Front Cover
 Back Cover

Title: Annual report of the Florida Citrus Exchange.
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00075941/00033
 Material Information
Title: Annual report of the Florida Citrus Exchange.
Physical Description: Serial
Creator: Florida Citrus Exchange
Publisher: The Exchange,
Publication Date: 1961-1962
 Record Information
Bibliographic ID: UF00075941
Volume ID: VID00033
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: ajg6778 - LTUF
46798761 - OCLC
001753794 - AlephBibNum

Table of Contents
    Front Cover
        Front Cover
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
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        Page 8
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        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
    Back Cover
        Back Cover
Full Text



* general

managers ... 1961-1962 ANNUAL




1961-1962 SEASON

President and Chairman of the Board
Phil C. Peters, Winter Garden
First Vice President
C. G. Wilhoit, Vero Beach
Second Vice President
Ford W. Moody, Palm Harbor
Third Vice President
G. B. Hurlburt. Mount Dora

Fourth Vice President
Joe E. Keefe, Dundee
General Manager
John T. Lesley, Tampa
James Samson, Tampa
General Counsel and Secretary
Counts Johnson, Tampa

Assistant Secretaries
E. F. Gudgen, Tampa
Luke C. Johnson, Tampa

E. S. Beeland, Clearwater
Robert K. Cooper, Florence Villa
J. P. Ellis, Bartow
John C. Flake, Mims
O. J. Harvey, Tampa
E. S. Horton, Winter Haven
D. A. Hunt, Lake Wales
G. B. Hurlburt, Mount Dora
Joe E. Keefe, Dundee

John T. Lesley
General Manager
Don M. Lins
General Sales Manager
James Samson
Counts Johnson
General Counsel

Armer C. Johnson, Mount Dora
Ford W. Moody, Palm Harbor
Alfred A. McKethan, Brooksville
I. J. Pemberton, Jacksonville
Phil C. Peters, Winter Garden
Jack A. N. Strong, Vero Beach
C. G. Wilhoit, Vero Beach
John C. Updike, Lake Wales
H. H. Willis, Sr., Fort Pierce

Luke C. Johnson
Asst. Gen. Counsel
E. F. Gudgen
Paul C. Sarrett
Traffic Manager
Howard N. Baron
Manager, International Division

James T. Hopkins
Industrial Relations Director

The 1061- 62 season was one of many surprises and unexpected events.
These were of such a nature as to greatly influence sales.
From some early reports, we expected mid-season oranges to be short.
However, this crop over-picked original estimates. We faced a freeze
in Florida which again appeared to considerably reduce our volume
of fruit. We have since found this was not a serious drawback to fresh
l .'nti except on .-m-niii.'. add to this .;turi;...n we found a
considerable addition had to be made to our Valencia estimate. This,
n turn, brought about a lk of confidence in our structure
during and a reduction in orange movement.

p ou r O sn e it ur t io n; w e go d e

of the season

S were tha s year, prces were
considerably better and arrivals ....1 were
.:.- .. sold well, although prices were ..- ..':i. .. lower than
previous years. This season we had by far the heaviest shipments of
this variety on record.

Temples were disappointing, after suffering more freeze damage than C.*
any other variety. Shipments were curtailed somewhat and buyers
bought with caution. In spite of this, many good crops were shipped
and complaints were surprisingly few.
Early and mid-season orange movement was good. Prices were fairly
good, and demand was steady. The Christmas season saw us booked
solid at a favorable price level as compared with earlier shipments.
Grapefruit started at a much lower level this season and it appeared
that we might be in serious trouble in moving colored fruit particuiari .
The Texas freeze completely changed this picture. Colored grapefruit'
moved well all season at reasonably good prices. Marsh seedless did
not enjoy much of an increase in demand because of Texas, although
we moved more volume at a comparable price during the same period.
Duncans suffered since we were unable to hold Marsh at a high enough
price level over Duncans to obtain proper movement. In other words,
successful movement of Duncans depends on somewhat of a discount
below Marsh.
Your sales department exerted great effort to stabilize the market
and movement of fruit during this highly competitive year. We in-
stigated and planned more sales promotions than ever before. We
had the widest distribution ever, doing exceptionally well in western
and mid-western marketing areas.
Our prepacking operations had its heaviest volume season.
We believe we obtained more new customers than any previous
season, and in more markets. Our northern salaried offices initiated
the greatest volume of business in our history as auction volume
continued to decline.
It becomes more apparent each season that we must continue to
strive for more diversified volume within each packing house unit.
This, along with more consolidation of sales to better facilitate mer-
chandising and size requirements for today's buying habits, will go
far in improving our fresh fruit industry. We have reversed the trend
of declining fresh citrus shipments and look forward to additional
gains in the years ahead.
We hope you share our enthusiasm along these lines.
.. I !~L

The 1961-62 season has been an outstanding season for exports in
most respects. After many long years of endeavor, it appears that we
are at last beginning to reap benefit from the foreign trade which
we have so vigorously pursued.
Our fresh fruit exports to Europe have increased quite substantially
over last season, and this is particularly true in France. Our importers
in Germany, and the Netherlands have also been most active, and
considerable credit must be given to them for our increased export
One of the highlights of the current season has been the introduction
of pink grapefruit in West Germany. Through our participation in the
U.S. Food Fair at Hamburg where we sampled pink grapefruit to
thousands of German housewives, we subsequently entered into a
pink grapefruit promotion with the largest of West Germany's con-
sumer cooperatives. The success of this promotion was exceptionally
gratifying, and pink grapc-fruit now known in Germany as Grape-
fruit Rose, is in great demand. We are confident that we shall ex-
perience increasing exports of this variety in the years to come.
For years we have endeavored to open new markets for fresh fruit
in the Far East, and the current season provided this opportunity. We
effected shipments of grapefruit to Japan with a marked degree of
success, and made shipments of Valencia oranges to Hongkong and
Singapore. AL

While we were able to accumulate a large portion of fresh grapefruit
sales to Great Britain again this year from Florida, the volume of fruit
to England has been disappointing. Heavy shipments from competing
citrus producing countries apparently coincided with arrivals of Florida
grapefruit and oversupply on the British market resulted. Narrow
margins of profit to importers resulted in lower volume purchases
from our regular customers throughout the season.
Our exports of canned juices have been substantially increased during
the 1961-62 season. We have accounted for virtually all of the tang-
erine concentrate exports shipped out of the state this season, and
have sold a large share of the total export of single strength juices.
Initial shipments of juices were made to Singapore, Hongkong and
other Malayan areas as well as to Kenya.
Our exports of juices to France have increased substantially, and we
have maintained our lead in the export of juices to Germany. We
have, on occasion, also handled juice shipments for the Middle Eastern
bases of the United Nations. The recently opened Danish market has
proven receptive to our sales advances in both fresh and processed
products, and we are leading the state in exports of both commodities
to that country.
The Florida Citrus Exchange is well known abroad, and has gathered
considerable prestige over the years. The advantages to us of main-
taining an active export department have never been more obvious
than during the 1961-62 season. Our knowledge of this export market,
and our experience in foreign trade becomes increasingly more im-
portant as the production capacity of the state increases.

Our Industrial Relations Department continues to maintain excellent
relations with the press and broadcast media at the industry level. In
view of the vast number of member as well as non-member growers
interested in our activities, a favorable press has become of extreme
importance in the interpretation of our policies and opinions.
We have enjoyed favorable news coverage throughout the season
with several thousand inches of editorial space devoted to our
Through the Industrial Relations Department we have also continued
good relations with both the legislative and administrative branches
of the state government, and we are in excellent position for effective
legislative liaison as the legislature convenes early next year.
Each of the special activities of this department is undertaken within
the general policy of the organization and designed to further the
best interests of the Exchange. The size and complexity of the citrus
industry in this day and time is such that our continued good relation-
ship with state officials, the legislature, the press, and the public in
general, is directly related to the protection of our interests within the
broad scope of the citrus industry.

The Florida Citrus Exchange has for many years conducted a national
advertising program in support of our fresh fruit brands. As the only
fresh fruit distributor in the state to conduct such a comprehensive
program, we have gained considerable recognition among trade
factors both in this nation and abroad. We have been particularly
well pleased with our outdoor advertising which this season has been
centered in the Chicago, Philadelphia, and Pittsburgh areas. While
our major expenditure has been on consumer advertising, we have
aslo maintained a trade advertising program in several media serving
the fresh fruit and produce trade.
There can be little doubt that well-planned consumer advertising
conducted at maximum continuity serves a double purpose. Not only
is it effective in bringing our product to the attention of the consumer,
but it also provides us with an important sales tool when dealing with
buyers in those areas in which our advertising appears.
Brand advertising is, of course, our method of inducing consumers to
purchase our brand of citrus. It is normally most effective when the
trade can be persuaded to support our advertising with in-store
promotions, and virtually every expenditure for advertising is made
with this point in mind. Our effort to closely coordinate advertising
and merchandising has provided exceptionally good returns from our
advertising investments.


The past season has seen a considerable increase in the scope of
activity undertaken by our Merchandising Department. Our Dealer
Service personnel have been hard put to keep abreast of the demand
for their services. They have contacted and in most cases constructed
displays for more than 6000 retailers during the season, and have
travelled more than 200,000 miles in pursuit of promotional services
for our customers.
As is the case in most high volume production years, promotions this
season have been by far the most effective method of increasing our
per-customer share of business. This is a factor that becomes increas-
ingly important as we prepare to meet the increased production which
the next few years will bring.
A good merchandising program coupled closely to effective adver-
tising has become a necessity in the vast area of competition facing
us on the markets today. Our merchandising program is flexible to
the degree that we can, and often do, move a dealer service repre-
sentative into a trouble spot on a moment's notice. This sort of flexibility
quite frequently brings about immediate results in a particular market-
ing difficulty within a matter of hours.
Functioning as the eyes and ears of the organization in areas infre-
quently visited by other personnel of the organization, our dealer
service personnel are constantly alert for situations which should be
brought to the attention of our Sales Department. Their daily reports
and informational intelligence are extremely important in matters
of planning and promotion.


Our Traffic Department has been unusually busy this season. As of
May 28, the Traffic Department has processed in excess of 1100 rail
and truck claims amounting to $94,764.28 with collections totaling
$88,137.24. These figures will increase considerably by the end of
the season.
Trucks have played an ever-increasing role in the movement of citrus
this season. "Hired" trucks alone have increased 33 1/3 percent this
season, to say nothing of the thousands of "customer" trucks that have
been utilized. As of May 23rd, 67.6 percent of all Seald Sweet ship-
ments moved by truck, compared to 32.4 percent by rail. This com-
pares with the state movement of 72 percent by truck and 28 percent
by rail.
Trailer-on-flat-car (piggyback) service has increased substantially this
season over last season. Effective January 15, 1962, the Florida lines
expanded their service from two to three trains each week via the
Potomac Yard serving Richmond, Washington, Baltimore, Philadelphia
and New York. This service, with trains departing Florida in the early
evening on Saturdays, Mondays, and Tuesdays, and affording early
second morning delivery at New York, has met with favorable ac-
ceptance from shippers and receivers alike. As the service is expanded
to other territories and fast schedules inaugurated, we expect even
greater use of this mode of transportation.

With several rail mergers before the Interstate Commerce Commission
as well as administration sponsored legislation before both houses of
Congress, the transportation industry may well undergo important
changes in the coming year. We will, of course, follow every develop-
ment with the greatest interest, and will take whatever steps necessary
to protect and advance the best interests of the fresh fruit industry.

For the five year period ending with fiscal 1961, our accounting de-
partment has handled collections totalling more than $150,000,000.00
for members of the Florida Citrus Exchange. To date, our col-
lections and disbursements for the current season are in excess of
Our Accounting Department is staffed with expert technicians rec-
ognizing the infinite attention which must be devoted to this phase of
our operation. Nonetheless, our collections are processed and returns
forwarded to our shippers within 24 hours after receipt by this office.
The Accounting Department collects from a wide range of nearly
2000 individual accounts, pays brokerage and many 'raniportoiion
charges, and performs additional services for all departments requir-
ing accounting and oujciing control
This Department is also r.spcns,.i- for io.roll acic-:.unt;nr and the
host of details involved in the collection of withholding and social
security taxes, retirement iontr'ur .,;i insurance deductions, and the
many other services that must be performed in connection with our
Under the supervision of the Accounting ) 1 -~ir'i.-rr our Statistical
:--,'o'mr-.nt .J~,O:1-. and maintains up-to-the minute sales and ship-
ment reports. -.' auction sales averages, graphs, and charts, as
.s,_i as other statistical data are available ,i.':...ji. this department to
each of our several operational departments on a moment's notice.
Both our accounting and statistical systems have been established
through long years of experience in serving the needs of the organiza-
tion. Both departments are geared to cope with the complexities of
the fresh fruit business and are contributing an outstanding service
to our membership.


Our legal department has been particularly active this season in liaison
between our growers and shippers and the Federal Trade Commission.
After considerable effort we were able to bring about a series of
meetings between FTC and representatives of the entire fresh fruit
and vegetable industry of the nation. We have joined in a common
effort to obtain from the FTC a workable and understandable set of
trade practice rules. It is our hope that out of this initial progress,
growers and shippers alike may secure explicit information concern-
ing what they can as well as cannot do under the multiplicity of laws
and regulations to which they are subjected.
During the season, the Comptroller of Florida has finally ruled that
written evidence of non-cash patronage refunds and other equity
allocations issued by farmer cooperatives have no fair market value
capable of ascertainment for ,ntanqibl-. tax purposes. Our Legal
Department has been in the forefront in this matter.
As usual, the Legal Department has spent considerable time and
effort in matters involving the P'-rnhoibI.- Agricultural Commodities
Act, the Robinson-Patman Act, and the Internal Revenue Code and
regulations thereunder.

The Flurndo Citrus >-r,,-i, aq continues to provide for its
the protection and service that could only be provided '.
time ful :,iclm.:; ',.- Legal "-ow ...e functioning as
part of our business operation.

S. ., a full
an integral

For the first time since the 1957 freeze, we have had an ample supply
of fruit for all outlets .fresh, canned, and concentrate. This fact,
alone, has several implications on the future outlook for the citrus
industry of Florida.
The most basic of these implications is that we are changing from
a sellers' market to a buyers' market. In view of the heavy increase
in plantings over the last 10 to 15 years, it was inevitable that this
change would occur. It should come as no great surprise to those
who have kept abreast of our production capability.
Nature has treated us kindly over the years. For example, our estimate
for the 1957-58 season was at more than a 100 million boxes of
oranges prior to the freeze. It was nearly four years before we
again approached that production figure. In the interim we have
enjoyed good prices with an active demand for our fruit. This year's
high production record indicates that the time has arrived for us to
pause and give serious consideration to the movement of high volumes
of fruit each season as a matter of course.
For the past several years, we have devoted most of our thought at
the individual level toward increased production, both in the groves
and in our facilities. We must now begin to spend much of our time
and effort on the business of marketing and expanding the demand

*> 'ill-

N -

for our products. This is a field that is rather foreign to most growers, -
and it is a problem for which solutions are extremely difficult to find.
But it is now our major problem, and we must apply our major efforts
toward its solution.
There are those who will jump to the conclusion that all marketing
problems can be solved by advertising; that if 90 million boxes of
oranges can be sold by spending five cents per box on advertising,
an appropriation of 10 cents per box for advertising would provide
a quick and effective answer to the problem. This, unfortunately, is
not true and cannot be substantiated in any commodity marketing
field. We must have advertising and promotional activity, but we
must also possess knowledge concerning many other intangibles if we
are to succeed in increasing the demand for our products.
The most important undertakings in this field will be accomplished,
we believe, by the new marketing research department of the Florida
Citrus Commission. The last session of the state legislature approved
legislation enabling the Commission to expend up to three percent
of its revenue on marketing research. This department is working in
close cooperation with the Department of Agricultural Economics of
the University of Florida. Some delay has been encountered in the
initial efforts of this department because of the lack of available,
qualified personnel, but a master plan has been instigated and it will
be implemented as soon as practical.
Briefly, their proposed research will include the measurement of the
elasticity of demand for our products under varying conditions. They
will attempt to determine how much citrus can be sold at a given
price, how much more if the price is reduced five, ten or 15 percent,

and how much less at higher prices. They will also probe the effect of
concentrate pricing on fresh fruit sales at varying levels.
They likewise expect to test-market new or improved products, to
guide the industry in making necessary changes. A good example
of this type of research could be to determine if consumers will readily
accept a four to one concentrate which would save tremendous
amounts of money in cans, cartons, freight, and other costs. In fresh
fruit, this research could include a determination of the effectiveness
of pound selling and its direct relation to our sizing standards.
Through this type of research, we hope to discover how to increase
consumption and decrease marketing costs without subjecting the
industry to the hazards of costly errors.
Until we have definite scientific facts on which to base our marketing
decisions, we, of course, will be forced to rely on those facts that
experience or observation have made seemingly self-evident.
Most of us in marketing know that we can sell a certain amount of
product at a given price, and that at a lower price we can sell more.
But when we use price only and it becomes economic suicide for
growers to sell at such low prices, should we not turn our attention
to other tools?

As an example, in the fresh fruit market we restrict the size and grade
of fruit that can be moved to market. This is accomplished under a
Federal Marketing Agreement and order, under the theory that less
desirable fruit brings the price for good fruit to lower levels. The
Indian River grapefruit growers, feeling that this was not enough
control to protect the week by week market, have established an
additional Federal Marketing Agreement which applies only to the
Indian River area. This agreement permits them to maintain volume
control over the sizes that are permitted under the statewide agree-
ment. In its first year of implementation, this system has been quite
effective and has returned thousands of dollars to the grapefruit
growers of that area.
Most of us agree that California's greatest asset is in having a major
part of its fresh fruit tonnage in a single marketing organization.
This factor allows them to control supplies to various areas and
channels of distribution. It is significant that they, nonetheless, find
it necessary to back up this control with a volume marketing agree-
ment that applies to the entire state.
Such volume control assures buyers that no flood of fruit will pour
into the market to make their earlier purchases appear unwise when
compared to the later purchases of their competitors. This protection
adds invaluable stability to the market and greater confidence on
the part of buyers throughout the nation.
It is axiomatic that good times are not conductive to the develop-
ment of overall marketing cooperation, just as it is difficult to solve

problems of over-supply in times of shortages. Our production trend
indicates, however, that the time is fast approaching when the climate
will be favorable to accomplish these things. We are more confident
now than ever before that, with the grower's increasing interest in
our basic problems, we will find and develop satisfactory solutions
to our demand and marketing problems.
Among these problems is the phenomenal growth of the chain store
which places us in a position of selling to fewer and fewer buyers.
It is obvious that the wholesale distributor group and the auction
markets are not now the factors they once were. The major portion
of our business is directed more and more to chain and cooperative
buying groups who control great volume and can exert tremendous
pressure on the market.

Our industry, meanwhile, is a classic example of disorganized selling
attempting to cope with buying that is growing more organized

and powerful each year. Buyers are only human, and if they sense
that a market is weakening, it is only natural that they withhold orders
until they can purchase at the lower price. Somewhere within the
200 odd selling agencies handling fresh Florida fruit, they consistently
find groups willing to capture extra business at a lower price. Even if
lower prices are not available, we have lost sales momentum if their
inventories are allowed to decrease while they search for lower prices.
While we mention fresh fruit in these illustrations, we might just as
well have mentioned concentrate or single strength juices, for those
industries are just as disorganized in selling as is the fresh fruit industry.
The Florida Citrus Exchange, while a definite leader in the fresh fruit
industry, is not large enough or strong enough to correct the imper-
fections in our overall sales system. Because of this, our major role
must be in our endeavor to generate enough cooperation among
other selling groups to establish a united front with which to legally
attack our common problems.
In the Exchange, we believe that we have our individual marketing
problems under good control. Percentage-wise and volume-wise, we
have the widest distribution pattern of sales in the industry. The West
coast of the United States, including California, has become a major
market area for us today because of aggressive solicitation. We
support the only private dealer service force in Florida's fresh fruit
industry because of our belief in the importance of promotions in the
merchandising of our brands. We are one of the few produce organiza-
tions in the country that maintain as many as nine salaried offices in
the major market terminals of the nation, all of which represent us
in those areas and provide us with unbiased market information.

We also have the only shipper controlled terminal packaging opera-
tion in the nation with our own plant in the New York area and
contractual arrangements in the other major markets. We have the
only specialized export department in the industry, selling direct to
foreign buyers. This year, we have assigned a representative in Europe
during the season, promoting our brands and making personal contact
with buyers in various fruit purchasing countries. The Export Depart-
ment has doubled its sales volume this season and has turned in a
fine record.
The Exchange is able to maintain and supr..o' these various programs
because we have a sufficient volume of fresh fruit to enable us to.
provide these services at a competitive sales cost to our growers.
These services, available to our shippers, are indication enough that
in "cooperation there is profit." Certainly, individual shippers could
not afford the extra benefits of these services, but because 30 odd
shippers have grouped together in the Exchange, they become possible
and profitable.
Even more impressive accomplishments could be attained with greater
tonnage in the Exchange system. Let us hope that we can continue
to increase our marketing volume to the point that we can meet
organized buying on an equal footing, and that through our own
organization of selling procedures we can bring about a stability
long sought but seldom found in the history of this great industry
of ours. A

John T. Lesley J
General Manager


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