly. 8-1b. poly. 5-1b. vexar 8-1b. vexar
fiber- bag in bag in bag in bag in
Season board master master master master
box carton carton carton carton

--------------------------Oranges----------------------------
1959-60 $1.26 $1.66
1960-61 1.33 1.71
1961-62 1.32 1.69
1962-63 1.50 1.96
1963-64 1.42 1.88
1964-65 1.44 1.74
1965-66 1.49 1.88
1966-67 1.48 1.87 -- $1.99 $1.76
1967-68 1.57 2.02 -- 2.27 2.12
1968-69 1.54 2.14 -- 2.30 2.16
1969-70 1.76 2.25 $2.21 2.35 2.30
1970-71 1.78 2.23 2.42 2.42 2.33
1971-72 1.81 2.27 2.21 2.41 2.30
1972-73 1.86 2.33 2.22 2.52 2.36
1973-74 2.09 2.63 2.52 2.77 2.67
1974-75 2.18 2.79 2.73 3.01 3.00
1975-76b 2.22 2.83 2.86 3.11 2.99
1976-77 2.60 3.20 3.15 3.51 3.30
-----------------------Grapefruit------------------------------
1959-60 $1.18 $1.58 $1.52
1960-61 1.20 1.63 1.50
1961-62 1.28 1.62 1.53
1962-63 1.29 1.77 1.69
1963-64 1.29 1.66 1.85
1964-65 1.37 1.56 1.46
1965-66 1.41 1.74 1.69
1966-67 1.41 1.76 1.72 $2.05 $1.79
1967-68 1.56 2.07 2.02 2.27 2.10
1968-69 1.57 1.98 1.99 2.18 2.04
1969-70 1.66 2.12 2.13 2.29 2.16
1970-71 1.71 2.14 2.19 2.35 2.21
1971-72 1.72 2.09 2.12 2.31 2.18
1972-73 1.77 2.16 2.01 2.37 2.10
1973-74 2.06 2.52 2.57 2.77 2.67
1974-75 2.21 2.72 2.61 3.01 3.28
1975-76 2.27 2.91 2.74 3.21 2.88
1976-77 2.55 3.20 3.08 3.59 3.25
information for seasons prior to 1976-77 is from Hooks [3].








,Table 12.--Value of packed 4/5-bu. cartons of Florida oranges and
grapefruit relative to packing costs, years, 1967-68
through 1976-77 seasons, 1 3/5-bushel equivalent boxes


Interior East Coast

Season FOB value FOB value
of packed acting Ratioc of packed c g Ratioc
fruit costfruita cost

$ per 1 3/5-bu. Percent $ per 1 3/5-bu.
equivalent equivalent Percent
Oranges
1967-68 4.56 1.53 32 5.50 1.84 33
1968-69 4.36 1.59 36 4.72 1.90 40
1969-70 3.86 1.63 42 4.60 2.01 44
1970-71 4.26 1.75 41 4.86 1.89 39
1971-72 5.08 1.80 35 5.44 2.01 37
1972-73 4.66 1.86 40 4.80 2.14 44
1973-74 5.14 2.04 40 5.30 2.47 47
1974-75, 5.42 2.13 39 5.68 2.56 45
1975-76 5.64 2.19 39 6.12 2.38 39
1976-77 5.92 2.56 43 5.86 3.23 55

Grapefruit
1967-68 4.68 1.84 39 5.70 1.67 29
1968-69 4.72 1.90 40 4.30 1.72 40
1969-70 4.60 2.01 44 5.04 1.81 36
1970-71 4.86 1.89 39 5.20 1.84 35
1971-72 5.16 2.01 39 5.80 1.84 32
1972-73 5.30 2.14 40 6.12 1.96 32
1973-74 5.16 1.87 36 5.74 2.21 39
1974-75 5.84 1.94 33 6.46 2.36 37
1975-76 5.26 2.05 39 6.16 2. 38 39
1976-77 5.68 2.28 40 6.60 2.77 42

aFrom Florida Citrus Mutual [1].

seasons prior to 1975-76 are from Hooks and Kilmer [3].

CRatio = packing cost value of packed fruit.

See footnote 1, page 1.













SELECTED REFERENCES


[1] Florida Citrus Mutual. Statistical Bulletin. Lakeland:
various issues.


[2] Florida Division of Fruit and Vegetable Inspection.
Season Annual Report. Winter Haven: 1977.


1976-77


[3] Hooks, R. Clegg and Richard L. Kilmer. Estimated Costs of
Packing and Selling Florida Citrus, 1975-76 Season.
Food and Resource Economics Department Economic Infor-
mation Report 72. Gainesville: University of
Florida. May 1977.


























This public document was promulgated at an annual cost of $862.00 or
$0.72 per copy to report citrus harvesting research results to
country agricultural directors and firms and agencies in the
citrus industry.







Table 10.--Simple average packing and elimination handling costs for the
five firms reporting the highest costs of packing 1 3/b-bushels
of Florida oranges in 4/5-bushel cartons, 1973-74 season

4/5-bushel carton Orange eliminations

Average Relation to Average Relation to
packing weighted packing weighted
cost average cost average

$ per $ per
1 3/5-bu. Percent 1 3/5-bu. Percent
equivalent equivalent
Materials .6305 110 .0000 0

Labor, payroll
taxes & insurance .9183 139 .0000 0

Other operating costs .5921 179 .0000 0

Total packing expense 2.1409 137 .0000 0
Administrative .1670 149 .1246 185
Selling .1716 108 .0000 0
Other items .2850 112 .0000 0

Total costs 2.7645 132 .1246 42


expenses from


Includes both direct and indirect operating
Tables 4 and 8.







low-cost firms reported only 5.9 cents per box for depreciation. In

addition, those firms reporting high costs did not allocate any labor or

operating expenses to eliminations.

Tables 9 and 10 serve to point out that both the accounting methods

for depreciating buildings and equipment and allocating costs to

eliminations influence the reported per-box costs. There are several

potential reasons why the five high-cost firms reported high depreciation.

First, several of the firms are new packinghouses and are using rapid

depreciation procedures for relatively expensive facilities. Second,

the results suggest the hypothesis that the new houses .have not fully

utilized the new technology. Third, it might be hypothesized that the

high-cost firms have not yet been able to procure sufficient volume to

achieve the advantages of newly expanded capacity.


COST TRENDS

Changes in the reported costs of packing oranges and grapefruit

in 4/5-bushel cartons from the 1972-73 season are shown in Table 11.

Total packing and selling costs for oranges and grapefruit in 4/5-bushel

cartons are reported to have increased 12 and 16 percent, respectively.

Comparing individual items, power, lights and water costs were up over

50 percent. Materials costs rose 15 and 17 percent, reflecting the

high carton coats. Labor costs were up 8 and 21 percent2, other

direct operating costs increased 22 and 20 percent and indirect

operating costs rose by 30 and 39 percent, respectively. With only one


2The reason for the larger percentage increase in labor for grape-
fruit packing is not clear from the data. Some of the changes could be
attributed to the addition of several large grapefruit packinghouses
to the sample.










Table ll.--Percentage change in the items that make up the total cost of packing 1 3/5-bushel Florida
oranges and grapefruit in two 4/5-bushel, cartons, 1973-74 over 1972-73

Oranges Grapefruit
Volume packed (1 3/5-bu. Oranges Grapefruit
equivalent) 1972-73a 1973-74 Change 1972-73a 1973-74 Change

$ per 1 3/5-bquivalent Percent $ per 1 3/5-equivalent Percent.
Materials
Containers .4804 .5544 15.4 .4974 .5760 15.8
Other materials .0180 .0207 15.0 .0177 .0257 45.2
Total materials .4984 .5751 15.2 ,5151 .6017 16.8

Labor
Receive, truck, dump .0445 .0511 14.8 .0362 .0514 42.0
Cratemaking & labeling .0706 .0732 3.7 .0637 .0676 6.1
Foremen, graders, others .1656 .1948 16.9 .1298 .1731 33.4
Packing .1433 .1538 7.3 .1175 .1293 10.0
Truck, check, load .1022 .1064 4.1 .1013 .1199 18.4
Payroll taxes, comp. ins. .0765 .0809 5.8 .0662 .0797 20.4
Total labor .6037 .6602 8.3 .5147 .6210 20.7
Other direct operating
Power, lights, water .0221 .0343 55.2 .0199 .0310 55.8
Repairs & maintenance .0811 .0924 13.9 .0614 .0629 2.4
Misc. supplies & expense .0365 .0433 18.6 .038 Q49I 29.2
Total other direct .1397 .1700 21.7 .1193 .1430 19.9
Indirect operating
Insurance-fire & casualty .0139 .0196 41.7 .0116 .0186 60.3
Taxes & licenses .0190 .0225 18.4 .0165 .0187 13.3
Depreciation .0842 .1101 30.8 .0774 .1029 33.0
Rent .0Q72 .0093 29.2 .0013 .0082 630.8
Total indirect operating .1243 .1615 30.0 .1068 .1484 39.0

Total packing expense 1.3661 1.5668 14.7 1.2559 1.5141 20.6
Administrative .0943 .1117 18.5 .1376 .1472 7.0
Selins .1489 .1593 7.0 .1528 .1732 13.4
Other items .2554 .2537 -1.0 .2277 .2267 0.0

Total costs 1.8647 2.0915 12.2 1.7740 2.0612 16.2

aThe data reported by Sherrod, Ward and Spurlock [3] for the 1972-73 season were revised because two
firms included in the 1972-73 sample reported incorrect repair and maintenance expenses.







minor exception, every item for both packs were reported to be higher

than previous season levels.3

Trends in orange and grapefruit packing costs for the past 15 seasons

are reported in Table 12. The change in 4/5-carton packing costs between

the 1972-73 and 1973-74 seasons was the largest percentage increase

reported in Table 12.

The changes in the components that make up total packing costs

for 1 3/5-bushel of oranges in two 4/5-bushel cartons that have taken

place since the 1959-60 season are shown in Table 13. Indirect operating

expenses have risen more than any other expense category while materials

have been the item showing the lowest relative increase. In general,

packing costs had not risen rapidly until the 1970-71 season. Some of

the year-to-year differences reflect changes in the number and type

of firms in the sample.

The relationship between packing costs and the FOB value of packed

fruit for 4/5-cartons of oranges and grapefruit in the Interior

and Indian River regions for the past seven seasons is shown in Table 14.

In general, packing costs have risen relative to the value of fruit.

The changes in the ratio have not been steady because the value of fruit

has shown great variability over the past seven seasons. Interior

grapefruit and Indian River orange packing costs have shown the greatest

increases relative to the value of packed fruit.







The exceptionally large 631.8 percent increase in rent cost for
grapefruit in 4/5-bushel cartons reflects the addition of a firm that
was not in the sample the previous season.







Table 12.--Total cost per 1 3/5-bushel equivalent for packing and selling
Florida citrus by type of pack, 1963-64 through 1973-74 season


4/5-bu. 5-lb.poly 8-lb.poly 5-lb.vexar 8-lb.vexar
n fiber- bag in bag in bag in bag in
Season
board master master master master
box carton carton carton carton

- - - Oranges - - - -

1959-60 $1.26 $1.66
1960-61 1.33 1.71 --
1961-62 1.32 1.69 -
1962-63 1.50 1.96
1963-64 1.42 1.88

1964-65 1.44 1.74 -
1965-66 1.49 1.88
1966-67 1.48 1.87 -- $1.99 $1.76
1967-68 1.57 2.02 -- 2.27 2.12
1968-69 1.64 2.14 -- 2.30 2.16

1969-70 1.76 2.25 $2.21 2.35 2.30
1970-71 1.78 2.23 2.42 2.42 2.33
1971-72 1.81 2.27 2.21 2.41 2.30
1972-73 1.86 2.33 2.22 2.52 2.36
1973-74 2.09 2.63 2.52 2.77 2.67

- - Grapefruit - - - -

1959-60 $1.18 $1.58 $1.52
1960-61 1.20 1.63 1.50
1961-62 1.28 1.62 1.53
1962-63 1.29 1.77 1.69
1963-64 1.29 1.66 1.85

1964-65 1.37 1.56 1.46
1965-66 1.41 1.74 1.69 --
1966-67 1.41 1.76 1.72 $2.05 $1.79
1967-68 1.56 2.07 2.02 2.27 2.10
1968-69 1.57 1.98 1.99 2.18 2.04

1969-70 1.66 2.12 2.13 2.29 2.16
1970-71 1.71 2.14 2.19 2.35 2.21
1971-72 1.72 2.09 2.12 2.31 2.18
1972-73 1.77 2.16 2.01 2.37 2.10
1973-74 2.06 2.52 2.57 2.77 2.67


information
Ward and Spurlock


for seasons prior to 1973-74 season are from Sherrod,
[3].







Table 13.--Relative changes in the cost components that make up the total cost of packing 1 3/5-bushels
of Florida oranges in 4/5-bushel cartons, 1959-60 through 1973-74 seasons

Selling Total packing
Materials Labor di thera g a Indirect operating administrative & Toal paing
direct operating other selling
Year _______ _______ ____
Cost Indexc Cost Indexc Cost Index Cost Indexc Cost Indexc Cost Indexc


1959-60
1960-61
1961-62
1962-63
1963-64

1964-65
1965-66
1966-67
1967-68
1968-69

1969-70
1970-71
1971-72
1972-73
1973-74


$.4649
.4818
.4857
.4639
.4372

.4433
.4634
.4723
.4645
.4637
.4756
.4699
.4440
.4984
.5751


99.6
103.2
104.1
99.4
93.7

95.0
99.3
101.2
99.5
99.4
101.9
100.7
95.1
106.8
123.0


$.3697
.3998
.4012
.4507
.4277

.4531
.4795
.4790
.5182
.5415

.4938
.5187
.5765
.6037
.6601


90.2
97.6
97.9
11.0
104.4

110.6
117.0
116.9
126.5
132.1
120.5
126.6
140.7
147.3
161.1


$.0805
.0896
.0850
.1076
.0926

.0906
.0926
.0850
.1059
.1273
.1185
.1275
.1484
.1397
.1700


88.4
98.4
93.3
118.1
101.6

99.5
101.6
93.3
116.2
139.7
130.1
140.0
162.9
153.4
186.6


$.0739
.0833
.0693
.0915
.0804

.0776
.0843
.0820
.0877
.1053
.1019
.1361
.1534
.1243
.1616


92.7
104.5
87.0
114.8
100.9

97.4
105.8
102.9
110.0
132.1
127.9
170.8
192.5
156.0
202.8


$.2758
.2784
.2776
.3819
.3823

.3749
.3743
.3667
.3950
.3977
.4734
.4756
.4885
.4986
.5247


86.4
87.2
87.0
119.6
119.8

117.4
117.3
114.9
123.7
124.6
148.3
149.0
153.0
156.2
164.4


$1.2648
1.3329
1.3188
1.4956
1.4202

1.4395
1.4941
1.4850
1.5713
1.6355
1.6632
1.7278
1.8108
1.8647
2.0915


92.6
97.5
96.5
109.4
103.9

105.3
109.3
108.7
115.0
119.7
121.7
126.4
132.5
136.5
153.1


a0ther direct operating expenses
miscellaneous supplies.


include power, lights, water, repair, maintenance and other


Indirect operating expenses include insurance, taxes, licenses, depreciation and rent.

CIndex is based on average 1959-60 through 1963-64 = 100.






Table 14.--Value of packed 4/5-cartons of Florida oranges and grape-
fruit relative to packing costs, years, 1967-68 through
1973-74 seasons, 1 3/5-bushel equivalent boxes


Interior East Coast
Season FOB FOB
value of ackitb Ratioc value of Packi g Ratioc
packed fruita cos packed fruit cost

$ per 1 3/5-equiv.. Percent $ per 1 3/5-equiv. Percent
Oranges
1967-68 4.56 1.53 32 5.50 1.84 33
1968-69 4.36 1.59 36 4.72 1.90 40
1969-70 3.86 1.63 42 4.60 2.01 44
1970-71 4.26 1.75 41 4.86 1.89 39
1971-72 5.08 1.80 35 5.44 2.01 37
1972-73 4.64 1.86 40 4.88 2.14 44
1973-74 5.14 2.04 40 5.30 2.47 47
Grapefruit
1967-68 4.68 1.84 33 5.70 1.67 29
1968-69 4.72 1.90 40 4.30 1.72 42
1969-70 4.60 2.01 44 5.04 1.81 36
1970-71 4.86 1.89 39 5.20 1.84 35
1971-72 5.16 2.01 37 5.80 1.84 32
1972-73 5.30 2.14 44 6.12 1.96 32
1973-74 5.16 2.47 47 5.74 2.21 39

aFrom Florida Citrus Mutual [1].


bSeasons prior to 1973-74 are from Sherrod, Ward

CRatio = packing cost value of packed fruit.


and Spurlock E3].














SELECTED REFERENCES


[1] Florida Citrus Mutual. Annual Statistical Report, Lakeland:
various issues.


[2] Florida Division of Fruit and Vegetable Inspection.
Season Annual Report. Winter Haven: 1974.


1973-74


[3] Sherrod, W. H., Jr., A. Lewis Ward, Jr. and A. H. Spurlock. Costs
of Packing and Selling Florida Citrus Fruits, 1972-73 Season.
Food and Resource Economics Department Economics Report 61.
Gainesville: University of Florida. April 1974.


This public document was promulgated at an annual cost of $5404.44 or $3,60
per copy to report citrus handling cost research results to county agricultural
directors and firms and agencies in the citrus industry.


_1_1__~ ___


I ~_ _~_fl_~___