• TABLE OF CONTENTS
HIDE
 Front Cover
 Abstract
 Title Page
 Center information
 Foreword
 Acknowledgement
 Table of Contents
 List of Tables
 Introduction
 Objectives
 Procedure
 Findings
 Conclusion
 Appendix
 Reference






Group Title: Industry report - University of Florida, Florida Agricultural Market Research Center ; no. 81-11
Title: Farmer to consumer direct marketing of selected agricultural commodities in Florida
CITATION PDF VIEWER THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026892/00001
 Material Information
Title: Farmer to consumer direct marketing of selected agricultural commodities in Florida producer and consumer benefits, a report
Series Title: Industry report Florida Agricultural Market Research Center
Physical Description: vii, 98 p. : ; 28 cm.
Language: English
Creator: Degner, Robert L
Rodan, Lance W
Mathis, Kary, 1936-
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: 1981
 Subjects
Subject: Farm produce -- Marketing -- Florida   ( lcsh )
Direct selling -- Economic aspects -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 97-98.
Statement of Responsibility: by Robert L. Degner, Lance W. Rodan, and Kary Mathis.
 Record Information
Bibliographic ID: UF00026892
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000410252
oclc - 10795339
notis - ACF7017

Downloads

This item has the following downloads:

IR81-11%20Degner ( PDF )


Table of Contents
    Front Cover
        Front Cover
    Abstract
        Abstract
    Title Page
        Title Page
    Center information
        Page i
    Foreword
        Page ii
    Acknowledgement
        Page iii
    Table of Contents
        Page iv
        Page v
    List of Tables
        Page vi
        Page vii
    Introduction
        Page 1
    Objectives
        Page 2
    Procedure
        Page 3
    Findings
        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
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
        Page 63
        Page 64
        Page 65
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
        Page 76
        Page 77
        Page 78
        Page 79
        Page 80
        Page 81
        Page 82
        Page 83
        Page 84
        Page 85
        Page 86
        Page 87
    Conclusion
        Page 88
        Page 89
    Appendix
        Page 90
        Page 91
        Page 92
        Page 93
        Page 94
        Page 95
        Page 96
    Reference
        Page 97
        Page 98
Full Text



Industry Report 81-11.


MA


Farmer t
of Selected Agri
PRODUCER AND


keting
in Florida:

ITS


December 1981














ABSTRACT


This study determined the nature and extent of benefits
of direct marketing activities to farmers and to consumers.

Nine agricultural products commonly marketed directly to
consumers in Florida were examined. Products included blue-
berries, citrus, grapes, snap beans, strawberries, tomatoes,
watermelons, eggs, and honey. Direct marketing activities in-
cluded Pick-Your-Own outlets, farmers' markets, and roadside
stands. Case studies of the predominant types of direct mar-
keting are presented for each commodity. Producers' and con-
sumers' monetary benefits are stressed, but other aspects of
direct marketing are also discussed.


Key words:


Marketing, direct marketing, blueberries, citrus,
grapes, snap beans, strawberries, tomatoes, water-
melons, eggs, honey.

















FARMER TO CONSUMER DIRECT MARKETING OF SELECTED

AGRICULTURAL COMMODITIES IN FLORIDA:

A SUMMARY OF PRODUCER AND CONSUMER BENEFITS












a report by

Robert L. Degner, Lance W. Rodan, and
Kary Mathis










December 1981

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 32611















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 agri-

cultural 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.
















FOREWORD


Inflationary trends in prices paid by consumers and input prices

paid by farmers have resulted in increased interest in farmer-to-consumer

direct marketing as a means of reducing food cost to consumers and

increasing financial returns to farmers. This increased interest

resulted in the passage of the Farmer to Consumer Direct Marketing Act

of 1976 (PL 94-463). The purpose of this act is to promote the devel-

opment and expansion of direct marketing of agricultural commodities

from farmers to consumers on an economically sustainable basis. The act

required evaluation of direct marketing activities through a series of

research activities.
In 1978, the Florida Agricultural Market Research Center was

selected by USDA-ESCS to conduct case studies of representative direct

marketing methods employed by farmers in Florida and of consumers pa-

tronizing these outlets. Nine agricultural commodities commonly market-

ed directly by producers to consumers were selected for the series of
case studies. The commodities included blueberries, grapes, citrus,

tomatoes, snap beans (including pole beans), strawberries, watermelons,
honey, and eggs. Detailed case studies for each commodity are reported

in separate publications to allow for greater efficiency in disseminat-

ing the results.

















ACKNOWLEDGEMENTS


This research was initiated by a request from the United States
Department of Agriculture, Economics, Statistics, and Cooperative

Service, National Economic Analysis Division (now Economic Research
Service, National Economics Division). A substantial portion of the
funding was provided by USDA-ESCS. Peter L. Henderson, Agricultural

Economist, was particularly helpful in formulating and guiding the

project, and is due our sincere appreciation.

Our appreciation is also expressed to Mr. Gervasio Cubenas, re-
search assistant, Mr. Scott Woolley and Miss Judith King, statisti-

cians, for their help in conducting and analyzing grower and consumer

interviews. We also express our thanks to Ms. Patricia Beville, Mrs.

Lois Schoen and Ms. Alice Bliss for typing this manuscript.












TABLE OF CONTENTS

Page

FOREWORD ................. ............................... ii

ACKNOWLEDGEMENTS.......................................... iii

LIST OF TABLES ........................................... vi

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

OBJECTIVES................................................. 2

PROCEDURE.................................................. 3

FINDINGS................. ................................. 4

Blueberries .............................................. 5

Producer Case Studies................................ 5
The Consumer...................................... 9

Citrus................................................ 12

Producer Case Studies.................................. 13
The Consumer........................................... 17

Grapes................................................... 25

Producer Case Studies.................................. 25
The Consumer........................................... 30

Snap Beans.............................................. 32

Producer Case Studies................................. 33
The Consumer......................................... 38

Strawberries ............................................. 41

Producer Case Studies.................................. 42
The Consumer........................................... 48

Tomatoes.............................................. 52

Producer Case Studies................................. 53
The Consumer........................................... 59












Table of Contents--Continued

Page

Watermelons ...................... ............................... 62

Producer Case Studies ........ ................................. 63
The Consumer................................................... 66

Eggs ................. .......................................... 69

Producer Case Studies................ .......................... 70
The Consumer................................................... 75

Honey.......................................................... 80

Producer Case Studies....................................... 80
The Consumer..... ................................. ............ 84

CONCLUSIONS ....................................................... 88

APPENDIX......... ................................................ 90

REFERENCES ...................... ............................. 97











LIST OF TABLES


Table Page

1 A summary of blueberries growers' costs and returns
for selected direct marketing operations.................... 7

2 Consumer expenditures and savings associated with blue-
berries purchased at PYO outlets............................ 10

3 A summary of citrus growers' costs and returns for selected
direct marketing operations............................... 14

4 Consumer expenditures and savings associated with oranges
purchased at roadside stands................................ 19

5 Consumer expenditures and savings associated with oranges
purchased at farmers' markets............................. 20

6 Consumer expenditures and savings associated with grapefruit
purchased at roadside stands................................ 22

7 Consumer expenditures and savings associated with grapefruit
purchased at farmers' markets .............................. 23

8 A summary of grape growers' costs and returns for selected
direct marketing operations................................. 28

9 Consumer expenditures and savings associated with muscadine
grapes purchased at PYO outlets........................... 31

10 A summary of snap bean grower's costs and returns for
selected direct marketing operations...................... 35

11 Consumer expenditures and savings associated with snap
beans purchased at PYO outlets.............................. 40

12 A summary of strawberry growers' costs and returns for
selected direct marketing operations........................ 44

13 Consumer expenditures and savings associated with straw-
berries purchased at PYO outlets.......................... 50

14 Consumer expenditures and savings associated with straw-
berries purchased at roadside stands........................ 51

15 A summary of tomato growers' costs and returns for
selected direct marketing operations........................ 55












List of Tables- Continued


Table Page

16 Consumer expenditures and savings associated with
tomatoes purchased at PYO outlets........................ 61

17 A summary of watermelon growers' costs and returns for
selected direct marketing operations..................... 64

18 Consumer expenditures and savings associated with water-
melons purchased at roadside stands....................... 68

19 A summary of commercial egg producers' costs and returns
for direct marketing operations......................... 71

20 A summary of small scale egg producers' costs and returns
for direct marketing operations.......................... 74

21 Consumer expenditures and savings associated with
purchases of eggs at roadside stands..................... 77

22 A summary of honey producers' costs and returns for
selected direct marketing operations.................... 82

23 Consumer expenditures and savings associated with
honey purchased at farmers market......................... 86













FARMER TO CONSUMER DIRECT MARKETING OF SELECTED
AGRICULTURAL COMMODITIES IN FLORIDA: A SUMMARY OF PRODUCER AND
CONSUMER BENEFITS


INTRODUCTION

Inflationary trends in prices paid by consumers and input prices

paid by farmers have resulted in increased interest in farmer-to-consumer
direct marketing as a means of reducing food cost to consumers and increas-

ing financial returns to farmers. This increased interest resulted in

the passage of the Farmer to Consumer Direct Marketing Act of 1976

(PL 94-463). The purpose of this act is to promote the development and
expansion of direct marketing of agricultural commodities from farmers

to consumers on an economically sustainable basis. The act required

evaluation of direct marketing activities through a series of research

activities.

In 1978, the Florida Agricultural Market Research Center was

selected by USDA-ESCS to conduct case studies of representative direct

marketing methods employed by farmers in Florida and of consumers

patronizing these outlets. Nine agricultural commodities commonly

marketed directly by producers to consumers were selected for the

series of case studies. The commodities included blueberries, citrus

grapes, snap beans (including pole beans), strawberries, tomatoes,




Robert L. Degner is associate professor and Kary Mathis is profes-
sor of food and resource economics, University of Florida. Lance W.
Rodan was research associate in food and resource economics at the
University of Florida, and is now with Farmbank Services, Denver,
Colorado.









watermelons, eggs, and honey. This report provides an overview of

producer and consumer benefits of direct marketing for each of these
commodities. The producer case studies encompass a broad range of
direct marketing activities, including pick-your-own (PYO) operations,
roadside stands, and farmers' markets. The type or types of direct

marketing activity reported for each commodity reflect an attempt to
depict the prevailing methods(s) used. Detailed findings for each
commodity are reported in separate publications to allow for greater
efficiency in disseminating the results


OBJECTIVES

The basic objective of this study was to determine the nature and
extent of benefits of direct marketing activities to farmers and to the
consumers who purchase commodities directly from them. Specific ob-
jectives were to 1) identify marketing inputs required by the predomi-
nant method of direct marketing 2) determine marketing costs associated
with the prevailing direct marketing activity 3) determine farmers' net

returns obtained through direct marketing and 4) estimate returns associat-
ed with each input, with particular emphasis on family labor.
Specific consumer-oriented objectives were to 1) determine prices
paid by consumers for the selected commodities at representative direct
marketing outlets and compare these prices with those paid at super-
markets 2) determine consumers' perception of commodity or product

quality at direct marketing outlets as compared to that obtainable at
supermarkets 3) identify additional benefits of direct marketing per-
ceived by consumers patronizing direct marketing outlets and 4) deter-

mine demographic characteristics of direct marketing outlet patrons.













PROCEDURE

The case study approach was utilized to determine benefits ac-

cruing to farmers or producers. Producers were identified and lo-

cated with assistance of county agricultural extension agents, state

horticultural extension specialists, word-of-mouth referrals, and
through direct observation. Specific producers were then selected to

reflect a broad spectrum of direct marketing activity, particularly
with respect to size and type of operation. Producers were person-

ally interviewed by the Florida Agricultural Market Research Center
staff during the 1979 and 1980 peak harvest and/or marketing seasons.

Production cost data were obtained from secondary sources and

slightly modified to reflect general production practices used by most
producers. In keeping with the objectives stated above, emphasis was

placed on marketing rather than production activities. In some cases,

total revenues and costs of marketing inputs were estimated and used to

determine financial returns whenever producers could not or would not

provide primary data. Producers were also questioned about non-monetary

benefits derived from direct marketing activities.

Consumer benefits were ascertained through personal interviews at

direct marketing outlets. Time and resource constraints precluded

obtaining large, random samples of consumers. In keeping with the case

study approach prescribed by U5DA-ISCS, relatively small numbers of

customers were interviewed. Consumers were selected on a non-prob-

ability convenience basis, at typical pick-your-own operations, road-

side stands, and farmers' markets. The customer flow at all direc mar-
keting outlets was sufficiently slow to allow all patrons to be

















interviewed during surveillance periods. Information relating to

consumers' purchases, demographic characteristics, shopping patterns,

and transportation was obtained in the interviews.

Consumers' monetary savings were determined by comparing prices

psid for the various commodities at direct marketing outlets with prices

prevailing at local grocery stores. Depending on the availability of
the commodities or products in major food stores, retail prices were
obtained through personal store visits or from retail food advertise-

ments.

Despite the consumer samples' limitations, it is felt that the

interviews provide a reasonable representation of customers typically

patronizing the various types of direct marketing outlets. The samples

for the respective commodities are thought to yield a valid assessment

of the qualitative and quantitative benefits accruing to consumers.

FINDINGS

Research findings for each of the nine commodities follow. First,

the general marketing environment for each commodity is briefly dis-
cussed. Then representative producers' case studies are examined to

isolate the monetary returns and other benefits associated with direct

marketing activities. Finally, consumer purchases and benefits are

analyzed. This general pattern of discussion is followed for each
product.











Blueberries

In recent years, agricultural experiment stations in the south

eastern United States have developed improved varieties of rabbiteye
blueberries adapted to Florida's growing conditions, resulting in

considerable grower interest and rapid increases in new plantings

(Crocker, Lyrene and Andrews). By 1979, there were approximately

175 bearing acres of rabbiteye blueberries grown in the state, pri-
marily in the northern half of Florida. Most bearing acreages were
owned by individuals and were quite small, ranging from approximately

one half acre to slightly over 10 acres.

Due to the small size and geographical dispersion of blueberry

plantings in Florida, traditional commercial markets were not avail-

able. In 1979, an estimated 95 percent of the blueberries produced in

the state were marketed directly to consumers. The predominant form

of direct marketing for blueberries is the PYO outlet. Growers' rel-
atively small production of blueberries precluded serious consideration

of commercial marketing prior to and including the 1979 season. Fur-

thermore, consumer demand had been sufficient for most growers to mar-

ket their entire production through PYO outlets, although two growers

interviewed sold small portions of their crops to local retailers.

Producer Case Studies

Blueberry farming was a secondary endeavor that represented only

a part of family income for all five of the individuals interviewed.
Several held other jobs or grew other crops in addition to blueberries,

and one was retired and grew them as a hobby and income supplement.

All five marketed the bulk of their blueberry production through

PYO outlets. Several marketed small quantities to independent retail











food stores, but because the volume was judged to be of minor im-
portance, only their PYO activity was analyzed. However, in these

cases, total acreages and corresponding production costs were prorated
to reflect only the quantities marketed through the PYO outlets. All

five PYO outlets were in reasonably good locations, i.e., on or near

paved roads and located approximately within 10 miles of cities with

populations ranging from about 35,000 to 75,000

The five growers had from two to approximately 12 acres of blue-

berries for PYO operations (Table 1). All growers charged 60 cents per
pound for their berries, and gross revenues ranged from slightly less
than $1,700 to an estimated $35,100. Growers' investments in marketing

facilities and equipment were relatively modest. The typical PYO blue-
berrry farm used a few inexpensive outdoor signs for roadside advertising
and on-site customer instructions, a small barn or shelter for sales

headquarters, a work table, and scales for weighing purchases. All
growers provided customers with small buckets for picking.

Expenditures for supplies and services were minimal. All growers
had liability insurance to cover their PYO activities. Advertising

expenses for the season ranged from $10 to $250, with newspaper ads the
only form of paid advertising. Customers generally brought their own

containers for transporting their berries home, but most growers pro-
vided grocery bags for those that had no containers.

Net return per hour of family labor was the common denominator used
to assess producers' monetary benefits. The highest estimated return

per hour of family labor was slightly over $13.00 and the lowest slightly

over $1.00 per hour. Two producers earned about $9.00 per hour for their











Table 1 .--A summary of blueberry growers' costs
direct marketing operations.


and returns for selected


Grower
Item Unit A B C D E


Acres


Revenue


PYO

11.7


6 2


Dollars 35,100 13,500 10,200 8,640 1,677


Production
Marketing
Total


6,295
3,034
9 ,2 39


2,421
1,089
3tTF


3,395
3,196
6,9T1


3.228
786
T~,T014


1,076
95
T177T


Net revenue

Net return if sold
commercially

Net return due to
direct marketing


25,771 9,990 3,609 4,626 506


b b
----- -----


25,771 9,990 3,609 4,626 506


Family labor


Production
Marketing
Total


Net return per hour
of family labor
due to direct
marketing


Dollars


13.12 8.83 9.02 3.04 1.15


a
Type of outlet refers to predominant forms
by the respective growers. Pick-your-own = PYO.


of direct marketing used


b
Traditional commercial marketing channels were not available to the
growers.

c
Production labor was hired and is included in production costs above.


Typea

Size


Costs


Hours
II
II


445
1 520
1,965


171
960
1 ,131


400
400


228
1,296
1,524













direct marketing efforts, and one earned about $3.00 per hour

(Table 1).

Most growers felt that marketing their produce directly to con-

cumers through their PYO outlets was their only viable marketing al-

ternative, considering their production volume. A major advantage

cited by growers was smaller capital requirements because of the elim-
ination of picking, packing, and transportation expenses required by

other marketing alternatives. The elimination of picking labor prob-
lems was also mentioned by several growers as an advantage. One grower
said that operating his farm as a PYO outlet gave him personal control

over the business that other marketing alternatives did not afford.

Specifically, he said that his PYO outlet gave him greater price control

as well as a greater assurance of a ready market for his blueberries.

Another grower who had "retired" was enthusiastic about his PYO business

because it gave him something to do even though his monetary returns
were low.

The most frequently mentioned disadvantage was the amount of time
that the PYO outlet demanded. Although managing the PYO activities was

not especially strenuous, the business required that someone oversee it
10 to 12 hours per day, six or seven days per week during the harvest

season. The other disadvantages discussed by growers were "people"
problems. Some growers found occasional criticism or complaints from
customers irritating. Several growers also mentioned problems with

children. They felt that some parents failed to discipline their

children properly, resulting in wasted berries and damaged plants.

Despite the disadvantages, the growers were generally pleased with

the benefits afforded by their experiences with direct marketing.












The Consumers

A sample of 31 patrons was interviewed at three of the blueberry

farms. About three-fourths of the customers were female and 60 per-

cent were 50 years of age or older. In general, the customers were

highly educated and had relatively high incomes. The trip to the PYO

outlet was planned by all customer interviewed; none stopped on im-
pulse. Customers traveled an average round trip distance of 30 miles

which required an average of 38 minutes. Most of the patrons dis-
covered the PYO outlet through friedns or relatives, althouug five of

the 31 customers said they found the outlet through newspaper adver-
tisements. About three-fourths of the interviewees were repeat customers.

The trip to the blueberry PYO outlet was a social activity for many

of the shoppers; about 90 percent had companion shoppers.

The 31 PYO customers purchased an average of approximately 14

pounds of blueberries (Table 2). Purchases ranged from 4 to 32 pounds.

At a price of 60 cents per pound, the price charged by all farmers

interviewed, the average expenditure was $8.50. Customers' estimates

of their monetary savings averaged $8.88 per transaction, but compared
with prevailing prices at area supermarkets, they saved an average

of $5.94 per transaction.
Customers rated the freshness and overall quality of the blue-
berries obtained at the PYO outlet significantly higher than fresh-
ness and overall quality of blueberries usually found at retail grocery

stores. Price was the primary advantage of shopping at the blueberry

PYO operation, mentioned by a total of 90 percent of those interviewed











Table 2 .--Consumer expenditures and savings associated with blueberries
purchased at PYO outlets.


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Pounds 31 14.2 4 32

Total expenditure Dollars 31 8.50 2.40 19.20

Price per pound at
PYO outlets 5 0.60 0.60 0.60

Expected retail price
per pound 16 1.20 0.83 1.70

Observed retail price
per pound 2 0.99 0.99 0.99

Expected savings per
transaction 16 8.88 1.61 26.10

Actual savings "16 5.94 1.56 11.70

Hypothetical savi gs
per transaction -5.54 5.54 5.54


a
Retail prices were observed in two major retail supermarket chains
during the time period customer interviews were conducted.

b
Hypothetical savings per transaction are based upon the average quantity
purchased by the 31 customers at average, minimum, and maximum prices observed
at PYO outlets compared with average observed retail prices.








11



Freshness and quality were mentioned by 65 and 35 percent, respect-

ively. Recreation was an advantage cited by 19 percent.

For most respondents, patronizing blueberry PYO outlets was a

positive experience. Only five of the 31 could think of disadvantages

to shopping there. The time and effort required were the leading

disadvantages. Respondents were generally pleased with the PYO op-

erations and offered few suggestions for improvement.













Citrus

Citrus is the most important agricultural crop in Florida. During

the 1978-79 season, farm gate receipts approached $1 billion from over

830,000 acres of citrus grown in the state. About 74 percent of Florida
citrus acreage was in oranges, 16 percent in grapefruit, and 9 percent

in speciality fruits such as tangerines and tangelos. Florida accounts
for about one-third and three-fourths of the nation's fresh orange and

grapefruit supplies, respectively. There were about 150 commercial
fresh fruit packing plants and an additional 200 licensed and bonded
fruit shippers engaged in fresh fruit packing and shipping in 1978-79.

Industry sources estimated that commercial packing plants handled over

99 percent of all fresh fruit sold in Florida. Nevertheless, direct

marketing provides many growers with alternative ways to market their
fruit.

Roadside stands and booths at farmers' markets are the predominant

methods used by small scale citrus producers to market their fruit

directly to consumers. There were very few pick-your-own (PYO) outlets;

the major reason appears to be liability considerations. While most

growers who engaged in direct marketing of citrus grew less than 50

acres, there were exceptions. They were primarily located in the major

fresh fruit producing region of the state, the Indian River area, where
growers with sizeable acreages operate roadside stands in conjunction

with their gift fruit shipping business. Several growers of this type

were interviewed, but due to the complexity of their businesses it was

decided that they were beyond the scope of traditional direct marketing

outlets. The three firms chosen as being representative of direct

marketing outlets for citrus were relativley small by industry standards.













Their acreages ranged from approximately seven to 30 acres. It should

also be noted that these growers' total acreages were comprised of

several different types of citrus.


Producer Case Studies

All three citrus growers were well over 65 years of age, but they

continued to grow citrus and market it as an income supplement. Each

lived in a residence located on the same property as their groves, and
sold a portion of their production at a roadside stand located on the

premises. One producer sold about half of his production at a nearby
farmers' market, another sold his fruit exclusively through his roadside

stand and the third sold most of his fruit through a PYO outlet and a

small proportion through his roadside stand.

Grower A grew 30 varieties of citrus in his 30.5 acre grove. He
sold half of his fruit at his roadside stand and the remainder at a

regional farmers' market. The large number of varieties provided him

with an extended marketing season ideally suited to both roadside and
farmers' market sales. His estimated gross revenue was slightly over

$49,000 (Table 3). After deducting production and direct marketing

costs, Grower A was left with a net revenue of over $4,800 for the
season (Abbitt and Muraro, Hooks and Kilmer, Hooks, Spurlock and Kilmer).

Because his grove was located on the fringe of the citrus producing

region and contained so many different types of citrus, he would have

had considerable difficulty in marketing his fruit through regular

commercial channels. The small quantities of any one type of citrus

would pose difficulties in selling his fruit to fresh fruit packers













Table 3.--A summary of citrus growers' costs and returns
direct marketing operations.


for selected


Grower
Item Unit A B C


Typea

Size


RS, FM


Acres


Revenue


RS PYO, RS


30.5


Dollars 49,030 24,195


Costs


Production
Marketing
Total


26,932
17,255
44,187


Net revenue


Net return if sold
commercially


Net return due to direct
marketing


Family labor


Production
Marketing
Total

Net return per hour of
family labor due to
direct marketing


Hours
i'


Dollars


6,446
9,347
15,793


4,843 8,402


-4,931 4,448


9,774 3,954


2,704
2,704


3.62


526
526


7.52


aType of outlet refers to predominant forms of direct marketing used
by each of the growers. Pick-your-own = PYO, roadside stand = RS, and
farmers' market = FM.
bProduction labor is included in production costs above.


8.9

15,113



7,859
1 075
8,934

6,179


-3,708


9,887


-----b
2,808
2,808


3.52












or to processing plants. Assuming that he would have been able to sell
his fruit at prevailing processing prices, he would have experienced a

net loss exceeding $4,900. In absolute terms, Grower A's direct mar-

keting activity resulted in almost $9,800 more income than if he had
elected to sell his fruit to a processing plant. However, he spent
slightly over 2,700 hours engaged in his direct marketing activities.
His net return per hour of family labor due to direct marketing amounted
to $3.62 (Table 3).
Grower B sold his fruit exclusively at his roadside stand. The
remainder was sold to a processor. His crop consisted primarily of
oranges, with a limited amount of grapefruit. In addition to the fruit
which he grew himself, he bought limited quantities of speciality fruit
to augment his own supplies. The costs and returns shown for Grower B
are applicable only to the proportion of fruit that he produced himself.
Grower B's net revenue from fruit marketed through his stand amounted to

approximately $24,000. After deducting production and direct marketing

costs, Grower B's net revenue was $8,402. If he had sold the fruit as
he had the remainder of his production, he would have realized a net

return of only $4,448. Thus, Grower B's net return due to direct mar-

keting was slightly over $3,900. He had spent an estimated 526 hours in
operating and managing his roadside stand, for a net reutrn per hour of
labor of $7.52 (Table 3).

Grower C owned and operated a 10 acre grove near a major metro-
politan center. Virtually all of his grove was planted in grapefruit;
he had less than one-half acre of oranges. Nearly nine acres of his

production was sold directly to consumers, and the balance sold to a













processing plant. Two-thirds of the fruit sold directly to consumers

was marketed through his PYO operation and the remaining one-third at

his roadside stand. Grower C's combined revenues from his PYO op-

eration and his roadside sales amounted to slightly over $15,000. His
net revenue, after deducting direct marketing expenses, amounted to

slightly over $6,000. If he had sold his entire crop to the processing
plant, his only commercial marketing alternative, he would have lost

approximately $3,700. Thus, in absolute terms, returns due to direct
marketing amounted to nearly $10,000. Grower C and his wife spent a
total of slightly over 2,800 hours operating their roadside stand and

supervising the PYO operation. The estimated net return per hour of
family labor due Lu direct marketing amounted to slightly over $3.50

(Table 3).

All three growers indicated that the major advantage associated

with marketing their fruit directly to consumers was increased returns.
Grower A felt that he was in a particularly vulnerable situation because

he had no viable commercial alternative due to the small quantities of
the various types of citrus produced. Grower C said that he had dif-
ficulty in obtaining commercial picking crews for his small acreage and

he was pleased with his PYO operation because he felt that PYO patrons,

despite their inexperience, did less damage to his trees than commercial

pickers. All three also mentioned labor difficulties in harvesting
fruit for their roadside stands. Despite their advanced ages, they all

assisted in picking fruit for their roadside stands.

As with other types of direct marketing outlets, all three growers
stated that their direct marketing activities required a great deal of


personal commitment and labor.














The Consumers

Fifty purchasers of citrus fruit were interviewed, 21 at road-

side stands and 29 at farmers' markets. Of the customers contacted

at roadside stands, 17 had bought oranges and 18 had bought grapefruit

Of the farmers' market patrons interviewed, 12 had purchased oranges

and 17 of the 29 had bought grapefruit.

The patrons of roadside stands and farmers' markets were found to
be quite similar. About two-thirds of both groups were male, and over

three-fourths were over 50 years of age. Over two-thirds lived in two-

person households. A very high proportion of patrons, 56 percent, were

retired. The interviewees tended to be highly educated as well, with 39

percent having attended college. Over 60 percent of those interviewed

had incomes in excess of $15,000 per year, considerably higher than the

average reported for the state as a whole (Sales and Marketing Man-

agement). All respondents were white, non-Hispanic; no blacks or white

Hispanlcs were observed purchasing citrus at either type of outlet. It
ts also important to note that over three-fourths of the shoppers at
both types of outlets were temporary or seasonal residents.

All roadside stand patrons had planned their purchases. Similarly,
a very high proportion of farmers' market patrons, 90 percent, had

planned their purchases. Very few stopped on impulse.
The majority of roadside stand patrons, 80 percent, combined other

activities with their trip. The average distance traveled was about















3.5 miles, which required slightly under seven minutes. However,

about 75 percent of farmers' market patrons had made a special trip

from their residence to the market. Their average round trip mileage

was 38 miles and required nearly an hour.

Only one-third of the roadside stand patrons were repeat cus-

tomers, but almost 80 percent of the farmers' market shoppers had

previously purchased citrus at the farmers' market. Seventeen of the
21 roadside stand customers discovered the stand through roadside

signs. Two had known about the stand for years and could not recall
how they first become aware of its existence. Newspaper advertising

and word-of-mouth were each mentioned by one person.

The majority of the farmers' market customers, almost 60 per-

cent, were introduced to the markets by friends or relatives. Al-

most one-third could not recall how they discovered the markets, and

four of the 29 customers were attracted to the markets by roadside

signs.
The average purchase of oranges at roadside stands was slightly

over one-half bushel, and the average price slightly over $5 per

bushel. Customers' estimates of monetary savings averaged $3.56 per

transaction, but compared with average retail food store prices, they

saved $2.19 per transaction (Table 4).

At farmers' markets, the average orange purchase was slightly

over one bushel. Customers felt they were saving about $15 per trans-
action, but compared to retail prices, they saved approximately $10.

Savings compared with retail prices ranged from $1.65 to $26.36 per

transaction (Table 5).











Table 4 .--Consumer expenditures
at roadside stands.


and savings associated with oranges purchased


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Bushels 17 0.56 0.25 1.0

Total expenditure Dollars 17 4.91. 2.5 9.0

Price per bushel at
roadside stands "5 5.10 3.00 7.0

Expected retail price 7 14.03 9.0 19.5

Observed retail price 13 10.99 7.49 13.39

Expected savings per
transaction 7 3.56 1.0 10.5

Actual savings per
transaction 7 2.19 0.65 4.09

Hypothetical savings
per transaction 3.30 4.47 2.23


a
Hypothetical savings per transaction are based on the average quantity
purchased by the 17 customers at average, minimum, and maximum prices observed
at roadside stands compared with average observed retail prices.












Table 5.--Consumer expenditures
at farmers' markets.


and savings associated with oranges purchased


Number of
Item Unit observations Average Mitnimum Maximum


Quantity purchased Bushels 20 1.03 0.25 4.0

Total expenditure Dollars 20 5.13 1.25 20.0

Price per bushel at
farmers' markets 2 4.00 4.00 4.00

Expected retail price 9 13.21 7.0 22.5

Observed retail price 13 10.99 7.49 13.39

Expected savings per
transaction 9 15.03 0.5 42.6

Actual savings per
transaction 9 10.07 1.65 26.36

Hypothetical savings
per transaction 7.20 7.20 7.20


a
Hypothetical savings per transaction are based upon the average quantity
purchased by the 20 customers at the average, minimum, and maximum prices
observed at the farmers' markets compared with the average observed retail
prices.













Grapefruit purchases at roadside stands averaged 0.65 bushel at an
average price of $4.20 per bushel. On the average, shoppers estimated

that they saved $5.35 per transaction, but actual savings amounted to

$1.78 (Table 6).
At farmers' markets, the average quantity of grapefruit purchased

was about 0.7 bushel. Three dollars per bushel was charged for grape-
fruit at both farmers' markets visited. The average customer felt that

approximately $7.50 had been saved on his grapefruit transaction, but a
comparison with retail food store prices revealed an estimated savings

of $4.62 per transaction (Table 7).
Customers rated freshness and overall quality of oranges and grape-
fruit bought at direct marketing outlets significantly higher than

oranges and grapefruit usually found at retail food stores.
Freshness, mentioned by over 70 percent of the respondents, was the

primary advantage of buying citrus at roadside stands. Price was the

next most frequently mentioned advantage, cited by almost half of the

shoppers. Quality was mentioned by nearly one-third of the respondents.

The overwhelming majority of roadside stand patrons could not identify

any disadvantages associated with shopping at the stands where they were
interviewed, and none offered suggestions for improvement.
Citrus purchasers interviewed at farmers' markets also mentioned

price and freshness as the most important advantages of buying citrus
there. Quality was the next most important advantage, followed by

convenience, proximity to other booths, and friendly service, respect-

ively. The major disadvantage to shopping at the farmers' markets












Table 6 .--Consumer expenditures and savings associated with grapefruit
purchased at roadside stands.


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Bushels 18 0.65 0.25 1.50

Total expenditure Dollars 18 5.19 1.60 12.00

Price per bushel at
roadside stands 5 4.20 3.0 5.50

Expected retail price 10 14.28 5.90 24.00

Observed retail price 24 8.73 4.61 10.52

Expected savings per
transaction 10 5.35 -2.10 19.50

Actual savings per
transaction 10 1.78 0.45 5.28

Hypothetical savings
per transaction 2.94 3.72 2.10


a
Hypothetical savings per transaction are based upon the average quantity
purchased by the 18 customers at average, minimum, and maximum prices observed
at roadside stands compared with average observed retail prices.













Table 7.--Consumer expenditures and savings associated with grapefruit
purchased at farmers' markets.


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Bushels 17 0.72 0.25 3.00

Total expenditure Dollars 17 3.27 1.15 13.50

Price per bushel at
farmers' markets 2 3.00 3.00 3.00

Expected retail price 10 10.02 5.50 26.50

Observed retail price 24 8.73 4.61 10.52

Expected savings per
transaction 10 7.43 0.25 44.00

Actual savings per
transaction 10 4.62 1.32 15.84

Hypothetical savings
per transaction -- 4.13 4.13 4.13


a
Hypothetical savings per transaction are based on the average quantity
purchased by the 17 customers at the average, minimum, and maximum prices
observed at farmers' markets compared with average observed retail prices.








24




mentioned by the interviewees was that the markets were too crowded.

Most suggestions for improvement were directed at general conditions at

the farmers' markets such as the provision of more and improved parking.

Only two of 29 citrus purchasers offered specific suggestions for the

citrus stands. One suggested that smaller packages (less than 1/2

bushel) be offered and another recommended the use of mesh bags rather

than paper sacks.













Grapes


Florida has a small but growing muscadine grape industry. Many

new, improved varieties of muscadine and bunch grapes have been de-

veloped in recent years. The new varieties, adapted to growing con-

ditions in north and central Florida, have stimulated interest in

viticulture (Crocker and Mortensen; Mortensen; Mortensen, Nesbitt, and

Underwood).

In 1979 there were approximately 250 bearing acres of grapes grown

in the state, primarily in the northern half of the state. Most bearing
acreages were owned by individuals and were quite small, generally less

than 10 acres. Due to the small size of the grape industry, traditional
commercial markets were not available.

In 1979. an estimated 95 percent of the grapes produced in Florida

were marketed directly to consumers. Most were muscadine grapes, sold
through PYO outlets. Limited quantities were picked by several pro-

ducers and sold at their PYO locations to customers who preferred not to

pick. Also, several growers sold limited quantities to small, inde-

pendent retail grocery stores. Muscadine grapes were occasionally found

at farmers' markets, but the PYO outlet was by far the most important

method used by farmers for marketing their grapes directly to consumers.

Producer Case Studies

Three grape growers' operations are summarized below. The grape

PYO outlets were not the sole source of income for any of the growers.

Several held other jobs or grew other crops in addition to their grapes.













One was retired; the vineyard was a hobby and an important income
supplement.
In 1979. the three growers had from three to ten acres of grapes
for PYO sales. Growers' investment in marketing facilities and equip-
ment were relatively modest. The typical PYO vineyard used a few

inexpensive outdoor signs for roadside advertising and onsite customer
instructions, a small barn or shelter for sales headquarters, a work
table, and scales for weighing purchases. All growers provided cus-
tomers with containers for picking.

Expenditures for supplies and services were minimal. Two of the
three growers had liability insurance to cover their PYO activities, and
all engagedd in some advertising, with newspaper ads, radio time and

billboards all being used. Customers generally brought their own
containers for transporting their grapes home, but all growers provided

grocery bags for those that had no containers.
The harvest season for all growers began in August and continued
through September. The season lasted from six to eight weeks in most
cases, depending on the varieties grown.

Grower A's vineyard was near two towns with populations of about
3,000 each and about 15 miles from a city with a population of approxi-
mately 80,000. Thfs grower's grape season lasted six weeks during

August and September. The vineyard was operated seven days per week,
from 8:00 a.m. to 6:00 p.m.

His 10 acre PYO operation yielded an average of three tons per
acre, for a total of 60,000 pounds of grapes. He charged customers












50 cents per pound for all grapes picked, resulting in an estimated
revenue of $30,000. He also sold 160 grape vines for $3.00 each,
resulting in total revenue of $30,000 (Table 8).
Grower A's production costs were estimated at $1,990 per acre, or

$19,900 overall and his marketing costs nearly $6,800. Grower A's net
revenue was slightly over $3,800, or about $5 per hour for his pro-
duction and marketing labor.

Grower B's vineyard was in a rural area, a few miles from a small
town of under 1,000 and 20 miles from a.town of approximately 10,000.
Despite reasonably good yields in 1979, estimated at three tons per
acre, Grower B was able to sell a total of only 8,000 pounds. Sales
were low because the vineyard was on a lightly traveled road near
smaller towns. His direct mail and newspaper advertising failed to
attract the necessary numbers of customers.

He sold an estimated 7,640 pounds of grapes at 50 cents per pound
through his PYO operation and 264 grapevines at $3 each for total
revenues of about $4,600. When production and marketing costs were
deducted, Grower B lost about $450 on the PYO outlet. Because customer
traffic was so light at the vineyard, Grower B attempted to sell part of
his crop at a farmers' market. He succeeded in selling a total of 360
pounds, also at 50 cents per pound. However the farmers' market sales
required six man-days (one day per week for six weeks). After deducting
transportation expenses, stall fees, and container costs, Grower B

netted an estimated $50 from farmers' market sales, slightly over 80
cents per hour of family labor (Table 8).












Table 8.--A summary of grape growers' costs and returns for selected
direct marketing operations.



Grower
Item Units A B B C


PYO

6


Acres


Dollars 30,480 4,612


19,900
6,763
26,663


4,056
1,012
5,068


FM PYO

6 3

180 7,000


b
130
130


2,028
2,059
4,087


Net revenue


3,817 -456


Net return if sold
commercially

Net return due to
direct marketing


Family labor


Production
Marketing
Total


Hours
I1
"I


3,817 -456



616 2,520
140 576
756 3,096


50 2,913


50 2,913


---b 1,260
60 600
60 1,860


Net return per
hour of family
labor due to
direct marketing


Dollars


5.05 -0.15


aType of outlet refers to predominant forms
used by the respective growers. Pick-your-own =
market = FM.


of direct marketing
PYO and farmers'


bThere was no production cost or labor allocated because it was
viewed as a salvage operation.
CTraditional commercial marketing channels were not available to
the growers.


Typea

Size


Revenue


Costs


Production
Marketing
Total


0.83


1.57













Grower C's vineyard was located in a rural area about 20 miles
from a town of 10,000 residents and 25 miles from a city of 80,000

All production was sold through the PYO operation. The harvest season

for Grower C's grapes lasted eight weeks from late July to September.
The vineyard was open for business seven days per week, 10 hours per
day.
In 1979, Grower C's three acres yielded an estimated 14,000 pounds

of grapes, all of which were sold for 50 cents per pound. No other
items were sold at the PYO outlet. Total revenue was $7,000 (Table 8).

Grower C's production and marketing costs were estimated to be slightly
over $2,000 each. The resulting net revenue was about $2,900, which
amounted to $1.57 per hour of family labor expended in production and

marketing (Table 8).
All growers felt that marketing their produce directly to consumers

through their PYO outlets was their only viable marketing alternative,

considering their production volume. A major advantage cited by growers
was smaller capital requirements because of the elimination of picking,
packing and transportation expenses required by other marketing al-
ternatives. The elimination of picking labor problems was also men-
tioned as an advantage.

The only disadvantage mentioned was the amount of time that the PYO
outlet demanded. Although managing the PYO activities was not espe-
cially strenuous, the business required that someone oversee it 10 to 12
hours per day, six or seven days per week during the harvest season.

Despite the long hours, the growers were generally pleased with the

benefits afforded by their experiences with direct marketing.














The Consumers

A sample of 25 patrons was interviewed at the three vineyards.

About 60 percent of the customers were female and half were 50 years

of age or older. The trip to the PYO outlet was planned by all but

one of the customers interviewed. Customers traveled an average round

trip distance of 33 miles which required an average of 45 minutes. One

half of the patrons discovered the PYO outlet through friends or rel-
atives, although five of the 25 customers saw road signs and four said

they found the outlet through newspaper advertisements. Nearly three-

fourths of the interviewees were repeat customers. The trip to the
grape PYO outlet was a social activity for many of the shoppers. Over

90 percent had companion shoppers.

The 25 PYO customers purchased an average of 14.6 pounds of grapes

(Table 9). Purchases ranged from 5 to 35 pounds. At a price of 50
cents per pound, the price charged by all farmers interviewed, the

average expenditure was $7.31. Customers' estimates of their monetary

savings averaged $5.65 per transaction, but compared with prevailing
prices at area supermarkets, they saved an average of $4.33 per trans-

action.

Customers rated the freshness and overall quality of the grapes
obtained at the PYO outlet significantly higher than freshness and

overall quality of grapes usually found at retail grocery stores.
Quality was the primary advantage of shopping at the PYO operation,

mentioned by a total of 96 percent of those interviewed. Prices and

freshness were mentioned by 44 and 20 percent, respectively. Rec-

reation was an advantage cited by 16 percent.















For most respondents, patronizing the PYO outlet was a positive

experience. Only four of the 25 could think of disadvantages to

shopping there. The time or effort required was the leading dis-

advantage. Respondents were generally pleased with the PYO operations

and offered few suggestions for improvement. PYO outlets offered

consumers an opportunity to obtain fresh, high quality grapes at

prices they felt were reasonable.


Table 9.--Consumer expenditures and savings associated with muscadine
grapes purchased at PYO outlets.


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Pounds 25 14.6 5 35

Total expenditure Dollars 25 7.31 2.50 17.50

Price per pound at PYO's 5 0.50 0.50 0.50

Expected retail price 9 0.88 0.69 1.09

Observed retail price 1 0.79 0.79 0.79

Expected savings per
transaction 9 5.65 2.28 9.62

Actual savings per
transaction 9 4.33 2.47 6.96

Hypothetical savings
per transaction0 --- 4.23 4.23 4.23

aOnly one retail firm was found that sold muscadine grapes.

bHypothetical savings per transaction are based upon the average
quantity purchased by the 25 customers at average, minimum, and maximum
prices observed at PYO outlets compared with average observed retail
prices.














Snap Beans

Two types of snap beans are grown commercially in Florida, bush

beans and pole beans. A total of 40,600 acres of snap beans were har-

vested during the 1978-79 season. Pole beans comprised about 10 percent

of the acreage and snap beans the remainder.

Virtually all commercial pole bean production occurs in Dade

County, and nearly 80 percent of the bush bean acreage is concentrated
in the southeastern portion of the state in Dade, Palm Beach, and

Broward counties. Approximately 13 percent of the bush bean acreage is
found in Hillsborough, Alachua and Gadsen counties, and the remaining 7

percent is scattered throughout other areas of the state. The estimated

value of Florida's snap bean production exceeded $31 million in the
1978-79 season (Florida Crop and Livestock Reporting Service).

Snap beans are harvested in Florida from October through June, but

nearly 90 percent of the crop is picked during the period November

through May. This is also the time of the year that many tourists visit

areas of the state where snap beans are produced, enhancing direct

marketing opportunities. However, direct marketing activities were

conducted only by a few, small scale bush bean farmers and by
some pole bean producers. Bush bean farmers generally operate PYO

outlets and roadside stands, while pole bean producers usually operate

PYO outlets as a salvage venture.

Snap bean production in Florida is generally a large scale, com-
mercial endeavor. Typical growers' plantings during the mid-1970's

averaged over 1,000 acres for bush beans and over 300 acres for pole

beans (Brooke). Because most commercial plantings of bush beans are













mechanically harvested, the once-over harvesting method makes a sal-

vage PYO outlet impractical, but PYO outlets are quite common for pole
beans. Pole beans must be picked by hand. They are usually picked two

or three times for the commercial market, depending on snap bean price
and labor availability. After the last commercial picking, many growers

lease their fields to independent PYO operators as salvage ventures, or
operate their own PYO outlets.

Pole beans are typically planted in blocks of approximately D1
acres. These blocks are separated by field roads that allow access for

cultural practices throughout the growing season and for harvesting. The

Individual blocks facilitate the PYO activity by enabling the operator
to limit customer access to a specific block. Blocks are usually kept

open for PYO activity for periods of one to three weeks, depending on
location, customer flow, and the quantity of beans that are available to

be salvaged. Although direct marketing of snap beans was observed at
several roadside stands, PYO outlets were judged to be the most prev-
alent and significant form of direct marketing.

The case studies presented below all describe PYO outlets. The
first two were salvage operations associated with typical large-scale
pole bean farms. The third case describes a PYO outlet for bush beans.

The beans were planted specifically for the PYO market along with a wide
variety of other vegetables.

Producer Case Studies

Producer A grew over 1,500 acres of vegetables and field crops

near a large metropolitan area in south Florida. He grew 450 acres












of pole beans which matured over a 28 week period from November through

May. Approximately 270 acres were opened to the public as a PYO op-

eration during the season. Most of this acreage was adjacent to or
within one-half mile of major highways or paved secondary roads. The
remaining acreage was too remote or inaccessible to attract sufficient
numbers of PYO customers.

Grower A did not operate the PYO outlet himself, but he allowed an
independent operator to manage the PYO activity for a 50 percent com-
mission. The independent operator used his personal vehicle as the PYO

headquarters, provided roadside signs to attract customers and to give
directions to the fields whenever necessary. He provided all equipment
and supervisory labor for the PYO outlet. He also provided paper bags

and buckets to patrons for picking, and scales for weighing purchases.
The independent operator kept the PYO fields open about eight hours per

day, seven days per week, for a 28 week period from November through

May.

Grower A's fields had been commercially picked only twice, and the
PYO operator tended to keep the readily accessible fields open for two
weeks or more. The resulting PYO harvest amounted to an average of

slightly over 620 pounds of beans per acre, equivalent to nearly 21 30-

pound bushels. He charged a flat rate of 15 cents per pound throughout
the season, resulting in a gross revenue of $25,200 (Table 10).

Grower A's involvement in the PYO operation was minimal. He
stopped at the PYO for brief visits occasionally during the week to
check on sales activity, and to keep the operator apprised of com-

cercial harvest activity and plans for replacing the spent pole bean













Table 10.--A summary of snap bean grower's costs and
selected direct marketing operations.


returns for


Grower
Item Units A B C


Acres


PYO

270


PYO

450


PYO

50


Dollars 25,200 20,250 27,750


Production
Marketing
Total


b
12,796
12,796


b
------
7 522
7,522


15,300
743
1T,043


Net revenue


12,404 12,728 11,707


Net return if sold
commercially

Net return due to
direct marketing


Family labor


Production
Marketing
Total

Net return per hour
of family labor
due to direct
marketing

Net return per acre


Hours
I'
I'


12,404


b
------ b
56
56


12,728


b
196
196


Dollars 221.50 64.94


45.94 28.28


aPick-your-own = PYO.


bNo production costs were attributed
because it was a salvage operation.
cCommercial marketing channels could
of lack of harvesting labor.


to the PYO allocated


not be utilized because


production labor is included in production costs above.


Typea

Size


Revenue


Costs


3,596


8,111


1,214
1,214


6.68


162.20














fields with other crops. Grower A drove about 35 miles per week and

spent an estimated two hours visiting the PYO outlet. On a per hour
basis, he earned a lucrative $221.50 per hour for his direct marketing

efforts. However, his returns from the PYO activity can be reasonably

viewed as stemming from his entrepreneurial abilities and the production
inputs associated with the commercial operation. Looking at Grower A's

returns from this standpoint, the PYO venture returned almost $46 per

acre.
Grower B was also a commercial pole bean producer, growing 450

acres per season. Most of his pole bean acreage was in the same

general locale as Grower A's fields. However, his strategy with his PYO
operation differed slightly from Grower A's. Even though some of Grower

B's fields were not very convenient to major roads, he was able to
attract PYO patrons to all fields (his entire acreage) over the course
of the season by keeping individual blocks open for only about one week

resulting in better picking for customers. As a consequence, his PYO

outlet yield averaged only 10 bushels (300 pounds) per acre. All beans
were sold at 15 cents per pound, resulting in gross revenue of $20,250

(Table 10).

Another important difference in Grower B's PYO operation was that
he operated it as his own enterprise. He provided all equipment and

supplies for the PYO operation. This included temporary roadside signs

picking pails, scales for weighing, and paper bags for packaging cus-

tomers' purchases. Grower B also erected and removed the roadside sign

daily, and supervised the PYO operation. He hired several retirees on a











commission basis to operate the PYO outlet. They were paid one-third

of gross revenue.

After all expenses, Grower B netted an estimated $12,728 as the

result of his direct marketing efforts. Because of his greater direct

involvement with PYO activity, his personal labor input amounted to

about an hour per day, for a total of 196 hours during the season. His
resulting hourly return was also quite high, nearly $65, but this too,

is probably misleading. As with Grower A, a more reasonable way to view

his return is on a per acre basis. On this basis, Grower B earned an
additional $28 per acre by operating the PYO outlet (Table 10).
Grower C grew 180 acres of assorted vegetables specifically for the

PYO market. His farm was located near a major metropolitan area in
south Florida. All labor required by his PYO outlet was provided by his

family. Over 20 species of vegetables were grown during the season

which began in November and ended in mid-June. The PYO operation was
open every day of the week from 8:00 A.M. until 4:30 P.M. except on

Monday.
Seven varieties of snap beans comprised 50 acres of the total; all

were bush varieties. Plantings were staggered to prolong the harvest

period for most varieties. The average yield was estimated at 74 30-

pound bushels, or 2,220 pounds per acre. All varieties were sold
throughout the season for 25 cents per pound, resulting in a gross

revenue of $27,750 (Table 10). After deducting production and mar-

keting costs, his net revenue was estimated to be $11,670. If he had

grown 50 acres of popular commercial varieties and obtained the same

average yield, his estimated net return would have been approximately













$3,600. Thus, the net return attributable to his direct marketing

activity was $8,074. This amounted to $6.65 per hour of family labor

(Table 10).

The two pole bean growers who were operating the salvage PYO out-

lets agreed that the primary advantage of this form of direct marketing
was elimination of harvesting labor problems. Their PYO operations also
provided additional revenues from their crops with minimal expenditure.

One pole bean grower could think of no important disadvantages, but

the other felt that the PYO outlet increased his liability risk. He

felt that his comprehensive farm liability insurance policy covered his
risks. However, the bush bean grower cited higher prices and elimina-

tion of commercial labor problems as the major advantages to his PYO
outlet. The major disadvantage was having to contend with customers

that would not abide by his picking policies.

The Consumers

Twenty-two snap beans purchasers were interviewed at the three
PYO outlets. Half were male. The customers tended to be older, better
educated, and had incomes that were considerably higher than the state

average (Sales and Marketing Management, Thompson). Over half the
patrons reported incomes of over $25,000 per year.

About one-third of customers could not recall how they discovered

the respective PYO outlets where they were interviewed, but a sizeable

proportion had been attracted by roadside signs and an equal number had

been told of the outlet by friends or acquaintances. About one-third














were retired, and nearly 20 percent were temporary residents, I.e.,
winter visitors. About two-thirds of those interviewed had shopping

companions, and about 90 percent had planned to make their purchase.

Eighty-five percent of the snap bean PYO patrons made a special trip
from their residence to the outlet, traveling an average round trip
distance of 41 miles, requiring about an hour and a quarter driving

time. The customers that combined their trips to the snap bean PYO
outlet with other activities drove an average round trip distance of 17
miles out of their way, which required slightly over half an hour in

order to patronize the outlet.

The average quantity of snap beans purchased was nearly 17 pounds,
and the range from 3 to 50 pounds. Expenditures ranged from 75 cents to
$7.58, and averaged $3.05 (Table 11). The average price observed at
five PYO outlets, all in the same general locale, was 17 cents per

pound. Most charged 15 cents, but one outlet charged 25 cents per

pound.
Customers tended to overestimate their savings. On the average,

they thought they were saying $10.80 per transaction, but compared with
prevailing average retail prices, they saved slightly over $4 per

transaction (Table 11).

Customers rated freshness and overall quality of the snap beans
purchased at PYO outlets significantly higher than snap beans available
at area grocery stores. Freshness and quality, low prices, and re-

creation were the major advantages associated with patronizing the PYO

outlet, according to the customers interviewed. Nearly three-fourths of
the shoppers mentioned no disadvantages. However, a few complained














that the outlets were Inconveniently located (too far to drive), and

other complained that picking was hard work or took too much time.

About 80 percent of the customers interviewed offered no suggestions

for improvement. However, one patron suggested that the PYO outlets

remain open all year; another recommended that the operator of the

bush bean PYO outlet irrigate at night to eliminate customer incon-

venience due to sprinklers and muddy fields. Still another patron
suggested that the PYO outlet advertise more to notify customers of

product availability.


Table ll.--Consumer expenditures and savings
beans purchased at PYO outlets.


associated with snap


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Pounds 22 16.8 3 50.5

Total expenditure Dollars 22 3.05 0.75 7.58

Price per pound
at PYO outlets 5 0.17 0.15 0.25
Expected retail price 13 0.70 0.40 1.15

Observed retail price 8 0.39 0.29 0.49
Expected savings per
transaction 13 10.80 1.20 29.93
Actual savings per
transaction 13 4.22 0.70 12.12

Hypothetical savings
per transactiona -3.70 4.03 2.35
a
Hypothetical savings per transaction are based upon the average
quantity purchased by the 22 customers at average, minimum, and max-
imum prices observed at PYO outlets compared with average observed
retail prices.
















Strawberries

Commercial strawberry acreage in Florida has fluctuated widely

since the mld-1950's, but unitl recently the general trend has been

downward. Plantings declined from 3,700 acres in the 1955-56 season

to only 1,200 acres in the 1974-75 season. However, by the 1978-79

season, acreage rebounded to 2,400 acres. The average yield in the

1978-79 season was 1,561 flats (10.25 pounds net) for a statewide
total of over 3.7 million flats which sold for over $22 million. Straw-

berry sales represented 3 percent of Florida's total vegetable sales

in 1979.

Commercial production is concentrated in three major areas.

In 1978-79, approximately 100 acres were grown in south Florida,

primarily in Dade County. The central area, the counties surrounding

Tampa Bay, had 2,100 acres, and the north central area, comprised of

Alachua, Bradford, and Union counties, had the remaining 200 acres

(Florida Crop and Livestock Reporting Service).

Competition from imports and escalating production costs have

been blamed for the long run decline in Florida's strawberry acreage,

although higher yielding varieties have stimulated production in recent
years. Even so, the cost-price squeeze has fostered greater interest

in direct marketing activities. Roadside and pick-your-own (PYO)

operations are the most common direct marketing methods used. Some

strawberries are sold at farmers' markets, but the vendors are gen-

erally not farmers. PYO operations consist of relatively small acre-

ages grown specifically for consumer picking or larger fields that














are harvested for the commercial market early in the season and later

converted to salvage PYO operations. Many commercial strawberry farms

are opened up as PYO outlets late in the season when commercial pickers

are scarce and/or commercial prices decline to relatively unprofitable
levels.

Roadside stands were observed in conjunction with commercial
harvest operations and with PYO outlets. In the former case, some of
the berries harvested for the commercial market were diverted to the
farmer's roadside stand to be sold at a higher price. Most PYO outlets
also offered picked berries for sale.

Harvesting of strawberries in Florida generally begins in mid-
December in the southern portion of the state and continues into May in

the northern areas, although the bulk of production is harvested January

through April. This harvest season also corresponds with Florida's

large influx of winter visitors, which enhances direct marketing op-

portunities.
Four case studies are presented which depict the broad range of

direct marketing activities found for strawberries in various parts of
the state.

Producer Case Studies

Producer A had a 40 acre strawberry farm located about 10 miles

from a city of approximately 30,000 persons in central Florida. From

January until mid-April, all production was sold commercially. In mid-

April production declined and commercial pickers became scarce. For many
commercial strawberry farms, the lack of harvest labor would have














signalled the end of the season. However, Grower A opened his straw-

berryfields to the general public as a PYO operation. He extended his

production for an additional month by continuing regular production

practices such as weeding, applying fertilizer, perticides, and irr-
igation water. These production practices cost Grower A approximately

$190 per acre, but resulted in estimated additional production of 6,300

flats of strawberries which he sold to PYO patrons at slightly over $3

per flat. The additional revenue amounted to over $19,000. His net

return, after deducting the additional production expenses and the
direct marketing costs, amounted to almost $7,300 (Otte, et. al.;

Prevatt and Pospichal). If he had sold his additional production

at the relatively low end-of-season prices, he would have lost slightly

over $600.

Grower A's primary role in the PYO operation was to manage and
supervise hired workers, which required about an hour per day. On the

basis of the time spent operating the PYO outlet, his financial return

was quite lucrative, exceeding $240 per hour. A more realistic way of

viewing Grower A's return would be a per acre basis, because the profits

accruing to the PYO operation were not only due to his marketing efforts

but to his entrepreneurial abilities associated with his entire farming

operation. Grower A earned an additional $182 per acre by extending his

season and operating the PYO operation (Table 12).

Producer B's farm was located in north Florida, within 10 miles of

several towns with populations ranging from about 500 to 5,000,








44




Table 12.--A summary of strawberry growers' costs and returns for
selected direct marketing operations.



Grower
Item Unit A B C D


Typea

Size


Acres


6 2.5


Dollars 19,278


7,600
5,002
12,602


40,320 19,680


20,622
8,068
28,690


10,452
743
11,195


" 6,676 11,630 8,485 11,760


Net return if sold
commercially

Net return due to direct
marketing


-607 6,342 4,128


" 7,283 5,288 4,357


Family labor


Production
Marketing
Total


Hours
11
if


30
30


-- b _b
1,344 324
1,344 324


Net return per hour
of family labor
due to direct
marketing

Net return per acre


Dollars 242.77 3.93 13.45

182.08 622.12 1742.80


aType of outlet refers to
used by the respective growers.
stand = RS.


redominent forms of direct marketing
Pick-your-own = PYO and roadside


Production labor is included in production costs above.

CThe net return per acre due to direct marketing is based upon
each growers'total strawberry acreage. Growers A,B,C, and D had
acreages of 40, 8.5, 2.5, and 5, respectively.


Revenue


Costs


Production
Marketing
Total


Net revenue


18.600



3,242
3,598
6,840


9,478


2,282


b--
510
-5TO


4.47

456.40


pr












and within 35 miles of two large cities with combined populations of

almost 750,000. Grower B and his son had several hundred acres of

farm and ranch land. Beef cattle were his primary agricultural enter-

prise, but he also grew about 11 acres of assorted vegetable crops.

In 1979, about 8.5 acres were planted in strawberries of which 70 per-

cent, 6 acres, were sold through their PYO operation. The remaining

berries were picked and sold to fruit and vegetable stands and small

retail food stores.

Because of the north Florida location, the harvest season only

lasted about eight weeks, from mid-March through mid-May. Grower B

estimated that 8,400 flats of strawberries were sold through the PYO

operation at 60 cents per quart, resulting in a total revenue of
$40,320. After deducting production costs and marketing costs, Grower B

had a net revenue of $11,630. If he had sold his strawberries com-

mercially, he would have netted only $6,342. The PYO marketing activity

resulted in almost $5,300 additional income over his commercial al-

ternative. On a per hour basis, his direct marketing efforts earned

nearly $4 per hour (Table 12).

Grower C's 2.5 acre strawberry farm was located in south Florida

about 3 miles from a city with a population of about 22,000. It was

also near a major metropolitan area, with over 1.5 million residents.
Grower C was retired, and he spent about 8 months of the year in Florida
and the remainder in a northern state. The strawberry farm was a part-

time venture which was undertaken as an income supplement. He had no

previous experience in growing strawberries in Florida; 1979 was his

first year to farm in Florida. As a result, his crop was somewhat late

and his production estimated to be only 1,200 flats per acre, as com-

pared with the state average of 1,561 in the 1978-79 season.













Most of Grower C's production was harvested in a six week period

in late March and April. Grower C operated the farm primarily as a PYO

operation, although he sold about 10 percent of his strawberries picked
in flats at roadside. His total revenue from strawberries was estimated
at nearly $20,000. Grower C's production costs were estimated at nearly

$4,200 per acre, for a total production expense of $10,452. Marketing
costs associated with his PYO outlet and roadside sales were estimated

to be $743. Grower C's net revenue came to almost $8,500. If he had
sold his strawberries commercially, however, his net return would have
been less than half of what he realized through his direct marketing

efforts. His net return attributable to direct marketing amounted to an
estimated $4,357, or over $13 per hour (Table 12).

Grower D had a relatively small vegetable farm in south Florida
approximately two miles from Grower C's strawberry farm. He grew five

acres of strawberries, 33 acres of eggplant, and one acre of bell

peppers. The production from one acre of strawberries, about 2,000
flats, and the bell peppers were sold at a roadside stand, along with

tomatoes that were bought from neighboring commercial tomato farms.

Strawberries constituted approximately half of his roadside sales. The

production from four acres of strawberries was sold commercially, as was
all of the eggplant production.

The roadside stand was operated primarily by a family member, with
Grower D assisting. The stand was open during the entire strawberry

marketing season, from mid-December through mid-April. This marketing













period coincided with the peak tourist season and the time when do-
mestic strawberry supplies are generally low. Grower D's berries

bought excellent prices, 75 cents per pint and $2.00 per quart. This

was equivalent to weighted average price of $9.30 per flat. Quarts
brought a premium price because they contained extra-large berries.

Grower D's total revenue from the one acre of strawberries was
estimated at $18,600. After deducting production and marketing ex-

penses, his net revenue was estimated to be $11,760. If he had sold

the 2,000 flats of strawberries commercially rather than marketing
them through his roadside stand, he would have netted an estimated

$9,478. Grower D and his family earned an additional $2,282 by mar-
keting the strawberries through their roadside stand. This amounted

to earnings of almost $4.50 per hour for their efforts (Table 12).
Three of the four growers felt that their direct marketing ac-

tivities resulted in higher prices and greater returns. The PYO
operator in south Florida said a major advantage was not having

to deal with the problems and uncertainties associated with harvest

labor. However, the grower in north Florida that did not have ready
access to a commercial market felt that he would be better off fi-

nancially if he could sell his berries commercially.
All growers cited the amount of time required as a definite
disadvantage. Inability to predict PYO outlet patronage was a prob-

lem mentioned by one grower. This caused difficulty in scheduling

PYO outlet labor and advertising. Two growers, both PYO operators,

complained that customers damaged plants, plastic mulch, and ir-

rigation equipment. Despite the disadvantages associated with their














direct marketing efforts, most growers were pleased with their im-

proved financial returns.

The Consumers

Twenty-eight strawberry purchasers were interviewed, 15 at PYO

outlets and 13 at roadside stands. Patrons were generally older, better

educated, and had higher incomes than the state average. Over half were
retired, and almost 40 percent were winter visitors or temporary res-

idents.
Most discovered the outlets through roadside signs erected by the
growers or by word-of-mouth. About one shopper in five said the deci-
sion to patronize the strawberry outlets was based on impulse. The

majority, nearly 90 percent, had not bought strawberries at retail food

stores during the current season. Yet, the patrons rated the freshness

and overall quality of the strawberries bought at the direct marketing
outlets significantly higher than those obtainable in grocery stores.
About half of the PYO patrons made special trips from their residences

to the PYO outlets and the remainder combined the trip with other ac-

tivities. The special trips averaged 29 miles and required about three-
fourths of an hour driving time, and the combination trips resulted in
an average additional distance travel

about eight minutes. Five of the 13 roadside stand patrons made special
trips to the stands where interviewed and eight made combination trips.

The special trips averaged 16 miles and required about half an hour of
total driving time and the combination trips only four miles and about

eight minutes.











PYO outlet patrons purchased an average of 5.4 pounds of straw-

berries (approximately six pints) at an average price of 55 cents per

pound. The prices at PYO outlets ranged from 20 to 73 cents per pound.
The average price observed at area grocery stores was 67 cents per
pound. The seven PYO outlet patrons that were willing or able to es-
timate their savings thought they were saving about 90 cents per trans-

action, but compared with observed retail prices they saved an average
of only 17 cents (Table 13).

Roadside stand patrons bought an average of 3.8 pounds of straw-
berries (slightly over four pints) at an average price of $1.00 per

pound. Only three patrons ventured a price comparison with prevailing
retail prices for strawberries, but they also tended to overestimate

their savings (Table 14).

As was the case with patrons of other types of direct marketing
outlets, the primary advantages cited by patrons of direct marketing
outlets for strawberries were freshness and quality, recreation, and
price. Only three of 28 patrons mentioned disadvantages, which were

high prices and travel distances.














Table 13.--Consumer expenditures and savings
purchased at PYO outlets.


associated with strawberries


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Poundsa 15 5.4 1.7 15.4

Total expenditure Dollars 15 3.18 1 9

Price per pound
at PYO outlets 4 0.55 0.20 0.73

Expected retail price 7 0.81 0.71 0.96

Observed retail price 35 0.67 0.54 0.81

Expected savings per
transaction 7 0.90 -0.06 2.45

Actual savings per
transaction 7 0.17 -0.30 0.60

Hypothetical savings
per transaction 0.64 2.52 -0.32

aMost outlets sold strawberries by the pint, quart, or "flat" al-
though several sold them on the basis of weight. The official weight of
a flat of strawberries as defined by the Florida Crop and Livestock Re-
porting Service was 10.25 pounds in 1979. Since most flats contain 12 -
pints, a pint of strawberries was assumed to weigh 0.85 pounds, or about
14 ounces.
Hypothetical savings per transaction are based upon the average
quantity purchased by the 15 customers at average, minimun, and maximum
prices observed at roadside stands compared with average observed retail
prices.













Table 14.--Consumer expenditures and savings
purchased at roadside stands.


associated with strawberries


Number of
Item Unit Observations Average Minimum Maximum


Quantity purchased Poundsa 13 3.85 0.9 10.3

Total expenditure Dollars 13 3.60 0.75 9.0

Price per pound at
roadside stands 6 1.00 0.59 1.76

Expected retail price 3 0.90 0.68 1.19

Observed retail price 35 0.67 0.54 0.81

Expected savings per
transaction 3 0.07 -0.36 0.75

Actual savings per
transaction 3 -0.66 -1.17 -0.20

Hypothetical savings per
transaction -1.24 0.30 -4.09


aMost outlets sold strawberries by
though several sold them on the basis of
a flat of strawberries as defined by the
porting Service was 10.25 pounds in 1979
pints, a pint of strawberries was assume
14 ounces.


bHypothetical
quantity purcahsed
prices observed at
prices.


the pint, quart, or "flat," al-
weight. The official weight of
Florida Crop and Livestock Re-
Since most flats contain 12
d to weigh 0.85 pounds, or about


savings per transaction are based upon the average
by the 13 customers at average, minimum, and maximum
PYO outlets compared with average observed retail















Tomatoes

Tomatoes are one of Florida's most important vegetable crops.

The statewide acreage during the 1978-79 season was 41,800, which

constituted about 10.5 percent of the state's total vegetable acreage.
Virtually all commercial production occurs in the fall, winter, and
spring quarters of the year. Quarterly acreages were 12,800, 12,300,

and 15,700, respectively.

Practically all of Florida's tomato acreage is planted for the

fresh market, although approximately 5 percent is salvaged for or

diverted to processing plants. The total value of Florida's tomatoes

for the fresh market approached $219 million in 1978-79 (Florida Crop

and Livestock Reporting Service).

Most of the commercial acreage is found in the southern half of the

state. Palmetto-Ruskin area, in the west central part of the state,

accounted for about 41 percent of the reported acreage. Dade County, in

south Florida, had 20 percent, the Immokalee-Bonita Springs-Naples area

had 26 percent, and the Fort Pierce-Pompano area, in the southeast por-

tion of the state, had slightly over 10 percent. Only 2.6 percent of

the state's commercial tomato production was in the north central and
Panhandle regions (Florida Crop and Livestock Reporting Service).

PYO operations were found to be the predominant form of direct

marketing for tomatoes. Producer-PYO operator interviews for tomatoes

were conducted in all but one of the major growing areas.













The mode of operation and financial returns were found to be
similar in areas where interviews were conducted. The three case

studies summarized below are typical of the PYO outlets identified

and interviewed. Their marketing activities were similar, but their
production activities were quite different.

The first was a small-scale "ground tomato" operation planted

specifically for the PYO market. The term "ground tomatoes" refers to

the prevailing cultivation method used by most commercial growers.
Tomato plants are not staked, but are planted on beds, usually on black

plastic mulch. The second PYO outlet grew staked tomatoes, and the
third was the salvage operation of a large-scale commercial grower.

Producer Case Studies

Producer A grew 23 acres of assorted vegetables specifically for

his combination PYO outlet and roadside stand. It was located several

miles from a city of approximately 20,000 in Dade County. Vegetables
grown by Producer A included tomatoes, peas, collards, cabbage, and

several varieties of bush beans. Tomatoes were the most important

crop; they were grown on 6.5 acres.
Yields in 1978-79 were estimated at 630 30-pound carton equiv-

alents per acre, similar to commercial yields in the area. An es-
timated 75 percent of Grower A's tomatoes were sold through the PYO
operation, and the remainder at his roadside stand. Tomatoes sold

to PYO patrons brought 15 cents per pound and those sold to roadside
stand customers bought 25 cents per pound.













Grower A's gross revenue from tomatoes was estimated to be
approximately $21,500 (Table 15). After deducting production and

marketing costs, he was left with an estimated $8,441. Marketing
costs were less than $600. All labor, including picking labor for
roadside stand, was provided by Grower A and his family, and the
PYO and roadside stand required little investment in equipment

and supplies.

If Grower A had sold his tomatoes commercially, his net return

would have been $3,640. Realistically, however, he would have had

difficulty in obtaining commercial picking crews because of his small
acreage. Assuming that he could have sold his tomatoes commercially,

his estimated return due to his direct marketing efforts would have

been slightly over $4,800,
When the time spent at the stand is prorated among the various

items grown and sold Grower A and his family spent a total of about

633 hours selling their tomatoes through their PYO and roadside stand.

On an hourly basis, Grower A and his family earned $7.59 for their

direct marketing efforts.
Grower B grew two acres of staked tomatoes in the same general
locale as Grower A. His crop averaged 750 30-pound carton equivalents

per acre, or 45,000 pounds. Two-thirds of his production was sold to

local restaurants and food retailers, and one-third was sold directly

to consumers.

Grower B estimated that he sold 15,000 pounds directly to consumers,














Table 15.--A summary of tomato growers' costs and returns for
selected direct marketing operations.


Grower
Item Unit A B C

Typea PYD, RS PYO,RS PYO

Size Acres 6.5 2/3 30

Revenue Dollars 21,499 3,180 3,060

Costs

Production 12,487 1,725 -- b
Marketing "571 577 236
Total 13,058 2,302 236

Net revenue 8,441 878 2,824

Net return if sold
commercially 3,640 58 ---

Net return due to
direct marketing 4,801 820 2,824

Family labor

Production Hours ---d -----
Marketing 633 1,020 408
Total 633 1,020 408

Net return per hour
of family labor due
to direct marketing Dollars 7.59 0.80 6.92

aType of outlet refers to predominant forms of direct marketing
used by the respective growers. Pick-your-own = PYO and roadside
stand = RS.
bThere was no production costs or family labor allocated because
it was a salvage operation.

CTraditional commercial marketing channels were not available to
the growers.
production labor is included in production costs above.













90 percent was sold through his PYO outlet, and the remaining 10

percent at his roadside stand, which also served as the PYO outlet

headquarters. The 13,500 pounds sold to PYO outlet patrons brought
20 cents per pound and the 1,500 pounds sold through the roadside
stand bought 32 cents. Grower B's total revenue from tomato sales
amounted to $3,180 (Table 15).
Production costs for his staked tomato operation were nearly

$2,600 per acre, substantially more than ground tomato production

costs. However, his yields were better and his prices somewhat higher
than those of Grower A. Grower B's prorata production costs for the
one-third of his acreage (two-thirds of an acre total) were $1,725.
Grower B used an attractive portable shed for his combination PYO

outlet headquarters and roadside stand. Total costs for the structure,

PYO outlet equipment, such as weighing scales, picking pails, and signs,

were $324. Bags for customers' purchases, liability insurance, and
advertising added an additional $253 in costs. After deducting pro-

duction and marketing costs, Grower B was left with an estimated
$878 (Table 15).

If Grower B had been able to sell his tomatoes through the con-

ventional commercial market, he would have netted only $58, thus, his
return due to his direct marketing activity was $820. It is very un-

likely that he could have sold his production through the commercial
market, however, because of his relatively small acreage. Grower B's

direct marketing operation required a great deal of family labor. He
indicated that it was open 8 1/2 hours per day, six days per week for













about 5 months, December through April, for total of 1,020 hours.
The resulting net return per hour of family labor attributable to

Grower B's direct marketing efforts was only $0.80 per hour. However
the return is probably understated because the family member or members

manning the operation assisted with production labor and marketing

efforts involving produce sold to restaurants and grocery stores.
Another consideration is that much of the direct marketing labor was
provided by children after school hours and on weekends. These children

had virtually no other employment opportunities outside the family's
direct marketing operation.

Producer C was a large-scale tomato grower in Dade County. His
total tomato acreage was estimated at 700 acres but only 30 acres
adjacent to a heavily traveled thoroughfare was opened as a salvage PYO
outlet. After several commercial pickings, two of Grower C's family
members opened the PYO outlet and kept it open for a little over three

weeks. The 30 acre block was opened to PYO patrons gradually, so that

patrons had access to "fresh" picking every few days. Grower C's family
sold an estimated 20,400 pounds of tomatoes from the 30 acre field, or
about 23 30-pound carton equivalents per acre. The price for the

duration of their PYO activity was 15 cents per pound, resulting in
gross revenue of $3,060 (Table 15).

No production costs were allocated to the PYO operation because it
was strictly a salvage venture. Marketing costs amounted to only $236.














The major expense was for the pickup truck which was used for trans-

portation to and from the field and as PYO headquarters. Kitchen

scales, picking pails, and a hand painted plywood sign were the only
other equipment items used. Expenditures for paper bags for customers'

purchases totalled $36. After deducting marketing costs, Producer C had
a net revenue of over $2,800.

The PYO activity required a considerable amount of labor, however,
all provided by Producer C's family. Two persons manned the outlet for

8 1/2 hours per day, for the entire 24-day period that it was open;
slightly over 400 man hours were expended. Grower C's net return per
hour of family labor was estimated to be nearly $7 (Table 15).

The growers were all in agreement as to the advantages and dis-
advantages of direct marketing. All said the primary advantage of

selling their produce directly to consumers was the improved financial
return, either due to higher prices received or to reduced marketing

expenses. In the case of Grower C, the return from the salvage PYO was

income that would not have been realized if the PYO outlet had not been

operated. One producer mentioned elimination of harvest labor problems
as a significant advantage.

All growers mentioned problems in dealing with people as the
biggest disadvantage. They said some customers were never pleased; they
were dissatisfied whenever they were restricted to certain picking

areas, and frequently complained that tomatoes were too ripe, too green,

etc. The only other disadvantage, mentioned by two of the growers, was

the amount of time required.












The Consumers

Thirty-two tomato purchasers were interviewed at PYO outlets.

Only PYO outlet patrons, and not roadside stand customers, were in-
terviewed because of the greater incidence of PYO outlet activity.

Slightly over half of the patrons interviewed were male. The

patrons tended to be older, better educated, and had relatively high
incomes. No patrons under 25 years of age were encountered; over half

were over 50. All patrons except one had twelve or more years of

education. About 65 percent reported incomes over $15,000 per year

and nearly 45 percent had incomes in excess of $25,000 per year.
Nearly one-third of the patrons were retired, and over 40 percent were
temporary winter visitors.

Nearly 60 percent of the patrons had been attracted to the out-
let where interviewed through roadside signs. Almost all of the rest

had learned of the outlet through word-of-mouth. Nearly half were
repeat customers. Over two-thirds had shopping companions; for many

shoppers, the excursion to the tomato PYO outlet appeared to be a

social, recreational event.

All those interviewed had planned to patronize a tomato PYO out-

let whenever they left their residences. Slightly over half made spe-

cial trips from their residents to the outlet and the remainder com-

bined their patronage of the tomato PYO outlet with other activities.

Those that made special trips drove an average round trip distance of

22 miles requiring slightly over half-an-hour driving time. Those













making combination trips required only 8 miles of additional driving
and approximately 15 minutes.

On the average, the PYO patrons bought nearly 17 pounds of to-

matoes at a weighted average price of slightly over 17 cents per

pound. The average expenditure was $2.85 (Table 16). Prices ob-

served at the three PYO outlets described above and three other in the

immediate geographic area ranged from 10 to 20 cents per pound, but

the most prevalent price was 15 cents per pound.
Customers tended to overestimate their savings. On the average,
they thought they were saving nearly $8 per transaction, but compared

with prevailing prices at area grocery stores, they saved about $3.50

per transaction.

Patrons rated freshness and overall quality of the tomatoes ob-
tained at PYO outlets significantly higher than tomatoes available
at area grocery stores. Customers cited low prices, freshness, quality,

and recreation as the major advantages gained by patronizing the to-

mato PYO outlets.

Only one customer in five mentioned disadvantages associated
with patronizing the PYO outlet. The most frequent disadvantage was

inconvenient location, i.e., the travel distance and time required.
Several customers said that picking tomatoes was hard work, and one

patron complained because all PYO outlets excluded children under 12
years of age from the fields for safety reasons. About 60 percent













of the patrons indicated that the PYO outlets were satisfactory and

thus, offered no suggestions for improvement. However, almost one

fifth suggested that the owners advertise more in mass media to inform

potential customers of product availability and the locations of their

outlets.


Table 16.--Consumer expenditures and savings associated with tomatoes
purchased at PYO outlets.


Number of
Item Unit observations Average Minimum Maximum

Quantity purchased Pounds 32 16.6 2 62

Total expenditure Dollars 32 2.85 0.40 9.30

Price per pound
at PYO outlets 6 0.15 0.10 0.20

Expected retail price 21 0.50 0.25 0.99

Observed retail price 34 0.35 0.19 0.39

Expected savings per
transaction 21 7.85 0.70 50.40

Actual savings per
transaction 21 3.56 0.80 12.40

Hypothetical savi gs
per transaction "- 3.32 4.15 2.49

aHypothetical savings per transaction are based upon the average
quantity purchased by the 32 customers at average, minimum, and maximum
prices observed at PYO outlets compared with average observed retail
prices.














WATERMELONS

In 1979, Florida farmers planted 50,000 acres of watermelons of
which 43,000 acres were harvested. The average yield was 150 hundred-
weight (cwt) per acre, resulting in statewide production of 6,450,000

cwt. The marketing of watermelons started in May with 29 percent of

the harvest, peaked in June with 62 percent and ended in July with

9 percent. At a season average price of $5.00 per cwt, the total

value of Florida's watermelon crop exceeded $32 million (Florida Crop

and Livestock Reporting Service). Prices received by farmers are typ-

ically very high during the beginning of the season and frequently
plummet to levels that fail to cover harvest costs late in the season,

resulting in unharvested acreage.
Some watermelon farmers engaged in direct marketing throughout

the season, but such activities become more prevalent late in the

season when commercial prices hit seasonal lows. Because of plant-

ing and harvesting patterns, north Florida growing areas are the last

to harvest, usually during periods of lowest prices. It is in north
Florida that the greatest incidence of direct marketing was observed.

The predominant form of direct marketing is the roadside stand,

although some direct marketing of watermelons occurs at farmers'

markets. Most "roadside stands" for watermelons are of a temporary

nature, although a few are permanent. The temporary stands usually

consist of a simple awning, an area under a shade tree, or simply the tail-
gate of pickup truck. Such stands are usually located at strategic













intersections of major streets or highways where they receive favor-

able traffic exposure and convenient access.

Three typical roadside stand operations are discussed below.

One was permanent and two were temporary. All were located in north
central Florida where considerable direct marketing of watermelons
occurs.


Producer Case Studies

Producer A was a full-time farmer who operated a commercial

vegetable farm within five miles of a city of 75,000 persons. In

1979, he grew 50 acres of watermelons and about 30 acres of assorted

vegetables including peas, sweet corn, bell peppers, tomatoes, can-

taloupes and squash. Producer A sold a portion of his watermelon
production and all of his other vegetables at a permanent roadside stand

which he operated for about four months of the year. He sold about

85 percent of his watermelon crop commercially.

An estimated 4,095 melons, the production equivalent of 7.5

acres, were sold through his roadside stand over an eight week period.

The melons weighted approximately 27.5 pounds each, and were sold for
$1.00 apiece. After deducting production and direct marketing expenses,

Grower A earned an estimated $7.43 per hour for his direct marketing

efforts (Table 17).

Grower B was a full time, large scale commercial farmer. He

farmered over 2,000 acres of land which were primarily devoted to soy-

beans and corn. He also grew 30 acres of watermelons of which over












Table 17.--A summary of watermelon growers' costs and
direct marketing operations.


returns for selected


Grower
Item Unit A B C


Typea

Size

Revenue

Costs

Production
Marketing
Total

Net revenue

Net return if sold
commercially

Net return due to direct
marketing

Family labor

Production
Marketing
Total

Net return per hour
of family labor due
to direct marketing


Acres

Dollars


Hours


Dollars

Dollars


RS

7.5

4,095



3,128
389
3,517

578


-313


891


---- d
120
120


7.43


4,388



1,126
691
T7IT7

2,551


1,874


677


1,650


-----b.....
60
60

1,590

-----c


1,590


-----d
360
360


168
168



4.03


4.42


a
Type of outlet refers to predominant forms of direct marketing used
by the respective growers. Roadside stand = RS.

b
No production cdsts or family labor allocated since this was
a salvage operation.

c
Traditional commercial marketing channels were not available to
Grower C for the small quantities of melons being salvaged.

d
Production labor is included in production costs above.













90 percent were marketed commercially. In 1979, Grower B experienced

tremendous watermelon yields, several times his average. Almost 4,400

melons, the equivalent of 2.7 acres, were sold through his temporary

roadside stand. Grower B also grew several acres of cantaloupes and
peanuts which were sold exclusively through his roadside stand. The

"stand" was simply a 20 year old pickup truck which he parked on a

vacant lot near a major Intersection in a town with a population of

about 2,000 people. He hired a high school student to operate the

stand on a commission basis, for 10 percent of gross sales. Grower

B supervised the stand and another family member picked and hauled

watermelons to it; together they spent a total of about three hours

per day. After deducting growing costs .and direct marketing costs,
Grower B received $677 more than he would have received for his water-

melons had he sold them commercially. His net return per hour of family

labor due to direct marketing was slightly over $4 per hour (Table 17).

Grower C was also a full-time, commercial farmer. He grew 60

acres of watermelons, and an undetermined acreage of field corn. His

farm was on a major state highway, approximately one-half mile from
a town with 1,500 inhabitants. Grower C's roadside operation was

quite simple. His house was adjacent to the highway, so he simply

stacked watermelons in his front yard and erected several handmade

signs.

He sold less than 5 percent of his total production at the road-

side, an estimated 1,650 melons, at $1 each. Virtually all of the

watermelons sold by Grower C through his roadside operation could be

classified as "salvage" or surplus. His major emphasis was on













commercial sales, and his roadside stand provided an outlet for small

quantities of melons remaining after harvesting by commercial crews.

Thus, no production costs were charged to Grower C's roadside sales.

By the same token, he had no commercial alternatives for the melons
sold at roadside. His only marketing expenses were for transporting

the melons from the field to his house and for the two signs. The

roadside sales did require that one of the family members be avail-
able for about 12 hours per day for the 30 day period during which

they sold melons roadside. Undoubtedly, this estimate of family labor

is considerably overstated because family members had time in between

customers to do other things. But even so, Grower C and his family
earned about $4.42 per hour for their direct marketing efforts (Table

17).
All three growers felt that the most important advantage asso-

ciated with selling their watermelons directly to consumers was the

greater monetary return, at least for part of the season. One grower
felt that selling directly to consumers assured him of a market for

part of his crop whereas the commercial market was uncertain. Another

said that direct marketing gave him the opportunity to visit with many

of his friends and neighbors. The primary disadvantage associated
with direct marketing, mentioned by all three growers, was the amount

of time required.

The Consumers


Two of the three roadside stands were observed for portions of

three days, but customer traffic was extremely light. As a result,













only 10 customers were interviewed at one location. The customers
tended to be older, better educated, and had higher incomes than the

general population. Most of them discovered the outlet through word-
of-mouth. Slightly over half made a special trip from their residence

to make a watermelon purchase, traveled an average round trip dis-

tance of 6 miles. The remaining customers stopped by the stand in

conjunction with some other activity, and traveled less than one-

half mile in total out of their way in order to patronize the water-
melon stand. In four out of 10 cases, the shopper was alone, and in

three additional cases was accompanied by only one other shopper. The

purchase of a watermelon was planned by seven of the 10 customers.

The average purchase was about two melons; purchases-was about
two melons; purchases ranged from one to six melons. The price ob-
served in all stands was $1.00 per melon, compared with an average

price observed in area retail stores of $2.07 each. Customers tended

to overestimate their savings at the roadside stand. They

felt they were saving $2.76 per transaction, but actually saved

approximately $2.57 per transaction (Table 18).












Table 18.--Consumer expenditures and savings associated with water-
melons purchased at roadside stands.


Number or
Item Unit observations Average Minimum Maximum

Quantity purchased Melons 10 1.9 1 6

Total expenditure Dollars 10 1.90 1.00 6.00

Price each at
roadside stands 6 1.00 1.00 1.00

Expected retail price 5 1.99 1.00 3.00

Observed retail price 23 2.07 1.29 3.00

Expected savings per
transaction 5 2.76 0.00 9.00

Actual savings per
transaction 5 2.57 1.07 6.42

Hypothetical savings
per transaction "- 2.03 2.03 2.03

aHypothetical savings per transaction are based upon the average
quantity purchased by the 10 customers at average, minimum, and maximum
prices observed at roadside stands compared with average observed retail
prices.















Eggs

In 1979, Florida egg producers had approximately 12.3 million

laying hens which produced about 3.2 billion eggs. The average
wholesale price was 49 cents per dozen, resulting in total industry

revenues of $130 million. Most commercial egg producers in Florida
have large flocks, i.e., 20,000 hens or more, and are very efficient.

Small, backyard flocks of several hundred hens or less are becoming

quite scarce, primarily because they are less efficient. The major

proportion of eggs marketed in Florida, probably 99 percent or more,

pass through commercial channels.

Marketing of eggs directly to consumers is a minor facet of

Florida's egg industry, but it is an important method for many of the
surviving small egg producers. Marketing their eggs directly to con-

sumers at "retail" rather than wholesale prices is their primary means

of staying in business.

Some large, commercial egg producers, particularly those located

near large cities or towns, also sell graded eggs to the general

public. Many also engage in direct marketing to sell eggs that do not

meet grade standards. These culled eggs are fresh and wholesome, but are

usually slightly cracked, oversized, or undersized. Their only alter-

native market for these eggs is to sell them to egg processors or
"breakers." Such sales are basically a salvage operation; prices

received from breakers are usually quite low, frequently less than

production cost.
Direct marketing is usually done on the farm (loosely termed












roadside stand operations). However, one small producer had an egg

route and delivered directly to his customers.

Eggs were observed at several farmers' markets, but the proprietors

of the egg booths contacted were reselling eggs bought from producers or

wholesale distributors.

Producer Case Studies

Four producer case studies are discussed below. Producer A and

B are large scale commercial egg producers that sold graded and culled

eggs, and C and D are producers with small, backyard operations.

Producer A was engaged in several agricultural activities, but

his laying flock, which averaged about 45,000 hens, was his primary

business. His egg farm was located near a city with a population of

approximately 75,000. Approximately 7 percent of Producer A's pro-

duction was sold directly to consumers. Sales were made at the farm.

His egg sales to consumers amounted to nearly $46,000 in 1979

(Table 19). About 30 percent of his revenue came from graded eggs

which he sold at a markup of 6 to 8 cents per dozen over prevailing

wholesale prices. The most important element of his direct marketing

activity was sales of cracked or undergrade eggs. Approximately 70

percent of his roadside sales volume consisted of such eggs which he

sold to consumers at 60 cents per dozen. This was 10 to 20 cents per

dozen less than the graded eggs, but substantially more than the 34

cents per dozen that they would have brought if he had sold them to

a "breaker."

After deducting his direct marketing expenses, which included













Table 19.--A summary of commercial egg producers' costs and returns
for direct marketing operations.



Producer
Item Units A B


Type Roadside Roadside
stand stand

Size Hens 45,000 20,000

Cases 31,938 31,200b

Revenue Dollars 45,964 10,531

Costs

Production ------c c
Marketing 3,326 717

Revenue, direct marketing
alternative 42,638 9,814

Revenue, commercial
alternative 30620 7,898

Net revenue due to direct
marketing 12,018 1,916

Family labor

Marketing Hours 450 130

Net return per hour
of family labor
due to direct
marketing Dollars 26.71 14.74

production in cases per year. One case contains 30 dozen eggs.

Producer B bought eggs from surrounding farms for processing or
resale.
CProducers were unable to estimate production costs.












some hired labor for assisting with sales, Producer A netted slightly

over $12,000 for his efforts. He estimated that he spent slightly

over an hour per day supervising the direct sales activity, which

earned him almost $27 per hour for his direct marketing effort

(Table 19).

Producer B's egg farm was located near a town with a population

of about 3,000. His flock averaged about 20,000 hens for most of 1979,

but he also bought eggs for resale from smaller egg producers in the

area. His sales directly to consumers amounted to approximately two

percent of his total production.

Producer B sold only Grade A large, cracked, and undergrade eggs

directly to consumers at his farm. Grade A large eggs were sold at no

markup over the wholesale price; they were sold to customers at the

same price that Producer B received from his wholesale buyer. However,

as was the case with Producer A, he fared considerably better with

the sales of cracked and undergrade eggs. Such eggs were sold to con-

sumers at 50 cents per dozen, but they would have brought only 32 cents

per dozen if sold to a breaker, according to Producer B.

After deducting Producer B's opportunity and direct marketing

costs, he had a net revenue attributable to direct marketing of $1,916.
The amount of personal time spent in supervising and assisting with

direct marketing sales was estimated at less than one-half hour per

day; Producer B's net return per hour of labor invested in direct

marketing was almost $15 (Table 19).













Producer C had a flock of about 1,000 layers. He was retired,
and raised chickens as a hobby and a retirement income supplement.

He raised chickens on several acres adjacent to his home which was
located on a major highway on the outskirts of a city with a pop-

ulation of approximately 35,000. A small sign in his front yard was

the only form of advertising used.
Washed and packaged eggs were put in a refrigerated case which

was located in the carport attached to Producer C's home. The eggs
were sold on an honor basis; customers selected eggs from the re-
frigerated case and placed the money in a small receptacle in the case.

Producer C and his wife rarely saw their customers. Only once in the
past five years did their cash receipts fail to correspond to the
quantity of eggs sold.
Producer C sold his eggs at an average price of 85 cents per

dozen. This was generally higher than prevailing retail prices, but
he was able to sell his entire production at the premium price. His

flock produced an estimated 17,771 dozen eggs in 1979. This was less

than typical commercial production, but he explained that his flock
had been sick for part of the year. His revenue totaled $15,105

(Table 20). After deducting production and marketing costs, Producer
C netted an estimated $7,912. If he had sold the eggs commercially
rather than selling them through his roadside outlet, he would have
made over $1,700 on his egg operation. Thus, on an absolute basis,
the difference between his roadside outlet net revenue and his commercial
alternative indicated a gain of $6,175. Nearly $10 per hour of family












Table 20.--A summary of small scale egg producers' costs and returns for
-direct marketing operations.



Producer
Item Units C D


Typea RS RS, FM

Size Hens 1,000 400

Cases 592 208

Revenue Dollars 15,105 5,696

Costs

Production 6,628 2,337
Marketing 565 2,537

Total 7,193 4,874

Net revenue 7,912 822

Net return if sold
commercially 1,737 -1,067

Net return due to direct
marketing 6,175 1,889

Family labor

Production Hours 520 ---c
Marketing 104 624

Total 624 624

Net return per hour of
family labor due to
direct marketing Dollars 9.90 3.03

aType of outlet refers to predominant forms of direct marketing used
by the respective growers. Roadside stand = RS and farmers' market = FM.
Production in cases per year. One case contains 30 dozen eggs.

Production labor is included in production costs above.













labor was attributed to the direct marketing effort. However, Producer

C never intended to produce eggs for the commercial market; he said
that he would cease production immediately if he could not market them

through his roadside operation. Thus, a more realistic appraisal of
his direct marketing returns would be to examine his net revenue ($7,912)

in light of his total family labor (624 hours), resulting in a return of
$12.68 per hour for his efforts (Table 20).
Producer D lived on a small farm which fronted on a state high-
way. His farm was located about four miles from a town with a pop-
ulation of approximatley 3,000. Producer D had a part-time job in a
nearby town,and spent the remainder of his time tending his flock
of 400 hens and selling the eggs. He managed to sell about 65 percent
of his eggs directly to consumers. The remaining 35 percent was
sold to a commercial egg handler. Of the eggs sold directly to consumers,
about one-third were sold at the farm to friends and neighbors, one-
third were delivered to regular customers in the nearby small town,
and the remaining one-third sold at a farmers' market. In addition

to egg sales, Producer D also sold 100 cull hens during 1979 at $1.50
each. He earned about $3 per hour for his direct marketing efforts
(Table 20).

The Consumers

A sample of 30 consumers was obtained at three egg farms. Over

half the customers were men, in contrast to some direct marketing

outlets, i.e., blueberry PYO outlets, where up to three-fourths of
the patrons were women. Customers had very diverse backgrounds. They











represented a wide array of age and educational categories, and the

racial composition of the sample was comparable to that of Florida

population as a whole. However, the income distribution of the patrons

was very skewed; patrons tended to have incomes considerably below those

of the general population (Sales and Marketing Management, 1980).
Also, patrons tended to be permanent rather than temporary residents,

in contrast to most fruit and vegetable purchasers. Most egg purchases
had been planned; only 2 of the 30 stopped on impulse. Over half of
the egg purchasers came to the egg farms alone, and an additional 40

percent came to the farms with only one other person. Thus, it is
apparent that a trip to the egg farm was not generally a social activity

like trips to farmers' markets and to PYO establishments.
Almost two-thirds of the trips to egg farms were combination

shopping trips, i.e., other activities were conducted during the same

outing. The marginal expenditure of travel distance and time was

relatively low for such combination trips; the average additional

time required to drive to the egg farm was only 0.2 miles and required
less than a minute of driving time. Customers that made a special

trip from their residence to the egg farm traveled an average distance
of 20 miles, which required slightly over one-half hour of driving time.

A very high proportion, 97 percent of the patrons, were repeat customers.

Eight of the 30 patrons had discovered the farms through roadside signs,
11 through word-of-mouth, and 11 could not remember.

The average purchase was almost five dozen eggs, with purchases
ranging from 1 to 17.5 dozen (Table 21). Prices charged by producers

engaging in direct marketing tended to be slightly higher than prices











Table 21.--Consumer expenditures and savings associated with purchases
of eggs at roadside stands.



Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Dozen 30 4.75 1 17.5

Total expenditure Dollars 30 2.72 0.95 8.75

Price per dozen at
roadside stands 5 0.72 0.50a 0.95

Expected retail price
per dozen 17 0.77 0.50 1.08

Observed retail price
per dozen "10 0.68 0.50 0.79

Expected savings per
transaction 17 0.66 -0.42 2.18

Actual savings per
transaction 17 0.35 -1.56 1.80

Hypothetical savings
per transaction -- -0.19 0.86 -1.28


a
The eggs available for
not Grade A quality.


50 cents per dozen were cracked and undergrade,


b
Hypothetical savings per transaction are based upon the average
quantity purchased by the 30 customers at average, minimum, and maximum
prices observed at roadside stands compared with average observed retail
prices.













in supermarkets. Prices at roadside outlets ranged from 50 cents per

dozen for cracked and undergrade eggs to 95 cents per dozen for the
equivalent of Grade A large quality. Prices observed in retail stores

during the same time period ranged from 50 cents to 79 cents per

dozen. When asked to estimate their savings for eggs of comparable

size and grade if bought in a retail food store, most patrons tended
to over-estimate their savings. On the average, customers estimated

that they were saving 66 cents per transaction, but compared to average
retail prices, they saved only 35 cents per transaction. Some of

the patrons interviewed at the egg farm where the highest price per
dozen was observed (95 cents per dozen) realized that they were paying

a premium price. However, they tended to underestimate the difference
between prevailing retail prices and the price at the egg farm.
Given the average quantity purchased, the hypothetical "savings"

at egg farms averaged 19 cents, that is, customers could have bought

the same quantity of eggs at retail stores for 19 cents less than they

paid for them at the farms. However, at the minimum observed price

of 50 cents per dozen, a net (positive) savings of 86 cents would
have been realized per transaction. It must be recalled that the

price of 50 cents per dozen only applied to cracked and undergrade eggs.

At the maximum observed roadside price of 95 cents per dozen, compared

with average retail prices, the average purchase would have cost

$1.28 more at the egg farm than at retail stores (Table 21).














Customers rated quality and freshness of the eggs obtained at

the farms significantly higher than for eggs purchased at retail food

stores. Quality and freshness were mentioned as major advantages to

buying eggs at the farms by approximately 60 percent of the patrons.
Price was mentioned by only 30 percent. Several bought eggs at the

farms because they liked doing business with the farmers, and one

patronized the egg farm because it was convenient.
Only two of the 30 shoppers could think of disadvantages asso-
caited with buying eggs directly from the farms. One complained that
the location was inconvenient Ctoo far to drive) and one did not like

the cracked eggs that were sold. Only three offered suggestions for

improvement; one suggested home deliveries, and two wanted more

convenient locations.















Honey


Florida was the leading honey producing state in the nation in

1979. Production exceeded 28 million pounds and was valued at over

$14.8 million. Approximately 360,000 colonies were located statewide,

producing orange blossom, gallberry, Brazilian pepper, wildflower, and

many other types of honey.

The size of beekeepers' operations varied greatly. Many bee-

keepers had only one or two hives in their backyards, but others had
hundreds in several locations. Even the smallest operations frequently

had more honey than needed for home consumption, so excess production

was given away or sold to friends or neighbors. Although several of

these small producers were interviewed and were found to engage in

direct marketing to some degree, sales were judged to be of minimal

significance.

On the other hand, large commercial producers sold most of their

production in bulk to wholesale honey dealers who processed, packaged,

and distributed to retailers or industrial users.

Producer Case Studies

Direct marketing was found to be very important to beekeepers

with medium-sized operations. Three such operators are described in

case studies summarized below. Even though direct marketing was im-

portant to these medium-sized producers, all beekeepers interviewed

marketed from 10 to 92 percent of their production through commercial

channels. Generally, they sold their lower quality honey commercially













and their better honey through their direct marketing outlets. Direct

marketing activities were varied. Several of the producers sold honey

at their homes, and one at his primary place of business, an automobile
repair shop. In addition to selling honey at their homes, two of the
producers sold their honey at a regional farmers' market and at several

annual county fairs. All three producers lived in northern Florida

in small towns with populations ranging from 1,000 to 2,000 persons.

However, all were located within 15 miles of a city with a population

In excess of 75,000.

Producer A was a full-time honey producer with 600 hives. He
also bought honey from smaller producers. In 1979, he marketed ap-

proximately 112,000 pounds of honey of which 16,800 pounds were
produced by his own hives and sold directly to consumers at an average

price of 85 cents per pound. Most of his honey sales were made at

his home, where a special area was set aside for retail sales. How-

ever, Grower A participated in several fairs where he rented booths

and sold significant quantities as well. His direct marketing costs

were prorated to reflect the proportion of total direct marketing
sales that his own produced honey represented.

In addition to his honey sales, he also sold 100 pounds of bees-

wax at $2.25 per pound and rented 250 of his hives to vegetable pro-
ducers for pollination purposes which netted him $7.50 per hive.

Grower A's total revenue was estimated at $16,380 (Table 22). After

deducting production expenses of nearly $3,700 and direct marketing

costs of $5,385, Grower A's net revenue was $7,299.












Table 22.--A summary of honey producers' costs and returns
direct marketing operations.


for selected


Producer
Item Units A B C


Type

Size


No. hives

Dollars


Revenue


Costs


Production
Marketing
Total


Net revenue


Net return if sold
commercially

Net return due to
direct marketing


600

16,380


3,696
5,385
9,081

7,299


2,341


4,958


Family labor


Production
Marketing
Total

Net return per hour
of family labor due
direct marketing


Hours
'1
11


620
620


Dollars


8.00


RS, FM

60

1,125


525
467
992


131
131


0.51


RS

40

1,228


733
396
T,129


99


-217


316


---- b
572
572


0.55


a
Type of outlet refers to predominant forms of direct marketing used
by the respective producers. Roadside stand = RS and farmers' market = FM.

b
Production labor is included in production costs above.












If Grower A had elected to sell his 16,800 pounds of honey and

100 pounds of beeswax to a commercial honey processor, he estimated
that he would have received 50 cents per pound for his honey and

$1.90 per pound for his beeswax. After deducting his production and
commercial marketing costs, Grower A would have netted $2,341. By
selling his honey and beeswax directly to consumers, however, he real-
ized an additional $4,958 for his efforts. Grower A estimated that
he and his family spent about 10 hours per week selling honey at
home and approximately 100 hours per year at fairs. Thus, on an hourly

basis, they recieved $8.00 per hour for their direct marketing efforts.
Grower B engaged in honey production on a part-time basis. In
addition to his full time job, he kept 60 hives of bees and sold
1,500 pounds of the honey produced in 1979 directly to consumers. He
bought approximately four times as much honey for resale, but costs
and returns were prorated to reflect only honey he produced. Grower

B sold his honey at a regional farmers' market and at his home. Sales

at his home were made at a small, self-service stand, and payment was
on an honor basis. This mode of operation was observed in several

locations throughout the state.
Grower B sold his honey at an average price of 75 cents per
pound, resulting in total revenues of $1,125. After deducting production

and direct marketing costs, he had a net revenue of $133. According to
Grower B, if he had sold his honey to commercial honey house, he would
have received 45 cents per pound for it, and $1.90 per pound for his
beeswax. His net return from his commercial alternative would have













been an estimated $66. Thus, his total net return due to direct
marketing amounted to $67. A total of 131 hours of labor were ex-
pended on direct marketing by Grower B and resulted in a net return

per hour of family labor of only 51 cents (Table 22)
Producer C's primary source of income was an automobile repair
business. He engaged in beekeeping as a hobby, and he sold most of

his honey at his shop. Due to weather conditions, his hives had only
produced a total of about 1,500 pounds of honey in 1979 and he sold

90 percent or 1,350 pounds directly to consumers at an average price
of 85 cents per pound. He sold the rest to a small local food re-

tailer. The only other revenue from his beekeeping operation was
from the sale of 40 queen bees which yielded him a net return of
$2.00 each.
After deducting production and direct marketing costs, Producer

C's net return was less than $100. Because his production costs were

so high, Producer C would have lost $217 if he had sold his honey to
a commercial honey processor. The absolute net return due to direct

marketing was $316, or about 55 cents per hour. If the potential
loss associated with his commercial alternative is ignored and his

actual positive net return is examined, he earned only 17 cents per
hour for his efforts. Producer C realized that his nometary returns

were insignificant, but he stressed that beekeeping was an enjoyable

hobby, and making money was not his primary objective.

The Consumers

A relatively small sample of honey purchasers was obtained because











the customer traffic flow at producers' home operations was very low

and unpredictable. As a consequence, all consumer interviews were
conducted at a regional farmers' market which operated one day per
week. Fourteen honey purchasers were interviewed during two day of
surveillance. Eleven of the 14 patrons were women. The patrons
tended to be older than the general population, better educated, and

had higher than average incomes. About one-fifth were out-of-state
visitors or temporary residents. Their round-trip mileage to and from

the farmers' market was 89 miles and required two hours of driving
time. Most of the patrons discovered the farmers' market through
word-of-mouth. The purchase of honey had been planned by less than

half the respondents; it appeared that honey purchased at the farmers'
market was done on impulse by a sizeable proportion of the customers.

The average purchase was about 3 1/4 pounds, and the average ex-
penditure $3.05. Patrons tended to overestimate their savings. On

the average, they felt they were saving $1.34 per transaction, but
compared with estimated retail prices, they saved only 13 cents

(Table 23).

The customers rated the freshness and quality of honey purchased at
the farmers' market significantly higher than for honey purchased at
retail food stores. The major advantages associated with buying honey

at the farmers' market were freshness, price, quality, recreation, and

varied selection, mentioned by 50, 36, 28, and 21 percent of the patrons
respectively.

About one-third of the patrons cited disadvantages, but most

were associated with the farmers' market in general, such as over-

crowding and lack of parking. Only one honey purchaser made a












Table 23--Consumer expenditures and savings associated with honey
purchased at farmers' market.



Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Pounds 14 3.27 0.75 6.00

Total expenditure Dollars 14 3.05 1.00 7.25

Price per pound
at farmers' markets 6 0.86 0.70 1.15

Expected retail price 13 1.47 1.00 2.00

Observed retail priceb 6 0.96 0.84 1.04

Expected savings per
transaction 13 1.34 0 4.74
Actual savings per
transaction 13 0.13 -1.50 1.14

Hypothetical savings
per transaction -- 0.33 0.85 -0.62


aThe price per pound reported for farmers' markets
average price for all types and sizes of containers.


is a weighted


bBecause retail honey prices vary widely by type of honey and type
and size of container, the "observed retail price" is a simple average
of all types and sizes observed in six retail stores.

cHypothetical savings are based upon the overall average quantity
purchased by the 14 customers at average, minimum, and maximum prices
observed at all farmers' markets compared with average observed retail
prices.







87




negative comment about the honey; the customer lacked assurance that

it was unadulterated. Similarly, most of the suggestions for improve-

ment were directed toward the general operation of the farmers' market

rather than the honey booth in particular. However, one purchaser

did suggest that the honey be more accurately identified with respect

to the plant source.
















CONCLUSIONS

Marketing agricultural products directly to consumers provides

many producers with increased monetary returns over conventional,

commercial marketing alternatives. For other producers, direct mar-

keting through PYO outlets, roadside stands, or farmers' markets is

their only alternative.

Blueberries and grapes are relatively minor crops which had
insufficient volume to be marketed effectively through commercial

channels, and the same was true of strawberries in some areas. Sev-

eral citrus producers had similar problems because their small acre-

ages made commercial marketing impractical.

Direct marketing was the only alternative for many commercial

vegetable farmers, when harvest labor shortages and low wholesale

prices signalled the end of their commercial marketing season.

Salvage PYO operations resulted in substantial returns for some pole

bean, tomato, watermelon and strawberry farmers.

Direct marketing also enabled small egg and honey producers to

maintain their operations even though they had relatively high pro-

duction costs. Being able to sell at "retail" rather than "wholesale"

prices kept several producers in business.

Direct marketing was not a universal route to financial success,
as is evident from the case studies discussed earlier. Location of

the outlet was probably the most important consideration. Producers

located near major population centers or highways tended to













fare better than those in more remote areas. Another important

consideration was the amount of family labor required by direct mar-

keting activities. Virtually all producers complained of the amount

of time required by their outlets. However, much of the labor re-

quired by the direct marketing operations was provided by retired
persons or children with limited employment opportunities.

Direct marketing outlet customers were generally enthusiastic

about their purchases and their patronage of the outlets. They tend-

ed to rate quality and freshness of items purchased at direct mar-

keting outlets significantly higher than similar items available at

retail grocery stores,and the social and recreational aspects were

important to many customers as well. Most customers felt that price

savings obtainable at direct marketing outlets were important. How-

ever, most tended to overestimate their savings.

In conclusion, it is apparent that direct marketing is an impor-

tant alternative to commercial marketing for many producers and


consumers.




































APPENDIX




University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs