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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: 1961
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: UF00027701:00014
 Related Items
Succeeded by: Estimated costs of processing, warehousing and selling Florida citrus products

Table of Contents
    Title Page
        Title page
    Table of Contents
        Page 1
    Cost of processing single-strength juices
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
    Cost of processing citrus sections
        Page 9
    Cost of processing frozen orange concentrate
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
    Citrus by-products
        Page 16
        Page 17
        Page 18
    Available publications
        Page 19
        Page 20
Full Text


April, 1963


Agricultural Economics
Mimeo Report No. 63-10


COSTS OF PROCESSING, WAREHOUSING AND


SELLING FLORIDA CITRUS PRODUCTS, 1961-62 SEASON



By


A. H. Spurlock and H. G. Hamilton


Season Pack
(1,000,000 gals.)
125 I


Percent of Crop


Florida Pack of Frozen Orange Concentrate and Percent of the Orange Crop Used for Concentrate, 1945-46
to 1961-62
(Source of data: Crop Production from USDA; Concentrate Pack from Florida Canners Association)







Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida










COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1961-62 SEASON

by

A, H. Spurlock and H. G. Hamilton1


CONTENTS

Page

Single-Strength Juices . 2

Variations in Cost . 7

Citrus Sections . 9

Frozen Orange Concentrate . . 10

Citrus By-Products . .. 16



Eighteen citrus processing firms cooperated in the study for the

1961-62 season. These firms processed over 21 million cases of 24/2

equivalent single-strength juices, 3,1 million cases of 24/2 equivalent

sections, and 64 million gallons of frozen orange concentrate. The

firms in the sample produced about three-fourths of the Florida output

of juices, two-thirds of the sections and 55 percent of the frozen

orange concentrate,

Data for single-strength juice were based on records of 11 firms,

and for sections on 10 firms. Concentrates were produced by 14 firms,

Six of the 18 firms in the sample produced juices, sections and concentrates.


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

This is a report of one phase of Southern Regional Project SM-22,
"The Economic Efficiency of Marketing Citrus Fruits."













These data represent estimates of industry costs. Year-to-year

changes in these estimates may result both from changes in plant and

changes in the sample. 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 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 12/46 orange juice averaged $0.8972 per case,

and for grapefruit juice $0,8970; yet cans are identical for each pack.

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 7 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.

Selling costs this season include brokerage as well as the firms' own

sales department expense--sales salaries, telephone and telegraph, office

expense, travel and advertising, The detailed tables show brokerage as a

separate item, since it has not been included previously. Discounts,

allowances and brand royalties have been omitted.

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

15 years in Table 1. The cost trend over this period has been definitely













upward but declined slightly from the trend in the years 1953-54

to 1955-56. In 1961-62, total costs for juices decreased from

the previous year's level by about 5 cents per case. In 1961-62,

costs for juices are based on data from 11 firms as compared with

14 for the preceding season.

TABLE 1.--Average Cost of Processing, Warehousing and Selling Florida Citrus
Juices, Excluding Sugar, in 12/46 Cases, 1947-48 through 1961-62 Seasons.

Orange Grapefruit Blended Tangerine
Season 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
1961-62a 1.53 1.52 1,52 1.53

aCosts shown above for 1961-62 exclude brokerage of about 3 cents
per case in order to be comparable with preceding years,

Analysis of major cost groups for unsweetened orange juice,

12/46, shows that costs per case decreased in 1961-62 by 3.9 per-

cent or about 6 cents per case. The materials cost showed no change

from the preceding season and labor cost per unit increased very

slightly. The other cost groups benefited by the larger volume pro-

cessed by the plants. Manufacturing costs, other than labor and

materials, and warehousing costs were each reduced by 13 percent and













administrative and selling costs (excluding brokerage) were 26 percent

lower per case than in the preceding season. A comparison of the change

among the principal cost categories is as follows:

Orange Juice, 12/46 (excluding sugar)
Cost per Case Change in Cost Percent
Cost Group 1960-61 1961-62 from 1960-61 Change
Materials $1.0624 $1,0621 -$0.0003 0
Labor .0905 .0915 4 .0010 4 1.1
Other Manufacturing .1615 ,1409 .0206 12.8
Warehousing .0982 .0854 o0128 13,0
Administrative & Selling .0944 .0694a .0250 26.5
Other Costs .0828 .0789- .0039 4.7
Total-nonsweet $1r5898 $I.5282a -$0.0616 3,9

aBrokerage excluded to be comparable with 1960-61.

Itemized costs of processing single-strength juices in the most

popular can sizes (24/2 cases) for the 1961-62 season are shown in

Table 2.

The costs of processing and selling citrus juices unsweetened

in 12/46 cases were about 10 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 approximately 22 cents per case lower

than for 24/2 cases. The differences were one cent larger than those

existing for 1960-61. The comparative costs for packing an equivalent

24/2 quantity of juice in both can sizes were as follows:


Itemr

Cost per 24/2 case
Cost 24/2 equiv. in
12/46 case
Difference
Difference in 1960-61


Orange
Juice
$1.4661

1.2434
$0,2227
,2133


Grapefruit
Juice
$1.4443

1.2263
$0.2180
,2079


Blended
Juice
$1.4580

1,2334
$0.2246
.2137


Tangerine
Juice
$1l4805

1,2349
$0.2456
.2378


-D--P-


~-P







5





TABLE 2.--Cost per Case by Type of Container for Processing, Warehousing and
Selling Florida Citrus Fruit Juices, 11 Plants, 1961-62 Season.


Product
Type of Container
Number of Firms
Cases per Firm


Orange Juice
24/2 12/46
11 11
174,940 513,004


Grapefruit Juice
24/2 12/46
11 11
132,892 428,740


Cost per Case:
Materials:
Cans
Cartons
Labels, adhesives
Total Materials
Manufacturing Labor:
Direct
Indirect
Payroll taxes & insurance
Total Manufacturing Labor
Other Manufacturing:
Power, lights, water
Maintenance, bldgs. & equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total Other Manufacturing
Total Manufacturing Expense
Warehouse Expense:
Warehouse & Shipping labor, taxes
Other warehouse expense
Total Warehouse Expense
Administrative Expensea
Selling Expense:
Brokerage
Other selling
Total Selling Expense
Other Expense:
Advertising tax & inspection
Other (int., misc. deductions)
Total Other Expense
Total Cost Unsweetened
Sugar
Total Cost, Sweetened


$0.8948
.0841
.0623
$1.0412


$0.8972
.1034
.0615
$1.0621


$0.8949
.0839
.0630
$1.0418


$0.8970
.1035
.0618
$1.0623


$0,0519 $0,0603 $0.0518 $0.0584
.0196 .0234 .0196 .0236
.0068 .0078 .0066 .0075
$0.0783 $0.0915 $0.0780 $0.0895

$0.0178 $0.0224 $0O0167 $0.0223
.0182 .0231 .0185 .0226
.0388 .0499 .0208 .0268
.0171 .0225 .0177 .0232
.0090 .0112 .0082 .0106
.0095 .0118 .0092 .0112
$0.1104 $0.1409 $0,0911 $0.1167
$1.2299 $1,2945 $1.2109 $1.2685

$0.0566 $0.0579 $0.0526 $0.0566
.0268 .0275 .0253 .0271
$0.0834 $0.0854 $0.0779 $0.0837
$0.0374 $0.0463 $0.0345 $0.0455

.0335 .0373 .0259 .0267
.0189 .0231 .0163 .0203
$0.0524 $0.0604 $0.0422 $0.0470

$0.0429 $0.0539 $0.0585 $0.0743
.0201 .0250 .0203 .0249
$0.0630 $0.0789 $0.0788 $0.0992
$1.4661 $1.5655 $1.4443 $1.5439
.0322 .0440 .0644 .0843
$1.4983 $1.6095 $1L5087 $1.6282


aIncludes management and office salaries, telephone,


travel, office expense.


bIncludes sales salaries, telephone, advertising, travel, but excludes brand
royalties, discounts, allowances.


~


--


- --


--


I II -I --













TABLE 2.--Cost per Case by Type of Container for Processing, Warehousing and
Selling Florida Citrus Fruit Juices, 11 Plants, 1961-62 Season,--Continued


Product
Type of Container
Number of Firms
Cases per Firm


Cost per Case:
Materials:
Cans
Cartons
Labels, adhesives
Total Materials
Manufacturing Labor:
Direct
Indirect
Payroll taxes & insurance
Total Manufacturing Labor
Other Manufacturing:
Power, lights, water
Maintenance, bldgs, & equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total Other Manufacturing
Total Manufacturing Expense
Warehouse Expense:
Warehouse & shipping labor, taxes
Other warehouse expense
Total Warehouse Expense
Administrative Expensea
Selling Expense:
Brokerage
Other selling
Total Selling Expense
Other Expense:
Advertising tax & inspection
Other (int., mise, deductions)
Total Other Expense
Total Cost Unsweetened
Sugar
Total Cost Sweetened


Blended Juice
24/2 12/46
11 11
37,995 169,794


$0,8938
.0842
.0631
$1.0411


$0,8972
.1034
.0627
$1.0633


Tangerine
24/2
5
6.762


$0,8970
.0849
.0594
S1.0413


Juice
12/46
8
19.217


$0.8956
.1031
.0576
S1.0563


$0.0507 $0,0604 $0.0659 $0.0678
.0201 .0239 .0187 .0189
.0065 .0077 .0076 .0084
$0.0773 $0.0920 $0.0922 $0.0951

$0.0185 $0S0224 $0.0185 $0.0241
.0188 .0228 .0189 .0293
.0297 .0365 .0412 .0436
.0181 .0227 .0146 .0226
.0091 .0110 .0097 .0090
.0094 .0118 .0105 .0104
$0.1036 $0.1272 $0.1134 $0.1390
$1.2220 $1.2825 $1.2469 $1.2904


$0.0564 $0.0574 $0.0636 $0,0601
.0270 .0273 .0266 .0277
$0.0834 $0,0847 $0.0902 $0.0878
$0,0379 $0,0454 $0.0345 $0.0485

.0267 .0308 .0236 .0246
.0183 .0218 .0205 .0233
$0.0450 $0,0526 $0.0441 $0.0479

$0.0510 $0.0643 $0,0493 $0.0615
.0187 ,0234 .0155 .0186
$0.0697 $0.0877 $0,0648 $0.0801
$1.4580 $1.5529 $1.4805 $1.5547
.0513 .0636 .0733 .0672
$1.5093 $1.6165 $1.5538 $1.6219


alncludes management and office salaries, telephone, travel,


office expense.


blncludes sales salaries, telephone, advertising, travel, but excludes brand
royalties, discounts, allowances.


-I I I


Iy


- --. -- -- -













Variations in Cost,--Variations among plants in the total cost of

processing, warehousing and selling single-strength unsweetened juices

for 1961-62 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,
11 Firms, 1961-62 Season.
Orange Grapefruit Blended Tangerine
Cost per Case Juice Juice Juice Juice
24/2 12/46 24/2 12/46 24/2 12/46 24/2 12/46
- Number of Firms - -
$1.40 $1.44 5 0 7 0 6 0 2 0
1.45 1.49 2 0 2 1 3 1 2 0
1,50 1.54 3 5 1 6 1 5 0 2
1.55 1.59 0 2 1 1 1 2 1 3
1.60 1.64 1 1 0 1 0 1 0 1
1.65 1.69 0 2 0 1 0 1 0 2
1.70 1.74 0 1 0 1 0 1 0 0
Total No. of Firms 11 11 11 11 11 11 5 8

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, 11 Firms, 1961-62 Season,
Orange Grapefruit Blended Tangerine
Cost per Case Juice Juice Juice Juice
24/2 12/46 24/2 12/46 24/2 12/46 24/2 12/46
- - -Number of Firms - - -
$1,25 $1.29 2 0 4 0 3 0 1 0
1,30 1.34 6 2 6 3 6 2 3 2
1,35 139 1 6 0 5 1 6 0 2
1.40 1.44 2 1 1 1 1 1 1 1
1.45 1,49 0 0 0 2 0 1 0 2
1.50 1.54 0 2 0 0 0 1 0 1
Total No, of Finns 11 11 11 11 11 11 5 8














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. The larger firmstended to cluster around the

lower cost ranges whereas the smaller volume pants spread over the extremes

of the cost group.

TABLE 5.--Variations in Cost of Processing, Warehousing and Selling Orange
Juice in 12/46 Cases, Unsweetened, by Total Volume of Plant, 11 Firms,
1961-62 Season.

Cost per Case Under 1,500,000 1,500,000 Cases
12/46 (unsweetened) Cases and Over
- -Number of Firms- - -
$1.50 $1.54 2 3
1.55 1.59 1 1
1.60 1.64 0 1
1.65 and over 3 0
Total 6 5

Costs of processing and selling unsweetened juices in 12/46 cases

showed only small differences in the average between those firms handling

over 1,500,000 cases and those handling under 1,500,000 cases. The

smaller group includes plants apparently large enough to have gained most

of the advantages of size. The lowest-cost producer was in the smaller

size group.

Size Group Orange Grapefruit
(24/2 equiv. cases) Juice Juice
-Cost per 12/46 Case Unsweetened
Under 1,500,000 cases $1.5857 $1.5616
1,500,000 cases and over 1.5580 1.5367
Difference $0.0277 $0.0249

The differences in average costs for the two groups are shown in detail

for orange juice and grapefruit juice in Table 6. Some of the cost difference

may be due to coincidence or to factors which it was not possible to measure.













TABLE 6,--Costs of Processing, Warehousing and Selling Florida Citrus Fruit Juices
in 12/46 cases by Volume Groups, 11 Firms, 1961-62 Season.

Product Orange Juice Grapefruit Juice
Volume Under 1,500,000 Under 1,500,000
(24/2 equiv, cases) 1,500,000 and over 1,500,000 and over
Number of Firms 6 5 6 5
Cases per Firm 225,263 822,293 227,271 670,504

Cost per Case:

Materials:
Cans $0.8968 $0.8973 $0.8972 $0.8969
Cartons .1048 .1029 .1046 .1031
Labels, etc, .0665 .0596 .0674 .0595
Total Materials $1.0681 $1L0598 $1,0692 $1,0595
Manufacturing Labor,incl.payroll
taxes and insurance $0.0910 $0,0916 $0.0906 $0.0890
Other Manufacturing:
Power, light & water ,0282 .0202 .0275 .0202
Maintenance, bldg. & equipment .0246 .0226 .0233 .0223
Royalties .0644 .0445 0326 .0244
Depreciation .0266 .0209 .0274 .0215
Taxes, insurance, rent .0150 .0098 .0139 .0093
Miscellaneous expense .0106 00123 .0105 .0115
Total Other Manufacturing Exp. $0.1694 $0.1303 $0.1352 $0.1092
Total Manufacturing Expense $1.3285 $1L2817 $1.2950 $1.2577
Warehouse Labor & Expense $0.0993 $0,0803 $0.0953 $0.0789

Administrative Expense .0528 .0439 ,0504 .0436
Selling Expense .0359 .0696 .0344 .0521
Other Costs .0692 .0825 .0865 .1044
Cost Unsweetened $1.5857 $1.5580 $1.5616 $1.5367
Sugar .0542 .0401 .0830 .0848
Total Cost $1.6399 $1.5981 $1.6446 $1.6215


Costs of Processing Citrus Sections


The average costs of processing, warehousing and selling grapefruit

sections and salad sections in 1961-62 were slightly higher than the level of

the preceding season for most packs. The following data show the trend in total


costs for sections and salads in recent years:















Season Grapefruit Sections Salad Sections
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.$9 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
1961-62a 3.82 2.64 4.36 3.20

aCosts shown above for 1961-62 exclude brokerage of about 3 cents
per case in order to be comparable with preceding years.

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

fruit and salad sections. The 12/46 case of grapefruit sections has

been used extensively only a few years.

In Table 7, a summary of costs is shown for two case sizes of

citrus sections.

Costs of Processing Frozen Orange Concentrate

Orange concentrate production in Florida increased in 1961-62 by

38 percent over the preceding year. The larger output of the plants in

the sample is reflected in lower unit costs. Can costs were lower for

48/6 oz., though this may be merely a change in proportion of aluminum

and steel cans used. Average can costs for 24/12 oz. and 12/32 oz. were

little changed.

Labor costs were less than in the preceding season for the 48/6 and

24/12 packs and about the same for 12/32. Other manufacturing costs per

unit declined substantially for all concentrate packs.













TABLE 7.--Costs of Processing, Warehousing and Selling Florida Citrus Sections,
1961-62 Season.


Product
Type of GCc.rt ier
Number of Firms
Cases per Firm
Cost per Case:


Grapefruit
24/303
10
198.877


Sections
12/46
8
73.187


Salad
24/303
7
26,990


Sections
12/46
4
9,366


Materials:
Cans
Cartons
Labels
Total Materials
Labor:
Direct--Peeling
Sectionizing
Other direct
Total Direct
Indirect
Payroll taxes & insurance
Total Manufacturing Labor
Other Manufacturing:
Power, lights, water
Maintenance, bldgs. & equipment
Royalties
Depreciatica
Taxes, insurance, rent
Miscellaneous expense
Total Other Manufacturing
Total Manufacturing Expense
Warehouse Expense:
Labeling, shipping labor & taxes
Other warehouse expense
Total Warehouse Expense
Administrative Expensea
Selling Expense:
Brokerage
Other selling expense
Total Selling Expense
Other Expense:
Advertising tax and inspection
Other (interest,misc.deductions)
Total Other Expense
Total Cost Unsweetened
Sugar
Total Cost Sweetened


$0.8053
.0750
.0571
809374


$0.1535
.5540
.1778
$0.8853
.0599
.0826
$1.0278


$0.0616
.0336
.0646
.0512
.0193
.0260
$0.2563
$2o2215

$0.0510
.0269
$0.0779


$0.9065
.1043
.0525
$1S0633


$0,1812
.8008
.2954
$1.2774
.1091
.1249
$1.5114


$0.0993
.0822
.1145
.0750
.0364
.0584
$0,4658
$3,0405

$0.0737
.0438
$0.1175


$0,8140
.0736
,0548
$0.9424


$0.2153
.7561
.2529
$1.2243
,0641
.1143
$1.4027


$0.0609
.0600
.0727
.0479
.0149
.0354
$0.2918
$2.6369

$0.0613
.0376
$0.0989


$0o9166
.1042
,0459
$1.0667


$0,3502
1,o105
04050
$1 8657
,0883
.1710
$2.1250


$0.0892
.1120
.0792
,0623
.0171
.0621
$0.4219
$3,6136

$0.0610
.0463
$0.1073


$0.0599 $0.1804 $0.1098 $0.1788

.0376 .0346 .0244 ,0253
.0274 ,0738 .0589 ,1060
$0,0650 $0.1084 $0.0833 $0,313

$0.0470 $0.0748 $0.0519 $0.0795
.0222 .0474 .0348 .0658
$0.0692 $0.1222 $0.0867 $01453
$2.4935 $3.5690 $3,0156 $4,1763
.1811 .2868 .2066 .2433
$2.6746 $3.8558 $3.2222 $4,4196


alncludes management and office salaries, office expense, telephone, and
travel.
bIncludes sales salaries, telephone, advertising, travel, but excludes brand
royalties, discounts, allowances,


_ 1_1_ -- III~ __~YLII


~


-I;-----~-- --:--I ---~- x^


I


_.I I--_IIIYmP~













Costs for processing, warehousing and selling frozen orange concentrate

for 1961-62 are shown for the three most common can sizes in Table 8.

S-li W, expense is included for concentrates for the first time. This

expense does however, exclude the special advertising assessment since pay-

ments on this assessment were not uniform among firms at the end of the

fiscal year.

A n:.,,i:par.n of the change among the principal cost categories for

o:r~~e concentrate 48/6 in 1961-62 is shown below. Selling is omitted from

the cio~prison as it was not included in the 1960-61 costs:


Frozen Orange Concentrate 48/6
Cost Group Cost per Case Change in Cost
1960-61 1961-62 from 1960-61 Percent Change

Materials $1.1368 $1.0586 -$0.0782 6.9
hc:~ufi~ct'? labor ,2032 .1743 .0289 -14.2
Other manufacturing expense .4245 .3168 .1077 -25.4
Warehousing .1228 .1232 4 .0004 4 .3
Administrative expense .1392 .0969 .0423 -30.4
Other costs .1608 .1512 .0096 6.0
Total Costs $2.1873 $1.9210 -$0.2663 -12.2

There was an increased use in 1961-62 of "multipak" cartons for frozen

orange concentrate especially in size 48/6 oz. No separate costs are shown

for cases of "multipak" cartons since they seem to differ significantly from

the regular case packs only in the added carton costs. The carton cost

a r ed about 13 cents per case for the 48/6 case and 15.7 cents for the

24/12 oz.

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

frozen r-',r.n, concentrate appears in Table 9, Costs in this table represent

a conversion to equivalent gallons of all containers of frozen orange concen-

trate, but excludes the cost of cans and cartons. Itemized costs are arranged













TABLE 8.--Costs of Processing, Warehousing and Selling Florida Frozen
Orange Concentrate, 11 Plants, 1961-62 Season.

.Type of Container 48/6 24/12 12/32
Number of Plants 11 11 11
Cases Produced per Plant 628,889 378 968 108.704
Cost per Case:


Materials:
Cans (lithographed)
Cartons
Total Materials


$0.9936
.0650
S1.0586


$0.7897
.0635
$0.8532


$0.7085
.0761
$0.7846


Manufacturing Labor:
Direct
Indirect
Payroll taxes & insurance
Total Labor

Other Manufacturing:
Power, lights, water
Maintenance, bldgs. & equip.
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total Other Manufacturing
Total Manufacturing Expense

Warehouse Expense:
Warehouse labor, payroll taxes, ins.
Other warehouse expense
Total Warehouse Expense

Administrative Expensea
Selling expense:
Brokerage
Other selling expense
Total Selling Expense

Other Expense:
Advertising tax & inspection
Other (int., misc. deductions)
Total Other Expense
Total Costs


$0.1047 $0.1025 $0.1582
.0562 .0542 .0722
.0134 .0129 .0192
$0.1743 $0.1696 $0.2496


$0.0702 $0.0683 $0.0951
.0403 .0415 .0611
.0730 .0744 .0967
.0582 .0576 .0815
.0313 .0325 .0376
.0438 .0409 .0574
$0.3168 $0.3152 $0.4294
$1.5497 $1.3380 $1.4636


$0.0379 $0.0361 $0.0470
.0853 .0843 .1037
$0.1232 $0.1204 $0.1507
$0.0969 $0.0977 $0.1174

.0363 .0369 .0582
.0641 .0640 .0792
$0.1004 $0.1009 $0.1374


$0.1157 $0.1191 $0.1498
.0355 .0284 .0338
$0.1512 $0.1475 $0.1836
$2.0214 $1.8045 $2.0527


aIncludes management and office salaries, office expense, telephone
and travel.

bExcludes allowances, discounts, brand royalties and special
advertising assessments.













TABLE 9.--Cost per Gallon for Processing, Warehousing and Selling Frozen
Orange Concentrate by Volume Groups, Excluding the Cost of Cans, Cartons
and Selling, 14 Florida Plants, 1961-62 Season.


Volume Group (Gallons)
Number of Firms
Gallons per Plant


All Plants
14
4,604,771


Under
4,000,000
7
2,718,138


4,000,000
and over
7
6,491,403


Cost per Gallon:
Manufacturing Labor:
Direct
Indirect
Payroll taxes & w/c insurance
Total Labor

Other Manufacturing:
Power, lights, & water
Maintenance, bldgs. & equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total Other Manufacturing

Total Manufacturing Expense

Warehouse Expense:
Warehouse, labor, incl. taxes, ins.
Other warehouse expense
Total Warehouse Expense

Administrative Expensea
Selling Expense:
Brokerage
Other selling expense
Total Selling Expense

Other Expense:
Advertising tax and inspection
Other (interest, misc. deductions)
Total Other Expense


$0.0446
.0246
.0057
$0.0749


$0.0492
.0284
.0067
$0.0843


$0,0427
.0230
.0052
$0.0709


$0o0283 $0.0335 $0,0261
.0171 .0183 ,0166
,0331 .0323 .0334
.0247 .0300 .0224
.0147 .0095 .0169
.0177 .0141 .0192
$0.1356 $0.1377 $0.1346

$0.2105 $0.2220 $0.2055


$0.0162 $0.0158 $0.0164
.0314 .0386 .0284
$0.0476 $0.0544 $0.0448

$0.0432 $0.0373 $0.0455

.0143 .0102 .0187
.0269 .0178 .0308
$0.0412 $0.0280 $0.0495


$0.0523 $0.0457 $0.0551
.0117 .0154 .0102
$0.0640 $0.0611 $0.0653


Total Costs


aIncludes ,4nagem.ent and office
telegraph travel,


salaries, office expense,


telephone and


bExcludes allowances, discounts, brand royalties
assessments.


and special advertising


$0.4065


S0.4028


S0.4106


--


- --------- L I


- I" --I-~----


I


$0,4106












by volume groups with those plants producing under 4,000,000 equivalent

gallons being compared with the group producing over 4,000,000 gallons.

This arbitrary division to place the same number of firms in each group

obviously includes in the smaller group plants large enough to achieve

a high degree of efficiency. The plants in the larger group had con-

sistently lower manufacturing and warehouse costs, though the average

difference in the two groups was small, However, the larger firms had

higher administrative and selling 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 the smaller plants which had relatively

low costs as shown by the following comparison:

Total Cost per Gallon Plants Producing Plants Producing
(Excluding Containers, Under 4,000,000 4,000,000 Gallons
and Selling) Gallons and Over
Under $0.35 1 2
$0.35 .39 2 2
.40 .44 2 2
.45 .49 0 1
.50 .54 1 0
.55 and over 1 0
Total 7 7

The average cost per gallon for processing and warehousing frozen

orange concentrate for the 1961-62 season was approximately 41 cents per

gallon. The record for the past 14 years is as follows:

Cost per Equivalent Gallon
(Excluding Packaging Number of Plants
Season Materials). 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
1959-60 .428 14
1960-61 .433 18
1961-62 .407 14






16


Since 1955-56, 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 num-

ber of plants included affects the comparability of season-to-season

average costs to some extent.

CITRUS BY-PRODUCTS

The 14 firms from which citrus by-products costs were obtained for

1961-62 manufactured 253,953 tons of citrus pulp and meal, 53,533 tons

of molasses and 2,501,143 pounds of cold pressed peel oil. The itemized

costs of producing pulp and meal, molasses and peel oil are shown in

Table 10, These are weighted average costs.

In all the by-products the direct costs of production represent a

large proportion of the total cost. Materials, labor and other manufact-

uring expense were 81 percent of the total production, warehousing and

selling cost for feed, 92 percent for molasses and 89 percent for peel oil,

Warehouse expense was negligible for molasses and oil. Feed bags, labor,

fuel and power were the large items of cost in feed production.

Citrus pulp and meal feed averaged $21.92 per ton for all costs of

manufacturing and selling; molasses $14,43 per ton; and peel oil $0.1239

per pound. (Table 10).

Variation in the total costs by firms for pulp and meal and for

molasses are shown in Table 11. Some of these variations are probably

due to different methods of allocating costs among the various by-products

since the firms do not have the same position or rank in the production of

pulp and of molasses.












TABLE 10.--Average Costs of Processing, Warehousing and Selling Florida
Citrus By-Products, 15 Firms, 1961-62.


Product Pulp and Meal Molasses Peel Oil
Number of Firms 15 7 5
Production per Firm 16,930 tons 7,648 tons 500,229 Ibs.
Costs per unit


Material:
Drums
Bags and twine
Lime and other
Total Material
Manufacturing Labor (incl. Payroll
Taxes, and Insurance):
Direct
Indirect
Total Manufacturing Labor

Other Manufacturing Expense:
Power, steam, fuel
Maintenance & repairs
Depreciation
Taxes, insurance, rent
Misc. supplies & expense
Inspection tax
Total Other Mfg. Expense
Total Manufacturing Expense
Warehouse Expense:
Warehouse & shipping labor
Other warehouse expense
Total Warehouse Expense

Administrative:
Salaries, incl. payroll tax & ins.
Other administrative
Total Administrative Expense

Selling Expense:
Salaries, incl. payroll tax & ins.
Brokerage
Other selling expense
Total Selling Expense

Other Expense:

Total Cost ner Unit


$----
4.47
.51
$4.98


$0.0198


$0.0198


$2.25 $1.09 $0.0200
1.18 .51 .0087
$3.43 $1.60 $0.0287


$5.86
1.36
1.16
.36
.52
.21
$9.47
$17.88


$7.45
1.57
1.29
.34
.97

$11.62
$13.22


$0.0140
.0079
.0278
.0018
.0099

$0.0614
$0.1099


$1.38 $0.04 $0.0005
.73 .02 .0001
$2.11 $0.06 $0.0006


$0.29 $0.21 $0.0008
.31 .24 .0006
$0.60 $0.45 $0.0014


$0.30 $0.08 $0.0042
.40 .33 .0004
.34 .14 .0065
$1.04 $0.55 $0.0111

$0.29 $0.15 $0.0009


S21.92


S14 43


nO.1239


.- .

Some of the variations are due also to individual items in the make-

up of total cost. In the production of pulp and meal, bags and twine

varied from $2.96 per ton to $5.26, depending partly on whether paper or












burlap bags were used. M-nf.c.in. labor included payroll taxes

and workmen's compensation insurance ringed from $2.09 to $6.12 per

ton; pc'-r, water, steam and fuel cost from $2o60 to $7,75 per ton;

maintenance and repairs varied from $0,46 to $6,38 per ton; and

depreciation on buildings and Fqui:-,it from $0.50 to $4.05.

In the pr`.duct i..n of molasses, labor including payroll taxes

and workmen's compensation insurance ranged from $0.81 to $2.68 per

ton; power, steam and fuel :.;, $2,31 to $10.37; maintenance and

repairs from $0.76 to $3.19; and dkreictation from $0.20 to $2.57o

TABLE ll,--Variation in Cost of -r;-, -,LnP, Warehousing and Selling
Citrus By-Froducts, 15 Firms, 1961-62

Citrus Citrus
Cost per Ton Pulp and Meal Molasses


dollars
Under 11o00
11.00 12.99
13.00 14.99
15.00 16.99
17.00 18,99
19.00 20.99
21.00 22,99
23.00 24.99
25.00 26.99
27.00 28.99
Total number of firms
Range in costs per ton


number of firms
0
0
0
0
0
4
6
3
1
I
15
$19.67--$27.91


number of firms
2
1
1
1
0
1
0
1
0
0
7
$9.62--$24.77


I-I---











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, 1961-62
Season.

Agricultural Economics Mimeo Report No. 63-9, April, 1963

2. Costs of Picking and Hauling Florida Citrus Fruits, 1961-62 Season.

Agricultural Economics Mimeo Report No. 63-7, March 1963

3. Twenty-nine Years of Citrus Production Costs and Returns in Florida,
1931-1962.

Agricultural Extension Service Economics Series, 62-16, Sept. 1962

4. Thirty Years of Orange Production Costs and Returns in Florida,
1931-1961.

Agricultural Extension Service Economic Series, 63-3, April, 1963.

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

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










AlS/ghs April, 1963
Agr. Econ. Exp. Sta. 1,250






























































































'iv