Agricultural Economics Series No. 53-2
COST S OF PICKING AND HAULING
FLORIDA CITRUS FRUITS,
1951-52 SEASON
by
A. H. Spurlock
Associate Agricultural Economist
Citrus Picking & Hauling Costs, 1951-52
Costs, Cents Per Box
0 10 20 30 40 50 60 70
Oranges -. : -..'. 41.9#
Grapefruit : 34.0"
Tangerines *' ; -- .' : ... ..t.- 66.6
A Study Conducted with Funds Provided by the
Research and Marketing Act
Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida
'Picking Hauling Buying
"[<*, *:. I't
Picking Hauling Buying
I-
~ ~---
January, 1953
& Selling
COST OF PICKING AND HAULING CITRUS FRUITS, 1951-52 SEASON
Introduction
Costs of hauling citrus fruit from the tree to the plant, for the 1951-52 sea-
son are summarized for 26 operators by type of fruit. Services studied were buying
and selling, picking, which included delivery to the roadside, and hauling from the
grove to the processing or packing plant. Fifteen of the firms were primarily
citrus dealers, specializing in buying and selling, picking, and hauling; ten were
principally packers of fresh fruit, and one operated a cannery and concentration
plant. Some of the firms did not provide all types of services. Two of the citrus
dealers did not pick fruit in 1951-52, and one hauled only. Most of the dealers
contracted with other operators to pick or haul some of their volume.
The location of the citrus dealers was Polk County six, Orange three, Lake
two, Volusia two, Pasco and Hillsborough, one each. Three of the fresh fruit
packers were located in Orange County, two each in Lake and Seminole, one each in
Polk, Pasco, Pinellds and Brevard. Volume of fruit handled by the citrus dealers
ranged from 127,000 to more than 3,000,000 boxes.
Data were used only from firms with detailed records of actual costs. In
order to obtain uniformity, estimates were used for dividing certain items of cost
but total coots were not changed from the book record. Depreciation was estimated
in a few cases from the preceding years amounts.
Method of Prorating Costs
The following is a brief explanation of how costs were allocated to the
various services performed, and distributed by types of fruit. Costs were first
obtained in total from the records, such as total labor, repairs, telephone and
telegraph. If more detail was needed on total costs, they were further analyzed
from subsidiary records, or by estimation of the operator, or in a few cases by
standard ratios developed from records having the needed breakdown. Labor was sub-
divided into classes from payroll records and piece rates.
COST OF PICKING AND HAULING CITRUS FRUITS, 1951-52 SEASON
Introduction
Costs of hauling citrus fruit from the tree to the plant, for the 1951-52 sea-
son are summarized for 26 operators by type of fruit. Services studied were buying
and selling, picking, which included delivery to the roadside, and hauling from the
grove to the processing or packing plant. Fifteen of the firms were primarily
citrus dealers, specializing in buying and selling, picking, and hauling; ten were
principally packers of fresh fruit, and one operated a cannery and concentration
plant. Some of the firms did not provide all types of services. Two of the citrus
dealers did not pick fruit in 1951-52, and one hauled only. Most of the dealers
contracted with other operators to pick or haul some of their volume.
The location of the citrus dealers was Polk County six, Orange three, Lake
two, Volusia two, Pasco and Hillsborough, one each. Three of the fresh fruit
packers were located in Orange County, two each in Lake and Seminole, one each in
Polk, Pasco, Pinellds and Brevard. Volume of fruit handled by the citrus dealers
ranged from 127,000 to more than 3,000,000 boxes.
Data were used only from firms with detailed records of actual costs. In
order to obtain uniformity, estimates were used for dividing certain items of cost
but total coots were not changed from the book record. Depreciation was estimated
in a few cases from the preceding years amounts.
Method of Prorating Costs
The following is a brief explanation of how costs were allocated to the
various services performed, and distributed by types of fruit. Costs were first
obtained in total from the records, such as total labor, repairs, telephone and
telegraph. If more detail was needed on total costs, they were further analyzed
from subsidiary records, or by estimation of the operator, or in a few cases by
standard ratios developed from records having the needed breakdown. Labor was sub-
divided into classes from payroll records and piece rates.
-2-
Next, total costs were allocated to three departments or types of operations
(1) buying and selling, (2) picking with own crews, (3) hauling, own trucks. Some
costs fell naturally into these categories; the management was asked to estimate
the allocation of some others. Buying and selling costs, and hauling costs were
not separated by type of fruit. Contract picking and hauling costs were mixed,
both as to services performed and type of fruit included, and are not shown in
the summary.
Finally, costs allocated to picking were further subdivided by type of fruit
picked, into oranges, grapefruit and tangerines. Labor costs for picking were
distributed by type of fruit from an analysis of the picking payroll, or from
piece rates for all piece-rate workers. Other cost items were prorated to the
three types of fruit in inverse order of the estimated average number of boxes a
picker could pick in a day as estimated by the operators. This resulted in higher
per-box costs for tangerines and lower per-box costs for grapefruit than a
straight box-basis proration would have given.
The rate of picking the various types of fruit, as estimated by the firms,
averaged as follows:
: Estimated number :
Type of Fruit t of boxes picked : Relative picking rate
tper worker per days
Oranges 77 100
Grapefruit 112 145
Tangerines 35 46
An illustration of how the overhead allocations were made to the several
types of fruit is given on Page 3.
For a firm which picked 400,000 boxes of citrus, distributed by type of fruit
as shown above, 54.4 percent of the citrus picking costs (except labor) would have
been charged to orange picking instead of 50 percent. It will be noted that
tangerine picking would have borne 11.83 percent of the overhead costs instead .of
only the 5 percent which a straight box volume would have given.
-3-
Sa : ; A. :. Percent
Type of fruit:ctual no's Percentage :Relative picking: Adjusted :distribution
Sof boxes :Distribution: rate ume of : used in
picked boxes* : prorations
$ a s r a prorations
(1) (2) (3) (4) (5) (6)
Oranges 200,000 50.00 100 200,000 54.40
Grapefruit 180,000 45.00 145 124,138 33.77
Tangerines 20,000 5.00 46 43,478 11.83
Total 400,000 100.00 367,616 100.00
*Column 2 4 by column 4 x 100.
Costs of Picking and Hauling
The average costs per box for picking and hauling citrus fruit for 1951-52
from the grove to the cannery or packinghouse are shown in Tables 1 and 2 by
type of service performed. Since two distinct types of firms or operators were
obtained, the costs for each group are shown separately. Direct comparisons
between the two groups are thus not always valid.
Some overhead costs for fresh fruit packinghouses are also incomplete. Since
their groves are often charged with the direct costs of picking fruit, overhead
may all be charged to the packinghouse and selling operations. Items most often
not found in their picking and hauling costs were interest paid, management and
office salaries, supplies, legal and accounting, dues and donations. These costs
are usually small per box, but would add a little more to the amounts shown for
packinghouses if they had been obtained completely.
The items of cost given in Tables 1 and 2 are believed to be self explanatory,
and represent actual expense paid or accrued, except for depreciation and manage-
ment cost. Depreciation was taken as calculated by the firm's accountants, or in
a few cases estimated from previous periods. Some of the citrus dealers were
partnerships and individual proprietorships and had no paid management. In these
cases the owner was asked to estimate the value of his labor and management. If
only the paid management costs had been included, the per box costs for management
-4-
Table 1.--Average Costs Per Box of Picking and Hauling Citrus Fruit, 1951-52 Season
Citrus Dealers Specializing in Buying and Selling, Picking and Hauling
Pi4 tk-n
s S -<+ r
,Buying & Haulingg
SSelling :Oranges Grape-
fPruit
: All Operations:
S : Buying & Selling,
t: Picking & Hauling
Tange-:OrangessGrape-.Tange-
rianes
: : %fruit :rines
Number of Operators 13 14 13 13 5
I :
Average Volume boxes 809,185 553,265:337,832 39,209: 2,795
Cost Per Box Cents
Lab or
Field Foremen 1.63 1.22 2.16 1.63 1.22 2.16
Pickers 17.42 12.15 38.85 17.42 12.15 38.85
Loaders 2.67 2.20 2.89 2.67 2.20 2.89
Grove Drivers 1.20 .96 1.60 1.20 .96 1.60
Highway Drivers 2.17 2.17 2.17 2.17
Mechanics .02 .41 .14 .04 .25 .57 .47 .68
Other .07 .15 .14 .12 .29 .36 .34 .51
Total Labor .09 2.73 23.20 16,69 46.04 26.02 19.51 48.86
Other Costs:
S.S. & Work. Comp. Taxes .01 .06 .40 .36 .58 .47 .43 .65
Gasoline, Oil, Grease .07 1.71 .55 .39 1.00 2.33 2.17 2.78
Repairs .09 1.97 .80 .49 1.41 2.86 2.55 3.47
Licenses, Taxes, Bonds .02 .31 .12 .12 .03 .45 .45 .36
Depreciation .11 1.60 .64 .48 .66 2.35 2.19 2,37
Insurance .04 .34 .20 .14 .33 .58 .52 .71
Equipment Rental .02 .03 .01 .02 .02 .06 .07 .07
Interest Paid .05 .06 .09 .02 .05 .20 .13 .16
Salaries:
Management .79 .76 1.28 .93 2.04 2.83 2.48 3.59
Office .17 .25 .37 .24 .45 .79 .66 .87
Buyers .48 .48 .48 .48
Brokerage & Commission .64 .64 .64 .64
Supplies, Shop Expense .06 .29 .24 .07 .35 .30 .13
Office Supplies & Expense .02 .03 .05 .05 .04 .10 .10 .09
Telephone & Telegraph .20 .04 .05 .04 .03 .29 .28 .27
Lights, Water, Power .02 .03 .03 .02 .02 .08 .07 .07
Travel Expense .36 .02 .03 .03 .03 .41 .41 .41
Driver's Expense .06 .06 .06 .06
Miscellaneous Expense .19 .13 .22 .15 .26 .54 ,47 .58
Total Other Costs 3.28 7.46 5.13 3.72 7.02 15.87 14.46 17.76
Total Costs 3.37 10.19 28.33 20.41 53.06 41.89 33.97 66.62
*Less than .005 cents.
E
: f
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Table 2.--Average Costs Per Box of Picking and Hauling Citrus Fruits, 1951-52
Season
Fresh Fruit Packinghouses and Processors
s : sTotal
-:-Picking- Total
hauling icing Picking & Hauling
Hauling----------- s ------
:Oranges'Grape- Tange- Oranges Grape- Tange-
Sfruit rines fruit rines
Number of Operators 9 10 10 10
s I *
Average Volume boxes 567,852 371,897'166,955 18,987:
Cost Per Box Cents
Labors
Field Foremen 2.03 1.34 4.80 2,03 1.34 4.80
Pickers 17.63 10.94 4,.67 17.63 10.94 43.67
Loaders 3.11 2.47 3.79 3.11 2.47 3.79
Grove Drivers 1.23 1.07 1.92 1.23 1.07 1.92
Highway Drivers 2.67 2.67 2.67 2.67
Mechanics .27 .06 ,02 .09 .33 .29 *36
Other .13 .08 .05 .13 .21 .18 .26
Total Labor 3.07 24.14 15.89 54.40 27.21 18.96 57.47
Other Costs:
S.S. & Work. Comp. Taxes .16 .39 .34 1.01 .55 .50 1.17
Gasoline, Oil, Grease 1.51 .35 .22 .54 1.86 1.73 2.05
Repairs 1.85 1.42 1.47 2.54 3.27 3.32 4.39
Licenses, Taxes, Bonds .20 .06 .03 .08 .26 .23 .28
Depreciation 1.21 .74 .34 1.41 1,95 1.55 2.62
Insurance .22 .16 .09 .32 .38 .31 .54
Equipment Rental .18 .18 .18 .18
Interest Paid .06 .06
Salaries:
Management .39 .52 .44 .94 .91 .83 1.33
Office .14 .17 .13 ,30 .31 .27 .44
Supplies, Shop Expense .02 .05 .03 .12 .07 .05 .14
Office Supplies & Expense .02 .12 .05 .22 .14 .07 .24
Telephone & Telegraph .04 .04 .03 .07 .08 ,07 .11
Lights, Water & Power .01 .02 .01 .02 .03 .02 .03
Travel Expense .01 .04 .03 .10 .05 .04 .11
Miscellaneous Expense .21 .31 .13 .46 .52 .34 .67
Total Other Costs 6.17 4.39 3.34 8.19 10.56 9.51 14.36
Total Costs 9.24 28.53 19.23 62.59 37.77 28.47 71.83
*Less than .005 cents.
for dealers would have been as follows:
Management
Paid Per Box
Buying and Selling .22 cents
Picking oranges .69 "
grapefruit .21 "
tangerines 2.02 "
Hauling .30 "
However, this procedure would have left some firms with no management expense.
All salaries shown for packinghouses were actually paid.
Buying and selling costs for citrus (Table 1) include the salaries, brokerage
and commission paid fruit buyers, car and travel expense, telephone and telegraph,
a portion of the management and office salaries and general overhead expenses.
When scales are maintained for buying fruit, the operator for these was included
as a buying expense.
The average cost of buying and selling citrus fruits for 1951-52 averaged
3.37 cents per box for 13 dealers. The average volume was 809,185 boxes. The
principal costs for providing this service was buyer's salaries, and commission,
management costs, travel expense, and telephone and telegraph.
Buying and selling unpacked fruit is not a normal function of fresh fruit
packinghouses and no cost for this is shown. However, some of the packers did have
fruit procurement costs.
Hauling costs for 13 citrus dealers with an average volume of 553,265 boxes
was 10.19 cents per box for 1951-52 (Table 1). Costs varied from 6.2 cents to
17.15 cents per box. Nine packinghouses operating their own trucks had an average
cost per box of 9.24 cents (Table 2). The variation was from 5.2 to 15,33 cents
per box. Volume for the packinghouses averaged 567,852 boxes.
The principal items of cost in hauling were driver's and mechanic's wages,
fuel, truck repairs, licenses, depreciation, insurance and management costs,
Hauling fruit is a less definite measure of service rendered than for example,
-7-
picking, where a fixed quantity is given. The average distance of haul is not
known. Some of the fruit is moved from groves to canneries at varying distances,
and some is moved from packinghouses (eliminations of lower grade fruit) to
canneries. Packers trucks mostly move fruit from the grove to the packinghouse,
with some secondary hauling from packinghouse to cannery,
The hauling costs calculated for dealers is principally from roadside to
cannery. Hauling in the grove to roadside is considered a picking cost. Many
packinghouse trucks load the field boxes in the grove onto the truck which trans-
ports them to the packinghouse, though sometimes they are transferred at roadside.
Hauling costs for both dealers and packers are an average of all types of
fruit. Dealers report that they can haul oranges and grapefruit at almost the
same cost per box, but that tangerines cost more because of the more careful
handling and lighter loading required. Based on estimates of operators, and a
few records the number of boxes hauled per load was:
Oranges 340
Grapefruit 374
Tangerines 246
Assuming that distances were the same for each type of fruit, and that the
types of fruit hauled were in the same ratio as that picked, then the average
cost of hauling the various types of fruit by dealers would be:
Oranges 10.26 cents per box
Grapefruit 9.32 "
Tangerines 14.18 "
Average 10.19 "
Picking costs as shown in Tables 1 and 2 include all amounts paid for direct
labor for picking and delivering to the roadside, grove truck expense and a por-
tion of the management and overhead expenses, Picking labor was allocated to the
types of fruit from payroll analyses and piece rates insofar as possible. Costs
for workers not paid on a piece rate were prorated on an adjusted volume basis as
illustrated on pages 2 and 3. The average labor cost per box of 17.42 cents for
orange pickers as shown in Table 1 represents a composite of all rates paid during
the season. Most operators picking cannery fruit reported paying 15 to 20 cents
per box for picking budded oranges, and 25 to 35 cents for seedlings. The cost of
picking budded and seedling oranges was not separated, bu;- the proportion of
seedlings was relatively unimportant.
Pickers' labor for grapefruit averaged 12.15 cents for dealers and 10.94 cents
for fresh fruit packers (Tables 1 and 2). The reason for this difference is not
known. Fresh fruit packers picked much larger quantities of grapefruit per firm
than dealers,--166,955 boxes versus 39,209. Picking rates reported by dealers
for grapefruit varied.from 1Q'to 15 cents, but were,mostly about 12 cents.per boxy
Pickers' labor for tangerines averaged considerably less for citrus dealers
than for packers, being 38.85 cents and 43.67 cents respectively. However,
dealers picked only a very small quantity of tangerines with their own crews.
Packers may have done more spot picking.
For dealers (Table 1) pickers' labor was 75 percent of all labor for oranges,
73 percent for grapefruit and 84 percent for tangerines. Total labor was the
largest item of cost for each type of fruit, being about 82 percent of the total
cost of picking oranges and grapefruit, and 87 percent of the total cost of pick-
ing tangerines.
Total picking costs for citrus dealers (Table 1) averaged 28.33 cents per
box for oranges, 20.41 cents for grapefruit and 53.06 cents for tangerines. Pick-
ing costs for fresh fruit packers which operated their own crews were 28.53 cents
per box for oranges, 19S23 cents for grapefruit, and 62.59 cents for tangerines
(Table 2). As previously pointed out the overhead costs for fresh fruit packing-
houses are less complete than for citrus dealers.
The last section of Table 1 shows the combined average costs for the complete
operation of moving fruit from the grove to the cannery which includes buying and
selling, picking, and hauling. The total handling costs for 1951-52 were 41.89
-9-
cents per box for oranges, 33.97 cents for grapefruit, and 66.62 cents for
tangerines. Only a very small quantity of tangerines was picked by the crews of
the firms included. More tangerines were handled, but the additional volume was
picked by contract with other operators.
Since fresh fruit packinghouses do not normally buy and sell unpacked fruit
their combined costs in Table 2 are only for picking and hauling and thus are not
comparable with those for the dealers. Some packers have fruit procurement costs,
but these were dropped; their selling costs apply to packed fruit principally.
Many citrus firms both dealers and packers contract with other operators
to pick or haul or both. This may be done to help them over a peak period when
their own crews and equipment are inadequate, or to do specialized picking. Rates
or amounts paid to contractors are not given because of the difficulty of obtain-
ing the exact service they were performing (picking or hauling) and the kind of
fruit. Some instances were noted where operators were able to contract picking
and hauling at rates somewhat lower than their own costs.
None of the costs in Tables 1 and 2 includes interest on invested capital.
Interest paid by the firms for the use of operating capital is included, though
only one-third of the firms had this expense.
Capital Investment
Capital invested in land, buildings, trucks, boxes and ladders, and other
equipment for 17 firms amounted to $55,243 per firm, or $94.90 per 1,000 boxes
handled (Table 3). The volume here was taken as the total number of boxes on
which any service was performed. Interest at 5 percent on this would amount to
0.47 cents per box. Picking and hauling are more intensive operations, and the
capital invested directly for these (trucks and trailers, boxes and ladders)
amounted to $104.63 per 1,000 boxes picked and hauled. Values given for capital
investment are depreciated values, except for land. Cost of the assets in use
would be considerably more.
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Table 3.--Average Capital Invested in Citrus Picking and Hauling
Equipment, 17 Firms, 1951-52 Season
I ,Average Investment
Item -----
m Per Firmn/ Per 1,000 Boxes Handled-i
Land $ 4,130 $ 7.09
Buildings 2,147 3.69
Autos, Trucks, Trailers 38,689 66,46
Boxes, Ladders 6,148 10.56
Other Equipment 2,990 5,14
Office Furn. & Fixtures 1,139 1.96
Total $55,243 $94.90
i/ Depreciated value. Cost would be much larger except for land.
/ Volume on which any service was performed buying and selling,
picking, hauling, or any combination of services.
Revenue from sales of fruit and services was obtained from 11 citrus dealers,
together with fruit purchases and total operating costs. Fruit sales averaged
$0.949 per box, and purchase price on the tree averaged $0.626 per box, but it
could not be divided by type of fruit. Most of it, however, was oranges. Four
of the firms showed a net loss on all operations for 1951-52 and seven showed
profits. Three firms with net gains had very small gains in relation to their
total volume. The 11 firms had an average net gain of 1.33 percent of their
sales. It appears that most operators who made a profit made it from the opera-
tion of buying and selling fruit, This was hazardous, and resulted in some losses,
but also seems to have been the principal source of profit. On-tree buyers must
risk market declines and weather hazards before the fruit is picked, as well as
yield, in the case of bulk or grove buying.
Variation in Costs Between Firms
Total costs vary rather widely between firms for providing the same service.
These variations in total costs per box are shown in Tables 4, 5, and 6.
Not enough is known about the individual firms' operations to provide much
information about reasons for costs, being high or low. Aside from the factor of
management, (some operators are more frugal and efficient managers than others)
-11-
Table 4.--Frequency Distribution of Cost Per Box for 24 Firms
Picking Oranges and Grapefruit and 15 Firms Picking Tangerines,
1951-52 Season
Citrus Dealers and Packers
Total cost per box Oranges Grapefruit Tangerines
(Cents) Number of Firms
15 18.99 6
19 22.99 1 15
23 26.99 4 2
27 30.99 9 1
31 34.99 8
35 38.99 2
50 55.99 4
56 61.99 3
62 67.99 4
68 73.99 1
74 79.99 2
80 and over 1
Total number of firms 24 24 15
Average cost per box 28.42/ 19.51/ 61.93/
Table 5.--Frequency Distribution of Cost Per Box for Hauling
Citrus Fruit from Grove to Cannery, 24 Firms, 1951-52 Season
Citrus Dealers and Packers
Cost per box Number of Firms
(Cents) Number
4 5.99 2
6 7.99 6
8 9.99 2
10 11.99 7
12 13.99 2
14 15.99 4
16 17.99 1
Total number of firms 24
Average cost per box 9.81/
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Table 6.--Frequency
Buying and Selling,
Total cost per box
(Cents)
24 29.99
30 35.99
36 41.99
42 47.99
48 53.99
54 59.99
60 65.99
66 71.99
72 77.99
78 83.99
84 and over
Total number of firms
Average cost per box
Distribution of the Total Cost Per Box for
Picking, and Hauling Citrus, 1951-52 Season
Citrus Dealers Only
Oranges Grapefruit Tangerines
Number of Firms
4
3
6 3
3 1
2 1
1
12
41.89X
12
33.97
4
66.62%
several firms appeared to have rather high capital investment in relation to the
total volume handled in 1951-52. This may make it possible to handle the peak
volume with owned equipment, but also means equipment is not fully utilized part
of the year, with high ownership costs. The book value of the total capital in
the business varied from $34.64 to $261.53 per thousand boxes handled.
Total costs per box did not seem to fluctuate according to size of firm.
Comparison of Costs With 1950-51
Total picking and hauling costs for 1951-52 were about the same as those
found in 1950-51 (Table 7). This despite the fact that picker's rates increased,-
although part of the increased rate was reflected in 1950-51 costs. Grapefruit
picking costs were higher in 1951-52 due principally to higher picker's rates.
Tangerine picking costs were slightly lower, but picking rates for them vary
rather widely.
The data for 1951-52 represent a much larger number of firms than were ob-
tained in the preceding season. With the wide variation that has been found be-
-13-
tween costs of individual firms, most of the differences between the two seasons
are apparently due to different combinations of firms.
Table 7.--Comparison of Total Costs for Picking & Hauling Citrus
Fruits, 1950-51 and 1951-52
Citrus Dealers Only
S 1950-51 : 1951-52
Operation :Number of: CostS-:Number of: Costs-
:Operators: Cents :Operators: Cents
: :Per Boxt :Per Box
Buying & Selling 7 3.84 13 3.37
Hauling 9 10.31 14 10.19
Picking Oranges 8 28.36 13 28033
Grapefruit 8 18.62 13 20.41
Tangerines 4 56.93 5 53.06
All Operations: Buying,
Selling, Picking & Hauling-
Oranges 42.51 41#89
Grapefruit 32.77 33197
Tangerines 71.08 66.62
AHStmm 1/23/53
Exp. Sta., Ag* Ec. 25
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