<%BANNER%>
HIDE
 Title Page
 Foreword
 Cost of processing single strength...
 Variations in cost
 Volume and cost
 Cost of processing frozen orange...
 Definitions of terms


FLAG IFAS PALMM UF



Costs of processing, warehousing and selling Florida citrus products
ALL VOLUMES CITATION SEARCH THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027701/00007
 Material Information
Title: Costs of processing, warehousing and selling Florida citrus products
Series Title: <19691970-> Agricultural economics report
Portion of title: Cost of processing, wareshousing and selling Florida citrus products
Physical Description: v. : ill. ; 28 cm.
Language: English
Creator: University of Florida -- Agricultural Experiment Station. -- Dept. of Agricultural Economics
University of Florida -- Food and Resource Economics Dept
Publisher: Dept. of Agricultural Economics, Florida Agricultural Experiment Stations, Institute of Food and Agricultural Sciences
Place of Publication: Gainesville Fla
Creation Date: 1954
Publication Date: -1974
Frequency: annual
regular
 Subjects
Subjects / Keywords: Citrus fruits -- Harvesting -- Costs -- Periodicals   ( lcsh )
Citrus fruit industry -- Costs -- Periodicals -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
serial   ( sobekcm )
 Notes
Dates or Sequential Designation: -1972-73.
Issuing Body: Vols. for <1967-68-> issued by the Department of Agricultural Economics, Florida Agricultural Experiment Stations, Institute of Food and Agricultural Sciences; <1971-72-> by the Food and Resource Economics Department, Aggricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida.
General Note: Some issues have title: Cost of processing, warehousing and selling Florida citrus products.
General Note: Description based on: 1967-68 season.
Funding: Agricultural economics mimeo report.
 Record Information
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: oclc - 31065500
System ID: UF00027701:00007
 Related Items
Succeeded by: Estimated costs of processing, warehousing and selling Florida citrus products

Table of Contents
    Title Page
        Page i
    Foreword
        Page ii
    Cost of processing single strength juices
        Page 1
        Page 2
        Page 3
    Variations in cost
        Page 4
        Page 5
    Volume and cost
        Page 6
        Page 7
        Page 8
    Cost of processing frozen orange concentrate
        Page 9
        Page 10
        Page 11
    Definitions of terms
        Page 12
Full Text


Agricultural Economics
Mimeo Report No. 56-11


COSTS OF PROCESSING, WAREHOUSING AND

SELLING FLORIDA CITRUS PRODUCTS, 1954-55 SEASON


Citrus Processing and Selling Costs Per Case
1954 55


$2.00


$2.50


E $1.33


Orange
Concentrate, 48/6
Orange
Juice, 12/46

Grapefruit
Sections, 24/303
Salad
Sections, 24/303


materials labor /


$1.73*


$2.23
$2.50
^ II
u, tr
sugar other costs


*Excludes selling cost.


A Study conducted with funds provided by the Research and Marketing Act



Department of Agricultural Economics
Florida Agricultural Experiment Stations .
Gainesville, Florida -.. ..
in cooperation with \':8
DEC 28 1956S
Farmer Cooperative ServiceL
U. S. Department of Agriculture
Washington, D. C. /


June 1956


4;0.50


$1.00


$1.50


0 Processn a 0 S g S
.9 4 -5









FOREWORD


Costs of processing Florida citrus products have been published
annually for the past nine seasons. These costs have been assembled,
tabulated, and published by the Florida Agricultural Experiment Station
in cooperation with the Farmer Cooperative Service, U. S. Department
of Agriculture.

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

This report was prepared by:

A. H. Spurlock, Agricultural Economist, and H. G. Hamilton, Agricul-
tural Economist and Head, Department of Agricultural Economics, Florida
Agricultural Experiment Station, University of Florida, Gainesville,
Florida.

1. W. Rust, Agricultural Economist, Fruit and Vegetable Branch, and
J. K. Samuels, Director, Marketing Division, Farmer Cooperative
Service, Washington, D. C. Etta Emmons, Farmer Cooperative Service,
made most of the computations for the data appearing in the tables.


TABLE OF CONTENTS


Cost of processing single strength juices .... 1

Variations in cost. .. .... . 4

Volume and cost . . .. ... 6

Cost of processing citrus sections . . .. 8


Cost of processing frozen orange concentrate .


S. 9


__










COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1954-55 SEASON


Seventeteo processing firms cooperated in the study for the season 1954-55.

These firms processed over 26 million actual cases of single-strength juices and

sections--approximately 70 percent of total Florida production; and 30 million

gallons of the frozen orange concentrate, or 46 percent of total Flolrda produc-

tion for 1954-55.

Detailed cost data were assembled from these cooperating firms and were

combined into the major cost categories listed below for single strength juice and

sections:

Materials--cans, cartons, lablbs and adhesives.
Direct labor.
Indirect labor.
Warehousing and shipping labor.
Other manufacturing costs--depreciation, repairs, power,
lights, water, fuel, royalties,
insurance, taxes, supplies.

Administrative and selling--excluding brokerage and discounts.
Other costs--fruit assessments.

Cost of Processing Single Strength Juices

Average costs of processing, warehousing and selling single strength juices,

excluding the cost of sugar, in 12/46 cases, are detailed in Table 1. This table

covers the past nine years, and discloses a steady upward trend in costs up to the

1953-54 season. A slight dip for that season vas substantially maintained during

1954-55.









-2-


Page 2, Table The earliest season shown on the right should be 1946-47

Through 1954~55Se-sons--

Season 1954-55 1953-54 1952-53 1951-52 1950-51 1949-50 1948-49 1947-48 1946-4


Orange $1.27 $1.26
Juice
Grape-
fruit 1.27 1.26
Juice
Blend-
ed 1.28 1.26
Juice


$1.35 $1.30 $1.24


$1.21 $1.17 $1.09 $1.06


1.35 1.31 1.23 1.19 1.17 1.09 1.06


1.34 1.31 1.23 1.19 1.15 1.09 1.05


A comparison made last year between 1952-53 and 1953-54 averages showed that

for single strength orange juice in 12/46 cases there was for the latter season a six per-

cent decrease in cost of processing. A similar comparison between 1953-54 and 1954-55

seasons reveals a small (1 percent) increase in costs. Details of the change among princi-

pal cost categories are as follows:
Change in Cost .
1953-54 1954-S5 : from 1953-54 Percent

Materials $0.8578 $0.8773 +$0.0195 +2
Labor .1136 .1195 + .0059 +5
Other Manufacturing .1660 .1601 .0059 -4
Administrative and Selling .0868 .0821 .0047 -5
Other costs .0372 .0338 .0034 49
Total nonsweetened $i26 iT4 $1.2728 +$0.0114 +1

Itemized costs of processing single strength juices in the principal containers

(24/2 and 12/46 cases) for the 1954-55 season are shown in Table 2. Average costs

(excluding sugar costs) for processing and selling citrus juices in 24/2 cases were


CIIIIII -r -- --










slightly lower in 1954-55 than in 1953-54 ($0.0207 per case lower). The same costs

for 12/46 cases were higher in 1954-55 than in 1953-54 ($0.0121 per case higher).

Table 2.--Cost perCase by Type of Container for Processing, Warehousing and
Selling Florida Citrus Fruit Juices, 14 Canneries, 1954-55 Season
-- -- -- -- -. .. -,~ ,,,,..


--Oran ge
. ... .. .. ._ A. l.e -


Type of cntainer
Number of firms
Cases per firm


Cost per case:
Material
Labor:
Direct
Indirect
Warehousing and shipping
Total labor
Other manufacturing
Total processing and
warehousing
Administrative and selling
Other cost
Cost unsweetened
Sugar
Total cost


Z4/z
: "
18152T"
T67525E


Juice Grapefruit Juice
12/46 24/2 12/46
14 14 14
490,885 138, 626 335, 565


$0.8856 $0.8773 $0.8861 $0.8771


0.0554
.0109
.0335
$06.0998
.1307

$1.1161
.0598
.0268
$1.027
.0469
$s.T296


0.0685
.0126
.0384
$0.1195
.1601


$1.1569
.0821
.0338
$1.2728
.0576
$004


0.0539
.0119
.0334
$0.0992
.1114


$1.0967
.0590
.0545
$1.2102
.0818
$TT9M20


0.0622
.0136
.0369
$0.1127
.1364


$1.1262
.0747
.0693
$1.2702
.0968
$1.3670


S BlendedJuice Tangerine Juice
Type of container 24/2 12/46 24/2 12/46
Number of firms 1337 8
Cases per fir1m 02, ,73 17" 92 614 30, 180
Cost per case:
Material $0.8854 0.8780_ 0.8810 $0.8729
Labor:
Direct .0555 .0646 .0649 .0778
Indirect .0109 .0123 .0118 .0139
Warehousing and shipping .0353 .0391 .0342 .0368
Total labor $1017 $ .1160 $ .1109 $ .1285
Other manufacturing .1262 .1501 .1470 .1763
Total praeeWrie and
warehousing $1.1143 $1.1441 $1.1389 $1.1777
Administrative and selling .0668 .0817 .0739 .0851
Other cost .0417 .0532 .0515 .0673
Cost unsweetened $1.2228 $1.2790 $1.2643 $1.330
Sugar .0638 .0805 .0578 .0708
Total cost $1.2866 $1.3595 $1 .327 $1.4009
--. ----- --- --


II
I


-


I l II I I I


I


I[ i


I '--C"-"~"----C









-4-

The costs of processing and selling citrus juices unsweetened, in 12/46 cases were

about -6. cent higher per case than for 24/2 cases. However, for an equivalent

volume of juice (basis 24/2 cases) the costs for 12/46 cases were 21 to 22 cents per case

lower than for 24/2 cases. The difference is about 4 cents smaller than that existing in

1953-54, as shown by the following figures:

Orange Grapefruit Blended Tangerine
Juice Juice Juice Juice
24/2 cases $1.2027 $1.2102 $1.2228 $1.2643
12/46 ca:es (24/2 basis) .9962 .9941 1.0010 1.0410
Difference $0.2065 $0.2161 $0.2218 $0.2233
1953-54 Difference 0.2421 0.2396 0.2427 0.2582

Variations in Cost

The average cost per case for all firms is a weighted average based on the total

cost and volume of each firm. There were more firms having average costs above than

below the weighted average cost for all firms. This was true for each type of juice

and for each major container.

The variation in the total cost of processing, warehousing and selling single-

strength juices for 1954-55 is shown in table 3. For the 12/46 cases, eight of the

14 firms processing orange juice, and seven of the 14 processing grapefruit juice had

costs between $1.20 and $1.35 per case.

In Table 4 are shown the variations in cost among firms for processing and ware-

housing citrus juicos, excluding administrative, selling, and "other costs."









-5-


Table 3.--Variations in Cost per Case of Processing, Warehousing, and
Selling Florida Citrus Fruit Juices, Excluding Sugar, 14 Canneries,
1954-55 Season

Type of container 24/2 1 2/46 24/2 12/46
Orange Juice Grapefruit Juice
Number of firms
Cost per case
Under $1,2000 3 1 3 1
$1.20- 1.2499 4 1 4 2
1.25- 1.2999 2 4 1 3
1.30 1.3499 1 3 3 2
1.35 and over 4 5 3 6
Total number of firms 14 14 14 14


Blended Juice

1


Cost per case
Under $1.2000
$1.20 1.2499
1.25- 1.2999
1.30- 1.3499
1.35 and over


Number of firms


Tangerine Juice


Total number of firms 13 13 7 8
_------------ ---- ~~--.-- "1

Table 4.--Variations in Cost per Case of Processing and Warehousing Florida Citrus
Fruit Juices, 14 Ccnneries, '1954-55 Season
(Excludes Administrative, Selling, Sugar and "Other Costs")
Type of container 24/2 12/46 ..24/2 .1. 2/46
Orange Juice Grapefruit Juice
Number of firms
Cost per case
Under $1.1000 4 1 5 2
$1.10- 1.1499 2 3 3 4
1.15- 1.1999 4 5 2 3
1.20- 1.2499 0 1 2 1
1.25 and over 4 4 2 4
Total number of firms 4 T.1" 14 14
Beided Juice Numr of firms Tangerine Juice
Number of firms
Cost per case
Under $1.1000 5 1 2 1
$1.10- 1.1499 3 4 1 1
1,15- 1.1999 2 4 2 2
1.20- 1.2499 1 1 1 2
1.25 and over 2 3 1 2
Total number of firms 13 13 7 8


I








-6-


Volume and Cost

The fourteen firms processing single strength orange juice were divided into two

groups on the basis of total volume processed. Seven firms processed under one million

cases, and seven firms processed over one million cases. Average per firm volumes for

these two groups were 340,390 cases and 1,711,668 cases respectively (see Table 5).

A comparison of average costs of processing and selling unsweetened juices in

12/46 cases reveals a substantial difference in costs between those firms handling over

one million and those handling under one million cases as follows:

~ jrc-- -- WTWS---- -- ,,,,,_ -- -_ .__
Page 6.--ln the table under "Grapefruit Juice" the figure for "under 1 million
cases" should be $1.3914.


Under 1 million
cases $1.4191 $1.13914 $1.3944 $1.4779
Over 1 million
cases $1.2520 $1.2457 $1,2434 $1.2995
Difference $0.1671 $0.1457 $0.1510 $0.1784


Total cost per 12/46 case for the large volume group was substantially lower than

that for the small volume group for all classes of single strength juice. With container

and sugar costs approximately the same for each group the difference in costs is most

apparent in the major categories of labor, other manufacturing costs, and administrative

and selling costs. Differences in costs of processing, warehousing and selling Florida

citrus fruit juices, sweetened, in 12/46 cases between large and small volume firms

were as follows:










Table 5.--Volume and Cost of Processing, Warehousing and Selling Florida
SCitrus Fruit Juices in 12/46 Cases, 1954-55 Season


Volume, cases Under 1,000, 000
--000. 000 and over
Page 7.--Near the top of the page, in he last column,
firm," the figure should read 558,638.
Cases per firm 122, 635 u r, ---


Under
1,000,000


in the row "cases per

- -rm-


1,000,000
and over


_ 558,438


Cost per case:
Material
Labor:
Direct
Indirect
Warehousing
and shipping
Total labor
Other manufactu-
ring
Total proces-
sing and ware-
housing
Administrative and
selling
Other cost
Cost unsweetened


Sugar
Total cost


$0.8708


$0,8782


$0.8698


$0.8786


$0.0914 $0.0652 $0,0914 $0.0563
.0143 .0124 .0176 .0128

.0527 .0364 .0470 .0348
0.13584 $0.1140 $0.1560 $0. 039

.2434 .1482 .2007 .1235


$1.2726


$1.1404


.1115 .0779
.0350 .0337
$1.4191 $1.2520
.0562 .0580
$1.4753 $1.3100


$1.2265

.0908
.0741
$1.3914
.1066
TT.4980


$1.1060

.0714
.0683
$1.2457
.0940
$1.3397


Blended Juice Tangerine Juice
Number of firms 6 7 3 5
Cases per firm 9T1,451 253,895 13,812 40, 000
Cost per case:
Material $0.8703 $0.804 _$0.8688 $0.8737
Labor:
Direct $0.0830 $0.0588 $0.1096 $0.0713
Indirect .0143 .0117 .0172 .0132
Warehousing and
shipping .0463 .0369 .0649 .0309
Total labor $0.1436 -. 0.1074- $0.1917 0---1154
Other manufactu-
ring .2039 .1335 .2424 .1626
Total processing and
warehousing $1.2178 $1.1213 $1.3029 $1.1517
Administrative and
selling .1213 .0696 .1180 .0783
Other cost .0553 .0525 .0370 p095
Cost unsweetened$T3944.... $1.-4 T.479 $1 25-
Sugar .0756 .0824 .0/36 .0702
Total cost T$.4700 $1.3258 $1.5515 $i51.3697


- -


-- --


I I I I










Size group Orange GrapefrLuit Blended Tangerine
Juice Juice Juice Jlice
Under 1 mil:ionJ
cases $1.4753 $1.4980 $1,4700 $1.5515
Over 1 million -
cases $1.3100 $1.3397 $1.3258 $1.3697
Difference $0.1653 $0.1583 $0.1442 $0.1818

The variation within groups shown in the following table for single strength orange

juice in 12/46 cases also supports the finding that large-volume processors tend to have

lower costs than do low-volume processors:

Cost Under 1,000, 000 cases
1,000, 000 cases and over

Under $1.25 1 1
$1.25-1.35 1 6
1.35 and over 5 0


CosLof Processing Citrus Sections
Page 8.--Near the bottom of the page in the comparison of trends in costs,
two typographical errors: (1) 1946-47 was not completed;
(2) 24/2 costbfr 1946-47 should read$2.13.

1953-54 season was two cents for 24/2 cases and 10 cents for 24/303 cases. The

following comparison for grapefruit sections for nine seasons shows trends in costs:
1954-55 1953-54 1952-531951-52 1950-51 1949-50 1948-49 1947-48 1946-
24/2 $2.65 $2.67 $2.62 $2.52 $2.34 $2.28 $2.26 $2.27 $2.1
24/303 2.23 2.33 2.23 2.19 -

The decrease in costs for grapefruit sections for 1954-55 relative to costs for

1953-54 was due largely to decreases in direct labor cost for the season.
The 12/46 case size has become an increasingly popular container, and has been








-9-

added to this study. Table 6 includes it in the breakdown of items of cost for the

most popular case sizes and the most common fruit packs.

Table 6.--Cost of Processing, Warehousing and Selling Florida Citrus
Sections, 1954-55 Season
S* Grapefiuit Sections Salad Sections
Type of container 24/2 12/46 24/303 24/303
Number of firms 5 7 12 10
Cases per rm 72 3,29. 28, 211 243,266 39, 763
Cost per case:
Material $0.8833 $0.8856 $0.8129 $0.8187
Labor:
--- -dt-QnS2_____tl^31S9____-Q_235 _... $ 1. 0788
A 31998235~ $1.0788
Page 9, Table 6.-Under Salad Sections there appears to be two sets of .07
costs for size 24/303. Actually the first 24/303 column should -- .031
be under grapefruit wetions; costs for salad sections, 24/303 1829
are shown only in the last column on the right.
Soprocessmg-------------------------
warehousing $2.1827 $2.5673 $1.8947 $2.1795
Administrative and selling .1221 .0740 .0679 .0646
Other cost .0511 .0647 .0439 .0392
Sugar .2928 .3263 .2234 .2188
Total cost $2.6487 $3.023 $2.2299 $2.5021


Cost of Processing Frozen Orange Concentrate

The average cost of processing and warehousing frozen orange concentrate during

the 1954-55 season for the 10 firms cooperating in this study was approximately 33 cents

per gallon, as shown in Table 7. This is about a one cent decrease from the previous

season average per-gallon cost, and makes 1954-55 the second consecutive season in

which costs have declined. The following comparison shows average per-gallon costs

for the seven seasons that frozen orange concentrate has been a major factor in the

Florida citrus industry:








-10-


Frozen
Orange
Concentrate
Cost per
Gallon


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


$0.328 $0.340 $0.372 $0.326 $0.346 $0.451


$0.465


Table 8 contains costs in the major categories for orange concentrate for three

popular container types--48/6, 12/32, and 24/12. Container cost is included, selling

cost is omitted. The 48/6 and 24/12 cases each contain the same net volume, which is

25 percent less than the 12/32 case. Therefore, for an equivalent volume (basis 48/6)

the 1954-55 costs, compared with those for 1953-54, were as follows:

1954-55 1953-54 Difference
48/6 $1.73 $1.80 -$0.07
12/32- 1.20 1.44 0.16
24/12- 1.53 1.51 + 0.02

Table 7.--Cost per Gallon of Processing and Warehousing Frozen Orange Concentrate,
Excluding the Cost of Cans, Cartons, Gnd Selling, 10 Florida Firms, IS34-55SeO~i
Frozen Or'ange Concentrate
Gallons per firm 21,9967,SO


Cost per gl Ion:
Labor:
Direct
Indirect
Warehousing and shipping
Total labor
Other manufacturing:
Power, light, water
Maintenance, building and equipment
Royalties
Depreciation
Taxes, licenses and insurance
Miscellaneous
Total other manufacturing
Administration
Advertising stamps, testing and inspection
Total cost


$0o66,1-
.0140
.0117


.0331
.0137
.0336
.0567
.0147
.0125


$0.0918







.1643
.0412
.0305
3'73^3


1IIILII- ~_


-~--UI~-lll-~--U
--U -- _~__ __







-11-


Table 8.--Type of Container and Cost of Processing and Warehousing Frozen
Orange Concentrate, Excluding Selling, Florida Firms, 1954-55 Season
Type of container 48/6 1232 24/12
Number of firms 6 7 7
Cases per firm 9675538 95,478 164,595

Cost per case:
Material:
Cans $0.9338 $0.6115 $0.6638
Cartons .0664 .0776 .0732
Total material T-O. T-2 --. 6891 $0.7370
Labor .2051 .2927 .1914
Other manufacturing .3571 .4942 .4174
Total Frocessing and
warehousi ng $1.5624 $1.4760 $1.3458
Administrative .0925 .1376 .0977
Advertising stamps, testing
and inspection .0736 .0956 .0836
Total cost T.7285 $1.7092 $1.52








-12-


Definitions of Terms

COST PER FIRM

The cost per firm or per container is a weighted average obtained by dividing
the sum of all the dollar costs for the specific container by the total number
of containers to which those costs apply.

PROCESSING OPERATIONS


Blended Juice:
of each varying
Cases per firn:


A mixture of orange and grapefruit juices, with the proportion
from 60-40 to 40-60 percent.
Number of cases processed,


Containers:


Kind
24/2
12/32
12/404 or 12/46
24/12
48/6
24/303


Cans per case
24
12
12
24
48
24


Size of can
18-ounce
32-ounce
46-ounce
12-ounce
6-ounce
15-ounce


Cost items:

Material: Cans, cartons, labels, adhesives, freight on material.
Labor: Plant and warehouse labor, supervision, mechanic, watchman, payroll
taxes, workmen's compensation insurance.
Other manufacturing: Depreciation, repairs and maintenance of building and
mra-inery, power, Tights, water, fuel, royalties, insurance, taxes, miscella-
neous supplies, other operating expense, warehouse expense other than labor.
Administrative: Management and office salaries, office supplies and expenses,
auto and travel, operating interest, telephone and telegraph, legal and audit,
dues, subscriptions, other administrative expense.
Selling: Salaries of salesmen and others, advertising, other plant selling costs,
brokerage, discounts and allowances are omitted.

Total cost: The cost, excluding sugar, of processing, administration and
selling. When given, the cost of sugar is the average for those firms that
produced sweetened juices, sections and salads.



0364-