PROCESSING, STORAGE, AND SELECTED STORAGE SERVICE COSTS FOR 

 BURLEY TOBACCO IN COMMERCIAL FACILITIES, 1966/67 AND ESTIMATED 1968 



by 



N. A. Wynn, Jr., Donn A. Reimund, and J. W. H. Brown, Agricultural Economists 



Marketing Economics Division 

 Economic Research Service 



FINDINGS 



This report analyzes the costs of handling, processing, storing, and 

 related services in commercial facilities handling Burley tobacco during 

 1966/67 and presents estimates for 1968. 



Results are based on costs in nine firms processing and eight firms storing 

 Burley tobacco. The nine processing firms redried 43.6 million pounds (redried 

 weight) of leaf tobacco. Tobacco was threshed by three firms and yielded 

 16.9 million pounds. Total green weight received by all firms processing 

 amounted to 76.8 million pounds of tobacco. 



Costs were developed for tobacco processing, which included receiving 

 tobacco into the plant through packing it into hogsheads and shipping it out. 

 These costs were for redried weight of tobacco packed as leaf and strip (lamina) 

 Strip costs included packing and shipping stems. 



Costs were also developed for tobacco storage and storage services. 

 Services included in this report are innage, outage, sampling, reweighing and 

 restoring, and reweighing while performing other services. 



Labor costs for 1966/67 were updated to reflect minimum wage changes 

 effective February 1, 1968, and changes in other variable costs as of January 

 1968. (See methodology.) 



Average survey period cost for redrying leaves was $6.02. When updated 

 to 1968, this cost increased to $6.60. The average cost for threshing and 

 redrying was $10.14 for the survey period and $11.03 for the 1968 estimate. 



Storage costs were computed on the volume stored during the survey period. 

 Storage warehouses used an average of 63 percent of storage capacity during the 

 survey period. At this rate of utilization, the average survey period cost was 

 27.23 cents per hogshead per month, while the 1968 estimate was 29.38 cents. 

 Estimated storage costs by percentage of capacity utilized are illustrated in 

 table 4. Services necessary for storing include innage and outage of the 

 tobacco. The innage cost per hogshead for the survey period was 79 cents, and 

 the 1968 estimate was 84 cents. For outage, these costs were 75 cents for t 

 survey period and 79 cents for 1968. 



Cost for sampling, the most expensive service performed in the ster 

 operation, amounted to $6.90 per hogshead for the survey period. When 

 estimated for 1968, this cost averaged $7.33 per hogshead. 



