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Group Title: Industry report
Title: An economic assessment of the long-run viability of the Pompano State Farmers' Market
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00026926/00001
 Material Information
Title: An economic assessment of the long-run viability of the Pompano State Farmers' Market
Series Title: Industry report
Physical Description: 49 p. : ill., map ; 28 cm.
Language: English
Creator: Degner, Robert L
Florida Agricultural Market Research Center
Publisher: Florida Agricultural Market Research Center, Institute of Food and Agricultural Sciences, University of Florida
Florida Agricultural Market Research Center, Food and Resource Economics Dept., Institute of Food and Agricultural Sciences
Place of Publication: Gainesville Fla. ;
Publication Date: 1999
Copyright Date: 1999
 Subjects
Subject: Farmers' markets -- Florida -- Pompano Beach   ( lcsh )
Farm produce -- Marketing -- Florida -- Pompano Beach   ( lcsh )
Produce trade -- Florida -- Pompano Beach   ( lcsh )
Economic conditions -- Pompano Beach (Fla.)   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: by Robert L. Degner ... <et al.>
General Note: Cover title.
General Note: "Presented to the Florida Department of Agriculture and Consumer Services Bureau of State Farmers' Market in fulfillment of project no. 99000791"
General Note: "November 1999."
 Record Information
Bibliographic ID: UF00026926
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: notis - AMR8483
oclc - 44033400
alephbibnum - 002552266

Table of Contents
    Copyright
        Historic note
    Main
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        Page ii
        Page iii
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Full Text





HISTORIC NOTE



The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida






































































100
F637fi
99-3









FLORIDA AGRICULTURAL MARKET RESEARCH CENTER

The Florida Agricultural Market Research Center is a service of the Food and
Resource Economics Department. Its purpose is to provide timely, applied research on
current and emerging marketing problems affecting Florida's agricultural and marine
industries. A basic goal of the Center seeks to provide marketing research and related
information to producer organizations, trade associations, and governmental agencies
concerned with improving and expanding markets for Florida's agricultural and marine
producers.
Client organizations are required to pay direct costs associated with their research
projects. Such costs include labor for personnel and telephone interviewing, mail surveys,
travel, and computer analyses. Professional time and support is provided to organized
producer groups at no charge by IFAS.
Professional agricultural economists with specialized training and experience in
marketing participate in every Center project. Cooperating personnel from other IFAS units
are also involved whenever specialized technical assistance is needed.


Dr. Robert L. Degner, Director
Florida Agricultural Market Research Center
P.O. Box 110240
1083 McCarty Hall
University of Florida
Gainesville, Florida 32611-0240
(352) 392-1871 (Voice)
(352) 392-1886 (Fax)
DEGNER(),FRED.IFAS.UFL.EDU













UNIVERSITY OF FLORIDA LIBRARIES









I0 ACKNOWLEDGEMENTS

1 We express our appreciation to the Florida Department of Agriculture and Consumer
q 9- Services (FDACS) for providing major funding for this project. We are particularly indebted

iCIEWcF to Mark Markley and Don Coker of FDACS for their penetrating insights as to the unique
L. problems and opportunities associated with the Pompano State Farmers' Market. We also
appreciate the prompt assistance and willing attitude displayed by Al Castro, Manager of the
PSFM, and his dedicated staff.
Thanks are also in order for the many tenants of the PSFM and the members of the
Pompano State Farmers' Market Authority that graciously participated in our lengthy
interviews. They were a fount of information about the produce industry in south Florida,
and their input was crucial to the completion of the study.
We are also deeply indebted to Ms. Lauren Justeson, our Graduate Research
Assistant, for her persistence and interviewing skills. We also thank Vivian Thompson for
typing much of the final manuscript.









INTRODUCTION

The Pompano State Farmers' Market (PSFM), established in 1939, is one of the
oldest markets in the state's Farmers' Market system. The market initially served Broward
County agricultural producers as an assembly point for fruits and winter vegetables. Local
producers brought their fresh produce to the market where it was graded, packed and shipped
to local and U.S. markets. Over time, the PSFM established itself as a major wholesale
shipping point, attracting large numbers of South Florida sellers, brokers, and buyers from
distant markets. By 1980, over 5.3 million packages of fresh produce were passing through
the market. However, the decade of the 1980s was not kind to the PSFM. Broward County's
population grew rapidly during the 1980's. From a population base of only 40,000 when the
PSFM was established, Broward County was home to well over one million permanent
residents by 1980, and by 1990, almost 1.3 million. This corresponded to the steady
reduction in fruit and vegetable production in Broward County; the 1982 Census of
Agriculture reported 4,593 acres of these crops, but by 1992, acreage had dropped to only
2,259, a decrease of over 50 percent over the decade. Also, the 1980s saw a marked increase
in direct shipments by Florida growers to customers in distant markets. Consequently, the
volume of produce physically moving through the market steady declined, and by 1990, only
2.7 million packages were reportedly handled by produce shippers on the market.


Despite the steady downward trend of shipping activity on the PSFM during the
1980s, the market has shown renewed signs of life during the 1990s as tenants have
responded to changes in the produce marketplace. Tenants have added refrigerated storage
and have focused on providing mixed loads for an increasingly diversified produce industry.
Although agricultural production in Broward County has continued to decline, considerable
quantities of fresh produce from other major production areas in South Florida flow through
the PSFM, along with increasing quantities of imported fruits and vegetables that do not
directly compete with Florida production.


This study provides an up-to-date overview of the activities of the PSFM and
examines factors that will have significant impacts on its long-run economic viability. To
that end, agricultural production in the market's service area is analyzed as are changes in

1









consumption and imports of selected fruits and vegetables. Much of the market's
infrastructure is 60 years old and approaching the end of its useful life. This study also
provides input from current and potential tenants of the PSFM as to facility needs.


OBJECTIVES

The basic objective of this study is to provide decisionmakers with a current,
comprehensive evaluation of the long-run economic viability of the PSFM and to suggest
several improvement scenarios as part of market's five-year master plan. Specific objectives
are to:


1. Analyze current and emerging fruit and vegetable production patterns within the market's
traditional south Florida service area, as well as national and international shifts in
production and supply sources that have already impacted the Pompano SFM or have
the potential to affect the market in the foreseeable future.
2. Analyze changing local, regional, national and international consumption patterns for
fresh produce grown in south Florida or available from other regions of the U.S. or
foreign sources.
3. Analyze the historical performance of the market with respect to operating revenues,
operating expenses, and commodity sales for the 1971-1998 time period and project
future market activity (physical product handled and the value of sales) through 2020.
4. Identify emerging technological advancements and changes in trade practices in the
produce industry that have the potential to affect the long-run infrastructure needs
associated with the Pompano SFM.
5. Assess the potential for development of complementary, on-site business activities.
Developments evaluated include retail space for fresh produce and value-added products,
space for processing value-added products, tenant amenities such as restaurants and
business services, and trucker services such as refueling and lodging, and a limited
assortment convenience store that would serve truckers and tenants.






2









PROCEDURE

Meeting objectives one and two requires a comprehensive analysis of existing
secondary data pertaining to the health of the agricultural economy in the market's service
area, imports of fresh produce items, and on the changing ethnic composition of the region's
consumer base. Major data sources include the Census of Agriculture, the USDA-NASS
Vegetable Yearbook, the FASS Vegetable Summary, and "Marketing Florida Vegetables",
published by USDA-AMS. Statistics on the changing consumer base are obtained from the
Census of Population the University of Florida's Bureau of Economic and Business Research,
and Sales & Marketing Management's: Survey of Buying Power.
Trends in consumer demand for various types of fresh fruits and vegetables (objective
two) are determined by examining published USDA statistics on consumption as well as the
changing ethnic composition of the south Florida region. These data are augmented through
interviews of produce shippers and wholesalers in the south Florida region to obtain
qualitative data on changes in demand for fresh fruits and vegetables.
The historical performance of the PSFM is evaluated using annual reports of market
activities (units handled and value of shipments) obtained from the Bureau of State Farmers'
Markets, Florida Department of Agriculture and Consumer Services (FDACS). FDACS
compiles the annual reports from monthly reports submitted by the market manager.
Technological changes that are imminent, i.e., likely to impact the Pompano SFM
within the 20-year planning horizon, were explored through interviews with many of the
same produce industry representatives contacted to achieve objective two.
Identification and evaluation of complementary business activities for the market
(objective five) were achieved through extensive in-depth personal interviews of various
stakeholders and persons that are knowledgeable with respect to the Pompano SFM. Input
from these respondents was sought using one or more methods, including mail surveys,
telephone surveys, and face-to-face interviews. Groups of respondents interviewed included
current tenants, potential tenants (former tenants and other produce related firms in the
Pompano Beach, Deerfield Beach, Ft. Lauderdale areas) and PSFM Authority members.
Of the 25 current tenants, 21 were interviewed in person or by telephone (84 percent).
Numerous attempts were made to interview the remaining four tenants, but they were
unreachable. Because of smaller numbers and potentially more diverse viewpoints, members


3









of the Pompano Beach Farmers' Market Authority were interviewed in person if at all
possible. Input was obtained from four of the six Market Authority members. As with the
tenants, numerous attempts were made to interview the two remaining members, but they
were unavailable. Input was also obtained via personal interviews with key personnel of the
Marketing Division of the Florida Department of Agriculture and Consumer Services
(FDACS).
Data obtained from all sources are used to develop recommendations for a five-year
plan to more effectively utilize the Pompano State Farmers Market property. Faculty and
staff of the Florida Agricultural Market Research Center have worked very closely with the
architecture firm retained to develop the physical plan for the market. As various phases of
the research were completed, the results were shared with architects and planners from
Corzo, Castello, Carballo, Thompson and Salman so that findings could be integrated into
preliminary improvements plans in an expeditious manner.






























4









STATUS OF AGRICULTURE IN THE PSFM SERVICE AREA

This section of the report evaluates the demand and supply conditions for vegetables,
fruits and horticultural products produced in a 7 county region of south Florida referred to as
the Pompano Farmers' Market Area (PFMA). The purpose of this section is to provide an
appropriate economic and logistical basis for formulating recommendations for future
operating facilities and procedures on the Market.
South Florida is a unique and very dynamic region of the nation, recognized for its
diverse, substantial and growing economy. International, national, and regional factors
impact the success and vitality of its fresh fruit and vegetable industry. The changes that
have had substantial effects on this industry during the last 15 years are discussed below.
Production

The scope and size of fruit, vegetable and nursery production in south Florida is
examined in this section. Both land area and market value, with respect to the type of
production and geography are reviewed. Particular attention is given to individual
commodities which are known contribute substantially to the Pompano State Farmers'
Market's revenues.


Type of Production

Agricultural production in the PFMA is divided into vegetables, fruits, and nursery
and greenhouse operations. These are examined individually in terms of acreage and
revenues.


Acreage

The total acreage in fruit, vegetable, and horticultural production in the PFMA has
increased by nearly 11 percent between 1982 and 1997 (Figure 1, Table 1). This acreage
growth was continuous from 1982 through 1992. By 1997 it had declined by approximately
nine percent from its 1992 levels, which totaled nearly 453 thousand acres. Much of this
recent decline is due to reduced vegetable acreage, which by itself has decreased by slightly
more than 28 percent since 1987. This decline in vegetable acreage has accelerated since


5










1992, falling over 23 percent during the last 5 year census period. Although fruit acreage has
increased during each 5 year census during the study period, there was little change between
1992 and 1997. Nursery and greenhouse acreage has leveled off at nearly 41,000 acres for
the PFMA, but overall it has increased by more than 40 percent since 1982.


Figure 1. Fruit, Vegetable, and Nursery Acreage in the Pompano Farmers' Market Area 1, 2

500,000
Nursery & GreenhOuse

400,000


S300,000 Fruits


200,000


100,000 Vegetables



1982 1987 1992 1997

M Vegetables 0 Fruits, nuts & berries ONursery & Greenhouse

Source: Census of Agriculture



Table 1 Vegetable, Fruit and Nursery Acreage for the Pompano Farmers' Market Area '
Nurseries and
Vegetables Fruits Greenhouses 2 Total
year Acres Acres
1982 153,251 189,568 29,161 371,980
1987 175,044 200,446 38,468 413,958
1992 165,375 244,766 42,491 452,632
1997 125,961 244,957 40,973 411,891
Source: Census of Agriculture
Missing values for some counties were estimated
2 Greenhouse square footage converted to acres




6









Market Value

The market value of vegetable, fruit and horticultural production in the 7 county area
was approximately 1,487 billion dollars in 1997 (Figure 2, Table 2). The real market value
of production (measured in 1992 dollars) from these three subsectors was in excess of $1
billion in 1982 and exceeded 1.3 billion in 1997. The value of vegetable production in the
PFMA peaked at $704 million in 1992. Its subsequent decline, by almost 21 percent in 1997,
was most likely due to the impacts of the North American Free Trade Agreement (NAFTA)
and Hurricane Andrew. Revenues from fruit and nut production also peaked in 1992 at $377
million and similarly declined by over 22 percent in 1997. In contrast, nursery and
greenhouse revenues for the PFMA increased by nearly 28 percent between 1992 and 1997.
Overall, revenues from nursery and greenhouse operations have grown more consistently
than for the other sectors.

Figure 2. Market Value of Fruit, Vegetable, and Nursery Production in the PFMA, 1992 $ '

1,600
1,400
1,200 Nursery & Greenhouse

1,000
800 ^Fruits
800
0

400 7 ,V vegetables" .-
200 ,


1982 1987 1992 1997

U Vegetables 0 Fruits 0 Nursery & Greenhouse
Source: Census of Agriculture
SMissing values for some counties were estimated.








7











Table 2. Market Value of Fruit, Vegetable and Nursery Production in the Pompano
Farmers' Market Area, 1992 $ '
Nurseries and
Vegetables Fruits Greenhouses Total
year Million 1992 $s Million 1992 $s
1982 469.75 258.51 279.13 1,007.39
1987 532.90 380.15 395.56 1,308.61
1992 703.99 377.31 389.51 1,470.80
1997 556.79 292.34 497.70 1,346.83
Source: Census of Agriculture
'Missing values for some counties were estimated.

Geography

The PFMA consist of seven counties spanning both east and west coasts of south
Florida. It includes Broward, Collier, Dade, Lee, Martin, Palm Beach and St. Lucie counties.
This area is physically and agriculturally diverse. Individual counties exhibit significant
differences in both the type and level of agricultural production.
Acreage
Figure 3 and Table 3 show the distribution of acreage in vegetable, fruit and nursery
production for individual counties within the PFMA. During the study period, Palm Beach
and St. Lucie Counties have traded places in having the largest acreage in combined
production. The majority of relevant acreage in Palm Beach County is in vegetables. Even
though vegetable acreage has declined in Palm Beach County from over 91,000 acres in
1982, to 58,000 in 1997, it still leads the seven county area in this category. The vast
majority of St. Lucie County's acreage is in citrus production. This acreage has grown from
nearly 91,000 acres in 1982 to almost 118,000 in 1997. In contrast, vegetable production has
been almost non-existent in St. Lucie County. Collier, Dade, and Martin County acreages are
clustered near 55,000. Vegetable acreage is predominant in Dade County, while fruit acreage
is greater in Collier and Martin counties. Collier county has experienced a dramatic increase
in fruit and total acreage over the last 15 years. This is largely due to significant increases in
citrus acreage in the aftermath of freezes which destroyed much of the citrus in Central
Florida.


8










Figure 3. Vegetable, Fruit and Nursery Production Acreage by County in the Pompano
Farmers' Market Area, 1992 $ '

500,000


400,000
400,000Br De StL Lucie

300,000


200,000 ..


100,000 eeae ad e d eae

0-
1982 1987 1992 1997

SBroward ECollier E3Dade nLee Martin E Palm Beach i St. Lucie 1

Source: Census of Agriculture
I Missing values for some counties were estimated



Table 3. Fruit, Vegetable and Nursery Production Acreage by County for the
Pompano Farmers' Market Production Area, 1992 $s 1
1982 1987 1992 1997
County Acres
Broward 5,787 7,504 4,150 3,593
Collier 27,470 38,058 61,973 53,041
Dade 47,856 64,915 60,761 60,478
Lee 17,435 16,928 18,717 22,585
Martin 50,443 56,317 52,436 55,188
Palm Beach 131,166 137,107 133,992 97,683
St. Lucie 91,823 93,128 120,604 119,323

Total 371,980 413,958 452,632 411,891

Source: Census of Agriculture
' Missing values for some counties were estimated


Revenues


9









The greatest market value of vegetable production in the 7 county PFMA occurs in
Palm Beach County, which is immediately north of Broward County. Palm Beach County
has large land areas devoted vegetable production and particularly to sweet corn, (21,770
acres in 1997). Collier and Dade are the next largest vegetable producing counties, but also
generate significant revenues from fruit and nursery operations. Collier County has more
than doubled its revenues from vegetable production during the 15 years between 1982 and
1997. The bulk of fruit production revenues are generated in St. Lucie and Martin counties,
in the northern range of the PFMA. This is primarily in the form of citrus fruit. Dade and
Palm Beach Counties generate the lion's share of revenues from nursery and greenhouse
production, with Dade County showing a significant increase in the last 5 year census period
(43 percent). In contrast to the previous two commodity groups, nursery and greenhouse
revenues increased dramatically between 1992 and 1997.
Looking at the geographic distribution of revenues from the three types of
commodities reveals that Palm Beach County, to the north of the Pompano Market, currently
has the largest revenues in the PFMA. It is followed by Dade County in the southern part of
the area and then Collier County to the west. Thus the Pompano Farmers Market is centrally
located with respect to the value of production in the marketing area it serves.
























10











Figure 4. Market value of Fruit, Vegetable and Nursery Production by County for the
Pompano Farmers' Market Area, 1992 $ '

1,600
1,400




S 800
600 of A
400 M a Dade
200 -
0
1982 1987 1992 1997


N Broward N Collier 0 Dade U Lee M Martin U Palm Beach 0 St. Lucie

Source: Census of Agriculture
Missing values for some counties were estimated



Table 4. Market Value of Fruit, Vegetable and Nursery Production by County for
the Pompano Farmers' Market Production Area, 1992 $s

1982 1987 1992 1997
County Million 1992 $
Broward 39.44 42.28 26.98 37.37
Collier 85.84 130.82 248.81 233.83
Dade 226.30 276.63 338.70 350.84
Lee 48.26 84.95 77.89 97.88
Martin 89.96 126.48 125.60 91.96
Palm Beach 402.97 460.45 458.15 398.29
St. Lucie 114.62 187.00 194.67 136.65
Total 1007.39 1308.61 1470.8 1346.82

Source: Census of Agriculture
Missing values for some counties were estimated





11









Domestic and Import Competition

Figures 5 through 10 graphically compare the volume and origin of U.S. shipments
for selected fresh vegetables during the fall, winter and spring months of the year. These are
shipments destined to major terminal markets in the US. Florida has competed with Mexico
in fresh winter vegetable production for several decades. During the 1990s the nature of U.S.
- Mexico competition changed. NAFTA eliminated or reduced many tariff barriers between
the two countries. Also, a significant decline the value of the Mexican Peso in relation to the
U.S. Dollar made Mexican imports much cheaper in the U.S. These figures demonstrate the
relative share of Mexican and Florida shipments with respect to the domestic supply of these
vegetables.
Florida has been relatively successful in retaining a majority share of the cool-season
fresh green-bean market. There has been a slight upward trend in Mexico's share over the
decade of the 90s (Figure 5). During this period, Florida's shipments to major U.S. terminal
markets fluctuated between 63 and 116 million pounds per year. The USDA Agricultural
Marketing Service (AMS) does not report any other sources of green bean shipments during
the winter season for the U.S.
In contrast, Florida's shipments of cucumbers to major terminal markets declined
precipitously during the 1990s (Figure 6). In the 1990/91 season, nearly 42 percent of
cucumber shipments originated from Florida. By the 1997/98 season, Florida's share of this
market had shrunk to less than 22 percent. Florida also faces competition from other states
such as Georgia and Texas, (Figure 6) which usually come into the market during the early
fall and late spring of the year. Imports of cucumbers from Central American and the
Caribbean through South Florida district ports in the 1998/99 season were approximately 87
million pounds (Figure 11, Table 5). This is about one third as large as the quantity of
Florida produced shipments during the 1997/98 season. Clearly, the state's cucumber
producers face significant challenges from both domestic and foreign competition.
Shipments of eggplant from Florida have fluctuated substantially in the last three
years of the analysis period, as shown in Figure 7. Overall, Florida's production has shown
no clear trend, but the volume of shipments from Mexico has grown by 79 percent since the
1990/91 season. As of the 1997/98 season, nearly three quarters of eggplant shipments



12









originated from Mexico. Cool season shipments of eggplant from other U.S. states are
relatively insignificant.
While Florida clearly dominated the cool season bell pepper market during the early
1990s, shipments from Mexico in 1997/98 were nearly double their 1990/91 levels, almost
matching those from Florida (Figure 8). Georgia has recently emerged as a minor competitor
in the market as well. In the 1996/97 and 1997/98 seasons, shipments of bell peppers from
Florida have rebounded, exceeding 300 million pounds for the first time since the 1991/92
season.
Since the 1992/93 season, Mexico has strengthened its dominance in the "other"
pepper market (Figure 9). As of the 1997/98 season, ninety percent of the shipments of this
category of peppers originated from Mexico. California and Texas do not appear to
substantially contribute to the national supply of these peppers.
The volume of watermelon shipments from Florida rebounded in 1997/98 season,
from their lowest levels of the decade in the previous year, but overall they show no clear
trend during the 1990s (Figure 10). Mexican imports have shown a fairly steady increase
since the 1991/92 season. Watermelon shipments from states other than Florida dominate the
national total, but overall, the three production regions are fairly complementary in their
production/shipping seasons. Mexican shipments do compete with Florida in the late spring,
while shipments from others states in the U.S. compete with Florida in the mid summer.
Substantial quantities of cantaloupe and honeydew melons are imported into the U.S.
through ports in the South Florida District. These melons originate primarily from Central
America and the Caribbean (Figure 11, Table 5). In the latest season (ending in March 1999)
over 226 million pounds of cantaloupe were shipped into South Florida sea ports. This
represents about 23 percent of all imports of cantaloupe into the U.S. and over 7 percent of
annual domestic consumption. Approximately 84 million pounds of honeydew melons were
imported through Florida ports during the 1998/99 season. This corresponds to over 40
percent of national imports and nearly 12 percent of domestic consumption. There is no
reason to assume these import volumes through south Florida ports will not continue at
current levels or increase in the future.






13











Figure 5. Shipments of Green Beans from Florida and Mexico, 1990/91 1997/98

6,000 100%

5,000 -83%

S 4,000 67%



s 2,000 33%
S3,000 50%




1,000 Florida 17%

0 0%
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

I Florida M Mexico Percent Mexican

Source: USDA-AMS, "Marketing Florida Vegetables


Figure 6. Shipments of Fresh Cucumber from Florida, other States and Mexico, 1990/91-
1997/98

18,000 100%

15,000 -er 83%

S 12,000 67%

9,000 -i 50%

t 6,000 33%

3,000 -Florida 17%

0 .. 0%
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

dI Florida M Mexico rI Other States -Percent Mexican

Source: USDA-AMS, "Marketing Florida Vegetables



14










Figure 7. Shipments of Eggplant from Florida, other States, and Mexico, 1990/91-1997/98.

4,000 100%


3,000 l Other States 75%


S 2,000 50%


1,000 -25%
Florida

0 0%
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

Z Florida M Mexico Other States Percent Mexican

Source: USDA-AMS, "Marketing Florida Vegetables


Figure 8. Shipments of Bell Peppers from Various Production Regions 1990/91-1997/98

32,000 100%


24,000 75%
as
Califomra
16,000- 50%


8,000 125%
Florida

0 0%
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

Florida M Mexico = California
= Texas Georgia Percent Mexican

Source: USDA-AMS, "Marketing Florida Vegetables





15









Figure 9. Shipments of Other Peppers from Various Production Regions 1990/91-1997/98.

8,000 100%
7,000 88%
6,000- i --- 75%
S 5,000 63%
4,000 5..- 50%
3,000 38%


1,000 OeFlorida s- 13%
0 1 0%
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

I Florida M Mexico a California = -Texas se Percent Mexican
Source: USDA-AMS, "Marketing Florida Vegetables

Figure 10. Shipments of Watermelons from Florida, Other States, and Mexico, 1990/91-
1997/98

250,000 100%


200,000 80%


S150,000 Other states 60%


g 100,000 40%


50,000 20%

0 = -. M- exic -- 0%
0 0%
1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98
M Mexico M Florida =r- Other states .Percent Mexico

Source: USDA-AMS, "Marketing Florida Vegetables






16










Figure 11. Imports of Melons and Cucumbers through South Florida Ports for the 1998/99
Season 1,2

25,000


20,000

15,000


o 10,000 i

5,000
0


Cantaloupe Honeydew Watermelon Cucumber

Commodity
SSouth Florida district includes the Port of Miami, Port Everglades, Port of Palm Beach, Port Manatee and
Port Canaveral
2 Countries of origin include Costa Rica, the Dominican Republic, Guatemala, Honduras, Nicaragua, and
Panama




Table 5. Imports of Melons and Cucumbers through South Florida District Ports for the
1998/99 Season l

Cantaloupe Cucumber Honeydew Watermelon Squash
Origin 10,000 lb. units
Costa Rica 3,064 3,982 1,149 181
Dominican Rep. 1,640 222 343 131
Guatemala 9,729 526 4,031 27 102
Honduras 7,197 4,042 1,978 1,297 78
Nicaragua 165 5
Panama 891 859 547
Total 22,686 8,772 8,365 2,183 180
SThe South Florida district includes the Port of Miami, Port Everglades, Port of Palm Beach, Port
Manatee and Port Canaveral.






17









U.S. and Florida Consumer Demographics

Changes in the size and make-up of the national and regional population will have a
variety of impacts on the demand and supply of fresh fruits, vegetables and nursery products.
Obviously, the overall demand for food will increase with population growth. It is also
important to evaluate how population changes will impact local versus out-of-state demand
for these products. The demographic make-up of our society influences the demands for
different types of foods. The impacts of such trends in population size and make-up on the
consumption of fruits and vegetables are evaluated below.
The population of the United States is expected to increase at a fairly steady rate over
the next 50 years, reaching nearly 400 million people by the year 2050. The projections for
U.S. population growth, broken out by ethnic category, are shown in Figure 12 and Table 6.
After the year 2010, almost all population growth will occur in non-white ethnic groups.
This indicates that a wider variety of food products will be consumed by our society in the
future. Projected population growth for the State of Florida, shown is Figure 13 and Table 7,
reflects a similar pattern. This chart shows that the population of Hispanic, Black and other
ethnic groups will more than double over the next 25 years, while Florida's Caucasian
population will only increase marginally.
Table 8 shows how the demand for exotic produce items is already changing due to
the evolving ethnic make-up of our society and the overall increasing popularity of ethnic
foods. For the seven items listed in this table, each experienced at least double digit
increases in quantity sold and sales revenue between 1996 and 1997 alone. The expanding
list of exotic or specialty fruit and vegetables in our diet will likely increase the need for
centralized assembly and distribution centers in our food marketing system.
With advances in medical and nutrition science, the importance of fresh fruits and
vegetables in our diet has been recognized and promoted by researchers and government
agencies. The public has responded to this information by significantly increasing their per
capital consumption of these foods since the early 1980s (Figure 14). Consumption of both
fruits and vegetables has increased by more than 24 percent on a per capital basis, during the
15 year period between 1982 and 1997. This growth is likely to continue for the intermediate
future. Consumption patterns for individual fruits and vegetables are discussed in the
following section.

18









Figure 12. U.S. Population, 1990, and Projections to 2050, by Race and Hispanic Origin

400,000


"-' 300,000
0

S200,000


100,000


0
1990 2000 2010 2020 2030 2040 2050

"* whites N blacks
"* Am. Ind./Eskimo/Aleut D Asian/Pacific Islander
O Hispanic

Source: U.S. Census Bureau



Table 6. U.S. Population, 1990, and Projections to 2050, by Race and Hispanic Origin

Ethnicity 1990 2000 2010 2020 2030 2040 2050

Whites 188,588 197,061 202,390 207,393 209,998 209,621 207,901

Blacks 29,398 33,568 37,466 41,538 45,448 49,379 53,555

Am. Indian
Eskimo/Aleut 1,802 2,054 2,320 2,601 2,891 3,203 3,534

Asian/Pacific
Islander 7,086 10,584 14,402 18,557 22,993 27,614 34,432

Hispanic 22,565 31,366 41,139 56,652 65,570 80,164 96,508










19











Figure 13. Florida Population, 1995 and projections to 2025, by race and Hispanic origin

24,000


18,000


S12,000
0


6,000


0
1995 2005 2015 2025

"* whites U blacks
"* Am. Ind./Eskimo/Aleut D Asian/Pacific Islander
O Hispanic

Source: U.S. Census Bureau



Table 7. Florida Population, 1995 and Projections to 2025, by Race and Hispanic
Origin
Ethnicity 1995 2005 2015 2025

Whites 10,010 10,764 11,540 12,196

Blacks 2,078 2,573 3,071 3,556

Am. Indian Eskimo/Aleut 45 58 70 84

Asian/Pacific Islander 218 316 417 526

Hispanic 1,955 2,845 3,828 4,944











20












Table 8. Estimated increases in Sales of Selected Exotic Produce Items in U.S.
Supermarkets, 1996-1997.
% Change in % Change in lbs.
Produce item $ Sales 1997 Sales, 1996-1997 Sold, 1996-1997
Avocados 276,328,641 19 13
Limes 115,992,224 12 15
Mangoes 109,873,190 23 18
Bok Choy 18,767,095 53 75
Ginger Root 16,361,256 37 28
Jicama 8,355,058 23 29
Yucca Root 7,487,628 112 66
Source: Information Resources Inc., InfoScan Census for Perishables, Progressive Grocer.


Figure 14. Per Capita Consumption of Fresh Fruits and Vegetables, 1977-1997

200 186
180- 162
160147 149
133
140. 122
S120 100 107
S100
80
60
40.
20

1977 1982 1987 1997

1 Fresh fruits 0I Fresh vegetables

Source: USDA-ERS, Vegetable Yearbook.










21










Fruit and Vegetable Consumption Trends

Figures 15 through 20 graphically depict trends in per capital consumption, along with
real and nominal shipping-point prices, during the last 25 years for six fruits and vegetables
that are important to the Pompano Market. These include tomatoes, cucumbers, green beans,
eggplant, bell peppers, and melons.
Historical prices and consumption of fresh tomatoes are shown in Figure 15. From
1974 to 1998, real FOB prices for tomatoes have declined by approximately 22 percent, but
since 1995 tomato prices have increased by thirty percent. Over the 25 year period, per
capital consumption of tomatoes has grown from 11.8 to 17.4 pounds per year, an increase of
47.5 percent.
Per capital consumption of fresh cucumbers has grown dramatically over the study
period, from slightly less than 3 pounds per year in 1974, to 6.7 pounds in 1998 (Figure 16).
Real shipping-point prices for cucumbers dropped by over 40 percent between 1974 and
1986. Since that time they have fluctuated between $15 and $20 per hundred-weight, with
no discernable trend.
Consumption of green or snap beans has not shown the dramatic per capital increases
that are seen for other fruits and vegetables. Neither have real farm prices for green beans
shown any substantial declines (Figure 17). As noted earlier, Florida continues to supply
more than 50 percent of the cool season shipments of snap or green beans in the U.S.
No clear trends are evident with respect to the consumption or prices of eggplant.
Eggplant production remains a relatively minor segment of Florida agriculture and like snap
beans, it does not any obvious trends in acreage or revenues over time (Figure 18).
Bell peppers have shown increasing popularity with consumers since the early 1980s,
with per capital consumption more than doubling over the last 20 years. Real shipping-point
prices for bell peppers took a significant drop during the first half of the 1980s, but have
since remained fairly stable at around $28 per hundred weight since that time (Figure 19).
Melons have an increasingly large per capital consumption level in the U.S., growing
by over 60 percent in the 24 years since 1974. Real farm prices for melons have remained
fairly stable since 1983, fluctuating between $10 and $12 per hundred-weight (Figure 20).
In conclusion, the consumption of most of the fresh vegetables that have been
traditionally important to the PSFM has increased dramatically in recent years. As long as

22









South Florida producers of these commodities can remain competitive with foreign sources,
these items will most likely continue to flow through the PSFM to distant markets. However,
if Florida producers cannot compete, many of these popular items will probably be imported
through South Florida sea and airports, and may be repacked and loaded as mixed loads by
shippers on the PSFM as before.











































23










Figure 15. U.S. Fresh Tomatoes: Prices with Per Capita Use, 1974-1998

20 $50





S12 -o $30

10 $25
8 $20
\ ..- .. 1.. .. .


6 $15
4 -._ \-. . ._.--""' '" $10
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

IM-Per cap use lbs. -*I-Avg. Price, current $ -A-Avg. price 1992 $

Source: National Agricultural Statistics Service, USDA.


Figure 16. U.S. Fresh Cucumber Prices and Per Capita Consumption, 1974-1998

7 $28


6 $24


"" 5 : $20
C

Ua
4 $16








Per cap use lbs. -UinAvg. Price, current $ Avg. price 1992 $

Source: National Agricultural Statistics Service, USDA.







24
24











Figure 17. U.S. Snap Bean Prices and Per Capita Consumption. 1974 1998

2.0 $58


1.6 I $48


"1.2 4 $ $38









1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

EiM' Per cap use lbs. -*-Avg. Price, current $ ---Avg. price 1992 $

Source: National Agricultural Statistics Service, USDA.


Figure 18. U.S. Eggplant Prices and Per Capita Consumption, 1974-1998

0.8 $32


0.6 $26

0.4 4 -i. $20
04- c-.- C.) ; _, : V


0.2 '. $14

0.0 $8

1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

i( f Per cap use lbs. --Avg. Price, current $ -i--Avg. price 1992 $

Source: National Agricultural Statistics Service, USDA.





25
~ ^^ ^t'lc .; / ^-^^ ^^;**^^^ ,;
0 .2 .r4-F' / :'*-, '.- V /*.-'.**.. S i.^:.? '" ^S 1














25










Figure 19. U.S. Bell Pepper Prices and Per Capita Consumption, 1974-1998

8 $46

7 $40

S 6 $34

5 $28

4 $22



2 $10
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

Per cap use lbs. --*Avg. Price, current $ ---Avg. price 1992 $

Source: National Agricultural Statistics Service, USDA.


Figure 20. U.S. Melon Prices and Per Capita Consumption, 1974-1998

35 $16

30 $14

25 $12



15 $8

10 1$6


1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998

I- Per cap use lbs. -M-Avg. price, current $ -Avg. price, 1992 $

Source: National Agricultural Statistics Service, USDA.






26
26









HISTORICAL PERFORMANCE OF THE PSFM
AND PROJECTIONS THROUGH 2020

This section evaluates the performance of the PSFM over the last 25 years by
analyzing the market's expenses and revenues, the number of units of produce moving over
the market, and the gross sales revenue earned by those units. This analysis is based on
monthly reports from the PSFM provided to the Florida Department of Agriculture and
Consumer Services (FDACS). Future market performance is estimated using linear and
logarithmic regression models that predict the number of units moving over the market
through the year 2020.


Expenses and Revenues on the PSFM

The PSFM generates revenue by leasing space on the loading platform, leasing cooler
space (as well as three state-owned coolers) on the platform, and by leasing office space.
The PSFM also charges fees for electricity and other utilities. Over the last few years,
approximately 60 percent of all revenue has been generated by the platform (including cooler
space and the cooler rentals.) Office leases comprise just under 40 percent, while fees earn
roughly two percent of all revenue. Expenses consist of salaries, operating costs, and indirect
costs. Since 1991, salaries have averaged 41 percent of total expenses, operating costs have
averaged 30 percent and indirect costs have averaged 29 percent. In recent years, salaries
have fallen to approximately 30 percent while indirect costs have risen to 37 percent.
Both revenues and expenses at the PSFM have fallen from the late 1970s through the
late 1990s. In real terms (inflation-adjusted 1998 dollars), revenue has declined from an
average of approximately $600,000 in the late 1970s to approximately $400,000 in the late
1990s. Costs have fallen from $730,000 in the late 1970s to roughly $400,000 in the late
1990s. Net income was significantly negative in the late 1970s, but ran comfortably in the
black throughout the 1980s. Recently, net income has declined somewhat, averaging $4,382
for the decade, as revenues have fallen and costs have increased (Figure 21).







27










Total Units of Produce

The number of units of produce moving over the market generally has declined over
the last 25 years. Total units peaked at over 5,300,000 units in 1980. From 1980 until 1990
activity on the market declined fairly steadily. In 1990, a low of 2,700,000 units crossed the
market, approximately 50 percent of market activity at its peak. Since 1990, the market's
volume has stabilized, averaging about 3,100,00 units per year (Figure 22 ).

Figure 21. PSFM Expenses and Revenue 1974-1998 in Current Dollars.
900
800
700
b 600
500
La 400
300
o 200
100
0
0 -- i------------------


-*--Total Expenses -*-Total Revenue



Figure 22. Total Units of Produce on the PSFM, 1974-1998.
6,000,000
5,000,000 ,
4,000,000
3,000,000
2,000,000
1,000,000
0








28










Gross Sales Revenue

Since 1974, nominal sales revenue has fluctuated around an average of $39.6 million.
This average reflects price increases that have offset the overall decline in the number of
units moving across the market. Figure 23 shows the fluctuations in sales revenue from 1974
to 1998 in nominal dollars. After adjusting for inflation, the picture for sales revenue
changes significantly. Real sales revenue (in 1998 dollars) reflects the overall decline in the
number of units moving over the market. Over the twenty-five-year period, real sales
revenue averages $67.6 million, with a high of $121.6 million in 1975 and a low of $28.9
million in 1997. Since 1989, however, real sales revenue has averaged $40.1 million with
relatively little fluctuation. The leveling of real sales revenue in the last decade is shown in
Figure 24.
It should be noted that these gross sales revenues include only those items that are
physically handled on the market, i.e. those that move across the platform. Anecdotal
evidence suggests that the economic activity generated by the brokerage activities of the
market's tenants dwarfs the dollar value of produce that is physically handled. No attempt
was made to determine the value of these brokerage activities because of their highly
confidential nature and the likely reluctance of tenants to provide such data.


Projected Market Activity Through 2020

To project market activity in the future, two widely-used projection techniques are
used to forecast the number of units of produce that will move over the market over the next
twenty years. These projections are based on the assumptions that no physical changes occur
on the PSFM, and past sales patterns continue in the future. Because of these assumptions,
forecasts of future market activity become successively less accurate as the time frame is
extended.
The first projection model fits a simple linear regression to the number of units of
produce over time. The results of this model can be approximated by using a ruler to draw a
line through the points in Figure 22, and extend it out for 20 years. Because of the decline in
units from 1974 to 1998, this model predicts a significant decline in units over the next
twenty years. Specifically, this model suggests that the number of units moving over the


29










market would decline by 88,000 per year. One problem with this model, however, is that it

gives little weight to the leveling out of units moving over the market in the last ten years.

A model that better reflects the stability of the number of units over the last decade is

a logarithmic model that regresses the number of units over the natural log of time. Using a

logarithmic model, the number of units moving over the market is predicted to decline very

slowly. As a result, slightly more than 3 million units are predicted to move across the

market in the year 2010. This model is presented in Figure 25.



Figure 23. Gross Sales Revenue from 1974 to 1998 in Nominal Dollars.
70,000


60,000


50,000


i 40,000


| 30,000


20,000


10,000


0
I I Co 0 CD O N CO 00 0' 0Co 0o
0 0 0) 0) 0 0) 0) 0) 0 0) 0) 0) 0)

















30









Figure 24. Gross Sales Revenue in Real Dollars from 1974 to 1998, (1998 $).
140000. ..,--,. ,,--,,--_--.---------- -----
140,000
120,000 '- -
100,000
C 80,000
e 60,000
o 40,000
20,000







Figure 25. Projection of Units of Produce Using a Logarithmic Trend.



6,000
5 ,000 -
S4,000
:3,000 -
S2,000
1000 :-- -- --
0
oa J ---- '- ** -- -
t 0 '.0 C1 0 T 0 C 0
tr 00 00 0N 0\ 0-
0\ 0\ 0\ \ 0\ 0 0 0
O- O CD C-

Units Log. (Units)









31









FACTORS AFFECTING THE FUTURE OF THE PSFM

In addition to a quantitative analysis of the future of the market, a qualitative analysis
of the market is necessary in order to incorporate the effects of changes in the produce
industry that are not quantitatively measurable. It has been shown that quantitative
projections of "business as usual" are slightly negative for the PSFM. However, changes in
fresh produce production, marketing, and consumption have potential for positive as well as
negative impacts on the PSFM.
The importance of the PSFM to agriculture in South Florida is derived primarily from
its function as a centrally-located congregation point for assembling mixed loads of produce
for shipment north. As a result, it has been advantageous for many elements of the industry
from brokers to buyers to truckers to be located on the market, thus maintaining the market's
reputation as a focal point for produce in South Florida. The vitality of the PSFM in the
future depends on factors that may affect the market in this capacity.


Strategic Location

As can be seen from the map in Figure 26, and from the mileage chart in Table 9, the
PSFM is located near two several agricultural production centers represented by the
Immokolee SFM (101 miles west), Florida City SFM (66 miles south) and major growing
areas in Palm Beach County. Most vegetable production in Palm Beach County is
concentrated near Belle Glade (73 miles northwest) and the Boynton Beach Delray Beach
area (approximately 22 miles north). It also is located within 38 miles of three ports and two
international airports. In addition, the PSFM is conveniently located adjacent to 1-95 and
near the Florida Turnpike, which are the two major arteries for shipping produce into and out
of South Florida (Figure 26, and Table 9).
The port of Miami is the largest container port in Florida, and the tenth largest in the
U.S. In 1998, nearly 357,000 tons of fresh fruits and vegetables arrived through the port, and
approximately 224,000 tons were exported. Port Everglades and the Port of Palm Beach also
are becoming important ports of entry. Additional cold storage space is currently being
added to both port facilities to facilitate handling of refrigerated food products, including
fresh fruit and vegetables.


32












Figure 26. Location of the Pompano State Farmers' Market in Relation to Key
Agricultural Focal Points.




Port Canaveral'

Port
Manatee



Port of Palm Beach
A ?Pah. Betok


Immokalee SFM
Pompano SFM
aple ort Laudjrdal (FLL)
Port Everglades

aml (MIA)

omestead (AFB)
Fl ida City SFM








Table 9. Distance of Key Agricultural Facilities from the PSFM (miles).

Facility Miles

Port of Miami 35

Port of Everglades 11

Port of Palm Beach 34

Port Canaveral 164

Port Manatee 203

Miami Int'l Airport 38

Ft. Lauderdale Int'l Airport 14

Homestead AFB 66

Immokalee SFM 101

Florida City SFM 66




33











Moreover, Port Canaveral and Port Manatee are located within about 200 miles. Although
limited quantities of fresh fruit and vegetables currently arrive at these ports, some produce
ultimately ends up in Pompano Beach food distribution channels. As local or regional food
distribution becomes more important to the south Florida area, the PSFM's proximity to all
these facilities could prove to be a significant asset.
The PSFM is also strategically located to benefit from its proximity to the Miami
International Airport (MIA). MIA is the number one airport for freight in the U.S., and fresh
fruit constitutes on of the major import categories. Further, MIA has a $500 million cargo
development program underway. This program will add 15 new cargo buildings and more
than double cargo warehouse space from 1.4 million to about 3 million square feet. Fort
Lauderdale International Airport (FLL) currently has limited cooler space, but there has been
some recent growth in its import of fruit. Another possibility for future importation of fruits
and vegetables is the Homestead Air Force Base. Although its future use is still uncertain
and has been surrounded by controversy, there is the possibility that this facility could be
used as a major air freight center.
The rapid growth in import activity through south Florida's seaports and airports
could have a significant, positive impact on the PSFM as the produce industry in the U.S.
requires more mixed loads. These factors combine to make the PSFM an ideally situated site
for assembling mixed loads of produce for shipment into and out of south Florida.
In a previous section, it was demonstrated that imports of produce are increasing.
The expectation that imports will increase is reflected in the growth of port facilities in South
Florida as described above. To the extent that these imports will need to be re-mixed and
provided that they do not compete with local produce, the PSFM would continue to provide a
necessary service to the agriculture industry and the food distribution sector, because mixed
loads of imports often mix imported products (such as exotic fruits and vegetables) with
produce grown in south Florida.


Changes in Production Agriculture

Agriculture in South Florida plays a prominent role in the State's production of
produce. Table 10 shows the fraction of the State's total output in selected crops that is

34









produced in the PSFM service area. Clearly, changes that affect local agricultural production
will affect the level of activity on the PSFM. Two changes that can positively affect the
PSFM in the future are increases in yield per acre, and the development of superior crop
varieties. By maintaining the competitiveness of local agriculture, these advances in
production would tend to maintain the importance of the PSFM as a centrally-located mixing
station. At the same time though, environmental restrictions will increasingly constrain
farming in South Florida as key pesticides (such as methyl bromide) are eliminated and
agricultural land is purchased by agencies such as the South Florida Water Management
District (SWFMD) and the Army Corp of Engineers (USACE) for environmental purposes.
In addition, increasing urbanization will continue to drive land values higher, thus reducing
the attractiveness for farmers to remain in the area. This demonstrates once again that the
proportion of imported produce moving over the market could increase. On the other hand,
increasing urbanization could generate a need for the PSFM to function as a point for
incoming produce to be distributed to local wholesalers, jobbers and retailers.


Changes in Marketing

Many changes are occurring in the techniques used to pack, ship, and market produce.
While it is difficult to say definitively how all these changes will affect the PSFM, one
implication is clear the market, and its tenants, can benefit from these changes given the
proper facilities and a willingness to adapt. Changes that can affect the market either
negatively or positively include: more sophisticated packing requirements (e.g. custom
packs, PLU stickers), communication advances that allow the buying, selling, and brokering
of produce to be conducted from anywhere, and the globalization of retailing. Two changes
in marketing that may affect the market adversely are first, less re-grading of shipments due
to superior varieties and handling practices, and second, an increase in the average size of
farms, with a concomitant increase in direct sales and shipping from larger farms. Activity
on the PSFM could be stimulated, however, by increased year round availability of many
items, and the tendency for large retailers to use the market as a warehouse to facilitate just-
in-time delivery.





35









Table 10. Production of Selected Crops in the Pompano SFM Service Area in
Comparison to State Totals.

State of
Pompano SFM Florida Percent of State
Crop Area (1,000s) (1,000s) Production
Bell Peppers (bu) 10,079 13,921 72
Corn (crts) 11,525 22,987 50
Cucumber (bu) 2,679 5,175 52
Squash (bu) 1,793 2,423 74
Tomatoes (ctns) 23,733 54,750 43





Changes in Consumption

An earlier section showed how the U.S. population is increasing in number, and in
ethnic diversity. Moreover, consumption of fruits and vegetables per person is trending
strongly upward. The result is not only a large increase in the consumption of fruits and
vegetables, but also an increase in the varieties of produce (such as tropical fruits) that are in
demand. Supermarkets now carry over 400 produce items versus 150 items in 1970. In the
last ten years on the PSFM the number of categories of items moving over the market has
increased nearly 60 percent.
Rising demand for a diversity of produce items has important implications for the
PSFM since shipping a diversity of products in relatively small quantities will require that
more mixed loads be assembled. The PSFM is particularly well-suited for assembling these
loads since at least some of the produce will be arriving in area ports from tropical suppliers.












36










BLUEPRINT FOR FUTURE MARKET FACILITIES

In order to design facilities that will meet the needs of the market's tenants in the
future, an attempt was made to contact every current tenant in order to administer a
questionnaire to them. Of the current 26 tenants, 84% were successfully interviewed. These
interviews were in-depth, with each one lasting from twenty minutes to an hour. Not every
question was relevant to every tenant, and some questions allowed for multiple answers, so
the totals for each question may vary. The results below are reported in percent of responses
where appropriate.
Table 11 shows that 91 percent of office space on the market is currently leased and
all of the platform space is leased. The tenants were asked to rate the quality of the space
they lease on the market on a scale from 0 to 10, where 10 is excellent. They were then
asked to rate the value of the space (on a 0 to 3 scale where 3 is excellent) by considering the
quality of the space combined with the price they pay. The results in Table 12 shows that the
tenants consider the office quality to be below average, but a fair to good value. Platform
quality is judged to be of average quality, but a good value.


Table 11. Current Utilization of Office and Platform Space.
Available Occupied Occupancy
Type of Space (Sq. Ft) (Sq. Ft.) Percent


Office 20,367 18,709 91


Platform 98,961 98,961 100



Table 12. Tenants' Ratings of Quality and Value for PSFM Space

Type of Space Quality Value

Office 4.4 Fair-Good (1.7)


Platform 5 Good (2.0)


37











Tenants were asked to list the advantages to their firm of being located on the PSFM.
Forty percent of the tenants think that the geographic location of the market is and advantage.
The same percentage thinks that being near brokers is an advantage (Table 13). The ability to
inspect produce, the proximity to truckers, and the availability of truck parking appeared on
one-third of the tenant's lists. The reputation of the market and proximity to the restaurant
were listed thirteen percent of the time. Forty percent of the tenants think that there are no
disadvantages to being on the market, although a lack of security, traffic, and prohibition of
imports appeared on twenty percent of the tenants' lists (Table 14).


Table 13. Tenants' Perceived Advantages of Being on the PSFM.

Advantages Percent of Respondents

Geographic location 40
Proximity to brokers 40
Ability to inspect produce 33
Proximity to truckers 33
Truck parking 33
Reputation of the market 13
Proximity to the restaurant 13



Table 14. Tenants' Perceived Disadvantages of Being on the PSFM

Disadvantages Percent of Respondents

None 40
Lack of security 20
Traffic, congestion 20
No imports allowed 20
Not near growers 13
Lack of access through N. gate 7





38









In the following questions, tenants responses are reported along with the responses of
"potential tenants." Potential tenants are identified as firms in the produce industry,
excluding firms that focus exclusively on imports or retail sales (such as jobbers), that are
located in the Pompano area (including Fort Lauderdale, Boca Raton, and Deerfield Beach.)
Using the Produce Reporter Co.'s Blue Book, 38 firms fitting this description were located.
Of those 38 firms, 20 were successfully interviewed. These 20 make up the sample of
potential tenants.
Both tenants and potential tenants were asked if there is sufficient platform space on
the PSFM (Table 15). The majority of tenants (71%) think that there is sufficient platform
space on the market, 29% think that there is insufficient space available. Among potential
tenants a significant number (47%) had no opinion, while 33% (just over half of those
professing an opinion) think that there is sufficient platform space. When asked if there is
sufficient space on the market to accommodate additional platform space, the majority of
tenants (53%) say the site is too small, while the majority of potential tenants (60%) think
that the site can accommodate more platform space (Table 16). (Many tenants who answered
"no" were concerned with the loss of truck parking.)


Table 15. Tenants' and Potential Tenants' Opinions As To The Adequacy Of Platform
Space On The PSFM (percent)

Opinion Tenants Potential Tenants

Platform space is adequate 71 33
Platform space is inadequate 29 20
No opinion 0 47



Table 16. Tenants' and Potential Tenants' Opinions As To The Adequacy Of The
PSFM Site To Accommodate Additional Platform Space (percent).

Opinion Tenants Potential Tenants

Yes, more space can be accommodated 47 60
No, the site is too small 53 13
Do not know 0 27


39











Table 17 shows current and potential tenants' demand for space in a new office
building. At the current rate of $9.86 per square foot tenants would want to lease 10 percent
more than they currently lease. Increasing the price approximately 25 percent lowers the
amount they would lease by 10 percent. Prospective tenants' demand is a rough projection of
the sampled firms' responses to the 38 firms in the area. Due to the very small sample size
these figures can have a very large variance.


Table 17. Current and Prospective Tenants' Demand for New Office Space at Various
Prices.

Price per Current Prospective
Square Foot Tenant Tenant(a) Total

$9.86 20,580 12,350 32,930
$12.50 18,460 10,070 28,530
$15.00 12,840 8,550 21,390

(a): Thirty-eight produce firms were contacted, of which 20 were successfully interviewed. Of these, five
expressed interest in leasing office space. Square feet demanded are projections of the sample to a universe of
38 firms.

To determine which amenities the tenants would like to see in a new office building,
they were asked if they would or would not like each amenity, recognizing that the cost of
providing each amenity would be passed on to the lease rate. The following amenities found
very high levels of support: a private bathroom for each office, in-office climate control, off-
hours air-conditioning, cable TV hookups, and carpeting (Table 18). Office services that
meet with high approval are at-door trash removal, and nighttime security personnel (Table
19). In general, potential tenants seemed to prefer more amenities and services than do
current tenants.











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Table 18. Tenants' and Potential Tenants' Preferences for Selected Office Amenities
(Percent Desiring the Amenity.)
Prospective
Amenities Tenants Tenants


Shared Conference Room 31 33
Employee Lounge, Not For Truckers 27 47
In-Office Coffee Bar/Sink 71 80
Shared Executive Bathroom 7 27
Private Bathroom 100 100
Carpeting 79 100
Window Treatments 71 67
Alarm System 44 80
Intercom System 33 56
High-Speed Internet Connection 60 81
Cable TV Hookup 80 93
Digital Door Locks 33 60
Video Security Systems 44 60
Reserved Parking 60 80
In-Office Climate Control 100 100
Off-Hours Air Conditioning 100 93
Outside Lights For Security 7 0
Open Landscaping For Security 7 0
Full Kitchen 0 7














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Table 19. Tenants' and Potential Tenants' Preferences for Selected Office Services
(Percent Desiring the Service.)

Potential
Services Tenants Tenants

Daily at-door trash removal 76 80
Daily trash removal from inside offices 7 67
Cleaning services 20 73
Exterior window washing 62 67
Interior window washing 0 60
Pest control 57 80
Daytime security personnel 47 50
Nighttime security personnel 93 87



According to Table 20 the tenants are highly satisfied with the snack bar on the
platform and consider it very important to the market. They are somewhat less satisfied with
the restaurant, although it does receive an above average rating. The tenants also consider
the restaurant to be important to the well-being of the market.




















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Table 20. Tenants' Evaluations of Food Service Facilities on the PSFM (On a scale of 0-
10, where 10 is excellent).

Facility/Criteria Average Rating

Restaurant

Personal satisfaction 6.4

Importance to the tenant 5.6

Importance to the market 7.5

Snack Bar

Personal satisfaction 8.6

Importance to the tenant 7.6

Importance to the market 9.5




Suggestions for improving the restaurant are presented in Table 21 along with the
number of people making each type of suggestion. Inadequate restroom facilities are
frequently mentioned, not just as a problem for the restaurant but for the market as a whole.






















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Table 21. Tenants' Suggestions for Improving the PSFM's Foodservice Facilities.

Facility/Suggestions Number of Tenants

Restaurant Facilities

Improve restrooms 3
Modernize facilities for cooking,
storage 2
Improve ventilation to reduce
tobacco smoke 2
Keep restaurant cleaner 2


Menu

Serve more fresh vegetables 3
Serve deli sandwiches 1


Snack Bar
Serve more hot food 1




When asked about the necessity for ancillary business services there was not an
overwhelming response from the tenants since their offices already have most of these
services (Table 22). Those tenants who do see a need for such services want them for the
truckers so that the drivers will stop asking to use their office equipment.













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Table 22. Tenant and Potential Tenant Utilization of Selected Business Services, if
Available at the PSFM (Percent).
Business service Tenants Potential Tenants

Document copying 40 7
Faxing 33 13
Typing 13 7
Bulk mailing 26 20
Overnight courier 33 73
Computer with internet access 13 20
Sale of basic office supplies 33 27
Notary Public N.A. N.A.
Telephones N.A. N.A.



For many years it has been postulated that the PSFM might make itself a showcase of
Florida produce. The following tables show little support for the idea among the tenants.
Their primary concerns are that none of their clients would see such a display, the produce
would need to be refreshed frequently, and if the display was not maintained it would look
bad and attract insects. Some tenants suggested that a static display of the history of the
market would be nice. Other suggestions for improving the market's facilities focused on
the conference room. Several of the members of the Farmers' Market Authority as well as
several tenants suggested that a multi-use conference room be designed to handle periodic
training sessions as well as public meetings. In personal interviews several tenants indicated
their willingness to support periodic training sessions for produce inspection and marketing,
and for retail produce department employees. These training sessions are envisioned partly
as community outreach programs and partly as a step in consolidating state and federal
agricultural representatives and their offices on the PSFM.








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Table 23. Tenants' and Potential Tenants' Level of Interest in Having a Display of Fresh
Produce in Public Areas of a New Office Building (Percent).

Response Tenants Potential Tenants
Yes, would like a display of
fresh produce
No, would not like a display of
fresh produce
Do not know 20 7





Table 24. Tenants' and Potential Tenants' Willingness to Provide Fresh Produce for an
On-Going Display in a New Office Building (Percent.)
Willingness to provide
Willingness to provide Tenants Potential Tenants
fresh produce

Yes, willing 7 33

No, unwilling 93 60

Uncertain 0 7




Table 25. Tenants' and Potential Tenants' Concerns About an On-Going Display of
Fresh Produce (Percent).
Concerns Tenants Potential Tenants
None 8 19

Lack of freshness 33 12

Insects 25 12

Neglect 17 31

Waste of money 17 25





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Table 26. Tenants' preferred location for a new office building on the PSFM property
(Percent).
Preferred location Percent of Respondents

North side 7

South side 33

Current site of offices 0

No preference 60







































47









SUMMARY AND CONCLUSIONS

This report examines the long-run economic viability of the Pompano State Farmers'
Market. The market has functioned as a major assembly and shipping point for Florida-
grown fresh produce since 1939.Although the volume of produce physically moving across
the market declined steadily during the 1980s, volume in the 1990s has stabilized at
approximately 3.1 million units annually. Projections for the next 20 years indicate that
volume will remain fairly stable.
Acreage, production and value of fresh vegetables in the market's south Florida
service area have declined about 20 percent since the 1992 Census of Agriculture, but this is
primarily attributable to increased import competition from Mexico resulting from NAFTA
and the devaluation of the Peso. When all agricultural crops, i.e., vegetables, fruits and
nursery crops are considered, the decline in value is only about eight percent between 1992
and 1997. Thus, it appears that agriculture as a whole remains fairly robust. However, the
outlook for vegetable production in south Florida is mixed. Improved crop yields and product
quality are likely as new cultivars are developed, giving Florida a competitive advantage. On
the negative side, the loss of key pesticides due to environmental concerns could put Florida
producers at a decided advantage. One example is the ban on methyl bromide for soil
fumigation, scheduled for 2005 in Florida, but 2015 in developing countries such as Mexico.
Other environmental regulations and the purchase of agricultural land by various
governmental agencies may also place further constraints on south Florida agriculture.
Urbanization is also a real threat to production agriculture in several of the counties in the
market's service area, as real estate developers push prices for farmland to stratospheric
heights, approaching $100,000 per acre in some locales.
Even though production agriculture in south Florida has declined somewhat in the
past few years and may face daunting challenges in the future, the outlook for the PSFM
remains bright. One of the major reasons for this positive outlook is the long-term upward
trend in the consumption of fresh fruits and vegetables by American consumers, especially
the items that have been traditionally handled by the PSFM. Additionally, the sheer diversity
of produce items being offered by retail stores in Florida and throughout Florida's primary
marketing region works to the advantage of the PSFM due to the increased demand for
mixed loads. For example, in the 1970s, the typical supermarket handled about 100 to 150

48









produce items during the course of a year; today, it is not uncommon for a large supermarket
to sell 400 or more items, as retailers strive for the "Garden of Eden" image. Many of the
more exotic (and low-volume) items are imported through airports and seaports of south
Florida, and some are grown in the market's service area as well.
Another factor driving the demand for new and unusual produce items is the
increasing ethnic diversity of the U.S. and Florida population. By 2020, approximately 17
percent of the U.S. population will be of Hispanic origin, and an additional six percent will
be of Asian origin. Many of these ethnic consumers are familiar with produce items that are
not common to the U.S. Thus, increasing ethnic diversity is driving the demand for an
increasingly diverse product mix, and because many of these items are relatively low
volumes, this has created a greater demand for mixed loads. Because of its history of
providing mixed loads and its proximity to domestic and imported supplies of unusual
produce, the PSFM is well positioned to meet future produce industry's demands
Today the PSFM is at a literal and figurative "crossroads". From a geographic
standpoint, the market enjoys a unique, strategic location at the crossroads of south Florida's
diverse fruit and vegetable industry. Coupled with the dramatic growth in exotic imported
produce, much of which enters through south Florida's seaports and airports, the market's
location is ideally suited to serve the emerging needs of the produce industry and ultimately,
American consumers. However, from a functional standpoint, the market is at the figurative
"crossroads" because much of its infrastructure is now 60 years old and is approaching the
end of its useful life. If the market is to attract and retain tenants and function as a major
trading center for the produce industry, a significant investment in infrastructure will soon be
required.















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