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

June~ 1969

CHANGES IN SEASONAL PATTERNS OF ON-TREE

PRICES OF FLORIDA CITRUS

1950-51 through 1965-66

-By-
Arthur F. Parker, Jr., and W. W. McPherson

Department of Agricultural Economics
Florida Agricultural Experiment Stations
Institute of Food and Agricultural Sciences
University of Florida

Economics Mimeo Report EC 69-14

ACKNOWLEDGEMENTS

Appreciation is expressed to Dr. Bobby R. Eddleman for his

valuable advice throughout this study, including preparation of the

manuscript.

Computing work was done at the University of Florida Computing

Center. Dr. Donald L. Brooke and Dr. F. W. Williams provided

valuable assistance in obtaining and classifying the data used in the

study.

TABLE OF CONTENTS

Page

Acknowledgements . . .

List of Tables .. . . .

List of Figures. . .. .

I. Purpose and Method of Study . .

:I. Grapefruit for Fresh Use . .

I. Grapefruit for Processing . .

.V. Early and Midseason Oranges, Including

Temples, for Fresh Use . .

V. Early and Midseason Oranges, Including

Temples, for Processing . .

rI. Valencia Oranges for Fresh Use .

I. Valencia Oranges for Processing. .

I. Summary. . . ...

V]
VI
VII

* .

I

II

I

. .

* .

. O .

LIST OF TABLES

Number Page

1. Grapefruit for fresh use: Estimated monthly
indexes of on-tree prices, Florida,
1950-51 and 1965-66. . . . 6

2. Grapefruit for processing: Estimated monthly
indexes of on-tree prices, Florida,
1950-51 and 1965-66. . . . ... 10

3. Early and midseason oranges, including Temples,
for fresh use: Estimated monthly indexes of
on-tree prices, Florida, 1950-51 and 1965-66 13

4. Early and midseason oranges, including Temples,
for processing: Estimated monthly indexes of
on-tree prices, Florida, 1950-51 and 1965-66 16

5. Valencia oranges for fresh use: Mean monthly
indexes of on-tree prices, Florida,
1950-51 to 1965-66 . .. . 19

6. Valencia oranges for processing: Mean monthly
indexes of on-tree prices, Florida,
1950-51 to 1965-66 .. . .... 22

LIST OF FIGURES

Number Page

1. Grapefruit for fresh use: Estimated monthly
indexes of on-tree prices, Florida,
1950-51 and 1965-66. . . . 5

2. Grapefruit for fresh use: Observed and estimated
monthly indexes of on-tree prices, Florida,
for October and June, 1950-51 to 1965-66 . 7

3. Grapefruit for processing: Estimated monthly
indexes of on-tree prices, Florida,
1950-51 and 1965-66. . . . 9

Page 2 cont.

Number Page

4. Early and midseason oranges, including Temples,
for fresh use: Estimated monthly indexes of
on-tree prices, Florida, 1950-51 and 1965-66 12

5. Early and midseason oranges, including Temples,
for processing: Estimated monthly indexes of
on-tree prices, Florida, 1950-51 and 1965-66 15

6. Valencia oranges for fresh use: Mean monthly
indexes of on-tree prices, Florida,
1950-51 to 1965-66 . . ... 18

7. Valencia oranges for processing: Mean monthly
indexes of on-tree prices, Florida,
1950-51 to 1965-66 . . . .. 21

I. PURPOSE AND METHOD OF STUDY

The harvest of Florida citrus varies among the months of the

harvest season. A large part of the Florida citrus crop is priced by

means of various vertically integrated systems or by means of con-

tracts in which final prices are not determined until the end of the

season. However, part of the crop is still sold directly by growers

under conditions in which prices are set at the time of the transaction.

In such cases it is likely that definite patterns may be found in the

seasonal variations in prices received by growers. The objectives of

this study were to identify and measure these seasonal price patterns,

and to determine the direction and extent of changes in these patterns

over time. Oranges and grapefruit, both for the fresh market and for

processing, are included in the study.

Because there was a vast difference in the patterns and levels

of prices between oranges sold for fresh use and those sold for pro-

cessing, the two different utilizations were analyzed separately.

Grapefruit was treated in a similar manner. Also, since early and

midseason oranges, compared with Valencia oranges, are sold in dif-

ferent months and are a relatively different commodity, they were

treated separately from Valencia oranges. Temple oranges were included

in the early and midseason category.

The purpose of this report is to present a summary of the

findings with respect to seasonal patterns of prices and the changes

that occurred between 1950-51 and 1965-66. A more accurate knowledge

of expected seasonal patterns may be useful when it is possible to

speed-up or delay the harvesting rate.

Time series data on prices usually contain one or more of the

following components: a secular or long-term trend, a cyclical pattern,

a seasonal pattern, and random variation. At the same time, the seasonal

pattern may be changing over time.

Prices used in this analysis are monthly averages of on-tree

prices reported during the marketing seasons for each of the years

1949-50 through 1966-67. These data were obtained from published reports

of the U. S. Department of Agriculture.-/ The marketing season was defined

as those months in which production was at least 0.5 per cent of the total

production of the commodity for the entire season.

The first step in the analysis was to eliminate the secular

trend and cyclical patterns from the data by finding the average prices
2/
for each year and regressing these average annual prices against time.-

When each monthly price was divided by its corresponding estimated

yearly average price, the data were adjusted for secular trend and

1/
U. S. Department of Agriculture, Agricultural Marketing Service,
Florida Citrus Fruit: Annual Summary, Orlando, Florida, 1958 issue;
and U. S. Department of Agriculture, Statistical Reporting Service,
Florida Agricultural Statistics: Citrus Summary, Orlando, Florida,
1962, 1966, and 1967 issues.

2/
Details of statistical procedures and data used in the calcula-
tions are given in: Arthur Findlay Parker, Jr., "Seasonal Price Patterns
for Major Florida Agricultural Commodities," unpublished Master's Thesis,
Department of Agricultural Economics, University of Florida, Gainesville,
December, 1968.

for cyclical effects, and the monthly data were expressed in the

form of ratios or percentages of the respective annual average prices.

The next step was to eliminate random variation from these

ratios by means of a three-term moving average consisting of ratios for

successive years for each month. This resulted in the loss of ratios

for the first and last years; thus the results pertain to the 1950-51

through 1965-66 period. After calculating the moving averages, the

ratios were then multiplied by a correction factor to give the adjusted

monthly indexes. The correction factor, obtained by dividing the

average ratio for each year into 100, adjusted the ratios so that the

mean ratios for each year was equal to 100. Thus each monthly index

represents the price in the respective month expressed as a per cent

of the average annual price.

Finally the monthly indexes were regressed on time and tested

for statistical significance in order to measure the rates of change

over time in the monthly price patterns.

In presenting the results in the following sections, only the

estimates of the seasonal price patterns at the beginning (1950-51)

and end (1965-66) of the period are shown in those cases where

statistical tests indicate that the patterns have changed over time.

As exceptions to this procedure, the actual and the estimated indexes

are shown for the months of October and June in the case of grapefruit

for fresh use. These two examples show the way in which the monthly

indexes shifted over the entire period of 1950-51 through 1965-66.

In the case of those commodities whose seasonal price patterns have

not changed over time, the estimated mean seasonal patterns for the

entire period are presented.

II. GRAPEFRUIT FOR FRESH USE

At the beginning of the period of years included in this study,

the prices of grapefruit for fresh use began the season in October

around 35 per cent above the seasonal average. As the season progressed,

the price declined to a low index of 81, or 19 per cent below the

seasonal average, in April. In June the price index had increased to

97. By the end of this period of years, 1965-66, the seasonal pattern

was completely reversed (Fig. 1 and Table 1). At the end of the period

of years compared with the beginning, the monthly indexes in the first

three months of the season fell significantly, and those in the last

three months increased significantly. The total range in the seasonal

variation changed very little. It was 81 to 135 in 1950-51 and 84 to

134 in 1965-66, a change of no significance.

While the estimated October index fell at an average rate of

2.64 points per year between 1950-51 and 1965-66 (Table 1), the actual

indexes varied rather widely around the line of estimated indexes

(Fig. 2). Particularly striking are the observations that range

from 70 in 1962-63 to 125 in 1965-66. The way in which the observed

indexes for June fluctuate around the estimated line (Fig. 2) suggests

that possibly the variations follow a cyclical pattern around the

upward trend.

5

Price
Index

140
*

130 -

120 \
1965-66 vA
110 ..- ..- ,

,,1950-51
100

90

80 -

70

0 I I I I I I
Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June

Month

Figure 1. -- Grapefruit for fresh use: Estimated monthly indexes of
on-tree prices, Florida 1950-51 and 1965-66.

* Changes over time in these months were significant at the .05 level
of probability.

Table 1. Grapefruit for fresh use: Estimated monthly indexes of on-
tree prices, Florida, 1950-51 and 1965-66.

Month Estimated Index Rate of
1950-51 1965-66 annual change,
index point
index points-

October

November

December

January

February

110

99

88

March

April

May

June

Season average

97

*
95 ----------

84-----

*
85 ----------

93 -------

86 ----

92 ----------

*
104 ----------

127-----

134 ---

100

-2.64
(.92)
-1.75
(.54)

-1.65
(.45)

-0.39
(.35)

-0.17
(.38)

0.37
(.47)

1.56
(.54)

2.20
(.68)

2.47
(.76)

a!
- These numbers are the
the standard error in
coefficient.

linear regression coefficients with
parenthesis immediately below the

Changes over time in these months were significant at the
.05 level of probability.

OCTOBER JUNE
Price Price
In ex Incex
150 150

140 140
*

130 130

120 120

90
90 90

80 80

70 70

o I I o I I I
0 0
1951 1956 1961 1966 1951 1956 1961 1966

Year Year

Figure 2. -- Grapefruit for fresh use: Observed and estimated monthly indexes of on-tree prices, Florida, for
October and June, 1950-51 and 1965-66.

III. GRAPEFRUIT FOR PROCESSING

The monthly price pattern for grapefruit used in processing

was quite different from fresh-grapefruit prices at the beginning

of the period included in this study. Prices were extremely low, an

index of 36, at the beginning of the season, reached a peak of 142 in

January, and then declined to reach a level below the seasonal average

in April, May, and June (Fig. 3 and Table 2). Thus the difference

between the high and the low indexes was extremely large, from the low

of 36 to the high of 142. Over time there were significant reductions

in the high indexes found in December and January, and significant

increases in the indexes in May and June, which rose above the sea-

sonal average. Thus, at the end of the period of years, prices still

began the season at a low point, increased to a low peak of 122 by

February, dropped below the seasonal average in March and April,

after which a high point of 134 was reached at the end of the season

in June. While the average price at the beginning of the season was

quite low, it was also highly variable from year-to-year.

r
r
r
r
r

r

r
r
r

\%

130

120

110

100

90

80

70 -

60

50

40

30

0

I 1

1-* 3 I I I

I I

Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June

Month

-- Grapefruit for processing: Estimated monthly indexes
of on-tree prices, Florida, 1950-51 and 1965-66.

* Changes over time in these months were significant at the .05
level of probability.

Price
Index

150

140 '

a'
I

I
I
I

Figure 3.

Table 2. Grapefruit for processing: Estimated monthly indexes of on-
tree prices, Florida, 1950-51 and 1965-66.

Month Estimated Index Rate of
1950-51 1965-66 annual change,
index point/
index points-

57 ---------

91 ---------

97---------

*
107 ---------

112 ---------

97 ---------

97--------

108---------

134---------

100

June

Season average

a/
'These numbers are the
the standard error in
coefficient.

linear regression coefficients with
parenthesis immediately below the

Changes over time in these months were significant at the
.05 level of probability.

October

November

December

January

February

March

April

1.39
(1.76)

0.77
(0.68)

-2.50
(0.82)

-2.31
(0.87)

-0.72
(0.82)

-1.29
(0.85)

0.12
(0.98)

1.71
(0.67)

2.84
(1.29)

May

IV. EARLY AND MIDSEASON ORANGES,
INCLUDING TEMPLES, FOR FRESH USE

The marketing season for these oranges begins in October and

ends in March. At the beginning of the period of years included in

this'study, prices in the first month were at a high of 135, dropped

to a low of 74 in November, and increased in each month thereafter to

a level of 128 in March (Fig. 4 and Table 3). By the end of the

period there was a significant reduction in the October index, from

135 to 96, or 4 percent below the seasonal average. The index for

January increased, from 82 to 106. The difference between the extremes

in the monthly range, 74 to 135 at the beginning of the period, was

reduced by the end of the period, when the range was found to be from

79 to 121.

Except for the differences in the months of October and January,

the seasonal pattern of the prices of these oranges did not change.

From October, prices dropped to a seasonal low in November and increased

gradually in each month thereafter.

Price
Index

, 140

130 -

120 -

110 -

1950-51

100 *

90 -

80 -

70 -

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Month

Figure 4. --

Early and midseason oranges, including Temples, for fresh
use: Estimated monthly indexes of on-tree prices, Florida,
1950-51 and 1965-66.

* Changes over time in these months were significant at the .05 level
of probability.

Table 3.

Early and midseason oranges, including Temples, for fresh
use: Estimated monthly indexes of on-tree prices, Florida,
1950-51 and 1965-66.

Month Estimated Index Rate of

1950-51 1965-66 annual change,

index points-

-2.54
October 135 97 ----
(1.01)

0.34
November 74 79 ------
(0.30)

0.51
December 79 87----------
(0.28)

1.59
January 82 106 ---------- .9
(0.39)

0.57
February 102 110----------
(0.48)

-0.47
March 128 121----------
Sa 1 (0.62)
Season average 100 100

-These numbers are the
the standard error in
coefficient.

linear regression coefficients with
parenthesis immediately below the

Changes over time in these months were significant at the
.05 level of probability.

V. EARLY AND MIDSEASON ORANGES,
INCLUDING TEMPLES, FOR PROCESSING

The seasonal price pattern for these oranges, at the beginning

of the period of years included in this study, was similar to the

price pattern for those for fresh use with the exception of the low

October index for oranges used for processing. During the period, the

November index increased from 76 to 92, the December index increased

from 90 to 102, while the March index decreased from 131 to 101 (Fig.

5 and Table 4).

At the beginning of the period, prices started at a low seasonal

index of 74, and increased in each month thereafter to a high of 131

in March, the end of the season. By the end of the period, prices

began the season at a low index of 83, increased to a peak of 112 in

February and decreased to 101 at the close of the season in March.

Thus the difference between the high and the low indexes, 74 to 131,

a difference of 57 at the beginning of the period, was reduced to

the difference between 83 and 122 or 29 index points.

Price
Index
140 1

-------------*--'

130

120

110

100

90

80

70

8-

Nov.

Dec.

Jan.

Feb.

Mar.

Oct.

Month

Figure 5. --

Early and midseason oranges, including
processing: Estimated monthly indexes
prices, Florida, 1950-51 and 1965-66.

Temples, for
of on-tree

* Changes over time in these months were significant at the .05
level of probability.

I I I I

Table 4. Early and midseason oranges, including Temples, for processing:
Estimated monthly indexes of on-tree prices, Florida,
1950-51 and 1965-66.

Month Estimated Index Rate of
1950-51 1965-66 annual change,

index points-

0.58
October 74 83 ----------- 58
(0.38)

*
November 76 92 ----------- 1.04
(0.34)

0.79
December 90 102 -----------
(0.22)

0.26
January 107 110 -----------
(0.19)

-0.64
February 122 112 ----------- 0
(0.36)

-2.03
March 131 101---------- -2
(0.35)

Season average 100 100

a/
-These numbers are the
the standard error in
coefficient.

linear regression coefficients with
parenthesis immediately below the

*
Changes over time in these months were significant at the
.05 level of probability.

VI. VALENCIA ORANGES FOR FRESH USE

The marketing season for Valencia oranges begins in February

and ends in June. In relation to other oranges the average monthly

indexes of prices for Valencia oranges for fresh use were quite stable,

varying from a low of 92 in March to a high of 114 in June (Fig. 6

and Table 5). While the June index is significantly higher than the

indexes for the other months, the differences between March and April,

and those between February and May are not significant at the .05 level.

The difference between the high and the low average indexes was only

22 points compared with a difference of 61 at the beginning of the

period and 42 at the end of the period in the case of early and mid-

season oranges for fresh use.

Also, there was no significant change in the seasonal price

pattern for Valencia oranges for fresh use during the 1950-51 to

1965-66 period. The year-to-year variation in the indexes within each

month was highest at the beginning and at the end of the season as

indicated by the higher coefficients of variation in February and

June (Table 5 and see confidence intervals in Fig. 6).

18

Price
Index

130
-S
120 -

110 -

100 ---- .---.. --.----

%670/o Confidence interval
80

70 -
70

p I I I
Feb. Mar. Apr. May June

Month

Figure 6. -- Valencia oranges for fresh use: Mean monthly indexes of
on-tree prices, Florida, 1950-51 to 1965-66.

Table 5. Valencia oranges for fresh use: Mean monthly indexes
of on-tree prices, Florida, 1950-51 to 1965-66.

Month Mean Standard Coefficients
Index Deviation of
Variation

February 98 9.8 .10

March 92 6.7 .07

April 94 6.2 .07

May 101 5.8 .06

June 114 10.0 .09

Season average 100

VII. VALENCIA ORANGES FOR PROCESSING

The average price index for Valencia oranges for processing

began the season at a low of 90 to 92 in February and March, and

increased significantly in the three succeeding months to a high of

113 at the end of the season in June (Fig. 7 and Table 6). Thus the

differences among monthly prices within the season are about the same

as those for Valencia oranges for fresh use and much less than the

difference for other oranges and for grapefruit. Here, again, the

seasonal pattern remained stable over time, with prices below the

seasonal average in February to April and above the seasonal average

in May and June. The year-to-year variation within monthly indexes

has been quite stable, also. The coefficient of variation ranged

from .02 in April to .08 in February and June at the beginning and

end of the season, respectively. (Table 6, and see confidence inter-

vals in Fig. 7).

Price
Index

130

120 -,-

110 -

100
--~----
Mean '
90 ..-'' 67/o Confidence interval

*------"
80

70

Feb. Mar. Apr. May June

Month

Figure 7. -- Valencia oranges for processing: Mean monthly indexes
of on-tree prices, Florida, 1950-51 to 1965-66.

Table 6. Valencia oranges for processing: Mean monthly indexes
of on-tree prices, Florida, 1950-51 to 1965-66.

Month Mean Standard Coefficient
Index Deviation of
Variation

February 90 6.8 .08

March 92 5.5 .06

April 98 2.0 .02

May 107 4.0 .04

June 113 9.4 .08

Season average 100

VIII. SUMMARY

The objectives of this study were to identify and measure the

seasonal patterns, and shifts over time, in on-tree prices of Florida

grapefruit and oranges for fresh use and for processing. In the analy-

sis, oranges for fresh use and for processing were subdivided into Val-

encias, and early and midseason oranges including Temples. Monthly pri-

ces for the years 1949 through 1967 were used in the analysis. The pur-

pose of this report is to provide a summary of the results of the study.

Definite monthly price patterns were identified and measured

for each of the categories of oranges and grapefruit listed above.

Significant shifts occurred in the seasonal price patterns in each

case with the exception of Valencia oranges. The seasonal pattern

was stable in the case of Valencia oranges for fresh use as well as

for processing. In these two cases the month-to-month price variation

within seasons, as well as the year-to-year variation within monthly

indexes were less variable than was the case with the other oranges

and the grapefruit.

The.annual rates of change in the monthly indexes over time

(regression coefficients) should be used with caution in any attempt

to extend these shifts very far into the future. It is quite possible

that reactions.in the form of changes in the seasonal supply patterns

have changed or will change the direction or rates of these shifts.

Additional research is planned on this matter and on explaining these

seasonal patterns that were identified and measured in this study.