Annual report of the Florida Citrus Exchange
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00075941/00015
 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: 1942
Frequency: annual
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 )
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: UF00075941:00015
 Related Items
Preceded by: Annual report of the business manager of the Florida Citrus Exchange

Full Text


I 1

Annual Report

Executive Officers
Season 1942-43
Center, C. H. Walker, President; left,
C. C. Commander, Gen. Mgr.; right, S. L. Looney, Treasurer-Comptroller



SEASON 1942-1943

C. H. Walker, President and Chairman of the Board .--- Bartow
H. E. Cornell, First Vice-President Winter Haven
H. G. Putnam, Second Vice-President --_----- Oak Hill
J. C. Palmer, Third Vice-President Windermere
W. O. Kirkhuff, Fourth Vice-President Bradenton
C. C. Commander, General Manager Tampa
Fred S. Johnston, Sales Manager Tampa
L. D. Aulls, Traffic Manager Tampa*
S. L. Looney, Treasurer-Comptroller Tampa
Counts Johnson, Secretary and General Counsel -------- Tampa
J. Samson, Assistant Secretary Tampa

Fort Pierce ----
Indian River .-
Lake Region -.
North Pinellas-
Polk County --
Winter Haven

R. J. Kepler --
W. C. VanClief
---- .W. M. Moseley -
.----- H. G. Putnam -- -
C. B. Hipson.-------
..---- A. R. Updike---
------- J. W. Smith
J. C. Palmer
W. O. Kirkhuff .-
Wm. G. Geier.--
.----- D. A. Hunt
C. H. Walker
..----- H. E. Cornell

Winter Haven
-.-- Fort Pierce
-- Oak Hill
-- Lake Wales
-- Bradenton
Lake Wales
Avon Park
Winter Haven

*While this report was being prepared, Lyman Drew Aulls passed
away at his home in Tampa, Sunday, May 16. Mr. Aulls was sixty
years old and had been traffic manager since 1933. Before coming to
the Exchange he held a similar position with the International Fruit
Corporation, of Orlando and Winter Haven.

SEASON 1942-43

The impact of the nation's war economy was increasingly
felt by the Florida citrus industry during the current season.
Changes of packing, handling and sales methods became neces-
sary. Frequent adjustments were required to meet the neces-
sities faced by abnormal conditions.
The Florida Citrus Exchange during this period found itself
in a favorable position to demonstrate the values of cooperative
service to the grower members of the Exchange system. For-
tunately, the organization deals in products essential to the health
of the nation. This classification automatically continued the
Florida Citrus Exchange as the biggest shipper in an essential
The Florida citrus industry and the Florida Citrus Exchange,
therefore, enjoyed certain considerations in the handling of its
products which tended to ease the normally difficult job of sales
and distribution. It became the policy of the government to
encourage wide-spread distribution and use of fresh citrus fruit.
Huge orders* were placed for canned sections and juice for mili-
tary and lend-lease use, leaving little available for competition
with the fresh fruit markets.:**

*All production of the canneries and concentrate plants was req-
uisitioned by the government for military and lend-lease use early in
the season. Tin allotments became the basis ubon which such control
was exercised. The only exception to this blanket purchase of processed
citrus products in Florida was an estimated 10,280,000 cases of grape-
fruit juice, which have been available for civilian distribution and con-
sumption. The total amount produced by canneries was 16,281,668
cases, of which the government used 6 million cases. No sections or
combination juice was available for civilians.
** Unique proof of the marked effect low-priced canned citrus have
upon the fresh fruit market is found in a study of price reaction to the
first reduction of point values for grapefruit juice on March 29, 1943.
Market averages for all but the poorest grades and sizes were pressed
strongly against the ceiling up to this date, as housewives were unwilling
to spend ration points for other than solid foods. Unrationed fresh
citrus, therefore, was in heavy demand. Promptly upon the reduction
of point values for grapefruit juice, however, the grapefruit market
reacted as much as 75c to $1.00. The orange market, on the other
hand, had little or no reaction, as no canned orange products were


A Seller's Market

In common with other industries producing essential prod-
ucts for military and civilian use, Florida citrus growers have
enjoyed a seller's market throughout the year. The buying
power of the nation has never been greater. Practically every
employable person is gainfully occupied at wages which are the
highest in the history of the world. This huge circulation of
money at the command of individuals normally subjected to
sharply restricted buying habits, coupled with a shortage of
available consumer goods, created an inflationary condition. If
this situation had not been brought under control by OPA price
ceilings, Florida growers again would have seen sales as high,
perhaps, as $10.00.

available. This weakness continues on poor grades of fruit which
otherwise would meet with satisfactory trade acceptance at higher
prices. It is the short volume of canned citrus available to civilians
which has been one of the factors in maintaining constant ceiling prices
on most of the fresh fruit movement.
Citrus Price Trend April 19, a few days prior to and after March
29, the Day Ration Points Were Lifted on Canned Citrus
*Oranges *Grapefruit
March 19 $3.81 $3.25
March 22 3.88 3.13
March 23 3.87 3.17
March 24 3.83 3.18
March 25 3.91 2.73
March 26 3.93 2.77

March 29 3.79 2.74

March 30 3.87 2.64
March 31 3.90 2.71
April 1 3.97 2.64
April 2 3.70 2.61
April 5 3.97 2.66
April 6 3.89 2.79
April 7 3.77 2.68
April 8 3.74 2.68
April 9 3.87 2.76
April 10 4.22 3.32
*Standard and Bruce Boxes Combined.
'*Seed and seedless, Standard and Bruce Combined.

This situation maintained in spite of record volumes going
to American markets from all producing sections. Total Amer-
ican citrus production exceeded 132,000,000 boxes, exclusive of
lemons and limes. The total for oranges and tangerines is up
nearly 2 million boxes and the total for grapefruit jumped
approximately 6 million boxes to an all-time high of nearly 47
million boxes. The detail of this production record is based
upon the latest available records of shipments and revised esti-
mates as of this date.
Florida, California and Texas Shipments Records and Esti-
mates To Date Combined for Remainder of Season, Including
the Total.
(Thousands of Boxes)**
1942-43 1941-42
Oranges Tangs. Grapefruit Oranges Tangs. Grapefruit
Florida 35,500 4,500 25,000* 27,200 2,100 19,200
Calif. 42,186 2,644 51,532 3,144
Texas 2,900 16,600 2,850 14,500
All Others 1,040 2,415 852 3,450

Total 81,626 4,500 46,659 82,434 2,100 40,314

Total U. S. Citrus 132,785,000 124,848,000
This favorable picture, however, was not without its pen-
alties. The same economy which produced an unparalled mar-
keting situation for Florida growers also created shortages of the
tools with which growers are accustomed to handle the business
of harvesting their crop, packing it and transporting it to con-
sumers. Shortages, principally of labor, containers and trans-
portation, constituted a serious drawback to an otherwise ideal
marketing operation.

Increasing Production Potential

Great as the current tonnage harvested from America's citrus
trees is at the present time, the potential for the future becomes
greater each season. The currently bearing trees, properly nur-
tured and cultivated, increase their bearing capacity. In addi-
tion the huge non-bearing acreage, particularly in Florida and
Texas, is being increased by thousands of acres now being set
out by growers. Substantial growers are responsible for these

*Total Grapefruit for Florida 1942-43 may reach 26 million.
**Citrus crop estimate of U.S.D.A. as of April 1, 1943.

increased plantings primarily for two reasons-profitable prices
maintaining at the present time coupled with certain income tax
rulings which make this disposition of accumulative returns a
profitable investment. The present policy of the Internal Reve-
nue Department permits certain substantial expenses for non-
bearing acreage to be charged against the revenues from bearing
acreage. This offset to income taxes is largely responsible for
the increased planting activity. The result is obvious. Ten
years from now American citrus production will be much more
than what it is today, in spite of the fact that current crops
are of record proportions. Too much emphasis cannot be placed
upon this situation. It defines the necessity for the develop-
ment of organization within the industry competent to find and
exploit markets sufficiently broad to receive these future vol-
umes at a profit to growers. The alternative is a reduction in
grove values even to the point of collapse. Growers alone have
it in their power to meet this threat through cooperative organ-
ization permitting positive action on the fundamentals of dis-
tribution and merchandising.
The shortage of labor, equipment and packing materials left
many growers who had been accustomed to trade with buyers
at will without a home for their fruit. Some of these and many
others at the mercy of buyers are known to have sold their fruit
during this season for prices frequently amounting to less than
half of what Exchange growers received for the same quality
and character of fruit.

Agricultural Labor Shortage
In spite of impending action highly publicized from time to
time by Washington's soothsayers to reassure the American pub-
lic that steps were being taken to protect the cultivation and
harvesting of America's food crops, farm labor and experienced
personnel necessary to handle perishable products is being draft-
ed continually. An even higher percentage of loss to farmers
and organizations handling their products has been to war
industries, where rates of pay are well above the maximum agri-
cultural interests are permitted to pay under the frozen wage
scales which now maintain. This handicap extends beyond the
direct cultivating, harvesting and packing of crops to the indus-
tries supplying the crates, fertilizers and equipment upon which
the farmer must depend if volumes of their produce are to be
made available to the armed forces and the consuming public.
At the present writing this situation looms as one of the
most serious problems with which the Florida citrus industry

will be faced during the coming season. In spite of repeated
attempts on the part of management in agriculture to obtain
a positive statement of policy upon which plans might be proj-
ected, the industry has no assurance of anywhere near adequate
labor supplies for its own and affiliated supply industries for
the coming season. If something more tangible than talk is not
forthcoming from the bureaucrats running the manpower situ-
ation, Florida growers will find their crops maturing without
labor to pick, haul and pack or containers to pack them in.
The industry already has had a foretaste of how seriously
this situation may develop. As the season closes containers of
practically all descriptions are being used-bags, bushel baskets,
reconditioned used boxes-all have been pressed into service to
meet the requirements of the current season.
Associations of the Florida Citrus Exchange as a whole found
themselves in a favorable position regarding containers during
this season. Most of these shipper members of the Florida Citrus
Exchange followed the suggestions made to them last summer
and fall and anticipated their season's requirements by obtaining
actual delivery on a sufficient volume to carry them through.
A repetition of this action, however, may be impossible for the
coming season, as the capacities of mills which normally work
through the summer to produce a backlog of shooks for the
ensuing season may be requisitioned by the government to pro-
duce containers for food and munitions shipments overseas. The
regulation at the moment governing this situation prohibits
crates being made for storage-they must be purchased for use
within ninety days.
Similarly, that phase of citrus handling for which carriers
and the trade are responsible has suffered from increasing lack
of experienced labor. With the transfer to the railroads of the
heavy tonnage formerly carried by boats, plus a generally heavy
increase in rail-borne war materials, it was obvious that an in-
creased carload minimum was essential. This increase was one
of the causes of heavy bruising and breakage. However, this
damage is far beyond that which heavier loads in themselves,
even when exaggerated by weaker containers, could have oc-
casioned. Such heavy loads have been carried before without
the losses which were experienced this season."
*Frequently cars in excess of 50 per cent breakage were reported
in the New York terminal. Much of this damage can be attributed
only to rough handling by insufficient and inexperienced labor. The
net result has been increased decay in trade channels and the loss of
food to the nation's consumers.

Price Ceilings

The industry as a whole does not quarrel with the theory
behind the establishment of price ceilings. When this program
was passed upon citrus fruits October 3 it was given thorough
consideration by representatives of all citrus-producing sections.
All expressed a desire to cooperate with the government in its
effort to take the necessary steps in the prevention of a runaway

Criticism is not made of the price ceilings as established, but
rather of the arbitrary and inequitable manner of their estab-
lishment. In the first place, the law specifically requires the
Office of Price Administration to base its ceilings upon the
average for the index period of 1919-1929 or upon a comparable
period to be determined with the approval of the Secretary of
Agriculture. Instead of either of these alternatives OPA chose
the period of 1931 through 1937-the years during which the
country suffered the most severe depression of its history.

Further, these ceilings were based upon auction averages.
While this may be an acceptable basis for California, which sells
a much larger percentage of its fruit through auctions, or at
prices based directly on auction averages, it is an unrepresenta-
tive reflection of Florida's price structure, where approximately
one-half of the tonnage is sold through auction facilities. In
addition, a car which may be rejected for any of several reasons
upon arrival for acceptance at a private sales terminal finds its
way to auction, where it is sold for whatever it may bring. The
averages of the sales from such reject cars are included in the
Florida auctions upon which the ceilings at which top-quality
fruit might sell are calculated.

Furthermore, fresh citrus fruit, in common with all perish-
ables, are subject to frequent and substantial price changes. They
are extremely sensitive to all market conditions. Yet the ceil-
ings for Florida fruit are not permitted to yield revenues to the
grower common to other perishables industries. Witness the
fact that a bushel of apples or a 30-pound lug of tomatoes bring
more revenue to the farmer than a 90-pound box of grapefruit
or a 100-pound box of oranges.

That these ceilings penalize the grower to a greater extent
than any of the trade factors supposedly controlled on a com-
parable basis is available from a study of the permitted trade
mark-ups based upon the various classifications of their oper-
ations. The OPA attempts to control the situation to an in-
finite degree. In all cases, however, the mark-ups permitted the
individual trade factor described is usually substantially in ex-
cess of what that particular service cost prior to the establish-
ment of price ceilings.*

For example, the cash-and-carry wholesaler buying from
an intermediate seller may multiply his base price by 1.20. Using
the ceiling of $4.11 as a base price of a bruce box packed in
Winter Haven and delivered in New York, this wholesaler's
selling price then becomes $5.17-a mark-up of $1.06 per box
-when he has been accustomed to doing business at margins of
50c to 75c per box. Similarly, the margins for other trade fac-
tors are beyond the normal used in their routine operations. The
net result of this situation permits a possible cumulative margin
between the grower's net and the selling price to the retailer
of $3.49. The grower is permitted a top return of $2.20.

Growers are not given such considerations under these ceil-
ings. Yet it is the grower who must pay the fertilizer bills, the
increased cost of labor, if and when it may be available to cul-
tivate and spray his trees, and it is the grower who must suffer
the loss in case of drouth, freeze or other acts of God. The
consumer in turn must pay the retail mark-up beyond the $5.69,
which accounts for the prices per dozen of oranges being almost
prohibitive in some markets, even with today's unparalled buy-
ing power.

The combination of these various factors has been the cre-
ation of a price ceiling structure which is inequitable to the
Florida citrus industry. If a comparison with the price aver-
ages obtained for Florida citrus during the last war is made, it
will be seen that the citrus industry is not faring nearly so well,
particularly when its costs of operation have materially increased.
Comparisons of the four pertinent years of each period may be
made in the following table:

'See Appendix A, Pages 29 and 30.

1915-16 $2.21 1939-40 $1.60
1916-17 2.26 1940-41 1.51
1917-18 3.71 1941-42 2.06
1918-19 3.77 1942-43 3.10 (Estimated)
1941-42 77.8% increase in Florida produc-
tion over 1917-18.
It is only due to the organized and able efforts of representa-
tives of the Florida citrus industry, acting in cooperation with
those of Texas and California, that the situation is not infinitely

The February Freeze

During the morning of February 15 temperatures in Florida
reached serious lows. Generally temperatures throughout the
industry were below normal danger points for citrus and re-
mained there for a substantial length of time. In some places
lows of 14 and 16 degrees were recorded. Fortunately, severe
as these temperatures were, they were not repeated the following
night and were followed by favorable weather. The result was
a relatively small tree damage and practically no loss of fruit to
the grower, as crops from these sections were rushed to process-
ing plants before the fruit had an opportunity to dry out.
Another and encouraging factor which minimized the dam-
age caused by this freeze was the improved scientific methods
of grove care which during recent years have become a more
common practice generally throughout the industry. As a re-
sult of these better cultural practices many growers suffered
far less than those who have not yet adopted such programs.
It is, of course, too early to estimate next season's crop on a
volume basis. Weather and bloom conditions upon which later
more accurate figures can be based indicate that the tangerine
production probably will not be more than half of the volume
produced in the state last season. In addition, it is quite prob-
able that there will be a substantial reduction in the crop of
regular grapefruit.
In recent years Florida has suffered from drouth conditions,
some times periodical and at other times rather continued in

duration. At this writing (May 10) the belt is still suffering
from a protracted period of below-normal rainfall. This may
affect the total production of oranges and grapefruit for the
coming season substantially.

Industry Benefits By Commission

The Florida Citrus Commission, with a hard-hitting and
efficient organization, has been in a position to render consider-
able valuable assistance to the industry. At the request of all
industry groups, it represented Florida citrus most successfully
in Washington in matters concerning tin requirements, crate
production and transportation. Through the Commission the
industry has found it possible to coordinate its own efforts and
take concerted and effective action with Texas and California
in regulations concerning price ceilings and other similar mutual
The Florida State Legislature, through which-with the con-
sent of the industry-the Florida Citrus Commission exists, is
meeting this spring. Experience with citrus legislation now on
the book indicated certain desirable modifications which could
be obtained only by corrections of the law. The Florida Citrus
Commission brought together various groups in the industry,
which discussed and agreed upon a series of bills and sent them
to Tallahassee with their unanimous approval. Of these-ten
have been reported favorably from committee and will be passed
for the governor's signature before the end of the session. These
approved bills are:
S.B. 122-Carry-over of Research Funds.
S.B. 124-Extension of Maturity Inspection.
S.B. 118-Repeal of Cost Guarantee Act.
S.B. 119-Juice Requirement Size 80 Grapefruit.
S.B. 120-One Advertising Tax Stamp.
S.B. 121-Carry-over of Transportation Funds.
S.B. 125-Increase in Cannery Inspection Tax.
S.B. 126-Increase in Citrus Inspectors' Salaries.
S.B. 127-Figuring Bulk Oranges at 23 Boxes Per Ton.
S.B. 128-Repeal of 10 per cent Juice Test Adjustment Act.
Two bills, however, were killed in committee. These were
the Kudner Bill, permitting the Florida Citrus Commission to
pay for printing placed several years ago outside of the state.
The Commission and the industry have received full value for

this work and owe the obligation. Under existing law it was
necessary that it be paid by a special enactment of the legislature.
It is unfortunate that petty politics prevent the industry from
meeting its just obligations.
The second bill was designed to permit the Florida Citrus
Commission to purchase printing at its discretion outside of the
state of Florida. The Supreme Court of the state held some
seasons ago that the so-called printing bill now on the statute
books compelled the Florida Citrus Commission as a state agency
to purchase all of its printing within the state. This position
was sustained, even though the Commission is the only or-
ganization in the state which uses most of its printing in north-
ern markets. The law, therefore, compels the Commission at a
cost of many thousands of dollars per year to ship paper from
northern mills to Florida, where it is printed, and then reship
it north for distribution and use. This places the Commission
at the mercy of the few printers who are equipped to handle the
exacting requirements of the industry. It also places an unnec-
essary burden upon war-laden carriers, who already have more
traffic than they can handle without delay. The subsequent
Melay in delivery of printing penalizes the industry heavily and
The bill was killed by the committee without even giving
representatives of the Commission the courtesy of a hearing.
These individuals were available in Tallahassee, at the request of
the committee, to explain the intent of the bill. It is a severe
criticism of inefficient Florida politics and politicians that an
uneconomic and unsound condition of th;s nature is permitted
to continue.


The Florida Citrus Exchange system is completing a most
satisfactory season of service to its membership and returns to
its growers. Policies generally adopted throughout the organ-
ization anticipated many of the difficulties found in the abnor-
mal conditions created by the war. Tonnage handled by the
organization came from packing units so located that they serve
every section of the citrus belt.
During the course of the year the interests of John Snively
of Winter Haven and the International Fruit Corporation at
Lucerne Park withdrew from the organization. These with-
drawals were based upon differences in policy matters which

had been approved by all other shipper members of the system.
The loss of this tonnage was replaced several times over by in-
creased tonnage brought to individual associations.

Practically every packing facility affiliated with the Florida
Citrus Exchange has operated through the season to serve grow-
ers to the limit of containers and labor available. Most of these
units have been forced, to turn away growers who sought affil-
iation with the local organizations. This proper procedure is
directly in accord with the long-established policy of the Florida
Citrus Exchange which insists upon first consideration being
given to its present membership, with the acceptance of addi-
tional tonnage only when it would increase the efficiency of the
packing unit without interference with its current membership.

Recognition of these facts should emphasize the importance
of a substantial packing and marketing connection upon which
growers can depend. Cooperative growers owning their own
facilities have been free from this risk and subsequent penalty.

Note in the following table that shipments through the
Exchange increased over 32 per cent, as compared with the state
increase of only 7 per cent, including a loss of grapefruit
Shipped thru April 13 1942-43 1941-42 Increase %
Oranges 42,295 38,480 3,815 9.0
Grapefruit -- 13,565 16,269 (2,704) (19.9)**
Tangerines 8,029 4,555 3,474 43.2

Total _. --- 63,889 59,304 4,585 7.2

Shipped thru April 13 1942-43 1941-42 Increase %
Oranges 9,206 6,861 2,345 25.5
Grapefruit ------ 5,934 3,649 2,285 38.5
Tangerines --------- 2,035 1,100 935 45.9

Total 17,175 11,602 5,565 32.4

*Does not include cannery.
**Parentheses indicate decrease.

Sales Volume Increase

The Florida Citrus Exchange system, as represented by the
sales organization and its members, handled a total of 9,876,774
boxes of fruit for the season 1941-42. Information for use
in comparing the present season's operations with last season
will not be available before late summer. Current information,
however, indicates that Exchange tonnage has increased in far
greater proportion than the increases which maintained in the
remainder of the industry.

Exchange Interstate Shipments Increase

Through May 15 the sales department of the Florida Citrus
Exchange, which deals only with interstate carlot shipments of
fruit packed by member houses, handled 11,200 cars of oranges,
5,028 cars of grapefruit, and 2,236 cars of tangerines. The
combined total of 18,464 cars represents a gain of 3,427 cars
when compared with the volume handled for the same period
of last season. This increased percentage of interstate shipments
through fresh fruit channels is considerably greater than the
state's gain in tonnage for the same period. This margin will
increase still more substantially between now and the close of
the season, as many non-Exchange houses already are closed,
leaving a larger percentage of the tonnage remaining in the state
for movement in Exchange hands.
The comparative interstate shipments by varieties for the
season are available for study in the following table:


State and Exchange Movement, through May 15
Season Oranges Grapefruit Tangerines Total
Florida 1942-43 51,719 16,683 8,053 76,455
1941-42 46,145 19,515 4,577 70,237
Increase (Decrease) 5,574 (2,832) 3,476 6,218
Exchange 1942-43 11,200 5,028 2,236 18,464
1941-42 9,070 4,810 1,157 15,037
Increase 2,130 218 1,079 3,427

Government regulations and price ceiling requirements pre-
sented many operating problems to house managers and the sales
department through the season. Careful and efficient manage-
ment on the part of managers minimized the troubles incident
to new and inexperienced help. In this connection, the sales
department lost many of its experienced employees to the Army
and still more to war industries which offered substantial in-
creases in pay. This necessitated the employment of inexperienc-
ed help to be used by the sales desks in handling a greatly in-
creased tonnage.
Further handicaps were experienced by the organization be-
cause its headquarters happened to be in a center of military
activities of Florida. Telephone and telegraph services to and
from Tampa have been taxed to capacity. Frequently hours
of delay were experienced in securing their services.
As a whole, however, the sales department has been able
to function smoothly throughout the season. After ceiling
prices became effective the organization maintained ceiling levels
on most of its sales. A few off grades and sizes from time to
time sold below these ceilings. However, the general statement
may be made that grower members of the Exchange system re-
cived the full permitted market for their fruit in every instance.

F.O.B. Sales Increase

Florida Citrus Exchange f.o.b. sales increased substantially
over last year. This swing of fruit away from auctions to pri-
vate sales methods of handling was stimulated by the effect
ceiling prices had upon auction sales. In most cases the practice
of distribution through auction when a line reached the ceiling
was to split it evenly between all bidders, regardless of their
individual requirements. This placed a handicap upon those
buyers who needed certain top grades of fruit, which because of
the ceiling became available to everybody. As a result, these
buyers were forced in many instances to arrange for direct or
f.o.b. purchases from the houses whose fruit they had been in
the habit of buying in previous years. Under these circum-
stances, it became necessary for many houses which had packed
for auction sales exclusively to revise their methods of handling
to accommodate their customers.
The comparative distribution this season over last through
May 15 at auction and private sale follows:

Through Tampa Sales Department
Season 1942-43* Season 1941-42*
Boxes Per cent Boxes Per cent Increase Decrease
Auction Sales 2,799,600 47.7 3,470,856 59.8 12.1
Private Sales 3,053,600 52.3 2,328,547 40.2 12.1

Total Sales 5,853,200 100.0 5,799,403 100.0
'This season as of May 15, 1943; 1941-42 figures for entire season.

A much wider distribution of Exchange fruit was maintained
by the sales department through the season. A large volume of
Valencias, for example, is being shipped into Texas and other
midwestern points usually served by California. Similarly, Va-
lencias are sold in the far West to markets like Spokane, Port-
land, Seattle, Vancouver and others in the Canadian Northwest.
This movement to date is very heavy; it is the first time in the
history of the industry that such a large volume of Florida
oranges has gone into this far western territory.

A brief picture of this distribution this season as compared
with last is available from the data tabulated below:

Summary of Distribution as of April 30

1942-43" 1941-42
Number of states distributed to ------- 42 37
Number of Canadian provinces entered 8 6
Total number of markets entered __----- 504 303
Number of new markets entered ------ 230 56
Total number customers sold -- 1,017 580
Number new customers sold 562 153

*'These figures will be substantially increased by end of season, and
will probably show the largest increase in distribution in the history
of the Exchange. Fruit is being sold in many cities by the Exchange
that have not been sold during past 5 or 6 years, and many more cities
that have never been sold before, particularly in the midwest and
far west.


Volume Reflects Economies
In common with every business, cost of operation rose sharply
during the past season. Expense of public communication facil-
ities, such as the telephone, telegraph and teletype-vital to the
successful sales distribution of citrus fruit-was increased heavily
by federal taxation. Increased costs of living and competition
from outside sources compelled a general salary increase through-
out the organization.
In spite of these added costs, however, the per box charges
reflected back to grower members showed a decrease. This has
been made possible by the increased volume handled through
the organization. It is indicative of the low levels per box at
which cooperative marketing, fully supported throughout the
state, would permit the handling of growers' fruit.
The comparative data for past seasons, showing the relation-
ship of revenue to departmental expenditures, are tabulated
Expressed in Averages Per Box Comparative
Per Box Per Box Per Box Per Box
Avgs. At Avgs. At Avgs. At Avgs. At
4-30-43 4-30-42 4-30-41 4-30-40
Retain from Fruit --- $0.0640 $0.0521 $0.0468 $ 0.0534
Other Income 0.0104 0.0076 0.0056 0.0067

Total Revenue -- 0.0744 0.0597 0.0524 0.0601
Sales Dept.-Tampa -- 0.0106 0.0100 0.0075 0.0102
Northern Offices --------- 0.0156 0.0172 0.0198 0.0265

Total Sales 0.0262 0.0272 0.0273 0.0367
Ad. and Dealer Service ---- 0.0014 0.0019 0.0043 0.0076
Field Supervision, Etc. .-- 0.0028 0.0034 0.0039 0.0054
Other Departments -------- 0.0098 0.0109 0.0115 0.0154

Total General ------ 0.0140 0.0162 0.0197 0.0284
Total Sales & Gen. Depts. 0.0402 0.0434 0.0470 0.0651
Other Expenses ------ 0.0016 0.0027 0.0017 0.0030

Total Expenditures ----- 0.0418 0.0461 0.0487 0.0681
OVER EXPENDITURES $0.0326 $0.0136 $0.0037 $(0.0080)

These lower costs per box assume even greater significance
if they are considered as a percentage of the dollar volume of
sales. Sales costs in all commercial organizations are computed
on the basis of a percentage of gross sales volumes. Computed
in this manner, therefore, the low costs available through coop-
erative handling this season are particularly significant. In spite
of the fact that the Exchange had collected for its fruit f.o.b.
Tampa to May 10 over 25 per cent more in dollars and cents
than for the entire preceding season, unit costs to growers com-
puted on the basis of percentage of estimated f.o.b. delivered
values are greatly reduced.

Based on F.O.B. Tampa, Florida
Period: From September 1 thru April 30
1943 1942
Direct Cost of Selling 1.27% 2.59%
Cost of Other Departments --_ __ 0.68% 1.27%

Cost of Sales and Other Depts. -....... 1.95% 3.86%
All Other Expenses 0.08% 0.24%

Total Cost of All Operations ------_ 2.03% 4.10%

Based on Delivered Values (Estimated)
Period: From September 1 thru April 30
1943 1942
Direct Cost of Selling 0.99% 1.85%
Cost of Other Departments ---- 0.53% 0.91%

Cost of Sales and Other Depts. __-.. 1.52% 2.76%
All Other Expenses 0.06% 0.17%

Total Cost of All Operations --.._--- 1.58% 2.93%

The record made last season of operation without credit loss
probably will be equaled again this season. This is a fact which
should be particularly pleasing to grower and shipper members
of the Exchange system. These reductions of credit losses as-
sumed by the Florida Citrus Exchange for its shipper members,
while never heavy, have been reduced during the past four years
to nothing, in spite of an increase in dollar volume of over 100
per cent. The comparative detail of this record is reflected in
the following table:

Seasons 1939-40, 1940-41, 1941-42
FROM SEPTEMBER 1, 1942, THRU MAY 10, 1943
Total Loss
Collected Expressed In
FOB TAMPA Loss Percentage
Season 1939-40 $ 7,924,946.48 $ 835.09 10/1,000 of 1%
Season 1940-41 9,406,030.69 595.62 6/1,000 of 1%
Season 1941-42 12,113,179.76 None None
Season 1942-43 (a) 17,344,962.85 None None

$46,789,119.78 $1,430.71 3/1,000 of 1%
(a) Through May 10, 1943

Packing Charges Again Increase

The increased cost of doing business also is reflected in still
greater costs of packing house operations. These costs represent
the bulk of the handling cost of fruit from the tree through
the sales collections from those sales. These costs cover the pick-
ing, hauling and packing of fruit.
An over-all estimate for all Exchange shipper members is
not available. The auditing department, however, maintains
touch with this situation by assembling accurate information on
seven average associations in the organization.
This information, tabulated in the following table, proves
the heroic measures which managers have been able to take in
meeting these rising costs. Note that materials and labor have
increased substantially. Direct and indirect costs, however,
which are within the control of the manager, have been reduced.


SEASON 1942-43
Materials $0.3536 $0.3208
Labor .1755 .1504
Other Direct ------------ .0267 .0310
Indirect .0432 .0587

Total $0.5990 $0.5609


Materials $0.2571 $0.2308
Labor .1428 .1239
Other Direct ---------- .0268 .0310
Indirect .0432 .0587

Total $0.4699 $0.4444

The "fixed" or "overhead" cost has been omitted from the
above, as these charges are beyond the control of house man-

Law Department

The law department of the Florida Citrus Exchange has
concluded the busiest season it has ever experienced. In addi-
tion to active participation in working out satisfactory disposi-
tion of the anti-trust indictment in California and representing
the Exchange in the pending cartage indictment in New York,
a vast amount of time and effort has necessarily been expended
on and in connection with multiple problems arising under wage
stabilization orders, regulations issued by Office of Price Admin-

istration placing ceilings on citrus fruit prices and packing and
other service charges, as well as countless regulations issued by
other war agencies and bureaus of the federal government. Lit-
igation over Social Security taxes paid by Exchange affiliates
prior to 1940 is now in full swing.
On November 16, 1942, the anti-trust indictment in Cali-
fornia, under which the Florida Citrus Exchange, California
Fruit Growers Exchange, California Fruit Exchange, DiGiorgio
Fruit Corporation, most of the auction companies, and one or
more officials of each of those corporations, were charged with
conspiring to restrain trade, fix prices, etc., came on for final
disposition. Only after government counsel had moved for
and obtained an order of the Court dismissing the indictment
as to every individual defendant named in the indictment did
the corporate defendants plead nolo contender and enter into
a consent decree. The Court took the matter of fines to be
assessed against the corporate defendants under advisement, and
up to the time this report is being prepared no decision in that
respect has been announced by the Court. It is felt that the
consent decree entered into is not prejudicial to the Florida Cit-
rus Exchange nor its operations, for the various acts or things
enjoined by the decree are, for the main part, practices which
the Exchange has not only never engaged in, but in reality has
openly and vigorously condemned.
On March 3, 1943, there was returned in the District Court
of the United States for the Southern District of New York an
indictment under the Sherman anti-trust act, charging price-
fixing and conspiracy to monopolize the fresh fruit and vege-
table carting business in the New York City area. Named as
defendants in this indictment are The Fruit and Produce Trade
Association of New York, Market Truckmen's Association of
New York, two auction companies, several trucking corpora-
tions, and a number of receivers, including Florida Citrus Ex-
change, California Fruit Growers Exchange, California Fruit
Exchange, and DiGiorgio Fru;t Corporation, the first three of
these organizations being cooperative associations of producers.
and the DiGiorgio Fruit Corporation being both a producer and
a receiver. Also indicted were some sixteen individual coroor-
ate officials, none of whom is connected with the four receivers
last named. It is altogether impossible to conceive of a more
ridiculous charge than the one made in the indictment to the
effect that the receivers indicted conspired among themselves,
as well as with others, to monopolize the carting business in New
York and to maintain exorbitant trucking charges. Since the

sole interest of the Florida Citrus Exchange is to obtain the max-
imum of efficiency at the lowest possible cost in the hauling of its
growers' fruit in the New York City area, as well as everywhere
else, such charge is tantamount to asserting that the Florida Cit-
rus Exchange conspired against its own best interests. This
is indeed something new and novel in government theorizing,
and is quite at variance with the actual existing record which,
among other things, clearly establishes that the Florida Citrus
Exchange has in the past protested to more than one government
agency about the trucking situation in the New York City area,
one of those agencies being the Anti-trust Division of the United
States Deparment of Justice, which is in active charge of the
indictment in question. The Exchange is content to stand upon
that record in the handling and ultimate disposition of this
The Exchange's General Counsel has had to attend many
conferences in Washington and Atlanta with officials of vari-
ous government agencies, particularly the War Labor Board and
Office of Price Administration, in concerted effort with other
representatives of all the citrus-producing areas, toward a solu-
tion of the many complex problems which wartime regulations
inevitably bring about. He is at the present time engaged in
the prosecution of the Exchange's formal protest to Maximum
Price Regulation 292 establishing ceiling prices for Florida citrus
fruit, which is no small undertaking within itself because of the
highly technical and complicated showing that is required to
substantiate the contentions made with respect to the correct and
legal method for determining parity prices, etc. It is felt that
some time will elapse before any final decision is had with respect
to this protest and those from other citrus-producing areas.
During the latter part of 1940 the Exchange's General Coun-
sel filed claims for most of the Exchange's affiliated associations
in an effort to recover Social Security taxes paid prior to 1940,
it being contended that the employees of these associations were
engaged in agricultural labor and not covered by the Social
Security Act. In due course all these claims were rejected by
the Commissioner of Internal Revenue, as had been anticipated,
and during the past few months suits on these claims have been
brought in the United States District Court for the Southern
District of Florida. One of these suits is already at issue and
should be tried reasonably soon. Since the questions of law and
fact are substantially the same in all the suits, the decision in the
case that is practically ready for trial should be largely deter-
minative of all the cases.

All of this work, most of which is directly beneficial to
Exchange affiliates and grower members, is absorbed in the
general retain of the organization. If it were possible to measure
the direct value of this work in dollars and cents, it is possible
that it alone would reflect full repayment to the grower for the
sales retain. It represents one of the important "plus" values
to cooperative membership.

Traffic Operations

The traffic department of the Florida Citrus Exchange
continued the efficient routing and checking of freight bills for
fruit moved by its shipper members. The burden of handling
this traffic detail was greater than ever before, however, because
of abnormal conditions through the country.
The war has increased freight traffic far beyond that of any
previous period. Rail lines serving Florida have been carrying
a large burden because of the numerous military camps located
in Florida and throughout the entire Southeast. This priority
traffic has been piled on top of the food and perishables switched
to rail carriers, but formerly handled by boats. All lines have
experienced great difficulty in maintaining schedules. There
have been considerable transit delays and some temporary short-
ages in both refrigerated and ventilated box cars.
Under General Order No. 18, issued by the Office of Defense
Transportation, heavier loading was required in all refrigerated
cars. All shippers have been obliged to load standard boxes
two layers high on end and an additional top layer on bottoms.
Bruce boxes are required to be loaded five layers high. This
makes a load of approximately 475 standard boxes or 525 bruce
boxes-an increase of 20 per cent over previous loadings.
It is natural that these heavy loadings have increased the
percentage of breakage and decay throughout the season. Un-
loading and handling from these overloaded cars at most auction
points, especially in New York, have been very unsatisfactory.
As previously discussed, an added-and perhaps principal factor
-in this damage may be traced to insufficient and inexperienced
In December 1941 railroads filed a petition with the Inter-
state Commerce Commission requesting an increase of 10 per
cent in all freight rates. In the proceedings which followed
(Ex Parte 148), the Commission granted a 3 per cent increase

on citrus fruit. This increase became effective on March 19,
1942, remained in effect until May 15, 1943, and was suspended
until January 1, 1944.
In the estimated weights and package rates cases, decided
June 8, 1942, the Interstate Commerce Commission ordered new
estimated weights per package and revised rates. These changed
weights are as follows:
Oranges Grapefruit
1-3/5 Bu. Nailed Box .---- 100 pounds 91 pounds,
1-3/5 Bu. Bruce Box _------- 93 pounds 83 pounds
The revised rates are based on rates in effect October 4, 1940,
reduced 5 per cent, and carload minimum weights of 40,000
pounds on oranges and 36,000 pounds on grapefruit and tan-
gerines. The new weights and revised rates became effective on
November 15, 1942.
Upon the direct request of the Exchange traffic department
the railroads established a rate of $1.61 per 100 pounds on bags
to North Pacific Coast points, effective April 27, 1943. This
rate maintains from all points of origin in Florida to all points
in North Pacific coastal markets designated.

Rail, Boat and Truck Shipments in
Percentage of Total Movement
Through May 15 Each Season
Season Rail Boat Truck
1942-43 89.22% *:10.78%
1941-42 76.25% 02.60% 21.15%
1940-41 55.13% 19.78% 25.09%
1939-40 58.44% 18.12% 23.44%
1938-39 55.27% 24.37% 20.00%
1937-38 59.62% 21.42% 15.96%

Grower members of the Florida Citrus Exchange own and
operate two service organizations in addition to the sales organ-
ization of the Florida Citrus Exchange. The first was organ-
ized in October 1916 under the name of Citrus Growers Guar-

* 1942-43 Truck. based on 485 Boxes.

anty Company, then in March 1918 the name was changed to
the Growers Loan and Guaranty Company, a cooperative finan-
cial organization. The second is the Exchange Supply Company.
The personnel of the Board of the Florida Citrus Exchange
acts as the Board of the Growers Loan and Guaranty Company.
The Exchange Supply Company Board, on the other hand, is
made up largely of operating personnel, including house man-
agers of various associations.
to render an adequate banking service to Exchange associations
and their members. During the fiscal year period ended April 30,
1943, which marked the close of the twenty-sixth year of the
company's existence, loans to associations and their members,
including trade acceptance discounted for Exchange Supply
Company, amounted to $1,312,877.78, which represents a slight
decrease as compared with the volume for the previous year.
Cash in banks and its equivalent (including $100,000.00
worth of United States Treasury Certificates) amounted to
$373,556.25 as of April 30, and loans outstanding as of that
date amounted to $382,140.40. This represents a considerable
increase in cash and a considerable decrease in loans outstanding
as of the same date last year, which is entirely due to higher fruit
prices. The satisfactory prices realized for fruit during this
season resulted in a much earlier liquidation of many of
its loans.
The company has no liabilities other than a contingent one
as guarantor of Federal Farm Board mortgages on packing plants
which, as of April 30, amounted to $293,909.82 as compared
with $573,423.24 as of same date last year.
The company is in an excellent financial condition and has
ample resources to finance all sound loan requirements of its
associations and their members. The credit facilities of the
company have been of invaluable assistance to both associations
and their members by enabling them to finance at reasonable
cost their packing house and grove operation.
pany operates as a purchasing organization for grower and pack-
ing house supplies. Its primary importance to Exchange mem-
bership is its function as a stabilizing factor for packing house
supplies. In this function it serves to help those who buy outside
or through other sources just as effectively as those associations

which buy their supplies through it. This premise holds true
because of the fact that competition must meet the price levels
developed by the Exchange Supply Company.
At the annual meeting of the Exchange Supply Company
held in June, 1942, stockholders voted to reorganize the Ex-
change Supply Company to come under the provision of the
Agricultural Cooperative Marketing Act, as amended.
Under the new charter all of the voting stock must be owned
by active members, which places the affairs of the company in
the hands of the associations patronizing the Supply Company.
During the 1942-43 season considerable improvement has
been shown in the condition of the company.

(In Boxes)
Disposition of Early, Midseason and Valencia Oranges, 1941-42
and 1942-43 Seasons

Disposition to May 15:
Interstate Shipments
Express Shipments
Gov't Purchases, Fresh
Gov't Purchases, Processed ...--_..
Intrastate Shipments
Interstate By-Products
Cannery, Commercial
Intrastate, Non-Commercial .-----

U.S.D.A. Crop Estimate
Remainder of Crop


1941-42 Season




1942-43 Season



Disposition of Seeded and Seedless Grapefruit, 1941-42 and
1942-43 Seasons
Disposition to May 15: 1941-42Season 1942-43 Season
Interstate Shipments 6,617,300 7,419,000
Express Shipments 160,400 248,000
Gov't Purchases, Fresh 761,061 -
Gov't Purchases, Processed ____...... 395,725 -
Intrastate Shipments 204,686 150,000

Disposition to May 15:
Interstate By-Products _--
Cannery, Commercial
Intrastate, Non-Commercial ------

U.S.D.A. Crop Estimate (Revised)
Remainder of Crop

1941-42 Season



1942-43 Season


Note: Disposition for last two weeks of 1942-43 season is esti-
Army and Navy procurement and lend-lease included in
commercial figure for 1942-43 Season.
For 1941-42 Season Government Purchases include lend-

For Florida, California and Texas Auction Averages
to date as of May 15th, 1943
Season 1942-43-41-42

State Variety and Section
Florida Interior Oranges-Standard Boxes
Interior Oranges-Bruce Boxes
Indian River Oranges-Std. Boxes
Interior Seed Grapefruit-Std. Boxes
Interior Seed Grapefruit-Bruce B.
Indian River Seed Gpft.-Std. Boxes
Interior Seedless Gpft.-Std. Boxes
Interior Seedless Gpft.-Bruce B.
Indian River Seedless Gpft.-Std. B.
*Tangerines-All Sections
California Navels
California Valencia
Texas Standard Seedless

1942-43 1941-42



*'Full Box Basis.


Shipments by Weeks, 1941-42; 1942-43
(Government Shipments Included)


Shipments (Cars)

Week End Fla.* Calif. Total
Oct. 3 --... 2 1,776 1,778
10 ..--..... 11 1,597 1,608
17 --..-..- 42 1,541 1,583
24 -....-.... 310 1,416 1,726
31 -...... .. 707 1,138 1,845

Nov. 7 --..-... 948 903 1,851
14 ......-- 1,154 713 1,867
21 ..... 1,411 591 2,002
28 --.- 1,204 567 1,771

Dec. 5 --........ 1,324 1,025 2,349
12 ........ 1,897 1,642 3,539
19.......... 2,859 1,598 4,457
26 ... 1,283 1,086 2,369

Jan. 2........... 1,124 1,284 2,408
9--...... 1,710 1,500 3,210
16--......... 1,447 1,309 2,756
23 .......... 1,329 1,191 2,520
30 --....... 1,534 622 2,156

Feb. 6---.... 1,571 1,169 2,740
13 ..... 1,650 941 2,591
20........-- 1,941 1,287 3,228
27--....-.... 1,962 795 2,757

Mar. 6 ........- 2,072 950 3,022
13 ...... 2,465 1,160 3,625
20 ...---... 2,602 1,416 4,018
27 ---... 2,512 1,397 3,909

Apr. 3............ 2,386 1,423 3,809
10-....- 2,265 845 3,110
17--........... 2,072 775 2,847
24 ..... 2,191 1,442 3,633

May 1..........-- 2,039 1,423 3,462
8............ 1,967 1,429 3,396
15 --....... 1,732 1,682 3,414

Shipments (Cars, 400
Box Basis)

Fla. Calif. Total
1,898 1,898
1 1,987 1,988
15 1,834 1,849
68 1,319 1,387
506 1,213 1,709

836 1,384 2,220
1,267 990 2,257
1,399 1,726 3,125
1,395 2,324 3,719

1,212 1,755 2,967
1,989 2,291 4,280
2,695 1,066 3,761
949 865 1,814

1,352 1,096 2,448
1,342 1,808 3,150
1,723 2,218 3,941
1,913 2,224 4,137
1,689 1,321 3,010

1,704 1,535 3,239
1,680 1,546 3,226
1,459 1,656 3,115
1,996 1,764 3,760

1,696 1,953 3,649
2,177 1,795 3,972
1,651 1,774 3,425
1,533 1,980 3,513

1,744 2,085 3,829
1,754 1,661 3,415
1,359 1,618 2,977
1,994 2,275 4,269

1,820 2,194 4,014
1,745 2,166 3,911
1,522 1,787 3,309

*Carlots based on 485 boxes.
1942-43 State Average Carload to date 494.0 boxes.
1941-42 State Average Carload to date 405.0 boxes.


Subject to minor errors and corrections, here are the various
charges pertaining to the shipment of bruce boxes from Winter
Haven to New York, at ceiling prices, showing shipments under
standard ventilation and the different forms of refrigeration:

Bruce Boxes Winter Haven to New York
FOB Ceiling Price 3.33 )
Freight ... .68 ) Ventilated


FOB Ceiling Price
Initial Ice

FOB Ceiling Price
Full Iced





Initially Iced

Standard Refrigeration

Plus 13/4 Auction Charge ---.- .07
Plus 11/2 Broker or Receiver's
Charge .06
Plus Cost Precooling .07

4.31 Maximum Auction Price

The Maximum Price for citrus
fruit sales through a broker is
the Packers' Maximum Price
multiplied by 1.015

If a retailer-owned cooperative
or cash-and-carry wholesaler
and buying from a packer,
broker, auction market or ter-
minal seller, he multiplies his
base price by 1.095

4.17 Selling Price


,, ,

If a cash-and-carry wholesaler
buying from another interme-
diate seller, he multiplies by
1.20 5.17 Selling Price

If a service wholesaler and buy-
ing from packer, broker, auc-
tion market or terminal seller,
he multiplies his base price by
1.21 5.22 "

If a service wholesaler who de-
livers in contradistinction to
the others and buying from an-
other intermediate seller, he
multiplies by 1.32 5.69 "

California and Arizona Maxi-
mum FOB Price on Wooden
boxes, unwrapped 3.38

Texas Maximum FOB Price on
bruce boxes 3.34

Florida Indian River oranges
Maximum FOB Price bruce
boxes 3.57

Florida's interior Ceiling or
Maximum Price 3.33 FOB

Average cost from tree to car -_- 1.13

2.20 Should be net to grower

Highest selling price above ..---- 5.69

Net to grower 2.20

Various Costs 3.49