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Costs of processing, warehousing and selling Florida citrus products
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Permanent Link: http://ufdc.ufl.edu/UF00027701/00013
 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: 1960
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: UF00027701:00013
 Related Items
Succeeded by: Estimated costs of processing, warehousing and selling Florida citrus products

Table of Contents
    Title Page
        Page i
    Table of Contents
        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
    Cost of processing citrus sections
        Page 11
        Page 12
    Cost of processing frozen orange concentrate
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
    Definitions of terms
        Page 18
Full Text


March 1962


Agricultural Economics
Mimeo Report No. 62-12


COSTS OF PROCESSING, WAREHOUSING AND


SELLING FLORIDA CITRUS PRODUCTS, 1960-61 SEASON



By


A. H. Spurlock and H. G. Hamilton


Cost
$1.60

1.40

1.20

1.00

.80

.60

.40

.20

0


Trend in the Cost of Processing, Warehousing and Selling Single Strength Orange Juice Per 12/46 Case,
1946-47 to 1960-61 Inclusive



hi


Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida S















COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1960-61 SEASON

by

A. H. Spurlock and H. G. Hamilton-


CONTENTS

Page

Costs of Processing Single-Strength Juices . . . 3

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

Costs of Processing Citrus Sections. . . . ... 1. 1

Costs of Processing Frozen Orange Concentrate . . . 13





Twenty-two citrus processing firms cooperated in the study for the

1960-61 season. These firms processed over 18 million actual cases of single-

strength juices, 3.7 million cases of sections, and 65 million gallons of

frozen orange concentrate. The firms in the sample produced about three-fourths

of the Florida output of each product.

Data for single-strength juice were based on records of 14 firms,and

sections on 10 firms. Concentrates were produced by 16 firms operating 18

plants. Six of the firms produced all 3 products.

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. All of the costs shown in this summary are weighted averages. The

1/
Agricultural Economist and Agricultural Economist and Head, Department
of Agricultural Economics.
This is a report of one phase of Southern Regional Project SM-22, "The
Economic Efficiency of Marketing Citrus Fruits."












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 firm 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, the can cost averaged $0.8840 per case and for grapefruit

juice, $0.8812. Such differences may be caused by a change in the number of

firms averaged or in a shift in the weight of the firms included in each group.

Detailed cost data assembled from the cooperating firms were combined

into 6 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 costs have

been added to the wage or salary items to which they apply. Some firms combine

Such charges with labor costs, while others show social security and related

items as separate costs. In order to make labor items consistent for all firms,

the amounts shown herein include payroll taxes and workmen's compensation

insurance.

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

own sales department expense--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 firm's records. However, the firms' use of the omitted items

and methods of accounting for them varied widely. Selling costs have been

omitted entirely from the concentrates.











Costs of Processing Single-Strength Juices

Average costs of processing, warehousing and selling single-strength

juices in 12/46 cases, excluding the cost of sugar, are shown for the past 14

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 1960-61,

total costs for juices increased from the previous year's level, with the largest

increase in orange juice. In 1960-61, costs for juices are based on data from

14 firms as compared with 15 for the preceding season.


TABLE l.--Average cost of processing, warehousing and selling Florida citrus
juices, excluding sugar, in 12/46 cases, 1947-48 through 1960-61 seasons.

Season Orange Grapefruit Blended Tangerine
Juice Juice Juice 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
1959-60 1.52 1.50 1.50 1.52
1960-61 $1.59 $1.57 $1.58 $1.57



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

that costs per case increased in 1960-61 in each category. The materials cost

showed the largest increase in cents per case but a small percentage increase.

Labor cost, other manufacturing, and warehousing increased by small amounts in

cents, but since warehousing cost was a comparatively small item for juices, the











percentage increase was large. Administrative cost, selling and other costs

were substantially higher in 1960-61.

The total cost per case for producing, warehousing and selling unsweet-

ened orange juice in 12/46 cases increased about 7 cents per case in 1960-61,

or 4.9 percent over the preceding season. 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
1959-60 1960-61 from 1959-60 Change

Materials $1.0344 $1.0624 +$0.0280 + 2.7
Labor .1473 .1496 + .0023 + 1.6
Other manufacturing .1604 .1615 + .0011 + 0.6
Warehousing .0301 .0391 + .0090 +29.9
Administrative & selling .0788 .0944 + .0156 +19.8
Other costs .0649 .0828 + .0179 +27.6

Total-nonsweet $1.5159 $1.5898 +$0.0739 + 4.9



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

can sizes (24/2 and 12/46 cases) for the 1960-61 season are shown in Table 2.

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

cases were about 9 to 11 cents per case higher than for 24/2 cases. However,

for an equivalent volume of juices (basis 24/2 cases), the costs for 12/46

cases were 21 to 24 cents per case lower than for 24/2 cases. The differences

were slightly larger than those existing for 1959-60. Differences in individual

plant costs for these different case sizes showed a high degree of consistency.







5



TABLE 2.--Cost per case by type of container for processing, warehousing and
selling Florida citrus fruit juices, 14 plants, 1960-61 season.

Product Orange Juice Grapefruit Juice

Type of Container 24/2 12/46 24/2 12/46
Number of Firms 13 14 13 13
Cases per Firm 107,351 346,266 108,242 440,061


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


$0.8840
.0921
.0554
$1.0315

$0.0576
.0227
.0577
$0.1380


$0.8956
.1123
.0545
$1.0624

$0.0637
.0268
.0591
$0.1496


$0.8812
.0907
.0567
$1.0286


$0.0576
.0245
.0513
$0.1334


$0.8952
.1115
.0549
$1.0616

$0.0592
.0292
.0563
$0.1447


$0.0169 $0.0219 $0.0168 $0.0223
.0203 .0278 .0223 .0299
.0419 .0525 .0225 .0274
.0209 .0280 .0236 .0306
.0129 .0168 .0112 .0147
.0121 .0145 .0117 .0129
$0.1250 $0.1615 $0.1081 $0.1378
$0.0371 $0.0391 $0.0365 $0.0375
$1.3316 $1.4126 $1.3066 $1.3816
$0.0465 $0.0577 $0.0412 $0.0548
.0300 .0367 .0256 .0304
.0679 .0828 .0791 .1002
$1.4760 $1.5898 $1.4525 $1.5670
.0493 .0622 .0933 .1434
$1.5253 $1.6520 $1.5458 $1.7104


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


--











TABLE 2.--Cost per case by type of container for processing, warehousing and
selling Florida citrus fruit juices, 14 plants, 1960-61 season.--Continued

Product Blended Juice Tangerine Juice

Type of Container 24/2 12/46 24/2 12/46
Number of Firms 12 13 7 9
Cases per Firm 30,134 136,853 7,424 38,024
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. and equip.
Royalties
Depreciation
Manufacturing overhead
Miscellaneous expense
Total Other Manufacturing
Warehousing
Total Processing, Warehousing
b
Administrative
Selling
Other costs
Total Cost, Unsweetened
Sugar
Total Cost, Sweetened


$0.8830
.0905
.0571
$1.0306

$0.0565
.0242
.0546
$0.1353


$0.0172
.0209
.0324
.0240
.0119
.0110
$0.1174
$0.0378
$1.3211
$0.0471
.0300
.0738
$1.4720
.0837
$1.5557


$0.8959
.1123
.0562
$1.0644

$0.0642
.0285
.0558
$0.1485


$0.0213
.0289
.0395
.0299
.0157
.0141
$0.1494
$0.0386
$1.4009
$0.0558
.0343
.0932
$1.5842
.1038
$1.6880


$0.8854
.0938
.0525
$1.0317


$0.0790
.0254
.0577
$0.1621


$0.0163
.0172
.0442
.0181
.0115
.0133
$0.1206
$0.0363
$1.3507
$0.0377
.0247
.0753
$1.4884
.0450
$1.5334


$0.8942
.1113
.0514
$1.0569

$0.0752
.0294
.0548
$0.1594


$0.0218
.0318
.0508
.0251
.0130
.0139
$0.1564
$0.0371
$1.4098
$0.0483
.0277
.0887
$1.5745
.0551
$1.6296


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


--


---


---











The comparative costs for packing an equivalent 24/2 quantity of juice in both

can sizes were as follows:




Item Orange Grapefruit Blended Tangerine
Juice Juice Juice Juice

Cost per 24/2 case $1.4760 $1.4525 $1.4720 $1.4884
Cost 24/2 equiv. in 12/46 case 1.2627 1.2446 1.2583 1.2506

Difference $0.2133 $0.2079 $0.2137 $0.2378
Difference 1959-60 $0.2082 $0.2022 $0.2098 $0.2044



Variations in cost.--Variations among plants in the total cost of

processing, warehousing and selling single-strength unsweetened juices for

1960-61 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, 1960-61 season.


Grapefruit Tangerine
Orange Juice Gr fuit Blended Juice Tangerine
Cost Per CaseJuceJuice
24/2 12/46 24/2 12/46 24/2 12/46 24/2 12/46

- - - Number of Firms - - -

Under $1.40 2 0 2 0 2 0 1 0
$1.40 1.44 3 0 4 0 4 0 2 0
1.45 1.49 3 1 2 2 2 1 2 1
1.50 1.54 1 6 2 5 1 6 1 3
1.55 1.59 3 1 2 0 3 0 1 2
1.60 1.64 0 2 0 2 0 2 0 2
1.65 & over 1 4 1 4 0 4 0 1

Total number
of firms 13 14 13 19 12 13 7 9











In Table 4 are shown the variations in cost among plants for processing

and warehousing unsweetened citrus juices, exclusive of administrative, selling

and other costs. These costs represent only the manufacturing and warehousing

expenses--materials, labor and plant costs.


TABLE 4.--Variations in cost for processing and warehousing Florida citrus
fruit juices, excluding sugar, administrative, selling and '"other costs," by
type of product and case size, 14 firms, 1960-61 season.


Orange Juic Grapefruit Blended Juice Tangerine
Orange Juice JuiceBlended JuiceJuice
Cost Per Case
24/2 12/46 24/2 12/46 24/2 12/46 24/2 12/46

- - - Number of Firms -,- - - -

$1.25 $1.29 3 0 5 0 5 0 2 0
1.30 1.34 5 0 5 3 4 1 3 1
1.35 11339 4 5 2 6 3 8 1 4
ql.40 11.44 0 5 0 1 0 0 1 2
1.45 1.49 0 3 0 2 0 3 0 1
1.50 & over 1 1 1 1 0 1 0 1

Total number
of firms 13 14 13 13 12 13 7 9



A comparison of average costs of processing and selling unsweetened

juices in 12/46 cases reveals some cost differences between firms packing large

volumes and those packing 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 in 12/46 cases, unsweetened, by total volume of plant, 14 firms, 1960-61
season.

Cost Per Case Under 1,000,000 1,000,000 Cases
12/46 unsweett) Cases and Over

- Number of Firms - -

Under $1.50 1 0
$1.50 1.54 2 4
1.55 1.59 0 1
1.60 1.64 1 I
1.65 & over 3 1

Total 7 7



Average costs of processing and selling unsweetened juices in 12/46

cases showed a difference between those firms handling over 1,000,000 cases and

those handling under 1,000,000 cases of about 5 to 13 cents per case as follows:



Se Grop Orange Grapefruit Blended Tangerine
Juice Juice Juice Juice

Cost Per 12/46 Case, Unsweetened -

Under 1,000,000 cases $1.6543 $1.6063 $1.6414 $1.7011
1,000,000 cases and over 1.5727 1.5545 1.5671 1.5709

Difference $0.0816 $0.0518 $0.0743 $0.1302



These differences are shown in detail in Table 6. The volume factor

used was the number of cases, 24/2 equivalent, of all juices processed. The

results are not completely conclusive as some of the cost difference may be due

to coincidence or to factors which it was not possible to measure. The number

of firms in each column group was small, especially for tangerine juice which










TABLE 6.--Costs of processing, warehousing and selling Florida citrus fruit juices in 12/46 cases by volume groups,
14 firms, 1960-61 season.

Product Orange Juice Grapefruit Juice Blended Juice Tangerine Juice

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

Number of Firms 7 7 6 7 6 7 3 6

Cases Per Firms 144,819 547,713 176,951 440,061 68,658 195,306 3,187 55,443
Cost Per Case:


Material:
Cans
Cartons
Labels, etc.
Total material
Labor:
Direct
Indirect
Warehousing and shipping
Total labor
Other manufacturing:
Power, light, and water
Maintenance, bldg., equip.
Royalties
Depreciation
Manufacturing overhead
Warehousing
Misc. expense
Total other mfg. exp.
Total processing and
warehousing
Administrative and selling
Other costs
Cost unsweetened
Sugar
Total Cost


$0.9026
.1125
.0593


$0.8937
.1122
.0533


$0.8978
.1092
.0587


$0.8944
.1122
.0537


$0.9010
.1115
.0611


$0.8944
.1125
.0547


$0.9316
.1160
.0458


$0.8931
.1112
.0515


$1.0744 $1.0592 $1.0657 $1.0603 $1.0736 $1.0616 $1.0934 $1.0558

$0.0490 $0.0676 $0.0469 $0.0631 $0.0485 $0.0689 $0.0542 $0.0758
.0334 .0250 .0361 .0270 .0347 .0267 .0335 .0293
.0695 .0564 .0690 .0523 .0697 .0517 .0819 .0540
$0.1519 $0.1490 $0.1520 $0.1424 $0.1529 $0.1473 $0.1696 $0.1591

$0.0255 $0.0209 $0.0277 $0.0206 $0.0248 $0.0202 $0.0576 $0.0208
.0292 .0275 .0240 .0318 .0270 .0295 .0683 .0308
.0576 .0512 .0318 .0260 .0443 .0381 .0579 .0506
.0439 .0237 .0466 .0256 .0462 .0250 .0418 .0247
.0255 .0145 .0240 .0118 .0269 .0123 .0261 .0125
.0364 .0399 .0332 .0388 .0358 .0394 .0218 .0376
.0091 .0159 .0084 .0142 .0089 .0157 .0107 .0139
$0.2272 $0.1936 $0.1957 $0.1688 $0.2139 $0.1802 $0.2842 $0.1909

$1.4535 $1.4018 $1.4134 $1.3715 $1.4404 $1.3891 $1.5472 $1.4058
.1172 .0883 .0922 .0829 .1057 .0855 .0847 .0758
.0836 .0826 .1007 .1001 .0953 .0925 .0692 .0893
$1.6543 $1.5727 $1.6063 $1.5545 $1.6414 $1.5671 $1.7011 $1.5709
.0655 .0614 .1492 .1416 .1097 .1019 .0679 .0547
$1.7198 $1.6341 $1.7555 $1.6961 $1.7511 $1.6690 $1.7690 $1.6256











was not processed by all. However, the average cost differences between the two

groups ee rather consistent for each item of expense. The smaller firms showed

lower direct labor costs per case but higher indirect labor. Some of this

variation may have been due to classification of labor by the plant.


Costs of Processing Citrus Sections

The average costs of processing, warehousing and selling grapefruit

sections and salad sections in 1960-61 were higher than the level of the

preceding season in almost every category. The following costs for sections

show the trend in recent years:



Grapefruit Sections Salad Sections
Season
12/46 24/303 12/46 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 4.03 2.96
1959-60 3.53 2.54 4.08 2.99
1960-61 3.79 2.64 4.32 3.03



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

and salad sections. The 12/46 case of grapefruit sections has been used exten-

sively only a few years. In Table 7, a summary of major cost items is shown for

the most popular case sizes and fruit packs of citrus sections.







12


TABLE 7.--Costs of processing, warehousing and selling Florida citrus
sections, 1960-61 season.

Product Grapefruit Sections Salad Sections

Type of Container 24/303 12/46 24/303 12/46
Number of Firms 10 8 8 5
Cases Per Firm 227,287 64,049 24,017 6,680
Cost Per Case:
Material:
Cans $0.7937 $0.9050 $0.7936 $0.9218
Cartons .0832 .1137 .0815 .1160
Labels .0491 .0472 .0499 .0523
Total material $0.9260 $1.0659 $0.9250 $1.0901
Labor:
Direct--Peeling $0.1536 $0.1838 $0.2040 $0.3280
Sectionizing .5657 .8315 .7685 1.0850
Other direct .2105 .3208 .2636 .3873
Total direct $0.9298 $1.3361 $1.2361 $1.8003
Indirect .0544 .0970 .0587 .0958
Warehousing and shipping .0560 .0719 .0520 .0729
Total labor $1.0402 $1.5050 $1.3468 $1.9690
Other manufacturing:
Power, lights and water $0.0484 $0.0862 $0.0561 $0.0906
Maintenance, bldgs. and equip. .0376 .0892 .0441 .1167
Royalties .0640 .1238 .1012 .1244
Depreciation .0553 .0802 .0579 .0821
Manufacturing overheada .0267 .0544 .0287 .0513
Miscellaneous expense .0296 .0615 .0351 .0578
Total other manufacturing $0.2616 $0.4953 $0.3231 $0.5229
Warehousing $0.0340 $0.0457 $0.0368 $0.0533
Total processing, warehousing $2.2618 $3.1119 $2.6317 $3.6353
Administrative $0.0632 $0.1611 $0.0683 $0.1342
Selling .0305 .0611 .0334 .0705
Other costs .0691 .1211 .0785 .1268
Total cost, unsweetened $2.4246 $3.4552 $2.8119 $3.9668
Sugar .2104 .3317 .2137 .3543
Total cost, sweetened $2.6350 $3.7869 $3.0256 $4.3211

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











COSTS OF PROCESSING FROZEN ORANGE CONCENTRATE

In Table 8, costs for processing and warehousing frozen orange concentrate

are shown for the three most common 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, from a smaller number of

firms averaged $0.0821 per case of 48/6 or 24/12, $0.0980 for 12/32 and $0.0354

per equivalent gallon.

Each of the 48/6 and 24/12 cases contains 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 1960-61 costs compared as

follows with those for 1959-60:



Type of Container 1960-61 1959-60 Difference

46/6 $2.19 $2.20 -$0.01
24/12 (48/6 basis) 1.88 1.87 + .02
12/32 (48/6 basis) $1.48 $1.54 -$0.06



A detailed statement of average per-gallon costs of processing and ware-

housing frozen orange concentrate appears in Table 9. Costs in this table repre-

sent a conversion to equivalent gallons of all containers of frozen orange con-

centrate, but excludes the cost of cans, cartons and selling. Itemized costs

are arranged by volume groups with those plants producing under 3,000,000 equiv-

alent gallons being compared with the group producing over 3,000,000 gallons.

The larger plants showed an over-all cost advantage of $0.0283 per gallon over

the smaller plants. The cost differences between the two size groups are smaller











TABLE 8.--Costs of processing and warehousing Florida frozen orange con-
centrate, 16 plants, 1960-61 season (excludes selling).

Type of Container 48/6 24/12 12/32

Number of Plants 16 16 13

Cases Produced Per Plant 811,484 374,808 87,871

Cost Per Case:
Material:
Cans (lithographed) $1.0674 $0.7944 $0.6839
Cartons .0694 .0684 .0834
Total material $1.1368 $0.8628 $0.7673
Labor (incl. payroll taxes, ins.):
Direct $0.1089 $0.1064 $0.1629
Indirect .0943 .0943 .0815
Warehouse and shipping .0390 .0360 .0488
Total labor $0.2422 $0.2367 $0.2932
Other manufacturing:
Power, lights and water $0.0894 $0.0869 $0.1057
Maintenance, bldgs. and equip. .0631 .0614 .0788
Royalties .0742 .0746 .1032
Depreciation .1051 .1008 .1079
Manufacturing overhead .0611 .0614 .0467
Miscellaneous expense .0316 .0312 .0497
Total other manufacturing $0.4245 $0.4163 $0.4920
Warehousing $0.0838 $0.0812 $0.1006
Total processing, warehousing $1.8873 $1.5970 $1.6531
Administrative $0.1392 $0.1403 $0.1499
Other costs:
Advertising tax, inspection $0.1206 .1217 .1295
Other deductions .0402 .0236 .0470
Total other costs $0.1608 $0.1523 $0.1765
Total cost (excluding selling) $2.1873 $1.8896 $1.9795

alncludes insurance, taxes, rent.
blncludes management and office salaries, office expense, tele-
phone and travel.
Concludes operating interest and certain other extraneous costs.













TABLE 9.--Costs per gallon for processing and warehousing
concentrate by volume groups, excluding the cost of cans,
selling, 18 Florida plants, 1960-61 season.


frozen orange
cartons and


Under 3,000,000
Volume Group (gallons) All Plants 300,000 and Over
3,000,000 and Over

Number of Firms 18 9 9

Gallons Per Plant 3,623,487 1,863,772 5,383,202


Cost Per Gallon:
Labor (incl. payroll taxes, ins.):
Direct
Indirect
Warehousing and shipping
Total labor
Other manufacturing:
Power, lights and water
Maintenance, bldgs. and equip.
Royalties
Depreciation
Manufacturing overhead
Miscellaneous expense
Total other manufacturing
Warehousing
Total processing, warehousing
Administrative
Other costs:
Advertising taxes, inspection
Other deductions
Total other costs
Total costs (excluding selling,
containers)


$0.0461
.0370
.0165
$0.0996


$0.0521
.0371
.0176
$0.1068


$0.0441
.0370
.0160
$0.0971


$0.0373 $0.0360 $0.0377
.0253 .0262 .0249
.0337 .0363 .0329
.0407 .0449 .0392
.0234 .0173 .0255
.0140 .0147 .0139
$0.1744 $0.1754 $0.1741
$0.0318 $0.0400 $0.0289
$0.3058 $0.3222 $0.3001
$0.0606 $0.0627 $0.0598

$0.0499 $0.0478 so.0507
.0165 .0210 .0149
$0.0664 $0.0688 $0.0656


$0.4328


$0.4537


$0.4255


aIncludes insurance, taxes and rent.


office expense, tele-


Concludes operating interest and certain extraneous costs.


Includes management and office salaries,
phone and telegraph, travel.












than those that have appeared in some prior years, but are rather consistent by

items. The larger plants had slightly higher costs per gallon for power, lights

and water, certain manufacturing overhead expenses, advertising taxes and

inspection. In other categories the group of larger plants had slightly lower

per-gallon costs.

Volume of output is not the only factor affecting costs and may not be

the most important. There were some plants in the large volume group which had

high costs, and some of smaller plants which had relatively low costs as shown

by the following comparison:



Total Cost Per Gallon Plants Producing Plants Producing
(Excluding Containers, Under 3,000,000 Gallons
selling) 3,000,000 Gallons and Over

- Number of Firms - -

Under $0.35 1 2
$0.35 0.39 1 2
0.40 0.44 2 2
0.45 0.49 2 1
0.50 0.54 1 0
0.55 & over 2 2

Total 9 9



The average cost per gallon for processing and warehousing frozen orange

concentrate increased only 1 percent in 1960-61 over the preceding year. Six

plants had decreased costs, 2 were practically unchanged and 6 plants had

increased total costs in 1960-61. Volume of output for 14 plants averaged

6.5 percent higher, with all but 3 plants showing some increase. Four plants

were included in 1960-61 which were not in the preceding year's summary.











The average cost per gallon for processing and warehousing frozen orange

concentrate for the 1960-61 season was approximately 43 cents per gallon. The

record for the past 13 years is as follows:



Cost Per Equivalent Gallon Number of Plants
Season (Excluding Packaging Sa
S. \in Sample
materials, selling)

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
1959-60 .428 14
1960-61 $0.433 18



Since 1955756, substantial changes have been made in the sample size

and composition for computing concentrate costs. The broader coverage has

resulted in an average cost figure which can be assumed to be more typical of

industry operations, However, the changing number of plants included affects

the comparability of season-to-season average costs to some extent.








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, 1959-60 Season.

Agricultural Economics Mimeo Report No. 61-8, February 1961.


2, Costs of Picking and Hauling Florida Citrus Fruits, 1960-61 Season.

Agricultural Economics Mimeo Report No. 62-11, March 1962.


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. Twenty-eight Years of Citrus Production Costs and Returns in Florida,
1931-1959.

Agricultural Extension Service Economics Series, 61-10, August 1961.


6. Twenty-seven Years of Orange Production Costs and Returns in Florida,
1931-1958.

Agricultural Extension Service Economic Series, 60-2, March 1960.


7. Cost of Planting and Developing Florida Citrus Groves Through 10 Years
of Age.

Agricultural Extension Service Economic Series, 59-6, September 1959.








AHS March 1962
Agr. Econ. Exp. Sta. 1000