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Title: Annual report of the Florida Citrus Exchange.
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Permanent Link: http://ufdc.ufl.edu/UF00075941/00020
 Material Information
Title: Annual report of the Florida Citrus Exchange.
Physical Description: Serial
Creator: Florida Citrus Exchange
Publisher: The Exchange,
Publication Date: 1941-1942
 Record Information
Bibliographic ID: UF00075941
Volume ID: VID00020
Source Institution: University of Florida
Holding Location: University of Florida
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Resource Identifier: ajg6778 - LTUF
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Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page 1
    Main
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
Full Text






Annual Report
of the
FLORIDA CITRUS
EXCHANGE


1941-42
-631-.8

/94-/ -4?Z


General Manager











Annual Report

1941-42


' iL ', E I CH AN .2,


THE SALES HEADQUARTERS
OF THE FLORIDA CITRUS EXCHANGE
110 OAK AVENUE, TAMPA, FLORIDA


FLORIDA CITRUS EXCHANGE










OFFICERS, DIRECTORS AND HEADS OF DEPARTMENTS
FLORIDA CITRUS EXCHANGE

SEASON 1941-1942


C. H. Walker, President and Chairman of the Board
H. E. Cornell, First Vice-President ------
H. G. Putnam, Second Vice-President -
J. C. Palmer, Third Vice-President --..-
W. 0. Kirkhuff, Fourth Vice-President -
C. C. Commander, General Manager ------ -
Fred S. Johnston, Sales Manager ----- -- -
L. D. Aulls, Traff/ic Manager --------- -
S. L. Looney, Treasuret-Comptroller- -
Counts Johnson, Secretary and General Counsel
J. Samson, Assistant Secretary --- -


Sub-Exchange
Indian River
Florence
Fort Pierce
International
Lake
Lake Region
North Pinellas
Orange
Pinellas
Plymouth -
Polk
Polk Packing
Scenic-
Winter Haven
Clark


Director
H. G. Putnam
H. C. VanClief-
W. M. Moseley
L. L. Lowry
C. B. Hipson
A. R. Updike
J. W. Smith
J. C. Palmer
W. 0. Kirkhuff
Wm. G. Geier
D. A. Hunt
J. A. Snively, Jr.
C. H. Walker
H. E. Cornell
R. J. Kepler


S-- Bartow
Winter Haven
Oak Hill
-Windermere
Bradenton
Tampa
--- Tampa
Tampa
S- Tamp'a
Tampa
Tamp a



Address
Oak Hill
Winter Haven
--Fort Pierce
Winter Haven
Umatilla
Lake Wales
Brooksville
Windermere
Bradenton
Windermere
Lake Wales
Winter Haven
Avon Park
Winter Haven
DeLand










ANNUAL REPORT

SEASON 1941-42

Without exception, weekly average price records reflect sub-
stantial improvements over the preceding season for Florida oranges,
grapefruit and tangerines. These improved price structures, how-
ever, still fall short of the prospects Florida had in her favor at the
beginning of the season.

Prospects Never Brighter
As the season opened the potential for grower returns was the
greatest in Florida's entire history. Every factor which affects prices
seemed to be decidedly in favor of a most successful season.
Consumption of fruits and vegetables was at a peak for several
months prior to the opening of the Florida season. California cit-
rus and deciduous were selling in increased volumes and at higher
prices in nearly all markets. The consumption of apples had in-
creased more than enough to absorb volumes which in normal times
would have been exported, leaving storage volumes well below nor-
mal. This apple movement was accomplished at highly satisfactory
prices-a bushel of apples selling frequently for more than 1-3/5
bushels of oranges.
These conditions were the result of the greatest buying power
ever in the hands of the American public. Because of the defense
effort, there were jobs for all who would work. Wage levels were
high. More money was in circulation than ever before.
This tremendous buying power soon found restricted outlets.
The armament demand for raw materials coupled with the conversion
of plants normally occupied with the production of consumer goods,
withdrew many articles from the reach of consumers. The press has
been filled with news of the restrictions on automobiles, tires, re-
frigerators, radios and dozens of kindred items which combine to
absorb a large percentage of the normal family income. With such
outlets closed to individual spending, growers had every reason to
except a diversion of part of these funds to their products upon
which no restrictions or rationing had been placed.
Even the crop volumes themselves pointed to prosperity. Florida
had a comparatively short tangerine crop. The Florida grapefruit
crop was considerably shorter in volume than the preceding season.
Texas grapefruit also was lower in volume making the total grape-
fruit available to American consumers fully 20 percent below the
preceding season. Orange production in both Florida and California
showed little if any increase over the preceding season. Crop quali-
ties throughout were generally above average as their growth had
3


14.1548









been unhampered by adverse climatic conditions.
In the light of so great a combination of favorable factors, the
increases received are disappointing-they are little more than ade-
quate to compensate for the increased cost of production, labor,
packing materials, transportation and selling.

Several Factors Limit Success
Analysis of the season's performance records indicates essen-
tially three factors which operated to hold returns well below the
levels indicated by the normal factors of market control.
The first of these limiting factors was unfavorable weather. As
the season got underway the weather remained warm. Heavy rains
throughout the belt during the late summer and fall combined with
hot days and warm nights created ideal conditions for decay or-
ganisms. In addition to this unfavorable weather in the producing
area, the weather in all markets remained unseasonably warm. This
in turn served to accelerate rather than retard decay. This decay
situation was exaggerated still further by the crowding of transpor-
tation. Railroads carrying a greatly increased burden of defense and
tonnages previously carried by water and trucks, employed much
inexperienced help which, in turn, was forced to speed up all hand
ling. In addition, car loadings were increased from the normal 400 to
loadings frequently in excess of 500 boxes per car. These attempts
to make maximum use of existing rail equipment naturally caused
a sharp increase in breakage and decay.
In spite of every possible precaution taken by shippers to hold
fruit in good condition, the merchantable life of Florida fruit dur-
ing the early weeks of the season was limited severely. Florida fruit,
particularly in retail channels, showed weakness and waste. The
trade naturally lost confidence in the crop and limited their pur-
chases to day-to-day requirements. This conservative but justifiable
buying policy on the part of the trade was inadequate to absorb the
volume of shipments moving from the state at satisfactory prices.
As a result, the market dropped.
Even more serious, however, was the failure of the California
citrus industry to operate under a marketing agreement and the
volume control factors made possible by that agreement. For the
first time in many years the provisions of the marketing agreement
making possible controlled and orderly movement of California
shipments became inoperative. The California marketing agreement
becomes effective only upon recommendations of an industry com-
mittee composed of representative growers and shippers in the Cali-
fornia-Arizona area. Shipments from that state were irregular and
spotty. On the whole they were increased, particularly to the barome-
ter markets such as New York City. As a result, losses to California
growers were heavy.











Unfortunately, however, the damage caused by this lack of con-
trolled shipments in California was not limited to that section. The
depressed price levels thus created reacted against Florida fruit. In
this manner, that situation became a second deterrent to a full reali-
zation of Florida's prospects.
There is adequate proof of these conclusions available in an
examination of the combined Florida and California weekly orange
shipments (see table) While Florida's weekly shipments as a
whole remain considerably lighter than the preceding season, Cali-


ORANGES
1941-42
SHIPMENTS (CARS)


WEEK END. FLA.
Oct. 4
11. 1
18--- 15
25 -- 67
Nov. 1 -- 506
8 -- 837
15 1267
22 1400
29-- 1394
Dec. 6-- 1212
13--- 1989
20-- 2696
27 ..-- 948
Jan. 3 ..-- 1348
10 .. 1340
17--- 1721
24--- 1908
31-- 1682
Feb. 7 1689
14 .1675
21 1455
28 1991
Mar. 7-- 1692
14-- 2163
21--. 1642
28-- 1528
Apr. 4-- 1733
11-- 1744
18 1332
25 1988


CAL.
1898
1987
1834
1319
1213
1384
990
1726
2324

1755
2291
1066
865
1096
1808
2218
2224
1321

1535
1546
1656
1764
1953
1795
1774
1980
2085
1661
1604
2275


May 2--. 1780 2194
9 1731 2166
16 1516 1787
23---.. 1528 2141
30-....... --
*Total volume lower than for same w


TOTAL
1898
1988
1849
1386*

1709*
2221
2257
3126
3718
2967*
4280*
3762 *
1813
2444*
3148
3939
4132
3003*
3224*
3221
3111
3755
3645
3958
3416
3508
3818
3405
2936
4263
3974
3897
3303*
3669


1940-41
SHIPMENTS (CARS)

FLA. CAL.
2 1630
9 1481
93 1674
530 1340

742 1133
1227 550
1654 150
1754 1035
1741 1411
1797 1742
2758 1540
2980 925
767 709
1598 933
1795 1083
2205 1255
2115 1378
2191 1413
1816 1640
1839 1282
1644 984
1487 1076
2064 1168
1745 1275
1813 1375
1848 1509
1772 1266
1597 1619
1276 1354
1421 1449
1604 1520
1749 1881
1644 1731
1254 1585
1392 1477


week of 1940-41 season.


TOTAL
1632
1490
1767
1870

1875
1777
1804
2789
3152
3539
4298
3905
1476
2531
2878
3460
3493
3604
3456
3121
2628
2563
3232
3020
3188
3357
3038
3216
3630
2870
3124
3630
3375
2839
2869









fornie irregularly ran much heavier, frequently as high as 40 per-
cent more for the same week of the preceding season. The com-
bined total, however, for many weeks was little more and for nine
weeks was less than the combined total of the same periods of the
preceding season. In spite of these nominal combined orange vol-
umes, the market average on California oranges fo'r an extended
period averaged 66 cents less per box than the previous season and
several times receded to more than a dollar lower than the average
of the year before.
This lack of regularity in a shipping program is common to the
Florida movement as it does not have the advantages of a volume
prorate. Heretofore, however, the Florida industry has been able to
capitalize the regularities provided by the volume prorate in Cali-
fornia. When that failed, market instability was inevitable with gen-
eral averages considerably below what they might have been.
This example furnishes further proof of the desirability of vol-
ume prorate methods. Regularity of shipments, available under such
a prorate system, protects the trade. It permits the buyers of citrus
fruit to make their purchases with confidence that their investment
will not be made worthless by unexpected and uncontrolled ship-
ments being dumped in their markets immediately after such pur-
chases. The Florida citrus industry has operated under a marketing
agreement with a grade and size prorate for several seasons. Time and
again this prorate method has demonstrated its inability to control
shipment volumes with the desirable regularity necessary to pro-
tect the trade. The obvious conclusion points to the development
of equitable volume prorates for all citrus producing sections.
A third factor which caused price levels to fall far short of ex-
pectations was the change in the government purchasing program
caused by the outbreak of the war. Nobody likes relief. Nevertheless,
the Federal purchasing machinery set up to form an economic bal-
ance wheel absorbing crop surpluses during certain periods of a
marketing season is the only effective method available to the in-
dustry until by-products plants have grown to a point where the,
can absorb these volumes.
During the summer and early fall preceding the season, the
industry and the government had developed a satisfactory purchase
program. It included the purchase of canned grapefruit juice and
sections, a concentrated orange juice and marmalade base made from
both oranges and grapefruit. It would have been adequate to handle
the situation during the season if it had remained operative.
December 7, however, brought an immediate change in the eco-
nomic thinking of government and business leaders. It caused the
abandonment of the carefully prepared purchase program. Never-
theless in the case of citrus the Federal government remained the
largest potential individual purchaser of Florida citrus fruit. The buy
ing made unnecessary by the decreasing relief rolls and similar
6









benevolencies were more than replaced by the food requirements of
the armed forces and our Lend-Lease arrangements for allied civilian
and military populations. These factors placed the government in
a better position to handle the surplus situation through a purchase
program revised to meet the changed conditions. These revisions.
however, were not made until the industry took positive action.

Governor's Committee Acts
When price levels continued to sag dangerously through Janu-
ary and part of February it became apparent that the only immediate,
solution lay in a prompt recognition of the inadequacies of the gov-
ernment purchasing program. The Board of Directors requested othet
factors in the industry to help develop some plan in an endeavor to
regain the confidence of the regular trade and get prices in line with
what they should be. A conference was held with Chairman Thomas
B. Swann of the Florida Citrus Commission. Mr. Swann was ready
and anxious to take all possible action permitted by his post as
chairman. He called a general meeting of substantial factors in the
industry. This meeting developed a plan of action.
A representative committee of the industry was appointed to go
to Washington in an attempt to solve the problem. This committee
included Governor Holland, Mr. Swann, Carrocll Lindsey, president
of the National Canners Association and ex-president of the Florida
Canners Association, and C. C. Commander, general manager of the
Exchange. In Washington this committee acquainted the Florida
congressional delegation, the Secretary of Agriculture and others
in his department with the critical condition of the Florida indus-
try as a result of these factors including the war-changed govern-
ment program. The crop on the trees had been produced at consid-
erable increased expense. While current market levels were some-
what higher than the preceding season, increases in labor, fertili-
zer, transportation and other items were so great that the actual
net to growers was below what the market should have yielded.
Arrangements were made for the committee to meet with the
British Purchasing Commission, the Quartermaster Corps and the
officers in charge of other phases of government food purchasing.
These individuals were sold on the prompt availability of Florida
citrus, its adequate food and health values and the low cost at which
it could be obtained per unit of vitamin C or any other basis' upon
which comparative purchases were made. The committee was suc-
cessful in obtaining prompt recognition for Florida citrus fruit on
the part of these purchasing agencies. Orders were placed for the
purchase of grapefruit, both fresh and in cans and later purchases
of canned orange juice and fresh oranges were made by these gov-
ernment buying groups.
This action by the industry had a salutary effect on prices. Fears









of sugar and tin rationing were dissolved in the rush to handle the
government business thus made available. Cannery price levels rose
and subsequently fresh fruit markets strengthened appreciably.

Price Ruling Breaks Market
Early in April, the industry learned of a meeting to be held in
Washington at which price ceilings were to be discussed but to
which no representative of growers from any citrus area were in-
vited. The attention of Senator Pepper was called urgently to this un-
fair method of handling an industry matter of such major import-
ance. Through his insistence, W. J. Steed* representing the Florida
Citrus Commission was invited to attend the meeting.
At a final meeting the industry was given every assurance that
there would be no price ceiling placed on citrus, either fresh or
canned, in the immediate future. If and when such ceilings were
placed on citrus, additional assurance was given that they would be
strictly in conformity with the law governing such actions.
On April 21, Federal Price Administrator Leon Henderson an-
nounced a broad ruling placing retail price ceilings on many com-
modities including canned citrus products. This ruling had an im-
mediate reaction on citrus prices. The confusion and uncertainty it
created caused some canners to close their plants entirely and those
who remained open dropped their price for grapefruit from $1.10
per box to as low as 60 cents. Oranges fell correspondingly from
$1.35-$1.40 to around 80 cents with relatively few purchases being
made even at these low figures.
Legal analysis of the ruling indicated that it did not comply
with the Emergency Price Control Act of 1942. This Act under a four-
way formula guarantees the agricultural producer 110 percent of
parity or its relative equivalent. If price ceilings are set at levels
which do not return such figures to the producers, the law implies
that the government will pay the difference in the form of a subsidy.
In case 110 percent of parity would create pricq levels out of line
with actual values working a hardship on consumers, provisions were
made in the law for arbitrary determination of substitute levels by
the Secretary of Agriculture after a public hearing.

-*Mr. W. J. Steed, Orlando, was employed by the Florida Citrus Commis-
sion during February to represent the Florida citrus industry in matters of this
character in Washington and elsewhere. His services have proved to be an
excellent investment on the part of the Commission. This type of representa-
tion is more than ever necessary with the increasing complexity of matters in-
volving price rulings, tin shortages, labor, material priorities and the many ad-
ditional controls being placed on the nation's economy because of the war
effort. The California citrus industry recognized the necessity for such repre-
sentation and has had one or two trained men handling its affairs in Wash-
ington for an even longer period than that covered by the Commission's em-
ployment of Mr. Steed.









Citrus price levels had never reached parity.* Furthermore, any
ceiling on canned citrus visibly controlled the fresh fruit prices to
producers. According to the best information available to the in..
dustry, this ceiling on canned citrus was placed arbitrarily without
consultation with the Secretary of Agriculture. Certainly no public
hearing was held and no subsidies to compensate for the losses to
growers which it occasioned were provided.
The Board of Directors of the Florida Citrus Exchange, after
a thorough study of the situation, passed a resolution supporting a
general industry effort to obtain compliance with the law governing
the matter. The situation was called to the attention of Florida's
congressional delegation and the Department of Agriculture through
the efforts of the industry's representative in Washington, Mr. W. J.
Steed. No relief has yet been obtained (May 28).

Commission Actions Helpful
Actions of the Florida Citrus Commission under the leadership
of Thomas B. Swann, were helpful throughout the season on many
phases of industry action other than the matter of price ceilings and
government purchases previously discussed.
The advertising campaign handled by the Commission for the
industry has been more productive than any campaign during the
Commission's existence. The net worth of advertising on Florida
fruit may be judged only by a comparison of Florida price levels
with competing sections for the same periods.
During the current season the spread between Florida and Cali-
fornia oranges, usually averaging $1.00 per box or more, was sharp-
ly reduced. (See Graph on following page.)
Some of this improvement is due to the revised copy policy de-
veloped by a committee from the industry and used during the
1940-41 Valencia campaign. This copy, while highly competitive, has
created much interest among the trade and the consumers. It con-
centrates on the merits of Florida fruit and presents them in a
manner which permits the facts to be grasped easily by the casual

*Nor was the ceiling as close to parity as most other tree fruits and vege-
tables. For example, apples during February averaged ,$1.20 per bushel which
was 85 percent of parity ($1.41) for that commodity for the month. Similarly,
in March, apples averaged $1.30 against the parity figures of $1.42-92 per-
cent of parity.
Compare this with the situation for the same months on citrus. The De-
partment of Agriculture's statement of average tree prices for February and
March was 81 cents and $1.14 respectively. Parity for oranges for February was
$2.07 and for March $2.12. In other words, Florida orange growers received
39 percent of parity in February and 54 percent of parity in March. Similar
analysis of the grapefruit situation based upon figures derived from the same
source shows that the state received 36 percent of parity in February and 41
percent of parity in March for its grapefruit.










reader. By no means all of this relative improvement of price struc-
tures between California and Florida oranges can be credited to the
advertising campaign, potent as this has been. The fact remains that
prorate difficulties (see page 5) denied California price levels which
might have been hers under controlled conditions of movement.
Florida grapefruit received less valuable advertising support due
to the lack of development by the industry of the factual matter
necessary to create a similarly forceful campaign on this commodity.
It is understood that work of this character is underway and the
necessary information may be made available in time for the de-
velopment of a strong campaign for Florida grapefruit during an-
other season.
The Commission also was helpful in representing the industry
in its attempts to eliminate the truck-weight barriers hampering the
free movement of Florida citrus to mid-western markets for truck
carriers. The only access to these important markets available to
Florida citrus has been over rail carriers. Lack of competition has
been responsible for the maintenance of high rail tariffs on Florida
citrus to these markets resulting in uneven distribution between the
east and west and an increasingly heavy pressure on prices in the
eastern barometer markets.
Most of the difficulty lay in the state laws of Kentucky and Ten-
nessee. Truck body dimensions and weights were such as to limit the
capacities of truck carriers below the point of economic handling.
The Commission was successful in relieving this situation through
ORANGE MARGINS REDUCED
The average weekly margin by which California oranges outsold Florida
was reduced consistently during the current season with Florida oranges out-
selling California's during the weeks ending March 14 and May 23 (latter date
not shown on graph).

2.30

2.10 .
2.00 _
1.90 _
1810
1 70
1.60 1 I Ilea
1.50 P1 D A N I F ._ M R A P L A


.90 %






wS7 1 8 15 22 29 3 10 17 34 1 7 11 21 28 1 7 14 21 28 1 4 I 1. 92 2
NOV. DEC. JAN FEB. M I Al I MAY










Governor Holland's offices. Appeals were made on the basis of war-
time necessity. The corrections permitting a free movement of Flor-
ida citrus by truck through these states for the duration will have
smaller value because of the rubber, gasoline and equipment short-
age.* It is hoped, however, that these benefits may be continued to
the advantage of the industry following the war.
As the industry, together with the rest of the country, becomes
more involved with rules and regulations, tin and rubber shortages,
price ceilings, rationing, wage and hour difficulties, labor short-
ages, et cetera, the Florida Citrus Commission holds every possi-
bility of being able to represent the industry as a whole success-
fully. Such efficient representation will be even more important next
season than it was during the current season.
The impact of the war economy upon the nation will have a
more direct bearing on the industry than ever before. Prospects for
a bumper crop of citrus were never better. Heavx rainfall has kept
the trees in fine condition and apparently has set a heavy crop.
Tangerines and seed grapefruit indicate substantial increases, with
oranges and Marshseedless reflecting some increases over the cur-
rent season. The best information available in Texas indicates sub-
stantial increases in that area's grapefruit crop and some increase
in her orange crop. It is too early to make definite statements con-
cerning the California crop but there is nothing to prevent her trees
from reacting to this season's freeze by bearing a large crop.
In view of the materials and labor shortages already evident,
the handling of such a bumper crop in prospect will become a seri-
ous problem indeed. In addition, the government's requirements of
nitrogen in the manufacture of munitions is so heavy as to cause a
scarcity in this plant food so vital to the success of cultivation of
Florida citrus. It is believed there are adequate supplies on hand
to bring the coming crop to maturity. Definite shortages in this
field, however, would restrict production seriously.

*War-time restrictions on transportation have eliminated boat shipments
in their entirety. The only tonnage moved by water was during the early part
of the season prior to Pearl Harbor. Truck transportation also has fallen off
in the percentage of total crops handled by nearly 4 percent. See following
table.
FLORIDA CITRUS. ALL VARIETIES
Rail, Boat and Truck Shipments Shown in
Percentage of Total Movement.
Seasons 1938-39 through 1941-42 are as of May 14-
Percentages prior to that time are for entire season)
SEASON RAIL BOAT TRUCK
1941-42 .... 76.25' 02.60% 21.15%
1940-4.1 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%
1936-37 55.20'' 31.05% 13.75%
11









4 Brighter Side
Many phases of the nation's war-time requirements and restric-
tions have and will react to the disadvantage of Florida citrus. There
are certain advantages which compensate in part at least for the
injuries caused. The rationing of consumer purchases of many items
is increasing constantly. There is no reason why citrus fruit should
not come in for an ever-increasing share of attention from the pub-
lic. The shortage of sugar already has reduced the volumes of bot-
tled synthetics sold through hundreds of thousands of retail outlets
the nation over. The refreshment drinking habit, through years of
promotion by these people almost has become an American ob-
session. The habit will continue even though the volume of synthet-
ics is decreased, offering a marketing opportunity to citrus which
can be realized by making our products convenient and easy to use.
The shortage of shipping for the transportation of fresh or can-
ned citrus to our Allies created a sharp increase in the demand for
concentrated citrus juice, particularly orange concentrate. Two new
plants are being rushed to completion in Florida through the aid
of Federal financing. These facilities were not available for use in
the movement of the current crop but, will ba a considerable factor
next season. In addition to these large plants in Florida, seven plants
already are in operation in California. The continuation and expan-
sion of these facilities for the coming season may do much to divert
a substantial percentage of that state's crop away from domestic
markets with a corresponding favorable price reaction. A further
war-createdi citrus market was developed this season permitting the
manufacture of a marmalade base using both oranges and grape-
fruit. It can be expanded in direct ratio to available transportation
to meet a far from saturated demand in Great Britain.
The development of these processing methods together with a
growing interest in by-products will be a factor in the provision of
additional markets and revenues for Florida citrus. Combined, they
form a silver lining to what otherwise would be a dark cloud over
the coming season. If exploited to their utmost there is no reason
why the coming crop even though large should not bring fair prices.
It will be necessary, however, for the industries in their respective
areas to show proper cooperation with each other and coordinate
their activities in the movement of their crops.

THE EXCHANGE SEASON
The Florida Citrus Exchange system enjoyed an increased mem-
bership during the season. Thre new shippers became affiliated with
the organization which handled their tonnage throughout the season.
These new members were the Great Southern Citrus Association,
an association of growers in the Winter Haven district; the Alcoma
Citrus Cooperative at Lake Wales, handling the substantial citrus









acreage developed by the late August Heckscher; and the Lake
Placid Packing Company, at Lake Placid. The latter two organi-
zations are Associate Shippers. In addition to this organized ton-
nage affiliating itself with the Exchange system, most associations
reported sign-ups of grower-members far in excess of withdrawals.
The combined tonnage added nearly 1,000,000 boxes to the Florida
Citrus Exchange in the form of new fruit.
The withdrawal of the Haines City Citrus Growers Association
from membership in the Florida Citrus Exchange partially offset
this increased tonnage. The Haines City association was one of the
early members of the Exchange. Many of its groves have shipped
through cooperative channels during their entire commercial history.
The fundamental reasons cited for the withdrawal were disagree-
ments on retain policies.

Retain Policy Defined
During recent years the problem of an equitable assessment of
retains throughout the organization has grown to a point where some
growers and associations were wholly dissatisfied. The contention was
based upon an inequitable distribution of the assessment of the costs
of the organization over various classes of fruit.
This retain problem grew from changing conditions in the in-
dustry. Cannery volumes have increased substantially to the point
where nearly 60 percent of the grapefruit crop is moved through
canneries in tin. From 15-20 percent of the orange crop is also' moved
through these channels. Since no sales service is performed directly
on this cannery movement by the Florida Citrus Exchange, it was
for a time exempt entirely from supporting retains and later
was assessed a small amount in the nature of a "stand-by" charge
for the maintenance of the organization and its optional use.
Similarly, trucks developed as carriers to the point where they
were moving approximately 25 percent of the total crop. It is pos-
sible that the extent of this service may be somewhat restricted be-
cause of war conditions but the value of their services to the industry
will continue upon the resumption of normality. Here again, the
direct bargaining with truck operators is best performed by the as-
sociation as the fruit is loaded. Many of the associations in the
truck areas have found it expedient to develop a department solely
to handle this business. The Florida Citrus Exchange obviously
performs little truck sales services in this connection, and a lower
retain on this class of fruit became a matter of contention.
To these was added a third classification of fruit developed by
large chain store buying organizations making their purchases
direct in the field. Some of this business was cleared through asso-
ciations and associate shippers but most of it was handled by the
sales department in bloc orders and distributed equitably among









associations who were able to meet the specifications. Since much
less expense was entailed in the handling of this business, several
associations and associate shippers who catered to this class of
sales believed that it should be assessed a lower retain than the
fruit handled in the normal fresh fruit channels. Some houses felt
that they could handle their sales more advantageously and with
less expense by dealing directly with these buying organizations.
These several classifications of fruit and the contentions surround-
ing the retains on them had been met during the past several seasons
by methods developed after thorough hearings on the part of all
parties involved. Upon the continued dissatisfaction, however, it
became apparent that a positive clear-cut definition of policy con-
cerning retains was necessary to meet this situation. The advisory
committee of the Board of Directors studied this situation through
the season and developed such a policy which it recommended
to the Board. This policy was adopted by the Board, after a two
weeks study, at a special meeting held on May 1, 1942. While the
retain itself has not been set, this expressed policy will govern its
application for the coming year equitably and uniformly to all
shipper members.

Forty-three Shipper Members
During the 1941-42 season, Florida Citrus Exchange member-
ship included thirty-one grower associations and twelve associate
shippers. The grower associations range in size, as measured by
packed volume, from 100,000 boxes to several in excess of 750,000
boxes.
The Florida Citrus Exchange system as represented by the sales
organization and these shipper members handled a total of 11,038,-
606 boxes of fruit or 25.9 percent of the state's total for the season
1940-41. Data for the current season, of course, will not be com-
pleted before the late summer. Indications, however, are that the
tonnagd thus handled will increase in percent of the total to about
26.5.
In considering these statements of volume it should be recogniz-
ed that the figures include all movement of fruit from Exchange
member-groves, interstate in fresh fruit channels whether shipped by
rail, boat or truck, to canneries and processing plants and intrastate
sales.
Exchange Sales Volumes
The Florida Citrus Exchange sales department concerns itself
directly with the interstate carlot sales of fresh fruit packed in
member houses. This business through May 16, totaled 9071 cars
of oranges, 4813 cars of grapefruit and 1153 cars of tangerines or
a total of 15037 cars. This represents a reduction of 2204 cars as









compared with the total of the same period last year. This reduc-
tion was common throughout the state in the same proportion, as it
will be noted that their total for the state shows a decrease of 9653
cars this season as compared with last for the same period.
The detail by varieties for the Florida Citrus Exchange and the
state is as follows:



FLORIDA RAIL, BOAT AND TRUCK SHIPMENTS
CARLOTS BY VARIETIES
State and Exchange Movement, through May 16
SEASON ORANGES GRAAE'FRIIT TANG1 EIIN ES TOTAL
Florida 1941-42 46145 19515 4577 70.237
1941-42 51167 22980 5743 79,890
Decrease 5022 3465 1166 9653
Exchange 1941-42 9071 4813 1153 15,037
1940-41 9944 5838 1459 17,241
Decrease 873 1025 306 2204

This movement was slightly heavier through auction terminal
centers than private sales markets, although private sales develop-
ments including direct chain store sales reflected some increase over
the preceding season as compared with distribution through auc-
tion centers. In examining these data as arranged in the following
table it should be remembered that auctions serve the ten largest
centers of population available to Florida citrus sales. The proper
handling of these markets is of utmost importance as they are the
barometers primarily responsible for the development of the base
price structures used in establishing f.o.b. quotations. Many of our
associations, including the entire east coast district, pack for auction
sale exclusively.



EXCHANGE SALES
THROUGH TAMPA SALES DEPARTMENT
SEA *OX SEASOX
19141-42* I'E 39EXT 140-41 l'EI(:Ii.:T IX. DE-
BOXES BOXES Auction Sales-- 2,392,304 58.8 3,586,896 59.3 0.5
Private Sales-- 1,676,738 41.2 2,459,548 40.7 0.5

Total Sales 4,069,042 100.0 6,046,444 100.0

*This season as of May 16, 1942; 1940-41 figured for entire season.









Distribution Restricted
As compared with the preceding season, the distribution of Ex-
change fruit reflects a more limited geographical spread. The num-
ber of markets entered and customers sold falls short of last sea-
son's totals.
There are several reasons justifying this situation. In the first
place, the volume of fresh Florida citrus moved interstate this sea-
son through May 15, is about 9,600 cars short of the volume of
last season for the same period. (See table preceding page.)
Transportation increases and restrictions always have mitigated
against the development of extended distribution. Higher prices
have been a factor in limiting the number of customers as credit
restrictions on higher priced cars rule out many smaller customers
who otherwise could be handled.
An additional factor which created many new customers and
markets during last season was the use of the Japanese box on tan-
gerines. This unit was pioneered by the Florida Citrus Exchange and
created satisfactory outlets for much fruit which, because of war
conditions, were closed to further development this year.
The comparative data are listed in the following table:
EXCHANGE DISTRIBUTION
Summary of distribution as of May 14.
1941-42 1940-41
Number of state distributed to 37 46
Number of Canadian Provinces entered 8 6
Total number of markets entered 323 373
Number new markets entered 65 121
Total number of customers sold 614 706
Number new customers sold --- 171 280

Sales Handled Economically
The cost of doing business rose steadily during the past season.
The successful sale of perishables requires a liberal use of rapid
communication. Telephone, telegraph and teletype costs increased.
Similarly, rents and office supplies climbed to higher price levels.
In order to compensate for the steady rise in basic living costs
the minimum salary brackets were increased in sales operations.
In spite of these conditions, however, the organization was oper-
ated at a total per box cost somewhat unde4 the proceeding season
and at a figure which represents a progressively lower cost during
the past four years. The comparative data for the four seasons and
the relationship of revenue to departmental expenditures are out-
lined in the following table, based on data through April 30 of
each season.










FLORIDA CITRUS EXCHANGE
REVENUE AND EXPENDITURES
EXPRESSED, IN AVERAGES PER Box
COMPARATIVE


PER IOX


REVENUE
Assessment from Fruit
Other Income

Total Revenue
EXPENDITURES
Sales Dept.-Tampa
Northern Offices ---

Total Sales .----
GENERAL DEPARTMENTS
Adv. & Dealer Service.
Inspection & Field --
Other Departments

Total General .--.


A
AT


AVERAGE AV I.A( E
S4-30-42* AT 4-30-41
.0521 $ .0468
.0076 .0056

.0597 .0524


.0100
.0172

.0272

.0019
.0034
.0109

.0162


AV
AT
$


.0075
.0198

.0273

.0043
.0039
.0115

.0197


ER BOX PER BOX
I. RA AVERAGES
4-:10-40 AT 4-30-30
.0534 $ .0638
.0067 .0051

.0601 .0689


.0102
.0265

.0367


.0101
.0197

.0298


.0076 .0109
.0054 .0061
.0154 .0127

.0284 .0297


Total Sales & Gen. Depts. .0434
Other Expenses .0027


.0470
.0017


.0651
.0030


Total Expenditures .0461 .0487 .0681
EXCESS OF REVENUE
OVER EXPENDITURES ----$ .0136 $ .0037 $(.0080)
*Through April 30, 1942 Debit


.0595
.0021

.0616

$ .0073


Savings have been introduced into the operation of the organi-
zation progressively each season. Care has been taken to accomplish
such economies without loss of efficiency and service. Because of the
trend during the past decade toward the development of large
associations managed by thoroughly efficient and experienced per-
sonnel, the day-to-day presence of district managers in each house
has become less necessary.
As a result, some changes have been made in the operations
of these districts. The office of District No. 1 at Orlando was closed
and the travel of the district manager reduced fully 75 percent.
The office of District No. 2 at Winter Haven has been continued
because of the large packing houses located in the vicinity. Travel
in this district, however, has been reduced to conserve gas and
rubber. In District No. 3, the office help was dismissed and the dis-
trict manager has cut his travel about 75 percent. The District No.
4 office continues at Cocoa but travel of the manager has been re-
duced in a like amount.


PER IHOX









Similar economies, of travel particularly, have been introduced
throughout the balance of the organization wherever possible in an
effort to co-operate fully with the government request to save tires
and gasoline.
If the cost of service and sales rendered by the Florida Citrus
Exchange is examined in its relationship to the gross dollar vol-
ume of sales, an even more favorable reflection of these costs is
made possible. Sales costs expressed in terms of the units handled
frequently are misleading. Practically every business figures its
cost of selling by the relation of the percentage of such costs to the
gross sales volume. On this basis, the marketing costs of the Florida
Citrus Exchange are very low and because of the higher prices
obtained for the commodities it handled this season, are considerably
lower than last season. Note in the following table that the total cost
of our operations was only 2.93 percent of the delivered value of
Exchange merchandise as compared with 3.54 percent for the same
period of the proceeding season.
The breakdown of this cost relationship compared for the two
seasons on the basis of returns at Tampa and the estimated deliv-
ered values, appears in the following table:

COST of MARKETING in RELATION to GROSS DOLLAR SALES
Based on' F. 0. B. Tampa, Florida
Period: From September 1, thru April 30
1942 1941
Direct Cost of Selling 2.59% 3.45%
Cost of Other Departments --------- 1.27% 1.68%

Cost of Sales and Other Departments 3.86% 5.13%
All Other Expenses --- -.24% .19%

Total Cost of All Operations 4.10% 5.32%

COST of MARKETING in RELATION to GROSS DOLLAR SALES
Based on Delivered Values (estimated)
Period: From September 1, thru April 30
1942 1941
Direct Cost of Selling ------------- 1.85% 2.29%
Cost of Other Departments -------- .91% 1.12%

Cost of Sales and Other Departments---- 2.76% 3.41%
All Other Expenses ------------ .17% .13%

Total Cost of All Operations 2.93% 3.54%
Credit customers is one of the major phases of business










operations. Liberal credit will bring in more customers and addi-
tional business. On the other hand, too tight credits may restrict
business volume.
The Florida Citrus Exchange assumes the credit risk on all
sales made for its shipper members. In the matter of credit oper-
ations the organization has been spectacularly successful. It has
maintained satisfactory sales volumes and relationships with a pro-
gressively lower credit loss through the current season. Through May
15, 1942 there have been no losses in this connection whatever.
The comparative detail for the past four seasons reflects this phase
of Exchange operations.

UNCOLLECTED ACCOUNTS FOR FRUIT SOLD
SEASONS 1938-39, 1939-40, 1940-41
And
FROM SEPTEMBER 1, 1941 THRU MAY 15, 1942
Season 1938-39 Credit loss in relation to F.O.B. Tampa returns, 12
-- of 1'1
1,000
Season 1939-40 Credit loss in relation to F.O.B. Tampa returns 10
-- of 1c
1,000
Season 1940-41 Credit loss in relation to F.O.B. Tampa returns 6
of 1ic
1,000
Season 1941-42 (a I Credit loss in relation to F.O.B. Tampa returns None
(a) Through May 15. 1942
Total Collected Tampa thru May 15, 1942.----.... $8,664,707.79

Packing Charges Increase
The war economy is reflected directly in the cost of packing
house operations. Packing houses are directly responsible for the
bulk of the cost for handling fruit from the tree through the sales
and collections therefore. These costs cover the picking, hauling and
packing of fruit.
In spite of heroic work done by the management of most asso-
ciations to hold costs down, the war-born rise of material and labor
reflects a substantial increase in the cost of association operations.
An overall statement for all Exchange members is not avail-
able. The auditing department, however, has been able to assemble
accurate information on eight average associations including smaller,
medium and large operations. It is believed that this test sample
reflects a true picture of this phase of fruit handling.
Note in the following table that materials have increased ap-
proximately three cents per box. Labor and other direct charges
also have increased. These operations also have met with increased
indirect costs (office salaries, telephone and telegraph, office supplies,
et cetera), just as has been the case with all business during the
period.









Consolidated Statement of Packing House Operations
Based on Eight Shippers' Operations
COMPARATIVE
ORANGES
Wrapped in, 1-3/5
Bushel Nailed Box
Season 1941-42 Season 1940-41
COST Est. at 3-31-42 Actual
Materials $0.3342 $0.3032
Labor .1511 .1370
Other Direct .0376 .0274
Indirect .0551 .0396

Total-1-3/5 Bushel
Nailed Box $0.5780 $0.5072
ORANGES
In 1-3/5
Bushel Bruce Box
COST
Materials $0.2347 $0.2065
Labor .1218 .1138
Other Direct .0329 .0267
Indirect .0487 .0423

Total-1-3/5 Bushel
Bruce Box $0.4381 $0.3893
NOTE: The "Fixed or Overhead" cost has been omitted
from above.

Law Department
During the current season the Law Department of the Florida
Citrus Exchange represented the organization in two major suits
in addition to handling the routine matters customarily before it.
The first of these suits was occasioned by the joint indictment
of the Florida Citrus Exchange and its general manager together
with the California Fruit Growers Exchange and several members
of its staff, the California Fruit Exchange, the Di Giorgio Fruit
Corporation and its affiliates together with officials of its various
organizations and practically all auction companies. This action
took the form of a blanket indictment on the part of the Justice
Department accusing these organizations and the individuals named
with operating in restraint of trade under the provisions of the
Sherman Anti-Trust laws.
This indictment followed similar action taken against the Cran.
berry Growers Exchange and other cooperatives. It appears to be
in line with a policy of the personnel of the Department of Justice









under the current administration, to hold cooperative action wherever
successful to the provisions of the Sherman Act regardless of the
exemption made under the Capper-Volstead Act and sponsored
directly by the Department of Agriculture. The general counsel of
the Florida Citrus Exchange was forced to represent the organization
both in Washington and California. He is now working with the
counsel of the other indicted interests with the common objective
of bringing about a satisfactory conclusion to the charges made
without harm to the organization.
A second suit of major consequence was handled by the Law
Department during the season. This was a suit against the Florida
Citrus Exchange made by one Pitman of New York in the amount
of $150,000. The suit was filed five years after a change in trucking
arrangements in that market was completed in the interest of the
organization.
The suit was settled in New York last October by counsel in-
volved. The Exchange suffered no losses except attorney's fees
and expenses plus the irretrievable damage caused by false and
misleading propaganda.
The services of the Law Department are available to Exchange
affiliates in handling their common problems relative to Social
Security, the Wage and Hours Act and similar regulatory legis-
lation. The cost of these services and expenses incurred by them are
borne by the Florida Citrus Exchange and absorbed in its general
sales retain.
Traffic Matters
The Florida Citrus Exchange Traffic Department is responsible
for the efficient routing and checking of freight bills for fruit
moved by its shipper members. In addition to this routine work,
however, the department manager works with other traffic person-
nel in the state in handling matters of common interest to the in-
dustry.
Probably the most important improvement in traffic matters dur-
ing the past season was the adjustment of the bulge pack on citrus
as applied to the various packages and varieties of fruit. The ob-
jective of these changes was to make the package uniform in bulge
and safe as far as possible from breakage enroute. This variation of
bulge between shippers has been a point of controversy for many
years. The adjustment of it is a long step forward for both shippers
and carriers.
Another important factor in handling Florida perishables this
season was the permission obtained for our initial lines for the
use of ventilated box cars in northern and eastern states without
restrictions as to the liability for their use. This has done much
toward preventing a car shortage and has enabled the industry to
move fruit safely and promptly with a maximum distribution.









The Exchange Traffic Department has brought about some ad-
justments in the division of Florida originating territory. This
has resulted in lower freight charged on outgoing citrus to many
northern territories. It also has reduced freight charged on incoming
traffic. These savings amounted to substantial sums and will apply
for many years to come.
There are many important matters pending at the present time.
Among these is a proposal to increase Florida rates on citrus
to northern Atlantic seaboard points in the amount of 612 cents per
cwt. Another pending proposal is the restriction of routing in ter-
ritories north of the Ohio and Potomac rivers on perishables. This
would work to the industry's disadvantage by curtailing Florida
distribution. The Department was able to get a suspension of this
proposal postponing any action on it at least until next season.
These and many more adjustments pertaining to rates, routes
and traffic will come up in the near future. They will be handled
by the Department as they are brought into issue.










EXCHANGE SERVICE AFFILIATES

Grower members of the Florida Citrus Exchange own and operate
two service organizations in addition to the sales organization of
the Florida Citrus Exchange. The first was organized in October 1916
under the name G'f Citrus Growers Guaranty Company, then in
March 1918 the name was changed to thd Growers Loan and Guar-
anty Company, a cooperative financial 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 o{f operating personnel including house managers of
various associations.

GROWERS LOAN AND GUARANTY COMPANY. Expert financial advice
is more than ever necessary to growers and to associations seeking
the most satisfactory adjustments of their operations to the con-
ditions created by regulatory Federal legislation and the war
economy. Past experience and current advice in general indicates
that the best policy during these conditions is the liquidation of
all possible indebtedness. The more favorable returns of the season
may not be repeated in the near future and should be used by
associations and growers wherever possible to retire obligations
which may become dangerously pressing in the future.

The Growers Loan and Guaranty Company is the financial
service organization of the Florida Citrus Exchange system, man-
aged by Mr. S. L. Looney, Comptroller of the Florida Citrus Ex-
change. Its service and counsel is available to every grower and
shipper member in placing and keeping their financial problems
on a sound operating basis.

EXCHANGE SUPPLY COMPANY. The Exchange Supply Company
operates as a purchasing organization for grower and packing house
supplies. Its primary importance to Exchange membership 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 Ex-
change Supply Company.
The effectiveness of the Exchange Supply Company has been
considerably strengthened by increased patronage from associations
during the past year.











ESTIMATED DISPOSITION OF FLORIDA CITRUS
(in Boxes)
Disposition of Early, Midseason and4 Valencia Oranges
1940-41 and 1941-42 Seasons
tion to May 23rd: 1940-41 Season 1941-42 Season
te Shipments --------- ---- 20,050,476 18,743,000
Shipments --- --- -- 234,800 227,000


Gov't. Purchases, Fresh
Gov't. Purchases, Processed
Intrastate Shipments ------..
Exports -. ----------
Interstate By-Products---
Cannery, Commercial ----
Intrastate, Non-Commercial

TOTALS --..-
Remainder of Crop*----..........
Disposition of Seeded and
Disposition to May 23rd:
Interstate Shipments........
Express Shipments .----
Gov't. Purchases, Fresh---
Gov't. Purchases, Processed-
Intrastate Shipments ...----
Exports -- --- -------
Interstate By-Products ----
Cannery, Commercial ----.
Intrastate, Non-Commercial--


...-------- 543,942

--------- 55,925
---------- 3,193,076
---- .. 1,086,307

----------25,164,526
...-------- 3,235,474
Seedless Grapefruit, 1940-41 and
1940-41 Season
---------- 8,038,676
-----...-........ 141,200
970,765
601,992
----------. 246,812
-------..- 840
----------- 9,711
------ .............. 12,948,177
-.---.-.-...... 797,981


175,000
440,000

65,000
3,444,000
1,447,000

24,541,000
2,559,000
1941-42 Seasons
1941-42 Season
6,822,000
164,000
761,000
396,000
209,000

15,000
9,660,000
675,000


TOTALS ------------..... ..... .. 23,756,154 18,702,000
Remainder of Crop* --- ------- 843,846 1,698,000
*According to U. S. D. A. Crop Estimate released May 11, 1942.
NOTES-Disposition for last two weeks of 1941-42 season estimated.
'Gov't. Purchases', do not include Army and Navy Procurement which
are included in Commercial figures.
For 1940-41 Season, Cannery figures include Grapefruit for canning
837618 cases of Juice and Sections for FSCC.
Compiled by the Growers Administrative Committee.


SEASON AVERAGES
For Florida, California and Texas Auction Averages to
Season 1941-42 and 1940-41.
STATE Variety and Section
Florida Interior Oranges-Standard Boxes --.---- ..
Interior Oranges-Bruce Boxes .---- --.-..
Indian River-Standard Boxes -------- .
Interior Seed Grapefruit-Std. Boxes--- -.....
Interior Seed Grapefruit-Bruce Boxes -----.
Indian River Seed Grapefruit-Std. Boxes ....
Interior Seedless Grapefruit-Std. Boxes ...--
Interior Seedless Grapefruit-Bruce Boxes
Indian River Seedless Grft.-Std. Boxes ---
*Tangerines-All Sections --------- -. -
California Oranges ------------.---
Texas Grapefruit (Seedless) -
*Full Box Basis.


date as of May 17th,


1941-42
-- $2.73
-- 2.60
_ 2.85
- 2.23
-- 1.88
-- 2.17
- 2.42
-- 2.20
-- 2.63
-- 3.58
- 3.32
- 2.25


1940-41
$2.24
2.19
2.69
1.70
1.46
1.85
1.77
1.57
2.17
2.39
3.16
1.95


Disposil
Intersta
Express




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