• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Title Page
 Center information
 Table of Contents
 List of Tables
 Acknowledgement
 Summary
 Introduction
 Findings
 Conclusions
 Appendix






Group Title: Industry report - Florida Agricultural Market Research Center ; 79-6
Title: Dairy delivery case losses in Florida, 1979
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Permanent Link: http://ufdc.ufl.edu/UF00026879/00001
 Material Information
Title: Dairy delivery case losses in Florida, 1979 a report
Series Title: Industry report Florida Agricultural Market Research Center 79-6
Physical Description: 17, 3 p. : 1 form ; 28 cm.
Language: English
Creator: Mathis, Kary, 1936-
Degner, Robert L
Publisher: Florida Agricultural Market Research Center, a part of the Food and Resource Economics Dept., Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla.
Publication Date: 1979
 Subjects
Subject: Dairying -- Costs -- Florida   ( lcsh )
Crates -- Costs   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references.
Statement of Responsibility: by Kary Mathis and Robert L. Degner.
Funding: FAMRC industry report ;
 Record Information
Bibliographic ID: UF00026879
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000409951
oclc - 06835684
notis - ACF6700

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Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Title Page
        Page i
    Center information
        Page ii
    Table of Contents
        Page iii
    List of Tables
        Page iv
    Acknowledgement
        Page v
    Summary
        Page vi
    Introduction
        Page 1
    Findings
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
    Conclusions
        Page 17
    Appendix
        Page 18
        Page 19
        Page 20
        Page 21
Full Text




INDUSTRY REPORT 79-6


Dairy Deli
in Flor


NOVEMBER 1979


$~Ms















Abstract


Executives in 24 dairy processing plants serving Florida in

1979 were interviewed to determine the extent of delivery case

losses, and to compare losses and costs with results from a 1977

study. Dairy processor association representatives in 13 other

states were also interviewed to ascertain any changes in case

losses or control applications since 1977.

Florida processors continue to suffer serious case losses,

amounting to $1.5 million in 1978, up from $1.3 million in 1976.

Case loss per gallon of fluid dairy product was 0.56 cents in 1978,

up from 0.53 cents in 1976.

Conclusions and recommendations concerning control measures

were virtually unchanged from the 1979 study.
Key words: dairy marketing, dairy delivery cases.
















DAIRY DELIVERY CASE LOSSES IN FLORIDA:


A Report by Kary Mathis and Robert L. Degner


















November 1979


The Florida Agricultural Market Research Center
a part of
The Food and Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida, Gainesville, Florida


1979
















The Florida Agricultural Market Research Center


A Service of
The Food and Resource Economics Department
of the
Institute of Food and Agricultural Sciences


The purpose of this Center is to provide timely, applied

research on current and emerging marketing problems affecting

Florida's agricultural and marine industries. The Center seeks

to provide research and information to production, marketing,

and processing firms, groups and organizations concerned with

improving and expanding markets for Florida agricultural and

marine products.

The Center is staffed by a basic group of economists trained

in agriculture and marketing. In addition, cooperating personnel

from other IFAS units provide a wide range of expertise which can

be applied as determined by the requirements of individual projects.
















TABLE OF CONTENTS

Page

LIST OF TABLES ..................................................... iv

ACKNOWLEDGEMENTS ................................................ v

SUMMARY ......................................................... vi

INTRODUCTION ................................... ..... ............1

FINDINGS .......................................................... 2

Case Usage ...................................................... 2

Case Losses ................................. ............... 8

Control Measures ..................... .. ..... ................. 12

Case Losses and Controls in Other States ......................... 14

CONCLUSIONS ...................................................... 17

APPENDIX ........................................... .................... 18





















iii
















LIST OF TABLES


Table Page

1 Dairy processing firms contacted and plant locations,
1979 . . . . . . . . . . . . . . 3

2 Dairy groups contacted, 1979 . . . . . . . . 4

3 Cases in use by type, 1977 and 1979. . . . ... . . 4

4 Case purchases by Florida dairy processors, 1976 and 1978. .. 5

5 Average annual fluid product volume by plant size, 1976
and 1978 . . . . . . . . . . . . . 6

6 Case purchases relative to volume by plant size, 1976 and
1978 . . . . . . . . . . . . .. 7

7 Processors' ratios of cases in float to product movement,
1977 and 1979. . . . . . . . . ... . . . 8

8 Florida dairy processors' descriptions of their case loss
situations by area, 1977 and 1979. . . . . . . 9

9 Cases lost in relation to volume and loss ratings, by plant
size, 1976-77 and 1978-79. . . . . . . . . ... 1

10 Florida dairy processors: Case purchases, cases in use,
product volume and cases lost, average per plant and per
1,000 cases of product, 1976 and 1978. . . . . . ... 11

11 Ratings and preference rankings of case loss control measures
1977 and 1979. . . . . . . . . . . . 73















ACKNOWLEDGEMENTS


The assistance of Florida dairy processors, particularly the

officers and directors of the Florida Dairy Products Association, is

gratefully acknowledged. Mr. C. 0. Beshears, Chairman of the Board of

that Association, and Mr. J. R. Antink, President, were most helpful.

We appreciate the assistance of representatives of dairy product

associations in other states In providing information on developments

since 1977. The assistance of Dr. James Jezeski, Extension Dairy Tech-

nologist at the University of Florida is acknowledged. Typing and

manuscript preparation and data summaries were ably done by Ms. Patricia

Beville and Ms. Ellen Bishop.

















This report is circulated without formal review by the
Food and Resource Economics Department. Content is the
sole responsibility of the authors.











Summary


Florida dairy processors' concerns over dairy delivery case
losses have continued since a 1977 study of case losses, costs and
control. An update of this study was conducted in 1979.

Twenty-four of the 27 processors serving Florida provided in-
formation in a telephone survey as did executives from dairy pro-
cessors associations in 13 other states.

Florida processors now use 88 percent plastic and 12 percent
wire cases, compared with 78 percent and 22 percent, respectively,
in 1977.

The 17 processing plants providing data on case purchases
bought 581,000 cases in 1978, up from the 444,000 bought in 1976.
Plastic cases were 88 percent of total purchases in both years.

Total case purchases increased 31 percent from 1976 to 1978,
but volume grew by 19 percent. Case purchases per 1,000 cases of
product volume increased slightly, from 9.7 in 1976 to 10.2 in 1978.

Case float also increased, from 4.4 cases required per case of
volume to 4.7 cases, an increase if 8 percent in float. Overall,
Florida processors feel that their case losses are the same in 1979
as they were in 1977. Twenty-one of the 24 plant executives respon-
ding in both years classified losses as "serious" or "extremely serious".

Florida processors lost 7.6 cases per 1,000 cases of product in
1978, compared with 7.4 cases per 1,000 in 1976, an average increase for
all 24 plants of 3.2 percent or 1.6 percent per year.

Total case losses remain large in absolute numbers as processors
reported an average of 20,000 cases lost per plant in 1976, but 28,000
in 1978, an increase of 40 percent over the two years.

Total costs of losses, including replacement cases and indirect
costs due to plant downtime and other inefficiencies,is estimated at
$1,468,000 in 1978, up from $1,330,000 in

Case losses cost Florida dairy processors $21.84 per 1,000 cases
of product in 1976, but $22.54 in 1978. These costs per gallon of
fluid product were 0.53 cents in 1976 and 0.56 cents in 1978.

Several Florida processors have initiated some control measures
since 1977. Additional education and emphasis with route personnel,
and case accounting and inventories have been the two chief controls
used. Results have been mixed, with some processors feeling losses
have been reduced but others stating losses are as bad as or worse
than 1977.

Conclusions and recommendations from the 1977 study were basi-
cally unchanged by results of the 1979 update.
















DAIRY DELIVERY CASE LOSSES IN FLORIDA, 1979

Kary Mathis and Robert L. Degner


INTRODUCTION


A 1977 study of dairy delivery case losses in Florida found that
2
these losses cost the Florida dairy industry over $1.3 million per year2

A number of other topics concerned with dairy product distribution, dairy

case use and case loss control measures were investigated in 1977. The

Florida Dairy Products Association (FDPA) had requested the 1977 study and

provided funds toward the cost of that study which was conducted by the

Florida Agricultural Market Research Center (FAMRC).

By the summer of 1979, many FDPA members had indicated that case losses

seemed as great as two years earlier. Also, dairy industry groups from

several other states had expressed interest in the 1977 study and in later

developments. Accordingly, FAMRC personnel conducted a survey of Florida

dairy processors to determine the current status of case losses and controls.

Objectives of the 1979 survey were to:

1. Determine the extent of case losses currently, and compare findings

with 1977 losses:




Kary Mathis is professor and Robert L. Degner is assistant professor
of food and resource economics, University of Florida.

2Mathis, Kary and R. L. Degner, Dairy Delivery Case Losses in Florida:
Costs and Controls, Food and Resource Economics Department, IFAS, University
of Florida, FAMRC Industry Rpport 77-1, ,linp 1977.











2. Determine control measures initiated since 1977 and effects

of these measures on case losses.

Personnel of the FAMRC conducted a telephone survey of Florida

dairy processors in August and September, 1979 (see questionnaire in

Appendix). Executives in 24 dairy plants owned by 16 firms were in-

terviewed (Table 1). Representatives of dairy product associations

in 13 other states (Table 2) were interviewed by telephone, to deter-

mine what changes had occurred in those states since the 1977 survey.


FINDINGS

Results of the 1979 survey are discussed under four headings: case
usage, case losses, control measures, and losses and controls in other

states. Comparisons with 1977 findings are included.



Case Usage

Florida dairy processors continued the change to plastic cases

documented in 1977. Of the 27 plants processing milk for Florida mar-

kets, case use information was collected for 24. These 24 plants have

88 percent plastic and 12 percent wire cases (Table 3). These same

plants had 78 percent plastic and 22 percent wire cases in use in 1977.

Of the total cases in use by the 36 plants operating in 1977, 75

percent were plastic and 25 percent wire.

It should also be noted that 11 of the 24 plants were using some or all

wire cases in 1977, while that number had dropped to nine by 1979 (Table

3). However, a few processors have begun purchasing wire rather than

plastic cases as additional cases are required. Information on case pur-

chases was supplied by 17 plants, for both 1977 and 1979. Only three

plants purchased wire cases in 1977 but five did so in 1979 (Table 4). The












Table l.--Dairy processing firms contacted and plant locations, 1979.


Area and firm


Plant locations1


Northwest


Borden
Kinnett


Northeast


Farmbest
Gustafson
Skinner
Superbrand
Velda


Pensacola, Tallahassee
Columbus



Jacksonville
Green Cove Springs
Jacksonville
Jacksonville
Jacksonville


Central


Borden
T. G. Lee
Velda


West Coast


Borden
Farmbest
Florida
Hart
Pet
Sealtest
Sunnybrook



Borden
Cumberland
Farm Stores
McArthur
Seal test
Velda


Orlando
Orlando
Winter Haven



Tampa
St. Petersburg
Tampa
Fort Myers
St. Petersburg
Tampa
Tampa



Miami
Riviera Beach
Miami
Miami
Miami
Miami


Total 16 firms


24 plants


O1f the 36 plants included in the 1977 study, six had closed, three were
no longer processing but operated as distributors, two did not provide infor-
mation, and one was not contacted due to hurricane damage to its area. A
total of 27 plants are currently processing milk for Florida markets.


South











Table 2.--Dairy groups contacted, 1979.


State


Alabama
California
Georgia
Massachusetts, New Hampshire
Rhode Island, Vermont
Michigan
New Jersey
New York

Ohio
Texas
Wisconsin


Alabama Dairy Products Association, Inc.
Dairy Institute of California
Georgia Dairy Products Association
Association of New England Milk
Dealers, Inc.
Michigan Dairy Foods Association
New Jersey Milk Industry Association
New York State Milk Distributors, Inc.
Metropolitan Dairy Institute
Ohio Dairy Products Association
Dairy Products Institute of Texas
Wisconsin Dairy Products Association


Table 3.--Cases in use by type, 1977 and 1979.


1979 1979
Plants Plants
Case type using Cases using Cases


Number Percent


24 791,695

11 220,255

24 1,011,950


aSame 24 plants in 1977 and 1979. All plants of
cases also use plastic cases.


Number Percent

1,184,191 88

152,700 12

1,338,891 100


these 24 using wire


Group


Plastic


Wire


Totala












number purchasing plastic cases dropped from 16 to 15 during

that period. However, plastic cases represented 88 percent of

case purchases for all 17 plants in both 1976 and 1978 (Table 4).

Information on purchases was provided for the full calendar or

fiscal year prior to the 1977 study or this 1979 update. Thus,

the total number of cases purchased by these 17 plants increased

by 31 percent from 1976 to 1978, while the average number of cases

purchased per plant increased from 26,100 to 34,183 (Table 4).
Table 4.--Case purchases by Florida dairy processors, 1976 and 1978.


1976 1978
Plants Purchases Plants Purchases
Case type using Total Average % purchasing Total Average %


Plastic 16 390,590 24,412 88 15 513,103 34,207 88

Wire _3 53,119 17,706 12 5 68,006 13,601 12

Totala 17 443,705 26,100 100 17 581,109 34,183 100

aSame 17 plants in 1977 and 1979 provided data for the full years
of 1976 and 1978.

Many of these additional cases were purchased to handle increased

volume. Total milk and dairy product volume in Florida increased sub-

stantially from 1976 to 1978, and the number of plants processing for

the state market dropped from 36 to 27. Thus, volume increased for the

27 plants processing and case needs increased accordingly. Twenty-four

of the 27 plants provided volume data for the year 1978. Total volume,

expressed in cases of fluid product, for these plants was 65.1 million

cases, up 19 percent from the 1976 volume of 54.9 million cases for these

same 24 plants. Average volume per plant increased for the 24 plants

reporting with large plants registering a sizeable increase, and small and

medium plants showing a decline in average volume (Table 5).













Table 5.--Average annual fluid product volume by plant sizes 1976 and
1978.


1976 1978
Volume Average annual Average annual
class Plants volume Plants volume


(1,000 cases) (1,000 cases)

Large 8 3,756 12 4,065

Medium 11 2,002 9 1,576

Small 5 576 3 574

Total 24 2,290 24 2,714

avolume classes are the same as in the 1977 report: Large, 2,750,000
cases or more annually; Medium 1,000,000 to 2.749,999 cases; Small, under
1,000,000 cases.

Processors purchased an average of 10.2 cases per 1,000 cases of

product in 1978, slightly more than in 1976 (Table 6). Product volume and

case purchase data for the same 17 plants in both years showed relatively

little change in case purchases for all plant sizes. The ratios of 9.7 or

10.2 cases purchased per 1,000 cases of product for the 17 plants in Table 6

are higher than the 8.8 average ratio reported for 34 plants in the 1977

study.

As noted earlier, several plants operating in 1977 are no longer in

business or are no longer processing (Table 1). Most of those were small

plants which purchased fewer cases in relation to volume than did medium or

large plants. Also, several plants moved to the next larger volume category

from 1976 to 1978 (Table 6).

Total case requirements reported by plants varied from 2.0 cases per

case of product to 7.5 (Table 7). This ratio or "float" differed between

plants due to different distribution systems and to factors particular













to each firm. Plant executives' estimates showed that 84 per-

cent of the 19 plants reporting had a float of 5.0 or less in

both 1977 and 1979 (Table 7). The 1977 report found that float

was 5.0 cases or less for 92 percent of the 34 plants included

them.


Table 6.--Case purchases relative to volume by plant size, 1976 and 1978.



Plant b Case purchases per
size a Plants 1,000 cases product
Average Low High


1976 1978 1976 1978 1976 1978 1976 1973

Large 6 11 10.1 10.5 4.3 3.1 19.5 15.8

Medium 9 5 9.2 9.0 3.2 3.2 19.3 17.4

Small 2 1 10.3 6.4 9.4 6.4 11.2 6.4

Total 17 17 9.7 10.2 3.2 3.1 19.5 17.4


size classes

17 plants in


described in Table 5.

1976 and 1978.


However, very few plants actually had records of case numbers or

accurate counts of the number needed for peak or average volume. The ratios

reported in Table 7 are estimates by the executives interviewed. When these

estimates are weighted by plant volume, the weighted average float for 1976

was 4.4 cases per case of product. The 1978 weighted average was 4.7 cases,

an increase of 8 percent in float.


aSame

Same











Table 7.--Processors' ratios
1977 and 1979.


of cases in float to product movement,


b Percent Cumulative
Ratio Plantsb of plants percent


1977 1979 1977 1979 1977 1979

2.0 1 1 5 5 5 5

3.0 4 2 21 11 26 16

3.5 3 2 16 11 42 26

4.0 3 4 16 21 58 47

4.5 2 3 11 16 68 63

5.0 3 4 16 21 84 84

5.5 1 1 5 5 89 89

6.0 1 1 5 5 95 95

7.0 0 1 0 5 95 100

7.5 1 0 5 0 100 100

Total 19 19 100 100 100 100


aRatio of cases per case of volume;
float for each case of product moved.
bSame 19 plants in 1977 and 1979.


i.e., 2 cases required in


Case Losses


Florida dairy processors feel their case losses are the same in

1979 as in 1977. Twenty-one of the 24 processors responding considered

their losses "serious" or "extremely serious" both years. Only one

processor in the northwest area and two in south Florida considered losses

"moderate" or less in either year (Table 8).


















Table 8.--Florida dairy processors' descriptions of their case loss situations by area,
1977 and 1979.



Case loss
situation Northwest Northeast Central West Coast South Total


1977 1979 1977 1979 1977 1979 1977 1979 1977 1979 1977 1979

Extremely
Serious 2 3 2 1 2 2 3 4 4 4 13 14

Serious 1 2 3 1 1 4 3 8 7

Moderate 1 1 1 1

Slight 1 0 1

No response 2 1 2 1

Totala 4 4 3 7 6 24

aSame 24 plants in 1977 and 1979,








-10-


Table 9.--Cases lost in relation to volume and loss ratings, by plant
size, 1976-77 and 1978-79.



1976-77 1978-79
Cases lost per Loss Cases lost per Loss
Plant size 1,000 cases volume rating 1,000 cases volume rating


Large 7.9 1.3 7.5 1.4

Medium 7.2 1.9 8.9 1.9

Small 11.2 2.0 6.4 2.0

Total 7.4 1.8 7.6 1.7

al=Extremely serious 3=Moderate 5=No problem
2=Serious 4=Slight


Processors' records or estimates of cases lost were calculated in

relation to plant volumes. An average of 7.4 cases per 1,000 cases of

product were lost in 1976, while the loss was 7.6 cases per 1,000 in 1978

(Table 9). Large plants reported slightly less loss per 1,000 in 1979 and

small plants considerably less. Losses per 1,000 cases of product were up

measurably for medium plants, however (Table 9).

Assigning numerical values of one through five to the ratings of

"extremely serious" through "no problem" allowed a comparison of loss ratings

for plants in 1977 and 1979. The average rating of 1.7 in 1979 means

processors in the aggregate feel losses are slightly worse than two years

earlier (Table 9).

Combining data from several previous tables provides a summary of the

case use and loss situation. Florida dairy processors responding to the survey

purchased an average of 31 percent more cases in 1978 than in 1976 and had

32 percent more cases in use (Table 10). Product volume was up 18.5 percent

from 1976 to 1978 and case losses were up 39.8 percent.












Table 10.--Florida dairy processors: Case purchases, cases in use,
product volume and cases lost, average per plant and per
1,000 cases of product, 1976 and 1978.



Change
Item Average per plant 1976-78 Average annual
Cases Percent


Case purchases 26,100 34,183 31.0 15.5

Cases in use 42,165 55,787 32.3 16.2

Product volume 2,289,600 2,713,900 18.5 9.3

Cases lost 19,926 27,855 39.8 19.9

Per 1,000 cases volume

Case purchases 9.7 10.2 5.1 2.6

Cases in use 18.4 20.6 11.6 5.8

Float 4.4 4.7 8.3 4.1

Cases lost 7.4 7.6 3.2 1.6


Calculating the case figures on the basis of 1,000 cases of product

volume provides another perspective. Case purchases per 1,000 cases of

product were up from 9.7 in 1976 to 10.2 in 1978, an increase of 5.1 per-

cent (Table 10). Cases in use increased 11.6 percent from 1976 to 1978,

and float went up from 4.4 to 4.7 cases per 1,000, an increase of 8.3 per-

cent. Cases lostincreased by 3.2 percent over the two years, from 7.4

to 7.6 (Table 10).

Thus, while average case purchases per plant were up 31 percent from

1976 to 1978, increases in volume and in float accounted for most of the

additional cases needed (Table 10). Case losses per 1,000 cases of pro-

duct volume were up slightly, confirming processors' qualitative evalua-

tions shown in Table 9.











Some processors reported higher rates of loss in 1979 than two

years earlier, however. Some processors in the northwest market area,

the west coast and in south Florida considered that losses had increased

over the past two years.

Dollar value of case losses in 1976 was $21.84 per 1,000 cases of

product, with a state total of $1,329,720. Estimated losses in 1978

cost Florida dairy processors $22.54 per ],000 cases of product, for a

total of 0.56 cents, up from 0.53 cents in 1976.


Control Measures

Executives were asked to rate 17 control measures on the effective-

ness of reducing case losses. The average rating for each of these

measures in both 1977 and 1979 is shown in Table 11, along with the

ranking of these measures. Overall, ratings changed relatively little

and the ranking or order of preference for the control measures varied

little from 1977 to 1979. Some of the differences undoubtedly are due

to the fact that many of the processor representatives were not the same

people in both years.

Mandatory deposits for cases were the most preferred measure in
1979, as in 1977. Keeping cases in fenced enclosures behind retail

stores moved up several places, and public relations efforts to con-

sumers dropped in esteem in the two rankings (Table 11). Placing signs

behind retail stores warning that taking cases is theft also fell in the
rankings.

Plant executives were asked if additional measures to reduce case

losses had been tried since 1977. Added efforts were reported in 12 of

the 24 plants for which questionnaires were completed. Two internal

control measures, education and emphasis with route personnel and case









13




Table 11-- Ratings and preference rankings of case loss control
measures 1977 and 1979.


Control


Mandatory deposit

Fenced enclosures

Driver education

State inspector

Case identification

Case inventories

Case redesign

Public relations

Voluntary inside storage

Case exchange

Warning signs

Bulk delivery systems

Driver incentives

Retailer incentives

Universal case plan

Warnings on cases

Voluntary deposit


Ratingsb Preference rankings


1977

5.7

4.1

5.1

5.0

4.1

3.9

4.7

5.1

3.9

2.5

4.1

2.1

2.6

1.5

2.0

2.1

1.4


1979

7.1

5.6

5.5

5.3

4.2

4.0

3.9

3.8

3.8

3.3

3.1

2.9

2.6

2.5

2.4

2.2

1.2


1977

1

6

2

4

6

9

5

2

9

12

6

13

11

16

15

13

17


1979

1

2

3

4

5

6

7

8

8

10

11

12

13

14

15

16

17


aControl measures are
Mathis and Degner.
bRatings are based on
9=extremely effective.


discussed in detail in the 1977 report by


a scale of 0=extremely ineffective to












inventories, were the most often used. Personnel education in five plants

took the form of reminders to return only that firm's cases, and stressed

the importance of picking up cases regularly and frequently.

Inventories have been instituted during the last two years in seven

plants. Some firms use weekly case inventories for each route, others
use monthly or quarterly accounting for each route. A few plants inventory

cases, only on certain routes or shipments which have had a history of
relatively high case losses.

Results of inventories have been mixed. Some executives stated flatly

that inventories have not helped reduce losses. Others noted two benefits:
inventories identify the routes or areas where most losses occur, and

losses are reduced some. One plant had a worker half time to inventory
cases, while another required a full-time person. One respondent said that

inventories cost as much as case losses.

One firm had used the writ of replevin (see the 1977 report) to re-

cover cases from another processor since 1977. No other control measures

were reported as having been used in the past two years.

Case Losses and Control in Other States

As indicated earlier, dairy industry organizations in several other

states were contacted (Table 2). An executive in most of these organizations

was interviewed by telephone in 1977, as well. Overall, case losses were

judged about the same. in 1979 as two years earlier.

Case losses and associated costs remain a chronic and aggravating
problem for most dairy processors in the states where processor groups were

contacted. Executives form associations in Michigan and New England reported

that some of'their members felt losses were not quite as great now as in












1977. However, case losses in California and in New York City are worse

now, according to the association executives in each of those areas. Case

loss is a major problem for Georgia and Texas processors, also.

Control measures used by processors in other states have had varying

results in the past two years. A mandatory deposit of 50 cents per case
has been in effect in New York state, but case losses have not declined.
In fact, New York City processors feel losses are greater now than in

1977, according to the association executive there.
A voluntary deposit program in southern California worked well for a

time after its beginning some three or four years ago. However, this

arrangement is no longer used, as the deposit was not required by all dairy

processors and suitable controls could not be maintained with non-processing
distributors.

A few individual processors in other states are required deposits on
cases. Most handle the deposit on a net basis, so that retailers and other

customers are charged only for the cases missing at the end of a month or

quarter. Some processors require deposits only on the large dispenser cases
but not on the standard delivery case.

Industry associations in several of the states are considering efforts
to request state government action to make case deposits mandatory. However,

several association executives said their members had many reservations
about mandatory deposits. Monitoring anc accounting requirements for a

workable system, customer opposition, and uncertainty about effectiveness

all have caused processors to move slowly on mandatory deposits.
Some sLaLes have sLdLuLes allowing case recovery similar to the writ

of replevin in Florida, but very few firms have actually used these measures.











One state association is considering requesting that unauthorized case

use be made a criminal not a civil offense.
The New England Milk Dealers Association conducted a major public

relations campaign to inform the public about the severity and costs of

case losses. Press conferences were held, association and processor

exectuvies appeared on television and radio talk shows, and brochures

were distributed to retailers. It was felt that publicawareness of the
probelm was increased greatly.

An association of dairy processors with members in 40 states and
three Canadian provinces recently completed a study on case losses among

their processor members. Findings were very similar to those reported

from Florida.

Case losses per 1,000 cases of product volume averaged 8.0, compared

with 7.6 in Florida. Costs of losses among these processors averaged

$25.04 per 1,000 cases filled, a little above the Florida costs of $22.54.

Total cost of case losses per gallon of product were 0.59 cents, compared

with 0,56 cents in Florida.

One difference between the two studies was in float. This processor

association had 5.4 cases per case of product, while Florida processors
reported 4.7 cases in float.

Control measures discussed in Florida had all been considered or tried

by processor members of this association, with results similar to those in

Florida. One processor had instituted a case deposit or charge with its

customers, even though no deposit was required by state law or other pro-

cessors in the market area.

The processor reported that initiating the deposit was "painful" but

that losses were reduced substantially. No accounts were lost even though

there are ten competitors in its market area.













This processor requires cases to be recorded in and out for each

truck and route, and for each account daily. The sales manager monitors

these records, and gives special attention to routes or accounts with

higher-than-average losses. Benefits are, of course, fewer cases lost

and lower case replacement cost. The major benefit was from eliminating

plant downtime previously experienced due to case shortages.


CONCLUSIONS

Relatively little change has occurred in either dairy case losses or

control measures used by Florida dairy processors since 1977. Several

processors feel their case losses are worse than two years ago, while

a few reported slightly lower losses. On the average, case losses for 24

of the 27 processors serving Florida increased 1.6 percent per year for

the two years between the 1977 and 1979 studies.

Processors' preferences for control measures also changed relatively

little between 1977 and 1979. More processors have stronger preferences

for a mandatory deposit than for any other control. Several processors

had instituted more rigorous case accounting procedures during the past

two years. Results of case inventories have been mixed. however.

Case losses in a number of other states were about the same as in

1977, according to dairy processor association executives. A few firms

in other states have tried a variety of control measures, with results

about the same as for those measures in Florida.


































APPENDIX










Food and Resource Economics Department City
Florida Agricultural Market Research Firm
Center
Person
Title
Date
CONFIDENTIAL


DAIRY CASE UPDATE PROCESSOR QUESTIONNAIRE


A few minutes of your time will be very helpful in updating the case loss study
we did in 1977.

1. What types of cases do you use? How many are now in use, and what is the
cost per case now?
Number Cost
S1977 1979 1977 C1979

Plastic

Wire

2. How would you describe your current case loss situation? We have five
categories (below); in 1977 you said case losses were

1979: (1) Extremely serious (2) Serious (3) Moderate

(4) Slight (5) No problem

3. How many cases did you purchase and lose in the two most recent calendar or
fiscal years? (Your figures for 1976 are from the 1977 study)
Purchased Lost
Year Type No. $ No. $


1978

1977

1976


4. What is your ratio of cases to volume (float)?

1979 1977











5. Your product volume would be very helpful. Any information you give us
will remain confidential. (We have 1976 figures from the 1977 study).
Year Volume $

1978
1977

1976

6. Have you made any major changes in your delivery system since 1977?
In 1977, you had routes. Now routes.
Service Drop
Delivery 1977 1979 1977 1979


Supermarkets
Convenience stores

Independent groceries
Restaurants
Schools
Other


7. Have you tried additional measures to
years? What were the results?


reduce case losses in the last two


8. What is your opinion of the following other measures? Rate on a scale of
0 = extremely ineffective to 9 = extremely effective

Control Ratings Comments
S977- 1979


Internal:

Case inventories
Driver education

Case identification


__ ~










8. Continued

Control Ratings Comments
1977 1979
Internal:

Driver incentives

Case exchange program

Retailer incentives

Warnings on cases

Additional Measures:

Deposit voluntary
mandatory

Universal case plan

State inspector

Warning signs

Fenced enclosures outside
retail stores

Voluntary inside storage
by retailers

Joint public relations
program with retailers

Bulk delivery systems

Case redesign

9. Do you have other contents concerning case losses and controls?




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