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ANNUAL REPORT


ORIDA CITRUS EXCHANGE

.lORIDA CITRUS EXCHANGE


For the Season
1926-1927


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THE EXCHANGE MAKES PROGRESS

HE Florida Citrus Exchange has increased its control
. q of the percentage of the total Florida crop. A
large amount of new acreage has been signed with
the Exchange. This membership is not the result of a cam-
paign, but has been. voluntarily adherences by grow-
ers who have seen the efficiency and value of the
organization.
All Exchange houses were closed after the freeze.
This act, plus careful inspection, has done much to im-
press fruit buyers with the trustworthiness of the Florida
Citrus Exchange and its pack.
In spite of the loss experienced in the hurricane and
freezes, the Exchange volume of shipments to date has
already passed the total of last year by 960 cars.
A 10 per cent greater number of markets were
entered. More customers-a third more new customers
than last year-have been developed.
Phenomenal success has been met in the first year's
intensive development of European markets. A 1325
per cent increase in volume of Seald-Sweet shipments
was obtained.
Operating expenses have been reduced $.011 per box,
yet increased efficiency of the organization has been
obtained.
A total of 2300 traffic claims have been filed this
season amounting'to $41,328.05. Seventy-five per cent
of the number of claims and 50 per cent of the amount
have already been collected and returned to growers on
this season's filings. $55,075.90 has been returned this
season to date, on current and older claims.
Twenty-five thousand Seald-Sweet Cook Books and
nearly ten thousand Seald-Sweet Juice Extractors have
been sent to the homes. f uses during the past year and
are operating tQ.ir(iea!te 'thec ssuj~Ation of citrus and
crystallize th6:.d&'eamda for Seald-Si;vet,"'**.
The fia.c'e of the Exchange are iri*"* ellynt condi-
tion. .... ;.. :. :.: ..*
0.... :. :.: *
















CONTENTS


Page
Florida Citrus Handicapped .......................... 3
Competition ....................................... 5
Exchange Sales and Returns .......................... 6
Bulk Fruit Shipments ............................ 10
Export Shipments .................. ........... 10
Sales Quotas .................................. 11
Field Department Activities .......................... 12
Inspection W ork ............................... 13
A association Audits .............................. 14
Marking Machines, Etc. .......................... 14
Decay and Prevention ..................... .... 15
Legal Phases ........................ ......... 15
Organization W ork .............................. 16
Seald-Sweet Chronicle ........................... 16
Seald-Sweet Advertising ............................. 17
Seald-Sweet Juice Extractors ...................... 18
Traffic Department ................................ 18
Growers and Shippers League ...................... 19
Expense of Operation ............................... 19
APPENDICES-
A. Non-Florida Citrus Acreage .................... 20
B. Shipments, Sales, Remittances .................... 22
C. Growers Loan and Guaranty Company ............ 23
D. Exchange Supply Company .................... 23
E. Canned Grapefruit .......................... 23





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ANNUAL REPORT

Season 1926-27
May 10th, 1927


From the standpoint of the grower, the season now drawing to a
close is not one to create exceptional enthusiasm. Progress in the de-
velopment of organized, intelligent marketing of the citrus crop has
been made. Such progress, however, but little out-weighs the set-
backs the industry has received.
Nor are these statements pessimistic. Plans have been perfected
and ground work has been laid which will make possible a visible
and substantial progress for the benefit of the grower during the next
few seasons.
The industry has operated under two serious handicaps this
season. Each of these has served to retard progress in the better
merchandising of the citrus crop not only for this season, but for
several seasons to come.
The first of these finds its source in the climatic calamities experi-
enced in Florida this season. Of these, the freezes of January 12th
and 16th are the most far-reaching in effect. Naturally, neither the
wind nor the freezes could be prevented. Proper organization of the
industry could, however, have definitely eliminated the disastrous re-
sults of these occurences which have cost the state an inestimable sum
in actual returns and in loss of confidence in the quality of the fruit.
Frozen fruit has been shipped from the state in large quantities.
Some instances have been reported in which.the fruit was shaken from
trees which had been defoliated, picked from the ground, packed and
shipped. Naturally, while the shipment of such fruit will at the
outset attain some returns, the early reaction is the loss of confidence
on the part of the trade and the consumer in all Florida fruit. Many
who used to swear by Florida citrus now swear at it.
The destroyed reputation of quality in Florida citrus fruits can
far more readily be regained among the trade than with the con-
sumers. It will take several seasons of carefully maintained grading,
together with hundreds of thousands of. dollars spent in advertising to
obtain once again the favor of the citrus consumer for Florida fruit.
The harm done to the industry this season by this lack of control is
not and, I believe, cannot be exaggerated.
The second handicap is not alone of this season; it has been with
us always. One of the most serious difficulties in the sale of Florida
citrus fruit is that it is its own worst competitor in the markets of the
nation. Today one hundred and forty competitive sales agencies are
trying to push varying volumes of Florida citrus through the same
trade channels in the same markets at the same time. Unstandardized


Freezes
Handicap
Industry




Frozen Fruit
Destroys
Confidence









Worst
Competitor
is Florida
Fruit










grades have made it extremely difficult for the trade to know what
is being offered and to intelligently judge the prices quoted. Naturally
it has turned from Florida citrus to the well standardized product of
our chief citrus competitor, which was also a product of exceptionally
fine quality this season.
Grading standards naturally materially effect the individual success
of each operator. Nevertheless, under these conditions it is inevitable
that the volume of offerings from Florida and the prices quoted must
dominate the choice of the buyer. In addition, the situation created
by the movement of such volumes by so many un-coordinated agencies
makes probable a costly glutting or over-loading of one or many
markets beyond their capacity to absorb.
Movement of the present volume without control to match the
absorbing power of markets can never be profitable. An increased
volume without such control makes the situation just so much more
hopeless. The failure of the industry to regulate its shipments in
accord with the amounts that can be absorbed without injury to mar-
kets is its most costly error. But that folly is matched by the in-
dustry's failure to do those things necessary to increase consumer
demand and market distribution, keeping them well ahead of produc-
tion. Such is the inevitable result of a product competing with itself. It
is a situation from which practically all of the present unrest, dissatis-
faction and difficulty now inherent in the conditions surrounding the
industry are derived directly.
This is not a pleasant picture to contemplate, nor is it made any
more attractive when it is realized that most of these hundred and
forty agencies, because of their limited volume, are dependent upon
conditions in the few markets in which they are able to obtain repre-
sentation. Such limitations cannot equip any person handling sales
of fruit with the knowledge of national market conditions necessary to
operate to best advantage against not only Florida competition, but
all other as well, citrus and non-citrus.
The Florida Citrus Exchange has been able to avoid much of
the disastrous effect of this intra-Florida fruit. competition. It has
more salaried representation than all other agencies combined. It now
has an international sales organization built expressly for the purpose
of handling Florida citrus fruit. It maintains national advertising on
its brand. It supports wide-spread dealer service work.
But with all of these merchandising methods employed effectively
in the distribution of a third of the crop, it is inevitable that the vol-
ume remaining to be handled by one hundred thirty-nine agencies with
as many or more directing heads should make reasonable satisfactory
results impossible. Prices cannot be maintained nor can proper dis-
tribution be effected. 35% control can do much, but it cannot ac-
complish these last most necessary ends. This competition of Florida
fruit with itself, leading as it does to such wide-spread and disastrous
results, is unnecessary and can be eliminated. In fact, this must be
done if Florida is to be in a position to meet successfully its non-


Uncontrolled
Shipments
Costly






Other
Operators
Limited




Exchange
Efforts
Valuable




Self-
Competition
Must Be
Eliminated












Florida and deciduous competition as well as to provide for the volume
promised in the present non-bearing acreage within the state.
There is one sure way of obtaining these results. It is found in
a true interpretation of the word "cooperation." Grower cooperation
-the placing of his fruit by each producer in the organization owned
and operated by the producer for the profit of the producer, which
organization alone can control 100% of a product, fix the price and
regulate its distribution without fear of legislative reprisal-cannot
do other than eliminate this greatest of Florida's citrus problems.

COMPETITION
This office is not in accord with those in the state who have voiced
the opinion that future crop increases both of this state and of other
sections are entirely prospective and not actual, and that since they
are such, can be left safely to care for themselves when and if they
eventuate. Such reasoning is a fallacy. An industry which pro-


Grower
Cooperation
Only Remedy


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Citrus Industry Grows In Value To State
Since the season of 1909-10 the volume of Florida citrus
shipments has increased from 6,100,000 boxes to 16,500,000.
The value to the state per box has increased from $1.59 to
$3.21. This increase can by no means be entirely attributed
to the decrease in the value of the dollar during this period.
It is ample evidence that the citrus industry is an increas-
ingly valuable asset to the state. It is one to the progress
of which the state cannot afford to be Indifferent.
Another interesting phase of the industry illustrated in
the above graph is the fact that this increase in value di-
rectly parallels the growth of the Florida Citrus Exchange,
which was organized in 1909-10 and grew to a control of
one-third of the crop in 1926-27.

duced 6,100,000 boxes in 1909-10 and from that time grew to a
normal of 20,000,000 boxes, will continue that growth if markets
are developed to provide for it.
It is unreasonable to assume that other citrus producing sections
or the producers of fruit competitive with citrus will voluntarily cede
a place to the Florida citrus crop. Markets and consumers are ob-
tained against such organized competition only by concentrated ad-
vertising and selling. Nor is it logical to assume that the state should
not exploit her citrus resources and increase her present production
when markets are available and can be had.


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State Cannot
Forfeit
Citrus
Progress


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Based on the latest data obtainable, approximately 40% of
Florida's present citrus acreage is non-bearing. The growth of these
40% Florida non-bearing groves to the point where they will materially increase
Acreage the present Florida citrus crop may serve either to bring disaster be-
Non-bearing cause of large production for which markets are not ready, or may
be made a decided asset to the state by careful planning and prepara-
tion of markets against competition before this increased production
becomes a factor.
It has been said that the law of supply and demand is immutable
and that the economic application of this law will drive the owners
of many groves out of business because so great a volume will be
Citrus unprofitable. It is true that the law of supply and demand applies,
Demand but fortunately its factors are variable. Rather than cut down the
Must Be supply and prevent the growth. of Florida's citrus industry, it is far
Increased more logical to organize now and increase the demand in spite of
whatever competition which may be faced so that these increased
volumes may find profitable markets. Six million non-bearing trees
and four million young trees with heavier yields each season are a
visible and striking challenge to the ingenuity and energy of the re-
sponsible heads of the industry.
It is not necessary to detail the non-Florida citrus competition.
These figures are given in Appendix "A." A study of them indicates
Competition that while California's volume will not materially increase, the acreage
Is Severe in the Rio Grande Valley, in Alabama and Porto Rico has by no
means reached capacity production and will soon be bidding strongly
for its share of the nation's markets.
Nor is the non-citrus competition to be disregarded. Every year
steady progress is made in the organizations controlling the merchan-
dising of these crops. You are acquainted with the work done by
the banana, raisin, grape and pineapple interests, etc. The producers
of apples have organized and plan the expenditure of $4,000,000
within the next few years selling their product. Even the prune
growers of California have organized to make their individual bid for
the consumer's fruit dollar. The methods used in every case are
grower control, modern merchandising and regulated distribution.
Such competition is real. It demands careful consideration on the
part of every person interested in the Florida citrus industry. It is
competition which must be met if the future of Florida's greatest
industry is to remain bright.

EXCHANGE SALES AND RETURNS
During the season 1926-27 to May 10th, the Florida Citrus
Exchange has shipped 6,941 cars of oranges, tangerines and mixed,
and 5,476 cars of grapefruit, or a total of 12,417 cars (see Appendix
"B" for details of varieties, acceptance, etc.) For the same period
41,221 cars were shipped from the state. The Exchange shipments
thus are 30% of the total at this date, as against 29.8% for the same










date last season. The control of a large majority of the remaining
fruit indicates that the final figure will be considerably higher.
For the season up to May 10th, the Exchange has returned to
its Sub-Exchanges, for distribution to Associations and growers, a
total of $9,181,681.26, exclusive of returns on export shipments.
This figure will be increased by approximately $1,500,000 on receipt
of final returns by the end of the fiscal year.
In spite of the reduction of crop volumes by the climatic disturb-
ances, we have already exceeded our last season's total by 960 cars.
The percentage of Exchange shipments at the end of the season will
probably exceed those of last year in a considerable degree. Had

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50 50
45 45
40 40
35 35
30 --30


15 15
10 10
5 5
0 0
Exchange Doubles Control In Ten Years
During the past ten years the Florida Citrus Exchange
has maintained a growth which has been steady and, with
the exception of the season of '24-25, has been consistent.
This increase is due to the economical pressure brought to
bear upon growers during a season of especially heavy pro-
duction without market control. Such a season occurred
in '23-24, bringing many growers into the Exchange for the
season '24-25. Many of them left the Exchange for the
season '25-26. This intermittent membership is not to be
desired, as its unstable nature materially increases the dif-
ficulty of planning proper organization and merchandising.
During the past ten years, however, the Exchange has
doubled its percentage of control of the Florida citrus crop.
this organization not adhered strictly to its policy of doing all possible
to sustain the reputation of its brands and shipped as most of its com-
petitors did, regardless of frost damage, our gain would have been
five or six per cent over last season.
The sales of this season naturally divide into two distinct parts,
each of which has had its own peculiar obstacles to free movement
and good prices.
The first division dates from the beginning of the shipping season
through the holiday season, ending about January 1st. During the
greater part of this period Florida oranges did not show the usual
good eating quality, had a subnormal percentage of Brights and ran
heavily to small sizes, with an exceptionally heavy percentage of 250s
and 360s.


Nearly
$10,000,000
Returned



Shipments
Already
Exceed Last
Season Total


Small Sizes
Poor Quality
Retards Sales










Very serious resistance to these sizes was encountered from the
smaller interior markets. Deliveries could be made only by granting
heavy discounts on this small fruit.
While the large auction centers absorbed considerable quantities
of oranges, the prices prevailing on small fruit were so low as to
render the average auction prices unsatisfactory.
During the greater part of this period grapefruit was slow in
Increasing maturing, with the result that relatively small shipments were able to
Shipments pass the green fruit test. The Exchange made correspondingly light
Drop shipments and because of this fact were able to maintain a $5.00
Prices price up to about November 1st, after which increasing quantities be-
gan to go forward from all sections of the state, dropping prices
rapidly to a level of $2.75 to $3.00 f.o.b. shipping point.
The beginning of the second period is marked by the two freezes
of January 2nd and 11th. Immediately after this all Florida citrus
was under suspicion. The Exchange at once took steps to maintain
the reputation of its brands. The details of this work are explained
under a discussion of Field Department activities.
Inspection This work produced most beneficial results. A surprisingly small
Work number of cars were seized. Nearly all of these seized cars carried
Beneficial certificates which had been issued at the shipping point and certified
that the fruit left the state in good condition.
On the whole the efforts of the Exchange in maintaining its
grade were successful. There is no question but what Seald-Sweet
has held its reputation for careful, efficient grade and pack in all the
Exchange large markets of the country.
Maintains At the present moment grapefruit is experiencing but little trouble,
Grade with prices ranging from $2.50 to $3.00 f.o.b. shipping point, less dis-
counts on 46s and larger. In this same period the Valencia orange crop
started at $3.50 to $3.75. These prices have been maintained and
have shown an advancing tendency straight through to date. Some of
the best packs have sold as high as $5.00 shipping point.
Average prices for all fruit from the beginning of the season to
date f.o.b. Tampa are as follows:
ORANGES-
Auction $2.72
Private Sales 2.75
General Average $2.73
GRAPEFRUIT-
Auction 2.12
Private Sales 2.35
General Average 2.26
TANGERINES-
Auction 3.36
Private Sales 4.04
General Average 3.50
Bulk Oranges, Average 1.01
Bulk Grapefruit, Average 1.08










Bulk Tangerines, Average 1.46
Cannery Grapefruit, Average .67
Notwithstanding the difficulties confronted in the sale of
fruit this season, the Exchange has maintained the widest and most
satisfactory distribution in its history. This wide distribution is even
more spectacular in view of the fact that fruit must be sent to


Senld-Sweet Distribution Reaches International Scope
During the past year 465 markets received and dis-
tributed Seald-Sweet fruit. As is indicated by the map
above, all states but California and Arizona, which legislate
against Florida fruit, purchased Seald-Sweet. In addition,
many markets in Canada and nine European countries re-
ceived shipments. This is graphic evidence of the wide-
spread and increasing distribution maintained by the
Florida Citrus Exchange. Such a record is made possible
through concentrated sales effort, advertising and a high
uniform standard of grade and pack.

those markets which offer the highest net return to the grower. This
condition speaks well for the increasing demand for citrus fruits which
maintains acceptable prices in a far greater number of markets than
heretofore has been the case.
An analysis of the private sale distribution with the gain or loss
as compared with the season of 1925-26 is given in the table below.
It is interesting to note that a gain of 35 markets, 13 of which are
new to Seald-Sweet, has been made and that 288 new customers


have been added.
1926-27
Towns .................-...... 456
New Towns -----.------. 76
Customers ....---......------- 964
New Customers --.......-... 288
States -. ...... 46
Canadian Provinces ........ 6
The percentage of fruit sold


1925-26
421
63
909
212
45
7


Gain
35
13
55
76
1


at auction by the Florida


Loss





Citrus
Citrus


Exchange
Increases
Distribution









Exchange has increased steadily from 35% in January. A large
percentage of Florida fruit has been forced into auction centers be-
cause of the lack of confidence private sale markets had in it, due to
the frost damage. Another factor causing this increase has been that
Valencia oranges have consistently sold at higher prices in the large
auction centers than were ,obtainable in the smaller private sale
markets. Very probably this condition on Valencias will obtain
through the balance of the season.
To date 57.3% of all Exchange sales have been made in private
sale markets, leaving a balance of 42.7% of Exchange fruit sold at
auction. Of this volume of auction shipments, 2,001 cars were
shipped direct by Association managers.
These figures do not take into consideration fruit that is now in
transit or fruit that has been sold but on which remittances have not
been received. Statistics on these are not available.


Bulk Fruit Shipments
The marketing of low grade, bulk fruit and non-standard varieties
New Depart- not regularly handled by the sales department presented a problem
ment Created which needed special attention this season. A new department in the
sales office was formed for this purpose. To date 447 cars have
been sold by this department.
By this new method a fairly satisfactory net was secured for our
shippers. This alone has proven its worth.
It was to be expected that here and there in the disposal of this
Results low grade, bulk and non-standard fruit, that disaster should be met.
Satisfactory Yet on the whole, the results have been satisfactory and with the in-
creasing activities of this department another year and a better under-
standing of its problems, far more satisfactory results can be obtained.

Export Shipments


Other
Operators
Refuse Export
Development






1325%
Increase


The development of foreign markets for Florida grapefruit is but
one of the phases of merchandising activities which is necessary to
forestall possible disaster from the prospective increase in the Florida
crop. Effort was made by the Florida Citrus Exchange to obtain the
cooperation of other operators in the formation of an Export Asso-
ciation for the development of these markets for Florida grapefruit.
This Exchange proposal was rejected. The sales possibilities o f
European markets are too great, however, to overlook. The Florida
Citrus Exchange has therefore, in spite of the refusal on the part of
other operators to cooperate or assist, proceeded with the develop-
ment and exploitation of markets in Western Europe for Seald-Sweet
Florida grapefruit.
The Exchange has appointed competent brokerage representation
and in addition has maintained salaried trade contact in the larger
markets. These arrangements and the work done by such organiza-
tion have produced a 1325% increase in volume of sales of Seald-
Sweet Florida grapefruit this season over last.


57.3% of
Volume
Sold Private
Sale










Nine countries in Western Europe have been entered by Seald-
Sweet grapefruit. The larger markets of these countries, including
London, Liverpool, Birmingham, Manchester, Newcastle, Hull,
Hamburg, Copenhagen, Antwerp, Paris, Glasgow, Rotterdam, Car-
diff and Oslo, have been intensively worked.
A tremendous volume of valuable publicity on Seald-Sweet grape-
fruit was obtained throughout Europe. At the time of the influenza
epidemic in Great Britain, publicity stories featuring the value of grape-
fruit for "flu" were released by this office and were widely printed
by European newspapers. The effect of this work was all that could
be expected, on the part of the trade as well as the consumer. It is
conservative to say that $100,000 would not have purchased the
advertising value of these news articles.
A greater volume of fruit could have been placed in these markets
this season had proper sizes been available. The demand for Seald-
Sweet was stimulated far beyond the supply available for shipment.
Because of the high freight rate on the fruit, the trade naturally de-
manded small sizes so that the per fruit cost would be comparatively
low. Arrangements are now being made which will permit the ship-
ment of export fruit direct from Jacksonville in another year. This
plan will reduce the freight rates on shipments to Europe approximately
85c per box. Naturally a far greater export volume with even more
extensive distribution will thus be available to Exchange growers.
Seald-Sweet fruit through the greater part of this season led all
other grapefruit in the prices obtained in European markets.
Sales Quotas
Two years ago the matter of sales quotas for Exchange divisions
and districts throughout the country was discussed by the sales and
advertising departments. Erwin, Wasey & Company finally prepared
quotas for the different parts of this country, based on buying power,
accessibility, competition, et cetera, of each district.
The country was divided into ten divisions. Each of these is in
charge of an assistant sales manager in the Tampa office. One of
these sales managers may take care of two or more sections, but no
two men work the same section. In this manner the assistant is able
to study his particular division, know its needs and requirements and
is enabled to work more intelligently for distribution.
The experiment has been successful. Our sales are either closely
in line with the quota laid down, or there is a reason for the differ-
ence. In three divisions actual sales are over quotas. In two, they
are practically equal to quotas. In three others they are slightly
und'r quotas. In the remaining two, the difference is pronounced.
In one of these last two divisions, New England, two years of
disastrous falling off in the textile, boot and shoe and other manu-
facturing industries has reduced the buying power of all manufacturing
centers. This naturally has been felt in the sales volume. In the
Southwestern division the severe competition of Texas grapefruit has
cut our sales during a three months period by more than one-half.


Wide-spread
Publicity
Obtained






Jacksonville
Shipments to
Save 85c Box



















Quota System
Valuable


I












FIELD DEPARTMENT ACTIVITIES
At the beginning of the season 1926-27 the Florida Citrus Ex-
change was composed of 11 operating sub-exchanges and the unor-
ganized territory in Lee County. There are a total of 82 associations
and 1 1 special shippers operating 75 packing houses. One association
(Lucerne Park) was packing in an independent house.


Exchange Facilities
Could Pack 75% of Crop
The facilities of the
Florida Citrus Exchange
are so planned and dis-
tributed through the
citrus belt that 75% of
the present crop could
be handled without
overloading. This wide-
spread coverage o b -
tained by sub-ex-
changes, associations
and. packing houses is
illustrated in the chart
to the right.
If the present mem-
be r s would actively
adopt the slogan "Every
Member Get a Member"
the Exchange volume
and control could be
materially increased
without additional cost
to the organization.


75 Packing
Houses
Operated










Due to the storm of last October, one sub-exchange (Dade
County) has been inactive the entire season as far as citrus shipments
are concerned. If weather conditions are not too unfavorable, there
should be some citrus production from the territory next season.
No active associations have been lost since last season. Four
small inactive ones have not, however, been functioning as associa-
tions. Their individual members have been shipping through other
associations. Three of these have never had a packing house of
their own. Two new associations, Moss Buff (shipping through
Ocala) and the DeSoto Citrus Growers Association of Arcadia have
been formed.
It is not believed to be good policy to endeavor to form new
associations except where there is a possibility of securing ample
tonnage to operate a packing house efficiently and economically.
The policy now guiding the effort of the field department is to sign
up growers with strong associations already operating, since these
are already so distributed over the territory that they can reach almost
all present plantings.
There are, however, a limited number of points where new pack-
ing houses might be of value. The establishment of these is planned
for the first opportunity.
The Satsuma Growers Association of West Florida has voted
to affiliate with the Florida Citrus Exchange. It has been agreed
that their business will be handled on the same basis as any of our
present sub-exchanges. Although their acreage is considerable, it is
mostly of young trees. The extreme drought prevailing in that ter-
ritory renders it unlikely, therefore, that they will have any appreciable
amount of tonnage next season.

SInspection Work
It is essential that any organization, in merchandising a product
successfully, must maintain uniformity and standard quality in that
product. The field department, through its inspection service, has
concentrated a great share of its attention to these ends.
The storms of last summer and fall and the cold of January have
undoubtedly rendered this one of the most difficult operating seasons
in the history of the Exchange. Thanks to the earnest effort of our
managers and inspectors all along the line, the situation has been
handled efficiently and, it is believed, as economically as possible
under the conditions. Despite the heavy storm damage, complaints
on grades were almost unknown prior to the freeze and have been
as few as could reasonably be expected since then. An efficient
corps of inspectors has been maintained. Two sub-exchanges used
Federal inspection from the beginning of the season.
After the freeze the majority of our associations took on Federal
inspection. Three Exchange inspectors were turned over to that
service and one was placed in charge of a small association. Exchange
field forces were thus reduced in the interest of economy without loss


Satsuna
Growers Join
Exchange











Difficult
Situation
Well Handled



Force
Reduced,
Efficiency
Maintained










of efficiency. In general, the government inspection has worked
smoothly and well. The certificates of inspection have been extremely
valuable to both the production and sales departments-more so in
Pure Food fact than could be appreciated readily by anyone not actually in con-
Bureau tact with the work from day to day. Any dissatisfaction that may
Inefficient have arisen with regard to the service is due generally to the arbitrary
and inefficient methods used by the Pure Food Bureau in handling
fruit under suspicion of frost injury. This, of course, was no fault
of the inspection service. It did everything possible to help the
Exchange combat the arbitrary actions of the Pure Food Bureau.
Association Audits
Three auditors have been able to handle the work of auditing
the books of associations and sub-exchanges during the season. It
has crowded them to accomplish this work, however.
The system of records generally in use by the associations has
proven satisfactory. Perhaps the only criticism is that in some
Audit System associations the bookkeepers have not filled out fully or clearly the
Satisfactory statements furnished the growers. This is an important phase of
the work and care in doing it will avoid much misunderstanding and
dissatisfaction.
Bulk shipments to canneries and elsewhere have developed the
fact that our present cost sheets do not accurately reflect the per box
cost in such houses and that many are losing money on their handling
or bulk fruit. Our auditors are now working on a new form to rem-
edy this for the coming season.
These cost sheets are of great value to managers as it gives them
Cost Sheets something definite from which to work. If our auditors furnished no
Valuable assistance beyond this, they would justify their employment. There
are, however, many other matters of importance handled by them.
Considering the unusual complications in handling the crop this
Packing Costs season, most of the packing houses have kept their costs at an eco-
Held Low nomical figure. Final comparisons, however, cannot be made until
all of the season audits have been received at the Tampa office.
Progress has also, been made in lowering sub-exchange charges
and in getting them to a more uniform standard.
Marking Machines, Etc.
While there is a general agreement that the marking of our fruit
has become a necessity, the problem of the machine to do this job
has not yet been satisfactorily solved. A number of houses have
Changes received fairly good results from the Hale machines, while others
Being Made have not been able to do so. Changes have recently been made in
this machine which give promise of overcoming the objections to it,
provided the manufacturers go ahead in a business-like way in their
installation. Failure to do this has been the main trouble in the past.
Meanwhile, the Ahlberg people have finally made a definite prop-
osition for the purchase of their machines. Comparative tests on this
machine will be made early next season.


I









Since the January freeze 25 light fruit separators have been in-
stalled in Exchange houses. Eleven of these were shipped from
California; eleven were built here and three were on hand from the
1917 freeze. They undoubtedly have been a very great help to the
houses operating them. There seems to be little, if any, difference
in efficiency between the machines bought from the factory and those
built at the packing houses. While it is hoped that there will be no
need for using these machines for another ten-year period, every house
having one should keep it in repair and ready for use.

Decay and Prevention
Decay this season has been comparatively light. Definite per-
centages are not available as the overhead necessary in the compilation
of these statistics was eliminated.
Houses using the borax treatment have had good results generally,
as have those using Zeltrocide.
So far as can be learned, no decision has been handed down in
the case of Brogden against the American Fruit Growers to prohibit
the use of borax by the latter.
Four new pre-cooling plants were installed in Exchange houses
at the beginning of this season. This makes a total of 16 now in
use in Exchange houses and giving most satisfactory results.

Legal Phases Affecting Field Work
The Board of Directors has instructed this office to work with
Commissioner of Agriculture Mayo and obtain the passage of what-
ever laws are necessary for the benefit of the industry. Consideration
has been given by Mr. Mayo, the Fruitmen's Club and a representa-
tive of this organization for legislation to prevent the use of arsenical
sprays, to prevent the shipment of frost damaged fruit, for a re-con-
sideration of the present green fruit law and of an act to standardize
the grades of citrus leaving Florida.
A law has been passed by the current legislature which prevents
the use of arsenic compounds in insecticides. A second law has been
passed which will operate to take care of any frozen fruit situation.
A reconsideration of the present green fruit law has extended the
time limit to December 1st.
Much as a standardization act was needed, other operators in
the state were not favorable to it.
A proposal to obtain a law providing certain maturity tests for
tangerines was also turned down by the Fruitmen's Club. The
failure of other operators to support these two phases to promote the
industrial welfare of citrus, together with similar flat refusals to other
important factors such as the state-wide advertising campaign, the
export association, et cetera, leads this office to question seriously the
value of this organization to the industry and to the state. The
Fruitmen's Club has not functioned in the successful solution of any
major problem which has faced the industry in the past.
It is again evident from the consistent refusal of the club to operate


Fruit
Separators
Installed


Borax and
Zeltrocide
Used


16 Pre-cooling
Plants In Use





New
Legislation
Considered




Frozen Fruit
Law Passed






Fruitmen's
Club Cannot
Function
Effectively,















No High
Pressure
Methods Used






Striking Gains
Made


Exchange
Grower
Morale High


Work
Effective






Net Cost Per
Issue About
$205


favorably for the benefit of growers, that the solution-and the only
solution-to the marketing problem is the sincere, earnest cooperation
of the growers themselves.
Organization Work
Organization work has been continued on the basis of offering
growers an efficient service to handle their product. The lurid revival
campaign method which, when the excitement dies down, leaves
growers cold and possibly resentful of having been forced to sign up
under pressure, has neither been used nor is it contemplated.
During the past season, the Exchange has had the worst compe-
tition in years. And by "worst" is meant all that the word implies.
This, however, is a good omen. It is in itself evidence of the fact
that the work being done by the Exchange is bringing results and
depriving our competition of volume. It is the hit dog which yelps.
We have made consistent gains in nearly all territories. It is
believed that, as the organization reaches a point where it is able to
select members instead of proselyting them, it will have a much more
stable membership.
The season has been a hard one for all concerned. Under exist-
ing conditions, growers are not satisfied, but this office believes that
the morale of Exchange growers is better than that of any other
operator. Much fruit has been signed by the Exchange which was
not in the Exchange last season. In addition, Federal officials are
very friendly fo cooperation, advocating and giving assistance in every
way possible to get greater efficiency in cooperative organizations.
The state press has been keenly alive to the situation. Every-
where, editors evidence a grasp of the problem and, with very few
exceptions, see grower cooperation as the only solution.
As a result, the year passed has shown gains in the whole field of
cooperative marketing with the greatest advances made in develop-
ment of quality standards which, while less noticeable than quantity
of volume, is much more sound and lasting in its effects.
The Seald-Sweet Chronicle
The Seald-Sweet Chronicle has served very satisfactorily in its
mission of selling the idea of grower cooperation to both members
and non-members of the Exchange. It has done much to combat
anti-Exchange propaganda and to mold a favorable opinion on the
part of all growers throughout the state.
The circulation of the paper will be. increased as substantially
as is possible including only commercial citrus growers. The present
circulation 6f the Chronicle is just under 10,000. It is the largest
strictly citrus circulation in the state.
The cost of the Seald-Sweet Chronicle to the Exchange for this
year, less the advertising revenue, has been $4,913.80. Since the
cost of each issue averages above $500.00, it is evident that the
advertising revenue is of considerable importance, not only in building
a better appearing sheet, but in reducing expenses.










SEALD-SWEET ADVERTISING
Seald-Sweet advertising has been continued this season, as in the
past. It has been directed, created and placed by our own adver-
tising department and Erwin, Wasey & Company, one of the largest
advertising agencies in the country.
The campaign has been built directly to meet the problems pre-
sented by a study of competitive activities and products and by the
local situation in the industry. Its main objectives are three-fold:
to increase consumption and demand of all citrus; to create a prefer-
ence for Florida citrus; to stimulate a recognition on the part of the
trade and consumer for Seald-Sweet as Florida's Finest Fruit.
Magazines of both general and specific nature were used as
media. General copy was placed in Good Housekeeping, Woman's
Home Companion and the American Magazine. Physical Culture
was used to reach a more clearly defined audience with special copy.
Life and Judge were included in the list to stimulate the use of Seald-
Sweet citrus juice by the large and not to be neglected cocktail
market.
The total circulation of the magazines used for Seald-Sweet ad-
vertising was nearly 6,000,000 per month.
This magazine advertising was strengthened by the use of news-
paper advertising in some markets. The use of newspapers however,
due to the restriction of advertising revenue because of the hurricane
and freezes, was materially reduced.
One of the most important phases of advertising activities is the
work of the dealer sales crews. The cooperation of the trade is
essential to the success of any advertising campaign of this nature.
The crews were operated as heretofore out of New York, Chicago,
Cincinnati, Detroit and Boston. In addition, the character of work
performed by our representation in Great Britain is essentially the
same as that performed by dealer sales crews in the United States.
A total of 316 days' work was put in by these crews. 5969
retailers and 243 jobbers were interviewed. 221 complete Seald-
Sweet window displays were installed in addition to the distribution
of 58,179 individual pieces of Seald-Sweet display material.
Seventy-six markets in the United States and 12 in Europe were
entered by Exchange dealer sales crews during the past season.
The advertising activities of the Exchange have been effective as
far as they have gone. It is readily evident, however, that to do the
job for the industry which advertising alone can do, far more adver-
tising than the Exchange can now support is necessary. One method
of obtaining this increase would be by means of a state-wide citrus
campaign supported by a tax on at least 75% of the fruit. This can
be obtained at present only through the cooperation of other operators.
This cooperation, as is evidenced by the action a year ago, is not
available.
The second and sure course in through the placing of a dominant
percentage of Florida fruit in the Exchange so that the advertising
burden may be justly apportioned.


Advertising
Objectives


6,000,000
Monthly
Magazine
Circulation
Used








Dealer Service
Work
Essential










Florida Citrus
Advertising
Inadequate










Seald-Sweet Juice Extractors
Seald-Sweet juice extractors, adopted to popularize the use of
16,324 citrus juice, now are in the homes of 16,324 consumers. This is
Seald-Sweet 150% greater than at the close of the previous season. A still
Extractors greater record was prevented by the curtailment of advertising and
in Use fruit distribution because of the storm and frost damage, materially
affecting premium sales.
The extractor department was started two seasons ago with a
Deficit Cut stock outlay for 25,000 new model extractors, costing $25,000. In
$30,000 in addition, a deficit of $9,900 was assumed from previous premium
Two Seasons operations. This total deficit of $34,900 now is down to $4,174.63
with assets conservatively figured at $12,000.
Practically every extractor goes into the private home. A few
have been purchased for fountain use. Nearly 25% of extractor
sales have been made in citrus growing territory. In Florida this con-
sumption is an outlet for other than fancy fruit. In California it
aids in reducing by that consumed amount, the fruit to be shipped to
the national competitive market.
Distribution principally is in this country, yet it safely can be said
that the sun always shines on the Seald-Sweet juice extractor. It is in
World-wide use in every state and territory of the United States. Extractors will
Distribution be found in England, Ireland, Scotland, France, Italy, Spain and
other" European countries. Japan recently began their use. Practi-
cally every country of the South and Central Americas has some in
operation. Remote, frost-bitten northern Alaska and Cape Town,
the southern extreme of Africa, enjoy its use.
In effect, the extractor is functioning as an advance agent of the
Seald-Sweet brand. Each extractor bears the stamp "Seald-Sweet"
and in this is a medium of introduction and a continuous silent sales-
man for our brand.
TRAFFIC DEPARTMENT
From September 1st, 1926, to May 1st, 1927, a total of 2,046
$55,075.90 claims amounting to $55,075.90 were collected for Exchange grow-
Returned to ers by the traffic department. A total of 2,300 claims amounting to
Growers $41,328.05 were filed this season. Of these current claims, 1,693
on Claims amounting to $19,738.78 have been collected and are included in
the total figure above.
Thus approximately 75% of the number and 50% of the amount
of claims filed during the past season have been collected by this
department to date.
Claims There are still outstanding on all seasons 753 claims amounting
Outstanding to $68,817.64. A large number of these claims are of recent filing
Total and sufficient time has not yet elapsed for complete investigation and
$68,817.64 disposition of them.
Claims during the past season have not been heavy because of
improved transportation facilities and service. Before this season a
large number of cars have been frozen in transit each season. This
year only two or three cars have been damaged in that manner. This


0-










fact is significant. Either the equipment now being used is of a
better class than heretofore or the carriers are giving the matter of
vent manipulation more careful attention.
An ample supply of refrigerated cars has been available through-
out the season. Practically all carriers have maintained fast and de-
pendable schedules to various markets. There is absolutely no com-
plaint on the character of service rendered during the past season.


Service
Satisfactory


Growers and Shippers League
The Traffic Manager of the Florida Citrus Exchange is a
member of the executive committee of the Growers and Shippers
League. The Exchange has contributed a large share of the funds
with which the work of this organization is continued.
The Growers and Shippers League is working on several cases
which, when favorably completed, will be of great benefit to the in- Work of
dustry. Chief among these perhaps is the Line Haul Rate case which Lea
has been prosecuted with sincerity and earnestness by the League. It Iportant
is now set for oral argument at Washington, D. C., on June 21st.
This is the final step before the Commission takes the case in hand
for review and decision.
The refrigeration case was heard in Jacksonville the week of
April 25th. From the testimony given by the witnesses for the Inter-
state Commerce Commission, it appears that a reduction in refrigera- Refrgerataton
tion charges is in order. This case, however, will not be concluded Cas e to Cse
for several months, since it takes in the entire Southeastern coast states.
Subsequent hearings will be held on it in Atlanta and Washington
during May and June of this year.
EXPENSE OF OPERATION
The Florida Citrus Exchange has endeavored to operate as effi-
ciently as possible in every department. The necessity for economy, *
however, has been realized, as is shown by the lowered operating
expense.
The Exchange, during the past season to date, has reduced its Operating
operating expense covering all departments $.011 per box. Details Expenses
of the savings effected as compared with last season are shown in the Reduced
tabulation below. $.011 per Box
Comparative Operating Statement
Season 1925-26 and 1926-27
To May I th


Items of 1925-26 3,958,572
Expense Amount Per B
Agents Expense ......$ 33,469.48 .008
Agents Salary less
Brokerage rec'd. .... 45,403.37 .011
General Expense,
Post. and Telephone 26,154.76 .007
Int. paid less Int. rec'd. 9,422.60 .002


Bxs.
ox
$


1926-27 4,440,030 Bxs.
Amount Per Box
31,657.94 .007

43,493.16 .010

25,722.95 .006
3,887.01 .001











Office Supplies ...... 9,158.50
Rent Paid .......... 6,091.25
Tampa Salary & Travel
Expense .......... 128,653.52
Telegraph .......... 79,122.99
Totals ............. $337,476.47


.002
.002

.033
.020
.085


9,352.57 .002
4,585.00 .001


124,117.45
87,918.15
$330,734.13


.027
.020
.074


It is essential that the sales costs of fruit in each division be known.
With these figures available a more intelligent check-up on satisfactory
sales volume can be made. The cost of acceptance by divisions for
the present season to May 10th are detailed below.

COST OF ACCEPTANCE BY DIVISIONS
To May 10th, 1927


Division, Salary
New England .. $ 8,903.30
Eastern .. 40,461.00
Southeastern . 2,983.00
Mid-Southern .. 2,965.00
Cincinnati ... .12.869.60
Mid-Western . 21.161.50
Southwestern . 3,467.50
N. W. & Can.. 1,805.00
Totals ... ..$94,615.90
Florida ...........


I otal Acceptances .


Expense Way & Sav* Total
$ 2,861.36 338.30 12.102.96
11,420.34 1,866.25 53.747.59
1,288.61 547.65 4,819.26
915.14 339.40 4,219.54
4.061.77 416.54 17,347.91
9,967.62 798.80 31.927.92
451.36 52.50 3,971.36
1,684.05 206.30 3,695.35
$32,650.25 $4.565.74 $131,831.89


Boxes Per Box
310.382 .039
1,702.9981/ .032
397.8392 .012
311,482 .014
378.4862 .046
727,636 .044
48,162' .080
189.337/2 .020
4.066,3241/ .032
150,719
4,217,0431~/


*Waycross and Savannah salary and expense is distributed proportion-
ately through all divisions, since these are main diversion points.

APPENDIX "A"
NON-FLORIDA CITRUS ACREAGE

California Citrus Acreage Reported by
California Fruit Growers Exchange, March 26, 1926


Bearing Percent Non-bearing
192,226 13,123
49,791 5,418
5,417 4,187
247,443 91.6 22,728


Percent Total
205,349
55,209
9,604
8.4 270,162


Arizona Citrus Acreage Reported by
T. S. Bishop, Chairman Commission, Phoenix, Arizona

March 26, 1926


Bearing Percent
600
1,200
1,800 60


Non-bearing Percent Total
300 900
900 2,100
1,200 40 3,000


Sales Cost
Compared by
Divisions


Variety
Oranges .
Lemons
Grapefruit
Totals .


Variety
Oranges .
Grapefruit .
Totals .


-










Alabama Citrus Acreage Reported by
J. W. Pace, Chief Citrus Inspector, Mobile, Alabama
April 1, 1926
Variety Bearing Percent Non-bearing Percent Total
Satsuma Oranges. 3,760 34 7,390 66 11,150

Texas Citrus Acreage
Texas citrus acreage is reported by J. M. Delcurto of the Texas
State Department of Agriculture May 13th, 1927. A total of 64,300
acres are planted, 22,300 in oranges and 42,000 in grapefruit. Ap-
proximately one-sixth of this acreage is now in bearing.

Isle of Pines
Due to the hurricane which swept through the Isle of Pines
during the past season, the present status of citrus in this section is
unknown. Their total acreage prior to the wind was 13,170 acres
of which all but 2,900 acres were in bearing. Reliable data on the
present condition of these groves will not be available for some months.

Total Grapefruit Acreage
It is important to a full understanding of the grapefruit situation
which now exists and which is in prospect that some picture of the
total prospective acreage which will feed American markets within
the next decade be examined. In the table below these figures are
compiled for Florida, Texas, California, Arizona and Porto Rico.
The Isle of Pines, for reasons previously stated, is omitted.
From this table it will be observed that while Florida is dominate
in the grapefruit industry, Texas is steadily making headway and will
soon be an important factor. Another more important consideration
should be the fact that the non-bearing acreage in these territories is
nearly half of the total. The potential grapefruit production is, then,
very high.

Grapefruit Acreage
Compiled May, 1927
Non-
State Bearing Percent Bearing Percent Total
Florida . .. 60,651 74 19,610 26 80,261
Texas . .. .10,931 17 53,369 83 64,300
.California . 5,417 56 4,187 44 9,604
Porto Rico . 3,145 83 615 17 3,760
Arizona . .. 1,200 58 900 42 2,100
Totals . .. .81,344 51 78,681 49 160,025


I









APPENDIX "B"
SHIPMENTS, SALES AND REMITTANCES
Remittances To Date


Sale Oranges Grapefruit Tangerines Misc.*
Auction 895,717 658,004 214,319 4,445
Outside 878,376 1,037,342 53,505 2,766
F. O. B.. 48,149 48,309 1,549 3,543
Bulk 50,579 33,807 '707 37,283
Canneries 300 155,019
Export .. 2,172 18,459
Totals ..1,875,293 1,950,940 270,080 48,037
Accepted but not remitted for ..................
Shipped but not sold ........................


Total
1,772,485
1,909,708
101,550
122,376
155,319
20,631
4,144,350
72,6932
222,9861/


Total shipped ............................ 4,440,030
*Includes lemons, limes, mandarins, satsumas and Temple oranges.
Distribution of Acceptances


Division
New England
Eastern .
Southeastern
Mid-Southern
Cincinnati .
Mid-Western
Southwestern
Northwestern
Canadian
Florida .
Totals ..


Sub-Exc.
Dade .
DeSoto .
Highlands .
Hillsborough
Indian River
Lee .
Manatee .
Marion .
Orange .
Pinellas
Polk .
St. Johns


Net Increase


Oranges Grapefruit Tangerines
145,482 145,646 19,254
S915,790 594,491 192,7172
234,852 137,280 25,70712
. 226,037 73,592 11,853
S167,799 187,148 23,539/2
S162,998 528,641 35,997
8,827 38,742 593!/2
904 124,645 37
13,110 48,981 1,66012
14,347 135,611 761
.1,890,146 2,014,777 312,1202
Shipments Compared With Last Season
By Sub-Exchanges
1925-26 1926-27 Decrease
52,486 0,000 52,486
S340,607 128,558 212,049
311,879 465,863
.92,874 145,899
158,552 158,413 139
128,626 20,859 107,767
205,949 100,417 105,532
31,376 46,508
.561,361 808,187
195,990 203,867
.1,639,443 2.192,017
239,429 169,442 69,987
3,958,572 4,440,030 547,960
3,958,572
1926-27 .. 481,458


Total
310,382
1,702,998/2
397,839/2
311,482
378,4862
727,636
48,162 2
125,586
63,75112
150,719
4,217,043/2


Increase


153,984
53,025



15,132
246,826
7,877
552,574

1,029,418
547,960
481,458









APPENDIX "C"
GROWERS LOAN AND GUARANTY COMPANY
The Growers Loan and Guaranty Company, a subsidiary of the
Florida Citrus Exchange operating as a financial organization lending
money to Exchange growers. The company has been a valuable asset
to this organization. Its loans this season are considerably over $1,-
000,000. All of these loans will be paid, as all of the crops held as
collateral and which were hurt by the freeze were insured.
The Growers Loan and Guaranty Company has made satisfac-
tory connections in the North through banks with which the Florida
Citrus Exchange does business. This increased line will extend the
work of this company far beyond any volume in its previous history.
APPENDIX "D"
THE EXCHANGE SUPPLY COMPANY
The Exchange Supply Company, also subsidiary of the Florida
Citrus Exchange, functions as a purchasing agent for associations and
packing houses. It has continued its liquidation of holdings and is
in excellent shape.
APPENDIX "E"
CANNED GRAPEFRUIT
The canning of grapefruit has developed into an industry of con-
siderable importance. Not only is it becoming vital to the fresh fruit
sale of citrus in that it removes from the box lot market off-size, off-color
fruit which would tend to bring down the prices of fresh fruit, but it is
also obtaining for Florida grapefruit a distribution which could not
otherwise be obtained. It is in this latter respect an excellent fore-
runner for the stimulation of demand in the creation of new consumers.
Four canneries operated during the season 1923-24 to use 98,986
field boxes of grapefruit. During the season just passed, 13 canneries
used 533,826 field boxes of grapefruit-over 500% increase in four
seasons. Five new canneries are now under construction and, it is
understood, will be ready for operation next season.
If the quality of the product is maintained by the executives
directly the production of canned grapefruit, a very bright future is
in store for this industry. It is not unreasonable that within a com-
paratively few seasons the canning industry will be developed to such
an extent that it will take from 25 to 33% of the Florida grapefruit
crop.
The canneries paid about 50 to 55c per box for culls and from
70 to 85c per box for choice fruit at the packing house. Large sizes
were in demand.
Some associations spot-picked in groves running heavily to ordin-
ary quality and large sizes. This fruit was sent directly to the can-
neries. Eighty-five cents a box was paid for it at the grove. The
saving effected by avoiding the necessity of washing, polishing and
grading the fruit accrued directly to- the grower. This policy is one
which might well be adopted by most associations.

































































































































HILLSBORO PRINTING COMPANY