UNIVERSITY OF CALIFORNIA COLLEGE OF AGRICULTURE AGRICULTURAL EXPERIMENT STATION BERKELEY, CALIFORNIA Marketing Tokay Grapes E. A. STOKDYK \ SHIPPER DISTRIBUTOR — • BROKER OR AGENT y RESTAURANT OR HOTEL / // ,'' \ \ / / FRUIT STAND FRUIT AUCTION X^-^^ J If — —/-* GROCER \ \ ^V / A \ WHOLESALER *^r*-> /^. V? JOBBER PUSHCART PEDDLER \ V : — — r N^ ^^A CHAIN STORE SYSTEM RETAIL UNIT Principal Trade Channels for Tokay Grapes. BULLETIN 558 September, 1933 CONTRIBUTION FROM THE GIANNINI FOUNDATION OF AGRICULTURAL ECONOMICS UNIVERSITY OF CALIFORNIA BERKELEY, CALIFORNIA CONTENTS PAGE Introduction 3 Acreage and production '. 5 Shipments and prices 5 Annual shipments 5 Seasonal shipments 8 Annual prices 8 Seasonal prices 8 Price relations among markets 8 Distribution of Tokay grapes 10 Distribution between auction and private-sale markets 10 Distribution among auction markets 12 Proportion of supplies sold in leading auctions and its relation to prices 14 Factors affecting prices 16 Annual prices 16 Weekly prices in all markets 22 Weekly prices in New York 25 Weekly prices in other important markets 26 Market capacity 26 Weekly capacity of eleven auction markets 26 The planning of distribution in relation to market capacity 26 Daily capacity of New York 33 Trade channels 34 Channels for auction sales 35 Channels for private sales 35 Adequacy of trade channels .... 36 Efficiency of marketing agencies in the trade channels 36 The fruit auctions as price-making mechanisms 37 Trade relations 38 Grower-shipper relations 39 Shipper-distributor relations 41 Distributor-wholesaler relations 41 Distributor-auction relations 42 Trade relations among other agencies 43 Marketing costs 43 Individual cost items 43 Marketing costs in relation to selling prices 44 Other marketing costs 45 Reductions in costs 45 The Tokay clearing house 45 Set-up of the clearing house 46 Functioning of the clearing house 46 Factors influencing clearing-house attainments 47 Possibilities and limitations of a planned distribution program under clear- ing-house organization 48 Extension of activities 48 Shipment restriction in 1932 50 Set-up of the restriction program 50 Functioning of the program 51 Results and appraisal 53 Suggested administrative changes 55 Summary, conclusions, and recommendations 56 Conclusions 60 Recommendations 63 Acknowledgments 64 Appendix 65 MARKETING TOKAY GRAPES' 2 E. A. STOKDYK 3 INTRODUCTION The purpose of this study was to determine what changes in the rela- tions between growers and marketing agencies might be made to in- crease the net returns to Tokay grape growers. With this purpose in view data were assembled to ascertain (1) the factors affecting the prices of Tokay grapes, both annually and season- ally, in all market areas and seasonally in the eleven principal auction markets, (2) the trade channels employed, and (3) the trade relations which prevail in the marketing of Tokay grapes. Certain other data were obtained, such as the records of acreage and production and a history of the attempts which have been made by various organizations to under- take marketing functions, which would aid in an understanding of the marketing of Tokay grapes. The growers and shippers of Tokay grapes have been parties to nu- merous marketing arrangements sponsored by various organizations in- cluding the California Fruit Distributors (1901-1926), the Lodi Grow- ers and Shippers League (1919-1924), 4 a clearing house conducted by the California Vineyardists Association ( 1926-1929 ), 5 a clearing house sponsored by the California Grape Control Board ( 1930-1932 ), 6 and a surplus control plan promulgated by the latter organization. 7 The foregoing organizations had several objectives in common, the principal one of which was the planning of the distribution of grapes among the most important market areas. Other objectives included the collection and dissemination of statistical information relative to acre- i Eeceived for publication March 31, 1933. 2 Paper No. 42, the Giannini Foundation of Agricultural Economics. 3 Associate Professor of Agricultural Economics, Associate Agricultural Econo- mist in the Experiment Station, and Associate Agricultural Economist on the Gian- nini Foundation. 4 For history, objectives, and attainments of the Lodi Growers and Shippers League, see: the Stockton Eecord, Nov. 16, 1921; the Lodi Sentinel, June 29, 1921; the Lodi News, Oct. 5, 1923 ; and the Lodi Sentinel, Jan. 5, 1924. s Conn, Donald D. The California vineyard industry. (Five-year report.) Califor- nia Vineyardists Association. San Francisco, California, April, 1932. 6 Stillwell, E. W. Tokay crop sells well in 1931. California Grape Control Board. San Francisco, California. April, 1932. (Mimeo.) 7 Stokdyk, E. A. The Farm Board's proposal for stabilizing California grape in- dustry. Jour. Farm Econ. 12:467-468. 1930. [3] 4 University of California — Experiment Station age, production, and prices ; the standardization of packs, packages, and grades ; and the handling of matters coming before courts and commis- sions which affected the grape industry. The Lodi Growers and Shippers League had an additional objective — the proration of empty cars among grape shippers in the Lodi area dur- ing periods of car shortage. The California Grape Control Board had a further objective, namely, that of eliminating the surplus of grapes if and when the Grape Con- trol Board determined that a surplus existed. Stabilization fees were to be collected on each ton of raisins, juice, and table grapes, which were to be used to purchase surplus grapes and allow them to remain unhar- vested or convert them into by-products. The Control Board's surplus operations in 1930 were based on the assumption that the principal excess above normal market requirements was in the raisin varieties, principally Muscats and Thompson Seedless, which entered both the fresh and dried-fruit markets. It was felt by fresh and juice-grape shippers on the Control Board that their principal difficulty was caused by the shipment of raisin varieties into fresh chan- nels. Consequently, most of the funds available for the purchase of sur- plus grapes were employed in the purchase of raisin grapes. 8 However, as the season progressed and after the Control Board's funds for the purchase of grapes were exhausted, it became apparent that there was a quantity of other varieties in excess of normal market requirements, among them Tokays. Several groups of growers thereupon instructed the agencies through whom they marketed not to pay the stabilization fees inasmuch as the Control Board could not purchase the surplus of the varieties which they raised. The Control Board brought suits against the marketing agencies to collect the fees, most of which were compro- mised out of court. The friction caused by the foregoing situation and the probability of the dissolution of the California Grape Control Board in 1932 resulted in a division of opinion among growers and among shippers as to ways and means of increasing returns to Tokay grape growers. Several groups of Tokay grape growers, through the Orchard and Vineyard Depart- ment of the San Joaquin County Farm Bureau, requested the Giannini Foundation of Agricultural Economics (April, 1932) to make an anal- ysis of the marketing of Tokay grapes and make recommendations ac- cording to the findings. s A total of 352,081 tons of raisin grapes, 19,308 tons of table grapes, and 16,185 tons of juice grapes was purchased in 1930 by the California Grape Control Board. See: California Grape Control Board. Eeport to the Federal Farm Board on 1930 operations. Exhibits B and C. San Francisco, California, Jan. 14, 1931. (Mimeo.) Bul. 558] Marketing Tokay Grapes ACREAGE AND PRODUCTION Records on Tokay acreage and production are available for 1930 only. The California Crop Reporting Service estimates annually the acreage and production of grapes according to classes — table, juice, and raisin — but does not make estimates by varieties. Table 1, compiled from the records of the California Grape Control Board, shows approximately 30,000 acres of Tokays in California, with a production of nearly 154,000 tons in 1930. The acreage is concentrated in two counties, San Joaquin and Sacramento, with 59.4 and 29.7 per TABLE 1 Tokay Grape Acreage and Production by Principal Counties in California, 1930 County Acreage Production San Joaquin acres 17,700* 8,859 482 406 393 1,965 per cent 59.4 29.7 1.6 14 1.3 6 6 100.0 tons 117,400* 25,067 3,081 950 1,557 5,729 per cent 76.4 Sacramento 16.3 Stanislaus 2.0 Placer 0.6 Merced 10 All others 3 7 Total 29,805 153,784 100.0 * Based on a survey of 98 per cent of the total grape acreage in San Joaquin County. Source of data: Shear, S. W. California grape acreage, production, yields, and acreage per farm. A preliminary statistical summary. California Agr. Exp. Sta. 1932. (Mimeo.) cent respectively. Production is heaviest in San Joaquin County with 76.4 per cent of the total in 1930. Detailed records are lacking to show the trend in acreage and produc- tion, but it is stated by those familiar with the situation that between 1920 and 1922 there was a marked increase in acreage ; 9 but since 1925 the acreage has remained practically stationary. However, approxi- mately 12 per cent of the acreage is not yet in full bearing. 10 SHIPMENTS AND PRICES Annual Shipments.-^- Interstate shipments of Tokay grapes have fluc- tuated between 3,982 and 7,456 carloads during the period 1921 to 1932 (table 2) . Shipments of Tokays averaged 25 per cent of total California table-grape shipments during this same period. 9 The Lodi News, Nov. 11, 1922. io Growers estimate that a Tokay vineyard reaches full bearing when it is from eight to twelve years old, the age depending upon methods of production. 6 University of California — Experiment Station During some years, particularly in 1925, 1927, 1928, and 1930, a con- siderable portion of the Tokay crop was unharvested, primarily because of low prices. In 1922 a car shortage prevailed. Official estimates of the TABLE 2 Annual Interstate Shipments of California Table Grapes, Including Thomp- son Seedless, Tokay, and Emperor Grapes, Annual Delivered Auction Prices for Tokay Grapes on Eleven Auction Markets, and All- Commodity Index of Wholesale Prices, 1921-1932 Interstate shipments of Average price per package* for Tokay grapes All- commodity Year Total, all California table grapes Tokay grapes Emperor grapes Other California table grapes index of wholesale prices 1 2 3 4 5 6 1921 carloads 13,100 18,800 23,500 25,600 29,6001 27,000f 27,700 30,200 24,600 24,200 17,300 15,200t carloads 4,500 4,400 5,900 5,900 7,125 5,872 6,835 7,456 5,613 7,670 4,109 3,982f carloads 2,200 3,100 4,500 5,300 4,800 4,300 5,317 6,201 3,642 4,608 3,886 3,660t carloads 6,400 11,300 13 , 100 14,400 17,675 16,828 15,548 16,533 15,345 11,922 9,305 7,558f dollars 2.18 1.91 1.72 1.53 1.20 1.43 1.40 1.31 1.42 1 14 1.59 lilt 1926 = 100 97.6 1922 96.7 1923 100 6 1924 98.1 1925 103.5 1926 100.0 1927 95.4 1928 97.7 1929 96.5 1930 86.3 1931 71.1 1932 65. Of * Packages consist of crates of 29 pounds gross weight and lugs of 31 pounds gross weight. Since 1928 most packages were lugs. t Subject to revision. Sources of data: Col. 1: Data compiled by: S. W. Shear, Giannini Foundation of Agricultural Economics, from various sources and converted to a 13-ton carload. For a partial list of the sources see: Mallory, L. D., S. R. Smith, and S. W. Shear. Factors affecting annual prices of California fresh grapes, 1921-29. Hil- gardia 6:106. 1931. Col. 2: For 1921: from Shear, S. W., and H. F. Gould. Economic status of the grape industry. California Agr. Exp. Sta. Bui. 429:46. 1927. For 1922-1924: estimated by S. W. Shear and the author from the records of the Agricultural Com- missioner's Office of San Joaquin County and the records of the California Fruit Distributors Asso- ciation and the California Fruit Exchange. For 1925 and 1926: from Schultz, C. E. Marketing California grapes, summary of 1926. U. S. Dept. Agr. Bur. Agr. Econ. p. 76. 1927. (Mimeo.) For 1927-1931: from Cox, W. F. California grapes. Annual summary, season of 1931. U. S. Dept. Agr. Bur. Agr. Econ., California State Dept. Agr., and California Grape Control Board, cooperating. p. 89. April, 1932. (Mimeo.) Col. 3 : For 1921-1926: estimated from the records of the California Fruit Distributors and the Cali- fornia Fruit Exchange. For 1927-1931: from Cox, W. F. California grapes. Annual summary, season of 1931. U. S. Dept. Agr. Bur. Agr. Econ., California State Dept. Agr., and California Grape Control Board, cooperating, p. 83. April, 1932. (Mimeo.) Col. 4: Col. 1 minus cols. 2 and 3. Col. 5: For 1921-1923: data furnished the author by E. W. Stillwell, of the California Grape Control Board. For 1924-1932: from the same sources as col. 2. Col. 6: From the annual and monthly publications of the U. S. Dept. Com. Bur. of Labor Sta- tistics. unharvested tonnage of Tokays are not available, but estimates of ship- pers and growers place the unharvested tonnage of Tokays at: 1922, 25,000 tons ; 1925, 15,000 tons ; 1926, 1,000 tons ; 1927, 10,000 tons ; 1928, 12,000 tons; and 1930, 20,000 tons. For all table grapes the official esti- Bul. 558] Marketing Tokay Grapes TABLE 3 Interstate Shipments and Prices for Tokay Grapes by Weeks, 1929-1932 Date of shipments, week ending Interstate ship- ments of Tokay grapes, in carloads Two-week moving average of ship- ments, in carloads Weighted average price in dollars per package at 11 markets advanced two weeks 1929 Aug. 24 15 116 271 538 525 595 743 755 739 569 372 66 193 404 531 560 669 749 747 654 470 2 15 31 1 81 Sept. 7 : 1.58 14 1 41 21 1.64 28 1.38 Oct. 5 1.16 12 1.20 19 26 1.37 1.59 Nov. 2 1930 1931 1932 Aug. 23 38 227 376 675 1,026 870 685 964 685 1,134 816 132 302 526 850 948 777 824 824 904 975 1.89 30 1.80 Sept. 6 1.46 13 1.22 20 1.08 27 1 33 Oct. 4 1 56 11 1 45 18 90 25 0.70 Nov. 1 Aug. 15 27 108 181 335 412 462 443 493 515 488 338 119 67 144 258 373 437 452 468 504 501 413 228 2.31 22 1.79 29 1 63 Sept. 5 1 37 12 1.46 19 1.72 26 1.85 Oct. 3 1.81 10 -. 1.62 17 1 51 24 1.58 31 Sept. 3 128 189 427 521 467 328 469 584 433 158 308 474 494 398 399 526 509 314 1.52 10 1.28 17 1.06 24 0.97 Oct. 1 1.23 8 1.22 15 1 12 22 0.99 29 Sources of data: Cols. 1 and 3: Cox, W. F. California grapes. Annual summary, season of 1931. U. S. Dept. Agr. Bur. Agr. Econ., California State Dept. Agr. and California Grape Control Board cooperating, p. 88-89, April, 1932 (Mimeo.); and daily reports of the Federal-State Market News Service: Grapes. San Francisco, California. Col. 2: Computed from col. 1. Cols. 2 and 3: Calculated to ascertain the relation between shipments and prices. Some shipments reach their destinations in the week following loading in California, while some reach destination the second week following loading. 8 University of California — Experiment Station mates of unharvested tonnage are : 1922, 60,000 tons ; 1925, 100,000 tons ; 1926, 15,000 tons; 1927, 142,000 tons; 1928, 75,000 tons; and 1930, 74,000 tons. 11 Seasonal Shipments. — The Tokay grape shipping season usually be- gins the latter part of August and ends the first part of November with heaviest shipments during September and October (table 3) . During the principal Tokay shipping season this variety dominates the California table-grape movement. Other varieties marketed then are principally Malagas, Thompson Seedless, Cornichons, and Emperors. Emperors, however, do not usually begin to move in heavy volume until the end of the Tokay season. 12 Annual Prices. — Average annual delivered auction prices for Tokay grapes have varied from $1.11 a package in 1932 to $2.18 in 1921 (table 2) . There is a tendency for prices to vary indirectly with the volume of shipments. This relation will be discussed more fully in the section on "Factors Affecting Prices" (pages 16 to 26). It should be noted that the annual prices shown in table 3 are the weighted average of prices re- ceived from sales in the eleven principal auction markets. Complete data are lacking on prices received from sales in other markets. However, the data that are available indicate that these prices approximate the prices received on the auction markets, because shippers make a practice of quoting prices to private-sale markets in accordance with the prices pre- vailing in auction markets. The average prices include the prices for all qualities, consequently some growers with high-quality grapes received a somewhat higher average annual price than the figures shown in table 2, while other growers with low-quality grapes received lower prices. Seasonal Prices. — Tables 3 and 18 and figure 1 show a tendency for Tokay grape prices to be relatively high early in the season (late Au- gust), and then to decline sharply during most of September with some recovery in late September or October. Shear and Gould 13 pointed out a similar tendency for all California table-grape varieties in an analysis of data for the years 1924-1926. There is an inverse relation between seasonal shipments of Tokay grapes and prices (table 3). This relation is discussed more fully below (pages 22-25). Price Relations Among Markets. — The major fluctuations in Tokay grape prices in the principal auction markets occur almost simulta- ii Shear, S. W. Grapes. Outlook charts and tables. California Agr. Exp. Sta. Feb- ruary, 1932. (Mimeo.) i 2 See : Stillwell, E. W., and W. F. Cox. Marketing California Grapes. U. S. Dept. Agr. Cir. 44:20-25. 1928. 1 :i Shear, S. W., and H. F. Gould. Economic status of the grape industry. Califor- nia Agr. Exp. Sta. Bui. 429:83-85. 1927. Bul. 558] Marketing Tokay Grapes 02 w m 02 W O t-H O H Oh ►h* l-H l-H H Pm ft O o En 02 O pq O co • • 1 ■ jiT ( \& 1 • • JZ* ••' ^ f\ ••• j 9^ *^fe% 1 1" ^}0? 1 1 ioO z 0> CM (M CM o • 1 ~ X • • • • • Sv 1 ^ 8> ^Ag 7* m 7* - _ O<0 cm2 z 3 _ 9 o. u cM» as 3 c£> Co >rj *H . Q _l 220 2.00 ISO 1.60 1.40 1.20 1.00 SECTION A - *'2I - •?* - '23 % - *3I 29. » >tf^ ^S7 - - •'30 1 I ---«-■ . i I 1 "0 3,000 4,000 5,000 6,000 7,000 8,000 INTERSTATE SHIPMENTS OF TOKAY GRAPES. CARLOADS 9,000 5 + 060 z°- H5 +0.20 OO _ ,Q 4 0.20 0.40 1 JECl — - ION i » - , ■* i - fe^ .*« - 5o« *29 # ^J26 '25 i '3/. 1 i i —J i 1 6 8 10 12 14 16 18 20 INTERSTATE SHIPMENTS OF CALIFORNIA TABLE GRAPES OTHER THAN TOKAYS AND EMPERORS THOUSANDS OF CARLOADS -O + 040 Otf) Q g-0.20 Ui (J 03 2 Z Q-O -040 s 0.60 r— _S£CTlON c > - '30^^^ i i I 1 ^** 1 no ALL 100 90 80 70 60 COMMODITY INDEX OF WHOLESALE PRICES Fig. 3. — The annual average delivered auction prices for Tokay grapes were found to be influenced by the volume of interstate shipments of Tokay grapes (Sec. A), the volume of shipments of other California table grapes (Sec. B) , and changes in the general price level, as measured by the all-commodity index of wholesale prices (Sec. C). (Data from table 2; P= 0.7996.) that the shipments of California table grapes, other than Tokays and Emperors, 18 were rather consistently related to the deviations from the price-supply curve in Section A of figure 3. This relation is shown in Sec- tion B. The dots represent the price deviations from the curve in Sec- tion A and the volume of shipments of other table grapes in individual years, and the curve represents the average relation between these two factors. Another factor which was thought to influence Tokay grape prices was the change in the general price level of all commodities as reflected 17 Mallory, L. D., S. R. Smith, and S. W. Shear. Factors affecting annual prices of California fresh grapes, 1921-1929. Hilgardia 6:105. 1931. is Emperors were excluded because the bulk of this variety is usually shipped after the Tokay season is over. 18 University of California — Experiment Station by the all-commodity index of wholesale prices. The relation between the deviations from the curve in Section B and the all-commodity index of wholesale prices is shown in Section C. It will be noted that this factor accounts for the wide deviations in Section B in 1930 and 1931. During earlier years, when fluctuations in the all-commodity index of wholesale prices were minor, the relation between the deviations and the index of wholesale prices was not outstanding. TABLE 7 Probable Prices for Tokay Grapes and Probable Total Returns by Shipping Varying Quantities in 1932* Shipments of Tokays Probable annual delivered auction price Price after deducting 7 per cent selling charge Price after deducting $0.65 freight and icing Price after de- ducting $0.30 for picking, packing, haul- ing, and loading Probable Carloads ot 882 lugs Packages of 31 pounds total returns on the vines 1 2 8 4 5 6 7 3,500 3,087,000 $1.54 $1,432 $0,782 $ 0.482 $ 1,567,934 4,000 3,528,000 1.38 1.273 0.623 0.323 1,139,544 4,500 3,969,000 1.26 1.172 522 222 981,118 5,000 4,410,000 1.15 1.069 0.419 0.119 524,790 5,500 4,851,000 1.06 0.986 0.336 036 174,636 6,000 5,292,000 0.98 0.911 0.261 - 0.029 - 153,468 6,500 5,733,000 0.90 0.837 0.187 - 0.113 - 647,829 7,000 6,174,000 $0.83 $0,772 $0,122 $- 0.178 $-1,098,972 * Assuming shipments of California table grapes (other than Tokays and Emperors) at 11,000 car- loads and the index of wholesale prices 65. Sources of data: Col. 1: assumed. • Col. 2: is col. 1 multiplied by 882. Col. 3: obtained by interpolation from figure 3. Col. 4: is col. 3 minus 7 per cent which is the common selling charge. Col. 5: is col. 4 less $0.65, which is the average freight and icing charge to eastern auctions. Col. 6: is col. 5 less $0.30 picking, packing, hauling, and loading expenses. Col. 7: is col. 2 multipliecTby.col. 6. In summarizing the relations shown in figure 3 it may be said that : On the average, (1) an increase or decrease of 1,000 carloads in Tokay shipments influenced Tokay prices approximately 16 cents a package ; (2) an increase or decrease of 1,000 carloads of other California table grapes influenced Tokay prices between 4 and 5 cents a package, and (3) a 5-point rise or fall in the all-commodity index of wholesale prices in- fluenced Tokay prices nearly 10 cents a package. Other factors influenced Tokay grape prices, but these occurred ir- regularly. One factor was quality. Another was the distribution of ship- ments during the season, while still another factor, as discussed pre- viously, was the distribution of shipments among the principal markets. The foregoing analysis of the factors affecting annual prices may be of aid in determining whether or not, during a given year, total returns to growers can be increased by limiting the quantity marketed. That is, Bul. 558] Marketing Tokay Grapes 19 it may be useful in deciding whether a shipment-restriction program, such as was undertaken in 1932 (pages 50-56), is advisable. It may also be of aid in determining the extent to which shipment restriction might profitably be employed. An example of the use to which the analysis may be put is shown in table 7. Column 3 of table 7 shows the annual delivered auction prices for Tokay grapes which might have been expected by shipping varying quantities in 1932. These prices were calculated from figure 3 under the assumption that shipments of California table grapes, other than To- kays and Emperors, would total 11,000 carloads and that the index num- ber of wholesale prices at the time the Tokay grape movement was under way would be approximately 65. For example, with shipments of Tokays at 3,500 carloads, Section A shows an average price of $2.05 a package. Section B shows $0.19 added to the price of Tokays with ship- ments of 11,000 carloads of other table grapes. Section C shows $0.70 subtracted from the price of Tokays with the all-commodity index of wholesale prices at 65. Thus, $2.05 + $0.19 - $0.70 = $1.54. Column 6 of table 7 shows the annual prices per package after mar- keting and harvesting expenses have been deducted from the delivered prices shown in column 3. These prices are net to the grower on the vines. By multiplying column 2 by column 6 an estimate of the total returns to growers on the vines which might have been obtained by shipping vary- ing quantities is obtained. A comparison of columns 1 and 7 shows that under the conditions as- sumed (shipments of California table grapes other than Tokays and Emperors at 11,000 carloads and the index number of wholesale prices 65) , the total returns to growers would have decreased as the volume of shipments increased. It also shows that the shipment of a quantity in excess of 5,500 carloads would be likely to have resulted in losses. In other words, growers would not receive harvesting and marketing ex- penses. The last two items in column 7 may appear extreme, for it may be argued that growers would not continue to harvest and market their grapes if the expenses incurred in these operations were not recovered. It is probable that growers would cease harvesting if delivered prices were consistently low ; however, delivered prices during the season fluc- tuate considerably, and since a period of from ten days to two weeks elapses before shipments from California reach eastern markets, growers often ship heavily in anticipation of an upward trend in prices. The re- sult is that at times growers do not recover harvesting and marketing expenses and in some cases not enough to cover marketing expenses. With the aid of such data as presented in table 7 an estimate may be made of the extent to which shipment restriction might be employed. 20 University of California — Experiment Station One might conclude from table 7 that it would be advisable to restrict shipments to 3,500 carloads, since that is the point Avhere total returns to growers is the highest. However, other factors must be considered, one of which is the percentage of the growers who are willing to partici- pate in a shipment restriction program. TABLE 8 Probable Returns Per Acre to Growers Within a Shipment-Control Program With 85 Per Cent of Growers Participating and With Varying Quantities Shipped, 1932* Total number of carloads Number of carloads to be shipped by growers within the program Per cent of their crop growers within the program would harvest Number of packages per acre growers within the pro- gram would harvest Probable net price per package on vines Probable average total returns per acre to growers within the program 1 2 3 4 5 6 3,500 2,450 41.2 151 $ 0.482 $ 72.78 4,000 2,950 49.6 181 0.323 58.46 4,500 3,450 58 212 0.222 47.06 5,000 3,950 66.4 243 0.119 28.80 5,500 4,450 74.9 274 0.036 9.86 6,000 4,950 83.2 305 -0.029 - 8.85 6,500 5,450 91.9 336 —0.113 -37.97 7,000 5,950 100.0 366 $-0,178 $-65.15 * A crop of approximately 7,000 carloads is assumed. Sources of data: Col. 1: assumed. Col. 2: calculated by subtracting 1,050, which is 15 per cent of 7,000, from the items in col. 1. Col. 3: calculated by dividing each item in col. 2 by the last item in col. 2. Thus 2,450 divided by 5,950 equals 41.2 per cent. Col. 4: the figure 366 multiplied by col. 3. The figure 366 is the average number of packages shipped per acre in 1927 by Tokay grape growers submitting records for cost analysis. See: Tokay cost of pro- duction summary, San Joaquin County, California. California Agr. Ext. Ser. and Orchard and Vineyard Dept. of the San Joaquin County Farm Bureau, cooperating, p. 3. 1928. (Mimeo.) Col. 5: from col. 6 of table 6. Col. 6: is col. 4 multiplied by col. 5. Table 8 shows a calculation of the returns per acre which growers within a shipment-restriction program might have expected by ship- ping varying quantities under the conditions assumed in table 7, with 85 per cent of the growers within the program. Here it is assumed that the total crop is 7,000 carloads. Column 2 shows the number of carloads to be shipped by growers within the program as the total number of car- loads shown in column 1 varies. Column 3 is the percentage of their crop which growers within the program would ship. Column 4 is the total number of packages which growers within the program would ship. These data were obtained by multiplying column 3 by the figure 366 which is an estimate of the average yield per acre. Column 5 is the esti- mate of net prices to growers, taken from table 7, which would be ob- tained by shipping varying quantities as shown in column 1. Column 6 Bul. 558] Marketing Tokay Grapes 21 (obtained by multiplying column 4 by column 5) is the total returns per acre which growers within the shipment program might expect. Table 9 shows the returns per acre which growers within a shipment- restriction program might expect with varying percentages of growers within the program. This table shows that the greater the percentage of growers within the program the higher the total returns per acre those within the program might expect. The reason for this situation is that the growers within the program would ship a larger percentage of their TABLE 9 Probable Beturns per Acre by Shipping Varying Quantities of Tokay Grapes, in 1932* Number of Probable returns per with varying acre to growers within shipment-control program percentages of growers within the program carloads 60 per cent 65 per cent 70 per cent 75 per cent 80 per cent 85 per cent 90 per cent 95 per cent 100 per cent 3,500 $29.40 $34 .22 $50 13 $58.80 $66.03 $72.78 $78.57 $83.38 $88.21 4,000 33.92 36.50 45.86 50.71 54.91 58.46 61.69 64.92 67.51 4,500 32.41 34.63 39.74 42.40 44.84 47.06 49.06 50 62 52.17 5,000 22.73 23.56 25.70 27.01 27.97 28.80 29.75 30.46 31.06 5,500 8.46 8.64 9.14 9.40 9.65 9.86 10 04 10 19 10.37 6,000 - 8.09 - 8.18 - 8.44 - 8.58 - 8.70 - 8.85 - 8.93 - 9 02 - 9.11 6,500 -36.39 -36.61 -37.06 -37.40 -37.63 -37.97 -38.08 -38.19 -38.42 7,000 -65.15 -65.15 -65.15 -65.15 -65.15 -65.15 -65.15 -65.15 -65.15 * Assumes a crop of 7,000 carloads. Also assumes a yield of 366 packages per acre. Source of data: Calculated from figure 3 by methods illustrated in table 8. crop with an increasing percentage of growers within the program. This table also shows that with a small percentage of growers within the pro- gram, shipment restriction would not be carried to as great an extent to obtain highest returns to growers within the program as with a large percentage of growers within the program. For example, with only 60 per cent in the program the highest return per acre would be obtained by shipping between 4,000 and 4,500 carloads, while with 70 per cent or more the highest returns would be obtained by shipping 3,500 carloads. Another factor to consider in deciding to what extent shipment-re- striction programs might be conducted is the probable effect on future plantings. If restriction were practiced to such an extent that all growers would increase plantings, the ultimate effect of the restriction program would be to destroy its profitableness. The reason for this situation is that when the new plantings come into bearing production would in- crease; then if shipment restriction were practiced the percentage of the total tonnage to be shipped (other factors remaining constant) would decrease. In such a case, the returns from the volume marketed, 22 University of California — Experiment Station even though above marketing and harvesting expenses, would be too small to compensate growers for cultural expenses on their entire pro- duction. The determination of the point to which restriction programs with Tokay grapes might be carried without stimulating new plantings is beyond the scope of this study. It would involve an analysis of the degree to which the acreage and production of Tokay grapes has in the past re- sponded to prices. Several studies of this kind have been made for other crops in designated areas, 19 which show that with adequate data a fairly accurate estimate can be made of the extent to which production will in- crease or decrease in response to high or low prices. The data necessary for such a study with Tokay grapes are not available. However, the judgment of growers and shippers who have been engaged in the indus- try for a considerable period can be considered in determining the point to which shipments may be restricted without encouraging plantings. Still another factor to be considered is the effect that a shipment-re- striction program is likely to have on the cultural programs of growers. Restriction programs might induce them to cultivate 20 more intensively, which would result in a greater tonnage per acre. This factor must also be considered in applying restriction programs. Weekly Prices in All Markets. — The factors affecting weekly prices for Tokay grapes were found to be (1) the volume of interstate ship- ments of Tokay grapes and (2) the prevailing prices of other California table grapes. See figure 4. Section A of figure 4 shows the relation between the volume of ship- ments and the weighted average of prices prevailing in eleven auction markets. The volume of shipments is a two-week moving average of shipments and the prices are those which prevailed two weeks following the first week considered in averaging the shipments (table 3). For ex- ample, the average of the shipments during the weeks ending August 15 and August 22, 1931, are related to the prices prevailing during the week ending August 29, 1931. A closer relation between shipments and prices was found by averaging two weeks' shipments than by using the ship- ments of a single week as the volume factor. The probable reason is that some shipments reach their destinations in the week following loading while others do not arrive at their destinations until the second week. Furthermore, some shipments may be held on track at destination until the week following their arrival. The average of two weeks' shipments is Bean, L. H. The farmers' response to price. Jour. Farm Econ. 12:3, 368-385. 1929. 20 The word "cultivate" here implies the application of fertilizer, pruning, spray- ing, and other production practices. Bul. 558] Marketing Tokay Grapes 23 Factors Affecting Weekly Tokay Grape Prices in Eleven Auction Markets, 1929-1931 i.5U SUCTION A • 2.00 V» DOLLARS PER PACKAGE o o • H • « » • • • • « » » • • • ^* ^M • • • •^^ II • 0.50 i i i i i i i i i i i i 1 1 1 l n iii. i i i i i i i i i i i i i i i i 1 J_l, ,1 [ill + 0.60 Si _ll- -1U + Ouj Qlfl n SS-o. *<. 2> Q 100 200 300 400 S00 600 700 600 SHIPMENTS OF TOKAYS, CARLOADS + 0.60 in 2 + 0.40 Q 900 1,000 goo -0.60 seer ION B • • • • «• • • • • • • • • • 1 • • •0.40 SECTION C / PRICE >EVIATIONS \ J N * 1 V 1... 1 1,. _i_ 0.80 0.90 1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 PRICE OF OTHER CALIFORNIA TABLE GRAPES, DOLLARS PER PACKAGE 7 21 5 19 2 6 20 4 18 I 29 12 26 10 24 7 SEPT. OCT. NOV. SEPT. OCT. NOV. A. SEPT. OCT. NOV. 1929 1930 1931 Fig. 4. — Weekly Tokay grape prices in the principal auction markets were found to be influenced by the volume of shipments of Tokay grapes (Sec. A), and the pre- vailing prices of other California table grapes (Sec. B). The fluctuations not ac- counted for by these two factors (Sec. C) were probably due in part to variations in quality, and the manner in which supplies were distributed among the various mar- kets. (Data from tables 3 and 20; P = 0.897.) tends to compensate the lack of accurate data on the date of arrival and sale of all shipments. The fluctuations in the individual weekly prices, as shown by the dots in Section A, in relation to the average as shown by the curve in Section A, were found to be influenced by the prevailing prices of other Cali- fornia table grapes. 21 2i In Section B the deviations from the curve in Section A are shown in relation to this factor. In the course of this analysis an inverse relation was found between the volume of shipments of other California table grapes and the deviations from the curve in Section A. However, this relation was not as marked as the direct relation between other table-grape prices and these deviations. A similar situation was found in an analysis of weekly artichoke prices. The pre- vailing prices of lettuce explained deviations from an artichoke supply-price curve better than the volume of lettuce. See: Stokdyk, E. A. Marketing globe artichokes. California Agr. Exp. Sta. Bul. 524:29-30. 1932. 24 University of California — Experiment Station There is an advantage in the employment of the factor of the prevail- ing prices of other table grapes as a partial explanation of the deviations from the price-supply curve over the factor of the volume of shipments of other table grapes when the question of anticipating the weekly prices of Tokays arises. This advantage, as pointed out by Wellman 22 in the case of apricots, is that the prices not only reflect changes in the volume of other table grapes, but also take into account changes in the supply of other products which compete with grapes, such as changes in the buying power of consumers, and changes in the general price level. TABLE 10 Weekly Shipments of Tokay Grapes to Obtain $1.30 a Package Under Varying Prices of Other California Table Grapes in 1932 Prices of other table grapes Weekly shipments of Tokays Prices of other table grapes Weekly shipments of Tokays $0.90 220 $1 15 440 0.95 255 1.20 500 1 00 300 1.25 580 1.05 330 1.30 680 $1.10 380 $1.35 800 Source of data: Calculated from figure 4. That there are factors affecting the weekly prices of Tokay grapes other than the volume of shipments and the prevailing prices of other table grapes is indicated by Section C of figure 4. Here the deviations from Section B are plotted chronologically. One factor known to influ- ence these deviations markedly is quality. The degree of acidity, the sugar content, the color, the formation of the bunches, and the degree of freedom from blemishes all influence quality. Unfortunately, an ade- quate measure of these qualities as price-making forces is not available. Another factor influencing the weighted average of prices in the eleven auction markets is the distribution of shipments among the sev- eral markets. This factor will be discussed more fully below (pages 26- 33). The principle may be stated here: with a given volume of ship- ments, other factors being constant, the highest weighted average price is obtained by placing supplies in the various market areas in such a manner that the same price is obtained in each market area. The data available on the distribution of supplies in the various market areas in- dicate that during some weeks supplies were distributed fairly well in accordance with this principle while in other weeks they were not. 22 Wellman, H. R. Factors that affected the annual prices of canned apricots, 1923- 24 to 1930-31. California Agr. Ext. Ser. p. 4. June, 1931. (Mimeo.) Bul. 558] Marketing Tokay Grapes 25 The foregoing analysis of the factors affecting weekly prices may be of aid in determining the point to which weekly shipments may be re- stricted under a shipment-restriction program. For example, if under conditions estimated to prevail in 1932, it had been decided to restrict annual shipments to between 4,000 to 4,500 carloads to obtain an average annual delivered price of approximately $1.30 a package (table 10), an Factors Affecting Weekly Tokay Grape Prices in New York, 1929-1931 2.50 ,2.00 1.50 1.00 0.50 - • SECTION A • • • • • - ■ • • • • • « • - * « i , , , , i i _ , 1 i i "1 " ' 20 40 60 80 100 120 140 NEW YORK AUCTION SALES, THOUSANDS OF PACKAGES 160 ^<+0.60 52+ 0.40 ^ a + 0.20 £ W - 0.60 O 0.90 1.00 10 1.20 1.30 1.40 1.50 1.60 1.70 ' Q PRICE OF OTHER CALIFORNIA TABLE GRAPES, OOLLARS PER PACKAGE JSECTION C I L PRICE _L I (DEVIATIONS se 7 21 5 19 2 6 20 4 18 I 29 12 26 10 24 7 SEPT. OCT. NOV SEPT OCT. NOV A. SEPT OCT. NOV. 1929 1930 1931 Fig. 5. — Weekly Tokay grape prices in New York were found to be influenced by the volume of sales (Sec. A) and the prevailing prices of other California table grapes (Sec. B). The fluctuations not accounted for by these two factors (Sec. C) were probably due to variations in quality. (Data from table 18; P= 0.901.) estimate might be made, from figure 4, of the weekly volume to be shipped to obtain a weekly average price of $1.30 a package. 23 Table 10 illustrates such an estimate. Weekly Prices in New York. — Available data indicate that the same factors have influenced weekly prices in New York as in all market areas. Figure 5 shows these to be primarily (1) the volume of sales, and (2) the prevailing prices of other California table grapes. In using figure 5 to anticipate prices in New York, the prevailing prices of California table grapes, other than Tokays, in the week pre- 23 The prevailing prices of other table grapes as a factor influencing Tokay grape prices can be ascertained from current issues of the Federal-State Market News Service. 26 University of California — Experiment Station vious to the one for which a forecast is to be made can be employed be- cause there was nearly as close correlation between the deviations from Section A and the prices of other table grapes one week earlier as be- tween these deviations and prices during the same week. Weekly Prices in Other Important Markets. — The weekly prices in other markets, namely Baltimore, Boston, Chicago, Cincinnati, Cleve- land, Detroit, Minneapolis, Philadelphia, Pittsburgh, and St. Louis, like New York, were found to be influenced by the volume of sales and the prices of other California table grapes. The supply-price curves for these markets are shown in connection with the following section. MARKET CAPACITY Weekly Capacity of Eleven Auction Markets. — Figure 6 shows the weekly supply-price curves for each of the eleven principal auction markets for the 1929, 1930, and 1931 seasons as found in the analysis of the factors affecting prices (pages 22-25). These curves represent the prices at which varying quantities of Tokay grapes might be ex- pected to sell, other factors remaining constant. For convenience, they are called market-capacity curves. It will be noted from figure 6 that the position and slope of the curves for the several markets vary somewhat. The reasons for the variations in position and slope may be found in such factors as differences in the total population in the trade areas served by each of the markets, differ- ences in the food-consuming habits of the population, differences in con- sumers' preferences for varieties of grapes, 24 and differences in the purchasing power of consumers. An analysis of these factors would be useful in determining where additional sales effort might be spent but would entail the collection and interpretation of data beyond the scope of this study. The Planning of Distribution in Relation to Market Capacity.' — The use to which the market-capacity curves might be put in planning the distribution of sales among the principal market areas is illustrated in tables 11 and 12 and figure 7. Here an attempt is made to ascertain how to plan the distribution of supplies among the several markets so as to obtain the highest weighted average price and the greatest total value. 24 Rasmussen found that in Philadelphia the Tokay was the most popular of all California table-grape varieties, while in Chicago the Thompson Seedless was the most popular, with the Tokay second. This may account for the fact, as shown by the market-capacity curves, that a given volume of Tokays sold for a higher price in Philadelphia than in Chicago. See: Rasmussen, M. P. The marketing of eastern grapes by retailers, Chicago, Illinois, 1928-29. Cornell University. Farm Econ. 75: 1735. 1932. Bul. 558] Marketing Tokay Grapes 27 30v«DVd a3d savnoo o . CO 0) CD So «n A o ^ CD so . S3 co 2 0) S3 co r-i XI -*J CO o 1 co O 05 "S a. Ph a? -^ On. NO s CO CD . '"H o ^ bflr=3 «i_ oJ .9 © •—* M rQ j 73 S3 -^ < < 3 C > c > o ft tf S3 . CD O* S3 5 5 1 «H -+J -P ° fl " rS CD ^ S S ° 00 -s ft © CD " ft ^ S3 CO CD * rH =>D co ^^ _ 01 > £ r2 cd a O CO o _2 bo S3 • rH S3 S3 CO CO r>» CO S3 o CD 2 a ^ r*M S3 OQ CD o r> «' CD 39vxdvOVd «3d SdVnOO CD ^ S3 ° , bcroO ft ^ w W tH o < o Eh TO H ta W o « w Crf w **< H S i-i H W ft OJ * A M o ** r/7 l> w O m to o i— i a Eh < O i-i O & O O O CO Q > o H-l — u /^ w p W J o N M > P h3 o O Eh W W Eh i— i H > £ K~ W Ul H to W M W P 23 a 3 to o B H o n H P Q < £ 5] W o 5 ooooooiooiooo •*01ifl!OOONONOO 00'*lO'HtO-*»«lMcOT)i O OJ CO Price per pack- age, in dollars OfflCCOOOOO^MNOON NO'HC<:r|lTjiMNO') l N 00 0»OifflOO>00 000»0ocoooococo rHlO'^THiHi-(THWlO'H»-t o US US CO Price per pack- age, in dollars moooiONocios-^mNio 05 OOONHHrt!OOHH coo«^nni)ic<)rHcqiOTti CO 00 Number of packages placed on the market OOOOOOOOOOO OOOOOOOOOOO 10NOOONOO>0 01NN HrfMHHHHOO^HH o o o o o CO OOOOOOOOOOO ooooooooooo iOOO»0»C»0"500'00 NOmNNNoomiot^o) us ■* O -^i 1— ( o o o o o CO Total value, in dollars CO 6 a o 3 DO 5 OO*< •^CD^OcDOaOSCDOSCOkO tO tO N N M - IHi- HOCC* o oa us US CO Price per pack- age, in dollars lOOfflmtDNlOOOQOOtC _|,-l,_ l ,_ l eS)i-HOe<)'-ieN^- NrtCO'<*OCO'*NMO'H CD oo 1H Number of packages placed on the market OOOOOOOOOOO OOOOOOOOOOO OONOlfSiDOOUJOC «S01rtNiOMNlO*iniC o o o o o CO OOOOOOOOOOO OOOOOOOOOOO aooo^otcom^H CCNMCSrtOJOS'HOiiHiH -H TJH Tt 1 1—1 OS ^ *— < '"H o o o o o CO Total value, in dollars 6 Z a o v> 90 5 OOOOOOOOOOO •"J'lMOtOOOO-'fOiOC lOCOOi-^US-^CNIOSTHI-^r^ o oo CO 6 c _o V> 3 -2 go 5 MNOOOOOOONOO i-iNMtoiooooNiom CDO'*'-i00 1 *t0OnNM r^ioi^^t<-((MIOCNICSJ»000>010 H05^ , '-lHHHt^^iHH c o c o c CO Total value, in dollars 6 a o 3 .a ■p an 3 OOOcO'-iOOOUS.-iC awiotooiOrtNoooo: H^I^HHHHHIIJHr. o o o CO CO CO 6 a _o 3 ga s OOlOimMtOOO^iONC lOOWNOmtOOlNOI^ NCOiOCOCOMNNiOtOtC •H ■t oc u; CO Price per pack- age, in dollars CS(MIMC^CMC^OCN100iOt^00CT>COTt M 03 t-c a C c j PC c c s PC s L X "5 B r. e '5 £ 1 9 a E c \ c 'J 1 i e: 1 • 1- 15 4< a Is £ G. g >X X u b t ij i ■ . — z 1 c !h • *- / 1 i > 03 CD ■s 4 — c < a c j 1 PC c c If c PC 9 c • «— ->- s c r c ■ ~ c 1 'c c a p cr "c c 9 I , c 1 05 s a X p- It b = a .-s . — c - X 1 c u 03 (-. ? 03 T3 XI t MX '53 c 1* 3 bC CC T3 3 o c3 o 03 XI 3 Bul. 558] Marketing Tokay Grapes 29 Table 11 shows 10 hypothetical distributions of 300,000 packages among 11 auction markets and the probable prices that would be ob- tained with the purchasing power of consumers and other factors the same as those which existed in the period 1929-1931. It will be noted U/ M illBhlV Sk- Distribution of Tokay Auction Sales to Obtain Highest Eeturns, 1929-1931 *3S z a z> i- Ul a. u i X z £ 25 m o g »- u < I UJ Z '5 O _l < NEW rORI <\ ^^ y-PHILADE IPHIA BOSTON* P o cw -t3 3 3 OJ T3 *- ° o M lO N OO N » tO u ° Q h n m io i^ * is ^^^^.^^^ ^^^.^ ^^^ Ti 0) -^ m a> -^ s J5 Ph '3 o Ph > *■■ 5R ^ S V o o o o o o o -<-2 flj OJ 3 O-^! 3 « o o o o o o o 3 o o © o © o o cc O O O iO o o o 3 o co oo -"tr o <— i oo co i-H >« O CM O 05 o ■* » O) IN * !D M * !D OJ h ii 115 00 >Z 03 *— 1 i-H VH i— 1 ►^ 03 Z ft ^H i-H i— ( 1— 1 -»j -»j c _ OJ "Ti 0) -^ W N X W » N O Cv> "S CO "5 t- OO t- OO CO %* CO CO CO CO CO CO CO ^3 f- s 0J ^ ^ „, ^ ^ ^ ^ ^ .2 o3 s Ph H 3 ^3 Pw go "3 a OJ V e vi_, 03 o o o o o o o B9 -t-> (_, 0Q 5 a? C «*-" 03 o o o o o o o 0) 3 o o o o o o o s o o o o o o o cj CO CO CD tf3 CO O CO CO OO Tt< O i-H 00 CO OJ 3 o M UJ N Ol H M t 3 i< !B O) N * (D 00 ►y o3 « ft i-H i— 1 »-H hv o3 ^ ft i-H i— I i—l i-H bf c3 Fh o -4J _fl -u > 3 " 3 o3 oj "3. U! N OC N O H O) o s-3 O i-H CM lO 00 O i-H o -»j fe°l CM CM CM CM CM CM i-H ft o3 n°o « N CD lO ■* ■* CO 09 y—t *— 1 i— ( »— t i— I T-l 1—4 0) o bE oj -^ 13 A Ph o 3 Ph 13 oj O M 13 03 3 13 ^ S o J3 ti m O d ««h 03 8 o^i o o o o o o o > CO OJ o o o o o o o '3 O O O lO o o o o3 Ph O O O "0 o o o m o in r— o "5 »o -u C3 <^ 03 8 O^S © m «o t^ «3 o >o 3 § £ ft CM OS IC >-h CO CM r^ BQ 3 W oo m CM oo ■* o> CM O o i-H i-l CM CO CO •* ■** -a >-r 03 S ft »-H CM CO CO ■«*" ^ "3 s r4 o -*-* fl d ^-, -u (-. O 0 lO "3 lO o >o o X! O O O "3 O O CM CO CM t>. CM CO O -* 1 B >*l O0 ■** i-H T(< lO CM <-H CM CM CO CO ^< Tf -u Y-7 o3 « ft M M l« N Ol >H ■* m »-H ?-H Q £-3 3 s^3 OJ -*-• O >C CM O t^ "5 CM »-H o» t^ »o CO «— 1 OS u ° O O «) lO «5 ^ * ^1 oo ■«* CO CO CO CO CO CM 9 ^3 O J Ph O ft 03 Ph (1) Is OJ V o o o o o o o 3 3 S oj o o o o o o o PQ o o o o o o c O O O iO o o o O CM CO »C O CO o: i c*- 1 55 >— i oo ■<*< r^ o os co 3 £ £ ft CD OO O CM -^ "3 CO 3 § ^ ft f< >C t^- OO O O i-i i— 1 T-H i-H 1— t rH y—it—tt—t A — OJ +» OS m t>- oo o o o CM CO CO CO f f f -t^ Ph "3 -»j o u 5R Q OJ OJ o o o o o o o o o o o o © o OS CO ''f «3 O O OO 5 § N lO N O) N i(i lO J5 ft s V 1-^ V— t X* co -u eg £ Mo, Si co 03 o> N U) N O H W OC o3 o> CM >C CM O y-* CO 00 s c7 N lO * W N H C 3 37 r- iO f CO CM y-< O MO t bCl V e« ► W 03 «& 6© o o T3 -d OJ OJ 2* 1 fa ft o o o o o o c i *0 er "oj-^S o © o o o o o -3fc§ O Q O Q O O C O O O O O O C o o o © o o c o >o o >o o >o c > > > > 3 t. h © © © © © © © ©©©©©©© ©©©©©©© © >C © >C © 'O O oj s \o ft «-H »-h CM CM CO CO -^ i OJ OJ >«,Q ft .-H <-l CM CM CO CO f< o o ** -*-» OJ fl 3 -u -3 OJ CJ Is O 03 -3 3 O CO Bul. 558] Marketing Tokay Grapes 31 in volume the percentage to be marketed in each area remains fairly constant for some market areas, decreases for others, while for New York the percentage increases. The probable reason for the variation in the percentage distribution is that the elasticity of demand 26 for Tokay grapes in the several market areas varies. This is indicated by the differences in slope of the supply-price curves in figure 6. If the elas- ticity of demand were approximately the same in all market areas the percentage distribution with varying volumes would remain constant. It was pointed out in pages 12 to 16 that there were fluctuations in the percentage of total weekly auction sales sold in each of the auction markets. The foregoing analysis of the market capacity of each auction market shows that some fluctuations are to be expected if equal pressure is to be maintained in all markets. It was also pointed out that there is a tendency for a given market to attract receipts the week following relatively high prices as compared with other markets and to repel receipts the week following relatively low prices. A comparison of tables 18 and 19 and figure 7 will show, however, that this tendency operated, at times, towards destroying an equal pressure on all market areas while, at other times it operated towards a more equal pressure. For example, during the week ending October 18, 1930, prices for Tokays in New York were $0.10 a package higher than the average of prices in all markets. During this week the volume of sales in New York was 47,605 packages, or 23 per cent of the total volume of sales in all markets (202,102 packages) , whereas accord- ing to figure 7 a volume of sales in New York approximating 27 per cent of the sales in all markets, or 54,568 packages, would have been the proper amount for that market. As a result of the higher prices in New York during the week of October 18, 1930, the volume of sales in New York was increased during the following week, and amounted to 29 per cent of the total volume sold in all markets. The proper proportion for New York, according to figure 7, would have been 28 per cent. Hence, at this particular time (the weeks of October 18 and October 25, 1930) the tendency for the New York market to attract receipts the week fol- lowing high prices tended towards a more equal pressure on all markets. On the other hand, during the week of October 4, 1930, prices in New York were $0.08 a package higher than the average of prices in all mar- kets (see table 18) . Sales in New York during that week were 23 per cent (table 19) of total sales as compared with 31 per cent for equal pressure 26 The term elasticity of demand refers to the degree with which consumers re- spond to changes in price. Demand is said to be elastic if with a slight reduction in price new customers buy freely or old customers purchase larger quantities, while demand is said to be inelastic if reductions in price do not attract many new customers or induce old customers to purchase more. 32 University of California — Experiment Station 250 u 1.00 o < < £0.50 Changes in Market Capacity for Tokay Grapes Between 1929-1931 and 1932 NEW YORK 1929 - 1931 1,1,1 BOSTON 2.00 >v » ^V^-/S^9 " 1931 1.50 >v Nv \<^«\w 1.00 ^^^—^r^^ 1,1,1,1. 10 20 30 40 50 60 20 40 50 200 "%. CHICAGO 1 50 ^'^^Vwx' 1929 - 1931 100 ^^^T^---. i,i,i,i, 2.00 PHILADELPHIA 30 40 50 10 20 30 WEEKLY AUCTION SALES , THOUSANDS OF PACKAGES Fig. 8. — The capacity of the four principal auction markets was markedly lower in 1932 than in 1929-1931, primarily because the purchasing power of consumers was lower. Daily Auction Market Capacity for Tokay Grapes in New York, 1929-1931 2.00 PACKAGE O ^k rA/0 VDAY a. UJ 0. - «1 a. < 1.00 ^«^? ! ? ^^^J^V/- ^^fc^ PRICE, OOL O o WEDNES DAY-J ft 1 i 1 1 1 1 20 30 40 SALES, THOUSANDS OF PACKAGES 50 60 2.00 V m ^V (FRIDAY PER PACKAG o \ V > ^s in K < 1.00 -1 o Q |il O aOiO THURSDAY^^ ^v ^vN. - ^ ^ ft i 1 1 10 20 30 SALES, THOUSANDS OF PACKAGES Fig. 9. — Monday and Friday are the days when demand is strongest. For example, a volume of 10,000 packages sold for $1.60 a package on Monday and Friday, while on Tuesday, Wednesday, and Thursday, prices realized from the sale of 10,000 pack- ages were $1.43, $1.40, and $1.45 respectively. (Data compiled from daily issues of the Federal-State Market News Service. Grapes. Fresno, California.) Bul. 558] Marketing Tokay Grapes 33 on all markets. The following week sales in New York were 35 per cent of the total sales in all markets whereas figure 7 indicates that 28 per cent would have been the proper proportion to sell in New York. Thus during this period (the weeks ending October 4 and 11, 1930) the ten- dency for the New York market to attract receipts the week following high prices tended to destroy an equal pressure on all markets. Unfortunately, from the standpoint of planning the distribution of sales, the foregoing analysis of market capacity illustrates a principle rather than an exact measure of the future capacity of these cities for Tokay grapes. The position and slope of the price-supply curves may change rapidly, particularly in periods of extreme fluctuations in the general price level and in the purchasing power of consumers. The marked changes which occurred in the market capacity of four cities between the period 1929-1931 and 1932 are shown in figure 8. Such a rapid change points to the necessity of analyzing current information when a distribution program is undertaken. It is probable that an analy- sis of the market capacity for other products marketed earlier in the season would be of aid in forecasting the capacity of various markets for Tokay grapes during a given season. Daily Capacity of New York. — The daily market capacity for Tokay grapes in New York is shown in figure 9. Monday and Friday appear to be the days when demand is strongest. For example, a volume of 10,000 packages sold, on the average, for $1.60 a package on Monday and Fri- day, while on Tuesday, Wednesday, and Thursday, prices realized from the sale of 10,000 packages were $1.43, $1.40, and $1.45 respectively. The reasons for the stronger demand on Monday and Friday are found in the purchasing habits of jobbers and retailers which in turn reflect the buying habits of consumers. On Monday and Friday some local dealers purchase supplies for two or three days. In addition, on these days purchases are usually made by brokers for dealers outside of metropolitan New York. A knowledge of the daily market capacity may aid in the planning of sales during the week. If current data indicate that sales on a particular day are likely to be excessive in relation to the daily capacity, while on succeeding days they are likely to be small, part of the supply may be held for a day or two. On the other hand, if indications are that supplies on a particular day are likely to be light, as compared with succeeding days, the holding of supplies can be discouraged. 34 University of California — Experiment Station TRADE CHANNELS The chart on the cover page pictures the principal trade channels which were found to exist in the marketing of Tokay grapes. There are a number of channels through which a particular carload of grapes might move from producer to consumer. These are the result of attempts to take the shortest possible route to the consumer in specific trade areas, the efforts of certain dealers to offer more marketing services, the trade relations which dealers have established, and the risks which individuals engaged in the marketing process have been willing to assume. Some markets have a restricted trade area while others serve a large territory. In the smaller markets the trade channels are few, while in the larger markets the trade channels are numerous and varied. The tendency, however, is for products to move by the shortest route eco- nomically feasible. Changes constantly occur as a result of this ten- dency, particularly when one type of dealer attempts to combine the functions performed by two or more types of dealers, as is the case with the chain-store system in undertaking the functions of the wholesaler and jobber. Some agencies offer more services to growers and shippers than other agencies. For example, a distributor through his agents or brokers can maintain a wider contact with markets than an individual shipper can afford ; the telegraphic expense alone restricts individual shippers to a few markets. Furthermore, the distributor usually offers the shipper the use of an established brand. The trade relations which distributors have established may often de- termine the channels through which the product may move. Some of the marketing agencies have their own representatives or subsidiaries in eastern markets ; others have developed connections with certain dealers who have rendered honest and efficient service. Once such connections are established, marketing agencies hesitate to assume the risks that are likely to be incurred by utilizing a trade channel which may appear to be a shorter route to the consumer. Furthermore, dealers who attempt to combine the services of one or more agencies usually ask for a dis- count equivalent to the commission or margin received by one or more of the dealers whose services they attempt to perform. The risks, which various individuals all the way from producer to consumer are willing to assume, have had a marked influence on the trade channels which have become established. Some growers and ship- pers prefer to sell for cash rather than to assume the risk of a decline in price between the time a shipment is loaded and the time it reaches a distant market. On the other hand, many growers and shippers feel that Bul. 558] Marketing Tokay Grapes 35 the risks assumed are, over a period of time, compensated by higher prices. In terminal markets, some agencies prefer to purchase their sup- plies while others prefer to handle them on consignment. Where the con- signment arrangement prevails a third party often completes the trans- action between buyer and seller. Channels for Auction Sales. — Two series of trade channels are promi- nent in the marketing of Tokay grapes, the one for auction sales, and the other for private sales. The auction-sales series is : producer — > shipper — » distributor — > broker or agent — > fruit auction — > retail outlets — » consumer. The producer grades and packs the grapes and delivers them to the shipper's loading shed. The shipper makes up carloads from the deliveries of growers, arranges with a distributor 27 for the sale of the products, and handles the documents incidental to the transactions be- tween himself and the grower. The distributor determines the market to which individual carloads shall be shipped. His agent arranges for the sale on .the fruit auctions, makes collections from the auction companies and forwards them to the distributor, who in turn remits to the shipper. Buyers representing various classes of retail outlets purchase their sup- plies on the fruit auction. In the preceding series of trade channels there are numerous varia- tions ; for example, some growers are grower-shippers in that they load their own products and make sales arrangements directly with distribu- tors. Again, in terminal markets, some retailers purchase their supplies through a buying broker or from a jobber. Channels for Private Sales. — The series of trade channels extensively employed in private-sales markets is : producer — > shipper — » distribu- tor — > broker —> wholesaler -» jobber — > retail outlets — » consumer. Fre- quently, however, the distributor is not utilized in this series of chan- nels ; some shippers sell to wholesalers or to jobbers through brokers. The brokers with whom some shippers deal are buying brokers instead of selling brokers. These brokers are frequently called cash buyers be- cause they buy for their principals for cash at loading point. The services performed by the various agencies in this series of chan- nels are much the same as those performed by the agencies in the auction series described above. The most important difference is that in this series, wholesalers and jobbers instead of the fruit auctions perform the function of breaking up carloads into small lots for retailers. It will be noted from the cover chart that some of the lines connecting the various marketing agencies are heavy lines while others are broken lines. The former represent the physical movement of the product while the latter represent transactions incidental to the physical movement. 27 Arrangements are usually made in advance of the marketing season. 36 University of California — Experiment Station Another agency, which may be looked upon as a part of a series of trade channels, has played a part in the marketing of Tokay grapes, namely, the clearing-house association. Its function is discussed else- where (pages 26 to 33 and 45 to 49) . Adequacy of Trade Channels. — The trade channels found in the mar- keting of Tokay grapes appear adequate. The existing agencies perform numerous and varied services. They afford opportunity for growers and shippers to market their products in the way which suits their particular circumstances and according to the marketing risks each is willing to assume. Furthermore, in each market area agencies have developed to meet the needs of the particular area. At the same time, an agency exists which has as its primary function the planning of the distribution of supplies in the principal market areas. It is desirable that such an agency be established permanently. Efficiency of Marketing Agencies in the Trade Channels. — The ade- quacy of trade channels should not be confused with the efficiency of marketing agencies in the trade channels. It is not among the purposes of this study to make a detailed analysis of the cost of operation of the various agencies handling Tokay grapes. It is probable, however, that local marketing agencies are not operating at maximum efficiency, be- cause the volume of business is divided among too many agencies. Ship- pers report that unit costs of local operation could be decreased if the volume were handled by fewer agencies. There has been a tendency toward the concentration of volume in the hands of fewer agencies as is evidenced by the fact that in 1922 there were 52 shippers in the Lodi district (including grower-shippers) , while in 1932 there were 34 shippers. Four factors were primarily responsible : (1) The shippers' gross operating margin has declined as the delivered selling price has decreased (table 13), because shippers' margins are a percentage of selling price. This decline made it unprofitable for some shippers with small volume to operate. (2) Auction companies have cur- tailed their activities in financing shippers. Some of the shippers who were dependent on this source for funds have ceased operations. (3) Heavy losses incurred by some shippers in financing growers' produc- tion operations forced them to liquidate. (4) Cooperative shipping has increased in the Lodi area ; six of the ten cooperative shippers organized between 1922 and 1932. 28 28 The dates of organization of cooperative shippers are as follows: Acampo Fruit Growers, 1921; Ampere Fruit Growers, 1924; Crown Fruit Company, 1924; Daugherty Fruit Growers, 1926; Live Oak Fruit Company, 1926; Lodi Fruit Grow- ers, 1919; Northern California Fruit Growers, 1922; Sunset Fruit Growers, 1921; Victor Fruit Growers, 1920; and Woodbridge Fruit Growers, 1927. Bul. 558] Marketing Tokay Grapes 37 From the standpoint of operating efficiency of local marketing agen- cies, it is desirable that the trend toward fewer agencies with accom- panying concentration of volume be continued. The Fruit Auctions as Price-Making Mechanisms. — Apart from the adequacy of fruit auctions and the efficiency with which the physical products are handled by such agencies, numerous Tokay growers and shippers question the effectiveness of the fruit auctions, particularly in New York, as price-making mechanisms. A brief history and description of auction selling in New York will aid in understanding and appraising the present auction situation in New York. 29 Prior to 1921, three fruit-auction companies conducted sales in New York. Their sales were, however, held in one room, each company taking its turn in making their sales. A fourth auction company was organized that year and its deciduous-fruit sales were held at the same hour as the deciduous-fruit sales of the older companies. The sales were held in adjacent rooms to permit buyers to shift from one room to the other as offerings attracted them. In 1924, one of the older fruit-auction companies withdrew from the rotation arrangement of selling, and established another auction ; hence, at the present time (1932), there are three regular deciduous-fruit sales conducted simultaneously. In addition to the regular sales there are frequently "second" sales conducted when the volume of fruit to be sold is extremely large. The "second" sales are started at 9 :30 a.m. whereas the regular sales begin at 8 :30 a.m. Consequently, there are at times from 5 to 6 deciduous-fruit sales conducted simultaneously. Opinion differs concerning the influence of the holding of simultane- ous sales on the effectiveness of the auctions as price-making mechan- isms. On the one hand, it is argued that simultaneous sales curtail auction effectiveness because the principle upon which auction selling is predicated is the concentration of supply and demand at one place and time. Miller and Hauck 30 in discussing the factor of simultaneous sales state : "Manifestly this prevents to a greater or lesser degree the convening of the demand in one place at one time, even though some dealers maintain two or more auction buyers to enable them to be rep- resented at each sale." On the other hand, some believe that under exist- ing conditions in the New York market the holding of simultaneous sales 29 For a detailed history and description of the fruit auctions see: Miller, Admer D., and Charles W. Hauck. American fruit and produce auctions. U. S. Dept. Agr. Dept. Bul. 1362:1-36. 1925. so Miller, Admer D., and Charles W. Hauck. American fruit and produce auc- tions. U. S. Dept. Agr. Dept. Bul. 1362:20. 1925, 38 University of California — Experiment Station does not affect the effectiveness of the auctions as price-making mechan- isms. They point out that with the large volume which is sold at auction, one, or only a small number of sales, would mean that sales would be prolonged and that many buyers would leave the sales before they were over. Late sales mean late deliveries to the places of business of the buyers, and late sales usually mean lower prices. For this reason, the selling trade as well as the buying trade have supported the simultane- ous sales. 31 It is difficult to appraise the effectiveness of the fruit auctions as price-making mechanisms without obtaining more objective data than are now available. The present auction situation, particularly in New York, appears to be the result of compromise between conflicting inter- ests and forces. Hypothetically, the holding of simultaneous sales would seem to impair the effectiveness of auction selling, yet other factors are operating which might make it undesirable to limit the number of sales. 32 TRADE RELATIONS With the movement of Tokay grapes through the various trade chan- nels between producer and consumer, a body of trade relations has be- come established among the several agencies which handle the product. A knowledge of existing trade relations is important in understand- ing the marketing of Tokay grapes and in determining possibilities for improvement. This knowledge is also essential in determining the type and form of organization which is best suited to accomplish a particular marketing objective. It is also desirable that these relations be definite and equitable, especially between producer and shipper, because the producers' principal contact with marketing problems and practices is through the shipper. Grower-Shipper Relations. — The relations between growers and ship- pers vary widely. Some shippers make annual contracts with growers to market their crops and sell them the supplies needed in marketing; other shippers, particularly cooperative shippers, make continuous con- tracts which carry the privilege of withdrawal each year. 33 The annual contracts usually provide that if the grower is indebted to the shipper at the end of the marketing season the contract remains in force cover- ing succeeding crops until the indebtedness of the grower is liquidated. 31 The author is indebted to F. W. Heegblade, of the Earl Fruit Company, San Francisco, California, and to A. D. Miller, of the Brown and Seccomb Fruit Auc- tion Company of New York, for information on the auction situation in New York. 32 Subsequent to the completion of this study two of the fruit-auction companies in New York merged their interests. See: Pacific Coast Packer 27(52) :1. 1932. 33 In the case of some cooperatives the member's signature to the by-laws con- stitutes an execution of a marketing contract. Bul. 558] Marketing Tokay Grapes 39 Some shippers, however, do not make contracts with growers, yet handle the crops of growers on the same basis as the shippers who do make con- tracts. Still other shippers make contracts with some of the growers they serve bnt not with other growers. Furthermore, there are several grow- ers with large acreages who are grower-shippers in that they themselves perform the functions of assembling their products into carloads. At the same time, there are some growers who market portions of their crops through several shippers. The marketings of these growers are called "split shipments." In some cases shippers are also distributors, the same firm perform- ing the functions of both. Some growers deal directly with the distrib- utor. The relations of these growers with such firms are similar to those of growers who make contracts with shippers. The firms which operate as distributors as well as shippers handle several other deciduous fruits grown in the Tokay grape area, a fact which explains the permanency of such agencies in this area. The contracts referred to above between growers and shippers are known as consignment contracts. The grower agrees to pick and haul his products at his own expense to the loading shed of the shipper. The ship- per agrees to load and sell the fruit for specified charges. (See pages 43 to 45.) The shipper is usually given full control of the products, includ- ing the right to determine the time when, the places where, the parties to whom, and the prices for which he shall sell or dispose of the fruit. By issuing a receipt for the delivery, shippers who do not make con- tracts with growers establish much the same relations with the growers they serve when the latter make delivery of their products. This receipt states that it is a consignment receipt and gives the terms upon which the fruit is to be handled. The significance of the latter arrangement is not apparent to some growers and has been the basis for sharp practices on the part of a few shippers. An illustration is furnished in the following situation. Some growers prefer to sell their crops for cash and refuse to sign consignment contracts with shippers. During the marketing season some shippers actively solicit business from such growers by stating that they have f .o.b. offers. Growers interpret this to mean that the shippers have cash orders and assume that their marketing risks cease when they make de- livery to shippers. They do not understand that f .o.b. offers may be cash offers or "f.o.b. usual terms" offers. The latter is not a cash offer but is the weakest form of a consignment offer. (See pages 41 to 42.) Conse- quently, growers often make delivery to shippers under the impression that their products are being sold for cash at the loading station, while in reality, they are delivering to the shipper for consignment and assume 40 University of California — Experiment Station the marketing risks incurred between the time the shipment is loaded and the time it reaches destination. A practice of some shippers closely related to the preceding practice is that of soliciting business from growers by stating that they have a cash offer. They may have a cash offer for one carload, but obtain enough volume from growers on the strength of their cash solicitation for several carloads. Growers, upon making delivery, however, are given the con- signment receipts referred to above (page 39). It is only when growers are given purchase receipts, which set forth the price of the product or are tendered payment upon delivery, that they are dealing with a ship- per on a cash basis. The relations between growers and shippers are influenced to a con- siderable extent by the financing of growers by shippers. The majority of Tokay grape shippers extend credit to growers to cover part of their production or harvesting costs, or both. A few shippers do not extend credit for either purpose, while some extend credit for harvesting costs only. Part of the credit furnished the grower is in the form of materials such as fertilizer, sulfur, and spray material ; that is, the shipper carries these items as book accounts until the marketing period. However, con- siderable cash sums are also advanced to growers by some shippers. As a result of the latter practice some shippers have unsettled accounts with some growers covering a period of several years. A large number of such accounts were settled, however, during 1931 when Tokay prices were relatively high — yet, one shipper reported outstanding accounts with 40 per cent of the growers he served at the end of the 1931 season. The amount of production credit which a grower can obtain from a particular shipper often determines which shipper will market his prod- ucts. Similarly, the amount of production credit which some shippers are willing to advance determines the volume of business they handle. This situation results in some shifting of growers from one shipper to another from year to year. There are numerous growers, however, who are not dependent upon shippers for production credit, and there are several shippers who do not attempt to obtain a large volume of business by advancing production credit. These relations between growers and shippers have an important bearing on most programs which might be undertaken to improve mar- keting conditions or to restrict shipments in years of large crops. Many shippers, through their financial relations with growers, are in a position to control the marketing policies of a large number of growers. Conse- quently, any method of attack on marketing problems on an industry- wide basis must receive their support. Furthermore, it is essential that Bul. 558] Marketing Tokay Grapes 41 most, if not all, of them cooperate if a voluntary shipment-restriction program is undertaken. Shipper-Distributor Relations. — Numerous shippers in the Tokay grape area contract with distributors to perform the selling function. However, several shippers perform the selling function themselves; these are known as independent shippers. The shipper who markets through a distributor makes a consignment contract with the latter organization which sets forth this relation. The distributor is usually given the authority to determine the time when, the places where, the parties to whom, and the prices for which the dis- tributor shall sell or dispose of the fruit. The distributor agrees to per- form these services for a definite charge, usually 10 per cent of the f .o.b. selling price or 7 per cent of the gross delivered selling price. One of the distributors operating in the Tokay grape area, the Cali- fornia Fruit Exchange, is a cooperative distributor. The relations be- tween shippers and the cooperative are much the same as those estab- lished between privately owned distributing agencies and shippers, ex- cept that the shippers are owners of the distributing agency. The shippers who sell through distributors frequently obtain credit from or through them, which the shippers in turn extend to growers in the manner described on page 40. This financial arrangement is signifi- cant because it gives the distributors considerable control over the mar- keting policies of the shippers they serve. Independent shippers, those who do not sell through distributors, usually consummate their sales through brokers. Their trade relations with brokers are much the same as the relations described above between shippers and distributors, except that contracts are not made between the shipper and the broker and the broker seldom finances the shipper. Distributor-Wholesaler Relations. — Tokay grapes sold at private sale are usually sold to wholesalers in carload lots. Such sales are negotiated by distributors through their agents, who are located in numerous cities in the United States, or through brokers. The agents of distributors or the brokers who act for them are called receivers in some markets. The terms of sale are principally three: (1) cash f.o.b., (2) f.o.b. usual terms, and (3) price arrival. The sales made for cash f.o.b. are, as the terms indicate, cash transactions for grapes in carloads at loading point. The purchaser obtains title there and assumes the risks incurred between the time of purchase and subsequent sale which is usually the period of time between shipment and arrival of the grapes at destination. Grapes sold f.o.b. usual terms are sold for a named price but the con- tents of the carload are subject to the buyer's inspection upon arrival at destination. In effect such a transaction is a weak form of a consignment 42 University of California — Experiment Station transaction, because if prices fall between the time the shipment was loaded and the time it reaches destination, the purchaser usually finds fault with the quality of the fruit and asks for a reduction in price, and the seller must either consent to a reduction or attempt to find another buyer. On the other hand, if prices rise in the interval between shipment and arrival the buyer usually is satisfied with the quality of the fruit and accepts the fruit at the price previously agreed upon. Many shippers vigorously oppose this type of transaction because it guarantees the buyer against a rise in price but does not protect the seller from a de- cline in price. Shipments sold on a price-arrival basis are sent to the point where the purchaser is located with the understanding that the price will be agreed upon when the shipment reaches destination. Usually settlement is made on the basis of the prevailing prices for similar quality and grade in the nearest or a designated auction market. Under this type of transaction the seller stands to gain or lose as prices rise or fall between the time of shipment and arrival. The principal disadvantage of this type of trans- action is that the seller is in a weak bargaining position if, for one reason or another, the buyer rejects the shipment when it reaches the market in which the buyer is located. Shippers who do not sell through distributors have much the same trade relations with wholesalers as the foregoing relations between dis- tributors and wholesalers through brokers. The brokers through whom they deal are, however, usually buying brokers in that they represent purchasers primarily and attempt to make purchases from among sev- eral shippers at the lowest possible prices, whereas distributors serve shippers in the capacity of selling brokers because they represent sellers primarily and attempt to make sales to buyers at the highest possible prices. This distinction is significant because it is one of the reasons why the distributor occupies such an important position in the trade channels for Tokay grapes. During the 1932 season approximately 75 per cent of the total shipments of Tokays were handled by distributors. Distributor-Auction Relations. — Tokay grapes sold at auction are handled by auction companies for the account of the distributor. The commissions charged by the auction companies vary from city to city ac- cording to local conditions and the extent and character of the services rendered ; the usual charges range from IV2 to 2% per cent of the gross selling price. These charges are paid by the distributor out of the 7 per cent commission which he charges the shipper for all marketing services. The auction companies assume responsibility for collections from the buyers who patronize them. In fact, auction companies settle with the Bul. 558] Marketing Tokay Grapes 43 distributors within 24 to 48 hours after a sale is held, and thus perform a financing function as well as a selling function. Trade Relations Among Other Agencies. — No attempt was made in this study to analyze the trade relations among wholesalers, jobbers, and retailers handling Tokay grapes. It is probable, however, that much the same relations exist as were found to exist in the marketing of Cali- fornia apples. 34 In private-sale markets wholesalers sell to jobbers in quantities of from 10 to 100 packages ; jobbers sell to retailers in quan- tities of from 1 to 5 packages ; while retailers sell to consumers in quan- tities of from 1 to 5 pounds. In auction markets some jobbers and retail- ers buy their supplies directly from the auctions, while others buy through brokers. These transactions are usually accompanied by credit arrangements, that is, the wholesaler finances the jobber to some extent by carrying his purchases as book accounts for a period of from 10 to 30 days, and the jobber finances the retailer in a similar way. Auction com- panies usually carry the accounts of their patrons from 10 to 15 days. However, buyers must arrange for credit in advance of their purchases. MARKETING COSTS The average costs incurred in the marketing of Tokay grapes from the point of loading through, and including, the consummation of sale in the wholesale markets at points east of the Rocky Mountains for the period 1925-1932 are shown in table 13. The total costs per package have re- mained fairly constant (column 2 of table 13) ; the range was from $0,844 a package in 1932 to $0,911 in 1926, a fluctuation of approxi- mately 8 per cent. On the other hand, the delivered selling price varied from $1.11 a package in 1932 to $1.59 in 1931, or more than 43 per cent. Individual Cost Items. — The materials used in packaging grapes have declined somewhat in price since 1929. There is, however, a wide varia- tion in the prices paid for packaging materials by growers inasmuch as some growers order these items in large quantities and some order in small quantities ; yet the trend in prices for package materials has been downward since 1929. Loading charges have been constant throughout the period 1925-1932. There is some variation from these charges inasmuch as some shippers load large quantities for a somewhat lower rate, and some growers load their own grapes at a lower cost than the prevailing rate of 3 cents a package. Freight and refrigeration costs have fluctuated somewhat. The freight rate to most eastern points during most of the period was $1.73 a hun- 34 Stokdyk, E. A., H. E. Erdman, Charles H. West, and F. W. Allen. Marketing California apples. California Agr. Exp. Sta. Bul. 501:72-85. 1930. 44 University of California — Experiment Station drechveiglit, except in 1928 and 1929 when it was $1.60 a hundredweight. In 1932, there was a slight reduction in the effective freight rate per package because during the major portion of the shipping season car- loads of grapes were accepted by the railroads at specified billing weights instead of at actual weight. In the case of Tokay grapes the accepted billing weight was 29 pounds per package, whereas the actual weight per package was approximately 31 pounds. TABLE 13 Marketing Costs, Gross Selling Price, and Percentage Marketing Costs Were of Gross Selling Price, 1925-1932 De- livered selling price Average total marketing costs Package material costs Loading charges Freight and refrigeration Selling Year Dollars per package Dollars per package Per cent of gross selling price Dollars per package Per cent of gross selling price Dollars per package Per cent of gross selling price Dollars per package Per cent of gross selling price Dollars per package Per cent of gross selling price 1 2 3 4 5 6 7 8 9 10 11 1925 1.20 0.890 74.2 0.126 10.5 0.030 2.5 0.650 54.2 084 7.0 1926 1 43 911 63.7 0.131 9 3 030 2 1 650 45.5 0.100 7.0 1927 1.40 0.907 64.8 129 9.2 030 2.1 650 46.4 098 7 1928 1.31 0.858 65.5 0.132 10.1 0.030 2 3 0.604 46.1 0.092 7.0 1929 1.42 0.868 61.1 0.135 9.5 030 2.1 604 42.5 0.090 7.0 1930 1 14 0.890 78.1 0.130 11.4 030 2.6 0.650 57.0 080 7.0 1931 1.59 0.919 57.8 0.128 8.1 0.030 1.9 650 40 9 0.111 7.0 1932 1.11 0.844 76.0 115 10.4 030 2.7 0621 56 0.078 7.0 Sources of data: Col. 1: from table 2. Col. 2: is the sum of cols. 4, 6, 8, and 10. Col. 3: calculated from cols. 1 and 2. Col. 4: from the records of the Pacific Fruit Exchange. Lodi, California. Courtesy of W. H. Thompson. Col. 5: calculated from cols. 1 and 4. Col. 6: from the Pacific Fruit Exchange. San Francisco, California. Courtesy of Joseph Guidera. Col. 7: calculated from cols. 1 and 6. Col. 8: from the California Growers and Shippers Protective League. San Francisco, California. Courtesy of M. E. McKirahan. Col. 9: calculated from cols. 1 and 8. Col. 10: is 7 per cent of col. 1 which is the selling charge. Col. 11: calculated from cols. 1 and 10. The average selling charge has varied from 7.8 cents a package in 1932 to 11.1 cents in 1931. The reason for this variation is apparent from column 11 of table 13, where it is shown that the selling charge is a con- stant percentage of the gross delivered selling price. Marketing Costs in Relation to Selling Prices. — In addition to the average costs incurred in marketing, table 13 also shows the various marketing costs as a percentage of the gross delivered selling price. Col- umn 3 shows that total marketing costs have been as low as 57.8 per cent of the selling price in 1931 and as high as 76.0 per cent in 1932. The rea- son for this situation is that marketing costs remained fairly constant Bul. 558] Marketing Tokay Grapes 45 while gross selling prices fluctuated markedly. Such a situation points out the fallacy of attempting to judge the efficiency of marketing agen- cies over a period of years on the basis of the percentage of the gross selling price or the percentage of the consumer's dollar returned to growers. It also shows the error of attempting to compare the efficiency of one marketing agency handling one commodity with another agency handling a different commodity. It is only when the efficiency of a num- ber of agencies handling the same commodities under similar circum- stances, during a definite period of time, is to be compared that the per- centage of the gross selling price or the percentage of the consumer's dollar returned to the grower is of any significance. Even then such an approach to an appraisal of the efficiency of marketing agencies is open to criticism because of the varying conditions under which marketing agencies operate. Other Marketing Costs. — The preceding costs incurred in the mar- keting of Tokay grapes do not include picking, packing, 35 and hauling expenses. Consequently, before net returns to growers can be calcu- lated these items must be deducted. Such expense items are, however, extremely variable because some growers perform these tasks with their own equipment and labor while other growers hire such services. Those growers who kept records of the cost of picking, packing, and hauling estimated the costs of these items as approximately 14 cents a package during the period 1925-1931 and at 12 cents a package in 1932. Reductions in Costs. — It will be noted from table 13 that the greatest reduction in marketing costs took place between 1931 and 1932. It is probable that some further reduction can be made in the future inas- much as several of the cost items are subject to bargain. However, the largest item, freight and refrigeration, is not subject to bargain but can only be obtained upon application to and hearing before administrative bodies such as the Interstate Commerce Commission and the California Railroad Commission. THE TOKAY CLEARING HOUSE One of the principal problems in the marketing of Tokay grapes is the planning of the distribution of shipments among the principal market areas to obtain the highest total returns with a given volume to be mar- keted (pages 26-33). The results of unplanned distribution during the first part of the 1931 season were also pointed out in pages 12 to 14. In 1932 a Tokay grape clearing house was operated during the entire season. The set-up, objectives, and operations of this organization will be 35 It is the common practice for growers to do their own packing in the field. 46 University of California — Experiment Station of interest because many persons do not understand the possibilities and limitations of such organizations. Set-up of the Clearing House. — At the beginning of the 1932 Tokay grape shipping season, the shippers representing approximately 90 per cent of the volume marketed agreed to clear their records of shipments through a central agency, the California Grape Control Board. Each participating shipper furnished this agency a daily record of the car- loads of Tokay grapes he had in transit, which he expected to sell in the TABLE 14 Tokay Grape Clearing-House Eeport, October 15, 1932 City Baltimore Boston Chicago Cincinnati.. Cleveland Detroit Minneapolis.. New York Philadelphia Pittsburgh.... St. Louis St. Paul Probable number of carloads for sale on Monday Oct. 17 2 8 3 2 2 2 2 12 9 2 2 2 Tuesday Oct. 18 Wednesday Oct. 19 Thursday Oct. 20 Friday Oct. 21 Source of data: California Grape Control Board Clearing House. Special Tokay report No. 39. October 15, 1932. San Francisco, California. (Mimeo.) Courtesy of Mr. E. W. Stillwell. principal auction markets, together with a statement noting the date that such carloads would arrive at their destinations. The Control Board Clearing House tabulated these records daily and furnished each participating shipper a summary of such tabulations similar to that shown in table 14. Shippers, after receiving the summary, frequently diverted shipments from markets which the summary indicated would have excessive supplies, to markets which the summary indicated would have relatively small supplies. Before such diversions were made, however, shippers usually consulted with the manager of the Clearing House to determine whether other shippers were contemplat- ing similar action in order to avoid duplication in diversions. Functioning of the Clearing House. — The manner in which this or- ganization functioned can be more readily comprehended from the rec- ords of the Clearing House for sales in New York for the period October 17 to 28, 1932. Table 15 shows the dates of the Clearing-House reports Bul. 558] Marketing Tokay Grapes 47 and the number of carloads that were likely to be sold in New York on specified dates. The last figure in each column shows the number of car- loads actually sold on the specified dates. It is evident from table 15 that there was often considerable adjust- ment in the number of carloads destined for New York between the time TABLE 15 Summary of Clearing-House Eeports for New York, October 17 to 28, 1932 Date of Probable number of carloads to be sold in New York on clear- ing- house report Mon- day Oct. 17 Tues- day Oct. 18 Wednes- day Oct. 19 Thurs- day Oct. 20 Fri- day Oct. 21 Mon- day Oct. 24 Tues- day Oct. 25 Wednes- day Oct. 26 Thurs- day Oct. 27 Fri- day Oct. 28 Oct. 11 6 Oct. 12 11 5 Oct. 13 15 8 2 Oct. 14 12 12 3 4 Oct. 15 12 9 5 5 6 Oct. 17 14 12 5 8 10 Oct. 18 7 6 9 11 Oct. 19 8 9 12 9 3 Oct. 20 9 11 16 6 2 Oct. 21 13 18 10 3 Oct. 22 17 11 5 11 5 Oct. 24 16 9 5 11 5 Oct. 25 9 5 9 7 Oct. 26 10 9 9 Oct. 27 9 8 Oct. 28 9 Source of data: California Grape Control Board. Special Tokay reports Nos. 35-50. October 11-28, 1932. (Mimeo.) Courtesy of E. W. Stillwell. of the first issuance of the Clearing-House report covering a specific date and the actual date of sale. For example, the October 12 Clearing- House report indicated 5 carloads of Tokays for sale in New York on October 18, the October 14 report showed 12 carloads, whereas on Octo- ber 18 there were 7 carloads actually sold. It is also evident from table 15 that shippers planned to sell larger quantities in New York on Mondays and Fridays (the days of the week which were shown on pages 32 to 33 to be the days of strongest de- mand) than on other days of the week. Thus there was planning of the time of sale as well as the planning of distribution among markets. Factors Influencing Clearing-House Attainments. — The degree to which the clearing-house arrangement can accomplish the objective of increasing total returns to growers by planning distribution among mar- kets and by the timing of sales depends upon three principal factors. The first is the extent of participation on the part of shippers. If ship- 48 University of California — Experiment Station pers representing a considerable percentage of the total volume will not participate, it is obvious that the efforts of the Clearing House would be futile. Furthermore, it is essential that participating shippers report promptly to the Clearing House any changes in intentions to ship to given markets in order that all shippers may be constantly informed con- cerning the probable volume to be sold in each market. The second factor affecting the possibility of increasing returns through a clearing-house organization is the accuracy of information relative to the market capacity of the principal markets and the accu- racy of information on periods of weak and strong demand. See pages 26 to 33 for an example of an analysis of such data. The third factor is the utilization of data on market capacity, to- gether with current information on shipments, in directing shipments to the more important market areas. Possibilities and Limitations of a Planned Distribution Program Under Clearing -House Organization. — That there are distinct possi- bilities of increasing total returns to growers in a planned distribution program is indicated in table 11 where 10 hypothetical distributions of a given volume are shown. Under distribution No. 1, where equal pres- sure was put on all markets, returns to growers would be approximately $15,000 more than under distribution No. 10, or approximately 4 per cent. The possibility of increasing total returns to growers in a planned distribution program as compared with unplanned distribution is, how- ever, limited. It must be remembered that the clearing house, unless definitely given such authority, has no control over the total volume to be marketed. It was shown above (pages 16 to 18) that during a given season the total volume marketed is the most important factor influenc- ing prices. This factor frequently obscures the results of a distribution program, and those who do not recognize the difference between a planned distribution program and a shipment-restriction program are likely to depreciate the results of the former. The planning of distribution, even though it has distinct limitations, is a marketing objective worthy of attainment. Growers would be war- ranted in marketing only with the agencies that participate in such a program. Extension of Activities. — The operations of the 1932 Tokay Grape Clearing House were confined to the collection and dissemination of data which aided shippers in planning the distribution of sales among the auction markets. No attempt was made to assemble data on shipments to private-sales markets. It is the opinion of some shippers, particularly those who sell most of their volume in such markets, that the operations Bul. 558] Marketing Tokay Grapes 49 of the clearing house could well be enlarged to include distribution in private-sales markets. There is no question that such an extension of operations would eliminate, at times, the congestion which results in some of these markets when two or more shippers consign to a smaller market. It is doubtful, however, if the results which might be obtained from such an enlargement of activities would warrant the expenditure of the funds which would be necessary to collect and disseminate the in- formation on private-sales markets. There are some 200 markets in which private sales of Tokay grapes are made, and as was pointed out above (page 36), there are 34 shippers (including grower-shippers). Another objection to such an extension of activities on the part of the clearing house is that there would be considerable conflict among ship- pers on prices at which sales were to be made in these markets. Some shippers market the best quality they have available at private sale while others dispose of their best quality at auction. The one who sold his best quality in these markets would charge the seller of the poorer quality with price cutting. Again, one shipper may be willing to reduce his quoted price on a given carload in a particular market rather than to divert it to some other market, while another shipper may prefer to chance diversion ; yet the latter may take the position, if he were furnish- ing records to a clearing house, that the former was attempting to take his market. There is, however, a compensating factor which limits the congestion that might arise in some of the private-sale markets through a lack of exchange of information among shippers on distribution to these mar- kets, and that is an unplanned division of territory. It would be ex- tremely expensive for a given shipper to attempt to make sales in all of the 200 or more private-sales markets. Consequently, some shippers in- tensify their efforts in certain areas and disregard other areas. Another compensating factor is that some shippers exchange information in an informal manner with other shippers whom they know are competitors in the territories in which they intensify their sales activities. An extension of the activities of the Tokay Clearing House that might well be made is the analysis of current data, similar to that made in this study (pages 26 to 33) on the market capacity of the principal markets, as an aid in planning the distribution of sales in these markets. Such an analysis of current data would also be of assistance in determining the extent to which shipment restriction is advisable when such programs are undertaken. 50 University of California — Experiment Station SHIPMENT RESTRICTION IN 1932 During the period this study was being conducted (May, 1932, to De- cember, 1932) a shipment-restriction program was undertaken. 36 Grow- ers had witnessed a crop of 7,670 carloads selling for an average deliv- ered price of $1.14 a package in 1930 and a crop of 4,109 carloads selling for $1.59 in 1931. With harvesting and marketing expenses averaging about $1.03 a package, this meant that the large crop in 1930 netted ap- proximately $750,000 while the small crop in 1931 netted more than $2,000,000. The season of 1932 promised to be another large crop year and the purchasing power of consumers was known to be lower than in the two previous years. It was evident from the analysis of the factors affecting prices (pages 16 to 18) that the shipment of the entire crop of Tokays would result in an average selling price which was less than picking, packing, loading, transportation, and marketing expenses. Those who are not familiar Avith marketing conditions in California often inquire why growers ship their products under such conditions. The answer is that California is nine days distant from most markets and that a large part of her deciduous fruits are shipped on consignment. It is no simple matter to judge what will happen in the fresh-fruit markets nine days in advance. Besides, in large crop years cash orders are few, hence, growers take the chance that shipments will net something. Set-up of the Restriction Program. — Several growers and shippers recognized the seriousness of the 1932 situation and called a mass meet- ing of growers to consider what action might be taken. At the mass meet- ing a growers' committee was named to work out and present a ship- ment-restriction plan. This committee, eighteen in number, 37 considered several proposals. The one recommended and later adopted by another mass meeting of growers was that of rating the productive capacity of each grower's vine- yard and allotting shipments on the basis of the percentage each grower's rating was of the total rated capacity of all vineyards. For example, if John Jones' vineyard were rated at 60,000 packages and the total rated capacity of all vineyards were 6,000,000 packages, Jones' rating would 36 A considerable portion of the data obtained in the course of this study was made available to those in charge of the restriction program. 37 The committee of eighteen was composed of the following: James T. Lang- ford, chairman; David Weigum; R. C. Bridge; Rolla Custer; Ray Van Buskirk; O. L. Marrs; Frank Aberlee; Verne Hoffman; S. T. Henderson; C. J. Weber; Earl Darrah; E. E. David; Lauren Wilkinson; Irving Ridenour; Rudolph Rode; Charles Spiekerman; W. B. May; and Edward Preszler. Bul. 558] Marketing Tokay Grapes 51 be 1 per cent of the total. Then if it were decided to restrict shipments to 300,000 packages a week, Jones would be entitled to ship 1 per cent of 300,000 packages or 3,000 packages. The rating of each grower's vineyard presented many difficulties. The determination of what constituted a normal, or full, crop for a particu- lar vineyard was the first. It was decided to obtain, as accurately as pos- sible, the performance of each vineyard in 1930, a crop year when there was no frost during the early part of the season and no heat damage dur- ing the latter part of the season. Growers and shipping companies were asked to submit the records of their marketings in 1930. The committee analyzed these records, checking them by districts, obtaining additional or missing data, making personal inspections of many tracts, and mak- ing adjustments for increases in tonnage that might be expected with an increase in the age of young vineyards between 1930 and 1932. This work was begun in June and finished in early September when the season was already under way; this fact is pointed out for the benefit of other groups who may contemplate a similar program. Delays were numerous because some growers and shippers were slow to submit their records ; only constant effort on the part of the committee brought the ratings to completion. When the ratings were finally totaled and each grower's percentage of the total was calculated, these percentages were tabulated by ship- ping companies and a record sent to each. Some difficulty was experi- enced here, however, because some growers dealt with more than one shipping company, and some growers had not indicated the shipping company with whom they would deal in 1932. Functioning of the Program. — When the volume of shipments reached a point where some restriction of shipments was thought advisable, the committee of eighteen, after deciding in conference with shippers the total quantity to be marketed each week, asked each shipping company to inform the growers whom they served, how many packages they were allotted for the week. The shipping companies reported their shipments at the end of the week to the committee. This program was undertaken without contracts among growers or shippers. It was recognized at the outset that all growers and all ship- pers would not participate, but it was felt that as many or more growers and shippers would participate without contracts as with contracts. The committee stated, however, that if too large a percentage of growers and shippers did not participate the program would be abandoned. It was evident at the start that a few shippers would not participate, in fact some actively solicited business from growers who desired to market 52 University of California — Experiment Station more than their allotment as recommended by the committee of eighteen. It should be noted, however, that these were relatively few. The record of the performance of all shipping companies during the period of shipment restriction is shown in table 16. The first week ship- ments exceeded the recommended quota by 6.6 per cent, the second week TABLE 16 Performance of Shippers Under Tokay Grape Shipment-Kestriction Program Week ending Quota Shipped Over quota Under quota Participating shippers Sept. 25 packages 280,201 282,788 263,595 237,478 packages 279,953 230,246 224,063 256,456 385,696 packages per cent 8.0 packages 248 52,542 39,532 per cent 1 Oct. 2 18.6 Oct. 9 15.0 Oct. 16 18,978 Oct. 23 Nonparticipating shippers Sept. 25 41,799 39,212 20,405 38,522 63,329 72,590 51,563 140,994 51,727 21,530 33,378 31,158 102,472 51.5 85.1 152.7 266.0 Oct. 2 Oct. 9 Oct. 16 Oct. 23 All shippers Sept. 25 322,000 322,000 284,000 276,000 343,282 302,836 275,626 397,450 21,282 6.6 44.0 Oct. 2 19,164 8,374 6.0 Oct. 9 2.9 Oct. 16 121,450 Oct. 23 Source of data: Committee of eighteen, Lodi, California. Courtesy of James T. Langford. shipments were 6.0 per cent less than quota, the third week 2.9 per cent less, and the fourth week 44.0 per cent in excess of quota. The performance of participating shippers in comparison with that of nonparticipating shippers is of significance. Nonparticipating com- panies exceeded their quota each week while participating shippers mar- keted a quantity under their quota during three weeks and exceeded their quota one week. Following the week ending October 16 the committee of eighteen de- cided to make no recommendations on the volume to be shipped because nonparticipating shippers had shipped more than 50 per cent of the total allotment for all shippers, although participating shippers repre- Bul. 558] Marketing Tokay Grapes 53 sented approximately 85 per cent of the total allotment. It became in- creasingly difficult to obtain the cooperation of participating shippers in restricting" shipments when their grower-patrons marketed an increas- ing volume with nonparticipating shippers. It is worthy of note, how- ever, that the participating shippers held to the restriction longer than some of the growers they served. Results and Appraisal. — An appraisal of the effectiveness of the Tokay shipment-restriction program can be made from table 17 which shows the volume sold in all markets in relation to the average of deliv- ered auction prices. The volume sold is a two weeks' average of ship- TABLE 17 Volume of Tokays Sold and Prices, 1932 Season Week ending Volume sold* Average auction pricesf September 3 carloads 158 308 474 499 398 399 526 509 433 dollars 1 52 10 1.28 17 1.06 24 0.97 October 1 1.23 8 .- 1.22 15 1.12 22 0.99 29 * An average of two weeks' shipments, t Prices advanced two weeks. Source of data: Compiled from Federal-State Market News Service. Grape Reports. Fresno and San Francisco. 1932. (Mimeo.) ments as compared with the prices which prevailed two weeks following the first week considered in averaging shipments. It will be noted from table 17, that prices declined during the first four weeks of the season as the volume sold increased ; then, as the volume sold decreased, prices rose, but prices fell again as the volume sold increased. The shipment- restriction program was begun September 19 and continued until Octo- ber 19. The average delivered selling prices each week of the season were above picking, transportation, and marketing costs. These costs were approximately $0.96 a package in 1932 — about $0.07 less than in 1931 owing to some reduction in labor, package, and transportation costs. It should be pointed out, however, that the selling prices are averages; some growers received less than these averages and some more, largely according to the quality they marketed. 54 University of California — Experiment Station The shipment-restriction program demonstrated clearly that prices for Tokay grapes were influenced by the volume of Tokay grapes mar- keted. This fact is of significance to Tokay grape growers because prior to the operation of the program many growers believed that if the vol- ume of shipments of Tokays were restricted other varieties of California table grapes would be marketed in larger quantities and that the prices of Tokay grapes would not respond to shipment restriction. This fact is also of significance to research workers because it demonstrated what an analysis of the factors affecting prices indicated, namely, that one of the principal factors influencing the prices for Tokay grapes is the vol- ume of shipments. It is probable that the restriction of shipments of Tokays induced some consumers to purchase other varieties of table grapes. It is also probable that had there been some restriction on the volume of other table grapes marketed, such restriction would have had some influence on Tokay grape prices. However, it is clear that the re- striction of Tokay shipments did not induce all consumers to purchase other varieties and that Tokay grape growers could increase their re- turns by limiting the shipments of this particular variety. The shipment-restriction program also demonstrated that the respon- sibility for the success or failure of such an undertaking was primarily that of growers ; most marketing agencies adhered to the program longer than did some growers. One of the difficulties encountered during the period the restriction program was conducted was that of judging the extent to which ship- ments may be restricted to obtain reasonable prices. It will be noted from table 16 that those in charge of the program recommended the ship- ment of 322,000 packages during the weeks ending September 25 and October 2, 1932, while during the weeks ending October 9 and October 16, a volume of 284,000 and 276,000 packages respectively were recom- mended. The recommended volume during the weeks ending September 25 and October 2 proved to be too large to obtain a reasonable price (an average selling price of from $1.20 to $1.30 a package). Two factors were primarily responsible for this difficulty : the first was the lack of information on the volume of shipments which was likely to be made by growers and shippers who did not participate in the restriction pro- gram ; the second was the uncertainty of the effect which the change in consumer purchasing power between 1931 and 1932 was likely to exert on the demand for Tokay grapes. The first factor is a problem in all voluntary proration programs. It is likely to be one of increasing difficulty because growers who have not participated in such programs and have marketed their products with- out restriction will be likely to gage their marketings in anticipation Bul. 558] Marketing Tokay Grapes 55 of the restrictions on marketing by those growers who participate in the program. The second factor is a difficulty which is likely to be overcome, to a considerable extent, by experience with such programs and with the aid of data on factors affecting prices. There is, however, the probability of error even with the best of information available. Growers and shippers must recognize this fact when shipment-restriction programs are under- taken. SUGGESTED FOKM OF CEETIFICATE Grower No. 1 Week of season No. 5 Delivered to shipper No Shipping allotment 1.00% Date Equivalent to packages* Shipper's signature This is to certify that the grower whose number and name are listed with the Blank Shipment Control Committee is entitled to ship the num- per of packages shown above during the week of the season indicated. This certificate is negotiable and can be assigned by the grower. It must accompany deliveries of growers to shipping or packing companies and be filed by shippers and packers with other documents relating to their shipments. Blank Shipment Control Committee By John Doe, Secretary. * The number of packages to be calculated after the Shipment Control Committee makes its recommendations on the total amount to be shipped during the week for which this certificate is valid. Certificate No. 800 Suggested Administrative Changes. — In the event that a shipment- restriction program is again undertaken, it is recommended that each grower's rating be allotted directly to him by certificates rather than indirectly by a memorandum to the shipping agency with whom he deals. The certificates would set forth the grower's name or number, his rating as a percentage of the total rated capacity of all vineyards, and the week of the shipping season in which each certificate would apply. Provision could also be made for other information which would aid in the checking of records incidental to a restriction program. Such certifi- cates would be negotiable and transferable and would accompany the deliveries of growers to shipping companies and be filed by shippers with other documents relating to their shipments. A suggested form of certificate is shown above. 56 University of California — Experiment Station The advantages of the employment of certificates in connection with a shipment-restriction program are several : 1. It allocates each grower's rating directly to him instead of through a shipping company, and thus avoids the possible favoring of one grower over another by a shipper giving shipping privileges to one grower that belong to another. At the same time it would simplify the checking of records particularly on split shipments. 2. It gives each grower the opportunity to utilize his rating as he sees fit. If he desires to harvest his crop one week instead of another, he can trade certificates with a neighbor. If he wishes to allow his entire crop to remain unharvested, he may do so, yet he may dispose of his certificates to other growers. At the same time it would relieve shippers of the task of making adjustments among growers in the time of harvesting. Such adjustments would be a grower's problem. 3. It would permit adjustments among growers of high and low-qual- ity grapes and would likely result in a higher quality being marketed. Grower A may have very low quality and grower B higher quality. Grower B could afford to purchase grower A's certificates and ship his entire high-quality crop and allow grower A's low-quality crop to re- main unharvested. Both might profit by such a transaction, and the quality of the crop shipped from the district would be higher than if A had shipped his crop. 4. It would in all probability tend to induce more growers to partici- pate in and adhere to a restriction program because each grower's rec- ord of shipments could be quickly ascertained. 5. The employment of certificates would provide an easy method of financing a restriction program. A small fee for certificates could be col- lected when growers obtained their certificates from the Shipment Con- trol Committee. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS The available data indicate approximately 30,000 acres of Tokay grapes in California with a production of nearly 154,000 tons in 1930. Since 1925 the acreage has remained practically stationary; however, approximately 12 per cent of the acreage is not yet in full bearing. Most of the acreage is concentrated in two counties, San Joaquin and Sacramento, with 59.4 and 29.7 per cent respectively. Production is heaviest in San Joaquin County with 76.4 per cent in 1930. Interstate shipments of Tokays have fluctuated between 3,982 and 7,456 carloads during the period 1921 to 1932. In several years consider- able tonnage was not harvested. Average annual delivered auction prices have varied from $1.11 a package in 1932 to $2.10 in 1921. Bul. 558] Marketing Tokay Grapes 57 The Tokay grape shipping season usually begins the latter part of August and ends the first part of November. During the principal part of the season this variety dominates the California table-grape move- ment. There has been a tendency for Tokay grape prices to be relatively high early in the season (late August) and then to decline sharply dur- ing most of September with some recovery in late September or early October. The major fluctuations in Tokay grape prices in the principal auction markets occur almost simultaneously ; however, during a given week of the season prices in the several markets often varied considerably. Part of the variation is accounted for by differences in quality and a part by the fluctuations in the supply of Tokay grapes on each of the markets at a particular time. There has been a marked tendency for the percentage of each season's Tokay grape shipments sold in the fruit auctions to decline. In 1925 ap- proximately 50 per cent was sold in the auctions ; in 1932 there was only 35 per cent. The factors primarily responsible for the decline have been (1) a more vigorous development of private-sales markets by some mar- keting agencies, (2) a curtailment in the financing of shippers on the part of auction companies, and (3) some increase in direct purchases instead of through the auctions on the part of chain-store systems. There was a distinct relation between the prices prevailing in impor- tant market centers in a given week and the volume of Tokay grapes shipped to these markets the succeeding week. High prices in a given market one week attracted shipments to that market the next week, while low prices in a given market repelled shipments the next week. This relation is of significance to an agency planning the distribution of ship- ments, particularly if all marketing agencies are not cooperating in the planning program. Annual Tokay grape prices have been influenced by three principal factors: (1) the volume of interstate shipments of Tokay grapes, (2) the volume of interstate shipments of other California table grapes, and (3) changes in the general price level, as measured by the all-commodity index of wholesale prices. Other factors which influenced prices were : variations in quality, the seasonal distribution of shipments, and the dis- tribution of shipments among the principal markets. Data are presented on pages 16 to 22 to show how an analysis of the factors affecting prices may be employed in determining the advisability of conducting a shipment-restriction program and the extent to which shipment restriction might be conducted to obtain the highest total returns. 58 University of California — Experiment Station The average of weekly Tokay grape prices in the principal auction markets during a given marketing season was influenced by two meas- urable factors : (1) the volume of interstate shipments of Tokay grapes, and (2) the prevailing prices of other California table grapes. Other factors were : variations in quality, and the distribution of supplies among the principal markets. Unfortunately, an adequate measure of these factors as price-making forces is not available. Weekly Tokay grape prices in each of the principal auction markets were influenced by (1) the volume of sales, and (2) the prevailing prices of other California table grapes. Quality was also a factor but an unmeasurable one. Data are presented in pages 16 to 22 showing how an analysis of the factors affecting prices in each market area may be used in planning the distribution of a given volume among the principal market areas to ob- tain the highest total returns. The principle involved in distributing is that of placing supplies in the various markets in such a manner that the price in each market is the same. Such a distribution of supplies may be termed "putting equal pressure on all markets." An analysis of the daily market capacity in New York showed that Monday and Friday are the days of strongest demand. A knowledge of this fact may aid in the timing of sales during a given week. The principal trade channel series for sales in auction markets is : producer — > shipper -» distributor — » broker or agent — » fruit auction — » retail outlets — > consumer. The series for private sales is principally : producer — » shipper — » distributor — » broker — > wholesaler — > jobber — > retail outlets —» consumer. There are numerous variations from the foregoing series of channels as a result of (1) attempts to take the short- est route to the consumer in specified trade areas, (2) the efforts of cer- tain dealers to offer more marketing services, (3) the trade relations which dealers have established, and (4) the risks which individuals engaged in the marketing process have been willing to assume. The trade channels appear adequate; they afford opportunity for growers and shippers to market their products in the way which suits their particular circumstances and according to the marketing risks they are willing to assume. It is probable, however, that local marketing agencies are not operating at maximum efficiency because the volume of business is divided among too many agencies. Unit costs of local mar- keting operations could be decreased if the volume were handled by fewer agencies. There has been a tendency toward the concentration of volume in the hands of fewer agencies; in 1922 there were 52 shippers (including grower-shippers), while in 1932 there were 34 in the Lodi area. Bul. 558] Marketing Tokay Grapes 59 The trade relations between growers and shippers vary widely ; yet, most shippers handle the products of growers on consignment. Some growers are unaware that their relation with shippers is a consignment relation, because some shippers solicit business from growers in a man- ner which infers a cash transaction, but which is in reality a consign- ment transaction. The relations between growers and shippers are influenced to a con- siderable extent by the financing of growers by shippers. Many shippers, through these financial relations with growers, are in a position to con- trol their marketing policies. Consequently, most programs to bring about improvements in marketing on an industry-wide basis must re- ceive the support of shippers. The trade relations between shippers and distributors are much the same as those between growers and shippers. Independent shippers, those who do not sell through distributors, usually consummate sales through brokers. The brokers through whom they deal are, however, usually buying brokers, whereas the distributor serves the shipper in the capacity of a selling broker. The significance of this distinction is apparent when it is realized that approximately 75 per cent of the total shipments of Tokay grapes are marketed through distributors. The terms of sale between distributors and wholesalers are principally three: (1) cash f.o.b., (2) f.o.b. usual terms, and (3) price arrival. From the standpoint of the distributor and the growers and shippers they represent, sales made f.o.b. usual terms are least desirable. Such sales are a weak form of a consignment transaction, because if prices fall between the time the shipment was loaded and the time it reaches destination, the purchaser usually finds fault with the quality of the fruit and asks for a reduction in price, and the seller must either consent to a reduction or attempt to find another buyer. On the other hand, if prices rise during the interval between shipment and arrival, the buyer usually is satisfied with the quality of the fruit and accepts the fruit at the price previously agreed upon. Sales made at auction are made for cash with settlement within 24 to 48 hours after the sale is held. Auction companies assume responsibility for collections from the buyers who patronize them. Average marketing costs, from the point of loading through and in- cluding the consummation of sale in the wholesale markets at points east of the Rocky Mountains, ranged from $0,844 a package in 1932 to $0,911 in 1926, a fluctuation of approximately 8 per cent as compared with a fluctuation of more than 43 per cent in delivered selling prices. Such a situation points out the fallacy of attempting to judge the effi- ciency of marketing agencies over a period of years on the basis of the 60 University of California — Experiment Station percentage of the gross selling price or the percentage of the consumer's dollar returned to growers. The Tokay Grape Clearing House, as operated in 1932, collected and disseminated information which aided shippers in planning the distri- bution of sales among the principal auction markets. Its operations tended to establish equal pressure on these markets throughout the mar- keting season. The extension of clearing-house activities to include the planning of sales among private-sale markets would be desirable, but it is doubtful if the results which might be obtained would warrant the expenditure of the funds which would be necessary to collect and dis- seminate the needed information. An extension of activities that might well be made is a more detailed analysis of current data to determine the market capacity of each of the principal markets during a given market- ing season. Such an analysis would aid in planning the distribution of sales. The shipment-restriction program conducted in 1932 resulted in aver- age selling prices each week of the season above picking, transportation, and marketing costs. The procedure in this program was that of rating the productive capacity of each grower's vineyard and allotting ship- ments on the basis of the percentage each grower's rating was of the total rated capacity of all vineyards. The shipment-restriction program demonstrated clearly that prices for Tokay grapes were influenced by the volume of Tokay grapes mar- keted. It also demonstrated that the responsibility for the success or failure of such an undertaking was primarily that of growers; most marketing agencies adhered to the program longer than did some growers. One of the difficulties encountered during the period the restriction program was conducted was that of judging the extent to which ship- ments may be restricted to obtain reasonable prices. Two factors were primarily responsible for this difficulty : the first was the lack of infor- mation on the volume of shipments which was likely to be made by growers and shippers who did not participate in the restriction pro- gram ; the second was the uncertainty of the effect which the change in consumer purchasing power between 1931 and 1932 was likely to exert on the demand for Tokay grapes. Conclusions. — The data obtained in this study indicate two outstand- ing problems which necessitate industry-wide participation for their solution. The first problem is how to restrict the volume marketed in years of large crops or low consumer purchasing power or both. The second is how to distribute supplies among the principal market areas in such a manner as to maintain equal pressure on all market areas in Bul. 558] Marketing Tokay Grapes 61 order to obtain the highest total returns with a given volume to be marketed. The data on acreage and production (pages 5 to 7) and the analy- sis of the factors affecting annual Tokay grape prices (pages 16 to 18) indicate the following situation : Even though the purchasing power of consumers recovers to 1928-1930 levels, all the Tokay tonnage produced in full-crop years from the present acreage cannot be marketed at prices remunerative to even the most efficient producers unless demand for this variety of grapes is increased markedly. To meet this situation several measures may be employed, the most promising of which, for immediate results, is the restriction of the vol- ume marketed during large crop years. The first measure which is usually suggested is the removal of acreage either through the impetus of several years of unremunerative prices or in a planned program of vine-pulling. Such a procedure by either method presents numerous difficulties. Acreage reduction, through the operation of low prices, is a slow process particularly when opportuni- ties in the production of other crops are limited. Under these circum- stances acreage reduction is likely to take place only after successive owners of the vineyards have become insolvent. A planned and organized acreage-reduction program presents the difficulty of estimating accurately the extent to which it must be carried so that a sufficient reduction in production will take place to raise prices to remunerative levels. Since one of the principal factors influencing Tokay grape prices is the purchasing power of consumers, a vine-pulling program, which would reduce production sufficiently to meet present purchasing power conditions, would be carried too far for periods of higher purchasing power. Then plantings would again be stimulated and the ultimate result of the vine-pulling program would be large capi- tal losses. If it were certain that consumer purchasing power would remain at 1932-1933 levels for several years the immediate removal of enough vines to reduce production to a point where all of the supplies could be marketed at reasonable prices would be the most economical procedure. It is believed, however, that the purchasing power of con- sumers will increase within a few years as it has done following previous periods of depression; consequently, the removal of a large number of vines to meet present conditions is not economical. The foregoing statements do not mean that it is not advisable for some growers under their particular conditions and circumstances to reduce their acreage of Tokay grapes. In fact, it is probable that a number of growers, regardless of what may be done in any industry-wide program, will find it advisable to reduce their acreage. 62 University of California — Experiment Station Another measure which, is of importance in meeting the situation in the Tokay grape industry is through the reduction of production and marketing costs. This procedure has, however, distinct limitations be- cause numerous items making up these costs, such as taxes, insurance, and freight rates, remain fairly constant. In addition, there are limits to which reductions in costs, even in those items which are subject to bargain, can be made. Hence, although cost reductions are important Possible Set-up of Tokay Geape Growers' and Shippers' Organizations TOKAY GROWERS' AND SHIPPERS' COUNCIL EXECUTIVE COMMITTEE BOARD OF DIRECTORS TOKAY GRAPE GROWERS' ASSOCIATION G G G G G G G G G EXECUTIVE COMMITTEE BOARD OF DIRECTORS TOKAY GRAPE SHIPPERS' LEAGUE S S S PRORATE COMMITTEE S S S S S S DISTRIBUTION COMMITTEE Fig. 10. — Growers would be members of the Tokay Grape Growers' Association and shippers of the Tokay Grape Shippers' League. A Tokay Growers' and Shippers' Council would be composed of the executive committees of each organization. from a long-time point of view, the results are not likely to meet the present situation. Of the several measures discussed above, the restriction of the quan- tity marketed in large crop years or in years of low consumer purchas- ing power or both appears the most promising. See pages 50 to 56 for a discussion of shipment restriction. From the analysis of the factors affecting prices in the important mar- ket areas (pages 16 to 22) and the analysis of the operations of the Tokay Grape Clearing House (pages 45 to 49), the conclusion was reached that a planned distribution program is desirable. The foregoing data showed that returns to growers could be increased by putting equal pressure on all markets instead of marketing a given supply in such a manner that there was unequal pressure on the most important markets. The Bul. 558] Marketing Tokay Grapes 63 difficulty of attaining such an objective in the absence of a planned dis- tribution program was also pointed out. Recommendations. — The problems of the Tokay grape industry (pages 60 to 61), the trade relations which were found to exist (pages 38 to 43), and the results of previous attempts in industry-wide effort, point to the desirability of the establishment of two separate organiza- tions, one composed of growers and the other of shippers, which for con- venience will be called the Tokay Grape Growers' Association and the Tokay Grape Shippers' League. See figure 10. It is also desirable that a third agency be formed to coordinate the activities of the two organiza- tions when mutual problems arise, which, as is indicated in figure 10, may be called the Tokay Growers' and Shippers' Council. The primary objective of the Tokay Grape Growers' Association would be to conduct shipment-restriction programs in those years in which this body deemed such action advisable. When shipment restric- tion is undertaken it would assume the responsibility of determining (1) the method of prorating shipments among growers, (2) the volume of shipments to be marketed from time to time, and (3) the manner in which such program would be supervised or enforced. In case of dis- agreement between the organization and the Tokay Shippers' League concerning the volume to be marketed the authority for final decision should rest with the former organization. This organization might also cooperate with similar organizations which might be formed in other grape-producing areas in California to undertake shipment restriction with other varieties. Other objectives would include the representation of growers in problems of general interest such as in the formulation of standard packs, and grades and in hearings before public bodies. The primary objective of the Tokay Shippers' League would be to conduct a planned distribution program, that is, this body would, with a given volume to market, decide the quantities to be placed in the most important market areas. See pages 45 to 48 for a detailed discussion of such activities and methods of conducting a planned distribution pro- gram. Other objectives would include the collection and dissemination of current market information. The objective of the Tokay Grape Growers' and Shippers' Council would be to coordinate the activities of the growers' and shippers' or- ganizations when problems of mutual interest arose. It is probable that such a council would meet frequently during the principal marketing season because if shipment restriction is undertaken the experience and judgment of shippers is valuable when the problem of determining the volume to be marketed from time to time is under consideration. This 64 University of California — Experiment Station council might also arbitrate disputes which might arise among growers concerning their allotments when shipments are prorated. 38 The recommendation is also made that when a shipment-restriction program is employed growers' shipping allotments be made directly to them in the form of certificates. This recommendation together with the reasons for its proposal is outlined in pages 55 to 56. ACKNOWLEDGMENTS The author is indebted to Director H. E,. Tolley and Dr. S. W. Shear of the Giannini Foundation of Agricultural Economics of the Univer- sity of California for assistance in outlining, conducting, and appraising the data of this study. Miss Edna Fisher, Statistical Assistant, and Mr. Spencer Sparks, Technical Assistant, aided in the collection and analysis of statistical data. Mr. A. R. Hunter prepared the charts. Miss Ellen Hawley, Editorial Assistant, corrected the manuscript and suggested important changes in the organization of the material. The author wishes to express his appreciation to the aforementioned persons and to several others who supplied information and assisted in numerous ways. Among them are : Mr. James T. Langford, Mr. Ray Van Buskirk, Mr. R. C. Bridge, Mr. Verne Hoffman, Mr. Earl Darrah, Mr. E. E. David, Mr. Frank Aberlee, Mr. Rolla Custer, Mr. S. T. Henderson, Mr. David Weigum, Mr. L. K. Marshall, Mr. Victor Larsen, Mr. John Melby, Mr. L. B. Bailey, all of Lodi, California ; Mr. H. S. Van Vlear, Secretary of the San Joaquin Farm Bureau Federation ; Mr. 0. V. Pat- ton, Farm Advisor, and Mr. Eugene Serr, Assistant Farm Advisor of San Joaquin County; Mr. E. W. Stillwell, formerly of the California Grape Control Board; and Mr. W. F. Cox of the Federal-State Market News Service at San Francisco. Mr. E. W. Stillwell and Mr. W. F. Cox gave liberally of their time in assisting the author in assembling and interpreting the original data. They also made available to the author unpublished data. 38 During the period this bulletin was in press, Tokay grape growers and shippers applied to the Agricultural Adjustment Administration of the United States Depart- ment of Agriculture for a marketing agreement with the Secretary of Agriculture under the terms of the Agricultural Adjustment Act (Public — No. 10 — 73d Con- gress). The agreement provides for an Executive Committee whose duties correspond closely to those outlined for the Tokay Growers' and Shippers' Council ; a Sales Man- agers Committee whose duties are similar to those proposed for the Tokay Grape Shippers' League; and a Proration Committee whose primary function is that out- lined for the Tokay Grape Growers' Association. In addition, an organization of growers has been perfected known as "The Tokay Grape Growers." The records of this organization are being utilized by the Proration Committee set up in the market- ing agreement with the Secretary of Agriculture. 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OJ OS CO CO lO * o "5 Tf< CO >Q ce oo © IO as o oo o cm H OONilNlOOOlOOa* n«5NO!!DOmin»N t^tOiOMNNOnrtO W rt (O N C t-HCO--HO>CMt~COcOCMOO tJicO-i—iCOOOOCDOOiOCO COOii— l N ^i i- I OS CM r^ OS osoio^t^i—iT-HCMr— »« -a ft Ph nN^OONiONNMH i-H-^f^i-HCMOCMaOCO NH^NWiHrtOOOO t^iOi— l Ol H OS N IN * (M CMi— It-hC^i-h.— It-Ii-H 0000<00»t^OO'OC<)-»*< i— !CO»OI~-.t--.005'* O « O ^2 4> > O 4> b£ 4) 72 University of California — Experiment Station OS ss Si o OS H h-H pq w o Ph o o> 03*2 - x 03 Ph S2 O O Ph° CD 5 CO Ph 0> -^ W O as W a e i (OW^NMNMMNMN ONOlONOOlOlltNO *nO>OONNOOOlOXN i>. o r~- eo O >— i n o> io n >■ ' •"Hi-icoeoicecc^TPTtcioc^ oo '3 O CO i— < o CM cm CO -* m ■« >o CO •<* CM r^ CO r» - CJ3 •<*< '*ltONCO'0 , MCC'* , * tONOJMMN<0000!« »-ICO'— liClO-^^cOOOCOT*' nio*<^ a G ocot^mcococoic^-^'*" OMCCt-M'ftOOON^H MO)lON»HM»OllO'- 1 0>'#nSMN01U50N'* NWtCNO'fOOfflNNlO ooooooooooo ooooooooooo ONNCONiflHlfltOioO CMO^'-'COOOCMOO'-HCO i— io«o - ^"oO'-hoo>— i n o> in wtow -h —" cm eo =3 do p < p a /- o> o -♦■J o o S3 s o inodN^nwrn^coN OOCMOOOCOCOCOOOO NOONH^HXtOO Hwoii^^fflineij a> io m C3> CO CO e r~ <* -h r^ CM »-l ^H CM i— c *-H CM eo Eg h o> S 03 0Q K l J3 a c > 3 o> Sf ft > o < <3 oj O % Bul. 558] Marketing Tokay Grapes 73 o OS i— I H o>-£ o o 0*° to -*3 03 Ph O" -*J « o fin ° 0> U 00 03 Ph IN o> -u o o Ph O CD 3 M -rH OS'S 03 Ph CD -^ « O Ph° ao 01 OS'S O 00 03 Ph 5^ « O Ph° 0> M -rH O 00 03 Ph O O Ph° oq 01 OS'S 03 Ph T3 G > 01 O 00 >o CO ■* * CM CI ■* -*< ■* -* on 04 o TO r^ O so TO 00 1— 1 o to o o to •rP o 00 t--. ■*»• CO i- 00 00 t^ o Tf TO CO ** >— 1 *— ( CO «3 CO CO >o CO to 02 NN'»NM»M"*»M ONM-^fOTflrtL'SOO'* CMTOCO(Ma000l^TO'-<'-< NnOO**0»"OU3N Tf N CO >0 O CO »0 "-i CO o 1 CO CO •f IQ CM CO CO ■* "5 "* * 1 *< CO oq iO CO ■^ on co co CM to O a> do tfi 00 lO Id f CM »o TO i— 1 1-1 CO t^ «* co «# CO 00 MNWOMffOMlO 00t^-»OO00'-l00C000 OOliOMOOffiN^O oeeiooinMO)'* i-H HlOWt-lOO^OO o J3 u CN r^ co *fl © W Ol CN f~- O co >o TO TO CO CI o o o r~ CO o r~ r~ oo >Q ■*r as 'TO CO t^ IO 1-1 oo l~ CO >o CO CO CM l^ CO co co co CO oo TO a, ~c2 T3 Ph nn©noiNTj««iiOM «O»O00t^00iOt^iOO00 CiJiOO)01*eOtDMNiO c o oo o PQ ON!OOON*Mi|liO CM(N^h^-H H M M H N N N (-1 o 0) eot^i^co'O'-HcNiooo lO »o O IO N » ID lO CO TO t»< O0 o >o O O iC o © © TO CN 0O -^ ■* O0 » CO N «3 03 W'f'0*^ l 'f ,, i | 'n'*'* COIN^ffliOOtO^NOO HfHNUJINHINNO 00*raNl0ON«T|iN O a 03 o> d a - lO OO •>* 00 f M N TO lO l^ O O O O 00 CO lO O O TO ">*< f N H N MNlOONMONN c o> 01 o o o O o o a o o o c CD o o O o o o o © o o t>. CO CM o TO ^* -# lO OO TO 04 CO TO t— 1 lO t^ oo ^t< CO o CM ■a r^ TO O) a CO r~ t^ CO ^H •f TO O) CO CO Ol 03 »o co CO OS lO oo CM i< IO 1-- " ^ " ~ 01 Q •"tiHTjicOfM^INNNIN OOOO'— l 00 ■* i- lOOS-H TOiiOCOCNOOOCOCOCN ^MWOOlOiON^lOIN CN NNrafflHNNW to a •B a o> /4 o> o> c C4 .— i cc IH 04 TO «fl o> £> 6 o> a O) 02 o> o -4-1 u O 01 o> a; M C3 9 > o T-H CM CO f- CM a: IC u o> ^2 a 0) w u 0> O -4-J o ^1 o> > o 0> of > <5 ^2 03 03 03 03 O 01 J3 M .a «ooph& 00 o> oo 03 Q 74 University of California — Experiment Station TABLE 20 Weighted Average Prices of California Table Grapes,* in Dollars per Package, Except Tokays, in Eleven Auction Markets and in Boston, Chicago, Philadelphia, and New York, 1929-1932 Week ending Eleven auction markets Boston Chicago New York Philadelphia 1929 September 7 1.26 1.38 1 45 1 41 1.39 1.29 1.19 1.26 1.45 1.31 1 37 1 38 1.35 1.43 1.41 1 23 1 25 1.21 1.37 1.46 1.33 1 38 1.41 1.36 1.43 1.44 1.33 1.36 1.60 1.39 1.23 1 40 1.58 1.49 1.51 1 33 1.16 1.30 1.51 1.64 1 20 14 1.32 21 1 45 28 1.38 October 5 1.58 11 1.22 18 1.21 25 1.32 November 2 1.31 9 1.17 1930 September 6 1.41 1.27 1 19 1.15 1.22 1.39 1.48 1 42 1.06 0.86 1 31 1 24 1.00 1 18 1.12 1 43 1.39 1.17 0.90 0.72 1.30 1.30 1 17 1.12 1.21 1.30 1 52 1 39 1.02 0.97 1.61 1 26 1.27 1.20 1.31 1 45 1.51 1.58 1.12 0.95 1.27 1 22 1.18 1.11 1.06 1.20 1.44 1.39 1.02 0.88 13 20 27 October 4 11 18 25 November 1 8 1931 August 29 1.51 1.45 1.34 1.29 1.46 1.58 1.54 1.33 1.36 1.30 1.36 1.78 1.36 1.39 1.23 1 37 1.59 1.53 1.30 1.23 1.05 1.16 1.50 1.28 1.39 1.15 1.46 1 51 1.53 1.38 1.33 1.42 1.37 1.68 1.53 1.40 1.34 1 55 1.62 1.61 1.44 1.39 1.39 1.42 1.95 September 5 1.36 12... 1.14 19 1.12 26 1.31 October 3 1.51 10 1.56 17 1.53 24 1.22 31 1.53 November 7 1.44 1932 September 3 1.02 1.27 1.25 1 20 1.17 1.09 1.22 1.16 1.08 1.02 0.90 1 22 1.25 1.18 1.20 0.94 1.13 1.26 1.04 0.95 1.06 1.21 1.25 1.10 1.07 1.20 1.23 1.11 1.05 1.08 1.04 1.31 1.21 1 31 1 23 1.10 1.22 1.14 1.08 1.02 1.12 10 1.31 17 1.37 24 1.12 October 1 1.14 8 1.16 15 1.27 22 1.17 29 1.16 November 5 1.19 * Other table grapes are Cornichons, Emperors, Red and White Malagas, and Thompson Seedless. Sources of data: 1929: Googe, W. D., Marketing California grapes, summary of 1929 season. U. S. Dept. Agr. Bur. Agr. Econ. August, 1930. (Mimeo.) 1930: Googe, W. D., Marketing California grapes, summary of 1930 season. U. S. Dept. Agr. Bur. Agr. Econ. July, 1931. (Mimeo.) 1931: Prugh, A. E. Marketing California grapes, summary of 1931 season. U. S. Dept. Agr. Bur. Agr. Econ. May, 1932. (Mimeo.) 1932: U. S. Dept. Agr. Bur. Agr. Econ. State and federal marketing service: Grapes. 1933. 12m-10,'33