• TABLE OF CONTENTS
HIDE
 Copyright
 Title Page
 Table of Contents
 Acknowledgement
 Introduction
 The development and importance...
 Shipping point organization
 Market structure and practices...
 Terminal market structure...
 Industry organization and marketing...
 Theoretical guidelines for price...
 Demand analysis
 Summary
 Literature cited






Group Title: Bulletin - University of Florida. Agricultural Experiment Station - no. 696
Title: Market structure and economic analysis of the Florida sweet corn industry
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027537/00001
 Material Information
Title: Market structure and economic analysis of the Florida sweet corn industry
Series Title: Bulletin University of Florida. Agricultural Experiment Station
Physical Description: 116 p. : charts, maps ; 23 cm.
Language: English
Creator: Brooke, Donald Lloyd, 1915-
Bell, J. B
Publisher: Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1965
 Subjects
Subject: Sweet corn -- Marketing -- Florida   ( lcsh )
Corn industry -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 115-116.
Statement of Responsibility: D.L. Brooke and J.B. Bell.
General Note: Cover title.
Funding: Bulletin (University of Florida. Agricultural Experiment Station) ;
 Record Information
Bibliographic ID: UF00027537
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: aleph - 000929282
oclc - 18361582
notis - AEP0060

Table of Contents
    Copyright
        Copyright
    Title Page
        Page 1
    Table of Contents
        Page 2
        Page 3
    Acknowledgement
        Page 4
    Introduction
        Page 5
        The problem
            Page 5
        Purpose of study
            Page 6
        Procedure
            Page 6
            Page 7
    The development and importance of the sweet corn industry
        Page 8
        Page 9
        Page 10
        Page 11
        Florida
            Page 12
            Page 13
            Page 14
            Page 15
    Shipping point organization
        Page 16
        Page 17
        Growers
            Page 18
            Page 19
            Page 20
            Page 21
        Sales firms
            Page 22
            Page 23
            Page 24
            Page 25
            Page 26
        Brokers
            Page 27
            Page 28
    Market structure and practices at the shipping point
        Page 29
        Sales firms and volume observed
            Page 29
        Grades
            Page 30
        Weeks of shipment
            Page 31
            Page 32
            Page 33
            Page 34
            Page 35
            Page 36
            Page 37
            Page 38
            Page 39
            Page 40
            Page 41
            Page 42
            Page 43
        Types of buyers
            Page 44
            Page 45
            Page 46
        Bases of sale
            Page 47
            Page 48
            Page 49
            Page 50
            Page 51
            Page 52
            Page 53
            Page 54
        Interpackinghouse sales
            Page 55
            Page 56
    Terminal market structure and practices
        Page 57
        Page 58
        Page 59
        Characteristics of the market areas
            Page 60
        Major markets of the market areas
            Page 61
            Page 62
            Page 63
            Page 64
            Page 65
            Page 66
            Page 67
            Page 68
            Page 69
            Page 70
        Distribution of white corn
            Page 71
        Sales areas
            Page 72
        Sizes of sales firms
            Page 73
        Types of buyers
            Page 74
    Industry organization and marketing channels
        Page 75
        The marketing order
            Page 76
            Page 77
            Page 78
        The Florida sweet corn exchange
            Page 79
            Page 80
        Evaluation by sales firms
            Page 81
            Page 82
            Page 83
            Page 84
        Marketing channels
            Page 85
            Page 86
    Theoretical guidelines for price and marketable output
        Page 87
        The economic model
            Page 87
            Page 88
            Page 89
            Page 90
        Assumptions of the analysis
            Page 91
        Short run
            Page 91
            Page 92
        Intermediate period
            Page 93
            Page 94
            Page 95
            Page 96
        Long run
            Page 97
            Page 98
    Demand analysis
        Page 99
        Graphic analysis
            Page 100
            Page 101
        Selection of variables
            Page 102
            Page 103
        Regression analysis
            Page 104
        Price elasticity
            Page 105
            Page 106
            Page 107
            Page 108
    Summary
        Page 109
        Page 110
        Page 111
        Page 112
        Page 113
        Page 114
    Literature cited
        Page 115
        Page 116
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




Bulletin 696 October 1965














S4










.r


wk






market structure and
economic analysis of the
florida sweet corn industry
D. L. Brooke J. B. Bell
Agricultural Experiment Stations
Institute of Food and
Agricultural Sciences
University of Florida, Gainesville
J. R. Beckenbach, Director









CONTENTS

Page
INTRODUCTION 5------ 5
The Problem ----- -------- 5
Purpose of Study --------------------------- 6
Procedure --------------- 6
THE DEVELOPMENT AND IMPORTANCE OF THE SWEET
CORN INDUSTRY --- _------------ 8
United States ..-....-----.---..- ---------------------- 8
Shifts in Production ------------ 8
Important U. S. Production Areas _----------------- -- 9
Sweet Corn's Importance in the Vegetable Industry -------------- 9
New Developments in Consumption Patterns -------------------- 10
Florida .---------------- 12
Rapid Expansion of the Industry ----------------------- 12
Seasonality of Production --. . ..-- 13
Production Risks .-------- -------------- ------ 13
Competition -_.__------_-------------------.- 16
SHIPPING POINT ORGANIZATION .--------.-------- 16
Growers ----------------18
Numbers and Sizes ----------------------- --- ------ 18
Sales Areas -......--------- .----------------- 20
Sales Firms -. ....... ......---------------------------- 22
Numbers of Growers .--------------------------- 22
Methods of Organization .---------------------- 24
Sizes ----------------------------- 24
Vegetables Handled -------------------------- ---- 26
B brokers --.-.....-------- .... ....... ..- 27
Buying Brokers .-------------------------- 28
Selling Brokers ------------------- 28
MARKET STRUCTURE AND PRACTICES AT THE
SHIPPING POINT -------------------- ---- 29
Sales Firms and Volume Observed --------------------------- 29
Grades -........----------------- 30
Weeks of Shipment _------ --- 31
Grades ---------------------------- 32
Sales Areas --------------------------------- 36
White Corn -------------------- -------------- 36
Prices _---- -------------- 37
Sizes of Sales -.-.. --------------- ------------ 37
Sizes of Sales Firms ------------------------------- 42
Types of Buyers ----------- 44
Sales Areas -_------------------------- ------------ 45
Weeks of Shipment ..---------------------- 46
Sizes of Sales Firms _---------------------- 47
Bases of Sale .---------------- ---------------------- 47
Sales Areas -__..-------------------------- 50
Weeks of Shipment _-------------------- 51
Types of Buyers ..------.-------- 54
Sizes of Sales Firms _--------------------------- 55
Interpackinghouse Sales .----- ---------------------- 55
Grades -------------------- 56
Sales Areas _- ------------------------------- 56
Sizes of Sales Firms .. -----------------------.- 56
Weeks of Shipment ...---------------------..- 57
TERMINAL MARKET STRUCTURE AND PRACTICES 57
Characteristics of the Market Areas ......... ..-------.------- 60
Seasonality _---_--------_- ------------------ 60
Terminal Market Sizes ------------------------------- 60
Sizes of Sales ---..........------ .--- ----------- 60











Major Markets of the Market Areas -------
Northeast --------------
North Central -----------
South ---- -----------
Southwest ------------
Midwest ..------------
West -------------
Canada --------------
Large and Medium Markets ----------
Distribution of White Corn --------
Sales Areas ------------------- ----
Sizes of Sales Firms -----------
Types of Buyers ------------
Bases of Sale ------------

INDUSTRY ORGANIZATION AND MARKETING CHANNELS.
The Marketing Order ----------
Purpose ...-------------
Administration ------------
Quantity Regulations ---------
Quality and Container Regulations ------
Unfair Trade Practices ----------
Research .. -------------
Advertising and Promotion -------------......_..---
The Florida Sweet Corn Exchange -------
Pricing --------------
Coordination
Evaluation by Sales Firms -----------
Selling Functions
Marketable Allotment ----- ------ -
Advertising
Buyer Relations
Pricing -----------------
Marketing Channels --- -------


THEORETICAL GUIDELINES FOR PRICE
AND MARKETABLE OUTPUT ---
The Economic Model -------------....
Numbers of Sellers ---------------
Collusion .-- ------
Identical Products -- ----
Assumptions of the Analysis -------...
Short Run --------
Maximization of Revenue
Evaluation ---- ------
Intermediate Period ------
Maximization of Profits ---
Evaluation --------
Long Run ------------------
Maximization of Profits
Evaluation -------

DEMAND ANALYSIS -----
Graphic Analysis --------------.. ------
Selection of Variables ----------.------
Regression Analysis ------.--..... .-----
Model -----------
Regression Equations -----------------
Price Elasticity ---------. --------------
Economic Implications .....---------
SUMMARY ----------

LITERATURE CITED --. ----


Page
.- 61
-- 61
--- 66
_-- 67
.- 68
.-- 69
--- 70
-- 71
_- 71
-- 71
-- 72
-- 73
--- 74
-- 75

--- 75
_- 76
--- 77
--- 77
--- 77
S78
.. 79
--- 79
--. 79
--- 79
--- 80
S80
- 81
81
--. 82
S83
84
.84
.-- 85


------ 87
. .----- 87
------ 88
------- 89
-------- 90
......---- 91
---- 91
91
----..-- 93
.----------- 93
---- 93
.------- 95
. ------ 97
--- 98
------------ 99

.-.---------.- 99
.-- 100
.------102
-------------.104
----- 104
----- 104
-.-...-------. 105
..------..- 108
------ 109

------ 115

























ACKNOWLEDGMENTS
The data in this publication were originally in a dissertation
presented by J. B. Bell to the Graduate Council of the Univer-
sity of Florida in partial fulfillment of the requirements for the
degree of Doctor of Philosophy. The authors wish to express
their appreciation to the managers of Florida sweet corn sales
firms and to the personnel of the Florida Sweet Corn Exchange
who cooperated with the writers in providing the data which
made this study possible.










MARKET STRUCTURE AND ECONOMIC
ANALYSIS OF THE FLORIDA
SWEET CORN INDUSTRY

D. L. Brooke and J. B. Bell 1

INTRODUCTION

The rapid expansion of the sweet corn industry in Florida
has been made possible by a number of production and market-
ing innovations. The adoption of these innovations has necessi-
tated many adjustments in the traditional marketing system.
In the process of making these adjustments the industry has
encountered numerous marketing problems. The availability of
market research results, or even economic data, has often been
too limited to serve as a guide in solving many of the problems.
A state marketing order was adopted in January 1963 which
covered a large segment of the industry. Concurrently, the
Florida Sweet Corn Exchange, a cooperative bargaining asso-
ciation of sweet corn growers, was organized. The purpose of
the Exchange and the marketing order was to provide the in-
dustry with the organization and control to obtain more orderly
marketing of sweet corn.

The Problem
The adoption of the Sweet Corn Marketing Order (as amend-
ed, 1962) and the formation of the Florida Sweet Corn Ex-
change offered an opportunity to work effectively on many in-
dustry marketing problems, but it also presented a challenge for
effective and wise leadership in carrying out marketing pro-
grams. The leaders of the Exchange and the Marketing Order
assumed a new responsibility to the industry since their deci-
sions affected not only their own businesses, but those of all the
industry. These organizations provided no more than the mech-
anism whereby industry-wide decisions could be made and im-
plemented. Individual marketing problems must be studied,
alternatives considered, and courses of action decided upon. The

1Agricultural Economist and Former Research Assistant, Agricultural
Economics Department, Florida Agricultural Experiment Station, Gaines-
ville, Florida.










MARKET STRUCTURE AND ECONOMIC
ANALYSIS OF THE FLORIDA
SWEET CORN INDUSTRY

D. L. Brooke and J. B. Bell 1

INTRODUCTION

The rapid expansion of the sweet corn industry in Florida
has been made possible by a number of production and market-
ing innovations. The adoption of these innovations has necessi-
tated many adjustments in the traditional marketing system.
In the process of making these adjustments the industry has
encountered numerous marketing problems. The availability of
market research results, or even economic data, has often been
too limited to serve as a guide in solving many of the problems.
A state marketing order was adopted in January 1963 which
covered a large segment of the industry. Concurrently, the
Florida Sweet Corn Exchange, a cooperative bargaining asso-
ciation of sweet corn growers, was organized. The purpose of
the Exchange and the marketing order was to provide the in-
dustry with the organization and control to obtain more orderly
marketing of sweet corn.

The Problem
The adoption of the Sweet Corn Marketing Order (as amend-
ed, 1962) and the formation of the Florida Sweet Corn Ex-
change offered an opportunity to work effectively on many in-
dustry marketing problems, but it also presented a challenge for
effective and wise leadership in carrying out marketing pro-
grams. The leaders of the Exchange and the Marketing Order
assumed a new responsibility to the industry since their deci-
sions affected not only their own businesses, but those of all the
industry. These organizations provided no more than the mech-
anism whereby industry-wide decisions could be made and im-
plemented. Individual marketing problems must be studied,
alternatives considered, and courses of action decided upon. The

1Agricultural Economist and Former Research Assistant, Agricultural
Economics Department, Florida Agricultural Experiment Station, Gaines-
ville, Florida.








Florida Agricultural Experiment Stations


extent to which either the Marketing Order or the Exchange can
be effective in solving individual marketing problems depends
upon the wisdom of the decisions made by the leadership.
A major problem for the leadership of the Marketing Order
and the Exchange has been that of finding sufficient facts on
which to base decisions. Insufficient information has been avail-
able on the market structure of the industry. Basic information,
such as the relative importance of various handlers in the mar-
keting system, the importance of different methods of selling,
and the pattern of shipments to the principal terminal markets,
has been inadequate. Even less was known about levels of ship-
ments and prices which would maximize industry benefits.
Under the Marketing Order and Exchange organizations a
more complete knowledge of the market structure and the eco-
nomic processes is necessary, since more decisions must be made
at the shipping point level. Industry benefits from these organ-
izations cannot be maximized unless those charged with their
administration have adequate economic information and an
understanding of the economic effects of their actions.

Purpose of Study
A primary purpose of this study was to develop basic eco-
nomic information necessary to an understanding of the market
structure of the Florida sweet corn industry. This included the
development of quantitative measures reflecting the importance
of types of organizations handling corn, geographic sales and
market areas, sales procedures, and seasonal effects. Deter-
mining the important interrelationships between these and other
factors was a part of the purpose also.
The secondary purpose of the study was to develop economic
guidelines to decision making based on a theoretical economic
model of the industry. Estimates of the demand elasticities for
sweet corn were necessary to augment the use of these theoret-
ical guidelines.

Procedure
As a part of the field work on this study, two types of infor-
mation were obtained from Florida sales firms handling sweet
corn. These were (a) information concerning the sales firms'
organization, method of operation, and marketing problems,








Florida Agricultural Experiment Stations


extent to which either the Marketing Order or the Exchange can
be effective in solving individual marketing problems depends
upon the wisdom of the decisions made by the leadership.
A major problem for the leadership of the Marketing Order
and the Exchange has been that of finding sufficient facts on
which to base decisions. Insufficient information has been avail-
able on the market structure of the industry. Basic information,
such as the relative importance of various handlers in the mar-
keting system, the importance of different methods of selling,
and the pattern of shipments to the principal terminal markets,
has been inadequate. Even less was known about levels of ship-
ments and prices which would maximize industry benefits.
Under the Marketing Order and Exchange organizations a
more complete knowledge of the market structure and the eco-
nomic processes is necessary, since more decisions must be made
at the shipping point level. Industry benefits from these organ-
izations cannot be maximized unless those charged with their
administration have adequate economic information and an
understanding of the economic effects of their actions.

Purpose of Study
A primary purpose of this study was to develop basic eco-
nomic information necessary to an understanding of the market
structure of the Florida sweet corn industry. This included the
development of quantitative measures reflecting the importance
of types of organizations handling corn, geographic sales and
market areas, sales procedures, and seasonal effects. Deter-
mining the important interrelationships between these and other
factors was a part of the purpose also.
The secondary purpose of the study was to develop economic
guidelines to decision making based on a theoretical economic
model of the industry. Estimates of the demand elasticities for
sweet corn were necessary to augment the use of these theoret-
ical guidelines.

Procedure
As a part of the field work on this study, two types of infor-
mation were obtained from Florida sales firms handling sweet
corn. These were (a) information concerning the sales firms'
organization, method of operation, and marketing problems,







Market Structure Sweet Corn


and (b) data on sweet corn shipments during the 1962-63 mar-
keting season.
A census of the 25 sales firms located in Florida's principal
production areas was made to obtain basic information on or-
ganization, method of operation, and marketing problems. The
manager, or his representative, was interviewed, following a
number of predetermined questions. The cooperation of all sales
firms was obtained in supplying most of the information needed
for this phase of the study.
Specific data on sweet corn shipments were obtained from
19 of the 25 commercial sweet corn sales firms. Six firms were
not willing to cooperate. A 10 percent stratified random start
systematic sample of the shipment invoices of each firm, exclu-
sive of interpackinghouse sales, was selected to obtain data for
this phase of the study. Interpackinghouse sales were handled
separately, since they did not move directly into the primary
channels of trade, but were more correctly a type of transfer
between sales firms. Data on date of shipment, type of buyer,
basis of sale, type and grade of corn, market destination, size
of shipment, and adjusted f.o.b. price were collected from the
sample invoices on a field survey form. These data were coded
as they were collected so they could be entered on IBM cards. A
multiple tabulation program of the IBM 1401-709 was used to
carry out the tabular analyses.
A theoretical economic model of the industry, based on the
tabular analyses of the data obtained from sales firms, was de-
veloped. Secondary data from the Sweet Corn Exchange, the
Marketing Order's Administrative Committee, and government
agencies were used to augment the invoice data. Applicable eco-
nomic theory which could serve as guidelines to marketable out-
put and price decisions was drawn from the writings of noted
economists and developed into a theoretical model suitable to
explain how profits to the industry could be maximized.
Secondary information from the Exchange and government
reports were used to obtain the data for the demand analysis
of sweet corn at the f.o.b. level. Graphic analysis was used to
establish preliminary relationships between variables. The step-
wise multiple regression program using the IBM 1401-709 was
used to select variables statistically significant in explaining
price variations. This regression technique was used to develop
equations which served as a basis in obtaining price elasticities.







Florida Agricultural Experiment Stations


THE DEVELOPMENT AND IMPORTANCE OF THE
SWEET CORN INDUSTRY

United States
Shifts in Production
The perishability of fresh sweet corn has affected the develop-
ment of this industry throughout its history. Sweet corn pro-
duction in the United States started in numerous truck farming
areas adjacent to cities. Large concentrated production areas,
such as the wheat and corn belts, did not develop in sweet corn
prior to World War II. New York, New Jersey, and Pennsyl-
vania, which were densely populated areas, were also the three
leading sweet corn producing states in 1939 (21) 2
Following World War II, production in truck crop areas near
large cities began to level off, and new specialized production
areas developed within the traditional seasons, as observed by
Andrews in his study of the Midwest sweet corn industry (2).
Ohio replaced the eastern states as the leading producer of sum-
mer fresh market sweet corn in 1963 (23).
A most important development, especially to southern pro-
ducing areas, was the growth of out-of-season production. An-
drews, in another publication, discusses seasonal shifts in pro-
duction:
A most important change in fresh market sweet corn
marketing to be noted is the rise in importance of the out-
of-season production. Winter, early spring and fall pro-
duction rose in importance from 15 percent of the fresh
market production in 1949 to 30 percent in 1956, declining
to 28 percent in 1957 Thus, the fresh market sweet
corn marketing trend is toward increasing importance
of winter, early spring and fall seasonal production
(1).
The percentage of winter, early spring, and fall production
continued to fall after the 1957 decline referred to by Andrews.
A low of 26.5 percent was reached in 1959, but since that time
this percentage has risen sharply (24). By the 1963 season 34
percent of the fresh market corn was accounted for by out-of-
season production (23).
2Numbers in parentheses refer to Literature Cited.








Market Structure .. Sweet Corn


Important U. S. Production Areas

Twenty-seven states were reported by the U. S. Department
of Agriculture as commercial producers of fresh market sweet
corn in 1963 (23). Florida, as may be seen in Table 1, produced
almost 30 percent of the total production. The three states,
Florida, California, and Texas, which supply sweet corn in the
out-of-season months, produced 42 percent of total corn. Cali-
fornia also produced corn during the main season months, thus
making the total production of these states, as shown in Table 1,
exceed that of the total out-of-season production cited earlier.
Production of main season sweet corn was divided among the
remaining 24 states and California. Distribution of this volume
ranged from 7.6 percent in Ohio down to 0.3 percent in Arkan-
sas (23).


Table 1.-Acreage and production of states harvesting 10,000 or more
acres of fresh market sweet corn, 1963.
State Production
State Harvested Acreage Production as Percent of
U.S. Total
Acres 1,000 cwt. Percent
Florida 50,300 3,974 29.4
California 19,100 1,319 9.6
Ohio 13,700 1,028 7.6
New Jersey 14,500 1,015 7.5
New York 16,100 966 7.1
Pennsylvania 18,500 851 6.2
Michigan 14,000 840 6.1
Texas 12,000 396 2.9
All others 51,950 3,148 23.3
Total 210,150 13,537 100.0
Source: USDA, SRS, Crop Reporting Board, Vegetables Fresh Market, 1963 Annual
Summary (Washington, D.C., 1963) Vg2-2(63), pp. 36-37.


Sweet Corn's Importance in the Vegetable Industry

Fresh market sweet corn in the United States was estimated
to have a value of over $52 million in 1963. Excluding melons
and potatoes, its 1963 value was exceeded only by that of toma-
toes, lettuce, and onions (Table 2). The seven-year average of
the value of vegetables in the United States indicated that sweet
corn ranked fifth. Sweet corn was exceeded only by lettuce in
the number of acres harvested both in the seven-year average
and in 1963.









10 Florida Agricultural Experiment Stations

Table 2.-Value and harvested acreage of the five principal vegetables
produced in the United States, 1957-63.

Value Harvested Acreage
Vegetable Average Average
1957-63 1963 1957-63 1963
1,000 1,000
Dollars Dollars Acres Acres
Tomatoes 144,604 150,089 181,984 159,840
Lettuce 142,183 161,426 219,711 215,680
Onions 71,358 85,378 102,099 95,000
Celery 54,643 49,657 33,909 31,430
Sweet corn 49,557 52,289 205,905 210,370
tPotatoes and melons excluded.
Source: USDA, SRS, Crop Reporting Board, Vegetables Fresh Market, 1963 Annual
Summary (Washington, D.C., 1963) Vg2-2(63), pp. 4-5.


New Developments in Consumption Patterns

The potential for the sale of any food product depends upon
its acceptance and ultimate consumption by consumers. Per
capital consumption may be used as a measure of this acceptance,
and sweet corn in the United States has fared well by this
measure. Per capital consumption averaged only 2.5 pounds dur-
ing the 1920-24 period, but had risen to a high of 8.1 pounds
by the 1955-59 period (Table 3). Per capital consumption
dropped to 8.0 pounds during the 1960-62 period, but this decline
was too small and the period too short to indicate any trend.
Consumption of all fresh vegetables rose to a peak during
the postwar years of 1945-49 of 125 pounds per person, but has
since declined to a 1960-62 level of 105 pounds per person. A rise
in the use of processed vegetables has offset much of this decline


Table 3.-Civilian per capital consumption of fresh market sweet corn and
total vegetables (farm weight basis), United States, 1920-62.
Year Sweet Corn Total Vegetables
Pounds Pounds
1920-24 2.54 92.20
1925-29 3.22 104.94
1930-34 4.98 109.74
1935-39 5.38 113.16
1940-44 6.32 118.06
1945-49 7.92 125.16
1950-54 7.88 111.00
1955-59 8.14 105.04
1960-62 8.00 104.67
tTotal vegetables excludes melons and potatoes.
Source: USDA, Agricultural Statistics, 1962 (Washington, D.C.: Government Printing
Office, 1963), pp. 302-303 and USDA, ERS, Supplement for 1962 Consumption of Food in the
United States, 1909-52 (Washington, D.C., October, 1963), p. 13.









Market Structure Sweet Corn


in fresh vegetable consumption; therefore, the total per capital
consumption of vegetables has remained near its current level
since World War II. Despite the declining trend for fresh mar-
ket vegetables, fresh market sweet corn consumption per capital
has risen slightly since World War II.
An insight into the nature of this rise in sweet corn con-
sumption may be gained by examining these data closely. If
the annual per capital consumption is divided between the main
season, May 16 through September 30, and the out-of-season,
October 1 through May 15, it may be noted that the increase
in per capital consumption of sweet corn has been provided by
the growth in out-of-season consumption (Table 4). Per capital
consumption during the out-of-season period increased from 1.2
pounds in 1949 to 2.7 pounds in 1963. Main season per capital
consumption declined from 6.4 pounds to 5.3 pounds during this
same period.

Table 4.-Civilian per capital consumption of fresh market sweet corn by
seasons (farm weight basis), United States, 1949-63.
Out-of-season Main Season Annual
Year Oct. 1-May 15 May 16-Sept. 30 Total
Pounds Pounds Pounds
1949 1.2 6.4 7.6
1950 1.7 6.0 7.7
1951 1.4 6.2 7.6
1952 1.9 5.9 7.8
1953 2.0 5.8 7.8
1954 2.4 6.1 8.5
1955 2.5 5.7 8.2
1956 2.5 5.4 7.9
1957 2.3 5.4 7.7
1958 2.3 6.1 8.4
1959 2.3 6.2 8.5
1960 2.2 5.9 8.1
1961 2.2 5.8 8.0
1962 2.4 5.5 7.9
1963 2.7 5.3 8.0
Source: USDA, Agricultural Statistics, 1962 (Washington, D.C.: Government Printing
Office, 1963 pp. 302-303; USDA, ERS, Supplement for 1962 Consumption of Food in the
United States, 1909-52 (Washington, D.C., October, 1963), p. 13.

In 1963 out-of-season per capital consumption reached a peak
of 2.7 pounds, and the main season consumption was at a low
of 5.3 pounds. However, even during this year, the average
monthly rate of consumption during the main season was more
than three times that of the out-of-season period. The average
monthly rate of consumption between May 16 and September
30 was 1.2 pounds per person, and that during other months was









Florida Agricultural Experiment Stations


only 0.4 pounds per person. Several factors, such as price, qual-
ity, availability, and habit of consumption, account for this dif-
ference. Even so, in view of the trend of consumers toward a
less seasonal diet, this difference in the consumption pattern
appears to offer an opportunity and a challenge to out-of-season
production areas.


Florida

Rapid Expansion of the Industry
Florida did not enter the commercial sweet corn market in
any significant manner until after World War II and by 1963
produced more than three times the fresh market production of
its largest competitor (Table 1). Expansion of the industry was
extremely rapid after 1947-48 when production was 480,000
crates (Figure 1). During the first five years production in-
creased over nine-fold or to a level near 4.4 million crates in
1952-53. Since 1952-53 Florida production has increased at an
average annual rate of a little less than one-half million crates
per year. Production for the 1962-63 season was estimated at
8.8 million crates.



Crates
(000)
1,000

8,000

6,000

4,000 Spring

2,000

0 L
47-8 48-9 49-0 50-1 51-2 52-3 53-4 54-5 55-6 56-7 57-8 58-9 59-0 60-1 61-2 62-3
Year


Figure 1.-Seasonal distribution of Florida sweet corn production, 1947-48
through 1962-63.
Source: Florida Department of Agriculture, Florida State Marketing
Bureau, Annual Fruit and Vegetable Report, 1953-54 Season (Jacksonville,
Florida, 1954), p. 53; and Florida Department of Agriculture, Division of
Marketing, Vegetable Summary, 1962 Issue (Tallahassee, Florida, 1962),
p. 34; and USDA, SRS, Crop Reporting Board, Vegetables-Fresh Market,
1963 Annual Summary (Washington, D.C., 1963) Vg2-2(63), pp. 36-37.








Market Structure Sweet Corn


Seasonality of Production
Florida produces sweet corn in three seasons: the fall, which
extends from October 1 through December 31; winter, from
January 1 through March 31; and spring, from April 1 through
June 30. Spring production is the largest. A three-year average,
1960-61 through 1962-63, indicated that 74 percent of the total
production was harvested during the spring. Fifteen percent
was harvested during the winter and 11 percent during the fall.
Fall production increased from 1952-53 through the 1958-59
season, but has leveled off at slightly below a million crates since
that time (Figure 1). Winter production has followed no clear
trend in recent years. The winter season has had the greatest
year-to-year variations in production, due mostly to cold weath-
er, although considerable variability was evident during all sea-
sons. Expansion of spring production from 3.3 million crates in
1952-53 to 6.5 million crates in 1962-63 has accounted for most
of the growth in production.


Production Risks
Year-to-year variations in the seasonal production of sweet
corn have resulted from changes in yields and in planted acre-
ages. Average yields of sweet corn have varied from over 200
crates per acre down to zero, or total loss. Production risks are
the primary factors contributing to yield variations. Extreme
temperatures, excessive rainfall, high winds, insect damage, and
plant diseases all represent production risks which growers must
face. In favorable years losses due to these risks, of which
extreme temperatures are most important, are low and yields
high. In other years, yields may be low, with substantial acreage
being lost.
Variations in plantings are affected by expectations of future
conditions, primarily those of yield and price. Past experiences
are very important in arriving at these expectations. For ex-
ample, increased plantings may often be observed in years
following high prices. An examination of acreage planted,
yields, and unharvested acreage provides an insight into the
extent to which production risks affect the Florida sweet corn
industry.
Production risks appeared to be greatest during the winter
season (Figure 2). Over the 10 years, 1953-54 through 1962-63,











Florida Agricultural Experiment Stations


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Market Structure .. Sweet Corn


an average of 28 percent of the winter sweet corn acreage was
unharvested. Acreage losses also demonstrated the greatest
range of variability during this season. In 1958, 79 percent of
the planted acreage was unharvested, while in 1957 only 7
percent was unharvested. The high losses in 1958 resulted from
a combination of frosts and freezes, excessive rainfall, and
prolonged cold (11). Winter yields averaged 140 crates per
acre, and ranged from 91 crates in 1958 to 164 crates in 1955.
Production risks in the fall were not as great as in the
winter, but greater than during the spring. An average of 16
percent of the fall planted acreage was unharvested between
the 1953-54 and 1962-63 seasons. Year-to-year variations ranged
from a 32 percent loss in the fall of 1956 to a 2 percent loss in
1961. Yields during the fall averaged the lowest of all seasons
at 128 crates per acre over the 10-year period. They ranged
from 83 crates per acre in 1956 to 156 crates per acre in 1954.
Production variability was enhanced during the fall and
winter seasons by the tendency for low yields and high acreage
losses to be associated. This phenomenon may be observed in
the fall seasons of 1956, 1960, and 1962, when acreage losses
were at high levels (Figure 2). Yields during these same years
were at low levels. This relationship would be expected, since
the damage, most often from cold temperatures, normally oc-
curred late in the growing season. While a freeze may cause
some acreage to be completely lost, other acreage would likely
be damaged to the point that yields are lowered.
The spring season differed from the winter and fall in several
respects. The percentage of unharvested acreage was much
smaller than that of other seasons, averaging only 6 percent
over the 10-year period. Neither were year-to-year variations
in acreage losses as great. Unharvested acreage ranged from 18
percent in 1961 to 3 percent in 1963.
Yields during the spring averaged substantially higher than
during the fall or winter. Over the 10-year period yields aver-
aged 184 crates per acre, ranging from 136 crates in 1954 to 214
crates in 1963. Yields and unharvested acreage did not appear
to be as closely associated in the spring as in the fall and winter.
This may have been expected, since most weather damage would
likely have occurred soon after planting and the crop would
either have been abandoned or would have made a near complete
recovery during the spring growing season.







Florida Agricultural Experiment Stations


Competition
Florida encounters little competition from other production
areas during most of its season. The most active harvesting
period for Florida begins around November 10. At this time
only California is a factor in sweet corn production, and their
most active harvesting season ends around November 20. No
production area offers major competition to Florida from
November 20 through May 1, when the most active harvest
season for Texas spring corn begins. California enters the
market on May 15, followed by South Carolina and Georgia on
June 1. Alabama begins its most active harvesting period on
June 10. These states constitute the major competing areas
during Florida's marketing season (22). This pattern shifts
somewhat from year to year depending on plantings and weather
conditions.
The magnitude of the competition offered by competing areas
is reflected by the distribution of average weekly sweet corn
shipments from Florida and other areas over the three years
1960-61 through 1962-63 (Figure 3). Shipments from other
areas continued at a stable level up through mid-November,
then declined for five weeks and ended the last week of
December. Florida shipments, which remained substantially
higher than other shipments after mid-October, reached a peak
during the last week of November, then declined throughout the
remainder of the fall.
For the three-season period covered by Figure 3, no ship-
ments occurred from competing states during the winter months,
and Florida weekly shipments tended to increase throughout
the season.
Spring shipments began from other states during the third
week of April and became fairly heavy by the first week of May.
They remained near this level throughout the remainder of the
season. Florida shipments increased throughout the spring to a
peak during the first week of June and then declined rapidly.


SHIPPING POINT ORGANIZATION
Twenty-five sales firms were included in the field census to
determine the organizational and marketing characteristics of
the Florida sweet corn industry at the shipping point. These
firms marketed 8,200,731 of the 8,804,000 crates of sweet corn




Carlots
1,000


. Florida Shipments

l Other Shipments


14 28 11 25 9 23 6 20 3 17 3 17 31
October November December January February March


14 28 12 26 9 23 7 21
April May June July


Figure 3.-Three-year average weekly distributions of interstate sweet corn shipments from Florida and other states,
1960-61 through 1962-63.
Source: Donald L. Brooke, Florida Truck Crop Competition I, Interstate and Foreign (Gainesville, Florida: Florida Agri-
cultural Experiment Station, Agricultural Economics Mimeo Reports 62-6, 63-2 and EC64-5).


400


200








Florida Agricultural Experiment Stations


sold from Florida in the 1962-63 season as reported by the
Florida Crop and Livestock Reporting Service (20). According
to these data only 6.9 percent of the Florida shipments were
made by firms not included in the survey, and most of this
volume was marketed from small scattered production areas.
For the purposes of this study a sales firm was defined as
any person or organization, either incorporated or unincor-
porated, which enters sweet corn into the primary channels of
trade. A firm is considered "entering sweet corn" only if the
corn is produced by the firm or if the firm acts as the first
handler of the corn. Sweet corn sold from a primary sales firm
to a second firm, which then enters it into primary channels of
trade, does not make the second firm a sales firm as defined.
Growers include all persons or organizations, either incor-
porated or unincorporated, who produce sweet corn to be entered
directly or indirectly into the commercial channels of trade.


Growers
Data on growers were obtained from information provided
by sales firms and confirmed by records of the Florida Sweet
Corn Advisory Committee. All growers were affiliated with
sales firms in one manner or another. In some instances, the
grower and sales firm were essentially the same. A grower-
sales firm, where production and sales were carried out by a
single organization, was considered as one grower affiliated with
one sales firm for purposes of analysis. In firms handling corn
for two or more growers, the numbers of growers reported
were used.

Numbers and Sizes
Large growers, those producing 200,000 or more crates an-
nually, predominated in the production of Florda sweet corn.
Although they accounted for only 10.1 percent of the number
of growers, they produced 40.9 percent of the output (Table 5).
Medium growers, those producing between 100,000 and 199,999
crates, accounted for 24.7 percent of the growers and 38.0 per-
cent of the production. Small growers, those producing under
100,000 crates annually, accounted for 65.2 percent of the
growers, but only 21.1 percent of the production. A total of 89
growers produced the 8,200,731 crates of sweet corn.








Market Structure .. Sweet Corn


Table 5.-Distribution of growers and production, by size of grower,
affiliated with 25 Florida sweet corn sales firms, 1962-63 season.
Size of Growers Production
Grower Number Percent Crates Percent
Large 9 10.1 3,349,318 40.9
Medium 22 24.7 3,117,157 38.0
Small 58 65.2 1,734,256 21.1
Total 89 100.0 8,200,731 100.0


Attempts to gain benefits from economies of scale and to
reduce risks appear to be the best explanations for the predomin-
ance of large scale producers in the Florida sweet corn industry.
Brooke discussed some of the economies of scale in production
in his 1962 study of the Florida sweet corn industry:

Specialized equipment for spraying and harvesting
sweet corn has been developed and improved over the past
10 years. This equipment is costly both from the initial
capital outlay and annual upkeep. A small grower with
one crop of corn cannot justify its purchase for a few
days per year of its use. Larger growers with multiple
plantings of corn use such equipment more efficiently and
can justify its cost (6).

Risks are important in affecting the profitability of sweet
corn from year to year. All plantings in one area or in one
period may be lost due to weather hazards. Larger growers can
offset some of these risks by extending production over the
season or by adding plantings in other production areas. Several
of the large growers produce corn in two or more of the pro-
duction areas as well as extend their plantings over more than
one season.
Growers, in some instances, have been affected by the needs
of sales firms to obtain economies of scale. This was especially
true for the grower-sales firm organizations. In such instances,
a larger volume of production was needed to achieve economies
from the standpoints of servicing buyer accounts, as well as
personnel, building, and equipment use.
Production economies, risks, and sales firm needs play a
different role in the decisions of each grower depending upon his
situation and problems. Some may expand production for one








Florida Agricultural Experiment Stations


reason, some for another, while others may feel their volume is
optimum. Nevertheless, from the standpoint of the industry
as a whole, these forces have encouraged and will continue to
encourage larger production units.



Sales Areas
Florida was divided into three sales areas, Belle Glade, South
Florida, and Central Florida, for analysis purposes (Figure 4).
The Belle Glade and South Florida areas conform to the market-
ing areas established under the Sweet Corn Marketing Order.
The Zellwood section produces most of the sweet corn in the
Central Florida area. Scattered areas in northern Florida,
which produced only 0.3 percent of the 1962-63 production, were
not included in this analysis (10).

The Belle Glade area had 71 growers who produced 6,037,348
crates of sweet corn in 1962-63. This accounted for 75.5 percent
of the growers and 73.6 percent of the Florida production. This
area is located in western Palm Beach County and extends
around the southeast shore of Lake Okeechobee, centering near
the town of Belle Glade, Florida. Corn in this area is produced
on peat and muck soils of the "custard apple" and "saw grass"
types which range in depth from 3 to 10 feet (6).

The South Florida area had only nine commercial sweet corn
growers who produced 737,403 crates, 9 percent of the total
production. Primary producing sections were eastern Palm
Beach County, Pompano section of Broward County, Homestead
section of Dade County, and small sections of Lee and Collier
counties. Sweet corn in the eastern Palm Beach and Pompano
sections was produced on Leon-Portsmouth sands and fine sands.
Dade County production in the Homestead section was con-
centrated on highly calcareous Perrine marl over oolite lime-
rock (6). There were 14 growers in the Central Florida area
who produced 1,425,980 crates of corn, 17.4 percent of the total
Florida production. The primary Central Florida area is the
Zellwood production section, which is centered west of the town
of Zellwood in Lake and Orange counties and just north of
Lake Apopka. Corn is produced in this section on muck and
mucky peat soils which vary in depth from 4 to 19 feet (6).








Market Structure Sweet Corn


Central Florida

South Florida

Belle Glade









Figure 4.-Florida sweet corn sales areas, 1962-63 season.




Since some growers produced corn in more than one area,
the sum of the growers operating in each area exceeded that for
the total number of Florida growers. The proportion of growers
falling into the three size classifications was not significantly
different between the three areas (Table 6).








Florida Agricultural Experiment Stations


Table 6.-Distribution of growers and production, by size of grower and
sales area, 25 Florida sweet corn sales firms, 1962-63 season.
Sales Area
Belle Glade South Florida Central Florida
Size of Growers Produc- Growers Produc- Growers Produc-
Grower tion tion tion
Percent
Large 11.3 42.8 11.1 36.4 14.3 35.0
Medium 22.5 36.1 22.2 36.2 35.7 46.8
Small 66.2 21.1 66.7 27.4 50.0 18.2
Total 100.0 100.0 100.0 100.0 100.0 100.0
Percentage
of total 75.5 73.6 9.6 9.0 14.9 17.4


Sales Firms
The traditional shipping point market where local shippers
buy from various growers at a competitive price does not exist
for the sweet corn industry in Florida. Only two sales firms
reported any direct purchases from growers, and this volume
was very small. The function of the sales firm in Florida is to
act as an agent for one or more of its affiliated growers. In
practically all cases, the entire production of a grower was
delivered to one sales firm.


Numbers of Growers
Ten of the 25 sweet corn sales firms in Florida have only
one grower as a source of supply usually the same firm was
doing both the growing and selling. These 10 single-grower
sales firms ranged in size from over 800,000 crates annually to
fewer than 50,000 crates. The other 15 sales firms had two or
more growers as a source of supply (Table 7).
Only one-fourth of the sales firms in the Belle Glade area
were single-grower sales firms, but in the other area two-thirds
of the firms fell in this class. The large firms in the Belle Glade
area attained their volume to a substantial extent by affiliating
with several growers. Thirty-seven percent of the firms in this
area had six or more affiliated growers compared with none in
other areas. The number of sales firms operating in each area
was exaggerated somewhat by the fact that a few sales firms
operated in more than one area. This was especially true of the
Central Florida area.

















Table 7.-Distribution of sales firms,
1962-63 season.


by number of affiliated growers and sales area, 25 Florida sweet corn sales firms,


Sales Area

Number of Belle Glade South Florida Central Florida All Areas
Growers Number Percent Number Percent Number Percent Numbert Percent

1 4 25.0 4 66.7 5 66.7 10 40.0
2-5 6 37.5 2 33.3 2 33.3 9 36.0
6 or more 6 37.5 6 24.0

Total 16 100.0 6 100.0 7 100.0 25 100.0

tSales firm numbers are not additive since some sales firms operated in two or more areas.








Florida Agricultural Experiment Stations


Methods of Organization

About one-half of the sales firms were organized as corpora-
tions, one-fourth as cooperatives, and one-fourth as partnerships
or proprietorships. The method of organization did not vary
appreciably between sales areas. The corporate organization
was observed somewhat more frequently in the Belle Glade and
South Florida areas than in the Central Florida area. A slightly
higher proportion of cooperatives was observed in the Central
Florida area.
There appeared to be little relationship between the method
of organization of the sales firm and the number of affiliated
growers (Table 8). Both corporations and cooperatives were
observed for all grower-number classifications. Half of the firms
with six or more growers were corporations, and the other half
were cooperatives. Indications are that the method of organiza-
zation of the sales firms was more a matter of personal prefer-
ence or other considerations than it was of the number of
growers to be affiliated with the sales firm.


Table 8.-Distribution of sales firms, by number of affiliated growers and
method of organization, 25 Florida sweet corn sales firms, 1962-
63 season.
Method of Organization
Number of Corpora- Cooper- Partner- Proprie- All
Growers tion ative ship torship Methods
Percent
1 50.0 20.0 10.0 20.0 100.0
2 5 66.7 11.1 11.1 11.1 100.0
6 or more 50.0 50.0 100.0
Average 52.0 28.0 8.0 12.0 100.0


Sizes
Large sales firms, those handling 500,000 or more crates an-
nually, marketed almost two-thirds of the sweet corn production
(Table 9). Although these firms accounted for only 32 percent
of the number of firms, they were predominant in the volume
marketed. Small sales firms, those handling less than 100,000
crates annually, marketed only 8.1 percent of the corn, but ac-
counted for 36 percent of the firms. Medium sales firms, those














Table 9.-Distribution of sales firms and crates sold, by size of sales firm and sales area, 25 Florida sweet corn sales firms,
1962-63 season.

Sales Area
Size of
Sales Fim Belle Glade South Florida Central Florida All Areas
Sales Firm
Sales Crates Sales Crates Sales Crates Sales Crates
Firms Sold Firms Sold Firms Sold Firms Sold

Percent


Large

Medium

Small

Total


64.8

27.1

8.1


100.0


100.0


100.0


100.0


100.0


100.0


100.0


100.0








Florida Agricultural Experiment Stations


handling between 100,000 and 499,999 crates, accounted for the
remaining 27.1 percent of the volume and 32 percent of the num-
ber of firms.
The proportion of sweet corn handled by large sales firms in
the Belle Glade area was substantially greater than that sold by
firms of this size in other areas (Table 9). In fact, all eight of
the large sales firms in Florida operated in the Belle Glade area.
Some of these firms handled substantial quantities of corn in
other areas also.

Vegetables Handled
The importance of sweet corn relative to other vegetables
marketed by the sales firm is of particular interest because the
policies of a firm which markets several vegetables are deter-
mined by the combined needs of all vegetables handled. In
multi-vegetable sales firms, it must be realized that the market-
ing policies and practices followed in sweet corn marketing are
not independent, but are a part of the total sales firm operation.
With this in mind, an attempt was made to determine the num-
ber of vegetables other than sweet corn marketed by the sales
firms and the relative importance of sweet corn in this array.
Twenty-four vegetables, other than sweet corn, were han-
dled by the sales firms, but 11 of these were considered as minor
vegetables since they were handled by three or fewer of the
firms. Examples of such vegetables are anise, water cress, and
turnips. The remaining 13 vegetables, plus sweet corn, are
shown in Table 10. Sales firms which handled vegetables other
than sweet corn ranged from 67.9 percent handling cabbage down
to 17.9 percent handling okra. Practically all major vegetables
were handled by the firms in all areas, but the relative impor-
tance of each varied from one area to another.
Although the number of vegetables handled by the sales firms
was important, the relative importance of particular vegetables
to the firm was of even more significance. Sweet corn was the
most important vegetable in terms of annual value to 42 percent
of the sales firms, but none of these handled sweet corn exclu-
sive of other vegetables. Thirty-eight percent of the firms indi-
cated that celery was their most important crop. Sweet corn
ranked second in importance in many of the firms where celery
was the principal vegetable handled and vice versa. Celery
ranked second where sweet corn was most important. Either








Market Structure .. Sweet Corn


Table 10.-Distribution of sales firms handling 14 vegetables, by sales area,
25 Florida sweet corn sales firms, 1962-63 season.
Vegetable Sales Area
Handled Belle Glade South Florida Central Florida All Areas
Percent
Green beans 66.7 66.7 42.9 60.7
Cabbage 80.0 16.7 85.7 67.9
Celery 66.7 16.7 85.7 60.7
Sweet corn 100.0 100.0 100.0 100.0
Cucumbers 26.7 66.7 14.3 32.0
Eggplant 26.7 16.7 14.3 21.4
Endive 46.7 16.7 85.7 50.0
Lettuce 46.7 16.7 85.7 50.0
Okra 13.3 33.3 14.3 17.9
Field peas 33.3 50.0 28.6 35.7
Potatoes 33.3 50.0 42.9 39.3
Peppers 66.7 33.3 28.6 50.0
Radishes 26.7 57.1 28.6
Squash 33.3 50.0 28.6


snap beans, cucumbers, radishes, or lettuce was the most im-
portant vegetable handled by the remaining 20 percent of the
firms.


Brokers
Due to the large number of brokers handling sweet corn no
attempt was made to obtain a complete census as was done for
the sales firms. Judgment samples of brokers handling sweet
corn were selected, and interviews were made to obtain infor-
mation on their methods of organization and operation. A quan-
titative measure of numbers, size, and other factors was not
obtained, but a fairly complete picture of their role was pre-
sented by those interviewed.
A broker, by definition, is one whose business it is to bring
together a seller and buyer who are ready, willing, and able to
trade. His authority is limited in the particular duty he under-
takes by the instructions of the seller or buyer he is acting for.
Although all sweet corn brokers interviewed fell under this defi-
nition, their methods of operation and functions varied widely
because (a) they were agents for different principals and (b)
they operated under different instructions. Brokers may be
classified according to the identity of their principals either as
buying brokers or as selling brokers.








Florida Agricultural Experiment Stations


Buying Brokers
The buying broker is the buyers' representative at the ship-
ping point, and the fees for his services are paid by the buyer.
His job is to negotiate the purchase of sweet corn according to
the instructions of the buyer. The interest of the broker is in
seeing that sweet corn purchases meet the quality, size, price,
and other requirements desired by the buyer. Such purchases
may be made in the name of the broker or the buying firm itself.
Buying brokers, as such, were relatively unimportant in the
Florida sweet corn industry. Some sales were made on this ba-
sis, but as a rule, terminal buyers have not paid brokerage to
shipping point brokers in Florida.


Selling Brokers
The selling broker is the representative of the local seller,
and his services are paid for by the seller. The job of the selling
broker is to negotiate the sale according to the instructions of
the seller. The interest of the broker in this case is to sell sweet
corn at the most favorable terms for the seller. Arrangements
between the broker and seller may vary widely according to the
needs and interests of each. The more common arrangements
and practices followed by brokers are discussed briefly.
Sweet corn sold through selling brokers may be invoiced
either to the broker or the buyer, just as with the buying bro-
ker. Through trade practices in Florida, most corn is invoiced
to the broker who, in turn, invoices it to the buyer. The broker
collects from the buyer and then remits the payment to the seller,
less brokerage fees. In actual practice most brokers pay the
seller before receiving the remittance from the buyer. The seller
may or may not know who the buyer of the corn was under this
arrangement.
Some shipping point brokers handle corn for several sales
firms, while others handle corn for only one, or a few. The dis-
tinction must be kept in mind between a broker who handles
corn for sales firms and one who handles corn for growers.
Under the definition used for a sales firm in this study, a bro-
ker handling corn directly for growers is classified as a sales
firm since he is the first handler. This is applicable even though
the grower may pay a "brokerage fee" rather than pay a share
of "selling cost" as may be the case for other sales firms.








Market Structure Sweet Corn


The number of buyers to whom brokers sell varies consider-
ably. Most brokers have a limited number of buyers with whom
they tend to work on a recurring basis. Some brokers make
practically all their sales to a single buyer. These brokers be-
come very well acquainted with the needs of the buyer as well
as with sources of sweet corn. Although these brokers obtain
corn from several sellers and generally use only one buyer outlet,
they are still acting as selling brokers by definition since their
services are paid for by the seller. Selling brokers operating
under these arrangements are sometimes confused with buying
brokers.


MARKET STRUCTURE AND PRACTICES
AT THE SHIPPING POINT
The purpose of this and subsequent sections is to describe
the structure and conduct of the Florida sweet corn market.
Bain defines market structure as
those characteristics of the organization of a market
which seem to influence strategically the nature of
competition and pricing within the market (4).
He defines market conduct as
the composite of "acts, practices and policies" of sell-
ers used in arriving at and in some way coordinating
their several decisions as to what prices to charge,
what selling costs to incur, and so forth (4).
Stated in another way, the purpose here is to reveal the "who's",
"how's", "when's", and "where's" of the industry's market-
ing. This is done first for the functions at the shipping points
and second, for those at the terminal markets. Much of this
analysis is based upon the sample of shipment invoices of co-
operating firms.

Sales Firms and Volume Observed
The sample of shipment invoices included 8.7 percent of the
8,200,731 crates of sweet corn handled by the 25 sales firms
operating in Florida during the 1962-63 season. The rate
of sampling varied between the three sales areas. The highest
sampling rate was 9.3 percent in the Belle Glade area. The low-
est sampling rate was in South Florida, where only 4.1 percent








Market Structure Sweet Corn


The number of buyers to whom brokers sell varies consider-
ably. Most brokers have a limited number of buyers with whom
they tend to work on a recurring basis. Some brokers make
practically all their sales to a single buyer. These brokers be-
come very well acquainted with the needs of the buyer as well
as with sources of sweet corn. Although these brokers obtain
corn from several sellers and generally use only one buyer outlet,
they are still acting as selling brokers by definition since their
services are paid for by the seller. Selling brokers operating
under these arrangements are sometimes confused with buying
brokers.


MARKET STRUCTURE AND PRACTICES
AT THE SHIPPING POINT
The purpose of this and subsequent sections is to describe
the structure and conduct of the Florida sweet corn market.
Bain defines market structure as
those characteristics of the organization of a market
which seem to influence strategically the nature of
competition and pricing within the market (4).
He defines market conduct as
the composite of "acts, practices and policies" of sell-
ers used in arriving at and in some way coordinating
their several decisions as to what prices to charge,
what selling costs to incur, and so forth (4).
Stated in another way, the purpose here is to reveal the "who's",
"how's", "when's", and "where's" of the industry's market-
ing. This is done first for the functions at the shipping points
and second, for those at the terminal markets. Much of this
analysis is based upon the sample of shipment invoices of co-
operating firms.

Sales Firms and Volume Observed
The sample of shipment invoices included 8.7 percent of the
8,200,731 crates of sweet corn handled by the 25 sales firms
operating in Florida during the 1962-63 season. The rate
of sampling varied between the three sales areas. The highest
sampling rate was 9.3 percent in the Belle Glade area. The low-
est sampling rate was in South Florida, where only 4.1 percent








Florida Agricultural Experiment Stations


of the area's sales were included. This was lower than desired,
but the total sample rate was not greatly affected since this area
accounted for only 9 percent of the Florida sales. The sample
from the Central Florida area included 8.6 percent of the area's
sales.
A total of 2,533 shipment invoices, exclusive of interpacking-
house sales, was selected for this sample. An additional 239 in-
terpackinghouse invoices were observed. A total of 711,758
crates of sweet corn was accounted for in the invoices sampled,
and the average size of sale was 281 crates. The value of the
sweet corn included in the sample was $1,507,839, and the
weighted average price per crate was $2.12.

Grades
The proportions of sweet corn which were classified in the
various grades were substantially different in this study from
those observed by Showalter et al. for the 1953-54 season (16).
From a sample of 2,224 invoices for the 1953-54 season it was
found that 73 percent was U. S. Fancy, 12 percent U. S. No. 1,
and 13 percent U. S. No. 2. Unclassified corn made up the re-
maining 2 percent of the shipments.
There were no U. S. No. 1 or U. S. No. 2 grade shipments
observed in this study for the 1962-63 season. Shippers did
not like to sell corn which did not meet the U. S. Fancy grade
as U. S. No. 1 or U. S No. 2 because their unclipped corn was
generally considered to be superior in quality to clipped corn
from other production areas which used these latter two grades.
Therefore, a system of stating the percentage of U. S. Fancy
was developed. Sweet corn of the U. S. Fancy grade has a tol-
erance of 10 percent, by count, which may fail to meet the grade
requirements. For corn in Florida which exceeded these tol-
erances the percentage of corn meeting the U.S. Fancy grade
requirements was stated rather than downgrade the corn. For
example, a lot may be graded and invoiced as "85 percent or
better U. S. Fancy." This differentiates Florida corn from that
originating in other states which failed to meet the Fancy grade
because the ears had to be clipped.
For purposes of this study the percentage quotations were
divided in two grade classifications-85 to 89 percent U. S.
Fancy and 75 to 84 percent U. S. Fancy. Corn below 75 per-
cent U. S. Fancy or ungraded corn was sold as Unclassified.









Market Structure Sweet Corn


The proportion of U. S. Fancy corn marketed rose from
73.0 percent in the 1953-54 season to 92.5 percent in the 1962-
63 season (Table 11). White corn, which was normally not
graded, accounted for 3.5 percent of the 1962-63 shipments.
The "percentage grades" were relatively unimportant to the
total volume of sweet corn shipped. Sweet corn falling in the
85-89 percent U. S. Fancy grade accounted for 2.4 percent of
the total shipments, and that in the 75-84 percent U. S. Fancy
category accounted for only 1.3 percent. Only 0.3 percent of the
observed corn was Unclassified.


Table 11.-Number of sales and crates shipped, percentage of crates ship-
ped, average size of sale, value of shipments, and average price
per crate, by grade and type, 19 Florida sweet corn sales firms,
1962-63 season.
Average
Grade and Average Value of Price
TGr e aSales Crates Size of i Pr
Type Sale Shipments Per
Crate
Number Number Percent Crates Dollars Dollars
U.S. Fancy
yellow 2,327 658,495 92.5 283 1,388,606 2.11
85-89 percent U.S.
Fancy yellow 83 17,221 2.4 207 39,768 2.31
75-84 percent U.S.
Fancy yellow 52 9,036 1.3 174 16,004 1.77
Unclassified
yellow 13 2,036 .3 157 3,430 1.68
Unclassified white 256 24,970 3.5 98 60,031 2.40
Total or
Average 2,731f 711,758 100.0 281 1,507,839 2.12
fThis number observed on 2,533 invoices; some invoices accounted for more than one
shipment.


Weeks of Shipment
Data were summarized by weekly time periods to determine
the "when's" of sweet corn marketing. Sweet corn shipments
were observed during 40 weeks, beginning with the second
week of October and ending with the second week of July.
Graphic analysis of prices and shipments of sweet corn was
used to divide the marketing season into two parts. The first,
fall and winter, extended from the week of October 8 through
February 18, and the second, spring, extended from the week
of February 25 through July 8. A pronounced shift occurred








Florida Agricultural Experiment Stations


in the relationship between prices and shipments between these
periods.3 For that reason the periods were analyzed separately.


Grades
It was hypothesized by several sales managers interviewed
that the proportion of "percentage grade" corn marketed was
affected by both the season and the price level. During the fall
and winter months, when the growing season is often unfavor-
able, a higher proportion of "percentage grade" corn is avail-
able for marketing. The existence of this corn encourages sales
firms to market it, but the amount actually marketed is also
affected by the price level. According to the sales managers, a
positive relationship exists between the level of prices and the
amount of the "percentage grade" corn marketed. During per-
iods of low prices much or all of the corn that does not make
the U. S. Fancy grade may be left in the fields because it is not
profitable to pack, handle, and market this corn. During per-
iods of high prices the returns from "percentage grade" corn
may be high enough to make its marketing profitable.
Evidence that this phenomenon occurred may be observed
in Table 12. The proportion of "percentage grade" corn shipped
was highest from January through April. The average prices
of all corn ranged from $2.00 to $4.00 per crate during this
period. Average prices were generally under $2.00 per crate
during May, June, and July, and shipments of "percentage
grade" corn dropped to a very low level.
The pooled and paired t tests as discussed by Steel and Torrie
were used to compare two means during several instances in
this section (17). The pooled t test was used to determine if a
significant difference existed between the average proportion of
"percentage grade" corn sold during the fall and winter sea-
son and the spring season. An average of 8.3 percent during
the fall and winter and 3.6 percent during the spring was "per-
centage grade" corn. Each season had 20 weekly observations;
thus, there were 38 pooled degrees of freedom. The calculated
t was 1.52. It was concluded that even though the proportion
of "percentage grade" corn marketed during the fall and win-
ter was higher than during the spring, the difference was not

SThis phenomenon is discussed under "Graphic Analysis" later in this
publication.








Market Structure .. Sweet Corn


statistically significant due to the wide week-to-week variations.
As may be observed in Table 12, the seasonal average price
was $2.11 for U. S. Fancy, $2.31 for 85 to 89 percent U. S.
Fancy, and $1.77 for 75 to 84 percent U. S. Fancy. The higher
average price for 85 to 89 percent U. S. Fancy resulted from
the weekly shipping pattern where a larger volume of ship-
ments of this grade occurred between January and April, when
prices were above average. Shipments of this grade were prac-
tically discontinued during May, June, and July, when prices
averaged below $2.00. Since average price was related to week
of shipment in this manner, it was necessary to use some other
method to estimate price differentials between grades.
A more accurate method of measuring price differentials
was to measure the weekly deviations between U. S. Fancy and
the "percentage grades" for weeks when shipments of both
grades were observed. This method partially eliminated the ef-
fect of week of shipment on average prices.
A comparison between U. S. Fancy and 85 to 89 percent
U. S. Fancy prices in which this method was used indicated that
prices for 85 to 89 percent U. S. Fancy averaged 41 cents per
crate below U. S. Fancy. The paired t test was used to deter-
mine if this difference was statistically significant. Since weeks
in which no shipments were observed were eliminated, weekly
paired price observations were reduced to 27. With the 41 cents
per crate price differential the calculated t value was 3.96. This
difference was significant at the 1 percent confidence level, so
it may be concluded that for the weeks observed the average
price of U. S. Fancy corn was significantly higher than that for
85 to 89 percent U. S. Fancy.
The average price of 75 to 84 percent U. S. Fancy was 77
cents less than that of U. S. Fancy during the weeks in which
both were observed. Paired price observations were available
for 17 weeks. The calculated t value was 7.00, which indicated
significance at the 1 percent confidence level.
When the $2.12 per crate average was used as a base price
for U. S. Fancy sweet corn, prices for other grades fell below
this average. On the basis of these analyses the price of 85 to 89
percent U. S. Fancy would be expected to be $1.71 per crate,
or 19.4 percent less than the base price. Corn grading 75 to 84
percent U. S. Fancy would be expected to be $1.35 per crate,
or 36.5 percent less than the base price. These ratios may be








Table 12.-Distribution of crates shipped and average price per crate, by grade and week of shipment, 19 Florida sweet
corn sales firms 1962-63 season.


Grade and Type
Monday 85-89 Percent 75-84 Percent All Grades
-- U~ l fi d andT1,~.;'


of U.S. Fancy U.S. Fancy u. rancy unclaa ieu uu i
Week Yellow Yellow Yellow Yellow White Types
of Avg. Crts. Avg.
Shipment Crts. Avg. Crts. Avg. Crts. Avg. Crts. Avg. Crts. Avg. Crts. Avg.
Ship. Price Ship. Price Ship. Price Ship. Price Ship. Price Ship. Price

Pet. Dol. Pet. Dol. Pet. Dol. Pct. Dol. Pct. Dol. Pet. Dol.
Oct. 8 87.0 2.15 13.0 2.39 100.0 2.18 3
15 76.4 2.33 .1 1.53 -- 23.5 2.42 100.0 2.31
22 88.5 2.03 3.6 1.80 7.9 2.47 100.0 2.05
29 85.0 2.08 4.3 1.78 1.4 1.90 9.3 2.66 100.0 2.12
Nov. 5 80.8 2.44 2.2 2.15 1.7 2.15 2.2 2.50 13.1 2.20 100.0 2.40 E
12 92.8 2.85 7.2 2.66 100.0 2.84
19 87.2 2.34 1.8 1.75 7.0 1.75 4.0 2.37 100.0 2.29 R
26 94.4 1.87 1.2 1.40 4.4 1.16 100.0 1.83
Dec. 3 95.2 2.23 1.8 1.95 3.0 2.42 100.0 2.23
10 72.0 3.19 22.1 3.17 5.9 3.04 100.0 3.17
17 84.6 3.35 -- 15.4 2.99 100.0 3.30
24 82.3 3.98 8.3 2.46 -- 9.4 2.04 100.0 3.67
31 52.3 3.40 31.8 3.47 15.9 2.54 100.0 3.29
Jan. 7 51.2 3.92 18.3 2.57 -- 30.5 3.06 100.0 3.41
14 82.8 4.43 7.0 1.95 -- 10.2 2.97 100.0 4.11
21 72.7 3.27 27.3 3.21 -- 100.0 3.25 cO
28 88.1 3.38 8.4 2.98 3.5 2.90 100.0 3.33
Feb. 4 99.9 3.42 .1 2.50 100.0 3.42
11 89.4 3.20 10.6 2.83 100.0 3.16
18 92.7 3.34 1.3 2.04 6.0 3.27 100.0 3.32
25 96.6 3.26 .6 1.75 2.8 3.26 100.0 3.26









Table 12-Continued


Monday
of
Week


Grade and Type
85-89 Percent 75-84 Percent All Grades
U.S. Fancy U.S. Fancy U.S. Fancy Unclassified Unclassified and
Yellow Yellow Yellow Yellow White Types


ofts. Avg.
Shipment Crts. Avg. Crts. Avg. Crts. Avg. Crts. Avg. Crts. Avg. CrAvg.
Ship. Price Ship. Price Ship. Price Ship. Price Ship. Price Ship. Price

Pct. Dol. Pct. Dol. Pct. Dol. Pct. Dol. Pet. Dol. Pet. Dol.
Mar. 4 88.5 3.32 5.4 2.41 .6 1.75 5.5 3.00 100.0 3.24
11 88.0 2.99 5.4 2.75 2.3 1.59 4.3 3.30 100.0 2.95
18 91.5 2.47 1.4 2.11 4.1 1.50 1.7 1.49 1.3 3.07 100.0 2.41
25 94.3 2.26 .1 1.50 3.0 1.50 1.6 1.43 1.0 2.93 100.0 2.23
Apr. 1 93.2 2.63 2.6 2.25 .8 1.75 3.4 3.08 100.0 2.62
8 90.7 2.64 5.3 2.41 2.3 2.18 1.7 2.93 100.0 2.62
15 88.9 2.58 3.6 2.34 4.6 2.02 -- 2.9 2.95 100.0 2.56
22 87.9 2.56 5.1 2.32 4.0 1.96 .1 2.00 2.9 3.00 100.0 2.53
29 84.5 2.15 7.3 1.89 4.4 1.62 3.8 2.52 100.0 2.12


May 6 98.2 1.64 .2 1.50
13 91.6 1.54 1.3 1.75 -
20 95.7 1.49 -
27 94.9 1.41 1.5 1.75 -
June 3 97.3 2.04 t 2.35 -
10 99.2 1.77 t 1.60 -
17 98.4 1.79 1.1 1.50 -
24 100.0 2.47 -
July 1 98.3 2.21 1.7 2.30 -
8 100.0 1.80 -
Average 92.5 2.11 2.4 2.31 1.3 1.77


.3 1.68


1.6 2.01 100.0 1.65 t
7.1 2.06 100.0 1.58
4.3 1.63 100.0 1.50
3.6 2.10 100.0 1.44
2.7 2.02 100.0 2.04
.8 2.17 100.0 1.77
.5 2.25 100.0 1.79
100.0 2.47
- 100.0 2.21
- 100.0 1.80
3.5 2.40 100.0 2.12


tLess than one-tenth of 1 percent.







Florida Agricultural Experiment Stations


expected to vary somewhat from season to season, but they can
serve as a guideline for expected price differences between
grades.

Sales Areas
The weekly pattern of sweet corn shipments from all Florida
sales areas showed marked seasonal differences (Table 13).
Weekly shipments began during the second week of October at
the moderate rate of about 1 percent of total sales. With some
week-to-week variations this rate continued until the first part
of December. The rate then dropped to about one-half the fall
rate and remained near this level through the third week of
February. The rate rose sharply thereafter and reached the
spring peak, a weekly rate of almost 10 percent, during the
second week of May. Shipments declined during the remainder
of the Florida season, which ended during the second week of
July.
Sweet corn sales were observed from the Belle Glade area
during 37 of the 40 weeks (Table 13). The weekly pattern of
shipments was similar to that discussed for Florida except that
the Belle Glade season ended around the first week of June.
Shipments from the South Florida area began during the third
week of January, reached a peak during the last week of March,
and ended by the first week of May. Volume sales began from
the Central Florida area during the third week of May, reached
a peak during the third week of June, and ended the second week
of July.

White Corn
The Belle Glade area marketed 94.8 percent of the white corn
(Table 13). The Central Florida area accounted for 4.8 percent
of the white corn shipments, and the remaining 0.4 percent was
sold from the South Florida area.
The seasonal pattern of shipments of white corn varied from
that for all corn. Although white corn shipments averaged only
3.5 percent of the weekly volume over the year, during the fall
and winter the average weekly rate of shipment of white corn
was 0.93 percent greater than that for all corn. The paired t test
was used to test this difference, and the calculated t value was
2.58, indicating significance at the 5 percent confidence level.








Market Structure. Sweet Corn


It was concluded that the average rate of shipment of white
corn was higher in the fall and winter season and consequently
lower in the spring than the average shipment rate of all corn.

Prices
The seasonal pattern of prices for sweet corn was inverse to
that of shipments (Table 14). Prices averaged slightly above
$2.00 per crate from the second week of October through the
first week of December. Prices then rose to a range of $3.00
to $4.00 and remained at this level throughout the winter. Prices
declined after the first of March to a spring season low of $1.44
during the last week of May. Prices then rose somewhat during
the remainder of the season.
The season average prices within the three sales areas ranged
from $2.42 per crate in the South Florida area to $1.97 in the
Central Florida area. The average price in the Belle Glade area
was $2.13. The season average price received by an area was
affected by the weeks in which shipments were made from that
area. Even so, there was some evidence that price differences
existed between sales areas, exclusive of the effect of week of
shipment. Since shipments during any one week, with one ex-
ception, were observed from no more than two areas, the paired
t test was used to test these differences.
A comparison between Belle Glade and South Florida weekly
prices during weeks when both areas shipped sweet corn indicat-
ed that the Belle Glade prices averaged 17 cents per crate, or 8
percent, higher during this 16-week period. Using the paired
t test, the calculated value was 2.93, indicating significance at
the 5 percent confidence level.
Central Florida prices averaged 6 cents higher per crate
than Belle Glade prices during the seven weeks when sales were
made from both areas. Using the paired t test, the calculated
value was 1.58. This indicated that no significant difference
existed between the averages of these area prices.

Sizes of Sales
The average number of crates of sweet corn per sale varied
substantially during different periods of the year (Table 15).
During the early fall weeks, the average number of crates per
sale ranged between 200 and 300. This gradually declined to a









Table 13.-Distribution of crates shipped of white and of all corn, by sales area and week of
corn sales firms, 1962-63 season.


shipment, 19 Florida sweet


Monday Sales Area
of Belle Glade South Florida Central Florida All Areas
Week
of White White White White
Shipment only only only only
Percent

Oct. 8 4.7 1.5 4.4 1.2
15 3.6 .8 3.4 .7
22 3.0 1.6 2.8 1.2
29 2.7 1.2 2.6 1.0
Nov. 5 2.5 .8 2.3 .6
12 1.7 1.0 1.6 .8
19 .9 1.0 .9 .8
26 1.8 1.7 1.7 1.4
Dec. 3 1.6 2.2 1.5 1.8
10 1.2 .9 1.1 .7
17 1.0 .3 1.0 .2
24 .5 .2 .5 .2
31 1.3 .3 1.2 .3
Jan. 7 2.7 .4 -- -2.5 .3
14 .6 .3 .6 .2
21 .5 2.1 .4
28 .5 .3 .4
Feb. 4 .5 .5 .5
11 .8 1.5 .7
18 1.2 .7 2.2 1.1 .6
25 1.0 1.5 .9 1.0 1.2








Table 13-Continued

Monday Sales Area
of Belle Glade South Florida Central Florida All Areas
Week
of White White White White All
of White All All All All
Shipment only only only only

Percent


March 4
11
18
25
April 1
8
15
22
29
May 6
13
20
27
June 3
10
17
24
July 1
8
Total


100.0


1.4
1.9
3.6
4.4
5.1
4.3
4.3
6.1
10.1
12.5
9.0
9.5
6.3
2.3
.5
.1




100.0


Percentage
of
total 94.8
tLess than one-tenth of 1 percent.


100.0


4.9
- .6


100.0 100.0


.4 9.0


100.0


100.0


4.8 17.4


1.2
1.7
3.4
4.5
4.7
3.9 S
3.6
5.1
8.2
9.8
7.0
7.6
6.7
5.5
4.0
4.0
3.0 Q
.8
.1


100.0


100.0


100.0


100.0


?









Florida Agricultural Experiment Stations


Table 14.-Average price per crate, by sales area and week of shipment,
19 Florida sweet corn sales firms, 1962-63 season.

Monday Sales Area
of
Week B. Glade So. Fla. Cen. Fla. All Areas
of
Shipment Avg. Pr. Avg. Pr. Avg. Pr. Avg. Pr.

Dollars


Oct. 8
15
22
29
Nov. 4
12
19
26
Dec. 3
10
17
24
31
Jan. 7
14
21
28
Feb. 4
11
18
25
March 4
11
18
25
April 1
8
15
22
29
May 6
13
20
27
June 3
10
17
24
July 1
8
Average


2.13 2.42 1.97 2.12









Market Structure Sweet Corn


Table 15.-Average size of sale, by sales area and week of shipment,
19 Florida sweet corn sales firms, 1962-63 season.

Monday
Moay Sales Area

Week
of Belle South Central All
Shipment Glade Florida Florida Areas

Crates


Oct. 8
15
22
29
Nov. 5
12
19
26
Dec. 3
10
17
24
31
Jan. 7
14
21
28
Feb. 4
11
18
25
29
March 4
11
18
25
April 1
8
15
22
May 6
13
20
27
June 3
10
17
24
July 1
8
Average


358
246
288
204
136
.148
126
188
187
140
75
67
78
71
53
88
103
114
100
93
127
361
106
147
238
272
225
230
236
300
423
407
454
525
474
436
350




259


358
246
288
204
136
148
126
188
187
140
75
67
78
71
53
100
96
103
96
97
124
365
103
152
230
277
239
246
244
310
419
401
439
493
517
474
458
530
605
700
261








Florida Agricultural Experiment Stations


low of 53 crates during the second week of January. Thereafter,
the average size sale gradually increased throughout the remain-
der of the season.
During the late fall and winter months buyers bought more
mixed loads of vegetables. Many shipments of 25 or fewer
crates were observed during this period. In the spring the mixed
loads tended to decline, and orders for solid loads of corn pre-
dominated. It was not uncommon during this period for a buyer
to purchase several solid loads of corn at one time. It was during
this period that the ability to supply large quantities of corn
became more important to the sales firm.
The average size sale for the season was 259 crates from
Belle Glade, 250 crates from South Florida, and 480 crates from
Central Florida. In order to eliminate the effect of week of
shipment the differences between Belle Glade and other areas
were tested using the paired t test. Sales from South Florida
averaged 30 crates per shipment larger than Belle Glade ship-
ments for the 16 weeks observed. The calculated t value was 1.20,
indicating that no significant difference existed.
Shipments from Central Florida averaged 122 crates larger
than those from Belle Glade for the seven weeks when both areas
shipped corn. Due to the week-to-week variations and the small
number of weeks observed, the 2.35 calculated t value indicated
that this difference was not significant.

Sizes of Sales Firms
Sales firms of different sizes were found to have substantially
different seasonal shipment patterns (Table 16). Large and
medium sales firms made practically all the fall and winter ship-
ments from Florida. The rate of shipment from firms of all
sizes increased in the spring, but the increase for small firms
was greater than that for firms of other sizes. During the fall
and winter large firms made 15.1 percent and medium firms
made 15.4 percent of their total seasonal shipments. Small firms
made only 1.0 percent of their shipments during this period.
This relationship was expected, since a higher proportion
of small sales firms operated in the South and Central Florida
areas than in the Belle Glade area. Only 3.5 percent of the ship-
ments from the Belle Glade area were made by small sales firms,
compared with 27.4 percent from South Florida and 17.7 per-
cent from Central Florida.









Market Structure Sweet Corn 43

Table 16.-Distribution of crates shipped, by size of sales firm and week
of shipment, 19 Florida sweet corn sales firms, 1962-63 season.

Monday
of Size of Sales Firm

Week
of
Shipment Large Medium Small All Sizes

Percent

Oct. 8 .7 3.5 1.2
15 .5 1.5 .7
22 1.2 1.9 1.2
29 1.0 1.2 1.0
Nov. 5 .7 .7 .6
12 .8 1.1 .8
19 1.1 .2 .8
26 1.6 1.3 1.4
Dec. 3 2.0 1.7 1.8
10 .8 .3 .7
17 .2 .3 .2
24 .2 .2 .2
31 .3 .1 .4 .3
Jan. 7 .4 .1 .3
14 .3 .1 t .2
21 .6 .1 .4
28 .5 .1 .3 .4
Feb. 4 .6 .1 .5
11 .8 .7 .7
18 .8 .2 .3 .6
25 1.5 .8 1.2
March 4 1.5 .5 1.2
11 2.3 .5 1.7
18 3.8 1.9 3.6 3.4
25 4.7 1.4 9.8 4.5
April 1 4.8 3.4 6.2 4.7
8 4.1 2.1 5.8 3.9
15 4.1 2.1 2.7 3.6
22 5.2 4.8 4.8 5.1
29 8.8 7.3 5.6 8.2
May 6 9.9 10.4 8.4 9.8
13 7.3 7.2 4.5 7.0
20 8.0 7.5 4.6 7.6
27 6.4 9.1 4.2 6.7
June 3 5.0 7.7 4.5 5.5
10 2.9 6.5 7.2 4.0
17 2.7 6.7 8.7 4.0
24 1.7 4.4 9.7 3.0
July 1 .2 .3 7.6 .8
8 1.1 .1
Total 100.0 100.0 100.0 100.0
Percentage
of total 64.8 27.1 8.1 100.0
t Less than one-tenth of 1 percent.








Florida Agricultural Experiment Stations


Types of Buyers
The purpose of studying types of buyers was to determine
the "who's" of marketing sweet corn. Who are the buyers of
sweet corn during different seasons, from different sales areas
and from different sizes of sales firms? Six types of terminal
market buyers-chains, terminal brokers, wholesalers, jobbers,
retailers, and government-were considered in this analysis.
Terminal brokers included both buying brokers and selling
brokers who operate in the terminal markets.
Shipments from sales firms to local brokers, either buying
or selling, were not included, since most of these shipments
were resold to one of the above types of buyers as discussed in
the previous section. Inclusion of local brokers in this analysis
would have given a distorted picture of the terminal market
buyers of Florida sweet corn. Nevertheless, the local broker
plays an important role as a second handler. Sales firms includ-
ed in the sample sold 12.5 percent of their volume to local bro-
kers. This accounted for 480 of the 2,533 invoices observed and
for 89,383 crates of corn.
The type of buyer could not be determined from the informa-
tion available on 89 of the invoices observed. Shipments with
unknown types of buyers accounted for only 0.1 percent of the
volume handled. Shipments to unknown buyers were not in-
cluded in the analysis, since this would have introduced a bias
in the distribution figures.
Two types of terminal market buyers-chain and whole-
salers-accounted for over 90 percent of all shipments (Table
17). Sales to chains made up 45.5 percent of the shipments, and
sales to wholesalers 44.7 percent. Terminal broker sales ac-
counted for 7.5 percent of the total. Sales to jobbers, retailers,
and government were relatively unimportant, accounting for
only 2.3 percent of the shipments.
Practically no difference existed between the average price
per crate for sales to chains and wholesalers. Average prices
to other types of buyers varied from the over-all average of
$2.11, but care should be observed in interpreting these differ-
ences due to the limited number of observations for some types
of buyers.
The average size sale to chain buyers was substantially
larger than that to other types of buyers. Chain sales averaged









Market Structure Sweet Corn


Table 17.-Number of sales and crates shipped, percentage of crates ship-
ped, value of shipments, and average price per crate, by type
of buyer, 19 Florida sweet corn sales firms, 1962-63 season.
Type of Sale Crates Value of Average Price
Buyer Shipments Per Crate
Number Number Percent Dollars Dollars
Chain 757 282,509 45.5 594,773 2.11
Wholesaler 966 277,847 44.7 583,515 2.10
Terminal broker 152 46,525 7.5 102,323 2.20
Jobber 46 7,917 1.3 19,263 2.43
Government 33 5,241 .8 10,811 2.06
Retailer 10 1,485 .2 3,253 2.19
Total or
Average 1,964 621,524 100.0 1,313,938 2.11


373 crates per shipment, while sales to wholesalers averaged
288 crates. The average size of sale to terminal brokers, 308
crates, was slightly higher than that to wholesalers. Sales to
the other types of buyers averaged from 148 to 172 crates.


Sales Areas
Sales firms in the South Florida area sold a larger per-
centage of their corn direct to chains than did firms of other
areas (Table 18). These sales firms sold 71.7 percent of their
shipments to chains, compared with 44 percent sold to chains
by firms in other areas. The higher shipments to chains in the
South Florida area were offset by lower sales to wholesalers.


Table 18.-Distribution of crates shipped, by sales area and type of
buyer, 19 Florida sweet corn sales firms, 1962-63 season.

Sales Area
Type of Belle South Central All
Buyer Glade Florida Florida Areas
Percent
Chain 44.2 71.7 44.1 45.5
Wholesaler 47.0 25.1 40.2 44.7
Terminal broker 6.8 3.0 11.3 7.5
Jobber 1.4 t 1.1 1.3
Government .4 .1 2.9 .8
Retailer .2 .1 .4 .2
Total 100.0 100.0 100.0 100.0
Percentage of
total 73.6 9.0 17.4 100.0
t Less than one-tenth of 1 percent.








Florida Agricultural Experiment Stations


Only 25.1 percent of the South Florida shipments were to
wholesalers, while 47.0 percent of the Belle Glade and 40.2
percent of the Central Florida shipments were to wholesalers.
Terminal broker sales were most prevalent in the Central
Florida area, accounting for 11.3 percent of the shipments, but
only 3 percent of the South Florida shipments were made to
terminal brokers. Sales to other types of buyers from all areas
were relatively unimportant, but sales to government agencies
were considerably more important in Central Florida than in
other areas.



Weeks of Shipment

The weekly distribution of shipments was analyzed by types
of buyers to determine if seasonal differences existed (Table 19).
Since chains and wholesalers were so important, accounting for
over 90 percent of the total, primary interest was to ascertain
whether or not a seasonal shift occurred between these two
types of buyers. Weekly sales to other types of buyers tended
to be more sporadic, and no definite pattern was apparent.
Pooled t tests were used to determine whether a significant
difference existed between the fall and winter season and the
spring season in the percentage of shipments handled by chains
and wholesalers. Twenty weeks were observed in the fall and
winter and 19 in the spring when sales were made to chains.
The average percentage sold to chains was only 0.1 percent
greater in the spring than in the fall and winter. The calculated
t value was 0.02, indicating that no significant difference ex-
isted in the percentage sold to chains between these two seasons.
The average percentage of shipments sold to wholesalers in
the fall and winter was 6.2 percent larger than in the spring.
Most of the decrease in the spring was accounted for by in-
creased shipments to the three minor types of buyers-jobbers,
retailers, and government. The distribution of shipments was
observed for 20 weeks in the fall and winter and 19 weeks in
the spring. The calculated t value was 1.48, indicating non-
significance. It may be concluded that even though some differ-
ences in the seasonal pattern of shipments were observed, they
were not large enough to show that a shift in the seasonal
pattern of shipments to wholesalers occurred.








Market Structure Sweet Corn


Sizes of Sales Firms
Little difference was observed in the types of buyers to
which large and medium sales firms sold sweet corn. Small firms
tended to sell more to chains and less to wholesalers and terminal
brokers (Table 20). Small sales firms sold 61.1 percent of their
volume to chains, while large and medium firms sold 44.6 and
41.2 percent, respectively. Small firms sold 32.6 percent of their
volume to wholesalers-about 14 percent less than large and
medium firms.




Bases of Sale
Bases of sales were analyzed to determine the "how's" of
marketing Florida sweet corn. How were the various bases of
sales used in the sales areas, during different seasons, by differ-
ent sizes of firms, and by different types of buyers? Six bases
of sales, f.o.b., delivered, price arrival, cash, joint account, and
consigned, were considered in these analyses.
Two bases of sales, f.o.b. and delivered, accounted for 95.9
percent of the shipments observed (Table 21). F.o.b. sales, by
far the most prevalent, accounted for 86.5 percent of the ship-
ments. Consigned sales was the third most important basis
of sale used, but accounted for only 2.8 percent of the crates
sold. Other bases of sale were observed only sporadically and
accounted for only 1.3 percent of the volume marketed.
The season average price for f.o.b. shipments was $2.12, the
same as the average for all shipments. The average price of
delivered sales was slightly lower at $2.04. Average prices for
other bases of sale varied substantially from that for f.o.b. sales,
but since the observations were limited, this difference probably
resulted more from week of shipment or some possible third
factor than it did from the basis of sale used.
The average number of crates per sale varied from 700 for
price arrival sales to 10 for cash sales. F.o.b. sales averaged 305
crates, somewhat larger than the average for all types of sales,
which was 281 crates. The average size of delivered sales was
below the average at 272 crates. Consigned sales averaged 471
crates, considerably larger than f.o.b. and delivered sales.








Table 19-Distribution of crates shipped, by type of buyer and week of shipment, 19 Florida sweet corn sales firms, 1962463
season.


Monday Type of Buyer
of
Week
of Whole- Terminal Govern- All
f Chain Jobber Govern- Retailer
Shipment ansaler Broker ment Types


Oct. 8
15
22
29

Nov. 5
12
19
26

Dec. 3
10
17
24
31

Jan. 7
14
21
28

Feb. 4
11
18
25


30.8
32.1
46.9
54.8

65.3
23.6
24.1
48.3

74.4
39.5
32.7
74.5
55.9

54.8
10.8
56.4
18.8

49.2
41.9
40.0
45.1


Percent
8.3
7.8
.2
1.9


53.7
59.9
52.8
43.3

34.7
76.4
67.7
45.9

22.5
55.5
64.6
25.5
33.6

34.1
89.2
38.0
59.7

46.1
45.3
58.3
39.6


100.0
100.0
100.0
100.0

100.0 J
100.0
100.0
100.0

100.0
100.0 '
100.0 *
100.0
100.0

100.0 W
100.0 5
100.0 o
100.0

100.0
100.0
100.0
100.0


0









Table 19.-Continued

Monday
of Type of Buyer
Week
of Whole- Terminal Govern- All
Shipment Chain saler Broker Jobber ment Retailer Types

Percent


March 4 40.5
11 38.1
18 45.0
25 62.9

April 1 47.4
8 40.2
15 43.8
22 33.0
29 45.9

May 6 49.6
13 49.2
20 48.2
27 51.6

June 3 44.1
10 39.6
17 36.0
24 36.8

July 1 34.7
8 -
Average 45.5


59.5 -
38.4 12.2 10.6 .7
42.3 12.1 .4 .1
24.9 11.9 .3 -

37.4 13.1 2.0 .1
51.4 6.9 1.3 .2
50.5 1.3 1.2 .1
54.6 9.9 .9 1.5
43.8 8.5 1.4 .1

45.4 3.9 .1 .9
46.0 2.2 1.7 .9
42.9 8.2 .6
45.0 2.7 .2 -

47.0 6.8 2.1 -
35.6 20.5 3.6
42.2 16.8 1.7 2.9
49.3 5.9 8.0

42.2 11.6 11.5 -
100.0 -
44.7 7.5 1.3 .8


100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0


100.0
- 100.0
.2 100.0








Florida Agricultural Experiment Stations


Table 20.-Distribution of crates shipped, by size of sales firm and type
of buyer, 19 Florida sweet corn sales firms, 1962-63 season.
Size of Sales Firm
Type of
Buyer Large Medium Small All Sizes
Percent
Chain 44.6 41.2 61.1 45.5
Wholesaler 45.8 46.3 32.6 44.7
Terminal broker 7.7 8.1 4.5 7.5
Jobber .9 2.7 1.2 1.3
Government .8 1.3 .5 .8
Retailer .2 .4 .1 .2
Total 100.0 100.0 100.0 100.0
Percentage
of total 64.8 27.1 8.1 100.0



Table 21.-Number of sales and crates shipped, percentage of crates, value
of shipment, and average price per crate, by basis of sale,
19 Florida sweet corn sales firms, 1962-63 season.
Basis of Value of Average Price
Sale Sales Crates Shipments Per Crate
Number Number Percent Dollars Dollars
F.o.b. 2,140 616,071 86.5 1,307,497 2.12
Delivered 245 66,704 9.4 136,168 2.04
Price arrival 4 2,800 .4 4,879 1.74
Cash 90 902 .1 2,009 2.23
Joint account 12 5,479 .8 11,042 2.02
Consigned 42 19,802 2.8 46,244 2.34
Total or
average 2,533 711,758 100.0 1,507,839 2.12



Sales Areas
No appreciable difference existed between the use of f.o.b. and
delivered sales in the Belle Glade and South Florida areas (Table
22). The volume of corn consigned from Belle Glade was sub-
stantially larger than from South Florida probably because 6f
the differences in seasonal movement between the areas and
perhaps because of a difference in sales policies of firms. Other
bases of sale were of minor importance in the Belle Glade area
and were not observed in the South Florida area.
The percentage of f.o.b. shipments was substantially lower








Market Structure .. Sweet Corn


Table 22.-Distribution of crates shipped, by sales area and basis of
sale, 19 Florida sweet corn sales firms, 1962-63 season.
Sales Area
Basis of Belle South Central All
Sale Glade Florida Florida Areas
Percent
F.o.b. 88.7 90.1 76.0 86.5
Delivered 7.3 9.6 18.7 9.4
Price arrival .5 .4
Cash .1 .2 .1
Joint account 1.0 .8
Consigned 2.4 .3 5.1 2.8
Total 100.0 100.0 100.0 100.0
Percentage of
total 73.6 9.0 17.4 100.0

and delivered and consigned shipments were higher in the Cen-
tral Florida area. F.o.b. shipments in the Central Florida area
were 13 percent less than in other areas. Delivered shipments
accounted for 18.7 percent and consigned shipments 5.1 percent
of the total. This rate of consignment in the Central Florida
area was more than twice that in the Belle Glade and South
Florida areas, where the Marketing Order and the Exchange
were in operation. This again reflects a difference in sales
policies among firms.

Weeks of Shipment
The f.o.b. sale, which ranged from 59.6 to 100.0 percent of
weekly shipments, was the predominant basis of sale used
throughout the season (Table 23). Delivered sales were observed
during most weeks, but other bases of sale were observed only
sporadically.
Since the f.o.b. basis of sale was of such major importance,
the pooled t test was used to determine if a seasonal difference
existed in the use of this basis of sale. On the basis of 20 weekly
observations for each season, it was determined that f.o.b. sales
in the fall and winter averaged 3.3 percent higher than in the
spring. A calculated t value of 1.20 indicated that this difference
was not significant. It was concluded that no shift between f.o.b.
and other bases of sale occurred between the seasons.
Some sales managers suggested that consigned sales were
used more during periods of declining prices than during periods








Table 23.-Distribution of crates shipped, by basis of sale and week of shipment, 19 Florida sweet corn sales firms, 1962-63
season.


Monday Basis of Sale
of
Week Pre Joint All
of F.o.b. Delivered Price Cash Consigned Bases
Shipment Arrival Account Bases


Percent


Oct. 8
15
22
29

Nov. 5
12
19
26

Dec. 3
10
17
24
31

Jan. 7
14
21
28

Feb. 4
11
18
25


59.6
88.2
85.4
99.9

90.0
90.2
73.8
91.4

87.1
98.6
92.7
93.7
90.2

97.6
99.7
95.8
86.3

97.5
89.1
97.0
85.6


100

100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0 .
100.0

100.0
100.0
100.0
100.0
100.0

100.0
100.0


100.0
100.0
100.0
100.0


9
5'1








Table 23.-Continued

Monday Basis of Sale
of
Week
of F.o.b. Delivered Price Joint Consigned All
Shipment Arrival ash Account Consigned Bases


Percent


March 4
11
18
25

April 1
8
15
22
29

May 6
13
20
27
June 3
10
17
24

July 1
8


98.3
85.4
89.6
89.9

87.5
96.6
88.9
86.2
91.1

88.6
89.0
81.2
89.1

86.1
75.3
71.5
70.4

86.8
100.0


Average 86.5
t Less than one-tenth of 1 percent.


100.0
100.0













100.0
100.0
100.0
100.0
100.0
100.0 3
100.0 .
100.0 J
100.0
100.0
100.0
100.0 n

100.0
100.0


100.0
100.0


100.0


Ita









Florida Agricultural Experiment Stations


of rising prices. They reasoned that sales were more difficult
to make when prices were falling, and, therefore, salesmen were
forced to turn to consignments. In order to test this hypothesis
all weeks were classified as those of rising or declining prices
based on the direction of price movement from the previous
week. Using the prices from Table 14, price rises were observed
in 20 weeks and declines in 19 weeks. The week of October 8
could not be classified, since the previous week's price was un-
known.
The average percentage of consigned shipments was found
to be 1.4 percent larger in weeks of declining prices than in
weeks of rising prices. The pooled t calculated value was 1.34,
and with 37 degrees of freedom it was nonsignificant. Although
the difference may indicate that more corn was consigned during
periods of declining prices, the difference was not large enough
to make this a positive conclusion. Some firms have an estab-
lished policy of consigned selling regardless of the trend of the
market price.


Types of Buyers

F.o.b. was the predominant basis of sale used by all types of
buyers except retailers and government. Delivered basis was
most frequently used by these two types of buyers (Table 24).
Chains used only two bases of sale, f.o.b., which accounted
for 86.6 percent of their purchases, and delivered, which account-
ed for 13.4 percent. Wholesalers used all bases of sale except

Table 24.-Distribution of crates shipped, by basis of sale and type of buyer,
19 Florida sweet corn sales firms, 1962-63 season.
Basis of Sale
Type of
Buyer Price Joint All
F.o.b. Del. Arr. Cash Acct. Cons. Bases
Percent
Chain 86.6 13.4 100.0
Wholesaler 89.9 7.0 .3 1.7 1.1 100.0
Terminal broker 53.1 5.6 4.5 1.6 35.2 100.0
Jobber 92.9 7.1 100.0
Government 6.0 94.0 100.0
Retailer 14.1 85.9 100.0
Local broker 100.0 100.0
Unknown 100.0 -
Average 86.5 9.4 .4 .1 .8 2.8 100.0








Market Structure Sweet Corn


cash, although the volumes handled on bases other than f.o.b.
were low.
Consigned sales, as would be expected, were largest to termi-
nal brokers, accounting for 35.2 percent of the shipments to
them. Slightly more than 1 percent of the volume sold to whole-
salers was on consignment. All cash sales were to unknown types
of buyers, but these accounted for only 0.1 percent of the total
sales.


Sizes of Sales Firms
Small sales firms sold 95.3 percent of their shipments on an
f.o.b. basis almost 10 percent more than sales firms of other
sizes (Table 25). Since small sales firms sold a higher proportion
of their volume to chains, who buy predominantly on an f.o.b.
basis, this relationship may have been expected. Large sales
firms sold 10.6 percent of their volume delivered, and medium
and small firms sold progressively less.
Medium sales firms sold the highest percentage, 4.8 percent,
on a consigned basis. Large sales firms sold 2.5 percent of their
volume on consignment, and small firms only 0.1 percent.

Table 25.-Distribution of crates shipped, by size of sales firms and basis
of sale, 19 Florida sweet corn sales firms, 1962-63 season.

Basis of Size of Sales Firm
Sale Large Medium Small All Sizes
Percent
F.o.b. 85.5 86.4 95.3 86.5
Delivered 10.6 7.0 4.6 9.4
Price arrival .6 .4
Cash .1 .4 .1
Joint account .7 1.4 .8
Consigned 2.5 4.8 .1 2.8
Total 100.0 100.0 100.0 100.0
Percentage of
total 64.8 27.1 8.1 100.0


Interpackinghouse Sales
Interpackinghouse sales are not sales in the sense that they
enter directly into the primary channels of trade. They may
more accurately be called exchanges between packinghouses.








Florida Agricultural Experiment Stations


By mutual agreement between the sales firms, a discount is
usually allowed by the selling firm to cover the selling cost of
the purchasing firm. This discount makes it possible for the
purchasing firm to cover the marketing cost involved in placing
the corn into the primary channels of trade and still sell at the
competitive market price. The selling firm foregoes the normal
selling revenue, but does not have the marketing expense of
placing the corn in the primary channels of trade.
The volume of interpackinghouse movement was 71,873
crates or about 10 percent of the observed sales. This volume
was observed on 239 shipment invoices, and the average size
of interpackinghouse sale was 301 crates. This is slightly larger
than the average of 281 crates per sale for corn which was
entered into the primary channels of trade. The value of the
interpackinghouse sales was $161,491, and the season average
price was $2.25.

Grades
The distribution of the grades of corn handled through inter-
packinghouse sales was not substantially different from that
observed for other sales. U. S. Fancy accounted for 93.5 percent
of the interpackinghouse volume, compared with 92.5 percent
for other types of sales. White corn accounted for 3.8 percent
of the interpackinghouse shipments and 3.5 percent of the other
shipments. The "percentage grades" accounted for the remain-
ing 2.7 percent of interpackinghouse shipments, compared with
4.0 percent for other shipments.

Sales Areas
Over 98 percent of the interpackinghouse movement was ob-
served in the Belle Glade sales area. Although interpackinghouse
sales were observed occasionally in other areas, they were a
common marketing practice only in the Belle Glade area.

Sizes of Sales Firms
An interpackinghouse transaction may be considered as either
a sale or a purchase to a sales firm depending on whether the corn
is bought or sold. Both sides of the picture must be considered
in order to understand the use of interpackinghouse sales at
the shipping point.
Large sales firms predominated in the making of inter-








Market Structure Sweet Corn


packinghouse sales, but medium firms were predominant in
purchases. Large firms accounted for 75.2 percent of the
interpackinghouse sales, but only 44.8 percent of the purchases.
Medium firms, which accounted for only 18.1 percent of the
sales, accounted for 48.9 percent of the purchases. Little differ-
ence was evident between sales and purchases for the small firms.
Substantial differences were observed between the percent-
ages of sales and purchases accounted for by individual firms.
Interpackinghouse sales of individual firms ranged from 0 to 32.4
percent of the observed volume, and purchases ranged from 0
to 34.2 percent. No particular pattern between sales and pur-
chases of the firms was apparent. Some firms with large inter-
packinghouse sales had very low purchases, and vice versa.

Weeks of Shipment
The pattern of weekly shipments of interpackinghouse sales
followed that of other shipments closely. The trend of sales
which were entered into the primary channels of trade tended
to be followed by interpackinghouse sales from October through
May, but interpackinghouse sales were practically discontinued
during June and July. This may be accounted for by Central
Florida's domination of the market during this period and the
fact that interpackinghouse sales were not used in this area to
an appreciable extent.
Weekly average prices of interpackinghouse shipments and
all other shipments were closely related, although some week-to-
week variations occurred. The seasonal average price of inter-
packinghouse shipments was $2.25, and that of all other ship-
ments was $2.12. The average price for all other shipments was
lower because interpackinghouse sales were discontinued during
June and July. A comparison of prices during the weeks when
interpackinghouse sales were active, October through May, show-
ed the average price of interpackinghouse sales to be $2.60 and
all other sales to be $2.69. This was more typical of the expected
difference during periods when interpackinghouse sales were
used.


TERMINAL MARKET STRUCTURE AND PRACTICES
A total of 1,853 invoices on shipments to known market
destinations was observed. The destinations were unknown for



























LEGEND: .
Market Areas *
1-Northeast 4 *
2-North Central
3-South
4--Southwest
5-Midwest .
6-West 0
7-Canada
Market Size
--Large (10,000 or more crates)
*-Medium (1,000-9,999 crates)
Figure 5.-Market areas and distribution of large and medium terminal markets, 19 Florida sweet corn sales firms, 1962-63
season.








Market Structure Sweet Corn


the remaining 680 invoices, most of which were to Florida
brokers. Only shipment invoices with known destinations were
included in the analysis of the terminal market distribution,
since inclusion of unknown destinations would have introduced
a bias in the distribution figures. Terminal markets for Florida
sweet corn were grouped into six market areas of the United
States, plus one for Canada. States included in each of these
market areas may be observed in Figure 5.
The terminal market sample of 581,337 crates of sweet corn
had a total value of $1,228,891 (Table 26). The weighted season
average f.o.b. Florida price was $2.11 per crate with a range
from $2.30 in the Southwest market area down to $1.93 in the
Canadian area. The distribution of the sweet corn shipped into
the various market areas ranged from 36.1 percent for the North-
east to 2.8 percent for the West. The Northeast, North Central,
and Southern market areas, the three most important areas,
accounted for 82.1 percent of the corn marketed.
Season average prices for the market areas appeared to be
affected substantially by the period during which the shipments
were heaviest to the various areas. A comparison between the
Southwest and the Canadian market areas illustrated this. The
largest percentage of shipments to the Southwest, where the
average price was 37 cents higher than in Canada, was received
during January and February, when prices were high. The
highest percentage of shipments were made to Canada during
May, June, and July, a low price period.

Table 26.-Number of sales and crates shipped, percentage of crates, value
of shipments, and average price per crate, by market area, 19
Florida sweet corn sales firms, 1962-63 season.
Market Sales Crates Value of Avg. Price
Area Shipments Per Cratet
Number Number Percent Dollars Dollars
Northeast 540 210,082 36.1 429,784 2.05
North Central 354 135,822 23.4 289,121 2.13
South 536 131,017 22.6 283,702 2.17
Southwest 175 32,106 5.5 73,987 2.30
Midwest 147 28,071 4.8 61,027 2.17
West 31 16,357 2.8 37,411 2.29
Canada 70 27,882 4.8 53,859 1.93
Total or
Average 1,853 581,337 100.0 1,228,891 2.11
t F.o.b. Florida shipping points.







Florida Agricultural Experiment Stations


Characteristics of the Market Areas

Seasonality
Three-week moving averages of the percentages of weekly
shipments received by each marketing area were computed to
determine the relative importance of the market areas during
different periods of the year. These moving averages were used
to smooth out some of the week-to-week variations that occurred
in the weekly distribution data (Figure 6).
Shipments to northern market areas were larger during the
spring and early summer months, while shipments to southern
market areas were heavier during the late fall and winter. A
more detailed discussion of the seasonal patterns of shipments
is presented in the subsequent discussion of shipments to in-
dividual market areas.


Terminal Market Sizes
Terminal markets were classified by size according to the
number of crates of sweet corn shipped to that market during
the 1962-63 season. Large markets, those receiving 10,000 or
more crates, accounted for only 9.7 percent of the markets to
which shipments were reported, but the 15 markets in this
category accounted for 61.0 percent of the sweet corn shipped
(Table 27). Medium markets, those receiving between 1,000 and
9,999 crates, represented 33.5 percent of the markets and 33.8
percent of the volume shipped. Small markets, those receiving
less than 1,000 crates, accounted for 56.8 percent of the markets,
but only 5.2 percent of the volume.
Ten of the 15 large terminal markets observed were located
in the Northeast and North Central market areas. The three
other large markets were located in the South, Midwest, and
Canada. Medium and small markets were observed in all market
areas. A more detailed discussion of the size of the markets in
each area is presented in the subsequent discussion of the in-
dividual market areas.


Sizes of Sales
The average number of crates of sweet corn per sale tended
to vary inversely with the distance between the Florida sales








Market Structure Sweet Corn


area and the market area. The average sale to the Western area,
which was the greatest distance from Florida, was 520 crates,
compared with an average of 241 crates for the Southern area.
Sales to the Northeast averaged second largest at 392 crates
per shipment. Although Canadian markets were more distant,
these shipments averaged only 380 crates per shipment. Ship-
ments to the North Central area also averaged 380 crates per
shipment. The Southwest and Midwest areas were exceptions
to this tendency. Southwest shipments averaged 172 crates and
Midwest shipments averaged 190 crates per shipment.


Major Markets of the Market Areas
A more intensive study of the individual market areas and
the distribution of shipments among the terminal markets pro-
vided an insight into the structure and practices of these areas.
A pronounced seasonal pattern of shipments was evident for
most areas.
In order to provide a more realistic picture of the volume
handled through metropolitan area markets, small outlying
markets were included as a part of the major market. This
assimilation of smaller markets provided a more accurate de-
scription of a major market's importance, since these shipments
were undoubtedly consumed in the metropolitan area. For
example, all shipments to Forest Park and East Point, Georgia,
were included as shipments to the Atlanta, Georgia, terminal
market.
No criteria such as mileage between the center of the major
market and that of outlying markets were established as a basis
of delineating terminal from outlying markets. Such definitions
were unworkable for the heterogeneous markets. The distinc-
tion between a terminal market and an outlying market was made
on a judgment basis, using the general consensus of the produce
industry as a criterion.

Northeast
The Northeast received the largest volume of sweet corn in
the seven market areas considered. This area received 210,082
crates, or 36.1 percent of the total observed shipments. This
volume was received by 34 markets in the 13-state area.




Percent

10






20


10 C

Southwest
0 1 1 I I I I I

10 -


0
o IWest



50


40



30 /


20



10 South


0
8 22 5 19 3 17 31 14 28 11 25 11 25 8 22 6 20 3 17 1
October November December January February March April May June July




Percent


0 .......... ......... ... .... .. C a n a d a



30


20

North Central
10 -


0


50


40


30 -





10 .
Northeast

0 I I I I I I I I t I -. _
8 22 5 19 3 17 31 14 28 11 25 11 25 8 22 6 28 3 17 I
October November December January February March April May June July

Figure 6.-Three-week moving average of percentages of weekly sweet corn shipments to seven market areas, 19 Florida
sweet corn sales firms, 1962-63 season.








Table 27.-Distribution of terminal markets and crates shipped, by terminal market size and market area, 19 Florida
sweet corn sales firms, 1962-63 season.

Terminal Market Size
Market Large Medium Small All Sizes
Area Term. Crates Term. Crates Term. Crates Term. Crates
Mkts. Mkts. Mkts. Mkts.

Number
Northeast 6 171,389 11 33,276 17 5,417 34 210,082
North Central 4 100,226 10 28,936 26 6,660 40 135,822
South 3 52,204 15 70,861 19 7,952 37 131,017
Southwest 8 30,234 5 1,872 13 32,106
Midwest 1 10,968 4 13,246 13 3,857 18 28,071
West 3 12,952 5 3,405 8 16,357
Canada 1 19,976 1 7,134 3 772 5 27,882
Total 15 354,763 52 196,639 88 29,935 155 581,337

Percent
Northeast 17.6 81.5 32.4 15.8 50.0 2.7 100.0 100.0
North Central 10.0 73.8 25.0 21.3 65.0 4.9 100.0 100.0
South 8.1 39.9 40.5 54.0 51.4 6.1 100.0 100.0
Southwest 61.5 94.2 38.5 5.8 100.0 100.0
Midwest 5,6 39.1 22.2 47.1 72.2 13.8 100.0 100.0
West 37.5 79.2 62.5 20.8 100.0 100.0
Canada 20.0 71.6 20.0 25.6 60.0 2.8 100.0 100.0
Average 9.7 61.0 33.5 33.8 56.8 5.2 100.0 100.0








Market Structure Sweet Corn


The percentage of Florida sweet corn shipped to the North-
east markets during October and November was variable, but
averaged near 30 percent of the observed shipments (Figure 6).
The rate of shipment declined sharply during the first three
weeks of December to a level near 10 percent. This level pre-
vailed until mid-January, when the proportion of Northeast
shipments rose. A peak of 35 percent was reached in mid-
February, followed by a slight decline until mid-March. The
percentage of sweet corn sold in the Northeast market area rose
throughout the spring, with the exception of the last three weeks
of the season.
Seventeen large and medium terminal markets in the North-
east received 97.3 percent of the corn shipped to this area (Table
28). The six large markets New York, New York; Philadel-
phia, Pennsylvania; Boston, Massachusetts; Washington, D. C.;
Pittsburgh, Pennsylvania; and Baltimore, Maryland account-
ed for 81.5 percent of the area's receipts from Florida and 29.6
percent of all observed shipments. New York and Philadelphia
alone accounted for 48.1 percent of the area's receipts. The 17
small markets accounted for only 2.7 percent of the corn received
by this area.


Table 28.-Number and percentage of crates shipped to terminal markets
in the Northeast market area, 19 Florida sweet corn sales firms,
1962-63 season.
Number of Percent of Percent of
Terminal Market Crates Northeast Total
New York, New York 58,235 27.7 10.0
Philadelphia, Pennsylvania 42,931 20.4 7.4
Boston, Massachusetts 26,285 12.5 4.5
Washington, D. C. 16,373 7.8 2.8
Pittsburgh, Pennsylvania 14,867 7.1 2.6
Baltimore, Maryland 12,698 6.0 2.3
Hartford, Connecticut 5,885 2.8 1.0
Buffalo, New York 4,800 2.3 .8
Norfolk, Virginia 4,741 2.3 .8
Albany, New York 3,020 1.4 .5
Providence, Rhode Island 2,750 1.3 .5
Roanoke, Virginia 2,518 1.2 .4
New Haven, Connecticut 2,395 1.1 .4
Portland, Maine 1,985 .9 .4
Scranton, Pennsylvania 1,944 .9 .3
Sunbury, Pennsylvania 1,850 .9 .3
Charleston, West Virginia 1,388 .7 .2
Other markets 5,417 2.7 .9
Total 210,082 100.0 36.1
t Markets receiving less than 1,000 crates.








Florida Agricultural Experiment Stations


North Central
The North Central was the second most important market
area in terms of volume received. Shipments to this area
amounted to 135,822 crates and accounted for 23.4 percent of all
observed shipments. Shipments were made to 40 markets, the
largest number of markets observed for any market area.
The North Central area received between 15 and 20 percent
of the total shipments during the first five weeks of the fall
season (Figure 6). The rate of shipment then rose to a peak of
38 percent during the third week of November. Following a
pattern similar to that of the Northeast, the percentage declined
to a low of 11 percent the last week of December and then rose
rapidly in early January to a level between 20 and 30 percent.
The rate of shipments to this area generally stayed within this
range for the remainder of the year. The proportion of ship-
ments marketed in this area during the spring did not rise as
it did in the Northeast and Canadian market areas.
The 14 large and medium markets in the North Central area
accounted for 95.1 percent of the corn received (Table 29). The
four large markets Chicago, Illinois; Cincinnati, Ohio; De-
troit, Michigan; and Cleveland, Ohio accounted for 73.8 per-
cent of Florida corn shipments to the North Central area and


Table 29.-Number and percentage of crates shipped to terminal markets
in the North Central market area, 19 Florida sweet corn sales
firms, 1962-63 season.
Number of Percent of Percent of
Terminal Market Crates North Central Total
Chicago, Illinois 36,311 26.7 6.2
Cincinnati, Ohio 25,749 19.0 4.4
Detroit, Michigan 23,200 17.1 4.0
Cleveland, Ohio 14,966 11.0 2.6
Louisville, Kentucky 9,096 6.7 1.6
Indianapolis, Indiana 4,924 3.6 .9
Grand Rapids, Michigan 3,026 2.2 .5
Milwaukee, Wisconsin 2,440 1.8 .4
Toledo, Ohio 2,130 1.6 .4
Green Bay, Wisconsin 1,856 1.4 .3
Paducah, Kentucky 1,520 1.1 .3
Evansville, Indiana 1,511 1.1 .3
Columbus, Ohio 1,235 .9 .2
Fort Wayne, Indiana 1,198 .9 .2
Other markets 6,660 4.9 1.1
Total 135,822 100.0 23.4
t Markets receiving less than 1,000 crates.








Market Structure Sweet Corn


17.2 percent of all observed shipments. Chicago, by far the
largest market in this area, accounted for over one-fourth of
the area's receipts. This market was the third largest sweet
corn market in the United States, exceeded only by New York
and Philadelphia. A larger number of small markets were ob-
served in the North Central area than in other areas. Twenty-six,
or 65 percent of the number of markets observed, were small,
but they accounted for only 4.9 percent of the North Central
sweet corn receipts.

South
A total of 131,017 crates of sweet corn was received in the
Southern market area, accounting for 22.6 percent of the total
shipments. Shipments to the South were only slightly less than
those to the North Central area. Thirty-seven terminal markets
were recorded in the seven-state area.
The Southern marketing area received around 40 percent of
the observed volume during the first five weeks of the fall period
(Figure 6). The rate of shipment dipped sharply during the
second and third weeks of November, then rose sharply for five
weeks to a peak of 55 percent during the last week of December.
The percentage of Southern shipments declined sharply during
January to a level near 30 percent. Although there were some
week-to-week variations, the percentage of shipments received
by this area exhibited a declining trend throughout the remain-
der of the season. During June and July less than 20 percent of
the observed volume was shipped to the South, compared with 40
to 50 percent during the fall.
Eighteen large and medium terminal markets in the South
received 93.9 percent of the corn shipped to this area (Table 30).
The three large markets Columbia, South Carolina; Atlanta,
Georgia; and Miami, Florida accounted for almost 40.0 per-
cent of Florida corn shipments to the South and 8.9 percent of
all observed shipments. Sweet corn shipments in the South were
less concentrated in major terminal markets than in the North-
east and North Central areas. The largest market in the North-
east and North Central areas accounted for 28 and 27 percent
of the area's shipments, respectively, but for only 16 percent in
the South. The 15 medium markets in the South accounted
for 54.0 percent of the shipments, and the 19 small markets
accounted for only 6.1 percent.








Florida Agricultural Experiment Stations


Table 30.-Number and percentage of crates shipped to terminal markets
in the Southern market area, 19 Florida sweet corn sales firms,
1962-63 season.
Number of Percent of Percent of
Terminal Market Crates South Total
Columbia, South Carolina 20,551 15.7 3.5
Atlanta, Georgia 19,926 15.2 3.4
Miami, Florida 11,727 9.0 2.0
Jacksonville, Florida 9,876 7.5 1.7
Lakeland, Florida 9,539 7.3 1.7
Tampa, Florida 8,852 6.7 1.5
Greenville, South Carolina 7,250 5.5 1.3
Charlotte, North Carolina 7,109 5.4 1.2
Birmingham, Alabama 5,901 4.5 1.0
Nashville, Tennessee 4,377 3.3 .8
Memphis, Tennessee 3,681 2.8 .6
Raleigh, North Carolina 3,381 2.6 .6
Asheville, North Carolina 2,660 2.0 .5
Orlando, Florida 2,235 1.7 .4
Montgomery, Alabama 1,834 1.4 .3
Chattanooga, Tennessee 1,675 1.3 .3
Jesup, Georgia 1,370 1.1 .2
Jackson, Mississippi 1,121 .9 .2
Other markets 7,952 6.1 1.4
Total 131,017 100.0 22.6
t Markets receiving less than 1,000 crates.


Southwest
The Southwest area ranked fourth in terms of volume of
sweet corn received. During the 1962-63 season 32,106 crates
were received in this four-state market area. Shipments to the
thirteen terminal markets in the Southwest accounted for 5.5
percent of the total observed volume.
The seasonal pattern of shipments to the Southwest was
similar to that of the South, with the exception of the early fall
weeks (Figure 6). The Southwest received between 5 and 10
percent of the observed shipments during October, November,
and the first half of December. The percentage of shipments
then increased to a level of 23 percent during the second week
of January. A declining trend in the percentage of corn received
in the Southwest prevailed for the remainder of the year, al-
though there were some week-to-week variations. During May,
June, and July this area accounted for only 2 to 3 percent of the
volume observed, compared with over 15 percent during several
winter weeks.
None of the terminal markets in the Southwest to which








Market Structure Sweet Corn


shipments were made were large, but the eight medium markets
accounted for 94.2 percent of the sweet corn received by the area
(Table 31). The two largest of these markets Houston, Texas,
and New Orleans, Louisiana accounted for 47.4 percent of the
area's receipts. The five small terminal markets in the Southwest
accounted for only 5.8 percent of the area's receipts.

Table 31.-Number and percentage of crates shipped to terminal markets
in the Southwest market area, 19 Florida sweet corn sales firms,
1962-63 season.
Number of Percent of Percent of
Terminal Market Crates Southwest Total
Houston, Texas 7,622 23.7 1.3
New Orleans, Louisiana 7,613 23.7 1.3
Dallas, Texas 4,806 15.0 .8
San Antonio, Texas 3,099 9.7 .5
Little Rock, Arkansas 2,353 7.3 .4
Oklahoma City, Oklahoma 1,848 5.8 .3
Fort Worth, Texas 1,516 4.7 .3
Tyler, Texas 1,377 4.3 .2
Other markets 1,872 5.8 .4
Total 32,106 100.0 5.5
t Markets receiving less than 1,000 crates.


Midwest
The Midwest market area ranked fifth in the volume of
Florida corn receipts. A total of 28,071 crates was received by
the 18 terminal markets located in the Midwest. This volume
accounted for 4.8 percent of all observed shipments.
The percentage of sweet corn shipments received by the
Midwest markets during October and November was very small
(Figure 6). The rate of shipment rose rapidly in December,
but declined to a level near 5 percent by the first of January.
Although the percentage of corn received declined in February
and rose in March, no pronounced trend was observed for the
late winter and spring periods. Receipts for this entire period
averaged around 5 percent of observed Florida shipments.
Large and medium size terminal markets in the Midwest
accounted for 86.2 percent of the corn shipped to that area
(Table 32). The one large market, St. Louis, Missouri, accounted
for 39.1 percent of the area's volume, but only 1.9 percent of
the total observed shipments. The 13 small terminal markets
received 13.8 percent of the Midwest corn receipts.









Florida Agricultural Experiment Stations


Table 32.-Number and percentage of crates
in the Midwestern market area,
firms, 1962-63 season.


shipped to terminal markets
19 Florida sweet corn sales


Number of Percent of Percent of
Terminal Market Crates Midwest Total
St. Louis, Missouri 10,968 39.1 1.9
Minneapolis, Minnesota 6,050 21.5 1.0
Kansas City, Missouri 3,903 13.9 .7
Des Moines, Iowa 1,775 6.3 .3
Kansas City, Kansas 1,518 5.4 .3
Other markets 3,857 13.8 .6
Total 28,071 100.0 4.8
t Markets receiving less than 1,000 crates.

West
The volume of sweet corn shipped to the West was smaller
than for any of the other six areas. Only 16,357 crates, account-
ing for 2.8 percent of the observed shipments, moved into the
eight terminal markets in this area.
Practically all shipments to the Western market area oc-
curred during March and April. The West received around
6 percent of the total shipments during this period. During
the fall and late spring, competition from California producers
made Florida shipments to this area uneconomical.
None of the terminal markets in the West received enough
corn to be classified as large, primarily due to the short market-
ing season. The three medium size markets Los Angeles, San
Francisco, and Sacramento, California accounted for 79.2
percent of the corn shipped to the area, but only 2.0 percent
of the total volume (Table 33). Los Angeles and San Francisco
were the two major terminal markets, each receiving around
35 percent of the area's total. The five small markets received
20.8 percent of the shipments to this area.

Table 33.-Number and percentage of crates shipped to terminal markets
in the Western market area, 19 Florida sweet corn sales firms,
1962-63 season.


Terminal Market


Number of
Crates


Percent of
West


Percent of
Total


Los Angeles, California 5,966 36.5 1.0
San Francisco, California 5,586 34.1 1.0
Sacramento, California 1,400 8.6 .2
Other markets 3,405 20.8 .6
Total 16,357 100.0 2.8
t Markets receiving less than 1,000 crates.








Market Structure Sweet Corn


Canada
Shipments to Canada were about one-third larger than those
to the West and about equal to Midwest receipts. A total of 27,882
crates of sweet corn was observed for the Canadian market area.
For the shipments to Canada, the province was considered as
the terminal market, rather than the individual city. Shipments
were observed to five Canadian provinces.
During the fall and winter, shipments were irregular, and
no pattern was apparent. Spring weekly shipments began at
2 to 3 percent of the total volume and increased slowly through-
out the season to a level of 9 percent in July.
The two largest provinces in Canada accounted for 97.2
percent of the area's volume and 4.7 percent of the observed
shipments (Table 34). Ontario alone received 71.6 percent of
the Canadian shipments.

Table 34.-Number and percentage of crates shipped to provinces in
the Canadian market area, 19 Florida sweet corn sales firms,
1962-63 season.
Number of Percent of Percent of
Provinces Crates Canada Total
Ontario, Canada 19,976 71.6 3.5
Quebec, Canada 7,134 25.6 1.2
Other provinces 772 2.8 .1
Total 27,882 100.0 4.8
t Provinces receiving less than 1,000 crates.

Large and Medium Markets
It is apparent from Figure 5 that the major terminal markets
were spread over the eastern United States and Canada with a
concentration in major population centers. The terminal markets
shown on this map received 94.8 percent of the sweet corn
shipments from Florida. The 15 large markets shown accounted
for 61.0 percent and the 52 medium markets accounted for the
remaining 33.8 percent.


Distribution of White Corn
Although white corn accounted for only 3.5 percent of the
sweet corn observed, it was of more relative importance to some
sales firms, especially during certain periods. The pattern of








Florida Agricultural Experiment Stations


market distribution of white corn was found to vary substanti-
ally from that of yellow corn. The percentage of white corn
sold in the South was three times greater than the proportion
of yellow (Table 35). The Southern marketing area received
63.4 percent of the observed white corn, but only 21.1 percent
of the yellow. The Southwest received a slightly higher per-
centage of the white corn than of the yellow 7.4 percent
compared to 5.5 percent, respectively. All other market areas
received a higher proportion of yellow corn than they did of
white.

Table 35.-Distribution of crates shipped, by type of corn and market area,
19 Florida sweet corn sales firms, 1962-63 season.
Type of Corn
Yellow White All Types
Market
Area Crates Percent Crates Percent Crates Percent
Northeast 206,145 36.7 3,937 20.4 210,082 36.1
North Central 134,473 23.9 1,349 7.0 135,822 23.4
South 118,762 21.1 12,255 63.4 131,017 22.6
Southwest 30,675 5.5 1,431 7.4 32,106 5.5
Midwest 27,711 4.9 360 1.8 28,071 4.8
West 16,357 2.9 16,357 2.8
Canada 27,882 5.0 27,882 4.8
Total 562,005 100.0 19,332 100.0 581,337 100.0


Sales Areas
The percentage of corn shipped to the Northeast market area
was considerably larger from Central Florida than from the
other sales areas (Table 36). The fact that receipts in the
Northeast and shipments from Central Florida both peaked
in late spring explained why almost 50 percent of the shipments
from Central Florida went to the Northeast, while less than
40 percent from other sales areas went to this market area.
The percentage of corn shipped to the Southern market area
from Belle Glade and South Florida was higher than average.
Receipts of corn in the South were highest in the fall and winter,
a period which coincides with the shipping season of the Belle
Glade and South Florida areas. Shipments to the Southwest
followed a pattern similar to that of the South.
All shipments to the West were from the Belle Glade and
South Florida sales areas. Sales to the West were discontinued









Market Structure Sweet Corn


Table 36.-Distribution of crates shipped, by sales area and market area,
19 Florida sweet corn sales firms, 1962-63 season.
Sales Area
Market
Area Belle Glade South Florida Central Florida All Areas
Percent
Northeast 32.4 39.1 49.8 36.1
North Central 24.3 13.6 22.2 23.4
South 23.7 28.4 16.4 22.6
Southwest 6.1 11.3 2.0 5.5
Midwest 5.2 2.4 4.0 4.8
West 3.6 2.7 2.8
Canada 4.7 2.5 5.6 4.8
Total 100.0 100.0 100.0 100.0
Percentage
by sales area 73.6 9.0 17.4 100.0


in the spring before the
ments.


Central Florida area commenced ship-


Sizes of Sales Firms
Large size sales firms shipped a smaller percentage of their
volume to the Northeast and Canadian market areas than did
medium and small firms (Table 37). Shipments by large firms
averaged about 10 percent less to the Northeast and 5 percent
less to Canada. Shipments to other market areas were dominated
by large sales firms with the exception of the Western market
area. Medium firms dominated shipments to this area.

Table 37.-Distribution of crates shipped, by size of sales firm and
market area, 19 Florida sweet corn sales firms, 1962-63 season.
Size of Sales Firm
Market
Area Large Medium Small All Sizes
Percent
Northeast 32.9 45.9 42.2 36.1
North Central 25.1 17.2 22.5 23.4
South 23.4 20.8 19.1 22.6
Southwest 6.5 2.3 3.9 5.5
Midwest 5.9 2.3 1.7 4.8
West 2.6 4.2 1.2 2.8
Canada 3.6 7.3 9.4 4.8
Total 100.0 100.0 100.0 100.0
Percentage
by firm size 64.8 27.1 8.1 100.0








Florida Agricultural Experiment Stations


Types of Buyers
Chain buyers played a more important role in the North-
eastern and Southern markets than in other areas. Chains
purchased slightly less than one-half of the sweet corn handled
in these areas, compared to only one-fifth to one-third of that
handled in other areas (Table 38).


Table 38.-Distribution of crates shipped, by type of buyer and market
area, 19 Florida sweet corn sales firms, 1962-63 season.
Type of Buyer
Market Term. Whole- Govern- All
Area Chain Broker saler Jobber Retailer ment Types
Percent
Northeast 49.5 5.7 40.4 2.9 .3 1.2 100.0
North Central 32.5 9.6 57.2 t .6 .1 100.0
South 47.3 3.7 47.1 .4 t 1.5 100.0
Southwest 30.3 20.6 47.2 1.0 .9 100.0
Midwest 35.1 22.7 40.2 .2 1.8 100.0
West 21.1 22.5 51.7 4.7 100.0
Canada 30.4 69.0 .6 100.0
Average 45.5 7.5 44.7 1.3 .2 .8 100.0
t Less than one-tenth of 1 percent.


Wholesalers handled more than one-half the corn in the
Canadian, North Central, and Western market areas. Whole-
salers handled the lowest percentage in the Northeast and Mid-
west areas, where they received slightly more than 40 percent
of the observed shipments. Since chain and wholesale buyers
accounted for over 90 percent of the sweet corn handled, one
of these types of buyers tended to be dominant in each market
area. Only in the Southwest, Midwest, and West did other types
of buyers handle a sizeable portion of the volume. Terminal
brokers received over 20 percent of the volume handled in each
of these areas. The sales to chains and wholesalers by terminal
brokers could not be determined from the invoices sampled.
Therefore, the total volume handled eventually by these factors
could not be established. Most of the shipments to miscellaneous
types of buyers jobbers, retailers, and government were
observed in the Northeast. However, jobbers played an im-
portant role in the West and government in the South and
Midwest.








Market Structure Sweet Corn


Bases of Sale
F.o.b. was the principal basis of sale used in all market areas,
ranging from 78.4 percent of the volume in the North Central to
100.0 percent in Canada. Nevertheless, three areas Northeast,
North Central, and Midwest received substantially fewer
f.o.b. shipments than did other areas. F.o.b. shipments accounted
for 76 to 79 percent of the receipts in these areas, while account-
ing for over 90 percent to other areas. The decline in importance
of f.o.b. shipments to these areas was offset by an increase in
delivered sales. Delivered sales accounted for more than 12
percent of the area's receipts in the Northeast, North Central,
and Midwest (Table 39).


Table 39.-Distribution of crates shipped, by basis of sale and market
area, 19 Florida sweet corn sales firms, 1962-63 season.
Basis of Salet
Market Price Joint All
Area F.o.b. Delivered Arrival Account Consigned Bases
Percent
Northeast 78.6 14.9 1.0 1.6 3.9 100.0
North Central 78.4 12.4 .5 .9 7.8 100.0
South 91.4 7.9 .6 .1 100.0
Southwest 96.9 3.1 100.0
Midwest 76.9 19.9 .7 2.5 100.0
West 95.1 4.9 100.0
Canada 100.0 100.0
Average 86.5 9.4 .5 .8 2.8 100.0
t Cash sales omitted, since no area received as much as one-tenth of 1 percent.

Consigned shipments were above average to the Northeast
and North Central market areas. Even in these areas, consigned
sales accounted for only a small percentage of the total volume
received. Some consigned sales were also observed in the South-
ern and Midwestern market areas.


INDUSTRY ORGANIZATION AND
MARKETING CHANNELS

The Florida sweet corn industry, which developed from one
of little importance to a multi-million dollar industry in the past








Florida Agricultural Experiment Stations


15 years, has experienced a number of acute marketing problems
during the past few years. Some of these problems were associ-
ated with rapid growth, but others appeared to be chronic. By
the early 1960's, leaders in the industry began questioning
whether the marketing problems could be met satisfactorily
with the market organization and structure then existing.
Action was subsequently initiated to adopt a state marketing
order covering sweet corn. Industry hearings were held to
evaluate the feasibility of an order and in January 1963 the
Sweet Corn Marketing Order (as amended 1962) was adopted
in the Belle Glade and South Florida sales areas. Concurrently,
a cooperative bargaining association was organized whose mem-
bership was made up of Florida sweet corn growers from the
area covered by the Marketing Order. This cooperative was
known as the Florida Sweet Corn Exchange, referred to here-
after as the Exchange.



The Marketing Order
The authority for the Marketing Order adopted by the sweet
corn industry was granted in the Florida Sweet Corn Marketing
Act of 1959, as amended.4 This act provided the framework
under which the sweet corn industry could adopt a marketing
order if approved by the growers and handlers. Adoption of the
order required the approval by 65 percent of the affected
growers who produced 75 percent of the sweet corn volume in
the area affected. It also required the approval of the handlers
of 65 percent or more of the volume. Regulations and restric-
tions issued under the authority of the Marketing Order are
binding on all growers and handlers in the affected area once
the Order has been adopted. The Marketing Order may be
terminated at the end of a marketing season by the Commis-
sioner of Agriculture when he receives a written request for
such action by 50 percent or more of the growers who produced
more than 50 percent of the volume marketed. Some of the
more important provisions of the Marketing Order are discussed
in the following sections (9).

All references to the sweet corn industry in respect to the Marketing
Order or Exchange refer only to the Belle Glade and South Florida areas
and not the Central Florida area.








Market Structure Sweet Corn


Purpose
The purpose of the marketing order is to improve returns to
growers through a more orderly system of marketing. Specific
provisions of the Order which are intended to promote more
orderly marketing are quantity regulation, quality control, in-
spection and container regulation, prohibition of unfair trade
practices, research, and advertising.

Administration
The final responsibility for the administration of the Market-
ing Order rests with the Commissioner of Agriculture. He is
authorized to appoint an 11-member Sweet Corn Advisory Com-
mittee to recommend rules and regulations and to carry out
certain provisions of the program. Elections are held in the
production areas to select the nominations for the nine Advisory
Committee members from the Belle Glade area and the two
from the South Florida area.
Although the final authority of the Marketing Order is
vested in the Commissioner of Agriculture, the Advisory Com-
mittee's role is vital, since it has the responsibility of formulat-
ing plans and policies for the industry and for recommending
actions to carry these out. Recommendations of the Advisory
Committee are normally accepted by the Commissioner pro-
vided they are within the authority of the Order and do not
violate the public interest.

Quantity Regulations
Provisions are made in the Marketing Order to control the
quantity of sweet corn sold during a marketing year by the
use of a "marketable allotment." The "marketable allotment"
represents the total number of crates which the industry intends
to market during a marketing year. Based on an "economic
and marketing survey" it is the responsibility of the Advisory
Committee to recommend a "marketable allotment" to the Com-
missioner prior to the start of each season. With the approval
of the Commissioner, the "marketable allotment" may:
1. Limit the total quantity of sweet corn, or that of
any grade, size, or quality, which may be distributed
by handlers.








Florida Agricultural Experiment Stations


2. Limit the grade, size, or quality which may be distri-
buted during a particular period of the marketing
year.

3. Allot equitably among handlers the total quantity or
the quantity by grade, size, or quality that may be
placed in the primary channels of trade. This allot-
ment is based on a prior period of sales which the
Commissioner finds representative. Such an allot-
ment constitutes a "base quantity" for handlers.

"Base quantity" is the predominant element used in comput-
ing the market share of the "marketable allotment" which sales
firms will receive in subsequent years. Normally, the total
"marketable allotment" will be divided according to the ratios
in which the "base quantities" are shared in the previous year;
however, a "base quantity reserve" is set aside each year for
new sales firms. "Temporary base quantities" may be assigned
from this by the Advisory Committee if they deem it appro-
priate. "Temporary base quantities" become permanent after
three consecutive years of use. Of the total "marketable allot-
ment," 5 percent will be set aside annually for this purpose
through the 1964-65 season and 2.5 percent each season there-
after.


Quality and Container Regulations
The Advisory Committee may recommend to the Commis-
sioner of Agriculture that standards of grade, condition, size,
maturity, or pack be established. Uniform inspection, grading,
and proper labeling may also be required under this provision.
Regulations may be issued establishing the size, weight, capacity,
and dimensions of containers which may be used for sweet corn
placed in the primary channels of trade.
The Commissioner has issued requirements that (a) all
sweet corn be precooled prior to leaving the marketing area,
(b) all sweet corn be packed in specified crates, and (c) no corn
below 85 percent U. S. Fancy Grade be placed in the primary
channels of trade (8). These regulations may be changed at any
time upon recommendation of the Advisory Committee and the
concurrence of the Commissioner.








Market Structure Sweet Corn


Unfair Trade Practices
The Commissioner, upon the recommendation of the Advisory
Committee, may issue and enforce regulations designed to cor-
rect any trade practice adversely affecting the distribution of
corn within the area covered by the order. The Commissioner
may also enforce existing regulations concerning trade practices.

Research
The Advisory Committee is authorized to carry out such
studies on the production or distribution of sweet corn as are
deemed desirable. It is also authorized to allocate and expend
the funds that may be required.

Advertising and Promotion
The Advisory Committee with the approval of the Commis-
sioner may establish advertising and sales promotion programs
to create new, or maintain present, markets for Florida sweet
corn. Any type of program in this category may be promulgated
as long as it does not promote any particular handler's brand
or trade name.



The Florida Sweet Corn Exchange
The articles of incorporation and bylaws of the Florida
Sweet Corn Exchange are similar to those of other cooperative
marketing organizations, but its method of operation is some-
what unique. From its membership of growers a 13-member
board of directors is elected whose responsibility it is to formu-
late policies and conduct the business of the Exchange. Three
officers, a president, vice-president, and secretary-treasurer, are
selected by the Board from its members. The Exchange has two
standing committees, the Executive Committee and the Market-
ing Subcommittee, to whom the responsibility for carrying out
many of the activities is delegated.
Through the use of marketing contracts with growers, the
Exchange acquires title to and exclusive marketing rights of
sweet corn produced by its members. The Exchange also signs
contracts with "authorized sales agencies" under which such
agencies agree to be governed in the sale and distribution of








Florida Agricultural Experiment Stations


all corn handled for Exchange members. Sweet corn is delivered
by growers directly to the "authorized sales agencies" of the
growers' choice, but must be handled according to the Exchange
agreement. Specifically, the sales firms agree not to sell for a
price less than that specified by the Board of Directors and to
adopt any sales procedures recommended by the Directors as
being in the best interest of the growers.
Membership in the Exchange, unlike the provisions of the
Marketing Order, is on a voluntary basis. All rules of the Ex-
change are applicable only to Exchange members, while Mar-
keting Order regulations are applicable to all industry members.
Growers who join the Exchange must place their entire produc-
tion under contract. Sales firms who contract with the Exchange
may handle corn for both members and nonmembers. Exchange
policies are applicable only to corn handled for members.


Pricing
Setting the selling price is a continuous job, requiring con-
stant revision throughout the season. This function is delegated
to the Marketing Subcommittee by the Directors. The Market-
ing Subcommittee weighs all marketing information and sets
prices by grade and type of corn. These prices must be followed
by all sales firms handling Exchange corn. Prices are normally
set as early as possible each week, usually on Monday, and are
applicable for periods ranging up to a week, depending upon
marketing conditions, but they may be revised anytime the
Subcommittee feels it is necessary.


Coordination
The Marketing Order and the Exchange are separate organi-
zations; however, in an operational sense they are companion
organizations and are intended to work closely together to meet
the marketing objectives of the industry. Each has specific
functions which it can perform, but the two working together
make it possible to have some control over marketable output,
price, advertising, and other factors which may affect industry
revenue.
Although the functions of the Marketing Order and Ex-
change are separate, a well defined marketing program must








Market Structure Sweet Corn


take into account the contributions from both. Coordination is
obtained largely by having an overlapping of Exchange Direc-
tors and members of the Advisory Committee. Nine of the 13
Directors of the Exchange during the 1963-64 season were either
members or alternate members of the Advisory Committee.


Evaluation by Sales Firms
The managers of the 20 sales firms in the Belle Glade and
South Florida areas were asked to evaluate the effects of
several of the Marketing Order and Exchange programs. Sales
firms in the Central Florida area were not included in this phase
of the study, since the Marketing Order did not cover that area
and most of the growers there were not members of the Ex-
change.

Selling Functions
Managers were asked to evaluate how their selling functions
in 1962-63, the first active year for the Marketing Order and
Exchange, had been changed from previous years. In four pri-
mary areas of interest, one-half or more of the firms observed
no change in their selling functions (Table 40).
Changes in sales cost of the firms were considered, exclusive
of any direct contributions to the Exchange. The six managers
who observed changes in their sales cost indicated it was higher.
Telephone charges and carryover expenses were the two areas
that accounted for most of the increases in sales cost. The
managers indicated that it took more calls to locate buyers
when operating with fixed prices and that more return calls
were required to confirm prices set by the Exchange. Two man-

Table 40.-Effects which the Marketing Order and Exchange programs had
on certain selling functions of the firm, 20 Florida sweet corn
sales firms, 1962-63 season.
Comparison with Previous Years
Selling Function Different Same
Number Percent Number Percent
Sales cost 6 30.0 14 70.0
Market area 2 10.0 18 90.0
Basis of sale 8 40.0 12 60.0
Grade shipped 10 50.0 10 50.0








Florida Agricultural Experiment Stations


agers indicated that delays in finding buyers when the prices
were set increased the cost of storage and handling. Fourteen
managers observed no effect on their sales cost due to the
operation of the Exchange and Marketing Order.
Only two of the sales firms felt that the Marketing Order
and Exchange programs had any effect on the terminal market
areas to which they marketed sweet corn. They felt that some
sales of "price corn" were lost to competing sales firms who
were not members of the Exchange. B
Although 60 percent of the managers indicated that they had
not altered their basis of sale, four firms consigned more and
three firms less than in previous years. The increase in con-
signed sales was attributed to the difficulty in finding buyers
and the tendency to use up the 5 percent consignment limitation
permitted by the Exchange. The firms that decreased consigned
sales had to do so to remain within the Exchange limitation. The
remaining firm indicated it had increased delivered sales in
order to be more competitive.
One-half of the managers interviewed indicated that the
grades of corn their firms shipped were affected by the activities
of the Marketing Order and Exchange. All 10 of these managers
indicated that the volume of the lower grades had been reduced.
Some firms had done this by discontinuing shipments of bulk
corn; others had reduced their shipments of "percentage grade"
corn, while still others discontinued shipments of U.S. No. 2
grade corn.


Marketable Allotment
None of the firm managers thought the 1962-63 "marketable
allotment" of the Marketing Order was too low, but seven, or
35 percent, felt it was too high (Table 41).6 Most of these felt
that the allotment was so large that it encouraged excess pro-
duction.
Sixty percent of the sales firms thought the size of the "mar-
ketable allotment" was about right, or about right if certain
6 "Price corn" refers to corn which barely meets the specifications of a
particular grade and is sometimes sold below the accepted price for the
grade.
"Marketable allotment" was referred to in the questionnaire as "mar-
keting quota."








Market Structure Sweet Corn


Table 41.-Opinions of firm managers concerning the size of the "market-
able allotment" established under the Marketing Order, 20
Florida sweet corn sales firms, 1962-63 season.
Sales Firms
Opinion Number Percent
Too high 7 35.0
Too low 0 0
About right 5 25.0
Qualified right 7 35.0
No opinion 1 5.0


conditions occurred. Of the seven firms that qualified their
opinions on the allotment size, five thought it was all right pro-
vided the production was well distributed throughout the season.
The suggestion was made that the allotment should be made
on a seasonal basis in order to assure a more satisfactory seasonal
distribution. Two firms felt the allotments were all right pro-
vided yields were not too high.


Advertising
Three-fourths of the sales firms felt that the advertising
program conducted under the Marketing Order was beneficial
to their sales (Table 42). The extent to which they felt it bene-
fited them ranged from "very much" to "it does no harm." Only
five sales firms felt that the program was of no benefit to them.
Three of these were from the South Florida area and indicated
that they received no benefits due to the timing of the promo-
tional efforts.


Table 42.-Questions on attitudes of firm managers concerning the in-
dustry advertising program conducted under the Marketing
Order, 20 Florida sweet corn sales firms, 1962-63 season.
Sales Firms
Question Number Percent
Did the program
benefit sales?
Yes 15 75.0
No 5 25.0
Should it be:
Expanded 8 40.0
Same 8 40.0
Decreased 3 15.0
Eliminated 1 5.0








Florida Agricultural Experiment Stations


Only one manager indicated that the advertising program
should be eliminated, and only three thought it should be de-
creased. These three qualified their answers by stating they
would be more in favor of the program if it were redirected
toward more direct merchandising efforts with their buyers.
They felt that consumer advertising was of little benefit to them.
On the other hand, several of the managers who felt the program
should be expanded felt that consumer advertising should also
be expanded.

Buyer Relations
All 18 sales firm managers who had received reactions from
their buyers on the activities of the Marketing Order and Ex-
change indicated that these reactions were unfavorable. Two
had received no buyer reactions to the program. Buyers generally
did not recognize any benefits they may have received from the
price stability or uniform price aspects of the program. Reasons
given for the buyer's dislike of the program were (a) prices
could not reflect the actual value of some corn and (b) advanced
prices could not be arranged for special large volume purchases
which were tied in with buyer's promotional programs.

Pricing
Sixty percent of the sales firm managers felt that the pric-
ing activities of the Exchange both raised and lowered prices
at various times (Table 43). There was little agreement, how-
ever, on the periods when prices were raised or lowered. Some
thought that prices were held down in the winter and early
spring, but were enhanced during the late spring. Others dis-
agreed with this and thought that prices were helped more by
these programs in the winter and early spring. Several of the

Table 43.-Opinions of firm managers concerning the effect the Exchange
had on price levels, 20 Florida sweet corn sales firms, 1962-63
season.
Sales Firm
Effect Number Percent
Raised 2 10.0
Lowered 3 15.0
Both 12 60.0
No effect 2 10.0
No opinion 1 5.0








Market Structure Sweet Corn


managers felt that the Exchange lowered or raised prices on a
day-to-day basis, depending on market conditions each day.
Those who thought the Exchange either raised or lowered prices
were about equally divided-two and three, respectively. Only
two firms felt the Exchange had no effect on the prices.


Marketing Channels
The organizations handling sweet corn have been discussed
in some detail in this study. However, due to the numerous or-
ganizations involved and the varied roles of each, it is sometimes
difficult to understand how they fit together in the marketing
system. The schematic drawing in Figure 7 illustrates the rel-
ative position in the marketing channels of organizations han-
dling Florida sweet corn. The percentage distribution figures
from the producer to the wholesale level were based on data dis-
cussed in this study, but the retail level data were based on sec-
ondary sources.
Sweet corn was produced by 89 growers in the three pri-
mary production areas of Florida and was marketed by 25 sales
firms. The Central Florida area, which was not covered by the
Marketing Order, sold 17.4 percent of the total volume. The
remaining 82.6 percent was shipped from the Belle Glade and
South Florida areas and was under the Marketing Order. The
Florida Sweet Corn Exchange contracted for the handling of
64.2 percent of the volume marketed from the area covered by
the Marketing Order, although it accounted for only 53.0 per-
cent of the Florida volume.
Florida brokers had 12.5 percent of the volume invoiced di-
rectly to them. This does not include all corn handled by brokers,
since part was invoiced directly to the terminal buyer by the
sales firm. When this was done, the designation of the terminal
buyer was used. Although the type of buyer was not known for
sales invoiced to brokers, it was assumed the distribution was
the same as that of other sales.7
Shipments made to the wholesale level accounted for 99 per-
cent of the volume sold, with chains and wholesalers accounting
for over 90 percent. One percent of the volume was sold directly
to retailers and government.
7This assumption was based on (a) the distribution of shipments from
brokers where the type buyer was known and (b) personal interviews with
brokers.







Sweet Corn MarketingOrder

I14 00
45.5 Chains 15 Chain
Florida Fla. Florida Stores
Sweet Sales
Growers As Corn 53.0 Firms


Frx-id I I ntut
change / 7.5




875 00. tuton- 9.
44.7 Whole- -- Markets Con-
f29\6 1 salers '- -' sumer
S12. Fla \\ \ 11 M


Figure 7.-Distribution of crates shipped by organizations handling Florida sweet corn, 19 Florida sweet corn sales firms,
1962-63 season.








Market Structure Sweet Corn


The distribution of shipments throughout the remainder of
the marketing system was based on the assumption that sweet
corn was handled in the same proportion by the chain stores,
retail stores, and institutional markets as all food.8 Data could
not be obtained on the distribution of sweet corn at this level.
On the basis of data reported by the Progressive Grocer on
the distribution of food handled by chain and independent stores,
it was estimated that slightly over one-half of the Florida corn
reached consumers through chain stores. Independent stores
were estimated to handle around 39 percent (13). The estimate
of the institutional market size was derived from a study of in-
stitutional wholesale grocers by Wischkaemper and Bouma (25).
It was estimated that 9 percent reached consumers through these
outlets. The remaining 0.8 percent was accounted for by direct
government purchases.


THEORETICAL GUIDELINES FOR PRICE
AND MARKETABLE OUTPUT
The primary decisions which must be made by the Market-
ing Order's Advisory Committee relate to marketable output,
and those by the Exchange's directors relate to price. Although
the organization and market structure of the Florida sweet corn
industry have been discussed in considerable detail in the pre-
vious sections, they do not relate directly to either of these ques-
tions. It is not the purpose of this section to provide answers
to price and output questions, but only to provide theoretical
guidelines for maximizing profits to the industry.


The Economic Model
Agriculture is often thought of as a segment of the economy
in the United States that closely approximates the economic
model of pure competition. This is undoubtedly true for some
industries, such as cattle and hogs at the farm level, but the Flor-
ida sweet corn industry does not meet many of the conditions
assumed in this model. Conditions contributing to the sweet corn
8 It was realized that certain biases may be introduced by making this
assumption, although there was no apparent reason why corn would be
expected to be handled in a ratio different from other foods. Nevertheless,
the data should be accepted for their purpose-to indicate the relative
importance of the marketing channels.








Market Structure Sweet Corn


The distribution of shipments throughout the remainder of
the marketing system was based on the assumption that sweet
corn was handled in the same proportion by the chain stores,
retail stores, and institutional markets as all food.8 Data could
not be obtained on the distribution of sweet corn at this level.
On the basis of data reported by the Progressive Grocer on
the distribution of food handled by chain and independent stores,
it was estimated that slightly over one-half of the Florida corn
reached consumers through chain stores. Independent stores
were estimated to handle around 39 percent (13). The estimate
of the institutional market size was derived from a study of in-
stitutional wholesale grocers by Wischkaemper and Bouma (25).
It was estimated that 9 percent reached consumers through these
outlets. The remaining 0.8 percent was accounted for by direct
government purchases.


THEORETICAL GUIDELINES FOR PRICE
AND MARKETABLE OUTPUT
The primary decisions which must be made by the Market-
ing Order's Advisory Committee relate to marketable output,
and those by the Exchange's directors relate to price. Although
the organization and market structure of the Florida sweet corn
industry have been discussed in considerable detail in the pre-
vious sections, they do not relate directly to either of these ques-
tions. It is not the purpose of this section to provide answers
to price and output questions, but only to provide theoretical
guidelines for maximizing profits to the industry.


The Economic Model
Agriculture is often thought of as a segment of the economy
in the United States that closely approximates the economic
model of pure competition. This is undoubtedly true for some
industries, such as cattle and hogs at the farm level, but the Flor-
ida sweet corn industry does not meet many of the conditions
assumed in this model. Conditions contributing to the sweet corn
8 It was realized that certain biases may be introduced by making this
assumption, although there was no apparent reason why corn would be
expected to be handled in a ratio different from other foods. Nevertheless,
the data should be accepted for their purpose-to indicate the relative
importance of the marketing channels.








88 Florida Agricultural Experiment Stations

industry's variance from this model may be classified as (a)
natural phenomena and (b) organizational characteristics.
Natural phenomena refer to the climatic and cultural condi-
tions that permit production of sweet corn in Florida over an
extended period when production is not available from compet-
ing areas. Not only is there no competition, but there is no threat
of domestic competition, barring a major change in technology,
during most of this period.
Organizational characteristics refer to the number of sales
firms, their interrelationships, and their organization under the
Marketing Order and Exchange. The limited number of firms
sets this industry aside from many others, butof even more sig-
nificance to its economic character is its organization under the
Marketing Order and Exchange.
These two characteristics, peculiar to the Florida sweet corn
industry, introduce an element of monopoly and of seller con-
centration with some degree of collusion. These characteristics
are evidently not compatible with the__Coditions-of pure compe-
tition. It is virtually impossible to develop a theoretical model
that conforms perfectly to the conditions of an industry in the
real world. On the basis of results of this study; it was deter-
mined that the Florida sweet corn industry was most closely
approximated by the conditions of the "organized collusive oli-
gopoly" as discussed by Leftwich (14), or the "collusive oligopoly
selling identical products" as discussed by Blodgett~- These
models with certain modifications appeared to offer the most ap-
propriate framework around which to develop a theoretical an-
alysis of the industry.
The validity of using the collusive oligopoly model to explain
price and marketable output determinations depends on how well
the industry in the real world conforms to the assumptions of
the theoretical model. Although it would not be expected that the
market conditions of the industry and the model would conform
perfectly, they should be approximated.

Numbers of Sellers
Blodgett defines oligopoly as "a market situation in which
there are only a few sellers of some economic good" (5). The
term "a few" is difficult to define in absolute numbers. Bain elab-
orates further by dividing oligopolies into five classes based on
the numbers of sellers and the concentration of output (3).








Market Structure Sweet Corn


Bain's classification, "moderate concentration among a few sell-
ers with a competitive fringe," seems to be most representative
of the market conditions found in the Florida sweet corn indus-
try. Bain described this classification as follows:
Industries where a very few or a moderately few sellers
control the bulk of the industry output and where a sub-
stantial number of small sellers share the remainder. For
example, seven large sellers supply 85 percent of the
industry output and 35 small sellers divide the remain-
der. .(3).
In the area included under the Marketing Order there were
20 sweet corn sales firms in 1962-63. The Central Florida area
was not included in this analysis, since it was not covered by the
Marketing Order and it shipped corn only in late May and June.
Eight large sales firms in the Belle Glade and South Florida
areas sold 71 percent of the corn observed. The 12 medium and
small firms accounted for the remaining 29 percent. The con-
centration of volume among the large sellers was slightly less
and the competitive fringe smaller than that described by Bain,
but the industry would undoubtedly still be considered as an
oligopoly on the basis of the number of sellers and concentra-
tion of sales.
Leftwich (14) in discussing the number and size of firms in
an oligopoly makes the additional point that "there are few
enough sellers of a particular product for the activities of one
to be of importance to the others. ." Since one of the objectives
of the Exchange as described by a Director was "to prevent drops
in prices due to price cutting of one or two shippers," there ap-
pears to be little doubt that the activities of one sales firm are
of importance to all.


Collusion
Leftwich defines the "organized collusive oligopoly" as fol-
lows:
Oligopoly of the Class 1 (this) variety consists pri-
marily of cartel arrangements. A cartel is a formal organ-
ization of the producers within a given industry. Its pur-
pose is to transfer certain management decisions and








Florida Agricultural Experiment Stations


functions of the individual firms to a central association
with the expectation that profit positions of the individual
firms will be improved by the transfer (14).

The Marketing Order and Exchange are types of legal car-
tels operating in the sweet corn industry in Florida. The man-
agement decision on output level was transferred from the grow-
ers and indirectly from the sales firms to the Advisory Commit-
tee of the Marketing Order. The management decision of the
sale price was transferred from the sales firms to the Exchange.
The purpose of these transfers was to improve the profits of the
industry and its members. Certain other management decisions
and functions of the sales firms were transferred to the Mar-
keting Order and Exchange also, but those of output and price
are most relevant to this analysis.


Identical Products
It may be possible for a sweet corn sales firm to market a
differentiated product in at least two ways: (a) market a sub-
stantially different quality of corn and (b) provide distinctive
services to the buyers.
It seems unlikely that any substantial degree of differentia-
tion was secured by the firms through marketing a superior
quality corn. It was found that 92.5 percent of the observed
corn was yellow U. S. Fancy grade and 3 percent was white,
all of which was precooled and packed in standard crates. This
means that only 4.5 percent could be differentiated by grade.
Since most of the "percentage grade" corn was marketed in the
fall and winter, corn quality can practically be considered homo-
geneous during most of the season.
Services which the sales firms may offer buyers could take
several forms. Some of the more common are protection against
risks, confidence in business ethics, prompt adjustments of
losses, and credit terms on the shipments. Since most business
is transacted verbally and the buyer usually does not see the
product before purchase, confidence plays an important role in
the produce business. For this reason some degree of differenti-
ation could exist between sales firms in this manner. However,
it seems unlikely that it is large enough to substantially alter
this assumption.








Market Structure Sweet Corn


Assumptions of the Analysis
It was necessary to assume prescribed time periods for an-
alysis purposes. Three time periods, the short run, intermediate,
and long run, as outlined by Blodgett were used (5). The short
run for this analysis refers to a period within the season after
the corn has been planted. Once planted, the quantity to be mar-
keted cannot be changed substantially, and the only relevant de-
cision on output is whether to sell or abandon it. The interme-
diate period roughly coincides with a marketing season (October
to July in Florida). It is a period long enough to change the
rate of plantings and, consequently, the rate of marketable out-
put, but not long enough to change the productive capacity. This
assumes that land is not a limiting factor in this period. The
long run is normally a period longer than a marketing season.
During this period the productive capacity of the firm can be
changed by acquiring or selling such equipment as planters,
harvesting machines, precoolers and, in some cases, land.
This analysis is developed to show the combination of price
and marketable output for each time period that will maximize
profits. In this analysis it is assumed that demand does not
change. It is also assumed that each time period is independent
and that the effects of action taken in one period do not have to
be considered in another. This analysis theoretically develops
how profits could be maximized in each time period. This does
not necessarily mean that it would always be desirable or wise
for the industry to attempt to maximize profits as shown. For
example, limitation of marketable output in one period may limit
long run growth or prompt the Commissioner of Agriculture
to intercede in the "public interest." This analysis is intended
to serve only as a guideline as to how profits could be maximized.

Short Run
The Advisory Committee of the Marketing Order has the
authority to affect the short run supply of corn through the use
of flow-to-market regulations, harvesting holidays, and grade
restrictions. The level to which supply should be restricted is
a continuing problem for the Committee.

Maximization of Revenue
In the short run costs become irrelevant, since all costs, with
the exception of harvesting and marketing costs, have already








Market Structure Sweet Corn


Assumptions of the Analysis
It was necessary to assume prescribed time periods for an-
alysis purposes. Three time periods, the short run, intermediate,
and long run, as outlined by Blodgett were used (5). The short
run for this analysis refers to a period within the season after
the corn has been planted. Once planted, the quantity to be mar-
keted cannot be changed substantially, and the only relevant de-
cision on output is whether to sell or abandon it. The interme-
diate period roughly coincides with a marketing season (October
to July in Florida). It is a period long enough to change the
rate of plantings and, consequently, the rate of marketable out-
put, but not long enough to change the productive capacity. This
assumes that land is not a limiting factor in this period. The
long run is normally a period longer than a marketing season.
During this period the productive capacity of the firm can be
changed by acquiring or selling such equipment as planters,
harvesting machines, precoolers and, in some cases, land.
This analysis is developed to show the combination of price
and marketable output for each time period that will maximize
profits. In this analysis it is assumed that demand does not
change. It is also assumed that each time period is independent
and that the effects of action taken in one period do not have to
be considered in another. This analysis theoretically develops
how profits could be maximized in each time period. This does
not necessarily mean that it would always be desirable or wise
for the industry to attempt to maximize profits as shown. For
example, limitation of marketable output in one period may limit
long run growth or prompt the Commissioner of Agriculture
to intercede in the "public interest." This analysis is intended
to serve only as a guideline as to how profits could be maximized.

Short Run
The Advisory Committee of the Marketing Order has the
authority to affect the short run supply of corn through the use
of flow-to-market regulations, harvesting holidays, and grade
restrictions. The level to which supply should be restricted is
a continuing problem for the Committee.

Maximization of Revenue
In the short run costs become irrelevant, since all costs, with
the exception of harvesting and marketing costs, have already








Florida Agricultural Experiment Stations


been incurred. The only relevant decision is whether or not to
harvest and sell the crop. The short run problem thus becomes
one of how to maximize revenue with a given potential market-
able output.
In order to maximize short run revenue the industry must
operate at the level on the demand curve wherlasticityis'at
or as close as possible to, unity. An assumed weekly demand
schedule based on a typical price-quantity relationship during
a heavy shipment period for the Florida sweet corn industry
is shown in the first three columns of Table 44. In this demand
schedule the most profitable short run marketable output would
be at the level where elasticity is at unity. This level is obtained
when the marketable output is 15,200 crates and the price is
$2.00 per crate. The total industry revenue at this level is
$30,400, and if the marketable output were raised or lowered
from this level, total revenue would decline. For example, if
all 28,000 crates were sold, the total revenue would drop $6,000,
to a total of $22,400.
If a schedule of marketing costs is considered as shown in
columns 4 and 5 of Table 44, then the optimum marketable
output the level where net industry revenue (column 6) would
be maximized would be at a lower level of shipments. In-
dustry revenue would now be maximized when the quantity sold
was 12,000 crates per week and the price per crate was $2.40.
Marketing cost per crate would be $1.10, and the net industry
revenue would be $15,680.


Table 44.-Assumed weekly demand schedule and marketing cost schedule
for Florida sweet corn.
Demand Schedule Marketing Cost Schedule
Quantity Which Price Total Marketing Total Net
Could be Sold Per Industry Cost Per Marketing Industry
Crate Revenue Crate Cost Revenue

Crates Dollars Dollars Dollars Dollars Dollars
8,000 3.20 25,600 1.30 10,400 15,200
9,600 2.80 26,880 1.20 11,520 15,360
12,000 2.40 28,880 1.10 13,200 15,680
15,200 2.00 30,400 1.00 15,200 15,200
18,400 1.60 29,440 .90 16,560 12,880
22,400 1.20 26,880 .80 17,920 8,960
28,000 .80 22,400 .70 19,600 2,800








Market Structure Sweet Corn


Evaluation
Attempts to maximize revenue by reducing shipments in the
short run have been undertaken only in a limited way. Flow-to-
market regulations, probably the most effective means of con-
trolling short run supply, have not been invoked. Minimum
grade requirements for shipment have been invoked, but have
not been very effective in reducing total shipments. Grade
requirements generally have been set at a level such that the
volume shipped by most firms was not affected substantially.
Their chief benefit has been to remove the miscellaneous ship-
ments of low grade corn that may damage the reputation of all
Florida corn. Harvesting holidays have been invoked in order
to remove the pressure of "market gluts." These may have had
some effect in spreading out shipments, but it is doubtful if such
holidays actually reduced the short run volume. Many compen-
sate for a holiday by accelerating their rate of harvesting before
and after the harvesting holiday, thus negating much of its
effect.


Intermediate Period
The Advisory Committee has the authority to set the quantity
of sweet corn that may be marketed in the intermediate period.
This is made possible by the provision for establishing an an-
nual "marketable allotment" prior to the time plantings begin.
The procedure whereby this allotment is established and divided
among the growers was discussed in the previous section.

Maximization of Profits
The determination of the most profitable level of price and
marketable output in the intermediate period is more involved
than in the short run since costs cannot be ignored. Costs are
important because that part of the marginal costs schedule which
exceeds the level where marginal and average variable cost are
equal makes up the supply schedule for a firm. This is a schedule
of quantities the firm is willing to sell at corresponding prices.
The industry supply schedule is formed by a summation of
the individual firm supply or marginal cost schedules. This
process is illustrated graphically in Figure 8. If it is assumed
that the industry is composed of three firms and that mcl, mc2,








Florida Agricultural Experiment Stations


D







me, me, iM
I



I MCD
I I i
I I I I
I I I
0 q q2 q3 Q

Figure 8.-Optimum solution for price and marketable output in the
intermediate period.


and mc3 represent their respective marginal cost curves, the
industry marginal cost or supply curve will be the horizontal
summation of these curves as illustrated by MC.
The principle of equating marginal cost and marginal reve-
nue is followed to determine the most profitable level of market-
able output for the industry. If DD represents the demand for
sweet corn and MR the marginal revenue, then the most profit-
able level for the industry is at point b, where MC equals MR.
At this level the industry marketable output will be OQ and the
price will be OP.
This solution indicates the total intermediate period output,
but does not solve the problem of what firms should produce
how much in order to maximize industry profits. In order to
maximize profits at this price and output, cost must be at a mini-
mum. This may be accomplished only by equating the marginal
cost of all firms to that of the industry. This is illustrated in Fig-
ure 8 by line ab which equates the marginal cost of all firms to
that of the industry at the optimum price and output level. The
marketable output of each firm is Oql, Oq2, and Oq,, which
necessarily equals the industry output OQ. This is the optimum
combination of price, industry output, and firm output to maxi-




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