Avocado Market - Excel by mme12188

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									1/16/2012                         AVOCADO PRODUCTION COSTS RETURNS                                                    Page 1.


  This program calculates the cash costs and financial return to resources on a per tree, per acre
  and per farm basis. The final result is a financial RETURN TO LAND used in Kona avocado production.
  If the actual land charge were subtracted from this return to land, the result would be "economic profit."
  All results are dependent upon specific assumptions and data entered by the user into the bordered cell .
  Results are only as accurate as the data provided by the grower(s). Mention of any specific product or
  practice should not be misconstrued to imply University of Hawaii endorsement of such product or practice.
  IF YOU HAVE PROBLEMS OR SUGGESTIONS CONTACT DR. KENT FLEMING, 808-922-9136, OR YOUR LOCAL EXTEN

ASSUMPTIONS:         1. Is analysis BEFORE or AFTER mktg.?BEFORE                               4. PAYMENT PERIOD: Enter "0" if cas
                     2. Total tree count=      500 trees                                       months if "terms" =>
                     3. Acres of avocado trees =   10 acres

GROSS INCOME:                                 Number                PER TREE:
                     % of production:          of trees:            Ave.yield: Units @              $/unit:
1 Grade 1                86% of crop                430                 110 lbs. #1                 $0.40
2 Off-grade              14% of crop                 70                 110 lbs. other              $0.10

     TOTAL =             100%                      500 trees         Weighted average =             $0.36 /lb.

OPERATING or VARIABLE COSTS:                                        PER TREE
                                                                    Quantity Units       @              $/ unit:
A.Fertilizer:
   1 Super Coffee +                                                      3.2 lbs./tree/year         $0.19 /lb.
   2 Other fertilizer in mixture                                         0.0 lbs./tree/year         $0.00 /lb.
   3 Labor @                   4 appli/yr @       0.25     min./appli. 1.00 min./tree/yr.           $9.00 /hour
   4 Fuel: mach. & equip. operation                                  (Enter total for farm/year)
                                                                    Fertilizing total =
B.Weed control:        Rate:                               Per farm:
   1 Round-up @            2 oz./gal.                 5    gal/appli 0.020 oz./tree/appli.         $17.00     /qt.
   2 Sticker               8 oz./qt. herbicide                        0.005 oz./tree/appli.        $10.00     /qt.
   3 Spray. labor          6 appli/yr @              12    hrs/appli. 8.64 min./tree/yr.            $9.00     /hour
   4 Mowing labor          1 mowing(s)               18    hrs/mow. 2.16 min./tree/yr.              $9.00     /hour
   5 Fuel: mach. & equip. operation                                  (Enter total for farm/year)
   6 Sheep expenses                                                  (Enter total for farm/year)
                                                                    Weed control total =
C.Other pest (e.g., rodent) control:
   1 Rat bait                 5 lbs./treatment =                        0.16 oz./tree/appli.     $1.85 /lb.
   2 Labor @                  0 treatmts@            30 min./acre      0.00 min./tree/yr.        $9.00 /hour
   3 Fuel: mach. & equip. operation                                  (Enter total for farm/year)
                                                                    Pest control total =
D.Pruning:
    1 Labor @               0 major pruning/yr. @ 16 hrs/ac. 0.00 min./tree/yr.              $9.00 /hour
    2 Labor @                0 minor prunings/yr. @ 4 hrs/ac. 0.00 min./tree/yr.             $9.00 /hour
    3 Fuel: mach. & equip. operation                            (Enter total for farm/year)
                                                              Pruning total =
E.Irrigation:
    1 Cost of water @                10.0 gallon(s)/tree/year                       $1.25 /1000 gals.
    2 Operation & maintainace of system                         (Enter total for farm/year)
                                                              Irrigation total =
                                                              PER TREE
                                                              Quantity Units               @       $
                                                                                                   /unit:
F.Harvesting:
1/16/2012                        AVOCADO PRODUCTION COSTS RETURNS                                     Page 2.


   1   Labor, picking @ 100 lbs./hour         110 lbs/tree/yr 66.0 min./tree/yr.        $9.00 /hour
   2   Labor, overhead 0.0%                                     0.0 min./tree/yr.       $9.00 /hour
   3   Boxes @              40 lbs./box &       15 uses/box 0.063 boxes                 $5.00 /box
   4   Other harvesting expense                        (Enter total for farm/year)
                                                            Harvesting total =
G.Marketing:
   1 Hauling (fuel $)@      15 boxes/truck load =            0.183 trips/tree         $5.00 /trip
   2 Labor, loading & driving                                    45 minutes/load      $9.00 /hour
   3 Commision @                              0.0%    of    $39.38 gross income/tree =
   4 Excise tax @                             0.5%    of    $39.38 gross income/tree =
   5 Other marketing expense                           (Enter total for farm/year)
                                                           Marketing total =
H.Operations overhead:
   1 Management (as %)                       5.0%     of    $39.38 gross income/tree =
   2 Office overhead (as %)                  1.0%     of    $39.38 gross income/tree
   3 Operating interest @ ave %             10.0%     of     $1.89 operating costs/tree
   4 Terms: opportunity cost                10.0%     of    $39.38 gross income/tree
   5 Other operations overhead                         (Enter total for farm/year)
                                                           Operations overhead total =

TOTAL OPERATING or VARIABLE COSTS OF PRODUCTION =

  GROSS MARGIN                (Gross income minus variable costs) =

OWNERSHIP or FIXED COSTS:              Year of analysis =                       1993
                       Historic            Yr ofExpected
Investment item:              cost:       Invst:    Life:                      Term: Interest:
1 Land prep.              $10,000          1970       10                           0 10.0%
2 Irrigation               $3,000          1970       10                           0 10.0%
3 Initial planting         $7,500          1971       10                           0 10.0%
4 Truck                   $10,000          1990         5                          2 10.0%
5 Other machinery          $2,000          1980         7                          0 10.0%
6 Equipment                $2,500          1985         7                          0 10.0%
7 Buildings                $5,000          1970       20                           0 10.0%
8 Other investment              $0                                                 0 10.0%
TOTAL ANNUAL OWNERSHIP or FIXED COSTS OF PRODUCTION =

  TOTAL ANNUAL COSTS (except land) =

RETURN TO THE LAND RESOURCE used in Kona avocado production =
                        (Actual
VALUE OF THE LAND RESOURCE land charge: rent, mortgage interest, op. cost + property taxes)
ECONOMIC PROFIT (Returns after ALL cash & opportunity costs) =

LABOR ANALYSIS: / tree:      Per acre: Per farm:      BREAK-EVEN ANALYSIS:
Hours of labor          1.43       72       717       To cover op. & total costs, gross margin & econ.profit must be >=$0
Value of labor       $12.91   $645.38 $6,454          Given the current yield (lbs/tree)=  110 , ave. price must be
                     $
Value of labor & mgmt. 14.88  $743.83 $7,438          Given the current wt. ave. price= $0.36 , ave. yield must be
                     $20.86 $1,093.87 $10,939
Return to labor & mgmt.
           1/16/2012                      AVOCADO PRODUCTION COSTS RETURNS   Page 3.


                             DATE:  16-Jan-12
 do production.
onomic profit."
e bordered cell .        Farm name:    Typical
 ic product or
 roduct or practice.
922-9136, OR YOUR LOCAL EXTENSION AGENT.

PAYMENT PERIOD: Enter "0" if cash, or the number of
                   0 months.


             ANNUAL GROSS INCOME:
                 $/tree:     $/acre:         $/farm: % gross:
                $37.84   $1,892.00          $18,920    96.1%
                 $1.54      $77.00             $770      3.9%

                 $39.38      $1,969.00      $19,690   100.0%

                ANNUAL OPERATING COSTS:
                  $/tree:   $/acre:     $/farm: % gross:

                  0.608          30.40          304     1.5%
                  0.000           0.00            0     0.0%
                  0.150           7.50           75     0.4%
                  0.000           0.00            0     0.0%
                 $0.758         $37.90         $379     1.9%

                  0.064           3.19           32     0.2%
                  0.009           0.47            5     0.0%
                  1.296          64.80          648     3.3%
                  0.324          16.20          162     0.8%
                  0.200          10.00          100     0.5%
                  0.000           0.00            0     0.0%
                 $1.893         $94.66         $947     4.8%

                  0.000           0.00            0     0.0%
                  0.000           0.00            0     0.0%
                  0.000           0.00            0     0.0%
                 $0.000          $0.00           $0     0.0%

                  0.000           0.00            0     0.0%
                  0.000           0.00            0     0.0%
                  0.000           0.00            0     0.0%
                 $0.000          $0.00           $0     0.0%

                  0.013        0.63        6      0.0%
                  1.000      50.00       500      2.5%
                 $1.013     $50.63      $506      2.6%
                 ANNUAL OPERATING COSTS
                  $/tree:    $/acre:  $/farm: % gross:
           1/16/2012                       AVOCADO PRODUCTION COSTS RETURNS   Page 4.


                  9.900         495.00         4,950     25.1%
                  0.000           0.00             0      0.0%
                  0.315          15.77           158      0.8%
                  0.000           0.00             0      0.0%
                $10.215        $510.77        $5,108     25.9%

                  0.917          45.83           458      2.3%
                  1.238          61.88           619      3.1%
                  0.000           0.00             0      0.0%
                  0.197           9.85            98      0.5%
                  0.000           0.00             0      0.0%
                 $2.351        $117.55        $1,176      6.0%

                  1.969          98.45           985      5.0%
                  0.394          19.69           197      1.0%
                  0.189           9.47            95      0.5%
                  0.000           0.00             0      0.0%
                  0.000           0.00             0      0.0%
                 $2.552        $127.61        $1,276      6.5%

                 $18.78        $888.48        $8,885     45.1%

                 $20.60      $1,080.52      $10,805      54.9%


             ANNUAL OWNERSHIP COSTS:
                 $/tree:   $/acre:   $/farm: % gross:
                 $0.00     $0.00          0      0.0%
                 $0.00     $0.00          0      0.0%
                 $0.00     $0.00          0      0.0%
                 $4.61   $230.48      2,305    11.7%
                 $0.00     $0.00          0      0.0%
                 $0.00     $0.00          0      0.0%
                 $0.00     $0.00          0      0.0%
                 $0.00     $0.00          0      0.0%
                 $4.61   $230.48     $2,305    11.7%

                 $23.39      $1,118.96      $11,190      56.8%

                 $15.99           $850        $8,500     43.2%
                 $10.00        $500.00        $5,000     25.4%
                  $5.99        $350.04        $3,500     17.8%

                            Point at which:
                            Gross
argin & econ.profit must be >=$0 marg=$0 Econ.profit=$0
       , ave. price must be          $0.17     $0.30 per lb.
       , ave. yield must be             52        93 lbs/tree/yr
                    or               2,482     4,522 lbs./ac/yr.

								
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