7 7: - Methods and Costs of ~ Handling Texas Citrus - 1946-51 1 1 geplemfiea 19.’. R. D. LEWIS. D IIIIII R. C LLLL GE S TTTTT ON, TEXAS TEXAS AGRICULTURAL EXPERIME-NT STATIO DIGEST The citrus industry in Texas underwent considerable change during the 1946-51 period. Volume of production dropped from a high of 29,800,000 boxes for the 1946-47 season to 300,000 for the 1950-51 season as a result of tree-killing freeze periods in the 1948-49 and 1950-51 seasons. Methods of harvesting, packing, processing and selling did not undergo significant changes during this period although trends in the use of containers for fresh citrus showed the rise in popularity of consumer-size mesh bags. The increase in proportion of these bags was from 2 percent of the total to 13 percent for grapefruit and from 10 percent to 32 percent for oranges. Introduction of special bag- handling equipment in some packing houses accompanied the increase in use of these bags. Truck movement of fresh citrus from the Lower Rio Grande Valley increased from 20 percent of the large movement during the 1946-47 season to 72 percent of the small volume during the 1950-51 season. This increase was influenced by the drop in volume resulting from the freezes. The truck portion of the last pre-freeze season, 1947-48, was 33 percent. The areas lying north of Texas and Northeast to Pennsylvania have been Texas’ principal markets for citrus. Prospects appear favorable for an extension of this area to the Rocky Mountains and be- yond on the west. The trend in population expansion in the western half of the United States indicates opportunities for new markets for Texas citrus in that area. Costs of packing oranges and grapefruit in 1-3 / 5 wirebound boxes increased about 36 percent dur- ing the postwar period. Volume was the principal factor affecting costs for the cooperating firms. The definite relationship between volume and cost indicates that packing houses and canning firms in the Lower Rio Grande Valley must increase their volume to effectively lower costs. The number of firms packing and processing citrus must be limited to gain this increase in volume. This is particular- ly important for the next few seasons of low Texas citrus production. The many estimates of future plantings in the Lower Rio Grande Valley indicate 75 percent will be red grapefruit, 10 percent other grapefruit, 10 percent Valencia oranges, 4 percent early oranges and 1 percent in miscellaneous plantings. The production area is being shifted from the eastern to the west- ern part of the Valley. This shift will eliminate some packing houses and reduce citrus processing by some canning firms in the coastal part of the Valley. A careful study of production and existing facilities of the industry might prevent a recurrence of the excessive number of plants that operated prior to the disastrous freezes. CONTENTS Page Pag i Digest ....................................................................................... .. 2 Costs of Handling Texas Citrus ......................................... ..10 I Harvesting Costs ............................................................... ..10 Introduction ............................................................................ .. 3 Packing Costs .................................................................... ..10 ., The Texas Citrus Industry ............................................. .. 3 Processing Costs ............................................................... ..11 I Character of Study ........................................................... .. 4 Y _ _ _ , Variations of Packing Costs ............................................... ..11 Methods of Handling Texas Citrus ................................... .. 4 Relafim" Pf C05“ tqvolume ------------------------------------------- ~11 Harvesting Operations ..................................................... .. 5 Dlstnbutlen 9f l_)aek1ng'h°"§e Expenses ---------------------- ~12 Packing House Operations _______________________________________________ __ 5 Cost _0f Processing and Sellmg Processing Operations ..................................................... .. 6 7 Jelees enfl Segments ---------------------------------------------------- ~12 Grower Prices .................................................................... .. 7 ‘ arlatlens m Cests ----------------------------------------------------------- ~13 Distribution of Texas Citrus ______________________________________________ __ 7 Acknowledgments .................................................................. .14 Methodspf Sales --------------------------------------------------------------- -- 7 Definition of Terms ______________________________________________________________ ..14 " Texas Citrus Outlets ........................................................ .. 7 Auction Sales ..................................................................... ..10 References .............................................................................. ._15 r l Metl1ods and Cost of Handling Texas Citrus, 1946-51 H. B. SORENSEN and C. K. BAKER* INTRODUCTION , METHODS UTILIZED AND COST IN- l. ¥OLVED in the packing and processing of Texas '9 citrus fruits‘ have become particularly important ' Yduring the post World War II years. The demand I for fresh fruit in consumer containers, the intro- i duction of frozen concentrates and increasing la- »- bor shortages have focused attention on technical ‘ changes in fruit handling methods. Increasing l» jéiational volume accompanied by decreasing citrus prices during a period when general price and g {page levels are increasing has necessitated careful l '?fa_ttention to efficent plant operation and market- p, This report has been prepared to provide I-general information on the harvesting, packing, ocessing and marketing of citrus fruits in Texas uring the postwar period with special reference costs of operation. ‘The Texas Citrus Industry The citrus industry in Texas underwent i major changes during the 1946-51 period. Volume ' of production reached the highest point for its . 50-year history during the 1947-48 season. Then 91a disastrous freeze in January 1949 and two more in the 1950-51 season dropped Texas citrus pro- Zluction to the position it held 2O years earlier. 1 ; ,- The Lower Rio Grande Valley citrus industry f e into recognition about 1920 when 123,951 ‘Vs were reported for the area.‘ The rate of - plantings was accelerated and by 1929 there '1 e about 5 million trees. It was estimated that 1933 grapefruit led the citrus industry with ntings totaling 6 million trees as compared h 1.5 million orange trees. By 1946, total ntings were well over 9.5 million trees and the oduction of 29.8 million boxes of fruit repre- nted 61 percent of the potential total from these - s. The first commercial fresh citrus shipments any importance from the Valley were made f uring the 1921-22 season when 54 carloads were I shipped. The following year, 142 carloads were Shipped? The number of boxes shipped increased I rapidly to 1,420,388 in the 1933-34 season and a peak of 17,465,868 boxes during the 1946-47 season?’ l ‘Respectively, assistant professor, Department of Agricul- tural Economics and Sociology, Texas Agricultural Ex- i gperiment Station, College Station, Texas; and agricultural feconomist, Cooperative Research and Service Division, Credit Administration, U. S. Department of Agri- lture, Washington, D. C. The bulk of Texas oranges and approximately half of Texas grapefruit have been marketed fresh with wide variations in the marketing practices, facilities and methods employed. In the 1946-47, season, 6O or more commercial ship- pers were in operation, shipping by rail and truck. A number of firms handled only the gift fruit shipping business. In 1925, it was reported that grapefruit com- prised 68 percent of the total citrus production, with oranges totaling 38 percent and miscella- neous types of fruits 4 percent? Fresh fruit shipments shown in Table 1 indicate that by the Table 1. Number of 1-3/5 bushel boxes equivalent of Texas citrus shipped, 18 seasons Season I Grapefruit I Oranges I Tangerines I Total — — — — — — Thousands — — — — — - 1933-34 1,061 349 11 1,421 1934-35 2,232 471 18 2,721 1935-36 2,131 632 20 2,783 1936-37 7,067 1,876 36 8,979 1937-38 6,735 1,279 32 8,046 1938-39 8,318 2,643 42 11,003 1939-40 7,377 2,152 43 9,575 1940-41 7,181 2,420 45 9,646 1941-42 7,854 2,332 43 10,229 1942-43 9,436 2,242 57 11,735 1943-44 9,1281 3,172 55 12,3551 1944-45 12.292 4,068 66 16,426 1945-46 13,079 3,989 95 17,163 1946-47 13,235 4,166 65 17,466 1947-48 11,487 4,328 58 15,873 1948-49 5,512 2,593 34 8,139 1949-502 3,565 1,622 41 5,228 1950-51 2,471 1,441 18 3.930 1 7,306 boxes grapefruit from Winter Garden and Laredo districts T! included. 2 Mexican citrus included. 1946-47 season, the proportion of grapefruit had risen to about 75 percent. The best estimates of plantings following the 1951 freeze indicate 75 percent in red grapefruit, 10 percent in other grapefruit, 10 percent in Valencia oranges, 4 per- cent in early oranges and 1 percent in miscella- neous plantings. There have been significant changes in the movement of the packed citrus from the Valley. Table 2. Total shipments of fresh citrus from Texas by rail and truck, 18 seasons Season I Rail I Truck I Total l Number l Percent I N umber I Percent I — — — — -— — Carlots -—- — — — — — 1933-34 1,807 46 2,096 54 3,903 1934-35 4,600 62 2.832 38 7,432 1935-36 4,650 64 2,659 36 7,309 1936-37 17,508 77 5,277 23 22,785 1937-38 14,019 71 5,600 29 19,619 1938-39 17,392 60 11,514 40 28,906 1939-40 12,676 50 12,645 50 25,321 1940-41 9,691 40 14,311 60 24,002 1941-42 16,056 _ 64 8,846 36 24,902 l9€2-43 20,212 82 4,319 18 24,531 1943-44 20,382 81 4,823 19 25,205 1944-45 27,890 86 4,519 14 32,409 1915-46 28,484 85 5,026 15 33,510 1946-47 27.154 80 6,703 20 33,857 1947-48 20,807 67 10,342 33 31,149 19198-49 7,089 45 8.722 55 15,811 1949-50 3,728 36 6,636 64 10,364 195-0-51 2,192 28 5.733 72 7,925 In the 1922-23 season, it was reported that 60 percent of the fruit was shipped by freight and 40 percent by express? Since that time, truck ship- ments have assumed importance and for some seasons 50 percent or more of the total citrus volume moved out of the Valley by truck, as shown in Table 2. Processing of grapefruit juice started in the late 1920’s. About 18,000 cases of 24/2 equiv- alents were produced during the 1929-30 season. The processing of grapefruit segments began about the same time but the 1933-34 season, with 7,000 cases, marked the first appearance of a significant volume. The citrus processing indus- try made rapid progress, as indicated in Table 3, and in the 1945-46 season 40 or more canning firms processed 10,572,000 cases. Segments dur- ing that season accounted for 288,800 cases of the total production. Table 3. Lower Rio Grande Valley production 0f all processed citrus fruits for the past 18 seasons Season I Casesl I Season i Cases! Thousands Thousands 1933-34 50 1942-43 7,402 1934-35 365 1943-44 7,981 1935-36 565 1944-45 9,452 1936-37 2,840 1945-46 10.572 1937-38 5,000 1946-47 9,173 1938-39 4,740 1947-48 9,687 1939-40 6,050 1948-49 5,659 1940-41 5,820 1949-50 2,869 1941-42 5,614 , 1950-51 5,790 1 Production is reported on basis of 24 No. 2 cans per case. The citrus industry was crippled by a freeze in January 1949, and 2 years later, when recovery appeared near, disaster struck again with the most severe freeze in 40 years according to weather records. This freeze killed an estimated 75 to 80 percent of the citrus trees and caused complete removal of many orchards. Economic disaster was averted for many growers by rapid conversion from citrus to cotton production. Many of the citrus orchards are being replaced as nursery stock becomes available, but they require a number of years to reach the production of the 1946-47 season. The Lower Rio Grande Valley has recorded freezing weather on numerous occasions dating back to the first records of 1876.7 Although there was no regularity in the occurrence of the freezes, 20 times in the past 75 years the temperature has been below 26°F., the temperature at which dam- age can be expected. Temperatures of 20°F. or lower were recorded only in 3 years at Browns- ville, 1880, 1881 and 1899. Character of Study This report is the result of a 5-year study of the cost of packing and processing of Texas citrus. It covers the methods and costs of harvesting, packing, processing, selling and distributing fresh citrus and citrus products. The study included a total of 38 packing houses and 29 processors as cooperators, representing independent and coop- erative firms. 4 Secondary data were obtained from reports of the Texas-Federal Inspection Service, the Texas Canners Association and publications of the Texas and Florida Agricultural Experiment Station. For the fresh fruit study, companies which handled more than 50 percent of the total volume of packed fruit supplied cost data and related information each season, as shown in Table 4. Table 4. Percentage of total Texas fresh fruit packed by firms included in the study, 5 seasons Texas total volume | Sample firms I Percent in Season packed fruit‘ packed fruit‘ sample Thousands Thousands 1946-47 17,466 10,549 60 1947-48 15,874 8,841 56 1948-49 8,139 5,451 67 1949-50 5,229 3,480 67 1950-51 3,930 2,123 54 Total 50,638 30,444 60 1 1-3/5 bushel equivalent. At the same time, the processing companies included in this study accounted for an average of 67 percent or more of the total volume processed by the Lower Rio Grande Valley citrus processing industry, as shown in Table 5. Table 5. Texas citrus products processed by the firms? included in the study, 5 seasons Total volume Sample firms Percent in Season processed‘ volume processed‘ sample Thousands Thousands 1946-47 9,173 8,168 89 1947-48 9,687 6,093 63 1948-49 5,658 3,699 65 4 1949-50 2,869 1,268 44 1950-51 5,790 3,044 53 g 'l"o1‘al 33,177 22.272 67 l ‘ 24/2’s case equivalent. METHODS OF HANDLING TEXAS CITRUS The marketing of citrus fruits begins on the. tree when maturity is reached. From this poin the packing or processing firm handles all shi ping point functions. The grower may marke his fruit through a grower cooperative, sell to a independent packer shipper or sell to an indepen dent processor. Information obtained from 1 packing firms in 1951 indicates that an averag of 195 growers and 6,880 acres of orchard we , served by each association. Radii of the are ' served by these firms ranged from 10 to 50 mile and averaged 27 miles. The citrus harvested by the firms represente p in this study follows one of three channels: fro orchard to cannery; from orchard to packin house and packed for fresh shipment; or fro orchard to packing house to canner as cull o offsize fruit. The distribution by percentage f0. these channels is shown in Table 6. Table 6. Use and accumulation of citrus fruit harvest by companies worked with, 5 seasons | 1946-41 | 1941-48 1 19422-49 | 1949-50 i 1950-51 | Avera . Type of use — -- — -— — Percent — — — — -< House to cannery 19 19 12 17 19 17 v Grove to cannery 11 15 27 11 23 17 " Total packed‘ 70 66 61 72 58 66 “ Total all fruit 100 100 100 100 100 100 ‘ Fresh. rvesting Operations The harvesting of citrus is done by contract ' king crews assembled by the owners of trucks. hese crews are supervised by the buyers or ieldmen of the packing or processing firm but re controlled otherwise and paid by the contrac- r. The number and size of crews vary consid- l. rably but 14 crews of 10 pickers each is a typical . .,packing house requirement. The harvesting contractor is paid by the 1 rms on the basis of so much for picking and so l; uch for hauling to the packing house. The pick- ging rate varies with the type of fruit and method 10f picking. Early in the harvesting season, “ring :picking” or the use of sizing rings is a common ractice in order that small fruit may be left on ‘the trees to grow larger. This extra care by the icker results in a higher picking cost. Distance ;s sometime considered in determining hauling i tes but more often all contractors for a given Jrm operate on a fixed rate for the entire season. vrf; " w») Packing House Operations The functions performed at the packing house fresh fruit shippers include degreening, dump- ing, Washing, coloring, drying, waxing, grading, sizing, packing and loading. The degreening process is done by placing the fruit in color rooms "l-Qupon arrival at the packing house and filling these 'p‘;r00ms with ethylene gas for several days until the ‘green pigment has been removed. The fruit is then moved from the color room to the washing, T waxing and coloring machinery. From this point, {the fruit moves over grading belts where fruit having disqualifying characteristics of size, shape sgor blemishes are removed and the market grades “fare separated before going into the sizing machin- 1;, ,iery. After the fruit is dropped into the packing i “bins from the sizing rollers, it is hand packed into l. k p, . Figure 1. Proportion of fresh grapefruit packed in eachof the principal container types, 1934-51. 20 10 O 1934-35 Figure 2. Proportion of fresh oranges packed in each of the principal container types, 1934-51. the boxes or bags selected for the shipment being packed. Boxes normally move out of the packing area on a belt or roller conveyor to a point where the lid is fastened. From there the box moves by hand truck to the truck or rail car in which it is shipped. Consumer-size bags are transported within the plant by several methods. Two-wheel hand trucks and four-wheel dollies are used by most of the firms, although this equipment entails more labor and maneuvering space than do the other methods. The overhead chain conveyor has been installed in some plants. It offers savings in space and cost of handling to the point of loading but the initial cost of the equipment and double handling before shipping has eliminated econo- mies for several plants. Belt conveyors are used by several plants with resultant savings in space and labor costs, although they also have the double-handling requirement. The containers used for fresh citrus fruits in Texas and their relative importance are shown in Figures 1 and 2. The bushel basket and the 1-3/ 5 standard nailed box were the principal con- tainers for oranges and grapefruit, respectively, during the 1930’s. The 1-3/5 wirebound Bruce box was introduced during the 1938-39 season and rapidly became the principal container for both oranges and grapefruit. Consumer-size bags were introduced during the 1934-35 season but were not widely used until the 1938-39 season when the equivalent of 25,000 boxes were shipped. Consumer-size bags account- ed for 17 percent of the fresh shipments, or 2,717,000 box equivalents, during the 1947-48 season, as shown in Table 7. Table 7. Percent of total fresh fruit shipments in con- slumer-size bags by type of fruit, 8 seasons Season | Oranges I Grapefruit l All citrus — — — — — Percent — — — — — 1943-44 1 1 1 1944-45 2 2 2 1945-46 10 4 5 1946-47 26 8 12 1947-48 36 l0 17 1948-49 31 11 17 1949-50 26 9 14 1950-51 ~32 13 20 1 Less than .5 percent. Table 8. Percentageof consumer packaged oranges and grapefruit by bag size, 6 seasons Bu: I I size, lbs. t 1945-46 t 1946-47 I 1947-48 1948-49 | 1949-50 1950-51 Oranges 20 3.8 1.3 .8 1.8 1.5 1.5 10 96.2 27.0 .7 .6 .8 .6 8 —- 71.4 93.7 56.9 31.9 24.2 5 —- 3 4.8 40.7 65.8 73.7 Total 100.0 100 0 100.0 100.0 100.0 100.0 Grapefruit 20 1.0 .6 .7 1.0 .9 1.2 10 99.0 92.1 45.7 13.0 1.1 .7 8 —— 7.3 53.4 82.3 77.8 55.3 5 — — .2 3.7 20.2 42.8 Total 100 0 100.0 100.0 100.0 100.0 100.0 Orafiges and grapefruit '1.0 ,8 1.4 20 2.2 1.2 1.4 10 97.8 59.9 19.7 5.8 .9 .6 8 —- 39.0 76.7 67.6 54.3 37.0 5 —- .1 2.8 25.2 43.6 61.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 The relative importance of the various con- summer bags has changed during the past 6 sea- sons, as indicated inTable 8. The 10, 8 and 5-pound bags followed in succession as the most important consumer container. Each container was used for oranges first and then for grapefruit. The machinery and plant arrangement for citrus packing houses are standardized and the only appreciable difference between plants is in the number of units or machinery groups they contain. Most of the Texas packing houses are one-unit plants although there are several two- unit plants and one four-unit plant. One-unit plants must stop operation and make machinery adjustments when switching from one fruit to another. Multiple-unit plants can pack both types of fruit at the same time. Floor space, and re- ceiving and shipping arrangements are factors contributing to plant efficiency. The number of employees required for the plants included in this study ranged from 15 to 70, excluding packers and cratemakers who are cus- tomarily piece-rate employees. The average num- ber of employees utilized in various departments is shown in Table 9 for four one-unit plants and six two-unit plants from which this information was obtained. Table 9. Average number of employees in the depart- ments of a citrus packing shed Average no. employees Department One-unit Two-unit Receiving (receive, truck & dump) 5 14 Graders 5 9 General (foremen, mechanics, janitor & watchmen) 7 12 Shipping (truck, check & load) 12 21 All departments 29 56 Processing Operations Citrus processing firms in Texas were of two general types during the 1946-51 period, those that specialize in citrus products only and those that also process vegetables. Citrus-juice processing is highly mechanized and the equipment and procedure also are stan- dardized. It is processed, filled, labeled and cased mechanically. Many plants also are equipped with 6 Table 10. Volume of principal containers used in process- ing grapefruit, orange and blend juices and grapefruit segments, 5 seasons 1 a container i 1946-47 I 1947-48 1948-49 1949-50 1950-51 — — — — — Thousands — — — -- — Grapefruit juice 24/2 2,060 461 829 297 524 12/404 4,085 3,878 1,76-3 764 1,430 6/10 71 151 25 1 6 72/5-3/4 — 132 61 — 38 48/5-3/4 — 24 3 17 21 Orange juice 24/2 49 37 66 1 112 12/404 42 66 131 -— 263 72/5-3/4 -— 13 25 -— 14 Blend juice 24/2 101 60 1 44 12/404 181 128 111 —- 99 6/10 1 - 1 - - 72/5-3/4 -— 6 11 -— 4 Grapefruit segments 24/2 423 49 71 —- 3 12/404 17 5 3 —- 15 48/8 —- — 3 —— — 1 Less than 500 cases. mechanical conveyors to move the cases into the warehouses or freight cars. The processing of grapefruit and orange segments is largely a hand-labor operation. The fruit must be moved through warm Water to loosen thepeel so that it can be removed by hand. The fruit is then conveyed through a warm lye solution to remove the albedo. After this opera- tion, the fruit is conveyed by belt to Workers who, with the aid of a special knife, separate the juice sacs from the fibrous material. The principal containers used for citrus juice and segments in Texas have been the 24/2 case and the 12/404 case, as shown in Table 10. The number 2 can, which contains about 18 ounces of fluid, and the number 404 can, which contains 46 ounces, are most popular with housewives, and the large 6/ 10 can, which contains 6 pounds E ounces, is popular with institutions. Table 11. Season average return per box to growers f0] oranges and grapefruit, 1919-51 Year I Orange‘ 2 I Grapefruit” Dollars Dollars 1919 2.25 1.65 1920 1.55 1.70 1921 2.18 1.59 1922 1.70 1.40 1923 1.35 .95 1924 2.20 1.20 1925 1.95 1.81 1926 1.56 1.64 1927 2.40 1.97 1928 1.75 1.51 1929 2.67 2.15 1930 1.62 1.26 1931 1.34 .81 1932 1.11 1.00 1933 .78 .82 1934 .96 .67 1935 1.00 .81 1936 1.50 .43 1937 .95 47 1938 .66 28 1939 .96 31 1940 1.00 .37 1941 1.18 62 1942 2.10 1 11 1943 2.42 1 47 1944 2.49 1 42 1945 2.38 1 26 1946 1.85 90 1947 1.50 49 1948 1.36 61 1949 2.29 1 95 1950 1.21 .99 1951 4.60 4.95 1 Includes tangerines. 2 Equivalent packing house-door returns for all methods of sale. Table 12. Mid-month average on-tree Texas citrus prices received by growers, 8 seasons‘ Season I Nov. I Dec. I Jan. I Feb. I March I April I May — — — — -— —- Dollars — — — -- — — Grapefruit 1950-51 2 01 .22 .93 .61 -— — — 1949-50 1 87 1.87 1.85 1.70 2 01 — —- 1948-49 .69 .71 .81 .41 35 — - 1947-48 .99 .55 45 .52 40 .29 .35 1946-47 1.29 .89 54 .65 74 .68 .63 1945-46 1.30 1.20 94 .93 1 14 1.31 1.12 1944-45 1 37 1.23 1.04 1.28 1.30 1 33 1.43 1943-44 1 48 1.27 1.16 1.14 1.43 1 48 1.54 Oranges 1950-51 1.82 1 31 .93 .84 — — — 1949-50 1.65 1.53 2.12 2.83 2.98 — -— 1948-49 .89 1.21 2 16 1.01 57 — - 1947-48 1.55 1.03 95 1.76 1 96 1.88 1.78 1946-47 1.88 1.25 82 1.61 2 37 2.52 2 60 45-46 2.19 2.02 1.91 2.12 2.50 2.59 2.64 1944-45 2.19 2.19 2.13 2.12 2.17 2.46 2.62 1943-44 2.12 2.23 2.10 1.86 2.47 2.62 2.62 1 The on-tree returns to Texas growers were reported by the U. S. De- partment of Agriculture and represent all methods of sale and prices for packed boxes and in-field sales converted to on-tree equivalents for all sales. Grower Prices The citrus farmer in the Lower Rio Grande Valley sells his fruit on the tree. The average return per box to growers for oranges and grape- fruit from 1919 to 1951 is shown in Table 11. The seasonal variations in prices are shown in Table 12, which gives the mid-month average on-tree price for both grapefruit and oranges. For three seasons previous to the 1949 freeze, the average month-to-month price variation was 14 percent for grapefruit and 19 percent for oranges. The price trends usually were down from November to January and up from January until the end of the season in May. DISTRIBUTION 01f TEXAS CITRUS Methods of Sales Sales of fresh-packed citrus are handled by a central sales agency for some cooperatives while cooperative packers and other packer shippers maintain their own sales staff. Sales other than shipments to terminal market auctions normally are on a f.o.b. basis. Varying amounts of the EAST NORTH HIST NORTH Cl-‘TYITRAL Region 6 9.2% POP. 191.7 Grapefruit Inigo Regiog 191.7 9 1 2.6% .5! . 2 12.2 3.5 . 3 2.5 .6 .2 L 41.5 23.3 .5 5 3,4 2.8 1.7‘ 6 25.0 23.9 35.6 7 4.5 5.9 6.0 s 3.4 1.0 .2 9 5.9 38.5 23.6 Figure 3. The percent population for the eight U. S. regions and the percent distributions of Texas carlot ship- ments of all citrus fruit, 1947. ' f.o.b. sales are through brokers. An average of about 36 percent of all sales fis f.o.b. shipping point, and most of them are for truck movement. Texas Citrus Outlets The distribution of Texas citrus is shown in Figure 3, in which the population percentages for specified regions are compared-with the percent- ages of Texas citrus fruits shipped to those re- gions during 1947. The outlets for Texas citrus are mainly in East North Central, Region 4;’ West North Cen- tral, Region 6; and West South Central, Region 9. These areas have approximately 39 percent of the U. S. population and take 70 percent of the grapefruit and 89 percent of the oranges and mixed citrus shipments. The region directly north of Texas, Region 6, seems to be our best market. There, 9 percent of the population receives 24 percent of the grapefruit and oranges. Regions 7 and 8, Mountain and Pacific areas, may be a source of new markets for Texas citrus as they have 13 percent of the U. S. population and are growing rapidly. They now take 7 percent Table 13. Texas grapefruit weighted average auction prices in 10 cities, 17 seasons‘ | Baltimore Boston Chicago Cincinnati Cleveland Detroit New York Philadelphia Pittsburgh | St. Louis Seasons I Av. price iv. price Av. price Av. price Av. price Av. price _ Av. price Av. price Av. price I Av. price .............................................................................................................................. .. Dollars 1950-51 3.98 — 4.07 3.47 4.14 3.87 3.88 4.28 3.71 3.16 1949-50 5.35 —- 4.28 4.28 4.59 4.22 —- 4.54 4.50 3.92 1948-49 3.42 — 2.91 2.88 3.13 3.02 3.44 3.44 2.97 2.48 1947-48. 2.97 2.23 2.68 2.60 2.74 2.66 3.19 3.16 2.78 2.18 1946-47 3.20 2.75 ' 2.76 2.78 2.77 2.73 2.67 2.95 2.77 2.33 1945-46 3.88 3.63 3.00 2.95 3.14 3.26 3.43 3.17 3.11 2.79 1944-45 3.79 3.18 3.18 3.05 3.25 3.33 3.30 3.35 3.47 2.83 1943-44 3.15 3.10 2.96 2.95 — -— 3.57 3.25 3.13 2.81 1942-43 3.10 2.79 2.72 2.83 2.89 2.92 3.24 3.11 2.96 2.33 1941-42 2.18 2.31 2.10 2.25 2.24 2.26 2.49 2.47 2.34 1.83- 1940-41 2.15 2.00 1.85 2.02 2.09 2.11 2.32 2.28 2.17 1.55 1939-40 2.38 2.14 2.02 2.09 2.23 2.19 2.21 2.29 2.30 1.69 1938-39 — 2.04 1.85 1.98 2.04 2.07 2.06 2.10 2.09 1.68 1937-38 — — 2.08 2.14 2.18 2.25 —- — 2.20 1.95 1936-37 — — 2.02 2.22 2.21 2.23 —- — 2.23 1.92 1935-36 — — 2.55 2.56 2.71 2.72 -- -- 2.78 2.43 1934-35 — - 2.29 2.36 2.60 2.53 -— — 2.66 2.18 1 Source-Market News Service on Fruits and Vegetables. 1946-47 to 1950-51 seasons. Marketing Texas Citrus Lower Rio Grande Valley of Texas. Summaries of Figure 5. General View of a citrus packing shed. Conveyor lines are shown running lengthwise of the picture. Figure 6. Receiving bags of citrus at the end of con- veyor line and loading it onto a hand cart. Figure 4. Cf hand-harvesting < fruit tree. Figure 7. Moving‘ boxed citrus 0n a conveyor line to the loading dock for shipment. Figure 8. A housewife selects citrus in the vegetable and fruit section of a supermarket. ns to pay off with. of a Valley grape- i I’ Fresh pack Percent $5.00 $3.50 $3.00 $2.50 $2.00 $1.50 81.00 00.50 195E‘ 1951 YGSTS Figure 9. Auction and grower prices per box for grapefruit, 1935-51. of Texas grapefruit, 7 percent of Texas oranges and 6 percent of the mixed-car shipments. Auction Sales Auction prices of Texas grapefruit for 10 major cities are shown in Table 13. Chicago, St. Louis, Detroit, Cleveland and Cincinnati re- ceived most of the Texas grapefruit. During_ the 5 seasons, 1946 to 1951, auction prices in Cleve- land were generally higher and those in St. Louis were generally lower than in the other leading auction cities. Chicago consistently received the largest volume and seems to be near the price average for the 10 cities each year. ‘ The auction and the grower price per box are compared in Figure 9. The two prices were closer together during the period 1941 to“ 1943 than for other periods. In 1951, the growerprice was higher than the auction price. This could be due to the fact that most of the fruit in 1951 moved by truck and since direct sale prices were higher, the auction price does not represent a true picture. COSTS OF HANDLING TEXAS CITRUS Costs and efficiency of handling citrus and citrus products have become of increasing im- portance to the grower, shipper and processor during the postwar period. High production on a national scale had lowered prices, and increased cost for labor, materials and transportation have narrowed margins. Table 14 gives a composite picture of the relation among the various shipping point cost items for citrus. Harvestiiig Costs Harvesting costs include the picking and hauling charges and half of the field-box expense. igable 14. Percentage of cost for harvesting, packing, processing and selling citrus Processed Percent Harvesting 15 Harvesting 11 Direct packing 68 Direct processing 66 Indirect packing 5 Indirect processing 14 Adm. and selling 12 Adm, and selling 9 Total 100 Total 100 10 Table 15. Field-box expenses charged to harvesting . . to packing operation, 5 seasons Item I 1946-47 I 1947-48 I 1948-49 I 1949-50 I 1950-5 Charged to harvesting $29,241.77 $16,148.39» $22,712.64 $17,057.92 $20,998. Charged to packing 29,241.77 16,148.39 22,712.64 17,057.92 20,998 I Total $58,483.54 $32,296.78 $45,425.28 $34,115.84 $41,996 Total volume ’ fruit, boxes 6,985,782 4,683,705 4,324,310 3,646,389 3,354,’! Cost per box $ .0084 $ .0069 S .0105 $ .0094 9 .012’ The remaining half of the field-box expense '_ charged to the packing-house operation. Table 1 shows the total field-box expense for all fir from which these data were available during th period of the study. The buyer or fieldman sala " is considered part of the administrative expen because his principal duty is procurement of frui Table 16 presents costs of harvesting orang and grapefruit for 5 postwar seasons. The cos of harvesting oranges did not increase as much .. Table 16. Harvesting costs for oranges and grapefr I for 1-3/5 Bruce-box equivalents, 5 seasons Item I 1946-47 I 1947-48 I 1948-49 I 1949-50 I 1950-51, Oranges No. of firms 12 9 6 8 8 ; 1-3/5 equiv. oranges 1,264,869 1,458,536 572,730 416,796 797,4 - Harvesting cost $190,332.69 $219,975.14 $68,877.01 $59,863.18 $130,026. Cost per 1-3/5 equiv. .1505 .1508 .1203 .1436 .1630 . Grapefruit No. of firms 13 10 7 8 8 _ 1-3/5 equiv. grapefruit 1,159,621 1,990,296 1,951, I Harvesting - ' cost $111,222.11 $596,049.51 $211,901.09 $201,649.56 $241,950. Cost per 1-3/5 equiv. .0924 .0644 .0924 .1135 .1266 v 6,348,112 2,358,419 that of grapefruit during this period. Before th 1949 freeze, orange cost averaged 61 percen higher than grapefruit but only 28 percent highe afterward. Grapefruit harvesting costs were decreasin during the 1946-47 and 1947-48 seasons whe there was an increase in volume of fruit picket There was an increase in harvesting costs in tli 1949-50 and 1950-51 seasons; this can be attri uted to the low volume of fruit picked each yea following the loss of a large number of trees i the freeze of January 1951. The condition of th orchards did not allow rapid harvesting wor because the trees had been severely pruned an had very little fruit. The pickers had to mov I more often from tree to tree and this reduce their efficiency. l Packing Costs The industry average costs for packin oranges and grapefruit in various containers zr shown in Table 17. The cost of packing an equiv alent volume of fruit in different containers varied due to differences in the cost of materials, packin labor rates, cost of handling packed fruit an slowdown of output. 17. Cost of packing and selling Texas citrus by type of container, 5 seasons I 1-3/5 | 20-lb. 10-lb. 8-lb. 5-lb. Bruce bag bag bag bag — — — — — — Dollars — — — — — — Grapefruit .65 — .73 .82 -— .62 — .85 .94 — 75 1.01 .88 .93 1.12 .91 95 .99 1.21 89 92 -— 1.16 1.38 Oranges .75 _ .87 .92 - .77 -— .97 1.10 — .86 -— .90 1.03 1.33 .91 .96 1.49 1.13 1.37 1.02 1.03 — 1.28 1.55 .,’ Grapefruit cost in 1-3/5 Bruce box for the uninterrupted production season, 1947-48, _ 62 cents. The 8-pound bag cost for the same ’ n was 94 cents, or 50 percent more than 1-3/ 5 - on an equivalent basis. f. ’ 18. Percent of total fruit that was sent to the ' cannery from the packing house, 5 seasons I Grapefruit I Oranges 2'3 8 25 11 18 5 21 10 31 28 i essing Costs The percentages of grapefruit and oranges ived at the packing houses that were graded for sale to processors during each of the 5 ns are shown in Table 18. Only two of the .ple plants used pre-sizers to remove a part of fruit before it began movement through the ‘ng-house units. The offgrade fruit received same handling up to the point of grading, equently the cost was the same as for the lied fruit. The average cost of handling can- fruit through the packing house is shown able 19. e 19. Average cost per 1-3/5 bushel equivalent of handling the house to cannery fruit for the sample packing houses, 5 seasons I Grapefruit I Oranges Cents Cents 13 16 9 12 11 16 16 18 14 18 VARIATIONS OF PACKING COSTS Costs for packing houses varied greatly for 7h type of container, as shown in Table 20. The _ of packing and selling grapefruit in 1-3/ 5 ce boxes varied over a range of 35 cents in the 6-47 and the 1947-48 seasons, _65 cents in the it 49 season and 4O cents in the 1950-51 season. Variations for 5 and 8-pound bags were ter than for the 1-3/ 5 Bruce. Packing costs 8-pound bags varied approximately 50 cents 29-50 season. These higher variations in cost Table 20. Variation in the cost per box of packing and selling Texas grapefruit by type of container, 5 seasons‘ * Number of firms Cost group 1946-47 I 1947-48 | 1948-49 I 1949-50 I 1950-51 1-3/ 5 Bruce Under $ .60 6 8 0 0 0 S .60 - .69 11 13 4 3 0 .70 - .79 8 2 12 2 1 .80 - .89 1 0 3 9 4 .90 - .99 1 1 1 3 4 1.00 - 1.09 0 0 1 1 3 1.10 - 1.19 0 0 1 0 0 1.20 and over 0 0 1 0 0 Total 27 24 23 18 12 Average cost per firm $0.65 $0.65 $0.81 $0.83 $0.93 8-pound bag Under $ .70 2 0 0 0 0 $ .70 - .79 2 0 2 0 0 80 - .89 8 5 2 2 0 90 - .99 6 11 7 6 0 1 00 - 1.09 1 2 7 6 2 1.10 - 1.19 0 2 1 5 5 1.20 - 1.29 0 2 0 0 3 1 30 - 1.39 0 0 2 0 1 1.40 and over 0 0 0 0 1 Total 19 22 21 19 12 Average cost per firm $0.87 $0.95 $1.01 $1.01 $1.21 1 Includes administrative and selling expenses. for bags were caused primarily by the differences in volume of fruit packed in bags and the method of handling. Relation of Costs to Volume Costs were influenced by volume during all 5 seasons, although other factors influenced the cost on certain containers for several seasons, as shown in Table 21. The average increase in costs was 4 percent for medium over high-volume firms and 12 percent for low over high-volume firms. The cost spread between the large and small- volume groups was greater for the consumer bags than for the 1-3/5 Bruce box. Costs from season to season could not be compared since the great change in volumes for all plants from season to season made it impossible to use the same volume designations for the whole period. The five-seasons’ costs for 10 firms were held in the grouping they occupied by volume for the Table 21. Average cost of packing oranges and grape- fruit in selected containers by volume of fruit packed, 5 seasons Volume groupsl 1-3/ 5 Bruce | 8-pound bag I 5-pound bag in 1,000 IOrant-reslGrapefruit!OrangeslGrapefruitlOrangeslGrapefruit ——---——Cents—-—'-——-——- 1946-47 a Under 300 .83 .69 1.04 .90 — — 300-500 .76 .67 .98 .92 — — Over 500 .70 .62 .82 .72 -— -— 1947-48 Under 250 .82 .67 1.16 1.01 1.39 — 250-500 .78 .63 1.05 .92 1.43 - Over 500 .74 .59 1.13 , .94 — —- 1948-49 p Under 150 .91 .83 1.20 1.17 1.45 1.40 150-300 .84 .77 1.09 _ .95 1.37 1 13 Over 300 .85 .71 .95 .88 1.23 1.10 1949-50 Under 125 .97 .85 1.19 1.07 1.43 1.30 125-250 .88 .78 1.16 .98 1.38 1.16 250 and over .91 .79 1.09 .96 1.34 1.19 1950-51 Under 100 1.15 .99 1.5-3 1.22 1.77 1.56 100-200 1.09 .88 1.32 1.21 1.68 1.45 Over 200 .95 ' .87 1.24 1.11 1.46 1.33 11 Table 22. Cost of packing and selling 1-3/5 Bruce grape- fruit for 10 packing houses by volume groups, 5 seasons I 1946-47 I 1947-48 I 1948-49 I 1949-50 I 1950-51 — — — — —- Cents —- — — — - 2 small-volume firms I 75 71 78 84 107 5 medium-volume firms .41’;- 63 60 70 77 87 3 large-volume firms 61;. _ 62 76 83 87 1946-47 season and are shown in Table 22. The level of capacity at which these firms operated during these seasons influenced the cost relation- ship between the groups. Data were not adequate to measure accurately the level of capacity at which the sample firms operated. Distribution of Packing-house Expenses The packing house operation expenses for the 5 seasons were divided into several categories and are shown in Table 23. Table 23. Packing-house expenses, 5 seasons Itgm Percent Material . . . . . . . . . . . . . . . . . - - -. 48 Labor ..................................... ............................................................... .. 22 Other direct expenses ...................................................................... .. 5 Indirect expenses .. ..... .. Total packing ex, Adm. and selling ex, l4 Other operating .................................................................................. .. 5 Total ...................................................................................................... .. 100 Material expense was the greatest item of cost for the packing houses and the only appre- ciable influence on this category was made by the choice of container type. The material costs for 5-pound bags were about 50 percent higher than for the 1-3/ 5 Bruce boxes. Labor expense ranged from 20 to 24 percent of total packing house cost during the 5 seasons and varied by type of container used and by type of fruit. Tables 24 and 25 show labor costs for the principal containers used for oranges and grapefruit. Oranges require more labor cost than grape- fruit because of the smaller size of fruit and the additional time required to handle a given volume through the packing house. Generally, oranges require about 1.5 times as long to move through the packing house as is required for an equal volume of grapefruit. Piece rates are also higher for oranges as fewer box equivalents can be pack- ed per unit of time. The choice of container has more influence on labor cost than does any other factor. About 60 percent of the total labor cost is in the packing and handling of fruit after it is graded and sized. Table 24. Labor costs for the principal containers used for oranges, 5 seasons Season I 1-3/5 Bruce I 1-3/5 std. I 4/5 box bag I 8-lb. bag I 5-lb. bag * - - - - - - Cents - - - - - - 1946-47 18 —- —— -— — 1947-48 20 31 — 30 — 1948-49 18 32 20 23 30 1949-50 20 26 20 25 31 1950-51 23 — 26 28 34 12 Table 25. Labor costs for the principal containers used for grapefruit, 5 seasons Season I 1-3/5 Bruce I l-3/5 std. I 4/5 box bag I B-lb. bag I 5-lb. bag — — — — — — Cents — -— — — — — 1946-47 14 —— -—- —- -— 1947-48 13 24 — 23 —- 1948-49 11 21 12 20 26 1949-50 15 23 17 22 26 1950-51 17 28 20 25 28 Therefore, the higher packing rates and additional labor required to handle packed fruit in the con- sumer-size bags make costs for these containers much higher than for the 1-3/5 Bruce box. Over- head chain and belt conveyors have been installed ‘ in some plants to handle the consumer-size bags but the volume has not been sufficient to allow a narrowing of the labor cost gap between the con- sumer-size bags and the 1-3/5 Bruce box. Administrative and selling expenses accountg; ed for about 14 percent of the total packing-house; cost but varied greatly within the industry. The variations depended on the selling method usedf the diversification of operation and the volume. of fruit handled. Kind of fruit and type of con-I tainer had only minor influence on these costs. Indirect plant expenses—depreciation, taxes, insurance and facility interest—were influenced primarily by volume, as previously stated, but also were higher for oranges than for grapefrui _‘ to a degree about in proportion to the plant slow down. ‘a Direct operating expenses—utilities, main- tenance, sundry plant supplies and half the field-i box expense—-varied greatly among plants and between seasons for individual plants. These‘ costs were influenced only slightly by the kind of fruit, type of container and volume. The‘ variations were due principally to management" decisions concerning these items during each season. i Other operating expenses—inspection, color- ing, waxing, precooling, maturity stamps and Texas Citrus Commission tax—were higher for oranges largely because of the useof the color-add process on them. Grapefruit required a degreen- ing treatment early in the season but this cost?" was nominal. " To Cost of Processing and Selling Juices and Segments The costs of canning citrus juices and seg; ments for the five postwar seasons are shown. in Table 26. On an actual case basis, the costs Table 26. yPer-case cost of processing, warehousing selling Texas citrus, 5 seasons ' GraDefi-uit Orange _ Blended Gxizfgu?‘ ‘wfith ‘i Juice Juice Juice sugar sugar Season 24/2112/404 24/2112/404 ,24/2|i2/404 24/2 —— —— —— — — — Dollars — — -— — 1040-47 1.00 1.01 .90 1.00 9s .90 seem 1947-48 1.02 I 1.04 .97 1.00 .95 .99 1948-49 1.21 1.35 1.17 1.26 1.13 1.19 1949-50 1.25 1.33 — -— 1950-51 1.27 1.33 -— 1.37 —- . 1.35 &P-lP-‘ ||bbb ®§5IB 3'27. Cost of processing, warehousing and selling l Texas citrus on an equivalent-volume basis‘, 5 seasons [Grapefruit juicel Orange juice I Blended juice | 24/2 |12/4o4| 24/2 |12/404] 24/2 112/404 —-——-——Dollars——-———--— .96 so 1.00 .85 . .93 .76 1.02 .83 .97 .80 .95 .79 1.21 1.07 1.17 1.00 1.13 .95 1.25 1.06 — — — — 1.27 1.06 —- 1.09 —- 1.07 ocessing 12/404 cases were higher for all cts largely because of higher direct labor, t operating, and administrative and selling es which are usually calculated on a juice- t basis. However, when costs are converted equal-volume basis, as shown in Table 27, st of processing in 12/404 cases was lower _ 24/2 cases. The cost of processing grape- juice in 24/2 cases was about 18 percent than for an equivalent volume of juice /404 cases. ;The industry average cost of processing Le and blended juices is shown to be lower jfor grapefruit juice, although this is not true {some plants. The few plants processing f: and blended juices had costs below average '- ruit juice cost for the industry, thus re- l. in lower industry averages for these two is». of juices. Eighteen of the sample firms processed fruit segments during the 1946-47 season. number dropped to six during 1948-49, the n of the first freeze, and to one during “1. The cost of processing segments in '7 was 14 cents greater per case than in 9. The total cost of processing a case of ents increased approximately 19 cents when nts were sweetened. ions in Costs Variations in costs for processing and selling g products are shown in Table 28. These ions were much greater for processed citrus for packing fresh citrus. The variations also greater for the 1946-47 season when the ile represented 90 percent of the total proc- g citrus than in the 1949-50 and 1950-51 ns when 44 and 53 percent, respectively, of total were included in the sample. The prin- i reason for these variations was volume. l 28. Variation in the cost per case of processing ’ and selling Texas grapefruit juice by 12/404 cans, 5 seasons | 1946-47 | 1947-48 | 1948-49 | 1949-50 | 1950-51 Number of firms QuBNOG “Nb-l NIIIQbIQ ‘hidb r-lwv-lwuwcce a» III III s: a III . N o: en i=1 c»: ~1 M 1"‘ c: r-nccwzecaco c»: c: en f‘ 00 OMMNNv-IOOQ a: oo Table 29. Relation of volume to cost of processing, ware- housing and selling grapefruit, orange and blended juices, 5 seasons Volume groups Grapefruit juice Orange juice Blended juice 1.000 cases 24/2 I 12/404 24/2 I 12/404 24/2 l 12/404 — —- — — — Dollars — — — — — 1946-47 Under 100 1.10 1.20 1.11 1.22 1.11 1.16 100-299 1.09 1.16 .98 1.04 1.01 .98 300 and over .94 1.02 .94 .98 .91 .95 1947-48 Under 100 1.41 1.39 1.13 1.25 1.43 1.40 100-299 1.05 1.17 1.09 1.11 1.05 1.06 300 and over .99 1.00 .94 .97 .94 .97 1948-49 Under 150 1.45 1.55 1.41 1.55 1.53 1.38 150-249 1.24 1.40 1.12 1.22 1.12 1.22 250 and over 1.16 1.29 1.16 1 23 1.13 ’ 1.19 1949-50 Under 100 1.41 1.52 — — — — 100-199 1.25 1.33 — — — — 200 and over 1.23 1.30 — —- — -— 1950-51 Under 200 1.42 .50 — 1.62 — 1.58 200-499 1.26 1.31 — 1.31 — 1.31 500 and over 1.26 1.30 —- 1.30 — 1.2 Table 29 shows the effect of volume on proc- essing 12/404 grapefruit juice, which leads in volume for all seasons. The average increases in costs were 8 percent for medium-volume over large-volume processing plants, and 22 percent for low-volume over large-volume plants. The relationship of variation in costs to the variation in volume between firms is more positive for proc- essed juice than for fresh citrus. Overhead costs (other manufacturing ex- pense and administrative and selling expenses), which were directly influenced by volume, ac- counted for 26 percent of the total processing, warehousing and selling costs, as shown in Table 30. Lowering of these overhead costs is the most effective way to lower total costs. This may be done for some firms by lengthening the operating season and increasing the total volume through diversification to include the processing of vege- tables. For these firms, lower overhead cost could result from increased volume or greater efficiencies in the administrative and selling functions. Material, labor and other operating costs represented 74 percent of the total processing plant cost. Plant managers have little oppor- tunity for reducing these costs for processing juice because of the fixed nature of these ex- penses. Labor cost shows some influence of volume. Reduction in the cost of processing segments could be made if the sectionizing process could be mechanized. Labor accounts for about 50 percent of the cost of processing segments, and about 90 percent of this labor cost was for sectionizing. Table 30. Costs for processing citrus, 5 seasons Item Percent Material ' 63 Labor (processing and wa- ‘ 11g) - l0 Other manufacturing expenses 16 Total processing and wa- “ ‘ng ...... .. 89 Administrative and selling expenses .......................................... .. 10 Other operating‘ cost 1 Total ............................... .. 100 13 ACKNOWLEDGMENTS The authors wish to express their apprecia- tion to the cooperating firms which made this study possible, and to the following persons who participated in planning and conducting the study: Kenneth A. Fugett, resigned, associate professor, Department of Agricultural Economics and Sociology, Texas Agricultural Experiment ‘Station; H. M. Mayes, Jr., resigned, technical assistant, Department of Agricultural Economics and Sociology, Texas Agricultural Experiment Station; and J. K. Samuels, agricultural econo- mist, head, Fruit and Vegetable Section, Cooper- ative Research and Service Division, Farm Credit Administration, U. S. Department of Agriculture. This report covers the cost of marketing Texas citrus for the 5-year period, 1946-47 to 1950-51 seasons, as a Texas phase of the Southern Regional Research Project S.M.-4, “Marketing Citrus Fruits.” Costs of packing and processing citrus in Texas and Florida for the 1946-47, 1947- 48, 1948-49, 1949-50 and 1950-51 seasons have been published previously, as shown in the Ref- erences. The research reported here was conducted cooperatively by the Department of Agricultural Economics and Sociology, Texas Agricultural Ex- periment Station, and the Cooperative Research and Service Division, Farm Credit Administration, U. S. Department of Agriculture. It was support- ed in part by funds made available under the Research and Marketing Act of 1946. DEFINITION OF TERMS Volume Group Determined for each packing house by the total boxes 1-3/ 5 bushels equivalent handled as packed or bulk fruit through the packing house, and for each cannery by the total cases of citrus products processed. Packing Operations Boxes per packing house: average volume packed, 1—3/ 5 bushel equivalent. I Containers: 1-3/5 Bruce, 1-3/5 standard wrapped, 1-3/5 venco: 1-3/ 5 bushel by volume. Venco box is the same as a flat pack. 4/5 Bruce, 1/2 box bags, 8-pound bags, 5-pound bags: all expressed in the equivalent of 1-3/5 bushel by volume. Items of cost: Materials: crate material; bags; fruit wraps; nails, strips and straps; labels and paste; and end guards. Labor: receive, truck and dump; crate making and labeling; foremen, graders and others; wrap and pack; truck, check and load; and payroll taxes. Payroll taxes include both social security and com- pensation insurance. Other direct cost: the cost of power, lights and water; repair of building and equipment; and miscellaneous supplies. Indirect operating: depreciation. Total packing cost: the total of materials, labor and other direct cost and indirect operating. Administrative and selling: management and office salaries; office supplies and expense; auto and travel; telephone and telegraph; miscellaneous of- fice expense; sales department cost, or charge for selling. Selling cost does not include brokerage or any terminal market charges. insurance, taxes, licenses and 14 Other cost: gas coloring; color add and wax; pre-A cooling and inspection. Processing Operations Blended juice: a blend of orange and grapefruit juice The proportion of each varies from 60-40 to 40-60 percent. Cases per firm: average volume of actual cases pro- duced. Containers: 24/2: a case of 24 eighteen-ounce cans. 12/404: a case of 12 forty-six-ounce cans. Items of cost: Materials: cans, cartons, labels and freight on ma- terials. Labor: Direct: receiving, processing, filling and closing. Indirect: Supervision, watchman, mechanic, janitor and payroll taxes. Warehouse and shipping: labeling, handling, ship- ping. Other manufacturing cost: expense for depreciation, repairs and maintenance; power, lights and Water; ,' fuel; royalties; insurance; taxes; miscellaneous sup- plies; miscellaneous operating cost and warehouse cost 1 other than labor. Administrative cost: includes management and office j salaries, office supplies and expense, auto and travel, ‘ operating interest, telephone and telegraph, legal and 1 audit, dues and subscriptions and other general ad- T» ministrative cost. Selling cost: salaries of salesmen and others, advertis- 1, ing and miscellaneous plant-selling cost. Does not ‘I include commercial brokerage, discounts and allow- ~. 311088. J. Potts and A. P. Swallow. Citrus Culture in the é Lower Rio Grande Valley of Texas. Extension Service Bulletin No. 66, 1929. ' M. Delcurto, E. W. Halstead and Hal F. Halstead. ._ The Citrus Industry in the Lower Rio Grande Valley of Texas. Texas Department of Agriculture Bulletin N0. 79, 1925. Texas-Federal inspection service data. Harlingen, Texas. ' gR. E. Winfrey. Market News Service on fruits and 'vegetables. Marketing Texas Citrus, Lower Rio Grande Valley of Texas. Summaries of 1946-47 >3 season to 1950-51 season. ij-K. A. Fugett—Texas data only. Cost of Handling i Florida and Texas Citrus Fruits in Fresh and Proc- , essed Form, 1946-47 Season. Special report, Florida Agricultural Experiment Station, 1948. Cost of Handling Florida and Texas Citrus Fruits in Fresh and Processed Form, 1947-48 Season. Special REFERENCES report, Florida Agricultural Experiment Station, 1949. Cost of Handling Florida and Texas Citrus Fruits in Fresh and Processed Form, 1948-49 Season. Special report, Florida Agricultural Experiment Station, 1950. Cost of Handling Florida and Texas Citrus Fruits in Fresh and Processed Form, 1949-50 Season. Special report, Florida Agricultural Experiment Station, 1951. K. A. Fugett and J. K. Samuels. Cost of Handling Texas Citrus, Fresh and Processed, 1946-47, Texas Agricultural Experiment Station Bulletin 709, 1949. 6. H. B. Sorenson. Cost of Handling Florida and Texas Citrus Fruits in Fresh and Processed Form, 1950-51. Cost of Handling Texas Citrus, Fresh and Processed, 1950-51 Season, Texas Agricultural Experiment Sta- tion Progress Report 1485. 7. Weather Record. John C. Hagan. Rio Grande Valley Horticulture Institute, January 21, 1953, pp. 129-138. SUPPLEMENTARY TABLES AVAILABLE Data supporting the material reported in this publication are available in a separate mimeo- graphed report entitled “Supplementary Tables for Method and Cost of Handling Texas Citrus, 1946-51.” Copies of these tables may be obtained from the Agricultural Information Office, Texas A&M College System, College Station, Texas. 15