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Title: Market structure and economic analysis of the Florida sweet corn industry
Physical Description: xiii, 198 leaves : ill. ; 28 cm.
Language: English
Creator: Bell, James Bailey, 1932-
Publication Date: 1964
Copyright Date: 1964
 Subjects
Subject: Sweet corn -- Marketing -- Florida   ( lcsh )
Corn -- Marketing -- Florida   ( lcsh )
Agricultural Economics thesis Ph. D
Dissertations, Academic -- Agricultural Economics -- UF
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Thesis: Thesis (Ph. D.)--University of Florida, 1964.
Bibliography: Includes bibliographical references (leaves 165-166).
Additional Physical Form: Also available on World Wide Web
General Note: Typescript.
General Note: Vita.
Statement of Responsibility: by James Bailey Bell.
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Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: alephbibnum - 000420272
oclc - 37441262
notis - ACG8087

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MARKET STRUCTURE AND ECONOMIC

ANALYSIS OF THE FLORIDA

SWEET CORN INDUSTRY












By
JAMES BAILEY BELL


A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY











UNIVERSITY OF FLORIDA


August, 1964

















2'- 0.37 1
5 +43 m

AGRI-
CULTURAL
tre JAP, AY















ACKNOWLEDGMENTS


The writer wishes to express his sincere appreciation to

Dr. D. L. Brooke for his guidance in conducting the research upon

which this dissertation is based and for his constructive sug-

gestions on the preparation of the manuscript. The author is

indebted to Dr. C. N. Smith, Dr. E. W. Cake and Dr. R. H. Blodgett

for their helpful suggestions for improving the content and

structure of the dissertation. Appreciation is also expressed

to Mr. W. B. Riggan for his assistance in formulating the ex-

perimental design and to the personnel of the Statistical

Laboratory for their assistance in performing the analyses.

Recognition is due to the managers of Florida sweet corn

sales firms and to the personnel of the Florida Sweet Corn Exchange

who cooperated with the writer in providing the data used in the

preparation of the dissertation.

The writer is indebted to Mrs. Barbara Altieri for aid

in editing and typing the preliminary drafts of the manuscript,

Appreciation is expressed to other members of the secretarial

staff for their assistance and to Mrs. Carole Puller who prepared

the final manuscript.















TABLE OF CONTENTS






ACKNOWLEDGMENTS..............................................

LIST OF TABLES. ........................ .. ....................

LIST OF FIGURES...........................................

Chapter

1. INTRODUCTION................. .....................

The Problem............... ... ... ..............
Purpose of Study...........................
Review of Literature .............................
Procedure......................... .........

II. THE DEVELOPMENT AND IMPORTANCE OF THE SWEET
CORN INDUSTRY... .... ...............................

United States ......................................

Early Developents..............................
Post-World War II Developments.................
Seasonal Shifts in Production..................
Important U. S. Production Areas................
Sweet Corn's Importance in the Vetetable
Industry .....................................
New Developments in Consumption Patterns.......

Florida ................................. ........

Rapid Expansion of the Industry................
Seasonality of Production......................
Production Risks...............................
Competition ....................................

III. SHIPPING POINT ORGANIZATION..........................

Growers.......... ......... ............ .. ...... .

Numbers and Sizes..... ..... ......... ...........
Sales Areas...................................


Page

ii

vil
vii

xit



1

2
3
4
6


9

9

9
10
10
11

13
13

16

16
17
19
22

25

26

26
28











TABLE OF CONTENTS--Continued



Chapter Page

Sales Firms............. ... .................... . 31

Numbers of Growers......... ................ 32
Methods of Organization....................... 33
Sizes................... .......... .. ...... ... 34
Vegetables Handled.......... ........... 35

Brokers .... ............ .. ..... ..... .. ... 37

Buying Brokers.. ........................ ...... 38
Selling Brokers................................ 38

IV. MARKET STRUCTURE AND PRACTICES AT THE
SHIPPING POINT.................................. 40

Sales Firms and Volume Observed................. 40
Grades........................................... 41
Weeks of Shipment................................ 43

Grades..................................... 44
Sales Areas................................. 49
White Corn ................................. 52
Prices......................... ..... 53
Sizes of Sales................................ 55
Sizes of Sales Firms........................... 57

Types of Buyers................................... 59

Sales Areas......................... .......... 61
Weeks of Shipment .............................. 62
Sizes of Sales Firms...................... .... 65

Bases of Sale................ .................... 66

Sales Areas .................................... 68
Weeks of Shipment............................. 69
Types of Buyers................................ 72
Sizes of Sales Firms........................... 73

Interpackinghouse Sales........................... 74

Grades......................................... .75
Sales Areas.................................... 75
Sizes of Sales Firms........................... 75
Weeks of Shipment........................... 76


Siv











TABLE OF CONTENTS--Continued


Chapter

V. TERMINAL MARKET STRUCTURE AND PRACTICES...............

Characteristics of the Market Areas...............


Seasonality.........................
Terminal Market Sizes...............
Sizes of Sales.......................


Major Markets of the Market Area.................

Northeast......................................
North Central...... ................ ..
South..........................................
Southwest......................................
Midwest........................................
West .......................... ..... ..........
Canada.........................................
Large and Medium Markets......................

Distribution of White Corn.......................
Sales Areas......................................
Sizes of Sales Firms.................... .........
Types of Buyers...................... ........
Bases of Sale............................... ..

VI. INDUSTRY ORGANIZATION AND MARKETING CHANNELS .........

The Marketing Order..............................


Purpose...............................
Administration......................
Quantity Regulations................
Quality and Container Regulations...
Unfair Trade Practices.............
Research..............................
Advertising and Promotion..........


The Florida Sweet Corn Exchange...................

Pricing.......................................
Coordination......................... .......

Evaluation by Sales Firms.........................

Selling Functions........................... .
Marketable Allotment..........................
Advertising...................... ..... .... .


Page

80

82


105
106
106
107
108
108
108

109

110
110

111

111
113
114


..........
..........
..........


...........
...........
...........
...........
...........
...........
...........










TABLE OF CONTENTS--Continued




Chapter Page

Buyer Relations ... ..... ....... ................ 115
Pricing... ... ................................. 115

Marketing Channels............................. 116

VII. THEORETICAL GUIDELINES FOR PRICE AND MARKETABLE OUTPUT 120

The Economic Model...................... ......... 120

Number of Sellers............................. 122
Collusion........... ....... ... ..... .... ....... 123
Identical Produots ........................... 124

Assumptions of the Analysis....................... 125
Short Run............ ....... ............... .... 126

Maximization of Revenue....................... 127
Evaluation.......... .......... ... ....... ..... 128

Intermediate Period............................... 129

Maximization of Profits...................... 129
Evaluation...... .. . ....... .......... ......... 131

Long Run................ ... ..... ............. ..... 134

Maximization of Profits...................... 135
Evaluation......... ............................ 137

VIII. DEMAND ANALYSIS................... ........... .... 138

Graphic Analysis................................. 138
Selection of Variables............................... 142
Regression Analysis............................... 144

Model .............. .............. ....... .... 144
Regression Equations........................... 144

Price Elasticity.................................. 146
Economic Implications........................... 149

IX. SUMMARY AND CONCLUSIONS ............................. 153

BIBLIOGRAPHY........ ............................ .. .. ... 165

APPENDICES....................................... ........... 167

BIOGRAPHICAL SKETCH....................................... 198

vi















LIST OF TABLES


Table
Number Page

1 Acreage and production of states harvesting 10,000
or more acres of fresh market sweet corn, 1963..... 12

2 Value and harvested acreage of the five principal
vegetabless produced in the United States, 1957-63 13

3 Civilian per capital consumption of fresh market sweet
corn and total vegetablesa (farm weight basis),
United States, 1920-62........,,.......,.... .... 14

4 Civilian per capital consumption of fresh market sweet
corn by seasons (farm weight basis), United States,
1949-63................................. .. .. ...... 15

5 Distribution of growers and production, by size of
grower, affiliated with 25 Florida sweet corn sales
firms, 1962-63 season.......................... 27

6 Distribution of growers and production, by size of
grower and sales area, 25 Florida sweet corn sales
firms, 1962-63 season..... ......... .,... ........ 31

7 Distribution of sales firms, by number of affiliated
growers and sales area, 25 Florida sweet corn sales
firms, 1962-63 season...o................... 32

8 Distribution of sales firms, by number of affiliated
growers and method of organization, 25 Florida sweet
corn sales firms, 1962-63 season........,....... 34

9 Distribution of sales firms and crates sold, by size
of sales firm and sales area, 25 Florida sweet corn
sales firms, 1962-63 season.... 00... ,............. 35

10 Distribution of sales firms handling 14 vegetables,
by sales area, 25 Florida sweet corn sales firms,
1962-63 season............ ....... ................. 36

11 Number of sales and crates shipped, percentage of crates
shipped, average size of sale, value of shipments and
average price per crate, by grade and type, 19 Florida
sweet corn sales firms, 1962-63 season............. 43











LIST OF TABLES--Continued


Table
Number Page

12 Distribution of crates shipped and average price per
crate, by grade and week of shipment, 19 Florida
sweet corn sales firms, 1962-63 season............. 46-47

13 Distribution of crates shipped of white and of all
corn, by sales area and week of shipment, 19 Florida
sweet corn sales firm, 1962-63 season............. 50 -51

14 Average price per crate, by sales area and week of
shipment, 19 Florida sweet corn sales firms, 1962-63
season .............. ...................... ........ 54

15 Average size of sale, by sales area and week of shipment,
19 Florida sweet corn sales firms, 1962-63 season.. 56

16 Distribution of crates shipped, by size of sales firm
and week of shipment, 19 Florida sweet corn sales
firms, 1962-63 season.............................. 58-59

17 Number of sales and crates shipped, percentage of crates
shipped, value of shipments snd average price per
crate, by type of buyer, 19 Florida sweet corn sales
firms, 1962-63 season............................. 61

18 Distribution of crates shipped, by sales area and
type of buyer, 19 Florida sweet corn sales firms,
1962-63 season.... ........... ................. 62

19 Distribution of crates shipped, by type of buyer and
week of shipment, 19 Florida sweet corn sales firms,
1962-63 season .......................................... 63-64

20 Distribution of crates shipped, by size of sales firm
and type of buyer, 19 Florida sweet corn sales firms,
1962-63 season..................................... 66

21 Number of sales and crates shipped, percentage of
crates, value of shipment and average price per
crate, by basis of sale, 19 Florida sweet corn sales
firms, 1962-63 season.............................. 67

22 Distribution of crates shipped, by sales area and basis
of sale, 19 Florida sweet corn sales firms, 1962-63
season......... ............. ...... ........ ..... 68


viii











LIST OF TABLES--Continued


Table
Number Page

23 Distribution of crates shipped, by basis of sale and
week of shipment, 19 Florida sweet corn sales firms,
1962-63 season...... .. ........ ................ ...... 70-71

24 Distribution of crates shipped, by basis of sale and
type of buyer, 19 Florida sweet corn sales firms,
1962-63 season. ... ... ... ........ ..... ....... ...... 73

25 Distribution of crates shipped, by size of sales firms
and basis of sale, 19 Florida sweet corn sales firms,
1962-63 season................... .............. 74

26 Distribution of crates shipped and purchased as inter-
packinghouse sales, by sales firm and size of sales
firm, 19 Florida sweet corn sales firms, 1962-63 season 77

27 Distribution of crates shipped and average price per
crate of interpackinghouse sales, by week of shipment,
19 Florida sweet corn sales firms, 1962-63 season.. 79

28 Number of sales and crates shipped, percentage of
crates, value of shipments and average price per crate,
by market area, 19 Florida sweet corn sales firms,
1962-63 season..... ........ ..... ..... ..... ....... 82

29 Distribution of terminal markets and crates shipped,
by terminal market size and market area, 19 Florida
sweet corn sales firms, 1962-63 season............. 86

30 Number and percentage of crates shipped to terminal
markets in the Northeast market area, 19 Florida
sweet corn sales firms, 1962-63 season............. 89

31 Number and percentage of crates shipped to terminal
markets in the North Central market area, 19 Florida
sweet corn sales firms, 1962-63 season............. 91

32 Number and percentage of crates shipped to terminal
markets in the Southern market area, 19 Florida sweet
corn sales firms, 1962-63 season................. 93

33 Number and percentage of crates shipped to terminal
markets in the Southwest market area, 19 Florida
sweet corn sales firms, 1962-63 season............. 94











LIST OF TABLES--Continued


Table
Number Page

34 Number and percentage of crates shipped to terminal
markets in the Midwestern market area, 19 Florida
sweet corn sales firas, 1962-63 season............. 95

35 Number and percentage of crates shipped to terminal
markets in the Western market area, 19 Florida sweet
corn sales firms, 1962-63 season......... ..... 96

36 Number and percentage of crates shipped to provinces
in the Canadian market area, 19 Florida sweet corn
sales firms, 1962-63 season....................... 98

37 Distribution of crates shipped by type of corn and
market area, 19 Florida sweet corn sales firms,
1962-63 season.......* *.................... ,,...... 99

38 Distribution of crates shipped, by sales area and market
area, 19 Florida sweet corn sales firms, 1962-63
season........................................o .... 100

39 Distribution of crates shipped, by size of sales firm
and market area, 19 Florida sweet corn sales firms,
1962-63 season................ ..................... 101

40 Distribution of crates shipped, by type of buyer and
market area, 19 Florida sweet corn sales firms,
1962-63 season............. ............. ............ 102

41 Distribution of crates shipped, by basis of sale and
market area, 19 Florida sweet corn sales firms,
1962-63 season............................... ..... 103

42 Effects which the Marketing Order and Exchange programs
had on certain selling functions of the firm, 20
Florida sweet corn sales firms, 1962-63 season..... 111

43 Opinions of firm managers concerning the size of the
"marketable allotment" established under the Marketing
Order, 20 Florida sweet corn sales firms, 1962-63
season ....................... ..................... 113

44 Questions on attitudes of firm managers concerning the
industry advertising program conducted under the
Marketing Order, 20 Florida sweet corn sales firms,
1962-63 season...... ................. ............ 115











LIST OF TABLES--Continued


Table
Number Page

45 Opinions of firm managers concerning the effect the
Exchange had on price levels, 20 Florida sweet
corn sales firms, 1962-63 season.................. 116

46 Assumed weekly demand schedule and marketing coat
schedule for Florida sweet corn................... 128

47 Opinions of managers on the degree of difficulty which
new sales firms would encounter in entering the Florida
sweet corn industry, 20 Florida sweet corn sales firms,
1962-63 season.................... 6 ............. 135

48 Weekly distribution of carlot shipments and f.o.b. prices
of Florida sweet corn, 1960-61 1962-63 seasons... 139

49 Pooled t test of weekly percentages, by seasonal and
price direction differences, 19 Florida sweet corn
sales firms, 1962-63 season........................ 182

50 Paired t test of weekly prices, shipment sizes and
percentages, by grade, sales area and type corn
differences, 19 Florida sweet corn sales firms,
1962-63 season............................... ..... 182

51 Independent variables and regression coefficients
selected through step four of the stepwise regression
analysis, 1960-61 through 1962-63................... 193

52 Correlation coefficients between the selected independent
variables, the dependent variable and other independent
variables within major classifications, 1960-61 through
1962-63............................. ................ 195
















LIST OF FIGURES


Figure
Number Page

1 Seasonal distribution of Florids sweet corn pro-
duction, 1947-48 through 1962-63 .................. 18

2 Seasonal harvested acreage, unharvested acreage and
yield per acre of Florida sweet corn, 1953-54
through 1962-63 seasons.......................... 20

3 Three-year average weekly distributions of interstate
sweet corn shipments from Florida and other states,
1960-61 through 1962-63.......................... 24

4 Florida sweet corn sales areas, 1962-63 season....... 29

5 Market areas and distribution of large and medium
terminal markets 19 Florida sweet corn sales firms,
1962-63 season..................................... 81

6 Three-week moving average of percentages of weekly sweet
corn shipments to seven market areas, 19 Florida sweet
corn sales firms, 1962-63 season................... 84-85

7 Distribution of crates shipped by organizations handling
Florida sweet corn, 19 Florida sweet corn sales firms,
1962-63 season.................. ............ ..... 117

8 Optimum solution for price and marketable output in the
intermediate period................................ 130

9 Response of the firm to an industry change in price
and marketable output ............................. 133

10 Optimum solution for plant size in the long run...... 136

11 Scatter diagram of weekly prices and carlot shipments of
Florida sweet corn, fall and winter season, 1962-63 141

12 Scatter diagram of weekly prices and carlot shipments of
Florida sweet corn, spring season, 1962-63......... 141

13 Price elasticities at the shipping point for Florida
sweet corn, fall and winter season, of three years
1960-61 through 1962-63.......................... 150












LIST OF FIGURES--Continued


Figure
Number


14 Price elasticities at the shipping point for Florida
sweet corn, spring season, of three years 1960-61
through 1962-63....................... ...........


xiii


Page


150















CHAPTER I


INTRODUCTION



Commercial production of fresh market sweet corn in appreci-

able quantities is of relatively recent origin in Florida. Production

was not of sufficient importance to be reported by the U. S. Depart-

ment of Agriculture until the 1947-48 marketing season when less than

one-half million crates were marketed. Production expanded rapidly

during the next five years to a 1952-53 level of 4.4 million crates.

Since that time the average rate of increase has been slightly less

than one-half million crates per year. The 1962-63 production was 8.8

million crates and the value was slightly less than 18 million
1
dollars.

The rapid expansion of the sweet corn industry in Florida has

been made possible by a number of production and marketing innovations.

The adoption of these innovations has necessitated many adjustments

in the traditional marketing system. In the process of making these

adjustments the industry has encountered numerous marketing problems.

The availability of market research results, or even economic data,

has often been too limited to serve as a guide in solving many of

the problem.



1USDA, AMS, Florida Crop and Livestock Reporting Service,
Florida Agricultural Statistics, Vegetable Summary, 1963 Issue,
Orlando, Florida.










A atate marketing order was adopted in January, 1963 which

covered a large segment of the industry. Concurrently, the Florida

Sweet Corn Exchange, a cooperative bargaining organization of sweet

corn growers, was organized. The purpose of this organization and

the marketing order was to provide the industry with the organization

and control to obtain more orderly marketing of sweet corn.


The Problem


The adoption of the Sweet Corn Marketing Order (as amended,

1962) and the formation of the Florida Sweet Corn Exchange offered

an opportunity to work effectively on many industry marketing problems,

but it also presented a challenge for effective and wise leadership

in carrying out marketing programs. The leaders of the Exchange and

the Marketing Order assumed a new responsibility to the industry

since their decisions affected not only their own businesses, but

those of all the industry. These organizations provided no more than

the mechanism whereby industry-wide decisions could be made and

implemented. Individual marketing problems must be studied, alterna-

tives considered and courses of action decided upon. The extent to

which either the Marketing Order or the Exchange can be effective in

solving individual marketing problems depends upon the wisdom of the

decisions made by the leadership.

A major problem for the leadership of the Marketing Order and

the Exchange has been that of finding sufficient facts on which to

base decisions. Insufficient information has been available on the

market structure of the industry. Basic information, such as the










relative importance of various handlers in the marketing system, the

importance of different methods of selling and the pattern of ship-

ments to the principal terminal markets has been inadequate. Even

less was known about levels of shipments and prices which would

maximize industry benefits.

Under the Marketing Order and Exchange organizations a more

complete knowledge of the market structure and the economic processes

is necessary, aince more decisions must be made at the shipping point

level. Industry benefits from these organizations cannot be maxi-

mized unless those charged with their administration have adequate

economic information and an understanding of the economic effects

of their actions.


Purpose of Study


A primary purpose of this study was to develop basic

economic information necessary to an understanding of the market

structure of the Florida Sweet Corn Industry. This included the

development of quantitative measures reflecting the importance of

types of organizations handling corn, geographic sales and market

areas, sales procedures and seasonal effects. Determining the

important interrelationships between these and other factors was

a part of the purpose also,

The secondary purpose of the study was to develop economic

guidelines to decision making based on a theoretical economic model

of the industry. Estimates of the demand elasticities for sweet

corn were necessary to augment the use of these theoretical guide-

linea.









Review of Literature


Economic marketing research relating to the sweet corn industry

has been limited, primarily because the industry became of major im-

portance in Florida only in the last decade. Greig and Spurlock pub-

lished some of the earliest marketing research on corn in 1956.2 In

this study of marketing margins a variation of the case study approach

was used. A limited time period, May 10-14, 1955, was used to il-

lustrate the marketing costs incurred at each level of the marketing

system in moving a car of sweet corn from Belle Glade, Florida through

the retail level in Baltimore, Maryland. A summary of the results in-

dicated that grower returns were low during this peak season of ship-

ments:


The Belle Glade grower received a gross return of $0.67
per crate for this car of sweet corn shipped to Baltimore
during the heavy shipping season. Out of the $0.67, the
grower had to cover all costs of production. After the costs
of the container, picking, packing and shipping point market-
ing charges were added, the f.o.b. shipping point price was
$1.70 per crate. The wholesale selling price was $2.75 and
the retail price was $3.87 per crate.3


Showalter et al., collected a sample of 2,200 shipment
4
invoices in the 1953-54 marketing season from four sales firms.



W. Smith Greig and A. H. Spurlock, Margins and Costs in Market-
ing Florida Sweet Corn (Washington, D.C.: U.S. Department of Agriculture
in cooperation with Florida Agricultural Experiment Station, Misc. Pub,
No. 719, April, 1956.)

3bid., p. 10.

4R. K. Showalter et al., Long Distance Marketing of Fresh Sweet
Corn (Gainesville, Florida: Florida Agricultural Experiment Station
Bulletin 638, November, 1961.)










Sales were observed to 144 cities in 34 states, the District of

Columbia and four Canadian provinces. It was shown that cities

receiving larger volumes were found to account for a high per-

centage of the total shipments:


More than 85 percent of the corn went to cities receiving
5,000 or more crates each. Cities receiving less than 5,000
crates represented 73 percent of the number of cities, but
took only 15 percent of the total volume.


Showalter et al., also found that the monthly average f.o.b.

prices of most grades of sweet corn declined steadily throughout the

season and that prices of U.S. No. 1 averaged 25 cents less than

U.S. Fancy. U.S. No. 2 averaged 88 cents less than U.S. No. 1,

but Unclassified was higher than U.S. No. 2. Price differences

between U.S. Fancy and U.S. No. 1 tended to become larger as the

season progressed. The f.o.b. price for all corn averaged $2.02 per

crate over the entire 1953-54 marketing season.

The f.o.b. basis of sale was found to account for 88.0 per-

cent of the total shipments. Delivered and consigned sales accounted

for only 4.7 percent and 7.3 percent of the shipments, respectively.

An inverse relationship was found to exist between f.o.b. prices and

the monthly rate of shipments:


On the average, an increase in monthly shipments of each
100 cars in the 1953-54 caused a decrease in monthly f.o.b. price
of U.S. Fancy corn of about 5 1/2 cents per crate. Increasing
shipments depressed the price much more than this in the early
part of the season, and less than this in the latter part.6



5bid., p. 10.

6Ibid., p. 19.










Brooke, in a 1962 study, found that sweet corn shippers have

been shifting from the use of rail to truck transportation.7 Truck

shipments rose from 44 percent of the total in 1954-55 to 56 percent

in 1961-62. Based on shipment data Brooke made several other ob-

servations concerning the distribution of Florida sweet corn:


Data on the distribution of corn are available only for
some 37 cities reported by the Florida State Marketing Bureau.
Those cities received 72 percent of Florida's sweet corn ship-
ments in 1960-61. The data indicate that: (1) Shipments by
rail are greater than shipments by truck to the more distant
markets of the Northeast and Midwest, (2) truck shipments
predominate to southern and western markets, (3) the larger
cities receive the largest supply of Florida corn, (4) Florida's
market for corn, as for most other vegetables, is in the
eastern half of the United States. Florida ships relatively
little corn to destinations north of Texas that are west of
the Mississippi River, (5) Florida's shipments to these
37 markets are about 30 percent of their total receipts of
corn during the year.


Procedure


As a part of the field work on this study, two types of

information were obtained from Florida sales firms handling sweet

corn. These were (1) information concerning the sales firms'

organization, method of operation and marketing problems and (2)

data on sweet corn shipments during the 1962-63 marketing season.

A census of the 25 sales firms located in Florida's prin-

cipal production areas was made to obtain the basic information

on organization, method of operation and marketing problems. The



7Donald L. Brooke, The Florida Sweet Corn Industry, 1953-62
(Gainesville, Florida: Florida Agricultural Experiment Station Agri-
cultural Economics Mimeo Report 63-4, December, 1962.)


Ibid., p. 11.










manager, or his representative, was interviewed, following a number

of predetermined questions as shown in the questionnaire in Appendix

A. The cooperation of all sales firms was obtained in supplying most

of the information needed for this phase of the study.

Specific data on sweet corn shipments were obtained from 19

of the 25 sales firms. Six firms were not willing to cooperate. A

10 percent stratified random start systematic sample of the shipment

invoices was selected to obtain data for this phase of the study.

Data on date of shipment, type of buyer, basis of sale, type and

grade of corn, market destination, size of shipment and adjusted

f.o.b. price were collected on a field survey form as shown in

Appendix B. These data were coded as they were collected so they

could be entered on IBM cards. A multiple tabulation program of

the IBM 1401-709 was used to carry out the tabular analyses.

A theoretical economic model of the industry, based on

the tabular analyses of the data obtained from sales firms, was

developed. Secondary data from the Sweet Corn Exchange, the

Marketing Order's Administrative Committee and government

agencies were used to augment the invoice data. Applicable

economic theory which could serve as guidelines to marketable

output and price decisions was drawn from the writings of noted

economists and developed into a theoretical model suitable to

explain how profits to the industry could be maximized.

Secondary information from the Exchange and government

reports were used to obtain the data for the demand analysis of

sweet corn at the f.o.b. level. Graphic analysis was used to

establish preliminary relationships between variables. The





8



stepwise multiple regression program using the IBM 1401-709 was used

to select variables statistically significant in explaining price

variations. This regression technique was used to develop equations

which served as a basis in obtaining price elasticities.















CHAPTER II


THE DEVELOPMENT AND IMPORTANCE OF THE
SWEET CORN INDUSTRY


United States



Early Developments

The first reference to the existence of sweet corn as a

distinct food is found in Thomas Jefferson's Garden Book of 1810.1

By 1828 sugar, or sweet, corn was listed in seed catalogs although

no variety names were given. During these early years sweet corn

was produced largely as a garden crop and was not important com-

mercially.

The perishability of fresh sweet corn has affected the

development of this industry throughout its history. Sweet corn

production in the United States developed in several truck farming

areas adjacent to cities. Large concentrated production areas, such

as the wheat and corn belts, did not develop in the sweet corn industry.

The traditional pattern, which prevailed until World War II,

was one where fresh market production was dispersed among numerous

truck farming areas. New York, New Jersey and Pennsylvania, which

were densely populated areas, were also the three leading sweet



1A. T. Erwin, "Sweet Corn--Mutation on Historic Species?"
Economic Botany, Vol. V, No. 3 (July-September, 1951), pp. 302-6.









corn producing states in 1939.2


Post-World War II Developments

The traditional pattern of sweet corn production changed

following World War II. Production in the truck crop areas near

large cities began to level off and new specialized production areas

developed. Andrews observed this development in his study of the

Midwest sweet corn industry:


Important changes appear to be underway in all fresh
market vegetable production, with production shifting from
nearby truck farms to more distant specialized farms, and
with an increase in out-of-season production. Around the
largest cities, expanding suburbs have taken up farmland
previously in vegetable crops. Expansion of chainstore
operation into smaller communities and servicing of the
chain retail outlet from centrally located depots have
shrunk market outlets of the truck gardeners supplying
these smaller urban centers.

Substantial shifts to more specialized areas of production

occurred within the traditional seasons. Ohio replaced the eastern

states as the leading producer of summer fresh market sweet corn in

1963. Other leading states were New Jersey, New York and Pennsyl-

vania, respectively.4


Seasonal Shifts in Production

A most important development, especially to the southern



2USDA, Bureau of Agricultural Economics, Commercial Truck Crops
for Fresh Market and Processing, 1939-45 (Washington, D.C., June,
1947), p. 69.

3Richard A. Andrews, The Midwest Sweet Corn Industry (Minneapolis,
Minnesota: Minnesota Agricultural Experiment Station Bulletin 450,
June, 1959), p. 14.

4USDA, SRS, Crop Reporting Board, Vegetables--Fresh Market, 1963
Annual Summary (Washington, D.C., 1963) Vg2-2(63), pp. 36-37.










producing areas, has been the growth of the out-of-season production

mentioned by Andrews. In another publication he elaborates further

on the importance of this development and discusses other seasonal

shifts in production:


A most important change in fresh market sweet corn mar-
keting to be noted is the rise in importance of the out-of-
season production. Winter, early spring and fall production
rose in importance from 15 percent of the fresh market pro-
duction in 1949 to 30 percent in 1956, declining to 28 percent
in 1957. . Thus, the fresh market sweet corn marketing
trend is toward increasing importance of winter, early spring
and fall seasonal production . .


The percentage of winter, early spring and fall production

continued to fall after the 1957 decline referred to by Andrews.

A low of 26.5 percent was reached in 1959, but since that time

this percentage has risen sharply. By the 1963 season 34 percent

of the fresh market corn was accounted for by out-of-season pro-
6
duction.


Important U.S. Production Areas

Twenty-seven states were reported by the U.S. Department of

Agriculture as commercial producers of fresh market sweet corn in



5Richard A. Andrews, A Study of the Sweet Corn Industry in the
Midwest Farm Economy (Minneapolis, Minnesota: Minnesota Agricultural
Experiment Station, North Central Regional Publication No. 95, June,
1959), p. 20.

6USDA, SRS, Crop Reporting Board, Vegetables for Fresh Market,
1954-59 (Washington, D.C., Statistical Bulletin No. 300, December,
1961), p. 64, and USDA, SRS, Crop Reporting Board, Vegetables-Fresh
Market, 1963 Annual Summary (Washington, D.C., 1963) Vg 2-2(63),
pp. 36-37.









1963.7 Florida, as may be seen in Table 1, produced almost 30 per-

cent of the total production. The three states, Florida, California

and Texas, which supply sweet corn in the out-of-season months, pro-

duced 42 percent of the total corn. California also produced corn

during the late spring and summer months, thus, making the total

production of these states exceed that of the total out-of-season

production cited earlier. Production of main season sweet corn

was divided among the remaining 24 states and California. Distri-

bution of this volume ranged from 7.6 percent in Ohio down to 0.3

percent in Arkansas.8


Table 1.--Acreage and production of states harvesting 10,000 or more
acres of fresh market sweet corn, 1963


State


Florida
California
Ohio
New Jersey
New York
Pennsylvania
Michigan
Texas
All others

Total


Harvested Acreage

Acres
50,300
19,100
13,700
14,500
16,100
18,500
14,000
12,000
51,950

210,150


Production

1,000 cwt.
3,974
1,319
1,028
1,015
966
851
840
396
3,148

13,537


State Production
as Percent of
U.S. Total
Percent
29.4
9.6
7.6
7.5
7.1
6.2
6.1
2.9
23.3

100.0


Source: USDA, SRS, Crop Reporting Board, Vegetables-Fresh
Market, 1963 Annual Summary (Washington, D.C., 1963) Vg2-2(63),
pp. 36-37.


7USDA, SRS, Crop Reporting Board, Vegetables-Fresh Market,
1963 Annual Summary, op. cit., p. 37.

8Ibid., p. 37.










Sweet Corn's Importance in the Vegetable Industry

Fresh market sweet corn in the United States was estimated

to have a value of over $52 million in 1963. Excluding melons and

potatoes, its 1963 value was exceeded only by that of tomatoes,

lettuce and onions (Table 2). The seven-year average of the value

of vegetables in the United States indicated that sweet corn ranked

fifth. Sweet corn was exceeded only by lettuce in the number of

acres harvested both in the seven-year average and in 1963.


Table 2.-Value and harvested acreage of the five principal
vegetabless produced in the United States, 1957-63




Value Harvested Acreage
Average Average
Vegetable 17-63 1963 -v e 1963
1957-63 1957-63
1,000 1,000
Acres Acres
Dollars Dollars

Tomatoes 144,604 150,089 181,984 159,840
Lettuce 142,183 161,426 219,711 215,680
Onions 71,358 85,378 102,099 95,000
Celery 54,643 49,657 33,909 31,430
Sweet corn 49,557 52,289 205,905 210,370


aPotatoes and melons excluded.

Source: USDA, SRS, Crop Reporting Board, Vegetables--Fresh
Market, 1963 Annual Summary (Washington, D.C., 1963) Vg2-2(63),
pp. 4-5.


New Developments in Consumption Patterns

The potential for the sale of any food product depends upon

its acceptance and ultimate consumption by consumers. Per capital

consumption may be used as a measure of this acceptance and sweet

corn in the United States has fared well by this measure. Per

capital consumption averaged only 2.5 pounds during the 1920-24









period, but had risen to a high of 8.1 pounds by the 1955-59 period

(Table 3). Per capital consumption dropped to 8.0 pounds during the

1960-62 period, but this decline was too small and the period too

short to indicate any trend.


Table 3.--Civilian per capital consumption of fresh market sweet corn
and total vegetables (farm weight basis), United States, 1920-62




Year Sweet Corn Total Vegetables

Pounds

1920-24 2.54 92.20
1925-29 3.22 104.94
1930-34 4.98 109.74
1935-39 5.38 113.16
1940-44 6.32 118.06
1945-49 7.92 125.16
1950-54 7.88 111.00
1955-59 8.14 105.04
1960-62 8.00 104.67


aTotal vegetables excludes melons and potatoes.

Source: USDA, Agricultural Statistics, 1962 (Washington, D.C.:
Government Printing Office, 1963), pp. 302-303 and USDA, ERS, Supplement
for 1962 Consumption of Food in the United States, 1909-52 (Washington,
D.C., October, 1962), p. 13.


The sweet corn consumption trend is encouraging when compared

with that of other fresh market vegetables. Consumption of all fresh

vegetables rose to a peak during the postwar years of 1945-49 of

125 pounds per person, but has since declined to a 1960-62 level of

105 pounds per person. A rise in the use of processed vegetables

has offset much of this decline in fresh vegetable consumption; there-

fore, the total per capital consumption of vegetables has remained

near its current level since World War II. Despite the declining










trend for fresh market vegetables, fresh market sweet corn consumption

per capital has risen slightly since World War II.

An insight into the nature of this rise in sweet corn consumption

may be gained by examining these data closely. If the annual per

capital consumption is divided between the main season, May 15 through

September 31, and the out-of-season, October 1 through May 14, it

may be noted that main season consumption has declined since 1949

(Table 4). The increase in per capital consumption of sweet corn

has been provided by the growth in out-of-season consumption. Per

capital consumption during the out-of-season period increased from

1.2 pounds in 1949 to 2.7 pounds in 1963. Main season per capital

consumption declined from 6.4 pounds to 5,3 pounds during this

sam period.

Table 4.--Civilian per capital consumption of fresh market sweet corn
by seasons (farm weight basis), United States, 1949-63


Out-of-season Main Season
Year Annual
Oct. 1-May 15 May 16-Sept. 30 Total

Pounds

1949 1.2 6.4 7.6
1950 1.7 6.0 7.7
1951 1.4 6.2 7.6
1952 1.9 5.9 7.8
1953 2.0 5.8 7.8
1954 2.4 6.1 8.5
1955 2.5 5.7 8.2
1956 2.5 5.4 7.9
1957 2.3 5.4 7.7
1958 2.3 6.1 8.4
1959 2.3 6.2 8.5
1960 2.2 5.9 8.1
1961 2.2 5.8 8.0
1962 2.4 5.5 7.9
1963 2.7 5.3 8.0

Source: USDA, Agricultural Statistics, 1962 (Washington, D.C.:
Government Printing Office, 1963), pp. 302-303; USDA, ERS, Supplement
for 1962 Consumption of Food in the United States, 1909-52 (Washington,
D.C., October, 1963,)p. 13.










In 1963 out-of-season per capital consumption reached a peak

of 2.7 pounds and the min season consumption was at a low of 5.3

pounds. However, even during this year, the average monthly rate

of consumption during the main season was more than three times

that of the out-of-season period. The average monthly rate of con-

sumption between May 16 and September 30 was 1.2 pounds per person

and that during other months was only 0.4 pounds per person.

Several factors, such as price, quality, availability and habit

of consumption, account for this difference. Even so, in view of

the trend of consumers toward a less seasonal diet, this difference

in the consumption pattern appears to offer an opportunity and a

challenge to out-of-season production areas.


Florida


Rapid Expansion of the Industry

Florida, which entered the fresh market sweet corn industry

as a "Johnny-come-lately," has in a little more than a decade become

the "Paul Bunyan" of the industry. Florida did not enter the com-

mercial sweet corn market in any significant manner until after

World War II and by 1963 produced more than three times the fresh

market production of its largest competitor (Table 1).

The 1919 Census of Agriculture showed only 647 acres of

sweet corn in Florida. (This was the earliest census which in-

cluded sweet corn acreages) By 1929 the acreage of sweet corn

in Florida had increased to 5,549, and by 1939 to 6,367. The

value of the crop was only $192,000 in 1929 and $148,000 in 1939.

Beginning in 1939, sales of sweet corn were reported annually for










each of Florida's state farmers' markets where any was sold. It is

interesting to note that in 1939 about one-third of the state's

acreage was in the Starke area (Bradford County) and very little

was produced in South Florida where most of it is now grown.

Expansion of the industry was extremely rapid after 1947-

48 when production was 480,000 crates (Figure 1). During the first

five years production increased over nine-fold or to a level near

4.4 million crates in 1952-53. Since 1952-53 Florida production

has increased at an average annual rate of a little less than one-

half million crates per year. Production for the 1962-63 season was

estimated at 8.8 million crates.


Seasonality of Production

Florida produces sweet corn in three seasons, the fall which

extends from October 1 through December 31, winter from January 1

through March 31, and spring from April 1 through June 30. Spring

production is the largest. A three-year average, 1960-61 through

1962-63, indicated that 74 percent of the total production was

harvested during the spring. Fifteen percent was harvested during

the winter and 11 percent during the fall.

Fall production increased from 1952-53 through the 1958-59

season, but has leveled off at slightly below a million crates

since that time (Figure 1). Winter production has followed no clear

trend in recent years. The winter season has had the greatest year-

to-year variations in production, due mostly to cold weather, al-

though considerable variability was evident during all seasons.

Expansion of spring production from 3.3 million crates in 1952-53

















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to 6.5 million crates in 1962-63 has accounted for most of the

growth in production.


Production Risks

Year-to-year variations in the seasonal production of sweet

corn have resulted from changes in yields and changes in planted

acreages. Average yields of sweet corn have varied from over 200

crates per acre down to zero, or total loss. Production risks are

the primary factors contributing to yield variations. Extreme

temperatures, excessive rainfall, high winds, insect damage and

plant diseases sll represent production risks which growers must

face. In favorable years losses due to these risks, of which low

temperatures are most important, are low and yields high. In other

years, yields may be low with substantial acreage being lost.

Variations in plantings are affected by expectations of

future conditions, primarily those of yield and price. Past ex-

periences are very important in arriving at these expectations.

For example, increased plantings may often be observed in years

following high prices. An examination of acreage planted, yields

and unharvested acreage provides an insight into the extent to

which production risks affect the Florida sweet corn industry.

Production risks appeared to be greatest during the winter

season (Figure 2). Over the 10 years, 1953-54 through 1962-63,

an average of 28 percent of the winter sweet corn acreage was un-

harvested. Acreage losses also demonstrated the greatest range

of variability during this season. In 1958, 79 percent of the

planted acreage was unharvested, while in 1957 only 7 percent
















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was unharvested. The high losses in 1958 resulted from a combi-

nation of frosts and freezes, excessive rainfall and prolonged

cold.9 Winter yields averaged 140 crates per acre, and ranged

from 91 crates in 1958 to 164 crates in 1955.

Production risks in the fall were not as great as in the

winter, but greater than during the spring. An average of 16 per-

cent of the fall planted acreage was unharvested between the 1953-

54 and 1962-63 seasons. Year-to-year variations ranged from a 32

percent loss in the fall of 1956 to a 2 percent loss in 1961.

Yields during the fall averaged the lowest of all seasons at 128

crates per acre over the 10-year period. They ranged from 83

crates per acre in 1956 to 156 crates per acre in 1954.

Production variability was enhanced during the fall and

winter seasons by the tendency for low yields and high acreage

losses to be associated. This phenomenon may be observed in the

fall season of 1956, 1960 and 1962 when acreage losses were at

high levels (Figure 2). Yields during these same years were at

low levels. This relationship would be expected since the damage,

most often from cold temperatures, normally occurred late in the

growing season. While a freeze may cause some acreage to be

completely lost, other acreage would likely be damaged to the

point that yields are lowered.

The spring season differed from the winter and fall in

several respects. The percentage of unharvested acreage was much



9Florida Department of Agriculture, Florida State Marketing
Bureau, Annual Agricultural Statistical Summary, 1957-58 Season
(Jacksonville, Florida, November, 1958), p. 17.









smaller than that of other seasons, averaging only 6 percent over the

10-year period. Neither were year-to-year variations in acreage

losses as great. Unharvested acreage ranged from 18 percent in 1961

to 3 percent in 1963.

Yields during the spring averaged substantially higher than

during the fall or winter. Over the 10-year period yields averaged

184 crates per acre, ranging from 136 crates in 1954 to 214 crates

in 1963. Yields and unharvested acreage did not appear to be as

closely associated in the spring as in the fall and winter. This

may have been expected since most weather damage would likely have

occurred soon after planting and the crop would either have been

abandoned or would have made a near complete recovery during the

spring growing season.


Competition

Florida encounters little competition from other production

areas during most of its season. The most active harvesting period

for Florida begins around November 10. At this time only California

is a factor in sweet corn production and their most active harvesting

season ends around November 20. No production area offers major

competition to Florida from November 20 through May 1, when the most

active harvest season for Texas spring corn begins. California enters

the market on May 15 followed by South Carolina and Georgia on June 1.

Alabama begins its most active harvesting period on June 10. These

states constitute the major competing areas during Florida's marketing










season.10 This pattern shifts somewhat from year to year depending

on plantings and weather conditions.

The magnitude of the competition offered by competing areas

is reflected by the distribution of average weekly sweet corn ship-

ments from Florida and other areas over the three years, 1960-61

through 1962-63 (Figure 3). Shipments from other areas continued

at a stable level up through mid-November, then declined for five

weeks and ended the last week of December. Florida shipments, which

remained substantially higher than other shipments after aid-October,

reached a peak during the last week of November, then declined

throughout the remainder of the fall.

For the three-season period covered by Figure 3, no ship-

rents occurred from competing states during the winter months and

Florida weekly shipments tended to increase throughout the season.

Spring shipments began from other states during the third

week of April and became fairly heavy by the first week of May.

They remained near this level throughout the remainder of the

season. Florida shipments increased throughout the spring to a

peak during the first week of June and then declined rapidly.


10USDA, SRS, Crop Reporting Board, Usual Planting and
Harvesting Dates in Principal Producing Areas (Washington, D.C.:
Agricultural Handbook No. 251, June, 1963).





























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CHAPTER III


SHIPPING POINT ORGANIZATION



Twenty-five sales firms were included in the field census to

determine the organizational and marketing characteristics of the

Florida sweet corn industry at the shipping point. These firms mar-

keted 8,200,731 of the 8,804,000 crates of sweet corn sold from

Florida in the 1962-63 season as reported by the Florida Crop and

Livestock Reporting Service.1 According to these data only 6.9

percent of the Florida shipments were made by firms not included

in the survey and most of this volume as marketed from small scat-

tered production areas.

A panoramic view of the development and competitive position

of the Florida sweet corn industry was presented in the previous

chapter. This approach, however, provided little information on the

organization and operation of the industry. This chapter provides

a more detailed picture of the firms growing and marketing sweet

corn in Florida.

For the purposes of this study a sales firm was defined as

any person or organization, either incorporated or unincorporated,

which enters sweet corn into the primary channels of trade. A



1USDA, AMS, Florida Crop and Livestock Reporting Service,
Florida Agricultural Statistics, Vegetable Summary, 1963 Issue,
op. cit.










firm is considered "entering sweet corn" only if the corn is produced

by the firm or if the firm acts as the first handler of the corn.

Sweet corn sold from a primary sales firm to a second firm, which

second firm then enters it into primary channels of trade, does not

make the second firm a sales firm as defined.

Growers include all persons or organizations, either incor-

porated or unincorporated, who produce sweet corn to be entered

directly or indirectly into the commercial channels of trade.


Growers


Data on growers were obtained from information provided by

sales firms and confirmed by records of the Florida Sweet Corn

Advisory Comittee. All growers were affiliated with sales firms

in one manner or another. In some instances, the grower and sales

firm were essentially the same. A grower-sales firm, where pro-

duction and sales were carried out by a single organization, was

considered as one grower affiliated with one sales firm for pur-

poses of analysis. In firm handling corn for two or more growers,

the numbers of growers reported were used.


Numbers and Sizes

Large growers, those producing 200,000 or more crates an-

nually, predominated in the production of Florida sweet corn.

Although they accounted for only 10.1 percent of the number of

growers, they produced 40.9 percent of the output (Table 5).

Medium growers, those producing between 100,000 and 199,999

crates, accounted for 24.7 percent of the growers and 38.0









percent of the production. Small growers, those producing under

100,000 crates annually, accounted for 65.2 percent of the growers,

but only 21.1 percent of the production. A total of 89 growers

produced the 8,200,731 crates of sweet corn.


Table 5.--Distribution of growers and production, by size of grower,
affiliated with 25 Florida sweet corn sales firms, 1962-63 season




Size of Growers Production
Grower Number Percent Crates Percent


Large 9 10.1 3,349,318 40.9
Medium 22 24.7 3,117,157 38.0
Small 58 65.2 1,734,256 21.1

Total 89 100.0 8,200,731 100.0



Attempts to gain benefits from economies of scale and to

reduce risks appear to be the best explanations for the predominance

of large scale producers in the Florida sweet corn industry. Brooke

discussed some of the economies of scale in production in his 1963

study of the Florida sweet corn industry:

Specialized equipment for spraying and harvesting sweet
corn has been developed and improved over the past 10 years.
This equipment is costly both from the initial capital outlay
and annual upkeep. A small grower with one crop of corn can-
not justify its purchase for a few days per year of its use.
Larger growers with multiple plantings of corn Vse such equip-
ment more efficiently and can justify its cost,


Risks, as discussed in the previous chapter, are important


2Brooke, op. cit., p. 4.










in affecting the profitability of sweet corn from year to year. All

plantings in one area or in one period may be lost due to weather

hazards. Larger growers can offset some of these risks by extending

production over the season or by adding plantings in other production

areas. Several of the large growers produce corn in two or more of

the production areas as well as extend their plantings over more

than one season.

Growers, in some instances, have been affected by the needs

of sales firms to obtain economies of scale. This was especially

true for the grower-sales firm organizations. In such instances,

a larger volume of production was needed to achieve economies

from the standpoints of servicing buyer accounts, as well as

personnel, building and equipment use.

Production economies, risks and sales firm needs play a

different role in the decisions of each grower depending upon his

situation and problems. Some may expand production for one reason,

some for another, while others may feel their volume is optimum.

Nevertheless, from the standpoint of the industry as a whole, these

forces have and will continue to encourage larger production units.


Sales Areas

Florida was divided into three sales areas, Belle Glade,

South Florida and Central Florida, for analysis purposes (Figure 4).

The Belle Glade and South Florida areas conform to the marketing

areas established under the Sweet Corn Marketing Order. The Zellwood

section produces most of the sweet corn in the Central Florida area.

Scattered areas in northern Florida, which produced only 0.3 percent




















































Central Florida


W South Florida


Belle Glade


. .


...
b . .


.p~


Figure 4.--Florida sweet corn sales areas, 1962-63 season


(i:










of the 1962-63 production, were not included in this analysis.3

The Belle Glade area had 71 growers who produced 6,037,348

crates of sweet corn in 1962-63. This accounted for 75.5 percent

of the growers and 73.6 percent of the production. This area is

located in western Palm Beach County and extends around the

southeast shore of Lake Okeechobee, centering near the town of

Belle Glade, Florida. Corn in this area is produced on peat and

suck soils of the "custard apple" and "saw grass" types which range

in depth from three to 10 feet.4

The South Florida area had only nine commercial sweet corn

growers who produced 737,403 crates, 9 percent of the total pro-

duction. Primary producing sections were eastern Palm Beach County,

Pompano section of Broward County, Homestead section of Dade County,

and small sections of Lee and Collier Counties. Sweet corn in the

eastern Palm Beach and Pompano sections was produced on Leon-

Portsmouth sands and fine sands. Dade County production in the

Homestead section was concentrated on highly calcareous Perrine

marl over oolite limerock.5

There were 14 growers in the Central Florida area who

produced 1,425,980 crates of corn, 17.4 percent of the total

production. The primary Central Florida area is the Zellwood


3
Florida Department of Agriculture, Division of Marketing,
Vegetable Summary, 1962 Issue (Tallahassee, Florida: 1963), p. 35.

4Brooke, op. cit., p. 2.

5bid.










production section which is centered west of the town of Zellwood

in Lake and Orange counties and Just north of Lake Apopka. Corn

is produced in this section on muck and mucky peat soils which

vary in depth from four to 19 feet.6

Since some growers produced corn in more than one area, the

sum of the growers operating in each area exceeded that for the

total number of Florida growers. The proportion of growers falling

into the three size classifications was not significantly different

between the three areas (Table 6).


Table 6.--Distribution of growers and production, by size of grower
and sales area, 25 Florida sweet corn sales firms, 1962-63 season




Sales Area
Size of
Grower Belle Glade South Florida Central Florida


Growers Production Growers Production Growers Production


Large
Medium
Small


11.3
22.5
66.2


Total 100.0
Percent-
age of
Total 75.5


42.8
36.1
21.1


100.0


73.6


Percent

11.1
22.2
66.7


100.0


9.6


36.4
36.2
27.4


100.0


9.0


14.3
35.7
50.0


100.0


14.9


35.0
46.8
18.2


100.0


17.4


Sales Firms


The traditional shipping point market where local shippers



Ibid.


j


%









buy from various growers at a competitive price does not exist for

the sweet corn industry in Florida. Only two sales firms reported

any direct purchases from growers and this volume was very small.

The function of the sales firm in Florida is to act as an agent for

one or more of its affiliated growers. In practically all cases,

the entire production of a grower was delivered to one sales firm.


Numbers of Growers

Ten of the 25 sweet corn sales firms in Florida have only

one grower as a source of supply--usually the same firm was doing

both the growing and selling. These 10 single-grower sales firms

ranged in size from over 800,000 crates annually to fewer than

50,000 crates. The other fifteen sales firms had two or more

growers as a source of supply (Table 7).


Table 7.--Distribution of sales firms, by number of affiliated
growers and sales area, 25 Florida sweet corn sales firms,
1962-63 season




Sales Area
Number of
Growers Belle Glade South Florida Central Florida All Areas
Number Percent Number Percent Number Percent Number Percent

1 4 25.0 4 66.7 5 66.7 10 40.0
2 5 6 37.5 2 33.3 2 33.3 9 36.0
6 or more 6 37.5 6 24.0

Total 16 100.0 6 100.0 7 100.0 25 100.0

1
Sales firm numbers are not additive since some sales firms
operated in two or more areas.


Only one-fourth of the sales firms in the Belle Glade area










were single-grower sales firms, but in the other area two-thirds of

the firms fell in this class. The large firms in the Belle Glade

area attained their volume to a substantial extent by affiliating

with several growers. Thirty-seven percent of the firms in this

area had six or more affiliated growers compared with none in other

areas. The number of sales firms operating in each area was exag-

gerated somewhat by the fact that a few sales firms operated in more

than one area. This was especially true of the Central Florida area.


Methods of Organization

About one-half of the sales firms were organized as corporations,

one-fourth as cooperatives and one-fourth as partnerships or proprietor-

ships. The method of organization did not vary appreciably between

sales areas. The corporate organization was observed somewhat more

frequently in the Belle Glade and South Florida areas than in the

Central Florida area. A slightly higher proportion of cooperatives

were observed in the Central Florida area.

There appeared to be little relationship between the method

of organization of the sales firm and the number of affiliated growers

(Table 8). Both corporations and cooperatives were observed for all

grower-number classifications. Half of the firms with six or more

growers were corporations and the other half were cooperatives.

Indications are that the method of organization of the sales firms

was more a matter of personal preference or other considerations

than it was of the number of growers to be affiliated with the

sales firm.










Table 8.--Distribution of sales firms, by number of affiliated growers
and method of organization, 25 Florida sweet corn sales firms,
1962-63 season



Method of Organization
Number of Corpora- Cooper- Partner- Proprie- All
Growers tion native ship torship Methods


Percent

1 50.0 20.0 10.0 20.0 100.0
2 5 66.7 11.1 11.1 11.1 100.0
6 or more 50.0 50.0 100.0


Average 52.0 28.0 8.0 12.0 100.0



Sizes

Large sales firms, those handling 500,000 or more crates

annually, marketed almost two-thirds of the sweet corn production

(Table 9). Although these firms accounted for only 32 percent of

the number of firms, they were predominant in the volume marketed.

Small sales firms, those handling less than 100,000 crates annually,

marketed only 8.1 percent of the corn, but accounted for 36 percent

of the firms. Medium sales firms, those handling between 100,000

and 499,999 crates, accounted for the remaining 27.1 percent of the

volume and 32 percent of the number of firms.

The proportion of sweet corn handled by large sales firms

in the Belle Glade area was substantially greater than that sold

by firms of this size in other areas (Table 9). In fact, all

eight of the large sales firms in Florida operated in the Belle

Glade area. Some of these firms handled substantial quantities

of corn in other areas also.









Table 9.--Distribution of sales firms and crates sold, by size of
sales firm and sales area, 25 Florida sweet corn sales firms,
1962-63 season




Sales Area

Belle Glade South Florida Central Florida All Areas
Size of
Sales Firm
Sales Crates Sales Crates Sales Crates Sales Crates
Firms Sold Firms Sold Firms Sold Firms Sold

Percent
Large 50.0 78.0 16.7 13.9 28.6 35.0 32.0 64.8
Medium 25.0 18.5 33.3 58.7 42.8 47.3 32.0 27.1
Small 25.0 3.5 50.0 27.4 28.6 17.7 36.0 8.1


Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0



Vegetables Handled

The importance of sweet corn relative to other vegetables

marketed by the sales firm is important because the policies of a

firm in which several vegetables are marketed are determined by

the combined needs of all vegetables handled. In multi-vegetable

sales firms, it must be realized that the marketing policies and

practices followed in sweet corn marketing are not independent,

but are a part of the total sales firm operation. With this in

mind, an attempt was made to determine the number of vegetables

other than sweet corn marketed by the sales firms and the relative

importance of sweet corn in this array.

Twenty-four vegetables, other than sweet corn, were handled

by the sales firms, but eleven of these were considered as minor

vegetables since they were handled by three or fewer of the firms.

Examples of such vegetables are anise, water cress and turnips.










The remaining 13 vegetables, plus sweet corn, are shown in Table 10.

The percentage of the sales firms which handled vegetables other

than sweet corn ranged from 67.9 percent handling cabbage down to

17.9 percent handling okra. Practically all major vegetables were

handled by the firms in all areas, but the relative importance of

each varied for one area to another.


Table 10.--Distribution of sales firms handling 14 vegetables, by
sales area, 25 Florida sweet corn sales firms, 1962-63 season




Sales Ares
Vegetable
Handled Belle Glade South Florida Central Florida All Areas

Percent

Green Beans 66.7 66.7 42.9 60.7
Cabbage 80.0 16.7 85.7 67.9
Celery 66.7 16.7 85.7 60.7
Sweet Corn 100.0 100.0 100.0 100.0
Cucumbers 26.7 66.7 14.3 32.0
Eggplant 26.7 16.7 14.3 21,4
Endive 46.7 16.7 85.7 50.0
Lettuce 46.7 16.7 85.7 50.0
Okra 13.3 33.3 14.3 17.9
Field Peas 33.3 50.0 28.6 35.7
Potatoes 33.3 50.0 42.9 39.3
Peppers 66.7 33.3 28.6 50.0
Radishes 26.7 -- 57.1 28.6
Squash 33.3 50.0 -- 28.6



Although the number of vegetables handled by the sales firms

was important, the relative importance of particular vegetables to

the firm was of even more significance. Sweet corn was the most

important vegetable in terms of annual value to 42 percent of the

sales firms, but none of these handled sweet corn exclusive of

other vegetables. Thirty-eight percent of the firms indicated









that celery was their most important crop. Sweet corn ranked second

in importance in many of the firms where celery was the principal

vegetable handled and vice versa. Celery ranked second where sweet

corn was most important. Either snap beans, cucumbers, radishes or

lettuce was the most important vegetable handled by the remaining

20 percent of the firms.

Although sweet corn was an important crop to most firms

and the leading one for 42 percent of the firms, it still may not

be assumed that the policies and marketing practices of the firms

were not affected by the marketing requirements of other vegetables.

Celery was particularly important to most firms. Even though the

other vegetables were not considered individually important for

some firms the relative importance of sweet corn to the firms was

diminished when the entire array of vegetables was considered.


Brokers


Due to the large number of brokers handling sweet corn no

attempt was made to obtain a complete census as was done for the

sales firms. Judgment samples of brokers handling sweet corn were

selected and interviews were made to obtain information on their

methods of organization and operation. A quantitative measure of

numbers, size and other factors was not obtained, but a fairly

complete picture of their role was presented by those interviewed.

A broker, by definition, is one whose business it is to

bring together a seller and buyer who are ready, willing and able

to trade. His authority is limited in the particular duty he

undertakes by the instructions of the seller or buyer he is acting for.









Although all sweet corn brokers interviewed fell under this definition,

their methods of operation and functions varied widely because (1)

they were agents for different principals.and (2) they operated under

different instructions. Brokers may be classified according to the

identity of their principals either as buying brokers or as selling

brokers.


Buying Brokers

The buying broker is the buyers' representative at the ship-

ping point and the fees for his services are paid by the buyer. His

job is to negotiate the purchase of sweet corn according to the

instructions of the buyer. The interest of the broker is in seeing

that sweet corn purchases meet the quality, size, price and other

requirements desired by the buyer. Such purchases may be made in

the name of the broker or the buying firm itself.

Buying brokers, as such, were relatively unimportant in

the Florida sweet corn industry. Some sales were made on this

basis, but as a rule, terminal buyers have not paid brokerage to

shipping point brokers in Florida.


Selling Brokers

The selling broker is the representative of the local seller

and his services are paid for by the seller. The job of the selling

broker is to negotiate the sale according to the instructions of the

seller. The interest of the broker in this case is to sell sweet

corn at the most favorable terms for the seller. The arrangements

between the broker and seller vary widely according to the needs

and interests of each. The more common arrangements and practices

followed by brokers are discussed briefly.










Sweet corn sold through selling brokers may be invoiced

either to the broker or the buyer, just as with the buying broker,

Through trade practices in Florida, most corn is invoiced to the

broker who, in turn, invoices it to the buyer. The broker collects

from the buyer and then remits the payment to the seller, less

brokerage fees. In actual practice most brokers pay the seller

before receiving the remittance from the buyer. The seller may

or may not know who the buyer of the corn was under this arrange-

ment.

Some shipping point brokers handle corn for several sales

firms while others handle corn for only one, or a few, The dis-

tinction must be kept in mind between a broker who handles corn for

sales firms and one who handles corn for growers. Under the

definition used for a sales firm in this study, a broker handling

corn directly for growers is classified as a sales firm since

he is the first handler. This is applicable even though the grower

may pay a'brokerage fee," rather than pay a share of "selling cost"

as may be the case for other sales firms.

The number of buyers to whom brokers sell varies consider-

ably. Most brokers have a limited number of buyers with whom they

tend to work on a recurring basis. Some brokers make practically

all their sales to a single buyer. These brokers become very well

acquainted with the needs of the buyer aa well as with sources

of sweet corn. Although these brokers obtain corn from several

sellers and generally use only one buyer outlet, they are still

acting as selling brokers by definition since their services are

paid for by the seller. Selling brokers operating under these

arrangements are sometimes confused with buying brokers.














CHAPTER IV


MARKET STRUCTURE AND PRACTICES AT THE SHIPPING POINT



The basic organizational framework of the Florida sweet corn

industry as it existed in the 1962-63 marketing season was discussed

in the previous chapter. This discussion does not relate how the

industry functions within this framework. The purpose of Chapters IV

and V is to describe the details of Florida sweet corn marketing

based on data from the sample of shipment invoices, or stated another

way, it is to reveal the "whos, hows, whens and where" of the industry's

marketing. Chapter IV is concerned with the functions at the shipping

points and Chapter V with those at the terminal markets.


Sales Firms and Volume Observed


A stratified random start systematic sample of the shipment

invoices was collected from 19 of the 25 commercial sweet corn

sales firms in Florida. Data could not be obtained from the remaining

six firms. Ten percent of the shipment invoices, exclusive of

interpackinghouse sales, were selected from each firm according to

the sample design. Interpackinghouse sales were handled separately

since they did not move directly into the primary channels of

trade, but were more correctly a type of transfer between sales

firms.

The sample included 8.7 percent of the 8,200,731 crates of










sweet corn handled by the 25 sales firms operating in Florida during

the 1962-63 season. The rate of sampling varied between the three

sales areas. The highest sampling rate was 9.3 percent in the Belle

Glade area. The lowest sampling rate was in South Florida where

only 4.1 percent of the area's sales were included. This was lower

than desired, but the total sample rate was not greatly affected

since this area accounted for only 9 percent of the Florida sales.

The sample from the Central Florida area included 8.6 percent of

the area's sales.

A total of 2,533 shipment invoices, exclusive of inter-

packinghouse sales, was selected for this sample. An additional

239 interpackinghouse invoices were observed. A total of 711,758

crater of sweet corn was accounted for in the invoices sampled

and the average size of sale was 281 crates. The value of the

sweet corn included in the sample was $1,507,839 and the weighted

average price per crate was $2.12.


Grades


The proportions of sweet corn which were classified in the

various grades were substantially different in this study from

those observed by Showalter et al., for the 1953-54 season.

From a sample of 2,224 invoices for the 1953-54 season it was

found that 73 percent was U. S. Fancy, 12 percent U. S. No. 1

and 13 percent U. S. No. 2. Unclassified corn made up the



1
Showalter et al., op. cit., p. 16.









remaining 2 percent of the shipments.

There were no U. S. No. 1 or U. S. No. 2 grade shipments

observed in this current study for the 1962-63 season. These

grades make provisions for the tip of the ear to be clipped.

U. S. Fancy corn must not be clipped and the ear must be at

least six inches long. Since ear damage is rigidly controlled

with the production practices used in Florida, it is not necessary

to clip the corn. Thus, practically all corn may be classified

as U. S. Fancy except that which does not meet ear length or has

minor defects. Shippers included in this study did not like to

sell corn which did not meet the U. S. Fancy grade as U. S. No. 1

or U. S. No. 2 because their unclipped corn was generally con-

sidered to be superior in quality to clipped corn from other

production areas which used these latter two grades,

Therefore, a system of stating the percentage of U. S.

Fancy was developed. Sweet corn of the U. S. Fancy grade has a

tolerance of 10 percent, by count, which may fail to meet the

grade requirements. For corn in Florida which exceeded these

tolerances the percentage of corn meeting the U. S. Fancy grade

requirements was stated rather than down grading the corn. For

example, a lot may be graded and invoiced as "85 percent or better

U. S. Fancy." This differentiates Florida corn from that origi-

nating in other states which failed to meet the Fancy grade be-

cause the ears had to be clipped.

For purposes of this study the percentage quotations were

divided in two grade classifications--85 to 89 percent U. S. Fancy

and 75 to 84 percent U. S. Fancy. Corn below 75 percent U. S.

Fancy or ungraded corn was sold as Unclassified.









The proportion of U. S. Fancy corn marketed rose from 73.0

percent in the 1953-54 season to 92.5 percent in the 1962-63 season

(Table 11). White corn, which was normally not graded, accounted

for 3.5 percent of the 1962-63 shipments. The "percentage grades"

were relatively unimportant to the total volume of sweet corn

shipped. Sweet corn falling in the 85-89 percent U. S. Fancy

grade accounted for 2.4 percent of the total shipments and that

in the 75-84 percent U. S. Fancy category accounted for only 1.3

percent. Only 0.3 percent of the observed corn was Unclassified.


Table ll.--Number of sales and crates shipped, percentage of crates
shipped, average size of sale, value of shipments and average price
per crate, by grade and type, 19 Florida sweet corn sales firms,
1962-63 season




Average Value of Average
Average
Grade and Sales Crates Size of Shipments Price
Type le er
Crate

Number Number Percent Crates Dollars Dollars
U.S. Fancy yellow 2,327 658,495 92.5 283 1,388,606 2.11
85-89 percent U.S.
Fancy yellow 83 17,221 2.4 207 39,768 2.31
75-84 percent U.S.
Fancy yellow 52 9,036 1.3 174 16,004 1.77
Unclassified yellow 13 2,036 .3 157 3,430 1.68
Unclassified white 256 24,970 3.5 98 60,031 2.40


Total or
Average 2,731a 711,758 100.0 281 1,507,839 2.12


aThis number observed on 2,533 invoices
accounted for more than one shipment.


Weeks of Shipment


since some invoices


Data were summarized by weekly time periods to determine the










whenn" of sweet corn marketing. Sweet corn shipments were observed

during 40 weeks, beginning with the second week of October and ending

with the second week of July.

Based on graphic analysis of prices and shipments of sweet

corn, the marketing season was divided into two parts. The first,

fall and winter, extended from the week of October 8 through February

18 and the second, spring, extended from the week of February 25

through July 8. A pronounced shift occurred in the relationship
2
between prices and shipments between these periods. For that

reason the periods are analyzed separately.-


Grades

It was hypothesized by several sales managers interviewed

that the proportion of "percentage grade" corn marketed was affected

both by the season and the price level. During the fall and winter

months, when the growing season is often unfavorable, a higher

proportion of "percentage grade" corn is available for marketing.

The existence of this corn encourages sales firms to market it,

but the amount actually marketed is also affected by the price level.

According to the sales managers, a positive relationship exists

between the level of prices and the amount of the "percentage grade"

corn marketed. During periods of low prices much or all of the

corn that does not make the U. S. Fancy grade may be left in the

fields because it is not profitable to pack, handle and market


2This phenomenon is discussed under "Graphic Analysis" in
Chapter VIII.










this corn. During periods of high prices the returns from "percentage

grade" corn may be high enough to make its' marketing profitable.

Evidence that this phenomenon occurred may be observed in

Table 12. The proportion of "percentage grade" corn shipped was

highest from January through April. The average prices of all corn

ranged from $2.00 to $4.00 per crate during this period. Average

prices were generally under $2.00 per crate during May, June and

July and shipments of "percentage grade" corn dropped to a very

low level.

The pooled and paired t test as discussed by Steel and

Torrie were used to compare two means during several instances in
3
this chapter. The pooled t test was used to determine if a signifi-

cant difference existed between the average proportion of "percentage

grade" corn sold during the fall and winter season and the spring

season.4 An average of 8.3 percent during the fall and winter and

3.6 percent during the spring was "percentage grade" corn. Each

season had 20 weekly observations; thus, there were 38 pooled

degrees of freedom. The calculated t was 1,52.5 It was concluded

that even though the proportion of "percentage grade" corn marketed

during the fall and winter was higher than during the spring, the

difference was not statistically significant due to the wide

week-to-week variations.



3
Robert G. D. Steel and James H. Torrie, Principles and Pro-
cedures of Statistics (New York: McGraw-Hill Book Company, Inc.,
1960), pp. 73-81.

4he use of the pooled t test and other statistical tests
to determine the reliability of results are discussed in Appendix C.

See Appendix C.













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As may be observed in Table 12, the seasonal average price

was $2.11 for U. S. Fancy, $2.31 for 85-89 percent U. S. Fancy and

$1.77 for 75-84 percent U. S. Fancy. The higher average price for

85-89 percent U. S. Fancy resulted from the weekly shipping pattern

where a larger volume of shipments of this grsde occurred between

January and April when prices were above average. Shipments of

this grade were practically discontinued during May, June and July

when prices averaged below $2.00. Since average price was related

to week of shipment in this manner, it was necessary to use some

other method to estimate price differentials between grades.

A more accurate method of measuring price differentials was

to measure the weekly deviations between U. S. Fancy and the "per-

centage grades" for weeks when shipments of both grades were

observed. This method partially eliminated the effect of week of

shipment on average prices,

A comparison between U. S. Fancy and 85-89 percent U. S.

Fancy prices in which this method was used indicated that prices

for 85-89 percent U. S. Fancy averaged 41 cents per crate below

U. S. Fancy. The paired t test was used to determine if this dif-

ference was statistically significant. Since weeks in which no

shipments were observed were eliminated, weekly paired price

observations were reduced to 27. With the 41 cents per crate

price differential the calculated t value was 3.96.6 This

difference was significant as the 1 percent confidence level,



6See Appendix C.










so it may be concluded that for the weeks observed the average price

of U. S. Fancy corn was significantly higher than that for 85-89

percent U. S. Fancy.

The average price of 75-84 percent U. S. Fancy was 77 cents

less than that of U. S. Fancy during the weeks in which both were

observed. Paired price observations were available for 17 weeks.

The calculated t value was 7.00 which indicated significance at the

1 percent confidence level.7

When the $2.12 per crate average was used as a base price

for U. S. Fancy sweet corn, prices for other grades fell below this

average. On the basis of these analyses the price of 85-89 percent

U. S. Fancy would be expected to be $1.71 per crate, or 19.4 percent

less than the base price. Corn grading 75-84 percent U. S. Fancy

would be expected to be $1.35 per crate, or 36.5 percent less than

the base price. These ratios may be expected to vary somewhat from

season to season, but they can serve as a guideline for expected

price differences between grades.


Sales Areas

The weekly pattern of sweet corn shipments from all Florida

sales areas showed marked seasonal differences (Table 13). Weekly

shipments began during the second week of October at the moderate

rate of about 1 percent of total sales. With some week-to-week

variations this rate continued until the first part of December.



7
See Appendix C.












Table 13.--Distribution of crates shipped of white and of all corn,
by sales area and week of shipment, 19 Florida sweet corn
sales firms, 1962-63 season




Sales Area
Monday Belle Glade South Florida Central Florida All Areas
of White White White White
All All All All
Week only only only only

Percent


Oct. 8
15
22
29

Nov. 5
12
19
26

Dec. 3
10
17
24
31

Jan. 7
14
21
28

Feb. 4
11
18
25

March 4
11
18
25

April 1
8
15
22


4.7
3.6
3.0
2.7

2.5
1.7
0.9
1.8

1.6
1.2
1.0
0.5
1.3

2.7
0.6






1.2
1.0

1.9
1.8
1.3
1.3

4.8
1.9
3.2
4.5


1.5
0.8
1.6
1.2

0.8
1.0
1.0
1.7

2.2
0.9
0.3
0.2
0.3

0.4
0.3
0.5
0.5

0.5
0.8
0.7
1.5

1.4
1.9
-3.6
4.4

5.1
4.3
4.3
6.1


4.4
3.4
2.8
2.6


2.3
1.6
0.9
1.7


100.0
--w
--w


2.1
0.3

0.5
1.5
2.2
0.9

2.0
6.1
14.6
24.3

15.8
12.1
4.8
6.7
5.8


1.5
1.1
1.0
0.5
1.2

2.5
0.6






1.1
1.0

1.8
2.1
1.2
1.3

4.6
1.8
3.0
4.2


1.2
0.7
1.2
1.0

0.6
0.8
0.8
1.4

1.8
0.7
0.2
0.2
0.3

0.3
0.2
0.4
0.4

0.5
0.7
0.6
1.2

1.2
1.7
3.4
4.5

4.7
3.9
3.6
5.1


-- 9.1 8.2


29 9.6 10.1









Table 13.--Continued


Sales Area
Monday Belle Glade South Florida Central Florida All Areas
of White White White White
Week only All only All All oy All
only only only only

Percent

May 6 4.7 12.5 -- 0.3 0.1 4.5 9.8
13 14.9 9.0 -- -- a 14.2 7.0
20 9.9 9.5 0.7 9.4 7.6
27 4.9 6.3 -- 47.1 10.3 6.9 6.7

June 3 3.3 2.3 -- 21.6 21.7 4.2 5.5
10 0.5 -- 18.3 21.1 0.9 4.0
17 -- 0.1 -- 13.0 23.3 0.6 4.0
24 -- -- -- 17.3 -- 3.0

July 1 -- -- 4.9 -- 0.8
8 -- 0.6 -- 0.1


Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Pereeatage
of
Total 94.8 0.4 9.0 4.8 17.4 100.0 100.0


Leas than one-tenth of 1 percent.











The rate then dropped to about one-half the fall rate and remained

near this level through the third week of February. The rate rose

sharply thereafter and reached the spring peak, a weekly rate of

almost 10 percent, during the second week of May. Shipments de-

clined during the remainder of the Florida season which ended

during the second week of July.

Sweet corn sales were observed from the Belle Glade area

during 37 of the 40 weeks (Table 13). The weekly pattern of ship-

ments was similar to that discussed for Florida except that the

Belle Glade season ended around the first week of June. Shipments

from the South Florida area began during the third week of January,

reached a peak during the last week of March and ended by the first

week of May, Volume sales began from the Central Florida area during

the third week of May, reached a peak during the third week of June

and ended the second week of July.


White Corn

The Belle Glade area marketed 94,8 percent of the white corn

(Table 13). The Central Florida area accounted for 4.8 percent of the

white corn shipments and the remaining 0.4 percent was sold from the

South Florida area.

The seasonal pattern of shipments of white corn varied from

that for all corn. Although white corn shipments averaged only 3,5

percent of the weekly volume over the year, during the fall and winter

the average weekly rate of shipment of white corn was 0.93 percent

greater than that for all corn. The paired t test was used to test

this difference and the calculated t value was 2,58, indicating










8
significance at the 5 percent confidence level. It was concluded

that the average rate of shipment of white corn was higher in the

fall and winter season and consequently lower in the spring than

the average shipment rate of all corn.


Prices

The seasonal pattern of prices for sweet corn was inverse to

that of shipments (Table 14). Prices averaged slightly above $2.00

per crate from the second week of October through the first week of

December. Prices then rose to a range of $3.00 to $4.00 and remained

at this level throughout the winter. Prices declined after the first

of March to a spring season low of $1.44 during the last week of May.

Prices then rose somewhat during the remainder of the season.

The season average prices within the three sales areas

ranged from $2.42 per crate in the South Florida area to $1.97

in the Central Florida area. The average price in the Belle

Glade area was $2.13. The season average price received by an

area was affected by the weeks in which shipments were made from

that area. Even so, there was some evidence that price differences

existed between sales areas, exclusive of the effect of week of

shipment. Since shipments during any one week, with one exception,

were observed from no more than two areas the paired t test was

used to test these differences.

A comparison between Belle Glade and South Florida weekly

prices during weeks when both areas shipped sweet corn indicated



8See Appendix C.





















N 4m
0C40
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om



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$4





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that the Belle Glade prices averaged 17 cents per crate, or 8 percent,

higher during this 16-week period. Using the paired t test, the

calculated value wss 2.93, indicating significance at the 5 percent

confidence level.

Central Florida prices averaged 6 cents higher per crate

than Belle Glade prices during the seven weeks when sales were made

from both areas. Using the paired t test, the calculated value was
10
1.58.0 This indicated that no significant difference existed between

the averages of these area prices.


Sizes of Sales

The average number of crates of sweet corn per sale varied

substantially during different periods of the year (Table 15). During

the early fall weeks, the average number of crates per sale ranged

between 200 and 300. This gradually declined to a low of 53 crates

during the second week of January. Thereafter, the average size

sale gradually increased throughout the remainder of the season.

During the late fall and winter months buyers bought more

mixed loads of vegetables. Many shipments of 25 or fewer crates

were observed during this period. In the spring the mixed loads

tended to decline and orders for solid loads of corn predominated.

It was not uncommon during this period for a buyer to purchase

several solid loads of corn at one time. It was during this period

that the ability to supply large quantities of corn became more

important to the sales firm.



9See Appendix C.

10See Appendix C.
See Appendix C.



















o0 0 n t-









rOO
0

'4
Cl i


0) D0 V o 0
O ciO'fin









66666 l )
66366C) C


4 P-4N
O-*N-V


WO 0Cv CMjOnCV()O o
00 0 0 00 00 00 0 11
4eNcq CV) 1 1 I


t- GO0 o 0 o4-
r-I t- 00 c CO







r- o0 0 oo0 0
vt-Cto 0o0 a0



a 1i coDt- *J'





0


0ot- 00 o0(c 0 r
*Pr-4 NN CNNNNCOV


r4 00 to
r-4 Uq
(*<
5
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St C O0 CV w e
CON N 0 4 -4 4


coo t- I- to
















t- 0 0 t- CO
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wco






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I I I I I I I I I I I I I
66111 6666 6666
11166 6666 6666


1 111


CO 0 0 r r
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1 I C1 r-I


t- a in t- 00 r-1 CV 00 CV v3 0 VO t-
oo q o- t- i0 0 O N
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The average size sale for the season was 259 crates from

Belle Glade, 250 crates from South Florida and 480 crates from

Central Florida. In order to eliminate the effect of week of

shipment the differences between Belle Glade and other areas were

tested using the paired t test. Sales from South Florida averaged

30 crates per shipment larger than Belle Glade shipments for the

16 weeks observed. The calculated t value was 1.20, indicating

that no significant difference existed.11

Shipments from Central Florida averaged 122 crates larger

than those from Belle Glade for the seven weeks when both areas

shipped corn. Due to the week-to-week variations and the small

number of weeks observed, the 2.35 calculated t value indicated

that this difference was not significant.12


Sizes of Sales Firms

Sales firms of different sizes were found to have sub-

stantially different seasonal shipment patterns (Table 16). Large

and medium sales firms made practically all the fall and winter

shipments from Florida. The rate of shipment from firms of all

sizes increased in the spring, but the increase for small firms

was greater than that for firms of other sizes. During the fall

and winter large firms made 15.1 percent and medium firms made

15.4 percent of their total seasonal shipments. Small firms

made only 1.0 percent of their shipments during this period.

This relationship was expected since a higher proportion



1Se Appendix C.

12See Appendix C.












Table 16.--Distribution of crates shipped, by size of sales firm and
week of shipment, 19 Florida sweet corn sales firms, 1962-63 season



Monday Size of Sales Firm
Monday
of Week Large Medium Small All Sizes

Percent


Oct. 8
15
22
29

Nov. 5
12
19
26

Dec. 3
10
17
24
31

Jan. 7
14
21
28

Feb. 4
11
18
25

March 4
11
18
25

April 1
8
15
22
29
May 6
13
20
27

June 3
10
17
24


.7
.5
1.2
1.0

.7
.8
1.1
1.6

2.0
.8
.2
.2
.3


.6
.8
,8
1.5

1.5
2.3
3.8
4.7

4.8
4.1
4.1
5.2
8.8
9.9
7.3
8.0
6.4

5.0
2.9
2.7
1.7


3.5
1.5
1.9
1.2

.7
1.1
.2
1.3

1.7
.3
.3
.2
.1


.1
.1
.1
.1

.1
.7
.2
.8

.5
.5
1.9
1.4

3.4
2.1
2.1
4.8
7.3
10.4
7.2
7.5
9.1

7.7
6.5
6.7
4.4


.3
.2
.4
.4

.5
07
.6
1,2

1.2
1.7
3.4
4.5

4.7
3.9
3.6
5.1
8.2
9.8
7.0
7.6
6.7

5.5
4.0
4.0
3.0


.3





3.6
9.8

6.2
5.8
2.7
4.8
5.6
8.4
4.5
4.6
4.2

4.5
7.2
8.7
9.7










Table 16.--Continued


Monday Size of Sales Firm
Monday
of Week Large Medium Small All Sizes

Percent

July 1 .2 .3 7.6 .8
8 -- 1.1 .1


Total 100.0 100.0 100.0 100.0

Percentage
of Total 64.8 27.1 8.1 100.0


aLess than one-tenth of 1 percent.




of small sales firms operated in the South and Central Florida areas

than in the Belle Glade area. Only 3.5 percent of the shipments from

the Belle Glade area were made by small sales firms, compared with

27.4 percent from South Florida and 17.7 percent from Central Florida.


Types of Buyers


The purpose of studying types of buyers was to determine the

whose of marketing sweet corn. Who are the buyers of sweet corn

during different seasons, from different sales areas and from dif-

ferent sizes of sales firms? Six types of terminal market buyers--

chains, terminal brokers, wholesalers, jobbers, retailers and

government--were considered in this analysis. Terminal brokers

included both buying brokers and selling brokers who operate in

the terminal markets.










Shipments from sales firms to local brokers, either buying or

selling, were not included since most of these shipments were resold

to one of the above types of buyers as discussed in Chapter III.

Inclusion of local brokers in this analysis would have given a

distorted picture of the terminal market buyers of Florida sweet

corn. Nevertheless, the local broker plays an important role as

a second handler. Sales firms included in the sample sold 12.5

percent of their volume to local brokers. This accounted for 480

of the 2,533 invoices observed and for 89,383 crates of corn.

The type of buyer could not be determined from the information

available on 89 of the invoices observed. Shipments with unknown

types of buyers accounted for only 0.1 percent of the volume handled.

Shipments to unknown buyers were not included in the analysis since

this would have introduced a bias in the distribution figures.

Two types of terminal market buyers--chain and wholesalers--

accounted for over 90 percent of all shipments (Table 17). Sales

to chains made up 45.5 percent of the shipments and sales to whole-

salers 44.7 percent. Terminal broker sales accounted for 7.5 percent

of the total. Sales to jobbers, retailers and government were

relatively unimportant, accounting for only 2.3 percent of the

shipments.

Practically no difference existed between the average price

per crate for sales to chains and wholesalers. Average prices to

other types of buyers varied from the over-all average of $2.11,

but care should be observed in interpreting these differences

due to the limited number of observations for some types of buyers.

The average size sale to chain buyers was substantially










larger than that to other types of buyers. Chain sales averaged 373

crates per shipment while sales to wholesalers averaged 288 crates.

The average size of sale to terminal brokers, 308 crates, was slightly

higher than that to wholesalers. Sales to the other types of buyers

averaged from 148 to 172 crates.


Table 17.--Number of sales and crates shipped, percentage of crates
shipped, value of shipments and average price per crate, by type
of buyer, 19 Florida sweet corn sales firms, 1962-63 season




Type of Value of Average Price
Buyer Sales Crates Shipments Per Crate

Number Number Percent Dollars Dollars
Chain 757 282,509 45.5 594,773 2.11
Terminal Broker 152 46,525 7.5 102,323 2.20
Wholesaler 966 277,847 44.7 583,515 2.10
Jobber 46 7,917 1.3 19,263 2.43
Retailer 10 1,485 .2 3,253 2.19
Government 33 5,241 .8 10,811 2.06


Total or
Average 1,964 621,524 100.0 1,313,938 2.11



Sales Areas

Sales firms in the South Florida area sold a larger percentage

of their corn direct to chains than did firms of other areas (Table 18).

These sales firms sold 71.7 percent of their shipments to chains,

compared with 44 percent sold to chains by firms in other areas. The

higher shipments to chains in the South Florida area were offset by

lower sales to wholesalers. Only 25.1 percent of the South Florida

shipments were to wholesalers while 47.0 percent of the Belle Glade

and 40.2 percent of the Central Florida shipments were to wholesalers.











Table 18.--Distribution of crates shipped, by sales area and type of
buyer, 19 Florida sweet corn sale firms, 1962-63 season




Sales Area
Type of Belle South Central All
Buyer Glade Florida Florida Areas

Percent

Chain 44.2 71.7 44.1 45.5
Terminal Broker 6,8 3,0 11.3 7.5
Wholesaler 47.0 25.1 40.2 44,7
Jobber 1.4 a 1.1 1.3
Retailer .2 .1 .4 .2
Government .4 .1 2.9 .8


Total 100.0 100.0 100.0 100.0

Percentage of
Total 73.6 9.0 17.4 100.0


aLess than one-tenth of 1 percent.


Terminal broker sales were most prevalent in the Central

Florida area, accounting for 11.3 percent of the shipments, but only

3 percent of the South Florida shipments were made to terminal brokers.

Sales to other types of buyers from all areas were relatively unimportant,

but sales to government agencies were considerably more important in

Central Florida than in other areas.


Weeks of Shipment

The weekly distribution of shipments was analyzed by types of

buyers to determine if seasonal differences existed (Table 19). Since

chains and wholesalers were so important, accounting for over 90 per-

cent of the total, primary interest was to ascertain whether or not

a seasonal shift occurred between these two types of buyers. Weekly











Table 19.--Distribution of crates shipped, by type of buyer and
week of shipment, 19 Florida sweet corn sales firms,
1962-63 season




Monday Type of Buyer
of Terminal Whole- Govern- All
Week Chain Broker saler Jobber Retailer ment Types


Oct. 8
15
22
29

Nov. 5
12
19
26

Dec. 3
10
17
24
31

Jan. 7
14
21
28

Feb. 4
11
18
25

March 4
11
18
25

April 1
8
15
22
29


30.8
32.1
46.9
54.8

65.3
23,6
24.1
48.3

74.4
39.5
32.7
74.5
55.9

54.8
10.8
56,4
18.8

49.2
41.9
40.0
45.1

40.5
38.1
45.0
62.9

47.4
40.2
43.8
33.0
45.9


7.2

.1





7.9
5.5

2.7
4.5


2.6

9.7

5.6
17.6

4.2
10.3
1.7
9.2


12.2
12.1
11.9

13.1
6.9
1.3
9.9
8.5


53.7
59.9
52.8
43.3

34.7
76.4
67.7
45.9

22.5
55.5
64.6
25.5
33.6

34.1
89.2
38.0
59.7

46.1
45.3
58.3
39.6

59.5
38.4
42.3
24.9

37.4
51.4
50.5
54.6
43.8


Percent

8.3
7.8
.2
1.9


.4
.5
2.7

6.7





3.9

.5
2.3

6.1


10.6
.4
.3

2.0
1.3
1.2
.9
1.4


1.4
ii

--i


.1

3.1



.1
.3


.2





.7
.1


.1
.2
.1

.1
o1l


100.0
100.0
100.0
100.0

100.0
100,0
100.0
100.0

100.0
100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0
100.0










Table 19.--Continued


Monday Type of Buyer
of Terminal Whole- Govern- All
Week Chain Broker saler Jobber Retailer sent Types
Percent

May 6 49.6 3.9 45.4 .1 .1 .9 100.0
13 49.2 2.2 46.0 1.7 -- .9 100.0
20 48.2 8.2 42.9 -- .1 .6 100.0
27 51.6 2.7 45.0 .2 .5 -- 100.0

June 3 44.1 6.8 47.0 2.1 -- -- 100.0
10 39.6 20.5 35.6 -- .7 3.6 100.0
17 36.0 16.8 42.2 1.7 .4 2.9 100.0
24 36.8 5.9 49.3 -- -- 8.0 100.0

July 1 34.7 11.6 42.2 11.5 -- 100.0
8 -- -- 100.0 -- -- -- 100.0

Average 45.5 7.5 44.7 1.3 .2 .8 100.0










sales to other types of buyers tended to be more sporadic and no

definite pattern was apparent.

Pooled t teats were used to determine whether a significant

difference existed between the fall and winter season and the spring

season in the percentage of shipments handled by chains and whole-

salers. Twenty weeks were observed in the fall and winter and 19 in

the spring when sales were made to chains. The average percentage

sold to chains was only 0.1 percent greater in the spring than in the

fall and winter. The calculated t value was 0.02, indicating that no

significant difference existed in the percentage sold to chains be-
13
tween these two seasons.

The average percentage of shipments sold to wholesalers in the

fall and winter was 6.2 percent larger than in the spring. Most of

the decrease in the spring was accounted for by increased shipments

to the three minor types of buyers--jobbers, retailers and govern-

ment. The distribution of shipments was observed for 20 weeks in

the fall and winter and 19 weeks in the spring. The calculated t
14
value was 1.48, indicating nonsignificance.1 It may be concluded

that even though some differences in the seasonal pattern of ship-

ments were observed, they were not large enough to conclude that a

shift in the seasonal pattern of shipments to wholesalers occurred.


Sizes of Sales Firms

Little difference was observed in the types of buyers to



13See Appendix C.

14See Appendix C.










which large and medium sales firms sold sweet corn. Small firms tended

to sell more to chains and less to wholesalers and terminal brokers

(Table 20). Small sales firms sold 61,1 percent of their volume to

chains, while large and medium firms sold 44.6 and 41.2 percent,

respectively. Small firms sold 32.6 percent of their volume to

wholesalers--about 14 percent less than large and medium firms.


Table 20.--Distribution of crates shipped, by size of sales firm and
type of buyer, 19 Florida sweet corn sales firms, 1962-63 season




Type of Size of Sales Firm
Buyer Large Medium Small All Sizes

Percent
Chain 44.6 41.2 61.1 45.5
Terminal Broker 7.7 8.1 4.5 7.5
Wholesaler 45.8 46.3 32.6 44.7
Jobber .9 2.7 1.2 1.3
Retailer .2 .4 .1 .2
Government .8 1.3 .5 .8


Total 100.0 100.0 100.0 100.0

Percentage of
Total 64.8 27.1 8.1 100.0



Bases of Sale


Bases of sales were analyzed to determine the howss" of

marketing Florida sweet corn. How were the various bases of sales

used in the sales areas, during different seasons, by different

sizes of firms and by different types of buyers? Six bases of

sales, f.o.b., delivered, price arrival, cash, joint account and

consigned, were considered in these analyses.

Two bases of sales, f.o.b. and delivered, accounted for









95.9 percent of the shipments observed (Table 21). F.o.b. sales,

by far the most prevalent, accounted for 86.5 percent of the

shipments. Consigned sales was the third most important basis of

sale used, but accounted for only 2.8 percent of the crates sold.

Other bases of sale were observed only sporadically and accounted

for only 1.3 percent of the volume marketed.

The season average price for f.o.b. shipments was $2.12,

the same as the average for all shipments. The average price of

delivered sales was slightly lower at $2.04. Average prices for

other bases of sale varied substantially from that for f.o.b. sales,

but since the observations were limited, this difference probably

resulted more from week of shipment or some possible third factor

than it did from the basis of sale used.


Table 21.--Number of sales and crates shipped, percentage of crates,
value of shipment and average price per crate, by basis of sale,
19 Florida sweet corn sales firms, 1962-63 season




Basis of Value of Average Price
Sale ales Crates Shipments Per Crate

Number Number Percent Dollars Dollars
F.o.b. 2,140 616,071 86.5 1,307,497 2.12
Delivered 245 66,704 9.4 136,168 2.04
Price Arrival 4 2,800 .4 4,879 1.74
Cash 90 902 .1 2,009 2.23
Joint Account 12 5,479 .8 11,042 2.02
Consigned 42 19,802 2.8 46,244 2.34


Total or
Average 2,533 711,758 100.0 1,507,839 2.12



The average number of crates per sale varied from 700 for price

arrival sales to 10 for cash sales. F.o.b. sales averaged 305 crates,










somewhat larger than the average for all types of sales, which was

281 crates. The average size of delivered sales was below the average

at 272 crates. Consigned sales average 471 crates, considerably larger

than f.o.b. and delivered sales.


Sales Areas

No appreciable difference existed between the use of f.o.b. and

delivered sales in the Belle Glade and South Florida areas (Table 22),

The volume of corn consigned from Belle Glade was substantially larger

than from South Florida probably because of the differences in seasonal

movement between the areas and perhaps from a difference in sales

policies of firms. Other bases of sale were of minor importance in the

Belle Glade area and were not observed in the South Florida area.


Table 22.--Distribution of crates shipped, by sales area and basis of
sale, 19 Florida sweet corn sales firms, 1962-63 season



Sales Area
Basis of
Sale Belle South All
Glade Florida Central Florida Areas
Percent

F.o.b. 88.7 90.1 76.0 86.5
Delivered 7.3 9.6 18.7 9.4
Price Arrival .5 .4
Cash .1 .2 .1
Joint Account 1.0 .8
Consigned 2.4 .3 5.1 2.8


Total 100.0 100.0 100.0 100.0

Percentage of
Total 73.6 9.0 17.4 100.0










The percentage of f.o.b. shipments was substantially lower

and delivered and consigned shipments were higher in the Central

Florida area. F.o.b. shipments in the Central Florida area were 13

percent less than in other areas. Delivered shipments accounted

for 18.7 percent and consigned shipments 5.1 percent of the total.

This rate of consignment in the Central Florida area was more than

twice that in the Belle Glade and South Florida areas where the

Marketing Order and the Exchange were in operation. This again

reflects a difference in sales policies among firms.


Weeks of Shipment

The f.o.b. sale, which ranged from 59.6 to 100.0 percent of

weekly shipments, was the predominant basis of aale used throughout

the season (Table 23). Delivered sales were observed during most

weeks, but other bases of sale were observed only sporadically.

Since the f.o.b. basis of sale was of such major importance,

the pooled t test was used to determine if a seasonal difference

existed in the use of this basis of sale. Based on 20 weekly

observations for each season, it was determined that f.o.b. sales

in the fall and winter averaged 3.3 percent higher than in the

spring. A calculated t value of 1.20 indicated that this difference

was not significant.5 It was concluded that no shift between f.o.b.

and other bases of sale occurred between the seasons.

Some sales managers suggested that consigned sales were used

more during periods of declining prices than during periods of rising



15See Appendix C.






70




Table 23.--Distribution of crates shipped, by basis of sale and week of
shipment, 19 Florida sweet corn sales firms, 1962-63 season




Week Basis of Sale
of Price Joint All
Shipment F.o.b. Delivered Arrival Cash Account Consigned Bases
Percent


Oct. 8
15
22
29

Nov. 5
12
19
26

Dec. 3
10
17
24
31

Jan. 7
14
21
28

Feb. 4
11
18
25

March 4
11
18
25

April 1
8
15
22
29


59.6
88.2
85.4
99.9

90.0
90.2
73.8
91.4

87.1
98.6
92.7
93.7
90.2

97.6
99.7
95.8
86.3

97.5
89.1
97.0
85.6

98.3
85.4
89.6
89.9

87.5
96.6
88.9
86.2
91.1


28.2
7.5






6.6


5.8
4.3
14.6


9.9
9.8
1.1
4.3

11.2
1.4
6.3

9.2


1.1
3.3

.6
2.8
2.9
1.2

1.7
8.8
4.6
5.6


8.8
3.0
11.0
11.9
6.1


8.2


2.4
.3




a
.1
.1
a


3.5


2.0
--


1.9
--


6.4







17.6
4.1

1.6


5.9





3.1
6.9

1.9
6.0

5.0


5.7
5.7
4.4

3.6
.3


1.6


100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0

100.0
100.0
100.0
100.0
100.0









Table 23.--Continued


Week Basis of Sale
of F.o.b. Delivered Price Cash Joint Consigned All
Shipment Arrival Account Bases
Percent

May 6 88.6 9.3 1.0 .1 -- 1.0 100.0
13 89.0 9.6 1.4 a -- 100.0
20 81.2 10.5 -- .5 2.6 5.2 100.0
27 89.1 10.1 .1 -- .7 100.0

June 3 86.1 10.3 -- .1 -- 3.5 100.0
10 75.3 17.8 -- .3 -- 6.6 100.0
17 71.5 19.2 -- .1 -- 9.2 100.0
24 70.4 24.3 -- .1 -- 5.2 100.0

July 1 86.8 13.2 -- -- 100.0
8 100.0 -- -- -- 100.0

Average 86.5 9.4 .4 .1 .8 2.8 100.0


aLess than one-tenth of 1 percent.










prices, They reasoned that sales were more difficult to make when prices

were falling, and, therefore, salesmen were forced to turn to consign-

ments. In order to test this hypothesis all weeks were classified as

those of rising or declining prices based on the direction of price

movement from the previous week. Using the prices from Table 14,

price rises were observed in 20 weeks and declines in 19 weeks. The

The week of October 8 could not be classified since the previous

week's price was unknown,

The average percentage of consigned shipments was found to be

1.4 percent larger in weeks of declining prices than in weeks of

rising prices. The pooled t calculated value was 1,34, and with 37

degrees of freedom it was nonaignificant.16 Although the difference

may indicate that more corn was consigned during periods of declining

prices, the difference was not large enough to make this a positive

conclusion. Some firms have an established policy of consigned

selling regardless of the trend of the market price.


Types of Buyers

F.o.b. was the predominant basis of sale used by all types of

buyers except retailers and government. Delivered basis was most

frequently used by these two types of buyers (Table 24),

Chains used only two bases of sale, f.o,b. which accounted

for 86.8 percent of their purchases and delivered which accounted for

13.4 percent. Wholesalers used all bases of sale except cash although

the volumes handled on bases other than f.o.b, were low.



16See Appendix C.






73




Table 24.--Distribution of crates shipped, by basis of sale and type of
buyer, 19 Florida sweet corn sales firms, 1962-63 season




Type of Basis of Sale
Buyer Price Joint All
Buyer F.o.b. Del. Cash Cons.
Arr. Acct. Bases

Percent

Chain 86.6 13.4 100.0
Terminal Broker 53.1 5.6 4.5 1.6 35.2 100.0
Wholesaler 89.9 7.0 .3 1.7 1.1 100.0
Jobber 92.9 7.1 100.0
Retailer 14.1 85.9 100.0
Government 6.0 94.0 100.0
Local Broker 100.0 100.0
Unknown 100.0 -


Average 86.5 9.4 .4 .1 .8 2.8 100.0




Consigned sales, as would be expected, were largest to terminal

brokers, accounting for 35.2 percent of the shipments to them. Slightly

more than 1 percent of the volume sold to wholesalers was on consignment.

All cash sales were to unknown types of buyers, but these accounted for

only 0.1 percent of the total sales.


Sizes of Sales Firms

Small sales firms sold 95.3 percent of their shipments on an

f.o.b. basis--almost 10 percent more than sales firms of other sizes

(Table 25). Since small sales firms sold a higher proportion of their

volume to chains, who buy predominantly on an f.o.b. basis, this

relationship may have been expected. Large sales firms sold 10.6

percent of their volume delivered and medium and small firms sold

progressively less.

Medium sales firms sold the highest percentage, 4.8 percent,










on a consigned basis. Large sales firms sold 2,5 percent of their volume

on consignment and small firms only 0.1 percent,


Table 25.--Distribution of crates shipped, by size of sales firms and
basis of sale, 19 Florida sweet corn sales firms, 1962-63 season




s of Size of Sales Firm
Basis of
Sale Large Medium Small All
Sizes
Percent

F.o.b. 85.5 86.4 95.3 86.5
Delivered 10.6 7.0 4,6 9,4
Price Arrival .6 -- .4
Cash .1 .4 .1
Joint Account .7 1,4 .8
Consigned 2.5 4.8 .1 2.8


Total 100.0 100.0 100.0 100.0

Percentage of
Total 64.8 27.1 8,1 100.0


Interpackinghouse Sales


Interpackinghouse sales are not sales in the sense that they

enter directly into the primary channels of trade. They may more

accurately be called exchanges between packinghouses. By mutual

agreement between the sales firms, a discount is usually allowed

by the selling firm to cover the selling cost of the purchasing

firm. This discount makes it possible for the purchasing firm to

cover the marketing cost involved in placing the corn into the

primary channels of trade and still sell at the competitive market

price. The selling firm foregoes the normal selling revenue, but

does not have the marketing expense of placing the corn in the primary

channels of trade.











The volume of interpackinghouse movement was 71,873 crates or

about 10 percent of the observed sales. This volume was observed on

239 shipment invoices and the average size of interpackinghouse sale

was 301 crates. This is slightly larger than the average of 281

crates per sale for corn which was entered into the primary channels

of trade. The value of the interpackinghouse sales was $161,491 and

the season average price was $2.25.


Grades

The distribution of the grades of corn handled through inter-

packinghouse sales was not substantially different from that observed

for other sales. U. S. Fancy accounted for 93.5 percent of the inter-

packinghouse volume, compared with 92.5 percent for other types of

sales. White corn accounted for 3.8 percent of the interpackinghouse

shipments and 3.5 percent of the other shipments. The "percentage

grades" accounted for the remaining 2.7 percent of interpackinghouse

shipments, compared with 4.0 percent for other shipments.


Sales Areas

Over 98 percent of the interpackinghouse movement was observed

in the Belle Glade sales area. Although interpackinghouse sales were

observed occasionally in other areas, they were a common marketing

practice only in the Belle Glade area,


Sizes of Sales Firms

An interpackinghouse transaction may be considered as either

a sale or a purchase to a sales firm depending on whether the corn is

bought or sold. Both sides of the picture must be considered in order

to understand the use of interpackinghouse sales at the shipping point.










Large sales firms predominated in the making of interpackinghouse

sales, but medium firms were predominant in purchases (Table 26), Large

firms accounted for 75,2 percent of the interpackinghouse sales, but

only 44.8 percent of the purchases. Medium firms, which accounted for

only 18.1 percent of the sales, accounted for 48.9 percent of the

purchases. Little difference was evident between sales and purchases

for the small firms.

Substantial differences were observed between the percentages

of sales and purchases accounted for by individual firms (Table 26).

Interpackinghouse sales of individual firms ranged from 0 to 32.4

percent of the observed volume and purchases ranged from 0 to 34.2

percent. No particular pattern between sales and purchases of the

firms was apparent. Some firms with large interpackinghouse sales

had very low purchases and vice versa.


Weeks of Shipment

A comparison between Tables 13 and 27 revealed that the pattern

of weekly shipments of interpackinghouse sales followed that of other

shipments closely. The trend of sales which were entered into the

primary channels of trade tended to be followed by interpackinghouse

sales from October through May, but interpackinghouse sales were

practically discontinued during June and July. This may be accounted

for by Central Florida's domination of the market during this period

and the fact that interpackinghouse sales were not used in this

area to an appreciable extent.

A comparison between Tables 14 and 27 revealed that weekly

average prices of interpackinghouse shipments and all other shipments











Table 26.--Distribution of crates shipped and purchased as interpacking-
house sales, by sales firm and size of sales firm, 19 Florida sweet
corn sales firms, 1962-63 season



Sales Firm
Size and Type of Transaction
Sales Firm Sale Purchase

Percent


Large:
A
B
C
D
E
F
G
H


2.0
7.4
13.7
4.9
32.4
a
12.6
2.2


1.8
9.0
1.8
17.1
6.6
2.4
.6
5.5


Subtotal

Medium:
I
J
K
L
M


Subtotal

Small:
N
0
P
Q
R
S


Subtotal


Total


75.2 44.8


a .1
12.2 2.3
3.5 11.4
a .9
2.4 34.2


18.1 48.9


2.6
a 1.1
5.2
.4
1.1
2.6


6.7


100.0


6.3


100.0


Leas than one-tenth of 1 percent.









were closely related although some week-to-week variations occurred. The

seasonal average price of interpackinghouse shipments were $2.25 and that

of all other shipments was $2.12. The average price for all other

shipments was lower because interpackinghouse sales were discontinued

during June and July. A comparison of prices during the weeks when

interpackinghouse sales were active, October through May, showed the

average price of interpackinghouse sales to be $2.60 and all other

sales to be $2.69. This was more typical of the expected difference

during periods when interpackinghouse sales were used.










Table 27.--Distribution of crates shipped and average price per crate
of interpackinghouse sales, by week of shipment, 19 Florida sweet
corn sales firms, 1962-63 season


Monday
of Week


Oct. 8
15
22
29
Nov. 5
12
19
26
Dec. 3
10
17
24
31
Jan. 7
14
21
28
Feb. 4
11
18
25
March 4
11
18
25
April 1
8
15
22
29
May 6
13
20
27
June 3
10
17
24
July 1
8


Total or Average


Crates
Shipped

Percent

3.1
.3
.2
2.1
1.4
2.2
.3
1.5
7.3
1.9
a
.4
.8
.6
.5
.5
.1
a
.6
1.0
1.7
.8
1.8
5.0
3.1
8.6
5.3
9.8
6.0
8.2
11.0
4.9
6.3
1.2
.4
a

1.1


Price per
Crate

Dollars

1.83
2.29
2.40
2.02
2.58
2,93
2.40
1.93
2.07
3.27
2.40
3.45
3.61
3.75
4.36
2.72
3.23
2.95
3.21
3.02
3.21
3.18
2.94
2.36
2.09
2.54
2.65
2.55
2.50
2.09
1.59
1.57
1.46
1.39
1.75
1.73

1.80


100.0


2.25


Less than one-tenth of 1 percent.

















CHAPTER V


TERMINAL MARKET STRUCTURE AND PRACTICES



A total of 1,853 invoices on shipments to known market

destinations was observed. The destinations were unknown for the

remaining 680 invoices, most of which were to Florida brokers.

Only shipment invoices with known destinations were included in

the analysis of the terminal market distribution, since inclusion

of unknown destinations would have introduced a bias in the distri-

bution figures. Terminal markets for Florida sweet corn were grouped

into six market areas of the United States, plus one for Canada.

States included in each of these market areas may be observed in

Figure 5.

The terminal market sample of 581,337 crates of sweet corn

had a total value of $1,228,891 (Table 28). The weighted season

average f.o.b. Florida price was $2.11 per crate with a range from

$2.30 in the Southwest market area down to $1.93 in the Canadian

area. The distribution of the sweet corn shipped into the various

market areas ranged from 36.1 percent for the Northeast to 2.8

percent for the West. The Northeast, North Central and Southern

market areas, the three most important areas, accounted for 82.1

percent of the corn marketed.

Season average prices for the market areas appeared to be

affected substantially by the period during which the shipments were







81











a
0
0

1*
-,



0





0
4J























ti
/ "
as












4 0

















0e



.4
) ) 40
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S"4





e a l *o s



/ .@0 0C

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heaviest to the various areas. A comparison between the Southwest and

the Canadian market areas illustrated this. The largest percentage

of shipments to the Southwest, where the average price was 37 cents

higher than in Canada, were received during January and February

when prices were high. The highest percentage of shipments were made

to Canada during May, June and July, a low price period.


Table 28.--Number of sales and crates shipped, percentage of crates,
value of shipments and average price per crate, by market area,
19 Florida sweet corn sales firms, 1962-63 season




Market Value of Average Price
Sales Crates
Area S s C s Shipments Per Crates

Number Number Percent Dollars Dollars
Northeast 540 210,082 36.1 429,784 2.05
North Central 354 135,822 23.4 289,121 2.13
South 536 131,017 22.6 283,702 2.17
Southwest 175 32,106 5.5 73,987 2.30
Midwest 147 28,071 4.8 61,027 2.17
West 31 16,357 2.8 37,411 2.29
Canada 70 27,882 4.8 53,859 1.93


Total or
Average 1,853 581,337 100.0 1,228,891 2.11


aF.o.b. Florida shipping points.


Characteristics of the Market Areas


Seasonality

Three-week moving averages of the percentages of weekly ship-

ments received by each marketing area were computed to determine the

relative importance of the market areas during different periods of

the year. These moving averages were used to smooth out some of the









week-to-week variations that occurred in the weekly distribution data

(Figure 6).

Shipments to northern market areas were larger during the

spring and early sumer months, while shipments to southern market

areas were heavier during the late fall and winter. A more detailed

discussion of the seasonal patterns of shipments is presented in the

subsequent discussion of shipments to individual market areas.


Terminal Market Sizes

Terminal markets were classified by size according to the

number of crates of sweet corn shipped to that market during the

1962-63 season. Large markets, those receiving 10,000 or more crates,

accounted for only 9.7 percent of the markets to which shipments were

reported, but the 15 markets in this category accounted for 61.0 per-

cent of the sweet corn shipped (Table 29). Medium markets, those

receiving between 1,000 and 9,999 crates, represented 33.5 percent

of the markets and 33.8 percent of the volume shipped. Small markets,

those receiving less than 1,000 crates, accounted for 56.8 percent

of the markets, but only 5.2 percent of the volume.

Ten of the 15 large terminal markets observed were located

in the Northeast and North Central market areas. The three other

large markets were located in the South, Midwest and Canada. Medium

and small markets were observed in all market areas. A more detailed

discussion of the size of the markets in each area is presented in

the subsequent discussion of the individual market areas.


Sizes of Sales

The average number of crates of sweet corn per sale tended to





























































































0 0 0 0 0
Cq .4 -4


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