Group Title: Agricultural economics mimeo report - Department of agricultural economics. Florida agricultural experiment stations - no. 60-1
Title: Distribution of Florida peppers
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 Material Information
Title: Distribution of Florida peppers seasons 1952-'53 and 1953-'54
Series Title: Agricultural economics mimeo report / Department of agricultural economics. Florida agricultural experiment stations ;
Physical Description: 14 p. : ; .. cm.
Language: English
Creator: Brooke, D.L
Smith, C.N
Publisher: s.n.,
s.n.
Place of Publication: Gainesville
Publication Date: 1959
Copyright Date: 1959
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Genre: non-fiction   ( marcgt )
 Notes
Statement of Responsibility: by D.L. Brooke, and C.N. Smith.
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Bibliographic ID: UF00072006
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 67280447
clc - 000489576

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September 1959


Agricultural Economics
Mimeo Report 60-1


DISTRIBUTION OF FLORIDA PEPPERS
Seasons
1952-53 and 1953-54




by


Donald L. Brooke and Cecil N. Smith
Associate Agricultural Economists

















Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida


~~-t










DISTRIBUTION OF FLORIDA PEPPERS

Seasons

1952-53 and 1953-54



by

Donald L. Brooke and Cecil N. Smith1



INTRODUCTION


Florida peppers, primarily the green types, are marketed from

November to July of each crop year.2 Domestic competition is slight

except for November shipments from Texas and June and July shipments

from Texas, Louisiana and Mississippi. Shipments from all other states

during the Florida season are less than one-fourth of those from Florida.

Florida produces more than one-third of the total domestic supply of

green peppers.

Florida's principal competition in the market is with peppers

imported from Mexico. The latter's annual exports of peppers to the United

States are equivalent, on the average, to about one-third of the Florida

production. Mexican peppers are marketed from December to May.

Peppers are Florida's seventh most important vegetable crop in

terms of value. During the 1953-54 season they were valued at $9,395,000


1Associate Agricultural Economists, Florida Agricultural Experiment
Stations, Gainesville, Florida.

2D. L. Brooke, Florida Truck Crop Competition, Fla. Agr. Exp. Sta.
Agr. Econ. Mimeo. Ann. Ser.


(2/3,












or 6.9 percent of the total value of all vegetable crops produced in

Florida. Nine seasons earlier, in 1944-45, green peppers were valued

at $6,623,000 or 6.0 percent of the value of Florida vegetable crops.

Acreage increased by 48 percent and total production by 42 percent from

1944-45 to 1953-54.3 Florida peppers are produced for the fresh market

and little, if any, of the production is used for commercial processing.

The data presented in this report were obtained from sales

invoices of fourteen firms for the 1952-53 and 1953-54 seasons. Infor-

mation obtained included bushels sold, prices received, type of sale,

contair.ar, variety, date of sale, method of transportation, marketing

charges, packing costs, type of receiver, and destination of shipment.

Data for each sale were coded and transferred to I.B.M. cards. Various

types of tabulations were made with these cards and tables prepared

for analytical purposes.

This report presents information on the pattern of distribution

of peppers from Florida. The data used in this study represented 2.4

and 4.5 percent, respectively, of the total shipments in the 1952-53 and

1953-54 seasons.


TYPE OF TRANSPORTATION


Florida's peppers move to market by rail and truck. Data from

the Crop Reporting Service of the United States Department of Agriculture

on carlot equivalents moved by rail and truck from Florida indicated that

trucks moved about three-fifths of the crop in each of the seasons


3JSDA, AMS, Florida Crop and Livestock Reporting Service,
Florida Vegetable Crops, Volume X, 1954, pp. 52 and 104.










studied (Table 1). Sampled sales invoices indicated a heavier truck move-

ment in each season. The sample data showed a decrease in rail movement

from 1952-53 to 1953-54 which was not reflected by the USDA data. Similar

information for more recent seasons indicates an increase in rail movement

in 1954-55 to 45 percent of total shipments; a decrease to 37 percent in

1956-57 and a sharp increase to 56 percent of total shipments moving by

rail in the 1957-58 season.

It is possible that the sampled firms used truck transportation

to a greater degree than was true of all firms shipping peppers from

Florida during the seasons studied. It was observed that some of the

firms studied catered to mixed-load sales. It is believed that more

of these are likely to move by truck than by rail. (From 1952-53 to

1956-57 from 33 to 40 percent of the pepper shipments by rail were in

mixed cars. In 1957-58, when heavier loading weights were permitted, over

75 percent of the pepper shipments by rail were in mixed car loadings.)


TABLE 1.--Proportion of Florida Pepper Production Shipped by Rail and
Truck, by Source of Data, Seasons 1952-53 and 1953-54

Percent of Shipments
Season
Rail Truck Total

USDAa

1952-53 3914 60.6 100.0
1953-54 39.3 60.7 100.0

Sample

1952-53 28.2 71.8 100.0
1953-54 7.7 92.3 100.0


aUSDA, AMS, Florida Crop and Livestock Reporting Service, Florida
Vegetable Crops, Volume XIII, 1958, p. 54.

Includes Florida and unknown destinations movement which later
data show separately.













DISTRIBUTION OF SHIPMENTS


Areas and type of transportation


Shipments by rail were relatively more important than truck

shipments to distant markets such as Canada and the Midwest (Table 2).


TABLE 2.--Proportion of Florida Pepper Volume Shipped by Type of
Transportation and Market Areas, Seasons 1952-53 and 1953-54


Market Type of Transportation
Area Rail Truck Total
Rail Truck Total


Percent of Volume

1952-53


Northeast
Midwest
Southeast
Southwest
West
Canada

All Areas

Floridaa



Northeast
Midwest
Southeast
Southwest
West
Canada

All Areas

Floridaa


30.6
34.6
13.0

22.3
79.6

28.9

26.9


69.4
65.4
87.0
100.0
77.7
20.4

71.1

73.1


100.0
100.0
100.0
100.0
100.0
100.0

100.0

100.0


1953-54


6.5
13.7
:5.$%

7.4
66.7

7.9

7.2


93.5
86.3
94.9
100.0
92.6
33.3

92.1

92.8


100.0
100.0
100.0
100.0
100.0
100.0

100.0

100.0


Many sales to brokers in Florida
not recorded on the original sales invoice.
were unknown, Florida was excluded from the
of all areas.


were diverted to destinations
Since these destinations
Southeast and the average











(The data in Table 2 relate to the proportion of shipments made by

rail and truck to each area.) A smaller proportion of shipments to

the Southeast and Midwest moved by rail. Rail volume increases with

distance, but may vary between markets at the same distance because of

differences in arrival time, terminal handling facilities, rate structures,

etc.

Truck movement was heaviest to the Southwest, Southeast and West.

Truck movement to the Northeast and Midwest increased appreciably from

1952-53 to 1953-54.


Areas and varieties

Among the firms studied, one-half of the volume shipped from Florida

was sold in the Northeast, between one-fifth and one-fourth was marketed in

the Midwest, about one-eighth moved into the Southeast and one-tenth to the

West. Canadian markets absorbed less than 1 percent of Florida's peppers

each season (Table 3).


TABLE 3.--Proportion of Sales of Florida Peppers by Market Areas, Seasons
1932-53 and 1953-54


Market Percent of Sales by Area
Area 1952-53 1953-54


Northeast 50.1 53.0
Midwest 26.3 21.9
Southeast 10.3 13.7
Southwest 1.4 1.4
West 11.1 9.9
Canada .8 .1

All Areasa 100,0 100.0


aMany sales to brokers in Florida were diverted to destinations
not recorded on the original sales invoice. Since these destinations
were unknown, Florida was excluded from the Southeast and the average
of all areas.












The variety California Wonder accounted for more than three-fourths

of the volume in all areas (Table 4). Hot peppers were purchased by buyers

in the Northeast and in the West to a larger extent than by those in other

areas. The variety World Beater accounted for less than 3 percent of sales

in each season.


TABLE 4.--Proportion of Sales of Florida Peppers by Variety
Areas, Seasons 1952-53 and 1953-54


and Market


Market
Area


Northeast
Midwest
Southeast
Southwest
West
Canada

All Areas

Floridaa



Northeast
Midwest
Southeast
Southwest
West
Canada

All Areas

Floridaa


Percent of Sales by Variety
California "orld
Wonder Beater Hot

1952-53
90.1 2.4 7.5
99.2 .8
91.2 6.9 1.9
100.0
77.6 2.4 20.0


100.0

90.7

86.6



81.5
98.5
95.1
90.6
78.1
100.0

86.6

84.0


2 W2

15

1953-54

4.1

1.7.
8.9
1.2


2.3

2.8


7.1

12.9


14.4
1.5
3.2
.5
20.7


11.1

13.2


aMany sales to brokers in Florida were diverted to destinations
not recorded on the original sales invoice. Since these destinations
were unknown, Florida was excluded from the Southeast and the average
of all areas.


Total


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


--- --- --- ----~---~








Type of Sale

F.O.B. sales were more important in the 1952-53 than in the 1953-54

season. They accounted for between 63 percent of the volume sold to the

Midwest and all of that sold in the Southwest, West and Canada in 1952-53

(Table 5). Consigned sales were important only in the Northeast and

Midwest in 1952-53. A year later consignment sales were also substantial

in the Southwest. Sales on a delivered basis were more significant in

1953-54 than a year earlier. Joint account sales were used only in selling


TABLE 5.--Distribution of Florida Peppers by Type of Sale and Market Area,
Seasons 1952-53 and 1953-54


Type of Sale
Market Joint Local
Area F. O. B. Consigned Delivered Total
Account Auction

Percent of Total Sales

1952-53

Northeast 69.4 22.7 .2 7.7 100.0
Midwest 63.4 29.5 1.5 5.6 100.0
Southeast 91.1 8.9 100.0
Southwest 100.0 100.0
West 100.0 100.0
Canada 100.0 100.0

All Areas 74.1 19.1 1.4 5.4 100.0

Floridaa 95.8 4.2 100.0

1953-54

Northeast 40.9 45.2 1.1 12.8 100.0
Midwest 38.2 55.9 5.3 .6 10C.0
Southeast 64.0 3.3 33.0 100.0
Southwest 47.2 31.4 2i.4 100.0
West 99.8 .2 100.0
Canada 100.0 100.0

All Areas 49.4 37.1 6.6 6.9 100.0
Floridaa 97.8 1.3 .5 .4 100.0

aMany sales to brokers in Florida were diverted to destinations not
recorded on the original sales invoice. Since these destinations were unknown,
Florida was excluded from the Southeast and the average of all areas.









to buyers in the Northeast and Midwest. They were more important than

delivered type sales, in terms of volume, in the Northeast for both seasons

and in the Midwest in the first season studied.

The changes noted in the use of different types of sale between

seasons could have resulted from significant differences in prices for

the p.:oduct, changes in supply, in sales policy or other factors. Neither

average p::ice nor total supply varied greatly between the seasons studied.

The fall supply was substantially lower, winter supply much higher and

spring supply slightly higher in 1953-54 than in the previous season.

Prices we7re considerably higher in the fall, r-..atively uncla-.ged in the

winter and somewhat lower in the spring of the 1953-54 season.5 However,

these changes do not appear sufficiently large to motivate firms to

change their sales policies. General tone of the market or expectations

of changes in buying habits of firms or consumers may have urduly influenced

the type of sale. Buyers were apparently less optimistic with regard to

peppers in 1953-54 than in the 1952-53 season, being less willing to assume

the risk of F.O.B. purchases.


Type of sale and diverseons

Marketing organizations vary widely with respect to sales policies.

Some attempt to sell F.O.B. before the product moves into the channels of

distribution. Others may start the commodity on its way (rolling) and

attempt to sell F.O.B., diverting the product to its final destination

at specified rail diversion points. Failing this, the organization has

the alternatives of consignment, delivered, price arrival or joint account

selling and of dumping. Some organizations, although in the minority, sell

all of their product on consignment by preference.


5Ibid., pp. 52, 53, 54, 55.










Diversion of shipments en route to a final destination appears

relatively unimportant for peppers. Only 4 percent of the 1952-53 and

1 percent of the 1953-54 volume was diverted en route (Table 6). Diversions

were made in shipments to the Northeast and Midwest in both seasons and to

the Southeast and Southwest only in 1953-54.

There appears to be little consistency between type of sale,

diversions, market area and seasons. Diversions of joint account sales

were important in two areas in 1952-53; none were diverted in 1953-54.

Diversions of consigned sales were greater in 1953-54 than a year earlier.

The only F.O.B. type sales diverted were 4 percent of the volume to the

Northeast in 1953-54.


TABLE 6.--Proportion of Pepper Volume Shipped from Florida Diverted En
Route to Destination by Type of Sale and Market Area, Seasons 1952-53
and 1953-54

Percent of Volume
Market
aret 1952-53 1953-54
Area
Diverted Undiverted Diverted Undiverted

All Types of Sales

Northeast 7.4 92.6 .1 99.9
Midwest 1.8 98.2 2.5 97.5
Southeast 100.0 .8 99.2
Southwest 100.0 31.4 68 6
West 100.0 1CO .
Canada 100.0 100.0

All Areasa 4.4 95.6 1.1 98.9

F.O.B. Sales

Northeast 4.2 95.8 100.0
Midwest 100.0 100.0
Southeast 100.0 100.0
Southwest 100.0 100.0
West 100.0 100.0
Canada 100.0 100.0

All Areasa 2.0 98.0 100.Gk









TABLE 6 (Continued)


Percent of Vol-me
Market 1952-53 1953-54
Area

Diverted Undiverted Diverted Undiverted.

Consigned Sales

Northeast 1.1 98.9 .3 99.7
Midwest 100.0 4.5 95.5
Southeast 100.0 27.1 72.9
Southwest 100.0
West
Canada

All Areasa .6 99.4 3.2 96.8

Delivered Sales
Northeast 100.0 100.0
Midwest 100.0 100.0
Southeasta 100.0 100.0
Southwest 100.0
West 100.0
Canada

All Areasa 100.0 100.0

Joint Account Sales

Northeast 54.7 45.3 100.0
Midwest 32.6s,, 67.4 100.0
Southeasta
Southwest
West
Canada

All Areasa 48.6 51.4 100.0


aMany sales to brokers in Florida were diverted to destinations
not recorded on the original sales invoice. Since these destinations were
unknown, Florida was excluded from the Southeast and the average of all areas.


In a study of sales distribution of tomatoes it was noted that the

percentage of volume diverted was greater among rail than among truck










shipments. Twenty-three percent of rail shipments andl~ ss than 1 percent

of truck shipments were diverted en route.6 Truck shipments are less

easily diverted in transit than rail shipments. In most instances truck

drivers have definite instruction concerning their destination before

moving a load. The fact that a greater proportion of peppers than tomatoes

move in mixed loads7 is also likely to reduce diversions en route by rail

or truck.


Type of First Handler

The organization of individual handling peppers from Florida was

recorded from the original sales invoice. A complete list of these handlers

was compiled and classified by type, using The Red Book and The Bluebook

information on dealers and handlers of fruits and vegetables. In many

cases handlers had more than one classification. Where this occurred,

the first one given was used. They were classified as buyers or agents.

Those included in the buyer category were handlers who took immediate

title to the product. Agents were those who acted as intermediaries

between buyer and seller and did not take title to the product.

Agents were important handlers of peppers in several market areas,

accounting for about one-half of the volume of the firms studied in each

season. Commission merchants moved more volume (consignment and joint

account sales) in the Northeast and Midwest (Table 7). Selling brokers

were important as agents in the West and Southeast in 1952-53 and in

the West and Southwest in 1953-54.

D. L. Brooke and C. N. Smith, Distribution of Florida Tomatoes,
Fla. Agr. Exp. Sta. Agr. Econ. Mimeo. Report 58-11, pp. 17-18.

7USDA, AMS, go. cit., pp. 57 and 76.










TABLE 7.--Purchases of Green Peppers by Type of First Handler and Market
Area, Seasons 1952-53 and 1953-54


Pe-cent of Purchases by Area
North- Midwest South-South- West Canada Florida All
east east west Areas


1952-53


Buyers:
Buying brokers
Jobbers
Wholesalers
Chain stores
Cash buyers
and truckers


Group Total


Agents:
Commission
merchants
Selling brokers


Group Total


All Handlers


22.1
7.5
.8


7.5
16.5
14.6


3.1
2.7
15.9
9.9


55.7
20.2 8.6 44.3


2.5 79.8


30.4 38.6


69.1
.5


61.4


69.6 61.4

100.0 100.0


34.1 100.0 8.6


21.5
44.4

65.9


100.0


4.2
87.2

91.4


100.0 100.0 100.0


100.0


82.3 28.7
.6 8.9
6.7
.3 4.6

3.5 2.1

86.7 51.0


5.1 36.7
8.2 12.3

13.3 49.0

100.0 100.0


1953-54


Buyers:
Buying Brokers
Jobbers
Wholesalers
Chain stores
Cash buyers
and truckers


Group Total


Agents:
Commission
merchants
Selling brokers

Group Total


10.2
.7
2.5


.6
4.2
5.4
8.4


40.2
4223
2.9


31.4
21.4


14.7


100.0


4.5 17.7


13.7 18.6


86.3 81.4


86.3 81.4


86.7 31.2
2.1 8.6
5.9
.3 2.4

3.9 2.1


89.9 70.5 18.6 100.0 93.0 50.2


8.6
1.5


5.1
29.5 76.3


10.1 29.5 81.4


100.0 100.0 100.0 100.0 100.0


Type of
First
Handler


6.0 44.2
1.0 5.6

7.0 49.8


100.0 100.0 100.0


All Handlers









Among the buyers, buying brokers purchased about 30 percent of

the volume of peppers sold by the firms studied. Their operation was

confined primarily to Florida and the true scope of their purchases is

not known. Jobbers, second in importance, operated in the Northeast,

Midwest, Southeast and Southwest.

Wholesaler and chain store outright purchases ranged from 2 to

7 percent in the seasons studied. Both of these may also purchase

from other types of handlers in the terminal markets. Therefore, their

true purchasing position is not reflected in Table 7.


SUMMARY

Peppers, Florida's seventh most important vegetable crop in terms

of value, are marketed from November to July of each crop season. Florida

produces about one-third of the total United States annual supply and

competes most heavily in the market with peppers imported from Mexico.

Between three-fifths and nine-tenths of Florida's peppers move

to market by truck. Rail movement is heaviest to the more distant markets

and to markets having relatively poor truck receiving facilities.

During the seasons studied about one-half the volume shipped from

Florida was sold in the Northeast, between one-fifth and one-fourth in

the Midwest, one-eighth in the Southeast and one-tenth in the West.

The variety California Wonder was first in volume of sales in

all areas. Hot varieties were in substantial demand by buyers in the

Northeast and the West.

F.O.B. sales were more extensive in the 1952-53 than intthe

1953-54 season. Consignment sales accounted for one-third to one-half

the volume in the Northeast, Midwest and Southwest in 1953-54. Buyers










were apparently less optimistic with regard to market conditions in the

latter season.

Diversion of shipments en route to a final destination appears

relatively unimportant for peppers. The high proportion of truck and

mixed load movement are believed responsible for this observation.

Commission merchants and selling brokers handled about one-half

the volume of peppers sold by the firms studied each season. Buying

brokers were important in Florida sales but final destinations of their

purchases were largely unknown. Jobbers handled many sales in several

market areas. Wholesaler and chain store outright purchases ranged from

2 to 7 percent in the seasons studied.


DLB:bjh 9/3/59
Exp. Sta., Ag. Ec. 400




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