Flour Milling Template 4-5-2004
Flour Milling Template 4-5-2004
Flour Milling Template 4-5-2004
This template is designed to assist you in assessing the feasibility of a flour mill.
Benchmark PP&E costs, utility requirements, and staffing requirements were taken from th
developed by Flores et. al at Kansas State University (see Transactions of the ASAE
However, these and many other operational factors may be altered by the users of this tem
Disclaimer: Neither the OSU researchers, nor the KSU developers of the MMEM, accept re
template or decisions made by template users based upon the model results.
Products
Label Value Unit
Flour Production
Flour Production per Bu (lbs) 44.4 lbs
Cwt of Flour Produced/year 2,450,000.00 cwt
% of Flour Production to A 50.00% %
% of Flour Production to B 40.00% %
% of Flour Production to C 10.00% %
% of Flour Production to Bulk 70.00% %
Cwt of Flour to Pk 100 lb 735,000.00 cwt
Sale Price: Package 100 lb $12.00 $/cwt
Total Flour to Packaged Sales 735,000.00 cwt
Cwt of Flour to Bulk A 857,500.00 cwt
Sale Price: Bulk-A $10.45 $/cwt
Cwt of Flour to Bulk B 686,000.00 cwt
Sale Price: Bulk-B $10.35 $/cwt
Cwt of Flour to Bulk C 171,500.00 cwt
Sale Price: Bulk-C $6.00 $/cwt
Total Flour to Bulk Sales 1,715,000.00 cwt
Sales Price Inflation 1% %/yr
Millfeed Production
Millfeed Production per Bu (lbs) 15.6 lbs
Millfeed Production per Bu (cwt) 0.156 cwt
Pounds of Millfeed Produced/year 86,081,081 lbs
Cwt of Millfeed Produced/year 860,811 cwt
Sale Price: $/ton $105.00 $/ton
Sales Price: $/cwt $5.25 $/cwt
Sales Price Inflation 1% %/yr
Assumptions
Maintenace as % PPE 5.00%
Property Tax as % PPE 0.05%
Insurance as % PPE 2.00%
Income Tax Rate 60.00%
% Senior Debt 40.00%
% Equity 60.00%
Employee Benefits % 30%
Wage Inflation 1%
Expense Inflation 1%
Year 0 Start-up Expenses $1,000,000
Mill Operations
Label Value
Average flour yield 74%
Average millfeed yield 26%
Utilities
Electricity $/kWhr $2.00
Electricity Requirement HP/day 532.76
Electricity Requirement HP/yr 186,466.00
HP/kWhr 0.7460
Electricity Requirement kWhr 397.44
Electricity Inflation Factor 1%
Water & Steam as % electricity 5%
Expenses
Label Value Unit Amount (annual)
Price FOB elevator $4.00 $/bu $22,072,072.07
Transportation cost $0.50 $/bu $2,759,009.01
Insurance transportation cost $0.00 $/bu $0.00
Demurrage $0.02 $/bu $110,360.36
Elevation cost $0.06 $/bu $331,081.08
Switching cost $0.00 $/bu $0.00
Unloading cost $0.00 $/bu $0.00
Other wheat delivery costs $0.00 $/bu $0.00
In-elevator handling cost $0.00 $/bu $0.00
Storage cost $0.00 $/bu $0.00
Fumigation cost $0.00 $/bu $0.00
Shrinkage cost $0.00 $/bu $0.00
Bagging material $0.09 $/cwt $289,695.95
Marketing expense $0.26 $/cwt $844,256.76
Total estimate expense $26,406,475.23
Products
Bulk A Bakers short patent
Bulk B Bakers standard patent
Bulk C Second clear
Package 100 lb Bakers short patent, 100 pound package
Millfeed Bulk (not bagged), unpelleted
Note: Other input cells (shaded in yellow) are found on the following pages:
1. Market Projections
2. Personnel
3. Loan Amortization
4. Depreciation
Revenue
Year 0 Year 1 Year 2 Year 3
Bulk A
Total amount (cwt) 0 857,500.00 866,075.00 874,735.75
Price/unit $10.45 $10.45 $10.55 $10.66
Gross Sales $0.00 $8,960,875 $9,140,989 $9,324,722
Bulk B
Total amount (cwt) 0 686,000.00 692,860.00 699,788.60
Price/unit $10.35 $10.35 $10.45 $10.56
Gross Sales $0.00 $7,100,100 $7,171,101 $7,242,812
Bulk C
Total amount (cwt) 0 171,500.00 173,215.00 174,947.15
Price/unit $6.00 $6.00 $6.06 $6.12
Gross Sales $0.00 $1,029,000 $1,039,290 $1,049,683
Package 100 lb
Total amount (cwt) 0 735,000.00 742,350.00 749,773.50
Price/unit $12.00 $12.00 $12.12 $12.24
Gross Sales $0.00 $8,820,000 $8,908,200 $8,997,282
Millfeed
Total amount (cwt) 0 860,811 869418.919 878113.108
Price/unit $5.25 $5.25 $5.30 $5.36
Gross Sales $0.00 $4,519,257 $4,564,449 $4,610,094
937,835.12
$11.43
$10,718,528
750,268.10
$11.32
$7,765,275
187,567.02
$6.56
$1,125,402
803,858.68
$13.12
$9,646,304
941456.106
$5.74
$4,942,645
$34,198,154
Year 10
$24,139,900
$3,017,488
$0
$120,700
$362,099
$0
$0
$0
$0
$0
$0
$0
$316,836
$27,957,022
$6,241,131.75
Fixed
Cost Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
General & Administrative $322,140 $325,361 $328,615 $331,901 $335,220 $338,572
Maintenance $648,878 $655,367 $661,921 $668,540 $675,225 $681,978
Insurance $259,551 $262,147 $264,768 $267,416 $270,090 $272,791
Property Taxes $3,202 $3,234 $3,267 $3,299 $3,332 $3,366
Depreciation $1,084,800 $1,755,222 $1,295,129 $966,490 $732,500 $731,842
Interest $565,282 $536,615 $505,655 $472,219 $436,107 $397,106
Total Fixed $2,883,854 $3,537,948 $3,059,355 $2,709,865 $2,452,475 $2,425,655
Variable
Cost Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Labor: Yearly Wages $789,600 $797,496 $805,471 $813,526 $821,661 $829,878
Labor: Benefits $236,880 $239,249 $241,641 $244,058 $246,498 $248,963
Labor: Overtime $51,324 $51,837 $52,356 $52,879 $53,408 $53,942
Total Labor Expenses $1,077,804 $1,088,582 $1,099,468 $1,110,463 $1,121,567 $1,132,783
Utilities: Electricity $372,932.00 $376,661.32 $380,427.93 $384,232.21 $388,074.53 $391,955.28
Utilities: Water $18,646.60 $18,833.07 $19,021.40 $19,211.61 $19,403.73 $19,597.76
Total Utilities $391,579 $395,494 $399,449 $403,444 $407,478 $411,553
Cost of Goods Sold* $25,562,218 $25,817,841 $26,076,019 $26,336,779 $26,600,147 $26,866,149
Total Variable $27,031,601 $27,301,917 $27,574,936 $27,850,686 $28,129,192 $28,410,484
*COGS breakdown on Market Projections Worksheet
Other Costs $0 $0 $0 $0 $0 $0
$0 $0 $0 $0
General Labor Positions (Direct Labor) Wage Rate 24 hours 8 hours 8 hours
(Hourly) (Monthly) [All Day] [Morning] [Afternoon]
Receiving and Storage
Unloader $9.00 1 1
Cleaning and Conditioning:
Smutter-oiler A $8.00 1 1
Smutter-oiler B $7.00
Milling:
Miller-bolter A $10.00 1
Miller-bolter B $9.00 1
Oiler-sweeper A $10.00 1
Oiler sweeper B $9.00 1
Packaging, Storage and Loadout:
Packer A $10.00 1 1
Packer B $9.00 2 2
Loader A $10.00 1 1
Loader B $9.00 2 1
Laboratory:
Chemist $10.00 1
Maintenance:
First Class A $10.00
First Class B $9.00 1 1
Second Class A $8.00 1
Second Class B $7.00 1
Other:
Chemist-sanit. relief A $10.00 1
Chemist-sanit. relief B $9.00 1
Unloader-loader-sweeper A $8.00
Unloader-loader-sweeper B $7.00
Total Labor Expense
Total # of Employees 0 14 12
Bonus Yearly
Expense Expense
$1,625 $34,125
$1,625 $34,125
$1,820 $38,220
$1,625 $34,125
$3,250 $68,250
$2,275 $47,775
$1,300 $27,300
$975 $20,475
$845 $17,745
$322,140
$68,796.00
$61,152.00
$26,754.00
$76,440.00
$34,398.00
$76,440.00
$34,398.00
$76,440.00
$137,592.00
$76,440.00
$103,194.00
$38,220.00
$38,220.00
$68,796.00
$30,576.00
$26,754.00
$38,220.00
$34,398.00
$30,576.00
$0.00
$1,077,804
Loan Amortization
Year 1 Year 2
Beginning Balance $5,191,027.20 $4,832,693.25
Interest $415,282.18 $386,615.46
Principal $358,333.95 $387,000.67
Ending Balance $4,832,693.25 $4,445,692.58
*Working Capital is the short-term borrowing made by the mill to purchase inputs and make payroll, all to be paid bac
Note: While this value may be determined by the template's users, a good rule of thumb is 10% of the average annua
Year 3 Year 4 Year 5 Year 6 Year 7
$4,445,692.58 $4,027,731.85 $3,576,334.27 $3,088,824.88 $2,562,314.75
$355,655.41 $322,218.55 $286,106.74 $247,105.99 $204,985.18
$417,960.72 $451,397.58 $487,509.39 $526,510.14 $568,630.95
$4,027,731.85 $3,576,334.27 $3,088,824.88 $2,562,314.75 $1,993,683.80
Expenses
Variable Costs $27,031,601.07 $27,301,917.08 $27,574,936.25 $27,850,685.61 $28,129,192.47
Fixed Costs $2,883,854.32 $3,537,947.56 $3,059,354.91 $2,709,865.41 $2,452,474.67
Other $0.00 $0.00 $0.00 $0.00 $0.00
Total Expenses $29,915,455.39 $30,839,864.64 $30,634,291.16 $30,560,551.03 $30,581,667.14
Year 0 1 2
Gross Margin $30,429,232 $30,824,029
Discount Factor 1.0000 0.892857 0.797194
PV of Income $0 $27,168,957 $24,572,727
3 4 5 6 7
$31,224,593 $31,631,019 $32,043,402 $32,461,839 $32,886,432
0.711780 0.635518 0.567427 0.506631 0.452349
$22,225,049 $20,102,084 $18,182,287 $16,446,178 $14,876,152