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






Group Title: Industry report - University of Florida, Florida Agricultural Market Research Center ; no. 81-7
Title: Farmer to consumer direct marketing of snap beans in Florida
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Permanent Link: http://ufdc.ufl.edu/UF00026895/00001
 Material Information
Title: Farmer to consumer direct marketing of snap beans in Florida producer and consumer benefits, a report
Series Title: Industry report Florida Agricultural Market Research Center
Alternate Title: Snap beans in Florida
Physical Description: viii, 38 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: Kidney bean -- 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. 38.
Statement of Responsibility: by Robert L. Degner, Lance W. Rodan, and Kary Mathis.
 Record Information
Bibliographic ID: UF00026895
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000410248
oclc - 10795254
notis - ACF7013

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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
        Page vi
    Summary
        Page vii
        Page viii
    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
    Conclusion
        Page 29
    Appendix
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
    Reference
        Page 38
Full Text




Industry Report 81-7.


K


Farmer to I
of SI


PRODUCER AND C


\ h MAMH


rketing


TS


December 1981














ABSTRACT


Snap beans are an important commercial crop in Florida, and sales
directly to consumers after commercial harvest provide important addi-
tional revenue to some producers. One grower realized $28 per acre
additional and another grower had $46 per acre from pick-your-own (PYO)
sales. A third producer, who grew snap beans strictly for PYO sales,
realized $6.68 per hour for family labor in direct marketing.

Consumers purchased almost 17 pounds of snap beans at average
expenditures of $3.05. Compared with prevailing prices in retail food
stores, PYO customers saved over $4 per transaction. Freshness, qual-
ity, lower prices and recreation were advantages, according to PYO
customers.


Marketing, direct marketing, snap beans.


Key words:






















FARMER TO CONSUMER DIRECT MARKETING OF SNAP BEANS IN FLORIDA:

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 Lo 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. Case study findings for each commodity are reported in

separate publications to allow for greater efficiency in disseminating

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...................................................11

ACKNOWLEDGEMENTS..............................................

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

LIST OF APPENDIX TABLES ..... ................................. v

SUMMARY ....................................................vii

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

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

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

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

Producer Benefits of Direct Marketing....................4

Case A ........................................ ......5

Revenue ........................................... 6
Costs ........................................ 6
Net Returns.................................... 8

Case B............................................. 8

Revenue....................................... 8
Costs ......................................... 10
Net Returns ..................................... 11

Case C ............................................. 11

Revenue............................................12
Costs ......................................... 12
Net Returns ........................................ 12

Other Advantages and Disadvantages of Direct Marketing........16

Consumer Benefits............................................ 16

The Patrons ...................................... 17
Transportation..................................20
Patrons' Shopping Patterns......................... 21
Monetary Benefits .................................. 23













Table of Contents--Continued


Freshness and Quality Comparisons...........................
Other Advantages dnd Disadvantages...........................
Suggestions for Improvement... ..............................

CONCLUSIONS ...................................................

APPENDIX ...........................................................

REFERENCES.........................................................


Page

24
26
28
29

30

38


LIST OF APPENDIX TABLES


Table

1 Snap bean production costs per acre, South Florida,
1978-79 assuming family production labor........................


Page


30















LIST OF TABLES

Table Page

1 Annual costs and returns for Grower A's pick-your-
own snap bean operation................................ 7

2 Annual costs and returns for Grower B's pick-your-
own snap bean operation................................... 9

3 Equipment requirements for Grower B's pick-your-
own snap bean operation............................... 10

4 Annual costs and returns for Grower C's pick-your-
own snap bean operation................................. 13

5 Structure and equipment requirements for Grower C's
pick-your-own snap bean operation....................... 14

6 Commercial marketing alternative for Grower C's snap
bean operation ..................................... 15

7 Demographic and socioeconomic characteristics of
snap bean PYO patrons.................................. 18

8 Travel distances and times for snap bean PYO 21
patrons..................................................

9 Shopping patterns of snap bean PYO patrons................ 22

10 Consumer expenditures and savings associated with snap 25
beans purchased at PYO outlets...........................

11 Consumers' comparisons of freshness and quality of 26
snap beans bought at PYO outlets and retail food stores...

12 Respondents' perceived advantages and disadvantages
associated with patronizing snap bean PYO 27
outlets......................................... .........

13 Snap bean PYO patrons' suggestions for improving the
outlet............................................... 28















SUMMARY


Two types of snap beans are grown commercially in Florida, bush
beans and pole beans. Over 80 percent of snap bean acreage is in
southeastern Florida, with most of commercial harvesting between No-
vember and May. Some smaller bush bean growers had pick-your-own (PYO)
or roadside outlets while pole bean producers operated PYO outlets as a
salvage venture after the last commercial harvest.

This report discusses case studies of three PYO operations, two by
pole bean growers and one bush bean enterprise that was all PYO. The
pole bean salvage operations let customers pick from 270 acres in one
case and 450 acres in the other during the season. The bush bean PYO
had 50 acres.

The three growers sold from 111,000 to 168,000 pounds of snap
beans, for revenues of $20,250 to $27,750. Net returns ranged from over
$8,000 to more than $12,700 for a 28-week season. The pole bean salvage
enterprises returned $28 per acre additional to the grower in one case
and $46 in the other. The bush bean producer received $6.68 per hour of
family labor for direct marketing activity.

Primary advantages of PYO sales cited by growers was reduction in
harvest labor expense. The bush bean grower felt he had higher returns
along with the advantage of no commercial harvesting costs.

Twenty-two snap beans purchasers were interviewed at the three PYO
outlets. Half were male, and half female. The customers tended to be
older, better educated, and had incomes that were considerably higher
than the state average. Over half the patrons reported incomes of over
$25,000 per year.

About one-third of the patrons were retired, and nearly 20 percent
were temporary residents, or winter visitors. About two-thirds of those
interviewed had shopping companions, and about ninety percent had plan-
ned their purchases. 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,
ranging from 3 to 50 pounds. Expenditures ranged from 75 cents to














$7.58, and averaged $3.05. 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 saving $10.80 per transaction, but compared with
prevailing average retail prices, they saved slightly over $4 per trans-
action.

Customers tended to rate 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 recreation 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 or too far to drive, and
others felt that picking was hard work or took too much time.


viii
















FARMER TO CONSUMER DIRECT MARKETING OF SNAP BEANS IN FLORIDA:
PRODUCER AND CONSUMER BENEFITS


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


INTRODUCTION



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

harvested during the 1978-79 season, with pole beans comprising about

10 percent of the acreage and snap beans the remainder.

Virtually all commercial pole beans are produced in Dade County,

while 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 Gadsden 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).






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.















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
found to be conducted only by a few, small scale bush bean farmers and

by some pole bean producers. Bush bean farmers producers operate pick-

your-own (PYO) outlets or roadside stands while pole bean producers

operate PYO outlets as a salvage venture.

Snap bean production in Florida is generally a large scale, com-

mercial endeavor. Typical growers' planting 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 salvage

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 price and labor avail-

ability. After the last commercial picking, many growers lease their

fields to independent PYO operators as salvage ventures, or operate

their own PYO outlets.


OBJECTIVES

The basic objective of this study was to determine the nature

and extent of benefits to snap bean producers and to the customers

who purchase snap beans directly from producers. Specific objectives














were to 1) identify marketing inputs required by the predominant

method of direct marketing; 2) determine marketing costs associated

with the prevailing direct marketing activity; 3) determine farmer net

returns obtained through direct marketing and 4) estimate returns

associated with each input, with particular emphasis on family labor.

Specific consumer-oriented objectives were to 1) determine prices

paid by consumers for snap beans at representative direct marketing

outlets and compare these prices with those paid at supermarkets; 2)

determine consumers' perception of snap bean quality at direct marketing

outlets as compared to that obtainable at supermarkets; 3) identify

additional benefits of direct marketing perceived by consumers patron-

izing direct marketing outlets and 4) determine demographic charac-

teristics of direct marketing outlet patrons.


PROCEDURE

The case study approach was utilized to determine producer ben-

efits. Snap bean producers were identified and located with the as-
sistance of county agricultural extension agents and state horticultural

extension specialists. Specific growers were then selected to reflect

a broad spectrum of direct marketing activity, particularly with respect

to size and type of operation. Producers were personally interviewed by

the Florida Agricultural Market Research Center staff during March and

April of 1979, the peak of the harvest season.

Production cost data were obtained from secondary sources and

slightly modified to reflect general production practices used by most













growers (Brooke). Considerable similarity was discovered with respect

to cultural practices. Thus, with the exception of family labor and

expenditures for hired labor, it was assumed that production costs were

similar for all growers. In some cases, total revenues and costs of

marketing inputs were estimated and used to determine financial returns

whenever growers could not or would not provide primary data. Growers

were also questioned about nonmonetary benefits derived from direct

marketing activities.

Consumer benefits were ascertained through personal interviews at

direct marketing outlets. Consumers were selected on a non-probability,

convenience basis, at typical pick-your-own (PYO) outlets. The customer

flow at all PYO outlets was sufficiently slow to allow all patrons to be

interviewed during surveillance periods. Information relating to con-

sumers' purchases, demographic characteristics, shopping patterns, and

transportation were obtained in the interviews. Consumers' monetary

savings were determined by comparing prices paid for snap beans at PYO

outlets with prices prevailing at local grocery stores.


FINDINGS

Producer Benefits of Direct Marketing

Pole beans are typically planted in blocks of approximately 10

acres, separated by field roads that allows access for cultural prac-

tices 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 sal-
vaged. Although direct marketing of snap beans was observed at several

roadside stands, PYO outlets were judged to be the most prevalent 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.


Case A

The producer grew over 1,500 acres of vegetables and field crops

near a large metropolitan area in South Florida. His 450 acres of

pole beans matured over a 28 week period from November through May.

Approximately 270 acres were opened to the public as a PYO operation

during the season. Most of this acreage was adjacent to or within

one-half mile of major highways or paved secondary roads. The re-
maining acreage was too remote or inaccessible to attract sufficient

numbers of PYO customers.

Grower A did not operate the PYO outlet himself, but allowed an

independent operator to manage the PYO activity for a 50 percent














commission. This operator used his personal vehicle as the PYO

headquarters, and 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, as well as paper

bags and buckets to patrons for picking, and scales for weighing pur-

chases. The independent operator kept the PYO fields open about 8 1/2

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

through May.


Revenue


Grower A's fields had been commercially picked only twice, and the

PYO operator kept the readily accessible fields open for two weeks or

more each. The resulting PYO harvest amounted to an average of slightly

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

bushels. The price remained at 15 cents per pound throughout the season,

resulting in a gross revenue of $25,200 (Table 1).

Costs


Since the PYO was a salvage operation, production costs were not

charged. These costs were included in the commercial portion of Grower

A's farm. Grower A's involvement in the PYO operation was minimal. He

stopped at Lhe PYO for brief visits occasionally during the week to

check on sales activity, and to keep the operator apprised of commercial












Table 1.--Annual costs and returns for Grower A's pick-your-own
snap bean operation.


Costs or returns


---- Dollars ----


Revenue

Pole bean sales

Costs

Production costs

Marketing costs

Truckb

Hired labor

Total marketing costs

Net revenue


168,000 pounds @ $0.15


Salvage



980 miles @ $0.20

50 percent commission


Family labor

Marketing 56 hours

Net return per hour of family labor due to direct marketing 221.50


aEquipment and supplies were provided by the operator of the PYO
operation out of his sales commission.
All operating expenses, including depreciation, are included in
the 20 cent-per-mile charge for a one-half ton pickup truck.


Item


25,200


0


196

12,600


12,796

12,404














harvest activity and plans for replacing the spent pole bean fields

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

an estimated two hours visiting the PYO outlet. Grower A had mileage

costs of $196, and paid the PYO operators $12,600 (Table 1).

Net Returns


Grower A's net revenue of $12,404 and small amount of marketing

time provided $221.50 per hour for his direct marketing efforts. How-

ever, 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.


Case B


Grower B was also a commercial pole bean producer, with 450 acres

per season. Most of his pole bean acreage was in the same general lo-

cale as Grower A's. However, his strategy with his PYO operation dif-

fered from Grower A's.

Even though some of Grower B's fields were not convenient to major

roads, he was able to attract PYO patrons to all fields over the course

of the season by keeping individual blocks open for only about one week,

resulting in better picking for customers.


Revenue

Grower B's PYO outlet yield was 10 bushels (300 pounds) per acre.

All beans were sold at 15 cents per pound, resulting in gross revenue

of $20,250 (Table 2).













Table 2.--Annual costs and returns for Grower B's pick-your-own
snap bean operation.


Costs or returns


---- Dollars ----


Revenue

Pole bean sales

Costs

Production costs

Marketing costs

Equipment
Truck
Scales
Pails
Signs
Interest on capital
Total, equipment


135,000 pounds @ $0.15


Salvage




980 miles @ $0.20


Supplies
Bags 443
Hampers 7
Total, supplies 450

Hired labor 1/3 commission 6,750

Total marketing costs 7,522

Net revenue 12,728

Family labor

Marketing 196 hours

Net return per hour of family labor due to direct marketing 64.94


Item


20,250



0


196
13
4
13
96
322












Costs



As in Case A, no production costs were charged because the PYO was

a salvage operations. However, Grower B operated his PYO enterprise.

He provided all equipment and supplies, including temporary roadside

signs, picking pails, scales for weighing, and paper bags for packaging

customers' purchases (Table 3).


Table 3.--Equipment requirements
bean operation.


for Grower B's pick-your-own snap


Depreciable Price/ Total
Description Quantity life unit investment

Number Years ------ Dollars ------

Truck, one-half ton 1 -b 6,000 875c

Scales 1 2 25 25

Pails 20 5 1 20

Signs 5 3 8 40

Total investment 960

Interest on capital @ 10 percent per annum 96

aStraight line depreciation is calculated for all items, assuming
no salvage value.
All operating expenses, including depreciation, are included in
the 20 cent-per-mile charge (Table 2).
CThe truck was used seven months out of the year for the total pick-
your-own operation, with one-fourth of its use allocated to snap beans.














Grower B also erected and removed the roadside sign daily, and super-

vised the PYO operation. He hired several retirees on a commission

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

revenue, which amounted to $6,750. Marketing costs totaled $7,522

(Table 2).

Net Returns

After all expenses, Grower B netted $12,728 as the result of his

direct marketing efforts (Table 2). Because of his greater 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 it is more reasonable to view the return

per acre. On this basis, Grower B earned an additional $28 per acre by

operating the PYO outlet.


Case C

Grower C had 180 acres of assorted vegetables specifically for the
PYO market. His farm was located near a major metropolitan area in

south Florida. Over 20 kinds of vegetables were grown during the

season which began in November and ended in mid-June. The PYO opera-

tion was open six days per week, Tuesday through Sunday from 8:00 A.M.

until 4:30 P.M.














Seven varieties of snap beans, all bush varieties, were planted on

50 acres. Plantings were staggered to prolong the harvest period for

most varieties.

Revenue

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 gross revenue of $27,750 (Table 4).


Costs


Since Grower C's entire farm was devoted to PYO sales, it is
relevant to include production costs. These costs for snap beans were

$306 per acre, or $15,300 total (Table 4 and Appendix Table 1). The
grower had a portable shed, scales and table for the PYO, and had 12

signs directing customers. He also provided pails and hampers for

picking. Annual costs for all owned structures and equipment were $95

for the snap bean enterprise which represented 28 percent of his total

operation (Table 5). Supplies and services, including insurance, ad-

vertising and bags for customer purchases, were $614, for total mar-

keting costs of $743 (Table 4).

Net Returns

Grower C's net revenue was $11,707. 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 (Table 6).













Table 4.--Annual costs and returns for Grower C's pick-your-own
snap bean operation.


Item


Costs or returns


---- Dollars ----


Revenue

Snap bean sales 111,000 Ibs.

Costs

Production costs 50 acres @ $

Marketing costsa

Structures and equipment
Owned items (Table 5)
Restroom rental
Total, structures and equipment

Supplies and services
Liability insurance
Advertising
Bags
Total, supplies and services


$0.25


27,750



15,300


306


95
34
129

166
116
333
614


Total marketing costs

Net revenue

Net return if snap beans sold commercially (Table 6)

Net return due to direct marketing

Family labor

Marketing 1,214 hours

Net return per hour of family labor due to direct marketing


743

11,707

3,596

8,111


6.68


aCosts are prorated to reflect the 28 percent of the acreage
that was in snap beans.














Thus, the net return attributable to his direct marketing activity

was $8,111. This amounted to $6.68 per hour of family labor (Table 4).


Table 5.--Structure and equipment requirements for Grower C's pick-
your-own snap bean operation.


Description


Quantity

Number


Depr
1

YV


Portable shed 1
Scales 2
Pails 20
Hampers 65
Table 1
Signs 2
Plastic signs 10

Total investment

Interest on capital @ 10 percent

aStraight line depreciation
no salvage value.
Prorated to reflect the 28
in snap beans.


eciable Price/ Total Annual
ife unit investment cost


ears ---------- Dollars ----------

10 900 252 25
10 135 76 8
5 1 6 1
2 1 23 11
5 20 6 1
3 50 28 9
2 0 2 1

393 56

per annum 39


is calculated for all items, assuming


percent of the crop acreage that was













Table 6.--Commercial marketing
operation.


alternative for Grower C's snap bean


Item


Costs or returns

--- Dollars ----


Revenue


Snap bean sales

Costs


Production
Marketing
Total


3,700 bu. @ $7.58a



50 acres @ $306
50 acres @ $183


Net return, commercial alternative


price is based on estimates by the Florida Crop and Livestock
Reporting Service. Yield is based on grower average yields reported
by Brooke.
production and marketing costs are adapted from Brooke.


28,046


15,300
9,150


24,450

3,596


~_















Other Advantages and Disadvantages of Direct Marketing


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 the reduction in harvest labor expense. Their PYO.operations also

provided additional revenues with minimal expenditures. One of the

growers could think of no important disadvantages, but the other felt

that the PYO outlet increased his liability risk. However, he felt that

his comprehensive farm liability insurance policy covered his risk. The

bush bean grower cited higher prices and elimination of harvest labor as

the major advantages to his PYO outlet. The major disadvantage was hav-

ing to contend with customers that would not follow his picking directions.

Consumer Benefits

Time and resource constraints precluded obtaining a large, random

sample of snap bean farm patrons. In keeping with the case study ap-

proach prescribed by USDA-ESCS, a relatively small number of customers

was interviewed. A non-probability, convenience sample of 22 patrons

was interviewed at the three farms described previously. All interviews

were obtained during weekdays, between the hours of 9:00 A.M. and 6:00

P.M. In most cases, the customer traffic flow was sufficiently slow

and the questionnaire brief enough so that all customers could be in-

terviewed during the surveillance periods.
Despite the sample's limitations, it is felt that the inter-

views provide a reasonable representation of customers typically













patronizing this type of outlet. The sample is thought to yield a

valid assessment of the qualitative and quantitative benefits accruing

to customers of snap bean PYO outlets.

The following sections describe the demographic composition of the

sample, and patrons' transportation and PYO outlet shopping patterns.

Customers' monetary benefits and other perceived shopping advantages
and disadvantages are also discussed, along with customers' sugges-

tions for improving the snap bean PYO outlets.

The Patrons


Patrons were equally divided between males and females, and over
50 percent were 50 years of age or older. Relatively few young people

were interviewed at the snap bean farms; less than 25 percent of the

customers were under 35 years of age. Over one-third of the customers

had attended college, compared with about 30 percent of the population

of Florida, and 9 percent had attended college four or more years,

compared with 14 percent statewide (Thompson). Eighteen percent of

the respondents had completed less than twelve years of schooling

(Table 7).

Most PYO customers came from small households. Half came from
one-or two-person households, 18 percent from three-person households,

and 27 percent from four-person households. Only one of the respon-

dents lived in a household which contained more than four persons.

Slightly over one-third of the interviewees were retired. Over 80

percent of the respondents were married.

Patrons' incomes were relatively high compared to those reported

for the population of the counties in which the snap bean farms were












Table 7.--Demographic and socioeconomic characteristics of snap bean
PYO patrons.



Characteristic Number Percenta


Sex of purchaser

Male 11 50
Female 11 50
Totals 22 100

Age of purchaser

18-24 0 0
25-34 5 23
35-49 5 23
50-64 8 36
65 and over 4 18
Totals 22 100

Years of education

Less than 12 4 18
12 10 45
13-15 6 27
16 or more 2 9
Totals 22 100

Number of persons in household

One 3 14
Two 8 36
Three 4 18
Four 6 27
More than four 1 5
Totals 22 100

Employment

Employed 14 64
Retired 8 36
Unemployed 0 0
Totals 22 100

Marital status

Married 18 82
Single 4 18
Totals 22 100













Table 7.--Demographic and socioeconomic
PYO patrons -- Continued.


characteristics of snap bean


Characteristic Number Percenta


Income

Under $8,000 1 5
$8,000-9,999 0 0
$10,000-14,999 4 19
$15,000-24,999 5 24
$25,000 and over 11 52
Totals 21 100

Race

White (non-Hispanic) 20 91
White (Hispanic) 1 5
Black (non-Hispanic) 1 5
Totals 22 100

Residency

Permanent 18 82
Temporary 4 18
Totals 22 100

percentages may not sum to 100 due to rounding.










located. The sample contained a disproportionately small number of
low income households, that is under $8,000 per year, and substan-

tially more households with incomes in excess of $25,000 (Sales and

Marketing Management).

With respect to race, the sample contained a disproportionately

large number of whites. Although whites constitute approximately 84

percent of the population in the counties where the snap bean PYO

operations were located, whites constituted 96 percent of the sample.

Only one of the 22 customers was black. Most of the customers were

Florida residents, although four persons, or 18 percent, were visitors

or temporary residents (Table 7).


Transportation

Personal automobiles were the only means of transportation used

by snap bean PYO patrons. Most of the customers, 17 of the 20 who

responded, indicated that the trip to the PYO outlet was a special

trip from their residence; no other activities were conducted in con-

junction with the trip. Three customers combined other activities

with their trip to the PYO outlet. Customers that made a special

trip from their residence to the snap bean PYO outlet traveled an

average round trip distance of 41 miles. The minimum round trip

distance was 4 miles, and the maximum 100 miles (Table 8).

For those customers that combined other activities with their

trip to the PYO outlet, their marginal expenditures of mileage and

driving time attributable to the PYO activity were determined. Ad-

ditional round trip distance ranged from Z1 to 17 miles, requiring

driving time of 20 to 40 minutes. The average round trip distance

traveled by all customers was 37 miles, requiring an average of 66

minutes.












and times for snap bean PYO patrons.


Type of trip/ Number of Distance or time
distance, time required observations Average Minimum Maximum


--- Miles or minutes ----

Special trip from
residence to PYO outlet

Miles traveled 17 41 4 100
Driving time 17 72 10 160

Combination trip

Miles traveled 3 17 12 20
Driving time 3 33 20 40

All trips

Miles traveled 20 37 4 100
Driving time 20 66 10 160

aCombination trips included activities in addition to the PYO visit.
The figures reflect patrons' marginal expenditure of mileage and driving
time attributable to the PYO activity.


Patrons' Shopping Patterns


Equal proportions of customers, 27 percent, discovered the outlet

either through roadside signs or through friends or relatives, i.e.,

word-of-mouth. One of the outlets where interviews were conducted en-

gaged in limited newspaper advertising, but only 9 percent of the cus-

tomers said they discovered the outlet this way. Eight persons could

not recall how the outlet was discovered (Table 9).


Table 8.--Travel distances












Half of the interviewees had previously patronized the PYO out-

let where contacted. All said they patronized the outlet more than

once each year, with 63 percent visiting it two or three times per

season, and 36 percent more than three times. Over 40 percent of the

customers said they typically visit at least one other snap bean PYO

operation during the harvest season, and 56 percent visited two or more.

Equal numbers of shoppers came to the snap bean PYO outlet alone,

or with one other shopper, and over one-third brought three or more

additional customers with them. Thus, it appears that the trip to the

PYO outlet was a social activity for most patrons. Furthermore, the

trip was planned, and not an impulse activity (Table 9).

Table 9.--Shopping patterns of snap bean PYO patrons.


Question/responsesa Number Percentb


How did you discover this outlet?

Roadside signs 6 27
Newspaper ads 2 9
Word-of-mouth 6 27
Do not recall 8 36
Totals 22 100

Have you patronized this outlet before?

Yes 11 50
No 11 50
Totals 22 100

How often do you patronize this outlet
each year?

Once 0 0
Twice 4 36
Three 3 27
More than three 4 36
Totals 11 100













Table 9.--Shopping patterns of snap bean PYO patrons.--Continued



Question/responsea Number Percentb


How many similar outlets have you
patronized during the past year?

None 0 0
One 8 44
Two 5 28
Three 2 11
More than three 3 17
Totals 18 100

How many shoppers in your party?

One 7 32
Two 7 32
Three 5 23
More than three 3 14
Totals 22 100

Was your snap bean purchase planned?

Yes 20 91
No 22 9
Totals 22 100

aQuestions about some aspects of shopping behavior have been
abbreviated or paraphrased for inclusion here. See questionnaire
in Appendix.
Percentages may not sum to 100 due to rounding.


Monetary Benefits

Each of the 22 PYO customers purchased an average of approximately

17 pounds of snap beans. The minimum purchase was three pounds and the

maximum 50. Prices at PYO outlets ranged from 15 to 25 cents per pound,

and averaged 17 cents. Consumer purchases ranged from 0.75 to 7.58 with

the average expenditure $3.05 (Table 10).













The PYO customers were asked to estimate retail prices of snap

beans. The 13 respondents that did expected to pay an average of

$0.70 per pound for them. Expected prices ranged from $0.40 to $1.15

per pound. Retail prices observed in stores of two leading super market

chains during the interview period ranged from 29 to 49 cents, averaging

39 cents per pound in all stores (Table 10). Thus, PYO customers tended

to overestimate their dollar savings.

On the average, the patrons estimated that they saved $10.80 per

transaction. But, compared with prevailing prices they saved an average

of $4.22 per transaction. These "actual" savings ranged from $0.70 to

$12.12 per transaction. The average difference between the PYO outlet

price and the prevailing retail price for all 22 customers amounted to

hypothetical savings of $3.70 per transaction (Table 10). It is im-

portant to note, however, that the "actual" and hypothetical "savings"

discussed here do not take into account transportation expenditures or

time spent in driving to the PYO outlet and in picking snap beans.


Freshness and Quality Comparisons


PYO outlet customers were asked to rate freshness and overall

quality of the snap beans obtained at the PYO outlet and snap beans

usually found at retail grocery stores. Ratings were based on a nine-

point rating scale where one represented "excellent" and nine repre-

sented "extremely poor". The average ratings for both freshness and

overall quality were 1.2 for the snap beans purchased at the PYO out

lets but only 5.0 and 4.9 for snap beans typically purchased at












Table 10.--Consumer expenditures and savings associated with snap
beans purchased at PYO outlets.


Number of
Item Unit observations Average Minimum Maximum


Quantity purchased Pounds 22 16.8 3.0 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 transaction -- 3.70 4.03 2.35

aHypothetical savings per transaction are based upon the average
quantity purchased by the 22 customers at average, minimum, and maximum
prices observed at PYO outlets compared with average observed retail
prices.












retail grocery stores. A paired t-test indicated that the fresh-

ness and overall quality rating differences were statistically

significant (Table 11).


Table 1l.--Consumers' comparisons of freshness and quality of snap
beans bought at PYO outlets and retail food stores.



Rating by source
Attribute PYO Retail grocery t-statisticb


Freshness 1.2 5.0 8.08

Overall quality 1.2 4.9 7.90
a
Ratings were based on a nine point scale where 1 = excellent and
9 = extremely poor. There were 13 observations for both attributes.
b
A paired t-test was used to determine whether or not rating by
source were significantly different. Both were statistically sig-
nificant at the 0.01 probability level.


Other Advantages and Disadvantages


Customers were also asked to enumerate the advantages and dis-

advantages associated with patronizing snap bean PYO outlets. Fresh-

ness was the primary advantage mentioned by 45 percent of the respon-

dents; in total, 77 percent of those interviewed cited freshness as an

advantage. Price was the next most frequently mentioned advantage,

cited by a total of 73 percent of the respondents. Recreation and

quality were advantages mentioned by a total 32 and 23 percent of the

respondents respectively (Table 12). Sixteen of the 22 respondents

could cite no disadvantages associated with patronizing the snap bean















PYO operation. Three respondents, 14 percent, mentioned the dis-

tance to travel as a disadvantage, two said picking beans was hard

work and one customer complained of the amount of time required

(Table 12).


Table 12.--Respondents' perceived advantages and disadvantages
associated with patronizing snap bean PYO outlets.


Advantages/disadvantages First response All responses
a
--------- Percent ----------

Advantages

Freshness 45 77
Price 36 73
Recreation 9 32
Quality 9 23
Better selection 0 5
Educational 0 5
Total O1OD t

Disadvantages

None 73 73
Location too far 14 14
Hard work 9 9
Takes too much time 5 5
Not economical 0 5
Total Too

percentages were based on 22 observations.

bPercentage may not equal 100 due to rounding.

CPercentages were not summed due to multiple responses.












Suggestions for Improvement


Over 80 percent of the customers interviewed offered no sug-

gestions 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 inconvenience due to sprinklers and muddy fields. Still

another patron suggested that the PYO outlet advertise more to no-

tify customers of product availability (Table 13).


Table 13.--Snap bean patrons' suggestions for improving the outlet.



Suggestions Number Percenta


No improvement necessary 18 82

Year round supply 1 5

More variety 1 5

More outlets 1 5

Turn on sprinklers after closing 1 5

Advertise more 1 5

Total 23 ---


are not summed


percentages are based upon 22 respondents. They
because of multiple responses.

















CONCLUSIONS


Marketing snap beans directly to consumers is an important

source of income for some commercial growers and for smaller producers

who grow several vegetables for the PYO and roadside markets. Com-

mercial growers realized additional income from salvage PYO op-

erations, but the major advantage was reduced harvest labor expense.

Consumers benefited from direct purchases of snap beans in several

ways. Monetary savings and greater freshness and quality compared

with retail store purchases were main advantages cited by consumers.

Recreation was also an important benefit from PYO purchases for many

consumers.































APPENDIX











Appendix Table l.--Snap bean production costs per acre, South Florida,
1978-79, assuming family production labor.



Item Costs

-- Dollars --


Growing costs:

Land rent 53.48
Seed 32.94
Fertilizer 53.90
Spray and dust 56.67
Machine hire 8.80
Gas, oil and grease 16.93
Repair and maintenance 26.76
Depreciation 12.26
Licenses and insurance 18.01
Interest on production capital (12% 4 months) 11.19
Interest on capital invested (other than land) 1.84
Miscellaneous expense 13.71

Total growing cost 306.49

Harvesting and marketing costs:

Picking and packing expense 82.12
Containers 67.70
Hauling 14.74
Selling 18.17

Total harvesting and marketing cost 182.73

Total crop cost 489.22

Source: Adapted from Brooke.












Food and Resource Economics Department
Florida Agricultural Market Research Center
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611
In cooperation with USDA/ESCS
Research Agreement # 58-319W-8-2522X


Form Approved
ONB No. 40-R 4070
Approval expires 6-30-80
Interviewee No.
Date


Consumer Benefits of Direct Marketing Activities

Section I

Description of Direct Marketing Outlet (complete prior to consumer interview.)
(For office use.)

Hello, I'm I represent the University of Florida
Market Research Center. We are conducting a research project on farmer-to-
consumer direct marketing. This research is designed to be helpful to both
farmers selling directly to consumers and consumers buying directly from
farmers. In this respect I would like to interview a sample of consumers
patronizing your outlet. Answers to all questions are confidential and
will only be used in summarizing data from this survey. No names will
appear or be related to the questionnaires in any manner. May I ask you a
question or two that will be used in classifying your outlet? Your response
is voluntary and not required by law. (Secure following information when
obtaining permission to interview customers.)


A. Type of outlet (circle one).


1. Roadside stand


2. U-Pick


3. Farmer's Market


For Office
Use


4. Other (specify)


B. Commodities or products sold (list, use back if necessary)









C.. Location of above outlet (County) (City)


D. Length of time in business at this location _(Years)












Section II

Direct Marketing Shopping Patterns


Hello I'm. I represent the University of Florida's
Market Research Center. We are conducting a research project on farmer-to-
consumer direct marketing. May I ask you a few questions about your pur-
chase(s) and your shopping here today? Your response is voluntary and is
not required by law. Answers to all questions are confidential and will be
used in summarizing data from this survey. Your name will not appear or
be related to the questionnaire in any manner. (If yes, proceed, if no,
terminate interview).

For office use
A. Have you patronized this particular outlet before? (circle one)

1. Yes (If yes,) how many times in the past year?

2. No (If no, skip to item C)


B. How often, on the average, do you patronize this outlet? (circle one)

1. Once per year 2. Once per month 3. 2-3 times per month

4. Once per week 5. More than once per week


C. How many similar outlets, if any, have you patronized during the
past year? (number)

D. How did you get to this location? (circle one)

1. Car 2. Walk 3. Public transportation (taxi, bus)

4. Other (bicycle, motorcycle, etc.) Specify


E. Was your visit to this market outlet today (circle one)


1. A special trip directly from your residence? (if checked, go to F)

2. Combined with other local shopping or similar activities?
( If yes, go to H & I)

3. Just passing by outlet? (tourist, joy riding, etc.)

4. Other (specify)
(Go to II & I)










For office
Use
F. How many miles is it from here to your residence? (mi.)

G. How much time does it take to come here from your residence? (min)
(Go to J)

H. How many miles out of your way was your visit here? (miles)


I. How much additional travel time did your visit here require? (min)


J. From your standpoint, what are the most important advantages to you
for buying food products here? (probe for 3)

1. 2. 3.


K. Are there any disadvantages to you for buying food products here?
Yes, No (circle one). If yes, specify disadvantages.

1. 2. 3.


L. How could this particular type of outlet be improved ? (probe)








Section III

Consumer Purchases of Specific Commodities

(Please use the following codes for the respective fruits, vegetables, and
other products. Code from observation whenever possible.)

Oranges = 0 Honey = H Blueberries = BB
Grapefruit = GF Milk = M Tomatoes = T
Snap beans = B Strawberries = S Eggs = E
Grapes = G Watermelons = W Other (Specify)


A. I see that you have bought some .When you stopped here
today, had you planned to buy 7
Code)
(circle one) 1. Yes

2. No









For office
Use
B. How many (units) of o_ did you purchase here today?
(code)


(specify quantity and units)

C. What was the total amount you spent for __ ? $___
(code)

D. From your standpoint, what are your most important reasons
for buying here? (probe for 3)
(code)

1. _________

2.

3.


E. Have you bought o___ at a local grocery store or supermarket
(code)
during this time of the year?

(circle one) 1. Yes 2. No (If no, do not ask F, H and J)


F. What would you estimate the total cost of these (this)
(code)
would be if purchased at a local grocery store or

supermarket? $


G. On a rating scale from 1 to 9, where l=excellent and 9=poor,
how would you rate the freshness of the co) you bought today?
(code)

Rating


H. Using the same rating scale (repeat) how would you rate the fresh-
ness of __ bought at the supermarket at this time of the year?
(code)

Rating


I. Again, usincj lhe rating scale from 1 to 9 where excellent and
9=poor, how would you rate the overall quality of the
you bought today? (code)

Rating










For office
use
J. Using the same rating scale (repeat) how would you rate the
overall quality of bought at a supermarket at this time
of year? (code)

Rating

(Repeat Section III for each commodity purchased)
Section IV

Consumer Demographics

A. Respondent (circle one) 1. Female 2. Male

B. What is the age of the head of the household?

C. How many people living in your household are 18 years of
age or above? Number

D. How many people living in your household dre under 18 years of
age? Number

E. In school, what is the highest grade you have completed?
(circle number of years)

1. Elementary (grade school 01 02 03 04 05 06 )
2. Junior high 07 08
3. High school 09 10 11 12
4. College 13 14 15 16
5. Graduate school 17 18 19 20 21

F. What is the occupation of the head of your household?
(circle appropriate classification; if in doubt of proper classi-
fication, write answer in Item 6.) (If not employed, skip to G)

1. Administrative, engineering, scientific, teaching and related
occupations, including creative artists.

2. Technical, clerical, sale and related occupations.

3. Service occupations including military occupations.

4. Farming, forestry, fishing and hunting occupations.

5. Production occupations including construction, extractive,
transport, and related occupations.

6. Other

G. Is the head of the household retired or unemployed ? (circle one)










For office
use
H. Are you married or not married? (circle one)

If respondent is married and:

1. Male, ask, Is wife employed? No Yes

2. Female, ask, Are you employed outside your home?
Yes No (circle proper answer)


I. Please tell me which of the following income categories most
closely describes your total family income in 1978 before
taxes, including wages and all other income. Is it--

(show card A; circle response)

1. Under $8,000
2. $8,000-9,999
3. $10,000-14,999
4. $15,000-24,999
5. $25,000 and over



J. (Complete by observation except when in doubt; then turn the
card to side B.) Please tell me how would you classify your-
self with the following racial or ethnic groups? (circle one)

1. White (not Hispanic origin)
2. White (Hispanic origin)
3. Black (Not Hispanic origin)
4. Black (Hispanic origin)
5. American Indian or Alaskan native
6. Asian or Pacific Islander

K. How did you learn about this outlet?

1. Road signs 2. Newpaper 3. Friends or relatives

4. Known for years 5. Other (specify)


Number of shoppers in your party?

Residencey:
1. Permanent area resident.


2. Temporary or visitor















REFERENCES


Brooke, D.L. Costs and Returns for Vegetable Crops in Florida,
Season 1978-79, with Comparisons, Economic Information
Report 127, Food and Resource Economics Department, IFAS.
University of Florida, 1980.

Florida Crop and Livestock Reporting Service. Florida Agricultural
Statistics: Vegetable Summary, 1980.

Rose, G.N. Snap Bean Production in Florida: A Historic Data Series,
Economic Information Report 74, Food and Resource Economics
Department, IFAS, University of Florida, 1975.

Sales and Marketing Management. Survey of Buying Power, Vol. 125,
No. 2, July 28, 1980.
Thompson, Ralph B., ed. Florida Statistical Abstract, Bureau of
Economic and Business Research, University of Florida,
Gainesville: University of Florida Press, 1980.




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