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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: 1962
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: UF00027701:00015
 Related Items
Succeeded by: Estimated costs of processing, warehousing and selling Florida citrus products

Table of Contents
    Front Cover
        Front cover
    Table of Contents
        Page 1
    Costs of processing single-strength juices
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
    Costs of processing canned and chilled citrus sections
        Page 9
        Page 10
        Page 11
    Costs of processing frozen orange concentrate
        Page 12
        Page 13
        Page 14
        Page 15
    Citrus by-products
        Page 16
        Page 17
        Page 18
        Page 19
    Available publications
        Page 20
Full Text
April 1964


q-/o

r L, X

~--


A


Costs of Processing, Warehousing and Selling
Florida Citrus Products, 1962-1963 Season


A. H. Spurlock and H. G. Hamilton




Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida


Agricultural Economics
Mimeo Report EC 64-10


~23-~:
I~(IICC~










COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1962-63 SEASON

by

A. H. Spurlock and H. G. Hamilton1

CONTENTS
Page

Single-Strength Juices . . ........ 2

Variations in Cost. . . . .. . 7

Canned and Chilled Citrus Sections . . 9

Frozen Orange Concentrate. . . . . 12

Citrus By-Products . . . . . 16



Twenty citrus processing firms operating 23 plants cooperated in

the study for the 1962-63 season. These firms processed over 18 million

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

24/2 equivalent canned sections, and 42 million gallons of frozen orange

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

Florida output of juices and canned sections, and 82 percent of the fro-

zen orange concentrate.2

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

and for canned sections on 12 firms. Concentrates were produced by 16

firms in 18 plants. Eight of the 20 firms in the sample produced juices,

sections and concentrates.

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

2Calculated from data in the Statistical Summary, 1962-63, Flor:
Canners' Association.

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 weigh-

ted averages. The cost for each firm for a given pack is weighted by the

volume packed. This tends to place the average cost near the cost for the

firm with the larger pack of that product than would occur if a simple aver-

age 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 $0.9023 per case, and for tangerine

juice $0.9039; 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 com-

bined into seven major cost categories for each product and can size to

give a total cost, unsweetened. Sugar cost was then added, if the pro-

duct is commonly sweetened, to give a total cost sweetened. The sugar

cost shown is the average rate per case for those cases sweetened.

Selling costs 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 prior to 1961-62. Dis-

counts, 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 16 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 five cents per case, but in 1962-63

increased again sharply. In 1962-63, costs for juices are based on data

from 14 firms as compared with 11 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 1962-63 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
1961-62a 1.53 1.52 1.52 1.53
1962-63a 1.73 1.72 1.74 1.70

aCosts shown these seasons exclude brokerage from selling in order
to be comparable with preceding years.


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

shows that costs per case increased in 1962-63 by 14 percent or about 22

cents per case. The materials cost showed little change from the preced-

ing season, but labor cost per unit, other manufacturing expenses, and

warehousing increased about one-fourth or more. Administrative and sell-

ing costs were 62 percent higher than in 1961-62, and other costs increased

by 83 percent. The doubling of the advertising tax rate was responsible










for part the increase in the latter group. The severe freeze in December

1962, reduced the supply of fruit for market and posed very difficult

operating problems for the plants, both as to total volume of fruit and

seasonality of operation. A comparison of the change among the principal

cost categories for the past two seasons is as follows:


Cost Group


Materials
Labor
Other Manufacturing
Warehousing
Administrative & Selling
Other Costs
Total-nonsweet


Orange Juice, 12/46 (excluding sugar)
Cost per Case Increase in Cost Percent
1961-62 1962-63 from 1961-62 Increase
$1.0621 $1.0736 $0.0115 1.1
.0915 .1177 .0262 28.6
.1409 .1736 .0327 23.2
.0854 .1084 .0230 26.9
.1067 .1727 .0660 61.9
.0789 .1443 .0654 82.9
$1.5655 $1.7903 $0.2248 14.4


Itemized costs of processing single-strength juices in the most

popular can sizes for the 1962-63 season are shown in Table 2.

The costs of processing and selling citrus juices unsweetened

in 12/46 cases were about 10 to 14 cents per case higher than for 24/2

cases. However, for an equivalent volume of juices, the costs for 12/46

cases were 22 to 25 cents per case lower than for 24/2 cases. The dif-

ferences were about the same as those existing for 1961-62. The compara-

tive costs for packing an equivalent 24/2 quantity of juice in both can

sizes for 1962-63 were as follows:


Item
Cost per 24/2 case
Cost 24/2 equiv. in
12/46 case
Difference
Difference in 1961-62


Orange
Juice
$1.6473

1.4220
$0.2253
.2227


Grapefruit
Juice
$1.5924

1.3670
$0.2254
.2180


Blended
Juice
$1.6051

1.3824
$0.2227
.2246


.2246


Tangerine
Juice
$1.6080

1.3532
$0.2548
.2456


.2456


I-~-










TABLE 2.--Cost per Case by Type of Container for Processing, Warehousing
and Selling Florida Citrus Fruit Juices, 14 Plants, 1962-63 Season.


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., misc. deductions)
Total Other Expense
Total Cost Unsweetened
Sugar
Total Cost, Sweetened


Orange
24/2
13
94,341


$0.9038
.0876
.0684


Juice Grapefruit Juice
12/46 24/2 12/46
14 11 13
362,492 113,722 314,755


$0.9023 $0.9020 $0.9024
.1039 .0876 .1035
.0674 .0691 .0667


$1.0598 $1.0736 $1.0587 $1.0726

$0.0647 $0.0765 $0.0657 $0.0776
.0239 .0304 .0239 .0293
.0091 .0108 .0090 .0105
$0.0977 $0.1177 $0.0986 $0.1174

$0.0184 $0.0244 $0.0177 $0.0244
.0213 .0295 .0221 .0301
.0451 .0569 .0241 .0328
.0229 .0291 .0229 .0287
.0120 .0160 .0112 .0167
.0126 .0177 .0142 .0178
$0.1323 $0.1736 $0.1122 $0.1505
$1.2898 $1.3649 $1.2695 $1.3405

$0.0667 $0.0721 $0.0624 $0.0694
.0345 .0363 .0334 .0360
$0.1012 $0.1084 $0.0958 $0.1054
$0.0632 $0.0809 $0.0571 $0.0725

.0538 .0642 .0465 .0497
.0249 .0276 .0211 .0268
$0.0787 $0.0918 $0.0676 $0.0765

$0.0794 $0.0988 $0.0704 $0.0888
.0350 .0455 .0320 .0374
$0.1144 $0.1443 $0.1024 $0.1262
$1.6473 $1.7903 $1.5924 $1.7211
.0474 .0580 .0995 .1252
$1.6947 $1.8483 $1.6919 $1.8463


aIncludes management and
office expense.


office salaries, telephone, travel,


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


I I I IIII II I II I m I I










TABLE 2.--Cost per Case by Type of Container for Processing, Warehousing
and Selling Florida Citrus Fruit Juices, 14 Plants, 1962-63 Season.--Continued


Product
Type of Container
Number of Firms
Cases per Firm
Cost per Case:


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


Blended
24/2
12
21.420


$0o9005
.0876
.0690
$1.0571


Juice
12/46
12
125.046


$0.9021
.1047
.0688
S1.0756


Tangerine Juice
24/2 12/46
8 9
2,340 23.498


$0.9037
.0878
.0701
$1.0616


$0.9039
.1041
.0680
$1.0760


$0.0602 $0.0726 $0.0705 $0.0788
.0249 .0315 .0279 .0211
.0087 .0105 .0098 .0095
$0.0938 $0.1146 $0.1082 $0.1094

$0.0188 $0.0244 $0.0156 $0.0210
.0235 .0300 .0214 .0254
.0341 .0442 .0449 .0535
.0236 .0300 .0233 .0271
.0097 .0122 .0112 .0126
.0140 .0171 .0139 .0137
$0.1237 $0.1579 $0.1303 $0.1533
$1.2746 $1.3481 $1.3001 $1.3387

$0.0649 $0.0680 $0.0588 $0.0686
.0350 .0368 .0346 .0354
$0.0999 $0.1048 $0.0934 $0.1040
$0.0605 $0.0793 $0.0540 $0.0764

.0425 .0442 .0608 .0528
.0241 .0298 .0160 .0228
$0.0666 $0.0740 $0.0768 $0.0756

$0.0732 $0.0928 $0.0473 $0.0589
.0303 .0414 .0364 .0501
$0.1035 $0.1342 $0.0837 $0.1090
$1.6051 $1.7404 $1.6080 $1.7037
.0834 .1036 .1011 .1132
$1.6885 $1.8440 $1.7091 $1.8169


aIncludes management and
office expense.


office salaries, telephone, travel,


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


Materials:
Cans


i I I I I II I I I II I iI


i


II


*


-------- -- ---


i I


I


*










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

processing, warehousing and selling single-strength unsweetened juices

for 1962-63 are shown in Table 3.


TABLE 3.--Variations in Cost
Florida Citrus Fruit Juices,
Case Size, 14


for Processing, Warehousing and Selling
Excluding Sugar, by Type of Product and
Firms, 1962-63 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 - - -
$1.45 $1.49 0 0 2 0 2 0 1 0
1.50 1.54 2 0 0 0 0 0 0 1
1.55 1.59 0 1 2 2 1 1 3 1
1.60 1.64 4 2 2 0 3 1 1 0
1.65 1.69 1 0 3 2 4 1 2 2
1.70 1.74 3 2 2 1 0 1 0 1
1.75 1.79 2 2 0 3 1 3 1 2
1.80 1.84 0 2 0 2 0 2 0 1
1.85 1.89 0 2 0 1 0 1 0 1
1.90 and over 1 3 0 2 1 2 0 0
Total No. of Firms 13 14 11 13 12 12 8 9

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

cessing and warehousing unsweetened citrus juices, exclusive of adminis-

trative, selling and other costs. These costs represent only the man-

ufacturing 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, 1962-63 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 0 0 1 0 1 0 1 0
1.30 1.34 3 0 2 1 2 1 0 1
1.35 1.39 1 3 3 1 1 1 2 0
1.40 1.44 3 2 3 2 5 2 3 3
1.45 1.49 4 1 2 2 2 2 2 1
1.50 1.54 0 2 0 4 0 3 0 2
1.55 1.59 1 4 0 1 0 2 0 2
1.60 and over 1 2 0 2 1 1 0 0
Total No. of Firms 13 14 11 13 12 12 8 9










A comparison of average costs of processing and selling unsweet-

ened juices in 12/46 cases indicate 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 firms tended to cluster around

the central cost ranges whereas the small volume plants spread over the

extremes of the cost group. However, the basis of sorting -- total vol-

ume output of juices and sections -- was not closely related to plant

capacity this season.


TABLE 5.--Variations in Cost of Processing, Warehousing and Selling
Orange Juice in 12/46 Cases, Unsweetened, by Total Volume of Plant,
14 Firms, 1962-63 Season.

Cost per Case Under 1,500,000 1,500,000 Cases
12/46 (unsweetened) Cases and over
- - Number of Firms - -
$1.50 $1.59 1 0
1.60 1.69 1 2
1.70 1.79 1 2
1.80 1.89 3 1
1.90 1.99 1 0
2.00 and over 2 0
Total 9 5


Average costs of orange juice and grapefruit juice per 12/46 case,

unsweetened, for the two size groups were as follows:


Size Group
(24/2 equiv. cases)


Under 1,500,000 cases

1,500,000 cases and over
Difference


Orange Grape- riit
Juice Jui:e
- Cost per 12/46 Case Unsweetened -

$1.8807 $1.8126

1.7550 1.6750
$0.1257 $0.1376


-


--










Costs of Processing Canned and Chilled Citrus Sections

The average costs of processing, warehousing and selling canned

grapefruit sections and salad sections in 1962-63 were markedly higher

than the level of the preceding season. The following data show the

trend in total costs for sections and salads in recent years:

Season Grapefruit Sections Salad Sections
eason12/46 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
1961-62a 3.82 2.64 4.36 3.20
1962-63a 4.16 2.98 4.81 3.50


aCosts shown these seasons exclude brokerage in order to be com-
parable with preceding years.


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

grapefruit and salad sections, being used for about 79 percent of the

1962-63 output. The 12/46 case was used for 16 percent of the quantity

packed. In Table 6, a summary of costs is shown for these two case-

sizes of canned sections.

This season a summary of costs has been prepared for several

packs of chilled grapefruit sections and salads. These summaries are

based on a smaller number of firms than for most products shown and

therefore, have the weaknesses inherent in averaging a small group. The

1962-63 season was abnormal in many aspects and costs in some plants

were affected more than in others. A broader sample would give a









TABLE 6.--Costs of Processing, Warehousing and Selling Florida Canned Citrus
Sections, 1962-63 Season.


Product
Type of Container
Number of Firms
Cases per Firm
Cost per Case:


Grapefruit
24/303
12
133.486


Sections
12/46
8
34,170


3 A


Salad Sections
24/303 12/46
4 3
12.724 5,745


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
Depreciation
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


$0.8132
.0777
.0652
$0.9561


$0.1686
.6093
.2086
$0.9865
.0719
.1075
$1.1659


$0.0673
.0550
.0693
.0635
.0346
.0370
$0.3267
$2.4487


$0.9057
.1045
.0685
$1.0787


$0.2425
.8707
.3264
$1.4396
.1274
.1659
$1.7329


Si. 7329 $1. 6362 $2 .4294


$0.0889
.1038
.0998
.1008
.0618
.0601
$0.5152
$3.3268


$0.8097
.0697
.0688
$0.9482


$0. 9482 Si. 0803


$0.3242
.8604
.2555
$1.4401
.0644
.1317
$1.6362


$0.0545
.0839
.0447
.0503
.0324
.0451
$0.3109
$2.8953


$0.9013
.1052
.0738
S1.0803


$0.4518
1.2471
.4257
$2.1246
.0985
.2063
$2.4294


$0.0689
.1111
.0785
.0877
.0411
.0573
$0.4446
$3.9543


$0.0712 $0.1043 $0.1153 $0.1156
.0367 .0490 .0392 .0579
$0.1079 $0.1533 $0,1545 $0.1735
$0.0961 $0.1868 $0.1080 $0.1563


.0553
.0392
$0.0945


$0.0503
.0368
$0.081 i
$2.8343
.2025
$3.0368


.1083
.0548
$0.1631


SO 61 $.116 $.11


$0.0795
.0479
$0.1274
$3.9574
.3094
$4.2663


54.2663 $3.5838


.0801
.0305
$0.1106


$0.0737
.0374
$0.1111
$3.3795
.2043
$3.5838


.1243
.0473
$0.1716


$0.1185
.0360
$0.1545
$4.6102
.3241
$4.9343


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

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


--


*










better picture, but, from the sources available, average costs of

chilled products are given in Table 7.


TABLE 7.--Costs of Processing, Warehousing and Selling
Sections, 1962-63 Season.


Product CI
Type of Container
Number of Firms
Cases per Firm
Cost per Case:
Materials -- Jars & cartons
Labor:
Direct--Peeling
Sectionizing
Other direct
Total Direct
Indirect
Payroll taxes & insurance
Total Manufacturing Labor


Florida Chilled Citrus


killed Grapefruit Sections Chilled Salad Sections
4/5 12/46 12/32 4/1
5 4 4 3
5,494 49,721 106,239 20,628


$0.8015


$0.3187
1.1285
.3144
$1.7616
.1059
.1791
$2.0466


Other Manufacturing:
Power, lights, water $0.1011
Maintenance, bldgs. & equipment .1107
Royalties .1038
Depreciation .1205
Taxes, insurance, rent .0627
Miscellaneous expense .1162
Total Other Manufacturing $0.6150
Total Manufacturing Expense $3.4631
Warehouse Expense:
Labeling, shipping, labor & taxes $0.2114
Other warehouse expense .1231
Total Warehouse Expense $0.3345
Administrative Expensea $0.1200
Selling Expense:
Brokerage .1146
Other selling expense .0616
Total Selling Expense $0.1762
Other Expense:
Advertising tax and inspection $0.0750
Other (interest, misc. deductions) .0907
Total Other Expense $0.1657
Total Cost Unsweetened $4.2595
Sugar .2074
Total Cost Sweetened $4.4669


$0.6370 $0.8538 $0.7814


$0.1240
.3990
.1628
$0.6858
.0347
.0779
$0.7984


$0.0365
.0324
.0572
.0569
.0205
.0451
$0.2486
$1.6840
$0.0667
.0659


$0.2402
.7800
.3149
$1.3351
.0711
.1531
S1.5593


$0.0739
.0647
.1169
.1159
.0415
.0916
$0.5045
$2.9176
$0.0984
.0972


$0.4151
1.2142
.3262
$1.9555
.1006
.1760
$2.2321


$0.0859
.1257
.0522
.0885
.0541
.0884
$0.4948
$3.5083
$0.1783
.1227


$0.1326 $0.1956 $0.3010
$0.0504 $0.0803 $0.1441

.0666 .1050 .1484
.0253 .0399 .0685
$0.0919 $0.1449 $0.2169

$0.0312 $0.0627 $0.0892
.03`0 .0669 .0877
$0.06.2 $0,1296 $0.1769
$2.0251 $3.4680 $4.3472
.1078 .2158 .2147
$2.1319 $3.6a38 $4.5619


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


$0.8015..


L










Costs of Processing Frozen Orange Concentrate

Orange concentrate production in Florida declined in 1962-63 to

only 44 percent of the preceding year's record volume, and was the small-

est production since 1952-53. Can costs were lower than for 1961-62,

though this may be merely a change in proportion of aluminum and steel

cans used.

Labor costs per case were much higher than in the preceding season

for each case pack shown. Other manufacturing costs also increased sub-

stantially for all concentrate packs.

A comparison of the change among the principal cost categories for

orange concentrate 48/6 in 1962-63 is shown below:


Frozen Orange Concentrate 48/6
Cost Group Cost per Case Change in Cost Percent
1961-62 1962-63 from 1961-62 Change
Materials $1.0586 $1.0283 $-0.0303 -2.9
Manufacturing labor .1743 .2588 + .0845 148.5
Other manufacturing expense .3168 .6065 t .2897 491.4
Warehousing .1232 .1487 + .0255 +20.7
Administrative expense .0969 .2025 .1056 4109.0
Selling (including brokerage) .1004 .0926 .0078 -7.8
Other costs .1512 .3187 + .1675 4110.8
Total Costs $2.0214 $2.6561 1- .6347 +31.4


Costs for processing, warehousing and selling frozen orange concen-

trate for 1962-63 are shown for the three most common can sizes in Table 8.

There was some use in 1962-63 of "multipak" cartons for frozen

orange concentrate in size 48/6 ounces. 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 multipak car-

ton cost added about $0.135 per case for the 48/6 size.










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

housing frozen orange concentrate appears in Table 9. Costs in this

table represent a conversion to equivalent gallons of all containers of

frozen orange concentrate, but excludes the cost of cans and cartons.

Itemized costs are arranged by volume groups with those plants producing

under2,000,000 equivalent gallons being compared with the group pro-

ducing over 2,000,000 gallons. This arbitrary division to place the

same number of plants in each group obviously includes in the smaller

group, plants large enough to achieve a high degree of efficiency. The

comparison between the two groups is not very satisfactory this sea-

son because of the curtailment of volume leaving little relation be-

tween output and plant capacity. The plants in the larger group hadlower

labor costs per gallon but almost the same total manufacturing costs.

The total of all costs for the large-volume group was 7 cents per gal-

lon less than for the smaller volume group.

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 Under 2,000,000 2,000,000 Gallons
Containers) Gallons and over
Under $0.60 0 1
$0.60 .64 1 2
.65 .69 2 1
.70 .74 1 1
.75 .79 1 4
.80 .84 1 0
.85 and over 3 0

Total 9 9










TABLE 8.--Costs of Processing, Warehousing and Selling Florida Frozen
Orange Concentrate, 14 Plants, 1962-63 Season.

Type of Container 48/6 24/12 12/32
Number of Plants 14 14 11
Cases Produced per Plant 515,592 293,063 48,446
Cost per Case:


Materials:
Cans (lithographed)
Cartons
Total Materials
Manufacturing Labor:
Direct
Indirect
Payroll taxes & 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, payroll taxes, ins.
Other warehouse expense
Total Warehouse Expense
Administrative Expensea
Selling expense:
Brokerage b
Other selling expense
Total Selling Expense
Other Expense:
Advertising tax & inspection
Other (int., misc. deductions)
Total Other Expense
Total Costs


$0.9648
.0635
$1.0283


$0.7535
.0619
$0.8154


$0.1244 $0.1207 $0.2112
.1089 .1056 .1061
.0255 .0245 .0309
$0.2588 $0.2508 $0.3482

$0.1003 $0.0971 $0.1349
.0631 .0609 .0988
.1022 .1016 .1297
.1286 .1258 .1641
.1065 .1045 .0452
.1058 .1086 .0786
$0.6065 $0.5985 $0.6513
$1.8936 $1.6647 $1.6799

$0.0417 $0.0419 $0.0623
.1070 .1069 .1545
$0.1487 $0.1488 $0.2168
$0.2025 $0.2042 $0.1878

.0383 .0389 .0904
.0543 .0560 .1373
$0.0926 $0.0949 $0.2277

$0.2255 $0.2227 $0.3021
.0932 .0879 .0894
$0.3187 $0.3106 $0.3915


$0.6042
.0762
$0.6804


A2 6561 527 A 7.17


aIncludes management and office salaries,
and travel.


office expense, telephone


bExcludes allowances, discounts, brand royalties and special adver-
tising assessments.


I


$2.i6561l


$2 4L232


$9 7037










TABLE 9.--Cost per Gallon for Processing, Warehousing and Selling Frozen
Orange Concentrate by Volume Groups, Excluding the Cost of Cans and Car-
tons, 18 Florida Plants, 1962-63 Season.


Volume Group (Gallons)
Number of Firms
Gallons per Firm
Cost per Gallon:
Manufacturing Labor:
Direct
Indirect
Payroll taxes & w/c insurance
Total Labor


All Plants
18
2,350,964


$0.0582
.0448
.0105
$0.1135


Under
2.000,000
9
1.222.271


i ~ ~ ~ ~ ,2,7 3,479 FiT i i 6I58


$0.0695
.0535
.0099
SO.1329


so. 1329 50.1067


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

Total Costs


a
Includes management and office
phone and telegraph travel.


$0.0435
.0293
.0456
.0548
.0393
.0426
$0.2551
S0.3686


$0.0240 $0.0311 $0.0215
.0442 .0572 .0397
$0.0682 $0.0883 $0.0612
$0.0881 $0.0899 $0.0875

.0221 .0357 .0174
.0289 .0465 .0227
$0.0510 $0.0822 $0.0401


$0.1002 $0.1102 $0.0967
.0337 .0225 .0376
$0.1339 $0.1327 $0.1343


$0.0444
.0327
.0509
.0601
.0225
.0266
$0.2372
S0.3701


$0.0432
.0281
.0437
.0529
.0452
.0483
$0.2614
S0.3681


$n- 7nc98


salaries, office expense, tele-


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


2,000,000
and Over
9
3,479.658


$0.0542
.0418
.0107
$0.1067


0$ 7632 $0 6912


I


I


AO 7098










The average cost per gallon for processing and warehousing frozen

orange concentrate for the 1962-63 season was approximately 71 cents per

gallon. The record for the past 15 years is as follows:


Cost per Equivalent Gallon
(Excluding Packaging
Materials)
$0.465
.451
.346
.326
.372
.340
.328
.341
.371
.461
.407
.428
.433
.407a
.710a

aIncludes selling; prior years do not.


Number of Plants
in Sample
5
8
9
7
9
10
10
9
13
15
16
14
18
14
18


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 number of plants

included affects the comparability of season-to-season average costs to

some extent.


Citrus By-Products

The 15 plants from which citrus by-products costs were obtained

for 1962-63 manufactured 193,493 tons of citrus pulp and meal, 33,396

tons of molasses and 1,683,614 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.


Season
1948-49
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55
1955-56
1956-57
1957-58
1958-59
1959-60
1960-61
1961-62
1962-63


r










TABLE 10.--Average Costs of Processing, Warehousing and Selling Florida
Citrus By-Products, 15 Plants, 1962-63.


Product
Number of Plants
Production per Plant


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


Pulo and Meal Molasses Peel Oil


15 8 6
12,900 tons 4,174 tons 280,602 lbs.
Costs per Unit


$----
4.44
.47
$4.91


5-~---


$0.0175


S0.0175


$2.48 $1.36 $0.0288
1.54 .80 .0115
$4.02 $2.16 $0.0403


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:


$6.25
1.67
1.63
.77
.72
.25
$11.29
$20.22


$9.41
1.89
2.03
.50
1.06

$14.89
$17.05


$0.0179
.0120
.0395
.0045
.0177

$0.0916
$0.1494


$1.67 $0.22 $0.0004
.90 .13 ----
$2.57 $0.35 $0.0004


$0.39
.40
S0.79


$--
.59
.59
$1.18


$0.32
.44
80.76


$0.06
.47
.09
$0.62


$0.0008
.0005
$0.0013


$0.0063
.0159
.0038
$0.0260


$0.32 $0.23 $0.0008


Total Cost per Unit $25.08 $19.01 $0.1779


Total Cost per Unit


$25.08


$19.01 $0.1779


-~~--~-


~~ -`--- --


I I


--


I I


t l


I I


I I


IIII II
III I


I .


I I


L I I


I


---- --


I I I I











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

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

facturing expense were 81 percent of the total production, warehousing

and selling cost for feed; 90 percent for molasses and 84 percent for

peel oil. Warehouse expense was negligible for molasses and oil. Bags,

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

Citrus pulp and meal feed averaged $25.08 per ton for all costs

of manufacturing and selling; molasses $19.01 per ton; and peel oil

$0.1779 per pound (Table 10). Costs for producing by-products from

citrus were considerably higher in 1962-63 than in 1961-62.

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

for molasses are shown in Table 11. Some of these variations are prob-

ably 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.

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 $3.33 per ton to $5.37, depending partly on whether paper or

burlap bags were used. Manufacturing labor, including payroll taxes and

workmen's compensation insurance, ranged from $2.46 to $7.30 per ton;

power, water, steam and fuel cost from $2.52 to $9.40 per ton; mainte-

nance and repairs varied from $0.53 to $7.45 per ton; and depreciation

on buildings and equipment from 0 to $4.97.

In the production of molasses, labor including payroll taxes

and workmen's compensation insurance ranged from $1.79 to $3.41 per ton;

power, steam and fuel from $3.20 to $12.48; maintenance and repairs from

$0.22 to $2.86; and depreciation from $0,23 to $4.64.









TABLE ll.--Variation in Cost of Processing, Warehousing
Citrus By-Products, 15 Plants, 1962-63.


and Selling


Cost per Ton Citrus Citrus
Pulp and Meal Molasses
Number of Firms Number of Firms
Under $15.00 0 2
$15.00 16.99 0 2
17.00 18.99 0 1
19.00 20.99 3 0
21.00 22.99 1 0
23.00 24.99 2 1
25.00 26.99 3 2
27.00 28.99 3 0
29.00 30.99 2 0
31.00 and over 1 0
Total Number of Firms 15 8
Range in Cost per Ton $20.11 $37.69 $11.49 $26.31



Fig. 1.--Comparative Cost of Processing, Warehousing and Selling
Specified Citrus Products, 1961-62 and 1962-63.


Cost per Case
0 $0.50 $1.00 $1.50 $2.00


$2.50 $3.00 $3.50


Orange Con-
centrate,
48/6

Orange J~ic(
12/46

Grapefruit
Sections,
24/303

Chilled
Salad,12/32


$4.00


.. 1961-62
"!"'g" "" *:: *" 1962-1962-6363
1961-62
. .1962-63

1961-621961-62
.. ...... ... ........ .. 1962-63



1962-61
Materials; Production Labor Other Production AdminSugar the
& Whse. Cost &
..__. .. .._Sell .


-- --










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


I. Costs of Packing and Selling Florida Fresh Citrus Fruits,
1962-63 Season.

Agricultural Economics Mimeo Report EC64-9. April, 1964.

2. Costs of Picking and Hauling Florida Citrus Fruits, 1962-63 Season.

Agricultural Economics Mimeo Report EC64-8. April, 1964.

3. Thirty-One Years of Citrus Production Costs and Returns in Florida,
1931-1962.

Agricultural Extension Service Economic Series, 64-2. March, 1964.

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, September,
1959.









AHS/ghs May, 1964
Agr. Econ. Sta. 1,250