Division of Agricultural Sciences UNIVERSITY OF CALIFORNIA COST AND EFFICIENCY IN HOUSE PACKING WESTERN HEAD LETTUCE R. V. Enochian, F. J. Smith, and L. L. Sammet UNIVERSITY OF CALIFORNIA DAVIS DEC i % 19S7 LIBRARY CALIFORNIA AGRICULTURAL EXPERIMENT STATION GIANNINI FOUNDATION OF AGRICULTURAL ECONOMICS Mimeographed Report No. 199 September 1957 i FOREWORD This study reports on the costs and efficiency of house packing western head lettuce. A previous report focused on the costs and efficiency of alter- native methods of lettuce field-packing operations. Prior to l Q f>2, most of the lettuce shipped from the Salinas district was house packed. Since that time, due to adoption of the vacuum- cooling process, there has been a rapid change-over to field packing. The shift to field pack- ing has created considerable excess capacity in existing house-packing facili- ties. The immediate problem confronting shippers is how most economically to use these facilities. Since the investment in buildings and equipment has already been made, the effect of this item on costs can be ignored in the im- mediate situation, and a solution can be worked out in terms of direct costs only. This study indicates that direct costs are higher in smaller than in larger packing houses . If a large number of Salinas packing houses were used to pack the 1956 volume of lettuce, none could have been effectively organized except as low-capacity operations and with high costs. The 1956 volume of house-packed lettuce could have been processed through a single packing plant of either i±20- or 630-crate-per-hour capacity. Costs would have been consid- erably lower in the larger plant. It is recognized that consolidation of the house-packing operations of a number of shippers in a single plant would give rise to many administrative problems, the cost of which would have to be weighed against the possible savings from consolidation. Eventually, existing plants and equipment will wear out and must be re- placed. The problem of the most economical organization when investment costs for replacement of plants and equipment are included is then of interest. Given a level of demand for house-packed lettuce sufficiently high to permit full ex- ploitation of economies of scale, this study shows that costs, including the fixed costs of buildings and equipment, are lowest with a plant of 630-crate- per-hour capacity. The greatest economies occur between the small- (210 crates per hour) and medium- sized (i|20 crates per hour) plants. Sufficient data are presented to permit computation of costs for any size plant betxreen the range of 210- to 630-crate-per-hour capacity under specified operating conditions. Thus, when and if the demand for house-packed lettuce eventually stabilizes, the information contained in this report should prove useful in the design of optimum-sized plants. This study was made cooperatively by the Giannini Foundation of Agricul- tural Economics of the California Agricultural Experiment Station and the Agri- cultural Marketing Service, U. S. Department of Agriculture, under authority of the Research and Marketing Act of 19U6. The work was performed as a part of Western Regional Research Project WM-lh relating to the marketing of western head lettuce. iii COSTS AND EFFICIENCY IN HOUSE PACKING WESTERN HEAD LETTUCE TABLE OF CONTENTS Page FOREWORD i INTRODUCTION 1 The Problem 1 The Physical Organization of the Industry 2 Method of Cost Estimation k Major Cost Components , . 5 Simplifications in Analysis 5 PACKING PLANT OPERATIONS AND COSTS 7 Operations Performed 7 Factors Affecting Rate of Output and Costs 13 Crew and Equipment Requirements and Costs in Relation to Plant Capacity 15 Size of Crew in Relation to Plant Capacity 15 Crew Costs in Relation to Plant Capacity 18 Equipment Requirements 18 Equipment Replacement Costs and Annual Fixed Costs of Equipment 20 Variable Repair and Equipment Operating Costs 22 Costs of Packing Materials and Supplies. ........... 22 Building Requirements and Costs .... 22 Space Requirements 22 Building Replacement Costs and Annual Fixed Costs for Buildings 27 HARVESTING AND HAULING OPERATIONS AND COSTS 30 Operations Performed 30 Factors Affecting Crew Requirements and Costs . 32 "to «*.tp.H fisxl 1 ! InunnA buss RlioO ^aams^eJ.qsfi sai. . . . .' .BT^C'O 'IMA SKOlTAHHIO OHIJUAH iv Crew and Equipment Requirements and Costs in Relation to Output Per Day 33 Production Standards 33 Harvesting Crew and Equipment Requirements 35 Truck Driver and Hauling Equipment Requirements 38 Harvesting and Hauling Labor and Supervision Costs Per Day 42 Equipment Costs 45 Operating Costs Per Day 45 Annual Fixed Costs of Equipment . 1+5 COMBINED PACKING HOUSE AND HARVESTING -HAULING COSTS 49 Total Variable Costs Per Day 49 Annual Fixed Costs , 49 Total Season Costs and Total Costs Per Packed Crate 52 IMPLICATION OF RESULTS TO THE PRESENT SITUATION IN THE SALINAS DISTRICT 60 LIST OF TABLES Table 1 Crew Organization, Wage Rates, Labor, and Supervision Costs for Lettuce Packing Plant Operations as Related to Capacity in Crates Per Hour, Salinas District, California, 1953-54 16 2 Equipment Requirements, Prices, and Installation Costs for Three Different Capacities of Lettuce Packing Plants, Salinas District, 1954 1 9 3 Replacement Costs and Annual Fixed Costs of Equipment for Lettuce Packing Plants of Three Different Capacities, Salinas District, 1954 21 4 Variable Equipment Repair and Operating Costs Per Day for Lettuce Packing Plants of Three Different Capacities, Salinas District, 1954 2 3 5 Costs of Materials and Supplies for Packing Lettuce, Salinas District, California, 1954 24 »H V Table Page 6 Building Space Requirements for Lettuce Packing House of Three Different Capacities, Salinas District, 195^ 26 7 Replacement Costs and Annual Fixed Costs of Buildings for Lettuce Packing Plants of Three Different Capacities, Salinas District, 195^ 28 8 Cutter Time Requirements in Harvesting Head Lettuce Expressed in Man-Hours Per Basket and Production Stand- ards in Baskets Per Man-Hour with Different Levels of Harvest Density and Length of Harvest Strip, Salinas District, 1953- 5^ 36 9 Lettuce Harvesting Crew Organization and Hours Worked Per Day in Relation to Daily Output and Harvest Density, Salinas District, California, 195^ 39 10 Number of Truck-Trailer Units and Drivers Required for Harvesting an:? Hauling Lettuce in Relation to Distance Traveled, Harvest Density, and Output Per Day, Salinas District, California, 1953- 5^ ^3 11 Total Daily Lettuce Harvesting and Hauling Labor Costs with Varying Daily Outputs, Harvest Densities, and Round- Trip Distances from Field to Plant, Salinas District, California, 1953-5^ ^ 12 Replacement Costs, Annual Fixed Charges, and Operating Costs Per Hour for Each Equipment Item Used in Harvesting and Hauling Lettuce, Salinas District, California, 1953-54. ... w 13 Total Daily Lettuce Harvesting and Hauling Equipment Operating Costs with Varying Daily Outputs, Harvest Density, and Round-Trip Distances from Field to Plant, Salinas District, California, 1953-5^ ^7 Ik Annual Fixed Costs of Lettuce Harvesting Equipment with Varying Daily Outputs, Harvest Densities, and Round-Trip Distances from Field to Plant, Salinas District, California, 1953-5^ ^ 8 15 Total Variable Lettuce Harvesting- Hauling and Packing Plant Costs Per Day as Related to Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density, Salinas District, California, 195^ 50 16 Annual Fixed Costs of Harvesting-Hauling and Packing Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density, Salinas District, Cali- fornia, 195^ 53 17 Total Season Cost of Harvesting-Hauling and Packing Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density, Salinas District, Cali- fornia, 195^ 55 3fli JLflcJ I ^ vi Table Page 18 Total Costs Per Crate of Harvesting-Hauling and Packing Head Lettuce as Related to Plant Output Per Day, Round- Trip Distance from Field to Plant, and Harvest Density, Salinas District, California, 195k 57 19 Monthly Distribution of Ice-Packed Shipments and Hours Worked and Estimated Season Total and Per Crate Costs of Packing House Labor and Direct Supervision in Plants of 420- and 630-Crate-Per-Hour Capacity, Salinas District, California, 1956 6k LIST OF FIGURES Figure 1 Diagrammatic Layout of Typical "String" of Lettuce Packing Houses . 3 2 Process-Flow Diagram for a Typical Lettuce Packing House . 8 3 Floor Plan for a Typical Lettuce Packing House with Ik Packing Stations 9 k Inside View of a Typical Lettuce Packing House Showing the "Packing Line" 11 5 Crushed Ice Being Blown Into A Refrigerator Car Loaded With House-Packed Head Lettuce 12 6 Relation Between Packout Per Basket and Rate of Output Per Packer Hour in a Sample of Lettuce Packing Houses, Salinas District, California, 1953-54 14 7 Exterior View of Typical Lettuce Packing House 25 8 Lettuce Harvesting Crew and Loader in Operation 31 9 The Effect of Harvest Density on Rate of Travel of Harvest Crews, Salinas District, California, 1953- 5k 34 10 The Effect of Harvest Density and Length of Harvest Strip on Output Per Man-Hour of Standardized Baskets of Lettuce, 100 Cubic Feet in Volume, Salinas District, 1953-54 37 11 Highway Truck Travel Time in Relation to Round-Trip Distance Between Field and Packing House, Salinas District, California, 1953-54 kl r vii Figure Page 12 Total Costs Per Crate of Harvesting, Hauling, and Packing Head Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density, Salinas District, 1953- 5^ 59 13 Distribution of Monthly Carlot Shipments of Ice- Packed lettuce, Salinas District, 1956 62 COSTS AMD EFFICIENCY IN HOUSE PACKING WESTERN HEAD LETTUCE by R. V. Enochian, F. J. Smith, 2/ and L. L. Sammet^/ INTRODUCTION Prior to 1952, methods of harvesting and packing western head lettuce in the Salinas district for interstate shipment were highly standardized. Lettuce was harvested from widely scattered fields, hauled to centrally located packing houses, trimmed, packed in wooden crates between layers of crushed ice, and loaded into refrigerated railroad cars for shipment. In 1952 a significant proportion of lettuce prepared for interstate shipment (20 per cent) was field packed. This was a direct outgrowth of the application of the vacuum-cooling principle to lettuce. This new cooling method eliminated the need for direct icing, made it feasible to use a corrugated paper carton rather than the stand- ard wooden crate, and to pack in the field rather than in a centralized packing house. Since that time, the new method has been rapidly adopted, and in 1956 approximately 92 per cent of the shipments from the Salinas district were field packed and vacuum cooled.— ^ The Problem The shift to field packing leaves the industry with considerable excess capacity in its centralized packing facilities. The extent of this excess for 1/ Enochian, Robert V., Agricultural Economist, Agricultural Marketing Serv- ice7 U. S. Department of Agriculture . 2/ Smith, Frank J., Cooperative Agent, California Agricultural Experiment Station and Agricultural Marketing Service, U. S. Department of Agriculture. 3/ Sammet, L. L., Specialist in the Experiment Station, University of Cali- fornia. ]\/ Harvesting and packing costs for several different methods of field pack- ing have been considered in an earlier report. Smith, Frank J., L. L. Sammet, a:d R. V. Enochian, Costs and Efficiency in Field Packing Western Head Lettuce (Berkeley: University of California, Division of Agricultural Sciences, Agri- cultural Experiment Station, December, 1955), U6p. (Giannini Foundation Mimeo- graphed Report No. 183.) Processed. 2. the Salinas district is indicated by comparison of the 1956 range in monthly- shipments of 62 to 387 cars of ice-packed lettuce with the 1951 range in monthly- shipments of approximately 1,500 to 6,000 cars. For the 1956 season, ice-packed lettuce amounted to only 3»8 per cent of the total shipments. Continuing demand from certain markets for ice-packed lettuce, as x-rell as the need for field cleanup after field-packing crews have finished their har- vest, make it reasonable to assume that a limited amount of lettuce will con- tinue to be ice packed, perhaps with a level of volume similar to that of 1956. This directs attention to the problem of how the reduced volume of ice-packed lettuce can be handled most economically. In the present situation of exist- ing plants with much excess capacity, plant investment costs can be ignored as these are sunk costs — assuming no salvage value — and have no bearing on cost- minimizing adjustments in operations with existing equipment. The problem can be resolved in terms of minimizing only the direct costs of operation. Assum- ing, however, a continuing demand for ice-packed lettuce, the present plants and equipment will eventually wear out and require replacement. The problem of most economical organization when investment costs for replacement of plants and equipment are included then is of interest. This study, therefore, considers both the immediate and long-term aspects of the problem. Specifically, the costs of harvesting and hauling operations with different conditions as to harvest density, length of haul, length of har- vest strip, and size of operation are considered. Similarly, the costs of plant operations and their relation to size of plant are studied and the combined costs of field harvest, hauling, and packing are estimated. Finally, the cost rela- tionships thus developed are considered in relation to the current level of ship- ments in the Salinas-Wat sonville district. The Physical Organization of the Industry In the Salinas district individually operated lettuce packing houses usu- ally are located in groups called "strings." A diagrammatic layout of such a group is shown in Figure 1. Each of these strings has a central ice-making plant and a crate-making facility. Ice and crates are delivered on order to individual packing houses by conveyor systems. In most cases these strings were developed by the ice companies which generally own the land, railroad spurs, ice-making facilities, the packing houses, and some of the equipment in the packing houses. J 1 Figure 1. Diagrammatic Layout of Typical "String" of Lettuce Packing Houses. There are various arrangements for charging a firm using the packing facili- ties in a string. Under some of these arrangements, the tenant of the packing house pays a fixed monthly rental for all the facilities owned by the ice com- pany and, in addition, pays the standard price for ice.i^ In other cases the quantity of ice used by the firm determines the rental that will be charged, while some firms pay no rent except insofar as the rent is included in the standard price of the ice. Under still other arrangements, the packing house and all of the equipment in it are owned by the packing firm, and ice is pur- chased at the standard or a somewhat lower price from the ice company. Trucks and trailers and other harvesting and hauling equipment are either owned by the packing firms or rented from companies that specialize in this service. Trucks used for hauling culls and trimmings away from the packing house are either owned or rented, or the entire cull-hauling operation may be done on a custom basis. Method of Cost Estimation Estimated costs, rather than average accounting costs, of a sample of firms are presented in this report. The bases for these estimates are production standards which are measures of the potential output rate of workers of average skills working under relatively efficient operating conditions. For the most part, production standards for harvesting operations were developed from time and production studies, while standards for the packing house operations were derived from daily accounting records of labor utilization and output.-^ From these standards, details of which are given in later sections, esti- mates of crew and equipment requirements for various levels of output were de- veloped. Appropriate wage rates were applied to the number of workers in each job category to obtain estimates of the direct labor costc per hour. 1/ In 19^3, the price per ton was f?U«00. 2/ Packing house employees were paid on a piece-rate basis, and the maximum output rate per packer hour was determined by management as a quality-control measure. Under these conditions, it was felt that time and production studies would not be as fruitful as they are in the case of field operations where the worker is allowed to find his own level of productivity,, Requirements for equipment and buildings were estimated from engineering studies of space and equipment layouts for packing houses of different capaci- ties. From these estimates, replacement costs were obtained by applying the appropriate prices for equipment, construction materials, and construction labor „ Price and wage data were obtained from equipment manufacturers and building contractors. Annual fixed charges for depreciation, taxes, insurance, interest on investment, and repairs were determined by applying appropriate percentages to the estimated replacement costs. The estimates of direct costs per hour of equipment operation (such as the costs of gasoline, tires, power, water, and repairs) xrere obtained by applying appropriate prices to estimates of physical quantities used per hour. Major Cost Components Three major cost components— harvesting, hauling, and packing plant opera- tions — are considered in this report. For each of these components, costs are further broken down into direct costs related to hours xiorked and volume of output and fixed costs involving expenses that are not dependent on hours worked or related to specific units of packout. The items included in each category are: Direct costs : These include all labor, materials, and supplies used in the packing operations ; operating costs such as fuel, elec- tricity, and vehicle tires j equipment repair expense related to hours of use; and direct supervision. Fixed costs : These include depreciation, interest, taxes, and insurance on the investment in buildings and equipment as well as vehicle license fees and other miscellaneous fixed expense associ- ated with the ice-pack operations. Simplifications in Analysis A great many factors affect the costs of lettuce packing. Since to include all of these specifically would unnecessarily complicate the analysis, certain conditions are assumed. With reference to the organization of activi- ties and allocation of costs within each packing string, for example, it is assumed that each packing firm owns all of the harvesting and hauling equipment, the packing house and loading docks, and all equipment used in the packing, icing, loading, and cull-disposal operations. It is al^o assumed that bClS £5ojt*I' : . ■ ■ 10 iJ I 6. the ice company owns the ice-making facilities, the land on which the packing house is built, parking space for motor vehicles, the railroad spurs, and the conveyor system for delivering block ice to the packing house; the price charged for ice includes the costs of these items. Package materials are esti- mated so as to include the costs of assembly and delivery to the packing house. Another simplification relates to hours of operation. While this varies among different plants and operating seasons and with respect to time within a given season, the general practice in the plants studied was to schedule opera- tions so as not to exceed 8 hours per day and a UO-hour week in the plant opera- tions. This pattern as to hours worked, therefore, is assumed in the analysis. With the exception of a limited amount of overtime work in connection with re- ceiving operations at the packing house, this permits the calculation of labor costs on the basis only of straight-time wage rates. In the plan of analysis, the packing house is recog^zed as the focal point of the ice-packing operations so that when the rate of packing house output is specified this becomes the controlling factor with respect to crew and equipment requirements for both the house and field operations. As a matter of conven- ience, the packing house output rates considered in the analysis are stated in terms of volume packed per eight-hour day. With some storage capacity at the packing house for unpacked lettuce, field and house operations do not need to be perfectly synchronized. The beginning and ending time of the house and field workday do not need to be the same nor do total field and house hours worked per day. Field operations need only to be scheduled to have available a supply of lettuce at the beginning of the house workday and to maintain an adequate level of supply through the day. While not directly linked to hours worked in the packing house, field hours worked per day can conveniently vary only within certain limits. If too few field hours are worked, with harvesting rate exceeding the house-packing rate, difficulty might be experienced in recruiting labor for certain field jobs, and an excessive proportion of time would be spent in mobilizing the field crews for work. On the other hand, an excessively long field workday with the har- vesting rate less than the house-packing rate would require an excessively early start to provide the daily total volume required, or the field day would have to extend beyond the end of the packing house workday with substantial carry-over of unpacked lettuce to the next day. To avoid these difficulties, the field work time in relation to an 8-hour packing house workday is assumed to range from a minimum of 6 to a maximum of °§ hours per day. ■ . • ■ • 1 • 7. An omission in the cost estimates is allowance for miscellaneous packing- house supplies (for example, janitorial and office supplies) and general ex- penses such as dues, donations, and administrative costs. Some of these have been omitted because of difficulty in obtaining adequate estimates. This is particularly true with respect to administrative expense. Relatively little data were available, and separation of administrative expense for packing and shipping operations for lettuce as compared with other commodities in multi- product firms and from crop production activities of grower-shippers was not possible. IJhile these items in total per year per firm amount to a substantial sum, they are quite small on a per-package basis and are of such nature that their omission does not impair the usefulness of the cost relationships devel- oped in this study. The above simplifications and the use of typical production and cost rates at later points in the analysis are consistent with the objective of developing estimates of costs that are representative of efficiently organized operations using harvesting and packing methods and equipment of the types specified. However, the cost estimates may not be appropriate for application to a particu- lar situation in which operating conditions differ from those specified, in which equipment purchases were made in different time periods, or in which dif- ferent rates for wages, depreciation, taxes, insurance, and other costs are ap- plicable. Basic data are presented, however, which would permit adaptation of results to other more specialized situations. The discussion immediately following concerns crew and equipment require- ments and costs of the packing house operations as related to size of plant. This is followed by an analysis of field harvesting and hauling costs and a summary section in which combined costs of field and packing house costs are presented. Finally, the cost relationships developed ar^ considered with re- spect to economical organization of house-packing operations xd.th the current volume level of ice-packed lettuce in the Salinas district, PACKING PLANT OPERATIONS AND COSTS Operations Performed Over-all packing plant operations may be conveniently broken down into a number of suboperations or stages which are connected by in-plant transportation or storage links. Figure 2 is an illustration of such a breakdown. Figure 3 8. INCOMING LETTUCE D Temporary storage Transportation ICE EMPTY BASKETS ODD(; EMPTY CRATE SUPPLY PACKING MATERIALS Figure 2. Process-Flow Diagram for a Typical Lettuce Packing House. Conveyors Packed crates Crushed ice Empty crates O ^-Car spots 45' apart-- T_ ~J y■ — "— ' — - — — — — 'At'is-sa? — - Sl0r ° qe | , Lidded V////////A Packing ^////////////////////////% ^ZA Shed 7\ foreman s j office - — * Baskets Receive and grind ice Crate lining plat- form Full and empty basket storage Doorway Rest rooms Misc. storage '••"*-Empty crate supply Cull pit Cull elevator Cull | hopper 227' Figure 3. Floor Plan for a Typical Lettuce Packing House with llj Packing Stations. 10 0 shows the floor plan for a typical lettuce packing plant in which the areas where specific operations are performed are designated. Operations begin with the receipt of lettuce from the field. The receiver records the quantity in each lot and the field from which it came. A group of workers, the floor help , roll the baskets off the field truck to temporary stor- age and reload the truck with empty baskets. T rimmers , located at packing sta- tions along the packing line (illustrated in Figure k) } are supplied with full baskets from temporary storage by the floormen.^/ To make the lettuce access- ible, each packing station has an independently operated lift for tilting the baskets. Air pressure for the lift is supplied from a central compressor. Trimmers remove outer leaves, divert undersized and soft or damaged heads to a cull sluice in which a constant stream of water is running. Trimmed heads are placed on a ribbed packing table which runs the full length of the packing line. Packers , equipped with two metal packing stands, sort the lettuce by size and place the heads in xjooden crates lined with *ja::ed paper. Each crate contains either 1*8 or 60 heads depending on size. Half crates containing 2k or 30 heads are sometimes packed. A chemically treated pad and a shovelfull of ice are placed between the first two layers. Packed crates are marked with the packer's number and placed on a power conveyor to the padman , who places a chemically treated pad over the top layer. He pushes the crate along a roller conveyor to the top iceman, who places a shovelfull of ice on top of the pad. The paper folder , when used, folds the paper liner over the pack. In small plants, this job is done by the lidder , who then positions the crate in a semiautomatic lid- ding machine. After lidding, a checker records the packer number and lot, and the crates move to the labeler. Labels, lids, and pads are supplied out of storage by a miscellaneous xjorker . After labeling, the crates continue on a power conveyor to a refrigerator car where car loaders stack and brace the crates. Loaded cars are then "blown" with crushed ice by a car top iceman (see Figure 5). 1/ A variation in the receiving and trimmer supply operations, not consid- ered" in this report, involves the use of inclined conveyors (commonly called "drapers") at each packing station. These extend at right angles to the pack- ing line. The section of conveyor at each station is individually controlled. Field trailers with tiltable beds are pulled along right angles to these con- veyors depositing lettuce on them. The lettuce is then conveyed upward to the trimmers, who perform the operations described. Fifs^ire U. Inside View of a Typical Lettuce Packing House Showing the "Packing Line" Figure 5. Crushed Ice Beinp Blown Into A Refrigerator Car Loaded With House- Packed Head Lettuce 15 trimmers to the packers. On the other hand, when much poor-quality lettuce is thrown cut with little time spent on trimming, the rate flow of lettuce to the packers is not necessarily reduced even though packout per basket is less. While the percentage of packout or, conversely, the percentage culls may have an important effect on the rate of output, this effect was not separated from the effects of other factors. The limiting output rate of 30 crates per packer hour used by most packing houses in the Salinas district during the 1953 season is the basic rate used in determining crew and equipment requirements in the following section. Crew and Equipment Requirements and Costs in Relation to Pl ant Capacity Size of Crew in Relation to Plant Capacit y A survey of lettuce packing plants in Salinas revealed that the potential capacity of most of them, determined by the number of crates packed per plant hour, was nearly the same. Since one of the objectives of this study is to determine the relationship between capacity of operation and cost — commonly called determination of economies or diseconomies of scale — crew organizations as well as building and equipment requirements for different plant capacities had to be synthesized from record data and observations of plant operations. The packer is the focal point of the crew organization of lettuce packing p7.ant operations. Union agreement and long industry experience determine the ratio of the number of workers in each job category to the number of packers. Given the rate of packer output per hour (30 crates in this study) and a target rate of output per plant hour, the over-all crew organization is determined by the number of packers required. Plants with capacities of 210, U20, and 630 crates per hour were selected for analysis in this study. The l±20-crate plant was the size typically observed in Salinas. While no plants observed were designed to be operated at 210-crate- per-hour capacity, this size was chosen to see if there were significant dis- economies in small-scale operations. On the basis of the above plant output rates and the rate of packer output of 30 crates, the crew organizations shown in Table 1 were developed. The ratio of some workers—for example, the trir.imers to packers— does not vary with ca- pacity of operation. For other workers— for example, the floormen— the ratio decreases with larger operations. For still other workers — for example, the ■ ! TABLE 1 Crew Organization, Wage Rates, Labor, and Supervision Costs for Lettuce Packing Plant Operations as Related to Capacity in Crates Per Hour, Salinas District, California, 1953-55 Crew organization and extra time per plant hour Wage rate per crate or Total labor and Number Extra Number Extra Number Extra per hour in dollars?/ supervision costs of wor- time, of wor- time, of wor- time, Per Per Per Per | Per Per per plant hour kers hours kers hours kers hours crate hour crate hour i crate hour in dollars Plant size (crates per hour) Item 210 520 630 210 520 630 210 520 630 Crew required Receiver 1 .500 1 .500 1 .500 .07500 1.500 .07500 1.500 .07500 1.500 3.00 3.00 3.00 Floor help 3 .500 5 .875 7 1.250 .O6875 1.375 .06875 1.375 .O6875 1.375 6.88 11.51 16.16 Trimmers 28 56 85 .06625 .06625 .06625 55.65 111.30 166.95 Packers 7 15 21 .08125 .08125 .08125 17.06 35.12 51.19 P adman]?/ . 1 l 1 .06625 .08125 .09875 1.99 2.55 2.96 Crate top icer£' 1 l 2 .07250 .10250 .08500 2.18 3.08 5.10 Paper folder 0 / 1 2 .09875 .08125 2.96 5.88 Lidder . 1 1 1 .01350 .01010 .01010 2.81 5.25 6.36 Checker^/ *i 1 1 .06625 .08125 .09875 1.99 2.55 2.96 Labeler 0 / 1 1 1 .06875 .09875 .13375 2.06 2.96 5.01 Miscellaneous 1 .250 1 .250 2 .250 .06625 1.325 .06625 1.325 .06625 1.325 2.32 2.32 5.31 Carloader 1 2 2 .OI92.O .01920 .01920 5.03 8.06 12.10 Car top icer 1 .250 1 .250 1 .250 .06875 1.375 .08375 1.375 .10125 1.375 2.50 2.85 3.38 Ice crusher]?/ 1 .250 1 .250 2 .250 .07875 1.575 .09375 1.575 .08506 1-575 2.75 3.20 5.59 Crate liner 0 ' 1 2 2 .07500 .07500 .08750 2.25 5.50 5.25 Cull truck driver 1 2 3 1.650 1.650 1.650 1.65 3.30 5.95 Packer bcssj*/ . 1 1 2.500 2.500 2.500 2.50 2.50 Shed foreman^/ 1 1 1 3.125 3.125 3.125 3.12 3.12 3.12 Crew costs per hour 112.15 207.90 305.67 Net Plus 5 per cent 218.30 for payroll taxes 117.75 319.90 Total cost per 1,756.50 eight-hour day 952.00 2,559.20 (Continued on next page.) I I 3J. ■ i ess, rot rc^i.* 1 fc& ?c*i£* ■ • . ■■ . • • . ■ c t> v. r r Table 1 continued. a/ Piece rates for trimmers, packers, lidders, and carloaders are on a straight per-crate basis. Hourly costs for these jobs are obtained by multiplying the appropriate piece rate by the number of crates packed per plant hour Other piece rate job categora.es are paid on the basis of an average packer rate of output per hour (in this study 30 crates) For these jobs hourly costs are computed by multiplying the appropriate piece rate by 30 and then multiplying this product by the number of workers in the particular category. The cost of extra time, obtained by multiplying extra time worked by the hourly rate, is added to the costs of particular job categories where applicable. b/ For each packer over 8, | cent per crate is added to the average packer rate. When there are 2 employees, the \ cent shall be paid for each packer over 16 and divided between the 2 employees. 4 c/ For each packer over 8, | cent per crate is added to the average packer rate. When there are 2 employees, the * cent shall be paid for each packer over 16 and divided between the 2 employees. d/ The packer boss received $100 per week and the foreman $125. The hourly rate is based on a to-hour week. 18, crate lidder or the receiver— the number remains the same regardless of the size of operation. Crew Costs in Relation to Plant Capacity Nearly all workers in the packing houses studied were paid a piece rate based on the packout rate with a minimum hourly guarantee. Crew costs per hour for crews of different sizes x*ere determined by apply- ing appropriate piece rates to the output rates for each worker. These rates and the costs per crew hour for each job category with ti .. ee different crew sizes are given in Table l.i/ Because of the nature of packing house operations, some of the workers in certain job categories report for work earlier or leave later than the remainder of the crew. These include the receiver, some of the floor help, the iceman, the ice blower, and a miscellaneous category. The receiver and floor help gen- erally commence work about two hours before the packing house crew. The ice crusher reports early to receive block ice from the central ice plant and to prepare a supply of crushed ice for the packing crew. A miscellaneous worker reports early to have ready for other workers a supply of pads, lids, labels, paper crate liners, etc., which he keeps supplied throughout the day's opera- tion. The car top iceman leaves later than the remainder of the crew because he must ice the last car of lettuce packed. The extra hours required per day for these jobs with different crew sizes x^ere determined from plant record data. These requirements were converted to man-hours per crew hour for different crew sizes and are given in Table 1, Pay for these extra hours is on an hourly basis. Total labor costs per crew hour for each size plant T^ere obtained by add- ing the costs for each job category, and these hourly totals were extended to an eight-hour day. For 210-, U20-, and 630-crate plants, daily costs are $9l}2, $1,71+6, and $2,559, respectively. Equipment Requirements Equipment requirements for the three sizes of plants are presented in Table 2, The packing line, shown in Figure U, is the focal point of the entire 1/ The wage rates given in Table 1 were taken from the 1953 Packing House Agreement between the Grower-Shipper • s Vegetable Association of Central Cali- fornia and the United Fresh Fruit and Vegetable Workers' Local Industrial Union No, 78 (CIO). ♦mutfsvnw to ©f.ta" o&si aoaiq ftfceq s'sau fcofcifctfa soejBOfi gftiJcAr arid a*>: •«/'£&•.• r Xs rXiosi' ■ i; i -j "(c : .stoo M» ©Ttgw aeais ws*s> dfmaYLL*:. tf.fJbHr stfofc' ^©rtf wx s" • .'r't'i TABLE 2 19. Equipment Requirements, Prices, and Installation Costs for Three Different Capacities of Lettuce Packing Plants, Salinas District, 1954 Number of units required as Delivered related to plant capacity Cost component and equipment Unit of price per Installa- Installed Capacity in crates per hour specification measure unit tion cost price 210 420 63O dollars Trimming and packing Baskets each 121 — 121 100 200 300 Air compressor and receiver: 5 h.p. motor, 80-gallon tank each 625 12 637 - 1 , 10 h.p. motor, 120-gallon tank each 1,429 12 1,441 1 15 h.p. motor, 120-gallon tank each 1,505 12 1 Air hoists and cradles for dumping baskets each 379 18 397 7 14 21 Air feed line and I beam for hanging hoists 100 feet 335 293 620 .7^ 1.48 2.22 Packing table 100 feet 1,213 -1 On loO 1,393 •7^ 1.48 2.22 Packing stand and humps each 16 16 14 28 42 OU-LJ. QlSpOGEU. tJKuuy 11 w ± LfLi n , p . inu uur each 1,242 72 1.31* , 1 1 1 Oill 1 G> "1 Avatar tj -f *- Vi C V| ~r\ tti r\ *- t- viiii cievabur vi tn 7 n .p • mo lot each 2,273 I 450 4,7505/ 1 1 1 Cull hopper, complete each 2,027 J 1 1 1 Pull tmrk each 5,000 5,000 1 2 3 Loaded crate conveyor Head section, with legs, spans 10 feet each 207 2 2 2 Tall section, vlth legs, spans 10 feet each 191 1,7865' 2 2 2 j u « p . i . p . m ■ mu bur each 316 288 2 1 — 5 h.p. 1^5 r.p.m. motor each 387 — 1 2 Sprockets, drive chain, etc* set 35 2 2 2 Center section, complete iw reel 1,180 . 70 1 250 1.70 3.35 5.00 Legs for center section, pair every 10 feet pair 7 •7 1 18 35 41 Roller conveyor, rust proof, 10— foot section each 641 144 ±1 X X 1 X Curve, right angle, 5-foot section each 62 r 1 1 1 Turn off, 1 per car spot each 8 -- 8 4 6 Roller conveyor, 16 -inch on 6 -inch center, 10 -foot section, 1 per 2 car spots each 38 — 38 2 3 ■ "4 '-' Accordion conveyors, 1 per 2 car spots each 121 -- 121 2 3 4 Slide back skids, 1 per 2 car spots each 39 — 39 2 3 4 Tread plate, vooden, 1 per 2 car spots each 10 — 10 4 6 8 Icing Ice crusher, complete with sheaves, belts, and 10 h.p. motor each 1,083 1 1 1 Ice feed screw, 12 Inch each 206 60 2,715^ 1 1 1 Vertical lift, 12 inch with 10 h.p. motor each 1,366 1 1 1 Horizontal icing screw in 9 -inch V-shaped trough 100 feet 991 1.35 2.25 3.15 Caps for end of screw each 25 2 2 2 Brackets to hang trough each 4 3 1 * 56 79 1.5 h.p. motor each 233 2,2182' 1 3 h.p. motor each 316 1 5 h.p. motor each 387 1 Sprockets, drive chain, etc. per motor 35 1 1 1 Icing screw gates (manual) : Packing and top ice stations each 26 8 15 23 Car spots each 31 J 4 6 8 Ice bins, galvanized iron: Packing station, 5 foot each 56 12 68 7 14 21 Top ice station, 10 foot each 100 12 112 X Scoop shovels each 4 4 8 15 23 Ice blower, portable, 20 h.p. complete with tubes, hose, and deflector nozzle each 1,266 1,266 1 X 1 Miscellaneous, other items Lidder each 4,000 4,000 1 1 1 Empty crate conveyor, 14 Inch roller type, on 6 inch centers 100 feet 301 137 438 1.00 1.75 2.50 Clamp trucks each 85 85 2 2 2 Label soaking tank each 85 85 1 1 1 a/ Cull elevator and cull hopper installed as a unit. b/ Bracketed items installed as a complete system. The $1,786 installed price is applicable to 210 crate capacity plants. " For 420 and 630 crate capacity plants, the installed prices are $1,857 and $1,928, respectively, c/ Bracketed items installed as a unit. d/ Bracketed items installed as a unit. Installation charges may be computed on the following basis: I = $10 + 62.5F, " where I Is the Installation charge and F is the number of 100-foot sections of icing screw. The $2,218 represents the installed price of the system for a 210 crate capacity plant. For 420 and 63O crate capacity plants, the installed prices are $3,58l and $4,963, respectively. 20. plant operation, and to a large extent its capacity determines the total amount of equipment required for various levels of output. Most of the equipment uti- lized is designed either to supply packers lettuce or other packing materials, such as crates and ice, or to move the packed crates from the packer to the railroad car. As a matter of convenience, equipment requirements shown in Table 2 are broken down into six categories, namely, trimming and packing, cull disposal, packed crate conveyor, car loading, icing, and miscellaneous. The kind and amount of equipment used in each of these categories were determined by obser- vation made in packing plants, discussion with packing plant managers, and esti- mates by equipment manufacturers. Where particular equipment items differed slightly either in design or operation but with little discernable difference in performance, the lower cost item was chosen. From Table 2 it is clear that some of the items, for example, packing stands, are identical for all sizes of plants and that osrly the amounts vary* Other items are necessarily larger in the larger plants. For example, the capacities of electric motors used in driving conveyors must increase as scale of operation increases because of the greater length of the conveyor involved. Equipment Replacement Costs and Annual Fixed Costs of Equipment When equipment requirements have been determined, replacement costs for equipment may be computed by applying the appropriate prices to each of the items included and multiplying by the number required. Table 2 includes the price of each equipment item delivered in Salinas, the installation cost, and the total installed price. Certain items are installed as part of an integrated system, for example, conveyors, and for them the installed prices are presented for the system rather than for individual components, Estimated equipment replacement costs for the three sizes of packing plants, computed by the above procedures, are presented in Table 3« Also included in the table are the estimated annual fixed costs of equipment which are derived from the replacement costs. Included in fixed costs are allowances for depre- ciation, annual fixed repair, insurance, interest, and taxes. The rates for these charges, as per cents of replacement costs, were determined from infor- mation contained in previous studies of packing plant operation and published estimates of plant equipment use life by the U. S. Treasv y Department. The specific rates used and the sources are included in Table 3. TABLE 3 Replacement Costs and Annual Fixed Costs of Equipment for Lettuce Packing Plants of Three Different Capacities, Salinas District, 195U Replacement costs as related to plant capacity Annual fixed cost as related to plant capacity!!/ Crates per hour Crates per hour Cost component 210 U20 630 210 ^20 630 dollars Trimming and packing 17,236 31,638 51,312 2,620 5,265 7,799 Cull disposal Packing plant equipment 6,06U 6,06U 6,06U 922 922 922 Cull trucks 5,000 10,000 15,000 1,12U 2,2U8 3,376 Loaded crate conveyor U,307 6,560 8,735 655 997 1,328 Carloading U68 702 936 71 107 1U2 Icing 6,819 8,686 10,576 1,036 1,320 1,608 Miscellaneous U,693 5,022 5,351 713 763 813 Total Wi,587 71,672 97,97U 7,lUl 11,622 15,988 a/ The use life for equipment was derived from info mation contained in Samraet, L» L., and I. P, Davis, Buildinr J and Equipment Costs, Apple and Pear Packing (Berkeley: University of California, College of Agriculture, AgriguiWL Experiment Station, December, 1952), p. 19. (Giannini Foundation Mimeographed Report No. lijl.J Processed, Also, U, S. Department of Treasury, Tables of Useful Lives of Depreciable Property (Washington: Gotu 0 Print. Off., 19U8), p. 17. (U. S. Internal Revenue Service Publication 117, Bulletin F.) The annual charges for each cost component, excluding cull trucks, computed as a per cent of replacement cost, are as follows: depreciation, 6.7 per cent; repairs, 3.0 per centj insurance, 1.5 per cent; and _ interest and taxes, U.O per cent. For cull trucks these per cents of replacement costs are as follows: depreciation, 3 2.5 per cent; interest on investment, 3 per centj fixed repair, 3 per centj and tax and license fees were esti- mated to be $531 per year based on information furnished by the State Department of Motor Vehicles. Insurance was estimated to be $68 per year based on information supplied by a mutual automobile company. •c-' -Mia 1 * ■ ■ - ... ' - .. .. i ■ . I ■ 22. Variable Repair and Equipment Operating Costs Table 1; presents estimated variable repair and equipment operating costs per day for the three sizes of packing plants. This category includes the cost of fuel, lubrication, tires, and repair on cull trucks, and the costs of elec- tric power and repairs for plant equipment. The details of operating costs per hour for cull trucks are presented in a footnote to the table. Variable repair costs were estimated as 0.8 per cent of replacement costs per 100 hours' use. The costs of electric power were estimated to be 1.0 cent per kilowatt hour per horsepower hour. Repair costs for packing plant equipment were estimated as being 0,£ per cent of replacement costs per 100 hours' use. These costs were estimated on an hourly basis and then extended to the standard eight-hour day used in this analysis. Costs of Packing Materials and Supplies Unit costs of packing materials and supplies taken from accounting record data on a sample of plants are presented in Table 5. Insofar as could be de- termined, these costs did not vary significantly with size of plant. Materials and supplies costs per day, obtained by multiplying the crates packed per day by unit costs, were £;1,UU8, :)2,096, and &U,3U* for plants with 210-, U20-, and 630-crate-per-hour capacity, respectively. Building Requirements and Costs Estimation of replacement costs for buildings is a txro-stage process in- volving estimation of floor space requirements as it is related to output and the construction costs incurred in meeting these requirements. In Salinas the type of building construction used is relatively uniform. Buildings usually have a concrete floor built to truck -bed height on an earth fill. The sides and roof are corrugated, galvanized iron sheets with a clear height from the floor to the underside of the roof trusses of 12 feet and a short-span roof construction, An exterior view of a packing plant of this type of construction is shown in Figure 7. Space Requirements Floor space requirements for the interior of the packing house and the loading dock are given in Table 6, Also included in the table are the surface area requirements for the cull sluice, cull pit, and ice-crusher pit. TABLE h Variable Equipment Repair and Operating Costs Per Day for Lettuce Packing Plants of Three Different Capacities, Salinas District, 195U Capacity, crates per hour Estimated equipment replacement costs Total installed motor horsepower Estimated variable equipment repair and operating cost Repair Qperating , Total Packing plant | Cull trucks Packing plants/ 1 Cull trucksV Power£/ i Cull trucksif/ 210 U20 630 dollars 73 81 90 dollars 39,587 61,672 82,97U * 5,000 10,000 15,000 l5»83 2h»6l 33.19 3.20 6 o ii0 9.60 5o8U 6 a U8 7.20 5.76 11.52 17.28 30.63 1*9-07 67.27 a/ Variable repair for packing plant equipment is estimated on the basis of 0,5 per cent of replacement cost per 100 hours of use. b/ Variable repair for trucks is et&imated on the basis of 0.8 per cent of replacement cost per 100 hours of use„ c/ Cost of electric power is estimated on the basis of l o 0 cent per kilowatt hour per horsepower hour. d/ Operating costs for cull trucks per hour are as follows: gasoline, U8 cents j oil and grease, 5 cents; tires, 19 cents j and repairs and miscellaneous, U0 cents. - — . . . - ...... - . - 2U. TABLE $ Costs of Materials and Supplies for Packing Lettuce, Salinas District, California, 195k Item Costs per cratejV dollars Crates .5106 Liners (2 per crate) .0719 Pads (3 per crate .0765 Lids .0886 Nails, labels, and paste .0090 Car bracing .0115 Crate ice^ .0600 Water .0030 Total .8621 a/ Average of record data from several firms, b/ Includes chemical treatment, c/ Based on a charge of &U.00 per ton for ice delivered to the pack- ing house which was typical in the Salinas district in 195U. The average amount of ice per crate was estimated at 30 pounds. Crushed ice blown over the crates after they have been loaded in the rail- road car is paid for by the buyer on f.o.b. sales and is not included in this analysis. .irrtx.. TABLE 6 Building Space Requirements for Lettuce Packing House of Three Different Capacities, Salinas District, 195U Plant capacity, crates per hour Floor space Surface area of cull sluice, cull pit, and ice-crusher pit£/ Enclosed areaf/ Loading doclcjV square feet 210 9,210 1,550 1,930 U20 13,620 2,U5o 2,210 630 18,030 3,350 2,H90 a/ Estimated from the following equation: A = 60 (80 + 10. 5P) where A is area in square feet, ~~ P is the number of packing stations, and 60 is the width of the packing house in feet. b/ Estimated from the following equation: A = 10 (20 + U5C) where A is area in square feet, " G is the number of car spots, and 10 is the width of the loading dock in feet. c/ Estimated from the following equation: SA = 1,650 + I4.OP where SA is surface area in square feet and P the number of packing stations. 27. Interior space requirements represent the sum of the requirements for each piece of equipment, the necessary storage space, and allowances for passageways through the plant. Over-all interior space requirements were found to be uniquely related to the number of packing stations. This relationship is expressed in footnote a, Table 6. In addition to the interior space requirements, a roofed loading dock is required for the packing plant. The important factor affecting the space re- quired in this case was found to be the number of "car spots" needed for posi- tioning refrigerator cars along the dock. While there was some variation in the number of car spots utilized by the packing plants observed, it was deter- mined that k> 6, and 8 car spots, each h$ feet long, would be required for pack- ing plants with capacities of 210, U20, and 630 crates per hour, respectively. The relationship between the number of car spots and loading dock space require- ments is shown in footnote b, Table 6. The surface area of concrete required for the cull sluice, cull pit, and ice-crusher pit shown in Table 6 was determined by measurements made in packing plants. These measurements in turn were related to the number of packing sta- tions, and this relationship is shown in footnote c, Table 6. 3uilding Replacement Costs and Annual Fixed Costs for Buildings When total space requirements have been determined, building replacement costs may be estimated. These estimates are presented in Table 7 for the three sizes of packing plants along with estimates of annual fixed costs. The type of construction to which they apply has been described earlier. The prices for materials and wages used in their construction are those which applied in 195U. The relationships between floor space requirements, for both the interior of the plant and the loading dock, and replacement costs are given in the footnotes to Table 7. In addition, an estimate is given in the table for installing the switch gear, wiring electric motors, and installing fluorescent lighting over the pack- ing line. The data on which these estimates were based were supplied by an electrical contractor in Salinas. These estimates were related to total re- quired horsepower and the number of packing stations which is shown in foot- note e, Table 7. Since the life of buildings extends over a number of years, their costs per operating season must be computed on the basis of annual charges which in- clude depreciation, interest on investment, insurance, and repairs. exl.t TABLE 7 Replacement Costs^' and Annual Fixed Costs—' of Buildings for Lettuce Packing Plants of Three Different Capacities, Salinas District, 195U Replacement costs as related to plant capacity Annual fixed cost as related to plant capacity Crates per hour Crates per hour Cost component 210 L;20 630 210 U20 630 dollars c/ Building and loading dock- 38,850 56,990 75,120 U,079 7,888 Cull sluice, cull pit, and ice- crusher pitfy 1,310 i,5oo 1,690 138 158 177 Wiring , Motors and fluorescent lighting-/ 1,590 1, 900 2,200 167 200 231 Total 111, 750 60,390 79,030 U,38U 6,3U2 8,296 a/ Based on 195U prices for building materials and equipment and 195U wage rates for construction labor. b/ The use life for buildings was derived from information contained in Sammet, L. L., and I, F» Davis, Building and Equipment Costs, Apple and Pear Packing (Berkeley: University of California, College of Agriculture, Agri- cultural Experiment Station, December, 1952), p. 19. (Giannini Foundation Mimeographed Report No. lhl.) Proc- essed, Also, U. S. Department of Treasury, Tabl e s of Useful Lives of Depreciable Prope rty (Washington: Govt-, Print, Off., 19U8), p. 17. (U. S. "nternal Revenue Service Publication 117, Bulletin FT) The annual charges for each cost component computed as a per cent of replacement cost are as follows: depreciation, 3.0 per cent; repairs, 2.0 per cent; insurance, 1<,5 per cent; and interest and taxes, U.O per cent. c/ Estimated from the following equation: C = 02,090 + 3.U16A where C is the building cost and A is the total floor space and square feet for the packing house and loading dock. d/ Estimated from the following equation: C * &0.678A where C is the cost of cull sluice, cull pit, and ice-crusher pit; and A is the surface area in square feet of this item. e/ Estimated from the following equation: C = §300 + 20H + 20P where C is the cost of wiring electric motors and fluorescent lighting, II is the total horsepoxjer rating of the motors, and P is the number of packing stations <, I 29. The rate of depreciation is dependent on the expected use life of the building. In this study it was estimated that buildings would last about 33 years with no salvage value at the end of that time. This would lead to a depreciation rate of 3 per cent of replacement costs per year 0 The rates for the other annual charges as per cents of replacement costs were determined from information contained in previous studies of packing plants and published estimates of the U. S. Treasury Department. The rates and sources are included in Table 7. 30. HARVESTING AND HAULING OPERATIONS AND COSTS Operations Performed The harvesting method to which the costs in this section apply is illus- trated in Figure 8 which shows a loader and harvesting crew in operation. Other methods were observed^/ but this one predominated. The crew for each field loader consists of from 12 to 1$ cutters, 2 load arrangers, a crew boss or "pusher," and drivers for the equipment. A field foreman generally over- sees and coordinates the harvesting operations of two loaders. The equipment, aside from the loader, consists of trucks and trailers fitted with baskets for hauling the harvested lettuce to the packing house and a field tractor or "bug" which is used for pulling the trailers through the field while they are being loaded. The loader consists of a mechanized conveyor pivot mounted on a specially constructed truck chassis so that it can be swung to a trailing position during highway travel and extended at right angles to the power unit when in use for harvesting. Conveyor lengths varied on different loaders ranging from 13 to Ik beds coverage. The conveyor length is limited by regulations on equipment that travel on public highways as well as by technical considerations o The rate of travel of the loader through the field is regulated by the driver in accordance with the harvest density-'' — slow at heavy densities and speeding up as the density becomes light. Since there are variations in the harvest density from one end of the field to the other as well as across the beds, the rate of output of the crew depends, in large measure, upon the skill of the loader-driver in adjusting the forward- speed to the harvest density. The cutters walk behind the loader — one in each irrigation furrow. They select and cut the mature heads of lettuce and toss them on the conveyor, Each cutter harvests the two rows adjacent to the furrow in which he is walk- ing. The crew boss or "pusher" specifies the desired firmness and size of the 1/ The most common other method involved use of field trailers drawn through the harvest strip by farm tractors. Six to eight cutters - positioned to the rear and sides of the trailer, cut lettuce from the harvest beds and toss it directly on the trailer, A limited number of studies of this method indicated little difference in the rate of output per man-hour between it and the one described in the text. 2/ Harvest density is an important concept that will be used throughout this report. It refers to the number of baskets of lettuce harvested per 1,000 feet of bed in a given cutting. * ■i ' O i, Figure 8. Lettuce Harvesting Crew and Loader in Operation. 32. heads to be cut and spot checks the harvested lettuce to see that the instruc- tions are being followed. He also walks across the beds behind the cutters and harvests any mature lettuce that has been missed. Cut lettuce is conveyed toward the power unit, elevated over it, and dumped into baskets on a truck or trailer moving parallel to the loader. Truck capacities vary from five to six baskets and trailer capacities from four to five baskets. The baskets are mounted on casters and range in volume from approximately 100 to 120 cubic feet when loaded— roughly equivalent to 7^0 to 900 heads of lettuce. The two load arrangers ride the trucks or trailers as they are being loaded and arrange the lettuce on top of the baskets to assure a full load without spillage en route to the packing house. When the end of a harvest strip is reached, the equipment is turned and moved to the next harvest strip. When a truck or trailer is loaded, it is driven from the loader to the edge of the field, and a waiting truck or trailer takes its place — usually with no interruption to the harvesting operation* En route to the packing house, a loaded truck usually picks up a loaded trailer. Factors Affecting Crew Requirements and Costs Many factors affect crew requirements and costs. A major determinant of the over-all requirements is the scale of operation of the packing plant. Total field crew size, with given levels of productivity, must be large enough to sustain the levels of plant output desired. The productivity of given sizes of harvesting and hauling crews is in turn affected by a number of factors o In harvesting operations output rate with a given crew is affected by management policy with respect to the "quality" of pack, scheduled rest periods for the workers, skills of the crew (particularly certain key members), the num- ber of times the field has been previously cut, the condition of the field, the length of the harvest strips, and the harvest density (previously defined). The productivity of hauling crews is also affected by these factors since all have a bearing on the time required for loading and, in addition, depend on the distance from the field to the packing plant. However, of all the factors bearing on productivity, only a few could be included specifically in the analysis. Harvesting time requirements have been related to harvest density and length of harvest stripj and the number of trucks, trailers, and drivers required has been related to hauling distance and harvest- ing time requirements. Average relationships are presented with respect to the other factors. 33. Crew and Equipment Requirements and Costs in Relation to Output Per Day Production Standards Production standards for labor and equipment in relation to the factors discussed above were developed from time and production studies of the har- vesting and hauling operations. In all, 252 separate field studies were made of 7 different firms representing 15 different crews operating in h3 fields « Each field study represents the observations made of a harvesting crew while working through one harvest strip — one traverse of the fxeld. Observations were made as to the size of the crew, the number of workers in each job cate- gory, the number of trucks and trailers used, the net time required to harvest the strip, the time spent in delays and the reason for the delay, the time spent in turning at the end of each strip, the amount of lettuce harvested, the size of the baskets, the length of the harvest strips, the number of beds cut per strip, the number of times the field had been previously cut, the time of day, the distance from the field to the packing plant, and a log of the time required by the trucks to make a round trip from the field to the packing plant and return o The standards are based on net labor requirements to which have been added allowances for unavoidable delays, personal time, and turning time at the end of the harvest stripe Gross time requirements estimated in this way are then converted to output rates per hour to obtain the production standards* One of the most important factors affecting the rate of output of a crew is the harvest density 9 This relationship is illustrated in Figure 9 which shows net time requirements per 1,000 feet of strip in relation to harvest density — expressed in standardized baskets of approximately 100 cubic feet — observed in each of the 252 field studies. Average net time requirements in relation to harvest density are shown by the sloping line drawn through the points for individual studies plotted in Figure 9.- The field studies indi- cated that, in addition to the net time requirements, an additional 5 per cent should be allowed for unavoidable delays and personal timej and an average turning time of three minutes at the end of each strip should be included. 1/ A regression equation fitted to this relationship gave the following result: T = 11.255 + 30.2li8D where T is the travel time in minutes per 1,000 feet of bed and D is harvest density in baskets per 1,000 feet of bed. %4 100 c E 0) O O o - 50 a. a> E > D 0 1 i i i • i i i i i r — i 1 — I'll • ' 1 " i • Individual harvest strip • • • Average • • • — • ' . • • . • • • * • ^ 1 •• • • * • • ir .:* ... .: • -?•* i 1 1 1 1 1 1 1 1 1 1 1 1.0 2.0 Density - baskets harvested per 1,000 feet of bed Figure 9. The Effect of Harvest Density on Rate of Travel of Harvest Crews, Salinas District, California. 1953-5U. 35. Standard time requirements and output rates per cutter hour— in stand- ardized baskets of 100 cubic feet volume — based on the above data are given in Table 8 for harvest strips of different harvest densities and lengths. Out- put per crew hour for crews of any size may be obtained by multiplying output per man-hour by the number of cutters used. For example, with a crew of 30 cutters (two loading machines with 15 men each) and a harvest density of .ij35 baskets per 1,000 feet of bed, output per crew hour would be 27.57 baskets. The estimates of output per cutter hour given in Table 8 and shown graphically in Figure 10 indicate output rates increase as harvest density in- creases. This rise in output rate becomes smaller, however, as harvest density increases, and little increase is indicated beyond harvest densities of 1.3 baskets per 1,000 feet of bed. Output rates are also shown to increase as length of harvest strip increases. However, the rise in output drops rapidly as length of strip increases, and the fixed turning time at the end of the strip is spread over a large total volume. This effect is relatively small with harvest strips greater than 500 feet long. The crew organizations and costs of harvesting and hauling presented in the sections that f olloxtf will be based on strips 1,000 feet in length which is the average for all on whi^b studies were made. Harvestin g Crow and Equipment Requirements With the data on cutter output rate described above, harvest crew organi- zation can be studie in relation to variations in harvest density and the volume of lettuce required per day at the packing house. Plant and field operating conditions specified earlier, which have particular bearing on field crew organization, include? the 8-hour plant day; the 3 plant sizes of 210-, U20-, and 630- crate -per-hour capacity j and the 6- to 9o-hour limit imposed on field hours per day. With the 8-hour per day plant operation and the selected plant sizes, daily outputs of 1,680, 3,360, and 5>0l;0 crates would result. The average pack- out in crates per standardized field basket for firms coooerating in this study was 8.8. While there was some variation around this average, it was considered representative enough to be used as the basis for estimating the number of bas- kets needed — given the number of crates to be packed. Accordingly, the number of baskets required per day for the three sizes of plants are 191, 382, and 573> respectively. For packouts per basket of less than 8.8 crates, the bas- ket requirements would be correspondingly higher; and the converse is true for higher packouts per basket. TABLE 8 Cutter Time Requirements in Harvesting Head Lettuce Expressed in Man-Hours Per Basket and Production Standards in Baskets Per Man-Hour with Different Levels of Harvest Density and Length of Harvest Strip, Salinas District, 1953-51* Harvest density in baskets per Time requirements in man-hours per basket for strips of varying length^ 1,000 feet of bed 250 feet 500 feet 1,000 feet 1,500 feet 1.101 1.202 1.088 1.052 •Op*! 1.161 1.006 .925 .899 .870 .982 .867 .810 .791 1.087 .877 • 787 .71*1* .729 1.301* . .81*1* .765 .726 .712 Output in baskets per man-hour .1*35 .709 .832 .919 • .951 .652 .861 .991* 1.081 1.113 .870 1.018 1.153 1.231* 1.261* 1.087 1.11*0 1.270 1.31*1* 1.372 1.30k 1.185 1.306 1.378 1.1*01* a/ Time requirements per basket for strips of varying length were estimated by the following equations: 250 feet T = 2.129750 - 1.9851*60D + .766251D 2 500 feet T = 1.770581* - 1.57l*952D + .616 70 3D 2 1,000 feet T = 1.559012 - 1.30i*5llD + .5l0l*27D 2 1,500 feet T = 1.1*93772 - 1.225661D + .l*8o!*l6D 2 where T is time in man-hours, and D is harvest density. 37. Figure 10. The Effect of Harvest Density and Length of Harvest Strip on Output Per Man-Hour of Standardized Baskets of Lettuce, 100 Cubic Feet in Volume, Salinas Dis- trict, 1953-5U. 38. Technical and legal limitations on size of equipment also play a role in the determination of crew organization. Field loading equipment usually- covered from 13 to Ik harvest beds when extended at right angles from the power unit (see Figure 8). Operating difficulties concerning side draft and balance prevent extension much beyond these lengths. In addition, since the conveyor part of the loader swings to the rear for overroad travel, its length must be limited to conform to the California Vehicle Code. These considerations sug- gest, for purposes of this analysis, that the conveyor be assumed to extend over Ik harvest beds. This would permit cutter crew sizes up to 1$ men— 1 man working beyond the end of the conveyor. To get the maximum utilization out of the loader, it should where possible be operated with 15 cutters. However, the lower limit of a 6-hour workday for harvesting cre-ws, discussed earlier, makes it necessary to operate with less than 15 men under certain conditions. On the basis of the production standards shown in Table 8, the number and sizes of crews necessary to attain the specified levels of output within the limits imposed above were designed. These crew organizations are presented in Table 9« Also included in the table are the number of hours worked per day for the various sized crews and levels of harvest density. Loader and tractor drivers were allowed an extra hour per day to account for the time spent in driving to and from the field. The time actually spent in travel would vary with distance, and this allowance represents an average. Cutter crew sizes per loader vary only in the case of those serving the small plants. The number of other workers required per loader is fixed for any level of output. For example, each loader requires one loader driver, one tractor driver, two load arrangers, and one row boss. Insofar as over-all supervision was concerned, it was estimated that one field foreman could handle up to two harvest crews. Assistant supervisors were added as necessary for more than two crews. Truck Driver and Hauling Equipment Requirements The number of truck drivers and truck-trailer units needed to attain the target levels of output specified above depends on several factors. These include the distance from the field to the packing plant, traffic conditions over the route traveled, condition of the field being harvested, harvest den- sity, the length of harvest strip, the number of crews operating, and the size of each crew. TABLE 9 Lettuce Harvesting Crew Organization and Hours Worked Per Day in Relation to Daily Output and Harvest Density, Salinas District, California, 195U Baskets of lettuce re- quired per dayV Harvest density, baskets per 1,000 feet of bed£' Number of loading machines and / «, . c/ drivers— Number of field tractors and / drivers— Number of cutters Number of load arrangers Number of row bosses Number of supervisors and assistants dumber of hours worked by crew per day .U35 2 2 30 h 2 1 7.00 191 .652 2 2 29 k 2 1 6.25 .870 2 2 26 h 2 1 6.00 1.087 2 2 23 h 2 1 6.25 .U35 k i» 60 8 h 2 7.00 382 .652 3 3 U5 6 3 2 8.00 .870 3 3 k$ 6 3 2 7.00 1.087 3 3 U5 6 3 2 6.50 .U35 5 5 75 10 5 3 8.50 573 .652 it U 60 8 k 2 9.00 .870 h It 60 8 k 2 7.75 1.087 h k 60 8 h 2 7.25 a/ Based on plant output rates of 1,680, 3,360, and 5,01*0 crates per day and a packout of 8.8 crates per ~" standardized field baskets. b/ At the average packout of 8.8 crates per basket, these harvest densities are equal to 50, 75, 100, ~" 125 crates per acre. c/ The loader and tractor drivers are allowed an additional hour per day to drive to and from the fie ~* being harvested. trusts 8£G sjjttisq fjousj pctx. be-.. gstf. pc gijae fo ;A« ho. One of the most important of these factors is distance from field to plant. A log of departure and arrival times of trucks taken at the field was used to estimate the round-trip time requirements at varying distances. This relation- ship is illustrated in Figure 11 »3/ Average travel time per round trip can be estimated from this chart. This includes an average 23 minutes per trip re- quired for the truck and trailer to be unloaded and reloaded with empty baskets plus normal delays at the plant and en route. In addition, approximately seven minutes were required for a truck to be driven from the loader to the edge of the field, coupled to a loaded trailer and, on returning to the field, uncoupled from the empty trailer and driven to the loader. Total time per round trip, therefore, would average slightly over 30 minutes spent in necessary prepara- tion and in terminal operations and delay plus about If minutes for each mile traveled. This means that, for example, when harvest crews were operating at a distance of 10 miles from the plant (20 miles round-trip distance), approxi- mately 60 minutes would be required from the time a loaded truck drives away from the loader to the time it could be in a position to load again. A second factor affecting hauling requirements is the size and produc- tivity of the harvesting crews. This determines the time required for actu- ally loading the truck-trailer unit with lettuce. As was indicated earlier, the productivity of the crew, given the length of harvest strip, is prin- cipally affected by the harvest density. Thus, for example, with a crew of 15 cutters, a harvest strip of 1,000 feet in length, and a harvest density of .625 baskets per 1,000 feet, crew output per hour would be approximately 16 baskets. This would mean that approximately hO minutes would be required to load a truck-trailer unit (11 baskets). This time plus a travel time of 60 minutes, assuming a round-trip distance of 20 miles, would give a total time requirement of 100 minutes per truck-trailer unit for each round trip. On the basis of this total time requirement, the average number of baskets hauled per hour per truck-trailer unit — the production standard — would be 6.6. Thus, with a crew output of 16 baskets per hour, 3 truck-trailer units would be required. This is obtained by dividing the hourly output rate (16 baskets) by the production standard (6.6 baskets) and rounding to the nearest whole number. 1/ A regression analysis of this relationship resulted in the following equation: T = 23.315 + l.li88R where T is round-trip time in minutes, and R is round-trip distance. An additional seven minutes must be allowed for necessary preparation and delay at the field to obtain total operating time. 100 1 1 1 | 1 | 1 | : 80 — : • ^ — 60 • 1 40 • • 20 m \ m • • • Observed trip time — Average 0 1- 1 1 1 1 1 1 0 10 20 30 40 50 Round trip distance - miles Figure 11. Highway Truck Travel Time in Rela- tion to Round-Trip Distance Between Field and Packing House, Salinas District, California, 1953-51*. ■ k2. In a similar manner the estimated truck and driver requirements for vary- ing distances, harvest density, and crew size presented in Table 10 were devel- oped. The exact computational procedure is summarized in an equation given in a footnote to the table. This equation is applicable to round- trip distances from field to plant of up to b.0 miles and to the range of crew organizations and harvest densities observed in the Salinas district. As was indicated ear- lier, it would apply only to harvest strips 1,000 feet in length. It assumes that all crews are operating in the same field. Where operations are widely separated, separate estimates xfould be required for each individual operation. Harvesting and Hauling Labor and Supervision Costs Per Day Total daily harvesting and hauling labor and supervision costs are pre- sented in Table 11 for varying conditions in regard to output per day, harvest density, and distance from field to plant. These costs were obtained by multi- plying the total number of man-hours worked per day in each job category derived from Tables 9 and 10 by the appropriate wage rate shown in the footnotes to Table 11. Costs of each category were added to obtain total labor costs. Wage rates for equipment operators and foremen are based on straight time up to eight hours per day and time and one half for all hours over eight. Wage rates for the other job categories are based on straight time for all hours. In the field operations studies, the cutters and load arrangers were Mexi- can Nationals who lived in labor camps. In the cost calculations, their wages were inflated by 11 per cent to cover camp costs borne by the employer M The wages of other workers xrare inflated by £ per cent to cover the employer's con- tribution to workmen's compensation, social security, and unemployment insurance funds. The typical salary for field foremen was $12$ per week and that of assist- ants was $100. These men usually performed other functions when not supervising harvesting crews, but in this analysis their salaries were assumed to be allo- cated entirely to field harvest work on the basis of a U0-hour week. This is equivalent to $3.13 and $2.^0 per hour, respectively. 1/ The 11-per cent allowance is based on estimates supplied by employers. TABLE 10 Number of Truck-Trailer Units and Drivers Required for Harvesting and Hauling Lettuce in Relation to Distance Traveled, Harvest Density, and Output Per Day- Salinas District, California, 1953-5U Distance, field to pacKxng nouse anu return in miles Harvest density J_Ii UdoAt; uO Pel . 1,000 feet of bed 3 ./ Number of truck-trailers and drivers required*?/ Baskets harvested per day 191 382 573 .135 3 5 5 $ .652 3 it 5 .870 3 5 6 1.087 3 5 6 .U35 ll 6 8 20 .652 h 6 7 .870 k 6 8 1.087 h 7 9 .U35 5 9 11 m .652 6 8 10 .870 6 9 11 1.087 6 10 12 a/ At the average packout per basket of 8.8 crates, these harvest densities are equal to 50, 75» 100, and 125 crates per acre. b/ Add one trailer to each of the requirements shown to provide a minimum "overlap" in case of truck delay. Truck-trailer requirements are computed by the following equation: N . 1 + (1.U88R + 30.315 )C 660 [1.559012 - 1.30U511D + .510U27D 2 ] where N is the number of truck-trailer units required rounded to the next highest whole number, R is the round-trip distance traveled, C is the number of cutters, and D is harvest density in baskets per 1,000 feet. - TABLE 11 a/ Total Daily Lettuce Harvesting and Hauling Labor Costs— 7 with Varying Daily Outputs, Harvest Densities, and Round-Trip Distances from Field to Plant Salinas District, California, 1953-5U Output, baskets pel t ~- ( -s/ T J «-\ mwft fill" riarvesT/ density, baskets per 1,000 feet Labor and supervision costs Total Field harvest Hauling Truck drivers Round- trip distance, miles Round-trip distance, miles Cutters Load ar- rangers Row boss Loader driver s^/ Tractor driver siy Super- visors 5 20 Uo 5 20 Uo Hollars .U35 20U 27 16 28 28 23 37 U9 62 363 375 388 1 Q/l .652 176 2U lU 26 26 20 33 UU 66 319 330 352 .870 152 23 111 25 25 20 32 U2 63 291 301 322 1.087 11+0 2U lU 26 26 20 33 UU 66 283 29U 316 .U35 Uo8 5U 32 56 56 Ul 62 7U 111 709 721 758 .652 35o U7 27 50 50 U7 56 8U 113 627 655 68U 382 .870 306 Ul 2U U2 U2 Ul 62 7U 111 558 570 607 1.087 28U 38 22 Uo Uo 38 57 80 nU 519 5U2 576 .U35 619 83 U8 90 90 73 77 123 169 1,080 1,126 1,172 .652 52U 70 Ul 77 77 53 8U 117 167 926 959 1,009 573 .870 U52 60 35 6h 6U U6 82 109 150 803 830 871 1.087 U22 56 i 33 59 59 U3 77 115 153 7U9 787 1 825 a/ Wage rates per hour on which these costs are based are as follows: cutters and load arrangers — $0,875; row boss — ~~ $1,075; supervisors — 03.13; assistant supervisors — $2.50; and equipment and truck drivers — $1.65. Wage rates of cutters and load arrangers were inflated by 11 per cent to take care of camp costs. Rates for other workers were inflated by 5 per cent to cover the employer's contribution to workmen's compensation, social security, and un- employment insurance. b/ Loader and tractor drivers are allowed an additional hour of wages per day for travel time to and from the packing "" plant regardless of distance. This would tend to overestimate their wage costs slightly for short distances from field to plant and underestimate them for longer distances. *5. Equipment Costs In addition to the costs of equipment drivers, there are other operating costs for equipment which include gasoline, oil, grease, tires, maintenance, and variable repairs as well as fixed costs which include depreciation, taxes, licenses, interest on investment, insurance, and fixed repairs. Operating Costs Per Day . — Costs of gasoline, oil, grease, and tires for each equipment item are given on an hourly basis in Table 12. They are based on data published in a report of the California Public Utilities Commission M Variable repair and maintenance costs also included in the table were estimated to be 0.8 per cent of replacement costs per 100 hours of use. Equipment operat- ing costs per day shown in Table 13 were obtained by applying these hourly rates to each of the equipment items shown in Tables 2 and 3 and multiplying by the number of hours used per day. Annual Fixed Costs of Equipment . --Annual fixed costs of equipment presented in Table ll; are derived from equipment replacement costs shown in Table 12. Fixed costs include allowances for depreciation, interest on investment, taxes, licenses, insurance, and fixed repairs. Depreciation rates are based on an eight-year use life of equipment with no allowance for salvage value. Tax and license fees were estimated from information provided by the California Depart- ment of Motor Vehicles. Insurance rates were supplied by a mutual automobile company and are representative of charges by truck insurers. Interest on in- vestment was estimated at $ per cent of the undepreciated balance of the invest- 2/ ment which is equivalent to about 3 per cent of replacement costs per year.-' 1/ Malquist, G. L., and Fred P. Hughes, California Public Utilities Commis - sion Report on Cost of Transporting Fresh Fruits and Vegetables by Hotor Vehicle Equipment Within California, Excluding Movements to Canneries and Processing Plants I Los Angeles; June 19, 19b?-)* (.Case No. ItbOO.J 2/ This estimate is based on the use life of similar equipment used in Cali- fornia apple and pear packing houses. See Sammet, L. L,, and I. F. Davis, Build - ing and Equipment Costs, Apple and Pear Packing (Berkeley: University of Cali- fornia, College of Agriculture, Agricultural Experiment Station, December, 1°52), p. 19. (Giannini Foundation Mimeographed Report No. Tljl ») Processed. (The fifth report in a series on Efficiency in Fruit Marketing.) 1 h6. TABLE 12 Replacement Costs, Annual Fixed Charges, and Operating Costs Per Hour for Each Equipment Item Used in Harvesting and Hauling Lettuce Salinas District, California, 1953-5U Item Loader, wide tread 2-ton truck, wide tread Field bug, wide tread Trailer, wide tread dollars Replacement cost 8,500 7,600 6,000 2,500 Fixed annual charges Depreciation!*/ . Tax and license?/ Insurance Interest on investment^/ Fixed repair^/ Total 1,063 161 80 255 255 i,BiU 950 153 75 228 228 1,63k 750 121 68 180 180 1,299 313 la 25 75 75 F29 Operating cqsts per hour*;/ Gasoline*/ Oil and grease£/ Tire si' . Repairs and miscellaneous^/ Total .U8 .10 .08 .68 T3E •U8 .05 .19 .61 1.33 ,U8 .05 .08 .U8 1.09 .Oii .20 T2i a/ Estimated on the basis of eight-year use life and no salvage value. b/ Derived from rates supplied by State of California Department of Motor Vehicles. c/ Approximately 5 per cent on undepreciated balance of investment (3 per cent of cost). d/ Estimated as 3 per cent of replacement cost, e/ Excluding operator's wages. f/ Derived from data in Malquist, G. L», and Fred P. Hughes, California Public Utilities Commission Report on Cost of Transporting Fresh Fruits and Vege - tables by Motor Vehicle Equipment Within California, Excluding Movements to Canneries and Processing; Plants (Los Angeles: June 19, 1952). (Case No, U808 • ) g/ Estimated as 0 9 8 per cent of replacement cost per 100 hours of use. .' t TABLE 13 Total Daily Lettuce Harvesting and Hauling Equipment Operating Costs with Varying Daily Outputs, Harvest Density, and Round-Trip Distances from Field to Plant Salinas District, California, 1953-54 Output, baskets per day Harvest density, baskets per 1,000 feet of bed Loaders Tractors Equipment item Trucks Round-trip distance, miles 5 I 20 I hO Trailers Round- trip distance, miles 5 T 20 I ko Total Round-trip distance, miles 20 I 4o 191 382 573 .^35 .652 .870 1.087 .435 .652 .870 1.087 .^35 .652 .870 1.087 dollars 21 17 28 37 47 7 19 16 25 33 50 6 19 15 2k 32 48 6 19 16 25 33 50 6 43 35 kl 56 84 10 36 29 k3 64 85 10 32 26 47 56 84 10 30 25 ^3 61 86 9 64 52 57 90 124 12 54 kk 60 84 120 13 hi 38 62 82 113 13 kk 36 58 87 116 12 8 8 7 8 12 13 12 12 18 17 17 17 10 73 83 95 10 66 76 95 10 64 73 92 10 66 76 95 17 135 146 179 17 118 142 167 17 115 126 159 17 107 128 158 24 185 224 264 24 171 199 242 22 160 184 220 23 150 184 219 TABLE 1U Annual Fixed Costs of Lettuce Harvesting Equipment with Varying Daily Outputs, Harvest Densities, and Round-Trip Distances from Field to Plant Salinas District, California, 1953-51* Harvest density, Equipment item Output, baskets baskets Trucks Trailers Total per 1,000 feet of Loaders Tractors Round-trip distance, miles Round- trip distance, miles Round-trip distance, miles per day bed 5 20 1*0 5 20 1*0 5 20 JiO dollars 191 .652 .870 1.087 3,628 3,628 3,628 3,628 2,598 2,598 2,598 2,598 U,902 I*, 902 U,902 1*,902 6,536 6,536 6,536 6,536 8,170 9,80l* 9,80l* 9,801* 2,116 2,116 2,116 2,116 2,615 2,61*5 2,61*5 2,61*5 3,171 3,703 3,703 3,703 13,21*1* 13,210* 13,21*1* 13,2UU 1 15,1*07 15,1*07 15,1*07 15,1*07 17,570 19,733 19,733 19,733 382 .1*35 .652 .870 1.087 7,256 5,14*2 5,1*1*2 5,1*1*2 5,196 3,897 3,897 3,897 8,170 6,536 8,170 8,170 9,8ol* 9,801* 9,801* 11,1*38 11*, 706 13,072 1U,706 16,3U0 3,171* 2,61*5 3,171* 3,171* 3,703 3,703 3,703 1*,232 5,290 U,76l 5,290 5,819 23,796 13,520 20,683 20,683 2$ t 9S9 22, 81*6 22,8U6 25,009 32,1*1*8 27,172 29,335 31,1*98 573 .1*35 .652 .870 1.087 9,070 7,256 7,256 7,256 6,1*95 5,196 5,196 5,196 8,170 8,170 9,80U 9,80U 13,072 11,1*38 13,072 lit, 706 17,971* 16,3U0 17,97U 19,608 3,171* 3,17U 3,703 3,703 l*,76l it, 232 U,76l 5,290 6,31*8 5,819 6,3U8 6,877 26,909 23,796 2$ t 9$9 2$,9S9 33,39Q 28,122 30,285 32,1*1*8 39,887 31*, 611 36,771* 38,937 i *9. COMBINED PACKING HOUSE AND HARVEST ING -HAULING COSTS Total Variable Costs Per Day Table 15 presents total variable packing plant and field harvesting-hauling costs per day in relation to plant output per day, round-trip distance from field to plant, and harvest density. These costs were derived from those presented in earlier sections. It is clear from the table that, for any given output per day and distance from field to plant, variations in variable costs arise largely from variations in harvest density. With, for example, an output per day of 1,680 crates and a round-trip distance of 5 miles, total variable costs decrease from 02,857 to 02,770 ($87) as harvest density increases from .U35 to 1.087 baskets per 1,000 feet of bed. On the other hand, as round- trip distance from field to plant increases, variable costs increase. For example, with an output of 3,360 crates per day and a harvest density of .1|35 baskets per 1,000 feet of bed, costs increase from s 05,535 to 05,628 (093) as round-trip distance increases from 5 to k0 miles. Further, while variable costs increase with increases in daily output, they do so in less than direct proportion. For example— with a round-trip dis- tance of 5 miles, a harvest density of .135 baskets per 1,000 feet of bed, and outputs of 1,680, 3,360, and 5,0UO crates per day— variable costs are $2,857, 05,535, and 08,235, respectively. As compared with the small plant, costs in the medium-sized one are approximately 1.9U times as great (with an output twice as large) and in the large plant 2.88 times as great (xri.th an output three times as large). This less than proportional increase in variable costs is the result of a more efficient utilization of labor and other variable inputs as scale of operation increases. As will be seen in a later section, this has important ef- fects on average cost per unit of output. Annual Fixed Costs Table 16 shows the annual fixed costs of harvesting-hauling and plant opera- tions in relation to output per day, round-trip distance from field to plant, and harvest density. The dominant factors affecting these costs are apparently dis- tance from field to plant and plant output per day. The effects of harvest density are somewhat less pronounced than they were in the case of daily vari- able costs. For example, with a plant output of 1,680 crates per day and TABLE 15 50. Total Variable Lettuce Harvesting- Hauling and Packing Plant Costs Per Day as Related to Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density Salinas District, California, 1954 Output, crates Round- trip distance, Harvest density, baskets per Labor Equipment Packing materials Total per day per , dayl' field to plant 1,000 feet of bed}*/ Harvest - hauling Plant Harvest - hauling Plant and supplies miles dollars 5 .435 .652 .870 I.087 363 319 291 283 942 73 66 64 66 31 1,448 2,857 2,806 2,776 2,770 1,680 20 .435 .652 .870 1.087 375 330 301 294 942 83 76 73 76 31 1,448 2,879 2,827 2,795 2,791 40 .435 .652 .870 I.087 388 352 322 316 942 95 95 92 95 31 1,448 2,904 2,868 2,835 2,832 5 .435 .652 .870 I.087 709 627 558 519 1,746 135 118 115 107 49 2,896 5,535 5,436 5,364 5,317 3,360 20 .435 .652 .870 I.087 721 655 570 s42 1,746 146 142 126 128 49 2,896 5,558 5,488 5,387 5,361 40 .435 .652 .870 I.087 758 684 607 576 1,746 179 167 159 158 49 2,896 5,628 5,542 5,457 5,425 5 .435 .652 .870 1*087 1,080 926 803 749 2,559 185 171 160 150 67 4,344 8,235 8,067 7,933 7,869 | 5,040 20 .435 .652 .870 1.087 1,126 959 830 787 2,559 224 199 184 184 67 4,344 8,320 8,128 7,984 7,941 40 .435 .652 .870 1.087 1,172 1,009 871 825 2,559 264 242 220 219 67 4,344 8,406 8,221 8,061 8,014 (Continued on next page.) ■id fit -rri '-f-. ■: ■ >ll«Fc'.XC Bo — i 51. Table 15 continued. a/ Output in crates packed per day is determined by multiplying respective plant capacity rates of output per hour of 210, k20, and 630 crates by 8, the length of packing plant workday assumed in this analysis. Daily out- put rates of 1,680, 3,360, and 5,0^0 crates are the equivalent of 191, 382, and 573 baskets, respectively, where the packout per basket is 8.8 crates. Each crate contains approximately 70 pounds of lettuce. b/ At an average packout of 8.8 crates per basket, harvest densities of .^35, ~ .652, .870, and I.087 baskets per 1,000 feet of bed are equivalent to 50, 75, 100, and 125 crates per acre, respectively. ill TABLE 16 Annual Fixed Costs of Harvesting-Hau ling and Packing Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density Salinas District, California, 195*+ UU opuk , crates packed per day£/ Round -trip distance, field to plant Hai've st density, baskets per 1,000 feet of bed*y Harvest- hauling Plant Total dollars 5 .1+35 .652 .870 1.087 13,2l+l+ 13,21+1+ 13,21+1+ 13,21+1+ 7,11+1 20,385 20,385 20,385 20,385 1,680 20 .1+35 .652 .870 1.087 15,*+07 15,1+07 15,1+07 15,to7 7,11+1 22,51+8 22,5*+S 22, 5I+8 22,51+8 1+0 .1+35 .652 .870 I.087 17, 570 19,733 19,733 19,733 7,1^1 2l+,711 26,874 26,871+ 26,874 5 .1+35 .652 .870 1.087 23,795 18, 520 20,633 20,683 11,622 35,*+l8 30,11+2 32,305 32,305 3,360 20 .1+35 .652 .870 1.087 25,959 22,81+6 22,81+6 25,009 11,622 37, 581 3l+,l+68 3l+,l+68 36,631 1+0 .1+35 .652 .870 1.087 32,1+1+3 37,172 29,335 31,1+98 11,622 1+1+,070 1+8, 79*+ 1+0,957 1+3,120 5 .1+35 .652 .870 1.087 26,909 23,796 25,959 25,959 15,988 1+2,897 39,781+ 41,947 4l,9i+7 5,0U0 20 .1+35 .652 .870 1.087 33,398 28,122 30,285 32,1+1+8 15,988 1+9,386 l+l+,110 46,273 1+8,1+36 1+0 .1+35 .652 .870 1.087 39,837 3i+,6ll 36,774 38,937 15,988 55,875 50,599 52,762 54,925 (Continued on next page.) ovs. 53. Table 16 continued. a/ Output in crates packed per day is determined by multiplying respective ~ plant capacity rates of output per hour of 210, 1*20, and 6^0 crates by 8, the length of packing plant workday assumed in this analysis. Daily output rates of 1,680, 3,560, and 5,0U0 crates are the equivalent of 191, 382, and 573 baskets, respectively, where the packout per basket is 8.8 crates. Each crate contains approximately 70 pounds of lettuce. b/ At an average packout of 8.8 crates per basket, harvest densities of .652, .870, and I.087 baskets per 1,000 feet of bed are equivalent to 50, 75, 100, and 125 crates per acre, respectively. a round-trip distance of 5 miles, fixed costs are the same for all levels of harvest density. On the other hand, with the same output per day--but with dis- tance increasing from 5 to Uo miles--annual fixed costs increase from $20,585 to $24,711 ($4,526). Similarly, with a round-trip distance of 5 miles and a harvest density of .455 baskets per 1,000 feet of bed, costs with outputs of 1,680, 3,560, and 5,01*0 crates per day are $20,385, $55,4l8, and $42,897- As in the case of variable costs, these costs increase in less than direct propor- tion to output. For example, fixed costs in the medium-sized plant as compared with the small plant at the above -specified distance and harvest density are approximately 1.74 times as great (with output twice as large) and in the large plant 2.10 times as great (with output three times as large). Total Season Costs and Total Costs Per Packed Crate Total costs per season for the harvesting-hauling and packing plant op- erations are estimated as the annual fixed costs given in Table 16, plus total variable costs per season obtained by multiplying variable costs per day given in Table 15 by l6o— the length of season selected for the Salinas district. To- tal season costs estimated in this way are given in Table 17. In the smallest plant--none of which were actually observed in operation- -total estimated sea- son costs are almost $500,000 when all costs are considered and in the medium- sized plant—the most common in Salinas --nearly $1,000,000. Total costs per packed crate are computed by dividing total season costs (Table 17) by total season volume. » These costs are given in relation to op- erating conditions and daily output^ in plants of three different capacity rates in Table 18 and shown in Figure 12. The table shows that plant costs vary only with size of plant; harvesting and hauling costs, however, are af- fected not only by this factor but also by harvest density and distance from field to plant. For example, with a daily output of 5,560 crates and a round- trip distance of 20 miles, harvesting and hauling costs decrease from 50.6 cents to 24.6 cents per crate (6 cents) as harvest density varies from .1+55 to I.O87 baskets per 1,000 feet of bed, and plant costs remain constant at $1.4l8 1/ For plants with daily outputs of 1,680 , 5,560, and 5,040 crates, total season outputs would be 268,800, 557,600, and 806,400 crates, respectively. 2/ Daily output is determined by multiplying the capacity rate of output per~hour by the eight-hour workday. 55. TABLE 17 Total Season Cost of Harvesting-Hauling and Packing Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density Salinas District, California, 1954 Output, crates packed per dayg/ 1,680 5,560 Round- trip distance, field to plant miles 20 4o 20 4o 20 4o Harvest density, baskets per 1,000 feet of bedV .455 .652 .870 I.087 .455 .652 .870 I.087 .455 .652 .870 I.087 .455 .652 .870 1.087 .455 .652 .870 1.087 .435 .652 .870 1.087 .455 .652 .870 1.087 .455 .652 .870 1.087 .455 .652 .870 1.087 Harvesting and hauling costs Vari- able Fixed Total Plant costs Vari- able Fixed Total Total season costs 69.8 61.6 56.8 55.8 75-5 65.O 59-8 59-2 77.3 71.5 66.2 65.8 135.0 119.2 107.7 100.2 138.7 127.5 111.4 107.2 149-9 156.2 122.6 117.4 202. k 175.5 154.1 143.8 216.0 185.3 3.62.2 155.4 229.8 200.2 174.6 167.0 13.2 13.2 13-2 13.2 15.4 15.4 15.4 15.4 17.6 19.7 19-7 19.7 23.8 18.5 20.7 20.7 26.0 22.8 22.8 25.0 52.4 37.2 29.3 31.5 26.9 23.8 26.0 26.0 33.4 28.1 30.3 32.4 39.9 34.6 36.8 38.9 1,000 dollars 83.O 74.8 70.0 69.O 88.7 80.4 75-2 74.6 94.9 91.2 85.9 85.5 158.8 137.7 128.4 120.9 164.7 150.3 134.2 132.2 182.3 173.4 151.9 148.9 229.3 199.3 180.1 169.8 249.4 213.4 192.5 187.8 269.7 234.8 211.4 205-9 387.4 387.4 387.4 387.4 387.4 387.4 387.4 387.4 387.4 387.4 387.4 387.4 750.6 750.6 750.6 750.6 750.0 750.6 750.6 750.6 750.6 750.6 750.6 750.6 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 1,115.2 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 7.1 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 11.6 16.0 16.0 16.0 394.5 394.5 394.5 394.5 394.5 394.5 394.5 394.5 394.5 394.5 394.5 394.5 762.2 762.2 762.2 762.2 762.2 762.2 762.2 762.2 762.2 762.2 762.2 762.2 1,131.2 1,131.2 1,131.2 16.0 1,131.2 16.0 16.0 16.0 16.0 16.0 16.0 16.O 16.0 1,131.2 1,151.2 1,131.2 1,131.2 1,131.2 1,131.2 1,131.2 1,131.2 477.5 469-3 464.5 465.5 485.2 474.9 469-7 469.1 489.4 435.7 480.4 480.0 921.0 899.9 890.6 885.I 926,9 912.5 896.4 894.4 944.5 955.6 914.1 911.1 1,560.5 1,550.5 1,511-5 1,501.0 1,580.6 1,544.6 1,525.7 1,519.0 1,400.9 1,366.0 1,342.6 i,557.i; (Continued on next page.) 1 t xp.y« 56. Table 17 continued. a/ Output in crates packed per day is determined by multiplying respective plant capacity rates of output per hour of 210, k20, and 6j0 crates by 3, the length of packing plant workday assumed in this analysis. Daily output rates of 1,680, 3,360, and 5,0to crates are the equivalent of 191 ; 532, and 573 baskets, respectively, where the packout per basket is 8.8 crates. Each crate contains approximately 70 pounds of lettuce. b/ At an average packout of 8.8 crates per basket, harvest densities of .*+35> .652, .870, and I.O87 baskets per 1,000 feet of bed are equivalent to 50, 75> 100, and 125 crates per acre, respectively. jMHSEp TABLE 18 57. Total Costs Per Crate of Harvesting-Hauling and Packing Head Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density Salinas District, California, 1954 Output , crates packed Round- trip distance, Harvest densitv. baskets per 1,000 Harvesting and hauling costs Plant costs per day&/ field to plant feet of bed?./ Vari- able Fixed Total Vari- able Fixed Total Total miles dollars 5 .^35 , .652 I .870 I.087 .260 .229 .211 .208 .0^9 .0U9 .01+9 .01+9 .309 .278 .260 .257 1.1+1+1 1.1+1+1 1.1*1 1.1+1+1 .027 .027 .027 .027 1.1+68 1.1+68 1.1+68 1.1*68 1.777 L.746 1.728 1.725 1,680 20 f .^35 .652 | .870 , I.O87 .273 .2*42 .223 .220 .057 .057 .057 .057 • 330 • 299 .280 .277 1.1+1+1 l.l+l+l 1.1+1+1 1.1+1+1 .027 .027 .027 .027 1.1+68 1.1*68 1.1*68 1.1*68 1.798 1.767 l.Tl+8 1.7^5 1*0 ' .^35 , .652 .870 , 1.087 .288 .266 .246 ,2k5 .065 .073 .073 .073 .353 .339 .319 .318 1.1+1+1 1.1+1+1 l.k-'l 1.1+1+1 .027 .027 .027 .027 1.1*68 1.1+68 1.1+68 1.1*68 1.821 1.807 1.787 1.786 5 f .435 J .652 1 .870 1 1.087 .251 .222 .200 .186 .01+1+ .03 l + .038 .038 .295 .256 .238 .221+ 1.396 1.396 1.396 1.396 .022 .022 .022 .022 1.1+18 1.1+18 1.1+18 1.1*18 1.713 1.674 I.656 1.642 3,360 < 20 f .435 .652 .870 . 1.087 .258 .237 .207 .199 .01+8 .01+2 .01+2 .01+7 .306 .279 .21+9 .21+6 1.396 1.396 1.396 1.396 .022 .022 .022 .022 1.1*18 1.1*18 1.1+18 1.1+18 1.721+ 1.697 1.667 1.661+ 1*0 h J .652 1 870 1 1.087 .279 .253 .228 .218 .060 .069 .055 .059 •339 .322 .283 .277 1.396 1.396 1.396 1.396 .022 .022 .022 .022 1.1*18 1.1+18 I.1+18 1.1+18 1.757 1.740 1.701 1.695 t 5 ' ^35 d .652 1 .870 i nft7 . i. .UO ( .251 .218 .191 .178 .033 .030 .032 .032 .281+ .21+8 .223 .210 1.383 1.383 1.383 1.383 .020 .020 .020 .020 1.1*03 1.1*03 I.1+03 1.1+03 1.687 I.651 I.626 1.613 5,040 < 20 .435 I .652 .870 „ 1.087 .268 .230 .201 .193 .Cl+1 .035 .038 .01+0 .309 .265 .239 .233 1.383 1.383 1.383 1.383 .020 .020 .020 .020 1.1*03 1.1+03 1.1+03 1.1*03 1.712 1.668 1.642 I.636 1 4o , .652 .870 . I.087 .285 .248 .216 .207 .01+9 .01+3 .01+6 .01+8 • 33^ .291 .262 .255 1.383 1.383 1.383 1.383 .020 .020 .020 .020 I.1+03 1.1*03 1.1*03 1.1*03 1.737 1.694 1.665 1.658 (continued on next page.) * 1 l_- 58. Table 18 continued. a/ Output in crates packed per day is determined by multiplying respective plant capacity rates of output per hour of 210, ^20, and 63O crates by 8, the length of packing plant workday assumed in this analysis. Daily output rates of 1,680, 5,360, and 5,0k0 crates are the equivalent of 191, 382, and 573 baskets, respectively, where the packout per basket is 8.8 crates. Each crate contains approximately 70 pounds of lettuce. b/ At an average packout of 8.8 crates per basket, harvest densities of .^35, .652, .870, and I.O87 baskets per 1,000 feet of bed are equivalent to 50, 75> 100, and 125 crates per acre, respectively. ■ 59- < cc o cc ui CL H V) o o < i- o 1.80 1.75 1.70 1.65 1.60 1 — 1 1 1 1 1 ROUND TRIP DISTANCE ■ 1 1 1 1 5 MILES — HARVEST ^ DENSITY * .435 .652 — --C^ .870 1 1 1 1 1 1 1 1 1.087 _ III! 1.0 2.0 3.0 4.0 50 6.0 £ (.8 0 cc o IT UI 0. H en o o < i- o 1.75 f- 1.70 1.65 1.60 0 ROUND TRIP DISTANCE - 20 MILES HARVEST DENSITY .435 1.0 20 3.0 4.0 5.0 6.0 ui 180 cc o 1.75 DC UI °- 1.70 l- cn o 165 < o l-«0 1 1 > 1 ! 1 ' v^ROUND TRIP DISTANCE 1 1 1 1 - 40 MILES HARVEST DENSITY — .435 ~~ *"*"-*■ .652 ~ ^ = =^—— _ 870 1.087 - h 1 1 1 1 1 1 1 1.0 2.0 3.0 4.0 5.0 OUTPUT PER DAY - 1000 CRATES 6.0 Figure 12. Total Costs Per Crate of Harvesting, Hauling, and Packing Head Lettuce as Related to Plant Output Per Day, Round-Trip Distance from Field to Plant, and Harvest Density, Salinas Dis- trict, 1953-5U. 6o. per crate. Total costs per crate decrease from $1,742 to $1,661*. on a season basis this difference amounts to $32,500. It is clear from Figure 11 that the rate of this decrease is smaller at high than at lov harvest densities. For example, as harvest density increases from .1*35 to .652 baskets per 1,000 feet, costs decrease about 2.5 cents per crate as compared to only about .5 cent per crate with the same increment in harvest density in the range of .870 to 1.037 baskets per 1,000 feet. Conversely, with an output of 3,360 crates per day and a given level of harvest density— for example, .652 baskets per 1,000 feet- harvesting and hauling costs increase from 25.6 to 32.2 cents (6.6 cents), as round-trip distance increases from 5 to 1*0 miles; plant costs remain at $1,418; and total costs per crate increase from $1,671* to $1.7^. This would mean that, if one firm continuously carried on its field operations at a distance from the plant of 2| miles while another operated at a 20-mile distance, the difference in harvesting and packing costs per season between the two firms would be $35,600. As size of plant increases, both harvesting and hauling and plant costs decrease. For example, with a round-trip distance of 5 miles and a harvest density of .870 baskets per 1,000 feet of bed, harvesting and hauling costs de- crease from 26.0 cents to 23-9 cents (2.1 cents) and plant costs decrease from $1.1*86 to $1.1*18 (5 cents) as daily output increases from 1,680 to 3,360 crates; total costs per crate decrease from $1,728 to $1,657 (7-1 cents). As daily output increases from 3,360 to 5,0l*0 crates, harvesting and hauling costs per crate decrease from 23.9 cents to 22.3 cents (1.6 cents) and plant costs from $1.1*18 to $l.lK)3 (1.5 cents). Total costs per crate decrease from $1,657 to $1,626 (3.1 cents). These comparisons indicate that a large portion of the savings possible with large-scale operation is achieved in the medium-sized plant— the most common in the Salinas district— and the curves in Figure 11 show that nearly all such savings would be accomplished in plants of the largest size considered (63O -crate -per-hour capacity) . IMPLICATION OF RESULTS TO THE PRESENT SITUATION IN THE SALINAS DISTRICT The preceding analysis illustrates the economies possible with the opera tion of large-scale lettuce packing plants. Since 1952, however, the demand for ice -packed lettuce has rapidly diminished. In 1956, for example, only • - ; : ; : • ■ . if, - ."- ' ■ ■ i :.vir.' ci do 0 ttM&O 61. 1,528 cars— as compared to over 30,000 cars in 1952— were ice packed in the Salinas district. This declining volume raises questions as to the practica- bility of large-scale operation. Even prior to the shift away from ice pack- ing, the variation in seasonal distribution of lettuce shipments had contributed to considerable excess packing plant capacity in the industry, and the present low total season volume has greatly increased this excess capacity. The dis- tribution of these ice-packed shipments from the Salinas district in 19S>6 is shown in Figure 13. The heaviest volume occurred in the months April through July reaching a maximum of 387 cars in May and decreasing thereafter. A major problem in the existing situation is how to organize existing and surplus facilities most economically. Some guides are available from the pre- ceding cost analysis, although several adjustments in the final results are appropriate. The preceding analysis would be of interest to those individuals planning the construction of new or the modification of old facilities. In this case it is necessary to consider both variable and fixed costs. Since the immediate problem in the Salinas district is not the construction of new plants but rather the optimum utilization of existing packing facilities, an analysis of alternative packing plant operations can ignore the effect of fixed costs, and the problem can be considered in terms of variable costs only. The analysis can be further simplified by considering only packing plant labor and supervi- sion costs since the other variable costs would differ only slightly from those presented earlier. For example, material and supply costs would be expected, under present conditions, to be slightly higher than those shown previously because of the smaller scale on which they are produced. This would tend to shift costs upward by the amount of the increase, but it would not affect the relative costs of alternative types of organization. Similarly, field harvest- ing and hauling costs would probably approximate those shown earlier in regard to small-scale operation since the fields from which lettuce is harvested for ice packing would be too widely scattered to warrant large-scale field opera- tions. Inclusion of these costs would merely tend to complicate the analysis of alternative methods of packing plant operations while adding little to the conclusions drawn. The analysis that follows focuses on a comparison of plant labor and super- vision costs assuming the entire Salinas district output of ice-packed lettuce is processed in a single plant of either 1420-crate-per-hour capacity or in one of 630-crate-per-hour capacity. Table 19 contains a summary of the distribution of shipments of ice-packed lettuce by months from the Salinas district in 1956 £0. QQfljftr. qs/.tv 62. 400 — {2 z Ul a. 300 to < 200 i H Z O 2 100 APRIL MAY JUNE JULY AUGUST SEPTEMBER Figure 13. Distribution of Monthly Carlot Shipments of Ice-Packed Lettuce, Salinas District, 1956. 63. TABLE 19 Monthly Distribution of Ice-Packed Shipments and Hours Worked and Estimated Season Total and Per Crate Costs of Packing House Labor and Direct Supervision in Plants of 1+20- and 630-Crate-Per-Hour Capacity Salinas District, California, 1956 Monthly and total season hours Monthly and U20-crate-per-houi- plant 630-crate-per-hour plant Item crates packed Regular time Over- time Regular time Over- time Month April 97,920 176 £7 123. 81iO 18U in 181+ 13 June 88,000 160 50 ll+O July 71,360 170 113 August 1+8,000 lilt 76 September 1*0.000 95 6U October 19,81+0 U7 31 Season total 1+88,960 9h6 218 763 13 Total season packing house labor and direct supervision costsfy $277,5lU $250,1+00 Packing house labor and direct supervision costs per crate $0,568 $0,512 a/ Total season plant labor costs were computed by multiplying total labor costs per hour (shown in Table 1 for the two sizes of plants) by the number of hours worked. Costs for overtime hours were computed at 1§ times the rate for regu- lar time hours. 6U. (previously shown in Figure 13) as well as an estimate of regular time and over- time hours of plant operation per month for the two sizes of plants. Total sea- son packing labor and supervision costs, shown in the table for the two plants, were computed by multiplying total labor costs per hour (given in Table l) by the total number of hours worked during the season e Costs of overtime hours were computed at 1^ times the rate of regular time hours. Costs per crate were obtained by dividing total season costs by the total season volume shown in the table* Table 19 indicates that the entire season's output could have been proc- essed in 1,16U hours of operation in the U20-crate-capacity plant or, alter- natively, in 776 hours in the 630-crate-capacity plant. These hours are based on the assumption that each plant works at its capacity hourly rate of output. In neither plant could the peak daily volume be packed in eight hours so some overtime would be required. In the smaller plant, 218 hours of overtime per season would be required as compared to only 13 overtime hours in the larger plant. The cost difference per crate between the U20- and 630-crate plants, shown in Table 19, is approximately 6 cents. This difference arises largely from the greater number of overtime hours worked in the smaller plant. In addition, labor costs per crate in the 630-crate plant are lower than those in the It- erate plant due to a more complete utilization of the labor force. As was indicated previously, the above cost differences are based on the assumption that the two sizes of plants are operated at their respective capacity hourly rates of output throughout the season, With this assumption, variations in daily output would be met by varying the number of hours worked . But varying the number of hours worked creates certain problems with respect to the labor force. For example, in Table 19 it is clear that, after the peak of the season, the total number of plant hours worked per month continuously declines. This would mean that fewer hours would be worked per month (or day) per worker as the season progressed. This decline is especially pronounced in the case of the plant of 630-crate-per-hour capacity. It would seem reasonable to suppose that workers would resist excessive decline in hours worked because of its ef- fect on their incomes. As a practical matter, therefore, it would probably be impossible to operate at the capacity rate of output for the entire season. An alternative to this would be to operate at or near the 630-crate-per- hour capacity during the peak of the season but at lower rates of output per hour as season volume decreases. This reduction in rate of output per hour 65. would be brought about by reducing the number of workers employed. Under these conditions the average number of hours worked by those still employed could re- main relatively constant. Labor costs per crate with the above method of operation would be somewhat higher than that shown for the 630-crate plant in Table 19 because the work time of certain members of the crew-f or example, the lidder-would not be as com- pletely utilized with the reduced hourly volume. Nevertheless, this method of operation would still yield lower labor and supervision costs per crate than if a similar method were used in a U20-crate-capacity plant. There would be no change in the number of overtime hours worked in either plant (shown in Table 19), and the reduced volume per hour as the season progressed would affect the costs in the smaller plant in exactly the same way as it does in the larger plant. Operation of more than a single packing plant under present conditions in Salinas seems unwarranted. With several plants operating, the daily volume processed through a particular plant could be quite irregular. Recruiting labor under such conditions would be difficult. In addition, because of the low total season district volume, season volume per plant would be lower than those pre- viously discussed. Low volume per plant would undoubted?/ be associated with low rates of plant output per hour. Under these conditions labor and supervi- sion costs would be considerably higher than for the plant sizes discussed in Table 19. The consolidation of ice-packing operations of a number of producers into a single plant raises a number of administrative problems. Questions of label- ing, coordination of field and plant operations, and decisions as to whose let- tuce and how much of it to pack in a given day require considerable administra- tive skill. The costs of these added administrative responsibilities would have to be weighed against the possible savings with a consolidated operation.