Title: Costs of processing, warehousing and selling Florida citrus by-products, 1960-61 season
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Title: Costs of processing, warehousing and selling Florida citrus by-products, 1960-61 season
Physical Description: Book
Creator: Spurlock, A. H.
Publisher: Dept. of Agricultural Economics, Florida Agricultural Experiment Station
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Bibliographic ID: UF00074496
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Resource Identifier: oclc - 123244050

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June, 1962


Agricultural Economics
Mimeo Report No. 62-15


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


by

A. H. Spurlock and H. G. Hamilton


4.00


Costs, Dollars per Ton
.00 12.00 16.00


20.00 24.00 26.00


-t I I I I


Molasses



Pulp and
Meal


i, : i f,- i $ 4 1


1r III
-. .- -. I

*l~ .1 1 . . .
,- in


Materials


Mfg. Other Manufacturing Warehousing Admling
Labor Other


Fig. 1. Costs of Processing, warehousing and Selling Citrus Pulp and Meal
and Molasses, 11 Firms, 1960-61












Department of Agricultural Economi
Florida Agricultural Experiment Stat
Gainesville, Florida /


f


I,, I I


I









COSTS OF PROCESSING, WAREHOUSING G AND SELLING FLORIDA CITRUS
BY-PRIODUCTS, 1960-61 SEASON 1


A variety of citrus by-products may be recovered from the citrus peel,

rag and seed after extracting the juice for canning or concentrating. These

include citrus pulp, citrus fine meal, molasses (some of which may be added

back to pulp and meal in feed-making), stripper oil from the evaporation

process peel oil and vitamin products. Not all the firms processing citrus

produced all these products, but citrus feed and molasses were common.

Citrus pulp or the residue after the juice extraction was once a waste

product requiring expensive disposal, or was partially utilized as a wet

feed for cattle. With the perfection of the processes for drying this pulp

it has become economically feasible to utilize it as a dairy cattle feed

where it has largely replaced imported bulky feeds as cottonseed hulls and

beet pulp.

Commercial manufacture of citrus pulp feed has grown rapidly in Florida,

especially since the-beginning of orange concentrate production. According

to data from the Citrus Processors Association2 Florida total production of

citrus pulp and meal, and molasses for the season 1940-41 through 1960-61

are shown in Fig. 2.

The 11 firms from which citrus by-products costs were obtained for

1960-61 manufactured 132,561 tons of citrus pulp and meal and 31,050 tons

of molasses or about 46 percent of the State total of both products.

The itemized costs of producing pulp and meal, molasses and peel oil

are shown in Table 1. These are weighted average costs.
1/ This is a report of one phase of Southern Regional Project SM-22, "The
Economic Efficiency of Marketing Citrus Fruits".
2/ Citrus Processors Association, Winter Haven, Florida. Yearbook, 1960-61,
p 27.







-2-

Fig. 2.@-Florida Production of Citrus Pulp and Meal, and Molasses, 1940-41
to 1960-61
Production
(1,000 tons)

350 i i

ao -


2W0 Pulp and Meal


200 -


150-


100 -
Molasses
50

0 I I t i ., I I i i J i .* I I ., J I
1942 1944 1946 1948 1950 1952 1954 1956 1958 1960
Season Ended

This is the first attempt to summarize by-product costs with the result

that some items may not have complete uniformity. Pulp and meal sometimes

contain some added molasses and sometimes not. The resulting feeds are said

to be close to the same analysis (TDN) but the production cost for the two

types may not be identical. Peel oils were produced by more than one method

or type of machinery and represent a mixture from the several kinds of fruit.

In the pulp and meal costs, three firms did not show any warehouse

expense as such and one showed no administrative expense. In molasses

production and in peel oil only one of the firms showed warehouse expense,

indicating the infrequent use of this segregation. However, manufacturing

expense represented a large part of the total handling cost of by-products

and may have included the comparatively small amounts usually assigned to

warehousing.







-3-


Manufacturing expense, including labor and materials, was 84 percent of
the total production warehousing and selling for pulp and meal, 92 percent

for molasses and 87 percent for peel oil.

Citrus pulp and meal feed averaged $25.30 per ton for all costs of

manufacturing and selling; molasses $14.11 per ton; and peel oil $0.1633

per pound. (Table 1).
Variatiornin the total costs for pulp and meal and for molasses are

shown in Table 2. 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 cost 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

with one exception from $3.11 per ton to $5.08, depending partly on whether

paper or burlap bags were used. Manufacturing labor including payroll taxes
and workmen's compensation insurance ranged from $2.28 to $9.43 per ton;

power, water, steam and fuel cost from $3,06 to $9.14 per ton; maintenance

and repairs varied from 0.12 to $2.80 per ton; and depreciation on build-

ings and equipment from $0.54 to i4.54.
In the production of molasses, labor including payroll taxes and

workmen's compensation insurance ranged from $1.37 to $2,79 per ton; power,

steam and fuel from $3.ll to $9064; maintenance and repairs from $1.44 to

$2.84 ; and depreciation from 0 to $2.83.












Table 1. Average Costs of Processing, Warehousing and Selling Florida
Citrus By-Products, 11 Firms, 1960-61.

Product Pulp and Meal Molasses Peel Oil
Number of Firms 11 6 5
Production per Firm 12,051 tons 5,175 tons 360,926 lbs.
(costs per tor(Costs perrton)(costs per lb.)
Materials:
Drums $0.0252
Bags & twine $ 4.06
Lime & other .56
Total materials $ t.62 $0,25"2
Manufacturing Labor:
Direct $ 2.62 $ 1.16 $0.0223
Indirect 1.59 .64 .0096
Total manufacturing labor $ 4.21 $ 1.80 $000319
Other Manufacturing Expenset
Power, steam, fuel $ 7.19 $ 6.39 $0o0266
Maintenance & repairs 1.83 1.86 .0099
Depreciation 1,66 o95 .0026
Mfg. overhead (taxes,inso,rent) .71 .46 .0005
Misc. supplies & expense .71 1.53 .0062
Inspection tax .25 -
Total other manufacturing expense $12.35 $11.19 $0.0858
Total Manufacturing Expense $21,18 $12.99 $0.1429
Warehouse Expense:
Warehouse & shipping labor $ 1.50 $ .03 $0.0008
Other whse. expense .71 .02
Total Warehouse expense $ 2.21 $ .05 $0.0008
Administrative:
Salaries incl. payroll tax & ins. $ .27 $ .26 $0.0005
Other administrative .35 .26 .0003
Total administrative expense $ .62 $ .52 $0.0008
Selling Expense:
Salaries, incl. payroll taxes & ins. $ .34 $ .04 $0.0057
Brokerage .49 .36 .0125
Other selling expense .20 .08 ,000o
Total selling expense $ 1,03 $ .48 $O,0o86
Other E:xpense: $ cIO $ .07 ., 00 j
Total Cost per Un t $2.,30 $64;.. ,;l ,633












Table 2. Variation in Cost of


Processing, Warehousing and Selling Citrus
By-Products, 1960-61


C&r1s Citrus
Cost per ton Pulp and Meal Molasses
dollars number of firms number of firms
Under 11.00 2
11.00 12.99 1
13.00 1L.99 1
15.00 16.99 0
17.00 18.99 1
19.00 20.99 0
21.00 22.99 1 1
23.00 24.99 3
25.00 26.99 4
27.00 28.99 2
29*00 30.99 0
31.00 and over 1
Total number of firms 11 6

Range in costs per ton $22,81 .33.36 $9.74 $22.67


AHS/cl 6-5-62
Agri. Econ. Exp. Sta. -4O00




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