The cost of production can be represented in various ways, but perhaps the most popular expression is
in terms of what it costs to grow a pound of bananas. In Table 3, we can see that in 1992 banana farmers
typically received about 38.1 ¢ for a pound ofbananas. Valuing pre-harvest labor at $12.00 per hour ($9.00 + 33% for labor "benefits," e.g., self-employ-ment or FICA tax, health insurance, etc.) and harvest labor at $10.00 per hour ($7.50 + 33.3% benefits), it cost 2¢ /lb. to plant replacement mats, a little over 4 1/2¢ /lb. for field maintenance (pruning plants, etc.), about 2 1/2¢ /lb. to fertilize the crop, a little over a half cent per pound for weed control, almost 1¢ /lb. for other pest control, nothing for irrigation (since in this case we have not included an irrigation system), and about
3/4¢ /lb. for interest on the operating
costs. The total pre-harvest growing
costs amount to about 11 1/2¢ lIb.,
almost a third of the 38.1¢ received for
the pound of bananas. Harvesting,
packing and shipping costs add almost
15¢ /lb. more, for a total of a little over
26¢ per pound, about two-thirds of the
amount received per pound of bananas.
The gross margin is almost 12¢ /lb.,
about one third of what was received for
the bananas. This amount is what
remains to pay the ownership costs.