• TABLE OF CONTENTS
HIDE
 Historic note
 Front Cover
 Abstract
 Acknowledgement
 Table of Contents
 List of Tables
 List of Figures
 Main
 Reference














Title: Grower's returns and marketing costs for Florida citrus
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026472/00001
 Material Information
Title: Grower's returns and marketing costs for Florida citrus
Series Title: Economic information report
Physical Description: v, 33 p. : ill. ; 28 cm.
Language: English
Creator: Kilmer, Richard L
Publisher: Food & Resource Economics Dept., Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1982
 Subjects
Subject: Citrus fruit industry -- Florida   ( lcsh )
Citrus fruits -- Marketing -- Florida   ( lcsh )
Fruit trade -- Florida   ( lcsh )
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 33.
Statement of Responsibility: Richard L. Kilmer.
General Note: Cover title.
General Note: "September 1982."
 Record Information
Bibliographic ID: UF00026472
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 001545232
oclc - 09468266
notis - AHF8750

Table of Contents
    Historic note
        Unnumbered ( 1 )
    Front Cover
        Front Cover
    Abstract
        Page i
    Acknowledgement
        Page i
    Table of Contents
        Page ii
    List of Tables
        Page iii
        Page iv
    List of Figures
        Page v
    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
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
    Reference
        Page 33
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida






Richard L. Kilmer


.EC'0 DEC 2 81982
Economic Information

Report 167


Grower's Returns and Marketing

Costs for Florida Citrus-


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


September 1982


..
, -
'


;'
r- i. .
:~" i-
"











ABSTRACT


Changes in costs associated with each level in the fresh and

processed citrus marketing channel are examined. The results indicate

that nearly 61 percent of the retail food dollar spent on fresh grape-

fruit is associated with activities that occur after the fruit leaves

fresh fruit packinghouses. For frozen concentrated orange juice and

canned single-strength grapefruit juice the F.O.B.-retail margin was

estimated to be 27 and.. 26 percent, respectively, of the consumers'

expenditures.


Key words: citrus marketing, marketing margins, cost trends,

citrus acreage, citrus production, on-tree revenue, on-tree returns.


ACKNOWLEDGMENTS


I wish to express my appreciation to Ms. Jan Strauser for her

clerical and secretarial assistance.











ABSTRACT


Changes in costs associated with each level in the fresh and

processed citrus marketing channel are examined. The results indicate

that nearly 61 percent of the retail food dollar spent on fresh grape-

fruit is associated with activities that occur after the fruit leaves

fresh fruit packinghouses. For frozen concentrated orange juice and

canned single-strength grapefruit juice the F.O.B.-retail margin was

estimated to be 27 and.. 26 percent, respectively, of the consumers'

expenditures.


Key words: citrus marketing, marketing margins, cost trends,

citrus acreage, citrus production, on-tree revenue, on-tree returns.


ACKNOWLEDGMENTS


I wish to express my appreciation to Ms. Jan Strauser for her

clerical and secretarial assistance.










TABLE OF CONTENTS

Page

ABSTRACT .. .... .. . . . . i

ACKNOWLEDGMENTS . . . .. . i

TABLE OF CONTENTS . . . . . ii

LIST OF TABLES . . ... . .. iii

LIST OF FIGURES ..... .. . . . . v

INTRODUCTION . ... . ... .. 1

TRENDS IN PRODUCTION, VALUE OF PRODUCTION, AND ON-TREE PRICES.. 1

HARVESTING AND HAULING COSTS . . . . 3

FRESH PACKING AND SELLING COSTS . . . 12

Packing Costs . . . . ... 12

PROCESSING, WAREHOUSING, AND SELLING . . . 18

WHOLESALING AND RETAILING COSTS . . . .. 23

COSTS OF MARKETING CHANNEL FUNCTIONS . . . 30

SUMMARY ....... . 31

REFERENCES ..... ...... . . . 33








LIST OF TABLES


Table Page

1 Florida citrus bearing acres by type of fruit, 1959-60
through 1980-81 seasons . . . .. 2

2 Florida citrus production by type of fruit, 1959-60
through 1980-81 seasons . . . . 4

3 On-tree value of Florida citrus production by type of
fruit, 1959-60 through 1980-81 seasons . .. 5

4 Average value of citrus production per acre of citrus by
type of fruit, 1959-60 through 1980-81 seasons . 6

5 On-tree price per box of Florida citrus by type of fruit,
1959-60 through 1980-81 seasons . . . 7

6 Picking and hauling costs and indices for Florida oranges,
1959-60 through 1979-80 seasons . .. . 9

7 Picking and hauling costs and indices for Florida grape-
fruit, 1959-60 through 1979-80 seasons . .. 10

8 Picking and hauling costs and indices for Florida tan-
gerines, 1959-60 through 1979-80 seasons ........ 11

9 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 1979-80 seasons -. 15

10 Cost components that make up the total cost of packing
and selling 1-3/5 bushels of grapefruit in 4/5 bushel
fiberboard cartons, 1959-60 through 1979-80 seasons 16

11 Utilization of oranges and Temples by type of processed
products, 1959-60 through 1980-81 seasons ..... 20

12 Costs of processing, warehousing, and selling Florida
concentrated orange juice in 48/6-ounce cans in cases,
450 Brix, 1959-60 through 1979-80 seasons . 21

13 Warehousing cost, carryover ending stocks and indices
for Florida FCOJ, 1959-60 through 1980-81 seasons 22

14 Utilization of grapefruit by type of processed products,
1959-60 through 1980-81 seasons . ...... 24

15 Cost of processing, warehousing and selling Florida
unsweetened grapefruit juice in 12 46-ounce cans of
juice in cases, 1959-60 through 1979-80 seasons . 25
iii








List of Tables (cont.)

Table Page

16 Proportion of the consumer's retail food dollar spent on
fresh grapefruit that is returned to various marketing
channel participants, 1964-65 through 1979-80 seasons. 27

17 Proportion of the consumer's food dollar spent on 6-ounce
cans of frozen concentrated orange juice that is returned
to various marketing channel participants, 1964-65
through 1979-80 seasons . . . ... 28

18 Proportion of the consumer's food dollar spent on 12 46-
ounce cans of single-strength grapefruit juices that is
returned to various marketing channel participants,
1964-65 through 1979-80 seasons .. . .. 29









LIST OF FIGURES

Figure Page

1 Utilization of Florida citrus from 1959-60 through
1980-81 seasons . . . .... .13

2 Certified fresh citrus fruit shipments from Florida
1959-60 through 1980-81 seasons . . .. 14

3 Proportion of Florida citrus fruit delivered to
packinghouses that is actually packed, 1959-60 through
1979-80 seasons . . . . ... 17

4 Certified fresh citrus shippers in Florida and average
volume per packinghouse 1959-60 through 1980-81 seasons 19








GROWERS' RETURNS AND MARKETING COSTS
FOR FLORIDA CITRUS

Richard L. Kilmer

INTRODUCTION

The United States Department of Agriculture has published the far-

mer's share of the consumer's food dollar on commodities for many years.

The increase in food prices has stimulated an interest in cost of mar-

keting functions performed between the producer and consumer. The

purpose of this update of a previous report [12] is to look at the

costs associated with each level in the fresh and processed citrus

marketing channel. In this paper (1) value of production and on tree

prices, (2) picking and hauling costs, (3) fresh citrus packing and

selling costs, (4) citrus processing, warehousing, and selling costs,

and (5) the wholesaling and retailing stage in.the citrus production/

marketing process are examined.

TRENDS IN PRODUCTION, VALUE OF PRODUCTION,
AND ON-TREE PRICES

Total citrus bearing acreage in Florida declined from 1970-71

through 1978-79 and then increased (Table 1). The increase came from

increases in orange.bearing acreage which were complemented by

increases in grapefruit bearing acreage whichhas continued since

1963-64. Specialty fruit acreage has declined since 1970-71 but

was offset by the increases in orange and grapefruit bearing

acreage. Prior to 1970-71, orange and specialty fruit bearing

acreage had increased rapidly while grapefruit bearing acreage

had remained relatively stable. In 1980-81, orange, grapefruit,



Richard L. Kilmer is an assistant professor in the Food and Resource
Economics Department.









Table 1. Florida citrus bearing acres by
1980-81 seasons.


type of fruit, 1959-60 through


All round oranges All grapefruit Specialty fruit All citrus
Bearing Indexb Bearing ndexb Bearing ndexb Bearing Indexb
Season A age ea Acreage Acreagereage Areage

1000 acres Percent 1000 acres Percent 1000 acres Percent 1000 acres Percent

1959-60 370.0 97 92.3 103 45.9 104 508.2 98
1960-61. 374.1 98 92.5 103 48.3 109 514.9 100
1961-62 408.7 107 94.0 104 46.8 106 549.5 106
1962-63 370.0 97 88.0 98 41.3 93 499.3 97
1963-64 388.0 102 83.0 92 39.1 88 510.1 99

1964-65 435.0 114 84.0 93 42.3 96 561.3 109
1965-66 472.0 124 85.8 95 45.3 102 603.1 117
1966-67 522.0 137 87.0 97 49.7 112 658.7 128
1967-68 557.6 146 87.5 97 54.6 123 699.7 135
1968-69 595.6 156 90.3 100 60.9 138 746.8 145

1969-70 636.1 166 98.7 110 71.6 162 806.4 156
1970-71 660.5 173 107.2 119 78.8 178 846.5 164
1971-72 624.2 163 112.6 125 75.6 171 812.4 157
1972-73 619.6 162 114.6 127 74.9 169 809.1 157
1973-74 614.6 161 115.8 129 73.4 166 803.8 156

1974-75 610.4 160 115.4 128 73.7 166 799.5 155
1975-76 596.4 156 117.9 131 70.2 159 784.5 152
1976-77 594.3 156 119.3 133 69.6 157 783.2 152
1977-78 579.0 152 120.3 134 65.5 148 764.8 148
1978-79 571.5 150 124.6 139 63.4 143 759.5 147
1979-80 576.6 151 126.4 141 63.6 144 766.6 148
1980-81 573.4 150 125.6 140 63.0 142 762.0 148


Index 382.16 89.6 44.28 516.4


Source: C[i

aIncludes Temples, tangelos, tangerines,honey tangerines and limes.

percentage of average value for 1959-60 through 1963-64 seasons (Index).










and specialty fruit accounted for 75, 17, and 8 percent of total citrus

bearing acreage.

Even though total citrus bearing acreage has stabilized during the

last four years instead of declining, total citrus production has

declined except for 1979-80 (Table 2). This is due to the freeze in

1976-77 which had carry over effects into the next two years and to a

second freeze in 1980-81. This decline in production is atypical when

compared to the 1970-71 through 1976-77 period when total citrus

acreage decreased while total production increased.

The total nominal on-tree value of the citrus crop more than

doubled from 1975-76 to the 1978-79 season (Table 3). Oranges showed

the largest increase with specialty fruit second. By the 1980-81

season, however, grapefruit value had increased more than 300 percen-

tage points.

Between 1976-77 and 1980-81, per acre nominal returns more than

doubled for the total citrus crop and oranges and grapefruit in parti-

cular (Table 4). This was also the case for on-tree nominal returns

per box (Table 5).

*HARVESTING AND HAULING COSTS

Harvesting and hauling represent the first process in the market-

ing channel from grove to consumer. Harvesting also represents the

least mechanized and most labor intensive operation in the marketing

channel. Recent increases in harvesting and hauling costs--especially

labor costs--have been of great concern to the industry. While

mechanical harvesting may, in the future, work to deter the rapidly

increasing harvesting costs, mechanical harvesting adoption has been

slow. Harvesting and hauling costs remain a major concern.







Table 2. Florida citrus production by type
1980-81 seasons.


of fruit, 1959-60 through


All round oranges All grapefruit Specialty fruita All citrus
Production Index Production Index Production Index Production Index

1000 1000 1000 1000
*1-3/5 boxes Percent 1-3/5 boxes Percent 1-3/5 boxes Percent 1-3/5 boxes Percent

1959-60 87,600 108 30,500 100 7,470 90 125,570 104
1960-61 82,700 102 31,600 103 9,980 120 124,280 103
1961-62 108,800 134" 34,800 114 10,210 123 153,810 128
1962-63 72,500 89 30,000 98 5,250 63 107,750 90
1963-64 54,900 68 26,300 86 8,620 104 89,820 75

1964-65 82,400 101 31,900 104 9,350 '113 123,650 103
1965-66 95,900 118 34,900 114 10,190 123 140,990 117
1966-67 139,500 172 43,600 142 11,895 143 194,995 162
1967-68 100,500 124 32,900 107 10,270 124 143,670 119
1968-69 129,700 160 39,900 130 11,500 138 181,100 151

1969-70 137,700 169 37,400 122 12,405 149 187,505 156
1970-71 142,300 175 42,900 140 13,250 160 198,450 165
1971-72 137,000 169 47,000 153 14,800 178 198,800 165
1972-73 169,700 209 45,400 148 13,200 159 228,300 190
1973-74 165,800 204 48,100 157 14,350 173 228,250 190

1974-75 173,300 213 44,600 146 15,850 191 233,750 194
1975-76 181,200 223 49,100 160 17,530 211 247,830 206
1976-77- 186,800 230 51,500 168 14,250 172 252,550 210
1977-78 167,800 206 51,400 168 12,450 150 231,650 193
1978-79 164,000 202 50,000 163 14,890 179 228,890 190
1979-80 206,700 254 54,800 179 20,200 243 281,700 234
1980-81 172,400 212 50,300 164 13,800 166 236,500 197

Index 81,300 30,640 8,306 120,246



Source: [1j

aIncludes Temples, tangelos, tangerines, honey tangerines and limes.

percentage of average value for 1959-60 through 1964-64 seasons (Index).






Table 3. On-tree value of Florida citrus production by type of fruit,
1959-60 through 1980-81 seasons.



All round oranges All grapefruit Specialty fruit All citrus
Season Value Indexc Value Indexc Value Indexe Value Indexc

Thousand $ Percent Thousand $ Percent Thousand $ Percent Thousand $ Percent

1959-60 170,057 80 32,043 88 19,635 82 221,735 82
1960-61 244,376 116 30,138 83 25,348 106 299,862 110
1961-62 203,255 96 23,498 65 23,506 98 250,259 92
1962-63 196,116 93 37,146 102 17,421 73 250,683 92
1963-64 243,935 115 59,147 163 34,005 142 337,087 124

1964-65 200,276 95 46,892 129 27,308 114 274,476 101
1965-66 155,625 74 47,471 130 22,312 93 225,408 83
1966-67 130,526 62 32,393 89 15,156 63 178,075 65
1967-68 207,432 98 66,317 182 34,321 143 308,070 113
1968-69 218,660 103 39,011 107 27,723 116 285,394 105

1969-70 156,876 74 63,526 175 22,055 92 242,457 89
1970-71 208,146 98 81,514 224 24,228 101 313,888 115
1971-72 280,317 133 108,991 299 33,991 142 423,299 156
1972-73 265,361 125 94,635 260 29,434 123 389,430 143
1973-74 244,691 116 79,879 219 30,692 128 355,262 131

1974-75 280,350 133 76,367 210 36,498 152 393,215 145
1975-76 321,449 152 72,155 198 42,552 177 436,156 160
1976-77 405,982 192 81,116 223 38,810 162 525,908 193
1977-78 693,677 328 84,438 232 68,219 284 846,334 311
1978-79 764,961 362 120,128 330 77,481 323 962,570 354
1979-80 768,877 363 181,208 498 76,639 320 1,026,724 378
1980-81 770,109 364 183,376 504 57,891 241 0lpl,376 372

Index 211,548 36,395 23,983 271,925



Source: [l]

aIncludes temples, tangelos, tangerines, honey tangerines and limes.

Includes all round oranges, all grapefruit, and specialty fruit.


Percentage of average values for 1959-60 through 1963-64 seasons (Index).










Table 4. Average value of citrus production per acre of citrus by type of
fruit, 1959-60 through 1980-81 seasons.


All round oranges All grapefruit Speciality fruita All citrus
Season Value Indexe Value Index Value Index Value Index

$/acre Percent $/aere Percent /acre Percent $/acre Percent

1959-60 459.62 83 347.16 84 427.78 78 436.31 83
1960-61 .653.24 118 325.82 79 524.80 96 582.37 110
1961-62 497.32 90' 249.98 61 500.13 91 455.43 86
1962-63 530.04 96 422.11 103 421.82 77 502.07 95
1963-64 628.70 114 712.61 173 869.69 158 660.83 125

1964-65 460.40 83 558.24 136 645.58 118 489.00 93
1965-66 329.71 60 553.28 134 492.54 90 373.75 71
1966-67 250.05 45 372.33 90 304.95 56 270.34 51
1967-68 372.01 67 757.91 184 628.59 115 440.29 83
1968-69 367.13 66 432.02 105 455.22 83 382.16 72

1969-70 246.62 45 643.63 156 308.03 56' 300.67 57
1970-71 315.13 57 760.39 185 307.46 56 370.81 70
1971-72 449.08 81 967.95 235 449.62 82 521.05 99
1972-73 428.28 77 825.79 201 392.98 72 481.31 91
1973-74 398.13 72 689.80 168 418.15 76 441.98 84

1974-75 459.29 83 661,76 161 495.22 90 491.83 93
1975-76 538.98 97 612.00 149 606.15 110 555.97 105
1976-77 683.13 123 679.93 165 557.61 102 671.49 127
1977-78 1,198.06 216 701.90 171 1,041.51 190 1,106.61. 210
1978-79 1,338.51 242 964.11 234 1,222.10 223 1,267.37 240
1979-80 1,333.47 241 1,433.61 348 1,205.02 220 1,339.32 254
1980-81 1,343.06 243 1,460.00 355 918.90 167 1,327.27 252

Index 553.78 411.54 548.84 527.40


Source: [1]


aIncludes Temples, tangelos, tangerines, honey tangerines


and limes.


percentage of average value for 1959-60 through 1963-64 seasons (Index).







Table 5. On-tree price per box of Florida citrus by type
through 1980-81 seasons.


of fruit, 1959-60


All round oranges All grapefruit Specialty fruit All citrus
Season b b b
Season Price Index Price Index Price Index Price Index

S/box Percent $/box Percent $/box Percent S/box Percent

1959-60 1.96 70 1.05 122 2.62 89 1.76 74
1960-61 2.98 107 .96 78 2.53 86 2.41 101
1961-62 1.88 67 .67 54 2.30 78 1.63 68
1962-63 2.71 97 1.24 101 3.32 113 2.33 98
1963-64 4.44 159 2.24 182 3.94 134 3.75 158

1964-65 2.43 87 1.47 120 2.92 99 2.22 93
1965-66 1.62 58 1.36 111 2.19 74 1.60 67
1966-67 .94 34 .74 60 1.27 43 .91 38
1967-68 2.07 74 2.01 163 3.34 114 2.14 90
1968-69 1.68 60 .98 80 2.41 82 1.58 66

1969-70 1.14 41 1.70 138 1.78 61 1.29 54
1970-71 1.46 52 1.91 155 1.83 62 1.58 66
1971-72 2.04 73 2.32 189 2.30 78 2.13 89
1972-73 1.56 56 2.08 169 2.23 76 1.71 72
1973-74 1.47 53 1.66 135 2.14 73 1.56 66

1974-75 1.62 58 1.72 140 2.30 78 1.68 71
1975-76 1.77 63 1.47 120 2.43 83 1.76 74
1976-77 2.17 78 1.58 128 2.72 93 2.08 87
1977-78 4.14 148 1.64 133 5.48 186 3.65 153
1978-79 4.66 167 2.41 196 5.20 177 4.21 177
1979-80 3.72 133 3.31 269 3.79 129 3.64 153
1980-81 4.46 160 3.65 297 4.19 143 4.28 180

Index 2.79 1.23 2.94 2.38


Source: [l]

aIncludes Temples, tangelos, tangerines, honey tangerines and limes.

percentage of average value for 1959-60 through 1963-64 seasons (Index).









Orange harvesting and hauling costs in 1979-80 are estimated to

have increased to 196 percent (1959-60 through 1963-64 as base years)

while grapefruit and tangerine picking and hauling costs are estimated

to have increased to 137 and 113 percent (Table 6, 7, 8). Of the items

that make up total picking and hauling costs for oranges, picking

labor is the item accounting for the largest proportion of the total.

Accounting for 47 percent of the total, it increased steadily from

1959-60 through 1973-74 and then declined slightly and started increas-

ing again in 1976-77. Other labor, however, has increased and contin-

ues to increase. Finally, fuel, maintenance, and depreciation have

increased significantly since 1968-69.

The relatively slow increase in picking labor costs for tanger-

ines (Table 8) reflects a change in the picking method. Clipping

involves manually handling each piece of fruit and using a shear to

remove each fruit from the tree. Because clipping tangerines reduces

a picker's capacity, pickers generally require a higher per box wage

when clipping is required. As the proportion of tangerines pulled

rather than clipped has increased, the cost of picking tangerines

has decreased relative to the cost of picking oranges and grapefruit.

In addition to the type of fruit and grove conditions, several

other economic factors have been found to be related to the piece

rate for citrus pickers. Walker [14] has shown that the most

important determinants of the piece rate for citrus pickers are the

nonfarm wage rate and the unemployment rate. The results indicate

that the piece rate and the nonfarm wage rate in food and kindered

industries in Florida are positively related and that the piece rate

and the Florida unemployment rate are negatively related.







Table 6. Picking and hauling costs and indices for Florida oranges, 1959-60
through 1979-80 seasons.



Oranges
Labor Fuel, Administrative
Pickersa maintenance &
Season Pickers er depreciation Other Total
Cost IndexC Cost Indexe Cost Indexc Cost Indexc Cost Indexe

C/box Percent C/box Percent C/box Percent C/box Percent C/box Percent


1959-60 18.77 90 10.59
1960-61 18.90 91 12.52
1961-62 19.64 94 12.17
1962-63 22.50 108 13.29
1963-64 24.24 116 14.17

1964-65 26.38 127 13.35
1965-66 28.54 137 14.43
1966-67 29.53 142 13.79
1967-68 33.42 161 16.96
1968-69 37.51 180 15.69

1969-70 38.54 185 17.00
1970-71 38.70. 186 17.99
1971-72 40.91 197 22.34
1972-73 52.60 253 22.00
1973-74 57.86 278 23.10


84 8.43
100 8.37
97 7.56
106 9.98
113 10.33

106 9.72
115 9.88
110 8.42
135 10.88
125 10.82

135 12.32
143 12.75
178 13.38
175 15.06
184 16.57


1974-75 51.87 249 22.87 182 16.53
1975-76 50.61 243 25.52 203 17.38
1976-77 54.96 264 27.60 220 19.29
1977-78 58.96 283 33.46 267 20.34
1978-79 65.76 316 40.31 321 23.32
1979-80 67.82 326 39.60 316 25.47


7.61
6.34
4.83
6.74
8.03

5.64
5.23
5.25
6.15
5.73

6.44
8.46
7.83
7.20
9.21

8.25
7.20
9.34
10.92
11.08
12.32


113 45.40 93
94 46.13 94
72 44.20 90
100 52.51 107
120 56.77 116

84 55.09 112
78 58.08 119
78 56.99 116
92 67.41 138
85 69.75 142

96 74.30 152
126 77.90 159
117 84.47 172
107 98.86 202
137 106.74 218

123 99.52 203
107 100.71 206
139 111.19 227
163 123.68 252
165 140.47 287
184 145.21 296


Index 20.81 12.55 8.93 6.71 49.00


Source: [8, 12]

aSupervisory, loaders, drivers, semi-drivers, miscellaneous and payroll taxes
and workman's compensation.

blInsurance, taxes, licenses, supplies, equipment rental, migratory labor, misc.

CPercentage of average value for 1959-60 through 1963-64 seasons (Index).









Table 7. Picking and hauling costs and indices for Florida grapefruit,
1959-60 through 1979-80 seasons.


Grapefruit
Labor Fuel, Administrative
Season Pickers Other maintenance & b Total
Season Pickers othera depreciation other Total

Cost Indexc Cost Indexc Cost IndexC Cost Index Cost Indexc

C/box Percent C/box Percent g/box Percent C/box Percent C/box Percent

1959-60 13.55 92 10.42 92 7.14 87 4.77 96 35.88 91
1960-61 13.84 94 11.25 99 8.13 100 4.64 93 37.86 96
1961-62 14.31 97 10.93 96 7.09 87 3.83 77 36.16 92
1962-63 15.11 102 11.66 103 9.05 111 5.44 109 41.26 105
1963-64 17.19 116 12.40 109 9.43 115 6.18 124 45.20 115

1964-65 18.78 127 12.83 113 8.97 110 4.16 84 44.74 114
1965-66 21.18 143 13.51 119 10.29 126 4.75 96 49.73 127
1966-67 21.75 147 13.55 120 8.86 108 4.23 85 48.39 123
1967-68 24.21 164 15.36 136 10.59 130 4.61 93 54.77 139
1968-69 25.39 172 14.60 129 10.48 128 4.50 91 54.97 140

1969-70 26.86 181 16.59 146 11.68 143 5.03 101 60.16 153
1970-71 26.73 181 16.96 150 12.18 149 5.78 116 61.65 157
1971-72 28.68 194 18.40 162 12.66 155 6.28 126 66.02 168.
1972-73 33.86 229 20.22 178 14.28 175 5.45 110 73.81 188
1973-74 38.75 262 23.02 203 15.54 190 7.72 155 85.03 217

1974-75 38.54 260 22.52 199 15.70 192 6.54 132 83.30 212
1975-76 38.46 260 22.72 201 17.52 214 5.80 117 84.50 215
1976-77 39.64 268 24.81 219 18.94 232 7.42 149 90.81 231
1977-78 41.00 277 24.62 217 11.25 138 5.20 105 82.07 209
1978-79 44.41 300 28.28 250 12.74 156 5.20 105 90.63 231
1979-80 45.16 305 30.27 267 11.69 143 6.05 122 93.17 237

Index 14.80 11.33 8,17 4.97 39.27


Source: [8, 12]

aSupervisory, loaders, drivers, other labor, payroll taxes.

Insurance, taxes, licenses, supplies, equipment rental, migratory labor, misc.







Table 8. Picking and hauling costs and indices
1959-60 through 1979-80 seasons.


for Florida tangerines,


Tangerines
Labor Fuel, Administrative
s Othera maintenance & b Total
Pickers Other depreciation Other
Season Cost Indexe Cost Index Cost Index Cost Index- Cost Index

C/box Percent C/box Percent C/box Percent C/box Percent C/box Percent

1959-60 58.06 93 '18.03 93 8.19 85 9.85 104 94.13 93
1960-61 57.11 92 18.86 97 9.73 101 9.00 95 94.70 94
1961-62 59.79 96 17.78 92 7.89 82 6.61 70 92.07 91
1962-63 66.86' 107 20.33 105 11.01 114 10.71 113 108.91 108
1963-64 69.83 112 21.83 113 11.41 118 11.37 120 1114.44 113

1964-65 73.57 118 21.68 112 10.59 110 8.45 89 114.29 113
1965-66 75.03 120 24.19 125 11.04 114 9.17 96 119.43 118
1966-67 79.55 128 26.18 135 9.64 100 8.84 93 124.21 123
1967-68 82.66 133 27.52 142 2.03 125 9.57 101 131.78 131
1968-69 83.73 134 27.71 143 12.19 126 8.90 94 132.53 131

1969-70 91.02 146 29.33 151 13.63 141 9.02 95 143.00 142
1970-71 87.52 140 33.16 171 14.85 154 12.02 126 147.55 146
1971-72 87.99 141 39.61 204 15.60 162 10.87 114 154.07 153
1972-73 96.22 154 37.49 194 17.39 180 10.75 113 161.85 160
1973-74 100.38 161 42.19 218 18.85 195 12.33 130 173.75 172

1974-75 104.19 167 40.01 207 18.30 190 11.09 117 173.59 172
1975-76 102.97 165 41.41 214 19.55 203 9.34 98 173.27 172
1976-77 108.88 175 46.64 241 21.43 222 14.40 151 191.35 190
1977-78 110.06 177 50.55 261 13.74 142 11.30 119 185.65 184
1978-79 110.08 177 54.12 279 12.97 134 11.49 121 188.66 187
1979-80 130.85 210 54.75 283 16.93 175 12.68 133 215.21 213

Index 62.33 19.37 9.65 9.51 100.85



Source: [8, 121

aSupervisory, loaders, drivers, other labor, payroll taxes.


Insurance, taxes, licenses, supplies, equipment rental, migratory labor, misc.

Percentage of average value for 1959-60 through 1963-64 seasons (Index).









FRESH PACKING AND SELLING COSTS

While over 97 percent of oranges, 66 percent of grapefruit and

33 percent of tangerines are generally used in processed citrus

products (Figure 1), the total volume of Florida citrus packed for

fresh shipment has increased every season between 1968-69 and 1976-77,

a freeze year (Figure 2). Since then, total shipments have not

returned to 1975-76 levels. For some growers, the fresh market is

their primary market and packing cost is the second key cost element

in the marketing channel that affects on-tree grower returns.

Packing Costs

The 4/5 bushel fiberboard carton is the predominant container

used. For the 1980-81 season, 71 and 64 percent of commercial orange

and tangerine shipments and 89 percent of commercial grapefruit ship-

ments were in the 4/5 corrugated carton. Total packing and selling

costs for grapefruit and oranges have risen steadily since 1959-60

(Tables 9, 10). All expense categories have not risen by the same

proportions. Direct operating expenses have increased more relative

to the base period than any other category.

Labor costs have not increased as much as most other items.

This may be attributed in part to increasing mechanization in the

handling and packing operations. The shift to pallet box instead of

field box receiving and dumping and increased use of mechanical

packer aids are two changes that have helped temper the increase

in labor costs.

Other factors that influence packing costs include packout per-

centage (Figure 3) and :packinghouse, size. Kilmer and Tilley esti-

mate that a 10 percent increase in packout will decrease packing









Oranges




o 80 --
09
o s

o Grapefruit


60





o40 Tangerines

0














Figure 1. Utilization of Florida citrus from 1959-.60 through 1980-81 seasons,

Source [2]
Source: [2]














40-
39

s Total citrus
35-
41
32-
31- '
30

Iz 21-
0 26-
2&- "2
r 25-
v4 24-
rI 23-
2-


20- GrapefriTit
) 18-
X I- Oranges




o- 1 /
I. I


: Tangerines
9-4 3







Figure 2, Certified fresh citrus fruit shipments from Florida 1959-60 through
1980-81.

Source: (4]




a ma e up the total cost of
packing 1-3/5 bushels of Florida oranges in 4/5 bushel cartons, 1959-60
through 1979-80 seasons.

Selling Total
Materials Labor Direct Indirectb administrative packing &
Year operatinga operating & other selling
Cost Indexc Cost Indexc Cost Indexc Cost Indexc Cost Indexc Cost Indexc

$/box Percent S/box Percent $/box Percent $/box Percent $/box Percent $/box Percent

1959-60 .4649 99 .3697 90 .0805 89 .0739 92 .2758 86 1.2648 92
1960-61 .4818 103 .3998 98 .0896 100 .0833 104 .2784 87 1.3329 97
1961-62 .4857 103 .4012 98 .0850 94 .0693 87 .2776 87 1.3188 96
1962-63 .4639 99 .4507 110 .1076 120 .0915 114 .3819 119 1.4956 109
1963-64 .4372 93 .4277 104 .0926 103 .0804 101 .3823 119 1.4202 104
1964-65 .4433 94 .4531 111 .0906 101 .0776 97 .3749 117 1.4395 105
1965-66 .4634 99 .4795 117 .0926 103 .0843 105 .3743 117 1.4941 109
1966-67 .4723 100 .4790 117 .0850 94 .0820 103 .3667 115 1.4850 108
1967-68 .4645 99 .5182 126 .1059 118 .0877 110 .3950 123 1.5713 115
1968-69 .4637 99 .5415 132 .1273 141 .1053 132 .3977 124 1.6355 119 t.

1969-70 .4756 101 .4938 120 .1185 132 .1019 127 .4734 148 1.6632 121
1970-71 .4699 100 .5187 127 .1275 142 .1361 170 .4756 149 1.7278 126
1971-72 .4440 94 .5765 141 .1484 165 .1534 192 .4885 153 1.8108 132
1972-73 .4984 106 .6037 147 .1397 155 .1243 155 .4986 156 1.8647 136
1973-74 .5751 122 .6601 161 .1700 189 .1616 202 .5247 164 2.0915 153

1974-75 .6747 144 .6449 157 .1829 203 .1265 158 .5476 171 2.1766 159
1975-76 .7082 151 .6493 158 .1829 203 .1287 161 .5464 171 2.2155 162
1976-77 .7144 152 .7768 189 .2565 285 .1941 243 .6614 207 2.6032 190
1977-78 .6988 149 .7541 184 .2102 234 .1673 209 .6286 196 2.4590 179
1978-79 .7668 163 .8011 195 .2523 280 .1785 223 .6365 199 2.6352 192
1979-80 .8871 189 .9151 223 .2969 330 .1872 234 .6380 199 2.9243 213

Index .47 .41 .09 .08 .32 1.37


Source: [5, 12]

another direct operating expenses include power, lights, water, repair, maintenance
and other misc. supplies.

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

Percent of average value for 1959-60 through 1963-64 seasons (Index).








Table 10. Cost components that make up the total cost of packing and selling 1-3/5
bushels of grapefruit in 4/5 bushel fiberboard cartons, 1959-60 through
1979-80 seasons.

Selling Total
Direct Indirectb administrative packing &
Year Materials Labor operating operating & other selling
Cost Indexc Cost Indexe Cost Indexc Cost Indexc Cost Indexc Cost Indexc

S/box Percent $/box Percent JIbox Percent $/box Percent JLbox Percent $/box Percent
1959-60 .5979 115 .2914 86 .0581 97 .0405 81 .2763 92 1.2642 100
1960-61 .5193 100 .3020 89 .0608 101 .0430 86 .2791 93 1.2042 96
1961-62 .5242 '101 .3492 103 .0594 99 .0545 109 .2946 98 1.2819 102
1962-63 .4818 93 .3621 107 .0723 121 .0551 110 .3144 105 1.2857 102
1963-64 .4534 87 .3733 110 .0646 108 .0607 121 .3337 111 1.2857 102
1"4-65 .4721 91 .4038 119 .0772 129 .0663 133 .3519 117 1.3713 109
1965-66 .4835 93 .4229 124 .0753 126 .0675 135 .3628 121 1.4120 112
1966-67 .4952 95 .4192 123 .0666 111 .0668 134 .3651 122 1.4129 112
1967-68 .4918 95 .4862 143 .0919 153 .0850 170 .4009 134 1.5558 123
1968-69 .4752 91 .5085 150 .1029 172 .0974 195 .3849 128 1.5689 125
1969-70 .4756 91 .4938 145 .1185 198 .1019 204 .4734 158 1.6632 132
1970-71 .4864 94 .5055 149 .1196 199 .1083 217 .4914 164 1.7112 136
1971-72 .4718 91 .5270 155 .1217 203 .1017 203 .4965 166 1.7187 136
1972-73 .5150 99 .5147 151 .1193 199 .1068 214 .5181 173 1.7739 141
1973-74 .6017 116 .6210 183 .1430 238 .1484 297 .5471 182 2.0612 164
1974-75 .6903 133 .6347 187 .1954 326 .1346 269 .5520 184 2.2070 175
1975-76 .7517 145 .6175 182 .1752 292 .1403 281 .5864 195 2.2711 180
1976-77 .7592 146 .7286 214 .2232 372 .1613 323 .6814 227 2.5537 203
1977-78 .7001 135 .7457 219 .1979 330 .1454 291 .6435 215 2.4326 193
1978-79 .7988 154 .7771 229 .2166 361 .1446 289 .6864 229 2.6235 208
1979-80 .9175 176 .8375 246 .2500 417 .1477 295 .7388 246 2.8915 229

Index .52 .34 .06 .05 .30 1.26


Source: [5, 12]

Power, lights, water, supplies equipment.

Insurance, taxes, licenses, depreciation, rent.

Crercentage of average value for 1959-60 through 1963-64 seasons (Index).














































190.-10


1tl)-.i


1tll.i*


Figure 3,' Proportion of'Florida Citrus fruit delivered to packinghouse that
is actually packed, 1959-60 through. 1979-80 seasons,


Source: [5, 12]'


191-19 1I4-41


197IS-46 I -**)


I1$3-M"









costs about 3 cents per box. High (low) packout means that less

(more) fruit must be handled in order to pack a given volume.

If low packout adversely affects the volume of fruit a packing-

house packs in a given year, low packout may have a secondary impact

on costs because of the decrease in volume. While the total volume

of fruit handled has been increasing, the number of firms commercially

packing fruit has decreased and the average volume per house has

generally increased except for freeze years and the year following

the freeze year (Figure 4).

PROCESSING, WAREHOUSING AND SELLING

Over 97 percent of oranges and 66 percent of grapefruit enter

the processing channel (Figure 1). The processing channel is a mul-

tiple product channel in which frozen concentrate, chilled and canned

products are produced. For each product there are a different set

of factors that may influence costs. In order to simplify presenta-

tion, the major product for oranges and grapefruit will be used to

illustrate the cost trends.

For oranges, frozen concentrate is the dominant product form

(Table 11). For one case of 48 six-ounce cans, warehousing costs

have shown the greatest variability and the greatest percentage

increase (Table 12) of all processing, warehousing, and selling costs.

Carryover has also increased and shown a great deal of variability

since the 1959-60 season (Table 13). During the period, average

warehousing costs increased from $0.08 to $0.23 per case of 48-six

ounce cans, and ending inventory of concentrate increased from 9.7

million gallons to 66 million gallons. Both data series have shown

great variability.










Average volume per house
(1000 1 3/5 boxes)


'----CIIL) --
Total number of -- --~-
packinghouses


1947I-


116t-1o


3*1-f LII.1 I','-,,~__ ~ ~ ~ ~


Figure 4. Certified fresh citrus shippers in Florida and average
packinghousel959-60 through 1980-81 seasons,


Source: [4]


volume per


5- t1941-63


1M3-4


itrr-n. ~,,(


Ml-A HI*19


lIot-to









Table 11.


Utilization of oranges and Temples by type of processed products,
1959-60 through 1980-81 seasons.


Canned single-
strength juice, Frozen Chilled juice,
Season sections and salads concentrate sections and salads Total Processed
Boxes Percent Boxes Percent Boxes Percent Boxes Percent
used of total used of total used of total used of total


1000 boxes Percent


51,957
56,039
73,986
47,176
34,206

54,511
61,853
96,857
61,988
92,167

100,776
103,554
104,410
132,211
132,475

135,515
144,527
147,782
130,929
129,124
173,229
144,323


74,3
80.5
80.7
75.7
75.6

78.7
74.7
78.1
72.5
76.9

78.6
78.1
79.3
81.6
82.4

81.7
82.1
80.6
79.6
81.3
84.5
84.6


1000 boxes Percent 1000 boxes Percent


7,769
6,297
7,970
6,066
5,548

'7,833
13,109
17,289
16,841
18,629

19,482
20,476
20,038
21,135
21,056

23,311
24,628
27,628
25,790
23,108
24,739
19,867


11.1
9.0
8.7
9.7
12.3

11.3
15.8
13.9
19.7
15.5

15.2
15.4
15.2
13.0
13.1

14.0
14.0
15.1
15.6
14.6
12.0
11.7


69,957
69,645
91,629
62,326
45,227

69,276
82,841
124,106
85,497
119,860

128,209
132,652
131,664
162,112
160,815

165,928
176,043
183,347
164,504
158,777
205,067
170,559


Source: [3]


Includes oranges used in blended concentrates and processed hot pack con-
centrates orange juice.


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

1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81


1000 boxes

10,231
7,309
9,673
9,084
5,467

6,933
7,879
9,960
6,668
9,064

7,952
8,622
7,216
8,766
7,284

7,102
6,890
7,937
7,784
6,546
7,098
6,369


Percent

14.6
10.5
10.6
14.6
12.1

10.0
9.5
8.0
7.8
7.6

6.2
6.5
5.5
5.4
4.5

4.3
3.9
4.3
4.8
4.1
3.5
3.7


- -- --




, t rough 1979-80 seasons.


Selling, Total
Processing Other processing administrative & processing
Materials labor expenses Warehousing other expenses cost
Cost Indexb Cost Indexb Cost Indexb Cost Indexb Cost Indexb Cost Indexb


$/case Percent $/case Percent $/case Percent $/case Percent $/case Percent $/case Percent


1959-60O 1.1769 108
1960-61e 1.1368 104
1961-62 1.0586 97
1962-63 1.0283 94
1963-64C 1.0300 94

1964-65c .9789 90
1965-66 .9982 92
1966-67 1.0208 94
1967-68 1.0128 93
1968-69 1.0279 94

1969-70 1.0271 94
1970-71 1.0627 97
1971-72 1.0771 99
1972-73 1.1815 108
1973-74 1.3285 122

1974-75 1.6534 152
1975-76 1.5213 140
1976-77 1.4557 134
1977-78 1.5049 138
1978-79 1.6011 147
1979-80 1.7419 160


.2459 102
.2422 101
.1743 73
.2588 108
.2892 121

.2167 90
.2656 111
.2117 88
.2729 114
.2776 116

.2943 123
.2881 120
.2666 111
.2978 124
.3865 161

.3654 152
.3394 141
.4463 186
.4517 188
.4515 188
.4779 199


.4135 94
.4245 96
.3168 72
.6065 138
.4430 101


.3716
.3782
.2759
.3705
.3380


.3355 76
.3769 86
.3728 85
.4170 95
.4864 111

.5130 117
.5468 124
.6302 143
.6854 156
.6615 150
.6954 158


.0812 74
.0838 76
.1232 112
.1487 135
.1209 110

.1198 109
.1234 113
.1053 96
.1395 127
.1112 101

.1278 116
.1354 123
.1147 104
.1358 123
.1930 175


.2849 59 2.2024 93
.3000 63 2.1873 93
.3485 73 2.0214 86
.6138 128 2.6561 113
.8403 175 2.7234 115

.4535 94 2.1405 91
.6126 128 2.3780 101
.4526 94 2.0663 88
.4593 96 2.2550 96
.4853 101 2.2408 95

.5990 125 2.3837 101
.5641 118 2.4272 103
.5539 115 2.3851 101
.5789 121 2.6640 113
.6283 131 3.0227 128


.2240 204 .6637 138 3.4195 145
.2005 182 .6359 132 3.2439 137
.2196 200 .7366 153 3.4884 148
.2204 200 .7661 160 3,6285 154
.2268 206 .8188 171 3.7597 159
.2310 210 .7604 158 3.9066 166


Index 1.09 .24 .44 .11 .48 2.36


Source: [7, 12]

aIncludes utilities, maintenance and repairs, depreciation, rent, taxes, insurance and misc.
other expenses.

percentage of average value for 1959-60 through 1963-64 seasons (Index).


C420 Brix


Season


I
~ ____










Warehousing cost, carryover ending stocks and indices for
Florida FCOJ, 1959-60 through 1980-81 seasons.


Total
Season December 1 Indexb Warehousingc Indexb
a
carryover


Percent

61
87
215
73
64

139
82
173
82
111

169
144
178
308.
311

323
342
162
197
238
349
422


$/case
48 6-oz. cans

.0812
.0838
.1232
.1487
.1209

.1198
.1234
.1053
.1395
.1112

.1278
.1354
.1147
.1358
.1930

.2240
.2005
.2196
.2204
.2268
.2310
-


Percent

73
75
110
133
108

107
111
94
125
100

115
121
103
122
173

201
180
197
197
203
207


Index 15.716 .1116


aSource: [2]
bPercentage of average value for 1959-60
(Index).
CSource: [7, 12]

d420 Brix.


through 1963-64 seasons


e43.4 Brix.


Table 13.


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

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

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

1974-75
1975-76
1976-77
1977-78
1978-79
1979-80e
1980-81


mil. gal.
450 Brix

9.663
13.631
33.750
11.399
10.136

21.814
12.828
27.225
12.885
17.400

26.566
22.568
28.000
48.431
48.861

50.759
53.709
25,526
30.909
37.386
54.8-56
66.353










Other items were quite stable until the last six seasons.

Material costs were just below base period levels during the 1971-72

season but increased to 152 percent of the base period level in the

1974-75 season and then decreased, only to increase five years later

to 160 percent. Labor expenses have almost doubled since the 1971-72

season. Both processing and administrative expenses have increased

to 158 percent and total processing costs have trended upward since

the 1964-65 season.

For grapefruit, the dominant product form is frozen concentrated

grapefruit juice Table. It replaced canned single strength juice

as the dominant product form during the 1978-79 season. A cost series

of sufficient length does not exist for frozen concentrated grape-

fruit juice; therefore, canned single strength juice will be used

to illustrate cost trends. For one case of 12 46-ounce cans, many

of the items have followed trends similar to those for frozen concen-

trated orange juice. Other processing expenses have shown the

greatest increase relative to the base period (202 in 1979-80).

Total processing costs have increased significantly since the 1977-

78 seasons (Table 15).

WHOLESALING AND RETAILING COSTS

In order to complete the marketing channel, transportation,

wholesaling and retailing costs in addition to F.O.B. shipping point

and retail prices would have to be available. Unfortunately, few of

the data needed to examine the components of the F.O.B.-retail mar-

gin are available for specific products. However, the.F.O.B.-retail

price differential can be examined.to determine the nature of








Table 14. Utilization of grapefruit by type of processed
through 1980-81 seasons.


products, 1959-60


Canned single-
strength juice, Frozen aChilled juice,
Season sections and salads concentrate sections and salads Total Processed
Boxes Percent 'Boxes Percent Boxes Percent Boxes Percent
used of total used of total used of total used cf total

1000 boxes Percent 1000 boxes Percent 1000 boxes Percent 1000 boxes Percent

1959-60 11,494 80.8 1,613 11.3 1,119 7.9 14,226 100
1960-61 11,046 69.8 3,603 22.7 1,195 7.5 15,844 100
1961-62 12,385 74.8 2,773 16.7 1,402. 8.5 16,506 100
1962-63 11,439 71.7 3,260 20.4 1,258 7.9 15,957 100
1963-64 7,387 63.8 2,407 20.8 1,784 15.4 11,578 100

1964-65 10,937 68.7 3,551 22.3 1,441 9.0 15,929 100
1965-66 13,242 67.6 4,010 20.4 2,363 12.0 19,615 100
1966-67 18,105 69.0 5,405 20.6 2,736 10.4 26,241 100
1967-68 13,411 74.1 1,793 9.9 2,904 16.0 18,108 100
1968-69 15,940 61.8 6,550 25.4 3,307 12.8 25,797 100

1969-70 15,604 67.4 4,579 19.7 2,983 12.9 23,166 100
1970-71 17,679 63.3 6,819 24.4 3,439 12.3 27,937 100
1971-72 17,121 57.0 8,725 29.0 4,201 14.0 30,047 100
1972-73 16,034 56.5 8,212 29.0 4,119 14.5 28,365 100
1973-74 16,794 57.2 8,732 29.7 3,843 13.1 39,369 100

1974-75 13,664 53.1 7,779 30.2 4,305 16.7 25,748 100
1975-76 14,410 50.8 8,987 31.7 4,974 17.5 28,371 100
1976-77 16,217 47.0 13,020 37.7 5,265 15.3 34,503 100.
1977-78 14,173 42.0 13,999 42.0 5,293 16.0 33,465 100
1978-79 13,037 43.1 13,276 43.9 3,933 13.0 30,246 100
1979-80 12,461 35.3 18,506 52.3 4,393 12.4 35,360 100
1980-81 10,140 30.6 19,490 58.9 3,489 10.5 33,118 100


Source: [3]

Includes grapefruit used in blended concentrates and processed hot pack con-
centrated grapefruit juice.









Selling, Total
Processing Other processing administrative & processing
Season Materials labor expenses Warehousing other expenses cost
Cost Index Cost Index Cost Index Cost Index Cost Index Cost Indexb

S/case Percent S/case Percent $/case Percent $/case Percent S/case Percent $/case Percent


1995-60 1.0348 98
1960-61 1.0616 100
1961-62 1.0623 100
1962-63 1.0726 101
1963-64 1.0678 101

1964-65 1.0849 102
1965-66 1.1175 105
1966-67 1.1241 106
1967-68 1.1537 109
1968-69 1.1971 113

1969-70 1.1882 112
1970-71 1.1780 111
1971-72 1.2005 113
1972-73 1.2583 119
1973-74 1.3664 129

1974-75 1.8672 176
1975-76 1.7765 168
1976-77 1.7825 168
1977-78 1.9602 185
1978-79 2.2258 210
1979-80 2.5544 241


.1449 111
.1447 111
.0895 69
.1174 90
.1298 100

.1120 86
.1210 93
.1304 100
.1688 130
.1745 134


.1355 97
.1378 98
.1167 83
.1505 108
.1676 120

.1218 87
.1312 94
.1164 83
.1588 113
.1497 107


.2101 162 .1752 125
.2081 160 .1983 142
.2004 154 .2007 143
.2104 162 .2157 154
.1856 143 .2273 162


.1920 148
.1985 153
.2501 192
.2721 209
.2805 216
.3146 242


.2336 167
.3062 219
.3143 225
.3186 228
.3699 264
.4229 302


.0283 40
.0375 54
.0837 120
.1054 151
.0942 135

.0809 116
.0947 135
.0929 133
.1245 178
.1109 158

.1133 162
.1337 191
.1352 193
.1756 251
.2321 332

.2293 328
.1797 257
.2007 287
.2011 287
.2014 288
.2109 301


.1596 76 1.5031 93
.1854 88 1.5670 97
.1917 91 1.5439 96
.2752 131 1.7211 107
.2621 125 1.7215 107

.2220 106 1.6216 101
.2385 114 1.7029 106
.2133 102 1.6771 104
.2729 130 1.8787 117
.2320 110 1.8642 116

.2977 142 1.9845 123
.3412 162 2.0593 128
.3217 153 2.0585 128
.2956 141 2.1556 134
.3813 182 2.3927 149


.3470 165 2.8691 178
.3639 173 2.8248 175
.3715 177 2.9191 181
.3978 189 3.1498 196
.4115 196 3.4891 217
.4891 233 3.9919 248


Index 1.06 .13 .14 .07 .21 1.61



Source [7, 12]

aIncludes utilities, maintenance and repairs, depreciation, rent, taxes, insurance and misc.
other expenses.

percentage of average value for 1959-60 through 1963-64 seasons (Index).










changes in the relationship for several seasons for fresh grapefruit,

frozen concentrated orange juice, and canned single-strength grape-

fruit juice. Even then, data on F.O.B. prices are not perfect because

sales at prices that deviate from "card" or "posted" prices are gen-

erally not publicized nor reported. In addition, F.O.B. prices for

advertised branded products were not available. At the retail level,

prices reported for frozen products by the Market Research Corpora-

tion of America and NPD Research Inc., and USDA prices for fresh

fruit were used. ..

It must be emphasized that only relative changes in the market-

ing margin can be measured and that little can be said about whole-

sale or retail profit levels. In addition, because of the nature of

a retail outlet, it is possible that a retailer may have very low or

negative margins on certain products in order to generate traffic

through his store and sell products with higher unit profits. The

extent to which citrus and citrus products are used as "loss leaders"

is not known.

The F.O.B.-retail margin accounts for over 60 percent of the

retail value of fresh fruit (Table 16). Less than 40 percent of the

retail price paid for fresh Florida grapefruit is paid for growing,

picking and hauling, and packing and selling fresh grapefruit. On

the other hand, the F.O.B.-retail margins for frozen concentrated

orange juice and canned single-strength grapefruit juice average

27 and 26 percent of retail value (Tables .17 and 18). No trend in

the F.O.B.-retail margin is indicated.

It is difficult to explain why the F.O.B.-retail margin for

processed products is a smaller percentage of the retail price than









Toble 16. Proportion of the consumer's retail food dollar spent on fresh grapefruit that
is returned to various marketing channel participants, 1964-65 through 1979-30
ocasons.


On-trce value
F.O.B.-retail PitkIng 6 c plus mirk.tt
Retail Values margin Packing cost hauling costs fitr profits
Cost Share Cost Share Cost Share Cost Share Cost Share


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

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

1974-75
1975-76

1976-77
1977-78
1978-79
1979-80
Standard
Deviacton
Mean

Coefficient
of Varifrl


/box P/ercent box Pernt /box Percent /x Percent $/box Percent

10.57 100 6.45 61 1.37 13 .45 4 2.30 22
10.00 100 5.69 57 1.41 14 .50 5 2.40 24
9.33 100 5.94 64 1.41 15 .48 5 1.50 16
10.85 100 5,82 54 1.56 14 .55 5 2.92 27
11.01 100 7.21 65 1.57 14 .55 5 1.70 15

11.48 100 6.82 60 1.66 14 .60 5 2.40 21
11.22 100 6.68 60 1.71 15 .62 5 2.21 20
12.54 100 7.27 58 1.72 14 .66 5 2.89 23
13.47 100 7.98 59 1.77 13 .74 6 2.98 22
13.97 100 8.81 63 2.06 15 .85 6 2.25 16

15.02 100 9.40 63 2.21 s1 .83 5 2.58 17
14.48 100 9.22 63 2.27 16 .85 6 2.14 15
(16.32) (100) (11.06) (68) (2.27) (14) (.85) (5) (2.14) (13)
15.76 b 100 10.08 64 2.55 16 .91 6 2.22 14
(18.79)b (100) (13.11) (70) (2.55) (13) (.91) (5) (2.22) (12)
18.11 100 12.62 70 2.43 13 .82 5 2.24 12
28.22 100 21.22 75 2.62 9 .90 3 3.48 13
36.04 100 27.86 77 2.89 8 .93 3 4.36 12
3.24 .967. ,599 4.13
(3.81) (2.70) (1.10) (.548)
60.8 14.5 5.2 19.4
(72) (11.4) (4.2) (12.14)
053 ..067 .115 .21
o.n (.053 .71).27 (.262) (.0441)


Source:

aSix-month weighted average (Nov.-April), white seedless, size 40 packed in two 4/5-bushel
cartons, average for Atlanta, Boston, Chicago, and Pittsburgh. Returns to retailer for
saleable fruit (3 percent allowance for loss incurred during marketing process).

bix-month weighted average (Nov.-April), grapefruit, reported as cents per pound in New York City.

CCosts do not include profits.

dThis value includes pick and haul and packinghouse firm profits.


Season


---










Table 17. Proportion of the consumer's food dollar spent on six-ounce cans of frozen
concentrated orange juice that is returned to various marketing channel
participants, 1964-65 through 1979-80 seasons.




On-true value
F.O.B.-retail Processing Picking & plus narketin-
Retail value margin costs hauling costs firm profits
Season Cost Share Cost Share Cost Share Cost Share Returns Share


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

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

1974-75
1975-76
1976-77
1977-78
1978-79
1979-80

Standard
Deviation
Hean
Coefficient
of Variation


$/doz. Percent $/doz. Percent $/doz. Percent $/doz. Percent S/doz.

2.32 100 .70 30 -.54 23 .19 8 .89
2.20 100 .58 26 .59 27 .26 12 .77
1.75 100 .56 32 .52 30 .24 14 .43
2.15 100 .53 25 .56 26 .28 13 .78
2.44 100 .66 27 .56 23 .35 14 .87


2.17
2.22
2.46
2.39
2.44

2.60
2.67
3.20
4.33
4.61
4.51


.71
.62
.58
.65
.64

.57
.67
.75
1.03
1.11
1.47


3.44
26.9


.128.


4.13
25.3

.163


2.75
14.7


.187


.52
.63
.91
.66
.58

1.00
.75
1.00
1.83
1.97
1.70


aCosts do not include profits.

btis value includes pick nnd hnul and processing firm profits.


Percent

39
35
24
36
36

24
28
37
28
24

38
28
31
42
43
38


6.46
33.2


.195


'"'




a e rop
strength grapefruit juices that is returned to various marketing channel par-
ticipants, 1964-65 through 1979-80 seasons.




On-tree value
F.O.B.-retail Processing Picking & plus marketing
Retail value margin costsa hauling costs firm profits
Season Cost Share Cost Share Cost Share Cost Share Cost Share


$/case Percent /case Percent $/case Percent $/case Percent $/case Percent

1964-65 4.43 100 1.27 29 1.62 37 .42 9 1.12 25
1965-66 4.67 100 1.38 30 1.70 36 .49 10 1.10 24
1966-67 4.03 100 1.34 33 1.68 42 .46 11 .55 14
1967-68 471 100 1.20 26 1.88 40 .53 11 1.10 23
1968-69 4.50 100' 1.43 32 1.86 41 .55 12 .66 15

*1969-70 5.42 100 1.36 25 1.98 37 .58 11 1.50 28
1970-71 5.74 100 1.34 23 2.06 36 .59 10 1.75 31
1971-72 5.81 100 1.33 23 2.06 36 .60 10 1.82 31
1972-73 5.60 100 1.48 26 2.16 39 .68 12 1.28 23
1973-74 5.59 100 1.40 25 2.52 45 .78 14 ..89 16

1974-75 5.91 100 1.57 27 2.87 49 .78 13 .69 11
1975-76 5.90 100 1.51 26 2.82 48 .78 13 .79 13
1976-77 6.52 100 1.51 23 2.92 45 .96 15 1.13 17
1977-78 6.78 100 1.73 26 3.15 46 .80 12 1.10 16
1978-79 7.62 100 1.58 21 3.49 46 .84 11 1.71 22
1979-80 9.44 100 2.34 25 3.99 42 .85 9 2.26 24

Standard
Deviation 3.32 4.50 1.71 6.28
Mean 26.3 41.6 11.4 21.1
Coefficient
of Variation .126 .108 .150 .298


Source:

Costs do not include profits.

bThis value includes pick and haul and processing firm profits.









the margin for fresh fruit because of the absence of accurate whole-'

saling and retailing cost data. Factors that would have to be consi-

dered include comparative sales revenues per unit of floor space,

added packaging that may be added to fresh fruit and the weight of

fresh fruit relative to its value. Perishability may also be an impor-

tant factor although fresh citrus wholesale and retail spoilage have

been estimated at very low levels [15].

COSTS OF MARKETING CHANNEL FUNCTIONS

While previous sections have been concerned with individual

stages in the marketing channel, the purpose of this section is to

look simultaneously at the total marketing channel and determine how

much of the consumer's dollar spent on citrus and citrus products is

returned to various marketing channel participants. Three products,

orange concentrate, canned single-strength grapefruit juice and fresh

grapefruit are examined.

The amount and percentage of the retail dollar that is returned-

at various levels in the marketing channel was calculated for frozen

concentrated orange juice (Table 17). On-tree returns have shown the

greatest variability and are followed closely by picking and hauling

costs (Table 17). F.O.B.-retail margins have shown the least amount

of variation.

For the 16 years shown, on-tree returns are 33 percent of the

average retail price paid for orange concentrate in 6-ounce cans.

The F.O.B.-retail and processing costs have averaged 27 and 25 per-

cent. Picking and hauling costs have been the element accounting

for the lowest percentage of the retail dollar.










For canned grapefruit juice the relative proportion of the'retail

dollar to processing costs is much higher than for concentrate (42

compared to 25) (Table 17 and 18). Picking and hauling costs repre-

sent a lower percentage of the retail dollar (11 percent) while grower

returns are 21 percent and show the most variation (.298). The F.O.B.-

retail margin is approximately 26 percent of the retail dollar and

shows slightly more variation than processing costs.

The most striking contrast between relative margins for market-

ing channel participants is the extremely high F.O.B.-retail margin

in fresh grapefruit accounting for 61 (72) percent of the retail food

dollar for the past 13 (5) seasons (Table 16). For every dollar a

consumer has spent on fresh grapefruit the past 13 seasons, 61 (72)

cents pays for services after it leaves Florida packinghouses.

Growers receive 19 (12) cents and picking, hauling, packing and sell-

ing expenses account for another 20 (16) cents. On-tree returns

(packing, picking and hauling costs) display the greatest variability.

SUMMARY

Total citrus acreage has stabilized after decreasing since 1970-

71. Orange, grapefruit, and specialty fruit acreage represents 75,

17 and 8 percent of:total acreage. Nominal on-tree value of citrus

more than doubled since 1975-76. Growers have generally received

a lower percentage of the consumer's dollar spent on fresh fruit than

on processed products even though returns for fresh fruit have

generally been higher than returns from processed products. Costs

of picking, hauling, packing, and processing citrus products have

increased.









Comparison of the coefficients of variation reveals that, in gen-

eral, on-tree returns and pick and haul costs are more variable than

any of the components of the citrus marketing bill, except for fresh

grapefruit during the last five seasons (Tables 16, 17, 18). During

the last five seasons, packing cost and pick and haul costs have been

more variable.

Finally, total citrus packed has not returned to 1975-76 levels.

The 4/5 fiberboard carton continues to be the predominate container

for packing citrus. Since 1972-73, the packout percentage has trended

upward.










REFERENCES

1. Florida Agricultural Statistics, Citrus Summary, Florida Crop and

Livestock Reporting Service,Orlando, Florida. Various years.

2. Florida Canner's Association, Statistical Summary, Winter Haven,

Florida. Various years.

3. Florida Citrus Mutual, Annual Statistical Report, Winter Haven,

Florida. Various years.

4. Florida Division of Fruit and Vegetable Inspection, Annual Report,

Various years.

5. Hooks, R. Clegg and Richard L. Kilmer, Estimated Costs of Packing

and Selling Fresh Florida Citrus, Economic Information Report.

Food and Resource Economics Department, University of Florida,

Gainesville. Various years.

7. Hooks, R. Clegg and Richard L. Kilmer, Estimated Costs of Pro-

cessing, Warehousing, and Selling Florida Citrus Products,

Economic Information Report. Food and Resource Economics Depart-

ment, University of Florida, Gainesville. Various years.

8. Hooks, R. Clegg and Richard L. Kilmer, Estimated Costs of Picking

and Hauling Florida Citrus Fruits, Economic Information Report,

Food and Resource Economics Department, University of Florida,

Gainesville. Various years.

9. Kilmer, Richard L. and Daniel S. Tilley, A Variance Component

Approach to Industry Cost Analysis, Staff Paper 82. Food and

Resource Economics Department, University of Florida, Gainesville.

April 1978.

10. Market Research Corporation of America, Unpublished reports on

citrus product sales and prices, purchased by Florida Department.




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