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Group Title: Economic information report
Title: Enterprise budget for sugarcane production in South Florida, 1978-79
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026499/00001
 Material Information
Title: Enterprise budget for sugarcane production in South Florida, 1978-79
Series Title: Economic information report
Physical Description: ii leaves, 21 p. : ; 28 cm.
Language: English
Creator: Lopez, Rigoberto A ( Rigoberto Adolfo ), 1957-
Alvarez, Jose, 1940-
Kidder, Gerald, 1940-
Publisher: Food & Resource Economics Dept., University of Florida
Food and Resource Economics Dept., University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1979
Copyright Date: 1979
 Subjects
Subject: Sugarcane industry -- Florida   ( lcsh )
Sugarcane industry -- Cost of operation -- Florida   ( lcsh )
Sugarcane -- Yield -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 21.
Statement of Responsibility: Rigoberto A. Lopez, Jose Alvarez, Gerald Kidder.
General Note: Cover title.
General Note: "September 1979."
 Record Information
Bibliographic ID: UF00026499
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: notis - AHM2469
alephbibnum - 001598327
oclc - 21028286

Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Table of Contents
        Page i
    List of Tables
        Page ii
    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
Full Text

Rigoberto A. Lopez Economic Information
Jose Alvarez Report 119
Gerald Kidder



Enterprise Budget for Sugarcane
Production in South Florida
1978-79
















Food and Resource Economics Department
Agricultural Experiment Stations and
Cooperative Extension Service 7
Institute of Food and Agricultural Sciences Septem ber 1
University of Florida, Gainesville















ABSTRACT


An enterprise budget for sugarcane production in south Florida
during the 1978-79 season was developed from data provided by local
producers. An efficient 640-acre farm was assumed. Results show a
cost per net ton of sugarcane of $18.12, and of $16.64 per net standard
ton. Costs per gross, net and harvested acre were $466, $518 and $690,
respectively. Net returns to management and risk were $37 per acre.

Key words: Everglades, sugarcane, enterprise budget, production
costs.




























The use of trade names in this publication is solely for the pur-
pose of providing specific information. It is not a guarantee or a
warranty of the products named and does not signify that they are
approved to the exclusion of others of suitable composition.














TABLE OF CONTENTS


Page

LIST OF TABLES. . . . . . . . . ... ....... ii

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

ASSUMPTIONS OF THE STUDY. . . . . . . . ... 2

Management . . . . . . . . ... . . . 2
Farm Characteristics . . . . . . . .... . 2
Machinery and Equipment. . . . . . . . . . 3
Labor . . . . . . . . . . . . .. 3
Yields and prices. . . . . . . . . ... ... 3

METHODOLOGY . . . . . . . . ... . . . . 3

Data Sources . . . . . . . . ... . . . 3
Calculation of Costs . . . . . . . .... . 4
Total Variable Costs . . . . . . . .... 4
Total Fixed Costs. . . . . . . . . ... ... 4
Calculation of Revenues. . . . . . . . . . 4

COSTS AND RETURNS . . . . . . . . ... . . .. 5

Cost Per Net Ton . . . . . . . . ... . . 5
Cost Per Net Standard Ton. . . . . . . . . 6
Costs Per Acre . . . . . . . . ... . . 6
Returns Per Acre . . . . . . . . ... . . 6

SENSITIVITY OF COSTS AND RETURNS. . . . . . . . . 7

SUMMARY AND CONCLUSIONS . . . . . . . . ... ... 7

REFERENCES. . . . . . . ... . . . . .21













i













LIST OF TABLES


Table Page

1 Land use distribution of the assumed 640-acre sugarcane
farm in south Florida . . . . . . . . . 8

2 Estimated initial investment and annual and hourly opera-
ting costs of machinery and equipment used on a 640-acre
sugarcane farm in south Florida, 1978-79. . . . . 9

3 Total costs of different activities performed on a 640-
acre sugarcane farm in south Florida, 1978-79 . . .. 10

4 Standard quality factor for converting net tons of cane
to standard tons of cane, by various measures of sugar
quality . . . . . . . .. .. .. . .17

5 Costs and returns for a 640-acre sugarcane operation in
south Florida, 1978-79. . . . . . . . ... 18

6 Returns per gross acre to factors of production for a
640-acre sugarcane operation in south Florida, 1978-79. 20
























ii














ENTERPRISE BUDGET FOR SUGARCANE PRODUCTION
IN SOUTH FLORIDA, 1978-79


Rigoberto A. Lopez, Jose Alvarez and Gerald Kidder


INTRODUCTION


Sugarcane production is the most important segment of the agricul-
tural economy of the Lake Okeechobee region of south Florida. In a
recent study [4] it was estimated that the sugarcane production and
processing sectors provided approximately 12 percent of local employ-
ment and 8 percent of local gross output. A detailed budget for this
important crop was published in 1972 f6] and updated in 1976 [3], and
an industry-wide cost study was published in 1977 [2]. Inflation and
changing agricultural practices have made the published values obsolete.
The purpose of this study is to update the budget figures for Florida
sugarcane.
An enterprise budget is a systematic listing of income, expenses,
capital, labor, and machinery requirements for a given crop. Enter-
prise budgets have several important applications. Sugarcane producers
may use current budgets to gauge their costs anJ practices against the
model farm. Budgets allow comparison of production costs and revenue
between different regions of the country and between crops in the same
region. Since enterprise budgets are useful in land appraisals, the
value of agricultural land is closely related to the potential net
revenue from the crop being produced on that land. Finally, published


RIGOBERTO A. LOPEZ is Research Assistant, Food and Resource
Economics Department, University of Florida. JOSE ALVAREZ and GERALD
KIDDER are Area Economist and Extension Sugarcane Specialist, respec-
tively, University of Florida, Agricultural Research and Education
Center, Belle Glade. The authors thank the sugarcane growers and
local dealers who provided the data needed for conducting this study.



1






2


budgets document costs for historical purposes and serve as a ready
reference to those requiring general economic statistics on the crop
in question.
The present study was performed in early 1979 and reflected the
costs of agricultural practices common in the sugarcane growing region
of south Florida during the 1978-79 season. Detailed discussion of the
data was not included since the purpose of the study was to update
previously published budget figures and to express the results in forms
convenient to the assorted needs of the users.

ASSUMPTIONS OF THE STUDY


Many variables influence sugarcane production in south Florida.
Variations in management, size of farm, soils, and all other factors
affecting production, result in different systems of production with
corresponding input and output levels. Budgeting a sugarcane operation
thus requires the stating of several assumptions.


Management


This study assumes: a) a high level of farm management, b) the
manager is a profit maximizer, c) use of the latest technology, and d)
the operator is either an independent producer or a mill coop member,
but is not a grower-processor.


Farm Characteristics

Sugarcane farms in south Florida vary in size from small, owner-
operated to large, corporate-run farms. In this study, a 640-acre
(one section) farm is assumed. Since the per-acre cost and yield
figures obtained are considered representative of the best managed
farms in the region, larger operations can use multiples of the basic
unit.
The farm assumed is already established and its land subdivided
into 16, 40-acre blocks. The land is distributed as shown in Table 1.
There are 14 one-half mile long field ditches (7 miles total) and







3



2 one-mile long seepage canals. The farm is assumed to be located less
than 15 miles from the mill, thus no extra charges for transportation
of cane to the mill are made.


Machinery and Equipment


The machinery and equipment assumed (Table 2) can perform all
necessary operations in the time required and is efficiently used.
Equipment usage time is assumed to be 90 percent of tractor time,
allowing for time lost in activities such as refueling, etc.


Labor


The farm has one full-time employee. Outside labor as well as
custom services are assumed to be available in the area when needed.


Yields and Prices


Yields of 50, 38 and 30 gross tons per acre and sucrose contents
of 14.5, 13.5 and 13 percent (normal juice sucrose) are assumed for
plant, first ratoon and second ratoon cane, respectively. For seed
cane, a 48 gross ton yield is assumed. Prices assumed for inputs
were obtained from local businesses. Guidelines for computing prices
of output were given by a local processor and are contained in The
United States Sugar Program [5]. Although the Sugar Act expired at
the end of 1974, its principles are still generally used for determining
methods of payment to growers.


METHODOLOGY


Data Sources


Data for activities performed and equipment used were obtained
through personal interviews with producers. Prices of inputs were
provided by local companies servicing the growers.






4



Calculation of Costs


In Table 3 are listed all the activities performed in producing
sugarcane on the model farm, along with the machinery and equipment
needed. Typical machinery and equipment usage was then determined
and the fixed and variable costs computed (Table 2). Variable costs
per hour were then used to complete the cost section of Table 3.
Detailed discussion of Table 3 is omitted because, along with the foot-
notes contained, it is self-explanatory.


Total Variable Costs


Variable costs are the costs that may be changed during the
production period by producing more or less of a product or using
more or less of a resource. Besides the costs incurred in different
activities, labor benefits, miscellaneous costs, and interest on the
investment are also included.


Total Fixed Costs


Fixed costs are those that cannot be changed during the production
period; they must be paid whether production takes place or not. Fixed
costs in cane production are those associated with owning machinery
and equipment, land charges, and land and drainage district taxes.
Machinery and equipment costs are listed in Table 3, the land charge
corresponds to a typical cash rent in the area [2], and typical taxes
were obtained from the interviews.


Calculation of Revenues


Revenues to the cane producer include the opportunity cost of the
seed cane he produced, the sugarcane sold to the mill, and the molasses
payment. Since most producers are paid in terms of net standard tons,
the gross tons delivered to the mill must be converted to net standard
tons as follows:






5



(1 % trash) x (gross tons) = net tons
(Net tons) x (quality factor) = net standard tons
For example, plant cane assumed to yield 50 gross tons of sugarcane and
14.5 percent of sucrose in normal juice. Since the cane was hand har-
vested (70 percent of the cane in south Florida is harvested by hand),
a 3 percent trash content is assumed:
(1 0.03) x (50 gross tons) = 48.5 net tons
(48.5 net tons) x (1.2002) = 58.20 net standard tons cane
where the quality factor is determined from Table 4. The price of $17.22
per standard ton is arrived at by multiplying the loan price basis of
$14.98 times 1.15, the government's fair price determination factor
intended to adjust the sharing ratio between producers and processors.
The molasses payment is calculated as follows:

1978-79 average price of molasses 19.52 /gal
Less fair price adjustment 4.75
Basic price for settlement 14.77
Less 50% for mill processing 7.38
Established price paid to growers 7.39 /gal
Times mill historical average yield
(since 1975) x6.2 gal/net ton cane

Molasses payment to cane grower 45.8 (/net ton cane


COSTS AND RETURNS


In Table 5 are summarized the costs and returns per acre as well
as for the entire 640-acre model farm. Since there is frequently
need to know average cost per net ton, per net standard ton, and per
acre, the budget was also used to determine these production costs.


Cost Per Net Ton


The calculation of average cost per net ton is demonstrated below.

(Gross tons/acre) (3% trash) = (Net tons/acre) x (Acres) = (Net tons)
Seed cane 48 1.44 46.56 12 560
Plant cane 50 1.50 48.50 132 6,400
1st ratoon cane 38 1.14 36.86 144 5,310
2nd ratoon cane 30 0.90 29.10 144 4,190
16,460






6



Dividing total costs of $298,210 (Table 5, variable plus fixed)
by total net tons of 16,460 gives a total cost of $18.12 per net ton
of cane produced.


Cost Per Net Standard Ton


The same procedure is used to determine the cost per net standard
ton. Total net standard tons are computed as follows:

(Quality (Net std.
(Net tons/acre) x factor) = tons/acre x (Acres) = (Net std. tons)
Plant cane 48.50 1.2001 58.20 132 7,680
1st ratoon cane 36.86 1.1004 40.54 144 5,840
2nd ratoon cane 29.10 1.0505 30.55 144 4,400
17,920
Dividing the $298,210 total cost figure by total net standard tons
results in a total cost of $16.64 per net standard ton.


Costs Per Acre


Per dcre costs can be computed considering gross, net and harvested
acreage. Gross acreage is the total farm acreage. Net acreage is
total acreage minus roads, ditches and canals. Harvested acreage is
the net acreage minus acreage fallowed. Dividing total costs by
640 acres gives a cost per gross acre of $466. Since net acreage
equals 576, $518 is the cost per net acre. Dividing by the 432 har-
vested acres results in a cost of $690 per harvested acre.


Returns Per Acre


The returns to various factors of production are presented in Table
6. The break-down facilitates the estimation of the value of the
resources used in sugarcane production. If land, management and risk
are considered as the residual claimants (or unpaid factors of pro-
duction), the net returns per acre are $127. If only management and
risk are left out, returns are $37 per gross acre.






7



SENSITIVITY OF COSTS AND RETURNS


There are important qualifiers to the results that need to be
pointed out. In general, yields, product prices and input costs are
pretty much the same across the area. In the case of fuel and petroleum-
based products, costs will increase next year due to the recent price
increase.
One item that deserves special consideration is the land charge.
A $90 per acre cash rent was assumed in this study since it represents
an average for the area. Variations in this charge will have a
significant impact on the cost and return figures.
On the revenue side, the possibility of growing one or two crops
of rice or one crop of field corn during the fallow period greatly
enhances the possibility of increasing net returns. These rotations
have become quite popular in recent years.


SUMMARY AND CONCLUSIONS


Costs and returns figures for sugarcane production in south
Florida were updated based on 1978-79 figures. Results show that,
under the conditions assumed in this study, it cost about $18.12 per
net ton and $16.64 per net standard ton to produce cane in Florida in
the 1978-79 season. Costs per gross, net and harvested acre were
$466, $518 and $690, respectively. Return to management and risk
were about $37 per acre. Variation in any one of an array of factors
can significantly change these figures.







8



Table 1.--Land use distribution of the assumed 640-acre sugarcane
farm in south Florida

Land use Acres Percent

Road, ditches and canals 64 10.0
Seed cane 12 1.9
Plant cane 132 20.6
1st ratoon 144 22.5
2nd ratoon 144 22.5
Fallow 144 22.5

Total 640 100.0







Table 2.--Estimated initial investment and annual and hourly operating costs of machinery and equipment
used on a 640-acre sugarcane farm in south Florida, 1978-79


Initial New Fixed costc
Initial New Years Salvage Annual Fixed costcVariable
Item list purchase Variable
price price Aowned valuennual Per gross cost/hr.d
acre
-----Dollars----- Dollars -Hrs.- ----------- Dollars -----------
Tractor, 110 HP 22,500 20,250 10 6,644 560 2,908 4.54 4.92
Tractor, 60 HP 12,500 11,250 10 3,691 566 1,615 2.52 2.54
Tractor, 60 HP 12,500 11,250 10 3,691 566 1,615 2.52 2.54
Disk, offset, 12', 24" 6,000 5,400 10 1,061 116 811 1.27 2.09
Disk, harrow, 21', 21" 5,200 4,680 10 919 190 703 1.10 2.05
Chisel plow, 12', 20" 1,600 1,440 10 283 51 216 0.34 0.43
Land leveler, 8-row, 30" 4,900 4,410 10 866 58 662 1.03 0.93
Mole drain 1,550 1,395 10 274 20 209 0.33 0.31
Furrow plow, 3-row 1,500 1,350 10 265 26 203 0.32 0.33
Covering rig 2,500 2,250 10 442 52 338 0.53 0.68
Scratcher, 3-row 2,000 1,800 10 354 303 270 0.42 0.93
Rolling cultivator 1,500 1,350 10 265 520 203 0.32 0.71
Rotary mower, 7' 1,700 1,530 10 300 45 230 0.36 0.44
Disk, 8', 24" 2,480 2,232 10 438 144 335 0.52 0.92
Pick-up truck 7,800 7,020 10 1,380 400 1,054 1.65 4.76
Pump, 36" pipe, 92 HP 17,000 15,300 10 3,000 500 2,298 3.59 1.78
Total 13,670 21.36

aAt 90% of initial list price.

Computed with the formula given in [7].

cIncludes straight line depreciation; interest on average investment at 10% calculated by adding
purchase price to salvage value divided by two; taxes and insurance at 1% of purchase price.
dCalculated from [1] for the fifth year to reflect average variable costs over the ten year period.












Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79

Number
Acres Hrs. Cost Times
Activity and equipment per a acres Amount Total
per day per acre per hr. over
per yr.

---$--- ---- Dollars ----
I-LAND PREPARATION
Heavy disking (offset) 45 144 4
110 HP tractor 0.22 4.92 623
24" disk 12' wide 0.20 2.09 241
Operator 0.22 3.60 456
Total 1,320

Light disking (harrow) 75 144 10
110 HP tractor 0.13 4.92 921
21" disk 21' wide 0.12 2.05 354
Operator 0.13 3.60 674
Total 1,949

Chiselingb 40 77 1
110 HP tractor 0.25 4.92 95
12' chisel plow, 20" deep 0.23 0.43 8
Operator 0.25 3.60 69
Total 172

Ditch cleaning
Custom hired 875

Continued









Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79--Continued

Leveling 45 144 2
110 HP tractor 0.22 4.92 312
8-row leveler, 30" 0.20 0.93 54
Operator 0.22 3.60 228
Total 594

Mole draining 36 77 1
110 HP tractor 0.28 4.92 106
Mole drain 0.25 0.31 6
Operator 0.28 3.60 78
Total 190

Fertilization 144 1
Fertilizer 3,960
Custom application 252
Incorporation: 75 1
110 HP tractor 0.13 4.92 92
21" disk 21' wide 0.12 2.05 35
Operator 0.13 3.60 67
Total 4,406 9,506

II-PLANTING
Furrowing 50 144 1 / A /
110 HP tractor 0.20 4.92 142
3-row furrower 0.18 0.33 9
Operator 0.20 3.60 104
-Total 255

Continued












Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79--Continued

Cutting cane f
Custom hired 12 2,765
Seed cost 11,520
Loading, hauling, dropping
Custom hired" 144 12,600
Total 26,885

Seed covering and insect. appl. 25 144 1
110 HP tractor 0.40 4.92 283
Covering rig 0.36 0.68 35
Operator 0.40 3.60 207
Insecticide 1,901
Total 2,426 29,566

III-PLANT CANE CULTIVATING
Scratching 60 144 14
60 HP tractor 0.17 2.54 871
3-row scratcher 0.15 0.93 281
Operator 0.17 3.60 1,234
Total 2,386

Mechanical cultivation 50 144 8
60 HP tractor 0.20 2.54 585
Rolling cult. 0.18 0.71 147
Operator 0.20 3.60 829
Total 1,561

Continued









Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79--Continued

Herbicide application3 144 1
Custom hired airplane 238
Materials 815
Total 1,053 5,000

IV-STUBBLE CANE CULTIVATING
Spreading fodder 36 144 1
60 HP tractor 0.28 2.54 102
7' rotary mower 0.25 0.44 16
Operator 0.28 3.60 145
Total 263

Disk cultivation 36 288 2
60 HP tractor 0.28 2.54 410
24" disk 8' wide 0.25 0.92 132
Operator 0.28 3.60 581
Total 1,123

Rolling cultivation 36 288 6
60 HP tractor 0.20 2.54 878
Rolling cult. 0.18 0.71 221
Operator 0.20 3.60 1,244
Total 2,343

Fertilizationk 288 1
Custom appl. 504
Materials 6,840
Total 7,344

Continued












Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79--Continued

Herbicide application3 288 1
Custom hired airplane 475
Materials 1,630
Total 2,105

Chiselingb 40 144 1
110 HP tractor 0.25 4.92 177
12' chisel plow, 20" deep 0.23 0.43 14
Operator 0.25 3.60 130
Total 321 13,499

V-HARVESTING1
Plant cane 132 1 56,100
1st ratoon cane 144 1 46,512
2nd ratoon cane 144 1 36,720
Total 139,332

VI-OVERHEAD ACTIVITIES
Edging 640 640 1
60 HP tractor 0.016 2.54 26
Rotary mower 0.014 0.44 4
Operator 0.016 3.60 37
Total 67

Continued









Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79--Continued

Rodent control 432 1
Custom hired airplane 648
Materials 1,080
Total 1,728

Borer control
Scouting 432 1,080
Custom hired 144 1,477
Total 2,557

Water control
Pump 36" pipe 890
Labor 360
Total 1,250 5,602

aA day is assumed to be 10 hrs. for labor and tractor and 9 hrs. for other machinery and equipment.

bOnly to about half of the land due to variations in soil depth.

cIncludes soil spreading and is done only to plant cane, 2.5 miles at $350/mile.

dOne 10" diameter mole plow pulled 2' deep every 20'.

"e500 Ibs. of 0-10-40 plus micronutrients applied broadcast, at $110/ton of material and $7/ton for
application.

fTwelve acres of seed cane with a 48 ton yield at $4.80/harvested ton. The 576 tons are planted in 144
acres at 4 tons per acre.

Continued












Table 3.--Total costs of different activities performed on a 640-acre sugarcane farm in south Florida,
1978-79--Continued


gAt $20/ton.
hAt $87.50/acre.

i40 Ibs. of Furadan/acre at $0.33/lb.

J\ gal. of 2,4-D/A at $4.25/gal. plus 2 Ibs. of Atrazine/A at $2.00/lb. plus surfactant at $6/gal.
(0.5% of sprayed volume). $1.65/A for the airplane.
k500 Ibs./A of 0-10-40 without micronutrients, custom applied at $95/T for material and $7/ton for
application.

1Custom hired, at $8.50 per gross ton, assuming yields of 50, 38 and 30 gross tons per acre for plant
cane, first and second ratoon, respectively.
"ml0 Ib./A of zinc phosphide at $0.25/lb., $1.50/A for the airplane.

"nCharges for scouting are $2.50 per acre for the season for 432 acres. Assumes two applications to
144 acres. Each chemical application costs an average of $5.13 per acre and includes 1 pint of Azodrin
5WM and the aircraft cost.
0100 hrs./year @ $3.60/hr.







17



Table 4.--Standard quality factor for converting net tons of cane to
standard tons of cane, by various measures of sugar quality

For sugar quality expressed as:
Multiply net
Percent Percent Potons per acre
Sucrose in Sugar in ouns sugar er by
SSugarbin ton of canec by
normal juice cane ton of cane

11.57 8.25 165 .9079
11.84 8.50 170 .9348
12.11 8.75 175 .9617
12.38 9.00 180 .9887
12.65 9.25 185 1.0156
12.92 9.50 190 1.0425
13.19 9.75 195 1.0695
13.46 10.00 200 1.0964
13.73 10.25 205 1.1233
14.00 10.50 210 1.1502
14.27 10.75 215 1.1772
14.54 11.00 220 1.2041
14.81 11.25 225 1.2310
15.08 11.50 230 1.2580
15.34 11.75 235 1.2849
15.61 12.00 240 1.3118
15.88 12.25 245 1.3387
16.15 12.50 250 1.3657
16.42 12.75 255 1.3926
16.69 13.00 260 1.4195
16.96 13.25 265 1.4465
17.23 13.50 270 1.4734
17.50 13.75 275 1.5003
17.77 14.00 280 1.5272

For every 0.01 percentage point, quality factor increments or
decreases by 0.001.
For every percentage point, quality factor increments or decreases
by 0.1077.
CFor every pound, quality factor increments or decreases by 0.0054.

Source: [3].












Table 5.--Costs and returns for a 640-acre sugarcane operation in south Florida, 1978-79

Quantity Price of Approximate Number Gross value
Item Unit per covalue or of or
acre cost/acre acres

Total revenues
Seed cane gross ton 48.00 20.00 960.00 12 11,520
Sugarcane plant cane net std. ton 58.20 17.22 1,002.20 132 132,290
Sugarcane 1st ratoon net std. ton 40.54 17.22 698.10 144 100,526
Sugarcane 2nd ratoon net std. ton 30.55 17.22 526.07 144 75,754
Molasses payment ave. net ton 37.95 0.458 17.38 420 7,300
Total 327,390

Total variable costs
Land preparation acre 66.02 144 9,506
PlantingD acre 203.55 144 29,566
Plant cane cultiv.b acre 34.72 144 5,000
Ratoon cultiv.b acre 46.87 288 13,499
Overhead activities acre 8.75 640 5,602
Labor benefits acre 1.75 640 1,123
Miscellaneousd acre 8.84 640 5,655
Interest acre 10.92 640 6,990
Harvesting acre 331.74 420 139,332
Total 216,220

Total fixed costs
Machinery and equip. acre 21.36 640 13,670
Land charge acre 90.00 640 57,600
Taxes: land and drainage acre 16.75 640 10,720
Total 81,990

aSee text for procedure used in computing total revenues.

Continued









Table 5.--Costs and returns for a 640-acre sugarcane operation in south Florida, 1978-79--Continued


From Table 3.

CAt 12% of gross salary and includes social security and unemployment and workmen's compensation.

At 10% variable costs above and includes pick-up truck use, office supplies, telephone, etc.

eAt 10% of pre-harvest variable costs.

From Table 2.






ko







20



Table 6.--Returns per gross acre to factors of production for a 640-acre
sugarcane operation in south Florida, 1978-79

Item Charge Return

---- Dollars ----
Total revenue over variable costs to labor, fixed
costs, land, and management and risk 511

Variable costs (excluding labor) 336

Return to labor, fixed costs, land, and management
and risk 175

Labor (2.8 hrs. at $3.60/hr.) 10

Return to fixed costs, land, and management and
risk 165

Fixed costs (Machinery, equipment, and taxes) 38

Return to land and management and risk 127

Land charge 90

Return to management and risk 37







21








REFERENCES


[1] American Society of Agricultural Engineers. Agricultural Machinery
Management Data--1977 Agricultural Engineer Yearbook, Michigan,
1977.

[2] Brooke, D. L. "Cost of Producing Sugarcane and Processing Raw Sugar
in South Florida, 1975-76," Food and Resource Economics Depart-
ment Economics Report 84, University of Florida, Gainesville,
March 1977.

[3] Halsey, Larry A. "A Management Guide to Profitable Sugar Production,"
Belle Glade AREC Research Report EV-1976-8, University of Florida
Agricultural Research and Education Center, Belle Glade, September
1976.

[4] Mulkey, David and John Gordon. "The Economic Importance of the Sugar
Industry in South Florida," Food and Resource Economics Depart-
ment Staff Paper 117, University of Florida, Gainesville,
February 1979.

[5] U.S. Congress. House. The United States Sugar Program, 91st Congress,
2nd Session, U.S. Government Printing Office, Washington, D.C.
1971.

[6] Walker, Charles. "Costs and Returns from Sugarcane in South Florida,"
Florida Cooperative Extension Service Circular 374, University of
Florida, Gainesville, June 1972.

[7] Walker, R. L. and Darrel D. Kletke. An Application and Use of the
Oklahoma State University Crop and Livestock Budget Generator,
Research Report #P-663. Oklahoma Agr. Exp. Stat., Stillwater,
July 1972.





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