• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Introduction
 Historical patterns in acreage,...
 Production practices and cost
 Weekly shipments and prices
 Conclusion
 Reference
 Appendix A. Watermelon production...






Group Title: Economic information report - University of Florida Food and Resource Economics Dept. ; 243
Title: An economic overview of watermelon production and marketing in Florida
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 Material Information
Title: An economic overview of watermelon production and marketing in Florida
Series Title: Economic information report
Physical Description: 30 p. : ill. ; 28 cm.
Language: English
Creator: Taylor, Timothy G
Smith, Scott A
Publisher: Food & Resource Economics Dept., Agricultural Expeirment stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1988
 Subjects
Subject: Watermelons -- Economic aspects -- Florida   ( lcsh )
Watermelons -- Marketing -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: Timothy G. Taylor, Scott A. Smith.
General Note: "March 1988."
General Note: Cover title.
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Bibliographic ID: UF00026493
Volume ID: VID00001
Source Institution: University of Florida
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Resource Identifier: aleph - 001078570
oclc - 22579409
notis - AFG3455

Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Abstract
        Abstract 1
    Introduction
        Page 1
    Historical patterns in acreage, production and value
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
    Production practices and cost
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
    Weekly shipments and prices
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
    Conclusion
        Page 22
        Page 23
    Reference
        Page 24
    Appendix A. Watermelon production budgets for selected areas in Florida
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
Full Text


43
Timothy G. Taylor
Scott A. Smith


Economic Information
Report 243


An Economic Overview of Watermelon
Production and Marketing in Florida


Central Science
\ Library"

______ F v/ !I1n *n ;
L L ^' "|


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


March 1988


..-..I











ABSTRACT


Historical trends in acreage, production and value are analyzed for the

Florida watermelon industry over the 1966-67 to 1985-86 period. In

addition, costs of production are presented and discussed for five

production areas in Florida. Weekly shipments and price data are presented

and analyzed as well.


Keywords: watermelons, cost of production, weekly prices, shipments.








INTRODUCTION


The production of watermelons in Florida has a long history. According

to Rose (1977), watermelons were first grown in the state by Florida

Indians as early as the mid-1600s. Commercial production dates back to at

least 1890 when some 2,678 acres of watermelons were grown (Rose, 1977).

Since that time the watermelon industry in Florida has grown substantially.

During the 1985-86 season, 47,550 acres of watermelons were harvested with

a total FOB value of $54.5 million. Total production was estimated to be

approximately 8.75 million cwt.

The relative importance of watermelons in the overall Florida

vegetable industry is rather substantial. During the 1985-86 season

watermelon production accounted for 12.3 and 12.0 percent of total planted

and harvested acreage in vegetables, respectively, and 4.7 percent of the

total value of vegetables and melons produced in Florida. In terms of the

ranking of these categories among the 16 vegetable crops for which data are

reported, watermelons ranked third behind sweet corn and tomatoes in terms

of both planted and harvested acreage and fifth behind tomatoes, potatoes,

peppers and sweet corn in total value for the 1985-86 season.

This report provides an economic overview of watermelon production and

marketing in Florida. The first section provides a brief analysis of

historical trends in acreage, production and value over the last twenty

years. Data are analyzed in terms of Florida's position in the U.S.

watermelon market and in regards to regional production within Florida. The

second section provides a discussion of production practices and cost.

Costs of production for five major producing areas in Florida are analyzed.









The third section presents a discussion of a variety of issues related to

the marketing of watermelons with particular emphasis on the historical

pattern of weekly shipments and prices. The final section provides some

brief concluding comments.



Historical Patterns in Acreage, Production and Value



Florida is the largest producer of watermelons in the United States.

Over the 1966-67 to 1980-81 period1, Florida watermelon producers accounted

for an average of 21 percent of total domestic harvested acreage and 30

percent of both total domestic production and value (Table 1). Furthermore,

the position of Florida producers in the market has been relatively stable.

In terms of harvested acreage Florida accounted for a minimum of 18 percent

and a maximum of 24 percent of total domestic acreage over the 1967-68 to

1980-81 period. Florida's share of the domestic market in terms of

production and value has also been very stable with its share of domestic

production ranging from a low of 25 percent to a high of 38 percent and its

share of total value ranging from a low of 25 percent to a high of 37

percent.

Harvested acreage within the state of Florida averaged just over

50,000 acres per year over the 1966-67 to 1985-86 period. As illustrated in

Table 1, harvested acreage has remained relatively stable over this period

ranging from a low of 42,500 acres in 1979-80 to a high of 60,000 acres in

1983-84.



1 The reporting of acreage, production and value data for watermelons
on a national basis was discontinued after the 1980-81 season.

2










Table 1. Acreage, Production
to 1985-86.


and Total Value of Florida Watermelons, 1966-67


Florida Percent Florida Percent Florida Percent
Harvested of U.S. Production of U.S. Total of U.S.
Years Acreage Harvested Production Value Total
(acres) Acreage (1,000 cwts.) ($ 1,000) Value


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
1981-82
S1982-83
1983-84
1984-85
1985-86
Average


57,000
56,000
53,500
47,500
50,100


56,100
48,700
44,500
43,600
55,000


8,265
7,560
6,955
6,888
7,515


6,732
7,792
6,675
8,066
9,900


51,000 22
50,000 23
43,000 21
42,500 23
49,000 24
48,000 N/Aa
49,000 N/A
60,000 N/A
54,000 N/A
47,550 N/A
50,303 21


8,925 33
8,000 31
6,450 27
7,863 35
8,085 31
7,920 N/A
8,085 N/A
10,020 N/A
8,964 N/A
8,749 N/A
7,970 30


aData reporting discontinued after 1980-81 season.

Source: Market News Service on Fruits and Vegetables, Marketing Watermelons,
and Florida Agricultural Statistics, Vegetable Summary. Various issues.


17,356
15,876
17,318
17,564
20,441


16,291
23,921
21,894
35,168
25,839


26,507
26,800
32,250
46,549
52,714
54,648
58,212
62,124
53,336
54,506
33,966


29
26
29
31
33
N/A
N/A
N/A
N/A
N/A
30









Although harvested acreage has not exhibited any clear trend over the

period of analysis (Figure 1), there is somewhat of a cyclical pattern

evident. Specifically, over the 1966-67 to 1980-81 period, acreage peaks in

1966-67, 1971-72 and 1975-76 were each followed by fairly consistent

declines in harvested acreage in the intervening years. From 1980-81 to

1982-83 acreage remained fairly constant. The substantial jump in

watermelon acreage in 1983-84 has been followed by two consecutive years of

declining acreage.

The presence of cyclical behavior in harvested acreage for watermelons

was analyzed by Wall and Tilley (1979). Their research found that acreage

planted to watermelons in any particular season could be related to the

average prices in three previous seasons. Prices in the two previous

seasons had the strongest impact on planted acreage. These results are

consistent with the type of cyclical pattern exhibited by harvested acreage

in Figure 1.

The total production of watermelons in Florida has averaged about 8

million cwt per year over the 1966-67 to 1985-86 period. As exhibited in

Table 1, there is a very slight upward trend in total production over the

period of analysis. This, in combination with the fact that harvested

acreage has exhibited no clear trend, suggests that the yield of

watermelons has shown only.a ery-modest increase over the last twenty

years.

The total FOB value of watermelon production has increased

substantially from $17.3 million in 1966-67 to $54.5 million in 1985-86.

This increase represents an average annual increase of about 2.6 percent

per year. Given the relatively stable levels of production over the 1966-67

to 1985-86 period it is likely that much of this increase in value is








Go-

68-
67 E
66-
65-
64-
63-
52-
61-
60-
49-
48-
47-
46-
45-
44 -
43-
42-
1966-67


Year
Harvested acres of watermelons in Florida, 1966-67
to 1985-86.


1969-70 1972-73 1975-76 1978-79 1981-e2 1964-85


Figure 1.









attributable to inflation. Indeed this can be shown to be the case as

deflating total value by the consumer price index indicates that the total

value of watermelon production in real terms has actually decreased by an

average of 0.06 percent per year. Thus while the nominal value of

watermelon production in Florida has increased rather substantially, in

real terms the total value of production has remained almost constant over

the last twenty years.

Within the state of Florida, data on harvested acreage and total

production of watermelons are reported for four regions: west, north,

central and south. As evident from Table 2, the north Florida region is the

predominate production area, accounting for an average of 25,445 harvested

acres per year and an average annual production of 3.9 million cwt. The

central Florida region ranks second with harvested acreage annually

averaging just over 11,000 acres and total production averaging about 1.9

million cwt. The south and west Florida regions are the smallest production

areas averaging about 6,200 and 7,400 harvested acres with average annual

production of 1.5 and 0.65 million cwt, respectively.

The trends in regional production of watermelons within Florida can

best be analyzed by viewing the percentage of harvested acreage and

production attributable to each region over the 1966-67 to 1985-86 period

presented in Table 3. The dominate position of the north Florida area is

evident in that it has accounted for an average of about 51 percent of

harvested acreage and 49 percent of total Florida production. It can be

seen that the share of both harvested acreage and total production

attributable to this region increased fairly consistently from 1966-67 to

1978-79 and has since exhibited a small but steady decline through the

1984-85 season.








Table 2. Harvested Acreage and Total Production of Watermelons by Region in Florida,
1966-67 to 1985-86.

Year West North Central South
Acres Productiona Acres Productiona Acres Productiona Acres Production


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


1981-82

1982-83
1983-84
1984-85
1985-86


Average


9,900
10,300
10,300
7,200
9,000


9,600
7,300
7,200
6,300
7,400


4,000
5,000
3,000
2,800
4,000


3,800
4,500
5,000
4,200
3,900


6,235 655


890
956
803
781
N/Ab


624
767
864
819
851


400
450
270
392
680


608
603
675
504
507


20,400
21,000
18,500
18,500
19,900


26,200
24,500
23,500
23,300
31,000


31,700
31,000
27,500
26,500
28,500


27,000
26,000
32,000
27,600
24,300


25,445 3,930


2,693
2,274
1,865
2,495
N/Ab


3,409
3,526
3,760
4,660
5,890


5,706
4,805
3,850
4,638
4,133


4,050
4,030
5,120
3,874
3,888


17,100
14,700
12,900
12,400
12,150


12,000
10,500
8,000
8,800
12,000


10,100
9,300
7,400
7,600
9,700


10,000
10,500
14,500
13,000
11,150


11,190 1,893


1,959
1,972
1,933
2,446
N/Ab


1,620
1,995
1,320
1,628
2,280


1,717
1,777
1,147
1,629
1,552


1,750
1,932
2,610
2,470
2,230


9,600
10,000
11,800
9,400
9,050


8,300
6,400
5,800
5,200
4,600


5,200
4,700
5,100
5,600
6,800


7,200
8,000
8,500
9,200
8,200


7,433 1,517


2,723
2,358
2,355
1,166
N/Ab


1,079
1,504
731
959
879


1,102
968
1,183
1,204
1,720


1,512
1,520
1,615
2,116
2,124


aThousands of cwts.
bData not available.
Source: Market News Service on Fruits and Vegetables, Marketing Watermelons, and Florida
Agricultural Statistics, Vegetable Summary, Various Issues.










Table 3. Percentage of Harvested Acreage and Production of Watermelons
Florida, 1966-67 to 1985-86.


by Region in


Year West North Central South
Acres Production Acres Production Acres Production Acres Production


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


1981-82
1982-83
1983-84
1984-85
1985-86


Average


11
13
12
11
N/A


09
10
13
10
09


04
06
04
05
08


08
07
07
06
06


08


33
30
27
36
N/A


51
45
56
58
59


64
60
60
59
51


51
50
51
43
44


49


24
26
28
36
N/A


24
26
20
20
23


19
22
18
21
19


22
24
26
28
25


24


33
31
34
17
N/A


16
19
11
12
09


12
12
18
15
21


19
19
16
24
24


15 19








The west Florida production region has exhibited a reasonably

consistent decline in harvested acreage over the past twenty years.

Harvested acreage has declined from a peak of 19 percent of total Florida

watermelon acreage in the 1968-69 season to about 8 percent for the 1985-86

season. Similarly, the proportion of the total Florida production

attributable to the west Florida region has also declined from a peak of 13

percent in 1967-68 to about 6 percent in the 1985-86 season.

The central Florida region has remained fairly stable in terms of both

harvested acreage and total production. The region's share of harvested

watermelon acreage has averaged about 22 percent of the state total over

the 1966-67 to 1985-86 period achieving a maximum share of 30 percent of

total harvested acreage in 1966-67 and a minimum share of 17 percent. Total

production in central Florida has similarly remained stable averaging about

24 percent of total Florida production.

The south Florida production area has accounted for an average of 15

percent of harvested watermelon acreage and 19 percent of total production.

Harvested acreage in the area exhibited a fairly consistent decline from

about 17 percent of total harvested acreage in 1966-67 to 8 percent in

1975-76. Since that time the portion of harvested watermelon acreage in the

south Florida area has steadily increased to about 17 percent of the state

total. Total production in the south Florida area has followed a similar

pattern, declining from about 33 percent of total Florida production in

1966-67 to 9 percent in 1975-76. Since that time, production in south

Florida has increased fairly consistently accounting for 24 percent of

total Florida production during the 1985-86 season.










Production Practices and Cost


This section provides a brief overview of watermelon production

practices in Florida and presents a comparative analysis of cost of

production for five production areas within the state. The production areas

considered are as follows. The two production areas in the northern portion

of the state are the(Jefferson)county area, designated North Florida, and

the Alachua/Levy)county area. In the central portion of the state the Lake

and Sumter county area, designated North Central Florida, and the

Manatee/Ruskin area, are analyzed. In the southern portion of the state the

Collier, Lee and Hendry county area, designated Southwest Florida is

analyzed.

The typical geographic pattern of production in Florida is such that

the southern production areas are the first to come into production and as

the season progresses, production moves steadily northward. Typical

planting and harvest periods for the five production areas considered in

this analysis are illustrated in Figure 2. Typical planting in the

Southwest area occurs in early to mid January with harvest beginning in mid

April. Planting in the remaining four production areas occurs from mid

February to early March with harvest beginning in May and continuing into

July.

The varieties grown are similar for all production areas. The

predominant varieties are Crimson Sweet, Charleston Grey and Jubilee. In

the North Florida area some Mirage is also grown. Although not currently

grown on a wide basis, it is anticipated that an increasing amount of

acreage will be planted to the so-called icebo melon varieties, Minnie Lee


10















Production January February March Aril _a. June-
Area Early Mid Late Early Mid Late Early Mid Late Early Mid Late Early Mid Late Early Nid Late



SOUTHWEST Transplan Harvest


ANATEE/RUSKIN Transplant Harvet


NORTH CENTRAL Plant Harvet


AIACHUA/LEVY Plant Harvest

NORTH FLORIDA Plant Harvest


Figure 2. Vaterelon production calendar by area in Florida.









and Mickey Lee in the future. In contrast to standard watermelons which

have an average size of 30 to 40 pounds, these icebox varieties average

about 10 pounds in weight.

Production practices are generally comparable in most areas. However,

watermelons are increasingly being grown on plastic mulch. Currently about

50 percent of the watermelons in the Southwest area, 80 percent of the

watermelons in the Manatee/Ruskin area and 75 percent of the watermelons in

the North Florida area are estimated to be grown on plastic. In the

Southwest and Manatee/Ruskin areas use of plastic mulch is primarily due to

the fact that watermelons are often double cropped following such

' vegetables as tomatoes or peppers which are commonly grown using plastic

mulch.

The estimated cost per acre of producing watermelons in each of the

five production areas for the 1986-87 season are summarized in Table 4. A

complete set of detailed production budgets are contained in appendix A. It

may be noted that in general, the cost of producing watermelons declines as

the location of production moves northward within the state. The Southwest

Florida production area has the highest estimated production costs at

$2,022.55 per acre and the Alachua/Levy area has the lowest estimated

production costs at $876.06 per acre. In order to compare production costs

across production regions it is useful to examine the relative cost shares

of various input categories. As exhibited in Table 5, the relative share of

costs attributable to various production inputs are generally similar even

though the absolute cost of production as shown in Table 4 differs

considerably across production areas.








Table 4. Operating, Fixed, and Harvest and Marketing Costs of Producing
An Acre of Watermelons in Various Regions of Florida, 1986-87.
Operating Fixed Harvest and Total
Region Cost Cost Marketing Cost Cost
Southwest $850.49 $400.26 $771.80 $2,022.55
Manatee $716.35 $263.271 $809.60 $1,789.22
North Central $985.21 $277.28 $375.00 $1,137.49
Alachua/Levy $396.25 $104.81 $375.00 $ 876.06
North $466.39 $207.61 $399.00 $1,073.00

Source: Taylor and Smith (1987).








J

Table 5. Cost Shares of Production Input by Production Region in Florida, 1986-87.


Input Region
Manatee/ North Alachua/
Southwest Ruskin Central Levy North


OPERATING COSTS Percent

Seed/Transplants 2 1 1 1 1
Fertilizer and Lime 9 15 12 12 12
Chemicals 7 6 3 3 6
Labor 7 4 10 15 8
Machinery 4 9 11 6 5
Interest 1 4 5 1 2
Miscellanous 11 -- -- 7 9


Total operating cost 42 40 42 45 43


FIXED COSTS
Land rent 12 6 9 5 5
Machinery 5 7 13 5 7
Overhead 3 2 2 2 7


Total Fixed Cost 20 15 24 12 19


TOTAL PREHARVEST COST 62 55 67 57 63


HARVEST AND MARKETING COSTS
Harvest, Haul and Pack 26 27 33 43 37
Selling 13 18 -- --


TOTAL HARVEST COST 38 45 33 43 37








The share of total cost attributable to operating costs, or preharvest

variable costs, are similar for all production areas, ranging from a low of

40 percent in the Manatee/Ruskin area to a high of 45 percent in the

Alachua/Levy county area. The share of total cost accounted for by fixed

costs however shows considerably more variation. The cost share of fixed

cost in the Alachua/Levy county area is about 12 percent whereas fixed cost

in the North Central area represents 24 percent of total cost. It may be

noted that much of the difference in the cost shares of fixed cost across

production areas may be found in the large share of cost attributable to
--------- -------------
land rent in the Southwest area and the shares of fixed machinery cost and

land rent in the North Central area.: '; C

For all production areas, total preharvest costs account for more than

half of total production cost. Total preharvest cost in the Manatee/Ruskin

area accounted for 55 percent of total cost, whereas preharvest cost in the

North Central area accounts for almost 67 percent of total cost. Falling

within these two extremes, preharvest cost in the Alachua/Levy, Southwest

and North Florida areas account for 57, 62 and 63 percent of total

production cost respectively.

Harvest and Marketing costs range from a low of 33 percent of total

cost in the North Central area to a high of 45 percent in the

Manatee/Ruskin area. It may be noted that only the Southwest and

Manatee/Ruskin areas incur selling costs, accounting for 13 and 18 percent

of total cost, respectively. This occurs because watermelons produced in

these areas are typically sold through produce brokers at a cost of $0.75

to $1.00 per cwt. In contrast, the majority of watermelons produced in the

remaining three areas are bought directly by independent truckers for

resale in northern markets.









The magnitude of an individual input's share of total cost is an

important determinant of how total cost may be affected by large increases

in input prices. If an input accounts for only 1 percent of total cost,

very large increases in its price will have a relatively minor impact on

total cost. In contrast, a large price increase for an input which accounts

for a substantial portion of total cost may significantly impact the total

cost of production.

The most significant input in terms of cost share across all

production regions is fertilizer and lime accounting for a minimum of 9

percent of total cost in the Southwest area and maximum of 15 percent of

total cost in the Manatee/Ruskin area. Labor also accounts for a

significant share of cost in the North Central area (10 percent) and the

Alachua/Levy county area (15 percent).



Weekly Shipments and Prices



As with the market for any fresh vegetable, the watermelon market is

characterized by considerable intraseasonal variation with respect to both

shipments and prices. Exactly what constitutes a "normal" season is

extremely difficult to define. As such, the most convenient and perhaps

only way to discuss typical intraseasonal characteristics of watermelon

shipments and prices is by defining a normal season in terms of historical

averages.

The general intraseasonal pattern of shipments of Florida watermelons

can be seen in Figure 3 which plots the average weekly shipments the 1977-

78 to 1981-82 period for both Florida and the U.S.. The dominance of

Florida production in the early spring is clearly evident as virtually all







4.5

4 U.S.
"u.s.


35;



|? -6 ;\ ?
E FLORIDA




I I-I


0.5



April18 15 22 29May613 20 27June310 17 24July1 8 15 22 29Aug512 19
Weeks
Figure 3. Average weekly watermelon shipment for Florida and
the U.S.









domestic production until mid-May emanates from Florida. From this point

until mid July, Florida remains a significant producer. However, its share

of the total domestic market on average declines as producers to the north

begin shipping.

The general pattern of watermelon shipments from Florida indicates

that, on average, shipments increase consistently from early April and peak

in mid-June. From that point on, shipments generally exhibit a consistent

decline, generally ceasing by the end of July. The pattern of total U.S.

watermelon shipments is similar to that of Florida. However, U.S. shipments

peak about two weeks later than Florida shipments on average. It should be

noted that peak U.S. watermelon production generally coincides with the

peak demand commensurate with the July 4th holiday.

As illustrated in Figure 4, average weekly FOB prices over the 1977-78

to 1981-82 period in Florida generally demonstrate the expected inverse

relationship with shipments. In general, as both Florida and total U.S.

shipments increase, prices decline. It is interesting to note that the

range in average weekly prices over the course of the season is fairly

substantial ranging from a average weekly price in excess of $10.00 per cwt

in early May to just over $3.00 per cwt in late July.

The extreme price volatility exhibited by average weekly price in the

first two to three weeks of the season is in part a manifestation of the

fact that the timing of initial shipments of watermelons from Florida is

affected by weather conditions in the production areas which can lead to

either excess production or shortfalls in supply. This price volatility is

however also in part due to the influence of temperatures in the northern

market areas.








11 -

10-


9-

8 -


7-







4

3-


2-
Apr. 22 29 oay 6 13 20 27 June 3 10 17 24 July 1 8 15 22 29

Week

Figure 4. Average weekly FOB prices for Florida watermelons.









The importance of temperature in influencing demand for early season

watermelons has recently been documented by Seale and Shonkwiler (1987). In

general, temperature and early season watermelon prices have been shown to

have a substantial positive correlation resulting from the fact that

watermelon consumption is strongly connoted with warm weather activities.
7----------------------.._I
Thus, warm temperatures in the northern markets induce a strong demand for

watermelons which, given a relatively limited supply, induces high prices.

In contrast, cool weather in northern markets inhibits the demand for

watermelons, resulting in somewhat of an excess supply and lower prices.

As already mentioned, weekly price on average declines consistently as

the season progresses. The only notable exception to this is the period

from mid to late June through the first week in July. During this period

weekly prices generally hold steady with a slight increase occurring

commensurate with the July 4th holiday. Subsequent to this period prices,

on average, show a substantial decline and then remain steady for the

remainder of the season.

The intraseasonal pattern of production and cost within Florida is

generally consistent with the weekly price pattern in Figure 4. That is,

the production areas which supply watermelons early in the season have the

highest cost of production, but also receive the highest prices. As the

location of production progresses northward in Florida the cost of

producing watermelons tends to decline as does the average price received

by producers.

Table 6 presents the estimated breakeven prices for a variety of yield

levels in each of the five production areas considered in this report. The

importance of the timing of production within the state is clearly evident

when these break even prices are compared with the average weekly prices








Table 6.


Breakeven Prices for Watermelons at Various Yield Levels and
Production Regions of Florida, 1986-87.


Yield (cwts.)
Region 275 300 325 350 375

Southwest $6.82 $6.44 $6.12 $5.84 $5.61
Manatee/Ruskin $6.09 $5.80 $5.54 $5.33 $5.14
North Central $4.02 $3.79 $3.60 $3.43 $3.28
Alachua/Levy $3.07 $2.92 $2.79 $2.68 $2.59
North $3.59 $3.39 $3.21 $3.07 $2.94

*<.t t LfI[



received by Florida producers (Figure 4). Given the typical timing of

harvest in each of the production areas (see Figure 2) it can be seen that

average weekly price exceeds the breakeven price for each area over a wide

range of yields. It is also evident that the relatively high cost of

production incurred by growers in the Southwest and Manatee/Ruskin areas

necessitate the high prices generally accompanying early season production.

Prices received later in the season would not, on average, be above the

breakeven prices for these production areas.

It should be emphasized that the results presented are based on

historical averages of weekly prices. Hence, they strictly imply that over

a period of years, the prices received by producers in each of the five

production areas considered will on average exceed the corresponding

breakeven price for a fairly wide range of yields. In any one season

however, producers in any production area may face prices below the

breakeven level, even for fairly high yield levels. This, of course, is a

manifestation of the extreme amount of uncertainty and price volatility

commensurate any fresh market vegetable. The important point to be made is

that, given the historical data on prices, watermelon production in Florida









appears to be profitable if one views production over an extended period of

time. In any one season, however, incurred losses may be just as likely as

the realization of profits.



Conclusions



From the historical data analyzed in this report, the Florida

watermelon industry appears to have been characterized by considerable

stability over the past twenty years, at least as measured by such

indicators as acreage, production and value. It seems likely that the

historical trends exhibited by the Florida watermelon industry will

continue as the industry appears to be somewhat insulated from moderate

fluctuations in the general economy.

Perhaps the most disturbing trend in evidence from the data analyzed

is the downward trend in real prices. This trend appears to be a

manifestation of declining per capital consumption of watermelons which has

generally been attributed to the decrease in average family size. Whether

or not this decline in consumption may reverse is of course unknown at

present.

To the extent that the decline in consumption is in fact related to

declining family size, the introduction of the new ice box varieties,

Minnie Lee and Mickey Lee may offer some potential to improve overall

consumption. As these watermelons are considerably smaller than the

traditional varieties grown, some groups of consumers may be induced to

increase consumption as these varieties allow easier storage thus less of

the potential waste associated with larger watermelons and the high prices

commensurate with pre-sliced watermelons.








In a "normal" year, a comparison of intraseasonal weekly prices and

cost of production indicated that breakeven prices for a wide range of

yields were exceeded by the corresponding weekly FOB prices. A "normal"

year, however, was defined in terms of the historical average of weekly

prices over the 1977-78 to 1981-82 period. Thus, while over an extended

period of time watermelon prices will on average exceed the cost of

production, in any given season prices may well fall short of production

cost in any particular production area.










References


Florida Agricultural Statistics. Vegetable Summary. Florida Crop and
Livestock Reporting Service, Orlando, Florida (annual issues).

Rose, G.N., Florida Vegetables. Melons. Irish Potatoes and
Strawberries--A Historic Data Series. Food and Resource Economics
Department Economic Report 85. Gainesville: University of Florida,
May 1977.

Seale, J.L. and J.S. Shonkwiler, "Rationality, Price Risk and
Response." Southern Journal of Agricultural Economics,
19(1987):111-118.

Taylor, T.G. and S.A. Smith. Production Costs for Selected Florida
Vegetables. 1986-87. Food and Resource Economics Department
Economic Information Report 234. Gainesville: University of
Florida, July 1987.

United States Department of Agriculture. Marketing Florida Vegetables.
Federal-State Market News Service, Winter Park,Florida (annual
issues).

Wall, G.B. and D.S. Tilley, "Production Response and Price
Determination in the Florida Watermelon Industry". Southern
Journal of Agricultural Economics, 11(1979):153-156.












Appendix A


Watermelon Production Budgets for Selected Areas in Florida









Table A-1. Watermelons: Estimated costs of production in the Southwest Florida area,
1986-87.

Average per
Category Acre 100 lbs.

Yield (100 lbs.) 340
- Dollars -
OPERATING COSTS
Transplants 39.00
Fertilizer and Lime 185.80
Fungicide 82.73
Insecticide 66.84
Labor 138.11
Machinery 88.65
Interest 28.26
Miscellanous
Bees 6.00
Irrigation 20.10
Plastic mulch 195.00

Total operating cost 850.49

FIXED COSTS
Land rent 250.00
Machinery 92.05
Overhead 58.21

Total fixed cost 400.26

TOTAL PREHARVEST COST 1,250.75 3.68

HARVEST AND MARKETING COSTS
Harvest, haul and pack 510.00 1.50
Packing material 6.80 0.02
Selling 255.00 0.75

Total harvest and marketing cost 771.80 2.27

TOTAL COST 2,022.55 5.95








Table A-2. Watermelons: Estimated costs of production in the Manatee/Ruskin area,
1986-87.

Average per
Category Acre 100 lbs.

Yield (100 lbs.) 320
- Dollars -
OPERATING COSTS
Seed 20.68
Fertilizer and Lime 275.00
Fungicide 85.60
Insecticide 23.25
Labor 65.56
Machinery 165.29
Interest 77.37
Miscellaneous
Bees 3.60

Total operating cost 716.35

FIXED COSTS
Land rent 100.00
Machinery 128.57
Overhead 34.70

Total fixed cost 263.27

TOTAL PREHARVEST COST 979.62 3.06

HARVEST AND MARKETING COSTS
Harvest and pack 480.00 1.50
Packing material 9.60 0.03
Selling 320.00 1.00

Total harvest and marketing cost 809.60 2.53

TOTAL COST 1,789.22 5.59









Table A-3. Watermelons: Estimated costs of production in the North Central Florida area,
1986-87.

Average per
Category Acre 100 lbs.

Yield (100 Ibs.) 300
- Dollars -
OPERATING COSTS
Seed 13.75
Fertilizer and Lime 137.71
Fungicide 32.70
Insecticide 6.25
Labor 112.57
Machinery 120.40
Interest 61.83

Total operating cost 485.21

FIXED COSTS
Land rent 100.00
Machinery 150.33
Overhead 26.95

Total fixed costs 277.28

TOTAL PREHARVEST COST 762.49 2.54

HARVEST AND MARKETING COSTS
Harvest and Haul 375.00 1.25

Total harvest and marketing cost 375.00 1.25

TOTAL COST 1,137.49 3.79








Table A-4. Watermelons: Estimated costs of
1986-87.


Category

Yield (100 Ibs.)


OPERATING COSTS
Seed
Fertilizer and Lime
Fungicide
Labor
Machinery
Interest
Miscellanous
Custom work

Total operating cost

FIXED COSTS
Land rent
Machinery
Overhead

Total fixed cost

TOTAL PREHARVEST COST

HARVEST AND MARKETING COSTS
Harvest and Haul

Total harvest and marketing cost

TOTAL COST


production in the Alachua/Levy County area,


Average per
Acre 100 lbs.

300
- Dollars --

10.00
102.50
26.15
134.11
50.39
11.10

62.00

396.25


40.00
45.97
18.84

104.81

501.06


375.00

375.00

876.06


1.67,
\1$,

1.25

1.25

2.92


,(K


/7









Table A-5. Watermelons: Estimated costs of production in the North Florida area, 1986-87.

Average per
Category Acre 100 lbs.

Yield (100 Ibs.) 350
- Dollars -
OPERATING COSTS
Seed 15.63
Fertilizer and Lime 125.13
Fungicide 51.25
Insecticide 8.20
Nematicide 4.95
Labor 85.78
Machinery 56.42
Interest 18.08
Miscellaneous
Air compressor 44.70
Plastic mulch 56.25

Total operating cost 466.39

FIXED COSTS
Land rent 55.00
Machinery 77.38
Overhead 75.23

Total fixed cost 207.61

TOTAL PREHARVEST COST 674.00 1.93

HARVEST AND MARKETING COSTS
Harvest 353.50 1.01
Haul 10.50 0.03
Selling 35.00 0.10

Total harvest and marketing cost 399.00 1.14

TOTAL COST 1,073.00 3.07




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