Costs of Building and Operating Rice Drying and Storage Facilities in California, 1973

The current rate of $.50 per hundredweight for drying and storing rough rice at commercial facilities in California produced insufficient revenues to encourage replacement or expansion of existing facilities at current cost levels. Analyses of capital requirements and operating costs, using economic-engineering techniques, show that per hundredweight operating costs, when annual receipts equal storage capacities, are higher than expected revenues for all 11 model plants developed in this study. Models consist of four sizes—100,000, 300,000, 600,000, and 900,000 hundredweight storage capacity--and three types of operations--all upright storage, 60-percent flat storage, and 80-percent flat storage, with high-capacity aeration to aid drying--in varying combinations. Estimated operating costs range from $.52 to $1.50 per hundredweight of rough rice received at 100-percent annual receipt levels. Costs favor the use of flat storage with high-capacity aeration by as much as 22 percent in the larger models. In operations of like type, costs per hundredweight were over 50 percent lower in the largest plant size than the smallest size. Capital requirements ranged from $750,000 to $3.25 million. Diseconomies resulting from reduced rates of plant utilization more than overshadowed economies of size.