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PREFACE
For several years major food processors have been contracting with
South Alabama vegetable growers for the production of several vegetables
for processing. Alabama vegetables are presently shipped to points in
several surrounding states for freezing. At this time, however, there
is no commercial freezing of fresh vegetables in Alabama.
Auburn University personnel involved in the preparation of this
report wish to emphasize the lack of any relation to facilities or busi-
ness organizations now existing. The report was prepared at the specific
request of the State Planning and Industrial Development Board and local
leaders in the study area. It was made possible by the existence of a
current research project in the area of economic development of food
processing in Alabama. The report examines the feasibility of establish-
ing a vegetable freezing industry in extreme southwest Alabama. With
minor adjustments, however, it is believed that the results of this study
would be equally applicable anywhere in the State of Alabama.
The authors express particular appreciation to M. R. sscock,
Specialist in Fruits and Vegetable Marketing, Alabama Cooperative Exten-
tion Service, for data relative to vegetable production patterns and
producer attitudes in the area as well as other assistance throughout
the course of the study. Appreciation is also expressed to members of
the Southern Regional Marketing Committee, SM-30, for making available
some of the research results reported in this study. The assistance of
other Auburn University and U.S. Department of Agriculture 
personnel,
representatives of the food processing industry, 
and L. B. Dixon of the
State Planning and Industrial Development Board 
is likewise appreciated.
TABLE O F CONTENTS
General Trends in Resource Use.. ...
General Trends in Consumption...
General' Trends'in Food Marketing .......
Competition in Producing Frozen Vegetables....
Competitive Position of Plants in the South
Raw Material Supply. . . .
Cost of Production for Producing Vegetables for
Processing Costs and Returns...... 
....
Variability in Planning Costs .. ....... .
Advantages and Disadvantages Relative to Labor and
Transportation Costs.. .......... .. .
Summary.. .. ................. .. ..
App1end ix Tab le ...... ...................
List of References 0 ......... 0......
Processing.
e e " e " o "
6
9
11
17
18
30
37
63
64
66
72
73
e s " " " " o
PLANNING DEVELOPMENT OF VEGETABLE FREEZING
IN SOUTHWEST ALABAMA-
B. R. Miller and W. F. Woods**%
Planning for market development is by definition a study of possible 
change
in the flow of resources to meet new or existing consumer demands through
an economically efficient marketing channel. Completely new investment 
is
representative of a change in the flow of resources and it is 
thought that
the pay-off to induce new investment must in general be higher than average
business returns because of additional risks in an unproven venture. 
A
principal objective of this study was to show how the annual rate of return
on rislk capital is related to the several variables that affect feasibility
of freezing southern peas, greens, speckled butterbeans, and snap beans in
the Baldwin County area. General trends in resource use, marketing, and
consumer demand now indicate a demand for this and other feasibility
studies.
*This study was based on research work carried out 
under Hatch Re-
search Project Ala-600. It was supported by Hatch and State research
funds.
*'*%Respectively Assistant Professor in the Agricultural 
Economics and
Rural Sociology Department, Alabama Agricultural Experiment 
Station, and
Specialist in Public Affairs, Cooperative Extension Service, 
Auburn Univer-
sity.
General Trends In Resource Use
Development of resources in rural areas of Alabama is characterized
in the sixties, as in the previous decade, by a decline in number of farms
and an increase in size of farms. There were twenty per cent fewer farms
in the Southeast in 1964 than in 1959, but commercial farms with more than
5,000 dollars gross sales increased in number. Farms in 
the Southeast
with more than 20,000 dollars gross sales almost doubled in number. In
Baldwin County, farms with more than 20,000 dollars gross sales increased
from 159 to 258 or about 61 per cent. Twenty thousand dollars in sales
seemed to be a significant volume as farms with less than this amount of
sales decreased in number. Number of acres and dollars of sales are not
perfectly correlated, but total farms in Baldwin County with less than
260 acres have also decreased in number while the number of farms with
larger acreages has grown. Thus, farmers in Baldwin County with at least
20,000 dollars of gross sales and over 260 acres of land appear to have
more possibilities of surviving under present conditions. There were 299
farms in Baldwin county with more than 260 acres at the time of the last
census. There were 1,000 commercial farms of all sizes in the county in
1964 and about 1,000 part-time and part-retirement farms which were non-
commercial. Total cropland harvested on all farms was 135,015 acres.
Cropland harvested in the county increased by 14,000 acres above the
1959 total and this contributed in part to an almost doubling in value of
crops sold in 19614 as compared to 1959. Value increased from 6,991,000
dollars to 12,730,000. Value of vegetables sold increased in about the
same proportion from 357,000 dolltars to 705,000 dolltars. All segments of
the livestock industry of the
I
county were down slightly with the exception
of dairy products. General changes in Baldwin county were not dissimilar
to general changes occurring in the rest of the state, but were greater in
magnitude (13).
Increased acreages of potatoes, soybeans, and wheat contributed most
to increased field crops sales in the county. Acreage of potatoes increased
from 9,000 to 11,286 acres and production increased from 1,049,000 to
1,541,000 hundredweight. Soybean acreage was increased from 73,954 acres
to 89,839 acres and wheat acreage was up from 7,381 acres to 22,928. Rates
of adjustment in cropland use are, perhaps, significant for planning vege-
table production in the county as a shift in land use of less than the
shift of 14,000 acres that has occurred would provide more than an adequate
base for a food processing plant as this base was developed in a latter
part of the report.
Growers in Baldwin County have shown an ability to shift land into
vegetable production. Green beans acreage has increased from 22 acres in
1959, to 825 acres in 1964, and to 4,500 acres in 1967. Southern peas
have also been planted in larger acreages. Production of southern peas
was 2,000 acres in 1967 compared to only 83 acres in 1964. Acreage planted
per grower has also been significant as both southern pea acreage and
green bean acreages have averaged over 60 acres per grower, Appendix Table
Gross returns to 70 growers of green beans were approximately 360,000
dollars in 1967 and gross returns to 30 growers of southern peas were ap-
proximately 216,000 dollars. Ability of these and other growers of the
area to produce profitably for processing will be a key factor in the de-
cision to build a processing plant in the area. Budget material is, there-
fore, developed later in the report that analyzes the profitability of
selected vegetables.
General Trends in Consumption
Consumption of frozen vegetables has been increasing steadily. Es-
timated per capita consumption of all frozen vegetables, excluding pota-
toes, was 29 per cent greater in 1966 than the 1957-59 average. The actual
increase was from 6.6 pounds to 8.5 pounds per person. Increased consump-
tion of frozen potatoes has been even more rapid. One and six-tenths
pounds per person were consumed in 1957-59 and 6.6 pounds in 1966 repre-
senting an increase of 312 per cent over the 1957-59 average (8). Frozen
french fries have been the major item in this expansion, and as suchhave
been of little benefit to the South where all of the potato pack has been
in small whole potatoes or in mixed vegetables. Estimated pack of small
whole potatoes in a recent year was estimated at 3.5 million pounds in
three southern plants 
(17).
Increased demand for frozen food can perhaps be understood better in
relation to changes that are tal ing place for other foods. Several com-
parisons are given in Table 1 where substantial increases are noted for
frozen vegetables, beef, chicken, turkey, cheese, and edible fats. By
contrast, fresh and canned vegetable consumption have been rather stable,
although significant in amount, about 94 per cent of the vegetable market
in 1966.
Part of the change in consumption of processed and fresh vegetables
is partly a result of a change in relative prices. The retail food price
index indicates that since 1956 the index of fresh fruit and vegetable
prices has tended to rise faster than the price index for processed fruit
and vegetables. Although there are seasonal highs and lows, processed
Table 1. Comparative Increases in Civilian Per Capita
Consumption of Selected Foods, U.S.
Average 1966 as per
Item 1957-1959 1966 cent of 57-59
Pounds Pounds Per cent
1957-59=100
Meats
Beef 82.1 100.3 122
Pork 63.0 57.6 91
Chicken 27.5 35.6 
129
Dairy Products
Cheese 7.9 9.6 122
Fluid milk and cream 335 300 90
Fats and oils
Butter 8.2 5.9 72
Margarine 8.9 10.6 119
Other edible fats & oils 10.8 14.1 131
Vegetables
Fresh 104.3 100.6 96
Canned.a/ 43.0 44.3 103
Frozena/ 6.6 8.5 129
Frozen potatoes 1.6 6.6 412
Sweet potatoes (fresh equiv.) 8.3 7.3 88
a/Excludes potatoes and sweet potatoes.
Source: National Food Situation, ERS, USDA, August, 1966.
items are on the average about ten per cent higher in price now than in
1957-59. Fresh items by contrast have been as much as 41 per cent
higher in price than in 1957-59. In 1965, the average increase in the
fresh index was 2.1 per cent for the year. As prices in fresh markets
continue to climb relative to processed market prices, consumption of pro-
cessed vegetables can be expected to gain a larger share of the market (8).
Increased income of consumers also favors consumption of frozen items
in relation to fresh. Families in the income class 10,000 - 14,999 dollars
buy three times as much frozen vegetables as families having incomes under
3,000 dollars. The same high income families have been shown to buy only
one and a-half times as much fresh vegetables. For certain items the in-
come effect is even more striking. A recent household food survey has
shown that consumption of frozen green beans, an item discussed later in
this report, was 10 times greater in families having over 10,000 dollars
income when compared to families having less than 3,000 dollars (3). The
potential impact that increased incomes could have on frozen food consump-
tion can be seen by the fact that the 1960 population census showed 308,871
families in Alabama with incomes less than 3,000 dollars and only 481,839
families with incomes greater than this amount (15). Similar situations
exist in other southern states.
An important fact for the South is that incomes are growing at a
faster rate, about 3.6 per cent per year in Alabama, than in the nation
as a whole, about 1.7 per cent (6). Increased population is another im-
portant factor affecting increased demand for food as consumption of 
many
food items tends to increase by at least the same rate as population growth.
The present growth rat. in Alabama is about .75 per cent per year which 
is
slightly less than the national rate of about 1.8 per cent (6).
Growth in amount of frozen food demanded is expected to be signifi-
cant. If present trends in income and population 
continue, aggregate con-
sumption of frozen vegetables in the South alone 
should increase at least
20 per cent within the next 10 years(il). 
In terms of southern production
in 1965 this would represent an increase of 
at least 40 million pounds.
This new demand alone can be shown to 
support the output of plant sizes
considered feasible in this study.
General Trends in Food Marketing
General trends in food marketing over the past decade reflect favora-
bly upon opportunities for development of a food processing industry in
vegetable producing areas. A development in food marketing that is of
particular significance to Alabama is revealed in the latest census 
infor-
mation that shows an important change in the location of the food proces-
sing industry. The relative change in location shows the industry 
shift-
ing away from the North Central and Northeastern States. Value 
of the
shift measured by gain in value added by manufacturers in 
developing areas
of the country has been estimated to be 500 million dollars by 
Hammond (5).
Fruit and vegetables processing is only a small part of all 
food proces-
sing but the determinants of location are probably similar throughout 
the
industry. Those regions with conditions favorable to fruit 
and vegetable
production and processing, specifically the South and the West, 
have in-
creased industrial development in food processing.
Basic determinants of food industry location are availability of uni-
form, high quality raw materials, processing costs, transportation 
costs
and market proximity. Costs of transporting raw materials along with 
their
10
perishable nature strongly favor location of vegetable processing plants
near vegetable producing centers. However, in net import areas, which is
the position of Alabama and the South in vegetable processing, both general
and very specific local conditions must be favorable before investment in
an import industry is made. The economics of location indicate that basic
competitive conditions have, in the past, been more favorable in other
parts of the country.
Development of an import industry, such as food processing, will have
important consequences for the continued development of an area as it is
not only a new market for farmers, but it is a new market for all farm sup-
pliers and a new market for the suppliers of the farm supply industry, etc.
The resulting new wages, rents, interests and profit from all industries
of the area are new demands for all other goods of the area including food
processing. This circular flow of wealth if estimated to result in more
than one dollar of spending added to the area economy as a result of a
new dollar of sales. On the basis of an input-output study by Heady and
Carter that has been adapted to Alabama conditions it has been estimated
that $1.65 in value of goods and services is generated for every new dol-
lar of vegetable processing sales (7).
New freezing plants have been economically feasible in recent years.
The Bureau of Census reported 405 U.S. plants engaged primarily in the
freezing of fruits, vegetables, and fruit juices in 1963 compared with
302 in 1958, an increase of 34 per cent in plant numbers (2). Seventy-
eight per cent of the freezing plants surveyed in a 1965 U.S. Department
of Agriculture study experienced an increased output over this period 1954-
1964. Nearly all plants experiencing a decrease were small while all large
11
plants reported increases, Table 2. The 1965 survey also indicated a pat-
tern of freezing plant size variation among regions. The Southeast and
Pacific regions had predominantly large plants; the Northeast, small plants;
and the Midwest, medium-size plants.
Freezing plants are also increasing the number of products they pro-
cess. The above survey indicated that 45 per cent of freezing plants
operating continuously since 1946 or established after that date had ex-
panded product lines while only 18 per cent reported a reduction. Three-
fourths of the plants in the Northeast packed three or less products and
two-thirds of the firms in the rest of the country packed four or more
products.
A special study of 23 established fruit and vegetable freezing plants
was made by the National Commission on Food Marketing in 1965 for the pur
pose of measuring costs and profits in this industry. Average returns to
stockholders' equity and on total assets employed for 1963 and 1964 are
shown in Table 3.
Despite the relatively sound position of the average firm on the ba-
sis of returns to stockholder equity, the amount of standard deviation in-
dicated that some firms experienced losses in both years. Returns to total
assets employed in freezing operations were considerably below those to
stoclholders' equity.
Competition in Producinq Frozen Vegetables
Per capita consumption of individual vegetables is not generally
available for estimation of consumer demand. Data on amounts of individual
vegetables processed do exist, however, and amount demanded by consumers
is known indirectly since inventories are not appreciably different from
12
Table 2. Changes in Volume of Products Processed During Period 1954-64,
by Size of Plant, 55 Freezing Plants, 1964
Direction Small a/ Medium b/ Large c/ Total
of change Number Per- Number Per- Number Per- Number Per-
in output of cent of cent of cent of cent
plants plants plants plants
Volume up 10 53 16 89 17- 
94 43 78
Volume down 8 42 2 11 --------- 10 18
Volume same 1 5 ------------------------ 1 2
Not ascertained ------------------------ 1 6 1 2
Total 19 100 18 100 18 100 55 100
a/Plants with annual output of less than 8,500,000 pounds.
6/Plants with annual output of 8,500,000 to 25,000,000 pounds.
c/Plants with annual output of more than 25,000,000 pounds.
Source: U.S. Department of Agriculture, ERS freezer survey, 1965.
Table 3. .Measure of Returns for Firms Specializing in the Production of
Frozen Fruits and Vegetables, 1963 and 1964
Fruit and vegetable
Return (after taxes) freezing firms
1963 1964
Per cent Per cent
To stockholders' equity:
Weighted average 6.6 11.1
Simple average 5.5 10.7
Standard deviation 8.3 
11.5
On total assets employed:
Weighted average 3.2 4.9
Simple average 3.2 4.6
Standard deviation 2.7 2.5
Source: National Commission on Food Marketing study, 1965.
13
year to year. The relative demand for frozen items is given in Table 4.
Processing production is concentrated to some extent by commodity.
Production in the South, i.e., Alabama, Arkansas, Florida, Georgia, Loui-
siana, Mississippi, North Carolina, Tennessee, Texas, and Virginia, has
been estimated to be at least 220 million pounds in a recent unpublished
survey (16)..I/ Thus, 543 million pounds of the 763 million pounds of
vegetables cited for the South and East in Table 4, would have been pro-
duced in the East. Furthermore, of the total 543 million pounds produced
in the East, 358 million pounds are potato products produced exclusively
in the East. When potato products are excluded, East with about 188
million pounds, South with 220 million pounds and midwest with about 219
million pounds would have had similar shares of the remaining frozen vege-
table market. Output of freezing plants in the South was estimated by
Williams to have been 100 million pounds in 1959, slightly less than half
of the 1965 estimate (1). The outstanding sectional leader in 1965 was
the West with 1,176 million pounds, excluding potato products, or about
five times the output of each of the other regions. Frozen vegetables
produced in the West, however, are not in direct competition with produc-
tion in the South except in the case of green beans, butterbeans, and
spinach. Processors in the South were estimated to have packed not more
than 30 million pounds of green beans or about one third as much as in the
West. Practically all specd led butterbeans were processed in the South.
The West in 1965 produced twice as much butterbeans products as the South.
1/ More recent pac- statistics are available, but 1965 data were
used to allow comparison with a survey taken in the South in 1965.
14
Table 4. The 1965 Pack of Frozen Vegetables 
Excluding
Principal Southern Vegetables a/
East and
Vegetable South Midwest West Total
(Pounds, 000 omitted)
Asparagus 8,881 (b) 21,985 30,866
Beans, lima, baby 25,626 4,072 51,098 81,425
Beans, lima, Fordhook: 9,175 (b) 54,927 64,102
Broccoli 12,943 (c) 109,368 122,310
Brussels sprouts 4,954 .... 32,385 37,339
Carrots 16,341 (b) 93,198 109,538
Cauliflower 3,875 (b) 42,336 46,211
Corn, cut 27,212 58,404 136,569 222,185
Corn-on-cob 6,701 7,655 25,981 
40,337
Kale ..... .... .... 4,337
Mixed vegetables 17,780 11,745 27,561 57,086
Onions 6,082 (b) 9,712 15,794
Okra 30,365 .... .... 30,365
Peas 51,886 42,794 348,608 443,289
Peas and carrots 6,224 (b) 15,442 21,666
Potato products 357,709 (b) 860,820 1,218,529
Pumpkin and squash 6,800 2,052 8,538 17,390
Rhubarb 1,882 (b) 3,919 5,801
Spinach 37,819 (b) 84,445 122,264
Squash, summer 10,987 .... (b) 10,987
Succotash 2,294 1,636 2,742 6,672
Miscellaneous vegetables 8,584 4,979 11,924 25,488
Totald/ 762,744 218,896 2,036,891 3,018,530
a/ East and South: Ala., Ark., Conn., Del., Fla., Ga., Ky., La.,
Me., Md., Mass., Miss., Mo., N.C., N.J., N.Y., Okla., Pa., Tenn., Texas,
and Va. Midwest: Ill1., Ind., Mich., Minn., Neb., N.D., Ohio, Wis.
West: Calif., Col., Idaho, Mont., Ore., Utah, Wash., Wyoming.
b/ Included in East and South.
c/ Included in West.
d/ Not necessarily column totals as most southern vegetables were
omitted, see Table 5, but estimated production within area.
Source: Frozen Food Pack Statistics, 1965 National Association of Frozen
Food Packers, Washington, D.C., April, 1966.
15
Less than five million pounds of spinach were packed in the South, mostly
in Florida and Texas. The principal frozen products of the South, southern
peas, all southern greens, and oIkra, were not processed or grown in compe-
tition with other areas. In addition to products listed above, processors
in the South also freeze small amounts of broccoli, cauliflower, green
peas, green peppers, squash, and strawberries.
Trends in output of selected southern vegetables are shown in Table
5. Only corn, carrots, and potatoes in the national market have shown a
near doubling in production since 1959 that has been shown for turnip
greens and southern peas. Demand for southern peas was such in 1967 that
one important Southern processor had sold his total retail pack before
December, 1967. Growth rates on all other frozen products in the U.S.
have been more similar to that shown for green beans (4).
The market at this time would, therefore, indicate that a new plant
in the South should consider packing those products for which the region
appears to have an advantage. These would be southern peas, southern
greens (turnip greens, collard, mustard and kale), okra, green beans,
speckled butterbeans, and sweetpotatoes. Furthermore, demand for these
products, with the exception of sweet potatoes has been increasing. Con-
sumption of sweetpotatoes frozen are about the same now as five years ago
and for this reason were excluded from the processing cost section that
follows. The development of new products from sweetpotatoes, especially
at Auburn University, indicates that further study is needed? A frozen
puree has been developed at Auburn that is superior in quality to sweet-
potato products now on the market.
Okra was also excluded from further analysis though output in the
16
Table 5. Trends in Processing Output of Selected Southern Vegetables~a/
Turn i p
Year greens Collards Mustard
(Pounds, 000
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
2,738
4,571
5,386
5,272
7,497
9,495
10,345
10, 871
11,041
13,730
1 7, 150
15,840
18,743
14,232
20,575
20,971
20,442
10,840
7, 589
8,848
9,002
12,301
12,277
5,406
6,742
6,113
8,287
7,860
8,428
Southern
peas
omitted)
1,280
2,725
4,156
6,431
5,697
10,227
6,737
11,624
13,011
14, 821
16,9678
18,683
18,9380
15,639
23,452
26,037
29,780
Butter- Green
beans beans
5,593
8, 061
4,45 3
5,367
6,9404
6,863
75,814
86,859
96,335
90, 929
90,970
1 08, 614
112,476
136,357
a/Estimated
total:
processing in the South except for green beans, U.S.
b/Data not compiled before this date.
Source: Frozen Food Pack Statistics, 1966, National Association of
Frozen Food Packers, Washington, D.C., April, 1967.
17
South has increased by 50 per cent in the last five years. Mechanized
harvest has not been developed for okra and this was judged to be a pri-
mary disadvantage. Many southern processors, however, feel that it is
necessary to process okra in order to offer the trade a complete mix of
southern vegetables. A following section on processing costs attempts to
outline only the feasibility of products that will be of major importance
in the success of a competitive plant. Potatoes, unfortunately for Baldwin
County, will also be a minor item for freezing until it is demonstrated
that a product developed from southern potatoes will be competitive on the
farm and in retail stores,
Competitive Position of Plants in the South
A new plant located in the South in 1965 and processing southern
vegetables would have competed with 20 other freezing establishments in the
South, two of which produced less than a million pounds of frozen vegeta-
bles in conjunction with a canning operation, The remaining 18 plants
processed only frozen items and ranged in size from one to more than 35
million pounds of southern vegetables per year in 1965. Freezing of
vegetables in the South was concentrated in Tennessee. Texas ranked
second. Ranked third were Georgia, Arkansas, Florida, and Louisiana where
annual output was about equal to Tennessee. Production in these four states
and in Virginia was similar with Georgia being the most important of the
five. There was no freezing in Alabama, Mississippi, South Carolina, and
North Carolina. Further more, according to a survey by Pearson there has
been excess freezing processing capacity in the freezing industry that
would be more than equivalent to the capacity of a new plant of the type
proposed in the remainder of this report (10).
18
Excess capacity is evidence of economic inefficiency, but also, in
the face of rising demand, excess capacity is one indication of scarce
supplies. The recent rapid increase in production of green beans, sou-
thern peas and greens in Baldwin County is, perhaps, an indication of a
search for supply areas. Historically, 82 per cent of all southern peas
going into freezing have been grown within 100 miles of the plant as have
90 per cent of greens, 100 per cent of speckled butterbeans and 83 per cent
of okra. Plant managers have in the past tended to buy green beans and
potatoes from more distant areas. Sixty-one per cent of potatoes and 40
per cent of green beans have been purchased at distances greater than
sixty miles. Baldwin County is more than 100 miles from plants now offer-
ing contracts to Baldwin County farmers indicating that buyers are now
willing to travel greater than average distances for their supplies (1).
Expanding demand and the fact that freezing plants have tended to be supply
oriented, in the above sense, are primary factors that favorably contribute
to economic feasibility of a plant in Baldwin County. Consideration of
transportation costs and available raw material supply may mean that it is
efficient to build at a favorable production site even though there is
excess capacity in existing plants. Furthermore, if the plant can be shown
to return profits that make it economically competitive within the county
and the South Alabama area this return will be most important in the decision
to build a plant.
Raw Material Supply
Results of a 1963 survey by the Alabama Cooperative Extension Service
gives some indication of farmers' willingness to supply vegetables for pro-
cessing. According to survey results compiled for this report an estimated
19
144 of 364 vegetable producers in the Baldwin, Mobile and Escambia Counties
reported interest in growing 11,027 acres of vegetables for processing,
Table 6. This table also gives acreage preferences according to crops and
shows that green beans and turnip greens were preferred. Southern peas
and butterbeans were least preferred; and, at the time of the survey,
these were difficult crops for mechanical harvesting. Advances in har-
vesting peas and beans within the last year, 1967, has reportedly increased
interest of farmers.
A comparison of grower preference for crops proposed in the proces-
sing plant is given in Table 7. Grower interest in green bean and leafy
greens acreage was far greater than presently proposed processing needs.]/
Interest in butterbeans was almost as great as requirements, but interest
in southern peas measured by acres was only 17 per cent of needs. Total
acreage according to interest was, however, less than 200 acres short of
the total plant requirements of 6,406 acres, Table 7.
The relationship between expressed interest in production and future
response has been studied at length in a recent study by Brown (9). Re-
sponses were obtained from 48 farmers concerning a hypothetical opportunity
to grow vegetables for processing. Responses were taken at two different
times under different conditions by a survey method very similar to the
Extension Service survey. Sixty-five per cent of the farmers surveyed by
Brown indicated a willingness to grow an average of 47 acres each in the
first interview. The second response was taken six months later. At this
1/ Processing requirements for acreage are developed in the following
section on Processing Costs.
20
Table 6. Growers Interest
Vegetables for Processing
in Specific Crops and Acreage for Producing
in Baldwin, Mobile and Escambia Countiesa/
Crops Baldwin Mobile Escambia Total
Growers Acres Growers Acres Growers Acres Growers Acres
(No.) (No.) (No.) (No.) (No.) (No.) (No.) (No.)
Snap beans 60 2,544 22 154 18 98 100 2,796
Collards 32 680 8 40 0 0 40 720
Turnip greens 25 1,315 12 252 0 0 37 1,567
Southern peas 16 250 28 330 4 24 48 604
Other greens 4 120 2 8 0 0 6 128
Butterbeans 7 75 22 246 12 96 41 417
Irish potatoes 20 1,195 2 100 
2 40 24 1,335
Other Vegeta- NA NA NA NA
bles
Total 8,721 1,890 
416 11,027
a/Estimated total number of growers expressing an interest was 144.
Column totals for the counties sum to more than 144 because growers ex-
pressed an interest in more than one crop.
Table 7. Crops and Acreage for Producing Vegetables for Processing in
Baldwin, Mobile and Escambia Counties According to Interest
and Processing Plant Needs
Baldwin Mobile Escambia Area
Initial Initial Initial Initial
Vegetables Interest Interest Interest Interest Need
a/
(A.) (A.) (A.) (A.)
Snap beans 2,544 154 98 2,796 1,606
Leafy greens 2,105 300 0 2,415 650
Butterbeans 75 246 96 417 614
Field peas 250 330 24 604 3,536
Totals 6,232 6,406
a/See section on processing costs.
21
interview farmers were provided information on 
expected yields, methods of
harvesting and the like, before they were asked if they would grow a spe-
cific vegetable crop. Only 31 per cent of the farmers expressed a willing-
ness to grow vegetables at that time, and they were willing to grow only
32 acres each. When farmers in the second measurement were provided addi-
tional analysis of how vegetables would fit into a management plan for
their farm, acreage plans were decreased to about 20 acres per farm.
A similar decrease of interest in the Baldwin County area would, thus,
clearly indicate that an additional supply area would be needed to serve
the plant. Forty per cent of the growers in the survey counties of Baldwin,
Mobile, and Escambia indicated an original interest somewhat less than
Brown's observation of 65 per cent. Average number of acres planned, how-
ever, was very similar. Baldwin area growers initially planned 43 acres
per grower compared to 47 acres per grower in Brown's sample. A correspond-
ing decline in interest with additional information such as that furnished
by Brown would mean that the Baldwin area would fall short of required
acreage. Other areas would normally be expected to supply the plant and
an analysis of growers by county begins with Baldwin county in Table 8.
Number of growers by county is shown in Tables 8-9 that also classi-
fies growers according to interest and attitude. Attitude was a subjective
measurement made by the interviewer as an attempt to further refine mea-
surement of interest. In general the interviewer thought that the respon-
dents did give serious consideration to questions that were asked as 75
to 90 per cent of the respondents were graded excellent on attitude. Ta-
bles 8-9 indicate that Baldwin County was by far the most important in
terms of numbers and also shows that farmers having gross sales over 5,000
22
Table 8. Growers Interest and Attitudes in Baldwin County for
Vegetables for Processing
Attitudes
No information
Excel lent
Good
Fair
Poor
Totals
INTEREST IN PRODUCING
Large growersa/ Small
Yes No Yes
(No.) (No.) (No.)
0 0 0
42 30 30
6 18 0
6 8 0
0 0 0
54 56 30
growersb/
No
(No.)
0
80
5
5
0
90
a/A large grower was one with gross sales greater than $5,000 per
year.
b/A small grower was one with gross sales less than $5,000 per year.
Table 9. Growers Interest and Attitudes in Mobile and Escambia Counties
for Producing Vegetables for Processing
INTEREST IN PRODUCING
Attitudes Mobile Escambia
Yes No Yes No
(No.) (No.) (No.) (No.)
No information 0 0 0 0
Excellent 40 26 14 18
Good 0 6 4 2
Fair 0 0 2 4
Totals 40 32 20 24
Producing
. ..
23
dollars were more interested in producing for processing than those with
smaller sales. Farmers in Mobile County were not tabulated by size of
sales. Farmers in Escambia County classified large were similar in size
and gave responses similar to those in Baldwin.
An additional supply area in Alabama for the processing plant is the
Wiregrass area where interest in processing was found in Houston, Geneva,
Henry, Coffee, and Dale Counties. There, an estimated 646 of 801 vegeta-
ble growers or about 80 per cent expressed an interest in growing an es-
timated 15,975 acres of vegetables for processing, Table 10. Thus, in-
terest was significantly greater in the Wiregrass area among growers al-
though initial planned acreage was significantly less, about 20 acres per
farm which was about half that initially planned in the Baldwin area.
Total southern pea requirements for the plant could easily be met in
the Wiregrass area alone according to initial interest. About half of
those interested expressed a preference for peas, Table 10, and the amount
of acreage planned in the area was more than one and a half times as much
as planned processing requirements. Leafy green and butterbean require-
ments of the plan could also be met in the Wiregrass. Interest in green
beans, however, was very slight, only about one-third of the required
acreage was planned by farmers. Thus, the Baldwin County and Wiregrass
areas were very compatible in the two major crops proposed for the plan
with green beans preferred in Baldwin County and southern peas preferred
in Houston County.
Attitudes did not score as good in the Wiregrass area as in Baldwin,
Mobile and Escambia. Excel lent and good attitudes ranged as low as 43 per
cent of those surveyed but at as high as 85 per cent among those expressing
Table 10. Growers Interest in Specific Crops and Acreage for Producing Vegetables
for Processing in Geneva, Houston, Henry, Coffee, and Dale Counties a/
Crops Geneva Houston Henry Coffee Dale Totals
Grs. Acres Grs. Acres Grs. Acres Grs. Acres Grs. Acres Grs. Acres
No. No. No. No. No. No. No. No. No. No. No. No.
Green beans
Collards
Turnip greens
Southern peas
Other greens
Butterbeans
Other vegetables
Totals
7
91
6
25
192
NA
46
1,302
75
135
2,312
3,870
72
2
8
324
14
134
308
NA
378
20
186
3,476
350
882
2,844
8,136
2
1
8
3
16
NA
12 10 70
3
133
29
195
372
5
60
35
140
NA
200
810
390
1,470
2,940
10 154
6
17
NA
65
438
657
91
14
493
20
203
673
NA
406
20
389
5,875
425
1,501 *
7,259
15,975
a/ An estimated 646 farmers are interested in processing; column 
totals do not add to 646 because
farmers were interested in more than one crop.
25
interest in processing, Tables 11-13. Attitudes were best in Houston County
where 38 per cent of the total interested growers in the Wiregrass were
located.
Previous research has indicated that there are discrepancies between
interest and action. Initial reactions as given in Tables 6 and 10 may
be regarded as, perhaps, the most optimistic estimates of supply response.
A conservative estimate was tabulated by choosing only those farmers
less than 45 years of age, whose attitude rated good or excellent, and who
had indicated an interest in growing vegetables. The results are given in
Table 14 which shows that only 38 per cent, 47 of 124, of those interested
in Baldwin, Escambia and Mobile Counties met these select qualifications.
Assuming, however, that farmers in the select group in the Baldwin area
had plans at least as optimistic as the area average, the Baldwin area
would still be able to supply more than planned processing needs for leafy
greens and two-thirds of the requirement for green beans, Table 15. Butter-
beans and southern peas would be in short supply, Table 15.
Similar restrictive assumptions were made about the Wiregrass area
and here only 24 per cent of those interested met the select qualifications,
Table 16. This most select segment of Wiregrass growers could, however,
supply half of the plan requirements for southern peas and two-thirds of
the requirement for butterbeans, Table 17.
The Wiregrass and Baldwin areas under these select qualifications
would be just over a thousand acres short of total plant requirements,
Table 18.
A still more conservative estimate would be the application 
of pre-
vious research results indicating that the select qualifications 
group
26
Table 11. Growers Interest and Attitudes in Geneva County for Producing
Vegetables for Processing
Attitudes
No information
Excellent
Good
Fair
Poor
Not interested
Totals
INTEREST IN PRODUCING
Large growers Small growers
Yes No Yes No
(No. ) (No.) (No.) (No.)
0 0 0
0 0 0
70 5 8 0
60 5 0 2
15 5 0
0 20 0
145 35 8 2
Table 12. Small Growers Interest and Attitudes in Henry, Dale/ and
Coffeea/ Counties for Producing Vegetables for Processing
INTEREST IN PRODUCING
Attitudes Henry Dale Coffee
Yes No Yes No Yes No
(No.) (No.) (No.) (No.) (No.) (No.)
No information 0 0 0 0 0 0
Excellent 0 0 1 0 0 0
Good 6 0 7 1 55 0
Fair 7 0 5 0 35 5
Poor 0 0 3 2 15 10
Not interested 1 1 1 0 10 5
Totals 14 1 17 3 115 20
a/No large growers in this county.
,,
27
Table 13. Growers Interest and Attitudes in Ho ston County
Vegetables for Processingl/
Producing
INTEREST IN PRODUCING
Attitudes Large growers Small growers
Yes No Yes No
-- ------------ -
(No.) (No.) (No.0) No.)
No information 0 0 0 0
Excellent 35 20 26 8
Good 105 40 44 12
Fair 20 10 8 2
Poor 5 0 4 2
Totals 165 70 82 24
Table 14. Estimated Number of Growers of Specified Ages in Baldwin,
Mobile, and Escambia Counties who were Interested in Pro-
ducing for Processing and Whose Attitudes Rated Excellent
and Good or Fair and Poor
Age Under 45 and Age Over 45 and
Attitude Excel- Attitude Fair Total Percent
lent or Good to Poor
(No.) (Pct.) (No.) (Pct.)
Baldwin
Large 24 44.4 30 55.6 54 100
Small 10 33.3 20 66.6 30 100
Aggregate 34 40.5 50 84
Mobile 8 40.0 12 60.0 20 100
Escambia 5 25.0 15 75.0 20 100
Totals 47 37.9 77 62.1 124 100
28
Table 15. Estimated Crops and Acreage for Producing Vegetables in Baldwin,
Mobile, and Escambia Counties Prorated by Percentage of Growers
less than 45 Years of Age with Attitudes Excellent or Good Com-
pared with Processing Plant Needs
Baldwin Mobile Escambia Area
initial initial initial plant Initial
interest interest interest needs interest
(A.) (A.) (A.) (A.) (A.)
Green beans 1,030 62 24 1,606 1,116
Leafy greens 857 
120 0 650 977
Butterbeans 30 98 24 614 152
Southern peas 101 132 6 3,536 238
Totals 6,406 2,483
Table 16. Estimated Number of Growers of Specified Ages in Houston, Coffee,
Dale, Henry and Geneva Counties Who Were Interested in Producing
for Processing and Whose Attitudes Rated Excellent and Good or
Fair and Poor
Age Under 45 and Age Over 45 and
attitude excellent attitude fair
or good or Poor
(No.) (Pct.) (No.) (Pct.) (No.) .Pct.)
Houston
Large 55 33.33 110 66.67 165 100.0
Small 26 31.71 56 68.29 82 100.0
Aggregate 81 32.79 166 67.21 247 100.0
Coffee
Small 30 26.09 85 73.91 115 100.0
Dale
Small 7 41.18 10 58.82 17 100.0
Henry
Small 3 21.43 11 78.57 14 100.0
Geneva
Large 30 20.69 115 79.31 145 100.0
Small 3 37.50 5 62.50 8 100.0
Aggregate 33 21.57 120 78.43 153 100.0
29
Table 17. Estimated Crops and Acreage for Producing Vegetables in Geneva,
Houston, Henry, Coffee and Dale Counties Prorated by Percentages
of Growers less than 45 Years of Age with Attitudes Excellent
and Good Compared With Processing Plant Needs
Crops Geneva Houston 
Henry Coffee Dale Area
Interest Interest Interest Interest Interest Needs
Interest
(A.) (A.) (A.) (A.) (A.) (A.) (A.)
Green beans 10 124 3 18 0 1,606 156
Leafy greens 16 182 1 52 0 650 251
Southern peas 281 1,140 29 211 63 3,536 1,724
Butterbeans 29 289 6 102 27 
614 453
Table 18. Estimated Crops and Acreages for Producing Vegetables in the
Wiregrass and Baldwin Areas Prorated by Percentage of Growers
less than 45 Years of Age with Attitudes Excellent and Good
Compared With Processing Plant Needs
Baldwin area Wiregrass area Total area
Crops 
interest 
interest 
Need Interest
(A.) (A.) (A.) (A.)
Green beans 1,116 155 1,271 1,606
Leafy greens 977 251 1,228 650
Southern peas 238 1,724 1,962 3,536
Butterbeans 152 453 605 614
Totals 2,483 2,583 5,066 6,406
30
might be expected to reduce its plans given more information. Brown's
study indicated a later reduction of slightly more than half the acres
initially planned. Thus, the select group of the Baldwin and Wiregrass
areas might plan to supply just less than half of plant requirements after
receiving full information. The select group, however, form a minor part
of the total interest group. The remaining group, those over 45 or with
attitudes fair to poor might also be expected to produce for 
processing.
This remaining non-select group in the Baldwin-Wiregrass area had expressed
an interest in approximately 10,000 acres of vegetables proposed for pro-
cessing. Production on at least one-third of these acres combined with
the select group would assure the acreage needed for the processing plant.
North Florida provides still another supply area where interest in
processing has been high in recent years (18). A principal assumption,
however, of this analysis of interest in processing is that net returns
for producing vegetables for processing will be compatible with farmer
expectations generating original interest.
Cost of Production for Producing Vegetables for Processing
A primary consideration in farmers' decisions relative 
to producing
vegetables for processing is that the reasonable expectation 
of net re-
turns from these crops is at least equal to net returns 
from other crops
now being produced.
Farmers now producing vegetables for fresh market 
may initial ly react
unfavorably to lower expected gross returns per acre for producing these
same vegetables for processing. Producing for processing, however, offers
several advantages: (1) Vegetables for processing are usually produced
under contract, thus the grower is guaranteed a market and a price for his
31
crop before committing any new resources to growing it. (2) Practically
all vegetables grown for processing may be mechanically harvested which
significantly reduces labor requirements and allows producers to grow a
greater volume of crops and perhaps generating more income from processing
than from fresh market production.
The budgets presented in this section were designed to reflect produc-
tion techniques used by better vegetable producers in the Baldwin County
area. Budgets are presented for each of the crops considered in this re-
port and for soybeans, corn, and potatoes for purposes of comparison.
In using the information contained in these budgets, Tables 19-27,
it will be necessary to adjust the information to suit individual situa-
tions. Since average data were used in their preparation they will not
be completely adapted to a specific farm without some modification.
The yield information presented in this section represents yields ex-
pected by plant managers of processing plants in Georgia, Tennessee and
Mississippi. Most plant scientists consider them to be low. Prices are
those that were prevailing in fall, 1967. Cash expenses shown in the
budget are for inputs to production recommended for use by Auburn Univer-
sity. Although conservative estimates of yield were used and harvest
costs were custom estimates in most cases, the data indicate the potential
for vegetables to compete favorably with soybeans, potatoes and corn.
Mechanical harvest is feasible for all except okra which is included only
because many plant managers in the South feel that some okra may be needed
in the product mix.
Competitive return is not enough to guarantee that an enterprise can
be successfully included in the farm plan. There are important problems
32
Table 19. Budget for Green Beans, Based on Good Management Practices and
Mechanical Harvest, Alabama
Item Description Unit Quantity Rate 
Amount
Receipts
Beans Yield Ton 2 $90 $180.00
Cash expenses
Soil Fumigant Nemagon Gal. 1 $9.00 9.00
Seed Recommended variety Lbs. 60 0.30 18.00
Fertilizer (broadcoast) 4-12-12 Cwt. 8.0 2.04 16.32
8-8-8 Cwt. 5.0 2.04 10.20
Lime Custom application (1 ton/4 yr. @ $7.75/ton) 1.94
Insecticide Sevin (80% wetable) Lbs. 2.4 0.70 1.75
Tractor operating Gas, oil, grease, Hr. 6.1 0.65 
3.97
expense repairs
Equipment operating Gas, oil, grease, .94
expense repairs
Herbicide Eptam Lbs. 1 3.35 3.35
Total pre-harvest cash expenses $ 65.53
Harvest & Haul Custom Ton 2 22.00 44.00
Net Returns to land, operator labor, and capital 70.47
Table 20. Turnip Greens for Processing Based on Good Management and
Mechanical Harvest, Alabama/
Item Description Unit Quantity Rate Amount
Receipts
Turnip greens Yield/acre Ton 5 $30.00 $150.00
Cash expenses
Seed Recommended variety Lb. 3 .75 2.25
Fertilizer 8-8-8 Cwt. 16 2.04 32.64
Lime Custom application (1 T./4 yrs. @ $7.75/T.) 1.94
Insecticide Malathion (1 qt. of 5 lbs./gal. E.C.) 2.00
Herbicide Dacthal Lb. 3 1.25 3.75
Tractor operating Gas, oil, grease, Hrs. 5 .65 3.25
expense repairs
Equipment operating Gas, oil, grease, .75
expense repairs
Total pre-harvest cash expenses $ 46.58
Harvest & Haul Custom Ton 5 7.00 35.00
Net returns to land, operator labor, and capital 68.42
a/The turnip green budget is representative of southern greens.
33
Table 21. Budget for Southern (Blackeye and Crowder types) Peas, Based
on Good Management Practices and Hand Harvest, Alabamaa/
Item Description Unit Quantity Rate 
Amount
Receipts In the hull,
Peas Yield/acre tonb/ 1l $100 $150.00
Cash expenses
Seed Recommended variety Lbs. 30 .35 10.50
Fertilizer 4-12-12 Cwt. 7 2.04 14.28
Lime Custom application (1 ton/4 yr. @ $7.75/ton) 1.94
Tractor Grease, oil, gas, repairs Hr. 5.25 .65 3.41
Equipment Grease, oil, gas, repairs .79
Insecticide Toxaphene (20%) Lbs. 60 .07 4.20
Herbicide Treflan Qt. 3/4 8.50 6.38
Total pre-harvest cash expenses $ 41.50
Harvest, cash expenses Labor Hr. 50 .90 45.00
Hauling 1? truck Hr. 3 1.53 4.59
Total cash expenses $ 91.09
Net Returns to land, operator labor, and capital 58.91
a/At least one processor pays $120 a ton for cream type peas delivered
to the plant.
b/920 pounds of shelled peas per ton of peas in hull gives a price
of $1
T
5/ton of shelled when peas in hull sell for $100/ton.
Table 22. Budget for Southern Peas (Pinkeye Purple Hull and Texas Cream
40), Based on Good Management Practices and Mechanical Harvest,
Alabama
Item Description Unit Quantity Ratea/Amount
Receipts
Peas Yield/acre Shelled Lb.. 1,200 $.06 $ 72.00
Cash expenses
Seed Furnished by processor Lbs. 30(furnished)
Fertilizer 4-12-12 Cwt. 7 2.04 14.28
Lime Custom application (1 ton/4 yr. @ $7.75/ton) 1.94
Tractor Grease, oil, gas, repairs Hr. 4.75 .65 3.09
Equipment Grease, oil, gas, repairs .79
Insecticide Toxaphene (20%) Lbs. 60(furnished)
Herbicide Treflan Qt. 3/4 8.50 6.38
Total pre-harvest cash expenses $ 26.48
Harvest, cash expenses (harvested and hauled) by processor
Net returns to land, operator labor, and capital 45.52
a/Rate paid by processor when harvesting and hauling is done with
processor's equipment.
34
Table 23. Budget for Speckled Butterbeans Based on Good Management Prac-
tices and Mechanical Harvest, Alabama
Item Description Unit Quantity Rate Amount
Receipts
Beans Yield/acre Shelled Lb. 2,200 $.065$1l43.00
Cash expenses
Seed Jackson's Wonder or Lb. 50 .35 17.50
other recommended variety
Lime Custom application (1 ton/4 yr. @ $7.75 ton) 1.94
Fertilizer (broadcast) 8-8-8 Cwt. 15 2.04 30.60
Insecticide Sevin (8%o) Lbs. 2.4 .70 1.68
Tractor operating Grease, oil, gas, Hr. 6.7 .65 4.35
expenses repairs
Fungicide Maneb Lbs. 8 .70 5.60
Equipment operating Grease, oil, gas, .95
expenses repairs
Herbicide Treflan Qt. .75 8.50 6.38
Total pre-harvest cash expenses $ 69.00
Harvest, cash expense harvested by processor
Net returns to land, operator labor 
and capital $ 74.00
a/$.065/lb. is equivalent to $130/ton of shelled beans and reflects
the rate when harvesting and hauling are done by processor.
Table 24. Budget for Okra, Based on Good Management Practices, Alabama
Item Description Unit Quantity Rate Amount
Receipts
Okra Yield/acre Ton 3 $80.00 $240.00
Cash expenses
Seed Recommended variety Lbs. 
10 .35 3.50
Fertilizer 4-12-12 Cwt. 10 2.04 20.20
Amonium nitrate Cwt. 2 3.65 7.30
Lime Custom application (1 ton/4 yrs. @ $8.00/ton) 2.00
Tractor Grease, oil, gas, repairs Hr. 6 1.00 6.00
Equipment Grease, oil, gas, repairs 1.00
Herbicide Treflan Qt. 3/4 8.50 6.38
Nematocide Nemagon (30% granule) Lbs. 30 .30 9.00
Total pre-harvest cash expynses $ 55.38
Harvest & Haul Custom2/ Ton 3 42.00 126.00
Net returns to operator labor, land, and capital 58.62
a/Harvest Labor: Estimated 40 hours of adult labor per ton at $1.00/
hour.
35
Table 25. Budget for Soybeans, Based on Good Management Practices and
Mechanical Harvest, Alabama
Item Description Unit Quantity Rate Amount
Receipts
Soybeans Bu. 28.0 $2.50 
$ 70.00
Pre-harvest and harvest
Cash expenses
Seed Recommended variety Bu. 1.0 4.50 4.50
Fertili er 0-20-20 Cwt. 2.5 2.35 5.88
Liminga/ Custom application 1.94
Insecticide 5% Sevin Cwt. .2 7.25 1.45
Tractor operating Gas, oil, grease, Hr. 4.6 .65 2.99
expense repairs
Equipment operating Gas, oil, grease, .50
expense repairs
Truck Hauling soybeans Bu. 28.0 .025 .70
Seasonal labor Hr. .7 1.00 .70
Total pre-harvest cash expenses $ 18.68
Harvest Custom Acre 1.0 8.00 8.00
Returns over cash expenses to land, operator labor and capital $ 
43.34
a/Since 1 ton of lime is applied every 4 years, one-fourth of the
$7.74 cost is charged off each year.
Table 26. Budget for Corn Based on Good Management Practices and 
Mechani-
cal Harvest, Alabama
Item Description Unit Quantity 
Rate Amount
Receipts
Corn Bu. 60.0 $1.20 $ 72.00
Pre-harvest and harvest
Cash expenses
Seed Recommended hybrid Lb. 
8.0 .20 1.60
Fertilizer 4-12-12 
Cwt. 3.5 1.90 6.65
Ammonium nitrate Cwt. 2.5 3.80 
9.50
Liming-/ Custom application 
1.94
Tractor operating Gas, oil, grease, Hr. 
8.1 .65 5.26
expense repairs
Equipment operating Gas, oil, grease, 
1.78
expense repairs
Seasonal labor 
Hr. 2.9 1.00 2.90
Total pre-harvest cash expenses 
$ 29.63
Harvest Reflected in tractor and 
equipment operating
expense and in labor expense
Returns over cash expenses to land, operator 
labor and capital $ 42.37
a/Since 1 ton of lime is required every 4 years, 
one-fourth of the
$7.75 cost is charqed off each year.
36
Table 27. Budget for Irish 
Potatoes
Alabama
Based on Good Management Practices,
Item Description Unit Quantity Rate Amount
Receipts
Potatoes Yield/acre Cwt. 145.0 $2.00 $290.00
Cash expenses
Seed Sebago, La Chipper Cwt. 15.0 4.50J 67.50
Seed treatment Captan Lb. 4#/25 ac. 4.00 .16
Fertilizer 4-12-12 Cwt. 12.0 2.00 24.00
8-8-8 Cwt. 8.0 2.05 16.40
Lime-/ Ton 2.00
Insecticides Diazinon (25% EC) Pt. 2.0 2.50 5.00
DDT (5% dust) Lb. 25.0 .04 1.00
Herbicide EPTC (Eptam) Gal. .25 20.00 5.00
Defoliant Paraquat (42% EC) Lb. .25 8.08 2.02
Tractor Operating Hr. 7.0 1.49 10.43
Other machinery 8.46
Hired labor (not including harvest) Hr. 5.0 1.00 5.00
Total pre-harvest cash expenses $146.97
Harvest & Haul Custom Cwt. 145.0 .50 72.50
Returns to land, operator labor, and capital 70.53
a/One ton is applied every 4 years.
b/Average price. Sebago seed cost approximately $4.00 per cwt. and
La ChTpper seed cost approximately $5.00 per cwt. For February 1968
delivery.
,I
37
of timeliness of labor use, farm equity, and scheduled planting for needs
of the processing plant. Detailed farm planning was not made a part of
this study but is a suggestion for further feasibility research. Farm
planning done in other areas using similar type budget material as pre-
sented here has shown that southern peas, green beans and southern greens
for processing are competitive within many cropping systems (9).
Processing Costs and Returns
Selection of product mix and container sizes is an area of important
concern for plant management, but from the standpoint of development these
are problems that can be best handled after having experience in plant
operation. In any specified set of buildings and equipment the optimum
product mix will be determined by the selling prices of the products, by
container size and variable costs of packing each. The effect of labor
efficiency on costs can be shown to have considerable effect on product
mix. If market shares and raw material supply were assured then product
mix relative to container size of institutional and retail packs would be
the principal focus of a feasibility study. Exactly opposite conditions
prevail in Alabama. Market shares and raw product supplies are the prin-
ciple items of concern and assumption of this study is that if feasibility
can be shown for any one product mix, future study may also indicate an
economical combination. Costs and returns on only the popular 10 oz. pack-
age are presented although other sizes can and should be 
considered for
use of plant equipment. Implied in continued development is the ability
of farmers and processors to work together towards the best product mix.
Both parties should recognize that they are producing for a market whose
specifications will continue to change.
38
Costs of freezing vegetables are also highly dependent on: (1) vol-
ume of plant output as determined by rate of output per hour 
and hours of
annual operation and (2) costs of raw material. 
The assumptions about
these important variables are spelled out 
in the tables that follow.
Volume of plant output presented here, 16 million pounds 
per year,
would be relatively small in comparison with some 
existing facilities in
the South that were known to process as much as 
75 million pounds in 1967.
The facilities called for, however, in Tables 28-37 and 
Figures 1-4 pro-
vide for expansion of annual output. Storage space as shown 
in Table 28
will accommodate about nine million pounds of frozen 
food and is about
twice as much as needed for the average monthly inventory 
of the proposed
plant on the assumption that average monthly inventory is 
27 per cent of
annual output. Additional space may be needed, however, 
if the green bean
and southern pea lines are operated more than 
440 hours per year as speci-
fied in this plan. A change in the product mix 
brought about by increasing
the hours of operation on beans and peas would also greatly 
expand annual
volume into the range of larger plants 
now in operation.
Investment costs of building, product preparation 
and packaging and
casing have been itemized in Tables 28-37 
as a basis for further considera-
tion of product mix and as a basis of projecting 
a single point estimate
of costs and returns.
Three basic processing lines are presented 
in Tables 28-35 for green
beans, peas, and greens. All costs and raw material 
requirements presented
elsewhere were based on these lines. Requirements for a potato 
processing
line are given in Tables 36-37 for inclusion in further planning 
for the
area, but costs of potato processing and are included 
in thle estimate of
39
Receiving
Blanching
Spray Cooling
Inspecting
Flotation Grading
Large
r4 WWaste
Waste
I. Q. F. Freezing (Optional)
Carton Forming, Filling (Op-.)
& Closing
Overwrapping (Optional)
Casing
Storage
Processing Line for Southern Peas or Speckled Butterbeans
(800 Cases per Hour, 24/10 Ounce Packages per Case)
Figure 1.
40
Unsnipped Beans
Receiving
Cluster Cutting
Dry Cleaning
Washing
Pre-Grading
Unsnipped Separating
Inspecting and Trimming
Size Grading (Double)
No. 3's &
4's
Cutting
Nubbin Grading
Waste
No. 51s &
6's (Optional)
Slicing (Optional)
Inspecting
Blanching
Spray Coo li
Overwrapping
Package Freezing
I. Q. F. Freezing (Optional)
Carton Forming, Filling (Optional)
& Closing
Overwrapping (Optional)
Casing
Storage
Figure 2. Processing Line for Green Beans (800 Cases per Hour,
24/10 Ounce Packages per Case)
Waste
Carton
Storage
~1.
Receiving
Waste
Inspecting
Washing
Inspecting
Blanching
Spray Cooling
I _Cutting (Optional)
Carton Forming, Filling & Closing
Overwrapping
Package Freezing
Casing
r Storage
Processing Line for Leafy Greens (400 Cases per Hour,
24/10 Ounce Packages per Case)
Carton
Storage
Figure 3.
Receiving
vasning Waste
Inspecting and Size Grading
Peeling 
Waste
Inspecting
Cutting (Optional)
Blanching
Spray Cooling
Dewatering
I. Q. F. Freezing (Optional)
Carton Forming, Filling 
(Optional)
& Closing
Overwrapping (Optional)
Casing
Storage
Figure 4. Processing Line for White Potatoes (400 Cases per Hour,
2/10 Ounce Packages per Case)
Carton
Storage
43
Table 28. Building Requirements for Freezing Southern Peas, Green Beans,
Speckled Butterbeans, and Leafy Greens at Rates of 800 Cases
Per Hour for Green Beans and Southern Peas, 400 Cases Per Hour
for Leafy Greens and Speckled Butterbeans, Output Container
Size is 10 oz. (24 pkgs. per case)
Building Requirements and Cost per Total
general equipment needs Unit unit cost
(dollars) 
(dollars)
Receiving
Concrete slab - 4" thick 2,000 ft.
2  
$ 0.80/ft.
2  
$ 1,600
Refrigeration for dock 6.00/ft.
2  
12,000
Zero degree storage 32,000 ft.
2  
20.00/ft. 640,000
(200' x 160' x 20')
Processing plant
Totally enclosed and
including utilities 17,800 ft. 10.00/ft. 178,000
Office 200 ft.
2  
15.00/ft.
2  
3,000
Rest rooms (6) 300 ft.
2  
20.00/ft.
2  
6,000
Shop 
2
Completely equipped 200 ft. 15.00/ft. 3,000
Laboratory 150 ft.2 15.00/ft.2 
2,250
Equipment storage 2,200 ft.2 10.00/ft.
2  
22,000
Total for building $867,850
Truck scale 50 ft. $14,500.00 $ 14,500
Well, building, pump and tank 400 g.p.m. 30,300.00 30,300
Boiler 90 b.h.p. 13,620.00 13,620
Fork trucks 2 9,000.00 18,000
Pal lets 3,200 5.00 16,000
Other 5,000
$ 97,420
TOTAL $965,270
Source: See footnote at the end of Table 37.
44
Table 29. Utilities Requirements for Freezing Southern Peas, Green Beans,
Speckled Butterbeans, and Leafy Greens at Rates of 800 Cases
Per Hour for Green Beans and Southern Peas, 400 Cases Per Hour
for Leafy Greens and Speckled Butterbeans, Output Container
Size is 10 oz. (24 pkgs. per case)
Operation: Units per Annual total
Machine, equipment, supplies, etc. case Usea/
Steam (Miscellaneous uses) 11 lbs. 12,672,000 lb.
Water (Miscellaneous uses)/ 150 gal. 172,800,000 gal.
Electric Energy 1.11 KWH 1,278,720 KWH
Waste (Solids and liquids)W 150 gal. 172,800,000 gal.
a/1,152,000 cases
b/Maximum use, minimum estimate is
24,005 gal./hr.
a source of water flowing at
Source: See footnote at the end of Table 37.
Table 30. Product Preparation Requirements for Freezing Southern Peas at
a Rate of 800 Cases Per Hour and Output Container Size is 10
oz. (24 pkgs. per case)a/
Product preparation
machine, equipment, supplies
Investment
cost
Conveying
2 Robins gooseneck elevators - 12" x 6'
complete with cross conveyor
Cleaning and Washing
1 Food machinery and chemical rotary
Rod type washer (36" x 8')
Cleaning
1 Commercial 4-purpose cleaner
Model 4209-D (III, IV, X)
Conveying
1 Robins gooseneck elevator (16" x 8')
Conveying and Inspecting
2 Chisholm-Ryder sanitary picking
Tables (30" x 12')
Flotation Cleaning
2 Flotation cleaners
Blanching
1 Chisholm-Ryder sanitary rotary blancher -
12' - complete with standard feed elevator
Washing, cooling and inspecting
1 Chisholm-Ryder sanitary picking table
30" x 16') with spray attachment from
above and recovery sump or disposal trough
Conveying
2 Robins gooseneck elevators 12" x 6' high
Flotation grading
2 Key quality graders
Holding
20 Stainless steel holding tanks
each 50 ft.
3
Conveying
2 Robins gooseneck elevators (12" x 6') with
spray attachment from above
Total
(dollars)
$ 4,800.00
4,300.00
9,700.00
2,200.00
3,460.00
17,400.00
7,800.00
2,300.00
4,200.00
15,800.00
2,000.00
4,500.00
$78,460.00
Source: See footnote at the end of Table 37.
a/Speckled butterbeans or lima beans are processed with this equip-
ment.
n~ r ~~CA
46
Table 31. Packaging and Casing Requirements 
for Freezing Southern Peas
at a Rate of 800 Cases Per Hour and Output Container Size 
is
10 oz. (24 pkgs. per case).
Machine, equipment, supplies, etc.
(other products for which used)
Investment
cost
Filling and closing
2 Food machinery and chemical Mara-Pak
carton filters
Conveying
4 Glove No. B-3 white Hycar belts (12" x 50')
Overwrapping
4 Hayssen series 5000 wrapping machines
Motel 43 ML
Conveying
4 Globe No. B-3 white Hycar belts
(12" x 100')
Package Freezing
4Frick Spiro-Flex freezers (625-36)
Conveying
4 Globe No. B-3 white Hycar belts
(12" x 50')
Casing
1 Food machinery and chemical sure way
model E-41 full automatic caser
Case Printing
1 Chisholm-Ryder New Way model CP
Conveying
1 Food machinery and chemical heavy duty
Accordion conveyor
Total
$ 69,600.00
3,300.00
121,600.00
6,200.00
300,000.00
3,300.00
33,400.00
2,200.00
160.00
$539,760.00
Source: See footnote at the end of Table 37.
IV VLI rl~rYI PVI Y
47
Table 32. Product Preparation Requirements for Freezing Green Beans at
a Rate of 800 Cases Per Hour and Output Container Size is 10
oz. (24 pkgs. per case)
Operator preparation
machine, equipment, supplies, etc.
Cluster cutting
2 Chisholm-Ryder cluster cutters
complete with standard feed elevator
Cleaning
Investment cost
$12,300.00
Common with
Southern Peas
Washing
2 Chisholm-Ryder twin screw washers
complete with standard food elevator
Conveying
2 Chisholm-Ryder sanitary picking table
(30" x 12')
Conveying
Flume with 12 discharges complete with
pump and piping (70" long)
Snipping
12 Chisholm-Ryder bean snippers model FHS
(large) complete with sanitary picking table
Conveying
2 30" x 32' Vibrating conveyors
Separating
8 Chisholm-Ryder unsnipped snap bean separators
complete with standard feed elevators
Conveying
3 Robins belt conveyors (18" x 24' long)
1 Robins gooseneck elevator (16" x 8' long)
Inspecting
8 Chisholm-Ryder sanitary picking table
(24" x 10' long)
318" x 20' Vibrating conveyors
Grading
12 Chisholm-Ryder adjustable bartype
Snap bean graders (double)
Cutting
8 Urschel model "30-C" green bean cutters
18,600.00
3,460.00
1,200.00
64,200.00
5,600.00
46,400. 00
7,200.00
9,200.00
6,600.00
61,200.00
18,400.00
\ LT UKU~r UC11
48
Table 32 Conrit'd.
Operator preparation
machine, equipment, supplies, etc. Investment cost
Conveying
4T18" x 20' Vibrating conveyors
Grading
2 Chisholm-Ryder model 'H' nubbin graders
Conveying
1 Robins belt conveyor 18" x 12' long
Holding
2- Stainless steel holding tanks each 50 ft.
Inspecting
2 Chisholm-Ryder sanitary picking table
(24" x 10' long)
Conveying
1 Vibrating conveyor (18" x 20' long)
Blanching
1 Chisholm-Ryder sanitary rotary blancher-
12' - complete with standard feed elevator
Conveying
1 Vibrating conveyor
Conveying, Washing, Cooking
2 Robins gooseneck elevators with spray
attachment from above (8" x 6')
Total
$ 8,800.00
5,000.00
2,000.00
Common with
southern peas
Common with
southern peas
2,200.00
Common with
southern peas
2,150.00
Common with
southern peas
$274,510.00
Source: See footnote at the end of table 37.
i
49
Table 33. Packaging and Casing Requirements for Freezing Green Beans at
a Rate of 800 Cases Per Hour and Output Container Size is 10
oz. (24 pkgs. per case).
Operation
machine, equipment, supplies, etc. Investment cost
Processing
Filling and closing
2 Food machiney and chemical Mara-Pak
carton fillers
Conveying
4 Globe No. B-3 white Hycar belts
(12" x 50')
Overwrapping
4 Hayssen series 
5000 wrapping
machines model 43 ML
Conveying
4 Globe No. B-3 white Hycar belts
(12t x 100')
Package Freezin
Frick Spiro-Flex freezers
(625-36)
Conveyi ng
4 Globe No. B-3 white Hycar belts
(12"''x 50'),
Casing
1 Food machinery and chemical sure way
model E-41 fully automatic caser
Case Printing
1 Chisholm-Ryder new way model CP
Conveying
1 Food machinery and chemical heavy
duty accordion conveyor
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Common equipment
with southern peas
Source: See footnote at the end of Table 37.
A-~ I I I 1L~ )~~ L~~ L
~L7r 3L~
50
Product Preparation Requirements for Freezing Leafy Green
Vegetables (Spinach, Turnip Greens, Collards, Mustard 
and
Kale) at a Rate of 400 Cases Per Hour and Output Container
Size is 10 oz. (24 pkgs. per case).
Operation
machine, equipment, supplies, etc. Investment cost
Dry cleaning
1 Robins rotary spinach sand tumbler
(Sr. size)
Inspecting
1 Chisholm-Ryder sanitary picking
table (30" x 16')
Washing
1 Robins spinach drum washer (Sr. size)
1 Robins rotary spinach spray washer
(Sr. size)
Inspecting
1 Chisholm-Ryder sanitary picking table
(30" x 16')
Blanching
1 Robins spinach blancher complete with
feeder (Sr. size)
Conveying and Cooling
1 Robins gooseneck elevator (16" x 6')
with spray attachment from above
Cutting (optional)
1 Urschel dicer model J
Total
$ 4,582,00 Inv.
Common with
southern peas
7,248.00 Inv.
7,297.00 Inv.
Common with
southern peas
10,860.00 Inv.
Common with
southern peas
7,730.00 Inv.
$36,717.00
Source: See footnote at the end of Table 37.
Table 34.
Irw r Y / 'r 1 v~~rrr r I yr~ r~ r Iv ~u?~l 1 ~ ~ ,,
- ~ - ---- ~ -- ---
I VI I IYI IV IIII I\IUYI Y~ l I ~~ J rlyl\l )IY L~ IIHIY
51
Table 35. Packaging and Casing Requirements for Freezing Leafy Green
Vegetables (Spinach, Turnip Greens, Collards, Mustard, and
Kale) at a Rate of 400 Cases Per Hour and Output Container
Size is 10 oz. (24 pkgs. per case).
Operation
Machine, equipment, supplies, etc.
(other products for which used)
Investment cost
Processing
Filling and closing
1 Food machinery and chemical straight line
carton filler model 16-S with appropriate
carton forming and closing attachments
Conveying
2 Globe No. B-3 white Hycar belts (12" x 50')
Overwrapping
2 Hayssen series 5000 wrapping machines model 43 ML
Conveying
2 Globe No. B-3 white Hycar belts (12" x 100')
Package Freezing
2 Frick spiro flex automatic continuous freezers
(625-36)
Conveying
2 Globe No. B-3 white Hycar belts (12" x 100')
Casing
1 Food machinery and chemical sure way fully
automatic caser model E-41
Case printing
1 Chisholm-Ryder new way model CP
Case conveying
1 Food machinery and chemical heavy duty
accordion conveyor
Total
$ 34,800
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
$ 34,800
Source: See footnote at the end of Table 37.
r ~rlY~ p
Product Preparation Requirements for Freezing White 
Potatoes
at a Rate of 400 Cases Per Hour and Output Container Size 
is
10 oz. (24 pkgs. per case).
Operation preparation
machine, equipment, supplies, etc.
Investment cost
Receiving and washing
1 Robins soaker washer with extension
discharge 60%
$ 2,400.00 Inv.
Inspecting
1 Robins
(20' x
and size grading
sanitary inspection conveyor
30")
2,400.00 Inv.
Conveying
1 Robins gooseneck elevator (16" x 6')
Peeling
1 Food machinery and chemical steam chemical
peeler (complete with all controls and
utility connections)
Inspecting and conveying
1 Robins sanitary inspection conveyor
(20' x 30")
Cutting (optional)
1 Urschel model F. slicer
Conveying
1 Robins gooseneck elevator (16" x 6')
Blanching
1 Chisholm-Ryder improved sanitary rotary
blancher (8')
Conveying and cooling
1 Robins sanitary inspection conveyor (20' x 30")
with spray attachment from above
Dewatering
1 Key water reclaim reel and tank
Conveying 
.
1 Robins gooseneck elevator (16" x 6')
Total
Common with
southern peas
4,300.00 Inv.
2,400.00 Inv.
4,539.00 Inv.
Common with
southern peas
Common with
southern peas
Common with
southern peas
1,125.00 Inv.
Common with
southern peas
$17,164.00
Source: See footnote at the end of Table 37.
Table 36.
T~~1 a ~~ Prr\r(llrt or P n zr r ~ t I? n n R pall i r c~mt7 n t s f
lu n7, 1 Lq DK(IJS~ Der c
INN
I ~-(f\n~n~ n~r\~anaru I 1 17" Y 17 ' I
Table 37. Packaging and Casing Requirements for Freezing White Potatoes
at a Rate of 400 Cases Per Hour and Output Container Size is
10 oz. (24 pkgs. per case)a/
Operation:
machine, equipment, supplies, etc.
(other products for which used)
Fi.lling and closing
1 Food machinery and chemical straight line
carton filler model 16-S with appropriate
carton forming and closing attachments
(VI, VII, Ix)
Investment cost
See leafy greens
Conveying
2 Globe No. B-3 white Hycar belts (12" x 50') (All)
Overwrapping
2 Hayssen series 5000 wrapping machines
model 43 ML (All)
Conveying
2 Globe No. B-3 white Hycar belts (12" x 100')
Package Freezing
2 Frick spiro flex automatic continuous
freezers (625-36) (All)
Conveying
2 Globe No. B-3 white Hycar belts (12" x 50')
Overwrapping
2 Hayssen series 5000 wrapping machine
model 43 ML (All)
Conveying
2 Globe No. B-3 white Hycar belts (12" x 100')
Ca sing
1 Food machinery and chemical Sure Way fully
automatic caser model E-41 (All)
Case Printing
1 Chisholm-Ryder New Way Model CP
Case Conveying
1 Food machinery and chemical heavy duty
accordion conveyor (All)
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Common with
southern peas
Agriculture,a/Source: Unpublished research, ERS, U.S. Department of
Washington, D.C., 1967,
net returns.
Equipment specifications as given in the tables represent only a
fraction of the information now available for planning (16). See "un-
published research, ERS, U.S. Department of Agriculture, Washington, D.C.,
1967." Specifications were not used in this report as a final recommenda-
tion for building and equipment but rather as the best basis currently
available for estimating equipment costs. Much on-the-job study in the
areas of food engineering and processing technologies will be needed in
specifying equipment best adapted to the local situation. Due considera-
tion should be given to latest research developments in processing tech-
niques and to all sources of information on equipment and processes.
Building specifications can be described in general terms as being
of concrete block construction with insulated metal roofing. Building
costs include plumbing, electrical wiring, lighting, heating, and ventila-
tion. Total building investment costs, Table 38, were 965,270 dollars and
about two-thirds of this was for zero-degree storage. Total initial invest-
ment costs in buildings and equipment were estimated to be just less than
two million dollars, Table 38.
The lines were assumed not to operate simultaneously and thus some
common use of equipment is possible. The extent of common use is shown
in Tables 30-37 and also in Figure 1-4 which show the flow of raw material
through each line.
Total costs for one year of operation were approximately three million
dollars, Table 39. Gross sales were estimated to be just less than three
and one-half million dollars, Table 40, leaving a net revenue before taxes
of 399,437 thousand dollars. Some common profit rates were calculated and
54
Table 38. Investment in Buildings and Equipment for Processing Selected
Vegetables in Baldwin County
Item Investment cost
(dollars)
Building and general equipment needs $ 965,270
Product preparation/
Southern pea line 78,460
Green bean line 274,510
Leafy greens 36,717
Total 389,687
Packaging and Casing
Southern Peas and Green Beans 539,760
Leafy Greens 34,800
Total 564,560
TOTAL $1,929,517
a/Green bean and leafy green lines use some common equipment from
the southern pea line. Butterbeans use the pea line only and require no
additional equipment.
56
Table 39. Annual Fixed and Variable Costs for Proposed Freezing Plant
for Processing Selected Vegetables
Cost category Total 1
Dollars
Fixed costs
Buildings
Equipment
Interest
Taxes and
a n
insurance c/
Total fixed costs
Variable costs
Processing:
Supervisory and 
other labord/
Seasonal labor d/
Packaging material e/
Utilities, fuel, and gasoline f/
Insurance, taxes, and inventory 9/
Maintenance and repairs h/
Product damage i
Interest on operating capital j/
Miscellaneous k/
Subtotal variable costs
Raw product
Transportation 1 /
Sales m/
Total variable costs
TOTAL
57,885
132,708
57,885
44,175
292,623
293,460
153,519
567,001
32,400
17,280
31,065
34,560
80,640
34,560
1,261,765
833,175
324,000
345,600
2,763,940
3,056,563
a/ Depreciation computed at 6.67 per cent of replacement costs for building
and 12.5 per cent for equipment.
b/ Interest on investment computed at 6 per cent of one-half of replacement
cost.
c/ Taxes computed at 0.74 per cent of replacement costs for buildings and
0.83 per cent of equipment replacement costs. Insurance computed at
1.5 per cent of building and equipment replacement costs.
d/ Includes fringe labor costs at 9.5 per cent of payroll.
e/ 3.5 cents per pound of output.
(Footnotes continued on next page.)
f/ .2 cents per pound of output.
g/ .5 per cent of Gross value of output with inventory averaging one-third
of annual output.
h/ Maintenance costs estimated at 1.5 per cent of replacement cost of
buildings and equipment. Repair costs estimated at 4 per cent of
equipment replacement cost per 100 hours of annual operation.
i/ Estimated at 1 per cent of annual pack.
/ Assumes 1/3 of annual gross value will be needed. Interest estimated
at 7 per cent.
k/ Office supplies, telephone, janitorial supplies, and contingencies
estimated at 1 per cent of annual gross revenue. Also includes
inspection fees.
1/ Estimated at 2.0 cents per pound of annual pack.
mi/ Estimated at 10 per cent of annual gross revenue for brokerage,
advertising and promotion.
58
are shown in Table 41. Well above average returns were indicated. Re-
turns as shown, however, were those resulting from a 100 per cent retail
pack and will be correspondingly lower as the percentage of institutional
pack increases. A recent study using different source materials from
those shown here and including an institutional pack as 25 per cent of the
total have shown profit rates as low as 6.5 per cent on initial investment
and 3.9 per cent on gross sales ( 2).
Total labor requirements include twenty-nine people on full-time sal-
ary, Table 42. Seasonal requirements go as high as 59 employees during
processing of southern peas and as low as 22 during the leafy green season,
Table 43.
The leafy green season was assumed to be approximately half of the
year from October through the middle of March. The green bean season was
assumed to be from mid-May to mid-June and from the first of October to
mid-November. Southern peas were assumed to be in season from mid-May
until mid-November. Speckled butterbeans and limas were expected to have
a similar season. Seasonality expectations were based on southern Alabama
conditions.
The output mix and corresponding days of processing shown in Table
45 are, thus, only one combiiation from which a decision must be made.
Two-shift operation which is likely in some seasons further increases the
range of possible outputs from the plant. Seasonality of production is a
recognized problem in the food processing industry; and other products,
product mixes, and repacking from bulk purchases from other processors
should be considered.
59
Prices, Gross Revenue, Total Cost and Net Returns from Processing
Selected Southern Vegetables, Baldwin County, Alabama
Product
Speckled butterbeans
Southern peas
Green beans
Leafy greens
Total
Total costs
Net return b/
Tota - Pcl in
Total Pack
10 oz. boxes
(1,000 pounds)
1,296
4,752
4,752
5,400
16,200
Price/lb. in
10 oz. boxes a/
(dollars)
.24
.24
.24
.16
Total
(dollars)
311,040
1,1 40,480
1,140,480
864,000
3,456,000
3,056,563
399,437
a/ Delivered prices, representative broker in Alabama, January, 1968.
b/ Return to risk, interest on investment has been deducted, Table 39.
Table 41. Profit Rates Relative to a Proposed 
Processing Plant in Baldwin
County, Alabama
Net income before corporate income taxes 
$399,437
Corporate income taxes a/ $187,735
Net income (profit) $211,702
Profit as a per cent of initial investment 11.0
Profit as a per cent of gross sales 
6.1
a/ Estimated to be 47 per cent of net income.
Table 40.
.60
Table 42. Annual Labor Requirements, Management, Supervisory and Others.
Title (Dollars)
President 25,000
Vice-president of sales 
20,000
Vice-president of production 
20,000
Plant manager 15,000
Assistant plant manager 
10,000
Procurement and receiving managers (2) 24,000
Comptroller 14,000
Sales representative 12,000
Office and personnel manager 8,000
Warehouse manager 8,000
Electrician 8,000
Mechanic 8,000
Mechanic helpers and maintenance (2) 10,000
Boiler room engineer 8,000
Warehouse men (2) 9,000
Janitors, cleanup and grounds (4) 16,000
Foreman for product preparation crew 7,000
Secretaries (2) 
9,000
Clerk-typists (3) 
12,000
Quality-control technician 5,000
Travel allowance for procurement 10,000
Travel allowance for sales 10,000
Total 268, 000
61
Table 43. Seasonal Labor Requirements for Preparation, Packaging and Casing
Southern Green Speckled Leafy White Wage
Hours of Description peas beans butter- greens pota- Rate/
beans toes hr.
Number Dollars
Receiving 4 4 4 2 8 1.60
Inspecting 35 24 35 6 
16 1.60
Blanching 2 2 2 2.50
Filling and closing 2 2 2 1 1 2.25
Fork lift operator 2 2 2 1 1 2.25
Carton handling 2 2 2 2.25
Freezer operator 2 2 2 1 1 3.00
Overwrap operator 4 4 4 2 2 2.25
Casing and final inspection 1 1 1 4 1 1.60
Case labeling 1 1 1 2 1 2.25
Equipment (convey & wash) 1 
1.60
Case sealing 2.50
Peeling and cutting 2.25
Janitor 4 4 4 
1.60
Total employees 49 48 59 22 32
Total wages/yr. a/ $46,700 $38,962 $12,738 $41,800 NA
a/ Depends on total hours each line is operated, see Table 45.
Table 44. Proposed Processing Plant: Raw Product Requirements, Acreage
Required, and Gross Revenue to Growers, Baldwin County
Product Yield Acreage Price Gross
Product requirements per acre needed a/ per ton revenue
to growers
Tons Tons Acres Dollars 
Dollars
Speckled butterbeans b/ 675 1.1 614 130 87,750
Southern peas b/ 2,475 .7 3,536 145 358,875
Green beans 3,211 2.0 1,606 90 
288,990
Leafy greens 3,252 5.0 650 30 
97,560
Total 9,613 --- 6,406 -- 833,175
Shelled basis.
a/ Annual land requirements are less because of durable cropping.
Table 45. Proposed Freezing Plant: Annual Operating Time, Raw Product, Requirements, Finished
Product Yield, and Output for Processing Selected Vegetables, Baldwin County, Alabama
: Days : Hours : Hours : Raw product Finished product : Expected output rates
Product : per : per : per : requirements a/: yield (as percentage of finished product
: year : day : year : Hourly: Annual: of raw product) : Hourly : Annual
Tons Tons Per cent Pounds 1,000 pounds
Speckled butterbeans....: 15 8 120b/ 5.62 675 96 10,800 1,296
Southern peas.............: 55 8 440b/ 5.62 2,475 96 10,800 4,752
Green beans.............: 55 8 440 7.29 3,211 74 10,800 4,752
Leafy greens............: 125 8 1,000 3.25 3,252 83 5,400 5,400
Total 250 - 2,000 - - 9,613 - --- 16,200
a/ 90 per cent of rated capacity. Loss of 10 per cent assumed because of delays and abnormal product
quality.,
Shelled basis.
C'
NO
63
About 9,613 tons of raw material would be supplied 
to a plant of the
type under discussion, Table 44. Gross revenue to farmers 
under price and
yield conditions shown in Table 44 would be 833,175 dollars. 
Prices and
yields data are those gathered from a telephone survey 
of a sample of
processing plants in the South. Yields reported 
by plant managers were
very near those that have been reported 
in other studies. Prices to
farmers, however, were as much as twenty per cent 
less than quoted in
other sources.
Raw material requirements could be satisfied for the proposed 
plant
with about 6,406 acres of land which as noted previously 
in an adjustment
in land use acres that is well within the capability 
of Baldwin County
alone. Anticipated double-cropping will reduce 
this figure considerably.
Variability in Planning Costs
In addition to the point estimates of costs developed 
for a specific
plant the effect on cost of product 
mix, length of season and rate of out-
put were examined by the use of estimating equations. 
Reed and Sammet in
a study of processing plants in California 
have provided a file of basic
information that has been used in numerous 
studies of processing feasi-
bility (12). This basic file may be used 
to calculate numerous point
estimates of investment and operating costs 
covering a wide range of prod-
uct mixes, season hours of operation and 
rates of output. Application of
linear regression methods to these basic 
data simplified the task of
examining several alternative levels of investment 
but with a loss of de-
tail contained in the single point budget estimates.
Total investment depends for the most part on 
rate of hourly output
desired from the plant. Because of this the following 
aggregate estimate
64
of investment costs has been made:
Total investment cost in
Southern peas and = $229,925 + $8,496R
I 
+ $17,265 R
2 
+ $81,616 (R + R
Southern green limas
R1 = Rate of hourly output of peas, speckled butterbeans or limas in
thousand pounds per hour.
R
2 
= Rate of hourly 
output of southern 
greens in thousand 
pounds per
hour.
Rates of output used in making the point estimates of costs were sub-
stituted into this equation as a means of comparison. Eight hundred cases
of peas or snap beans per hour are equivalent to 12,000 pounds. Estimated
investment cost was 2,057,483 dollars which is just slightly above the
estimate given in Table 44 of 1,929,517 dollars. Additional preparation
costs of green beans included in the green bean lima were not included in
the estimating equation. One principal result of using the estimating
equation was to show that increasing rate of output by 1,000 pounds per
hour or by 66 cases will require an additional 100,000 dollars investment
cost. Estimating equations for annual in-plant costs of processing are
shown in more detail in Table 46.
Advantages and Disadvantages
Relative to Labor and Transportation Costs
Costs of processing as shown by the estimating equations developed
from the California data will be higher than expected for Alabama because
of differences in labor cost. An analysis was made of the California
study for the purpose of partitioning out labor costs from all others.
Using basic tabular data from the study it was possible to calculate total
annual processing costs as labor plus other costs. Total labor and other
costs were calculated for several rates of output and hours of operation
65
for processing green beans, lima or speckled butterbeans and greens. 
As-
suming that each product would be processed at the same rate 
of output and
season hours of operation the following total annual labor costs, total
annual other costs and total annual plant costs were estimated.
1) Total annual plant costs = $49,827 + 12,206R + $57H + $133 RH.
2) Total annual labor costs 
= 
8,592 + 3,037R + $53H + $29RH.
3) Total annual other costs = $42,202 + $9,099R + $104RH.
R = Rate of output in (1000) lb/hr.
H = Hours of operation per season.
Costs in equations two and three were not expected to sum exactly to
those of equation one as all three are separate estimates from a similar
source of data. The close agreement of the sum of two and three:
4) 50,794 + 12,136R + 53H + 133H
with equation one supports the assumption that this was a valid method of
partitioning out labor costs. Labor costs for several rates of output
and hours of operation averaged about 25 per cent of total annual costs.
This estimate provides a basis for the assertion of one type of locational
advantage. Average hourly earnings of production workers in Alabama have
in recent years averaged about 75 per cent of those in California (14).
Total processing costs would thus be reduced by about six per cent in
Alabama versus California, the major processing area.
Alabama is also located near the population centers of the U. S. giving
rise to a locational advantage of another type. Sixteen locations in the
South were examined with respect to costs of frozen food transportation to
42 major Southern cities. A transportation cost analysis was made by calcu-
lating the total transportation bill from each of the 16 locations to the
66
42 cities. Each city was weighed in the analysis by its population. Minimum
cost locations in Alabama are listed in the following order: Talladega, Clanton,
Oneonta, Fort Payne, Guntersville, Dothan, Cullman, and Brewton. Albany, Georgia
was about as good as either of the best two locations in Alabama. Nashville,
Tennessee was ranked after the Alabama and Albany locations. With the exception
of Brewton, the Alabama and Albany locations had transportation costs of not
more than five per cent greater than the Talladega location, Table 47.
Baldwin County, Alabama was not included in this transportation cost
and analysis, but the cost disadvantage would be similar to that of Brewton.
Total annual distribution costs to the southeastern area can be expected
to be about eight per cent or about 27,000 dollars more in Baldwin County
than in a location nearer the center of the State, Table 47. This aspect
of location is thus not as significant within Alabama as local factors re-
lating to farm yields and internal plant management.
Summary
Farms in Baldwin County with over 260 acres of land and 20,000 dol-
lars or more gross sales annually appear to be on the increase. Part of
this increase in commercial agriculture can be attributed to the ability
of farmers of the area to adjust rapidly to new farm plans. Net increase
in cropland use in the county during the 1960-65 period was 14,000 acres
with some crops, soybeans and wheat, showing this much increase or more.
Change in commercial vegetable acreage has also been pronounced. Green
bean acreage has increased from 22 acres in 1959, to 825 acres in 1964,
to 2,800 acres in 1966, and to 4,500 acres in 1967. Southern peas have
also been planted in large acreages increasing from 83 acres in 1964, to
67
Table 46.
Item
Estimated Annual Total Plant Costs 
of Southern Peas, Greens, and
Speckled Butterbeans a/
Cost
(Dol ars)
Processing:
Variable costs
Greens 47.015 R
2
H
2 
+ 14,861 H
2
Beans and peas 44.885 R1H
1 
+ 26.408 H
1
Fixed costs
Beans, peas, & greens 
33,276 + 4,977 R
1 
+ 6,424 R
2
R1 = Rate of output in thousands of pounds per hour of southern peas.
H
1 
= Hours of seasonal operation of southern pea line.
R2 = Rate of output in thousands of pounds per hour of southern peas.
H2 = Hours of seasonal operation of southern green line.
Source: Multiple Product Processing of California Frozen Vegetables,
Reed, Robert H., and Sammet, L. L., Gianni Foundation Research Report
No. 264, University of California, Division of Agricultural Sciences, 1963.
Table 47. Relationship of Transportation Costs at the Best of Sixteen
Locations to the Remaining Locations.
Per cent Increased
Location relative to Transportation
Ranking Talladega costs relative
to Tall ade a
(Per cent) (dollars a/
Talladega 100.0
Clanton 101.4 4,536
Albany, Ga. 102.0 6,480
Oneonta 102.2 6,480
Fort Payne 102.2 7,128
Guntersvi lie 103.3 10,692
Dothan 103.8 12,312
Cul Ilman 104.6 14,904
Brewton 108.4 27,216
Nashville, Tenn. 117.9 57,996
Charlotte, N. C. 122.9 74,196
Charleston, S. C. 123.3 75,492
Jackson, Tenn. 125.6 82,944
Memphis, Tenn. 130.7 99,468
Winston-Salem, N. C. 134.2 110,888
Baton Rouge, La. 140.8 132,192
a/ "See footnote next page."
68
SDollars greater than transportation cost shown in Table 39. Costs of
transportation from each location was calculated to 42 cities and amount
transported was weighted by 1960 population. The 42 citieswere:
Albany, Georgia
Asheville, North Carolina
Atlanta, Georgia
Augusta, Georgia
Baton Rouge, Louisiana
Birmingham, Alabama
Charleston, South Carolina
Charlotte, North Carolina
Chattanooga, Tennessee
Columbia, South Carolina
Columbus, Georgia
Durham, North Carolina
Ft. Lauderdale - Hollywood, Florida
Ft. Smith, Arkansas
Gadsden, Alabama
Greensboro - H. Point, North Carolina
Greenville, South Carolina
Huntsville, Alabama
Jackson, Mississippi
Jacksonville, Florida
Knoxville, Tennessee
Lake Charles, Louisiana
Lexington, Kentucky
Little RocK - N. Little Rock, Arkansas
Louisvil1le, Kentucky
Macon, Georgia
Memphis,- Tennessee
Miami, Florida
Mobile, Alabama
Monroe, Louisiana
Montgomery, Alabama
Nashville, Tennessee
New Orleans, Louisiana
Orlanda, Florida
Pensacola, Florida
Raleigh, North Carolina
Savannah, Georgia
Shreveport, Louisiana
Tampa - St. Petersburg, Florida
Tuscaloosa, Alabama
West Palm Beach, Florida
Winston-Salem, North Carolina
69
1300 acres in 1966 and 2,000 acres in 1967. Baldwin County alone appears
to have the potential to supply the basic 6,406 acres of commercial vege-
tables needed to support a freezing plant in the area.
Demand for frozen food including southern vegetables appears to be
increasing. Frozen vegetable consumption in total was up 29 per cent in
1967 over 1959 while canned consumption was up three per cent and fresh
consumption down four per cent. As frozen consumption occupies only six
per cent of the total market there is ample room for continued growth.
Other indicators of continued growth in consumption of frozen food are:
(1) Fresh vegetable prices have been rising faster than frozen vegetable
prices; (2) Increases in income have been correlated with increased con-
sumption of frozen vegetables at a faster rate than for fresh vegetables;
and (3) Increases in population are substantial.
New freezing plants in the food industry have been feasible in recent
years. Numbers have increased 34 per cent. Freezer output of vegetables
in the South has increased rapidly to the point that, if frozen potatoes
and potato products are omitted, the South, East and Midwest were estimated
to have had about the same output, 188-220 million pounds in 1965. Out-
put in the South was estimated to have more than doubled since 1959. Per
cent increases in outputs of green beans, southern peas, and turnip greens
have rivaled the percentage increases that have been seen recently in
corn, carrots, and potatoes. Green bead output increased 56 per cent in
1959-65 period; southern peas output increased 100 per cent; and turnip
greens output increased 70 per cent.
Growers initial interest in producing vegetables 
for processing in
the southern Alabama area has been high. According 
to survey results farmers
70
expressed an initial interest in 27,000 acres. Introduction of mechanical
harvesting after the survey appears to have enhanced this interest. A
select group of farmers were defined from the study as being those under
45 years of age and having attitudes graded excellent or good. The ini-
tial production interest of this group was further reducedaccording to
previous research results showing plans for production are likely to de-
crease as more information is received. On this most select basis, the
select group in the Baldwin and Wiregrass areas would plan to supply just
less than half of plant requirements after receiving full information. The
select group, however, formed a minor part of the total interest group.
The remaining group, those over 45 or with attitudes fair to poor might
also be expected to produce for processing. This remaining non-select
group in the Baldwin-Wiregrass area had expressed an interest in approxi-
mately 10,000 acres of vegetables proposed for processing. Production on
at least one-third of these acres combined with the select group would as-
sure the acreage needed for the processing plant. Northern Florida provides
still another supply area where interest in processing has been high in
recent years.
Net returns for growing selected vegetable crops were compiled based
on a survey of processor's expected yields from the area and the prices
processors were willing to pay. Net returns per acre to land, operator
labor and capital were budgeted to be $70.47 for green beans; $68.42 for
turnip greens, $60.4 for hand harvested southern peas, $47.40 for mechani-
cally harvested southern peas, and $78.36 for speckled butte rbeans. These
were compared with net returns after harvest of soybeans at $43.34, corn
at $42.37, and potatoes at $70.53. Costs of mechanical harvesting other
71
than custom estimates were not included in this report and additional study
is needed to determine the effect of mechanized harvest on net returns as
they affect both farm and plant feasibility. Total gross return to farmers,
however, from the proposed plant would be $833,175 for 9,613 tons of raw
material.
Total investment costs of a plant having a green bean line, a sou
thern pea line and a southern greens line would be $1,929,517 dollars.
Annual total costs of the plant would be $3,056,563 and annual gross re-
turns, $3,456,000, leaving a net income of $399,437 before corporate in-
come taxes. Profit after taxes would be 11.0 per cent of initial investment.
Annual output of the plant would be approximately 16 million pounds which
in recent years would have been about eight per cent of total production
in the South.
Labor requirements of the plant would include 29 persons on full-time
salaries with a payroll of $293,460 and up to 59 seasonal employees with
a payroll of $153,519.
There should be a labor cost advantage relative to California of
about six per cent of total costs per year. Baldwin County has a slight
disadvantage in relation to Southern markets when compared to other loca-
tions in Alabama, but this was found to be of minor importance.
Based on projected net returns to farmers and the history of the area
to produce there seems to be little doubt that the area can support a
vegetable processing plant of a commercial size. Key elements in the
success of the plant will be its ability to capture at least eight per
cent of a market which shows possibility of continued growth and the way
in which costs of mechanical harvesting will be shared by the processor
and the farmer.
72
Appendix Table . Number of Growers and Acres of Commercial 
Vegetables
by Sales to Processors, Wiregrass and Gulf Coast Counties, 
1967.
Count Growers Acres 
Sales
Coffee
Southern peas 20 100 
$ 10,000
Geneva
Tomatoes 50 250 
10,000
Cucumbers 30 40 
10,000
Southern peas 30 400 100,000
Dale
Field peas 40 200 
20,000
Houston
Cucumbers 60 100 
20,000
Southern peas 50 200 40,000
Henry
Cucumbers 8 12 1,000
Southern peas 40 75 4,500
Subtotal 328 1,377 $215,500
Mobile
Irish potatoes 12 1,200 225,000
Baldwin
Snap beans 70 4,500 
360,000
Southern peas 30 2,000 216,000
Irish potatoes 250 2,500 
506,000
Escambia
Tomatoes 1 20 
3,000
Cucumbers 680 825 
240,000
Subtotal 1,043 11,045 $1,550,000
Total 1,371
12,422
$175,0
73
List of References
1. Allen, M. B., and F. W. Williams. 
1962. The Southeastern Vegetable
Processing Industry: Raw Product Procurement, 1960, 
U. S.
Department of Agriculture 
Mktg. Res. Rpt. 560. U. S. Department
Agr., Econ. Res. Serv. in 
cooperation with Ga. Exp. 
Station.
2. ERS Freezer Survey. 1965. U. S. Department 
of Agriculture, Washington,
D. C.
3. Food Consumption of Households in the United States. 1955. 
Report
No. 1, U. S. Department of Agriculture, 
Washington, D. C.
4. Frozen Food Pack Statistics 
1965. 1967. National Association of
Frozen Food Processors, Washington, D. C.
5. Hammond, Leigh H. June 1966. "Food 
Industry Location," Tarheel Farm
Economist, North Carolina State University at Raleigh.
6. Miller, B. R. and R. S. Glover. 
January 1967. "Estimates of the
Impact of the Poverty Program on Demand for Selected 
Foods,"
Journal of the Alabama Academy of Science, Vol. 38.
7. Miller, B. R. July 1964. "Alabama's Regional 
Trade Balance with
Emphasis on Agriculture and Economic 
Development," Journal
of the Alabama Academy of Science, Vol. 35.
8. National Food Situation. August, 1966. ERS, U.S. 
Department of
Agriculture, Washington, D. C.
9. Pearson, James L., and Thomas G. Brown. 1965. Fruits 
and Ve e-
tables for the Delta, Special Report 69 4/6 
22 M, University
of Missouri Agricultural Experiment Station.
10. Pearson, James L. 1968. Utilization of the 
South's Vegetable
Processing Capacity, Department of Agricultural Economics,
Florida Agricultural Experiment Stations, Gainesville,
Florida in cooperation with Marketing Economics 
Division,
Economics Research Service, U.S. Department 
of Agriculture.
11. Purcell, J. C., and K. E. Ford. 1964. Consumption 
Requirements
and Prospective Demand for Fruit and Vegetables in the
South, Special Report, Georgia Experiment Station, Experiment,
Georgia.
12. Reed, Robert H., and L. L. Sammet. 1963. Multiple Product Pro-
cessing of California Frozen Vegetables, Gianni Foundation
Research Report No. 264, University of California, Division
of Agricultural Sciences.
74
13. U.S. Bureau of 
the Census. 1964. 1964 
United States Census of
Agriculture, Series 
AC 64-P1.
14. U.S. Bureau of the 
Census. 1963. 1963 United States 
Census of
Manufacturing.
15. U.S. Bureau of the 
Census. 1960. 1960 United 
States Census of
Population, Alabama, General 
Social and Economic Characteristics.
16. Unpublished Survey of 
Vegetable Freezing Capacity. 1965. 
ERS,
U.S. Department of Agriculture, 
Washington, D. C.
17. Unpublished Survey on Food 
Processing Lines. 1967. ERS, 
U.S.
Department of Agriculture, Washington, 
D. C.
18. Williams, F. W. 1963. 
A Vegetable Processing Plant 
in Jackson
County, Florida, ERS, U.S. Department 
of Agriculture in
cooperation with Georgia 
Agricultural Experiment 
Station,
Experiment, Georgia.