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Cost of Production for Processed Oranges Grown in Southwest Florida, 2015/161

Ariel Singerman2

Introduction

This article presents the cost of production per acre for processed oranges in southwest Florida during 2015/16. The cost estimates below do not represent any individual operation. Instead, their purpose is to serve as a benchmark for the Florida citrus industry. Typical users of these estimates include growers, consultants, property appraisers, and researchers. By surveying growers regarding the costs of their caretaking programs, we ensured that the estimates reported in this article closely reflect growers’ expenditures.

Data

A total of thirteen growers participated in the data-collection process by attending either of the two meetings at the UF/IFAS SWREC or Arcadia Extension office in May and June 2016, respectively. Growers brought a completed survey form to the meeting that had been distributed to them beforehand. The questionnaire asked growers to provide annual, per-acre costs by program for a “typical” irrigated, mature grove (10+ years old), including resets.

Figure 3. 

USDA


[Click thumbnail to enlarge.]

The data collection process was anonymous and confidential. During the meeting, each grower used a “clicker” or remote device to enter the costs for each caretaking program. The figures below were obtained by computing the weighted average of the responses by the acreage of each of the participating growers. The number of acres managed by their combined operations accounts for approximately 41,000 acres. The acreage for oranges in southwest Florida during 2015 was estimated at 257,298 (USDA-NASS 2015). Thus, the sample of growers represented 16% of the acreage devoted to oranges in that region.

Table 1 shows the costs of production by program. The estimates include both the cost of materials and the cost associated with their application. The total for weed management, which includes chemical and mechanical mowing as well as herbicides, was $210.09 per acre. At $611.62 per acre, foliar sprays were the largest expense in grove caretaking. Fertilizer was the second largest expense at $454.18 per acre. Citrus Health Management Areas (CHMA) sprays accounted for $17.96 per acre. The expense for pruning was $49.83 per acre, while that for irrigation was $180.88 per acre. Adding all the costs listed above, the cultural cost of growing oranges for processing during 2015/16 without tree replacement was $1,524.55 per acre.

Growers were also asked to provide details regarding their reset practices, including the number of trees replaced in their groves. On average, growers replaced nine trees per acre during 2015/16. The total cost of tree replacement, including tree removal, site preparation, and care of young trees for those nine trees was estimated at $385.70 per acre. Adding this cost yields a total production cost with tree replacement of $1,910.25 per acre.

Figure 1 depicts a double pie chart. The larger pie shows the cost of each program as well as the percentage relative to the cultural production costs with tree replacement. The smaller pie in Figure 1 provides greater detail regarding the individual components included in the foliar spray category. The expense of $611.62 was divided as follows: insecticides totaled $183.95 per acre, (representing 10% of the cultural cost of production); fungicides accounted for $99.73 per acre (5%); foliar nutritionals for $165.91 per acre (9%); aerial application for $28.92 per acre (1%); and ground application of materials for $133.11 per acre (7%).

Figure 1. 

Cultural costs of production for processed oranges grown in southwest Florida, 2015/16


[Click thumbnail to enlarge.]

Figure 2 shows a comparison of the cost of the main production programs in 2015/16 relative to 2014/15. The greatest change was the reduction in insecticide spending by $50 per acre in 2015/16 compared to 2014/15. Weed management and fertilizer expenses were reduced by $38 and $33 per acre while tree replacement expense increased by $39 compared to 2014/15.

Figure 2. 

Cost of production by program for processed oranges grown in southwest Florida, 2014/15 vs. 2015/16


[Click thumbnail to enlarge.]

In addition to cultural costs, growers typically incur other costs when managing their groves; these other costs include management, regulatory, and opportunity costs. Table 2 shows the total cost of production for processed oranges in southwest Florida during 2015/16 was $2,327.98 per acre. Using this estimate, the breakeven prices per box for different levels of yield are presented in Table 3. Breakeven prices were calculated on an on-tree and delivered-in basis. The latter assumes harvesting costs per box were $3.22, which is based on the results of the 2015/16 Picking, Roadsiding, and Hauling Charges for Florida Citrus survey (FE1005). The calculations in Table 3 also include the Florida Department of Citrus (FDOC) assessment of $0.23 per box for the 2015/16 season. Thus, for example, the on-tree and delivered-in breakeven prices for covering the total costs of production with yields at 250 boxes per acre were $1.59 and $2.18 per pound solids.

Summary

This article presents a summary of the 2015/16 costs of production for processed oranges in southwest Florida. The methodology chosen to collect the data consisted of surveying growers directly to closely reflect growers’ costs in the era of citrus greening (HLB). The total cost of production for processed oranges in 2015/16 was $2,327.98 per acre, down $87.86 per acre from last season.

References

United States Department of Agriculture, National Agricultural Statistics Service (USDA-NASS). 2015. Commercial Citrus Inventory: Preliminary Report. Florida Department of Agricultural Services. Maitland, FL.

Tables

Table 1. 

Cultural costs of production per acre for processed oranges in southwest Florida, 2015/16

Costs represent a mature grove (10+ years old) including resets

Number of Applications

Materials Cost Per Acre ($)

Application Cost Per Acre ($)

Total Cost Per Acre ($)

Cultural Costs

       
 

Weed management

       
   

Mowing (chemical and mechanical)

6

1.08

58.41

55.49

   

Herbicides

3

103.09

47.51

150.59

   

Total weed management costs

     

210.09

 

Foliar sprays

       
   

Insecticides

 

183.95

   
   

Fungicides

 

99.73

 

449.59

   

Nutritionals

 

165.91

   
   

Application

       
     

Ground

5

 

133.11

133.11

     

Aerial

3

 

28.92

28.92

   

Total foliar sprays costs

     

611.62

 

CHMAs sprays

3

 

17.96

17.96

   

Total CHMAs sprays costs

     

17.96

 

Fertilizer

       
   

Ground/dry fertilizer

3

326.45

26.84

353.29

   

Fertigation/liquid fertilizer

6

73.12

27.76

100.89

   

Total fertilizer costs

     

454.18

 

Pruning

       
   

Topping and hedging

1

 

29.63

29.63

   

Chop/mow brush

1

 

20.20

20.20

   

Total pruning costs

     

49.83

 

Irrigation

       
   

Irrigation system1

     

130.31

   

Fuel for pump

     

50.57

   

Total irrigation costs

     

180.88

 

Total cultural costs without tree replacement

   

1524.55

 

Tree replacement (9 trees):

       
   

Tree removal (clip-shear; use front-end loader)

   

60.66

   

Site preparation and plant tree (includes reset trees)

   

96.84

   

Supplemental fertilizer, sprays, sprout, etc. (trees 1–3 years old)

228.20

   

Total tree replacement costs

   

385.70

 

Total cultural costs with tree replacement

   

1910.25

1 Irrigation system includes maintenance and repairs to emitters, clean ditches, ditch and canal maintenance, and water control.

Table 2. 

Total costs of production per acre for processed oranges in southwest Florida, 2015/16

Total Cultural Costs with Tree Replacement

1910.25

 

Other costs

 
   

Interest on operating (cultural) costs

95.51

   

Management cost

131.24

   

Property tax/water management assessment

28.73

   

Interest on average capital investment

162.25

   

Total other costs

417.73

 

Total costs

2327.98

Table 3. 

Breakeven price per box for processed oranges in southwest Florida, 2015/16

 

Yield (boxes per acre)

 

175

200

225

250

275

300

325

350

375

 

dollars per acre

Cost of production per acre

2328

2328

2328

2328

2328

2328

2328

2328

2328

 

Pick and haul per acre

564

644

725

805

886

966

1047

1127

1208

 

FDOC assessment

40

46

52

58

63

69

75

81

86

 

Total delivered-in cost per acre

2932

3018

3104

3190

3277

3363

3449

3535

3622

                       
 

Breakeven price

$ per box

   

On-tree

13.30

11.64

10.35

9.31

8.47

7.76

7.16

6.65

6.21

   

Delivered-in

16.75

15.09

13.80

12.76

11.92

11.21

10.61

10.10

9.66

 

Breakeven price 1

$ per pound solids

   

On-tree

2.27

1.99

1.77

1.59

1.44

1.32

1.22

1.14

1.06

   

Delivered-in

2.86

2.58

2.35

2.18

2.03

1.91

1.81

1.72

1.65

1 Assumes 5.86 pounds solids per box based on FDOC Processor Statistical Report for 2015/16 season.

Footnotes

1.

This is EDIS document FE1007, a publication of the Food and Resource Economics Department, UF/IFAS Extension. Published January 2017. Visit the EDIS website at http://edis.ifas.ufl.edu..

2.

Ariel Singerman, assistant professor, Food and Resource Economics Department, UF/IFAS Extension, Citrus Research and Education Center, Lake Alfred, FL.


The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other UF/IFAS Extension publications, contact your county's UF/IFAS Extension office.

U.S. Department of Agriculture, UF/IFAS Extension Service, University of Florida, IFAS, Florida A & M University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Nick T. Place, dean for UF/IFAS Extension.