Abstract
Increased production and shorter harvesting seasons necessitated a greater drying capacity in the Texas rice industry in recent
years. This study attempts to determine the most economical drying
system and the economic optimum rice temperature for drying rice in
the next few years. Projections of the 1975 crop size have been
taken for estimating the appropriate capacity needed by then for
Texas. Off-farm commercial driers handle most of the crop, and these
have been considered in this study.
Budgeting techniques and net profit analysis under the basic
framework of production functions and cost and revenue functions have
been used in this study. Budgets have been constructed for different levels of rice temperature under each of the following three
systems of drying:
1. Complete drying with lot identity preserved: System 1;
2. Partial drying with lot identity preserved: System 2;
3. Complete drying with comingling and lot identity lost:
System 3.
Both secondary and primary data have been used in this study
primary data with respect to present off-farm drying capacity and with respect to the practice of drying were collected by a mailed
questionnaire survey and personal interview. All secondary data as
required have been adjusted by the appropriate index numbers.
It has been found that operating costs of drying as well as revenue per hundredweight of rice dried increase when drying is done
at lower rice temperatures, but the rate of increase in revenue is
greater than the rate of increase in costs as long as rice temperature increases milling yields. Revenue increases by 0.262 cents per
hundredweight and cost increases by 0:095 cents per hundredweight for
one degree decrease in rice temperature.
It is found that when drying is done at 95° rice temperature,
under complete drying (System 1), it requires construction of 30 percent and 40.3 percent additional capacity respectively for the 1968
and the projected 1975 Texas crop sizes. While under partial drying
(System 2) the present capacity is sufficient and there is no need
for building additional capacity for either crop size. Additional
working bins would be needed, but. they could be accommodated from
the storage function. Under comingling (System 3) it would be necessary to construct 4 percent and 14.3 percent capacity respectively
for the 1968 and the projected 1975 crop sizes. However, the operating cost of drying per hundredweight of rice dried is found to be
lowest under System 3, and the highest under System 1, at each level
of rice temperature analyzed for the 1963 and the projected 1975. The estimated optimum temperature for drying rice is 92° when
the industry benefits are considered. Analysis indicates that, in
the short run, driers have economic incentive during the peak period
to dry at temperatures as high as they feel they can avoid alienation
of customers. Comingling rice during the drying process is the
economic optimum system of drying. But until this is widely accepted
for practical use in Texas, the system of partial drying with lot
identity preserved, which is now practiced in some cases, should be
the guide for future planning.
By constructing adequate capacity and drying at a rice temperature of 95°, the estimated net profit to the rice industry would be
0.6, 0.7, and 1.0 million dollars per year for complete drying,
partial drying and commingling, respectively, for a Texas crop size
of 1968.
The analysis suggests that driers should be paid on the basis of
the level of temperature used in drying rice. Furthermore, it
suggests that the industry cannot afford not to have adequate capаcity to dry rice during the peak period at temperatures at 95° or
below. Privately owned, commercial driers may not have the incentive
to construct enough capacity unless producers are willing to pay
additional rates for rice dried at lower temperatures.
crops.