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 Cover
 Table of Contents
 Nature of the sample
 The measurement of costs
 1955-56 costs of packing and...
 Variations in packing and selling...
 Trend in packing and selling...














Group Title: Costs of packing and selling Florida fresh citrus fruits ... season
Title: Costs of packing and selling Florida fresh citrus fruits
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Permanent Link: http://ufdc.ufl.edu/UF00027603/00008
 Material Information
Title: Costs of packing and selling Florida fresh citrus fruits
Series Title: <1971-72 season>-1972-73 season: Economics report
Alternate Title: Cost of packing and selling Florida fresh citrus fruits
Physical Description: v. : ; 27 cm.
Language: English
Creator: University of Florida -- Agricultural Economics Dept
University of Florida -- Food and Resource Economics Dept
Publisher: Dept. of Agricultural Economics, Florida Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida,
Dept. of Agricultural Economics, Florida Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: 1955-1956
Copyright Date: 1969
Frequency: annual
regular
 Subjects
Subject: Citrus fruit industry -- Costs -- Periodicals -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
statistics   ( marcgt )
 Notes
Dates or Sequential Designation: Ceased with 1972-73 season.
Issuing Body: Issued by: Dept. of Agricultural Economics, University of Florida, <1969-70 season->; Food and Resource Economics Dept., University of Florida, <1971-72 season>-1972-73 season.
General Note: Title varies slightly.
General Note: Description based on: 1969-70 season; title from cover.
 Record Information
Bibliographic ID: UF00027603
Volume ID: VID00008
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 23368100
electronic_aleph - 003247079
electronic_oclc - 60395278
lccn - 91649936
 Related Items
Succeeded by: Estimated costs of packing and selling fresh Florida citrus

Table of Contents
    Cover
        Cover
    Table of Contents
        Table of Contents
    Nature of the sample
        Page 1
    The measurement of costs
        Page 2
        Page 3
        Page 4
    1955-56 costs of packing and selling
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
    Variations in packing and selling cost among firms
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
    Trend in packing and selling cost
        Page 24
        Page 25
Full Text
v-l j OKT


FEBRUARY, 1957


AGRICULTURAL ECONOMICS MIMEO REPORT NO.


COSTS OF PACING AND SELLING

FLORIDA FRESH CITRUS FRUITS,

1955-56 SEASON


by
A. H. Spurlock and H. G. Hamilton


A Study Conducted with Funds Provided by the
Research and Marketing Act





DEPARTMENT OF AGRICULTURAL ECONOMICS
FLORIDA AGRICULTURAL EXPERIMENT STATIONS
GAINESVILLE, FLORIDA













CONTENTS
Page

Nature of the Sample . . . . . ........ 1

The Measurement of Costs ........... ..... 2

Costs of Packing and Selling, 1955-56 . . . . . 5

Oranges ................. .... 5

Grapefruit . . . . . . . . 11

Tangerines. ..... ........... ... 11

Bulk Fruit and Packed Fruit Purchased . 12

Variations in Packing and Selling Cost Among Firms . . .. 12

Oranges .... .. .... . 12

Grapefruit .... .............. . 13

Tangerines . . .. . . . .. . .. 16

Relationship of Seasonal Volume to Average Cost of

Packing and Selling . . . . . . . . . 18

Trend in Packing and Selling Cost . . . . . . . 24








COSTS OF PACKING AND SELLING /
FLORIDA FRESH CITRUS FRUITS, 1955-56


Nature of the Sample

This report is based on the accounting records of 42 citrus packinghouses. The

total packed volume handled by these houses amounted to an equivalent of 15,605,536

1-3/5 bushel boxes, or approximately 37 percent ?/of the total pack of Florida fresh

citrus in 1955-56. Four new packinghouses were added to the sample to replace houses

that ceased to operate, or whose records were not ready in time.

The original sample of 43 packinghouses drawn in 1952 was on the basis of

three considerations: First, the sample was restricted to firms which packed primarily

for commercial interstate trade. Second, an attempt was made to select a proportional

sample based upon the total number of houses operating within each geographic area.

Third, only houses that possessed rather detailed cost records were included. An

attempt has been made to include the same firms each year to prevent year to year

cost fluctuations due to sample changes.

The packed volume of the 42 sample houses ranged from 32,000 to 1,218,000

boxes of 1-3/5 bushel equivalent, and averaged 372,000 boxes. This was consider-

ably larger than the packed volume of all citrus houses in the state which averaged

only about 217, 000 packed boxes, even after excluding the very small houses of

less than 10,000 boxes.


1/This is a report of one phase of Southern Regional Project SM-4, Marketing
Citrus Fruits".

SCalculated from data in 1955-56 Season Annual Report, Citrus and Vegetable
Inspection Division, Winter Haven, Florida









During the period since the processing industry has become of vital importance

in citrus marketing, an increasing proportion of the fruit controlled or owned by pack-

inghouses has been going to processing plants. This may affect fresh fruit packing

costs adversely if the packed volume falls much below the normal capacity of the

packinghouse. In many cases however, the total volume controlled by the packing-

house has grown over the years so that the packed volume still may be near the

optimum.

In 1955-56 the proportion of the total volume represented by packed fruit

was as follows:
Percentage
Packed fruit - - - - - - - - - -51.2
Cannery fruit through house - - - - - - 26.5
Total through house - - - - - -- - 77.7
Direct from grove to cannery and tree sales - - - 22.3
Total - - - - 100.0



The Measurement of Costs

The primary cost data made available by the fresh citrus fruit packinghouses

showed the details of the annual expenditure of each packinghouse in the sample.

The total operating cost was broken down into about 34 accounts and combined into

seven major categories to obtain total packing and total packing and selling costs.

Distribution of the various items of cost to each kind of fruit and each container

was made by the firm's auditors in most cases. These costs were used without sub-

stantial changes in preparing the averages by containers. For the few firms included

who had only total costs, allocations were made to the various containers with ratios

developed for this purpose by studying packing operations in a number of packing -









houses. /

There was some variation among accountants in method or formula for distribut-

ing costs. Materials cost, general and administrative and selling expenses were rather

uniformly distributed, but labor and other direct operating costs were allocated by

various methods. About three-fourths of the houses were audited by three accounting

firms.

In most of the packinghouses the cost of labor, power and equipment for hand-

ling the bulk fruit graded out for canneries was charged to this class of fruit. However,

in three of the houses, the eliminated fruit was charged only with a portion of the

administrative expense, the same as fruit going direct from grove to cannery. This

method is based on the assumption that the packinghouse expense incident to handling

the bulk fruit is incurred in order to get packed fruit.

To give a clearer picture of the nature of the costs of packing and selling fresh

Florida citrus fruit, a brief description of each element of operating cost is presented.

1. Material expense: Material expense includes crates, boxes, bags, fruit wraps,

nails, strips, straps, wire, labels, paste, bag inserts, liners and end guards. Costs

of these materials were allocated to the appropriate type of pack.

2. Labor expense: Labor expense was divided into six categories corresponding to

the general departmentalization of a packinghouse. The classifications are: (a) re-

ceiving, trucking and dumping; (b) crate-making and labeling; (c) foremen, graders,

box closer, others; (d) wrapping and packing; (e) trucking, checking and loading;

and (f) payroll taxes and workmen's compensation insurance.


SUnpublished data of the Florida Agricultural Experiment Station.









3. Other direct operating expense: This expense includes power, light, water and

fuel; repairs to buildings and equipment; and miscellaneous supplies.

4. Indirect operating expense: Included under the heading are fire and casualty

insurance; taxes and licenses; depreciation; and rent.

5. Administrative expense: Administrative expense includes management and office

salaries; office supplies and expense; auto and travel; interest on operating capital;

telephone and telegraph, and miscellaneous expense.

6. Selling expense: Selling expense includes the salaries and operating expense of

the sales section, but does not include commissions or brokerage fees. It does

include assessments made to members for overhead expenses by central sales organi-

zations, such as the Florida Citrus Exchange and others.

7. Other items: In this category are included degreening; color-add and wax

material and service charges; precooling; Florida citrus advertising tax; Federal and

State inspection on grade, maturity and color-add; Florida Citrus Mutual and

Tangerine Co-operative charges; and Growers Administrative Committee assessments.

Material, labor and other direct operating and indirect operating expenses

are combined to give total packing expense. To these are added administrative,

selling and other expenses to arrive at the total packing and selling cost.

The average costs shown are weighted averages of the houses included in

each category,i.e., the total money cost of each item is divided by the total

number of boxes.








1955-56 Costs of Packing and Selling

The costs of packing and selling oranges, grapefruit and tangerines for the

1955-56 season are given in Tables 1, 2 and 3. These tables show the average costs

for the major expense items by type of pack.

This year for the first time the costs of handling bulk fruit through the house,

cannery fruit direct-from-grove and packed-fruit-purchased are shown in Table 3.

These operations are not separated by kind of fruit, but represent a mixture of all

kinds.

Oranges.-- The average cost per box for packing and selling oranges in the

1-3/5 bushel wirebound box was $0.96 (Table 1). The two major expense items,

materials and labor, accounted for 64%of the total cost. Material expense, which

included the wirebound crate, liner and label, averaged $0.37 per box. The average

labor expense was $0.24.

The average cost of wrapping, packing and selling oranges in the 1-3/5

bushel standard nailed box was $1.45. Materials, which included the box, fruit

wraps, liners, end guards and labels, accounted for $0.69 of this total cost, and

labor for $0.35 per box.

The cost per 1-3/5 bushel box equivalent for oranges packed in 4/5 bushel

wirebound boxes was $1.32, and 4/5 bus.:e l ;iberboard boxes was $1.09. Oranges

packed in 8 pound mesh bags averaged $1.23 to peck and sell, and 5 pound mesh

bags cost $1.50. Both materials and labor costs were larger for the smaller bag.

The 4/5 bushel wirebound flat box, which was used more extensively in

1955-56,cost $1.38 per 1-3/5 bushel to pack and sell.









Table I.--Average Costs of Packing and Selling Florida Oranges per 1-3/5 Bushel
Equivalent by Type of Container, 42 Packinghouses, 1955-56

1-3/5 bu. 1-3/5 bu. 4/5 bu. 4/5 bu. 8-lb. 5-lb.
Type of Container Wirebound Std. Box Wirebound Fiberboard Mesh Mesh
Box Wrapped Box Box-/ Bag Bag
Number of Packinghouses 40 20 25 37 28 29
Average volume packed
(1-3/5 bu.equivalent) 97,645 21,010 19,964 28,632 21,517 17,810
Costs per 1-3/5 bushel:
Containers $0.3575 $0.5885 $0.5475 $0.3953 $0.5621 $0.7593
Other materials .0158 .0965 .0320 .0097 .0117 .0124
Total materials $0.3733 $0.6850 $0.5795 $0.4050 $0.5738 $0.7717
Labor:
Receive, truck, dump $0.0274 $0.0403 $0.0330 $0.0290 $0.0330 $0.0353
Cratemaking, labeling .0328 .0374 .0567 .0529 .0050 .0070
Foremen, graders, others .0550 .0830 .0812 .0701 .0850 .0917
Wrap and pack .0658 .1142 .0877 .0850 .1005 .1248
Truck, check, load .0446 .0484 .0794 .0625 .0707 .0829
Payroll taxes, comp. ins. .0159 .0227 .0235 .0200 .0186 .0242
Total labor $0.2415 $0.3460 $0.3615 $0.3195 $0.3128 $0.3659
Other direct operating/ $0.0589 $0.0828 $0.0741 $0.0661 $0.0788 $0.0800
Indirect operating 3/ .0366 .0737 .0434 .0475 .0428 .0485
Total packing $0.7103 $1.1875 $1.0585 $0.8381 $1.0082 $1.2661
Administrative 4/ $0.0489 $0.0571 $0.0474 $0.0498 $0.0453 $0.0491
Selling / .0688 .0660 .0684 .0680 .0577 .0593
Other items / .1323 .1366 .1418 .1380 .1210 .1222
Total packing and selling $0.9603 $1.4472 $1.3161 $1.0939 $1.2322 $1.4967

/ Includes both telescope and one-piece cartons.
2/Other direct operating expense includes power, lights, water, repair of buildings and
equipment, and miscellaneous supplies.
-/indirect operating expense includes fire and casualty insurance, taxes and licenses,
depreciation, and rent.
/ Administrative expense includes management and office salaries, office expense, auto
and travel, interest, telephone and telegraph.
Selling includes sales salaries, travel, telephone and telegraph, but excludes brokerage,
commission and auction charges.
Other items include Florida citrus advertising tax, Federal-State inspection and testing,
Growers Administrative Committee and Florida Citrus Mutual assessments, degreening,
pre-cooling, color-add and wax.









Table 1.--(continued) Average Costs of Packing and Selling Florida Oranges per 1-3/5
Bushel Equivalent by Type of Container, 42 Packinghouses, 1955-56


Number of Packinghouses 20 4 5 5 14 10
Average volume packed
(1-3/5 bu.equivalent) 17,826 9,055 21,143 7,757 12,376 13,994
Costs per 1-3/5 bushel:
Containers $0.5774 $0.6378 $0.5158 $0.5932 $1.1325 .....
Other materials .0352 .1441 .0632 .0306 .0037 $0.0079
Total materials $0.6126 $0.7819 $0.5790 $0.6238 $1,1362 $0.0079
Labor:
Receive, truck, dump $0.0328 $0.0243 $0.0326 $0.0301 $0.0372 $0.0212
Cratemaking, labeling .0589 .0312 .0604 .0554 .0363 .0005
Foremen, graders, others .0853 .0575 .0881 .0840 .1051 .0522
Wrap and pack .0959 .0593 .0895 ,0914 .1063 .0035
Truck, check, load .0820 .0502 .0720 .0647 .0771 .0377
Payroll taxes, comp.ins. .0232 .0134 .0201 .0198 .0181 .0065
Total labor $0,3781 $0.2359 $0.3627 $0.3454 $0.3801 $0.1216
Other direct operate g3/ $0.0694 $0.0439 $0.0686 $0.0689 $0.0735 $0.0532
Indirect operating/ .0521 .0249 .0365 .0362 .0463 .0145
Total Packing $1.1122 $1.0866 $1.0468 $1.0743 $1.6361 $0.1972
Administrative/ $0.0490 $0.0585 $0.0492 $0.0465 $0.0540 $0.0411
Selling .1018 .0687 .0781 .0790 .0612 .0496
Other items?/ .1171 .0992 .1344 .1415 .1177 .1121
Totalpackingandselling$1.3801 $1.3130 $1.3085 $1.3413 $1.8690 $0.4000

1/Telescope-type fiberboard box.
/Fruit passing over the grading table and sold in bulk in interstate trade,
SOther direct operating expense includes power, lights, water,repair of buildings and
equipment, and miscellaneous supplies.
4/ Indirect operating expense includes fire and casualty insurance, taxes and licenses,
Depreciation, and rent.
Administrative expense includes management and office salaries, office expense, auto
Sand travel, interest, telephone and telegraph.
SSelling includes sales salaries, travel, telephone and telegraph, but excludes brokerage,
commission and auction charges.
SOther items include Florida citrus advertising tax, Federal-State inspection and testing,
Growers Administrative Committee and Florida Citrus Mustual assessments, degreening,
pre-cooling, color-add and wax.







Table 2.--Average Costs of Packing and Selling Florida Grapefruit per 1-3/5 Bushel
Equivalent by Type of Container, 42 Packinghouses, 1955-56

1-3/5 bu. 1-3/5 4/5 bu. 8 Ib 5 Ib Bulk-
Type of Container Wirebound Std. Box Fiberloard Mesh Mesh in-
Box Wrapped Box Bag Bag Truck-
Number of Packinghouses 39 20 38 28 28 9
Average volume packed
(1-3/5 bu.equivalent) 92,773 57,785 25,783 13,809 9,716 7,146
Costs per 1-3/5 Bushel:
Containers $0.3575 $0.5939 $0.4141 $0.5621 $0.7564 .....
Other materials .0158 ,0681 .0106 .0123 .0137 $0.0050
Total materials $0.3733 $0.6620 $0.4247 $0.5744 $0.7701 $0.0050
Labor:
Receive, truck, dump $0.0226 $0.0310 $0.0252 $0,0315 $0.0340 $0.0183
Cratemaking, labeling .0299 .0356 .0525 .0058 .0084 .0003
Foremen,graders, others .0384 .0575 .0446 .0684 .0757 .0406
Wrap and pack .0523 .0830 .0674 .0918 .1052 .0080
Truck, check, load .0376 .0322 .0526 .0650 .0787 .0335
Payroll taxes, comp.ins. .0119 .0174 .0152 .0145 .0217 .0071
Total labor $0.1927 $0.2567 $0.2575 $0.2770 $0.3237 $0.1078
Other direct operating/ $0.0458 $0.0526 $0.0503 $0.0704 $0.0775 $0.0400
Indirect operating-/ .0290 .0445 .0308 .0343 .0391 .0104
Total packing $0.6408 $1.0158 $0.7633 $0.9561 $1.2104 $0.1632
Administrative5/ $0.0434 $0.0541 $0.0462 $0.0429 $0.0433 $0.0400
Selling6/ .0580 .0567 .0543 .0544 .0539 .0461
Other items?/ .1260 .1772 .1362 .1190 .1188 .1257
Total packing and settling $0.8682 $1.3038 $1.0000 $1.1724 $1,4264 $0.3750

-/Telescope-type fiberboard box.
/.Fruit passing over the grading table and sold in bulk in interstate trade.
-/Other direct operating expense includes power, lights, water, repairs of buildings and
equipment, and miscellaneous supplies.
Indirect operating expense includes fire and casualty insurance, taxes and licenses,
depreciation, and rent.
/Administrative expense includes management and office salaries, office expense, auto
and travel, interest, telephone and telegraph.
V/Selling includes sales salaries, travel, telephone and telegraph, but excludes brokerage,
7 commission and auction charges.
Other items include Florida citrus advertising tax, Federal-State inspection and testing,
Growers Administrative Committee and Florida Citrus Mutual assessments, degreening,
pre-cooling, color-add and wax,









Table 3.--Average Costs of Packing and Selling Florida Tangerines, Bulk Fruit and Packed
Fruit Purchased, per 1-3/5 Bushel Equivalent, 42 Packinghouses, 1955-56

Tangerines
4/5 bu. 4/5 bu. Bulk Fruit Direct from Packed
Type of Container Wirebound Wirebound Thru House Grove to Fruit
Box Flat to Cannery Cannery Purchased
SBox All Types All Types All Types
Number of Packinghouses 16 18 42 36 6
Average volume packed
(1-3/5 bu.equivalent) 26,303 19,458 192,226 188,421 23,662
Cost per 1-3/5 Bushel:
Containers $0.5475 $0.5774 .............
Other materials .0393 .0367 ..... ..... $0.0005
Total materials $0.5868 $0.6141 ..... ..... $0.0005
Labor:
Receive, truck, dump $0.0425 $0.0362 $0.0309 ..... $0.0109
Cratemaking, labeling .0652 .0592 ..... ..... .....
Foremen, graders, others .1042 .0899 .0181 $0.0024 .....
Wrap and pack .1213 .1138 .0015 ..... .....
Truck,check,load .0850 .0883 .0015 ..... .0137
Payroll taxes, comp. ins. .0292 .0289 .0049 .0002 .0021
Total labor $0.4474 $0.4163 $0.0569 $0.0026 $0.0267
Other direct oper tingl/ $0.0955 $0.0936 $0.0289 $0.0048 $0.0056
Indirect operating-/ .0678 .0583 .0162 .0030 .0020
Total Packing $1.1975 $1.1823 $0.1020 $0.0104 $0.0348
Administrative3/ $0.0477 $0.0513 $0.0424 $0.0454 $0.0220
Selling4' .0648 .1059 .0001 .0001 .0203
Other items5/ .1480 .1330 .0073 .0062 .0008
Total packingandselling $1.4580 $1.4725 $0.1518 $0.0621 $0.0779

'/Other direct operating expense includes power, lights, water, repair of buildings and
,/equipment, and miscellaneous supplies.
Indirect operating expense includes fire and casualty insurance, taxes and licenses,
depreciation and rent.
-Administrative expense includes management and office salaries, office expense, auto
4and travel, interest, telephone and telegraph.
-Selling expense includes sales salaries, travel,telephone and telegraph;but excludes
brokerage commission and auction charges.
Other items include Florida citrus advertising tax,Federal-State inspection and testing,
Growers Administrative Committee and Florida Citrus Mutual assessments, de-greening,
pre-cooling, color-add and wax.









The average cost of packing and selling oranges for export in 1-3/5 bushel

wirebound boxes was $1.31. This was $0.35 higher than oranges sold in interstate

trade. The spread in the cost of the two types of packs was due primarily to the

difference in material costs.

The average cost per 1-3/5 bushel equivalent of packing oranges in 4/5

bushel fiberboard boxes for the export trade was approximately $0.25 per box higher

than oranges packed in 4/5 bushel fiberboard boxes sold in the domestic market. This

difference was to a large extent due to the difference in container costs which were

higher for export than for domestic shipments. In general, the export shipments were

made in the telescope type fiberboard box while the interstate trade shipments were

made in either telescope or non-telescope type fiberboard box. Therefore, the

average container cost for 4/5 bushel fiberboard boxes sold in domestic trade was less

than the price of telescope type boxes, but higher than the price of non-telescope

type boxes.

The most expensive pack for oranges in common use in 1955-56 was the 5-lb.

mesh bag in master containers. Since it required two containers it had the highest

material cost, and also the highest labor cost. The average cost of packing and

selling this pack was $1.87 per 1-3/5 bushel equivalent.

The average cost of packing and selling oranges "loaded bulk in truck" was

$0.40 per 1-3/5 bushel equivalent. This classification represents oranges sold in

bulk in interstate trade. In general, oranges sold "loaded bulk in truck" passed

through all the packing operations that fruit packed in containers did, with the

exception that after the fruit had been graded and sized it was loaded by conveyor









belt directly into the truck. Some allocations of costs for cratemaking, labeling,

trucking, checking and loading have been made by packinghouses to this fruit. This

may be logical as long as the houses are not set up to handle bulk without slowing

down the volume of other packs. When bulk in trucks is being handled the workers

in the box-supply and truck, check, and load sections are not fully employed. This

delay may properly be charged to bulk.

Since packers are also assured of $1.00 per hour, when bulk in truck is

handled packers may not earn this minimum on a piece-rate basis. Therefore, some

houses have made a special charge for this service.

Grapefruit.-- The average costs of packing and selling grapefruit are shown

in Table 2. The average total cost per 1-3/5 bushel equivalent for packing and

selling grapefruit was $0.87 for the 1-3/5 bushel wirebound box, of which 65%was

materials and labor. Packing and selling costs were $1.30 for the 1-3/5 bushel

standard nailed; $1.00 for the 4/5 bushel fiberboard box sold in interstate trade;

$1.17 for the 8-lb. mesh bag; $1.43 for the 5-lb. mesh bag; and $0.38 for grape-

fruit sold "bulk in truck".

Tangerines.-- The season average costs of packing and selling tangerines are

shown in Table 3. The 4/5 bushel wirebound box and the 4/5 bushel wirebound flat

were the only two containers in common use in 1955-56. The 1-3/5 bushel equiva-

lent cost for packing and selling tangerines in the 4/5 bushel wirebound box was

$1.46 and in the 4/5 bushel wirebound flat box, $1.47.

As with oranges and grapefruit, material was the greatest single expense item.

The cost of the material, which includes the crate, liner and label was 40%of the









total cost for the 4/5 bushel wirebound box, 42 %for the 4/5 bushel wirebound flat

box.

Bulk Fruit and Packed Fruit Purchased.-- The cost of handling bulk fruit

through the house (eliminations to cannery) for 1955-56 averaged $0.15 per box

as shown in Table 3. This fruit was charged with the packinghouse labor used in

handling it, and a portion of the other direct and indirect operating costs, adminis-

trative costs and miscellaneous other items.

Fruit direct from the grove to the cannery averaged only $0.06 per box of the

packinghouse expenses. There was no packinghouse labor involved, except that one

firm had supervisory personnel for this operation on the packinghouse payroll.

The cost of handling packed fruit purchased averaged about $0.08 per box.

Some handling labor was required, and a portion of some of the other operating costs

was charged.


Variations in Packing and Selling Cost Among Firms

Oranges.-- There was considerable variation among firms in the total cost

per 1-3/5 bushel equivalent of packing and selling oranges in the various containers.

The packing and selling costs of oranges for the sample are arrayed in five cent

intervals for six types of containers in Table 4. For the 40 firms packing oranges in

1-3/5 bushel wirebound boxes, the total packing and selling costs ranged from $0.80

to $1.31, with 32 firms falling within the range of $0.85 to $1.09. For 1-3/5 bushel

standard nailed boxes the range was from $1.11 to $1.85 with 13 of the 20 firms

within the range of $1.15 to $1.49. Thirty-seven firms packing 4/5 bushel fiberboard

boxes had costs between $0.89 to $1.52 with 30 in the range of $0.90 to $1.24.










Costs $or -+-t4/5 bushel wirebound box varied from $1.14 to $1.60 per 1-3/5 bushel

equivalent, with costs for 17 of the 25 firms within the range of $1.15 to $1.39.

Packing and selling costs of oranges in 8-lb. mesh bags fell between $1.04

and $1.68 for 28 packinghouses, of which 23 had costs between $1.15 and $1.39.

For 5-lb. mesh bags the average total packing and selling costs ranged from $1.37

to $2.08 for 29 firms of which 20 ranged from $1.40 to $1.69.

The variations in packing costs among the firms were similar to the variations

in packing and selling costs. The range for the 40 firms handling 1-3/5 bushel wire-

bound boxes of oranges was from $0.59 to $0.99. The packing cost for 33 of these

firms ranged from $0.65 to $0.84. Twenty firms packing in 1-3/5 bushel standard

nailed boxes had costs from $0.85 to $1.61, with 18 of these firms having packing

costs over $0.95. The variation in the cost of packing oranges in 4/5 bushel fiber-

board boxes for 37 firms ranged from $0.71 to $1.18, and for 31 firms from $0.70

to $0.99. Twenty-five houses packing 4/5 bushel wirebound boxes had costs varying

from $0.86 to $1.39 with 19 firms between $0.95 and $1.19.

The spread in packing cost for 8-lb. mesh bags for 28 firms was between

$0.84 and $1.46 with 22 firms included within the cost interval of $0.90 to $1.14.

For the 29 firms packing oranges in 5-lb. mesh bags the packing cost ranged from

$1.08 to $1.86 and 24 of these firms had costs of $1.20 or more per box.

Grapefruit.-- The range in grapefruit packing and selling costs among the

different firms was not as great as in oranges, except for 5-lb bags. The 39 firms

using 1-3/5 bushel wirebound. boxes varied between $0.78 and $1.18 for packing

and selling each box, as shown by data in Table 5. Of these firms, 30 had costs








Table 4.--Variation in the Cost per 1-3/5 Bushel Box Equivalent of Packing and Selling
Florida Oranges by Type of Container, 42 Packinghouses, 1955-56

1-3/5 bu. 1-3/5 bu. 4/5 bu. 4/5 bu. 8-lb. 5-lb.
Cost per Wirebound Std. Box Fiberboard Wirebound Mesh Mesh
1-3/5 Bushel Box Wrapped Box Box Bag Bag
-- -- -- -- Number of packinghouses - - - - -
Packing and Selling
Under- $0.85 2 0 0 0 0 0
$0.85- 0.89 4 0 1 0 0 0
0.90- 0.94 9 0 3 0 0 0
0.95- 0.99 5 0 3 0 0 0
1.00- 1.04 9 0 6 0 1 0
1.05- 1.09 5 0 1 0 0 0
1.10- 1.14 0 1 8 1 1 0
1.15- 1.19 3 2 6 4 6 0
1.20- 1.24 1 3 3 1 4 0
1.25- 1.29 1 4 1 4 5 0
1.30- 1.34 1 1 1 6 5 0
1.35- 1.39 0 1 1 2 3 2
1.40- 1.44 0 0 1 1 1 5
1.45- 1.49 0 2 1 4 0 5
1.50- 1.54 0 2 1 1 0 5
1.55- 1.59 0 1 0 0 1 2
1.60- 1.64 0 0 0 1 0 1
1.65- 1.69 0 0 0 0 1 2
1.70- 1.74 0 0 0 0 0 5
1.75 and over 0 3 0 0 0 2
Total number of firms: 40 20 37 25 28 29
Packing
Under- $0.65 2 0 0 0 0 0
$0.65- 0.69 9 0 0 0 0 0
0.70- 0.74 13 0 6 0 0 0
0.75 0.79 9 0 7 0 0 0
0.80- 0.84 2 1 6 0 1 0
0.85- 0.89 0 0 4 1 1 0
0.90- 0.94 1 1 5 1 3 0
0.95- 0.99 4 4 3 6 9 0
1.00- 1.04 0 2 3 3 4 0
1.05- 1.09 0 3 0 2 3 1
1.10- 1.14 0 2 0 6 3 0
1.15- 1.19 0 0 3 2 2 4
1.20- 1.24 0 3 0 1 0 10
1.25- 1.29 0 1 0 2 0 1
1 .30- 1.34 0 0 00 0 4
1.35- 1.39 0 0 0 1 1 2
1.40 and over 0 3 0 0 1 7
Total number of firms 40 20 37 25 28 29








Table 5.--Variation in the Cost per 1-3/5 Bushel Box Equivalent of Packing and Selling
Florida Grapefruit by Type of Container, 42 Packinghouses, 1955-56
1i-3/5 bu. 1-3/5bu. 4/5 bu. 8 Ib. 5 lb.
Cost per Wirebound Std. Box Fiberboard Mesh Mesh
1-3/5 Bushel Box Wrapped Box Bag Bag
- - - - Number of packinghouses -- - - -
Packing and Selling
$0.75- $0.79 3 0 1 0 0
0.80- 0.84 6 0 1 0 0
0.85- 0.89 13 0 7 0 0
0.90- 0.94 4 0 5 0 0
0.95- 0.99 7 1 5 0 0
1.00- 1.04 2 1 5 3 0
1.05- 1.09 3 3 4 5 0
1.10- 1.14 0 3 3 4 0
1.15- 1.19 1 1 0 6 0
1.20- 1.24 0 3 3 3 1
1.25- 1.29 0 1 2 2 3
1.30- 1.34 0 1 1 2 4
1.35- 1.39 0 1 1 1 7
1.40- 1.44 0 3 0 0 5
1.45 .49 0 1 0 0 2
1.50- 1.54 0 0 0 1 0
1.55- 1.59 0 1 0 0 0
1.60- 1.64 0 0 0 1 3
1.65 and over 0 0 0 0 3
Total number of firms 39 20 38 28 28
S Packing
$0.55 $0.59 7 0 0 0 0
0.60- 0.64 14 0 5 0 0
0.65- 0.69 12 0 7 0 0
0.70- 0.74 2 0 8 0 0
0.75- 0.79 1 1 4 1 0
0.80- 0.84 3 2 3 4 0
0.85- 0.89 0 3 4 5 0
0.90- 0.94 0 3 1 10 0
0.95- 0.99 0 3 4 1 1
1.00- 1.04 0 2 2 1 1
1.05- 1.09 0 2 0 2 5
1.10- 1.14 0 1 0 2 7
1.15- 1.19 0 1 0 0 5
1.20- 1.24 0 0 0 0 3
1.25- 1.29 0 1 0 0 0
1.30- 1.34 0 1 0 0 1
1.35- 1.39 0 0 0 2 1
1.40- 1.44 0 0 0 0 1
1.45 and over 0 0 0 0 3
Total number of firms 39 20 38 28 28









between $0.80 and $0.99. For the 1-3/5 bushel standard nailed boxes 20 packing-

houses had packing and selling costs from $0.98 to $1.57, and 10 had costs between

$1.05 and $1.24. The 38 firms using 4/5 bushel fiberboard boxes had total packing

and selling costs ranging between $0.80 and $1.36. Of these, 22 had costs from

$0.85 to $1.04.

The packing and selling costs for grapefruit in 8-lb. mesh bags were from

$1.00 to $1.61 for 28 firms, with 18 firms between $1.05 and $1.24. For 5-lb.mesh

bags, 28 firms ranged from $1.21 to $2.02, with 19 firms falling between $1.25 and

$1.44 per 1-3/5 bushel equivalent.

Packing costs for grapefruit in 1-3/5 bushel wirebound boxes for 39 firms

varied from $0.55 to $0.83. Thirty-three of these firms ranged between $0.55 and

$0.69. Twenty packinghouses had packing costs ranging from $0.76 to $1.30 for

1-3/5 bushel standard nailed boxes, with 13 of these firms ranging from $0.85 to

$1.09. The 38 firms packing 4/5 bushel fiberboard boxes were within the cost range

of $0.62 and $1.03, with 26 of the firms falling between $0.65 to $0.89.

The cost of packing in 8-lb. mesh bags for 28 firms ranged from $0.81 to

$1.37, with 19 houses between $0.80 and $0.94. Variation in cost for the 28 firms

packing grapefruit in 5-lb. mesh bags ranged from $0.99 to $1.78. Costs for 20

houses fell within the range $1.05 to $1.24.

Tangerines.-- Packing and selling costs for 4/5 wirebound boxes ranged from

$1.33 to $1.81 per 1-3/5 bushel equivalent for 16 firms, and for 4/5 bushel wirebound

flat boxes from $1.24 to $1.77 for 18 firms, Table 6,

The costs of packing tangerines per 1-3/5 bushel equivalent varied from $1, 01
to $1.46 for 4/5 bushel wirebound boxes and from $1.02 to$1.54 for4/5 bushel wirebound
flat boxes.








Table 6.-- Variation in the Cost per 1-3/5 Bushel Box Equivalent of Packing and
Selling Florida Tangerines by Type of Container, 42 Packinghouses,
1955-56

Cost per 4/5 Bushel 4/5 Bushel
1-3/5 Bushel Wirebound Box Wirebound Flat Box
- - Number of packinghouses - - -- -
Packing and Selling
Under $1.30 0 3
$1.30- 1.34 2 1
1.35- 1.39 2 2
1.40- 1.44 2 3
1.45- 1.49 3 2
1.50- 1.54 4 2
1.55- 1.59 0 1
1.60- 1.64 1 1
1.65- 1.69 1 0
1.70 and over 1 3
Total number of firms 16 18
Packing
Under $100 0 1
$1.00- 1.04 1 2
1.05- 1.09 0 2
1.10- 1.14 3 2
1.15- 1.19 3 4
1.20- 1.24 3 2
1.25- 1.29 3 1
1.30- 1.34 1 0
1.35- 1.39 1 0
1.40- 1.44 0 2
1.45 and over 1 2
Total number of firms 16 18










Relationship of Seasonal Volume to Average Cost of Packing and Selling

The data indicate that there is a relationship between the average total pack-

ing and selling cost and the seasonal volume handled by the individual house. In

order to investigate some of the firm variation in cost, the relationship between the

size of the packinghouse, based on the total volume of citrus per season (packed and

bulk through house), and the overage total cost of packing and selling were considered.

The packinghouses were divided into four seasonal volume classes of (1) under

200,000 boxes, (2) 200,000 to 399,999 boxes, (3) 400,000 to 699,999 boxes, and

(4) over 700,000 boxes. The average total cost of packing and selling oranges and

grapefruit packed in the 1-3/5 bushel wirebound box was calculated for each volume

group and is shown in Table 7 and 8. The average total packing and selling cost also

was calculated for each volume group of tangerines packed in the 4/5 bushel wire-

bound flat box, Table 9. The data in all three of the tables showing average total

packing and selling cost by volume classes, indicate that houses with the larger

seasonal volumes tended to have lower unit costs.

The relationship between total volume and cost is imperfect because there are

other important factors affecting costs. Some of these are length of season or number

of days operated, per cent of house capacity used, and arrangement of house and

machinery which affect labor costs in particular. The number of different lots,

frequency of change of lots, and number of different containers packed probably

affect costs also to some extent. There was not sufficient information on all these

factors to account for the effect of each on costs.

Upon a more detailed study of the data, it was found that there were houses







that had high as well as low costs- n all volume groups. This variation within groups

is shown in Table 10 and indicates that the larger volume groups contained more

houses with low costs than the smaller seasonal volume groups.

The reason for the variation in costs between types of packs can be accounted

for to a certain extent by differences in labor requirements and container prices.

However, this does not account for the variation in cost among firms for providing

the same service. The firm to firm variation in costs may be associated with economies

of scale, or economies associated with work methods, or a combination of both.











Table 7.--Costs of Packing and Selling Florida Oranges in 1-3/5 Bushel Wirebound Boxes,
by Volume Groups, 40 Packinghouses, 1955-56


Citrus Fruit Handled (boxes)


Number of packinghouses


Under
200,000
6


200,000-
399,999
11


400,000-
699,999
10


700,000
andover
13


Season Avg.
All Volumes
40


Average pack of oranges
(1-3/5 bu. equivalent) 28,572 64,849 83,718 167,988 97,645
Cost per 1-3/5 bushel:
Material $0.3950 $0.3846 $0.3548 $0.3709 $0.3733
Labor:
Receive, truck, dump .0343 .0312 .0277 .0253 .0274
Crate making and labeling .0380 .0370 .0312 .0317 .0328
Foremen, graders and box closer .0588 .0552 .0575 .0537 .0550
Wrap and pack .0645 .0618 .0661 .0671 .0658
Truck, check, load .0383 .0416 .0438 .0465 .0446
Payroll taxes and insurance .0172 .0174 .0164 .0152 .0159
Total labor $0.2511 $0.2442 $0.2427 $0.2395 $0.2415
Other direct operating/ $0.0564 $0.0642 $0.0656 $0.0547 $0.0589
Indirect operating/ .0575 .0402 .0299 .0363 .0366
Total packing $0.7600 $0.7332 $0.6930 $0.7014 $0.7103
Administrative $0.0521 $0.0634 $0.0439 $0.0457 $0.0489
Selling .0906 .0903 .0715 .0591 .0688
Other items-/ .1191 .1281 .1349 .1337 .1323
Total packing and selling $1.0218 $1.0150 $0.9433 $0.9399 $0.9603


-/Other direct operating expense includes power, lights and water,
equipment, and miscellaneous supplies.


repair of buildings and


VIndirect operating expense includes fire and casualty insurance, taxes and licenses,
depreciation, and rent.

-/Other items include Florida citrus advertising tax, Federal-State inspection and testing,
Growers Administrative Committee and Florida Citrus Mutual assessments, degreening,
color-add and wax.


II


~











Table 8.--Costs of Packing and Selling Florida Grapefruit in 1-3/5 Bushel Wirebound
Boxes, by Volume Groups, 39 Packinghouses, 1955-56

Citrus Fruit Handled (boxes) Under 200,000- 400,000- 700,000 Season Avg.
200,000 399,999 699,999 and over All Volumes
Number of packinghouses 5 11 10 13 39
Average pack of grapefruit
(1-3/5 bu. equivalent) 10,551 43,472 100,296 160,328 92,773

Cost per 1-3/5 bushel:
Material $0.3982 $0.3828 $0.3629 $0.3796 $0.3733
Labor:
Receive, truck, dump .0433 .0281 .0231 .0206 ..0226
Crate making and labeling .0345 .0365 .0286 .0288 .0299
Foremen,gradersand box closer .0460 .0419 .0323 .0403 .0384
Wrap and pack .0527 .0534 .0488 .0537 .0523
Truck, check, load .0311 .0370 .0367 .0384 .0376
Payroll taxes and insurance ,0139 .0131 .0104 .0123 .0119
Total labor $0.2215 $0.2100 $0.1799 $0.1941 $0.1927
Other direct operatingI $0.0524 $0.0459 $0.0394 $0.0488 $0.0458
Indirect operating-/ .0459 .0359 .0270 .0279 .0290
Total packing $0.7180 $0.6746 $0.6092 $0.6504 $0.6408
Administrative $0.0783 $0.0612 $0.0399 $0.0401 $0.0434
Selling .0476 .0710 .0775 .0459 .0580
Other items/ .1364 .1286 .1272 .1247 .1260
Total packing and selling $0.9803 $0.9354 $0.8538 $0.8611 $0.8682


!/Other direct operating expense includes power, lights and water,
and equipment, and miscellaneous supplies.


repair of buildings


? Indirect operating expense includes fire and casualty insurance, taxes and licenses,
depreciation, and rent.

-/Other items include Florida advertising tax, Federal-State inspection and testing,
Growers Administrative Committee and Florida Citrus Mutual assessments, degreening,
color-add and wax.











Table 9.--Cost of Packing and Selling Florida Tangerines in 4/5 Bushel Wirebound
Flat Boxes by Volume Groups, 18 Packinghouses, 1955-56


Citrus Fruit Handled (boxes)


Number of packinghouses


Under
200,000


2


200,000-
399,999


4


400,000-
699,999


7


700,000
and over


5


Season Avg.
All Volumes
18


Average pack of tangerines
(1-3/5 bu. equivalent) 2,759 19,084 23,918 20,192 19,458
Cost per 1-3/5 bushel:
Material $0.6244 $0.6137 $0.6118 $0.6207 $0.6141
Labor:
Receive, truck, and dump .0571 .0347 .0321 .0428 .0362
Crate making and labeling .0906 .0703 .0542 .0573 .0592
Foreman, graders and box closer .1732 .0697 .0930 .0957 .0899
Wrap and pack .1321 .1061 .1143 .1176 .1138
Truck, check and ioad .1529 .0885 .0831 .0938 .0883
Payroll taxes and insurance .0408 .0307 .0277 .0288 .0289
Total labor $0.6467 $0.4000 $0.4044 $0.4360 $0.4163
Other direct operating/ $0.0683 $0.1188 $0.0813 $0.0961 $0.0936
Indirect operating?/ .1040 .0423 .0667 .0540 .0583
Total packing $1.4434 $1.1748 $1.1642 $1.2068 $1.1823
Administrative $0.0322 $0.0656 $0.0508 $0.0425 $0.0513
Selling .1332 .0846 .1481 .0504 .1059
Other items/ .1156 .1771 .1199 .1223 .1330
Total packing and selling $1.7244 $1.5021 $1.4830 $1.4220 $1.4725


I/Other direct operating expense includes power, lights and water,
and equipment, and miscellaneous supplies.


repair of buildings


Indirect operating expense includes fire and casualty insurance, taxes and licenses,
depreciation, and rent.

-/Other items include Florida citrus advertising tax, Federal-State inspection and testing,
Growers Administrative Conmittee and Florida Citrus Mutual assessments, degreening,
color-add and wax.


I- -- - -~- -~- ~- --











Table 10.--Volume of Fruit Handled and Variation in the Cost of Packing and Selling
Florida Citrus Fruit in Wirebound Boxes, 42 Packinghouses, 1955-56


1-3/5 bushel box equivalent handled
Cost per Under 200,000- 400,000- 700,000 All
1-3/5 bushel 200, 000 399,999 699,999 and over Volumes

Oranges in 1-3/5 bu. wirebound boxes
- - - - - Number of firms - - - - - -
Under- $0.80 0 0 0 1 1
$0.80- 0.89 0 0 2 3 5
0.90- 0.99 1 2 6 5 14
1.00- 1.09 2 8 2 2 14
1.10- 1.19 1 0 0 2 3
1.20 and over 2 1 0 0 3

Grapefruit in 1-3/5 bu. wirebound boxes
Under- $0.80 0 0 2 1 3
$0.80- 0.89 1 2 7 9 19
0.90- 0.99 1 9 0 1 11
1.00- 1.09 2 0 1 2 5
1.10 and over 1 0 0 0 1
Tangerines in 4/5 bu. wirebound flat boxes
Under- $1.30 0 0 1 2 3
$1.30- 1.39 0 0 1 2 3
1.40- 1.49 0 2 3 0 5
1.50- 1.59 0 2 1 0 3
1.60 and over 2 0 1 1 4








Trend in Packing and Selling Cost

The cost of packing and selling Florida citrus is increasing. The average

total cost of packing and selling Florida citrus fruits in the seven containers shown

in Table 11 has increased during the past eight seasons with minor fluctuations,

The average total cost of oranges packed in 1-3/5 bushel wirebound boxes

increased from $0.83 for the 1948-49 season to $0.96 for the 1955-56 season. The

decrease noted in 1954-55 was due to a reduction of container prices. A comparison

of the eight seasons for oranges packed in 1-3/5 bushel standard nailed boxes shows

an increase from $1.16 to $1.45 per box; for 8-lb. bags the cost increased from

$1.01 to $1.26 in 1954-55, with a slight decrease in 1955-56; and for 5-lb. bags

the average total packing and selling cost changed from $1.18 to $1.50 during

the period.

The average total cost of packing and selling grapefruit in 1-3/5 bushel

wirebound boxes increased from $0.74 in 1948-49 to $0.87 in 1955-56, excepting

a decline to $0.80 in 1954-55. Grapefruit packed in 1-3/5 standard nailed boxes

increased in cost from $1.08 to $1.30. Cost per 1-3/5 bushel equivalent for 8-lb.

bags increased from $0.92 in 1948-49 to $1.17 in 1955-56, and for 5-lb. bags

from $1.17 to $1.43.

The average total cost per 1-3/5 bushel equivalent for packing and selling

tangerines increased during the eight year period from $1.19 to $1.46 for 4/5

bushel wirebound boxes, and from $1.21 to $1.47 for 4/5 bushel wirebound flat

boxes.









Table 11.--Average Total Cost per 1-3/5 Bushel Equivalent for Packing and
Selling Florida Citrus Sold for Fresh Consumption,
1948-49 through 1955-56 1/


Type of Pack

Boxes Mesh Bags
Season 1-3/5 bu. 1-3/5 bu. 8 lb. 5 Ib.
rebound Standard Wrapped_
-- ----- - -- Dollars per 1-3/5 bu. equivalent ----


1948-49
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55
1955-56


1948-49
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55
1955-56


.8330
.8785
.9166
.9111
.9530
.9355
.8863
.9603

.7359
.8046
.8196
.8487
.8543
.8375
.7984
.8682


Oranges
1.1590
1.1368
1.2062
1.2526
1.2730
1.3735
1.3957
1.4472
Grapefruit
1.0785
1.0257
1.0945
1.1907
1.1669
1.1871
1.2166
1.3038


1.0052
1.0488
1.1490
1.1069
1.2067
1.2335
1.2609
1.2322


.9153
.9453
1.0849
1.0467
1.1231
1,1659
1.1891
1.1724


1.1822
1.2580
1.4086
1.3444
1.4469
1.4597
1.5005
1,4967


1.1736
1.2387
1.3201
1.2670
1.3233
1.3666
1.3964
1.4264


4/5 bu.
Wirebound Box


1.1916
1.2491
1:4250
1.3994
1.4417
1.3689
1.4266
1.4580


/ Number of houses included in each
1948-49 73 1950-51 77
1949-50 73 1951-52 67


Tangerines
4/5 bu.
Wirebound Flat


1.2125
1.2555
1.3563
1.3589
1,4379
1.4373
1.4597
1.4725


of the years:
1952-53 43
1953-54 43


4/5 bu.Standard
Nailed Box


1.3479
1.5702
1.4938
1.5074
1.5827
1.5768
1.7944
. .*..


1954-55- 43
1955-56 42


1948-49
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55
1955-56


I


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