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COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1963-64 SEASON

by 1
A. H. Spurlock and H. G. Hamilton

CONTENTS

Single-Strength Juices . . . .

Canned Sections and Chilled Citrus Products. .

Frozen Orange Concentrate. . . . .

Citrus By-Products .. . ..

Page
. . 2

. * 8

S. . 6

. . 16

Sixteen citrus processing firms operating 19 plants cooperated in

the study for the 1963-64 season. These firms processed over 12 million

cases of 24/2 equivalent canned single-strength juices, 2,268,000 cases of

24/2 equivalent canned sections, and 37 million gallons of frozen orange

concentrate. The firms in the sample produced about 78 percent of the

Florida output of canned juices, 64 percent of the canned sections and
2
69 percent of the frozen orange concentrate.

Data for single-strength juice were based on records of 12 firms

and for canned sections on 10 firms. Concentrates were produced by 13

firms in 15 plants. Only seven of the 16 firms in the sample produced

juices, sections and concentrates.

The summaries following contain only the costs for plant operation,

warehousing and selling the finished products. Fruit cost is not included.

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

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

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

Calculated from data in the Statistical Summary Season of 1963-64
Florida Canners Association.
-1-

_l IJ

conditions and changes in the sample. All of the costs shown in this sum-

mary 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 near

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 dif-

ferences shown in cost of identical items for various products. For

example, in Table 2, can costs for size 12/46 orange juice averaged $0.906"

per case, and for grapefruit juice $0.9071; 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 volume 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 17 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. Costs in the last two seasons shown have been affected by the

reduced volume of citrus available for processing.

TABLE 1.--Average Cost of Processing, Warehousing and Selling Florida Citrus
Juices, Excluding Sugar, in 12/46 Cases, 1947-48 through 1963-64 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 1.57 1.54 1.55 1.55
1962-63a 1.79 1.72 1.74 1.70
1963-64a 1.78 1.72 1.75 1.75

aCosts for seasons prior to 1961-62 excluded brokerage from
selling expense. Brokerage averaged $0.0570 per case in 1963-64.

Total costs per case for unsweetened orange juice, 12/46, were

almost the same as for 1962-63, but some group expenses changed. Materials,

and administrative and selling costs remained almost constant. Labor cost

per unit, and other manufacturing expenses, increased by 9.1 and 10.6 per-

cent, respectively. Warehousing costs were 7.7 percent lower and other

costs were 19 percent less -- partly because of lower advertising tax

rates.

A comparison of the change among the principal cost categories

for the past two seasons is as follows on the next page:

Cost Group

Materials
Processing labor, taxes, ins.
Other manufacturing expense
Warehousing labor & expense
Administrative & selling
Other costs
Total Non-sweet

Orange Juice.
Cost per Case
1962-63 1963-64

$1.0736 $1.0680
.1177 .1284
.1736 .1921
.1084 .1000
.1727 .1732
.1443 .1167
$1.7903 $1.7784

12/46 (excluding sugar)
Change in cost Percent
from 1962-63 Change

-$0.0056 -0.5
+ .0107 +9.1
+ .0185 +10.6
.0084 -7.7
+ .0005 +0.3
.0276 -19.1
-$0.0119 -0.7

The costs of processing and selling citrus juices unsweetened in

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

However, for an equivalent volume of juice, the costs for 12/46 cases were

23 or 25 cents per case lower than for 24/2 cases. The comparative costs

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

1963-64 were as follows:

Item

Cost per 24/2 case
Cost 24/2 equivalent
in 12/46 case
Difference
Difference in 1962-63

Orange
Juice

$1.6624

1.4125
$0.2499
.2253

Grapefruit
Juice

$1.6173

1.3674
$0.2499
.2254

Itemized costs of processing single-strength juices in the most

popular can sizes for the 1963-64 season are shown in Table 2.

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

processing, warehousing and selling single-strength unsweetened juices

for 1963-64 are shown in Table 3.

Blended
Juice

$1.6309

1.3921
$0.2388
.2227

Tangerine
Juice

$1.6226

1.3905
$0.2321
-2584

I

I

*

-5-

TABLE 2.--Cost per Case by Type of Container for Processing, Warehousing
and Selling Florida Citrus Fruit Juices, 12 Plants, 1963-64 Season

Product

Type of Container
Number of Plants
Cases per Plant
Cost per Case:

24/2
12
80.972

Orange Juice
12/46
12
258.884

48/6
8
83,131

Tangerine
Juice
12/46
8
16.572

Materials:
Cans
Cartons
Labels
Total Materials
Manufacturing Labor:
Direct
Indirect
Payroll taxes & insurance
Total Manufacturing Labor & Taxes
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 b
Other selling expense
Total Selling Expense
Other Expense:
Advertising tax & inspection
Other (int., misc. deductions)
Total Other Expense
Total Cost Unsweetened
Sugar
Total Cost. Sweetened

$0.9157
.0845
.0623
ti nK,2c

$0.9060
.0976
.0644
21 nA8Rn

$1.0501
.0649

$ .1 1 0

$0.9065
.0966
.0601
1-.0632

,. r--., V -. -

$0.0701 $0.0825 $0.0453 $0.0925
.0288 .0340 .0179 .0347
.0100 .0119 .0059 .0132
$0.1089 $0.1284 $0.0691 $0.1404

$0.0199 $0.0253 $0.0125 $0.0220
.0278 .0355 .0206 .0340
.0480 .0593 .0315 .0576
.0294 .0382 .0178 .0338
.0160 .0194 .0099 .0196
.0117 .0144 .0073 .0164
$0.1528 $0.1921 $0.0996 $0.1834
$1.3242 $1.3885 $1.2837 $1.3870

$0.0640 $0.0654 $0.0492 $0.0668
.0323 .0346 .0285 .0358
$0.0963 $0.1000 $0.0777 $0.1026
$0.0678 $0.0804 $0.0491 $0.0740

.0536 .0598 .0375 .0579
.0275 .0330 .0206 .0312
$0.0811 $0.0928 $0.0581 $0.0891

$0.0694 $0.0889 $0.0463 $0.0696
.0236 .0278 .0160 .0284
$0.0930 $0.1167 $0.0623 $0.0980
$1.6624 $1.7784 $1.5309 $1.7507
.0559 .0689 .0366 .1217
$1.7183 $1.8473 $1.5675 $1.8724

,H" T-` -- T -- mI r i ,ii ,
aIncludes management and office salaries, telephone, travel, office
expense.
includes sales salaries, telephone, advertising, travel, but
excludes brand royalties, discounts, allowances.

8- ,7

--

I

TABLE 2.--Cost per Case by Type of Container for Processing, Warehousing
and Selling Florida Citrus Fruit Juices, 12 Plants, 1963-64 Season (Cont.)

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 b
Other selling
Total Selling Expense
Other Expense:
Advertising tax & Inspection
Other (int., misc, deductions)
Total Other Expense
Total Cost Unsweetened
Sugar
Total Cost Sweetened

Grapefruit Juice
24/2 12/46
11 11
6.875 1Q7.105

$0.9169
.0840
.0 633
1$ n02i

$0.9071
.0964
.0643
t1 nA78R

Blended
24/2
11
2~ ;nol

$0.9153
.0837
.0646
1$ n636

Juice
12/46
11
122.1 9

$o.9061
.0962
.0665
$1i0688

$0.0705 $0.0838 $0.0714 $0.0839
.0288 .0339 .0298 .0352
.0101 .0121 .0102 .0120
$0.1094 $0.1298 $0.1114 $0.1311

$0.0198 $0.0245 $0.0199 $0.0244
.0309 .0390 .0294 .0378
.0280 .0344 .0374 .0472
.0308 .0385 .0306 .0395
.0144 .0173 .0140 .0172
.0109 .0139 .0110 .0135
0.1348 $0.1676 $0.1423 $0.1796
$1.3084 $1.3652 $1.3173 $1.3795

$0.0608 $0.0613 $0.0580 $0.0646
.0315 .0329 .0320 .0331
$0.0923 $0.0942 $0.0900 $0.0979
$0.0616 $0.0735 $0.0628 $0.0751

.0445 .0521 .0476 .0582
.0254 .0307 .0257 .0316
$0.0699 $0.0828 $0.0733 $0.0898

$0.0652 $0.0821 $0.0677 $0.0856
.0199 .0237 .0198 .0247
$0.0851 $0.1058 $0.0875 $0.1103
$1.6173 $1.7215 $1.6309 $1.7526
.1214 .1499 .0908 .1145
$1.7387 $1.8714 $1.7217 $1.8671

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

I IIIII I

6 87 197

2r 00 1 V w L

TABLE 3.--Variations in Cost for Processing, Warehousing and Selling
Florida Citrus Fruit Juices, Excluding Sugar, by Type of Product and
Case Size, 12 Firms, 1963-64 Season

t p C Orange Grapefruit Blended Tangerine
Cost per Case Juice Juice Juice Juice
24/2 12/46 48/6 24/2 12/46 24/2 12/46 12/46
- - Number of Firms - -
$1.45 $1.49 2 0 2 1q 0 1 0 0
1.50 1.54 1 0 1 1 0 1 0 0
1.55 1.59 1 2 3 3 1 3 1 1
1.60 1.64 2 1 1 2 2 1 1 1
1.65 1.69 2 0 0 0 1 1 1 2
1.70 1.74 0 3 0 1 2 1 2 1
1.75 1.79 2 0 0 2 1 2 2 1
1.80 1.84 1 2 0 1 1 0 1 2
1.85 1.89 0 1 0 0 0 0 0 0
1.90 and over 1 3 1 0 3 1 3 0
Total No. of Firms 12 12 8 11 11 11 11 8

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, 12 Firms, 1963-64 Season

Cost per Case Orange Grapefruit Blended Tangerine
Cost per Case
Juice Juice Juice Juice
24/2 12/46 48/6 24/2 12/46 24/2 12/46 12/46
- - Number of Firms - -
$1.25 $1.29 1 0 0 1 0 1 0 0
1.30 1.34 1 1 3 0 1 0 0 0
1.35 1.39 3 1 2 5 0 3 1 1
1.40 1.44 4 1 2 1 5 4 2 2
1.45 1.49 0 5 0 1 1 0 4 3
1.50 1.54 1 1 0 2 1 1 1 2
1.55 1.59 1 1 0 0 1 1 1 0
1.60 and over 1 2 1 1 2 1 2 0
Total No. of Firms 12 12 8 11 11 11 11 8

A comparison of average costs of processing and selling unsweet-

ened juices in 12/46 oz. cases indicate some cost differences between firms

packing large volumes and those packing small volumes (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 volume 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,
12 Firms, 1963-64 Season

Cost per Case Under 1,000,000 1,000,000 Cases
12/46 (unsweetened) Cases and Over
- Number of Firms - - -
$1.50 $1.59 2 0
1.60 1.69 0 1
1.70 1.79 1 2
1.80 1.89 0 3
1.90 1.99 2 0
2.00 and over 1 0
Total 6 6

Average costs of orange juice and grapefruit juice per 12/46 oz.

case, unsweetened, for the two size group were as follows:

Size Group
(24/2 eauiv. cases)

Under 1,000,000 cases

1,000,000 cases and over
Difference

Orange Grapefruit
Juice Juice
- Cost per 12/46 Case Unsweetened -
$1.8361 $1.7911

1.7615 1.7061
$0.0746 $0.0850

Costs of Processing Canned Sections and Chilled
Citrus Products

The trend In the total cost of processing, warehousing and sell-

ing canned grapefruit sections and salad sections for a number of years

is shown immediately following this page:

--

aCosts for seasons prior to 1961-62
selling. Brokerage for 1963-64 is shown in

excluded brokerage from
Table 6.

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

grapefruit and salad sections, being used for more than 80 percent of the

1963-64 output. In Table 6, a summary of costs is shown for two case-sizes

of canned sections.

A cost summary has also been prepared for 4/1 gallon packs of

chilled grapefruit sections and for quarts of chilled orange juice

(Table 7). 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.

Costs of Processing Frozen Orange Concentrate

Production of frozen concentrated orange juice in Florida for

1963-64 was about four percent above the preceding year's volume, but was

54 percent lower than the record year of 1961-62.

Season

1951-52
1952-53
1953-54
1954-55
1955-56
1956-57
1957-58
1958-59
1959-60
1960-61
1961-62a
1962-63a
1963-64a

I -

Grapefruit Sections
12/46 24/303

$ --- $2.19
---- 2.23
--- 2.33
3.03 2.23
3.07 2.34
3.23 2.48
3.41 2.60
3.39 2.56
3.53 2.54
3.79 2.64
3.86 2.67
4.27 3.04
4.29 3.01

Salad Sections
12/46 24/303

$---- $2.48
---- 2.49
---- 2.60
-- 2.50
-- 2.72
-- 2.90
3.09
4.03 2.96
4.08 2.99
4.32 3.03
4.42 3.22
4.93 3.58
4.52 3.44

4..2 3.01-

-10-

TABLE 6.--Costs of Processing, Warehousing and Selling
Citrus Sections, 1963-64 Season

Florida Canned

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

Grapefruit
24/303
10
1 2.934

Sections
12/46
8
33.866

Salad Sections
24/303 12/46
8 6
16.844 5.831

8 16844 S83

Materials:
Cans
Cartons
Labels
Total Materials
Labor:
Direct--peeling
Sectionizing
Other direct
Total Direct labor
Indirect labor
Payroll taxes & insurance
Total Manufacturing Labor & Taxes
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 b
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

and trav

$0.8027
.0757
.0637

$0.9267
.1042
.0623

$0.7964
.0736
.0686

$0.9421 $1.0932 $0.9386 $1.0560

$0.1560 $0.1795 $0.1861 $0.2750
.6118 .8976 .8202 1.2180
.1988 .2876 .2245 .3372
$0.9666 $.1.3647 $1.2308 $1.8302
.1150 .1722 .1506 .1182
.1064 .1487 .1319 .1672
$1.1880 $1.6856 $1.5133 $2.1156

$0.0677 $0.1019 $0.0703 $0.0823
.0480 .1005 .0543 .0682
.0743 .1546 .0962 .1737
.0588 .1195 .0690 .0942
.0278 .0558 .0285 .0393
.0344 .0642 .0348 .0538
$0.3110 $0.5965 $0.3531 $0.5115
$2.4411 $3.3753 $2.8050 $3.6831

$0.0597 $0.0894 $0.0714 $0.0752
.0295 .0359 .0315 .0344
$0.0892 $0.1253 $0.1029 $0.1096
30.0854 $0.1675 $0.1041 $0.1247

.0527 .0897 .0640 .0771
.0357 .0482 .0344 .0341
SO.0884 $0.1379 $0.0984 $0.1112

$0.0504 $0.0787 $0.0593 $0.0864
.0318 .0491 .0402 .0357
$0.0822 $0.1278 $0.0995 $0.1221
$2.7863 $3.9338 $3.2099 $4.1507
.2205 .3548 .2318 .3724
$3.0068 $4.2886 $3.4417 $4.5231

$0.9013
.0996
.0551

includes management and office salaries, office expense, telephone,
eel.

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

- --

mt I

*
*

--

-11-

TABLE 7.--Costs of Processing, Warehousing and Selling Florida Chilled Citrus
Sections and Juice, 1963-64 Season

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

Chilled
Grapefruit Sections
4/1-gallons (glass)
3
9.436

Chilled
Orange Juice
Quarts (paper)
3
710.044

Materials -- containers
Labor:
Direct -- peeling
Sectionizing
Other direct
Total Direct Labor
Indirect labor
Payroll taxes & insurance
Total Manufacturing Labor & Taxes
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 b
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

S0-7467

$0.2920
1.0765
.4135
$1.7820
.2835
.2445
$2.3100

$0.1130
.0694
.0876
.4536
.0674
.0324
50.8234
$3.8801

.2012
.0746
$0.2758

$0.0284

$0.0086
$0.0086
.0034
.0013
$0.0133

$0.0014
.0018
.0033
.0049
.0019
.0011
$0.0144
$0.0561

.0028
.0032
$0.0060

$0.0867 $0.0044

.1231 .0063
.0897 .0040
$0.2128 $0.0103

$0.0761 $0.0054
.0845 .0025
$0.1606 $0.0079
$4.6160 $0.0847
.2351 --
S4.8511 --

aIncludes management and office salaries, office expense,
and travel.
b
Includes sales salaries, telephone, advertising, travel,
brand royalties, discounts, allowances.

telephone

but excludes

Im II

0 7.467

2 ._31 0

$4.8511

-12-

A comparison of the change among the principal cost categories

for 420 frozen orange concentrate, 48/6 oz. in 1963-64 is shown below:

Frozen Orange Concentrate, 4C/6 oz.
Cost Group Cost per Case Change in Cost Percent
1962-63 1963-64 from 1962-63 Change

Materials $1.0283 $1.0300 + $0.0017 + 0.2
Mfg. labor, taxes, ins. .2588 .2892 + .0304 + 11.7
Other manufacturing expense .6065 .4430 .1635 27.0
Warehouse labor & expense .1487 .1209 .0278 18.7
Administrative expense .2025 .1905 .0120 5.9
Selling (including brokerage) .0926 .4225 + .3299 +456.3
Other costs .3187 .2273 .0914 28.7
Total Costs $2.6561 $2.7234 + $0.0673 + 2.5

Costs for processing, warehousing and selling frozen orange

concentrate for 1963-64 are shown for the three most common can sizes

in Table 8.

There was some use in 1963-64 of "multipak" cartons for frozen

orange concentrate. 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 carton cost about

$0.14 per case more than the regular carton 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 firms producing under

2,000,000 equivalent gallons being compared with the group producing over

2,000,000 gallons. This arbitrary division to place near 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 firms in the

-13-

TABLE 8.--Costs of Processing, Warehousing and Selling Florida Frozen
Orange Concentrate, 420, 12 Firms, 1963-64 Seasona

Type of Container 48/6 24/12 12/32
Number of Firms 12 12 11
Cases Produced per Firm 487,783 294.315 43.781
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 Expenseb
Selling Expense:
Brokerage
Other selling expense
Total Selling Expense
Other Expense:
Advertising tax & inspection
Other (int., misc. deductions)
Total Other Expense
Tntatl fncc

$0.9700
.0600

$0.7546
.0606

$0.6071
.0699

$1.0300 $0.8152 $0.6770

$0.1289 $0.1254 $0.1955
.1345 .1183 .0984
.0258 .0238 .0O05
$0.2892 $0.2675 $0.3244

$0.0856 $0.0836 $0.1120
.0536 .0541 .0657
.0988 .0982 .1198
.1059 .1092 .1377
.0328 .0374 .0562
.0663 .0644 .0669
$0.4430 0.4469 $0.5583
$1.7622 $1.5296 $1.5597
$0.0438 $0.0438 $0.0531
.0771 .0871 .1102
$0.1209 $0.1309 $0.1633
$0.1905 $0.1887 $0.1905

.1835 .1561 .0961
.2390 .1964 .1007
$0.4225 $0.3525 $0.1968

$0.1578 $0.1578 $0.1885
.0695 .0604 .0370
$0.2273 $0.2182 $0.2255
t9 79UL A? Loqa

aThese 12 firms operated 14 plants.

Includes management and
and travel.

office salaries, office expense, telephone

cExcludes allowances, discounts, brand royalties.

u~u uvr~~ c r I ~
lu~ul uvr~~ rcr~~r

-14-

TABLE 9.--Cost per Gallon for Processing, Warehousing and Selling Frozen
Orange Concentrate, 420 Equivalent, by Volume Groups, Excluding the Cost
of Cans and Cartons, 13 Florida Firms, 1963-64 Seasona

Volume Group (Gallons)
Number of Firms
Gallons per Firm
Cost per Gallon:(420 Equiv.)

All Firms
13
2.8'8.;33

Under
2,000,000
6
1.227.926

2,000,000
and Over
74.q 62
4.965.562

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 Expenseb
Selling Expense:
Brokerage
Other selling expense
Total Selling Expense
Other Expense:
Advertising tax and inspection
Other (interest, misc. deductions)
Total Other Expense
Total Costs

$0.0540
.0500
-0101

$0.0711
.0369
.0104

$0.0504
.0526
.0101

$0.1141 $0.1184 $0.1131

$0.0371 $0.0448 $0.0352
.0229 .0287 .0215
.0437 .0439 .0436
.0473 .0637 .0433
.0167 .0277 .0140
.0283 .0214 .0299
$0.1960 $0.2302 $0.1875
$0.3101 $0.3486 S0.3006

$0.0196 $0.0241 $0.0188
.0329 .0549 .0271
$0.0525 $0.0790 $0.0459.
$0.0837 $0.0593 $0.0898

.0616 .0287 .0696
.0828 .0316 .0956
$0.1444 $0.0603 $0.1652

$0.0694 $0.0630 $0.0710
.0241 .0308 .0224
$0.0935 $0.0938 $0.0934

S0.6842

S0.6410

o0.694q

aThese 13 firms operated 15 plants.

bIncludes management and office salaries,
and telegraph, travel.

office expense, telephone

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

-

-`---~cc- ~~---' ---

I

-15-

larger group had lower manufacturing and warehousing costs per gallon, but

higher administrative and selling costs made their total costs above the

smaller size group. The total of all costs for the large-volume group

was five cents per gallon more than for the smaller volume group.

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

not be the most important. There was one plant 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, 420 Firms Producing Firms Producing
(Excluding Under 2,000,000 2,000,000 Gallons
Containers) Gallons and Over

Under $0.60 2 6
$0.60 .64 0 0
.65 .69 1 0
.70 .74 2 0
.75 .79 0 0
.80 .84 0 0
.85 and over 1 1
Total 6 7

The average cost per gallon for processing and warehousing frozen

orange concentrate for the 1963-64 season was approximately 68 cents per

gallon 420 equivalent. The record for the past 16 years is as follows:

Cost per 420 Equivalent Gallon
(Excluding Packaaing Materials)
$0.465
.451
.346
.326
.372
.340
.328
.341
.371
.461
.407
.428
.433
.407a
.710a
.684a
alncludes 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
15

Season

1948-49
1949-50
1950-51
1951-52
1952-53
1953-54
1954-55
1955-55
1956-57
1957-58
1958-59
1.959-60
1960-61
1961-62
1962-63
1963-64

ii i iT

~-c- -u

-16-

Citrus By-Products

The 14 plants from which citrus by-product costs were obtained

for 1963-64 manufactured 132,227 tons of citrus pulp and meal, 15,820 tons

of molasses and 1,846,000 pounds of cold pressed peel oil. The itemized

costs of producing pulp and meal, molasses and 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 manu-

facturing expense were about 83 percent of the total production, ware-

housing and selling cost for feed; 90 percent for molasses and 80 percent

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

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

Citrus pulp and meal feed averaged $29.19 per ton for all costs of

manufacturing and selling; molasses $20.84 per ton; and peel oil $0.1744

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.

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 $3.24 per ton to $5.02, depending partly on whether paper or

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

workmen's compensation insurance, ranged from $2.57 to $13.85 per ton;

power, water, steam and fuel cost from $4.68 to $9.85 per ton; maintenance

and repairs varied from $0.45 to $9.20 per ton; and depreciation on build-

ings and equipment from $1.03 to $4.50.

-17-

TABLE 10.--Average Costs of Processing, Warehousing and Selling Florida
Citrus By-Products, 14 Plants, 1963-64

Product Pulp and Meal Molasses Peel Oil
Number of Plants 14 4 4
Production per Plant 9,445 tons 3,955 tons 461,719 lbs.
Costs per Unit

Material:
Drums
Bags and twine
Lime and other
Total Material
Manufacturing Labor:
Direct
Indirect
Payroll taxes & insurance
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 &
Other administrative
Total Administrative Expense

$0.0230

$ ----
4.07
.46

ins.

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

$ 4.53 $ ---- $0.0230

$ 3.43 $ 1.15 $0.0238
2.62 1.11 .0134
0.59 .23 .0031
$ 6.64 $ 2.49 $0.0403

$ 6.52 $ 8.93 $0.0235
1.88 2.43 .0074
2.60 2.86 .0374
.88 .76 .0035
1.14 1.19 .0052
---- ---- ----
$13.02 $16.17 $0.0770
$24.19 $18.66 $0.1403_

$ 1.80 $ 0.53 $0.0010
1.27 .57 --
$ 3.07 $ 1.10 $0.0010

$ 0.32 $ 0.41 $0.0023
.34 .26 .0014
$ 0.66 $ 0.67 $0.0037

$ 0.25 $ ---- $0.0011
.45 0.29 .0243
.16 .04 .0035

$ 0.86
$ 0.50

$ 0.33
$ 0.08

$0.0289
$0.0005

Total-'- Cost ner Unt-2.8-28 -A

I

!

$29.28

$20.84 S0.1744

Total Cost oer Unit

-18-

TABLE I.--Variation in Cost of Processing, Warehousing and Selling
Citrus By-Products, 14 Firms, 1963-64

Sp T Citrus Citrus
Pulp and Meal Molasses
Number of Firms Number of Firms
$15.00 16.99 0 1
17.00 18.99 0 1
19.00 20.99 0 0
21.00 22.99 1 0
23.00 24.99 3 0
25.00 26.99 2 1
27.00 28.99 2 1
29.00 30.99 1 0
31.00 32.99 0 0
33.00 34.99 2 0
35.00 and over 3 0
Total Number of Firms 14 4

Range in Cost per Ton $22.86 $42.20 $16.68 $28.26

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, 1963-64
season.

Agricultural Economics Mimeo Report EC65-7. April 1965.

2. Costs of Picking and Hauling Florida Citrus Fruits, 1963-64 Season.

Agricultural Economics Mimeo Report EC65-6. March 1965.

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, 65-1. February 1965.

AHS/gha April 1965
Agr. Econ. Sta. 1200

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