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represent the historic publishing
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used only to trace the historic work of
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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.
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