University of California r / College of Agricultxire T ^ Agricultural Experiment Station /Vo . ^ ^ Berkeley, California Supplement to Statistical Analysis of the Annual Average F.O.B. Prices of Canned Clingstone Peaches, 1924-25 to 1948-49 Sidney Hoos July 1949 Contribution from the Giannini Foundation of Agricultural Economics ^^JTVERSITY OF CAUFORNJA LIBRARY ,oa-ECE OF AGRICULTURT DAVIS -jsrfaae^ ©iTo-te . Yd ft Supplement to Statistical Analysis of the Annual Average P.O.B. Prices of Canned Clingstone Peaches, 1924-25 to 1948-49 Sidney Hooe^/ This supplement or amendment to the previous report, issued June 1949, on f>o.b. prices of California clingstone peaches is being released since it in- corporates data not available at the time the earlier report was developed. The earlier report was prepared at the request of the industry which desired a preliminary report at the earliest possible date. To accomplish that objective, the Cling Peach Advisory Board suggested to the writer that he use an f.o.b. price based on the first eleven months of the 1948-49 season, and an estimated movement for the year, since data on movement during May 1949 as well as the price for the complete season were not available. During April and particularly May of 1949, canned clingstone f.o.b. prices were reduced to the extent that the 1948-49 price and movement reflected in the earlier report are somewhat out of line with actual developments. Now, the movement for the entire 1948-49 season and the weighted average industry f.o.b. price of canned clingstone peaches for the 12-month period of June 1, 1948- May 31, 1949 are available. Therefore, in order to present to the clingstone peach industry a report which reflects actual price and movement data for the 1948-49 year (June 1-May 31), as well as latest data on income and exports, this supplement is being issued. The purpose of this supplement is to present the i-evised results of a statistical analysis of the major factors which have influenced the annual average f.o.b, prices received for canned clingstone peaches by canners in California from 1924-25 through 1948-49. The war years 1941-42 through l/ Associate Professor of Agricultural Economics, Associate Agricultural Economist in the Experiment Station, and Associate Agricultural Economist on the Giannini Foundation, University of California, Berkeley. « , ? 4 ♦ •1 O J CJ. ^ .till.* r-. . ;-i V ' ■■■■■■ ' « ■•3, :>-.'.■• ■ ■ . .{■.• . : i ■ :■ v; ;V .»v «* • • ■ I' 2. 1946-46 were excluded from the analysis because of the abnormal conditions which prevailed then, such as federal price control} and 1946-47 was excluded because a large proportion of the canner shipments that year went into the re- filling of the supply pipe line rather than into consumers' hands. In the analysis the average relationships which prevailed between the f .o.b. prices of canned clingstone peaches and three factors were measured. These three factors are (l) total domestic shipments of California canned peaches, including both clingstones and freestones, (2) index of nonagricul- tural income payments in the United States, and (3) adjusted index of prices of competing canned fruits. The average relations between the f.o.b. price and each of the independent variables may be summarized as follows: (a) A change of one million cases in dcmiestic shipments of California canned peaches, with nonagricultural income and with competing canned fruit prices held constant, was on the average accompanied by a change in the opposite direction of slightly over 13 cents a case in the f.o.b. price of canned clingstone peaches. (b) A change of 10 per cent in the index of nonagricultural income in the Uiiit-eO S-:»tes^ with domestic shipm^jnts of Cali- fornia canned peaches and with prices of competing canned fruits held constant, was on the average accompanied by a change in the same direction of 35 cents a case in the f ^o.b. price of Cali- fornia canned clingstones. (c) A change cf 10 points in the adjusted index of prices of competing cenued fruitsj. with domes tie shipments of California canned peaches bmc with urn^^rioultural income held constant, was on the average acc^panieu by a change in the same direction of 26 cents a case in the f.o.b. price of California canned clingstones. iimvi \ y-^ox - i ill" ■ t :• > f •>'. : '♦o r.rfjril ^ 7JiS or.,. '."}'s>rt 8;. •5"'ir.'. ■bsrt-tj^tn' U.^-^vjr-S'-j. .cS.o.'i. a."* njr • ' I j9xr ■■ 'l.-'J: . f f. , 3. Differences between the actual prices and those explained by the atatis- tioal analysis are given in table 4, column 3. A second analysis was also made in which quantity of domestic shipments was taken as the dependent variable. In this latter analysis the emphasis was shifted from the factors influencing the f.o.b, prices of California canned clingstone peaches to Hie factors influencing the California domestic shipments of canned peaches. The domestic movement of canned peaches, along with income and competing fruit prices, as used in the first analysis, provides a better explanation of the canned cling price behavior than if we try to explain the behavior of move- ment by using canned cling prices along with income and competing fruit prices as in the second analysis. This is illustrated by the fact that there are greater unexplained differences resulting from the analyses of the movement behavior 1iian from the analyses of the price behavior. Therefore, from the statistical viewpoint and the use of the results in measuring historical relationships, the first analysis, in which the behavior of cling prices is explained, is statistically more significant. This situa- tion is not uncommonj it also prevailed in the prewar reports on canned cling- stone peaches, and is often found in the analyses of other agricultural products. aiflafffiKjirii oijetfirtob JSirnnol'iX^sD ortj gn|oa-3«I'inl a-to^osl srti o.^ -Ho Ti'hr«r?--' i|«Icxo ♦rrrif'-'' -"i/t? ".'tJIn -rrr"-" .-rf.- 5'j0.;.i.i :.L,'.J. g.jij ;:,-?jo b:ixi .jaK.'S.a ■.jJiw ^jrioiiy 3->oii^ .^iiiiO i-i-'iiiiAja aa^. ii-'smtiVcm 9lfi lo S'-iU'^ilms sK.-t.mo-i'* rTr.-JJi.'rT',7 '•^f;.T•^'*'>^^ .'vfTTjrf/ "--"r- f<, at Bd-IUBei iiri* To' e^x; art* bnt ^nioqweJhr f aoitaJiJjsrf ?. ' • ^Tum j&Aj»ijji±a 3x ,b:,.iiiii aciox*i4 .^i-t-io 'io '>IIflBO no Bilr • T. si flc l.f ii Teohnioal Note .— 'With price as the dependent variable and the three factors mentioned above as the independent variables, the multiple linear regression equation fitted by the method of least square to the series covering the years 1924-25 through 1948*49 (excluding 1941-42 through 1946-47) is« (1) « -15.173849 - QP00133X2 * 8.205412 log^QXs O.O25549X4; (5.098279) (25.245675) (9.334332) where X]^ is the annual average f .o.b. price of California canned clingstone peaches (in dollars per ease); Xg is the domestic shipments of California canned peaches, including both clingstones and freestones (in units of 1,000 cases); Xg is the index of nonagri cultural income in the United States (1935-1939 « 100); X4 is the adjusted index of prices of competing canned fruits (1955-1939 « 100)} the figures in parentheses are t-ratios of the net regression coefficients; the adjusted ooeffioient of multiple oorrelation Ij^^gj^ " 0,988; With domestic shipments as the dependent veriable, the multiple linear regression equation is; (2) Xg - -71,146,962933 - 4,770,297088Xi + 41,401,596634 logiQXj + (5.098279) (5.820023) 99.249012X4 (2.896836) the adjusted coefficient of multiple correlation "Sg ^1^34 ■ 0,947. ■• i.O ♦ ... _ -■"•^ ♦ .J. ■ , 'ia * «*B5VJ.C /< (X) ;(?-=f!fi?i OOO^i r:tsr.u 'lit) nerr-xJ- I'i- f?rri: p -irKViR-iiiiflo ' ■ ' - nnso nniieqfflco lo sea.'-'.:: -lo xcihnl bn.t.-.jMjja «ff '- «i OX 1 litres t civic ijiib t i > \t'VjdvC»cj ^ - p c»— ,,/{j> v. TABLE 1 Statistical Analysis of the Annual Average F.O.B, Prices of Canned Clingstone Peaches Variables Used in the Analysis Year F.O.B, price Domestic Index of Adjusted index of Jvmc canned shipments nonacricultural prices of ccanpeting through clingstone of California income canned \ fruits . May peaches canned iDcachcs (1935-1939=100) (1935-1939=100) 1 2 3 ^ 4 dollars thousand per case cases ■nsp fiOnt oer cent 1924-25 4.21 5,637 103 9 147,3 1925-26 3,78 8,511 112 7 123.3 1926-27 3.66 9,046 lis 3 118.0 1927-28 3.17 11,163 116 2 112.7 1928-29 3*22 10,800 120,7 106.0 1929-30 4.08 7,845 120 2 117.3 1930-31 2,88 9,402 104 4 109.2 1931-32 2.55 6,058 85.5 102.9 1932-33 1,97 8,188 68.1 123.3 1933-34 2.31 7,480 75.5 124.5 1934-35 2.69 8-006 82 1 127.9 1935-36 2.51 8,726 91.0 109.9 j 1936-37 2.66 9,876 106.5 93,0 1 1937-38 2.96 7,531 103.3 101.6 ; 1938-39 2,30 10, 669 101.0 92.1 1 1939-40 2.44 9,551 109.6 93.1 1940-41 2.30 12,666 122.1 84.^ \ 1947-48 4.82 15,134 292.1 64,^ f 1948 -49a/ 4.P5 i:.,ost5 l^l 9 §/ Preliminary— subject to revision. Sources of data: ri'il, 1: Compiled from reports by canners. Prices are weighted average prices of canned clingstone peaches received hy canners, f,o,b. Col, 2: Total shipments minus exports. Total shipments compiled by the Cann'^rs League of California, J>'o. 2f basis. See table 2. • • Col, 3: Simple average of the pack-year monthly indices of national income, ex- cluding agricultural income, 1935-1939 average oqtials 100. Monthly in- ccano data compiled from U.S. Dept.- of Conmerce, Survey of Current Business, Unreviscd figures used for months prior to Jvinc 1939 and revised inccane figures used for June 1939 and following months. The revised income data obtained from July 1947 Supplement to Survey of Cvirrent Business and later monthly issues. Indexes for April and May 1949 estimated,at snjne levol vis M-.rch 1949 (310.4). Col, 4: For sources and method of construction see table 3. r^: ■ , • . . ytM: ra' he- ■ •• .s- ,» ■ , ■ •- , ■• ^ •• • r .^**r> . , iAvOiv ;■.,.„„.'.— vij.-...- -I 3-,.v'. i. ' . ' ? ■ ■ • * i 1 I" P; ", V ■i ■* 1 ♦ 1 1 t' ' i 1 * ... • ! I >f'o, - ■ »; ( ■ - fl ■( .■>, , - • f-''. '■'.i'">;'.^ !.....''. .^v i'r.j •■ ' TABLE 2 6. Shipments of California Canned Clingstone and Freestone Peaches and United States Exports of Canned Peaches Year California L United States California June Ca3ined Canned Canned Domestic ship- through clingstone freestone peach Exports ments of cannec May shiments shiments shipments peaches 1 2 3 4 5 thoussmd cases. lo. 2i basis 1924-25 5,637 1925-26 8,511 1926-27 9,046 1927-28 12,907 296 13,203 2,040 11,163 1928-29 12,652 310 12,962 2,162 10,800 1929-30 9,204 362 9,566 1,721 7,845 1930-31 J.U,aol 145 11,026 1,624 9,402 1931-32 7,445 82 7,527 1,469 6,058 1932-33 9,881 40 9,921 1,733 8,188 1933-34 9,214 65 9,279 1,799 7,480 1934-35 8,811 321 9,132 1,126 8,006 1935-36 10,757 274 11,031 2,305 8,726 1936-37 10,667 518 11,185 1,309 9,876 1937-38 8,125 677 8,802 1,271 7,531 1938-39 12,287 542 12,829 2,160 10,669 1939-40 10,626 878 11,504 1,953 9,551 1940-41 11,520 1,233 12,753 87 12,666 1941-42 10,568 2,161 12,729 1942-43 12,926 1,191 14,117 1943-44 10,739 598 11,337 1944-45 12,285 337 12,622 1945-46 12,236 510 12,746 1947-48 14,518 1,291 15,809 675 15,134 1948-49§/ 12,C33 1,590 14,5?C > 430 14,096 a/ Preliminary—subject to revision. Sources of data: Cols, 1 and 2: Compiled by the Canners League of California and the Canning Peach Industry Board, Col, 3 : Col, 1 plus col, 2. Col, 4 : United States Department of Commerce, Monthly Summary of Foreign Commerce of the United States, April-May 1949 exports estimated. Col, 5 : Col. 3 minus col, 4, '■ erxocJ:: •no ( I 1 I 'A '•'.8 0*0 : . 5 • ■ i ■ t •t • 'Oh ; - 1 dft.it si. ■'«'} •.■■I's -50 9tii bOB B 10 \.--7''.;m?r ^ 's S . .'0 Iv.v"." V - '..•-:s'oc * f*- ■.*c* - . ■ s*oo • 5 ate' " i Itr 1 * ■ J I III': 120 '^i- ■ ' T* ' ; f - qos* caus 'i r._^._ _ _3 J - r:r: ■ J . .. . ■ T ' - ■ ' ■ —1 wan: 2 Table 3 continued. a/ Frelimi nary— subject to revision. Sources of data: records of canners. Prices are weighted average prices for all grades and sizes Cols. 1 and 2. ^J^P^^^^^ fTb cannery. Canned Bartlett pear prices for all years are for the Pacific Coast; except 1947-48 is for California canners. Cannet^ apricot prices are for California. Col. 3: Compiled by S. W. Shear for No. 2^ sliced fancy pineapple, Hawaii, f .o.b. San Francisco from published quotations supplemented by trade information. Cols.4.5and6:Prices given in colurrms 1, 2 and 3 in per cent of their 1935-1939 averages-canned Bartlett Dears $2,990; canned apricots $2,804; canned pineapples, 11.80. Col 7: Weighted combination of relatives given in cols. 4, 5, and 6, using following weights: canned Bartlett pears, 3; canned apricots, 2; canned pineapples, 6. Col. 8: From table 1, col. 3. Col. 9: Col. 7 as per cent of col. 8 1948-49 prices for canned Bartlett pears and camied apricots are for period, Juiie 1, 1948-April 30, 1949. ■"'^J ■ 0*. COJ* A =re bet ceu^ o|. cot- 9^ TABLE 4 Actual and Estiioated F.O.B. Prices of California Canned Peaches, 1924-25 to 1948-49 (Excluding 1941-42 through 1946-47) Year Percentage June Difference : difference : through Actual Estimated col, 1 minus col, 3 as ^ ^5ay ..,„ . PI^.pe,. „ , ..er ca^e .. per.QeR* 1 924-2^ 4.21 4.39 --18 -4.28 1925-26 3,78 3,68 +.10 2.65 1926-27 5.66 3,56 +.10 2,73 1927-28 3,17 3,17 0 0 1928-29 5.22 3.18 +.04 1.24 1929-30 4,08 3,85 +,2i 5,64 1930-31 2,88 2,91 -.03 -1.04 1931-32 2.55 2,50 +.05 1,96 1932-33 1.97 1.93 +.04 2,03 1933-34 2.51 2.42 -.11 -4,76 1934-35 2.69 2.74 -.05 -1.86 1935-36 2,51 2,55 -.04 -1,59 1936-37 2,66 2,52 +.14 5,26 1937-38 2,96 2.9E +•01 0,34 1938-39 2.30 2,21 + .09 3,91 1939-40 2.44 2.67 -.23 -9,43 1940-41 2.30 2,42 -.12 —5. 22 1947-48 4.82 4.70 +.12 2,49 1948-49S/ 4.85 5.01 -.16 -3,27 fi/ Preliminary— subject to revision. Sources of data; Col. Is Col. 1, table 1. Col. 2s Estimated ty equation (1) on page 4. Col, 3; Col, 1 minus col, 2, Col, 4s Col* 3 as per cent of col, 1.