Economic Feasibility of Processing Alternatives for Small-Scale Processors of Fruits and Vegetables in Oklahoma

Abstract

The focus of this study was the average cost of production for barbecue sauce in the following settings: mobile processing unit, copacker and an own fixed facility. Scenario analysis was conducted using Simetar� at an iteration of 500 for different production levels. An average cost curve was generated for each processing alternative to show how the level of production affects the average cost per gallon of barbecue sauce. At very low production levels, one is better working with a copacker since cost per gallon of product remains fairly unchanged. The mobile unit and the fixed facility have high capital investment which must be covered through minimum production levels. The mobile unit is the preferred mode of processing for barbecue sauce in those areas having limited resources such as rural areas while the fixed facility would be the mode of choice in the urban areas where resources are easy to assemble.