Comprehensive Cost Analysis Report: Nuts.com Almond Production

This report provides a detailed cost analysis of almond production at Nuts.com, examining the expenses incurred across various stages. The analysis includes a breakdown of land preparation, planting, irrigation, maintaining, harvesting, preparing, packaging and overhead costs over a three-year period (2017-2019). The report highlights the proportioning of costs, with land preparation and planting accounting for a significant share. It differentiates between Hickory Smoked and Sprouted Almonds, discussing their pricing and production implications. The analysis also covers cultural costs, including labor, fuel, pruning, and materials. The report concludes by emphasizing the variability of almond production costs based on factors such as climate, soil, and mechanization, while referencing the provided data from Nuts.com and other sources.

Introduction
This report describes a cost analysis of almonds among in Nuts.com, one of the companies in the
Blue Diamond Company. Nuts.com sells almonds as one of their major products. This report,
therefore details the costs spent in land, equipment, culture and overheads.
Cost Analysis
Table 1. Cost Analysis table for three years
COST ($)
SN ITEM 2017 2018 2019
Land preparation and planting costs
1 Removal of previous tree humps 380 380 380
2 Tilling 95 95 95
3 Leveling 70 70 70
4 Preparing rows 30 30 30
5 Application of herbicides 40 45 67
6 Planting 1,400 1,400 1,400
Total preparation and planting
cost 2,015 2,020 2,042
Irrigation costs
7 Water tests 1 1 1
8 Pumps 5 5 5
9 Manpower 30 41 45
10 Irrigation 160 160 160
Total irrigation cost 196 207 211
Maintaining and fertilizer application costs
11 Potassium Sulphate 64 108 151
12 Zinc Sulphate 39 39 39
13 Supplements 123 167 181
14 Pesticides application cost 138 138 138
15 Pruning 67 70 73
Total Maintaining and fertilizer
application costs 431 522 582
Harvesting
16 Tree shaking 100 100 106
17 Sweeping and blowing 48 56 56
18 Picking 40 47 54

19 Hull 22 33 37
Total harvesting cost 210 236 253
Preparing and packaging
20 Sorting 64 65 65
21 Handling 21 24 28
22 Packaging 30 43 21
Total preparing and packaging
cost 115 132 114
Allow for 4.25% variation
Overheads
23 Insurance 8 8 8
24 Office expenses 60 60 60
25 Sanitation charges 8 8 8
26 Environmental charges 10 10 10
27 Premise Taxes 195 195 195
28 Fuel 7 7 7
29 Equipment 34 35 36
30 Sprinklers 85 85 95
31 Premise insurance 65 60 60
Total overheads 472 468 479
Total costs/acre 3,324 3,453 3,567
Allow for 4.25% variation 4,737 4,921 5,083
Note:
Prices are according to the
Nuts.com.
From table 1, it can be deduced that land preparation and planting accounts for the majority of
the production cost with a proportion of 43% of the total cost. In general, the pre-harvesting cost
accounts for the largest share of the production cost. A packaging cost is also affected by the
nature of the final almond as produced by Nuts.com. The company produces almonds in the form
of organic almonds, sliced almonds, chopped almonds, and whole blanched almonds. All these
aspects affect production cost (Nuts.com, 2019).

The proportioning of this costs can be illustrated on a pie chart as shown in figure 1 below. The
cultural costs takes the largest share of about 45 %. Cultural costs include labour, fuel, pruning
and materials as shown figure 2 below. Other costs include land, equipment and harvesting.
Figure 1. Almond costs proportioning

Figure 2 Cultural costs
Two almond products are provided by the Nuts.com Company. These products are Hickory
Smoked Almond and Sprouted Almond. Hickory Smoked Almonds is the almond that has
undergone roasting in addition to the normal drying. The roasting removes moisture from the
almond nuts and can, therefore, be stored for long. On the other hand, sprouted almonds are
those that have undergone soaking. Soaking soften the nuts and removes enzyme inhibitors
which otherwise take long to digest. It is therefore recommended for children and aged people
because it is easy to digest, easy nutrient absorption and easy to chew. Generally, most people
prefer sprouted almonds and hence its price is relatively higher than the smoked one. According
to Nuts.com, the current prices for these nuts are as shown in figure 2 shown below.

Table 2: Pricing of almond brands by Nuts.Com
Quantity Almond type
Hickory Smoked Almonds Sprouted Almond.
1 bag (1 lb) $11.99 $17.99
2 bag $23.98 $35.98
3 bags $35.97 $53.97
4 bags $47.96 $71.96
5 bags $59.95 $89.95
( Source: Nuts.com,
2019)
Conclusion
In summary, it is worth mentioning that almond costs varies significantly from place to place
depending on variables like the climate, soil, availability of water and mechanization. The
anticipated returns also can relax or catapult the cost significantly. This is, however, relative in
terms of costs and returns.
References
Nuts.com. (2019, 9 18). Nuts.com. Retrieved from Raw Almonds:
https://nuts.com/nuts/almonds/raw-no-shell.html