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 Historic note
 Front Cover
 Abstract
 Table of Contents
 List of Tables
 Main
 Reference














Group Title: Costs and returns for sugarcane production on muck soils in Florida
Title: Costs and returns for sugarcane production on muck soils in Florida, 1983-84
CITATION PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00072580/00001
 Material Information
Title: Costs and returns for sugarcane production on muck soils in Florida, 1983-84
Series Title: Economic information report
Physical Description: iii, 18 p. : ill. ; 28 cm.
Language: English
Creator: Alvarez, Jose, 1940-
Rohrmann, Francisco
Publisher: Food & Resource Economics Dept., Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1985
 Subjects
Subject: Sugarcane -- Economic aspects -- Florida   ( lcsh )
Sugarcane -- Soils -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: Jose Alvarez, Francisco Rohrmann.
General Note: Cover title.
General Note: "January 1985."
Funding: Economic information report (Gainesville, Fla.) ;
 Record Information
Bibliographic ID: UF00072580
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 22579422

Table of Contents
    Historic note
        Unnumbered ( 1 )
    Front Cover
        Front Cover
    Abstract
        Page i
    Table of Contents
        Page ii
    List of Tables
        Page iii
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
    Reference
        Page 18
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida





Jose Alvarez
Jose Alvarez


(('k1- i?--1


Francisco Rohrmann


Economic Information
Report 20.


Costs and Returns for Sugarcane
Production on Muck Soils in
Florida, 1983-84


Food and Resource Economics Department
Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611


January 1985




















Costs and returns for suga rcane production on muck soils in
Florida during the 19 83--84 season were estimated from data
provided by local producers and dealers servicing them. An
efficient 640-acre farm was ass' .umed. Results show a cost per net
ton of ..sugarcane of 23 and of $20 per standard ton. Costs per
gross, net and harvested acre: were $65c3, $741. and $865 respective-
ly. Net returns to management and risk were $211 per gross acre.

Key words:: Everglades, u:.uqarcane-, enterprise budget production
costs,,


































The use of trade names i I n this publication is solely for the
purpose of providing spec::. fi ::. information. It is not an en-
dorsement, a guarantee, or a warranty of the products named.

IBM PC i.s a t:. a r adermalk of Inter n a tion al Bins Mach i nes Corp.
Lotus 1-2--3 is a trademark of Lo...tus Development Corporation.


ABSTRACT

















i ABLE OF CONiTENTS



LIST OF TABLES ,............. ..... ... iii

INTRODUCT ION .. .. .. .. .... ... .. .... .. 1

METHODOLOGY AND DATA SOURCES . ... .. . 3

Management ri .. ... .. ..... ...... 3
Farm Characteri st.ics. .. ., . 3
Machinery and Equi:pmenliei .,. ., 4
Labor . ,. . 4
Cultural Practi ces ,. .. ,. . . 7
Costs and Prices,, .. 7
Data Sources .. 1 ()

COSTS AND RETURNS ... ... . .. . . 11

Produtcti on Costs.t ,, . 11
Revenues and Co( ts: ., .. .. . . 11
Retu-trns;. to Factors of P:"odIucti oni., . . 15
Costs aund Returns per Unli t,, . . . 15

SUMMA:AR;Y AND CONCL...USIONS, .. . ., 1 7

REF ERENCES .. .. .. ... . .. . . 18













L....[S OF TABLE


1 Assumed land di stri but.ion, yield, percent trash
and sucrose for a 640--acre sugarcane farm in south
Florida:, 1 983-84 . . .. .. .. 5

2 Estimated :initial i investment and assumptions for
machinery anrd equi .pment' used on a 640-acre sugar-
cane farm in south Florida, 1983-84. . . 6

3 Assumed pre-harvest cultural practices performed by
di f feren-t machinery and equipment to produce 161
acres of plant cane .i.i south Flor ida, 1983-84. . 8

4 Assumed pre-harvest cultural practices performed by
diff erent machinery and equipment to :produce 322
acres of stubble cane in: s oul h Florida, 1983-84 9

5 Summary of production cost:.s estimates by activity
for a 640--acre sugarcane farm in south Florida,
1983-3-84 . .. .. .. . . 12

6 Est. i mated h-arvest:ing nanrid over lead activities costs
for a 640-acre sugarcane farm in south Florida,
1983--84. . . . . . 13

7 Stummar y of estimated revenuess, costs. and margins
f or a 640-acr square sugar an farm in south Fl or i a,
1983-84. .. ,. .. . . 1.4

8 Estimated totaJ returns to f actors of production
per gross acre; +a r a 64 0-acre sugar-a.ne farm in
south Florida, 1983-84 ., . . 16
















COSTS AND RETUiI'S FUI:R SJi.. i.I;: : FPRiDU)L FION ON MUCK SOILS IN

FL.RI .A,, 198 384



Jose Al varez and Francisco Rohrmannn



:: 1I '; .. JCT 1 -1\iN

Sug l.ar:cane production icn south F:lorida takes place in the

area arn..d and south of Lake Ok:-eechobee. Although Palm Beach

County accounts i for most:. (:..f Ihe acreae o, tLhe crop i.s also grown i.n

Herncidry, Gl aides and Mart .i.n Cuni i s. Dr i ng the 1982-83 season,

the value o:f the sugar and molasses prc-duced *from 355,300 acres

devoted to sugarcane a. n .:unc. i. d t:io ;5.-2 (ii 1 n Alvar: ez and

Shuler :198:3). Mu.ik.::ey arnd.i Gu' don (1 C; ) have st .ated that "beyond

its relat:i vel y lar ge con r L .:uti on io cash r ecei pts in the

fOL ur-1ount cy sugar prod.:uc:tio.. ar ii;ea, the production of sugarca ne

and associated sugar milling operations iimake a significant

contribution to thLe local econ omy" ( p. 1).. Using 1980 data, this

contriut: .i on tra..nslated to. over 'I (l,,000 local .jobs generated

through direct, indirect and. induced active y, and over $1.1

billion in gro s s i ales.




Josec- A. varez and Franc: isco :.,Rohrmiann are A rea Economi st and Direc--
tor oi f IBM: i Grant, r-espec i.::' .vely:.. F:ood: and Resour..ice Economics De--
p:artme.nt, Un university of i Forida iEverg:l ade;.s Research and Educat:i on
Cent er Bell11e G1 ad e Fi... 3:3.:5..:' ,.















Enterpr :i. ..budget or !: .'i imip: rtant crop: were last

published in 1979 (t..opt.: e1 ) .. Changes in factor and outp.. utt..t

prices, as well. s requests fro:i growers, researchers, bankers

and government agent cie:, made it necessary to devel op a current

budget,, The purp:::ose of i publ :i. cati on is to update cost and

return figures for uct .gar :. ,. pro duct ion Ion the muck s::ils of

south h F ::)ri. da:,

An ent ..erpr i. se 1::fudget. .i. ; a sy stemat i c li sting of income,

expenses,, capitall, labor and mac.:hinery requi rements .f:or a given

crop,, Enter:.:r :i. se bu:::dgets h- a several important applications.

Sugarcane Iprod uce mi ," I I .:i:e current t. bud:!:gets to gauge their costs

and p::ract:i. c:es against a i "i.::,**,- ichi,!la:'k" farfm, Bud::gets allow comparison

of production cos":',, arnd reven:.*es': bet between different regions of the

cou .ntry and betw-1en cro .: i I the same region., They are a. so

useful in land a:: pp.ra i sa ,: : ::i. e .Ithe value of agricultural land

is closely related to the potential net revenue f r::om the crop

produced on ctha .I : land., Fi l .i .1v Ip.ublished budgets document costs

for historical p:urp::ses and serve as a ready reference f or those

desiring C general? e.:conomi(: stats. s !. on C Lhe crop in question.

The f: figure :. n this r.epo :ri w.ere developed wi th a computer :ized

sugarcane budget general I..tj... :;Iesi ~ ned by the authorsr. The software

package is inrtendedl for :::,.- ar use with an ITDM Personal Computer

having a mini mum !memory of :9,.: Kilob::ytes of Random Access Memory,,

two disk drives, a r inter, and either version 1 or IA of the

L. .ot u s 1 2-3 1 e. c tron ic si.::r e ds:-.:i-; t,,















ME.THODOL...OGi Y LWiD DATA B5.JOURCE:.

Many var iab l: es :i. nif :1 ..enc: e su .g a r c :a ri e product i o(n in south

Florida., Variati:ons in managementt, farm size,, soil. type, soil

depth, distance from Lake Ok:eech obee, and many other factors

result in d different systems e production with corresponding

:input and output. levels,, For this reasiEi:on, several assumptions

were needed in developing) thi s budget,



This study assumedd: (* :A high level of management; (b) the

manager is a profit i ma: .imi ie. er(c) .Ue o:f the latest technology;

and (d) the grower 1s ei:. i.f an i independent producer or a mi ll.

cooperate ive member, buL :: : in o..L o rower-processor.

F-arm^ Chli -. r ..t.. i. ;t. C.

SSugjarcane frm in )ou h Flori da vary in size from small, ,

owner.-operated Lto large., courpoi:."rl-un farms. Ini this study, a

640-acre (usually ref'err-d L..o) a "o ::e sect: i onr") .farm was assumed.

Since the per-acre cost anid le ld fig ..ures obtained were considered

representation i o e b-:s. managed f arms i i the area, l larger

operations c:n use i i. 1 em.; uf the bas:.i. unit t1::: estimate the

co:rresp::rondi costs arld r et u..r"<: t i ur'es. However, some economies

of scale are :present-i r ma .iner r y cosls.

The farm assumed was est.abli shed and its land subdivided

into :.6, 40--acre b::l.ock:: ; r here were 14 one-.half mile long field

ditches (7 mil es total) and 2 one-mi.le long seepage canals. The

farm was assuLmed to b:e located less than 15 mi les from the mi ll,

thus no e:.tra charges :for t :raelN:Iortati on of: cane to the mill were

made. The soil. was ...i :s .ied as m-uckI and the land di stri buti on
















and correspondi. ny y ield-.- <:.-: e shw.n. :in Tabl:e :1...

Ma c::h i nEr y .. L Id:_ .g 1. 3 .L L n01

The machinery and equip::,ment a:ssum:ed (Table 2) can perform

al 1 necessary I operations in the time required when is used

eff ici gently. A typical work:i.. o day +or a machi ne was assumed to

be .5 hours i.e., equip rmeit .n':age t i me represents 85% of labor

time, allowing for the ltime ] osl. in activities such as refueling,

etc.

Annual .ix ed co..sts inci t.i r u dep: r eci. ati on, repairs,, interest,

ta: -Ees and i insurance De:p re .... :.t i on wias ca c:ul ated using the

straight line methii.cd, a-ssume:d a ina.ri:hi nery :life of ten years and a

salvage value of i.. o- th- purchase cost.: This method was used

because it .. ta-kes into a.....o ....u the normal ustief:ul service life of

the machinery, thus spl eadi.nqI ichi.nery ownership p ::: costs over the

enrit ei r i od.

Repl::,airs were est .i Jat1ed al.. 3, of purchase cost.,, Interest on

machi nrery loans was calcul ate.: d at 13% of the aver-age value of the

machi ne, where average value was de:f i.ned as the average of the

purchase cost arind. t:he saH v.: ae val ue. Tames an d ins ur ance

represented 1% of: the initial investment of the machine.

Var-i abl e costs were :the doll. ar amount ,of fuel di irectl y

consumed b:,y power machinery, esti. imat ed at $0..95 p:: er gall.. onr, plus.

the opera t or :' s 'a 1 ar y. F or non-r.p oweri e cqu :i p men~ t, r ep a i rs were

i ncl uded u-nder mac::h i lne r y owner s Ii-i h :::. costs.,

Lab or

The farm has one .fui .1-i.i employee. Outside labor as. well.

as custom services wierie a umed to be available in the area when








5


Table 1.- Assumed land distribution, yield, percent trash and sucrose for
a 640-acre sugarcane farm in south Florida, 1983-84

Assumed Assumed
Assumed gross percent Net % Std.
Land use acres % tons/A trash tons/A sucrose tons/A
assumed

Fallow 81 12.6 -

Plant canea 161 25.2 47.05 5.0 44.7 14.25 52.56

1st ratoon 161 25.2 40.00 5.0 38.0 14.20 44.49

2nd ratoon 161 25.2 32.00 5.0 30.4 14.10 35.29

Otherb 76 11.8 -
Total 640 100.0

aHalf is from fallow land and half is from successive planting. Eighty-two acres
at 50 gross tons per acre and 79 acres at 44 gross tons per acre, respectively,
average 47.05 gross tons per acre.
blncludes road, ditches and canals.











Table 2.- Estimated initial investment and assumptions
cane farm in south Florida, 1983-84.


for machinery and equipment used on a 640-acre sugar-


No.of New Fuel/ Taxes and
Item units cost Life hr Repairs Insurance Interest Depreciation


Tractor, 110-115 HP
Tractor, 60 HP
Disk, offset, 12',24"
Disk, harrow, 21',21"
Disk, 8',24"
Chisel plow, 12',20"
Land leveler, 8-row, 3
Mole drain, 2-row
Furrow plow, 3-row
Covering rig
Scratcher, 3-row
Rolling cultivator
Rotary mower, 7'
Pick-up truck
Pump, 36" pipe, 92 HP
Total


28,000
14,700
5,600
9,100
2,660
2,030
5,600
2,450
1,960
3,100
2,300
2,450
2,660
9,500
20,900


Years
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10


Gallons
5.2
4.0


I


1,680
441
168
546
80
61
168
74
59
93
138
147
80
285
627
4,647


560
147
56
182
27
20
56
25
20
31
46
49
27
95
209
1,550


4,004
1,051
400
1,301
190
145
400
175
140
222
329
350
190
679
1,494
11,070


5,040
1,323
504
1,638
239
183
504
221
176
279
414
441
239
855
1,881
13,937


65

















Labor cost ,per hour o:. work was estimated to be $5,.00, while

equ i pmernt op erator' -. c:o, sMt .. i:: c. !75, b.oth :i including frin ge

bene-fits. Th'e rnumi3ber of Iho ..tr-: of i.'r:k in a .typical working day was

assumed to be 10. .

Cultur al!. ..:.ti, s.

Table 3 slhow) Le c.u .1 r ::.i. I:practices performed in the plant

cane operate i on. Time over r 'presentI. t-he Inumber of ti mes a

cul. tural p rac :tice was .:. ai- r:i ::-i. ou ThI e e f i cie. ncy measures or

per form ance rates of the oper ::io Li n were stated in acres :per day,,

given the type of mia.:: ch.i ner-'y :i i..'] o e-..l.

The :effi c:i. ernc y in Lr-.:m:.. aO.res per day was used to obtain

thie to:,:tal. numi,.::'r of hIo" s p :.-r .cre -a mat: :i.rne was employ :yed. This

i nforC mati wr ,as. uI .ed c to c.:i !. : I..; l: variable: e product: on costs on a

per acre b as :i. ,

The c:ulLural pri: ::, Lic s::. pr.-forrmed in;' the stubble operation are

shown in Table 4.

QCost and :.i...es.

The costs assumed for the di tffer-ent materials applied are

shown in the c orresp ondin i:c:ti ons of the budget. Other cost

asssu.mptions inclu ded a 1.:::j. interest rate for operating loans, a

t9.75 per gross ton for harvestingg, loading and hauling to the

mill, and land and drainagee tla:. es of $12 per acre,,

he land charge deserves special c:onsiderati on. Brooke (1977)

developed three different figures that could be used depend ng

.upo n the pur pose for which the estimate was computed: (a)

interest on the current marLket value oft land (for long-run costs









Table 3.- Assumed pre-harvest cultural practices performed by different machinery and equipment to produce 161 acres of
plant cane in south Florida, 1983-84.


Times over

Operator
Tractor, 110-115
Tractor, 60 HP
Labor
Crew size (#)

Custom hired
Materials


Hea
dsk
3

30
HP 30
0
0
0

0
0


Land preparation

vy Light Chisel-
g. dskg. inga
9 0.3

45 45
45 45
0 0
0 0
0 0

0 0
0 0
0 0


P1


Ditch Leve
clean. ing
1 2

0 40
0 40
0 0
0 0
0 0

8.40 0
0 0


1- Mole Fertil- Furow-
drainEizingd ing
0.5 1 1
- - Acres/day- -
36 0 55
36 0 55
0 0 0
0 0 0
0 0 0
- - $/acre- -
0 3.50 0
0 35.00 0 1(


wanting

Cut.
canee
1

0
0
0
0
0

25.00
00.00


Load
iaulf
1

0
0
0
0
0

57.509
0


Cultivation

Seed Scratch- Mech Herb
cov. ing cult, appl!
1 12 3 1

40 50 40 0
40 0 40 0
0 50 0 0

40 0 0 0
1 0 0 0

0 0 0 2.25
25.00h 0 0 1.50


aAbout 1/3 of the land wasassumed to be chiseled due to variations in soil depth.

bTwo miles were cleaned at$600/mileandincluded soil spreading.

cOne 10" diameter mole plow was pulled 2' deep every 20'.

dSix hundred Ibs.of 0-10-40 plus micronutrients were used.

eFive tons of cane at $20/ton plus a cutting cost of $25/acre were used.

Estimate included $7.50 for loading, $25 for hauling and $25 for dropping.

gEstimated charge for seed transportation.
hEstimate assumed 33 Ibs. of Mocap at $0.75/lb.

1v "a w*$-'rt u


---









Table 4.-Assumed pre-harvest cultural practices bydifferent machinery and equipment to produce 322 acres of stubble
cane in south Florida, 1983-84.


Times over


Operator

Tractor, 110-115 HP



Custom hired

Materials


Spread. Disk Rolling Fertil- Herb.b Chisel-
fodder cult. cult ization appl. ingc
1 2 6 1 2 0.5
- - - - - -Acres/day - - - - -
36 30 36 0 0 40

36 30 36 0 0 40
- - - - - $/acre - - - - - -

0 0 0 3.00 2.25 0

0 0 0 30.00 8.80 0


alt was assumed that 500 Ibs. of 0-10-40 without micronutrients were used.

bEstimate assumed one lb. of Evik at $1.60/lb. with 4 Ibs. of Atrazine at $1.80/lb. plus $2.25 for the aircraft.

CEstimate assumed only about 1/2 of the land was chiseled due to variations in soil depth.







10





project ons to e:val. uate. 1. :-nd as: an invest menrt); (b) the

opportunity cost;; i:.e,,, the e::pected earnings from the use of the

:land for other crops: (apprl:opri. at:e for several purposes such as

studying shor -ru'n supplyl r responses) ~ ; and ( c) the 1 aidl. ord' s net

cash ren. (for estimating cos:.ts o produ t::i on). The last method

seemed t ..b e the most appr .::i ::I.: i .1.it for the i:..ir :::o f this study.

Yet, it was d: .f: f i cut Vo pinpoint a "typ:i.cal" cash rent f(:or

several reasons:: r:-enting l:nd .or suci arcane production: is a very

rare phenomenon in the area and the: cost would depend on numerous.

f actorss, Th e $ 1. f:i re was chosen and wa the midpoint i n the

$100 to $1.50 range C.!suggested b:.y several growers,,

The r:::ice p:::er standard ton of cane (net :: tons times a quali. ty

factor which varies with th:e su:croe content) was set at 24., 15,,

Thi s price was the result. of ass.umi.ng the price of sugar at

0. 2:/1 b and mul ti pl i ng .it. times 1. 5 (the air pri. ce

determination f actor). Although this method was stated in the

Sugar Act: whi. ch: ex: pired at t he endi o 1. 974, i ts use has

remained essentially unchangedd, Read ers i interest i n learning

an easy way to comput:e di f er ent relation nshi ps: aimcng various

measures of sugar quality cn:.: cons ulL Al. ]arez and iRohrmanni

(1984) .



Data for activities perf formed, equipment used and their r

corresponding efficiencies, were ob t ai ned through per : o n a per

interviews w:i.th producerss. Pr:ic.es for machinery a -nd inp uts, were

provi ded by loc:a.l. firms servicing the :growers: and the grow ers

themsel ves.
















COSTS AND RETURNS

Fr oduc t. :on Cost s.

A break-down of production costs by activity :is shown in

Table 5. They are expressed in terms of total amounts and dollars

per acre. The first four major headings (land preparation,

planting, plant cane cultivation and stubble cultivation) show

summary numbers from Tabl.es 3 and 4. The source of the numbers

for harvesting and overhead activities appears in Table 6,

which also shows a computer estimate of the expected deficit or

surplus of the mill quo Ita.

R e e ne s D2 an. d _o t s i ;

Table 7 shows a summary of revenues and costs (both variable

and fixed costs) in terms of dollars per acre and per standard

ton. Total amounts are also included along with relative

percentage figures.

On the revenue- side, plant and first r-atoon canes accounted

for about 68% of total revenues, whi le second ratoon cane

represented almost 25%. The contribution of molasses was close

to 7% of total revenues,.

Pl anti ng showed the hii hst percentage of all pre-harvest

var i able costs, wi t. h 8. 2%, f ollo. wed by ratoon cul ti vati on wi th

6. 5%. Harvesting costsii r represenVted about .45% of total costs.

At the bottom of Table 7:, a summary of projected revenues and

costs is presented. Estimated variable costs represented 54%

of estimated total revenues, while fixed costs accounted for

2:1.5%. A net margin of 24. 4% was a residual to the grower.













Table 5.- Summary of production costs estimates
farm in south Florida, 1983-84


by activity for a 640-acre sugarcane


8. LAND PREPARATION
Heavy Disking
Light Disking
Chiseling
Ditch Cleaning
Leveling
Mole draining
Fertilization
Subtotal
PLANTING
Furrowing
Cutting cane
Seed Cost & Transport.
Seed Covering & Insect.
Subtotal
PLANT CANE CULTIVATING
Scratching
Mechanical Cult.
Herbicide appl.
Subtotal


($)
1,756
3,513
117
1,352
878
244
6,199
14,059


319
20,125
9,258
4,665
34,367


3,856
1,317
604
5,777


($/A)
10.91
21.82
0.73
8.40
5.45
1.52
38.50
87.32


1.98
125.00
57.50
28.98
213.46


23.95
8.18
3.75
35.88


STUBBLE CULTIVATING
Spread fodder 97(
Disk Cult. 2,342
Rolling Cult. 5,851
Fertilization 10,62(
Herbicide appl. 7,11(
Chiseling 43'
Subtotal 27,35
HARVESTING
Plant cane 73,851
1st Ratoon 62,79(
2nd Ratoon 50,232
3rd Ratoon
4th Ratoon
Subtotal 186,87e
OVERHEAD
Edging 64(
Pest Ctrl 4,30(
Water Ctrl 3,84(
Subtotal 8,78(


)
61












3
7


0


9


0
0
0


($/A)
3.03
7.27
18.18
33.00
22.10
1.36
84.95


458.74
390.00
312.00
0.00
0.00
386.91


1.00
6.72
6.00


13.72


0










Table 6.- Estimated harvesting and overhead activities costs for a 640-acre sugar-
cane farm in south Florida, 1983-84.

Tons harvested Har
Harvest
Item Gross Net Standard cost Net tons

Plant cane 7,575 7,196 8,462 $73,857 Mill

1st ratoon 6,440 6,118 7,164 62,790 Quota 17,000

2nd ratoon 5,152 4,894 5,682 50,232 Expected
Total 19,167 18,208 21,308 186,879 deficit
or >>>> 1,208
surplus

OVERHEAD ACTIVITIES

Edginga $ 640
Rodent control 1,280
Borer control 3,020
Water controld 3,840
Total 8,780


aEstimate based on a cost of $1/acre.

bNot applied in all areas. An average of $2/acre was assumed. This estimate in-
cluded two applications of 2 Ibs. of rat bait at $1/lb. and the operator's salary.
CCharges for scouting were assumed to be $2.45/acre for the season for 322 acres.
Two insecticide applications to 161 acres were assumed. Each chemical application
costs an average of $4.68/acre for 1 1/4 pt. of Azodrin 5 WM plus $2.25 for the
aircraft cost.
dThe water control estimate included an assumed cost of $5/acre for electricity and
$1 for repairs and maintenance.










Table 7.- Summary of estimated revenues, costs and margins for a 640-acre sugar-
cane farm in south Florida, 1983-84.


Total Revenues
Plant Cane
1st Ratoon
2nd Ratoon
3rd Ratoon
4th Ratoon
Molasses Payment
TOTAL


Total Variable Costs
Land Preparation
Planting
Plant cane Cultiv.
Ratoon Cultiv.
Overhead Activities
Miscellaneous
SUBTOTAL
Interest
Harvesting
TOTAL


Total Fixed Costs
Machinery & Equip.
Land Charge
Taxes:Land & Drainage
Administrative Ovhd
TOTAL


$/Acre
1,269
1,075
852
0
0
60
864



22.0
53.7
9.0
42.7
13.7
14.1
155.3
20.2
292.0
467.4



48.8
125.0
12.0
0.0
185.8


$/Std ton






25.95



0.66
1.61
0.27
1.28
0.41
0.42
4.66
0.61
8.77
14.04



1.46
3.75
0.36
0.00
5.58


Total $
204,360
173,000
137,218
0
0
38,384
552,963



14,059
34,367
5,777
27,353
8,780
9,034
99,370
12,918
186,879
299,167



31,204
80,000
7,680
0
118,884


%
37.0
31.3
24.8
0.0
0.0
6.9
100.0



3.4
8.2
1.4
6.5
2.1
2.2
23.8
3.1
44.7
71.6



7.5
19.1
1.8
0.0
28.4


SUMMARY OF PROJECTED REVENUES AND COSTS


REVENUES
VARIABLE COSTS
GROSS MARGIN
FIXED COSTS
NET MARGIN


864.0
467.4
396.6
185.8
210.8


25.95
14.04
11.91
5.58
6.33


552,963
299,167
253,796
118,884
134,911


use, office


100.0
54.1
45.9
21.5
24.4


supplies,


aAssumed to be 10% of variable costs and included pick-up truck
telephone, etc.

















Ret. urns to :Facto s- of Pojdui:: il. n

The ret..rns to variou..s fac-tors of production are presented in

Table B. The break-down facilitates the estimation of the value

of the resources used in sugarcane production and is designed to

test the economic profitability of the sugarcane operation as an

economic uni t.

The figures are giv en on a per acre basis. Total revenue

amounted to an estimated $864 per acre. Deducting variable and

fixed costs ( excluding land) left $336 as the return to land,

management and risk. With the land charge of $125 per acre, the

return to management and risk was $21:1 per acre.



The previous results allow the computation of costs and

returns for the different units of production. The total cost

was obtained by adding total variable and total fixed costs

($299,167 + $118.,S84 = $418,051). The total net return

equals total revenues minus total variables costs minus total

fixed costs ($552,963 $299,167 $118,884 = $134,912).

Gross acreage was the total farm acreage (640). Net acreage

was total acreage minus roads, ditches and canals (640 76 =

564). Harvested acreage was net acreage minus acreage followed

(564 81 = 483) Gross tons produced amounted to 19, 167. Net

tons were 18,209, while the number of standard tons was 2:1.,308.












Table 8.- Estimated total returns to factors of production per gross acre for
a 640-acre sugarcane farm in south Florida, 1983-84



Item Charge Return

Total Revenue 864

Variable Cost 467

Return to fixed cost, land, and Mgt & Risk 397

Fixed Costs (Machinery, Equip. & Taxes) 61

Return to land and management & risk 336

Land Charge 125

Return to management & risk 211

















Dividing toLal costs ard i t ota net returns'i by the

corresponding per unit measures provides the following results:


Gross Net Harv ., Gross Net Stand.
acre acre acre ton ton ton

Total Cost ($) 653.20 741.22 865. 3 21.81 22.96 19.62
Net Return ($) 210.80 2329.21 279.32 7.04 7.41 6.33




SUMMARY AND CONCLUSIONS



Costs and returns figures for sugarcane production on muck

soils in Florida were updated f or the 1983-84 season using a

computerized budget generator developed by the authors. Results

show that, under the assumptions of this study, it cost about $23

per net ton and $19.62 per standard ton of cane produced. These

figures represented a total cost of $741.22 per net acre and

$865.53 per harvested acre,,

Assuming a $125 per acre for land charge, net returns to

management and risk amounted to :210.80 per gross acre, $7.41 per

net ton and $6.33 per standard ton. Estimates for individual

farms in the area would ifluctua.te widely due to factors varying

from the assumpti ons used in this study.



















REFERENCES

Alvarez, Jose and Franci sco Rohrmann. "Relationships Among

Various Measures of Sugar j !aliI.t.y," Belle Glade EREC Research

Report EV-1984-10, Unrivers ity of Florida., Ever.glades Research and

Educate Ion Center, Belle Bladce, Florida, September 1984.

Alvarez, Jose and Kennethi DI., Shuler. "Economic Importance of

the Ever:glades Agri cultural Area, 1.982-83, Belle l ade AREC

Research Report FV--19:3----8, Un:. versi ty of Florida, Agricultural

Research and Education Cen ter", Bell e Gladce, Flori da, November

1983.

Brooke, D.L. "Cost of P-roducing Sugarca ne and Processing Raw

Sugar in South Fl ori da, 1975-76, ", Food and Resource Economics

Department Economics Rep::or t 84, Uni .versi ty of Flor i da,

Gainesville, Florida, Ma"rch 1977.

Lopez, Rigoberto A., Jose Alvarez and Gerald Kidder.

"Enterpr i se Budget -for Sugarcan e Produc t i on in South Florida,

1978-79, F ood and c Resource Econo :mic s Department Ec:onromi c

Inf orm at i on Rep ort 119, U..n :i. i: e r s i t: y of Florida, Gai nesvi 1 e,

Florida, September 1979,.

Mulkey, W. David and John R. Gordon "The Economic Impact of

the Sugar Industry in Sou.th Flor:ida," Food and Resource Economics

Department Ec:onomic Inf: ormfat i on Report 173, Un versity of

Florida, Gainesvi le, Florida, November 1982.




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