Doctoral Dissertations

Date of Award

6-1973

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

M. B. Badenhop

Committee Members

Luther Keller, Irving Dubov, Hans Jensen

Abstract

The objectives of this study were: (1) to describe existing Tennessee vegetable freezing plants that processed lima beans, (2) to determine initial investment for synthetic model plants freezing lima beans in multiple-product operations, and (3) to compare cost per pound for processing lima beans in synthetic model freezing plants according to plant capacity, hours of operation, percent of capacity utilized, freezing method, and container. Data concerning existing lima bean freezing plants were obtained from three West Tennessee processors via interviews with plant managers, observations of plant operations and plant accounting records. A com-posite or representative Tennessee multiple-product lima bean freezing plant was described on the basis of these data. Sixteen synthetic model lima bean freezing plants were developed on the basis of data recorded from existing plants and from data col-lected by the technical research committee of the Southern Regional Cooperative Fruit and Vegetable Marketing Project SM 30. The model plants were multiple-product vegetable processing plants. Model plants were developed to plate freeze 10-ounce cartons, plate freeze 2-1/2- pound cartons, belt freeze 20-ounce polybags, and fluidized freeze 20-ounce polybags in 3,000, 6,000, 12,000, and 18,000 pound per hour capacity operations. The number of hours each model plant operated annually was considered the length of season, Seasonal lengths of 300, 500, 700, and 900 hours were used for each plant. Percent of capacity utilized was varied for each plant using rates of 90, 75, 60, and 45 percent of capacity. Fixed and variable costs of model lima bean freezing plants according to plant capacity, hours of operation, percent of capacity utilized, method of freezing, and type of container used were tabulated to determine total cost of the various operations. These total cost computations were divided by appropriate output data to determine aver-age cost for the plants under varying conditions of seasonal length and/or percent of capacity realized. Comparisons were also made among model plants on the basis of cost per pound of processing according to plant capacity, freezing method, hours of operation, percent of capacity utilized, and type of container used. Cost analysis of model plants indicated that there were substantial economies of size in the lima bean freezing industry. The long run aver-age cost curve (LRAC) fell rapidly as plant capacity was increased from 3,000 to 6,000 and to 12,000 pounds per hour. However, the cost analy-sis of model lima bean freezing plants also indicated that a longer pro-cessing season or the use of a higher percent of the plant's capacity may under some conditions be a more feasible alternative for lowering processing costs per pound than increasing plant size. The ability of additional hours of processing to reduce the cost of processing per pound was found to diminish greatly after a 700 hour season was obtained. Processing operations using less than 75 percent of a plant's capacity may find considerable potential in reducing costs by making more efficient use of the plant's capacity. It was determined that under many conditions, cost efficiency in lima bean freezing plants depended more upon the variable cost components than upon fixed cost components. Employing labor saving equipment in single-product process-ing plants has become an accepted means of obtaining cost efficiencies when total output justifies the purchase of such equipment.

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