• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Table of Contents
 List of Tables
 Main














Group Title: Economic information report
Title: Factors affecting efficiency in Florida fresh citrus packinghouses, 1995-96 season
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026517/00001
 Material Information
Title: Factors affecting efficiency in Florida fresh citrus packinghouses, 1995-96 season
Series Title: Economic information report
Physical Description: iii, 12 p. : ; 28 cm.
Language: English
Creator: Muraro, R. P
Publisher: University of Florida, Institute of Food and Agricultural Sciences, Food and Resource Economics Dept.
Place of Publication: Gainesville FL
Publication Date: 1998
Copyright Date: 1998
 Subjects
Subject: Citrus fruit industry -- Statistics -- Florida   ( lcsh )
Citrus fruits -- Packing -- Statistics -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references (p. 8).
Statement of Responsibility: Ronald P. Muraro ... et al..
General Note: Cover title.
General Note: "April 1998"--Cover.
 Record Information
Bibliographic ID: UF00026517
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 - AMP0309
alephbibnum - 002524457
oclc - 42519863

Table of Contents
    Front Cover
        Front Cover
    Abstract
        Page i
    Table of Contents
        Page ii
    List of Tables
        Page iii
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
Full Text
wk-

Ronald P. Muraro Economic Information
John J. VanSickle Report 98-1
W. F. Wardowski
William M. Miller




Factors Affecting Efficiency
In Florida Fresh Citrus
Packinghouses, 1995-96


















5 UNIVERSITY OF
i FLORIDA
T-.;" te of Food and Agricultural Sciences
and Resource Economics Department April 1998
SDOC ida Agricultural Experiment Station
100 Z' rida Cooperative Extension Service
F637fe Gainesville, FL 32611
El
98-1














ABSTRACT


A Florida fresh citrus packing efficiency cost study for the 1995-96 season was
conducted from January 1997 to August 1997. A total of 14 commercial citrus packers--8
from the Interior region and 6 from the Indian River area--provided packing cost data for the
study. These 14 packers accounted for 26.9% of the total Florida fresh packed citrus during
the season reported. A summary of the estimated average comparative packing costs per 4/5
bushel carton for the Interior and Indian River regions is presented. The average cost per 4/5
carton for the Interior and Indian River was $3.53 and $4.10, respectively. The statewide
average cost for all packers was $3.74 per 4/5 carton.

Key words: Florida citrus packing costs, fresh fruit, packing charges, harvesting costs.





ACKNOWLEDGMENTS


We wish to express our appreciation to the participant packinghouses for their
excellent cooperation.

Also, we want to express our appreciation to Mrs. Jane Wilson for typing the final
draft of this manuscript.












S... ''ln tT OP F Fc~~~Lr-dJ3A L~sES















TABLE OF CONTENTS




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

ACKNOWLEDGMENTS ........................................ i

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

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

RESULTS ...................................................... 1

REFERENCES ................... .... .. ................... ... 8

ADDENDA ............. ..................................... 9



























ii














LIST OF TABLES


Table Ea

1 Summary of packers by volume of cartons packed, 1995-96 season -
all participating packers ................. ................... 2

2 Summary of fruit volume handled through packinghouses, 1995-96
season all participating packers ............................. 2

3 Average volume of fruit handled by packinghouses, 1995-96 season ... 3

4 Summary of packed fruit by type of container, 1995-96 season all
participating packers ..................................... 4

5 Estimated per carton packing costs for packinghouses, 1995-96 season. 5

6 Average of mean efficiency and range of efficiency for packinghouse
in cost study- 1995-96 season .............. ............... 6

7 Average of mean labor cost and range of labor cost as a percentage of
total cost for packinghouses in cost study 1995-96 season ........ 7




















iii









FACTORS AFFECTING EFFICIENCY IN FLORIDA FRESH CITRUS
PACKINGHOUSES, 1995-96 SEASON'


Ronald P. Muraro, John J. VanSickle,
W. F. Wardowski, and William M. Miller


INTRODUCTION


The lower returns experienced by Florida's fresh citrus industry in recent years has
raised the need for current information to evaluate the cost efficiency of commercial fresh
citrus packers. The Florida Department of Citrus in 1996, funded a cost efficiency study for
Florida's fresh citrus packinghouses. The cost study was for a two-year duration. This report
summarizes the second year results of the cost efficiency study.
This research involved collecting data from packinghouses operating in Florida and
analyzing the efficiency of their operations. All packinghouses were contacted to collect data
needed to calculate packinghouse efficiency. A total of 50 packinghouses were contacted to
provide data on the 1995-96 packing season. Data were received from 14 packinghouses;
8 from the Interior and 6 from the Indian River citrus production regions. This compares
with a total of 10 packers in year one of this project. The 14 packers accounted for 26.9%
of the total citrus packed in Florida during the 1995-96 season. By variety, the 14 packers
accounted for the following percentages of citrus packed in 1995-96 season: 36.5% of
oranges and temples; 22.2% of grapefruit; 32.7% of tangelos; and 31.0% of tangerines. A
size distribution of packers by volume of fruit packed is shown in Table 1.
RESULTS
A total of 15.151 million field boxes were received/handled by the packers in the
survey (Table 2). The average volume of the Interior packinghouses was 1.112 million field



'This research project was funded by the Florida Department of Citrus.

RONALD P. MURARO, W. F. WARDOWSKI and WILLIAM M. MILLER are
professors at the University of Florida, IFAS Citrus Research and Education Center, in Lake
Alfred, FL. JOHN VANSICKLE is a professor in the Food and Resource Economics
Department, University of Florida, IFAS, Gainesville, FL.

1







2

boxes received with 0.719 million field boxes packed as fresh citrus (Table 3). The average
volume of the Indian River packinghouses was 1.043 million field boxes received with 0.580
million boxes packed as fresh citrus. There was more diversity of varieties handled by the
Interior packinghouses; 92% of the fruit was comprised of oranges, grapefruit and tangerines.
Whereas, grapefruit accounted for 92% of the total fresh citrus packed in the Indian River
packinghouses.


Table l.--Summary of packers by volume of cartons packed, 1995-96 season all
participating packers
Interior Indian River
Total cartons packed packers packers All packers
1,000 4/5 bu.
carton equivalents
500.0- 999.9 2 2 4
1,000.0- 1,499.9 3 2 5
Greater than 1,500.0 3 2 5
Total packers 8 6 14
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouses) and Interior (8 packinghouses) producing regions.


Table 2.--Summary of fruit volume handled through packinghouses, 1995-96 season -
all participating packers
Total fruit Cannery Percent
Variety received Fruit packed eliminations packout
------------- 1,000 field box equivalents -------------

Oranges 4,928.7 3,087.6 1,841.1 62.6%
Grapefruit 8,202.5 4,711.6 3,490.9 57.4%
Temples 372.2 237.2 135.0 63.7%
Tangelos 403.7 267.8 135.9 66.3%
Tangerines 1,244.0 928.1 315.9 74.6%
Total fruit 15,151.1 9,232.3 5,918.8 60.9%
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouse) and Interior (8 packinghouses) producing regions.






3

Table 3.-Average volume of fruit handled by packinghouses, 1995-96 season'
Total Fruit Cannery Percent
Variety fruit received packed eliminations packout
------------- 1,000 field box equivalents -------------
Interior
Oranges 576.1 356.8 219.4 61.9%
Grapefruit 302.6 198.4 104.2 65.6%
Temples 44.5 28.1 16.3 63.3%
Tangelos 45.1 29.2 15.8 64.9%
Tangerines 143.3 106.2 37.0 74.1%
Total fruit 1,111.6 718.8 392.8 64.7%

Indian River
Oranges 53.3 38.9 14.4 73.0%
Grapefruit 963.6 520.7 442.9 54.0%
Temples 2.7 2.0 0.7 73.2%
Tangelos 7.2 5.7 1.5 78.7%
Tangerines 16.3 13.0 3.3 80.0%
Total fruit 1,043.1 580.3 462.8 55.6%
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouses) and Interior (8 packinghouses) producing regions.


The average percent packout for all packinghouses was 60.9% indicating that 39.1%
were eliminations, not packed as fresh fruit. The average percent packout for the Interior
packers was 64.7% compared to 55.6% for the Indian River packers. The dominance of
grapefruit packed for the export market was the major factor lowering the average packout
percentage for the Indian River packers. The foreign buyers demand a superior, blemish free
appearance and more selective fruit sizes which requires handling a larger volume of fruit to
meet their market standards.
A summary of packed fruit by type of container for all packers participating in the cost
study is shown in Table 4. A total of 18.672 million 4/5 bushel equivalent cartons were
packed which represented 26.9% of the total Florida fresh citrus packed during the 1995-96






4

season. A total of 14.542 million standard cartons, which includes both domestic (10.127
million) and export (4.415 million) cartons, accounted for over 77.9% of the total cartons
packed. The Indian River area packed over 81.8% of the total export cartons consisting
almost entirely of grapefruit. Bag master containers represented 16.4% or 3.066 million
cartons packed. The remaining 1.064 million packed cartons consisted of 2/5 bushel gift fruit
cartons (2.4%) and bulk fruit shipped in pallet boxes and bins (3.3%).




Table 4.--Summary of packed fruit by type of container, 1995-96 season all
participating packers'
2/5 bu 4/5 bu Bag master Bulk in pallet Total cartons
Variety cartons cartons std containers boxes and bins packed
------------------- 1,000 4/5 bushel equivalents -----------------

Oranges 191.2 3,606.6 1,985.0 372.6 6,155.4
Grapefruit 209.6 8,500.6 723.8 213.7 9,647.7
Temples 4.1 454.5 21.0 3.9 483.5
Tangelos 37.5 381.8 104.7 4.4 528.4
Tangerines 3.5 1,598.3 231.7 23.5 1,857.0
Total fruit 445.9 14,541.8 3,066.2 618.1 18,672.0
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouses) and Interior (8 packinghouses) producing regions.



The cost of operating the packinghouses varied between producing regions and within
producing regions. The per unit average total of all costs for packing fresh citrus varied
between the Interior and Indian River producing regions, averaging $3.53 per 4/5 bushel
carton in the Interior and $4.10 per 4/5 bushel carton in the Indian River (Table 5). The total
cost of operating the packinghouses ranged from $3.07 to $4.20 per 4/5 carton in the Interior
and from $3.79 to $4.47 in the Indian River region The total of all costs for all packers
averaged $3.75 per carton with a range of $3.07 to $4.47 per carton.






5

Table 5.--Estimated per carton packing costs for packinghouses, 1995-96 season
Item Interior Indian River All packers
------------ $ per 4/5 bushel carton ------------
Production cost:
Materials $1.0573 $1.1628 $1.0968
Labor' 0.8811 1.1219 0.9715
Other direct packing costs 0.5307 0.5545 0.5396
Indirect packing costs' 0.2768 0.3682 0.3111
Total production costs $2.7459 $3.2074 $2.9190

Selling expense 0.2489 0.2716 0.2574
General and administrative costs 0.3038 0.3515 0.3217
Total packing costs $3.2986 $3.8305 $3.4981

Special assessments 0.2357 0.2711 0.2490
Total all costs $3.5343 $4016 $37471

Range $3.07- $4.20 $3.79- $4.47 $3.07- $4.47
"*Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouses) and Interior (8 packinghouses) producing regions.
"bIncludes mesh/plastic bags, labels/PLUs, etc.
"Includes supervisor/foreman labor, grading, palletizing, shipping and general
labor. Includes payroll taxes (FICA), workers' compensation, group insurance, etc.
"dOther direct packing costs include: fruit treating; power, lights and water;
repair/maintenance; miscellaneous supplies, etc.
"Indirect packing costs include such items as: insurance-fire and casualty; taxes
and licences, depreciation and rent.
fG&A costs include: office personnel (FICA, w/comp); packinghouse and general
manager; office suppliers; telephone, etc.
BSpecial assessments include such items as: advertising taxes, inspection fees,
Florida Citrus Packers; CAC.






6

Efficiency, as a concept, is built on the premise of determining the best combination
of resources operating at the optimum scale which produces a bundle of goods with the least
expense possible. The cost efficiency of packing fresh citrus for the fresh market assumed
that one firm is operating at 100% efficiency. Thus, efficiency is estimated here as the
proximity of the firm to the least cost firm in operating costs per unit cost basis. The firm
operating at the lowest per unit cost was defined as 100% efficient and the deviation from the
lowest firm's per unit cost for other firms was defined as inefficiency. A production function
could not be estimated because of lack of sufficient data to estimate the regression equation
necessary to define efficiency. Estimating efficiency of packing using per unit costs provides
a second method that does approach a true measure of efficiency.
Following these procedures, efficiency was measured for the 14 participating firms in
this study. The results presented in Table 6 indicate that average efficiency of the firms in the
study is 68.5% when compared to a 100% efficient cost of $3.07 per 4/5 bushel carton.
Further comparison shows the Interior packinghouses operated more efficiently than firms in
the Indian River region, 76.0% to 56.1%, respectively. However, when comparing cost
efficiency within regions, the Indian River region had a higher average cost efficiency rating
(91.8%) than the Interior (76%). This may be due to the fact that a single citrus variety,
grapefruit, represented over 92% of the total citrus packed in the Indian River region.



Table 6.--Average of mean efficiency and range of efficiency for packinghouse in cost
study 1995-96 season"
Production region Average Low range High range
---------- % efficiency of packinghouses ---------

Interior packers 76.0% 52.6% 100.0%
Indian River packers 56.1% 43.2% 66.9%
All packers 68.5% 43.2% 100.0%
Indian River packers
compared within region 91.8% 82.1% 100.0%
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouses) and Interior (8 packinghouses) producing regions






7

An analysis of factors contributing to efficiency found those firms operating in the
Interior region increased their efficiency with higher packout (Table 3) and lower labor costs
(Table 7); however, no relationship was measured between packout and labor costs with
efficiency in the Indian River region. The cost of labor for all packers averaged 25.9% of
total costs (Table 7). The average labor costs as a percentage of total costs for both the
Interior and Indian River packers were similar, 24.9% and 27.4%, respectively. The lowest
percentage labor cost was in the Interior (18.5%) and the highest in the Indian River (35.4%).


Table 7.--Average of mean labor cost and range of labor cost as a percentage of total
cost for packinghouses in cost study 1995-96 season'
Production region Average ,Low range High range
---------- % labor cost of total cost ----------

Interior packers 24.9% 18.5% 30.4%
Indian River packers 27.3% 22.6% 35.4%
All packers 25.9% 24.9% 35.4%
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6
packinghouses) and Interior (8 packinghouses) producing regions.


A lack of response to the survey limited the analysis of efficiency to a discussion of
costs related to packing fresh citrus. As new technologies are developed to improve
efficiencies in growing and packing fresh citrus, it becomes vitally important to expand the
base on which this study was completed. Future cost efficiency studies for Florida's fresh
citrus industry should encourage more firms to participate so that a production function can
be estimated for measuring efficiency. Using per unit costs as a proxy for measuring
efficiency serves a useful purpose, but developing a production function would be more
theoretically correct.







8

REFERENCES


1. Muraro, Ronald P., John J. VanSickle, Alex Heyman, W. F. Wardowski and William M.
Miller. "Measuring Efficiency in Florida Fresh Citrus Packinghouses." Proc. Fla. State
Hort. Soc. 109:1996.
2. Muraro, Ronald P., John J. VanSickle, Alex Heyman, W. F. Wardowski and William M.
Miller. "Factors Affecting Efficiency in Florida Fresh Citrus Packinghouses, 1994-95
Season." Staff Paper. Food and Resource Economics Department, IFAS, University of
Florida, January 1997.






9

ADDENDA


Three tables are listed in the ADDENDA of this report. Table 1-A shows charges for
several items involving the handling of fresh packed citrus. Table 2-A harvesting charges for
picking, roadsiding and hauling Florida citrus. The estimated costs per box for harvesting
(pick, roadside and haul) Florida citrus by hauling distance is shown in Table 3-A. The tables
in the ADDENDA were included to provide additional information for the reader/user of this
report.







10

ADDENDA TABLE l-A.--Summary of Florida fresh citrus packing charges by variety 1995-96
season

Grapefruit Oranges/Temples Tangerines Tangelos

Domestic Export
----------------- $ per 4/5 carton --------------

Total packing 2.998 3.068 3.303 4.080 3.502

Label/PLU charges 0.134 0.174 0.193 0.174

Export handling charges 0.733 -

Eliminations charges per
field boxb 0.578 0.472 0.562 0.576 0.569

Drenching charges per
field box 0.147 0.147 0.147 0.147 0.147

Fly free charges per 0.550 -
"Represents data from 14 fresh citrus packinghouses located in the Indian River (6 packinghouses)
and Interior (8 packinghouses) producing regions.


bAdd $0.35 per box charge for short haul distance to processing plant and up to $0.60 per box for
100+ miles hauling distance.






11

ADDENDA TABLE 2-A.--Estimated average picking, roadsiding and hauling rates for
Florida citrus 1995-96 season"

Variety Fresh Processing State average

Picking: ---------------- $ per Florida field box--------------
Early/Midseason oranges 0.792 0.741 0.771
Valencia oranges 0.803 0.758 0.728


Pink/Red grapefruit 0.606 0.574 0.592
White grapefruit 0.624 0.579 0.604


Temples 0.847 0.771 0.816
Tangelos 1.079 0.897 1.008
Tangerines 1.668 1.213 1.466


Roadsiding: ------------- $ per Florida field box--------------

Early/Midseason oranges 0.824 0.784 0.805
Valencia oranges 0.834 0.804 0.819


Pink/Red grapefruit 0.722 0.682 0.704
White grapefruit 0.770 0.739 0.756


Temples 0.825 0.773 0.802
Tangelos 0.904 0.839 0.875
Tangerines 1.108 0.954 1.039


Hauling (All citrus): ----------------- $ per Florida field box--------------

(Mileage Range)
0-30 miles 0.347 0.348 0.348
31-50 miles 0.403 0.406 0.405
51-80 miles 0.479 0.499 0.489
81-100 miles 0.521 0.546 0.533
100+ miles 0.570 0.599 0.585
"Harvesting rates from a mail-in survey conducted. Although, the total survey
respondents represented less than 10% of the total fruit harvested in the 1995-96 season,
review of the harvesting rates data by industry sources indicate that the averages reported
are representative for the 1995-96 harvest season.






'P../,SV)N SCIENCE LIBRARY
12

ADDENDA TABLE 3-A.--Estimated total harvesting (pick/roadside/haul). Costs
per box for Florida citrus 1995-96 season

Variety/Hauling range Fresh Processing State average
Earl/Midseason oranges --------$ per Florida field box ------------
0-30 miles 1.957 1.867 1.918
31-50 miles 2.012 1.924 1.973
51-80 miles 2.088 2.016 2.057
81-100 miles 2.128 2.062 2.100
100+ miles 2.179 2.116 2.153
...............tate. avera e.............. 2.053 1.975 ..... ........ 2 019 ............
alencia ranges -------- $ per Florida field box -----------
0-30 miles 1.978 1.903 1.942
31-50 miles 2.033 1.960 1.997
51-80 miles 2.108 2.052 2.082
81-100 miles 2.149 2.098 2.124
100+ miles 2.200 2.152 2.177
...... a.. ......tea.rage 2.074 ..2.011 2.044
Red grapefruit ----------- $ per Florida field box -----------
0-30 miles 1.670 1.598 1.638
31-50 miles 1.724 1.655 1.693
51-80 miles 1.800 1.748 1.777
81-100 miles 1.840 1.793 1.820
100+ miles 1.891 1.848 1.873
State average 1.763 1.703 1.736
................. .. ........... ............................. ...... .................................................................................
White grapefruit ---------- $ per Florida field box -----------
0-30 miles 1.734 1.661 1.701
31-50 miles 1.789 1.717 1.757
51-80 miles 1.865 1.810 1.841
81-100 miles 1.905 1.855 1.884
100+ miles 1.956 1.910 1.937
State average 1.825 1.762 1.797
................................. ..................... ...... ................ .................... .................................. .............
Tangelos ---------- $ per Florida field box -------------
0-30 miles 2.342 2.097 2.243
31-50 miles 2.402 2.158 2.303
51-80 miles 2.477 2.251 2.388
81-100 miles 2.522 2.300 2.434
100+ miles 2.569 2.351 2.483
State average 2.440 2.205 2.346
Tangerines ----------- $ per Florida field box----- ----
0-30 miles 3.134 2.527 2.864
31-50 miles 3.194 2.588 2.925
51-80 miles 3.270 2.681 3.009
81-100 miles 3.314 2.730 3.056
100+ miles 3.361 2.781 3.105
State average 3.232 2.636 2.968
"Harvesting rates from a mail-in survey conducted. Although, the total survey
respondents represented less than 10% of the total fruit harvested in the 1995-96 season,
review of the harvesting rates data by industry sources indicate that the averages reported
are representative for the 1995-96 harvest season.





University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs