43
Timothy G. Taylor
Scott A. Smith
Economic Information
Report 243
An Economic Overview of Watermelon
Production and Marketing in Florida
Central Science
\ Library"
______ F v/ !I1n *n ;
L L ^' "|
Food & Resource Economics Department
Agricultural Experiment Stations
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611
March 1988
..-..I
ABSTRACT
Historical trends in acreage, production and value are analyzed for the
Florida watermelon industry over the 1966-67 to 1985-86 period. In
addition, costs of production are presented and discussed for five
production areas in Florida. Weekly shipments and price data are presented
and analyzed as well.
Keywords: watermelons, cost of production, weekly prices, shipments.
INTRODUCTION
The production of watermelons in Florida has a long history. According
to Rose (1977), watermelons were first grown in the state by Florida
Indians as early as the mid-1600s. Commercial production dates back to at
least 1890 when some 2,678 acres of watermelons were grown (Rose, 1977).
Since that time the watermelon industry in Florida has grown substantially.
During the 1985-86 season, 47,550 acres of watermelons were harvested with
a total FOB value of $54.5 million. Total production was estimated to be
approximately 8.75 million cwt.
The relative importance of watermelons in the overall Florida
vegetable industry is rather substantial. During the 1985-86 season
watermelon production accounted for 12.3 and 12.0 percent of total planted
and harvested acreage in vegetables, respectively, and 4.7 percent of the
total value of vegetables and melons produced in Florida. In terms of the
ranking of these categories among the 16 vegetable crops for which data are
reported, watermelons ranked third behind sweet corn and tomatoes in terms
of both planted and harvested acreage and fifth behind tomatoes, potatoes,
peppers and sweet corn in total value for the 1985-86 season.
This report provides an economic overview of watermelon production and
marketing in Florida. The first section provides a brief analysis of
historical trends in acreage, production and value over the last twenty
years. Data are analyzed in terms of Florida's position in the U.S.
watermelon market and in regards to regional production within Florida. The
second section provides a discussion of production practices and cost.
Costs of production for five major producing areas in Florida are analyzed.
The third section presents a discussion of a variety of issues related to
the marketing of watermelons with particular emphasis on the historical
pattern of weekly shipments and prices. The final section provides some
brief concluding comments.
Historical Patterns in Acreage, Production and Value
Florida is the largest producer of watermelons in the United States.
Over the 1966-67 to 1980-81 period1, Florida watermelon producers accounted
for an average of 21 percent of total domestic harvested acreage and 30
percent of both total domestic production and value (Table 1). Furthermore,
the position of Florida producers in the market has been relatively stable.
In terms of harvested acreage Florida accounted for a minimum of 18 percent
and a maximum of 24 percent of total domestic acreage over the 1967-68 to
1980-81 period. Florida's share of the domestic market in terms of
production and value has also been very stable with its share of domestic
production ranging from a low of 25 percent to a high of 38 percent and its
share of total value ranging from a low of 25 percent to a high of 37
percent.
Harvested acreage within the state of Florida averaged just over
50,000 acres per year over the 1966-67 to 1985-86 period. As illustrated in
Table 1, harvested acreage has remained relatively stable over this period
ranging from a low of 42,500 acres in 1979-80 to a high of 60,000 acres in
1983-84.
1 The reporting of acreage, production and value data for watermelons
on a national basis was discontinued after the 1980-81 season.
2
Table 1. Acreage, Production
to 1985-86.
and Total Value of Florida Watermelons, 1966-67
Florida Percent Florida Percent Florida Percent
Harvested of U.S. Production of U.S. Total of U.S.
Years Acreage Harvested Production Value Total
(acres) Acreage (1,000 cwts.) ($ 1,000) Value
1966-67
1967-68
1968-69
1969-70
1970-71
1971-72
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
S1982-83
1983-84
1984-85
1985-86
Average
57,000
56,000
53,500
47,500
50,100
56,100
48,700
44,500
43,600
55,000
8,265
7,560
6,955
6,888
7,515
6,732
7,792
6,675
8,066
9,900
51,000 22
50,000 23
43,000 21
42,500 23
49,000 24
48,000 N/Aa
49,000 N/A
60,000 N/A
54,000 N/A
47,550 N/A
50,303 21
8,925 33
8,000 31
6,450 27
7,863 35
8,085 31
7,920 N/A
8,085 N/A
10,020 N/A
8,964 N/A
8,749 N/A
7,970 30
aData reporting discontinued after 1980-81 season.
Source: Market News Service on Fruits and Vegetables, Marketing Watermelons,
and Florida Agricultural Statistics, Vegetable Summary. Various issues.
17,356
15,876
17,318
17,564
20,441
16,291
23,921
21,894
35,168
25,839
26,507
26,800
32,250
46,549
52,714
54,648
58,212
62,124
53,336
54,506
33,966
29
26
29
31
33
N/A
N/A
N/A
N/A
N/A
30
Although harvested acreage has not exhibited any clear trend over the
period of analysis (Figure 1), there is somewhat of a cyclical pattern
evident. Specifically, over the 1966-67 to 1980-81 period, acreage peaks in
1966-67, 1971-72 and 1975-76 were each followed by fairly consistent
declines in harvested acreage in the intervening years. From 1980-81 to
1982-83 acreage remained fairly constant. The substantial jump in
watermelon acreage in 1983-84 has been followed by two consecutive years of
declining acreage.
The presence of cyclical behavior in harvested acreage for watermelons
was analyzed by Wall and Tilley (1979). Their research found that acreage
planted to watermelons in any particular season could be related to the
average prices in three previous seasons. Prices in the two previous
seasons had the strongest impact on planted acreage. These results are
consistent with the type of cyclical pattern exhibited by harvested acreage
in Figure 1.
The total production of watermelons in Florida has averaged about 8
million cwt per year over the 1966-67 to 1985-86 period. As exhibited in
Table 1, there is a very slight upward trend in total production over the
period of analysis. This, in combination with the fact that harvested
acreage has exhibited no clear trend, suggests that the yield of
watermelons has shown only.a ery-modest increase over the last twenty
years.
The total FOB value of watermelon production has increased
substantially from $17.3 million in 1966-67 to $54.5 million in 1985-86.
This increase represents an average annual increase of about 2.6 percent
per year. Given the relatively stable levels of production over the 1966-67
to 1985-86 period it is likely that much of this increase in value is
Go-
68-
67 E
66-
65-
64-
63-
52-
61-
60-
49-
48-
47-
46-
45-
44 -
43-
42-
1966-67
Year
Harvested acres of watermelons in Florida, 1966-67
to 1985-86.
1969-70 1972-73 1975-76 1978-79 1981-e2 1964-85
Figure 1.
attributable to inflation. Indeed this can be shown to be the case as
deflating total value by the consumer price index indicates that the total
value of watermelon production in real terms has actually decreased by an
average of 0.06 percent per year. Thus while the nominal value of
watermelon production in Florida has increased rather substantially, in
real terms the total value of production has remained almost constant over
the last twenty years.
Within the state of Florida, data on harvested acreage and total
production of watermelons are reported for four regions: west, north,
central and south. As evident from Table 2, the north Florida region is the
predominate production area, accounting for an average of 25,445 harvested
acres per year and an average annual production of 3.9 million cwt. The
central Florida region ranks second with harvested acreage annually
averaging just over 11,000 acres and total production averaging about 1.9
million cwt. The south and west Florida regions are the smallest production
areas averaging about 6,200 and 7,400 harvested acres with average annual
production of 1.5 and 0.65 million cwt, respectively.
The trends in regional production of watermelons within Florida can
best be analyzed by viewing the percentage of harvested acreage and
production attributable to each region over the 1966-67 to 1985-86 period
presented in Table 3. The dominate position of the north Florida area is
evident in that it has accounted for an average of about 51 percent of
harvested acreage and 49 percent of total Florida production. It can be
seen that the share of both harvested acreage and total production
attributable to this region increased fairly consistently from 1966-67 to
1978-79 and has since exhibited a small but steady decline through the
1984-85 season.
Table 2. Harvested Acreage and Total Production of Watermelons by Region in Florida,
1966-67 to 1985-86.
Year West North Central South
Acres Productiona Acres Productiona Acres Productiona Acres Production
1966-67
1967-68
1968-69
1969-70
1970-71
1971-72
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
Average
9,900
10,300
10,300
7,200
9,000
9,600
7,300
7,200
6,300
7,400
4,000
5,000
3,000
2,800
4,000
3,800
4,500
5,000
4,200
3,900
6,235 655
890
956
803
781
N/Ab
624
767
864
819
851
400
450
270
392
680
608
603
675
504
507
20,400
21,000
18,500
18,500
19,900
26,200
24,500
23,500
23,300
31,000
31,700
31,000
27,500
26,500
28,500
27,000
26,000
32,000
27,600
24,300
25,445 3,930
2,693
2,274
1,865
2,495
N/Ab
3,409
3,526
3,760
4,660
5,890
5,706
4,805
3,850
4,638
4,133
4,050
4,030
5,120
3,874
3,888
17,100
14,700
12,900
12,400
12,150
12,000
10,500
8,000
8,800
12,000
10,100
9,300
7,400
7,600
9,700
10,000
10,500
14,500
13,000
11,150
11,190 1,893
1,959
1,972
1,933
2,446
N/Ab
1,620
1,995
1,320
1,628
2,280
1,717
1,777
1,147
1,629
1,552
1,750
1,932
2,610
2,470
2,230
9,600
10,000
11,800
9,400
9,050
8,300
6,400
5,800
5,200
4,600
5,200
4,700
5,100
5,600
6,800
7,200
8,000
8,500
9,200
8,200
7,433 1,517
2,723
2,358
2,355
1,166
N/Ab
1,079
1,504
731
959
879
1,102
968
1,183
1,204
1,720
1,512
1,520
1,615
2,116
2,124
aThousands of cwts.
bData not available.
Source: Market News Service on Fruits and Vegetables, Marketing Watermelons, and Florida
Agricultural Statistics, Vegetable Summary, Various Issues.
Table 3. Percentage of Harvested Acreage and Production of Watermelons
Florida, 1966-67 to 1985-86.
by Region in
Year West North Central South
Acres Production Acres Production Acres Production Acres Production
1966-67
1967-68
1968-69
1969-70
1970-71
1971-72
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
Average
11
13
12
11
N/A
09
10
13
10
09
04
06
04
05
08
08
07
07
06
06
08
33
30
27
36
N/A
51
45
56
58
59
64
60
60
59
51
51
50
51
43
44
49
24
26
28
36
N/A
24
26
20
20
23
19
22
18
21
19
22
24
26
28
25
24
33
31
34
17
N/A
16
19
11
12
09
12
12
18
15
21
19
19
16
24
24
15 19
The west Florida production region has exhibited a reasonably
consistent decline in harvested acreage over the past twenty years.
Harvested acreage has declined from a peak of 19 percent of total Florida
watermelon acreage in the 1968-69 season to about 8 percent for the 1985-86
season. Similarly, the proportion of the total Florida production
attributable to the west Florida region has also declined from a peak of 13
percent in 1967-68 to about 6 percent in the 1985-86 season.
The central Florida region has remained fairly stable in terms of both
harvested acreage and total production. The region's share of harvested
watermelon acreage has averaged about 22 percent of the state total over
the 1966-67 to 1985-86 period achieving a maximum share of 30 percent of
total harvested acreage in 1966-67 and a minimum share of 17 percent. Total
production in central Florida has similarly remained stable averaging about
24 percent of total Florida production.
The south Florida production area has accounted for an average of 15
percent of harvested watermelon acreage and 19 percent of total production.
Harvested acreage in the area exhibited a fairly consistent decline from
about 17 percent of total harvested acreage in 1966-67 to 8 percent in
1975-76. Since that time the portion of harvested watermelon acreage in the
south Florida area has steadily increased to about 17 percent of the state
total. Total production in the south Florida area has followed a similar
pattern, declining from about 33 percent of total Florida production in
1966-67 to 9 percent in 1975-76. Since that time, production in south
Florida has increased fairly consistently accounting for 24 percent of
total Florida production during the 1985-86 season.
Production Practices and Cost
This section provides a brief overview of watermelon production
practices in Florida and presents a comparative analysis of cost of
production for five production areas within the state. The production areas
considered are as follows. The two production areas in the northern portion
of the state are the(Jefferson)county area, designated North Florida, and
the Alachua/Levy)county area. In the central portion of the state the Lake
and Sumter county area, designated North Central Florida, and the
Manatee/Ruskin area, are analyzed. In the southern portion of the state the
Collier, Lee and Hendry county area, designated Southwest Florida is
analyzed.
The typical geographic pattern of production in Florida is such that
the southern production areas are the first to come into production and as
the season progresses, production moves steadily northward. Typical
planting and harvest periods for the five production areas considered in
this analysis are illustrated in Figure 2. Typical planting in the
Southwest area occurs in early to mid January with harvest beginning in mid
April. Planting in the remaining four production areas occurs from mid
February to early March with harvest beginning in May and continuing into
July.
The varieties grown are similar for all production areas. The
predominant varieties are Crimson Sweet, Charleston Grey and Jubilee. In
the North Florida area some Mirage is also grown. Although not currently
grown on a wide basis, it is anticipated that an increasing amount of
acreage will be planted to the so-called icebo melon varieties, Minnie Lee
10
Production January February March Aril _a. June-
Area Early Mid Late Early Mid Late Early Mid Late Early Mid Late Early Mid Late Early Nid Late
SOUTHWEST Transplan Harvest
ANATEE/RUSKIN Transplant Harvet
NORTH CENTRAL Plant Harvet
AIACHUA/LEVY Plant Harvest
NORTH FLORIDA Plant Harvest
Figure 2. Vaterelon production calendar by area in Florida.
and Mickey Lee in the future. In contrast to standard watermelons which
have an average size of 30 to 40 pounds, these icebox varieties average
about 10 pounds in weight.
Production practices are generally comparable in most areas. However,
watermelons are increasingly being grown on plastic mulch. Currently about
50 percent of the watermelons in the Southwest area, 80 percent of the
watermelons in the Manatee/Ruskin area and 75 percent of the watermelons in
the North Florida area are estimated to be grown on plastic. In the
Southwest and Manatee/Ruskin areas use of plastic mulch is primarily due to
the fact that watermelons are often double cropped following such
' vegetables as tomatoes or peppers which are commonly grown using plastic
mulch.
The estimated cost per acre of producing watermelons in each of the
five production areas for the 1986-87 season are summarized in Table 4. A
complete set of detailed production budgets are contained in appendix A. It
may be noted that in general, the cost of producing watermelons declines as
the location of production moves northward within the state. The Southwest
Florida production area has the highest estimated production costs at
$2,022.55 per acre and the Alachua/Levy area has the lowest estimated
production costs at $876.06 per acre. In order to compare production costs
across production regions it is useful to examine the relative cost shares
of various input categories. As exhibited in Table 5, the relative share of
costs attributable to various production inputs are generally similar even
though the absolute cost of production as shown in Table 4 differs
considerably across production areas.
Table 4. Operating, Fixed, and Harvest and Marketing Costs of Producing
An Acre of Watermelons in Various Regions of Florida, 1986-87.
Operating Fixed Harvest and Total
Region Cost Cost Marketing Cost Cost
Southwest $850.49 $400.26 $771.80 $2,022.55
Manatee $716.35 $263.271 $809.60 $1,789.22
North Central $985.21 $277.28 $375.00 $1,137.49
Alachua/Levy $396.25 $104.81 $375.00 $ 876.06
North $466.39 $207.61 $399.00 $1,073.00
Source: Taylor and Smith (1987).
J
Table 5. Cost Shares of Production Input by Production Region in Florida, 1986-87.
Input Region
Manatee/ North Alachua/
Southwest Ruskin Central Levy North
OPERATING COSTS Percent
Seed/Transplants 2 1 1 1 1
Fertilizer and Lime 9 15 12 12 12
Chemicals 7 6 3 3 6
Labor 7 4 10 15 8
Machinery 4 9 11 6 5
Interest 1 4 5 1 2
Miscellanous 11 -- -- 7 9
Total operating cost 42 40 42 45 43
FIXED COSTS
Land rent 12 6 9 5 5
Machinery 5 7 13 5 7
Overhead 3 2 2 2 7
Total Fixed Cost 20 15 24 12 19
TOTAL PREHARVEST COST 62 55 67 57 63
HARVEST AND MARKETING COSTS
Harvest, Haul and Pack 26 27 33 43 37
Selling 13 18 -- --
TOTAL HARVEST COST 38 45 33 43 37
The share of total cost attributable to operating costs, or preharvest
variable costs, are similar for all production areas, ranging from a low of
40 percent in the Manatee/Ruskin area to a high of 45 percent in the
Alachua/Levy county area. The share of total cost accounted for by fixed
costs however shows considerably more variation. The cost share of fixed
cost in the Alachua/Levy county area is about 12 percent whereas fixed cost
in the North Central area represents 24 percent of total cost. It may be
noted that much of the difference in the cost shares of fixed cost across
production areas may be found in the large share of cost attributable to
--------- -------------
land rent in the Southwest area and the shares of fixed machinery cost and
land rent in the North Central area.: '; C
For all production areas, total preharvest costs account for more than
half of total production cost. Total preharvest cost in the Manatee/Ruskin
area accounted for 55 percent of total cost, whereas preharvest cost in the
North Central area accounts for almost 67 percent of total cost. Falling
within these two extremes, preharvest cost in the Alachua/Levy, Southwest
and North Florida areas account for 57, 62 and 63 percent of total
production cost respectively.
Harvest and Marketing costs range from a low of 33 percent of total
cost in the North Central area to a high of 45 percent in the
Manatee/Ruskin area. It may be noted that only the Southwest and
Manatee/Ruskin areas incur selling costs, accounting for 13 and 18 percent
of total cost, respectively. This occurs because watermelons produced in
these areas are typically sold through produce brokers at a cost of $0.75
to $1.00 per cwt. In contrast, the majority of watermelons produced in the
remaining three areas are bought directly by independent truckers for
resale in northern markets.
The magnitude of an individual input's share of total cost is an
important determinant of how total cost may be affected by large increases
in input prices. If an input accounts for only 1 percent of total cost,
very large increases in its price will have a relatively minor impact on
total cost. In contrast, a large price increase for an input which accounts
for a substantial portion of total cost may significantly impact the total
cost of production.
The most significant input in terms of cost share across all
production regions is fertilizer and lime accounting for a minimum of 9
percent of total cost in the Southwest area and maximum of 15 percent of
total cost in the Manatee/Ruskin area. Labor also accounts for a
significant share of cost in the North Central area (10 percent) and the
Alachua/Levy county area (15 percent).
Weekly Shipments and Prices
As with the market for any fresh vegetable, the watermelon market is
characterized by considerable intraseasonal variation with respect to both
shipments and prices. Exactly what constitutes a "normal" season is
extremely difficult to define. As such, the most convenient and perhaps
only way to discuss typical intraseasonal characteristics of watermelon
shipments and prices is by defining a normal season in terms of historical
averages.
The general intraseasonal pattern of shipments of Florida watermelons
can be seen in Figure 3 which plots the average weekly shipments the 1977-
78 to 1981-82 period for both Florida and the U.S.. The dominance of
Florida production in the early spring is clearly evident as virtually all
4.5
4 U.S.
"u.s.
35;
|? -6 ;\ ?
E FLORIDA
I I-I
0.5
April18 15 22 29May613 20 27June310 17 24July1 8 15 22 29Aug512 19
Weeks
Figure 3. Average weekly watermelon shipment for Florida and
the U.S.
domestic production until mid-May emanates from Florida. From this point
until mid July, Florida remains a significant producer. However, its share
of the total domestic market on average declines as producers to the north
begin shipping.
The general pattern of watermelon shipments from Florida indicates
that, on average, shipments increase consistently from early April and peak
in mid-June. From that point on, shipments generally exhibit a consistent
decline, generally ceasing by the end of July. The pattern of total U.S.
watermelon shipments is similar to that of Florida. However, U.S. shipments
peak about two weeks later than Florida shipments on average. It should be
noted that peak U.S. watermelon production generally coincides with the
peak demand commensurate with the July 4th holiday.
As illustrated in Figure 4, average weekly FOB prices over the 1977-78
to 1981-82 period in Florida generally demonstrate the expected inverse
relationship with shipments. In general, as both Florida and total U.S.
shipments increase, prices decline. It is interesting to note that the
range in average weekly prices over the course of the season is fairly
substantial ranging from a average weekly price in excess of $10.00 per cwt
in early May to just over $3.00 per cwt in late July.
The extreme price volatility exhibited by average weekly price in the
first two to three weeks of the season is in part a manifestation of the
fact that the timing of initial shipments of watermelons from Florida is
affected by weather conditions in the production areas which can lead to
either excess production or shortfalls in supply. This price volatility is
however also in part due to the influence of temperatures in the northern
market areas.
11 -
10-
9-
8 -
7-
4
3-
2-
Apr. 22 29 oay 6 13 20 27 June 3 10 17 24 July 1 8 15 22 29
Week
Figure 4. Average weekly FOB prices for Florida watermelons.
The importance of temperature in influencing demand for early season
watermelons has recently been documented by Seale and Shonkwiler (1987). In
general, temperature and early season watermelon prices have been shown to
have a substantial positive correlation resulting from the fact that
watermelon consumption is strongly connoted with warm weather activities.
7----------------------.._I
Thus, warm temperatures in the northern markets induce a strong demand for
watermelons which, given a relatively limited supply, induces high prices.
In contrast, cool weather in northern markets inhibits the demand for
watermelons, resulting in somewhat of an excess supply and lower prices.
As already mentioned, weekly price on average declines consistently as
the season progresses. The only notable exception to this is the period
from mid to late June through the first week in July. During this period
weekly prices generally hold steady with a slight increase occurring
commensurate with the July 4th holiday. Subsequent to this period prices,
on average, show a substantial decline and then remain steady for the
remainder of the season.
The intraseasonal pattern of production and cost within Florida is
generally consistent with the weekly price pattern in Figure 4. That is,
the production areas which supply watermelons early in the season have the
highest cost of production, but also receive the highest prices. As the
location of production progresses northward in Florida the cost of
producing watermelons tends to decline as does the average price received
by producers.
Table 6 presents the estimated breakeven prices for a variety of yield
levels in each of the five production areas considered in this report. The
importance of the timing of production within the state is clearly evident
when these break even prices are compared with the average weekly prices
Table 6.
Breakeven Prices for Watermelons at Various Yield Levels and
Production Regions of Florida, 1986-87.
Yield (cwts.)
Region 275 300 325 350 375
Southwest $6.82 $6.44 $6.12 $5.84 $5.61
Manatee/Ruskin $6.09 $5.80 $5.54 $5.33 $5.14
North Central $4.02 $3.79 $3.60 $3.43 $3.28
Alachua/Levy $3.07 $2.92 $2.79 $2.68 $2.59
North $3.59 $3.39 $3.21 $3.07 $2.94
*<.t t LfI[
received by Florida producers (Figure 4). Given the typical timing of
harvest in each of the production areas (see Figure 2) it can be seen that
average weekly price exceeds the breakeven price for each area over a wide
range of yields. It is also evident that the relatively high cost of
production incurred by growers in the Southwest and Manatee/Ruskin areas
necessitate the high prices generally accompanying early season production.
Prices received later in the season would not, on average, be above the
breakeven prices for these production areas.
It should be emphasized that the results presented are based on
historical averages of weekly prices. Hence, they strictly imply that over
a period of years, the prices received by producers in each of the five
production areas considered will on average exceed the corresponding
breakeven price for a fairly wide range of yields. In any one season
however, producers in any production area may face prices below the
breakeven level, even for fairly high yield levels. This, of course, is a
manifestation of the extreme amount of uncertainty and price volatility
commensurate any fresh market vegetable. The important point to be made is
that, given the historical data on prices, watermelon production in Florida
appears to be profitable if one views production over an extended period of
time. In any one season, however, incurred losses may be just as likely as
the realization of profits.
Conclusions
From the historical data analyzed in this report, the Florida
watermelon industry appears to have been characterized by considerable
stability over the past twenty years, at least as measured by such
indicators as acreage, production and value. It seems likely that the
historical trends exhibited by the Florida watermelon industry will
continue as the industry appears to be somewhat insulated from moderate
fluctuations in the general economy.
Perhaps the most disturbing trend in evidence from the data analyzed
is the downward trend in real prices. This trend appears to be a
manifestation of declining per capital consumption of watermelons which has
generally been attributed to the decrease in average family size. Whether
or not this decline in consumption may reverse is of course unknown at
present.
To the extent that the decline in consumption is in fact related to
declining family size, the introduction of the new ice box varieties,
Minnie Lee and Mickey Lee may offer some potential to improve overall
consumption. As these watermelons are considerably smaller than the
traditional varieties grown, some groups of consumers may be induced to
increase consumption as these varieties allow easier storage thus less of
the potential waste associated with larger watermelons and the high prices
commensurate with pre-sliced watermelons.
In a "normal" year, a comparison of intraseasonal weekly prices and
cost of production indicated that breakeven prices for a wide range of
yields were exceeded by the corresponding weekly FOB prices. A "normal"
year, however, was defined in terms of the historical average of weekly
prices over the 1977-78 to 1981-82 period. Thus, while over an extended
period of time watermelon prices will on average exceed the cost of
production, in any given season prices may well fall short of production
cost in any particular production area.
References
Florida Agricultural Statistics. Vegetable Summary. Florida Crop and
Livestock Reporting Service, Orlando, Florida (annual issues).
Rose, G.N., Florida Vegetables. Melons. Irish Potatoes and
Strawberries--A Historic Data Series. Food and Resource Economics
Department Economic Report 85. Gainesville: University of Florida,
May 1977.
Seale, J.L. and J.S. Shonkwiler, "Rationality, Price Risk and
Response." Southern Journal of Agricultural Economics,
19(1987):111-118.
Taylor, T.G. and S.A. Smith. Production Costs for Selected Florida
Vegetables. 1986-87. Food and Resource Economics Department
Economic Information Report 234. Gainesville: University of
Florida, July 1987.
United States Department of Agriculture. Marketing Florida Vegetables.
Federal-State Market News Service, Winter Park,Florida (annual
issues).
Wall, G.B. and D.S. Tilley, "Production Response and Price
Determination in the Florida Watermelon Industry". Southern
Journal of Agricultural Economics, 11(1979):153-156.
Appendix A
Watermelon Production Budgets for Selected Areas in Florida
Table A-1. Watermelons: Estimated costs of production in the Southwest Florida area,
1986-87.
Average per
Category Acre 100 lbs.
Yield (100 lbs.) 340
- Dollars -
OPERATING COSTS
Transplants 39.00
Fertilizer and Lime 185.80
Fungicide 82.73
Insecticide 66.84
Labor 138.11
Machinery 88.65
Interest 28.26
Miscellanous
Bees 6.00
Irrigation 20.10
Plastic mulch 195.00
Total operating cost 850.49
FIXED COSTS
Land rent 250.00
Machinery 92.05
Overhead 58.21
Total fixed cost 400.26
TOTAL PREHARVEST COST 1,250.75 3.68
HARVEST AND MARKETING COSTS
Harvest, haul and pack 510.00 1.50
Packing material 6.80 0.02
Selling 255.00 0.75
Total harvest and marketing cost 771.80 2.27
TOTAL COST 2,022.55 5.95
Table A-2. Watermelons: Estimated costs of production in the Manatee/Ruskin area,
1986-87.
Average per
Category Acre 100 lbs.
Yield (100 lbs.) 320
- Dollars -
OPERATING COSTS
Seed 20.68
Fertilizer and Lime 275.00
Fungicide 85.60
Insecticide 23.25
Labor 65.56
Machinery 165.29
Interest 77.37
Miscellaneous
Bees 3.60
Total operating cost 716.35
FIXED COSTS
Land rent 100.00
Machinery 128.57
Overhead 34.70
Total fixed cost 263.27
TOTAL PREHARVEST COST 979.62 3.06
HARVEST AND MARKETING COSTS
Harvest and pack 480.00 1.50
Packing material 9.60 0.03
Selling 320.00 1.00
Total harvest and marketing cost 809.60 2.53
TOTAL COST 1,789.22 5.59
Table A-3. Watermelons: Estimated costs of production in the North Central Florida area,
1986-87.
Average per
Category Acre 100 lbs.
Yield (100 Ibs.) 300
- Dollars -
OPERATING COSTS
Seed 13.75
Fertilizer and Lime 137.71
Fungicide 32.70
Insecticide 6.25
Labor 112.57
Machinery 120.40
Interest 61.83
Total operating cost 485.21
FIXED COSTS
Land rent 100.00
Machinery 150.33
Overhead 26.95
Total fixed costs 277.28
TOTAL PREHARVEST COST 762.49 2.54
HARVEST AND MARKETING COSTS
Harvest and Haul 375.00 1.25
Total harvest and marketing cost 375.00 1.25
TOTAL COST 1,137.49 3.79
Table A-4. Watermelons: Estimated costs of
1986-87.
Category
Yield (100 Ibs.)
OPERATING COSTS
Seed
Fertilizer and Lime
Fungicide
Labor
Machinery
Interest
Miscellanous
Custom work
Total operating cost
FIXED COSTS
Land rent
Machinery
Overhead
Total fixed cost
TOTAL PREHARVEST COST
HARVEST AND MARKETING COSTS
Harvest and Haul
Total harvest and marketing cost
TOTAL COST
production in the Alachua/Levy County area,
Average per
Acre 100 lbs.
300
- Dollars --
10.00
102.50
26.15
134.11
50.39
11.10
62.00
396.25
40.00
45.97
18.84
104.81
501.06
375.00
375.00
876.06
1.67,
\1$,
1.25
1.25
2.92
,(K
/7
Table A-5. Watermelons: Estimated costs of production in the North Florida area, 1986-87.
Average per
Category Acre 100 lbs.
Yield (100 Ibs.) 350
- Dollars -
OPERATING COSTS
Seed 15.63
Fertilizer and Lime 125.13
Fungicide 51.25
Insecticide 8.20
Nematicide 4.95
Labor 85.78
Machinery 56.42
Interest 18.08
Miscellaneous
Air compressor 44.70
Plastic mulch 56.25
Total operating cost 466.39
FIXED COSTS
Land rent 55.00
Machinery 77.38
Overhead 75.23
Total fixed cost 207.61
TOTAL PREHARVEST COST 674.00 1.93
HARVEST AND MARKETING COSTS
Harvest 353.50 1.01
Haul 10.50 0.03
Selling 35.00 0.10
Total harvest and marketing cost 399.00 1.14
TOTAL COST 1,073.00 3.07
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
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