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Annual report of the Florida Citrus Exchange
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Permanent Link: http://ufdc.ufl.edu/UF00075941/00010
 Material Information
Title: Annual report of the Florida Citrus Exchange
Alternate title: Seald-Sweet story
Seald-Sweet annual report
Physical Description: v. : ill. ; 24 cm.
Language: English
Creator: Florida Citrus Exchange
Publisher: The Exchange
Place of Publication: <Tampa Fla.>
Creation Date: 1936
Frequency: annual
regular
 Subjects
Subjects / Keywords: Citrus fruit industry -- Statistics -- Periodicals -- Florida   ( lcsh )
Citrus fruits -- Statistics -- Periodicals -- Florida   ( lcsh )
Citrus fruits -- Marketing -- Statistics -- Periodicals -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
statistics   ( marcgt )
serial   ( sobekcm )
 Notes
General Note: Mimeographed, 1933/34-1934/35.
General Note: Description based on: Season 1926/27; title from cover.
 Record Information
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 001753794
oclc - 46798761
notis - AJG6778
lccn - 2001229399
System ID: UF00075941:00010
 Related Items
Preceded by: Annual report of the business manager of the Florida Citrus Exchange

Full Text






Annual Report

of the

FLORIDA CITRUS


EXCHANGE






SEASON
1936-1937


631~.\


General Manager















UNIVERSITY


OF
LI


FLORIDA
BRAR Y



090S



















Annual Report

of the


FLORIDA CITRUS


EXCHANGE
















SEASON

1936-1937


.


*. r 4. .


..

.








163I /l


(3 6/37
OFFICERS, DIRECTORS AND HEADS
OF DEPARTMENTS, FLORIDA CITRUS EXCHANGE,
SEASON 1936-37



W. L. Tilden, President and Chairman of the Board.............-..Orlando
W. C. VanClief, First Vice-President Winter Haven
A. W. Hurley, Second Vice-President Winter Garden
J. O. Carr, Third Vice-President ..Fort Ogden
L. L. Lowry, Fourth Vice-President .Winter Haven
C. C. Commander, General Manager Tampa
Harold Crews, Assistant General Manager ..Tampa
L. D. Aulls, Traffic Manager Tampa
S. L. Looney, Treasurer-Comptroller Tampa
O. M. Felix, Secretary Tampa
Counts Johnson, Attorney ........Tampa



Sub-Exchange Directors Address
Dade & Indian River .H. G. Putnam Oak Hill
DeSoto........................J. O. Carr. .Fort Ogden
Florence W. C. VanClief. Winter Haven
Hillsboro B. E. Stall, R. F. D. No. 1 Tampa
International I L. Lowry Winter Haven
Lake & Marion............C. B. Hipson Umatilla
Lake Apopka...---.......... J. C. Palmer Windermere
Lake Region................Fred T. Henderson...............-...Winter Haven
Manatee I ee S. Day Bradenton
Orange Chas. A. Garrett Kissimmee
Pinellas John S. Taylor, Jr I.argo
Polk Geo. W. Mershon, 1715 S. Fla. Av...Lakeland
Ridge D. A. Hunt ..Lake Wales
Scenic ...CM'.Vpk Bartow
Seminole-Orarnge..:,..:. *A. W: Htirldy.:...:.'..',., .......Winter Garden
St. Johns. Ri.'.:.'.....R. J. Kepler, Jr...... :. DeLand
Winter:1i4yen'.............-H. E. Cornell ':** -*-*.Winter Haven
Spedialb~:tate-at-Larg'.~-. ..'.fj I : : '.......Orlando
-.. .. .












ANNUAL REPORT

SEASON 1936-1937

Perhaps the most outstanding feature of this season's operation is
the fact that the three major citrus producing sections which feed Amer-
ican markets have shipped a record combined volume during the Florida
season. The combined volume shows a weighted average increase of
25.4%, in spite of California's loss of nearly 8000 cars this season over
last.
Texas showed the greatest increase. It shipped over 15,000 cars,
or 213% more fruit, this season. Florida increased its shipments over
17,000 cars, or 30%. The detail by producing sections is tabulated
below:
Shipments from Major Producing Sections
Seasons 1936-1937-1935-1936
(In cars as of May 20) %
1936-37 1935-36 Increase Increase
Florida ............ 73,483 56,383 17,100 30.3
California .......... 24,664 32,551 (7,887)* (24.2)*
Texas ............. 22,350 7,133 15,217 213.3
120,497 96,067 24,430 25.4
Particularly significant is the phenomenal increase in combined grape-
fruit shipments from Florida and Texas. (See Table on Page 24).
While some weeks show from 150% to 265% increase over last season
in commercial shipments from the two territories, the average for the
season will approximate 93%-nearly double the volume.
These figures are for commercial shipment by rail, boat, and truck
from the two producing sections. To appreciate their full significance,
it should be remembered that over ten million cases of grapefruit and
grapefruit juice were canned in addition to these volumes of fresh fruit
marketed. This is the greatest volume of canned grapefruit produced in
the history of the industry.
Season Profitable for Producers
In spite of the fact that these record volumes have been shipped to
American markets, price averages throughout the season for Florida pro-
ducers have been more satisfactory. One of the underlying causes for
this fortunate situation is the generally improved economic condition of the
country. Buying power has been increased. More money is in the
*Decrease
3
S.' r I0









hands of the consumers for the free circulation and purchase of what,
during the depression, were regarded as semi-luxuries.
There are several additional reasons which have been responsible for
these improved grower returns. In the order of their importance, these are
'the Marketing Agreement and the prorates available under that Agree-
ment, the purchase of surplus fruit by the Government, canners' com-
mitments on futures, the legislative program of the state, the chain store
promotion campaign on grapefruit, and the California freeze.

Marketing Agreement and Prorates
The Marketing Agreement and the prorates which were a part of
that Agreement have been most influential in improving Florida citrus
marketing conditions. If the legal technicalities which have clouded
this issue are not used to confuse the fundamental purpose of the instru-
ment, the facts prove that it has been decidedly effective in its true dem-
ocratic purpose-the creation of the greatest good for the greatest num-
ber.
In a recent conference with a large buyer of Florida citrus, the
management was advised that his organization had orders to purchase 45
cars of Florida fruit. These were cancelled upon the suspension of the
Marketing Agreement and never were again placed in that volume.
This incident aptly illustrates the confidence which the trade as a
whole placed in Florida marketing conditions as controlled under the
Agreement. When it was suspended, that confidence was destroyed.
If results only are considered, an impartial review of the facts proves
this point. Fortunately, these data are sufficiently definite to permit
graphic presentation and analysis. The conclusions which are obvious
from a study of them are presented, together with a graph of the market
record during and following the prorate periods, on pages 6 and 7.
The Marketing Agreement and the prorates available under it thus
are necessary and may become a valuable financial asset to the producers
of Florida citrus. With it, markets can be maintained, the flow of all
fruit can be handled more successfully, more consistent returns procured,
and, most important, trade confidence in Florida fruit can be held.
Even in California, which markets 93 % of her lemons and 75 % of
her oranges through one organization, with a few shippers handling the
balance, the industry has found that a marketing agreement has been
helpful and makes money for its growers.

National Coordination Desirable
In this connection, consideration should be given to the fact that a
Marketing Agreement for Florida, even though properly supported by
effective administration of the State's own legislative program, is not a
final solution to the constant efforts of the producer to gain stabilization
in the industry.
Florida oranges are marketed for a price which is directly affected
by the total volume of oranges moved from California, Texas and Ari-









zona. Correspondingly, Florida grapefruit markets are dependent upon
the national supply factor which is the combined production of Florida,
Texas and Porto Rico. In each case, it is the combined volumes which,
balanced with existing demand, control the price.
These factors point to but one ultimate objective. To secure full
and permanent benefit from a Marketing Agreement and proration or
other activities available under that Agreement, it will be necessary for
the nation to establish similar operations in other producing sections.
These should operate in harmony and uniformly on oranges and grape-
fruit as commodities.
It is important that Florida growers should appreciate the magnitude
to which their industry has grown. They must recognize the fact that,
since it has become a national institution, it must be handled nationally, if
it is to continue successfully and reach any semblance of stabilization for
its investments.
The Florida citrus industry is no longer sufficient unto itself and
able to operate without regard for other producing sections. It does not
control its own markets. Jointly with these other producing sections,
however, it can. To accomplish this end, the industry, with the coopera-
tion of the Government, must press the adverse decision of the Federal
Court through, if necessary, to a favorable decision from the Supreme
Court in Washington.
Government Purchases
The purchase of surplus commodities was, perhaps, the final influ-
encing factor in obtaining the Marketing Agreement in Florida.
Washington authorities, after studying the petition of the industry to
handle its surplus, stated that these funds could be made available only
provided the industry had a Marketing Agreement and, under it, a Con-
trol Committee which could represent the industry and act as an agent
through which the Government might negotiate these purchases.
The Government agency responsible for the purchase of these sur-
pluses adopted a well-founded policy and stuck to it. As a result, can-
nery grade grapefruit, for instance, was pegged at 31c on the tree.
The arrangement for Federal purchase of surpluses, therefore, be-
came a strong factor in the successful results obtained for producers this
season. The law of supply and demand regulates the price of any com-
modity. During the early part of the season, many became hysterical
in the belief that a dangerous over-supply of grapefruit existed.
Time has proved that there was no such surplus. The canning in-
dustry could have taken every box of fruit purchased by the Government
and paid the growers a fair price for it, had this hysteria not existed.
Canners today are paying $1.25 per box for fruit and, even at that
price, cannot get enough to take care of the demand which exists for their
product. One of the largest canners in Florida recently stated to the
management that the canning industry could have used two million boxes
(Continued on Page 8)










DO PRORATES PAY?
The sensitiveness of the orange market to prorates is well illustrated by
the graph of volume-price performance below. It records weekly orange
shipments from Florida, from Florida and California combined, their
relation to the Florida prorate and the Florida all-auction price averages.
Significant observations are summarized on the opposite page.


NOVEMBER-DECEMBER-JANUARY- FEBRUARY MARCH -APRIL MAY
7 142128 5 1219 262 9 16 23 30 6 13 20 27 6 13 20 27 3 101724 1 815
4.00 O
3.90 ?
3.80 -

3.70 A '
3.60
3.50 "-,
3.40
3.30 2
3.20
3.10
3.00
2.90
2.80 /
2.70
2.60 \/
2.50 \
2.40
2.30 \ .
2.20 '
2.10
2.00
3750
3500 A
3250---
3000-
2750
2500- /
2250 ,-
2000 -- /
1750/ .


750 0
150 0
750
Soo0 p0 ~ ~ t..-'









The 1936-1937 Prorate History
Analysis of the graph on the opposite page indicates the following
significant conclusions:
1. Prorate for one week only, without consistent regulation through
many weeks, tends to restrict the volume, but is of too short duration to
affect price levels. Note the week ending November 28. A prorate of
600 cars reduced shipments to about 850 cars, but did not stop the price
decline.
2. With the announced abandonment of prorate regulation fol-
lowing that one week, the trade properly anticipated heavy arrivals as
occurred through the week ending December 19, with continued lowered
prices.
3. The reestablishment of regular prorates beginning the week
ending December 26 produced an immediate price reaction. Weekly
shipments were more uniform and, even though heavy volumes were
moved, prices rose an average of nearly 60c.
4. Shipments in excess of the announced prorate produced a prompt
price decline-note the weeks ending January 9, 16 and 23. By the
end of that week California arrivals were reduced by the freeze of three
weeks previous, with the consequent absorption of Florida over-shipments
at higher levels.
5. The publicity attendant upon the temporary injunction granted
against the prorate, plus rumors throughout all markets concerning the
abandonment of prorates, started a decline during the week ending Feb-
ruary 6. The denial of a permanent injunction was promptly publicized
and corrected this situation. Prices rose, further stimulated by the re-
turn to below prorate volumes.
6. Shipments remained below prorates *during the weeks ending
February 13, 20 and 27. The corresponding rise in price reached about
60c per box average.
7. The week ending March 6 saw shipments again exceed the re-
duced prorate and prices fell nearly 20c per box average. Shippers
quickly pointed out to the trade that this over-shipment of prorate meant
no increased Florida shipments, but a reduction in prorate. Prices
promptly became firm and reached a season's peak during the week end-
ing March 27.
8. On March 27 the prorate was suspended by Secretary Wallace
because of the conflicting decisions in the two Federal Courts in Florida.
Even under reduced shipments from Florida and California, prices
promptly started a decline totaling nearly 25c per box two weeks later.
Vigorous sales efforts backed by a voluntary proration within the
industry, plus reduced California shipments and quality as they com-
menced moving Valencias, halted this decline and returned the prices al-
most to the previous high by May 1. The latter date began a decline
which has as yet not been stopped.









more grapefruit and that, even with this additional supply, the entire vol-
ume of packed goods would have been consumed before the end of the
summer.
It must be admitted that much of the help obtained through the
Government purchase of surplus was psychological in effect. It was not
the actual volume which the Government purchased-2301 carloads or
9.7% of the total shipments from Florida and 2925 carloads or 16.4%
of the total shipments from Texas-but rather the effect that such an ar-
bitrary pegging of the market created throughout all channels of trade.
When buyers recognized that no manipulation could force the price
below that set figure, demand continued and the price rose steadily from
it.
Canners' Commitments on Futures
There were several public statements made by canning company ex-
ecutives earlier in the season to the effect that they would be able to buy
all of their requirements for 20c per box or less. To substantiate their
statements they pointed to the abnormal quantities of grapefruit available
in American producing sections. They discounted the effect of the Gov-
ernment purchase operation and openly stated that they believed that it
would not work and that the Government would discontinue its buying
before the season was very far advanced.
As a result of these unwise conclusions, they sold futures for as low as
57/2c per dozen based on No. 2 juice. These commitments anticipated
an unlimited purchase of raw fruit supplies at 25c or 30c levels. These
future sales were confirmed in quantities which reached a tremendous
total.
Following the first of the year, when the Government continued to
purchase contrary to their expectations, canners found themselves faced
with the necessity of being compelled to make deliveries with cans filled
from a rising raw fruit market. There resulted a mad scramble on the
part of all canners for grapefruit. The law of supply and demand im-
mediately applied, with the result that in six weeks' time the market for
cannery grapefruit rose from about 35c roadside to as high as $1.25.

State Legislation
All growers are cognizant of the increasingly unsettled conditions
which existed in the Florida citrus industry during the past few years.
They became so critical about two years ago that a great majority of
citrus growers, the Florida Citrus Exchange, and other shippers in the
state participated in the drafting of state legislation designed to improve
these conditions.
This block of laws provided for the adoption of many standard
merchandising fundamentals and ethics of sound business procedure.
These laws became applicable to the entire industry. They fairly and
impartially included all growers and operators in their provisions.
That this legislation, even in its original form, has proved profitable









to the industry as a whole even the most skeptical in the industry now
concede. It has been helpful in creating and maintaining demand for
Florida citrus. It practically eliminated bulk shipments and provided for
the inspection and certification of fruit so that buyers were able to place
their commitments with confidence.
It is natural that the past two years' experience would reveal certain
inequities, deficiencies, and weaknesses in this original group of citrus
laws. The Florida Citrus Exchange acted as a member of the Joint
Legislative Committee, composed of various interested shippers and grow-
ers, and concerned itself through that Committee, during the past several
months, with the development of and agreement upon the necessary
changes to be proposed in the current legislative session.
This Committee finally drafted and agreed upon these changes. They
provided for a continuation of the present laws with certain amendments
to correct and strengthen them. These have been passed by the Legis-
lature, signed by the Governor, and are today a permanent part of Flor-
ida's citrus marketing picture.
Any opinion of these laws should consider the fact that they are the
culmination of the best thought which sincerely interested factors in the
industry have been able to give the problems over a period of several
months. The consensus concerning them is that, as amended, they will
continue to improve the marketing conditions of the Florida citrus in-
dustry.
To produce the greatest possible results, however, this state legis-
lation must be coordinated with some interstate control of fruit move-
ments. This is only possible with a Federal Marketing Agreement.

Chain Store Grapefruit Drive
The food chains' nation wide sale of grapefruit also served as a
beneficial influence in the creation of the season's satisfactory market
conditions. The sale alternated four weeks during an eight week's
period, beginning January 14 and ending March 3.
It cannot be denied that this work on the part of the food chains did
some good. During the eight weeks' period total grapefruit shipments
from Florida and Texas were increased 11 6% over the same period of
last year. (See Table on Page 24). In addition during these
eight weeks of last season 28% of the entire Florida and Texas crops
were moved. Because of this promotional work, however, this percent-
age of the total was increased by 3.3% to 31.3%.
In spite of this more than doubled volume during this period, prices
based upon the average for all auctions were only 14% to 26% less
than the averages received for the same weeks of the preceding season.
The effect of this advertising during the eight weeks' drive was cumu-
lative. It permitted increased shipments during subsequent weeks rang-
ing from 152% to 208%, all of which were shipped at increasing mar-
ket levels. Note the price rise in the table above referred to from March










13 when the Florida average was $2.19 through to April 17, which
reflects an average of $2.57 per box.
The California Freeze
Many attribute most of the improved conditions enjoyed this season
to the California freeze. While this climatic misfortune had a very
definite psychological effect, it was, however, nowhere nearly as serious
as many were led to believe.
California has shipped substantial weekly volumes of oranges. An
examination of the total weekly shipments from Florida and California-
and it is this total volume which governs orange market levels-shows
that since the freeze total shipments from these producing sections have
averaged between 85% and 95% of comparable totals for the same
periods of last season.
But price levels have ranged from 50c to $1.00 more per box. Ob-
viously, therefore, the freeze is not the single, or even the chief, cause
for Florida's favorable marketing position.
Exchange Makes Progress
All of the above described marketing stimuli were shared by the in-
dustry as a whole. All growers benefited by them in direct ratio to the
efficiency of the agency which marketed their fruit. In this connection,
the Florida Citrus Exchange has increased its capacity to serve at a lower
cost. As a result, its members have been in a position to obtain a maxi-
mum benefit from these conditions.
Progress has been made in spite of unfortunate losses in personnel.
The deaths of Senator Taylor, former President of the Florida Citrus
Exchange, and E. E. Patterson, General Sales Manager, have been
felt very keenly.
Judge W. L. Tilden of Orlando succeeded Senator Taylor as Pres-
ident. He has amply demonstrated his ability to fill this position. Other
re-arrangements of personnel were made following Mr. Patterson's death
which permitted the organization to meet this handicap promptly and suc-
cessfully.

FLORIDA CITRUS EXCHANGE SALES
The Florida Citrus Exchange through its sales organization has in-
creased distribution of fruit under the Seald-Sweet and Mor-juce marks
very substantially. As of May 22, 1937 it has made sales in 44 states
and 6 Canadian Provinces. A total of 308 markets have been entered
of which 1 14 or 37% are new markets.
A total of 637 customers were sold of which 307 or 48.2% were
new sales.
The intensive effort of the Florida Citrus Exchange Sales Depart-
ment must be registered in more favorable returns, as well as the above
described increased distribution. Comparative returns, grade for grade
10









and size for size, for the Exchange as compared to all other competitors in
the state is obtained from the records of auction sales. These, together
with the registration of brands in Florida, are public information. Since
more than half of the State's fruit is sold at auction, this method faith-
fully reflects conditions existing in private sales markets between these
competitive brands. Here is found a true measure of sales results.
In the table below, weighted averages of all auctions by grade and
variety of all Exchange fruit compared with fruit sold outside of the
Exchange, exclusive of Indian River in both cases, is presented. Exchange
premiums range up to 2 7c per box.

Comparative Sales Results
Exchange results versus all other Florida sales, based on averages of
all auctions except Boston. This market was not included as 95% of
Exchange sales there were of Indian River fruit, which would make a
comparison unfair to competition. Indian River fruit has been excluded
throughout in computing these averages.
(All as of May 1).
U. S. NO. 1 U. S. NO. 2
All Exchg. All Exchg.
Variety Exchg. Others Prem. Exchg. Others Prem.
Round Oranges -------3.11 2.96 .15 2.90 2.64 .26
Pineapple Oranges ---- 3.09 2.83 .26 2.86 2.81 .05
Valencia Oranges ------3.88 3.78 .10 3.86 3.59 .27
All Oranges----------3.25 3.04 .21 3.10 2.92 .18
(Combined)
Duncan Grapefruit ----2.13 2.05 .08 1.91 1.85 .06
Marsh Seedless Grapefruit 2.43 2.35 .08 2.15 2.17 (.02)
All Grapefruit ------- 2.20 2.14 .06 1.98 1.97 .01
(Combined)
Tangerines ----------.2.56 2.40 .16 2.14 2.02 .12
*Loss
In summary the Exchange sold in all auction markets as of May 1
(excluding Indian River fruit and Boston for reasons above cited) a
total of 2,542,989 boxes of oranges, grapefruit and tangerines. It re-
ceived for this fruit an average price of $2.74 per box. Sales of Florida
competitors in the same markets for the same period totaled 4,838,498
boxes and returned an average of $2.59 per box.
The weighted average premium obtained by the Florida Citrus Ex-
change, therefore, is indicated as 15c per box.
If the nearly five million boxes of competitive fruit had been sold at
Exchange prices, the growers owning that fruit would have grossed
$725,774.70 more than they did for their crops, without considering
the lower sales and packing costs available through Exchange opera-
tions.
Exchange Increases Percentage
Florida as a whole shipped 30.4% more oranges, grapefruit, and
tangerines as of May 22 this season over last. The Exchange during










the same period shipped 40.4% more fruit. This excess of 10% ob-
tained by the Exchange represents a 2 % increase in percentage of the
total crop handled by the Florida Citrus Exchange.
The details by varieties are cited in the following table:


TOTAL RAIL, BOAT AND TRUCK SHIPMENTS
Entire State and Exchange
Seasons 1935-1936 and 1936-1937 (as of May 22)
Season Oranges Grapefruit Tangerines
1936-37 40,769 26,286 6,942
1935-36 34,859 17,399 4,482
STATE Increase 5,910 8,887 2,460
% 17.0 51.1 54.9
1936-37 9,389 8,957 1,817
EXCHANGE 1935-36 8,237 4,974 1,145
Increase 1,152 3,983 672
% 14.0 80.1 37.0


Total
73,997
56,740
17,257
30.4
20,163
14,356
5,807
40.4


Total Income on Packed Fruit
The Exchange as of May 21 has remitted on 5,606,249 boxes of
fruit this season as compared with 4,484,407 boxes for the same period
last season. This represents an increase of 1,121,842 boxes, or 25%
more fruit.
Cash received by the Tampa office as of May 21 this season totals
$11,690,218.99, which is $2,364,519.63, or 25.4% more than was
obtained last year.
Remittances to associations for the same period totaled $11,129,-
594.09 which is $2,252,335.43, or 25.4% more than the remittances
for the same period of last season.

Special F. O. B. Orders
The special order desks, installed four years ago in the Sales De-
partment, have continued with a consistent increase in the number of
orders filled. Two years ago 2,300 orders were handled. Last season
this volume was increased to 3,350 orders. During the present season
the total will exceed 3,850 orders.
Special attention is given to the development of carlot shipments on
special orders. Large buyers look to the Exchange for a satisfaction of
their requirements and specifications on definite orders.
To make this special order business even more effective, arrange-
ments were made with associations to file with their district managers at
the beginning of each week an estimate of the fruit which was available.
This permitted the prompt acceptance and confirmation of orders by the
Sales Department without necessitating the delay of contact with the
association for confirmation on each car.
To meet competition even more successfully, it is going to be neces-
sary for the Exchange Sales Department to put itself in a position where









it can accept orders of any size promptly. In the future, therefore, it will
be necessary for associations to so order their affairs that this informa-
tion may be constantly available to the Sales Department so that this
quick action may be continued and increased.
Export Activities
The reciprocal trade agreement with Canada, completed a year ago,
included citrus fruits. It provided for an abandonment of all tariffs on
oranges during January, February, March and April, and a reduction
of the tariff on grapefruit from I c to /2c per pound.
This has permitted the Florida Citrus Exchange to increase its Ca-
nadian business materially. Sales to May 20 of this season showed a
gain of 73.9% over last season's volume.
In considering this gain, it is significant to note that no additional
sales were made in Canada after May 20 of last season. This season,
however, our Canadian business will continue well into June which will
materially increase the volume of business and the gain over last season to
well over 100%.
Frequent inquiry has been made as to the effect of the Spanish civil
war on the Florida citrus marketing picture. While it will have no
direct bearing on Florida exports to Europe, it undoubtedly will con-
tinue to have some bearing on the domestic situation. Spanish oranges
are moved to European markets during the period of Florida's heaviest
shipments. They are directly competitive, and comparative price levels
prevent the profitable export of Florida fruit to accommodate the de-
ficiencies in Spanish volumes caused by the war.
California, on the other hand, has developed a demand for its fruit
which is suitable for export, permitting it to export substantial volumes
during the spring and summer. It can enter the European field to ad-
vantage.
The loss in Spanish volume, therefore, may be counter-balanced by
increased exports from California. This, in turn, relieves domestic mar-
kets in direct proportion to the California volumes exported. An im-
proved domestic marketing situation, of which Florida can receive full
benefit, may result.
Spain produces little grapefruit, and, therefore, the conflict will have
no material effect on the Florida grapefruit market.
Advertising and Merchandising
The Florida Citrus Exchange has continued its brand advertising
and merchandising activities. Subway and elevated advertising, news-
papers, radio, dealer tie-ups in local retailer advertising, space in food
shows, cooking schools, et cetera, were used to advantage in many mar-
kets throughout the season.
Dealer service crews and individual dealer service operators have
composed the backbone of the Exchange brand merchandising and ad-
vertising program. The majority of the personnel are seasoned, experi-









enced operators who have been in the employ of the Exchange during
the season for several years. Others are newer at the work, but are
receiving training in the larger markets under the experienced crew heads,
preparatory to their being transferred to outlying territories to accomplish
more complete coverage.
The heads of these merchandising crews are held in the permanent
employ of the organization. They form the nucleus around which full
strength operations are built to the requirements of the organization dur-
ing the season.
These men are essentially salesmen for the jobber and work in every
possible way to move Seald-Sweet and Mor-juce fruit from the jobber's
floor into the retailer's hands. In addition, with point-of-purchase ad-
vertising in the form of window, wall, and counter displays, this effort
becomes a material factor in moving the fruit more speedily into the
hands of the consumer.
On the following pages typical window displays installed by the New
York and Chicago crews operating under Division Managers Teague and
Smith are reproduced. Displays such as this have been found to increase
the sale of fruit as high as 300% during the period of their installation.
One of the most successful units which the Florida Citrus Exchange
has developed is the display vender. This has been produced in two
sizes, the larger of which will accommodate from two to three boxes of
fruit and stands in a suitable location in the aisleway of the store. It
acts as a sales bin from which the clerks serve their customers. Because
of its advertising panels on each wall, it gives the Exchange advertising
representation on its brands which can be obtained in no other way.
So great was the demand for these display venders that the organiza-
tion was forced to double the original order to accommodate the requests
of retailers for them.
A smaller similar unit was designed for the counter display of fruit.
Each also serves excellently as an advertising display unit in full window
displays. Their use for this purpose may be observed in the pictures
above noted.
Another highly satisfactory advertising unit designed by the Ex-
change which has met with unusual success is a computation scale which
permits the retailer to compute automatically the cost per dozen of his
oranges, regardless of the size or the price he paid. On the reverse of
this scale similar data has been arranged to permit the retailer to deter-
mine at a glance the cost per unit of the grapefruit. These scales, of
course, carry Seald-Sweet and Mor-juce advertising and act as intro-
ductory or "calling" cards for the dealer service men in their work with
the retailers.
These merchandising crews during the current season through May
22 made nearly 25,000 calls on wholesalers and retailers in all large
markets. Over 4,000 complete window and interior displays were in-
stalled, using in excess of 60,000 pieces of display material.




























































EASTERN DEALER DISPLAYS
Typical window and fountain displays installed by Exchange dealer
service crews in the Eastern Division under the direction of S. W.
Teague Division Manager, (inset) are pictured above. The work in
Daniel Reeves stores during the first two weeks in February in-
creased sales approximately 125%. (1, 4). The Walgreen Seald-
Sweet Fountain campaign (3, 5) doubled the volume of citrus dis-
pensed during the three weeks' period when Exchange marks were
featured. Attractive illuminated dioramas (2, 5 and 6) have been
used to advantage to draw attention to the displays throughout the
season. Note the advantageous use of the counter vender (6) for
display purposes.




15



























































S-


CHICAGO DISPLAY INSTALLATIONS
Typical window and counter installations of Seald-Sweet and Mor-
juce fruit and display material in the Mid-Western Division are re-
produced above. This work is under the direction of C. W. Smith,
Division Manager (inset). Juice demonstrations were run in con-
junction with the displays 2, 3 and 5 on Saturdays from 8:30 A. M.
until 9:00 P. M. During these single day's sales in each retail out-
let turnover exceeded 100 boxes of fruit representing increases of
from 60% to 100% over the previous Sathrday. The use of the dis-
play vendor for window work is also illustrated. (4). The electrical
display bulletin at State and Randolph Streets having an approxi-
mate circulation of 100,000 daily was maintained through the season
with alternating orange and grapefruit copy.


4 P:4; 7.,
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FIELD OPERATIONS
Field operations of the organization are handled under the immediate
supervision of the Assistant General Manager. Through the district
managers and a few temporary employees direct contact with associa-
tions is maintained. Through this work assistance is rendered associa-
tion managers on grade and packing, inspection, various operating prob-
lems, et cetera.
The personnel in this department were charged with the responsi-
bility of handling all details in conjunction with proration of fruit under
the Marketing Agreement. Association managers throughout the or-
ganization cooperated fully with this organization on prorate matters.
As a result, the Florida Citrus Exchange enjoys an excellent perform-
ance record in keeping shipments in line with the prorates made by the
Control Committee.

Decay
The present season has been one of the most difficult in Florida his-
tory from the standpoint of decay. The state has experienced a very
open winter with practically no cold weather and plenty of rainfall. As
a result, the fruit is tender, weak, and inclined to decay rapidly.
This has caused much dissatisfaction on the part of the trade and
has necessitated many adjustments.
Under the growing conditions which existed this season, fruit treated
with hot color or hot wax has proved to be shorter-lived and affected in
flavor. This situation is indicated not only by the complaints from mar-
kets, but by the records of the Federal Government in its check on this
condition.
Confronted by these conditions, the field force of the organization
conducted investigational work on color added and hot wax. It fostered
additional experimental work to determine the best methods of handling
fruit in order to retard decay, pitting, weak stem-end conditions and
hardening of the rind.
In this connection, the industry faces a loss of Federal work in in-
vestigating causes of decay. The Florida Citrus Exchange succeeded in
getting a substantial increase in the Federal appropriation for this work
in Florida two years ago. Present indications, however, are that the drive
for economy will cut the appropriation for this much needed research,
particularly on hot color and wax.

Crop Conditions
It is too early to forecast the size of next season's crop. Trees have
been blooming steadily since January. Much of this bloom has not
set. As new bloom comes on, the trees are shedding heavily.
From the best information available on bloom, particularly that of
seeded grapefruit, it has been comparatively light. Further, it is of such
a nature as to make the marketing of next season's crop difficult in the









extreme because of the varying maturity which will exist on individual
trees throughout the belt.
Reliable reports from Texas indicate that that producing section will
have a crop increase over this season of from 25% to 30%. California
reports the probability of a good Navel crop. It is still too early, how-
ever, to report on Valencia conditions in that state.

TRAFFIC DEPARTMENT
Transportation has been exceptionally good during the current season.
With added boat service and unsurpassed rail service, the industry is in
no position to register complaint.
The only flaw in the transportation records was caused by the Ohio
River flood. Even in this emergency the carriers generally did every-
thing possible to move the fruit successfully. All showed a fine spirit
of cooperation in meeting each difficulty as it arose.
Rates
The season opened with a continuance of the emergency rate reduc-
tion of 12c per hundred pounds below the normal rate to northern in-
terior points. Provision also was made for a continuance of rail rates to
eastern seaports competitive with truck-water rates.
A further reduction of an additional 8c per hundred pounds to
northern interior points was secured later in the season. This brought
the total reduction to 20c per hundred pounds.
The rates and minimum car load to southeastern zones were readjust-
ed on the basis of 200 boxes minimum on rail ventilated box cars. The
rate was lowered to 50% of the normal rate in Zone 1, 35% in Zone 2,
and 15 % in Zone 3.
Because of the extremely low prices which maintained during the
early part of the season on grapefruit an attempt was made to get a 50%
reduction in rates on this commodity. This effort was unsuccessful.

Diversions and Claims
Diversions of Exchange fruit have been handled almost entirely
through local railroad offices. This has been the practice during the
past three years.
The service has been excellent with the result that over 8,000 diver-
sions have been handled satisfactorily and with little expense to the or-
ganization.
The Traffic Department has checked freight charges on some 16,-
000 cars of fruit. Corrections have been made where necessary and
over-charge claims filed where over-charges existed.
During the past season approximately 900 claims have been filed
with transportation lines for over-charges and for loss and damage. The
organization has been successful in collecting its claims.









Refrigeration Case Won
The refrigeration case in which the Florida Citrus Exchange and the
Growers and Shippers League have been plaintiffs was finally decided
by the Interstate Commerce Commission. The case brought about com-
plications with other producing sections. As a result, hearings were
necessary in every citrus producing section. It became a long drawn out
and expensive matter.
The final decision, however, gives Florida a reduction of from $4.00
to $13.00 per car on all shipments moving under standard refrigeration
to the territory north of the Ohio and between the Mississippi River and
Buffalo-Pittsburgh.line after June 24, 1937. The Commission also or-
dered reparation by way of refund on all cars into this territory under
standard refrigeration in an amount approximately equal to the reduc-
tion made. This reparation covers the period from June 12, 1930 to
June 24, 1937, the date the lower rates will apply.
This reparation should result in a handsome refund to the Exchange
for its grower members.

LAW DEPARTMENT
Competent legal services check all operations of the organization for
the proper protection of its grower-members. This Department was
active in many major undertakings of the industry in addition to its rou-
tine matters.
This Department was to a large extent responsible for drafting much
of the State legislation as originally passed two years ago and as amend-
ed during the current session. It also has cooperated with others in the
industry on Federal legislation in which the Florida citrus industry has a
direct interest.
This Department was active in the negotiations for and preparation of
the Federal Marketing Agreement and the many details necessary in its
favorable operation. It handled negotiations and adjustments of the
Florida Citrus Exchange loans with the Farm Credit Administration.
The Mor-juce and Flor'da-Sweet trade names of the Florida Citrus
Exchange have been registered with the Federal Patent Office. In ad-
dition, this Department negotiated individual state reigstrations through-
out the United States on these two marks.
The re-districting problems of the Florida Citrus Exchange to pro-
vide for proper and legal representation on the Tampa Board was a
matter which required much study and analysis. This Department was
largely instrumental in perfecting the plan which is now in operation.
STATISTICAL SERVICE
The Florida Citrus Exchange maintains a Statistical Department so
organized that it can furnish data on practically every phase of the citrus
industry in general and Exchange operations in particular. All infor-
mation falling within the general classifications of shipments, distribution,









sales, production, acreage, plantings, estimates, price averages, produc-
tion costs, cannery products, decay, grades and sizes, export, etc., is
available from the general records and files of this Department.
In connection with Exchange sales, detailed carlot distribution rec-
ords are maintained. These indicate the sales division, district, market,
and customer for each car of fruit sold. From these records workable
sales data are furnished the Sales Department, thus permitting the or-
ganization to be posted constantly regarding the scope and status of
private market sales distribution.
Exchange records are so arranged that the distribution effected for
each individual association is available. In connection with sales, rec-
ords are maintained for each association indicating the f. o. b. price
averages received for each grade and variety of fruit in auction and pri-
vate markets.
An outstanding feature of the service rendered by this Department
is the "Daily Auction Averages." This information is gathered each
day from the ten leading auction markets immediately following the close
of sales. It is then disseminated to the citrus industry by telegraphic
"CND" service.
Comprising several bulletins, these data are issued daily to Exchange
officers, salesmen, department heads, district managers, associations, and
special shippers. It is the only authoritative detailed sales record avail-
able to the industry in the form presented. Its value lies not only in the
detail of the information thus made available, but also by its publication
on the day the sales are made.

LOWEST SALES COSTS
The sales charge of the Florida Citrus Exchange is lower than that
of other operators handling Florida citrus fruit. During the current
season the organization was operated on the basis of Oc per box.
For this 10c per box Florida Citrus Exchange member growers and
shippers obtain the services of a complete marketing organization. No
other shipper in the State renders the fully rounded service reported on
preceding pages.
The significance of this low retain is more thoroughly realized by
direct comparison with the charges for "market representation" made by
any other type of operator in the State or by brokers or commission mer-
chants at the other end of the line who offer their services as sales organi-
zations.
This competitive sales representation carries a far greater expense in
every instance than the normal cost charge of the Florida Citrus Ex-
change. Refer to Table on Page 23, which cites a definite com-
parison between the Florida Citrus Exchange direct selling expense in a
given market such as New York, and the charges of selling brokers
ranging from 5% to 7%. Details of this comparison show the variance
on prices ranging from $2.50 to $5.00.










In every instance the Florida Citrus Exchange affords a substantial
profit margin which accrues to Exchange member shippers and growers.
Producers using these other services pay profits ranging up to nearly 18c
per box to the speculative interests for limited marketing representation.
Because of the excellent financial condition of the Florida Citrus Ex-
change, together with the increasing volume, the management believes
that a lower retain may be adopted safely for use next season. This
matter will be given full consideration by the Board of Directors prior to
next season.


1










AFFILIATED SERVICE ORGANIZATIONS
In addition to the marketing services of the Florida Citrus Exchange,
the cooperative associations of the organization own and operate a fi-
nancial credit institution known as the Growers Loan and Guaranty
Company, and a cooperative purchasing agency, the Exchange Supply
Company.

Growers Loan and Guaranty Company
This company enjoys the distinction of being the first agricultural
credit corporation of its kind organized in the United States. During
the twenty years of its existence it has made loans to associations and
grower members aggregating approximately thirty-two million dollars.
At the close of its fiscal year, April 30, 1937, the company had a
substantial cash working capital with no liabilities other than those con-
tingent as guarantor of the Federal Farm Board loans. During the
past year it completed the redemption of its outstanding issue of 7% pre-
ferred stock so that the 5% preferred stock, owned in its entirety by as-
sociations and special shippers, now becomes a first preferred issue.
Due to improved conditions, the company has been able to liquidate
considerable of its grove holdings without any loss. By the end of the
next fiscal year it is probable that the remaining properties will have
been liquidated on a satisfactory basis.
By the close of each season the company liquidates its current bor-
rowings from banks. Because of its favorable performance record, it
has been able to secure a reduction of interest rates which it has passed
on to its borrowers. The company is in a sound financial condition and
is able to finance all short-term operating and production loans offered
by its associations and their members.
This financial service is of material assistance to the cooperative idea
and program expressed in the Florida Citrus Exchange.

Exchange Supply Company
The operation of the Exchange Supply Company for the year end-
ing April 30, 1937 shows a marked improvement over the previous year.
Sales increased by more than 10% while operating expenses were lower.
Supplies were purchased at prices which resulted in considerable
profit to associations. Chief among these favorable purchasing arrange-
ments negotiated by the Exchange Supply Company was the contract
for the purchase of paper which reflects a saving of about 25% to asso-
ciations.
The financial condition of the Exchange Supply Company has been
improved materially during the past season. Under an arrangement with
the Growers Loan and Guaranty Company and the Exchange National
Bank, it has been able to operate in a most satisfactory manner.










COMPARATIVE SALES COSTS
Per Box Exchange Charges Competitive Charges
Sales Auction Exch. Exch. Exch.
Price Retain 2% Total At 5% Advtge. At 6% Advtge. At 7% Advtge
2.50 .0706 .0500 .1206 .1250 .0044 .1500 .0294 .1750 .0544
2.60 .0706 .0520 .1226 .1300 .0074 .1560 .0334 .1820 .0594
2.70 .0706 .0540 .1246 .1350 .0104 .1620 .0374 .1890 .0644
2.80 .0706 .0560 .1266 .1400 .0134 .1680 .0414 .1960 .0694
2.90 .0706 .0580 .1286 .1450 .0164 .1740 .0454 .2030 .0744
3.00 .0706 .0600. 1306 .1500 .0194 .1800 .0494 .2100 .0794
3.10 .0706 .0620 .1326 .1550 .0224 .1860 .0534 .2170 .0844
3.20 .0706 .0640 .1346 .1600 .0254 .1920 .0574 .2240 .0894
3.30 .0706 .0660 .1366 .1650 .0284 .1980 .0614 .2310 .0944
3.40 .0706 .0680 .1386 .1700 .0314 .2040 .0654 .2380 .0994
3.50 .0706 .0700 .1406 .1750 .0344 .2100 .0694 .2450 .1044
3.60 .0706 .0720 .1426 .1800 .0374 .2160 .0734 .2520 .1094
3.70 .0706 .0740 .1446 .1850 .0404 .2220 .0774 .2590 .1144
3.80 .0706 .0760 .1466 .1900 .0434 .2280 .0814 .2660 .1194
3.90 .0706 .0780 .1486 .1950 .0464 .2340 .0854 .2730 .1244
4.00 .0706 .0800 .1506 .2000 .0494 .2400 .0894 .2800 .1294
4.10 .0706 .0820 .1526 .2050 .0524 .2460 .0934 .2870 .1344
4.20 .0706 .0840 .1546 .2100 .0554 .2520 .0974 .2940 .1394
4.30 .0706 .0860 .1566 .2150 .0584 .2580 .1014 .3010 .1444
4.40 .0706 .0880 .1586 .2200 .0614 .2640 .1054 .3080 .1494
4.50 .0706 .0900. 1606 .2250 .0644 .2700 .1094 .3150 .1544
4.60 .0706 .0920 .1626 .2300 .0674 .2760 .1134 .3220 .1594
4.70 .0706 .0940 .1646 .2350 .0704 .2820 .1174 .3290 .1644
4.80 .0706 .0960 .1666 .2400 .0734 .2880 .1214 .3360 .1694
4.90 .0706 .0980 .1686 .2450 .0764 .2940 .1254 .3430 .1744
5.00 .0706 .1000 .1706 .2500 .0794 .3000 .1294 .3500 .1794
Total Retain ................................ $ .10 per box
Less 1. Advertising and dealer service. ........... 0150
This consumer and trade promotion of marks
made available and recognized as Florida
standards is not available from competition.
2. Industry Promotion .. .......... .. .. 0072
Includes development and retention of contacts
in Tallahassee and Washington, all of which
are in the interests of growers.
3. Legal services available for protection of all
operations ......................... .0015
4. Statistical Department ............... .0014
Current and detailed market information of all
movement including shippers' own cars, quota-
tions, routings, conditions, etc.
5. Traffic Department ................. .0021
Handles all routing, diversions, claims, etc. In
addition, was responsible for initiating much of
negotiations accomplishing lowered freight
rates.
6. Insurance, bonding, etc............. .. .0022
No Exchange shipper has ever lost on any credit
risk.
TOTAL INDIRECT EXPENSE.. .0294
Total direct selling expense ..................... .0706























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