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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: 1958
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.
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Resource Identifier: oclc - 31065500
System ID: UF00027701:00011
 Related Items
Succeeded by: Estimated costs of processing, warehousing and selling Florida citrus products

Table of Contents
    Title Page
        Title page
    Foreword
        Foreword
    Table of Contents
        Foreword
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
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        Page 16
        Page 17
        Page 18
Full Text


June 1960






COSTS


Agricultural Economics
Mimeo Report No. 60-12






OF PROCESSING, WAREHOUSING AND


SELLING FLORIDA CITRUS PRODUCTS,

1958-59 SEASON


By
A. H. Spurlock and H. G. Hamilton


Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida











FOREWORD


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

13 seasons. These costs were assembled and published by the Florida Agricultural Experiment

Station in cooperation with the Farmer Cooperative Service, U. S. Department of Agriculture

for the first 11 years. For the past two seasons, processing costs have been prepared by the

Agricultural Experiment Station.

This is a report of one phase of Southern Regional Project SM-22, "The Economic

Efficiency of Marketing Citrus Fruits."





TABLE OF CONTENTS
Page

Costs of Processing Single-Strength Juices**....**....*....***...... ......**. 3

Variations in Cost.....**.. ....................................... 7

Volume and Cost .....*...............,....................o..... 7

Costs of Processing Citrus Sections ......................................... 9

Costs of Processing Frozen Orange Concentrate .............................. 10

Definition of Terms *............................................*.....*.. 16











FOREWORD


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

13 seasons. These costs were assembled and published by the Florida Agricultural Experiment

Station in cooperation with the Farmer Cooperative Service, U. S. Department of Agriculture

for the first 11 years. For the past two seasons, processing costs have been prepared by the

Agricultural Experiment Station.

This is a report of one phase of Southern Regional Project SM-22, "The Economic

Efficiency of Marketing Citrus Fruits."





TABLE OF CONTENTS
Page

Costs of Processing Single-Strength Juices**....**....*....***...... ......**. 3

Variations in Cost.....**.. ....................................... 7

Volume and Cost .....*...............,....................o..... 7

Costs of Processing Citrus Sections ......................................... 9

Costs of Processing Frozen Orange Concentrate .............................. 10

Definition of Terms *............................................*.....*.. 16









COSTS OF PROCESSING, WAREHOUSING, AND SELLING
FLORIDA CITRUS PRODUCTS, 1958-59 SEASON

by

A. H. Spurlock and H. G. Hamilton1


Twenty-one processing firms cooperated in the study for the 1958-59 season. These

firms processed about 28 million actual cases of single-strength juices and sections--approxi-

mately 86 percent of total Florida production; and 60.7 million gallons of frozen orange

concentrate, or 75 percent of total Florida production for the season.

Data for frozen orange juice concentrate were based on records of 14 firms operating

16 plants while data for single-strength juice and sections were based on records of 16 firms

operating 16 plants. Grapefruit sections were produced by 11 of these firms.

For the past three 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 compo-

sition of the sample were so substantial that concentrate costs for the last three seasons are

not entirely comparable with those of preceding years. In the case of those products for

which the sample has changed little (juices and sections), the average cost of production

will be comparable with costs for prior years.

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.

1Agricultural Economist and Agricultural Economist and Head, Department of
Agricultural Economics.












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 $0.8828 per case and for tangerine

juice, $0.8851. The difference is caused by a change in the number of firms averaged

and by a shift in the weight of the firms included.

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.

Social security taxes and workmen' s compensation insurance changes 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 and 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, office expense, travel, and

advertising. Brokerage, discounts, allowances, and brand royalties have been omitted,











In some cases brokerage was the largest item shown for selling on the firms' records. How-

ever, the firm' s use of the omitted items and methods of accounting for them vary widely.

Selling costs have been omitted entirely from tho concentrates.


Costs of Processing Single-Strength Juices

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

cluding the cost of sugar, in 12/46 cases, are shown for the past 12 years in Table 1. The

cost trend over this period has been definitely upward but showed decreases from the trend

in the years 1953-54 to 1955-56. In 1958-59, total costs for juices, except tangerine

juice, declined very slightly from the previous year's level. In 12/46 cases costs for

orange juice and blended juice decreased 1 cent, grapefruit juice 3 cents. Tangerine juice

increased 4 cents per case, mainly due to a more adequate sample of plants. In 1958-59,

costs for juices are based on data from 15 firms as compared with 14 for the preceding season.


Table 1 .--Average Cost of Processing, Warehousing, and Selling Florida Citrus Fruit Juices,
Excluding Sugar, in 12/46 Cases, 1947-48 through 1958-59 Seasons

Season Orange Juice Grapefruit Juice Blended Juice Tangerine 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 1.24
1950-51 1.24 1.23 1.23 1.24
1951-52 1.30 1.31 1.31 1.32
1952-53 1.35 1.35 1.34 1.39
1953-54 1.26 1.26 1.26 1,29
1954-55 1.27 1.27 1.28 1.33
1955-56 1.32 1.33 1.33 1.33
1956-57 1.38 1.40 1.39 1.43
1957-58 1.48 1.50 1.49 1.47
1958-59 1.47 1.47 1.48 1.51











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

declined in 1958-59 in each category except materials which increased. The materials cost

increase was due to an increase in can costs. Costs of cartons and labels declined from the

1957-58 level. Small decreases are noted in labor costs and "other manufacturing" costs,

while administrative and selling costs decreased by 17 percent. Cost reductions for most

groups in 1958-59 were perhaps due to an increase in plant volume over the preceding

season, rather than to a decrease in prices of goods and services used in manufacture. 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
1957-58 1958-59 from 1957-58 Change

Materials $1.0177 $1.0274 + $0.0097 + 1.0
Labor ,1325 .1315 .0010 .8
Other manufacturing .1748 .1743 .0005 .3
Admin. and selling .0970 .0799 .0171 -17.6
Other costs .0623 .0609 .0014 2.2

Total-nonsweet $1.4843 $1.4740 $0.0103 0.7


Itemized costs of processing single-strength juices in the most popular cansizes

(24/2 and 12/46 cases) for the 1958-59 season are shown in Table 2.









Table 2.--Cost per Case by Type of Container for Processing, Warehousing, and Selling
Florida Citrus Fruit Juices, 15 Canneries, 1958-59 Season


Product Orange Juice __Grapefruit Juice
Type of Container 24/2 12/46 24/2 12/46
Number of Firms 13 14 13 15
Cases per Firm _147,386 442,613 128,526 355,548
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, bidgsc and equip.
Royalties
Depreciation
Manufacturing overheada
Miscellaneous expense
Warehousing
Total Other Manufacturing Expense
Total Processing.and Warehousing
Administrative
Selling
Other Costsd
Total Cost, Unsweetened
Sugar
Total Cost, Sweetened


$0.8828
.0840
.0577
$1.0245


$0.0431
.0168
.0592
$0.1191


$0.8682
.1032
.0560
$1.0274


$0.0482
.0206
.0627
$0.1315


$0.8827
.0832
.0569
$1.0228


$0.0479
.0179
.0549
$0.1207


$0.8687
.1027
.0551
$1.0265


$0.0543
.0225
.0590
$0.1358


$0.0179 $0.0226 $0.0176 $0.0228
.0243 .0313 .0253 .0336
.0384 .0483 .0227 .0278
.0159 .0207 .0183 .0233
.0080 .0108 .0082 .0113
.0106 .0134 .0107 .0135
.0269 .0272 .0262 .0261
$0.1420 $0.1743 $0.1290 $0.1584
$1.2856 $1.3332 $1.2725 $1.3207
$0.0421 $0.0508 $0.0395 $0.0503
.0241 .0291 .0196 .0238
.0487 .0609 .0620 .0786
$1.4005 $1.4740 $1.3936 $1.4734
.0554 .0740 .1101 .1431
$1.4559 $1.5480 $1.5037 $1.6165


aIncludes taxes, insurance, rent.
blncludes management and office salaries, telephone, travel, office expense.

SIncludes sales salaries, telephone, advertising, travel, but excludes brokerage,
brand royalties, discounts, allowances.
dOther costs include advertising tax, inspection fees, operating interest.


II


~


'I


I









Table 2.--Continued


Product Blended Juice Tangerine Juice
Type of Container 24/2 12/46 24/2 12/46
Number of Firms 13 14 8 9





Cartons .0844 .1033 .0836 .1030
Labels, adhesives .0571 .0559 .0572 .0562
Total Material $1.0240 $1.0277 $1.0259 $1.0263
Labor (incl. payroll taxes, ins.):
Direct $0.0433 $0.0514 $0.0606 $0.0686
Indirect .0188 .0232 .0223 .0282
Warehousing and shipping .0607 .0626 .0526 .0561
Total Labor $0.1228 $0.1372 $0.1355 $0.1529
Other Manufacturing:
Power, lights, and water $0.0181 $0.0229 $0.0181 $0.0240
Maintenance, bIdgs. and equip. .0265 .0338 .0277 .0367
Royalties .0294 .0373 .0368 .0460
Depreciation .0167 .0217 .0199 .0259
Manufacturing overhead0 .0083 .0109 .0066 .0085
Miscellaneous expense .0107 .0132 .0088 .0108
Warehousing .0265 .0267 .0254 .0272
Total Other Manufacturing Expense $0.1362 $0.1665 $0.1433 $0.1791
Total Proceauingiand Wnhousing $1.2830 $1.3314 $1.3047 $1.3583


Administrative
Selling
Other Costsd


$0.0420 $0.0532 $0.0446 $0.0589
.0245 .0283 .0189 .0241
.0567 .0708 .0535 .0670


Total Cost, Unsweetened $1.4062 $1.4837 $1.4217 $1.5083
Sugar .0837 .1066 .0534 .0620
Total Cost, Sweetened $1.4899 $1.5903 $1.4751 $1.5703

aIncludes 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.











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

about eight 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 $0.2250 cents per

case lower than for 24/2 cases. The differences were about one cent less than those existing

for 1957-58. Differences in individual plant costs for these different case sizes show a high

degree of consistency. The comparative costs for packing an equivalent 24/2 quantity of

juice in two can sizes were as follows:


Item Orange Grapefruit Blended Tangerine
I Juice Juice Juice Juice

Cost per 24/2 case $1.4005 $1.3936 $1.4062 $1.4217
Cost 24/2 equiv. in 12/46 1.1708 1.1703 1.1985 1.1980

Difference 1958-59 $0.2297 $0.2233 $0.2277 $0.2237
Difference 1957-58 .2369 .2304 .2454 .2386



Variations in cost.--Variations among firms in the total cost of processing, ware-

housing, and selling single-strength unsweetened juices for 1958-59 are shown in Table 3.

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

housing 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 of juices and sections processed. Eight firms pro-

cessed fewer than 1,500,000 cases, and six firms more than 1,500,000 cases each. The

variations in total cost of processing, warehousing, and selling orange juice, unsweetened,

in 12/46 cases by size group of plant are shown in Table 5.












Table 3.--Variations in Cost for Processing, Warehousing, and Selling Florida Citrus Fruit
Juices, Excluding Sugar, by Type of Product and Case Size, 15 Firms, 1958-59 Season

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 1 0 1 0 1 0
$1.35 1.39 6 0 6 1 6 1 1 1
1.40 1.44 4 4 3 2 4 2 3 0
1.45 1,49 1 6 3 7 2 7 1 2
1.50 1.54 1 1 0 1 0 1 2 3
1.55 and over 0 3 0 4 0 3 0 3
Total Number
of Firms 13 14 13 15 13 14 8 9


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, 15 Firms, 1958-59 Season


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


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

0 0 1 0 1 0 0 0
8 2 7 3 8 1 4 0
3 5 4 6 3 7 2 3
2 4 1 3 1 4 0 2
0 1 0 1 0 1 2 3
0 2 0 2 0 1 0 1


13 14 13 15 13 14 8 9


i -











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

12/46 cases reveals some cost differences between firms canning large volumes and those

canning small volumes. However, some high-cost and some low-cost firms appeared in

each volume group as shown by the distribution in Table 5.


Table 5.--Variations in Cost of Processing, Warehousing, and Selling Orange Juice 12/46,
Unsweetened, by Total Volume of Plant, 14 Firms, 1958-59

Cost per Case Under 1, 500, 000 1,500, 000 Cases
12/46 Cases and Over
---------Number of Firms -- -------

Under $1.45 1 3
$1.45 1,50 4 2
1.50 1.55 1 0
1.55 and over 2 1

Total 8 6



It appears that maximum efficiency in canning juices may be reached at a plant

volume of less than 1, 500, 000 cases.


Costs of Processing Citrus Sections

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

1958-59 declined slightly from the level of the preceding season. Costs for materials

increased due to higher can prices, and labor costs were higher, but other groups of costs

were lower. The average product volume per firm was higher.











The following costs for sections show the trend in recent years:


Season Grapefruit Sections Salad Sections
F12/46 24/303 24/303


1951-52 $ .. $2.19 $2.48
1952-53 .. 2.23 2.49
1953-54 .. 2.33 2.60
1954-55 3.03 2.23 2.50
1955-56 3.07 2.34 2.72
1956-57 3.23 2.48 2.90
1957-58 3.41 2.60 3.09
1958-59 3.39 2.56 2.96



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 2 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.

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 because of the difficulty of determining a comparable figure among

firms. The data obtained indicated widely varying sales costs, a large part of which was

often represented by brokerage. Selling costs, exclusive of brokerage, allowances, and

brand royalties, averaged $0.1443 per case of 48/6-ounce cans and $0.0600 per gallon.






Table 6.--Costs of Processing, Warehousing, and Selling Florida Citrus Sections,
1958-59 Season


Product Grapefruit Sections Salad Sections
Type of Container 24/303 12/46 24/303 12/46
Number of Firms 11 8 9 7
Cases per Firm 268,611 58,341 36,538 10,566
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. and equip.
Depreciation
Manufacturing overheada
Miscellaneous expense
Warehousing
Total Other Manufacturing Expense
Total Processing and Warehousing
Administrativeb
Selling
Other Costsd
Total Cost, Unsweetened
Sugar
Total Cost, Sweetened


$0.8215
.0728
.0518


$0.8664
.1042
.0535


$0.8258
.0751
.0516


$0.8706
.1046
.0567


$0.9461 $1.0241 $0.9525 $1.0319

$0.1624 $0.2421 $0.2651 $0.4015
.5483 .8130 .7617 1.1632
.1986 .2969 .2368 .4221
$0.9093 $1.3520 $1.2636 $1.9868
.0579 .0832 .0694 .0874
.0602 .0611 .0612 .0632
$1.0274 $1.4963 $1.3942 $2.1374

$0,0365 $0.0557 $0.0333 $0.0553
.0438 .0593 .0541 .0691
.0348 .0608 .0318 .0497
.0690 .1233 .0607 .1193
.0302 .0425 .0343 .0438
.0261 .0284 .0236 .0332
$0.2404 $0.3700 $0.2378 $0.3704
$2.2139 $2.8904 $2.5845 $3.5397
$0.0460 $0.0547 $0.0542 $0.0598
.0339 .0322 .0538 .0325
.0559 .0867 .0673 .0958
$2.3497 $3.0640 $2.7598 $3.7278
.2067 .3217 .2003 .3037
$2.5564 $3.3857 $29601 $4,0315


includes taxes, insurance, rent.


blncludes management and office salaries, office expense,


telephone, and travel.


CIncludes sales salaries, telephone, advertising, travel, but excludes brokerage,
brand royalties, discounts, allowances.
includes advertising tax, inspection fees, operating interest.







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


Orange Concentrate, 1958-59


Type of Container 48/6 24/12 12/32
Number of Plants 14 14 13
Cases Produced per Plant 930,195 329,450 87,561
Cost per Case:


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


$1.0859
.0594
$1.1453


$0.1048
.0872
.0353
$0.2273


$0.7653
.0598
$0.8251


$0.1005
.0945
.0328
$0.2278


$0.6714
.0753
$0.7467


$0.1550
.0932
.0431
$0.2913


$0.0844 $0.0857 $0.1127
.0484 .0502 .0703
.0782 .0814 .1133
,0958 .1046 .1257
.0526 .0609 .0538
.0422 .0436 .0579
.0665 .0712 .0774
$0.4681 $0.4976 $0.6111
$1.8407 $1.5505 $1.6491
$0.1393 $0.1533 $0.1548
.1190 .1177 .1450


$2.0990


$1.8215


$1.9489


aIncludes insurance, taxes, rent.
bIncludes management and office salaries, office expense, telephone, and travel.
SIncludes advertising tax, inspection fees, operating interest.


II II


I II I I I


I I


I I I I I




13

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 1958-59 costs compared as follows with those for 1957-58:



Type of Container 1958-59 1957-58 Difference


48/6
24/12 (48/6 basis)
12/32 (48/6 basis)


$2.10
1.82
1.46


$2,20
1.94
1.66


- $0.10
- 0.12
- 0.20


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 equivalent gallons of all containers of frozen orange concentrate, but exclude the cost

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

producing under 4,000,000 equivalent gallons being compared with the group producing over

4,000,000 gallons. The larger firms showed a cost advantage in almost every item. Exceptions

were administrative expense and machine royalties. The total costs per gallon for the group of

larger firms were $0.087 per gallon less than for the small group. However, it should be

pointed out that volume of output is not the only factor affecting costs. There were some

firms in the large volume group which had high costs, and some of the smaller plants had rela-

tively low costs as shown by the following comparison:


Cost per Gallon Plants Producing Under Plants Producing
ost per allon4,000,000 Gallons 4,000,000 Gallons or Over

---------------- Number of Firms----------------
Under $0.35 1 3
$0.35 0.39 2 3
0.40 0.44 2 0
0.45 0.49 0 1
0.50 0.54 0 1
0.55 and over 3 0
Total 8 8









Table 8.--Costs per Gallon for Processing and Warehousing Frozen Orange Concentrate, by
Volume Groups, Excluding the Cost of Cans, Cartons, and Selling, 16 Florida Plants,
1958-59 Season

Under 4,000,000
Volume Group (gallons) All Firms 4,000,000 and Ovr
4,000,000 and Over
Number of Firms 16 8 8
Gallons per Plant 3,799,085 2,223,969 5,374,200
Cost per Gallon:
Labor:
Direct $0.0455 $0,0592 $0.0398
Indirect .0355 .0375 .0347
Warehousing and shipping .0149 .0219 .0119
Total Labor $0.0959 $0.1186 $0.0864
Other Manufacturing:
Power, lights, and water $0.0361 $0.0410 $0.0341
Maintenance, bldgs. and equip. .0222 .0245 .0212
Royalties .0354 .0348 .0356
Depreciation .0423 .0591 .0353
Manufacturing overheada .0213 .0239 .0202
Miscellaneous expense .0174 .0190 .0167
Warehousing .0267 .0309 .0250
Total Other Manufacturing Expense $0.2014 $0.2332 $0.1881
Total Processing and Warehousing $0.2973 $0.3518 $02745
Administrative $0.0580 $0.0565 $0.0586
Other Costsc .0513 .0598 .0479
Total Cost $0.4066 $0.4681 $0.3810


a
Includes insurance, taxes, and rent.
bIncludes management and office salaries, office


expense, telephone and telegraph,


travel.


CIncludes advertising taxes, inspection fees, and operating interest.


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

decreased 12 percent in 1958-59 over the preceding year. While the percentage decrease was










not uniform among firms, all except three showed a decrease in costs. Comparative data

were lacking on two of these firms. Volume of output for the 14 plants with 1957-58 data

averaged 29 percent higher, with all but three plants showing increases. Two of the plants

with volume decreases had corresponding cost increases.

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

for the 1958-59 season was approximately 41 cents per gallon. The record for the past

11 years is as follows:


S~ ... 11 Number of Plants
Season Cost per Equiv. Gallon in Sample
in Sample

1948-49 $0.465 5
1949-50 .451 8
1950-51 .346 9
1951-52 .326 7
1952-53 .372 9
1953-54 .340 10
1954-55 .328 10
1955-56 .341 9
1956-57 .371 13
1957-58 .461 15
1958-59 .407 16



Since 1955-56, substantial changes hove been made in the sample size and composition

for competing concentrate costs. The broader coverage has resulted in an average cost figure

which can be assumed to be more typical of industry operations. However, it is apparent that

some higher cost plants have been added which affect the comparability of costs in the last

three seasons with those of 1955-56 and earlier years.






16


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, man-
ufacturing 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.







17


Selling: Salaries of salesmen and others; advertising; other plant
selling costs. Brokerage, discounts, and allowances are omitted.

Other Costs: Advertising taxes on fruitP 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, 1958-59 Season.

Agricultural Economics Mimoo Report No. 60-10, February 1960.


2. Costs of Picking and Hauling Florida Citrus Fruits, 1958-59 Season.

Agricultural Economics Mimeo Report No. 60-9, February 1960.


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-six Years of Citrus Product Costs and Returns in Florida, 1931-1957.

Agricultural Extension Service, Economics Series, 59-5, August 1959.






AHS June 1960
Agr. Econ. Exp. Sta. 1000