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Costs of processing, warehousing and selling Florida citrus products
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 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: 1957
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: UF00027701:00010
 Related Items
Succeeded by: Estimated costs of processing, warehousing and selling Florida citrus products

Table of Contents
    Title Page
        Page i
    Foreword
        Page ii
        Page 1
        Page 2
    Cost of processing single-strength juices
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
    Cost of processing citrus sections
        Page 13
        Page 14
    Cost of processing frozen orange concentrate
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
    Definition of terms
        Page 20
    Available publications
        Page 21
Full Text
5~ -'* J


Agricultural Economics,
Mimeo Report No. 59-12


COSTS OF PROCESSING, WAREHOUSING AND


SELLING FLORIDA CITRUS PRODUCTS, 1957-58 SEASON



By

A. H. Spurlock and H. G. Hamilton


Citrus Processing and Selling
1957 58
0 $0.50 $1.00 $1.50


Costs Per Case

$2.00


Orange
Concentrate,48 $2.19*
Orange
Juice, 12/46 $1.53
Grapefruit
Sections, 24/303 $2.60
Salad $3.09
Sections, 24/303

Materials Labor Sugar Other Costs
*Excludes Selling Cost


Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida

in cooperation with

Farmer Cooperative Service
U. S. Department of Agriculture
Washington, D.C.


June 1959


$2.50


$3.00


m i I I I


^^---^ _












FOREWORD


Costs of processing Florida citrus products have been published annually for the past

twelve seasons. These costs have been assembled, 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-22, "The Economic

Efficiency of Marketing Citrus Fruits."






TABLE LF CONTENTS

CbStS of Ptocessing Single-strength Juicei**........ ...,.**.,,,* ........ 3

Variations in Cost ..8.,..... ,,,.........o.,..... ...,.... 8

Volume and Cost ** ... *,........,,** ,........, .**#....** 8

Costs of Processing Citrus Sections................ ....... .............. 13

Costs of Processing Frozen Orange Crincenfrate.....* ...................... 15













COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1957-58 SEASON


by


A. H. Spurlock and H. G. Hamiltona

Nineteen processing firms cooperated in the study for the 1957-58 season. These firms

processed about 23 million actual cases of single-strength juices and sections--approximately

62 percent of total Florida production; and 41.5 million gallons of frozen orange concentrate,

or 72 percent of total Florida production for the season.

Data for frozen orange juice concentrate were based on records of 13 firms operating

15 plants while data for single-strength juice were based on records of 14 firms operating 14

plants. Grapefruit sections were produced by 11 of these firms.

For the past two seasons there has been an increase over prior years in the number of

plants providing records on frozen orange concentrate, and a corresponding increase in the

cooperating plants' proportion of Florida's total production. Shifts in size and composition

of the sample were so substantial that costs for the last two seasons are not entirely comparable

with those of preceding years. In the case of those products for which the samplehas changed

little, juices and sections, the average cost of production will be very nearly comparable with

costs for prior years.


aAgricultural Economist and Agricultural Economist and Head, Department of
Agricultural Economics.













It should be noted that these data represent estimates of industry costs. Year-to-year

changes in these estimates may result from both changes in plant costs and changes in the sample.

Thus, when sample changes have been substantial, as with frozen orange juice concentrate,

caution must be used in interpreting data.

All of the costs shown in this summary are weighted averages. The cost for each firm

for a given pack is weighted by the volume packed. This tends to place the average cost

nearer the cost for the firms with the larger pack of that product than would occur if a simple

average were used. This also explains the slight differences shown in cost of identical items

for various products. For example, in Table 2, can costs for size 24/2 are identical; yet for

orange juice can cost averaged $0.8631 per case and for grapefruit juice $0.8644. For tan-

gerine juice the cost for 24/2 cans averaged $0,8591, although this average consists of a

smaller number of firms.

Detailed cost data assembled from the cooperating firms were combined into six major

cost categories for each product and can size to give a total cost, unsweetened. Sugar cost

was then added, if the product is commonly sweetened, to give a total cost, sweetened.

As in previous years, en effort has been made to provide detailed information on the

"materials" and "cther mcnufac:uring" categories. In general it is possible to be quite confi-

dent in the total cost figures for various products and sizes. As categories are divided into

subgroups, however, there is rcGm for :ome discrepancy. For examp!e,the report attempts to

put all labeling labor--either from line or stack--ino warehousee Icbor." Occasionally a

cooperating firm will include labeling from the line in "direct labor." In such instances, it

is difficult to isolate and measure.














Social security taxes and workmen's compensation insurance charges are grouped in the

wage or salary category to which they apply. Some firms distribute such charges along with

labor costs, while others distribute social security and related items to some category such as

"general administrative expense." This calls for arbitrary reallocation and distribution to

make labor items consistent for all firms.

The selling costs shown for juices and sections include costs only for the firms' own

sales departments, sales salaries, telephone and telegraph, travel, and advertising. Brokerage,

discounts, allowances, and brand royalty have been omitted. In some cases brokerage was

the largest item shown for selling on the firms' records, However, the firm's use of the

omitted items and methods of accounting for them vary widely. Selling costs have been

omitted entirely from the concentrates.

Costs of Processing Single-strength Juices

Average costs of processing, warehousing, a!:d selling single-strength juices, exclud-

ing the cost of sugar, in 12/46 cases, are shown in Table 1. This table covers the past 11

years, and shows a definite increase in costs over previous years, particularly in !ho last

season. In 1957-58 costs for juices are based on data from 14 firms as compared with 15 for

the preceding season.

Analysis of major cost categories for unsweetened orange juice, 12/46 shows that

costs in four items (materials, other manufacturing costs, administrative and selling costs,

and other costs) were higher in 1957-58 than in 1956-57. Only total labor costs in 1957-58














Table 1 .--Average Cost of Processing, Warehousing and Selling Florida Citrus Fruit Juices,
excluding Sugar, in 12/46 Cases, 1947-48 through 1957-58 Seasons


Season Orange Juice Grapefruit Juice Blended Juice


1947-48 $1.09 $1.09 $1.09
1948-49 1.17 1.17 1.15
1949-50 1.21 1.19 1.19
1950-51 1.24 1.23 1.23
1951-52 1.30 1.31 1.31
1952-53 1.35 1.35 1.34
1953-54 1.26 1.26 1.26
1954-55 1.27 1.27 1.28
1955-56 1.32 1.33 1.33
1956-57 1.38 1.40 1.39
1957-58 1.48 1.50 1.49



were slightly lower per case than in the preceding year. A comparison of the change among

principal cost categories is as follows:



Orange Juice, 12/46 (excluding sugar)

Cost Group Cost per Case Change in Cost Percent
1956-57 1957-58 from 1956-57 Change

Materials $0.9627 $1.0177 + $0,0550 + '5.7
Labor .1415 .1325 .0090 6.4
Other manufacturing .1580 .1748 + .0168 + 10.6
Admin. and selling .0812 .0970 + .0158 + 19.5
Other costs .0330 .0623 + .0293 + 88.8

Total nonsweet $1.3764 $1.4843 + $0.1079 + 7.8


aOperating interest was changed in classification in 1957-58 from administrative to
other costs.











Similar analyses of costs for grapefruit and blended juices show that oil groups of costs

other than labor, or about 91 percent of the total cost exclusive of sugar, were higher in

1957-58 than for the previous season. Total labor costs per case were lower for both products

than in the previous season.

Itemized costs of processing single-strength juices in the most popular can sizes (24/2

and 12/46 cases) for the 1957-58 season are shown in Table 2. Average costs (excluding

sugar costs) for processing and selling citrus juices were higher in 1957-58 than in 1956-57.

Increases ranged from $0,0450 per case of 24/2 tangerine juice to $0.1079 per case of 12/46

orange juice.

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

about seven cents per case higher than for 24/2 cases. However, for an equivalent volume

of juice, (basis 24/2 cases) the costs for 12/46 cases were approximately 23 cents per case

lower than for 24/2 cases. The differences were about the same or slightly higher than that

existing in 1956-57. Differences in individual plant costs for these different case sizes show

a high degree of consistency. Changes in sample plants in 1957-58 have no appreciable

effect on the following comparison:


Item Orange Grapefruit Blended Tangerine
Juice Juice Juice Juice

Cost per 24/2 case $1.4159 $1.4201 $1.4267 $1.4060
Cost 24/2 equiv. in 12/46 1.1790 1.1897 1.1813 11674
Difference 1957-58 $022369 $0.2304 $0.2454 $0,2386
Difference 1956-57 .2310 .2305 .2316 .2281












Table 2.--Cost per Case by Type of Container for Processing, Warehousing and Selling
Florida Citrus Fruit Juices, 14 Canneries, 1957-58 Season


Product Orange Juice Grapefruit Juice
Type -f Container 24/2 12/46 24/2 12/46
Number of Firms 14 14 14 14
Cases per Firm 189,491 533,402 100,137 295,184


Cost per Case:
Material:
Cans
Cartons
Labels, adhesives
Total Material
Labor (incl. payroll taxes, ins.):
Direct
Indirect
Warehousing and shipping
Total Labor
Other Manufacturing:
Power, lights, and water
Maintenance, bldgs., equip.
Royalties
Depreciation
Manufacturing overheada
Miscellaneous expense
Warehousing
Total other Manufacturing Expenses
Total Processing, Warehousing
Administrative
Selling
Other Costsd
Total Cost, Unsweetened
Sugar
Total Cost, Sweetened


$0.8631
.0952
.0623
$1.0206


$0.0540
.0191
.0519
$0.1250


$0.0179
.0213
.0364
.0159
.0092
.0095
.0318
$0.1420
$1.2876
$0.0464
.0342
.0477


$0.8343
.1223
.0611
$1.0177


$0.0570
.0199
.0556
$0.1325


$0.0234
.0284
.0460
.0200
.0132
.0119
,0319
$0.1748
$1.3250
$0.0575
.0395
.0623


$0.8652
,0986
.0596
$1.0234


$0.0479
.0172
.0512
$0.1163


$0.0184
.0255
.0218
.0201
,0117
.0097
.0272
$0.1344
$1.2741
$0.0469
.0282
.0709


$0.8368
.1215
.0583
$1.0166


$0.0540
.0191
.0564
$0.1295


$0.0239
.0330
.0291
.0240
.0170
.0135
.0273
$0.1678
$1.3139
$0.0608
.0355
.0876


$1.4159 $1.4843 $1.4201 $1.4978
,0463 .0563 .1105 .1424
$1.4622 $1.5406 $1.5306 $1.6402


concludes taxes, insurance, rent.
bIncludes management and office salaries, telephone, travel, office expense.
Concludes sales salaries, telephone, advertising, travel, but excludes brokerage,
brand royalties, discounts, allowances.
Other costs include advertising tax, inspection fees, operating interest.


L


~


II


Z:.j


I


I


__


I I


I I













Table 2 Continued


Product


Blended


Type of Container


24/2


Juice


12/46


Tangerine Juice
24/2 12/46


Number of Firms 14 14 4 8
Cases per Firm 42,212 175,716 4,549 17'865


Cost per Case:
Material:
Cans
Cartons
Labels, adhesives
Total Material
Labor (incl. payroll taxes, ins.):
Direct
Indirect
Warehousing and shipping
Total Labor
Other Manufacturing:
Power, lights, and water
Maintenance, bldgs., equip.
Royalt;es
Deproci:tion
Ma-uf??ctruring overhead
Miscellaneous expense
Warehousing
Total other Manufacturing Expenses
Total Processing, Warehousing
Administrative
Selling
Other Costs
Total Cost, Unsweetened
Sugar
Total Cost, Sweetened


$0.8674
.0979
.0596
$1,0249


$0.0477
.0186
.0502
$0.1165


$0.0192
.0259
.02385
.0226
.0106
.0091
.0281
$0.1440
$1.2854
$0.0494
.0314
.0605


$1.4267
.0908
$1.5175


$0.8360
.1216
.0586
$1.0162


$0.0530
.0191
.0549
$0,1270


$0.0241
.0320
.0368
.0233
.0148
.0118
.0279
$0.1707
$;' 3139
$C,0600
.0355
.0778


$1.4872
.1154
$1.6026


$0.8591
.1001
.0591
$1.0183


$0.0668
.0179
.0435
$0,1282


$0.0174
.0269
.0284
.0187
.0108
.0053
.0229
$0.1304
$1.2769
$0.0463
.0197
.0631


$1.4060
.0250
$1.4310


$0.8297
.1199
.0517
$1.0013


$0.0786
.0207
.0454
$0.1447


$0.0216
.0463
.0426
.0293
.0123
.0094
.0250
$0.1865
$1.3325
$0.0541
.0211
.0620


$1.4697
.04P7
$1.5184


aIncludes taxes, insurance, rent.
blrnc1iedd mancamett aid office salaries, tel'ahor6. travm!, affei expense.
Concludes sales salaries, telephone, advertising, travel, but excludes brokerage,
brand royalties, discounts, allowance,.
aOther costs include advertising tax, inspection fees, operating interest.


- --~- ---- --
-


_ __


I


I


__ __ __


I I[ I


I


II


m


J


I


II











Variations in Cost

Variations among firms in the total cost of processing, warehousing, and selling

single-strength unsweetened juices for 1957-58 are shown in Table 3.


Table 3.--Variations in Cost for Processing, Warehousing and Selling Florida Citrus Fruit
Juices, excluding Sugar, by Type of Product and Case Size, 14 firms, 1957-58 Season

Cost per Case Orange Juice Grapefruit Juice Blended Juice Tangerine Juice
Cost per Case
24/2 12/46 24/2 12/46 24/2 12/46 24/2 12/46
....---- ...----. -Number of Firms- -----------------

Under $1.35 1 0 0 0 0 0 0 0
$1.35- 1.39 3 0 4 0 4 0 2 0
1.40- 1.44 5 3 5 2 5 2 1 1
1.45- 1.49 1 4 1 5 1 5 0 2
1.50- 1.54 2 3 2 3 2 3 0 2
1.55 and over 2 4 2 4 2 4 1 3
Total Number
ofFirms 14 14 14 14 14 14 4 8



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

unsweetened citrus juices, exclusive of administrative, selling, and "other costs."


Volume and Cost

The 14 firms processing single-strength juice were divided into two groups on the basis

of total volume processed. Seven firms processed fewer than 1,000,000 cases, and seven

firms more than 1,000, 000 cases each. Average per-firm volumes and costs for each kind

of juice are shown in Table'5.











Table 4.--Variations in Cost for Processing and Warehousing Florida Citrus Fruit Juices,
excluding Administrative, Selling, Sugar and Other Costs, by Type of Product and Case
Size, 14 Firms, 1957-58 Season


Cost per Case


Under $1.25
$1.25- 1.29
1.30- 1.34
1.35- 1.39
1.40- 1.44
1.45 and over
Total Number
of Firms


Orange Juice Grapefruit Juice
24/2 12/46 24/2 12/46
.--------- ---Number of
1 1 2 1
4 0 6 1
6 4 4 6
1 7 1 4
1 0 0 0
1 2 1 2

14 14 14 14


Blended Juice Tangerine Juice
24/2 12/46 24/2 12/46
Firms-- .. ----.--------
2 1 1 0
4 1 1 1
6 4 1 2
0 6 0 3
1 0 0 1
1 2 1 1

14 14 4 8


A comparison of average costs of processing and selling unsweetened juices

12/46 cases reveals a cost difference between those firms handling over 1,000,000

and those under 1,000,000 cases of 7 to 11 cents per case as follows:


in

cases


Size Group Orange Juice Grapefruit Juice Blended Juice Tangerine Juice
(Cases) -- ------Cost per 12/46 Case, Unsweetered-- -- ---

Under 1,000,000 $1.5531 $1.5728 $1.5785 $1.5365
1,000,000 and over 1.4684 1.4752 1.4679 1.4656

Difference $0.0847 $0.0976 $0.1106 $0.0709


*












Table 5.--Costs of Processing, Warehousing and Selling Florida Citrus Fruit Juices in
12/46 Cases, by Volume Groups, 1957-58 Season


Product Orange Juice Grapefruit Juice
Under 1, 000,000 Under 1,000,000
Volume, Cases 1,000,000 and Over 1,000, 000 and Over
Number of Firms 7 7 7 7

Cases per Firm 200,069 866,734 136,267 454,100


Cost per Case:
Material:
Cans
Cartons
Labels, adhesives
Total Material
Labor:
Direct
Indirect
Warehousing and shipping
Total Labor
Other Manufacturing:


$0.8401
.1187
.0605
$1.0193


$0.0620
.0271
.0536
$0.1427


Power, lights, and water $0,0355
Maintenance, bldgs., equip. .0326
Royalties .0463
Depreciation .0336
Manufacturing overhead .0219
Miscellaneous expense .0171
Warehousing .0277
Total other Manufbcturihg-Expenes $0.2147
Total Processing andWarehousing $1.3767
Administrative $0.0630
Selling .0461
Other Costsd .0673
Cost, Unsweetened $1,5531
Sugar .0659
Cost, Sweetened $1.6190


$0.8330
.1232
.0612
$1.0174


$0.0559
.0182
.0561
$0.1302


$0.0207
.0274
.0459
.0168
.0111
.0107
.0329
$0.1655
$1.3131


$0.8407
.1195
.0596
$1.0198


$0.0626
.0279
.0584
$0.1489


$0.0240
.0343
.0306
.0360
.0258
.0176
.0302
$0.1985
$1.3672


$0.8356
.1221
.0579
$1.0156


$0.0514
.0164
.0558
$0.1236


$0.0239
.0325
.0287
.0204
.0144
.0123
.0264
$0.1586
$1.2978


$0.0562 $0.0696 $0.0582
.0380 .0497 .0312
.0611 .0863 .0880
$1.4684 $1.5728 $1.4752
.0541 .1483 .1407


$1L5225 $1L7211


alncludes taxes, insurance, rent.
bIncludes management and office salaries, telephone, travel, office expense.
Concludes sales salaries, telephone, advertising, travel, but excludes brokerage,
brand royalties, discounts, allowances.
'Includes advertising tax, inspection fees, operating interest.


t1 -619O


I I I I


I


q u


- -- ----


II ....


I III I


I


II
I


. I












Table 5 Continued


Product Blended Juice Tangerine Juice
Under 1,000,000 Under 1,000,000
Volume, Cases 1,000,000 and Over 1,000,000 and Over
Number of Firms 7 7 3 5

Cases per Firm 61,269 290,162 2,691 26,970


Cost per Case:
Material:
Cans
Cartons
Labels, adhesives
Total 'Material
Labor:
Direct
Indirect
Warehousing and shipping
Total Labor
Other Manufacturing:
Power, lights, and water
Maintenance, bldgs., equip.
Royalties
Depreciation
Manufacturing overheada
Miscellaneous expense
Warehousing
Total other Manufacturing E:


$0.8425
.1194
.0613


$0.8347
.1220
.0580


$0.8302
.1160
.0616


$0.8296
.1201
,0511


$1.0232 $1.0147 $1.0078 $1.0008

$0.0595 $0.0517 $0.0805 $0.0785
.0290 .0170 .0224 .0206
.0552 .0548 .0775 .0435
$0.1437 $0,1235 $0.1804 $0.1426


$0.0268
.0341
.0387
.0395
.0249
.0170
.0300
expenses $0.2110


Total Processing andWarehousing $1.3779
Administrative $0.0715
Selling .0519
Other Costsd .0772
Cost, Unsweetened $1.5785
Sugar .1206


$0.0235
.0315
.0364
.0199
.0127
.0107
.0275
$0.1622


$1.3004
$0.0576
.0319
.0780
$1.4679
.1143


$0.0315
.0379
.0396
.0244
.0375
.0198
.0138
$0.2045


$1.3927
$0.0519
.0252
.0667
$1.5365
.0526


$0.0210
.0468
.0427
.0296
.0108
.0088
.0257
$0.1854


$1.3288
$0.0542
.0209
.0617
$1.4656
.0485


Cost, Sweetened


$1.6991


$1.5822 $1.5891


aIncludes taxes, insurance, rent.
blncludes management and office salaries, telephone, travel, office expense.
Clncludes sales salaries, telephone, advertising, travel, but excludes brokerage,
brand royalties, discounts, allowances.
Includes advertising tax, inspection fees, operating interest.


$1.5141


II I


I I II I I I I II I II I I IIII I I I I I I


I


II IIII II


J II


I


I


III II


- III












Total costs per 12/46 case including sugar, for those firms handling over 1,000,000

cases also were lower than for those handling fewer than 1,000,000 cases for single-strength

juices:


Size Group


(Cases)

Under 1,000,000
1,000,000 and over

Difference


Orange Juice Grapefruit Juice Blended Juice Tangerine Juice


.....--------Cost per 12/46 Case, Sweetened-----------

$1.6190 $1.7211 $1.6991 $1.5891
1.5225 1.6159 1.5822 1.5141

$0.0965 $0.1052 $0.1169 $0.0750


Differences between large and small-volume firms in costs of processing, warehousing,

and selling Florida citrus fruit juices in 12/46 cases are shown in detail in Table 5. With

few exceptions large volume firms showed an advantage in almost every item of cost. The

cost variation within groups, shown in the following summary for single-strength unsweetened

orange juice in 12/46 cases, illustrates the advantage of the larger volume operations as

reflected in lower costs:


Cost per Case


Under 1,000,000 Cases 1,000,000 Cases and Over


..--..- ---. -Number of Firms---- -----------
Under $1.45 0 1
$1.45- 1.50 3 3
1.50- 1.55 1 2
Over $1.55 3 1
Total 7 7


-- -- --


- --











Costs of Processing Citrus Sections

The average costs of processing, warehousing, and selling grapefruit sections continued

the upward trend which has characterized six of the past seven seasons. The following costs

for grapefruit sections show these trends:


Season Grapefruit Sections
12/46 24/303


1951-52 $.... $2.19
1952-53 .... 2.23
1953-54 .... 2.33
1954-55 3.03 2.23
1955-56 3.07 2,34
1956-57 3.23 2.48
1957-58 3.41 2.60



The 24/303 case size continues to be the most popular pack for grapefruit and salad

sections. The 12/46 case size of grapefruit sections, introduced in the 1954-55 report for

the first time, is still used but production of 24/2's was reported by only one of the 11 firms

producing sections. In Table 6 a breakdown of major cost items is shown for the most popular

case sizes and fruit packs of citrus sections. Average costs increased over the previous season

in every item of expense except direct labor and total labor.










Table 6 r-Costs of Processing, Warehousing and Selling Florida Citrus Sections, 1957-58 Season

Product Grapefruit Sections Salad Sections
Type of Container 24/303 12/46 24/303
Number of Firms 11 6 7
Cases per Firm 189,591 29,855 22,936
Cost per Case:


Material:
Cans
Cartons
Labels
Total Material
Labor:
Direct Peeling
Sectionizing
Other direct
Total Direct
Indirect
Warehousing and shipping
Total Labor
Other Manufacturing:
Power, lights, and water
Maintenance, bldgs., equip.
Depreciation
Manufacturing overhead0
Miscellaneous expense
Warehousing
Total other Manufacturing Expense
Total Processing and Warehousing
Administrative
Selling Expense0
Other Expensed
Total Cost, Unsweetened
Sugar
Total Cost, Sweetened


$0.7952
.0868
.0578
$0.9398


$0.8318
.1202
.0634
$1.0154


$0.8081
.0869
,0530
$0,9480


$0.1618 $0.2357 $0.2.78
.5207 .7576 7380
.2090 .3Y47 .2221
$0.8915 $1.2'80 $1.2279
.0449 .0539 .0630
.0648 .0823 .0755
$1.0012 $1.4,'92 $1.3664

$0.0440 $0.041 $0.0551
.0478 .0903 .0531
.0672 .0574 .0636
.0546 .0949 .0455
,0257 .0561 .0463
.0232 .0209 .0167
$0.2f2j $0.3737 $0,2803
$2.2035 $2.8283 $2.5947
$0.0610 $0.0859 $0.1098
.0351 .0399 .0659
.0752 .1126 .0709
$2.3748 $3,0667 $2.8413
.2295 .3389 .2445


$2.6043


$3.4056


$3.0858


aIncludes taxes, insurance, rent.
bIncludes management and office salaries, office expense, telephone, and travel.
includes sales salaries, telephone, advertising, travel but excludes brokerage, brand
royalties, discounts, allowances.
Includes advertising tax, inspection fees, operating interest.


I I _


I










Costs of Processing Frozen Orange Concentrate

In Table 7, costs for processing and warehousing frozen orange concentrate are shown

for three popular can sizes 48/6, 24/12, and 12/32. Container costs are included, but

selling is omitted. Costs increased in 1957-58 in each major category and in most individual

items.

Selling costs have been omitted from the cost tables on concentrates because of the

difficulty of determining a comparable figure among firms. The data obtained indicated

widely varying selling costs, a large part of which was often represented by brokerage. Selling

costs, exclusive of brokerage allowances and royalties, averaged $0.158 per case of 48/6 and

$.063 per gallon.

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

25 percent less than that contained in a case of 12/32's. Therefore, for an equivalent

volume (basis 48/6) the 1957-58 costs compared as follows with those for 1956-57:


Type of Container 1957-58 1956-57 Difference

48/6 $2.20 $1.95 + $0.25
24/12 (48/6 basis) 1.94 1.56 + 0.38
12/32 (48/6 basis) 1.66 1.30 + 0.36


A detailed statement of average per-gallon costs of processing and warehousing frozen

orange concentrate appears in Table 8. Costs in this table represent a conversion to equiv-

alent gallons of all containers of frozen orange concentrate, but excludes the cost of cans,

cartons, and selling. Itemized costs are arranged by volume groups with those firms producing










Table 7.--Costs of Processing and Warehousing Florida Frozen Orange
Season (Excludes Selling)


Concentrate, 1957-58


Type of Container 48/6 24/12 12/32
Number of Plants 14 14 11
Cases Produced per Plant 674,296 233,221 74,232
Cost per Case:


Material:
Cans (lithographed)
Cartons


$1.0704
.0745


$0.7515
.0742


$0.6472
.0941


Total Material
Labor:
Direct
Indirect
Warehousing and shipping
Total Labor
Other Manufacturing:
Power, lights, and water
Maintenance, bldgs., equip.
Royalties
Depreciation
Manufacturing overhead
Miscellaneous expense
Warehousing
Total other Manufacturing Expense
Tofal Processing and Warehousing
Administrative
Other Costsc
Total Costs (Excluding Selling)


$1.1449 $0.8257 $0.7413

$0.1335 $0.1287 $0.1802
J1096 .1174 .1482
.0378 .0400 .0605
$0.2809 $0.2861 $0.3889

$0.0932 $0.0986 $0.1303
.0436 .0455 .0703
.0774 .0841 .1068
.1222 .1345 .1689
.0390 .0430 .0590
.0481 .0531 .0627
.0651 .0668 .1034
$0.4886 $0,5256 $0.7014
$1.9144 $1.6374 $1.8316
$0.1290 $0.1374 $0.1732
.1552 .1653 .2045


$2.1986


$1.9401


$2.2093


alncludes insurance, taxes, rent.
blncludes management and office salaries, office expense, telephone,
includes advertising tax, inspection fees, operating interest.


and travel.


under 3,000,000 equivalent gallons being compared with the group producing over 3,000,000

gallons. The larger firms showed a cost advantage in almost every item. Exceptions are


- --







manufacturing overhead (insurance, taxes, rents), miscellaneous manufacturing expenses and

other costs. The total costs per gallon for the larger firms were $0.096 per gallon less than

for the smaller group.


Table 8.--Costs per Gallon for Processing and Warehousing Frozen Orange Concentrate, by
Voumne Groups, excluding the Cost of Cans, Cartons, and Selling, 15 Florida Plants,
1957-58 Season


Volume Group (gallons) All Firms Under 3,000,000
3, 000,000 and Over

Number of Firms 15 9 6
Gallons per Plant 2, 768,750 1,800,894 4, 220,533
Cost per Gallon:
Labor:
Direct $0.0579 $0.0686 $0.1110
Indirect .0448 .0461 .0-44
Warehousing and shipping .0165 .0205 .040
Total Labor $0.1192 $0.1352 $0.1ro
Other Manufacturing:
Power, lights, and water $0.0423 $0.0482 $0.0385
Maintenance, bldgs., equip. .0198 .0283 .0143
Royalties .0358 .0387 .0340
Depreciation .0515 .0756 ,0360
Manufacturing overheada .0174 .0173 .0174
Miscellaneous expense .0230 .0166 .0272
Warehousing .0279 .0352 .0231
Total other Manufacturing Expenses $0.2177 $0.2599 $0.1905
Administrative Costsb $0.0572 $0.0614 $0.0545
Other Costsc .0673 .0636 .0697
Total Cost $0.4614 $0.5201 $0.4238


alncludes insurance, taxes, and rent.
blncludes management and office salaries,
travel.


office expense, telephone and telegraph,


Concludes advertising taxes, inspection fees, and operating interest.








However, there were some firms in the large volume group which had high costs, and

some of the smaller plants had relatively low costs as shown by the comparison below:



Cost per Gallon Firms producing under Firms producing
Cost per Gallon
3 million gallons 3 million gallons or over

---.------- Number of Firms----------- ---

Under $0.40 1 2
$0.40- 0.44 1 1
0.45- 0.49 2 1
0.50- 0.54 3 1
0.55 and over 2 1
Total 9 6



The average cost per gallon for processing and warehousing frozen orange concentrate

increased 24 percent in 1957-58 over the preceding year. While the percentage increase was

not uniform among firms, all except two showed a decided increase in costs, Comparative

data were lacking on one of these firms. The total cost per gallon for processing and

warehousing for the 1957-58 season was approximately 46 cents per gallon. The record for

the past 10 years is as follows:

Frozen Orange Concentrate
Season Cost per Gallon
1948-49 $0.465
1949-50 .451
1950-51 .346
1951-52 .326
1952-53 .372
1953-54 .340
1954-55 .328
1955-56 .341
1956-57a .371
1957-58a .461

'1956-57 costs are based on data from 13 plants, and 1957-58 on 15 plants, as
compared with 9 plants for 1955-56,








The 1957-58 and 1956-57 sample plants represented 72 percent and 65 percent,

respectively, of Florida's total production of orange concentrate while the 9 plants included

in 1955-56 were responsible for only 42 percent. The additional coverage for the 1956-57

and 1957-58 seasons has resulted in an average cost figure which can be assumed to be more

typical of industry operations. However, with the substantial changes in sample size and

composition necessary to achieve broader coverage, some comparability between costs for

the past two seasons and costs for prior years has been sacrificed. For example, If average

costs per gallon are compared for eight plants included in the 1955-56, 1956-57, and

1957-58 seasons samples, the results would appear as follows:


Cost per Gallon
(excluding cans, cartons, 1955-56 1956-57 1957-58
and selling)

Identical 8 plants $0.3465 $0.3343 $0.4022


Had data been available for the past seasons for all 15 plants included in this report,

costs for 1955-56 and earlier years might well have been higher since it is apparent that

some higher-cost plants have been added. Interpretation of cost relationships for recent years

should be made with due consideration for broader coverage of the sample in the last

two seasons,








Definition 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: A mixture of orange and grapefruit juices, with the proportion of each
varying from 60-40 to 40-60 percent.

Cases per Firm: Number of cases processed.

Containers:
Kind Cans per Case Size of Can
24/2 24 18-ounce
12/46 or 12/404 12 46-ounce
24/303 24 15-ounce
48/6 48 6-ounce
24/12 24 12-ounce
12/32 12 32-ounce

Cost Items:

Material: Cans, cartons, labels, adhesives, freight on material.
Labor: Plant and warehouse labor, supervision, mechanics, watchmen, payroll
taxes, workmen' s compensation insurance.
Other Manufacturing: Depreciation; repairs and maintenance of building and
machinery; power, lights, water, fuel, royalties, manufacturing overhead (insurance
taxes, rent), miscellaneous supplies and other operating expense; warehouse expense,
other than labor.
Administrative: Management and office salaries; office supplies and expense; auto
and travel; 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:
Other Costs: Advertising taxes on fruit; inspection fees; operating interest.
Total Cost: The cost, excluding sugar, of processing, administration, selling, and
other costs. When given, the cost of sugar is the average for those firms that produced
sweetened juices, sections, and salads.




OTHER PUBLICATIONS AVAILABLE ON CITRUS COSTS
DEPARTMENT OF AGRICULTURAL ECONOMICS
FLORIDA AGRICULTURAL EXPERIMENT STATIONS
GAINESVILLE, FLORIDA



1. Costs of Packing and Selling Florida Fresh Citrus Fruits, 1957-58 Season,

Agricultural Economics Mimeo Report No. 59-9, February 1959.


2. Costs of Picking and Hauling Florida Citrus Fruits, 1957-58 Season.

Agricultural Economics Mimeo Report No. 59-10, February 1959.


3. A Method of Allocating Citrus Packinghouse Costs.

Agricultural Economics Mimeo Report No. 58-1, July 1957.


4. The Use of Packing Labor in Florida Citrus Packinghouses.

Agricultural Economics Mimeo Report No. 57-8, June 1957.


5. Costs for Handling Florida Oranges Shipped in Consumer Bags and in Bulk.

Agricultural Economics Mimeo Report No. 58-12, June 1958.


6. Twenty-five Years of Citrus (production) Costs and Returns in Florida, 1931-1956.

Agricultural Extension Service, Economics Series, 58-6, December 1958.


7. Economies of Scale in the Operation of Florida Citrus Packinghouses.

Bulletin 606 January 1959.


AHS June 1959
Agr. Econ. Exp. Sta. 1000