Agricultural Economics
t?.. Mimeo Report EC 67-12

COSTS OF PROCESSING,

WAREHOUSING AND SELLING

APR 18 1967

I f

FLORIDA

CITRUS PRODUCTS

1965-66 SEASON

Citrus Processing, Warehousing, and Selling Costs Per Case, 1965-66
0 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50
Materials
Orange concen- $2.38 La ori
trate, 48/6 J$2.38 Labor
Other Mfg. & Warehouse
Orange juice, Admin., Selling
12/46 $1.81 & Other

Chilled orange 8
juice, 12/32
Grapefruit
sections 24/303 J$2.94

Chilled
grapefruit $4.10
sections 12/32
II II I IIIl

by
A. H. Spurlock
Agricultural Economist
Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida

April 1967

COSTS OF PROCESSING, WAREHOUSING AND SELLING
FLORIDA CITRUS PRODUCTS, 1965-66 SEASON

by
A. H. Spurlock

CONTENTS
Page

Introduction......., .. ....... .. .. .. .. .... ...... ......o.. 1

Single-Strength Juice .......,,,,..... .... .... ,...... ... 3

Canned Sections and Chilled Citrus Products.........,.......... 9

Frozen Orange Concentrate.,....,,V....,,.....,,.............*.. 14

Citrus By-Products,.. ............. ............... ,,, .. ;8

Introduction

Seventeen citrus processing firms operating 19 plants cooperated

in the study for the 1965-66 season. These firms processed 16,837,000

cases of 24/2 equivalent canned single-strength juices, 2,504,000 cases

of 24/2 equivalent canned sections, and 59,327,000 gallons of frozen

orange concentrate. The firms in the sample produced about 64 percent

of the Florida output of canned juices, 58 percent of the canned sections

and 84 percent of the frozen orange concentrate.]

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

and for canned sections on 9 firms. Concentrates were produced by 15

firms in 17 plants. Only 7 of the 17 firms in the sample produced

juices, sections and concentrates.

]Calculated from data in the Statistical Summary, Season of 1965-66,
Florida Canners Association, Winter Haven, Florida.

-I-

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 conditions and changes in the sample. All of the costs shown

in this summary are weighted averages. The cost for each firm for a

given pack is weighted by the volume packed. This tends to place the

average cost near the cost for the firms with the larger pack of that

product than would occur if a simple average were used. This also

explains the slight differences shown in cost of identical items for

various products. For example, in Table 2 can costs for size 12/46

orange juice averaged $0.9502 per case, and for tangerine juice

$0.9538; 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

combined into seven major cost categories for each product and can size

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

product is commonly sweetened, to give a total cost sweetened. The

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

Selling costs include brokerage as well as the firm's 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 was not included prior to 1961-62. Discounts,

allowances and brand royalties have been omitted.

-3-

Costs of Processinq Single-Strength Juices

Average costs of processing, warehousing and selling single-

strength juices in cases of 12/46 ounce cans, excluding the cost of

sugar, are shown for the past 19 years in Table.l. 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 1962-63 and

1963-64 were affected by the reduced volume of citrus available for

processing. The cost was lowered in 1964-65, with operations nearer

normal, but was still higher than in any season before the 1962 freeze.

Table 1.--Average Cost of Processing, Warehousing and Selling Florida
Citrus Juices, Excluding Sugar, in 12/46 Ounce Cases, 1947-48
Through 1965-66 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
1964-65a 1.66 1.62 1.64 1.65
1965-66a 1.75 1.70 1.74 1.72

aCosts include brokerage in
prior years.

selling expense, which was omitted in

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

5.4 percent higher than in 1964-65. Materials cost increased only 3.0

percent,but all other groups were significantly higher.

A comparison of the change among the principal cost categories

for the past two seasons is as follows:

Cost Group

Materials
Processing labor, taxes,
insurance
Other manufacturing expense
Warehousing labor and expense
Administrative and selling
Other costs

Total nonsweet

Orange Juice, 12/46 (Excluding Sugar)

Cost Per Case :Change in Cost:Percent
1964-65 : 1965-66: From 1964-65 : Change

$1.0848 $1.1174 $0.0326 3.0

.1112 ,.1182 .0070 6.3
.1425 .1526 .0101 7.1
S.0827 .0934 .0107 12.9
.1355 .1510 .0155 11.4
.1076 .1221 .0145 13.5
$1.6643 $1.7547 $0.0904 5.4

The costs of processing and selling citrus juices unsweetened in

12/46 cases were about 9 or 10 cents per case higher than for 24/2

cases in 1965-66. However, for an equivalent volume of juice, the

costs for 12/46 cases were 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 1965-66 were as follows:

Item

Cost per 24/2 case
Cost per 24/2 equivalent
in 12/46 case
Difference
Difference in 1964-65

Orange
Juice

$1.6526

1.3937
$0.2589
.2543

Grapefruit
Juice

$1.6145

1.3525
$0.2620
.2529

Blended
Juice

$1.6394

1.3824
$0.2570
.2488

i ii i j i

I I I I I

I

-5-

Itemized costs of processing single-strength juices in the most

popular can sizes for the 1965-66 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 1965-66 are shown in Table 3.

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

processing and warehousing unsweetened citrus juices, exclusive of

administrative, selling and other costs. These costs represent only

the manufacturing and warehousing expenses--materials, labor and

plant costs.

Table 2.--Cost Per Case by Container Size for Processing, Warehousing and
Selling Florida Citrus Fruit Juices, 11 Plants, 1965-66 Season

Product Orange JuiceTangerine
Juice

Container Size 24/2 12/46 48/6 12/46
Number of Plants 11 11 8 7
Number of Cases Per Plant 92,718 400,608 122,383 5,782

Cost Per Case

Materials:
Cans
Cartons
Labels
Total materials

Manufacturing labor:
Direct
Indirect
Payroll taxes and insurance
Total manufacturing labor & taxes

Other manufacturing:
Power, lights, water
Maintenance, bldgs. and 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 expenses
Selling expense:
Brokerage b
Other selling expense
Total selling expense
Other expense:
Advertising taxes and inspection
Other (int., misc. deductions)
Total other expense
Total cost unsweetened
Sugar
Total cost sweetened

$0.9706 $0.9502 $1.0825 $0.9538
.0888 .1025 0.0646 .0977
.0651 .0647 6- .0658
$1.1245 $1.1174 $1.1471 $1.1173

$0.0648 $0.0757 $0.0407 $0.0779
.0272 .0305 .0147 .0288
.0105 .0120 .0059 .0123
$0.1025 $0.1182 $0.0613 $0.1190

$0.0144
.0253
.0392
.0201
.0098
.0120
$0.1208
S1 .3478

$0.0597
.0260
n nR0C7

$0.0179
.0323
.0498
.0257
.0120
.0149
$0.1526
$1.3882

$0.0633
.0301
Sn 0n-a3

$0.0098
.0158
.0269
.0108
.0057
.0075
$0.07652
$I.2849

$0.0432
.0231
0o 0663

$0.0180
.0337
.0596
.0245
.0134
.0148
$0.1640
$1.4003

$0.0644
.0292
$SO.0q36

$0.0461 $0.0584 $0.0339 $0.0527

$0.0555 $0.0630 $0.0419 $0.0619
.0246 .0296 .0113 .0249
$0.0801 $0.0926 $0.0532 $0.0868

$0.0735 $0.0950 $0.0522 $0.0674
.0194 .0271 .0111 .0238
$0.0929 $0.1221 $0.0633 $0.0912
$1.6526 $1.7547 $1.5016 $1.7246
.0417 .0515 .0276 .0535
$1.6943 $1.8062 $1.5292 $1.7781

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

I I

I III

t -1 .3

. i i i i I I I lm l II I .

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Table 2.--Cost Per Case by Container
Selling Florida Citrus Fruit Juices,

Size for Processing, Warehousing and
11 Plants, 1965-66 Season (Concluded)

Bl ended
Product Grapefruit Juice Juice

Container Size 24/2 12/46 48/6 12/46
Number of Plants 10 10 8 10
Number of Cases Per Plant 104,369 502,691 144,493 122,904

Cost Per Case

Materials:
Cans
Cartons
Labels
Total materials
Manufacturing labor:
Direct
Indirect
Payroll taxes and insurance
Total manufacturing labor & taxes
Other manufacturing:
Power, lights, water
Maintenance, bldgs. and 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 expenses
Selling expense:
Brokerage
Other selling
Total selling expense
Other expense:
Advertising taxes and insepction
Other (int., misc. deductions)
Total other expense
Total cost unsweetened
Sugar
Total cost sweetened

$0.9698
.0891
.0660
1 1 29o

$0.9496
.1015
.0664

$1.0815
.0636
.0007
14~. i8

$0.9506
.1037
.0665
$1.1208

$0.0631 $0.0768 $0.0399 $0.0751
.0255 .0320 .0149 .0341
.0100 .0122 .0058 .0123
$0.0986 $0.1210 $0.0606 $0.1215

$0.0144 $0.0181 $0.0098 $0.0183
.0257 .0331 .0168 .0365
.0239 .0301 .0151 .0420
.0202 .0253 .0110 .0270
.0094 .0112 .0055 .0112
.0102 .0134 .0072 .0132
$0.1038 $0.1312 $0.0654 $0.1482
$1.3273 $1.3697 $1.2718 $1.3905

$0.0599 $0.0633 $0.0440 $0.0582
.0284 .0314 .0236 .0306
$0.0883 $.$0.07 $ 0.0676 $0.0888
$0.0465 $0.0576 $0.0339 $0.0596

$0.0395 $0.0541 $0.0345 $0.0575
.0258 .0202 .0104 .0266
$0.0653 $0.0743 $0.0449 $0.0841

$0.0649 $0.0816 $0.0433 $0.0889
.0222 .0250 .0118 .0285
$0.0871 $0.1066 $0.0551 $0.1174
$1.6145 $1.7029 $1.4733 $1.7404
.0941 .1187 .0647 .0930
$1.7086 $1.8216 $1.5380 $1.8334

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

II

I1

-8-

Table 3.--Variations in Cost for Processing, Warehousing and Selling
Florida Citrus Fruit Juices, Excluding Sugar, by Type of Product
and Case Size, 11 Firms, 1965-66 Season

Grapefruit Blended Tangerine
Cost Per Case Orange Juice Juice Juice Juice
24/2 12/46 48/6 24/2 12/46 12/46 12/46
Number of Firms
$1.40 $1.44 0 0 2 0 0 0 0
1.45 1.49 0 0 1 0 0 0 0
1.50 1.54 0 0 1 1 0 0 0
1.55 1.59 2 0 2 3 0 0 0
1.60 1.64 4 1 0 3 2 0 1
1.65 1.69 2 1 1 1 2 2 2
1.70 1.74 1 4 0 0 3 4 1
1.75 1.79 0 2 0 1 1 1 2
1.80 -. 1.84 1 1 0 0 0 1 0
1.85 and over 1 2 1 1 2 2 1
Total number
of firms 11 11 8 10 10 10 7

Table 4.--Variations in Cost for Processing and Warehousing Florida Citrus
Fruit Juices, Excluding Sugar, Administrative, Selling and Other Costs,
by Type of Product and Case Size, 11 Firms, 1965-66 Seasons

Orange Juice Grapefruit Blended Tangerine
Cost Per Case Juice Juice Juice
24/2 12/46 48/6 24/2 12/46 12/46 12/46

Number of Firms
$1.25 $1.29 0 0 1 0 0 0 0
1.30 1.34 0 0 2 0 0 0 0
1.35 1.39 2 0 2 3 1 0 0
1.40 1.44 5 3 1 4 2 3 1
1.45 1.49 2 3 1 1 4 4 5
1.50 1.54 0 3 0 1 1 1 0
1.55 1.59 1 0 0 0 0 0 0
1.60 1.64 0 1 0 0 1 1 0
1.65 and over I I 1 I I 1 1

Total number
of firms 11 11 8 10 10 10 7

Costs of Processing Canned Sections and
Chilled Citrus Products

The trend in the total cost of processing, warehousing and

selling canned grapefruit sections and citrus salad for a number

of years is shown in Table 5.

Table 5.--Average Cost of Processing, Warehousing and Selling Florida
Grapefruit and Salad Sections by Can Size, 1965-66 Season

Canned Grapefruit Canned Citrus Chilled Grape-
Season Sections Salad fruit Sections
12/46 24/303 24/303 12/32
1951-52 $ -- $2.19 $2.48 $ --
1952-53 -- 2.23 2.49 --
1953-54' -- 2.33 2.60 --
1954-55 3.05 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 2.96 --
1959-60 3.53 2.54 2.99 --
1960-61 3.79 2.64 3.03 --
1961-62a 3.86 2.67 3.22 --
1962-63a 4.27 3.04 3.58 --
1963-64a 4.29 3.01 3.44 3.30
1964-65a 3.98 2.94 3.39 3.09
1965-66a 4.01oi 2.94 3.40 3.17
aCosts include brokerage in selling expense which was omitted in
prior years. Brokerage for 1965-66 is shown separately in Tables 6 and 8.

In Table 6 a summary of costs is shown for several can sizes of

processed sections.

Cost summaries have also been prepared for several packs of

chilled sections and salad in Tables 7 and 8, and for chilled orange

juice and grapefruit juice in glass (Table 9). 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.

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Table 6.--Costs of Processing, Warehousing and Selling Florida Canned Citrus
Sections, 1965-66 Season

Product

Container Size
Number of Plants
Number of Cases Per Plant

Materials:
Cans
Cartons
Labels
Total materials
Labor:
Direct--peeling
sectionizing
other direct
Total direct labor
Indirect labor
Payroll taxes and insurance
Total manufacturing labor & taxes
Other manufacturing:
Power, lights, water
Maintenance, bldgs. and 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 expenses
Total selling expense
Other expense:
Advertising taxes and inspection
Other (interest, misc. deductions)
Total other expense

Total cost unsweetened
Sugar
Total cont sweetened

Canned Grapefruit Can
Sections
24/303 12/46 24/30
9 6 8
216,856 71,184 14,0:
Cost Per Case

ied Citrus
Salad
3 12/46
6
37 6,747

$0.8357 $0.9542 $0.8338 $0.9603
.0782 .1060 .0783 .1081
.0619 .0655 .0607 .0629
$0.9758 $1.I1257 $0.9728 $1.131

$0.1555
.6400
.2277
$1.0232
.0499
.1261
$1.1992

$0.0511
.0533
.0694
.0404
.0218
.0320
$0.2680
$2.4430

$0.0654
.0288
t 0n L9

$0.1537
.9471
.3322
$1.4330
.0792
.1623
S1.6745

$o.0847
.0678
.1520
.0624
.0394
.0616
$0.4679
$3.2681

$0.0817
.0434
o_ 1251

$0.1787
.9321
.2515
$1.3623
.0625
.1518
$1.5766

$0.0538
.0526
.0996
.0460
.0266
.0292
$0.3078
2.8572

$0.0835
.0277
$0.1112

$0.2043
1.3935
.4229
$2.0207
.0704
.2247
$2.3158

$0.0828
.1134
.1908
.0820
.0455
.0605
$0.5750
$4.0221

$0.0886
.0309
$0.1195

$0.0478 $0.0890 $0.0517 $0.0951

$0.0554 $0.0654 $0.0555 $0.0642
.0239 .0318 .0288 .0332
$0.0793 $0.0972 $0.0843 $0.0974

$0.0500 $0.0780 $0.0632 $0.0955
.0252 .0321 .0185 .0212
$0.0752 $0.1101 $0.0817 $0.1167
$2.7395 $3.6895 $3.1861 $4.4508
.1971 .3171 .2120 .3273
62.q366 $4.0066 $3.3981 $4.7781

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

I

T 4-- S i,

I

II

S2.4430

,v r ..... I I

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Table 7.--Costs of Processing, Warehousing and Selling Florida Chilled
Salad, 1965-66 Season

Product Chilled Salad
Container Size 4/1 gal, 12/32 oz. 12/16 oz.
Number of Plants 4 4 3
Number of Cases Per Plant 32,185 119,441 49,071

Materials--containers
Labor:
Direct--peeling
sectionizing
other direct
Total direct labor
Indirect labor
Payroll taxes and insurance
Total manufacturing labor and taxes
Other manufacturing:
Power, lights, water
Maintenance, bldgs. and equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total other manufacturing
Total manufacturing expense
Warehouse expense:
Warehouse & shipping labor and taxes
Other warehouse expense
Total warehouse expense
Administrative expense
Selling expense:
Brokerage
Other selling expenses
Total selling expense
Other expense:
Advertising taxes and inspection
Other (interest, misc. deductions)
Total other expense
Total cost unsweetened
Sugar
Total cost sweetened

Cost Per Case
$2.0482 $0.9718 $0.7250

$0.3147
1.1955
.3551
$1.8653
.0910
.2419
$2.1982

$0.1169
.0568
.1104
.0647
.0311
1846
$0.5645
$4.8109q

$0.0490 $0.0557 $0.0331
.0547 .0623 .0372
$0.1037 $0.1180 $0.0703
$0.0717 $0.0533 $0.0270

$0.1559 $0.0800 $0.0463
.0876 .0478 .0263
$0.2435 $0.1278 $0.0726

$0.0835 $0,0622 $0.0310
.0564 .0425 .0223
$0,1399 $0.1047 $0.0533
$5.3697 $3.3719 $1.9710
.0842 .1060 .0544

$0.2112
.8710
.2710
$1.3532
.0742
.1809
<1l-6083

'i .608T SO.82

$0.0656
.0527
.1177
.0507
.0352
.0661
$0.3880
$2.9681

$0.1341
.4359
.1212
$0.6912
.0343
.0957
SO.8212

$0.0320
.0288
.0548
.0291
.0095
.0474
$0.2016
$1.7478

$5.4539

$3.4779

$2.0254

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

ilml i

i i i

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Table 8.--Costs of Processing, Warehousing and Selling Florida Chilled Citrus
Sections, 1965-66 Season

Product Chilled Chilled
______ Grapefruit Sections Orange Sections
Container Size 4/1 gal, 12/3. ozi 4/1 gal.
Number of Plants 4 4 4
Number of Cases Per Plant 33,899 26,347 20,007

Materials--containers
Labor:
Direct--peeling
sectionizing
other direct
Total direct labor
Indirect labor
Payroll taxes and insurance
Total manufacturing labor and taxes
Other manufacturing:
Power, lights, water
Maintenance, bldgs. and equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total other manufacturing
Total manufacturing expense
Warehouse expense:
Warehouse & shipping labor and taxes
Other warehouse expense
Total warehouse expense
Administrative expense
Selling expense:
Brokerage b
Other selling expense
Total selling expense
Other expense:
Advertising taxes and inspection
Other (interest, misc. deductions)
Total other expense
Total cost unsweetened
Sugar
Total cost sweetened
includes management and office sa
and travel.

Cost Per Case
$0.8719 $0.9181 $0.8725

$0.2127 $0.1819 $0.3374
1.1037 .6970 1.3002
.3603 .2445 .3615
$1.6767 $1.1234 $1.9991
.1089 .0720 .1008
.,2370 .1817 42619
$2.0226 $1.3771 $2.3618

$0.0957
.0587
.1360
.0562
.0223
.1194
$0,4883
SO ~9R2

$0.0727
.0527
.1007
.0510
.0204
.1010
$0.3985-

$0.1015
.0624
.1883
.0623
.0300
.0735
$0,s180
S3.7523

$0.0923 $0.0455 $0.0711
.1030 .0510 .0794
$0.1953 $0.0965 $0.1505
$0.0725 $0.0511 $0.0763

$0.1178 $0.0828 $0.1213
.0689 .0490 .0682
$0.1867 $0.1318 $0.1895

$0.0763 $0.0550 $0.0915
.0548 .0423 .0622
$0.1311 $0.0973 $0.1537
$3.9684 $3.0704 $4.3223
.1294 .1036 .1226
$4.0978 $3.1740 $4.4449

laries, office expense,

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

telephone

but excludes

i i i I

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Table 9.--Costs of Processing, Warehousing and Selling Florida Chilled
Citrus Juices, 1965-66 Season

Product Chilled Chilled
Orange Juice Grapefruit Juice
Container 12/32 6/64 12/32
(glass) (glass) (glass)
Number of Plants 7 6 6
Number of Cases Per Plant .436,935 301,346 60.358
Cost Per Case

Materials--containers
Manufacturing labor:
Direct
Indirect
Payroll taxes and insurance
Total manufacturing labor & taxes
Other manufacturing:
Power, lights, water
Maintenance, bldgs. and equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total other manufacturing
Total manufacturing expense
Warehouse expense:
Warehouse and shipping labor & taxes
Other warehouse expense
Total warehouse expense
Administrative expensea
Selling expense:
Brokerage
Other selling expenses
Total selling expense
Other expense:
Advertising taxes and inspection
Other (interest, misc. deductions)
Total other expense
Total cost unsweetened
Sugar
Total cost sweetened

$0.8653 $0.7752 $0.8596

$0.0595 $0.0778 $0.0815
.0807 .0280 .0297
.0152 .0122 .0125
0.1554 $0.11 80 $0.1237

$0.0360 $0.0125 $0.0124
.0347 .0208 .0218
.0332 .0305 .0248
.0327 .0392 .0319
.0156 .0168 .0207
.0066 .0137 .0217
$0.1588 $0335 $0.1333
$1.1795 $1.0267 $1.1166

$0.0433 $0.0508 $0.0597
.0381 .0493 .0479
$0.0814 $0.1001 $0.1076
$0.0418 $0.0394 $0.0423

$0.0416 $0.0519 $0.0459
. .0379 .0354 .0350
$0.0795 $0.0873 $0.0809

$0.0792 $0.0766 $0.0658
.0162 .0250 .0264
$0.0954 $0.1016 $0.0922
$1.4776 $1.3551 $1.4396
.. -- .0760
$1.4776 $1.3551 $1.5156

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

-14-

Costs of Processing Frozen Orange Concentrate

Costs for processing, warehousing and selling frozen orange con-

centrate for 1965-66 are shown for the three most common can sizes in

Table 9.

There was some use in 1965-66 of "multipak" cartons for frozen

orange concentrate. No separate costs are shown for cases of "multipak"

cartons since they seem to differ from the regular case packs principally

in the added carton costs. The "multipak" cartons cost about $0.14 per

case more than the regular carton for the 48/6 size. Labor costs also

were increased slightly.

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

housing frozen orange concentrate appears In Table 10. Costs in this

table represent a conversion to equivalent gallons 450 Brix of all

containers of frozen orange concentrate and all bulk, but excludes

the cost of cans and cartons. Itemized costs are arranged by volume

groups with plants producing under three million gallons of concentrate

being compared with the group producing three million gallons and over.

This arbitrary division to place approximately 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 firms in the

larger group had lower manufacturing and warehousing costs per gallon,

but slightly higher administrative and selling costs. The total of all

costs for the large volume group was only about 2-1/2 cents per gallon

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 was one firm in the large volume group

-15-

Table 9.--Costs of Processing, Warehousing and Selling Florida Frozen
Orange Concentrate, 450, 12 Firms, 1965-66 Seasona

Container Size 48/6 24/12 12/32
Number of Plants 14 14 14
Cases Produced Per Plant 635,828 449,780 71,626

Cost Per Case

Materials:
Cans (lithographed)
Cartons
Total materials
Manufacturing Labor:
Direct
Indirect
Payroll taxes and insurance
Total labor
Other manufacturing:
Power, lights, water
Maintenance, bldgs. and 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 expenses
Other expense:
Advertising tax and inspection
Other (int., misc. deductions)
Total other expense
Total costs

$0.9360 $0.6975 $0.5867
.0622 .0600 .0815
$0.9982 $0.7575 $0.6682

$0.1294
.1120
.0242

$0.0609
.0467
.0866
.0905
.0291
.0644
$0.3782
<1 f>L'>9

$0.1299
.1179
.0245
S0.2723

$0.0611
.0483
.0868
.0969
.0273
.0669
$0.3873
$1.4171

$0.1860
.1590
.0361
$0.3811

$0.0754
.0653
.1222
.1213
.0437
.0960
$0.5239
51 .S732

$0.0554 $0.0559 $0.0704
.0680 .0725 .0914
$0.1234 $0.1284 $0.1618
$0.1444 $0.1473 $0.2111

.0644 .0621 .0957
.0875 .0869 .1143
$0,1519 $0.1490 $0.2100

$0.2851
.0312,
$0.3163
$2.3780

$0.2843
.0315
$0.3158
($2. 157&

$0.3572
.0352
$0.3924
)$2.5485

aThese 12 firms operated 14 plants.
bIncludes management and office salaries, office expense, telephone
and travel.
cExcludes allowances, discounts, brand royalties.

I

I T -- L II_ F Jr

IIIII

M

-16-

Table O1.--Cost Per Gallon for Processing, Warehousing and Selling Frozen
Orange Concentrate, 450 Equivalent, by Volume Groups, Excluding the Cost
of Cans and Cartons, 15 Florida Firms, 1965-66 Seasona
Under 3,000,000
Volume Group (Gallons) All Plants 3,000,000 and over

Number of Plants 17 9 8
Gallons Per Plant 3,489,815 1,695,615 5,508,292
Cost Per Gallon

Manufacturing labor:
Direct
Indirect
Payroll taxes and w/c insurance
Total labor
Other manufacturing:
Power, lights, and water
Maintenance, bldgs, and equipment
Royalties
Depreciation
Taxes, insurance, rent
Miscellaneous expense
Total other manufacturing
Total manufacturing expense

Warehouse expense:
Warehouse, labor, incl. taxes,
Other warehouse expense
Total warehouse expense
Administrative expense
Selling expense:
Brokerage
Other selling expense
Total selling expenses
Other expense:
Advertising tax and inspection
Other (int., misc. deductions)
Total other expense
Total costs

ins.

$0.0527 $0.0690 $0.0474
.0452 .0324 .0493
.0099 .0105 .0096
$0.1078 $0.1119 $0.1063

$0.0258 $0.0355 $0.0224
.0199 .0260 .0178
.0402 .0458 .0383
.0394 .0480 ,0364
.0141 .0144 .0140
.0299 .0237 .0320
$0.1693 $0.1934 $0.1609
$0.2771 $0.3053 $0.2672

$0.0242 $0.0267 $0.0236
nf7 076 .0227

$0.0509 So.0643 $0.0463
$0.0681 $0.0508 $0.0741

.0253 .0189 .0282
.0383 .0386 .0376
$0.0636 $0.0575 $0.0658

$0.1165 $0.1077 $0.1196
.0120 .0223 ,.0084
$0.1285 $0.1300 $0.1280

$0.5882

$0.6079 $0.5814

aThese 15 firms operated 17 plants.
includes management and office salaries, office expense, telephone
and telegraph, travel.
cExcludes allowances, discounts, brand royalties.

-17-

which had comparatively high costs and some of the smaller firms which

had relatively low costs as shown by the following comparison:

Total Cost Per Gallon, 450 Firms Producing Firms Producing
(Excluding Containers) Under 3,000,000 3,000,000 Gallons
Gallons and Over

Under $0.50 1 2
$0.50 .54 1 1
.55 .59 3 1
.60 .64 1 1
.65 .69 0 1
.70 .74 0 0
.75 and over 3 0
Total 9 6

The average cost per gallon for processing, warehousing and selling

frozen orange concentrate for the 1965-66 season was approximately 59

cents per gallon, 45 equivalent. The record for the past 17 years

is as follows:

Cost Per 42F Equivalent Number of Plants
Season Gallon (Excluding n pl
Packaging Materials)
1948-49 $0.465 5
1949-50 .451 8
1950-51 .346 a
1951-52 .326 7
1952-53 .372 9
1953-54 .340 10
1954-55 .328 10
1955-56 .341 9
1956-57 .371 13
1957-58 .461 15
1958-59 .407 16
1959-60 .428 14
1960-61 .433a 18
1961-62 .407a 14
1962-63 .710a 18
1963-64 .684a 15
1964-65 .486a 15
1965-66b .589a 17

includes selling;
Costs 1965-66 are

prior years do not.
for 450 concentrate.

-18-

Citrus By-Products

The 15 plants from which citrus by-product costs were obtained for

1965-66 manufactured 244,567 tons of citrus pulp and meal, 39,145 tons

of molasses and 2,384,939 pounds of cold pressed peel oil. The itemized

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

11. 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

manufacturing expense were about 80 percent of the total cost for feed;

90 percent for molasses and 83 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 feed averaged $23.59 per ton for all costs of manufacturing

and selling; molasses $14.95 per ton; and peel oil $0.1460 per pound

(Table 11).

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

molasses are shown in Table 12. 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 $2.61 per ton to $8.69 depending partly on whether

paper or burlap bags were used. Manufacturing labor, including payroll

taxes and workmen's compensation insurance, ranged from $2.72 to $10,,44

per ton; power, water, steam and fuel cost from $3.53 to $10.10 per

ton; maintenance and repairs varied from $0.47 to $9.95 per ton; and

depreciation on buildings and equipment from $0.46 to $4.54,

-19-

Table ll.--Average Costs of Processing, Warehousing and Selling Florida
Citrus By-Products, 15 Plants, 1965-66 Season

Product Pulp and Meal Molasses Peel Oil
Number of Plants 15 5 6
Production Per Plant 16,304 tons 7,829 tons 397,490 lbs.

Cost Per Unit

Materials:
Drums
Bags and twine
Lime and other
Total materials
Manufacturing labor:
Direct
Indirect
Payroll taxes and insurance
Total manufacturing labor
Other manufacturing expense:
Power steam, fuel
Maintenance,and repairs
Depreciation
Taxes, insurance, rent
Misc. supplies and expense
Total other manufacturing
Total manufacturing expense
Warehouse expense:
Warehouse, labor, taxes, ins.
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 expensea
Total cost per unit

-- $0.0164
$4.54 --
.51 -- -"".
$5.05 .. $0.0164

$ 2.50 $ 1.10 $0.0272
1.54 .68 .0129
.46 .21 .0037
$ 4.50 $$1.99 $0.0438

$ 5.78 $ 6.86 $0.0200
1.43 1.92 .0166
1.04 1.74 .0150
.40 .38 .0026
.78 .63 .0065
$ 9.43 $1153 $0.0607
$18.98 $13.52 $0.1209

$ 1.60 $ 0.03 --
.83 .01 $0.0001
$ 2.43 $ .04 $0.0001

$ 0.37 $ 0.34 $0.0007
.30 _.25 .0006
$ 0.67 $ 0.59 $0.0013

$ 0.32
.53
.18
1*i 'a

$ 0.01
.29
.31

$0.0039
.0096
.0093
S0.0228

,$ 0.48 $ 0.1 $0.0009
$_0.48 $ 0.19 $o.0009

$23.59

$14.95

$0.1460

inspection taxes and miscellaneous other deductions.

II I IJ

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

-20-

Table 12.--Variation

in Cost of Processing, Warehousing and Selling Citrus
R -rA d -t 1Pl D t 1 6.-6C Cs

+ y I I I a" a s I? sa s/ 9 J e Is I

Cost Per Ton Citrus Citrus
Pulp and Meal Molasses

Number of Plants Number of Plants

Under $19.00 0 2
$19.00 20.99 2 3
21.00 22,99 4 0
23.00 24.99 3 0
25.00 26.99 2 0
27.00 and over 2 0

Total number of firms 13a 5

Range in cost per ton $20.32 $49.44 $10.05 $20.13

a
One firm operated two plants, and one other included more than one
plant.

Other Publications Available on Citrus Costs
Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida 32601

1. Costs of Packing and Selling Florida Fresh Citrus Fruits, 1965-66
Season. Agricultural Economics Mimeo Report EC 67-11, March 1967.

2. Costs of Picking and Hauling Florida Citrus Fruits, 1965-66 Season.
Agricultural Economics Mimeo Report EC 67-10, March 1967.

3. Thirty-four Years of Citrus Production Costs and Returns in Florida.
1931-1965. Agricultural Extension Service Economic Series 67-1,
Jan. 1967.

4. Thirty-two Years of Orange Production Costs and Returns in Florida,
1931-1963. Agricultural Extension Service Economic Series 65-3,
March 1965.

5. Cost of Planting and Developing Florida Citrus Groves Through
10 Years of Age. Agricultural Extension Service Economic Series
65-1, February 1965.

AHS:lkr April 1967
Exp. Sta., Agr. Econ. 1250

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