• TABLE OF CONTENTS
HIDE
 Front Cover
 Title Page
 Table of Contents
 Foreword
 Summary and conclusion
 Factors affecting total demand
 Demand for livestock products
 Local marketings, demand and market...
 Marketing channels
 Marketing structure and potent...
 Appendix






Group Title: Report - Virgin Islands Agricultural Experiment Station no. 8
Title: Marketing potential for livestock products in the U.S. Virgin Islands
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Permanent Link: http://ufdc.ufl.edu/UF00096183/00001
 Material Information
Title: Marketing potential for livestock products in the U.S. Virgin Islands
Series Title: Report - Virgin Islands Agricultural Experiment Station ; no. 8
Alternate Title: Livestock products in the U.S. Virgin Islands
Physical Description: vi, 30 p. : ill. ; 26 cm.
Language: English
Creator: Stammer, Richard W
Virgin Islands Agricultural Experiment Station (U.S.)
Donor: unknown ( endowment )
Publisher: College of the Virgin Islands, Virgin Islands Agricultural Experiment Station
Place of Publication: St. Croix
Publication Date: 1974
Copyright Date: 1974
 Subjects
Subject: Animal industry -- Virgin Islands of the United States   ( lcsh )
Meat industry and trade -- Virgin Islands of the United States   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
Spatial Coverage: United States Virgin Islands
 Notes
Statement of Responsibility: by Richard W. Stammer.
 Record Information
Bibliographic ID: UF00096183
Volume ID: VID00001
Source Institution: University of the Virgin Islands
Holding Location: University of the Virgin Islands
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 02213026
lccn - 75622034

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Table of Contents
    Front Cover
        Page i
    Title Page
        Page ii
    Table of Contents
        Page iii
    Foreword
        Page iv
    Summary and conclusion
        Page v
        Page vi
    Factors affecting total demand
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
    Demand for livestock products
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
    Local marketings, demand and market potential
        Page 11
        Page 12
        Page 13
    Marketing channels
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
    Marketing structure and potential
        Page 20
        Page 21
        Page 22
    Appendix
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
Full Text























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Virgin Islands
Agricultural Experiment Station
Report No. 8
October 1974











Marketing Potential for

LIVESTOCK PRODUCTS

in the U.S. Virgin Islands


















College of the Virgin Islands
Virgin Islands Agricultural Experiment Station
Fenton B. Sands, Director
St. Croix, U.S. Virgin Islands









CONTENTS


Page
F orew o rd .. .. .. .. .... .. ...... .. ... . ...... .. ..... iv
Summary and Conclusions .................. . ............ v

Factors Affecting Total Demand ... . . . 1
P op u lation .. .. .. ........ ..... . . ...... ..... ..... .. 2
In com e ....... .. ........ ........... ..... 3
Consumer Preferences .. . . .. .. .... 6
Prices of Complementary and Supplementary Products ............. 6

Demand for Livestock Products . . . ..... 6
B eef . . .. .. .. .. .. . . .. .. .. 7
P o rk . .. . .. . . . . . . . . . 7
Poultry ........... .... ... 8
Miscellaneous Meat Products .. . .......... . .... 8
Processed Meat Products .. ............ .......... . . 9
Liver and Edible Offals . ... ..................... 9
E g g s . . . . . . .. . . . . . . . . . . . . . . . 9
Milk and Dairy Products . ........ 10
Total Livestock Product Consumption ............. 11
Local Marketing, Demand and Market Potential ... .. ...... .... 11

Marketing Channels . ................. ...... .... 14
Beef . . . ........................................ 15
Pork .......................... . . ........................ 16
Goat and Mutton .. . ................... 17
Poultry and Eggs .......... ......... ........ . 17
Fluid W hole M ilk . ... ... .. ............... 17
Supermarket Distribution System .. ............. ........ 18
Institutional Distribution System .......... .... 19
Market Structure and Potential .... ..................... 20


















iii










FOREWORD



"This report, "Marketing Potential for Livestock Products in the U.S. Virgin Islands," is one of a se-
ries of feasibility studies sponsored by the newly created Virgin Islands Agricultural Experiment Station,
College of the Virgin Islands. These investigations were financed totally with Federal funds made availa-
ble to the Station under the provisions of the Hatch Act, Amended.
Preparation of this report was accomplished by contracting for the services of Dr. Richard W. Stam-
mer, Assistant Professor, Department of Agricultural Economics and Marketing, Rutgers University,
New Brunswick, N.J. Dr. Stammer conducted the study and wrote the manuscript for this report.
The objective of these studies was to try to determine the agricultural enterprises, both plant and
animal, that have economic potential on the Virgin Islands. It is my belief that the agricultural industry
must be economically sound in order to be viable.
On the Virgin Islands, agriculture has been on the decline since the early part of the 1960's. The
average number of farms, farmers, and production of agricultural commodities (with the exception of
fluid milk) have all declined at a consistent rate. Among the questions which are uppermost in the minds
of many people are: What factors have been responsible for these declines? Can these downward trends
be stopped and perhaps reversed? What is the future of the agricultural industry, particularly on St.
Croix where 85 percent of the farmland is located? This report on the marketing potential for livestock
products, along with the others, sheds some light on these questions.
These feasibility reports have also revealed the areas where lack of training and education on the
part of the farmers has adversely affected production. These subjects have now become part of the new
program of the V.I. Extension Service. At the same time, the lack of information about the response of
crops and livestock in this environment, which also limits production, has been recognized. These gaps
in our knowledge have become the basis for the planned research program of the V.I. Agricultural Ex-
periment Station. Thus, these studies have given more direction to the efforts of the Extension and re-
search programs of this land-grant institution. More importantly, the results of these studies are expect-
ed to be beneficial to full- and part-time farmers, as well as to potential investors.
This series of reports rests squarely on the belief that a revival of agriculture would contribute sub-
stantially to the general welfare through increased output of goods and services and by providing addi-
tional employment. Moreover, expanded production and marketing of farm products could provide
greater, and in some cases cheaper, sources of nutritious foods for consumers.
A more fully developed agriculture would complement the major industry-tourism-in two ways.
First, visitors would be pleased to be served local products, especially tropical fruits and vegetables, by
hotels and restaurants where such products are often not now available. Second-and perhaps more
important-an expanded agriculture would tend to preserve the environment of exotic tropical islands.
Most visitors and some permanent and semi-permanent residents come to the Virgin Islands to seek this
environment. If this attraction is destroyed, the basis of the major industry of the Islands will be under-
mined.
The Virgin Islands Agricultural Experiment Station gratefully acknowledges the cooperative assist-
ance and contributions from many St. Croix farmers; Rudolph Shulterbrandt, Commissioner, V.I. De-
partment of Agriculture and his staff; and Bennett S. White, Jr., project consultant and former USDA
agricultural economist, now retired.

Fenton B. Sands, Director
March 1974











SUMMARY AND CONCLUSIONS


The present and future market potential for locally
produced meat products in the U.S. Virgin Islands is
very good. In 1972, local production accounted for
only 5 percent, by weight, of total meat consumption
on the Islands. Local beef production accounted for
81 percent of local red meat marketing, and this
comprised 16.8 percent of total beef consumption.
However, it was estimated that even production of
local beef could be expanded from 60 to 100 percent,
at the present time and at present prices, without cre-
ating an oversupply situation. Production of most
other meat products could be expanded more than
beef. Furthermore, a fairly large future growth in the
demand for most meat products is expected because
of a continued growth in population and per-capita
income.
For livestock products as a whole, the U.S. Virgin
Islands are most self-sufficient in the production of
fluid whole milk. In 1972, they produced 90 percent
of total local consumption. It was estimated that at the
present time and with present prices, production of
fluid whole milk could-probably be increased 20 per-
cent without creating an oversupply situation. It was
also estimated that local demand would probably in-
crease 100 percent by 1980, subject to qualifications
on population composition, tourist expenditure, and
composition of tourist population discussed in the
body of this report.
When one considers market potential, market
structure, resource base, welfare considerations, and
a cursory cost analysis, the most feasible areas for
expanded livestock production appear to be grass-fed
beef, fluid whole milk, and goat products. These en-
terprises all would utilize a portion of the considera-
ble grazing resources available on St. Croix. The fea-
sibility of expanding production in grain-based live-
stock enterprises depends on the feasibility of eco-
nomically producing grain locally, since importing
grain does not appear to be an economically viable
alternative. Even if studies indicate the feasibility of
producing local grain, new systems would have to be
developed to facilitate the marketing of any consider-
able expansion in the production of poultry or pork
products. The present marketing system for beef and


fluid whole milk is relatively efficient and probably
capable of handling a doubling in local production.
Finally, there will continue to be a small, fairly select
market for locally produced large and extra large
eggs and this market will probably double over the
next ten years.
This study has uncovered several potentially fruit-
ful areas of further research, among which are the
following:
1. Determine the relationships between the
composition of tourist expenditures and the
welfare and livestock consumption patterns
of the resident population.
2. Determine local preferences for various live-
stock products and examine how these pref-
erences change with changes in consumer
disposable income.
3. Examine the cost-benefit relationship between
subsidizing, if necessary, local grass-fed beef
production and improving the welfare of the
native population.
4. Examine ways of encouraging increases in
local milk production, since the marketing
system for this product is capable of handling
more output and since milk provides the
population with a relatively low-cost source of
animal protein.

5. If it proves feasible to produce grain crops
locally, a careful analysis of where this grain
should be utilized is in order. There are sev-
eral possibilities. First, grain could be used in
the local dairy industry which has proven its
economic viability. Second, it could be used to
increase the output of poultry and pork prod-
ucts. Third, it could be used as a basis for cat-
de feeding operations to supply butchers,
independent grocers, and supermarkets. Or,
grain could be used to feed beef for the insti-
tutional market. All of these alternatives
should be examined in some detail and the
respective benefits costs and welfare implica-










tons for each possibility should be consid-
ered.
6. Since there is a ready market for pork prod-
ucts and an available supply of high quality
garbage from the institutions, the feasibility
of a more widely used and a better-managed
garbage-fed hog operation should be exam-
ined.


7. If the meat production industry does expand
to a considerable extent, the feasibility of
producing some processed meat products
should be examined. There is a large demand
for these products on the Virgin Islands and
such an operation would result in a greater
utilization of total livestock production.










Marketing Potential for


LIVESTOCK PRODUCTS


in the U.S. Virgin Islands

by

RICHARD W. STAMMER


The cost per unit of production and the underlying
factors affecting the supply of livestock products in
the U.S. Virgin Islands have been analyzed in several
other reports in this series. This report concentrates
on the demand for livestock products and the effects
of the present marketing system structure on prices
received by producers and paid by consumers. Thus,
although this report can stand alone as a marketing
study, it should be considered in conjunction with the
other reports in this series when analyzing questions
of economic feasibility.
The relevant demand from the standpoint of live-
stock producers is that which is derived from demand
at the consumer level. The relationship between con-
sumer demand and derived farm demand depends
on the structure of marketing channels and the per-
formance of the marketing system in assembling
products from producers and distributing them to
consumers. Thus, in determining the relevant de-
rived demand, it was necessary to analyze both con-
sumer demand and the performance of the market-
ing system.
The marketing system serving the Virgin Islands
livestock industry is not a single system but actually a
complex of four distinct but somewhat interrelated
systems. In any analysis of Virgin Islands livestock
marketing, we must recognize the special functions of
these individual systems. Basically, they are:
1. A small-store marketing system on St. Croix
selling primarily locally produced meat prod-
ucts to the native population. These stores
also market some imported non-beef prod-
ucts.


2. A small-store marketing system on St. Thom-
as selling primarily imported meat products
to the native population.
3. A chain supermarket system on St. Croix and
St. Thomas that imports high quality meat
products and sells them to local continentals
and some natives.
4. A marketing system on St. Thomas and St.
Croix that services the institutions dealing
primarily with the tourist trade, that is, hotels
and restaurants.
The special functions and interrelations of these
four systems will be analyzed in more detail later in
this report. However, it should be recognized that
they work jointly in supplying the total demands of
the Islands, and if one channel does not operate ef-
fectively, another must compensate or some sector
will not be adequately served.


FACTORS AFFECTING TOTAL DEMAND

Total demand for any product is a function of
many factors; the primary ones are population, con-
sumer disposable income, consumer tastes and pref-
erences, and the prices of complementary and sup-
plementary products. In analyzing the demand for
livestock products in the U.S. Virgin Islands, it be-
came apparent that consumers were a quite heteroge-
neous group with respect to tastes, preferences and
per-capita disposable income. Thus, to facilitate the
analysis, consumers were divided into three broad








groups: -natives, continentals, and tourists.' Of
course, these groups are not mutually exclusive nor
are they homogeneous. For instance, a significant
number of natives have consumption patterns similar
to continentals because of their incomes or changes in
tastes and preferences developed from a period of
residence in the U.S. mainland. However, the sole
purpose of this breakdown was to assist in the analy-
sis, and it was useful for this purpose. Furthermore,
in a general sense the marketing system as previously
defined has been developed to serve the needs of
these consumer groups.

Population
Total resident and tourist populations in the U.S.
Virgin Islands have been growing at a fairly rapid
rate. From 1960 to 1970, resident population in-
creased 94 percent and from 1970 to 1972 it in-
creased another 12.6 percent (Table 1). By 1980, resi-
dent population is projected to be 122,340-an in-
crease of 44.5 percent over 1972. St. Croix's rate of
growth from 1970 to 1972 was approximately 3 per-
cent greater than the rate for St., Thomas. Past and
projected population increases are attributed to a res-
ident birth rate that exceeds the resident death rate
and a net migration into the Islands.
If the native and continental populations increase
in the same proportion that presently exists, the
growth in consumption of livestock products from
1972 to 1980 should be significantly larger than 45
percent because of changes in incomes, tastes and
preferences. One complicating factor affecting this
-projection arises from assuming that continental and
native populations will have the same proportions in
1980 as in 1972. Since the per-capita consumption of
certain livestock products is considerably higher for
continentals, due primarily to a higher average in-
come and different tastes and preferences, a shift in
this proportion would affect the demand projection.
Unfortunately, there are no reliable data available
indicating how these proportions changed over time
or how they are projected to change in the future.
There is some evidence, however, that in the past

'The following definitions of consumer groups were
used in this study: Natives were considered to be, for the
most part, non-Caucasians born in the Caribbean area.
Continentals were all Caucasians and other persons born
outside the Caribbean area but residing principally in
the Virgin Islands. Tourists were persons staying in the
Islands for a period of less than six months a year.


Table 1.-Population growth and projections, U.S.
Virgin Islands, 1970-1985
Virgin St.
Year Islands St. Croix St. John Thomas

1970 75,150 35,940 1,920 37,280
1971 79,830 38,510 2,040 39,280
1972 84.650 41,160 2,150 41,340
1973 89,620 43,900 2,270 43,450
1974 94,730 46,730 2,390 45,610
1975 99,980 49,650 2,510 47,820
1976 105,380 52,650 2,630 50,100
1977 110,910 55,740 2,760 52,420
1978 113,820 57,320 2,830 53,670
1979 118,080 59,680 2,930 55,480
1980 122,340 62,030 3,030 57,280
1981 126,600 64,390 3,130 59,080
1982 130,860 66,750 3,230 60,880
1983 135,110 69,!110 3,320 62,680
1984 139,370 71,460 3,420 64,480
1985 143,630 73,820 3,520 66,290

Source: Virgin Islands Department of Health

Table 2.-Air and cruise ship passengers landing in
the U.S. Virgin Islands, 1965-72
Cruise
Fiscal Air ship Total
year passengers passengers

1965 354,370 109,340 463,710
1966 436,780 117,660 554,440
1967 516,300 133,360 649,660
1968 651,100 166,120 817,220
1969 772,500 213,540 986,040
1970 669,820 251,080 920,900
1971 657,060 253,870 910,930
1972 742,850 364,640 1,107,490


year or so net immigration of continentals has dec-
lined.t This decline in net immigration, which has
been attributed primarily to the Fountain Valley af-
fair and related events, may be temporary, and, if so,
it will have little effect on future consumption. But if
the trend does become permanent, then the changing
composition of consumers could result in a smaller
increase in total demand than the percentage in-
crease in total resident population.

2 The primary evidence of this decline is a decrease in
property values in prime undeveloped land. Since the sup-
ply of this land is relatively fixed, it appears that the de-
crease was due to a lessened demand. Primary buyers of
this type of land are continentals. There is also some evi-
dence of this decline in the consumption figures for vari-
ous meat products.












Changes in the tourist population also have a sig-
nificant effect on demand, especially because tourists
tend to consume a relatively high proportion of live-
stock products. From 1965 to 1969, air and cruise
ship passengers visiting the Virgin Islands increased
113 percent (Table 2). Because of the general eco-
nomic conditions in the U.S. mainland in 1970-71,
the number of tourists declined somewhat, but by
1972 total air and cruise ship passengers were above
the level established in 1969. During the 1969-72
period, however, a dramatic shift, from the stand-
point of livestock product consumption, occurred in
the expenditure patterns of tourists (Table 3). Al-
though total tourist expenditures over this period
increased 8 percent, the amount spent in bars and
restaurants decreased 39 percent. This decrease in
tourist expenditures on food items had a significant
impact on livestock product consumption in the U.S.
Virgin Islands during this period.
The decline in tourist expenditures in bars and res-
taurants during a period when total tourist expendi-
tures were increasing was due to a shift in the compo-
sition of the tourist population. The U.S. Virgin Is-
lands were attracting more tourists who were interest-
ed in taking advantage of the free port privileges in a
single day's shopping spree, but fewer tourists were
spending their vacation on the Islands. This fact is
also reflected by the 18-percent decline in tourist
expenditures in hotels and in the relative increase in
cruise ship passengers in relation to air passengers
during 1969-72. The impact on St. Croix was even
more marked than on St. Thomas. Tourist expendi-
tures in St. Croix bars and restaurants declined 66
percent from 1969-70 to 1971-72, and expendi-
tures in hotels declined 34 percent.
Although it is difficult to predict the direction of
tourist expenditures in bars and restaurants, it is ob-
vious that this factor will significantly influence future
livestock product consumption in the Virgin Islands.
In summary, because population is an important
factor affecting total demand for livestock and live-
stock products, it seems apparent that increases in
resident and tourist populations will cause a marked
increase in the demands for these products.

Income
Most meat products are very income-elastic and,
thus, the income levels of the resident population in
the U.S. Virgin Islands will have a significant impact
on total demand. Moreover, it is important to exam-


ine not only average per-capita income but also distri-
bution of income when analyzing changes in con-
sumption.
According to the 1970 census, the median cash in-
come for all families and unrelated individuals in the
U.S. Virgin Islands was $4,656-more than 1,000
percent over the 1950 figure (Table 4). In real terms,
this increase in median income was approximately
730 percent. Distribution of incomes also changed
significantly over this period. For instance, in 1970 10
percent of all persons reporting had incomes of less
than $250, while 31 percent had incomes in excess of
$10,000. In 1950, 14 percent of those reporting had
incomes of less than $100 and more than 50 percent
had annual incomes of less than $500.
Improvement in both median income and the dis-
tribution of income over the past 20 years has un-
doubtedly had an impact on livestock product con-
sumption in the Virgin Islands. However, there is still
a significant proportion of the resident population
that probably cannot afford to purchase these live-
stock products in any significant quantity. Forty-five
percent of all families had incomes of less then $6,000
in 1970 (average family size was five persons) and, 56
percent of unrelated individuals had incomes of less
than $3,000. Also, the greatest impact of low income
fell upon the native Negro population where 55 per-
cent of the households (average household size was
5.5 persons) have incomes of less than $6,000 and 64
percent of unrelated individuals had incomes of less
than $3,000.
Estimated per-capita income for all persons in the
U.S. Virgin Islands was $1,992 in 1970, Negroes hav-
ing an estimated per-capita income of $1,732. These
income levels are significantly below those of the U.S.
mainland where average per-capita income of all per-
sons was $3,910 in 1970. Income distribution was also
quite different since in the U.S. mainland 26 percent
of all families had incomes of less than $6,000, and 46
percent had incomes over $10,000 in 1970.
The important factor, from the standpoint of live-
stock product consumption, is that median incomes
in the U.S. Virgin Islands have increased about three
times as fast as median incomes in the U.S. mainland
between 1950 and 1970. If this trend continues, the
income gap between the mainland United States and
the Virgin Islands will continue to narrow and many
more persons will enter the meat consuming market
and others will be able to greatly increase their meat
purchases. It seems likely that median income for all















Table &3-Tourist expenditures, U.S. Virgin Islands, 1969-72
Change Change Change
1969-70 1970-71 1969-70
Item 1969-70 1970-71 1971-72 1 1 o
1970-71 1971-72 1971-72

--------------------------------Thousand dollars ...-------------
St. Thomas and St. John
Hotels 18,460 16,739 14,017 -4,443 (-24%)
Gift shops & liquor stores. 35,436 32,047 42,377 +6,941 (+20%)
Bars & restaurants 6,314 5,629 4,731 -1,583 (-25%)
Other expenditures 10,422 9,305 15,340 +4,918 (+47%)
TOTAL 70,632 63,720 76,465 +5,833 (+8%)
St. Croix
Hotels 10,726 9,855 7,094 -3,632 (-34%)
Gift shops & liquor stores 8,849 8,385 12,911 +4,062 (+46%)
Bars & restaurants 3,216 2,880 1,094 -2,122 (-66%)
Other expenditures 7,057 6,290 11,153 +4,096 (+58%)
TOTAL 29,848 27,410 32,251 +2,403 (+8%)
All U.S. Virgin Islands
Hotels 29,186 26,594 21,111 -2,592 (-9%) -5,483 (-11%) -8,075 (-18%)
Gift shops & liquor stores 44,285 40,432 55,288 -3,853 (-9%) +14,856 (+37%) +11,003 (+25%)
Bars & restaurants 9,530 8,509 5,825 -1,021 (-11%) -2,684 (-32%) -3,705 (-39%)
Other expenditures 17,479 15,595 26,493 -1,884 (-11%) +10,898 (+70%) +9,014 (+52%)
TOTAL 100,480 91,130 108,717 -9,350 (-10%) +17,586 (+19%) +8,236 (+8%)











Table 4.-Cash income of families and unrelated individuals, U.S. Virgin Islands, 1969
All U.S. Virgin Islands St. Croix only
Item Total White Negro Other

Families 13,135 2,987 8,940 1,217 6,744
Percent of families with incomes less than
$250 4 2 4 3 3
$3,000 17 7 21 14 17
6,000 45 19 55 48 47
$10,000 69 35 79 75 70
25,000 95 84 98 97 95
Median income $6,612 $13,373 $5,512 $6,272 $6,442
Mean income 9,062 16,082 6,884 7,889 8,926
Estimated per capital for persons in families 1,810 4,470 1,250 1,610 1,970
Number of unrelated individuals 8,112 1,605 6,444 393 4,137
Percent of individuals with incomes less than
$250 20 9 22 21 19
$3,000 56 27 64 47 54
6,000 82 51 91 81 82
$10,000 92 75 98 95 93
25,000 99 97 99 99 99
Median income $2,479 $5,845 $1,948 $3,221 $2,637
Per-capita mean income 3,467 7,269 2,512 3,596 3,633
All families and unrelated individuals'
Median income $4,656 $10,299 $3,821 $5,381 $4,661
Mean income 6,873 12,996 5,052 6,841 6,914
Estimated per-capita income 1,992 4,830 1,396 1,732 2,168

Source: U.S. Census of population
'Estimated from, U.S. census figures


persons could double between 1970 and 1980. A
doubling in income in combination with the project-
ed population increases could result in nearly a 100-
percent increase in resident livestock product con-
sumption.
No data are available detailing what has happened
to per-capita incomes since 1970. However, in spite of
what was projected in the previous paragraph, there
is one situation that should be closely analyzed: the
income effects of the aforementioned decline in tour-
ist expenditures in hotels, bars and restaurants dur-
ing the past few years. These declines could have a
greater negative impact on low income persons than
the positive effects generated by increased tourist
expenditures in other categories. It should be re-
membered that the upward income mobility of low
income persons will have a greater impact on live-


stock product consumption than any other changes in
personal incomes. By observation, it appeared that a
much larger proportion of low income persons were
employed in hotels and restaurants than in any other
sector of the tourist industry. Since both total wages
paid and gratuities will decline in some proportion to
expenditures in this sector, the $11.8 million decline
in such expenditures in the past two years was bound
to have a significant effect on the welfare of low in-
come people.
A decline in expenditures will also have an indirect
effect. Because low income people will spend most of
their income in the Islands and because they also
have a very high marginal propensity to consume, the
multiplier effect will be quite large and the decline in
total income will be several times the initial decline in
wages and gratuities. In addition, probably a larger










proportion of total expenditures in hotels, bars, and
restaurants remains on the Islands than expenditures
in other tourist enterprises. If this is true, then the
multiplier effect of changes in tourist expenditures in
these establishments will be much greater than for
other tourist businesses and, thus, declines in these
expenditures will have a greater impact on the total
income picture for the Islands than increases in tour-
ist expenditures in other areas. This whole area war-
rants more research, but if the trend of the past few
years is not altered, then the increase in total resident
meat consumption between 1970 and 1980 will prob-
ably fall quite short of the projected 100 percent.

Consumer Preferences
Environment, ethnic group, experience spectrum,
and cultural background will all affect consumption
patterns for livestock and livestock products. Thus,
tourists, natives, and continentals will all have some-
what different between-group and within-group con-
sumption preferences. It was not possible, within the
time limits of this study, to analyze the consumption
patterns of the various groups comprising the Virgin
Islands population. Also, the interpretation of per-
capita consumption figures (as will be done later)
does not yield a clear cut indication of tastes and pref-
erences since per-capita income also has a significant
effect on these figures. However, from observation
and cursory analysis, it did appear that, as a whole,
Virgin Islanders have a greater preference for goat,
lamb, mutton, and poultry, and a lesser preference
for dairy products and possibly pork than the average
continental U.S. consumer does. For other products,
it was more difficult to differentiate between prefer-
ence effects and income effects. Some overall change
in taste and preferences for the resident Virgin Is-
lands population can probably be expected. Howev-
er, this change will probably be very gradual and not
have a large effect on meat consumption in the next
10 years unless there is a major change in the compo-
sition of the resident population.

Prices of Complementary and Supplementary
Products
The lower a person's disposable income, the more
conscious he is of price differences between supple-
mentary products. Thus, there is a higher probability
that he will change his consumption pattern when
relative prices change. Since a large portion of the


resident Virgin Islands population would be classified
as low income people, it was expected that any change
in relative prices would cause some shift in consump-
tion. Of course, because of personal tastes and pref-
erences, most consumers will hold to some minimum
level of consumption for some products. A much
smaller portion of the Virgin Islands resident popula-
tion will have a relatively small cross elasticity of de-
mand for livestock products due to their relatively
high incomes. Finally, tourist demands for livestock
products are not very responsive to changes in meat
prices, since raw product cost is a relatively small part
of the cost of a meal away from home. Thus, meal
prices are not as variable as raw product cost.
In this study, some analysis was made of consumer
shifts in response to relative price changes. Time did
not permit a complete analysis of these shifts and only
shifts between meat products were considered. How-
ever, if livestock product prices increase relative to
other food products, a shift away from livestock
products will occur. This is especially true for low-
income persons. If world demand for livestock prod-
ucts continues to increase faster than world supply
(which is quite possible) there will be a tendency for
some shifting from livestock to nonlivestock food
products within the Virgin Islands. This shifting will
dampen the positive effects on consumption exerted
by population increases and higher per-capita in-
comes.


DEMAND FOR LIVESTOCK PRODUCTS
This section presents a brief analysis of the present
demand situation, changes in demand over the past
three years, and potential future changes in demand
for each of the major product groups. This analysis
depends, to a large extent, on functional demand re-
lationships developed in the previous section of this
report.
Several types of consumption data are presented for
each commodity. First, since the major portion of total
livestock product consumption in the Virgin Islands is
imported, an analysis of import data for 1970-72 is
presented. These analyses will include data on total
quantities imported, average price per unit of quantity
imported, and point of shipment. Prices reported in
the tables are f.o.b. shipping point; a delivered price
can be derived by using the representative transporta-
tion costs in Table 5. It should be recognized that a
large part of meat shipments reported as being from










Table 5.-Transportation rates per cwt.
for full truckloads


Frozen
Point of packaged
origin Poultry Carcass beef beef
New York $2.96 $4.48 $3.25
Florida 2.78 4.22 3.04
San Juan 1.75 1.75 1.75


San Juan, Puerto Rico are actually transshipments that
originated in the U.S. mainland. Values shown in the
tables, however, are f.o.b. San Juan.
Per-capita consumption figures for livestock prod-
ucts (1971 and estimated consumption) for the popu-
lation of the Virgin Islands, together with a compari-
son with U.S. mainland figures, are given in Table A-
I in the Appendix.

Beef
From 1970 to 1972, total beef imports into the U.S.
Virgin Islands declined 45 percent (Table A-2).
During the same period, local beef production, which
was about 16.8 percent of total consumption in 1972,
increased by 20 percent. However, total beef con-
sumption declined by 39 percent (Table 10). At first
glance, this appears to be inconsistent, for during this
period population was increasing and presumably
per-capita incomes were also increasing. However,
the decline in beef consumption reflects the full im-
pact of the primary and secondary effects of declines
in tourist expenditures in hotels, bars and restau-
rants. Beef is the primary livestock product con-
sumed by tourists and virtually all this beef is import-
ed.
locally produced beef is consumed primarily by
natives-and a small percentage of continentals. The
correlation between beef imports during this period
and tourist expenditures in bars and restaurants was
.95. This figure indicates that a large part of the dec-
line ihi beef consumption was directly attributable to a
decline in tourist beef purchases. It is also believed
that the previously mentioned secondary effects of
the decline in tourist expenditures are reflected in
beef consumption figures. Beef has the highest aver-
age price per pound of any livestock product group-
ing. Thus, when the incomes of low and low-middle
income persons decline, the first meat item sacrificed
would be beef, especially the higher grade and higher
priced imported beef. Moreover, when wage and gra-


tuity incomes for people employed in hotels, bars and
restaurants decline, they purchase either more local
beef or other less expensive food items.
The future demand for beef depends largely on
what happens to the tourist industry and other
sources of employment. If tourist expenditures in
hotels, bars and restaurants can be increased or even
stabilized, or other employment opportunities
opened up for residents, beef consumption should
start to increase. Resident per-capita beef consump-
tion was only 59 percent of that in the U.S. mainland
and native per-capita consumption was only 51 per-
cent in 1971. Thus, as the income level of residents
increases, per-capita consumption and total con-
sumption of beef should increase significantly, de-
pending on what happens to beef prices in relation to
other food prices. However, regardless of what hap-
pens to total beef consumption, the production of
locally produced grass-fed beef could probably dou-
ble at the present time without creating an oversup-
ply.
Local production gives residents an opportunity to
buy beef at prices that average about 25 percent less
than imported beef. On St. Croix where most of the
local beef is produced, butchers cannot supply their
customers with all the products they wish to pur-
chase. On St. Thomas there is practically no locally
produced beef available. Furthermore, about 12.5
percent of the 1972 beef imports came from coun-
tries outside the continental United States-New Zea-
land, Argentina, Panama and the Dominican Repub-
lic. Generally, this beef is grass-fed and it tends to
supply a group of St. Thomas consumers similar to
those supplied by local production on St. Croix. This
imported beef is more expensive than locally pro-
duced beef, but less expensive than the USDA choice
beef imported from the U.S. mainland. Wholesalers
indicated that this foreign beef is becoming harder to
obtain and is getting more expensive all the time.
Local producers could undoubtedly capture this
market easily, the potential of which is at least 60 per-
knt greater than present production. Thus, there is a
large potential market for locally produced grass-fed
beef and this market will exist for many years.

Pork
The overall trend in pork consumption is some-
what similar to that for beef (Table A-3). From 1970
to 1972 pork imports declined 25 percent, local pork
production declined 4 percent, and total pork con-










sumption declined 23 percent. Basically, two factors
underlay this decline in consumption. First, the dec-
line in tourist expenditures in hotels, bars and restau-
rants had similar effects on pork and beef consump-
tion. Second, the cause of the decline in pork con-
sumption was a price effect. Pork production in the
U.S. is quite cyclical and prices fluctuate widely from
year to year (foreign pork represents only 1 percent
of total consumption). Prices declined about 16 per-
cent from 1970 to 1971 and consumption increased
18 percent over this period (beef consumption dec-
lined from 1970 to 1971). In 1972 pork prices in-
creased 17 percent, and this was associated with a 36
percent decline in pork consumption. Thus, pork
consumption was affected somewhat by the decline in
tourist expenditures (especially in 1972) but not to as
great an extent as beef, and the price elasticity of
demand for pork appears to be relatively high. As
mentioned previously, a high price elasticity of de-
mand is to be expected when a large proportion of
consumers comes from low and middle-low income
groups.
Domestic pork production accounts for about 8
percent of total consumption. Most domestic pork
comes from small backyard operations. Per-capita
consumption of pork in the U.S. Virgin Islands is
only 59 percent of that on the U.S. mainland. Native
per-capita consumption is 38 percent of the U.S.
figure. Thus, there is a very large potential market
for local pork, not only because producers can easily
capture a larger share of the present market, but also
because the present market will undoubtedly expand
as population and per-capita income on the island
increase. Finally, pork consumption is not quite as
dependent as beef consumption on tourist expendi-
tures in bars and restaurants.

Poultry
From 1970 to 1972, poultry imports into the U.S.
Virgin Islands and total poultry consumption both
increased 7 percent (Table A-4). It appears that
most poultry products imported into the Islands are
consumed by the local population. Native per-capita
consumption of poultry products was approximately
2.5 times larger than per-capita consumption in the
U.S. mainland. This is to be expected because poultry
products were the lowest-cost source of meat protein
and Virgin Islanders appear to have a stronger pref-
erence for poultry than consumers in the U.S. main-
land.


The price effect on quantity consumed is evident
from the data, but price elasticity is not as large for
poultry as it is for beef and pork, because there-is no
other lower cost meat product to which a consumer
can switch when poultry prices rise.
From 1971 to 1972, weighted average poultry
prices increased 5.7 percent and total consumption
declined 2.3 percent. There was evidence that a high
cross elasticity of demand between various poultry
products existed. This was shown by the large
amount of consumer shifting between whole chick-
ens, chicken parts, other poultry products, and poul-
try livers in response to changes in relative prices. For
instance, in 1972, the average price of whole chickens
and chicken parts increased 12 percent and con-
sumption of these products declined 28 percent. At
the same time, price of other poultry products dec-
lined 25 percent and the price of poultry livers dec-
lined 76 percent, which increased consumption 275
percent and 2,300 percent respectively. Thus, al-
though price elasticity for the total poultry group was
relatively low, there was a large amount of substitu-
tion between poultry products and the within-group
cross elasticities were very high.
Future total consumption of poultry products will
probably increase at a slower rate than population
and quite possibly total consumption could decline
even though population is increasing. This is due to
the fact that Virgin Islanders will most probably sub-
stitute other meat products for a portion of their
present poultry consumption as their incomes in-
crease.
Regardless of what happens to total consumption,
there is a very large potential market for locally pro-
duced poultry products. At present, local production
accounts for only 1 percent of total consumption and
most of this production comes from selling cull laying
flocks. Producers indicate that the demand for fresh
poultry is so strong that they can sell their entire flock
to individuals in less than a day, in spite of the fact
that they are selling only old hens.

Miscellaneous Meat Products
Native Virgin Islanders have a strong preference
for meat dishes made from goat and lamb. Per-capita
consumption for these products by the native popula-
tion was approximately 210 percent larger than per-
capita consumption in the U.S. mainland during
1972. From 1970 to 1972, imports of goat, lamb, and
mutton increased 28 percent; local production de-











creased 1 percent and total consumption increased 28
percent (Table A-5). In 1972, consumption of these
products increased 25 percent even though prices
rose 2 percent. Finally, goat, lamb, and mutton con-
sumption were not affected by the primary effects of
declines in tourist expenditures in bars and restau-
rants, but they might have been affected somewhat by
secondary income effects.
At present, local production accounts for only 3.3
percent of total consumption of goat meat, mutton
and lamb. These products probably have the greatest
market potential for local production of any meat
product produced on the Islands. All of the imported
goat meat was frozen and the majority of it was pro-
duced in either Texas or New Zealand. At the time of
this study, July 1973, butchers reported difficulty in
obtaining goat meat. Moreover, the retail price was
14 percent higher than the price of locally produced
sirloin steak.
In the future, goat consumption should continue to
increase as both population and incomes increase,
and at a greater rate than the rate of population
growth, assuming that the composition of the resi-
dent population remains the same or that the propor-
tion of natives increases.
The 940 percent increase in consumption and 68
percent decrease in price of meat from bovine ani-
mals between 1970 and 1972 represents a change in
the composition of items reported in this classification
(Table A-5). In 1970, the major import in this cate-
gory was veal and it had a high average price. In
1972, the majority of meat imports in this category
were cull cow beef, a much smaller percentage being
veal. This large increase in imports of lower grade
beef indicates increased efforts on the part of the resi-
dent population to obtain inexpensive beef.

Processed Meat Products
The price effect on the quantity of processed meat
products consumed is quite evident over the past
three years (Table A-6). The weighted average price
of processed meat products decreased 14 percent
over this period. This resulted in a 36 percent in-
crease in the quantity of processed meat products


'Actual local production is probably higher and may
be as much as 5 percent of total consumption since a
fairly large amount of backyard slaughtering of goats and
lambs exists and poundages for these animals are not
recorded.


purchased as consumers shifted from other products
such as beef and pork to processed meats. Future
changes in demand for this classification of livestock
products are somewhat difficult to predict because
composition of the class is so varied. Some items are
used primarily by institutions and their consumption
is directly related to tourist expenditures in bars and
restaurants; other products are used primarily by res-
idents.

Liver and Edible Offals
Consumption of liver and edible offals bears some
similarity to that for processed meat products. From
1970 to 1972, weighted average price increased 13.7
percent for these products and consumption declined
17 percent (Table A-7). However, in 1972, both
prices and consumption increased. The indetermi-
nate nature of the price effect on consumption is due
to the fact that some of these products would be clas-
sified as economically inferior goods while other
products would be considered normal or even luxury
goods. Also, some of the products are consumed
primarily by tourists and continentals while others
are consumed by natives. However, on the basis of an
informal sample, it appears that the preference of
Virgin Islanders for liver and edible offal products is
at least equal to that of the average Continental U.S.
consumer. At present, per-capita consumption of
these products by Virgin Islands residents is about 40
percent of U.S. per-capita consumption. Hence, as
per-capita income in the Virgin Islands increases,
consumption of liver and edible offals should increase
at a rate greater than population growth.

Eggs
Between 1970 and 1972, imports of eggs into the
Virgin Islands declined 5.3 percent, local production
fell 13.4 percent, and total consumption declined 6
percent (Table A-8). Price of imported eggs did not
change over this period. The primary reason for the
decline in consumption was the decline in tourist
expenditures in hotels, bars, and restaurants. Per-
capita consumption of eggs by tourists is probably
three times that of the resident population, hence,
any decline in meals eaten by tourists will significantly
affect total egg consumption.
The market potential for expanding local produc-
tion is very large, since 91 percent of all eggs are now
imported. Furthermore, most imported eggs are










mediums because large and extra large eggs incur a
high degree of breakage in transportation. Local
producers receive a premium price for their large
eggs and have no problems in marketing their total
production. In fact, local producers have not even
tapped the chain store market. Per-capita consump-
tion of eggs by residents in the Virgin Islands is ap-
proximately 62 percent of the U.S. mainland con-
sumption and this percentage should increase as in-
comes increase. Thus, the consumption of eggs
should increase at a faster rate than population
growth, assuming that tourist expenditures in hotels,
bars, and restaurants level off or start to increase.
Along with projected increases in total demand, the
egg market is also attractive since local producers
have a virtual monopoly on large and extra large egg
supplies.


Mlk andDary Preduets

Fluid whole milk is the one livestock product in
which the U.S. Virgin Islands is nearly self-sufficient.
Estimated fluid whole milk and cream consumption
for 1972 was 4,111,000 quarts, the Virgin Islands
producing 90.2 percent of this amount (Table 6).
Total fluid whole milk production within the Virgin
Islands was, by necessity, estimated since it was not


possible to obtain exact production figures for St.
Thomas. Total production figures for St. Croix were
supplied by Island Dairies and, thus, should be quite
accurate. Total fluid milk consumption in the Islands
was somewhat larger than fluid whole milk produc-
tion since the processors on St. Thomas and St. Croix
are reconstituting milk for the school lunch program
and the processor on St. Thomas is selling some recon-
stituted milk to consumers. However, the St. Thomas
processor would not release sales figures for reconsti-
tuted milk.
Fluid whole milk consumption has continued to
increase over the past 10 years, and from 1970 to
1972 it rose 22 percent which was approximately 1.74
times the growth in resident population. Even with
this growth, per-capita consumption of fluid whole
milk by Virgin Islands residents was still only 36 per-
cent of that in the U.S. mainland. Thus, as per-capita
incomes increase, total consumption of fluid whole
milk should continue to expand at a rate considerably
above population growth, and it is possible that con-
sumption will double by 1980. Local production
could probably be increased by 20 percent without
creating an oversupply of fluid milk in relation to
present prices. Local producers definitely have an
absolute advantage in producing fluid whole milk
because of the high weight-to-value ratio which


Table 6.-Milk production, U.S. Virgin Islands, 1959-1972
Percent
Year St. Croix1 St. Thomas Total change
_- _____________ Quarts----------------
1959 325,600
1960 398,600
1961 400,000
1962 473,200
1963 729,500
1964 880,400 526,200 1,406,600
1965 1,050,700 703,000 1,753,700 +25%
1966 1,232,300 838,000 2,070,300 +18%
1967 1,371,800 946,500 2,318,300 +12%
1968 1,414,000 990,000 2,404,000 +4%
1969 1,797,200 1,284,800 3,082,000 +28%
1970 1,895,100 1,413,000 3,308,100 +7%
1971 2,124,900 1,554,000 3,678,900 +11%
1972 2,007,100 1,700,000 3,707,100 +.8%
Change from 1964 to 1969 +119%
Change from 1969 to 1972 +20%
Change from 1964 to 1972 +163%
Production information was obtained from Island Dairies for St. Croix.
'Production information for St. Thomas was estimated for 1964 and 1969 from census data and for 1972 from
data provided by St. Thomas Dairies; years in between were interpolated.










makes milk a relatively expensive item to transport.
Imports of dairy products declined 30 percent
from 1970 to 1972 (Table A-9). Again, the major
reason for the decline was the decline in tourist ex-
penditures in hotels, bars, and restaurants. Per-capita
tourist consumption of these items is four times as
large as per-capita resident consumption. However,
most of these products are very income elastic and if
per-capita incomes continue to increase, consump-
tion of dairy products will grow at a considerably fast-
er rate than population. Since per-capita resident
consumption of these products was only 23 percent
of Continental U.S. consumption, it would not be
surprising to see total Virgin Islands consumption
increase by 150 percent between 1970 and 1980.

Total Livestock Product Consumption

The composite consumption figures for livestock
products are presented in Table 7. From 1970 to
1972, total U.S. Virgin Islands consumption (in
pounds) of livestock products declined by 5 percent.
During this same period, population was estimated to
have increased by 12.6 percent. The underlying rea-
sons for this surprising decline in consumption are
evident when the consumption patterns for individu-
al products are examined. The consumption of prod-
ucts that were most heavily demanded by tourists, or
were relatively expensive, declined because of the
primary and secondary effects of declines in tourist
expenditures in hotels, bars, and restaurants. The
consumption of products for which natives had a
strong preference, or which were relatively low-
priced, increased. Examination also showed evidence
of high within-group and between-group cross elas-
ticities of demand. It is expected that total livestock
product consumption will increase in the future as
both the island population and per-capita incomes
increase. The magnitude of the increase in total con-
sumption and the composition of this increase de-
pend primarily on four factors: change in resident
population, change in resident per capital incomes,
changes in tourist expenditures, and changes in the
composition of the resident population.


LOCAL MARKETING, DEMAND AND
MARKET POTENTIAL

The data in Tables 8 and 9 indicate the trends in
local meat marketing (excluding poultry) during the
past four fiscal years. During this period local market-


ings of beef increased 28 percent, pork 11.4 percent,
goat .4 percent, and lamb decreased .4 percent. Total
meat marketing (carcass weight) increased 25.5 per-
cent. Approximately 65 percent of the increased beef
marketing came from St. Croix; the remainder came
from St. Thomas and St. Johns. Beef accounted for
approximately 81 percent of local Virgin Islands red
meat marketing during this period. Coat and pork
marketing declined somewhat on St. Croix but in-
creased on St. Thomas during this period; lamb mar-
ketings declined on St. Thomas but increased on St.
Croix. St. Croix produced 89 percent of the total Vir-
gin Islands red meat marketing in 1970-71 and 86
percent in 1972-73. It should be cautioned that
these figures represent marketing and do not neces-
sarily represent an increase in production or produc-
tion potential. In beef, for instance, an increase in
marketing could have resulted from either an in-
crease in herd production or increased marketing of
breeding animals in response to higher prices or
higher costs. The latter case would be one in which
increased marketing meant decreased production
potentials.
Data indicating the percentage of total consump-
tion supplied from local production for most Virgin
Islands livestock products are presented in Table 10.
By weight, local production supplied 26 percent of
total livestock product consumption in 1972. Howev-
er, this high percentage was due primarily to the fact
that 90 percent of total fluid whole milk consumption


Table 7.-Livestock and livestock product
consumption patterns U.S. Virgin Islands


Product


Beef and veal
Pork
Goat, lamb, mutton
Poultry
Other meat products
All meat and meat
products
Eggs
Milk and cream
Other dairy products


Change
in con-
sumption
1970-71


-23
+17
+2
+10
+.5


Change
in con-
sumption
1971 72


Change
in con-
sumption
1970-72


-Percent --------
-21 -39
-34 -23
+25 +27
-2 +7
+29 +36


-2 -6 -9
-5 -1 -6
-11 +10 +22
-34 +6 -30


All livestock and livestock
products -4 -1 -5











Table 8.-Meat marketing in the U.S. Virgin Islands, liveweight basis


1969-1970


1970-71


1971-72


St. Croix
Beef and veal
Goat
Lamb
Pork
TOTAL
St. Thomas
Beef and veal
Goat
Lamb
Pork
TOTAL
Total U.S. Virgin Islands
Beef and veal
Goat
Lamb
Pork
TOTAL
Percent change from
previous period


------------------- Pounds ---- -------__


1,308,700
17,100
26,600
224,600
1,577,000


994,460
10,910
17,420
200,770
1,223,560


95,000
6,000
4,400
52,100
157,500


1,089,460
16,910
21,820
252,870
1,381,060


-12.4%


Source: Figures in the first 3 columns above are estimated from data on number of head slaughtered at the St. Croix
and St. Thomas abattoirs. Figures in the last column are based on actual liveweight data for July 1972 to May 1973,
plus an estimate of slaughter in June 1973.

Table 9.-Meat marketing in the US. Virgin Islands, carcass weight

1969-70 1970-71 1971-72 1972-73

St. Croix _----------------------------- Pounds.
Beef and veal 576,800 685,500 850,120
Goat 5,500 4,750 5,050
Lamb 8,700 10,000 10,650
Pork 140,500 133,150 133,350
TOTAL 731,500 833,400 999,170
St. Thomas
Beef and veal 49,400 79,800 109,250
Goat 3,000 1,200 3,800
Lamb 2,200 2,700 2,050
Pork 36,400 29,000 45,300
TOTAL 91,000 112,700 160,400
TOTAL U.S. VIRGIN ISLANDS
Beef and veal 746,000 626,200 765,300 959,370
Goat 8,500 8,500 5,950 8,850
Lamb 13,300 10,900 12,700 12,700
Pork 157,200 176,900 162,150 178,650
TOTAL 925,000 822,500 946,100 1,159,570
Change from previous year -12% +15% +22.6%

Source: Data derived from Table 8


1972-73


1,181,880
9,500
20,000
190,200
1,401,580


153,400
2,380
5,400
41,500
202,680


1,335,280
11,880
25,400
231,700
1,604,260


+16.2%


1,465,700
10,100
21,300
190,500
1,687,600


210,100
7,600
4,100
64,720
286,520


1,675,800
17,700
25,400
255,220
1,974,120


+23%











Table 10.-Local production and consumption of livestock products, U.S. Virgin Islands

Product 1970 1971 1972


Beef and veal (pounds)
Local production
Imports
Total consumption
Percent local production
Pork (pounds)
Local production
Imports
Total consumption
Percent local production
Goat, lamb, mutton (pounds)
Local production
Imports
Total consumption
Percent local production
Poultry (pounds)
Local production
Imports
Total consumption
Percent local production
Eggs (dozen)
Local production
Imports
Total consumption
Percent local production
Milk & cream (quarts)
Local production
Imports
Total consumption
Percent local production
Meat and meat products
Local production
Imports
Total consumption
Percent local production
All livestock and livestock products
Local production
Imports
Total consumption
Percent local production


713,520
7,679,730
8,393,250
8.5%


169,640
2,438,600
2,608,240
6.5%


20,640
463,010
483,650
4.3%


11,700
8,457,600
8,469,300
.1%


165,191 1
1,508,513
1,673,704
9.9%


3,308,100
50,388
3,358,500
98.5%


913,500
32,531,200
33,444,700
3.9%


8,273,700
29,105,500
37,379,200
22%


649,560
5,786,680
6,436,240
10%


169,260
2,889,700
3,058,960
5.5%


18,325
473,110
491,435
3.7%


10,800
9,283,600
9,294,400
.1%


154,150
1,430,815
1,584,965
9.7%


3,678,900
44,700
3,723,600
98.8%


847,950
22,106,500
22,954,450
3.7%


8,988,800
27,080,600
36,069,400
25%


857,630
4,255,740
5,113,370
16.8%


163,050
1,842,000
2,005,050
8.1%


20,365
593,890
614,255
3.3%


9,800 '
9,068,500
9,078,300
.1%


143,100'
1,428,770
1,571,870
9.1%


3,707,100
404,300
4,111,400
90.2%


1,050,850
20,490,200
21,541,050
4.9%


9,235,800
26,423,600
35,659,400
26%


x Source: U.S. Census of Agriculture
Based on a current estimated poultry population of 13,000 birds
Note: Local figures in this table may differ somewhat from previous figures because these are on a calendar basis and
previous figures were on a fiscal year basis.










was produced locally. Local production accounted for
approximately 5 percent of total meat consumption
in 1972, and this ranged from 16.8 percent for beef
and veal to .1 percent for poultry. The 16.8 percent
total consumption accounted for by local beef mar-
ketings was up from 8.5 percent in 1970 because of
the joint effects of a decrease in total consumption
and an increase in local marketing of beef.
The potential for expanding the market for locally
produced livestock products is very good if the pro-
per marketing channels are available to distribute the
local production. However, it must be recognized that
the U.S. Virgin Islands is very definitely a grain-defi-
cit region and any grain-fed livestock enterprise must
be based on imported inputs unless it is shown to be
feasible to produce feed grains locally. If one assumes
that it is not economically feasible to grow a large
amount of feed grain locally and assuming that other
costs of production are similar for the U.S. mainland
and the Virgin Islands, then it is not economically
feasible to raise grain-fed livestock on the Virgin Is-
lands. This conclusion was reached thru an analysis
comparing the cost of transporting a pound of final
livestock product with the cost of transporting an
equivalent amount of feed from Miami to the Virgin
Islands. The results of this analysis are presented in
Table A-10. On the basis of this analysis, it is not
economically feasible to produce grain-fed beef,
pork, poultry, or eggs within the Virgin Islands. Two
possible exceptions to this conclusion are that it may
be feasible to operate a garbage-fed hog operation
and some egg producers can probably make a profit
by exploiting their local favorable position in the
market for large and extra large eggs.
Hence, the most feasible livestock products for
expanded production, based on market potential and
a cursory cost analysis, are grass-fed beef, fluid whole
milk, and goat. As noted earlier, goat is very much in
demand on the Islands and imported supplies are
scarce, high priced, and frozen. The market potential
for expanding production of this product is very
good. Fluid whole milk production also has a strong
market potential because of its high weight-to-value
ratio and the fact that milk is a relatively inexpensive
protein source. At present prices, milk production
could probably be increased 20 percent without creat-
ing an oversupply, and there should be a good deal of
future growth in the demand for milk. Grass-fed beef
provides the native population with a source of beef
that is cheaper and leaner than imported U.S. beef.


At present prices, the marketing of this product
could probably increase 60 percent without creating
an oversupply.
Of course, the economic feasibility of expanding
production of any of these products depends on costs
and profits as well as market potential. Even if it does
not prove economically feasible to expand produc-
tion of a product such as grass-fed beef, the Virgin
Islands government may want to consider the costs
and benefits of subsidizing production as a part of a
consumer welfare program. This would be especially
advantageous to low or middle-low income natives.
Finally, it should be noted that all three of these en-
terprises would utilize the grazing resources that exist
on the Islands.

MARKETING CHANNELS

The hearts of the marketing systems for locally pro-
duced red meat products on the Virgin Islands are the
St. Croix and St. Thomas abattoirs. These operations
are run by the Virgin Islands Department of Agricul-
ture, and virtually all of the beef, veal, goat, pork and
lamb produced locally and marketed thru commercial
channels is processed at one of the abattoirs, which
also provide U.S.D.A. meat inspection and cold stor-
age facilities. Some goats and sheep produced for
home consumption do not go through the abattoirs,
which charge 1 per pound liveweight for services.
This charge also entitles the owner of the meat to store
it at the abattoir for one week with no extra charge.
The 1-cent per pound charge is considerably less than
the estimated cost of operation which was 9 cents per
pound (Table A- 11). The 9-cent figure was estimated
for the St. Croix abattoir through which most of the
meat is processed. This figure may be somewhat lower
for fiscal 1973 because poundage processed was high-
er and because the V.I. Department of Agriculture
hired an efficiency expert who initiated several operat-
ing economies. The 8-cent difference between operat-
ing cost and processing charge probably represents a
consumer subsidy rather than an agricultural subsidy.
Given present market conditions, if the full rate were
charged most of the additional 8 cents would be passed
on to the consumer. Finally, it was estimated that the
St. Croix abattoir operated at approximately 35 per-
cent of capacity in 1972. Hence, the slaughtering facil-
ities on the Island do not present a bottleneck to ex-
panded meat production since the abattoir could fairly
easily triple its output.











Beef
As noted in the introduction, there are four fairly
distinct marketing channels for beef on the U.S. Vir-
gin Islands. One supplies natives and some conlinen-
tals with local beef on St. Croix; one supplies natives
and some continentals on St. Thomas; one supplies
beef to supermarkets on St. Croix and St. Thomas;
and one supplies the tourist institutions on St. Croix
and St. Thomas. Since the supermarket and tourist
institution supply channels are essentially the same
for all meat products, these will be discussed after the
other channels are described.
There are several channels for marketing locally
produced beef on St. Croix. At the time of the study,
there were two types of wholesalers operating on the
Island. One type was a vertically integrated producer
who also bought beef from other producers. He
provided transportation from the farm to the abattoir
and also delivered to butcher shops, independent
grocery stores, and some local restaurants. Approxi-
mately 90 percent of the beef wholesaled by this firm
was from his own production unit. The other type of
wholesaler purchased animals from local producers
and provided transportation from the farm to the
abattoir and also delivered to butchers, independent
grocery stores, and local restaurants.
Butchers were of three types: those who purchased
only from wholesalers and paid a delivered price;
those who bought cattle on the hoof (at farm) and
paid a contract hauler to transport cattle to the abat-
toir at a cost of approximately $5.00 per head and
then provided his own transportation from the abat-
toir to his store; and a third type of butcher who was
similar to the aforementioned butcher except he also
produced some of his own cattle.
Small grocery stores and local restaurants pur-
chased local beef from either of the two types of
wholesalers. The production, wholesaling, and butch-
er enterprises would all have to be classified as oligo-
polist-that is, a small group having control of a
commodity in a given market. At the time of this
study, local beef sold at the farm for approximately
40g per pound liveweight and was wholesaled at ap-
proximately 851 per pound carcass weight. Retail
prices for local beef are presented in Table 11, col-
umns I and 2. The weighted average price in butcher
shops was estimated to be $1.25 per pound by using
USDA conversion figures. After converting farm
prices to retail equivalent prices, the farm-retail price


Quality standards sought in carcass grading by a Federal
meat inspector stationed at the St. Croix abattoir, are
being pointed out to Dr. Fenton B. Sands (left). Director,
V.I. Agricultural Experiment Station.


spread was estimated to be 34o per pound. This
farm-retail margin compares very favorably with the
U.S. margin of approximately 37 per pound. Of
course, the margin would be higher if the abattoir
charged a price that equaled the full cost of slaugh-
tering. However, the present marketing and distribu-
tion system for locally produced beef appears to be
operating relatively efficiently.
The butchers and independent grocers on St.
Thomas are supplied beef from wholesalers who
purchase grass-fed beef from brokers in New Zealand
and USDA standard and choice beef from brokers in
the U.S. mainland. This sector of the wholesale beef
industry has one dominant firm and a few much
smaller fringe firms. The dominant firm wholesales
sirloin steak from $1.55 to $1.80 a pound and chuck
from $1.25 to $1.35 a pound.
Retail prices for this beef are shown in column 3,
Table 11. It was not possible to obtain enough infor-
mation to calculate the farm-retail price spread for










this portion of the beef-marketing system. It should
be noted, however, that consumers on St. Thomas
pay more for grass-fed beef than those on St. Croix
because of the joint effects of higher procurement
costs and market performance.

Pork
The distribution system for locally produced pork
on St. Croix is simpler than that for beef because
there are no wholesalers. There are basically four
types of producers, most of whom do their own mar-
keting: (1) the producer selling only to individuals
who pick up live animals at the farm; (2) the producer
selling to individuals and butchers, both of whom
pick up live animals at the farm; (3) the producer who
transports live hogs to the abattoir and then delivers
and sells carcass pork to butchers; and (4) the produc-
er who sells and delivers carcass pork to independent
grocers and individuals.
The price of pork on the hoof varies from 40 to 55
cents a pound, and carcass pork varies from 80 cents
to 90 cents a pound. This wide range of prices is due
to the fairly unorganized nature of the pork market-
ing system. Local pork retails for an average price of
$1.25 per pound. Thus, the farm retail price spread
varies from 17 to 46 cents a pound as compared to a
farm retail price spread of 38 cents per pound in the


U.S. mainland. It thus appears that some sectors of
the local pork marketing system are operating very
efficiently and others are not.
If it is economically feasible to expand local pork
production, a more organized marketing system will
have to be developed in order to effectively market
the larger output. However, it should be noted that
local production does provide consumers with pork
at a price that is from 16 to 26 percent lower than
imported pork products.
Small stores on St. Croix buy some imported pork
products from independent wholesalers. The price of
pork chops from these wholesalers varies from 90 to
98 cents a pound and they sell for an average retail
price of $1.35 per pound. The wholesale-to-retail
price spread for these pork products varies from 30
cents to 39 cents, which is considerably above the av-
erage wholesale-retail price spread of 19 cents in the
U.S. mainland.
Butchershops and small stores on St. Thomas re-
ceive their pork through the same channels they re-
ceive beef. Pork wholesalers servicing this market
obtain their product from brokers in the U.S. main-
land. The wholesale price of pork chops from this
source varies from 90 cents to $1.45 per pound, de-
pending on cut, and the average retail price in small
stores was approximately $1.69 a pound.


Table 11.-Comparative retail meat prices, U.S. Virgin Islands, June 20-July 1, 1973


Butcher Ave. small Ave. small Supermarket Supermarket
Product shop prices, store price, store price, prices, prices,
St. Croix St. Croix St. Thomas' Virgin Islands New Jersey

-- ----------------------------------Dollars ___ -- ----
Sirloin steak (with bone) 1.40 1.55 2.69 1.85 1.59-1.69
Sirloin steak (clear) 1.45-1.50 1.69
T-Bone 1.40 2.29 2.09
Fillet 1.95 3.99 3.79
Liver 1.10-1.20 .85
Ground chuck 1.10 1.49 1.29 1.09
Stew meat 1.10 1.25 1.49 1.49 1.39-1.49
Lamb chops 1.25-1.60 2.89 1.65-2.25 2.29-2.39
Pork chops 1.25 1.35 1.69 1.49-1.61 1.59-1.69
Goat 1.30-1.60 -
Whole .70 .75 .75 .59-.79 .59
Chicken legs .75 .89 .99 .99-1.08 .99

'The sample of stores on St. Thomas was much smaller than that on St. Croix; hence, these average price fig-
ures may not be as statistically reliable as those for St. Croix.










Goat and Mutton
The availability of locally produced goat and mut-
ton for commercial sale is very limited and the chan-
nels for marketing these products are very informal.
A significant portion of the local sheep and goat
herds is produced for home consumption, and,
hence, the meat never enters commercial channels.
The animals that do enter the commercial channels
are usually purchased on the hoof by local butchers
who provide the necessary transportation. Occasion-
ally, however, some producer will deliver a dressed
carcass to the butcher. Goats and sheep on the hoof
sell for 55 to 60 cents per pound; dressed prices
range from $1.00 to $1.15 a pound. A substantial
amount of the goat products sold through local
butcher shops is imported from Puerto Rico and
Texas. These carcasses are frozen and wholesale for
approximately $1.10 per pound. Retail prices for
goat and mutton products range from $1.30 to $1.60
per pound. Thus, the farm-retail price spread for
these products ranges from $.70 to $1.05 per pound,
which is considerably greater than the spread of ap-
proximately 59 cents in the U.S. mainland. Although
these spreads may not be directly comparable, be-
cause of different breeds and dressing percentages,
most of the larger margin can probably be attributed
to the unorganized nature of the marketing systems
for these products. If production of goat and mutton
products is expanded to any significant extent, more
efficient marketing channels will have to be devel-
oped.

Poultry and Eggs
The marketing system for local poultry products
on St. Croix is fairly simple. Producers sell the largest
quantity of their eggs through home deliveries, but
some producers also deliver to small independent
grocery stores, hotels, and restaurants. The price re-
ceived for large eggs varied from $1.00 to $1.25 a
dozen and the price received for mediums varied
from 65 cents to $1.00 a dozen at the time of this
study. No producers distribute to chain supermarkets
at present. When examining these prices in terms of
expanding production, it must be emphasized that
present producers sell a relatively small volume of
eggs to a specialized market. If egg production was
expanded to any large extent, the eggs would have to
be marketed through the more conventional chain
store channels and producers could not expect to


receive the premium prices they presently enjoy from
their specialized channels. They could expect to re-
ceive a price that equaled the Miami price plus trans-
portation cost and a breakage factor. As mentioned
previously, the breakage factor for large and extra
large eggs is probably high enough that producers
could obtain a somewhat premium price for these
eggs. However, the market for large eggs that sell at
20 cents per dozen over medium eggs will still be
quite limited.
Local poultry meat production on St. Croix is limit-
ed to the selling of cull birds by egg producers. These
producers advertise the sale of their flocks in local
newspapers and sell their birds live to individuals at
from 60 cents to $2.00 each.
Independent grocery stores on St. Croix and St.
Thomas are supplied poultry and egg products by
primarily two types of wholesalers. One type receives
their poultry and egg products from a central distri-
bution center in the U.S. mainland and distributes
these supplies between independent groceries. They
also supply one of the chain supermarkets with eggs.
The other type of wholesaler operating primarily on
St. Thomas buys eggs directly from large producers
and poultry products directly from packers in the
U.S. mainland. They then distribute these products
to independent groceries and some hotels and restau-
rants. The average wholesale price for medium eggs,
at the time of this study, was 73Y cents a dozen and
the average retail price was $1.00 a dozen in inde-
pendent groceries and 86 cents a dozen in chain su-
permarkets.
The wholesale price for whole chickens varied
from 55 to 74 cents a pound, depending on grade
and wholesaler, and the wholesale price of chicken
legs varied from 70 to 88 cents a pound. The retail
price on whole chickens in small stores and butcher-
shops varied from 7( to 85 cents a pound, and for
legs from 75 to 99 cents a pound.

Fluid Whole Milk
The marketing system for fluid whole milk in the
Virgin Islands is characterized by the existence of two
* local monopoly processors, one on St. Croix and the
other on St. Thomas. The processor on St. Thomas
has a completely vertically integrated operation. He
produces all the milk he processes and he delivers this
milk to supermarkets, independent groceries, hotels
and restaurants. He is the sole source of fluid whole
milk on St. Thomas. This processor also reconstitutes








milk and sells it to supermarkets, independent gro-
cery stores, retailers on other islands, and the school-
lunch program. He also produces a fairly full line of
dairy products. The delivered price of fluid whole
milk on St. Thomas is 36 cents a quart and the deliv-
ered price of reconstituted milk is 34 cents a quart.
Prices in the supermarkets are 37 cents and 35 cents
respectively.
On St. Croix the only processor of fluid whole milk
is partially vertically integrated but he also purchases
milk from six other producers. This processor picks
up milk at the farm, processes it, and distributes it to
hotels, restaurants, independent grocery stores, and
chain supermarkets. He also sells reconstituted milk
to the school lunch program and produces some
dairy products as a service item for some customers.
This processor pays farmers 23 cents a quart for raw
milk and wholesales processed fluid whole milk for 36
cents a quart. The out-of-store price for this milk var-
ies from 37 cents a quart in chain supermarkets to 41
cents in independent grocery stores. Thus, the farm-
retail price spread for fluid whole milk on St. Croix
varies from 13.5 to 17.5 cents a quart. This compares
quite favorably with the average farm-retail price
spread of 15 cents a quart in the U.S. mainland. In
fact, it appears that the fluid milk marketing system is
operating quite efficiently on St. Croix in view of the
following facts:
1. The U.S. mainland margin is based on half-gal-
lons, which generally have a smaller farm-retail price
spread than quarts. The St. Croix figures are based
on quarts.
2. The capacity of the St. Croix processing facility
is approximately 20,000 pounds a day, which is small
in comparison to processing plants in the U.S. main-
land. Hence, since St. Croix plants cannot achieve the
economies of scale obtained by U.S. plants, a larger
marketing margin would be expected.

Supermarket Distribution System
There are two chain supermarkets, Grand Union
and Pueblo, providing a full line of livestock products
to Virgin Islands consumers. These markets service
both St. Thomas and St. Croix.
Grand Union is a chain based in the U.S. mainland
In their Virgin Islands stores, they market some local.
ly produced beef products purchase from a local
wholesaler but most of their fresh beef is imported
from the U.S. mainland. They also market some fro-
zen beef imported from Costa Rica. All the fluid milk


products marketed in the Virgin Islands Grand Un-
ion stores are purchased from local processors, but
most of the processed dairy products are imported
from the U.S. mainland. In previous years, Grand
Union has purchased some locally produced eggs but
there were problems in obtaining a constant supply.
At present, Grand Union purchases their eggs from a
local wholesaler who imports them from the U.S.
mainland. All of Grand Union's chicken and pork
products are imported from the U.S. mainland. Goat
products are purchased frozen from Puerto Rico.
The Grand Union Company has always followed a
policy of purchasing local agricultural products when
they are available in sufficient quantity and quality.
This policy pertains not only to the Virgin Islands but
also to the U.S. mainland. Hence, if sufficient quanti-
ties of good quality locally produced livestock prod-
ucts were available, it appears that the Grand Union
supermarkets would potentially be a very viable retail
outlet.
All livestock products shipped to the Virgin Islands
from the U.S. mainland by the Grand Union Compa-
ny originate from their Washington, D.C. warehouse.
From this warehouse, the products are transported
by ship to Puerto Rico. The ships are then reloaded in
Puerto Rico and sent on to St. Thomas and St. Croix.
Pueblo Inc., the other supermarket chain serving
the Virgin Islands, is a Puerto Rico-based firm. Ex-
cept for fluid milk, Pueblo does not market any local-
ly produced livestock products. All of the fresh beef
marketed in Pueblo outlets is produced in the U.S.
mainland from primarily two packing houses. This
beef is shipped out of the Port of New York. Frozen
beef products, which comprise approximately 30
percent of total beef sales, are purchased from Costa
Rica. All pork marketed in Pueblo outlets is frozen,
and about 80 percent originates in the U.S. mainland
and 20 percent from Puerto Rico All of the chicken
products sold in Pueblo outlets originate in the U.S.
mainland and are sold frozen. All eggs sold by Pueblo
also are imported from the U.S. mainland.
It was hard to gauge the feeling of Pueblo manage-
ment towards the marketing of locally produced live-
stock products. However, it appeared that Pueblo was
not as amenable to marketing such products as was
the Grand Union Company. Again, it may be possible
to convince Pueblo management to market locally
produced livestock products if they could be assured
of a constant supply.
Retail prices for livestock products in the two











chains were virtually identical. It was not possible to
obtain information on raw product prices paid or
marketing margins utilized by these firms. However,
at the time of the study choice steers in Omaha were
selling at an average price of $46.50 per cwt.; hogs in
Omaha at an average price of $39.80 per cwt.;
dressed grade A broilers in New York for 45 cents a
pound; and large white eggs in Chicago were selling
for 56.5 cents a dozen. The comparison of average
retail meat prices in the Virgin Islands and U.S.
mainland supermarkets (Table 11) indicated that
these chains were probably not exploiting their local
competitive position and that their Virgin Islands
marketing margins were probably similar to those in
the U.S. mainland. This is especially true when the
factor of additional handling and transportation costs
is considered.
There is also one discount supermarket .operating
on St. Croix that markets a very limited line of live-
stock products. This line is comprised of fluid whole
milk, frozen poultry and poultry parts, eggs, and
some processed dairy products. All of these products
except the fluid whole milk are imported from the
U.S. mainland. Due to the nature of its marketing
mix, this supermarket will probably not be a viable
potential outlet for locally produced livestock prod-
ucts other than fluid whole milk.

Institutional Distribution System
Except for fluid whole milk and some fresh eggs,
most of the livestock products marketed through
hotels and restaurants-are imported. The only restau-
rants utilizing locally produced livestock products are
those catering to primarily the native market. These
establishments purchase their meat produrit from
iocarbutchers. All of the fiii'd whole milk marketed
through these institutions is produced and processed
locally.
The institutional livestock distribution system is
dominated by two firms on St. Croix and three on St.
Thomas. Two of the dominant firms operate on both
St. Croix and St. Thomas. The third one on St.
Thomas caters primarily to the native restaurant
trade. A number of smaller firms also distribute some
livestock products to hotels and restaurants, and at
least one St. Croix hotel imports some of its livestock
products directly from the U.S. mainland. These
organizations account for probably no more than 5
percent of the total institutional business.


The two dominant firms, which handle most ot the
business for institutions serving tourists, carry a very
similar product line. The livestock products handled
by these firms are very high quality; all of the red
meat is USDA choice or prime. Most of the red meat
products are sold in portion controlled cuts, oven
ready. All livestock products except butter, hams, and
some cheeses are imported trom the U.S. mainland
and they are shipped in containerized vessels from
either New York or Miami. Butter. hams. and ap-
proximately 75 percent of the cheese products are
imported from EuroptA representative list of aver-
age wholesale prices charged by these firms is pres-
ented in Table A- 12.
On the basis of price, the institutional livestock
market within the Virgin Islands appears to be a very
attractive potential outlet for locally produced meat
products. However, because ot several problems re-
lating to grade and marketing services, this market is
riot, at present, open to local producers. First. the
beet sold in this market is all either USDA choice or
prime and Virgin Islands producers would have to go
into the feedlot business to produce these grades of
product. Second, the institutions are service-oriented
businesses and they are interested in a consistent
year-round supply that would vary in quantity with
the tourist season. They are also interested in buving
from wholesalers who can supply a well-rounded
product line and not just a few items. This second
fact would preclude Virgin Islands wholesalers trom
marketing just a speciality product, such as lamb, to
the institutions without also having a tairly complete
line of other products, particularly beet. L.onverseiy,
if a beef line was developed it would probably be pos-
sible and desirable to market some other livestock
products through this channel. Third, institutional
buyers demand a portion cut, oven-ready product.
Providing this type of a product would necessitate
developing a meat fabricating facility on the Islands.
It should be realized that institutional buyers have
a high demand for certain meat cuts, such as steaks,
and little or no demand for other products such as
stew meat and tripe. Therefore, a profitable institu-
tional supply business depends, in part, on a second-
ary market for products not demanded by the institu-
tions. It is quite possible that this secondary market
exists within the Virgin Islands among the low and
middle-low income consumers. This would certainly
be true if the secondary beef products were priced at
a level similar to the locally produced grass-fed beef.










This could be done if the local institutional wholesal-
er utilized a form of third-degree price discrimina-
tion where, in a sense, he may take a small loss on sec-
ondary beef products which would be more than
offset by the higher profits obtained on products sold
to the institutions. It should be noted that this prac-
tice would provide an economic benefit to low income
consumers. Finally, it should be realized that the
whole feasibility of this type of operation depends on
the feasibility of producing grain-fed livestock on the
Islands.

MARKETING STRUCTURE AND POTENTIAL
Because of the present structure of the marketing
systems for local livestock products, certain segments
of total market potential are more easily realized than
are others.
The St. Croix system for marketing local beef
products through independent grocery stores, butch-
er shops, and restaurants serving the native popula-
tion is fairly well developed. The present system
could probably efficiently market twice its present
beef production. This is particularly true since a large
producer of local beef has embarked on a wholesale
marketing operation and plans to expand his facilities
in accord with raw product availability. Also, as men-
tioned previously, the abattoir is operating at only 35
percent capacity and it could greatly increase its out-
put. The present system could also supply expanded
supermarket sales of local beef if an adequate supply
was available. It should be realized that the market
for grass-fed beef through supermarket outlets is


Butchers preparing consumer-size cuts in a local meat
market in Christiansted, St. Croix.


somewhat limited and will probably decline if con-
sumers develop a preference for grain-fed beef. Also,
it may be difficult to convince the Pueblo chain to
market local heef. The beef-marketing system could
also efficiently market any grain-fed beef produced
for consumption on St. Croix.
If the production of grass-fed beef on St. Croix was
expanded beyond the level of local demand, at pres-
ent prices, excess supplies could be shipped to St.
Thomas where a ready market for this beef exists. To
facilitate the distribution of this beef on St. Thomas,
the St. Croix wholesaler would probably sell his beef
to a St. Thomas wholesaler, such as Merchants Mar-
ket, which has an established system for marketing
imported grass-fed beef products to independent
grocers and restaurants serving the native trade.
With this type of distribution system, retail prices for
grass-fed beef on St. Thomas could probably be re-
duced.
The present marketing systems for hogs. mutton,
and goat products are very unorganized. If there was
to be any substantial increase in the production ot
these products, a more organized system would have
to be developed to ensure efficient market perform-
ance. It is quite possible that wholesalers presently
marketing beef products would also provide market-
ing services for these products if sufficient supply
were available. Again, the excess abattoir capacity
would facilitate the expansion of goat, mutton, and
hog production since a new major processing facility
would not have to be constructed.
The marketing of poultry products is also very
unorganized at the present time. Large scale egg
production would require a much broader distribu-
tion system than exists at present. In order to develop
a broiler industry, an entirely new distribution would
have to be established. This .type of industry would
also require a new facility to process the broiler prod-
ucts. Thus, there could be substantial marketing ori-
ented costs associated with the development of a
broiler industry.
If production of meat products is increased on the
U.S. Virgin Islands, consideration should be given to
developing a facility to produce processed meat prod-
ucts, which comprise over 15 percent of all meat
products consumed on the Islands. The production
of processed meat products would result in a greater
utilization of total livestock production and perhaps
provide a relatively inexpensive source of animal pro-
tein for local consumers.
The marketing systems for fluid milk on St. Croix










and St. Thomas are fairly well-developed and appear
to be operating relatively efficiently. Both systems are
capable of marketing the increases in total demand
expected over the next 10 years. The processing of
this expanding output, if available, will probably re-
quire a two-shift operation at each of the processing


plants and an expansion of delivery routes. However,
if anything, this expanded production will probably
result in more efficient marketing, since fixed re-
sources will be more fully utilized and the percentage
increase of variable inputs will probably not be as
great as expanded output.











APPENDIX
Table A-1.-Per-capita consumption figures, 1971, and estimated consumption


Per-capita Estimated per-capita
consumption for consumption for Estimated per-capita Per-capita
Product total population, resident population consumption for native consumption for
U.S. Virgin Islands U.S. Virgin Islands population, U.S.V.I. Continental U.S.
Pounds -------------------------------
Beef and veal 74.7 63.5 55.3 108
Pork 35.5 28.8 23 60.2
Poultry 108 112 124 50.1
Lamb and mutton 5.7 5.91 6.4 3.1
Edible offals 5.0 4.5 3.3 11.1
Eggs (doz.) 18.4 16.7 14.8 26.8
Fluid milk and cream 43.2 38.2 25.4 107.2
Other dairy products 34.2 27.6 10.6 120.5


Explanation of Estimated Per-Capita Figures in
Table A- I
Figures in the first column of Table A-1, per capi-
ta consumption for the total population of the U.S.
Virgin Islands, were estimated by dividing total island
consumption by the sum of the tourist and resident
populations. The figure for resident population was
obtained from Table 1. The estimate of tourist equiv-
alent population, from the standpoint of food con-
sumption, was made by using a set of data transfor-
mations developed by Robert Bohall for use in the
V.I. Agr. Exp. Sta. Report No. 2, "Fruits and Vegeta-
bles: Production and Consumption Potentials and
Marketing Problems in the U.S. Virgin Islands."
These transformations were:
1. Cruise ship passengers consume an average of
one meal on the island, three meals equaling one
tourist day.
2. Air arrivals spend an average of three tourists
days on the islands. The average tourist day may be
slightly longer, but this is partially offset by the fact
that many Virgin Island residents travel to other
areas for business and vacation.
3. Navy.personnel spend an average of two tourist
days on the Islands.
4. Ferry passengers and Antilles Air Passengers
were excluded from the analysis, since they tend to
represent traffic which is offset by Virgin Islands busi-
nessmen and tourists visiting other areas.
5. Each set of 365 tourist days represents one tour-
ist equivalent resident.


By utilizing these transformations, a tourist equiva-
lent population of 6,320 was estimated for 1971,
which meant the total food-consuming population
was 86,150. The figures in Column 2 were computed
by subtracting estimated tourist consumption from
total consumption for the various food groupings
and dividing by resident population. For purposes of
this analysis, it was assumed that, on the average,
tourists will consume twice as much beef and pork
per capital and 1.5 times as many eggs as the average
mainland consumer. This is due to the fact that peo-
ple on vacation tend to consume more beef and pork
and eat more full breakfasts than at home and also
because tourists tend to have a higher average income
than the average mainland consumer. This last factor
is particularly important in determining beef and
pork consumption. In the other livestock product
categories, it was assumed that tourists would have
the same per-capita consumption patterns as the av-
erage mainland consumer.
Column 3 was calculated by subtracting the esti-
mated consumption of various meat products by con-
tinentals and tourists from total consumption and
dividing by an estimated native population. It was
assumed that continentals have the same consump-
tion patterns as the average mainland consumer.
Finally, all figures in Column 4, except those for
beef and pork, were taken directly from published
USDA figures on per-capita consumption. The beef
and pork figures had to be adjusted to make them
compatible with Virgin Islands consumption figures,












because the Virgin Islands data contained a mixture of
retail weight and carcass weight statistics. The data
were adjusted by utilizing estimates that 75 percent of
Virgin Islands beef consumption represented carcass


weight and 25 percent represented retail cut weight,
and 50 percent of pork consumption represented re-
tail cut weight and 50 percent represented carcass
weight.


Table A-2.-Fresh-frozen beef imports into the U.S. Virgin Islands, 1970-72


1970 1971 1972
Average Average Average
Point of shipment Quantity price per Quantity price per Quantity price per
pound pound pound

Pounds Dollars Pounds Dollars Pounds Dollars
Miami 1,278,908 1.04 1,069,222 1.08 979,093 1.09
New York 25,644 .87 161,941 1.47 160,796 1.66
San Juan 5,818,977 .67 4,173,222 .66 2,529,330 .68
Tampa 24,079 .86 66,142 1.05 53,305 1.15
Foreign 532,120 .56 316,156 .61 533,217 .65
TOTAL 7,679,730 .72 5,786,683 .72 4,255,741 .78
Percent change from
previous year -- -25% 0 -26% +8%

Source: U.S. Dept. of Commerce

Table A-3-Fresh and frozen pork imports into the U.S. Virgin Islands, 1970-72

1970 1971 1972
Point of origin Quantity Average Quantity Average Quantity Average
and item price price price

Cwt. Dollars Cwt. Dollars Cwt. Dollars
San Juan
Pork carcasses 11,008 .43 15,159 .38 9,585 .40
Fresh ham shoulder 468 .46 414 .53 145 .60
Cut pork (excludes offals) 4,890 .49 5,695 .47 2,118 .68
Miami
Pork carcasses 102 .46 106 .41
Fresh ham shoulder 77 .88 37 .53 269 .44
Cut pork (excludes offals) 2,968 .63 3,128 .50 3,127 .58
New York
Pork carcasses - 81 .39
Cut pork (excludes offals) 2,045 .72 379 .38 669 .49
Tampa
Cut pork (excludes offals) 2,688 .46 3,656 .43 2,075 .58
Foreign
Pork ham shoulders 242 .77 327 .71 244 .69
TOTALS
Carcasses 11,008 .43 15,261 .38 9,772 .40
Fresh hams 787 .60 778 .60 658 .57
Cut pork 12,591 .55 12,858 .46 7,989 .60
GRAND TOTAL 24,386 .50 28,897 .42 18,420 .49
Percent change from
previous year +18% -16% -36% +17%












Table A-4.-Poultry imports into the U.S. Virgin Islands, 1970-72


1970 1971 1972
Point of origin Ave. price Ave. price Ave. price
and item Quantity per pound Quantity per pound Quantity per pound

Cwt. Dollars Cwt. Dollars Cwt. Dollars
New York
Chickens 19 .56 69 .36 977 .42
Chicken parts 53 .34 141 .45 915 .43
Other poultry 114 .50 17 .55 193 .53
Poultry livers --- 22 .68
Miami
Chickens 5,885 .33 4,140 .31 4,280 .355
Chicken parts 8,039 .34 10,085 .34 10,278 .38
Other poultry 568 .60 2,629 .39 12,541 .34
Poultry livers 10 .38 138 .47
San Juan
Chickens 17,753 .31 17,833 .33 7,410 .33
Chicken parts 25,556 .36 34,347 .37 25,977 .44
Other poultry 7,378 .48 2,489 .56 1,528 .55
Poultry livers 115 1.24 57 1.27 13,138 .30
Tampa
Chickens 14,983 .30 18,276 .32 6,586 .33
Chicken parts 4,080 .32 2,672 .32 6,246 .345
Other U.S. ports
Chickens 350 .43
Chicken parts 25 .56 73 .67 106 .44
TOTALS
Total chickens 38,639 .31 40,317 .32 19,602 .34
Total chicken parts 37,753 .35 47,328 .36 43,522 .40
Total other poultry 8,059 .49 5,185 .48 14,263 .36
Total poultry livers 125 1.17 58 1.27 13,298 .30
TOTAL ALL POULTRY 84,576 .35 92,836 .35 90,685 .37
Change from previous year +9.8% 0 -2.3% +5.7%










Table A-5.-Miscellaneous meat products imports into the U.S. Virgin Islands, 1970-72

1970 1971 1972
Point of origin Ave. price Ave. price Ave. price
and item Quantity per found Quantity per pound Quantity per pound

Pounds Dollars Pounds Dollars Pounds Dollars
San Juan
Meat of bovine animals 41,864 1.54 62,562 1.23 424,193 .35
Goat, lamb, mutton 224,600 .63 235,325 .52 194,900 .49
Miami
Meat of bovine animals 13,482 .76 86,942 .52 42,347 .70
Goat, lamb, mutton 47,197 1.01 54,138 .77 91,545 .78
New York
Meat of bovine animals 214 3.29 10,056 2.26
Goat, lamb, mutton -- 385 1.92 8,170 1.43
Tampa
Meat of bovine animals 845 1.25 -
Goat, lamb, mutton 56,989 .26 112,867 .29 67,193 .34
Foreign
Veal 27,714 .51 44,000 .56
Goat, lamb, mutton 134,226 .41 70,394 .41 232,080 .38
Corned beef 300,100 .58 205,234 .89 307,020 .89
TOTALS
Meat of bovine animals 55,346 1.35 178,277 .77 520,600 .43
Goat, lamb, mutton 463,012 .61 473,109 .48 593,890 .49
Corned beef 300,100 .56 205,234 .89 307,020 .89
TOTAL ALL PRODUCTS 818,458 .64 856,620 .64 1,421,510 .55
Change from previous year +5% 0 +66% -14%












Table A-6.-Processed meat products imports into the U.S. Virgin Islands, 1970-72


1970 1971 1972
Point of origin Price Price Price
and item Quantity per pound Quantity per pound Quantity per pound


Pounds Dollars


Sail Juan
Pork, ham cured
Other cured pork
Dried beef, pork, poultry
Sausage, bologna, franks
Canned meat products
Other meat products
(not canned)
Miami
Pork, ham cured
Other cured pork
Dried beef, pork, poultry
Sausage, bologna, franks
Canned meat products
Other meat products
(not canned)
New York
Pork, ham cured
Other cured pork
Dried beef, pork, poultry
Sausage, bologna, franks
Canned meat products
Other meat products
(not canned)
Other U.S. ports
Other cured pork
Dried beef, pork, poultry
Sausage, bologna, franks
Canned meat products
Foreign
Pork, ham cured
Sausage, bologna, franks
TOTALS
Pork, ham cured
Other cured pork
Dried beef, pork, poultry
Sausage, bologna, franks
Canned meat products
Other meat products
(not canned)
TOTAL PROCESSED
MEATS
Change from previous year


798,714
84,661
67,937
392,143
231,881

27,492

29,248
63,376
16,685
105,701
34,859

69,829

2,721
17,665
24,216
26,043
61,721

64,419




33,750

201,381
87,810

1,032,064
165,702
108,838
611,700
362,211

161,740

2,442,260


Pounds

1,006,955
118,545
57,341
384,195
282,075

91,543

76,944
55,513
8,309
109,351
191,345

12,955

28,005
27,750
6,825
17,250
26,682

27,597


- 64,438
- 3,500
- 10,700
.52 576


194,380
57,368

1,306,284
266,246
75,975
578,864
500,678

132,095


Dollars

.63
.53
.54
.55
.71


Pounds

550,763
86,125
65,259
267,033
587,190


.36 558,724


27,576
137,126
45,652
141,977
253,290

21,022

51,977
20,970
5,300
21,195
64,291

2,108

77,035
12,805
12,960
42,637


.71 221,169
.67 51,503


851,385
321,256
129,016
494,668
947,408


Dollars

.61
.46
.49
.66
.53

.30

1.02
.65
.59
.83
.40

1.04

.60
.80
.54
.82
.80

1.29

.29
.54
.41
.87

.74
.77

.66
.52
.53
.72
.53


.79 581,854


.65 2,860,142 .61 3,325,587 .56
+17% -6% +16% -8.2%








Table A-7.-Liver and offal imports into the UiS. Virgin Islands, 1970-72


1970 1971 1972
Point of origin Ave. price Ave. price Ave. price
and item Quantity per pound Quantity per pound Quantity per pound

Pounds Dollars Pounds Dollars Pounds Dollars
San Juan
Beef and veal 200,434 .49 82,033 .56 78,821 .50
Lamb and mutton 200,180 .61 184,244 .54 127,900 .53
Pork and other 232,772 .25 83,031 .22 51,375 .39
Tampa
Beef and veal 14,819 .16
Pork and other 8,250 .22 24,540 .22 8,400 .16
Miami
Beef and veal 37,836 .52 39,241 .34 121,717 .73
Lamb and mutton 2,484 1.56 3,676 1.61 18,290 1.13
Pork and other 12,637 .24 12,958 .81 155,556 .30
TOTALS
Beef and veal 238,270 .50 121,274 .49 215,357 .61
Lamb and mutton 202,664 .62 187,920 .56 146,190 .60
Pork and other 253,659 .25 120,529 .28 215,331 .31
TOTAL LIVER
AND OFFALS 694,593 .44 429,723 .46 576,878 .50
Change from previous year -38% +4.5% +34% +8.7%




Table A-8.-Egg imports into the US. Virgin Islands, 1970-72


1970 1971 1972
Point of origin Ave. price Ave. price Ave. price
and item Quantity per dozen Quantity per dozen Quantity per dozen

Dozen Dollars Dozen Dollars Dozen Dollars
San Juan
Shell 704,190 .42 664,830 .46 420,440 .49
Other 23,180 .50 27,674 .48 -
Miami
Shell 760,660 .34 716,212 .32 924,551 .32
Other 20,480 .32 1,000 .52 17,288 .58
Tampa
Shell 19,050 .30 57,390 .33
Other -- -
New York
Shell -- 1,550 .34 9,100 .46
Other 496 1.13 --
Total
Shell 1,464,854 .38 1,401,645 .39 1,411,482 .38
Other 43,659 .41 29,170 .49 17,288 .58
GRAND TOTAL 1,508,513 .38 1,430,851 .39 1,428,770 .38
Change from previous year -5.1% +2.6% 2 -.1% -2.6%












Table A-9.-Dairy imports into the U.S. Virgin Islands, 1970-72


1970 1971 1972
Point of origin Value Value Value
and item Quantity per pound Quantity per pound Quantity per pound

Pounds Dollars Pounds Dollars Pounds Dollars
San Juan
Evap. and condensed milk
and cream 1,789,100 .175 655,840 .21 740,630 .18
Whole dry milk 241,960 103,570 38,400 -
Non-fat dry milk 272,120 .26 365,390 .24 204,790 .26
Fresh milk & cream (gal.) 7,310 1.29 10,421 1.50 9,734 2.20
Butter 195,100 .61 130,930 .55 129,610 .48
Natural cheese & curd 366,620 .44 443,680 .47 626,500 .41
Processed cheese 264,970 .51 97,970 .59 440,860 .28
Miami
Evap. and condensed milk
and cream 5,630 .21 40,595 .21 33,840 .20
Whole dry milk 63,063 .26 10,475 .34 12,450 .27
Non-fat dry milk 73,171 .16 -
Fresh milk & cream (gal.) 1,157 2.90 751 2.83 88,100 .90
Butter 92,701 .52 67,239 .77
Natural and curd cheese 6,012 .71 15,423 .75 15,967 .93
Processed cheese 25,350 .71 30,297 .58 51,030 .63
New York
Evap. and condensed milk
and cream 74,027 .32
Whole dry milk 17,835 .26 840 .89 40,000 .29
Non-fat dry milk 468,000 .10 198,080 .12 221,236 .20
Butter -- 900 .78 62,128 .33
Natural and curd cheese 20,650 .53 4,310 .29 18,620 .29
Other U.S. ports
Non-fat dry milk 51,000 .46
Butter 4,773 1.00 59,750 .73
Foreign
Fresh milk, cream 4,130 .38 3,231 .93
Butter 656,649 .23 625,706 .39 181,880 .61
Cheese 69,799 .47 51,973 .54 51,360 .76
TOTALS:
Evap. and condensed milk 1,794,730 .18 696,437 .21 848,493 .20
Whole dry milk 332,862 .25 114,884 .29 90,850 .25
Non-fat dry milk 740,137 .16 636,642 .19 447,027 .26
Butter 851,746 .32 855,010 .43 544,579 .58
Natural cheese and curd 393,278 .45 463,417 .47 661,094 .42
Processed cheese 290,318 .53 128,068 .59 491,894 .31
Imported cheese 69,799 .47 51,973 .54 51,360 .76
GRAND TOTAL
(excludes fresh milk) 4,472,870 .26 2,946,431 .37 3,135,287 .35
Change from previous year -34% +42% +6% -9%
Fresh milk and cream (gal.) 12,597 1.14 11,172 1.59 101,065 1.03
Change from previous year -- -11% +39% +905% -35%











Table A-10.-Comparison of final product and grain
equivalent transportation costs

Feed
required Feed Cost to
to produce trans- transport
Product a pound porta- a pound Difference
of final tion of final
product cost' product'
Pounds -- ___Dollars....---....-
Grain fed beef 13 .32 .042 -.278
(carcass
weight)
Pork 5.4 .133 .042 -.091
(carcass
weight)
Broilers 3.5 .086 .028 -.058
Eggs 2.87 .07 .035 -.035

'Conversion ratios used are for Virgin Islands condi-
tions and were supplied by Robert L. Park, livestock
specialist.
Transportation costs are calculated from Miami.


Table A-IL-Cost of running St. Croix abattoir


Cost for
Item fiscal year
1972
Dollars
Labor and personal services 94,025
Utilities and insurance 12,000
F.I.C.A. and retirement 10,919
Maintenance and repairs 12,000
Depreciation' 8,000
Interest on investment at 8% 10,000
Other operating expenses 7,789
TOTAL 154,733
Estimated cost per pound (liveweight) .096
Estimated cost per pound (carcass) .164
Estimated % of capacity of operation 35%
Estimated liveweight cost per pound,
less interest .09
Estimated liveweight cost per pound,
less interest and depreciation .085

The depreciation figure should be approximately 50%
higher, but some equipment replacement costs were in-
cluded in the maintenance and repair figure.
Costs in this table were derived from figures obtained
from the V.I. Dept. of Agriculture.


Table A-12. Average livestock product prices charged
to hotels and restaurants by institutional wholesalers

Portion Price per
Product size pound
Ounces Dollars
Choice strip loin steak 10 4.40
Filet mignon 8 5.48
Prime tenderloin steaks 8 5.54
Choice filet of sirloin steaks 7 3.08
Choice T-Bone steaks 12 3.73
Salisbury steak 6 1.31
Choice stew beef 2.07
Ground beef patties, lean 4 1.36
Chopped sirloin steak 8 1.38
Choice top round roast 1.83
Breaded veal steaks 4 .96
Calves liver 4 3.25
Choice loin lamb chops 4 4.36
Lamb for stew 2.10
Center cut pork chops 5 2.51
Center cut pork roast 1.80
Rock Cornish hens 16 1.20
Split broilers 12 .92
Premium turkeys .79
Chicken legs .86
Belgium butter .89


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