PROCESSING, STORAGE, AND SELECTED STORAGE SERVICE COSTS FOR 

 FLUE-CURED TOBACCO IN COMMERCIAL FACILITIES, 1966/67 AND ESTIMATED 1968 



by 



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



Marketing Economics Division 

 Economic Research Service 



FINDINGS 



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

 related services in commercial facilities handling flue-cured tobacco during 

 1966/67 and presents estimates for 1968. 



The results are based on accounting records of 15 firms processing and 

 14 firms storing flue-cured tobacco. All firms processing tobacco redried 

 bundles for a total redried weight of 66 million pounds. Loose leaves were 

 redried by nine firms which handled about 52.5 million pounds in this manner. 

 Tobacco was threshed by seven firms and yielded almost 59.4 million pounds. 

 Total green weight received by all firms for processing amounted to almost 

 225.9 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 bundle, looseleaf, 

 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. 



The 1966/67 labor costs 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 bundles was $8.34. When updated 

 to 1968, this cost increased to $9.31. During the same period, the average 

 cost for redrying loose leaves was $6.54, while the 1968 estimate was $7.25. 

 The average cost for threshing and redrying was $12.18 for the survey period 

 and $13.44 for the 1968 estimate. 



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

 Storage warehouses used an average of 87 percent of storage capcity during 

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

 cost was 21.63 cents per hogshead per month, while the 1968 estimate was 



