UNIVERSITY OF CALIFORNIA COLLEGE OF AGRICULTURE AGRICULTURAL EXPERIMENT STATION BERKELEY, CALIFORNIA Marketing California Apples E. A. STOKDYK, H. E. ERDMAN, CHARLES H. WEST and F. W. ALLEN Distributor TRADE CHANNELS FOR CALIFORNIA APPLES BULLETIN 501 NOVEMBER, 1930 CONTRIBUTION FROM THE GIANNINI FOUNDATION OF AGRICULTURAL ECONOMICS UNIVERSITY OF CALIFORNIA PRINTING OFFICE BERKELEY, CALIFORNIA CONTENTS Page Foreword 3 Summary and conclusions 3 Trade channels followed by California apples 10 Trade opinion on market preferences , 11 Variety preferences 11 Size preferences 15 Grade preferences 15 Pack preferences 17 Container preferences 17 Color preference for Newtowns 22 Opinions on packing well-striped Gravensteins separately 23 The effect of the sale of immature apples 27 Specific demand for early immature apples 31 Qualities reported in out-of-state apples not found in California apples 33 Opinions and practices with reference to the possibility of increasing the demand for apples 36 Attitude of markets other than those covered by the detailed survey toward California Gravensteins 46 Consumers' preferences and purchases of apples 51 Retailers' operations and practices 66 Wholesalers' and jobbers' operations and practices 72 Brokers' and distributors' operations and practices 92 Shippers' operations and practices 97 Sebastopol district 97 Watsonville district 108 Apple districts other than Sebastopol and Watsonville 116 Growers' financing and marketing problems 118 Sebastopol district 118 Watsonville district 120 Apple storage 123 Apple supplies and wholesale prices 129 Retail prices of apples 142 Acknowledgments 150 MARKETING CALIFORNIA APPLES' E. A. ST0KDYK,2 H. E. ERDMAN,3 CHARLES H. WEST.4 and E. W. ALKEN5 FOREWORD The information in this bulletin was obtained in a study under- taken by the Giannini Foundation of Agricultural Economics and the Division of Pomology of the University of California at the request of a committee of apple growers. The principal objects of the study were to gain a comprehensive view of the methods of marketing' apples, to obtain information on market preferences, and to determine possibili- ties for improvement. The major phase of the study was a survey of principal marketing channels from producer to consumer. This sur- vey included the main producing sections of California, the principal distributing centers of California, and a number of large eastern cities. Specific questions were asked of a representative group at each stage in the marketing process. With the exception of a part of the growers' survey the study was conducted by personal interview. SUMMARY AND CONCLUSIONS A fundamental consideration in the marketing of apples is a knowledge of individual market preferences with reference to such factors as variety, size, grade, and pack. This study has shown that different markets have distinct preferences in these respects, although most markets were found to have some preferences in common. Variety Preferences* — In all the markets surveyed the Gravenstein was named as first choice among the early eating apples available. 1 Paper No. 14, The Giannini Foundation of Agricultural Economics. 2 Associate in Agricultural Economics and Associate on the Giannini Foun- dation. 3 Professor of Agricultural Economics, Agricultural Economist in the Experi- ment Station and Agricultural Economist on the Giannini Foundation. * Assistant Agricultural Economist in the Experiment Station and Assistant Agricultural Economist on the Giannini Foundation. s Associate Pomologist in the Experiment Station. * Pomologists differ regarding the nomenclature of Esopus Spitzenburg, and whether or not the green and yellow colored Newtowns are distinct varieties. In this publication the most common usage was followed, Esopus Spitzenburg being shortened to Spitzenburg and Newtown used to designate either Green Newtown or Yellow Newtown. Green or yellow where used in connection with this variety are therefore only descriptive of the color rather than a part of the name. 4 University of California — Experiment Station However, the Gravenstein is not equally in favor in all markets. It is not well known by southern California consumers. Eastern markets indicated a preference for the Gravenstein but competition of cheap local apples or low-prieed soft fruits has excluded the Grav- enstein in some years. Although this variety occupies first place as an early eating apple in all markets, it loses favor in southern Cali- fornia and in New York City as soon as the Jonathan appears on the market. In the northern California markets, the Gravenstein with- stands competition from the Jonathan remarkably well. In California markets the Gravenstein was also named as one of the preferred varieties of early cooking apples. Consumers with medium and high incomes reported using the Gravenstein as a cook- ing apple as often as they reported using it as an eating apple. In contrast, the Gravenstein is classed almost exclusively as an eating apple in eastern markets. Such varieties as Wealthy, Duchess, Trans- parent, and Williams Red are used for cooking in those markets and are available at relatively low prices. Of the late varieties of eating apples, Jonathan, Winesap, New- town, Spitzenburg, and Delicious are favorites in California markets. Northern California named Spitzenburg, Newtown, and Winesap, while southern California named Jonathan, Delicious, and Winesap most frequently. Eastern markets indicated a preference for Wine- sap, Delicious, Jonathan, Spitzenburg, and Mcintosh. In California markets, Newtown, Bellflower, and Rome Beauty are preferred late cooking varieties. The Bellflower is the outstand- ing first choice in southern California while the Rome Beauty, which is used primarily for baking, is most acceptable in northern Califor- nia. In eastern markets Rhode Island Greening, Baldwin, and Rome Beauty are preferred as late cooking apples. Size Preferences. — In general, the sizes of apples ranging between 100 and 150 per standard apple box are most acceptable in all mar- kets. However, for some varieties used primarily for baking, larger sizes are preferred, and in some markets smaller sizes of Jonathans are received without marked discrimination. Size preference was reported to vary to some extent with prices. If prices are low the large apples are in greater demand, while, if prices are high, small apples are taken more readily. Grade Preferences. — As a whole, northern California markets required better grades of apples than southern California markets. The New York market expressed decided preference for fruit of high grade from the Pacific coast. Northwest 'Extra Fancy,' California Bul. 501] Marketing California Apples 5 'Fancy,' and 'U. S. No. 1' were most popular at price differentials prevailing' in 1929. Pack and Container Preferences. — In general, northern California markets prefer all apples packed and wrapped in standard apple boxes. Brokers, who do little business in early cooking apples, stated this to be the case for all varieties of apples, whereas wholesalers and jobbers stated that early cooking apples were preferred unwrapped in lugs. Southern California markets lean heavily toward California apples unwrapped and loose in unlidded boxes. On the other hand, these markets expressed a preference for wrapped and packed apples in standard apple boxes from the Northwest. In Eastern markets the box is the universally accepted container for western apples, including California Gravensteins and Northwest varieties. Color Preferences. — Red apples are in general favor among con- sumers, although approximately 50 per cent of those interviewed reported no color preference. Green rather than yellow colored New- towns are preferred in California markets. The Effect of the Sale of Immature Apples. — Less than 40 per cent of all the consumers interviewed reported purchasing early immature apples. Consumers who reported purchasing- such apples for specific purposes, for sauce and pies, for example, indicated that in general the immaturity did not prejudice them against the purchase of the same variety later in the season when it was mature. Retailers, how- ever, were of the opinion that, on the whole, the sale of immature apples was injurious and that it affected later sales. At the same time, they felt that there is a specific demand for early immature apples. Consumers in northern California markets purchase immature apples to a greater extent than do those in southern California markets. Consequently there were a larger number of wholesalers and jobbers in northern California markets than in those of southern California who were of the opinion that the sale of immature apples did not hurt later sales. It was the opinion of the wholesale trade that imma- turity was more objectionable in the Gravenstein than in the Bell- flower or Newtown. Possible Premiums for Well-Striped Gravensteins Packed Sep- arately. — Approximately half of the California retailers interviewed reported they could pay a premium of from 25 cents to a dollar a box for well-striped Gravensteins, the majority reporting approximately 50 cents a box. Likewise, nearly 50 per cent of the wholesalers and jobbers in California markets stated that they could pay such a 6 University of California — Experiment Station premium but the majority felt that 25 cents a box was the extent of the premium. Brokers were more generally of the opinion that a premium could be obtained. On the eastern markets wholesalers, job- bers, and brokers were almost unanimous in stating- that a premium of from 25 cents to 50 cents a box could be obtained. Nevertheless, it was the general opinion of all factors, including shippers, that it would not be a profitable practice under present con- ditions of production in the Gravenstein area to attempt to pack well-striped Gravensteins separately. Only a small proportion of the apples produced are highly colored and it was felt that packing the well-striped apples separately would lower the price for the general run of the pack to such an extent that the premium obtained for the highly colored apples would not offset the loss from lower prices that would be received for the bulk of the pack. Storage Operations and Problems. — Storage of Gravensteins is seldom practiced in California markets. Those who had stored them held them for short periods, usually not longer than three to four weeks. Bitter-pit was reported to be the principal problem encoun- tered in the storage of this variety. It was the concensus of opinion from retailer to shipper that it is inadvisable to store Gravensteins in order to extend their marketing season because Jonathans are preferred in most markets and as soon as available tend to displace Gravensteins. The only conditions that would make the storage of Gravensteins advisable would be an over- loaded market during mid-season in heavy crop years or a late Jonathan crop in the Northwest. Bellflowers are stored by the majority of wholesalers in southern California markets and by most of the shippers in the Watsonville district. However, only half of the dealers in northern California markets stored them, and the quantity stored by these dealers was considerably less than that stored by those in southern California. The length of the storage period varied from three to six months with a marked tendency on the part of southern California wholesalers to store longer than those in northern California. The development of bitter-pit and a tendency to ripen too rapidly were the chief difficul- ties encountered in the storage of Bellflowers. Most dealers reported the storage of this variety as profitable. Most of those who handled Newtowns made a practice of storing. The length of the storage period was considerably longer than for Bellflowers. It is a common practice to hold some Newtowns until July 1. Internal browning was reported to be the chief difficulty in Bul. 501] Marketing California Apples 7 storage. Scald was stated to add to storage difficulties, but was not reported troublesome except where difficulties were experienced with ventilation, high temperatures, or some unusual delay in placing the fruit in storage. The majority reported the storage of this variety as profitable. Market Structure. — Apples, like other fruits and vegetables, take a variety of routes as they move from producer to consumer. On the whole the most typical route followed by California apples is as fol- lows : Producer — country packer — distributor — broker — jobber — re- tailer — consumer. In eastern markets an auction, and at times also a wholesaler, is found between broker and jobber. In Los Angeles a wholesaler is often found at that stage. (See chart on cover page.) There was no evidence of purposeful extra handling. When one jobber, for example, bought of another, it was because he needed immediately a small quantity of apples of a particular size, quality, or variety to meet the needs of his trade. When jobbers bought of whole- salers they did so because they could not use the full car lots offered by brokers for country shippers. All dealers were found to take short- cuts in these trade channels when they found it profitable, even to the extent in some cases of going directly to the producer. Quantity Per Sale. — The country packer, the distributor, and the broker usually ship and sell car lots; the wholesaler commonly sells 25 to 100 boxes, the jobber 5 to 10 boxes, and the retailer from 3 to 5 pounds. Credit Relations. — It was found that retailers received credit from wholesalers, while jobbers reported purchasing principally on a cash basis, although some purchases were made on a credit basis. Whole- salers often engaged in two-way financing. That is, they made cash advances to country packers as well as extending credit to retailers and jobbers. Brokers and distributors also extended credit in both directions. Shippers financed growers to some extent by making cash advances on delivery of the product but financed production opera- tions directly only in a limited way. In the Sebastopol area growers are usually free to choose the type of marketing agency they favor because they do not obtain credit from shippers. In that area credit service from local banks was reported to be generally satisfactory. The rates of interest paid by growers compare favorably with those in other agricultural sections. There is no apparent credit shortage in the district. Charges and Margins. — Between 20 and 35 per cent is the gross margin considered necessary by most retailers for handling apples. 8 University of California — Experiment Station Wholesalers and jobbers attempt to obtain a margin of 15 per cent or approximately 25 cents a box. If they sell on a commission basis the charge for this service is usually 15 per cent. Five cents a box and 25 dollars a carload are the most usual selling charges of brokers while distributors generally charge 7 per cent on delivered or auction sales and 10 per cent on f.o.b. sales. Cooperative shippers handle apples for growers' account at actual cost. Packing charges range from 45 to 60 cents a box. The most usual charge is 55 cents a box. Total charges made by the shipper for packing and selling range from 55% to 67 V2 cents a box. In eastern cities storage charges for carload lots vary from 8 to 10 cents a box for the first month in storage and from 5 to 6 cents a box for each succeeding month. In California the rates are fixed by the Railroad Commission. The rate is 9 cents a box for the first month and 5 cents a box for each succeeding month, with a maximum rate of 25 cents a box for the season. Cooperative storage houses operate at cost. Competition Between Fruits, and Possibilities and Suggestions for Increasing the Demand for Apples. — During the Gravenstein market- ing season, many species of soft fruits are available and offer severe competition. For the entire apple season oranges and bananas are considered the chief competitors of the apple. There was considerable diversity of opinion as to the possibilities of increasing the demand for apples. Those who felt the demand could be increased thought that advertising, better packing, better sizing, better grading, the use of new boxes, and the proper timing of the sale of varieties would be of value. Advertising was mentioned most fre- quently. It was apparent from the consumer and retailer surveys that the retailer occupies an advantageous position to influence con- sumer's purchases. More than 70 per cent of all consumers go in person to the retail store and nearly 80 per cent of all consumers merely ask for "apples" rather than for a given variety. Hence an advertising campaign to be most effective should first be directed at the retailer. As a cheap form of effective advertising, shippers might place in each box an attractive card suitable for display by the retailer. This should feature such points as the name of the variety, its point of production, its best uses, and the time of year when it is at its best. Opinion was divided as to whether a fancy package was a selling aid. There was also a diversity of opinion as to whether price con- trol at shipping point would improve apple marketing. Bul. 501] Marketing California Apples 9 Growers' Attitude Toward Marketing Agencies. — The majority of Sebastopol apple growers favored a cooperative marketing agency of the centralized type with a federated type as second choice. Approximately 65 per cent of those dealing with cooperative agencies were satisfied with the service rendered, while 53 per cent of those who dealt with independent agencies were satisfied. Nearly half of the growers had used more than one marketing agency during the past five years. Apple Production and Wholesale Prices. — Wholesale prices of California apples are closely related to the general level of apple prices throughout the country. Los Angeles wholesale prices are influenced to a considerable extent by supplies on that market. New York auction prices for Gravensteins are influenced by several other factors which outweigh in importance the quantity of Gravensteins sold at auction. Retail Prices. — The most striking characteristic of retail prices of apples is their wide variation. Quality and variety and the type of store in which the apples are sold all influence retail prices. Pre- miums for high quality are greatest when the supply of high-quality apples is limited. Fruit stores commonly offer high-quality apples at lower prices than do independent or chain-store retailers. 10 University of California — Experiment Station TRADE CHANNELS FOLLOWED BY CALIFORNIA APPLES The chart on the cover page pictures diagrammaticaHy the various trade channels that were found to exist in the marketing of California apples. A number of agencies are engaged in performing the various marketing services. 6 At the same time, all of the agencies may or may not be utilized in bringing the product from a given producer to a given consumer. Likewise, some of the agencies are performing some- what similar services. Furthermore, short cuts are sometimes made in the marketing process which eliminate one or more agencies. For instance, a shipper may sell all or a portion of his output directly to a wholesaler instead of selling through a broker or through a dis- tributor and a broker. However, it was found that the principal trade channels followed in the marketing of California apples were those represented in the chart. That is, the shipper assembled, graded, and packed the apples delivered by the producer ; a broker acting for a dis- tributor, or a broker acting for the shipper, sold to wholesalers in car lots; the wholesalers sold less than car lots to jobbers or retailers or to both; jobbers sold small lots of packages to retailers, and the retailer sold to the consumer in lots of a few pounds. 7 In eastern markets, similar trade channels are used except that California apples are sold almost exclusively on the auction to wholesalers and jobbers. The complicated market structure pictured on the cover chart has arisen out of attempts on the part of certain dealers to offer more and better marketing services and on the part of others to find short cuts, all, of course, with an eye to greater profits. Thus any given shipper may make connections with wholesalers in a number of cities and either consign to them or exchange telegrams in order to make sales. He may, however, find it more satisfactory in cost and service to make connections with brokers in those cities and thus reach all avail- able carlot buyers in a given market through one broker, and at a minimum of expense for telegrams. Again, a shipper may find that it takes a long time and is expen- sive to build up satisfactory brokerage connections in many markets. He may, therefore, find that his net profits are actually increased by 6 For a discussion of marketing services see: Macklin, Theodore. Efficient marketing for agriculture. Chap. Ill to XI. Macmillan Co., New York. 1921. 7 For a detailed discussion of trade channels see: Erdman, H. E. American produce markets. Chap. VI, p. 94-113. D. C. Heath & Co., Boston. 1928. Bul. 501] Marketing California Apples 11 paying a somewhat higher charge to some distributor who maintains an elaborate set of brokerage connections reaching all of the large markets of the country. There are a number of such distributors, both private and cooperative. Any given shipper will thus balance the advantages and disad- vantages of different trade channels against his own needs and ability. Likewise, various plans may be followed by other dealers. A jobber in an eastern market may, for example, buy apples at auction in lots of 20 boxes or more, or he may buy of a car lot receiver (pictured in the chart as a wholesaler), or he may buy a carlot outright through a broker. He will do the latter only if he has a, large business in apples or if he has the necessary storage facilities and is adequately financed. TRADE OPINION ON MARKET PREFERENCES Trade opinions on market preferences were obtained by personal interview from 104 retailers in California cities, 116 wholesalers and jobbers in California and eastern cities, 34 brokers and distributors in California and eastern cities, and 37 shippers in California. Spe- cific questions were asked of each person interviewed and the replies were summarized as shown in tables which follow. In many cases the questions were not answered or the replies were vague. Consequently, only those replies were tabulated which were direct and to the point. The tables present the opinions of the various factors in the trade with reference to market preferences. In general the various factors were in accord concerning the demands of their markets, but in some instances there was a conflict of opinion. Where such conflict is evi- dent, attention will be called to the fact in the discussion which follows. However, since some readers will be interested in comparing and contrasting the opinions of the various classes of dealers, the data obtained are presented in tables which separate the opinions of each type of dealer. VARIETY PREFERENCES* When stating variety preferences, dealers were asked to classify apples as early eating, early cooking, late eating, and late cooking, but it was difficult for most of them to do so. (See tables 4 to 7.) In both northern and southern California markets, the Bellflower was called an early eating apple by many and a late cooking apple by * See footnote, page 3. 12 University of California — Experiment Station others. In southern California, in fact, the Bellflower was classed as an early eating", early cooking, and late cooking apple. Likewise, the Jonathan was given fourth choice as an early eating apple by the northern California trade and first choice as a late eating apple by the southern California trade. It was also difficult for the trade to name varieties in order of their preference. They invariably tended to name the varieties in order of their seasonal appearance on the market. Hence it is felt that the answers are somewhat biased by this factor, although the interviewer tried to keep the correct question before them. In California markets most dealers named the Gravenstein as first choice as an early eating apple. It was considered superior to such varieties as Astrachan and Skinner's Seedling. In the New York market, the Gravenstein was regarded as being the only variety in its season used strictly for eating out of hand. Duchess and Wealthy, particularly the early Wealthy from New Jersey, Maryland and Delaware, were considered of little value for eating. Both of these varieties, however, as well as the Yellow Transparent and Will- iams Red, were frequently mentioned as eating apples. Mcintosh and Jonathan were considered very popular varieties for eating but these were most often classed as late varieties. It was particularly difficult to make a satisfactory distinction between early and late varieties in the East because New York and other eastern markets receive the same varieties from numerous sources, each section having different shipping dates. In Chicago, Cleveland, Philadelphia, and Boston markets, the Gravenstein was again looked upon as the outstanding and in reality the only early eating apple. Perhaps Chicago used more Duchess, Wealthy, and Transparent than the other markets. Philadelphia was not an important market for Gravensteins, but dealers recog- nized their value. Because there are many local varieties, some classed fall Jonathans as the first eating sort. Boston gave Gravenstein first place, followed by Mcintosh. Later Gravensteins from New Hamp- shire, Massachusetts, and Vermont compete to some extent with the last of the California crop. The eastern Gravenstein possesses more color than the California Gravenstein. (See table 4 for summary of market preferences for early eating varieties.) The Gravenstein was named as a cooking apple as well as an eating apple in California markets. A total of eleven varieties were named as early cooking apples, but Astrachans (both red and white), Graven- steins, Bellflowers, and Alexanders were named most frequently. Bul. 501] Marketing California Apples 13 The dealers on eastern markets named fifteen to twenty varieties of early apples used for cooking purposes. Of these, Wealthy, Codlin, Twenty Ounce, and Duchess were most important in New York, while Wealthy, Duchess, and Transparent, were prominent in other eastern markets (table 5). Red Astrachan, Gravenstein, and Northwestern Greening' were used to a limited extent in New York. In California, the varieties preferred as late eating apples were Jonathan, Winesap, Newtown, Spitzenburg and Delicious. Rome Beauty and Bellflower were also mentioned several times. (See table 6.) Of the varieties of late eating apples, Winesap was generally pre- ferred in the East. Jonathan, Delicious, and Spitzenburg are next in importance. Mcintosh, a fall and early winter variety was in special demand on the New York market, while Philadelphia and Boston showed a decided partiality for the Stayman Winesap. Cleve- land and Chicago gave the Jonathan first place. E. F. Dummeier 8 in a study of the Chicago market reported: "The four varieties of far western apples which stand out on the Chicago market are Delicious, Jonathan, Winesap, and Rome Beauty. The Stayman Winesap is more popular in Philadelphia, Baltimore, and Washington, than it is in Chicago. The Spitzenburg sells better in comparison with other varieties in several eastern cities than it does in Chicago. ' ' California markets preferred the Newtown, Bellflower, and Rome Beauty varieties as late cooking apples. The Rome Beauty was par- ticularly in demand as a baking apple, although it was used to a considerable extent as a late eating apple. It is worthy of note that the varieties named as cooking apples are not red apples. Other varieties named as late cooking apples were Winesap, Tompkins King, Fall Pippin, Twenty Ounce and Rhode Island Greening. (See table 7.) For fall and winter cooking apples, New York preferred Rhode Island Greening, Baldwin, and Rome Beauty. The trade appeared to have no special preference among the three varieties. Other varieties of much less importance are Newtown, Twenty Ounce, York, Imperial, and Stayman Winesap. The three most popular varieties listed for New York were also the general favorites throughout the East. Indi- vidual markets, however, showed a slight preference for each variety. Boston favored Baldwin ; Cleveland, Rome Beauty ; and Philadelphia Rome Beauty and Stayman Winesap. s Dummeier, E. F. Marketing of Pacific Coast fruits in Chicago, p. 232. 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However, the size requirements varied somewhat for different varieties. For Jonathan the range was 113 's and 150 's, Delicious 88 's and 125 's, Spitzenburg 100 's to 125 's, Winesap 113 's to 150 's, Newtown 100 's to 150 's, and Kome Beauty 72 's to 96 's. For general culinary uses, sizes 113 to 138 were in greatest demand while for baking 100 's and larger sizes were desired. Somewhat larger sizes were preferred in southern California mar- kets than in northern California markets. However, toward the end of the season the preference was for the smaller sizes in the preferred range in southern California. For instance, in the early part of the Jonathan season, the preferred sizes ran from 100 's to 138 's, while in the latter part of the season 125 's to 150 's were preferred. Never- theless, sizes most in demand ranged between 113 's and 138 's. Several dealers reported that size requirements varied with the price. If prices were low the larger apples were in greater demand while if prices were high the smaller apples were taken more readily. New York also showed a preference for the sizes between 100 's and 150 's for general trade. Other eastern markets preferred the 113 's to 138 's inclusive, with Chicago using some 150 's. The statements of wholesalers, jobbers, brokers, and distributors with reference to size preferences agreed closely with the statements made by retailers as to the size of apples they handled (table 1). GRADE PREFERENCES Grade preferences varied widely among varieties and markets. Price and time of the year were also said to influence grade prefer- ences. For example, when apple prices were low, or late in the sea- son when apples come out of storage, the preference was for 'Extra Fancy,' while with prices high, or early in the season, the preference was for ' Fancy. ' As a whole the northern California markets required a better grade of apple than did those in southern California. This was par- ticularly true of the San Francisco market. The Sacramento and Stockton markets did not, however, require as good a grade as the San Francisco market, these markets reporting that approximately 75 per cent 'C grade is demanded and 25 per cent 'Fancy.' 16 University of California — Experiment Station The 'Unclassified' grade 9 was acceptable in Los Angeles for early varieties. For early cooking varieties this usually meant orchard run with culls out. In San Francisco, however, the 'Fancy' grade was in greatest demand even for early varieties. Late apples of 'Fancy' and 'Extra Fancy' grades were preferred in most California markets, but Los Angeles accepted large quantities of the 'Combi- nation' grade. In New York, Northwest 'Extra Fancy,' California 'Fancy,' and 'U. S. No. 1' were most popular. 10 The above grades were also in greatest demand on other eastern markets surveyed with the excep- TABLE 2 Grades of Apples Handled by Retailers in California Extra fancy Fancy C grade Combination Number of Area Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent dealers reporting 1 2* 3 4*- 5 6* 7 8* 9 32 1 26 3 2 31 5 57 14 20 84 15 45 19 5 82 75 98 86 50 24 5 9 3 7 24 25 20 14 70 11 10 1 11 22 5 102 20 46 Alameda, Berkeley, 22 Stockton and Sacra- 10 *The items in columns 2, 4, 6, and 8 will not total 100 because several retailers stated they carried more than one grade. tion of Cleveland. This market recognized high quality but paid little more for it than for a good second grade. Here California 'Fancy' and Northwest 'Fancy' sold well. Eastern varieties of the 'U. S. No. 1' grade were in greatest demand with 'Combination' grade a second choice. The statements made by the trade concerning grade preferences appear to conflict with the data obtained from retailers on the grades of apples handled by them (table 2). That is, more retailers reported that they handled 'Extra Fancy' than the wholesale trades' statements would indicate. This may be explained by the fact that retailers often handle several grades but the bulk of their business is in one or two grades. o After August 15, 1929, the ' Unclassified ' grade was replaced by the 'Combi- nation' grade. 10 Very little eastern fruit grades 'U. S. Fancy.' Bul. 501] Marketing California Apples 17 PACK PREFERENCES Northern California markets, particularly the San Francisco mar- ket, preferred to have apples packed and wrapped, while the Los An- geles market preferred California varieties loose in unlidded boxes and Northwest apples packed and wrapped. Eastern markets demanded packed and wrapped apples from California and the North- west but accepted local apples loose. CONTAINER PREFERENCES Container preferences varied with markets and variety of apples. Early cooking apples were sold in lugs in San Francisco and unlidded boxes in Los Angeles. The latter market also accepted early eating, late cooking, and late eating apples in these containers. Aside from TABLE 3 Type of Container Preferred and Opinions Concerning Small Containers as Reported by Retailers in California Reporting a preference for Opinions as to whether apples could be sold advantageously in original containersif packed in smaller packages Area Boxes Lugs No preference Total replies Could Could not Total replies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Num- ber Per cent Num- ber Per cent Num- ber 81 15 48 8 10 79 83 98 36 77 5 1 3 5 2 14 8 16 3 11 2 16 17 50 15 102 18 49 22 13 26 7 7 8 4 28 29 19 35 36 68 17 29 15 7 72 71 81 65 64 94 24 36 Alameda, Berkeley, and 23 Stockton and Sacra- 11 early cooking apples, the San Francisco market demanded that apples be in standard apple boxes. Eastern markets desired that western apples arrive in standard apple boxes, although bushel baskets and barrels were acceptable containers for eastern apples. In Philadel- phia and Cleveland % bushel baskets were becoming popular. Boston received a considerable proportion of its early cooking apples in a local bushel lug box. As is shown in table 3, the majority of California retailers sup- ported the opinion of the rest of the trade by stating that they pre- ferred to buy apples in boxes, those in Los Angeles indicating a preference for the unlidded box. 18 University of California — Experiment Station TABLE 4 Market Preferences for Early Eating Apples (In order named most frequently) Item Markets All Cali- fornia Northern California Southern California New York All Eastern As reported by wholesalers and jobbers Variety Gravenstein Jonathan Bellflower Gravenstein Jonathan Bellflower Gravenstein Skinner's Seed- ling Gravenstein Wealthy Duchess Gravenstein Size 100-150 88-125 113-150 100-150 113-150 100-138 100-150 88-125 100-150 80- 96 113-150 Grade Fancy Unclassified C grade Fancy C grade Extra Fancy Unclassified Fancy C grade N.W.ExtraFancy Calif. Fancy U. S. No. 1 Calif. Fancy N. W. Fancy U. S. No. 1 Pack Unwrapped Wrapped Both Unwrapped Wrapped Both Unwrapped Wrapped Wrapped Container Boxes Lugs Both Boxes Lugs Both Boxes Lugs Both Boxes Bushel basket Boxes Bushel basket As reported by brokers and distributors Variety Gravenstein Jonathan Skinner's Seed- ling Gravenstein Astrachan Jonathan Gravenstein Skinner's Seed- ling Jonathan Gravenstein Wealthy Duchess Gravenstein Wealthy Duchess Size 100-150 88-125 100-150 100-150 88-125 113-150 113-138 Grade Fancy Unclassified C grade Fancy C grade Extra fancy Unclassified Fancy Fancy U. S. No. 1 Fancy U. S. No. 1 Pack Unwrapped Wrapped Both Wrapped Unwrapped Both Unwrapped Wrapped Wrapped Container Boxes Lugs Baskets Boxes Lugs Boxes Baskets Boxes Boxes Seventy-two per cent of the retailers were of the opinion that apples could not be sold advantageously in original packages even if they were packed in small containers (table 3). In the poorer districts retailers were emphatic in their statements that they could not sell Bul. 501] Marketing California Apples TABLE 5 Market Preferences for Early Cooking Apples (In order named most frequently) 19 Item Markets All Cali- fornia Northern California Southern California New York All Eastern As reported by wholesalers and jobbers Astrachan Astrachan Astrachan Wealthy Wealthy Variety Gravenstein Alexander Bellflower Codlin Duchess Alexander Gravenstein Gravenstein Twenty Ounce Duchess Transparent 100-150 100-150 100-150 113-138 113-138 Size 88-125 113-125 88-125 88-104 88-100 113-125 80-113 150 Fancy Fancy Unclassified U. S. No. 1 U. S. No. 1 Grade Unclassified C grade Fancy Commercial Commercial C grade C grade Unwrapped Unwrapped Unwrapped Unwrapped Unwrapped Pack Wrapped Both Boxes Lugs Boxes Bushel baskets Bushel baskets Container Lugs Boxes Lugs Y% bushel baskets Both Both Both Lugs As reported by brokers and distributors Variety Bellflower Gravenstein Astrachan Gravenstein Astrachan Alexander Bellflower Astrachan Gravenstein Wealthy Duchess Williams Red Wealthy Duchess Transparent Size 100-150 88-125 100150 100-150 88-125 100-125 80-100 100-125 80-100 Grade Fancy Unclassified C grade Fancy C grade Unclassified Fancy U. S. No. 1 Commercial U. S. No. 1 Commercial Pack Unwrapped Wrapped Both Wrapped Unwrapped Both Unwrapped Unwrapped Unwrapped Container Boxes Lugs Both Boxes Lugs Both Boxes Bushel baskets Bushel baskets Bushel lugs in original packages, while in the higher income districts a larger number reported that they could sell to advantage in small packages. Some said that the holiday trade would be more likely to accept original packages. 20 University of California — Experiment Station TABLE 6 Market Preferences for Late Eating Apples (In order named most frequently) Item Markets All Cali- fornia Northern California Southern California New York All Eastern As reported by wholesalers and jobbers Jonathan Spitzenburg Jonathan Winesap Winesap Variety Winesap Newtown Delicious Delicious and Jonathan Newtown Winesap Winesap Jonathan Spitzenburg Delicious Mcintosh 100-150 100-150 100-150 100-138 113-138 Size 113-150 113-150 113-150 88- 96 138-150 88-125 125-150 88-125 150 Fancy Fancy Extra fancy Extra fancy Extra fancy Grade Extra fancy Extra fancy Fancy Fancy Fancy C grade C grade Combination Wrapped Wrapped Both Wrapped Wrapped Pack Both Unwrapped Wrapped Unwrapped Unwrapped Unwrapped Both Unwrapped Boxes Boxes Boxes Boxes Boxes Container Lugs Both Baskets Baskets Baskets Baskets Lugs Barrels Barrels As reported by brokers and distributors Spitzenburg Spitzenburg Jonathan Winesap and Winesap Variety Winesap Winesap Delicious Delicious Jonathan Jonathan Newtown Winesap Jonathan Mcintosh Delicious 100-150 100-150 113-150 113-150 113-150 Size 113-150 100-113 100-113 80-125 80-100 80-100 Fancy Fancy Extra fancy Extra fancy Extra fancy Grade Extra fancy Extra fancy Fancy Fancy Fancy Combination C grade Combination U. S. Fancy and U. S. No. 1 U. S. Fancy and U. S. No. 1 Both Both Both Wrapped Wrapped Pack Wrapped Wrapped Wrapped Unwrapped Unwrapped Unwrapped Unwrapped Unwrapped Boxes Boxes Boxes Boxes Boxes Container Baskets Baskets Baskets Barrels Baskets Barrels Bul. 501] Marketing California Apples TABLE 7 Market Preferences for Late Cooking Apples (In order named most frequently) 21 Item Markets All Cali- fornia Northern California Southern California New York All Eastern As reported by wholesalers and jobbers Newtown Newtown Bellflower R. I. Greening R. I. Greening Variety Bellflower Rome Beauty Newtown Baldwin Baldwin Rome Beauty Bellflower Rome Beauty Rome Beauty Rome Beauty 100-150 100-150 100-150 88-138 88-138 Size 72-100 64-80 72-100 72-88 64- 80 113-150 150 Fancy Fancy Combination Extra fancy (W)* Extra fancy (W) Grade Extra fancy C grade Fancy U. S. No. 1(E) t U. S. No. 1 (E) C grade Extra fancy Extra fancy Fancy (W) U. S. Combina- tion (E) Fancy (W) Wrapped Wrapped Unwrapped Both Both Pack Both Both Both Unwrapped Unwrapped Wrapped Boxes Boxes Boxes Boxes (W) Boxes (W) Container Both Lugs Both Lugs Baskets (E) Baskets (E) As reported by brokers and distributors Variety Newtown Bellflower Rome Beauty Rome Beauty Newtown Bellflower Bellflower Newtown Rome Beauty R. I. Greening Baldwin Rome Beauty Rome Beauty Baldwin Winesap Size 100-150 72-100 72- 88 72- 88 100-150 100-150 72-100 100-125 72-100 100-125 72-100 Grade Fancy Combination Extra fancy Fancy Extra fancy Combination Combination Fancy Extra fancy Extra fancy U. S. No. 1 Fancy Extra fancy U. S. No. 1 Fancy Pack Wrapped Both Unwrapped Wrapped Unwrapped Both Wrapped Wrapped (W) Unwrapped (E) Wrapped (W) Unwrapped (E) Container Boxes Boxes Boxes Boxes Baskets Barrels Boxes Baskets Barrels *(W) Western apples. |(E) Eastern apples. 22 University of California — Experiment Station A retail survey in Pennsylvania 11 brought out the fact that some retailers had repacked apples and sold them in peck packages. Their margin of profit was low but the volume sold made this practice profitable. TABLE 8 Color Preference for Newtowns in 1 California Markets as Reported by Wholesalers and Jobbers Markets Reporting preference for green color Reporting preference for yellow color Reporting a demand for both yellow and green Total replies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent 32 15 17 77 68 85 3 2 1 7 9 5 7 5 2 16 23 10 42 22 20 100 Northern California 100 Southern California 100 COLOR PREFERENCE FOR NEWTOWNS IN CALIFORNIA MARKETS Per cen+ of replies 20 40 60 eo Preference Fig. 1. — In California markets the preference is usually for green colored Newtowns and this is especially the case in southern California. (Data from table 8.) COLOR PREFERENCE FOR NEWTOWNS Watsonville growers and shippers are particularly interested in trade preferences for color of the Newtown variety. In reply to a question with reference to color, California wholesalers and jobbers reported a decided preference for a green Newtown (table 8 and fig. 1). Some dealers stated that the trade wanted a yellow-colored Newtown late in the season, but all dealers reported a preference for a green Newtown for storage. ii Hanemann, H. A. Merchandizing apples in Pennsylvania cities. (Mimeo.) p. 6. Pennsylvania Bur. Markets. March, 1927. Bul. 501] Marketing California Apples 23 Brokers were in general agreement with wholesalers and jobbers as to color preference. Compare tables 8 and 9. For export, how- ever, California brokers stated that the Hamburg market prefers a yellow Newtown while other markets want a green Newtown. TABLE 9 Color Preference for Newtowns in California Markets as Eeported by Brokers and Distributors Markets Reporting preference for green color Reporting preference for yellow color Reporting a demand for both yellow and green Total replies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent 13 5 8 86 83 89 1 1 7 11 7 17 15 6 9 100 100 100 OPINIONS ON PACKING WELL-STRIPED GRAVENSTEINS SEPARATELY California markets differed in their answers to the question of whether or not the trade would pay more for well-striped Graven- steins packed separately. Northern California wholesalers stated more frequently that they would pay more. Likewise, brokers were more generally of the opinion that a higher price could be obtained than were wholesalers and retailers. (See tables 11 and 12.) The premium they could pay ranged from 15 cents to a dollar a box. Southern California dealers, as is evident from tables 10, 11, and 12, were generally of the opinion that they could not pay more for sep- arate packing of the well-striped Gravensteins, and those who did, indicated that they could pay a smaller premium than the northern California dealers reported. However, most dealers expressed doubt as to whether this would be profitable from the standpoint of the shipper. They felt that packing the fancy well-striped apples sep- arately would rob the other grades to such an extent that they would sell for less, resulting in a total smaller return to the grower. Ship- pers concurred in this opinion. It was the general opinion of the trade on all of the eastern mar- kets that well-striped Gravensteins would bring a premium of from 25 to 50 cents a box more than those without stripe. Only 10 per cent of those interviewed stated they would not pay at least 15 24 University of California — Experiment Station fee 888 88 ,-H rH ~H -h ,-< o a Hg a§3 Oi OS Oi C) C4 £*° CO i-H 0) p^g CO iH o Oi © §S (M ^H 00 O O Ih o Ol »H O CO O CD C n, a) eo cm t- o o £i « g CO i* CO O O © G Png 888 88 3J o"H. H£ s* m ic to cm © bO I 1 O IN ^ CM »-t a "£ as o «o cm o o a e M ^ ^ CO CO CO w , s O g | s fc o o © i>> co "3 fr «5 hw 0) PHg r+ © t« O0 © 3 J "5 CO CO CO N , O 2 Sfe CO "5 CO «5 !>• a £* U5 H t-H i-H d "2 "S eS s I 9 E >i 2 03 i O M QQ i i 8 S -2 o u 01 T3 d 1 ill s § S&< III G3 g g ,3 o O < 05 K- < CQ Bul. 501] Marketing California Apples 25 TABLE 11 Wholesalers ' and Jobbers ' Opinions as to Premiums for Well-striped Gravensteins Would your trade pay more for well striped Gravensteins packed separately? Markets Yes No Total replies How much more? Num- ber Per cent Num- ber Per cent Num- ber Per cent 21 14 7 26 55 53 64 39 81 90 19 8 11 6 6 47 36 61 19 10 40 22 18 32 61 100 100 100 100 100 10 cents to $1.00 a box, mostly 25 cents. 15 cents to $1.00 a box, mostly 25 cents. 10 cents to 35 cents a box, mostly 25 cents. 15 cents to $1.00 a box, mostly 25 to 50 cents. Northern California Southern California New York ally 25 to 50 cents, mostly 25 cents. TABLE 12 Brokers ' and Distributors' Opinions as to Premiums for Well-striped Gravensteins Would your trade pay more for fancy well striped Gravenstein's packed separately? Markets Yes No Total replies How much more? Num- ber Per cent Num- ber Per cent Num- ber Per cent All California 13 7 6 6 10 77 78 75 86 91 4 2 2 1 1 23 22 25 14 9 17 9 8 7 11 100 100 100 100 100 10 to 50 cents per box, mostly 25 cents. 10 to 50 cents per box, mostly 25 cents. 25 to 50 cents per box, mostly 25 cents Northern California Southern California 26 University of California — Experiment Station 03 .2 1 t-c e O a) P-l O co o «o I-- CO 1* •* CM > eg o T> Ph o N * rt CO OS i-i »-c CM N CO * H « d Ph cj O ■* IS N OO l-H i-H * (N 1-° *M H ©CO TJ e3 n *1 Ph 3 CO CM •"*< O CO N N N lO CO 1* O CO Til N o CO H rt H 1(1 n u c3 "a 4 Northern California Southern California New York All eastern Bul. 501] Marketing California Apples 27 cents a box more, and several would pay from 75 cents to a dollar more. Some of the better informed eastern dealers felt, however, as did California dealers, that to take the striped apples away from the general run of the pack would be a mistake, because not enough of the fruit would come to this color requirement to offset the lower price which would be paid for the larger proportion of the crop. THE EFFECT OF THE SALE OF IMMATURE APPLES One of the questions concerning which apple growers desired specific information was the effect of the sale of immature apples. As was noted in the consumer survey, information was obtained on this point from them. In interviewing the various factors in the trade, the question of immaturity and its effect on the market was discussed from several angles. First, the general question, "What is your opinion as to the sale of immature Gravensteins, Newtowns, Bell- flowers, and other varieties?" was asked. The second question was, ' l Is there a specific demand for early apples even if they are' imma- ture V 9 The third question was, "Will the sale of immature Graven- steins, Newtowns, Bellflowers, and other varieties hurt later sales?" The general opinion of the trade in California markets was that it is a bad practice to sell immature apples. Some dealers felt that it was satisfactory under some circumstances, but the majority felt that it was detrimental. By several it was held to be absolutely suicidal for shippers to sell green fruit, yet a few insisted that buyers knew what their trade demanded. Those who gave a qualified opinion expressed the belief that there was a demand for immature apples for cooking, particularly early in the summer when other apples were not on the market. (See tables 13, 14, and 15.) Several brokers who sold apples for export, stated that early in the season there was a demand for green fruit and that it was not injurious to the market to supply this demand. In reply to the question concerning the effect of the sale of imma- ture Newtowns there was a tendency for the trade to confuse green color with immaturity. This no doubt accounts for the relatively large number who felt that the sale of immature Newtowns was satisfactory. New York dealers were rather evenly divided in their opinion as to the effect of the sale of immature apples. Jobbers felt that Grav- ensteins had little competition and that early varieties would sell regardless of quality. A few stated that eating apples should be 28 University of California — Experiment Station mature but that cooking- sorts might be immature. Large receivers were practically unanimous in stating that not only immature Grav- ensteins but that immature fruit of all kinds and varieties should be left at home. Over two-thirds of the dealers interviewed were of this opinion. Some were very emphatic in their replies, a few of which were: "A shame to sell them." "Wrong." "Shouldn't be permit- ted." "Should be kept at home until fit to ship." "Kills off the con- sumer." "Should have good color." As was noted above, some exporters reported that immature apples were satisfactory for export. It is important, however, to keep in TABLE 14 Brokers ' and Distributors ' Opinions as to the Effect of the Sale of Immature Fruit Gravenstein Newtown Bellflower Other varieties Markets Bad 0. K. Mixed Bad O. K. Mixed Bad 0. K. Mixed Bad O. K. Mixed All California Northern California Southern California 13 6 7 4 9 IE* IE 3 2 2 2 11 5 6 1 1 2E 2E 12 5 7 2E 2E 2 2 11 5 6 4 9 2E 2E 2 2 2 2 *E indicates sale of immature fruit satisfactory for export. mind the country in which the apples are sold. The report of the Fruit Trades' Federations 12 of Great Britain on National Advertising and Trade Propaganda contains the following statement with refer- ence to immaturity: "Apple advertising during the past two years has been our most difficult problem. No effort has been spared to offset and overcome the unfortunate and damaging prejudice that was created in 1926. [Referring to the spray residue publicity.] Furthermore, the difficulties have been enhanced by the fact that large quantities of immature and unattractive apples have been thrown on the market causing further unpopularity to this fruit." The factor of immaturity on English markets was also reported by Edwin Smith 13 in a summary of the apple export situation for 1928- 1929: "The Newtown did not have a satisfactory year in any of the European markets. Beginning with the California Newtown which arrived in September (in an entirely immature state) prices were sat- 12 The Fruit Trades' Federations. A report on national advertising and trade propaganda. New Bridge Street London, E. C. 4. p. 23. Undated. is Smith, Edwin. Foreign news on apples. Bur. Agr. Econ., U. S. Dept. Agr. Mimeo. pp. 3-6. August 2, 1929. Bul. 501] Marketing California Apples 29 TABLE 15 Sebastopol Shippers' Opinions as to the Effect of the Sale of Immature Gravenstein Apples Shipper Statement regarding sale of immature fruit Opinion as to whether the sale of immature fruit hurt later sales Opinion as to whether there was a specific demand for early- apples even though immature A bad practice to pack and ship. O. K. for Bay cities. Some markets demand green apples, but it hurts later sales. O. K. if sold "unclassified" as cooking apples and unwrap- ped. O. K. if loose and unwrapped for cooking. Don't believe in it as a general practice. O. K. for loose ap- ples. Very detrimental; should not be done even on loose apples O. K. Same buyers come back each year. O. K. Early sales bring a good price. Bad on domestic sales. O. K. to Orient, they want a green apple. No statement. Opposed to it; has not shipped green fruit, and will not. O. K. when sold as a cooking apple. Yes, hurts the name of the Gravenstein. Yes, would be O. K. if apples were labeled "cooking." Yes, green packed apples hurt later sales because an eating apple is expected. O. K. for local markets but not for shipment. Yes on eastern markets; No on local markets. Yes, exporter says green apples kill the English market. No. Not in a position to state. Feels it is overemphasized. Yes on domestic markets. Yes. Yes. Yes. Yes, locally. O. K. on f. o. b. sales. Yes, but should be branded as such. Yes for cooking. Yes Yes, for sauce and pies. Very little. Better to leave this demand unsupplied than to ship green. Yes, Oreint, Hawaii, and Central America want im- mature apples; can't sell them ripe apples. Yes. Yes, particularly for export. Yes, but very small; there is a demand for 20 cars but not 200. Little, what little demand there is does more harm than good. Yes. isfaetory for a few weeks but the eating quality was such as to check consumption to such an extent that very low prices followed during October and November. No doubt these inferior Newtowns injured the consumer demand for all Newtowns." 30 University of California — Experiment Station This same report states further: "A few green apples may be absorbed by the British markets without causing' any observable harm to the business. Early in the season small quantities can be used for cooking purposes and may command attractive prices. The exporta- tion of immature apples has been greatly overdone, however, and last season offered a striking example of the bad influence which immature apples may have on a market. ' ' Shippers' opinions as to the sale of immature Gravensteins varied widely. (See table 15.) Some were strongly opposed to the prac- tice and stated that they refused to sell immature apples. Others felt that there was a demand for immature fruit and that buyers knew what they were buying. The majority opinion was, however, that the sale of immature fruit was a permissible practice if the apples were not packed and wrapped but were sold loose as cooking apples. For export shipment there was a distinct difference of opinion. No doubt this is due to the fact that one shipper sells for export to one country and another to another. Shippers who sell for export to the Orient state that the demand is for an immature apple. This statement was substantiated by Professor J. Lossing Buck of the Uni- versity of Nanking in a conference with one of the authors. "The Chinese," he said, "like crisp fruits. They serve American apples at feasts. These are quartered and served with toothpicks stuck in them." On the other hand, European markets are reported to prefer mature apples and the shipment of immature fruit demoralizes the market. For domestic shipment to eastern markets most shippers felt that it was a bad practice to wrap and pack immature fruit. The eastern trade, it was asserted, expects an eating apple in a packed box, conse- quently the shipment of green fruit destroys confidence in the prod- uct. The majority favored the sale of immature fruit when packed loose for nearby markets for cooking purposes. Watsonville shippers were divided in their opinions as to the effect of the sale of immature fruit. (See table 16.) Although the recorded opinions show as much variation as those of Sebastopol shippers the interviews on this subject showed the interest more pro- nounced in the Sebastopol district. The majority opinion was that it was a bad practice to sell imma- ture apples on the domestic market, but that it was permissible if the fruit went to export, particularly to the Orient. Most shippers felt that there was a demand for early apples even though they were imma- ture, but the majority reported this demand as limited. Bul. 501] Marketing California Apples 31 TABLE 16 Watsonville Shippers ' Opinions as to the Sale of Immature Fruit Opinion as to whether the Opinion as to whether there Shipper Statement regarding the sale of sale of immature fruit hurts is a specific demand for early immature fruit later sales apples even though immature 1 Satisfactory for export. 0. K. for export; hurts sales lo- cally. Yes. 2 0. K. only for export to China. Yes. Yes for some varieties, but demand limited. 3 Opposed to it. Only 0. K. for cooking apples. Yes. Yes. 4 A mistake to sell immature fruit. Yes. Yes but limited. 5 Bad practice. Yes. Yes for pies. 6 O. K. to sell immature. No. Yes. 7 Should not be done except for export. Yes. Yes for cooking. 8 Should not be done. Yes. Yes but it is abused. 9 O.K. No. Yes. 10 A bad practice. Yes. Yes but limited. 11 Opposed to it. Yes. Yes. 12 Should not be done. Yes. Yes but won't sell them. 13 Should not be done. Yes. Yes but limited. 14 15 Satisfactory for Oriental trade. Yes on domestic markets. 16 Should be fairly mature before 17 sold. Yes. 18 A bad practice. Yes. Yes 19 O. K. for export; some demand domestically. No on Newtown; yes on Bell- flower. Yes. 20 O. K. for export; a bad practice on domestic market. Yes. Yes SPECIFIC DEMAND FOR EARLY IMMATURE APPLES In spite of the fact that the majority of the wholesale trade felt that the sale of immature apples was a bad practice, they indicated that there was a specific demand for early apples even though they were immature. (See tables 17 and 18.) Many stated, however, that this demand was limited : ' ' The market will take a few cars and then the demand stops." Again, others reported that the demand for early apples was for cooking apples. Eastern dealers were practically unanimous in stating that there is a demand for early applet even though they are immature. In most instances, however, the answer of ''Yes" was followed by such statements as: "For a limited quantity." "But kills the market — consumers won't buy any more for several weeks." "If a short sup- ply." "If Winesaps are not held over in any quantity." "Can fool 32 University of California — Experiment Station the public but once. " " Customers want something new but they are disappointed." " Trade soon lays off." "Probably for cooking." "We have to have some of the first." "But buyers lose money." 1 ' People expect them to be sour and of poor quality. ' ' TABLE 17 Wholesalers ' and Jobbers' Opinions as to the Demand for Early Apples Even Though Immature Is there a specific demand? Markets Yes No Number Per cent Number Per cent 32 18 14 33 62 80 86 74 97 95 8 3 5 1 3 20 14 26 New York 3 All eastern 5 TABLE 18 Brokers' and Distributors ' Opinions as to the Demand for Early Apples Even Though Immature Is there a specific demand? Markets Yes No Qualified Total replies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent 10 3 7 7 12 53 50 54 78 86 2 1 1 1 10 17 8 11 7 7 2 5 1 1 37 33 38 11 7 19 6 13 9 14 100 100 Southern California 100 100 100 Every shipper expressed the opinion that there was some demand for immature apples. The majority opinion was, however, that this demand is decidedly limited and soon oversupplied (table 15). As one shipper expressed it, "There is a demand for 20 cars but not 200." Nevertheless, some felt that the demand was so slight that for the benefit of the later market it would be best to leave this demand go unsupplied. Mr. H. A. Weinland, Farm Advisor of Sonoma County, felt that if a method could be devised for branding each apple "cooking apple," it would lessen the complaint on the sale of immature fruit. Bul. 501] Marketing California Apples 33 The majority of the retailers reported that there is a specific demand for early apples even though they are not fully mature. (See table 19.) This demand for early apples was said to be primarily for cooking purposes, consequently, retailers did not believe that the sale of immature apples hurt later sales. Several retailers placed cards with their apple displays calling attention to the fact that the apples were cooking apples. This would seem to be a practice that TABLE 19 Eetailers' Opinions Concerning the Demand for Early Apples Yes No Total replies Question Number Per cent Number Per cent Number Per cent Is there a specific demand for early im- 89 16 46 88 16 42 12 82 63 12 84 58 101 98 109 100 Does the sale of immature apples hurt 100 Is there a specific demand for Graven- 100 should be encouraged. There was said to be a demand for an early eating apple, but it must be mature. In reply to the question as to whether there is a specific consum- ers' demand for Gravenstein apples, approximately half of the retail- ers reported that there is, although several qualified their statements by pointing out that it is the only eating apple on the market at the time. (See table 19.) QUALITIES REPORTED IN OUT-OF-STATE APPLES NOT FOUND IN CALIFORNIA APPLES Grading, packing, color, and appearance were most frequently mentioned by California wholesalers as being the desirable qualities found in out-of-state apples that were not found in California apples. (See table 20.) Northern California dealers reported that it was a matter of variety as well. The southern California dealers did not analyze this question as the northern dealers did but reported that everything was better. However, when a specific suggestion was made, it was that the grading in the out-of-state apple was better. Some reported that the out-of-state apple must be better graded and packed 34 University of California — Experiment Station xn H i— i I OP "3 CO .2 i-~ O) oo er o "ft CN CN CO H eJ 5 Jt* »o CN •*« iti 0) C -*■ CO >> P^ g CO -^ CO 'C c3 > I 1 GO 00 0) o ©fl «» CM H CO a 2 CO CN CN o3 0) a a J* ^, t-- CO Oi < *"« 00 .2 £ a o3 >> fcc * CO OS CO 9 "a ^g CN CN CN 03 O ? "3 1* o> tn oo a> o a CO c3 fi .2 00 OS s a O. D* o3 3 ^ oo oo J3 "3 O 1* »o CN CO _^ a> S3 * O oo >-i bfi CLi CD »* ITS . H N U CD '^4 § 1 "S A< P so J2 +j cS a T3 o> ^ ■* •* ^ g o -g >o ■>* CO "B cS a < CO lO t^- 03 o3 '3 'd I-c t, o o a> 03 03 act a U h O -S a> cd k, % -a -a ^ o3 J-. 3 t* O ® S3 fe 05 fc < Bul. 501] Marketing California Apples 35 to offset the advantage in competition that California apples had in the matter of freight rates. Perhaps it is inadvisable to compare California Gravensteins with other varieties of packed apples. The Gravenstein, being a yellow and red streaked variety, could not be expected to have the same TABLE 21 Qualities in Out-of- State Apples Not Found in California Apples as Reported by Brokers Markets Northern California.. Southern California New York Number reporting desirable qualities in out-of-state apples Grad- ing Pack- ing Color Wrap- ping Uni- formity Appear- ance Vari- ety Flavor 6 All sta 1 6 ted to b 4 e better 4 3 2 2 4 2 Total replies TABLE 22 Retailers' Attitude Toward Present California Apple Packs Reporting Objections to present pack Area Satisfied with present pack Not satis- fied with present pack Total replies Pack- ing Grad- ing Siz- ing Oth- ers* Total re- plies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Num- ber Num- ber Num- ber Num- ber 69 21 22 19 7 73 95 56 83 70 25 1 17 4 3 27 5 44 17 30 94 22 39 23 10 100 100 100 100 100 7 1 4 1 1 21 1 15 2 3 5 1 4 8 41 3 6 2 29 Alameda, Berkeley, and Oak- 5 Stockton and Sacramento 4 ♦"Other objections" included bruising and internal browning. degree of color as Northwest Jonathans, Winesaps, etc., and this dif- ference in color stands out as the greatest difference between Califor- nia apples (as the eastern trade knows them) and those from the Northwest. Other than color, however, it was generally believed that the Northwest practiced better and closer grading (three grades as compared with two from California) and that the fruit was more uniform and of better appearance. In one or two instances the opin- ion was expressed that California Gravensteins did not always come up to the grade marked on the box. 36 University of California — Experiment Station The majority of retailers stated that they were satisfied with pres- ent California, apple packs; less than 30 per cent for the state as a whole made complaints (table 22). However, in the Los Angeles market, nearly half of the retailers objected to present packs. Their most frequent complaint was that the apples were not properly graded. In contrast, only 5 per cent of the dealers in the San Fran- cisco market were dissatisfied with the California pack. The reason for the difference between the two markets is, no doubt, that most of the California apples sent to southern California markets were loose in boxes, while those sent to northern California markets were mostly packed and wrapped. It should be noted, however, that retailers expressed the >r >inion that California apples were better graded and had a bette r ance in 1929 than in previous years. OPINIONS AND PRACTICES WITH REFERENCE TO THE POSSIBILITY OF INCREASING THE DEMAND FOR APPLES Northern California dealers were almost unanimous in their opin- ion that the demand for apples could be increased, while southern California dealers were about evenly divided in their opinion (table 23). Several opinions as to how the demand could be increased were stated. Advertising and lower prices were given most frequently. A better pack was mentioned by several. (See table 23.) One suggestion that warrants attention was "the proper timing of the sale of varieties. ' ' Although it was given as a means of increas- ing demand by only one wholesale dealer, it was apparent in inter- views with retailers that the proper timing of -the sale of varieties is important in the consumption of apples. It was also apparent that the wholesaler could influence the purchases of retailers. In New York the number of dealers who believed the demand for apples can be increased and those who expressed some doubt were about equal. Some were of the opinion that the demand could not be increased. Among those who felt that the demand could be increased the major- ity favored advertising*. Other suggestions were : lower price, better pack, better distribution, better quality, and the control of bitter-pit. In advertising it was felt that the public should be educated as to the value of varieties, quality, and general dates of ripening. Seasonal advertising, in local papers and national magazines, window displays, and the radio were suggested. Those who favored lower prices Bul. 501] Marketing California Apples 37 bO _G ►--s JS5 CD G N CO CO to W S CO CO h o > T5 ■ b0 03 I* 0C » N « o >5-° CO r- CM rH o 0, fc sz; *2 bfi 3 fee Ph g OO * N T|l rH CM rH rH 1 1 > 1-° » lO W W , 1 05 £ t^ ■><* CO rH •2 # CO a s a) a Cu v H-l CO O CO t^. _o co »o cq t-( CO a CD M bo 3 i* O N M « 03 o i-° bO "3 Cu J* * to » to g G 1 c3 O is O © O rH CD o CD S fc 5fe Ph g IO N N 11) ^ g CD"" CO H 11} N -3J5 o £ i O cu -fJ cu Sfe N t)< w N 1- !"£ & G Cu CD «5 CO 00 tO G * CO 00 ■<»< CO "3 "3. o S3 >< Ji CM © CM O CO CN ^H rH £ 03 03 'a 'S U 1- o o CO a — - G3 4) ■3 03 a3 ° g g -E s . TG »i (^ o r» 3 S 3 O S CD < fc oo g 38 University of California — Experiment Station emphasized "something which could be offered at a bargain." They wished to appeal to a price trade. One dealer felt that the demand might be increased through more export orders. Advertising Practices. — Apple dealers, as is shown in table 23, reported doing little advertising. Those who did so reported that they contributed to advertising campaigns such as National Apple Week and that they sent circulars to their trade. Most apple dealers had posters in their place of business calling attention to brands of apples. However, this can hardly be considered as advertising. The results obtained by those who advertised were reported as 'fair' and ' marked.' One exporter reported that his firm supported the 'Eat More Fruit' campaign of the Fruit Trades' Federations of Great Britain. The results of this campaign were reported as highly successful. The methods used and the type of advertising are described in a most interesting and comprehensive report issued by the Fruit Trades' Federations. 14 This report is worthy of consid- eration on the part of those who intend to advertise fruits. New York dealers likewise do little advertising of apples with the aim of influencing the consumer. A review of the trade papers such as The Packer shows that advertisements are directed toward the trade rather than the consumer. Approximately 40 per cent of the retailers reported that they advertise apples (table 24). The medium was either the daily news- paper or special hand bills distributed to homes in the vicinity of the store. Those who advertised in this manner stated that it results in a fair to marked increase in sales. Whenever a special bargain was offered the results were marked. As a whole, chain stores advertised to a considerable extent and featured apples when prices were low. All but two of the retailers interviewed displayed apples. The most common method of display was on stands or benches. In the Los Angeles market the stores carrying fruits, seldom have window front displays. Here apples are piled in the form of pyramids on benches which make a unique and attractive display. In northern California a majority of retailers used window displays as well as benches. Two displayed the apples on the sales counter. (See table 24.) It was the unanimous opinion of retailers that displays were effec- tive in increasing sales. Hannemann 15 reported this to be true in i* Fruit Trades' Federation. A report on National advertising and trade propaganda. 31 p. Fruit Trades' Federation, New Bridge Street, London, E. C. Not dated. is Hannemann, H. A. Merchandizing apples in Pennsylvania, {mimeo.) p. 4. Pennsylvania Dept. Agr. Bur. Markets. March, 1927. Bul. 501] Marketing California Apples 39 Pennsylvania cities. Sherman 16 believes that retail displays are the most effective method of increasing sales of fruits and vegetables and goes so far as to state that as a rule advertising of these products is a useless expenditure. It should, however, be pointed out in this connection that 14 per cent of the California consumers interviewed do not go to the store but order by telephone. Obviously, store dis- plays alone will not reach them. Nevertheless, an advertising cam- TABLE 24 Advertising and Displays of Apples by Retailers Reporting Method of display Area Advertising apples Not advertising apples Total replies In windows On benches On counters Total re-, plies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber 1 2 3 4 5 6 7 8* 9 10* 11 12* 13 All California. San Francisco Los Angeles Alameda, Ber- keley, and Oakland Stockton and Sacramento... 37 3 21 6 7 39 16 47 30 64 59 16 25 14 4 61 84 53 70 36 96 19 46 20 11 100 100 100 100 100 28 14 8 6 29 64 53 75 72 13 50 7 2 76 59 100 47 25 2 1 1 2 5 7' 95 22 50 15 8 ♦Items in columns 8, 10, and 12 will not in all cases total 100 because several retailers reported displaying apples in more than one place. paign may well be directed at the retailer to encourage and assist him in making effective displays. The records of two attempts in Great Britain to advertise fruits and vegetables are worthy of attention. The British Glasshouse Produce Marketing Association reported : 17 After a year's experience it was realized that propaganda amongst retailers was needed and four travelling representatives were appointed. The first year's working in connection with the Fruit Trades Federation 1 ' Eat More Fruit Campaign ' ' indicated that some organization amongst retailers was necessary if the full effect of propaganda was to be obtained and, as a result the Retailers' Propaganda Association was formed. Competition Between Varieties. — California wholesale dealers were almost unanimous in their opinion that high or low prices of one is Sherman, W. A. Merchandising fruits and vegetables, p. 356-373. A. W. Shaw Co., Chicago. 1923. 17 Anonymous. Report on fruit marketing in England and Wales. Min. Agr» and Fisheries, Economic Series 15:115. His Majesty's Stationery Office, London. 1927. 40 University of California — Experiment Station variety affected the demand and prices of other varieties. Most deal- ers illustrated this with varieties that were of the same utility. That is, a variety that was classed as a dessert apple if high in price would be affected by other dessert apples which were low in price. Few expressed an opinion as to whether substitution of cooking" varieties would take place if dessert apples were too high. (See table 25.) New York dealers were about equally divided as to the effect of prices of given varieties on the prices of other varieties. Those who believed that price would have no influence on demand, stated that customers called for a given variety regardless of price and that the TABLE 25 Wholesalers ' and Jobbers ' Opinions with Eeference to Competition Among Varieties of Apples Markets Opinions as to whether high or low prices of given varieties of apples affect the demand for and prices of other varieties Yes No Number Per cent Number Per cent All California 44 19 25 14 95 90 100 48 2 2 15 5 Northern California 10 Southern California New York 52 demand was for well-known standard varieties. Others stated that lower prices of nearby apples do not affect demand for boxed Graven- steins to any great extent. Others felt that the demand for given varieties shifts at certain price levels. Still others qualified their statements, reporting that some customers substitute varieties while others do not. Opinions as to Competition Between Fruits. — Oranges and bana- nas, as is shown in tables 26 and 27, were reported by California deal- ers as the fruits which offered the greatest competition for apples. The fact that these three fruits are available during the greater part of the year accounts, no doubt, for this competition. In California, all fruits in season were usually reported to give some competition to apples but most dealers did not feel that this competition is as severe as in the case of oranges and bananas. One dealer stated emphatically that a tariff is needed on bananas to increase apple sales. New York dealers listed oranges, pears, and Bul. 501] Marketing California Apples 41 peaches as the greatest competitors of apples. Other competitors of considerable importance were grapefruit, grapes, and cantaloupes. A few dealers felt that if a customer desired apples he would purchase nothing else, hence there was no competition. Those listing canta- loupes, grapefruit, and berries felt that these fruits compete with apples as a breakfast dish. During the summer season pears and peaches were seen on the fruit stands in the largest quantities. Grapes and bananas probably follow a close second. There seems little doubt that oranges offer the greatest competition for winter apples. It is rather striking that only five of the wholesalers interviewed in New York listed bananas as competitors of apples. WHOLESALERS > AND JOBBERS ' OPINIONS AS TO WHICH FRUITS OFFER THE GREATEST COMPETITION FOR APPLES Percentage number of times mentioned o 20 40 6o eo too 1 1 1 1 1 1 1 Oranges 68 1 63 IHBHHMHHHHHI Pears IT AMU Peaches 15 1 Other fruits 36 ■■■■■■■ Fig. 2. — California wholesalers and jobbers consider oranges and bananas the most important competitors of apples. (Data from table 26.) The observations of wholesalers and jobbers on the competition between fruits check closely with consumers' statements. Critch- field's 18 study of consumers' preference for canned peaches indicates that the housewife serves apples, bananas, and oranges more fre- quently than other fruits. Fig. 3 adapted from his study illustrates the relative importance of various fruits in the diet. A comparison of figures 2 and 3 shows that the opinions of wholesalers and jobbers as to competition between fruits were in close agreement with con- sumers' choice of fruits. Opinions as to How Apple Marketing May be Improved. — From the answers to the question as to how apple marketing could be improved it was evident that only a few dealers had given this serious consideration. The most usual reply was better grading and packing (tables 28 and 29). In southern California a frequent suggestion was "new boxes." A suggestion made by one dealer in a northern is Oritchfield, B. H. Problems involved in the marketing of California canned peaches, p. 41. California Canning Peach Growers, San Francisco. 1929. 42 University of California — Experiment Station to M £ 1 H ■o S3 |3 bo Ph .9 ?o O f-C CJ H ft H CO (Li ft kJ <1 CO o H 03 o o OC ft 3-2 H OO CO Tf P*Q> ** ^H o fe i 1* O © © ^ 125 CD fl Ph 8 c© CN« 00 t>- to 00 -l *Tl * fa"S Cu ® t^ i-H CM t~- ^h ^* CN CO 0! 03 0 <-( O* to J O 03 0) Ph J* CO TjH o o o co CO (h o3 a fc O O O 00 Ah g « N N H 1 » N U5 « (3 o3 03 i PQ £fc CO CO CO »o J.2 CM fH ^H & S Png OO O CO OS CO O "* t~- So d 03 u O £$S 0O OO O OS ►3-Q -• >-. o o 4) 03 «3 f3 ^4 03 •3 03 03 o o ci -if .« u u c ~< O o ^ OO Jz Bul. 501] Marketing California Apples 43 California market was that cars be precooled before shipment. In view of the danger of the development of bitter-pit in California apples this suggestion warrants attention. Brokers TABLE 27 and Distributors ' Opinions as to Which Fruits Offer the Greatest Competition for Apples (Expressed as number and percentage of dealers reporting competition from each fruit mentioned.) Oranges Bananas Peaches Pears All fruits Total replies Markets Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Number 1 2* 3 4* 5 6* 7 8* 9 10* 11 12 6 6 63 60 67 10 5 5 53 50 56 4 3 1 21 30 11 5 4 1 1 26 40 11 17 10 6 4 5 53 60 44 83 19 Northern California 10 9 6 *Columns 2, 4, 6, 8, and 10 will not total 100 owing to the fact that several mentioned more than one fruit as a competitor of the apple. FRUITS MOST FREQUENTLY SERVED BY CONSUMERS | Fits.* Preference 1 l^.Z'^.3'^ f^-gfe i- ericas 1 Per cent of replies 20 AO 60 eo too Per- cent of replies O ZO AO 60 eo POO Apples 30.8 Bananas 285 Oranges »4.8 Peaches 13.9 Grapes 3B Berries 3.7 Grapefruit 2 A Pears 1.4 Melons A Plums .2 Pineapple X P Fig. 3. — Apples, bananas, oranges, and peaches in the order named are the fruits most frequently served by consumers. (Figure adapted from: Critchfield, B. H. Problems involved in the marketing of California canning peaches. Pam- phlet published by California Canning Peach Growers, fig. 24, p. 41. 1929.^ Many eastern dealers had no suggestions to make regarding im- provement of apple marketing. Those who did reply were of various opinions. Better grading and packing and heavier packs with more color on the fruit were mentioned. In answer to the question "Does a fancy package help sell?" 37 California wholesalers reported that it did and six that it did not, o *-i . Ph « c© CO Oi C~J 3 Oi o w £1 CO CN» ^ CO f.SB o fc is* lO CO OS CO fe"S © o O —1 oo a Ph o "3 "5 lO i-H a a .§3 ►5 >* 'StS H a k (^ eq in •*> 1- CO (M J ^J pS i US OS o o 03 " H CS CO 0) o a *« t^ *< 01 a > •7 O lb © o o o o a .a g c Ph S OS 00 o o >•- c o GD P .2 T3.2 b l* •* * O IH 1 bO fe a * o fe M * H es« ^h "•2.5 CO c CO «-i Ph o o 00 CO o 0) c t^ 00 t^ •"*! SH-i PQ fa, a ^ CO ■*t OS ^ M 1-° CO §3 mi 1 .3.9 1 d CS if t^ (M io o ) 2 CS o a _£ a o ra CI _0 1 M 3 0Q — CO r oa %UdO J8J o o o c O O o o o o jaqmn^; OS OS O t^ t^ 2 O ^U80 J8J CO O 1^ t^ i-H lO US jaqum^ IO ■* rH •* rfl DO S %UB0 J8J = c O CO CO jaquin^j o c O CO CO 5&s ^uao aaj = O CO CO ^H Tfl T*l jaquin^ o -— l CO CO -JU80 J8J us o o o jaquin^ ^ o o o fafl is a o o £/E J§a ^uao aaj s o o o CM aaquin^j; - 1 < 46 University of California — Experiment Station (See table 28.) However, in answering this question most dealers qualified their answer by stating that the factor of prime importance was the quality of the fruit. Those dealers who had handled apples packed in boxes with linings of fancy paper and colored cleats were, however, definite in their statements that the fancy package helped to sell. In reply to the question as to the value of fancy packages as an aid to selling, New York dealers were about equally divided in their opinion. Dealers in other eastern markets were practically unani- mous in stating that a fancy package did not help to sell — that buyers are looking for quality in the product. The wholesale trade was asked whether price control at shipping point would improve apple marketing. The question referred to the practice of making uniform price quotations in a shipping district rather than to an attempt to hold prices at an arbitrarily fixed level. However, some dealers interpreted it to mean price fixing or the nam- ing of a price which was out-of-line with market conditions. The opinions of wholesalers and jobbers in California were 22 yes, and 15 no, and 7 qualified or doubtful (table 28). Most of those who said that it would not aid, felt that it could not be done. Several stated that it would be satisfactory if opening prices were not too high. They suggested a low opening price and then a raising of prices later rather than too high an opening price which would have to be lowered to encourage consumption. Eastern dealers were skeptical of price control and practically unanimous against such a policy. Price control was interpreted as price fixing. ATTITUDE OF MARKETS OTHER THAN THOSE COVERED BY THE DETAILED SURVEY TOWARD CALIFORNIA GRAVENSTEINS Through the courtesy and cooperation of Mr. H. R. Tolley, then Assistant Chief of the Bureau of Agricultural Economics, a survey was made of several of the principal cities in the United States to determine the attitude of these markets to California Gravensteins. The representatives of the Bureau interviewed the wholesale trade and reported its opinions on several specific questions. The replies are tabulated in table 30. As will be noted from table 30, the various markets presented considerable contrast in their attitude toward Gravensteins. Some reported that the quality and condition was satisfactory while others Bul. 501] Marketing California Apples 47 © g © >>d 5 a ° 2 3J§o >> u IS OJ a gj * 5 3 © > o tf> T> til O a 4) a O bO to i * a," O a" o ■as 2 "3 J 3 ' c § « -° O 5 ■•» as a -5 -5 -a * s 2 . a -o •a .2 ^ 2 © 13 a > O o* fl u ~ 2 3 g~ § <3 o £ c » a32?8 a«S £ ©-* J*|sa S s a s fl 2 I o 03 u © J3 o a £ 6 £ 8 5* '-8 £ © £ .O & *■§* - o S o © >> fa « d -d 5? © ss •« ■♦» ,ej *3 J2 © -t-s © bO ^ -O >> B 03 - > O tf © © S ""' 8 ^ G A O ■SO-d "o3 o M M O © o d u © . g a © 3 .. O 03 - © O 5 . >- P-i • — •P ~ *" T3 §o 8 §d ©I 3 £ 6 < = £ « T3 "3 £ > © >H ~« P5 -•» 13 -•« c § © o3 £ r £ -d a r •J § 2-s .HO £ > T3 ■31 S ^ ^r.2 8 S T3 G Q S © ■ J3 s '3 a "3 15 O c 3 O d d n c3 N u a a S BO "3 O < s o © © a .13 '5 £ 1 J 5§i o ? e3 r; =3 03 "-2 ? d © Oj 03 • © a © O ft ^ d a r k a U ^ © © 03 - 5 I? d d d o ^3 a ag o'Jo3 .12 ©oi CO Is 03 O I bfi "w 2 >> 5 .12 ^i> 2, .12 d CT 1 °^" C cm ^j T3 "H d ' a w © I S JS a ■J 2 CO <- J3 J^ ' © o o a £ d 03 o3 O > o ■gSiil § a S & 2 03 bD cj >bf> 48 University of California — Experiment Station g-2 * s are llyto heap is to local able. •43 OS J3 0) C 0) s « ° ad « * iS a> re 11 s ; » a -5 © - 1 11 O >• S ° 2 7=T3 5 C m -S^o c t- a ? c © fe c C ■ •S4 © • - c © © © '3 •^^1 © Is* c c a C § 1 o o o O ^5 C co o3 a.i3 o £ £ 55 fe fe O fc as to ould pay ^ensteins n their season 5 8 "5 1 «i JJ 5 "2 S 8 O w i a OS ^© "ft 2 c 73 03 -O Oj "5 "0 -^ C ° 73 ft 03 3 ^ g .2 * So Mo 3 ^ 73 © 44 a! $ c il © S3 £ * © IE c «*- © . 73 -5 o> «- «h a> cj V2 co « 01 0, s © . ft £ »l • — 1 a 03 5 r & S.og © O r © g 3 Jgl ill g- OS O g S j 03 h la CO a a c cS c c 03 03 ■c a ^ <3 03 — gO »> . -0 © £ to 5 ^ £ •** a ^ a '3 u (-, © 3 * "i^ft^ 1 S^"S g co « 03 Q. © * © a ^ S ago % £ O £ £ 0) h « a co 3 g| s & r 73 -* 33 C *j QJ 03 < 1-1 73 44 r 1 J: h H > © i o3 fa s © "J 0> 3 '5 it 03 03 a "3 a 73 co o3 C Hi* .15 '3 •a © a CO .2 > o o CO ft ft oj "3 a © s | 3. "© u "£ O) a 03 73 > c II O O is 5 03 > ° ^ 8 1- M 73 © -3 03 as -C t-, co _ 43 .2 2 © 73 O ^ -C "3 ^ 03 © » o3 £^ . «8 ^ 73 g «a < w 73 0) 8 x o ■*= 2 ? J3 »-i O 03 ^ ft "3 o ti 1-1 O fc fa W fa CO Oi~ s^ CU CO b» © P bC a 13 C M 73 a "ft 1 . "3 o ,£} CO ffi ■ S 3 3 ^ ^ a 'a ^, . ft 4> 5 11 1 >> |d 'S 2 CO a > CD T3 CL C c c g ^ N OJ ' s 8 . 5 73 a c > 1 (1 J! co 03 O OS O 44 ^ 8 2 . ^ M © -o -a ft ^ c Sll >> t3 u 03 fc 5 § 1 >> o 5 *_. 03 B c S 03 . 2B§ a -a • S bD a 03 T3 < > ."3 ©o> * fa. o *H "O G O a S3 § * ao SI 3 w 72 © a o ..So fa > «*1 •300 fa 03 -s 0J 03 91 CO ©" +3 h a h c 1 O a ► .3 s 3 c o .2 03 O 03 73 c CO A 1 © Pv n W c A 2 Bul. 501] Marketing California Apples 49 3 2 ~ x ft.2 °S3 £a g 3 ° g a. 2 O 2 * iji 6 -a ■c £ 6 S §3 52; =« c u, a r, ft iT3 o § °|a» a* *8 c ftj £ g-g 15 « 3* s o * © C O fl c3 ft o d 3 s T3 of £ 2 a a M a 1| o S o-8 05 > a o> n o rt « 03 | ffl -d ■a b ° -2 a 5 o 5: -a g?l VD g u ftc8 O °|? ■a o o ® T3 o £ 03 O ao •3 g £ £ o3 « C C o3 , ft 2 S-d > - - s 3 ft a s a 03 03 8 r § a I s 7* 2 a c 3 ^ d fc £ S r >J . r "S "3 tz - £* 8 o | - & * a 2 8 g ^ > § M -§1° 3 ° 03 .13 "3 03 c3 •° a e3 tc 6 T3 2. a o w o .2 03 O d Jd 55 a ja -a o § * a D S'S'i s 12 ft Ph f 3 ! els? fc | « a | •§ .2 p-. -o § ? - 5 - 2 « ° a s "S -S d -a °s g 03 g o --J g .t5 ft «r» £ © S5 O 03 £ a 1-2 M 3 1 o3 oj .„ ©OS 8^ -is q T3 >> a b o r< o »«S I d .« 03 d — 03 ?3 g C s -a ^ 03 a ft ^ « o &j * 05 1 S 2 hfi c3 a I -Q oo g 50 University of California — Experiment Station cS ° ^ &•££ x a.s ten >>b ® •s§g 11° es, if qualitygood and prices low or local fruit crop is a failure. a u *a © JO 3 d £ « •S £ IS ^ a a © o3 «*H X ® a 8 J3 when consumers n the high qual- of the Graven- n. 2m° 2* a 3 e3 © C u, O © © B 1 ft gj.t'l © © B B O O ft. 5 o >■ O £ J >H fc 55 ^ Opinion as to ther it would pay tore Gravensteins lengthen their arketing season ' 1 * £ i -a * «£ J !> to o3 - «1 °H bfi © fc S3 . O « J « ~ O W O ci i» o3 © s -^ t< — 03 a S £ « 8 ■ id bfi _g © 03 a .2 _§ & 'ft © © o3 s "a . a -« o3 © 2 "u "3 o3 § a ~* © 3 © !! 2S • - s t-c •- ^ h <» O O ■*- O O 6 fe % fe fe fe 55 Sz; fe a '.2 « ■43 g ^ '•fo.3 g-03 O © O © O H3 S c © C © x- 1 J § J 3 j • - § CO J© "ft a 03 (4 © a a (0 c 3 ,B 3 U a « g 3 1 ij a S « •B B f 1 ^ a § 2 ft » 2 a .h -3 a a 03 1 t : .2 « § i | § a .. -1 © if : ^ j .0 , © 13 a t- m-i 1 « > > 2 § s § "o3 O © - a U C3 "© ^3 © O a b 5 ■ 9 i3 S O 73 3 O 3-g "3 o <* J ^ <3 ^ to J b c >> "c o3 © ©' 'ft a O 3 O a 03 b3 -2 « c © bfi -§1° 3 P ca += o b 1 3 S3 © w g -a 2* 03 co 03 T3 © 03 8-d > © .3 1 .S © a 3 h O i c c © O B © * » .B -2 53 S fa B i 3 a . * 3 > < S3 > b bfi > > © o3 -3 03 « fa 1 a tin 03 O O * t-3 (4 O >> -2' 3 ft a S2 1 | o3 i IS © "03 ^> IS © 3 > 1 S 2 1 2 .5 £ "ft © E a a B 1 3 © g © a •^3 O O DQ W fe fc w » s? fe 2oT J? B*M ir CO § .2 O 0) © • a3 - - ® © O ft © © ^ • s' a bfi & > © E 3 B _ ■ © 03 > 3 03 $0 © 8 b 2 B B . *| B "5 ►" 'S § ss ^ 11 a S ® s 2 b a •« .3 ^ jj 1 « 5 B I g .5 >» © E © a © a > b O t 0: ■ 03 O a s a 0$ © to *-» i s - K» S5 fc fe CO CO h- 1 ,B 03 P 1 -c bl C U P b" Id © a 3 © E O C a Ph © c © '£ 6 '3 H >l O © 03 i _©■ C 3 O © c ft W oE J ft CO g 3 is Bul. 501] Marketing California Apples 51 had. objections. The principal objections were lack of color, imma- turity (although one market complained that the apples were too mature), bitter-pit, and slack pack. Many of the markets were not favorable toward the Gravenstein owing- to its high price in comparison with other apples. It was recognized as a high-quality dessert apple but local apples were sold, it was stated, at lower prices. Other fruits competed with the California Gravenstein most se- verely in southern markets, It is worthy of note that the northern markets were in general more favorable to the Gravensteins than southern markets. It has often been stated that the apple is a cool- weather fruit. This survey tends to bear this out. All markets reported that it would be folly to store the Graven- stein to lengthen its marketing season. Competition from other varie- ties was too severe to make storage feasible. Several instances of dealers losing money by holding Gravensteins too long in 1929 were cited. The majority opinion was that the demand for Gravensteins was very limited. Most cities reported that it would not be possible to expand consumption unless prices were materially lowered or local apple crops were failures. CONSUMERS' PREFERENCES AND PURCHASES OF APPLES The data in the survey of consumers' preferences and purchases of apples were obtained through personal interview with 649 con- sumers. A list of 21 questions covering the information desired was asked of each person. The area covered in the survey comprised selected districts in the city of Los Angeles and in the cities of San Francisco, Oakland, and Berkeley. The selected districts were chosen in conference with rep- resentatives of various organizations. An effort was made to select districts which were typical for those persons having a low, medium, and high income. Two separate surveys were made, the first during the months of July and August when the early varieties of apples were on the mar- ket, and the second during the months of October and November when several of the late varieties were available. The first survey included 344 consumers and the second 305. The data obtained in the two surveys are combined in this report, but mention will be made of differences where they occur. As a whole, the surveys were in close 52 University of California — Experiment Station agreement. Slight differences were considered immaterial because these may have been due to variations in the presentation of questions by the interviewer. Qualities Desired in Apples. — The quality most desired was that of "flavor" or "taste." More than 40 per cent stated that they bought apples for their "taste." (See table 31.) Some demanded a juicy apple, others a sweet apple, and a third group a tart apple. The TABLE 31 Reasons Given by Consumers for Purchasing Apples and Qualities Desired in Apples All California Northern California Southern California Reasons for purchasing apples and qualities desired Number Per Cent Number Per cent Number Per cent 1 2* 8 4* 5 6* Taste 272 145 15 105 29 28 34 40 6 13 12 54 19 80 42 22.4 2 3 16.2 4.5 4.3 5 2 6.2 9 2.0 19 8.4 2 9 12.3 148 102 5 44 29 22 33 34 6 12 8 12 17 40 42 .7 29.2 14 12.7 8.4 6.4 9 5 9.8 1.7 3 5 2 3 3.5 4 9 11 5 124 43 10 61 6 1 6 41 14 2 3 3 Suitable for both cooking and eating 20 2 2 3 Habit 2.0 Color 1 4 42 2 40 3 13 13 9 0.6 13 2 649 347 302 *Columns 2, 4, and 6 total more than 100 per cent owing to the fact that several named more than one desired quality. **Other reasons include "takes what's recommended," "knows them," "thin skin," "family's prefer- ence," "quality." majority merely indicated that the apple must have "flavor." Next in order of importance was ' ' good cooking quality. ' ' Approximately 20 per cent reported this characteristic as essential. Other qualities looked for were "keeping" quality, "firmness," "color," and "ap- pearance." This is in general agreement with a similar study conducted by Myrtle Sunselman in Chicago. Dummeier 19 summarizes her study: "In a house-to-house canvass made in Chicago representatives of 250 families were asked what varieties of eating apples they preferred 19 Dummeier, E. F. Marketing of Pacific Coast fruits in Chicago. Unpub- lished thesis in the Department of Political Economy, University of Chicago, p. 234. 1926. Bul. 501] Marketing California Apples 53 and why. Answers were secured from 182 persons. Of these 182 persons, 96 (53 per cent) gave as their reason for preferring- the apple named that it was juicy, 40 (22 per cent) it was firm and crisp, 25 (14 per cent) that it was tart and spicy, and only 3 (2 per cent) named color as the reason for their choice. " Critchfield 20 in a recent study of consumers ' preferences for canned peaches states : "In order of frequency of mention the reasons given by housewives were: flavor, sweetness, size, uniformity, price, color, freedom from blemishes, and workmanship.' ' It is apparent from these various studies that "flavor" or "taste" are of prime consideration in the purchase of fruits. Variety Preferences. — The California consumer found it difficult to classify variety preferences, owing to lack of knowledge of varieties. French 21 reported a similar experience in a study of consumer demand for apples in New York City. In northern California New- towns 22 and Gravensteins were mentioned more often than others as preferred apples. Both varieties were named as eating and as cook- ing apples, the Newtown being mentioned more often as a cooking apple and the Gravenstein about equally as an eating apple and a cooking apple. (See table 31 and fig. 4.) In the first survey men- tioned on page 51 the Gravenstein was named more frequently as a preferred variety. This is no doubt due to the fact that the Graven- stein was on the market at that time, whereas when the second survey was conducted it was no longer available. However, consumers with high and medium incomes more frequently classed the Gravenstein as a cooking apple while those with a low income favored it slightly as an eating apple. The Spitzenburg came next in importance. The Bellflower was mentioned by 31 per cent and the Jonathan by 26 per cent of the consumers in the northern district. The Bellflower was considered about equally as an eating and as a cooking apple, while the Jonathan was classed almost exclusively as an eating apple. (See tables 32 and 33.) In southern California, Newtown, Gravenstein, and Spitzenburg were seldom named as preferred varieties, whereas the Bellflower and 20 Critchfield, B. H. Problems involved in the marketing of California canned peaches, p. 10-11. California Canning Peach Growers, San Francisco. 1929. 2i French, E. E. Consumer demand for apples in New York City. Bur. Agr. Econ. Typed report, p. 8. July, 1927. 22 The consumer called Newtowns, ' l Pippins, ' ' but in accordance with the classification of the American Pomological Society they are referred to as New- towns in this report. 54 University of California^-Experiment Station Jonathan were reported frequently. Thus there was a decided con- trast between the two California districts. In the southern district the Bellflower was considered chiefly as a cooking apple and the Jonathan as an eating apple. TABLE 32 Consumers' Preference for Varieties by Districts All California Northern California Southern California Variety Mentioned as eating apple Mentioned as cooking apple Mentioned as eating apple Mentioned as cooking apple Mentioned as eating apple Mentioned as cooking apple Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent 1 2* S 258 4* 5 6* • 7 8* .9 10* 11 12* Newtown 197 30 40 193 56 234 68 4 1 24 8 Gravenstein 151 23 151 23 146 42 143 41 5 2 8 3 Spitzenburg.. 132 20 37 6 130 37 37 11 2 1 Bellflower 169 26 239 45 107 31 91 27 62 21 198 66 Jonathan 292 45 56 9 95 26 27 8 197 65 29 10 Others 136 21 31 5 55 17 20 6 77 26 11 4 Number of Interviews 649 649 347 347 302 302 "Columns 2, 4, 6, 8, 10, and 12 will not total 100 per cent, because several indicated a preference for more than one variety. CONSUMERS ' PREFERENCE FOR VARIETIES OF APPLES BY DISTRICTS Fig. 4. — The Gravenstein and Newtown are preferred both as eating arid cook- ing apples in northern California, while the Jonathan is preferred for 4 eating and the Bellflower for cooking in southern California. (Data from table 32.) Bul. 501] Marketing California Apples 55 TABLE 33 Consumers' Preferences for Varieties by Income Groups Income groups Varieties All Low Medium High Number Per cent Number Per cent Number Per cent Number Per cent 1 2* 3 i> 5 6* 7 8* s "5 < a OS W Newtown Gravenstein .... Spitzenburg.. Bellflower Jonathan Others... 197 151 132 169 292 136 30 23 20 26 45 21 79 51 37 60 89 23 33 25 18 29 43 11 71 49 49 66 101 54 31 21 21 29 45 23 47 51 46 43 47 59 22 24 22 20 99 28 I "S a ««! o o o Newtown Gravenstein. . Spitzenburg... Bellflower Jonathan 258 151 37 289 56 31 40 23 6 45 9 5 80 39 12 103 19 6 38 19 6 50 9 3 103 58 10 83 18 11 45 25 4 38 8 5 75 54 15 98 19 14 36 26 7 47 9 7 Na mber of inter- 649 203 231 210 "Columns 2, 4, 6, and 8 do not add to 100 because some consumers mentioned more than one variety. CONSUMERS' PREFERENCE FOR VARIETIES OF APPLES BY INCOME GROUPS Variety Looj Income Groups I Medium Income Group I Hiqh Income Groupj Per cent Per cen+ Per cent O 2Q AO 60 8Q O ZO 40 60 BO O gO 4Q 60 6Q IOO Fig. 5. — The high income group has a distinct preference for the Jonathan as an eating apple. (Data from table 33.) 56 University of California — Experiment Station Size Preferences. — Nearly 50 per cent of the consumers stated a definite preference for medium-sized apples (table 34). Only 2 per cent preferred small sizes, while approximately 13 per cent preferred large apples. The remainder reported that size was not a factor influencing their purchases. Color Preferences. — The red apple led in color preference, although not to the extent one might expect. Forty-two per cent reported red TABLE 34 Consumers ' Size Preferences Preferred size Consumers' replies Number Per cent Small 11 328 96 227 17 50 7 14 8 No preference 35.0 649 TABLE 35 Consumers ' Color Preference Consumers' replies Preferred color Number Per cent Red 272 7 40 330 42 Yellow 1 Green : 6.2 No preference 50.8 Number of interviews 649 as the preferred color, 1 per cent yellow, 6 per cent green, while 50 per cent stated they had no preference (table 35). The most frequent qualifying statement, when any was given, was that red apples were bought for the children. French 28 reported that consumers thought red color indicated good eating quality and associated green color with cooking quality. Knowledge of Brands. — Only 18 per cent of the consumers inter- viewed had a knowledge of apple brands (table 36). "Hood River" wjis named almost exclusively. The brands ' ' Wolverne, ' ' "Skoo- 23 French, E. R. Consumer demand for apples in New York City. Bur. Agr. Econ. Typed report, pp. 9 and 10. July, 1927. Bul. 501] Marketing California Apples 57 kum," and " Rogue River" were each reported once. The New York study 24 was in close agreement with these results where it was found that only 15 per cent of the consumers could recall the names of apple brands. In a study conducted in Chicago by Myrtle Sunselman TABLE 36 Consumers' Knowledge of Apple Brands All California Northern California Southern California Brands named by the consumer Number Per cent Number Per cent Number Per cent 114 3 1 1 530 17 5 4 1 1 81.9 106 3 1 237 30.6 0.8 3 68.3 8 1 293 2.7 "Skookum" "Rogue River" "Wolverne" 0.3 None 97 Total 649 100 347 100.0 302 100 TABLE 37 Consumers ' Practices in Buying Early Immature Apples Income group All Low Medium High Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Not purchasing early immature 400 249 148 61.7 38.3 22.8 141 67 34 67.8 32 2 16.3 144 87 53 62 3 37.7 23 115 95 61 54.8 Purchasing early immature apples Purchasing for a definite reason* 45 2 290 Number of replies 649 208 231 210 "Indicates that a specific reason such as "for cooking," "for jelly," etc., was given for buying and not merely because they were available. and reported by Dummeier 25 it was stated that of the entire 250 per- sons not one was able to name a. single brand. Early Apple Purchases. — The number of consumers who reported purchasing early immature apples was less than 40 per cent, although it was considerably greater in northern than in southern California. In table 37 it is shown, however, that in both districts a greater num- 24 French, E. E. Consumer demand for apples in New York City. Bur. Agr. Econ. Typed report, pp. 9-10. July, 1927. 25 Dummeier, E. F. Marketing of Pacific Coast fruits in Chicago. Unpub- lished Thesis in the Department of Political Economy, University of Chicago, p. 241. 1926. 58 University of California — Experiment Station ber of families with high incomes purchased early immature apples than did those in the other income groups. The proportion of persons who bought early apples for a definite reason, i.e., for cooking or jelly-making as contrasted with persons who merely bought because they were available, was greater in the northern district and in the higher income groups. Purchases of early Gravensteins were likewise more frequent in northern California than in southern California. However, the income status showed little effect upon the quantity purchased. In reply to a specific question as to whether the immaturity of early Gravensteins influenced consumers against making purchases TABLE 38 Effect of the Purchase of Immature Gravensteins on Later Purchasers Those who purchased early Gravensteins Those who Consuming District Total Later purchases not affected by immaturity Later purchases affected by immaturity did not purchase early Gravensteins Total replies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent 267 220 47 41 63 16 250 204 46 94 93 98 17 16 1 6 7 2 382 127 255 59 37 84 649 347 302 of the same variety when it was mature, only 6 per cent reported that it did (table 38). It must be remembered, however, that table 38 shows that only 41 per cent of the consumers reported purchasing early Gravensteins. Perhaps the 59 per cent who did not purchase early Gravensteins were prejudiced against them. No doubt this is true because as will be shown in table 45, the most important use made of apples is for eating out of hand. Thus it is apparent that the demand for early immature apples is rather limited. It was interesting to note that in the first survey, which was made while the Gravenstein was on the market, a greater percentage of the consumers reported that they were influenced against making' addi- tional purchases of Gravensteins because of their immaturity than in the second survey, when the Gravenstein was not available. Purchases of Processed Apples. — California consumers used pro- cessed apples to a very limited extent. Only 4.2 per cent reported Bul. 501] Marketing California Apples 59 that they purchased dried apples and 3.5 per cent canned apples (table 39). Dried apples were bought to a greater extent by the groups with low and medium incomes than by those with high incomes. Canned apples were purchased most frequently by the low income group. However, the purchase of canned or dried apples may vary to a con- siderable extent by geographical areas. Critchfield, 26 for example, reports that 20.4 per cent of the housewives in eastern cities used dried apples. TABLE 39 Consumers ' Purchases of Processed Apples Income groups All Low Medium High Process Number Per cent Number Per cent Number Per cent Number Per cent Dried 27 23 4 2 3 5 10 12 4.8 5.8 13 7 5.6 3 4 4 19 1 9 Number of inter- 649 203 231 210 Method of Purchase. — The consumers' procedure in purchasing foodstuffs showed marked variance among the different income groups. Table 40 and fig. 6 show that as the income increased there was a con- stant increase in the number who ordered by telephone and a steady decrease in the number who purchased at the store or from the wagon dealer. Where one person in 100 made his purchases by telephone in the low income group, there were 11 in the medium income group, and 26 in the high income group who bought in this manner. Like- wise, there was a relatively larger percentage of deliveries made to the homes of the higher income group. The method of purchase assumes considerable importance when advertising is contemplated. This will be brought out more fully in connection with the survey of retailers' operations and practices. (See pages 66-67.) Quantity Purchased. — It was not possible to determine by inquiry the quantity of apples that was usually purchased by the three income groups. Practices of individual consumers varied to such an extent from time to time that it was difficult to name the quantity usually 26 Critchfield, B. H. Problems involved in the marketing of California canned peaches. California Canning Peach Grower, pp. 10-11. San Francisco. 1929. 60 University of California — Experiment Station fee Ph g >* 00 o o (N ~H o^ a > B ©a 3 a * ^ 0> P^ a ^h oi oo o o 00 J?JS »o eo OJ a fc bfl S ^ fe e ® U5 -h U5 N 111 tN CO fa ojg ftta ^ , ©■ o> 3 «S ft Sfe UJ H CO H U) «5 rt CO 00 CO © O a f3 1" £ «*H fee »< ^( T(l O H T3 O 0> 2^3 Ph g -H t^ rt 2-a " to ! ft 3 o 0> a> 3 Ph g ft a n I 1 r^ © cnj co cn (M i-H t^ (M CO bfi '"' a 8 T3 O 0> 5b§ o> 3 i-i o — i o a a Cu o> 6M , 1 os 3 tf.§ft eo © co © C CO is O S c -h o co co c Cu * 00 rl 2.3 O tX\£ t-i © o> 3 Sfe l^ 2 co o oo r^ c r~ CN 00 o ^ CM _ fee est eo O o C 13 o o> Ph g OS'S a> £ a n t^ t^ t^. o c 1- t- Tl CO CO ■a s fe .3 a a 5 "2 S O) o o -S a £ J3 % J J M (J f 1 g a a o +» 5 o> o> * -g d "3 "o> O u c h E- c fe £ Bul. 501] Marketing California Apples 61 purchased. The purchases were usually "25 cents worth" or less. The actual quantity was seldom mentioned. It was found, however, from a special study, that 90 per cent of all price quotations were on the basis of 25 cents or less. This price was for quantities ranging' from 1 to 6 pounds, usually 2 to 4 pounds. Therefore, whenever the CONSUMERS' METHOD OF PURCHASE BY INCOME GROUP High 20 AO 60 80 IOO Per cent of replies Low Medium Method of ° 2 ° 4 ° sp so o 20 40 60 ao purchase At stored Usuallq telephone ' Sometimes telephone ° From wagon I- 3 Fig. 6. — Most consumers purchase apples at the store, tout those in the high income groups buy frequently by telephone. (Data from table 40.) . -444— r ^■■HB 1 + J. i 41 ■ ■ 10 ■ ' TABLE 41 Quantity of Apples per Purchase Income groups Quantity All Low Medium High Number Per cent Number Per cent Number Per cent Number Per cent l^to 5 pounds 6 to 10 pounds Box 418 85 71 73 15 12 145 25 16 78 13 9 130 19 25 77 10 13 123 41 30 64 21 15 Total replies.. 574 186 194 194 consumer stated that his purchase amounted to a quantity worth 25 cents or less, it was assumed that he bought from 1 to 5 pounds. Likewise, whenever his purchase was from 25 cents to 50 cents worth, it was assumed that the quantity was 6 to 10 pounds. On the basis of these assumptions for the replies made in terms of price table 41 was constructed. Here it will be seen that a quantity ranging between 1 and 5 pounds was the usual size of purchase. It is to be noted further that the larger quantities were among consumers with the higher incomes. 62 University of California — Experiment Station Time of Day When Apples Are Eaten. — An adequate analysis of the uses made of apples in the home requires far more detailed study than was made in this survey. The data here presented may be TABLE 42 Time of Day Apples Are Eaten, by Districts All California Northern California Southern California Time of day apples are eaten Number Per cent Number Per cent Number Per cent 1 2* 3 4* 5 6* Morning 77 45 206 35 15 279 60 11 8 6 9 31.7 5 4 2.3 42 8 9 2 42 25 72 21 13 178 29 12.0 7.1 20 6 6 3 7 50 8 8.3 35 20 134 14 2 101 31 11 6 Noon 6.6 Night 44.4 4.6 0.7 33 5 10.3 649 350 303 'Columns 2, 4, and 6 will not total 100 because several mentioned more than one time of day. TABLE 43 Time of Day Apples Are Eaten, by Income Groups Income group Time of day All classes Low Medium High apples are eaten Number Per cent Number Per cent Number Per cent Number Per cent 1 2* 3 4* 5 6* 7 8* 77 45 206 35 15 279 60 11.8 6.9 31 7 5 4 2 3 42.8 9.2 28 14 55 1 4 113 14 13 5 6.7 26.4 5 19 54.4 6.7 28 16 69 17 7 89 30 12 6.8 29.4 7.3 3 38 12 8 21 15 82 17 4 77 16 10 7 1 Night.... 39 1 8 1 Between meals 1.9 36 7 7 6 Total number of 649 208 234 210 "Columns 2, 4, 6, and 8 will not total 100 because several mentioned more than one time of day. suggestive for further studies. However, tables 42 and 43 show that regardless of income standing, approximately 12 per cent of the con- sumers used apples in the morning. It is of interest to note that southern California consumers mentioned using apples at night more often than those in the northern district. Again, apples were not Bul. 501] Marketing California Apples 63 eaten at night as frequently by the lower income groups as by the higher income groups. Compared with 26 per cent who ate apples at night in the low income group and 39 per cent in the medium income group, there were nearly 40 per cent in the high income group. Uses Made of Apples. — The most popular use for apples, irre- spective of district or income class, was for eating out of hand (tables 44 and 45 and fig. 7). Consumers in the southern district reported eating relatively more apples in this way than those in the northern district and those in the low income group ate apples out of hand to a greater extent than those in other income groups. The difference between districts may be partially explained by the fact, as shown in tables 42 and 43, that more apples are eaten at night; and the differ- ence between income groups by the fact that the low income group reported eating apples "any time" to a greater extent than other groups. In order to summarize the data on the uses made of apples, weights were assigned to the importance of the use by giving first importance a weight of 4 points, second importance a. weight of 3 points, third importance a weight of 2 points and fourth importance a weight of 1 point ; then the weights were tabulated in table 45. Here it is again apparent that the most important use made of apples is for eating out of hand. Use for sauce was next in importance. There was a tendency for those in the high income group and in the northern district to use apples for this purpose to a greater extent than those in other groups, but the difference was not marked. This variation may be partly accounted for by the fact that the groups which used apples to the greatest extent for sauce reported using apples at meals more often than did those in other groups. It is worthy of note that consumers were consistent in their answers to questions concerning apples. In table 31 it was shown that taste and cooking quality were the most desired characteristics. Here it is shown that eating out of hand and sauce are the most important use made of apples. Third in "use" importance for almost all income groups and dis- tricts was baking. (See tables 44 and 45, and fig. 7.) Only one excep- tion to this general statement was ascertained. The low income group in northern California reported using apples for pies to a slightly greater extent than for baking. However, the difference in the weighted relative importance is not marked (table 45). 2 '8 u o ol u d fe A o CO 8 ■Cg Ja fe d Pug O OOM OOOcO OOOOi OOOCM O O OiO OOOCO oooo cooocm-* CM U5 ^h CM ^■^r-HCM OCM CO U0 CO CM CM CM IONOO ^h-*CM •«*"OC0CM CM ■* OCM ■* CO CM CO 1-° cooo cmco eo"3*-ioo Tj d ft, 03 (OO^H NtOrHOO U0 CO t— CO ■*0»l^05 OSW^iH OOOSThOO OS ■* CM ■* ■*N(OtD C0-*O5U0 00 OSCMCO OJONS -HNrlrH MNlCO) T-H.-HCM ^H rttoiceo r^. co oo •* CO CO CM CO CM -*cOOO ^HCM O CM Tfl CO CN^i-lTt< i-lt^ -*CM CM CM —1 CO lO CO 00 CO -h CM CM CO CM U0 CO CO -H t^ 1— C OS ■* -*CO-H oo os O r^ OCM -*"* r ° H a o> d Qj 03 ■"tMOifl CM"*OS0O CO-*lOCO xotoio WlflOH t^ CO OS CO MOOO) t^OOOS ONOh 00 CO-* CO CM CM CM CM t^ t^ CO CM CM i-H CM CM cOiOO-* COCMOCM ifliOOM OO •* -H CO i-H i-H CO HtONOJ ~H~H-HCO t-i •**< t^ CM CO CO CM 03 O CM CO 00 CO CM CM r^ NONO CM CM-* •* CO -HOO t^ o^oo ^HCM-H-* OOOIOS O CM —1 ■* o 03 d -HCOWH CO lO O0 "3 COCO •* CM CO CM CO 00 CM •* CM 00 O0 CO 00 OS O CO l> oo -HC3)!OCN MOIHH lOCOCO -* MOlOO CM CM CM O CO CO OS 0«3MN i-H-*l-ICM ■* OS CM »« g S3 CM CM 00 CM 00-HuO"* l« "0 co -^ O CO OO o COCMt^ i-lt^ OS t— ^H CM CMCOCMO »OCMCOO -H CM 0CO1OS OCM -H-* 03 d 18 JS *a fed Ph g 00)CO«5 CO 00 CO CO r^ oo O cm t^CM-«*t«0 OK3Nr(< O O OS co ooooo) lO i-l CO CO r- to ■* io |^ ^ CO CO ^H CN CO CM MNON CO CO CO UO OH(NH oooo ONON 1* rH r^ oo co 00 CO-* OS OSCMO-H iH CO ** Oi ■*O^H«5 •* OO 1-- OS O CM CO «0 OOlHlH OOOO »»ON OCM^H-* oa 'S M o .d d ^a 03 d pug 00-* CO CM OS 00 CM CO CO CM OS —1 lO CO CO CM CO CO ■* !>• OSl-HCOl-H O O CO CM CO t>- ■* »o CM -*iOTt< CO i-H i-l CO CM CM ^H CM OS t^ CM OS i-H CO ^H CM CM-* CO O lO ■* CO -* CO CM CO 1-° oo r-^osx* i-l CO CO-H -H» HHIM •*COiO«0 CO CM CM 00 hONM "OlOMCO oooo oo CM •* CO CM CO »0 OS O CM CO CM i-H CO 00 00»O-H CM OOHOO oeort -* CM CM CM CO a) ■Bj S fed ft, 03 I-H 00 t- CO t^ rHtDllJO 0> »C ■* CM CO CM OiO CO -* CO t^ ■*NOO t^OsiO-* lOOOCON H00OO CM rt CM CM CO lO CO "0 CM CM CM CM o oo o os CM^HCM i-H ■* O •* OS CM ^h ^h CM 00 CO ^ >o CM O00 O ~HCM.-ciO ■<** CO CO o ■* •* ■* CO CO Oi OS Tfl "0 iO rf CO CO CM CM t^ -*< if -* CM OS ■* O CO CM CO CO >o •* ■* CO OS OS-* CM CO CO CM O OO-hOOS OCO -H •* CM CM CM CO 03 C3 T3 d d o3 fed Ph g CO ■* ■* i— I ncocc^ CO 00 CO -* OrtON O0 CM CM O •* o ■* o NON00 OlOWH CM OO CO 00 ^ CO CO CO O(0 00>0 CM CM CM CM CM CO O OS U3K5NCO -HCO-HCM NO«3N OfOOCM (NNINN oooo t^ ■* CONOiO *& co co CO w*^o CNt-^ co r^ uo ic co -^-HCN CN CNCONlC CO OS CO kO OO— IO oooo O CO O CM O CO OCO COCO CM —l -* >o-mo CO •* CO ■>*< CO lO CO t^ 1H-HCC O0 CM O0 00 CM CO O CM CO >0 OO-f-H O-*— IUB »wOO OW-HDI CM CM CM CO S S o o d a q 03.-, — puBq jo inQ s d s a d o ^ — S P^l^S a d "- 1 rd sjaq^o a jawsu'B °N a d Bj=fe SAV8IA a> 3 Bul. 501] Marketing California Apples 65 OS '3 u O 3 a u o T5 • M oj pq -H ■* 50 ^H N N » N o 03 03 Fh o T3 03 QQ !D 00 rt rt N IO N O a> •>*< O O0 CO H N O) N a 03 pq CO Tf* O 00 IO t-t l— t^~ a) cS CO 00 "fl N IN w; m Tti N CM H IB ^ CO _G 03 PQ CO •* O) «5 IB ^ ID S o3 in ID 00 ID ■* •* CO CO IB CM IN CM CO Eaten out of hand O IO OO OS CO CO N N a o u M O B o o a < a £ J3 b 9 a 3 * .SP« >> o3 2! o * a «2 03 » 3 cj 03 < Ob 66 University of California — Experiment Station The use of apples for pies was more important than for salads in all income groups and districts. Their use for the latter was relatively unimportant. Here may be an opportunity for expanding the con- sumption of apples. The data obtained in this study on the uses of apples are in close agreement with those reported in New York 27 study of consumers' uses of apples. There it was shown that 57.6 per cent of the apples consumed were eaten out of hand, 15.7 per cent used for sauce, 12.8 per cent for baking, 10.9 per cent for pies, and 3.0 per cent for salads. EELATIVE IMPORTANCE OF USES MADE OF APPLES IN CALIFORNA Use Weighted relative importance O IOO ZOO 300 400 Eaten out of hand 308 Sauce £46 ■■■■■■■ Baking 163 HipHHHi Pies Salads III ■■■■ 1 1 60 Qi Fig. 7. — The most important uses of apples are eating out of hand, as sauce, and for baking. Apples for eating out of hand are more important in southern California than in northern California. (Data from table 45.) RETAILERS' OPERATIONS AND PRACTICES Interviews with 104 retailers in California cities form the basis of the data presented in this part of the survey. Specific questions were asked of each retailer and the replies are summarized in the tables and figures which follow. Demand for Apples as Reported by the Retailer. — Retailers re- ported that most consumers merely asked for apples suitable for cooking or eating purposes rather than by variety or by region of origin (table 46). However, in the case of varieties which have a long marketing season, such as the Jonathan, Winesap, Belhiower, and Newtown, a considerable number of consumers asked for these varie- ties when making their purchases. Retailers' Purchases. — Most retailers bought their entire supplies of apples at the wholesale markets, but in Stockton and Sacramento several reported that they purchased from growers who delivered to their stores. Only one stated that he bought to a considerable extent from a wagon jobber. It is known that in many of the smaller towns, not covered in this survey, apples are purchased directly from grow- ers as in St ockton and Sacramento. 27 French, E. R. Consumer demand for apples in New York City. Bur. Agr. .Leon. Typed report, p. 30. July, 1927. Bul. 501] Marketing California Apples 67 TABLE 46 How Consumers Ask for Apples as Eeported by Betailers in California Merely for apples By variety By region of origin Retailers' estimate Number of retailers Per cent Number of retailers Per cent Number of retailers Per cent "Most consumers" 81 14 9 78 13 9 13 37 32 10 14 40 35 11 2 6 36 49 2 6 39 None 53 Total replies 104 100 92 100 93 100 In the Los Angeles market there are several jobbers who specialize in supplying the retail trade in nearby cities. They take orders, buy in the wholesale market, and truck the produce to the retailer. These jobbers purchase their supplies between 8 :00 and 9 :00 p.m. and deliver to the retailer in the early morning. Approximately one-third of the retailers reported that they bought apples in lots of from 1 to 5 boxes (table 47), another third purchased from 6 to 10 boxes at one time, and the remainder took from 11 to 100 boxes. In the San Francisco market the usual size of purchase was from 6 to 10 boxes, while in the Los Angeles market 1 to 5 boxes was the prevailing quantity. Only a few of the larger retailers bought as many as 50 to 100 boxes at a time ; such purchasers could obtain their supplies from wholesalers at the same price as jobbers. Retail stores which were operated in chain systems reported that their management frequently bought in carload lots. Size of Sale. — " Twenty-five cents worth" was the most common size of sale at retail in California markets. In San Francisco, how- ever, eating apples were sold almost exclusively by the dozen. In the East Bay region the better grades of eating apples were sold by the dozen while poorer grades of eating apples and cooking apples were sold by the pound. When sold by the pound, the size of sale ranged between 3 and 6 pounds per sale, depending upon the quality of the apples and whether a " special" was carried in apples on a particular day. Like- wise, the size of sale varied with the general price level. Even when sold by the pound, the size of sale centered around the 25-cent quo- tation. (See discussion under "Retail Prices of Apples," pages 146-147.) 68 University of California — Experiment Station o CO < W o p PM DQ W Ik P 8 fcfl e o e c e c e c § Ah g rH rt ^H »H ,-1 3. © 13 c3 fl o £S+3 as — 1 O 00 CN -H O CS Tji N 'H s a »7 0> sa a> X o a> c CO CO lO 00 h2 n, CD o IQ o3 1.2 0) O ►2 a << 01 CO O CO i-i CN a ca 0> fee i-^ o -*t< uo oo o Ah § I— ( .— c £1 o *0 o CN as t- CN CN — i CN 3 S£ to io oo f^ r^- o »-t l-H CN CN X! CN . M O S3 c X!'-G S 15 2 ® M fl » M CO O CD c m ifl m a oo Ah g M T(i N U5 H £> o o .a +5 as «5 OS rt CO « CO CO i-H ~H s a ££ CO co C r^ o oo uo oo i-h o CO CO >o ^H o JQ ^ M o ® S ,0-3 as a a N O 00 H N CO c<3 ^ «3 .« 8 fe T? £||w§ 1 g |4 § 3**11 3§S^5 •< X ►-3 < X Bul. 501] Marketing California Apples 69 CD d Q. CD o o o o o o o o o o ^ "5 _ _ rt i-H ,-H e3.2 o a H£ ^ CO O OO CN OO O N •* CN <-H fed CN O M< O O $£ T » P^ g C o Ui r-j CD ■* a J* CN O CN O O fe fed f- o co o oo 3« 0) Ah § 3 ° _ *-i CO HI CO Q, CD a cd NO* O — 1 CD 1-° CO O s CD o a CD CD M CD fe d OS US 00 "5 O i-H CO CD O O T3 , a o CO Q, o a O H OO i-H O CN ~H O cb fe o CO ,2 Ph '3 CD d O-i to ■moo oo o CO CO CO l-i CD CD I 0 CD rt a 1 1"° a h « cn oo T3 d d CD Oj a 1 03 .4 3 fed fed Ang O IV P* d a M o O a S u 1-° O O S <*J 0) 03 a tj H 0) C Ah g m d Ah g ^H 00 (1 0) a 1 S jj (M eo i* CO -*< 03 Q) S d Ang A O "^ fci 03 > H a P a , "5. d a _> c3 0) a d W t— Bul. 501] Marketing California Apples 71 Retailers who reported selling by the box were few. The box was sold only to a limited extent near the holidays. Most retailers stated that they sold large quantities cheaper than small quantities. How- ever, this did not appear to encourage buying because few consumers have satisfactory storage facilities to hold large quantities. Gross Margin of Profit Considered Necessary in Handling Apples. — Between 20 and 35 per cent of sale prices was the gross margin considered necessary by most retailers for handling apples. (See table 48.) In Los Angeles the reported margin tended to be some- TABLE 50 Ketailers' Dealings in Processed Apples Dried apples Canned apples Area Handling dried apples Not handling dried apples Total replies Handling canned apples Not handling canned apples Total replies Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent Num- ber Per cent 10 1 4 1 4 10 4 13 5 31 78 23 27 19 9 77 96 87 95 69 88 24 31 20 13 87 100 100 100 100 13 6 1 6 13 14 5 46 68 25 36 20 7 67 100 86 95 54 101 25 42 21 13 100 100 100 Alameda, Berkeley, and 100 Stockton and Sacra- mento 100 what higher than in other California markets, several small dealers stating that between 35 and 45 per cent was the necessary margin. All retailers expressed the opinion that handling apples was profit- able. Some qualified their opinions by excepting the handling of early local apples and those that had been held in storage for a long time. Amount of Apples Which Spoil and Causes of Spoilage. — The quantity of apples lost through spoiling was not considered excessive by retailers. Only 11 per cent of the dealers reported losing more than 10 per cent of the early apples they handled while 47 per cent reported less than 10 per cent loss. With late apples, losses ran some- what higher. Between 10 and 15 per cent was the usual amount of spoilage reported. The heaviest losses were with apples that had been stored for a long period. (See table 49.) "Storage breakdown" and decay were reported as the principal causes of loss in late apples, while bruising and shriveling were of most importance with early apples. Shriveling was reported most 72 University of California — Experiment Station frequently in southern California on early immature apples, and bit- ter-pit in northern markets. Dealings in Processed Apples. — Only 10 per cent of the retailers handled dried apples (table 50). These were located in trade terri- tory comprised of low income groups. There was a tendency as well for dealers located in smaller cities to handle dried apples to a greater extent than did those in the larger cities. Canned apples were car- ried by 13 per cent of the dealers. Those dealers who catered to a restaurant trade handled the gallon can. In the smaller cities canned apples were on the shelves more frequently than in the larger cities, and as in the case of dried apples, they were carried by the dealers in low income districts. .Apple butter was sold by a number of retailers. These reported that the No. 1 and No. 2 cans were the best sellers. WHOLESALERS' AND JOBBERS' OPERATIONS AND PRACTICES Relation of Apples to Other Products Handled by Wholesalers and Jobbers. — For those dealers who handled apples in California, markets the apple business was a substantial part. In southern Cali- fornia there was a tendency for those who dealt in apples to make it a bigger part of their business than the northern California dealers. TABLE 51 Per Gent of Wholesaler's and Jobber's Business in Apples, Fruits as a Whole, and Vegetables Markets Per cent in apples Per cent in fruits as a whole Per cent in vegetables Northern California 20 to 40, mostly 25 . 25 to 75, mostly 50 25 to 75, mostly 50. Southern California 10 to 95, mostly 30 10 to 100, mostly 50 10 to 90, mostly 50. All California 10 to 95, mostly 25 to 30 7 to 75, mostly 20 to 50 10 to 100, mostly 50 10 to 90, mostly 50. New York 20 to 100, mostly 50 to 100 to 75, mostly under 50. The usual division of business between fruits and vegetables was about half and half. In New York, the importance of apples as com- pared with other products handled varied from only 7 per cent to as high as 75 per cent. The majority reported their apple business constituted from 20 to 50 per cent. Most dealers interviewed handled a greater volume of fruits than vegetables, seven out of thirty-three handling no vegetables at all. (See table 51.) It is well known, however, that some dealers handle vegetables exclusively. These were not interviewed, hence the data on proportion of business in fruits and vegetables apply only to those engaged in handling fruits only or fruits and vegetables in combination. Bul. 501] Marketing California Apples 73 Quantity of Apples Handled from Various Producing Sections. — The quantity of apples handled by dealers from the principal pro- ducing- sections was reported to vary from year to year. It also varied greatly between dealers. Southern California dealers handled a much larger quantity of apples from Watsonville than northern California dealers (table 52). This was due to the fact that Los Angeles was a good market for Bellflowers while the San Francisco market was not greatly interested in them. Furthermore, the Los Angeles market used larger quantities of the Watsonville Newtowns than the San Francisco market. It was also noted that southern California markets handled more apples from other California pro- ducing sections than did the northern California markets. Again, southern California markets used apples from Idaho and Utah to a much greater extent than the northern California markets. The matter of freight rates evidently plays an important part in the sources from which the northern and southern California mar- kets secure their apples. According to the Bureau of Railway Eco- nomics 28 the following rates obtained : To To Los Angeles San Francisco From Cents per 100 lbs. Cents per 100 lbs. Milton, Oregon 100% 65 Provo, Utah 79 Underwood, Washington 52% Wenatchee, Washington 106 79 Yakima, Washington 106 Fruitland, Idaho 98 98 Twin Falls, Idaho 95 Watsonville, California 35% 16 Here it will be noted that the southern California markets are served most advantageously with late apples from Watsonville, Utah, and Idaho. On the other hand, it will be noted that the Northwest has an advantage in freight rates into San Francisco over the Utah and Idaho shipping points. The importance of the freight rate structure in determining the receipts from Utah was brought out by Thomas and Cardon 29 in their study of the apple industry of Utah. These workers quoting Homer A. Harris, then market reporter for the United States Bureau of Agri- cultural Economics, state: "Receipts of Jonathans from Utah are 28 Commodity prices in their relation to transportation costs. Bur. of Kailway Economics. Bul. 34:28. Washington, D. C. Feb. 1929. 29 Thomas, Preston W., and P. V. Cardon. An economic study of the apple industry of Utah. Utah Agr. Exp. Sta. Bul. 208:38, 1928. 74 Univeksity of California — Experiment Station heavy on account of favorable freight rates from that state as com- pared with Idaho, Oregon, or Washington. ' ' The quantity of apples handled by New York dealers and the few who were interviewed in other eastern markets is exceedingly variable. Some dealers handled only a small part of a car while others handled up to 50 cars of early apples and several hundred or even a thousand cars of late apples. The quantity of California Gravensteins handled constitutes a very small percentage of all apples purchased. Dealers buying only a car or less of Gravensteins may handle several hundred cars of Northwest apples. Some of these, particularly in Philadel- phia and Boston, handled several hundred cars of barreled apples, mostly from Virginia. TABLE 52 Quantity of Apples Handled from Various Producing Sections by Wholesalers .and Jobbers District of origin Northern California markets Southern California markets New York markets All eastern markets Number of carloads handled by wholesalers and jobbers 2 to 50, mostly 10 fX to 50, \ mostly 1-5 \i to 50, 3 to 200, mostly 25 10 to 600, mostly 75 mostly 1-5 2 to 40, mostly 5 to 10 3 to 150, mostly 15 3 to 150, mostly 10 3 to 20, mostly 10 5 to 1,200 5 to 1,200 1 to 25, mostly 10 4 to 25, mostly 10 Utah (Only one dealer) 15 to 25 4 to 25, mostly 10 Other 2 to 1,000 2 to 1,000 Total 5 to 300, mostly 100 50 to 825, mostly 150 5 to 2,200 5 to 2,200 Method of Purchase. — The diagram on the cover page shows that wholesalers and jobbers have an opportunity to make their purchases from or through various agencies. Southern California dealers re- ported buying a larger portion of their apples through brokers than did northern California dealers. This applied particularly to the purchase of California apples. Northern California markets are located near the two principal producing sections; consequently con- tacts with shippers and growers are more easily made. Again, considerable quantities of apples were trucked to the northern California markets from the producing sections. The purchase of apples from growers or country packers was con- fined largely to state shipments. In all California markets, most of the apples coming from points out-of-state were purchased through Bul. 501] Marketing California Apples 75 brokers. Some of the wholesalers, however, owned or had interests in orchards both in and outside of the state and obtained their supplies in this manner. (See table 53 and fig. 8.) Some dealers who do strictly a jobbing business purchased their supplies from wholesalers. Occasionally, a wholesaler bought from another wholesaler in the event he wanted to fill a special order. Most eastern wholesalers and jobbers reported buying California apples at auction. It is estimated that about 90 per cent of all west- ern apples sold at eastern markets move through the auctions, A few WHOLESALERS' AND JOBBERS' OPERATIONS IN CALIFORNIA MARKETS A t 3 m i 1 Pur Though Broker 89 cha ses 5ales 1 ndcpcndcnt Peta.lers 87 £ p Cr, al n I Srorcs = 70 (o Wholesalers and J obbers From Growar- 52 Jobbers E 90 Ifl T Cou^r 4 Packer 40 62 X 2 Froilsrand. + 60 Wholcialcr, 1 1 u Ho+cl« i. t?e5+<3"ron+* 0. 36 Fig. 8. — California wholesalers and jobbers most frequently reported either that they purchased through brokers or directly from growers. Most of them reported sales to jobbers, to independent retailers, to chain stores, and to hucksters. (Data from tables 53 and 58.) dealers reported buying at private sale through brokers although some of the larger firms made contracts with large growers and with pack- ers. Time did not permit obtaining data on this point in markets other than New York, but several large dealers interviewed in Phila- delphia and Boston had representatives in the field making contracts with growers in the nearby states. It appears, therefore, that a con- siderable percentage of the eastern apple crop is purchased from the grower or packer. Some of the wholesale houses did some of their own packing at country points. However, this is not the usual practice. Size of Purchase. — The usual size of purchase reported by dealers in California was the carload. Those doing a jobbing business only, bought from 25 to 100 boxes at a time, usually 100 boxes. On trucked- in lots the size of purchase varied with the capacity of the truck. 76 University of California — Experiment Station M to a o> ai a t~- -* O CO Ph§ OO N O ^ 3a o3 O iO CO CO SdD £o 1-° ^f H M fl 3 § a O to fee w oi o * Ph fc 8 ^H (N lO a a I 9 I- CO CO O t~- Ph >> oi a O 00 (N N fl 03 Cu 01 Tf T* CO ^H 1 Sa o is 00 O O0 i* s* t- -tf o> a N N 0O OO to 115 lO * H 2 * £2 is bJO •* in cq •* CO 3 Ph£ X! PJ *o pj-i o 1* O O -* i-H »H . +3 53 a O O O CO a P* g t^ .2 a OS i-H CO 1— 1 •Ss Q, 0) « 00 05 M 3 a> U O -3 £ P H N T|( N T* t-H -, g o r3 ® S Ln ^, h< 3 c £ V O M K-r t(< o CO o O o 'C CD a £ d > 1 fed o Oi o CO CO 0) o d Ph g CN CM CN CO o3 > > tn 43^3 a> lb 1-° CO CM ^ - 1 "o >4 O u if C M <3 d "5 O cu d a .§§* Ph g t^ 00 CO cu °2 ^ ^ OJ "5 ■* CM .9 8 id c £d o 1^ o o Png t^ US 00 t^ 03 fl a* J co o d 2*8 CM <-C 13 <1 fed o CO o o M« § Ah § CO ■* CM CO d cd a 93* 03 03 »-" o -* o> "5 CO bfi ^ d g •~ ^ 5 d CO t^ o OS oo g-d a o > is a <- 12 CD id cd a M< CO oo _ CM •* 1-1 oj a 8+2 . +a k. U g | £ ^ Oi H o o -2 03 •a u o 1 o a "3 O d g o 1 o CD CD >1 u o "3 o CO is CD <: fe ^ Bul. 501] Marketing California Apples 81 CO CD G o o O CO a> ft, CD O o w £ o i^ s o o o co IS o o o >o CO O X SS O 03 i o o o oo o CO "ot cg '£ £ o o «3 So CU ® rH O rH o ■>*< OO CO -* cn -«^ o CM -" 2 o n a O X '5b to ^ c3 O 53 i a 18 "5 iO o o T3 O o © ft CD G rH lO oo o "5 H Ph § co G 0) O W "^ tH o a> cn a P iO CO CN © CD G Ph g N O 00 •* 2fl •* CD O O "** to O CD rH ft £ fe — ' -H 1 - 1—1 l- CN —1 8 •8S B t3 o *s ■** rG.P ° c in in .h n rH rH T-j el a, o c ■n -p rj in co co G o ¥ < O O v r> B fl 5 » £ o O «5 l» lO r>\ o o o T " 1 +3 +J +s O o o o +* _ rt rt ts_ o3 03 G Si >H to O O t c3 '.G "J i •2 S S Sou . ■ .~ to to C "\ s-« d > S3 .O R .» < £ GO £ 82 University of California — Experiment Station commission charge varied with the quantity, smaller lots carrying the higher rate. Seven to 10 per cent were the usual charges of New York dealers. The New York commissions were based upon delivered sales, hence the actual commission received was as large as that received by California dealers. Some dealers charged 7 per cent on large lots and 10 per cent on small lots. On goods not sold on commission California dealers reported an expected margin ranging from 10 to 25 per cent, the usual margin being 15 per cent, Several reported on a per-box basis, the expected margin in this case ranging from 10 to 25 cents a box, the usual reply being 25 cents a box. (See table 57.) The margin of profit considered necessary by New York dealers varied with the class of trade to which they catered. After paying cartage, which they figure at 10 or 11 cents, they hoped to make 15 to 20 cents a box as a minimum. Most dealers catering to a moderate- priced trade expected to make 25 cents. Dealers catering to a higher- class trade mark up the boxes from 35 to 75 cents. Those having the higher mark-up usually go over the fruit and see that every specimen is in perfect shape before it leaves their store. A large share of this fruit is sold through the Gansevoort jobbing market to steamship, restaurant, and hotel companies. Sales Outlets. — California wholesale apple dealers had a variety of outlets. The tabulated results (table 58) show the number of dealers who reported sales to the various classes of trade. Here it is apparent that aside from hotels and restaurants the wholesale trade sold, in general, to all classes listed in the right-hand portion of the chart on the cover page. Southern California dealers more often indi- cated sales to jobbers than did the northern California dealers, prob- ably because a larger number were doing a strictly wholesale business than was the case in northern California. Another point of interest is that a much smaller number reported selling to chain stores in the southern California markets. Dealers, as a whole, hesitated about giving definite percentages on sales. Those who did indicated that the bulk of their trade was with retail stores. It is worthy of note that hucksters furnished a considerable outlet for jobbers. The outlet for fruit sales for New York dealers was even more varied than with the California dealers. Washington Street dealers had a rather general class of trade but sell largely to jobbers, inde- pendent retailers, a few hotels, and chain stores. The dealers on the Gansevoort market, because of its location relatively near to the piers. Bul. 501] Marketing California Apples 83 w CD O 1 o O O co (-1 CD J3 6 ■ is "* O O O OO ^^ & a) OS CO O l>- so 0O N O M 03 P-i g - O •~s a is ©» O ffl * M JM T* H N H £ »1 %3 p w ^3 b C-2 P. .3 T3 i-c S b o Ol OO H l« c i- CO rt (N H 3 >- o fc g Oi a to * o to OO iO N w C c3 8 fe 1-1 OO CO t- o 1-° oo co t-h ~h CO Pn g o CO io 1^ 13 c t- CD ■* N CO 03 02 3 Sfe S O) OO « - £ 15 eo < h c -3 0> « C a o « .9 < fc QQ Z 84 University of California — Experiment Station sold largely to ship lines, export institutions, and restaurants. The Harlem dealers serving upper Manhattan had a general trade to retailers, hucksters, and fruit stands. The dealers on the Wallabout market in Brooklyn distributed relatively large quantities of fruit to almost all classes except ships and export companies. The Attorney Street market on the lower east side of Manhattan served hucksters and push carts primarily. Terms of Sale. — Terms of sale in most California markets were usually cash or cash w T eekly. In the northern California markets terms were frequently twice a month or what the trade termed "steamer days." In 1927, W. L. Jackson estimated that between 20 and 25 per cent of the business was done on a cash basis. 30 In south- ern California 10 days' credit was often extended to purchasers. Cash sales and credit of a week or 10 days were the most common terms of sale in New York. Buyers with good credit are given 30 days and in a few instances longer. Auction terms are 10 days. Discounts. — Wholesalers in California generally made discounts on quantity sales. In southern California markets, jobbers are given a discount in case they purchase a full line from the wholesaler but are not given a discount above that given to other purchasers on quantity sales if they only purchase apples. In some cases jobbers reported handling on a smaller margin in their dealings with other jobbers. In northern California markets most wholesalers reported giving a discount to jobbers not given to other purchasers, but job- bers did not make a practice of giving a discount to other jobbers because this business was not large in volume. Most wholesalers in New York give some discount for quantity sales and also to jobbers. In one instance merely a 2 per cent brok- erage charge was made to jobbers. Extent of Market. — Northern California dealers reported a mar- ket radius of approximately 75 miles while southern California deal- ers reported a market radius of from 50 to over 200 miles. As a whole southern California dealers served a wider territory domes- tically. However, several northern California dealers reported exporting to a considerable extent. The San Francisco market is located nearer the producing sections, hence exports are made through this market rather than through the Los Angeles market. The freight rate from Watsonville to Los Angeles is 35 y 2 cents per hundred pounds, while from Watsonville to San Francisco it is only 16 cents per hundred pounds. 30 Jackson, W. L. The San Francisco wholesale and produce market. U. S. Dept. Agr. Bur. Agr. Econ. Unpublished report, San Francisco Office. 1927. Bul. 501] Marketing California Apples 85 It is difficult to summarize the extent of the market of New York dealers. Some supply an area of only 8 to 10 blocks ; others supply Manhattan and Long Island ; some ship to out-of-town customers for 100 miles; and still others supply ship and export trade. Grouping the dealers under four general heads, we find nine supplying a local or nearby trade, fifteen supplying the different parts of Greater New York (the distance up to 40-50 miles), two shipping 50 to 100 miles, and eight supplying export trade. Only general information as to the extent of the general market was obtained in Chicago, Cleveland, Philadelphia, and Boston. Gen- erally speaking, Chicago is a distribution center. Cleveland is largely a local market supplying fruit in a semicircle south to a distance of 60-100 miles. Philadelphia ships apples as far west as central Penn- sylvania and east to the coast. Boston supplies most of New England and ships some apples to Nova Scotia. The Factor of Trucked-in Fruits. — Trucking of apples to Califor- nia markets is an important means of transportation. In the north- ern California markets only 2 of 22 dealers interviewed reported that shipments were received by rail only. Some dealers reported that from 50 to 80 per cent of the apples they handled were hauled by truck. On the other hand, those handling a large quantity of North- west apples reported that only a small percentage of the apples they handled were received by truck. Southern California markets received all local apples by truck, other apples being transported mostly by rail. It is interesting to note, however, that apples were trucked in from Utah. Arrivals by rail and truck in the Los Angeles market in July and August, 1929, calculated in carloads, were approximately: 48 car- loads by rail and 14 carloads by truck during July ; 127 carloads by rail and 16 carloads by truck in August. 31 Answers to questions concerning trucked-in fruits were not obtained from many dealers in the eastern markets. Trucking, however, is becoming more important each year as a means of transporting fresh fruits and vegetables from nearby sections. Biddle 32 reports the car- load arrivals in New York for 1928 to be 7,953 by rail and 1,107 by truck for the period from July to December. Monthly reports for July and August, 1929, showing the origin of rail and motor truck shipments are presented in table 59. 3i Daily Market News Service Reports. U. S, Dept. Agr. Bur. Agr. Econ. Los Angeles, Calif. 1929. 32 Biddle, E. R. Annual summary of carlot arrivals of fruits and vegetables for New York, 1928. (mimeo.) U. S. Dept. Agr. Bur. Agr. Econ. 1929. 86 University of California — Experiment Station The data in table 59 show that truck shipments from New Jersey to the New York market have virtually eliminated rail shipments. The states of Delaware, Maryland, and New York also employ truck transportation to a large extent. TABLE 59 Carload Receipts of Apples in New York During July and August, 1929* Carloads received by rail Carloads received by truck State of origin July August July August California 2 6 3 4 28 9 41 121 5 16 2 80 2 1 28 51 47 15 239 4 14 Maryland 5 257 New York 38 North Carolina Pennsylvania 1 West Virginia 'From Daily Market News Service Reports, U. S. Dept. Agr. Bur. Agr. Econ. New York, 1929. TABLE 60 Carload Receipts of Apples in Boston, January to July, 1929* Month Carloads received by rail Carloads received by truck January 132 126 149 88 64 44 158 73 February 59 March 91 April 166 May 122 June 44 July 188 •Monthly report of carlot receipts. Market News Service Reports, U. S. Dept. Agr. Bur. Agr. Econ Boston, 1929. No definite data could be obtained on actual quantity of apples received in Philadelphia by truck. It can be stated without ques- tions, however, that during August the great bulk of the apples were trucked in from New Jersey and Delaware. Table 60 shows the relative importance of rail and truck shipments of apples on the Boston market. Most of the apples received by truck originated in Massachusetts or New Hampshire and the Boston market was well supplied with local stock in August. Bul. 501] Marketing California Apples 87 The Cleveland and Chicago markets also receive considerable quantities by truck. One of the best-posted men in Cleveland esti- mated that probably 25 per cent of the early apples arrived by truck but no figures could be obtained. On the Chicago market, some of the fruit from Illinois, Michigan, and Wisconsin is doubtless trucked in but no data were available. Storage Operations With Gravensteins. — Storage of Gravensteins by the wholesale trade was seldom practiced in California, Only 8 out of 40 dealers interviewed stated that they had stored Graven- steins (table 61). Gravensteins in the eastern markets are usually sold as received although about one-third of the wholesalers and jobbers reported storing in a limited way and for short periods. Those dealers who had stored Gravensteins held them for only a short period. Three to four weeks was the usual length of the storage period, although one dealer reported carrying one car 'for three months. The reason given for the short storage period was to avoid competition with the Northwest Jonathan which would be on the market when the Gravenstein came out if the latter were stored too long (table 61). That is, it was inadvisable to try to move the Grav- enstein after the Northwest Jonathan was in the market. Many of those who did not store expressed the opinion that it was inadvisable unless the market during a part of the season was demoralized. The quantity stored by those dealers who did store was small. From 1 to 5 cars was the usual size of holding. The carrying quality after storage was reported as varying. "Fairly well" was the com- mon reply to the question as to how they carried after storage. The condition of the apple when it went into storage was stated to be important in relation to the carrying quality after the apples came out of storage. The loss after storage was reported as ranging from 2 to 10 per cent. The principal reasons for storage of Gravensteins as given by wholesalers were to avoid a glutted market and to lengthen the season. Storage Operations With Newiowns. — Storage of Newtowns is a common practice on the part of California wholesalers (table 62). The ratio of those who stored to those who did not store was 5 to 1. There was a tendency for more wholesalers in southern California to store than for northern California dealers, although some dealers in northern California reported exceedingly heavy operations in stored Newtowns. The length of the storage period for Newtowns varied with the dealer in California. Yet, it is a common practice to hold some in storage until June 1. Some reported holding them until July 1. 88 University of California — Experiment Station i a i d .2 3 2 S-2 03 a o co 2 s *o bO T3 d 41 -2 a CD CD DO CD d O CD ■+3 o 0"-j3 l-s s ' — I — rrt M o3 cd Ijj d a a M o3 U CD U (h ■-2 1 2 3 -1-3 -d 6B •_3 CD d iS £ o * J "o > 03 a CD 03 CD d * «! o o a rd cd ffl o £ a »-s co CD & 2 tJ -d CO 0> u to a ne if m ore N onatha: one unt thans ar market O +» o «« "-a fc £ fc fc u <* "^ % cd CD o .2 p, a a CO o CO _; ■s d £ •R5 « J CM BO 49 . 3 »h 03 8 >, 53 £ tu a d 5r! c3 03 O "E 03 > 0) o "8 fa y ' « " o >> -w CD dig CO c o 03 03 Of a -Q o o y ^ CO CD «h a kO lO CO c o o 03 1 «*h 03 ^ "- 1 O -rH o "3 ^ _o -o £ U 1 § 'bb bfl 2 s CO a^ o (D .2 3 03 o"2 o3 a S- cc ulate mar ulate -a ■pro 7B T3 ^ T 8 3 § 3£ a 'o > 1? 'c > a o a CO > '/. § < * t^ T* J3o£ ft, g 00 !>• OO CC 00 a u o a ■g « 03 S fr. ?* CO ~ CN CO a w & .2 a> co » c o SB CO cr: CO &H 8 J- d 03 O CD 5 1 00 »o CO cr CO a fe; 03 o3 3 d M u O o CO .2 a 3 CD 03 03 M u 03 3 o o a o d 4< d CD u u c s "3 CD -a CD d o i CD 3 o s «< £ cc y 3 Bul. 501] Marketing California Apples 89 oa H - •«*! CO "S p fee n, 0J CO 0 00 00 oo 1- m oo r- CO y-i >H a a 03 e 'c c c L o3 a '5 'c «2 £ 'cj "t C a e 1 J ! ) '< I 2 90 University of California — Experiment Station a 1 o M "8 a d CD o So +3 co a § 0> > J5 3 . © w A >> cci lis c i t a CD O a CO -0 O 2 >> CO X £ As below. Supply toe ripening Speculate; season. id «d o o a u o o c ■+J j>> h CO >> 1 3 CO 1 CO p •3 co (4 a s a c3 o o o O O § o o 3 ,H CM CO CO X) jq T3 fl O c a CD o a CO >> a CO b> a 1 CO — c3 3 o B a 3 ?>> "c CO A X *> P "5 o a a CD O c3 6 ^ ^ 3 to 6 Up to to o CO fafi CD o o CO to "— ' o CO CO o 1* « O ti O CCrQ s fe 5P^ ft PI 5 >> oi r-l O O H PQ-Q CD a bB CO CO CO o CD O > w. GO c .2 CO CD-fl O a CD CD a o O O O CM O fe CD a O sa £ a M ft PI CD .2 1 P) CD ^§ CO .& 2 a J b o oo o M O PI "o PI O ■- 1 —. o o o PI P3 iSS cs <; 0> 5 3 •fl T3 -fl o o « 0> CD • CD PI u .fl -a 42 -fl CD u b CD O CO O o3 o3 -£ -Jj 3 +J "oS « g 1 d u pd o o r o fl CD PI *£ +3 +j a +j ^=3 a pi O H CO U) CN th o c3 e8 fl fl (-1 (H o o CD 03 •a oj o3 .2 fl a i • fl Ji &-, O •fl a oi kL off* S o S ») S T3 q 3 03 ^ u 5 > >H ^ >H fi CI t5 -3 >H ^ CI « o 2 03 T3 co^OOlZiM^&PHO^ t^ .-H O t^ O .ft -ft .ft XI XI O 0) 1) f*l fe U* _ 0) 0) 0) » i'^gflflg'aflflflci 3^ 3 3h 3 S 3 3 3 O O d' -9 « « ft § 81 ft H +o g 9 - O « ^ s fc O 05 O 05 £ >* £ >* O5o5o5a5o5o5d5a5o5d5o5od5a5o5o5 —t(MeO"<*<»0<©r^OOC»0^0 55 I* ^ Ph Bul. 501] Marketing California Apples 115 sale and/or otherwise to dispose of the apples controlled by the asso- ciation and to enter into agreements with brokers, distributors and/or others for the harvesting, sorting, grading, storing, evaporating, can- ning and/or otherwise preparing the same and/or any by-product thereof for marketing and for the sale, marketing and/or consign- ment thereof." 34 The association acts primarily as a sales agency for the members. Each member has the privilege of making sales outside of the asso- ciation but these must be approved by the organization. The secre- tary makes billings, collections, and routings. A fee of one cent a box is charged on all sales to defray the expenses of the association. Each sale is made on a separate basis. If an order for 10 cars is under consideration, members of the organization agree to fill the order. Upon completion of this transaction the shippers receive the returns netted on this order. No attempt is made to pool sales for the season. In the fall of 1929, it was estimated by Mr. E. J. Faul, Secre- tary of the Association, that the organization controlled 40 per cent of the output of the Watsonville district. Members of the asso- ciation felt that they had accomplished several things through their organization, namely (1) the establishment of more uniform price quotations, (2) the elimination of objectionable trade practices, (3) concerted action on matters of mutual interest to shippers, and (4) somewhat better distribution of the crop. It was stated, however, by members and non-members that control of a larger portion of the crop would be necessary before the association could function to best advantage in distributing it. Watsonville shippers cooperate to a considerable extent in their storage operations. Two cold storage houses are operated on this basis. One of the houses has been in operation for ten years, and the other is beginning its second season. These report that they have stored for members at from one-half to one-third of commercial storage rates. Several shippers who are members of the Watsonville Apple Growers and Packers Association are members of the coopera- tive cold storage association. 34 Section 5, Article III. By-Laws of the Watsonville Apple Growers and Packers Association. 116 University of California — Experiment Station APPLE DISTRICTS OTHER THAN SEBASTOPOL AND WATSONVILLE There were so few shippers outside of the Sebastopol and Watson- ville districts that it is impossible to make general statements regard- ing their operations and practices. Shippers in the Beaumont, Yucaipa, and Sonora districts were interviewed. Since conditions varied widely in these sections it was TABLE 82 Number of Growers for Whom Shippers Packed Apples in the Beaumont, Yucaipa, and Sonoma Districts Shipper No. Number of growers Location 1 2 3 4 5 200 40 2 12 1 Beaumont. Yucaipa. Sonora. Sonora. Sonora. TABLE 83 Shippers' Charges Per Box for Handling Apples in the Beaumont, Yucaipa, and Sonora Districts Shipper No. Packing Overhead Selling Other charges Material, sorting, grading, and washing $0 10 for sorting Total 1 $0.07* 40 0.55 10-15 per cent 2 3 $0.10 $0.65 4 59 5 42 "A charge for merely wrapping and packing the apples. TABLE 84 Practices of Shippers With Eeference to Contracts in the Beaumont, Yucaipa, and Sonora Districts Shipper No. Are contracts made with grower? Are contracts made every vear? Kind of contract Time of year contract is usually made 1 Sometimes Vos No Consignment purchase Consignment 2 Yes August. 3 No No 4 Yea No 5 No No Bul. 501] Marketing California Apples 117 TABLE 85 Shippers ' Practices in Financing Growers in the Beaumont, Yucaipa, and Sonora Districts Shipper Advances for production Advances for harvesting Advances for marketing No. Number of growers Extent Number of growers Extent Number of growers 1 All Spray material boxes... All All. 2 50 per cent.... None Picking Few. 3 None None. 4 None None None. 5 None. TABLE 86 Shippers ' Sales Methods in the Beaumont, Yucaipa, and Sonora Districts Shipper No. To cash buyers locally By wire through brokers Through sales agencies Consignment on commission New York auctions 1 Mostly Some 2 3 20-25 per cent 4 5 Some Some years When prices low TABLE 87 Shippers ' Experiences in Storing Apples in the Beaumont, Yucaipa, and Sonora Districts Shipper No. Varieties stored Quantity stored Length of storage period Remarks 1 Gravenstein 2 3 4 All varieties grown locally Delicious and Winesap Delicious, Rome Beauty and Winesap Delicious, Winesap 35,000 to 60,000 boxes Up to 6,000 boxes Up to 20 cars 1-8 months Up to June Up to March.... Up to May with more highly colored Gravensteins when taken out of storage. Stores to supply local trade and for better prices later in season. Stores to supply local trade; usually profitable. 5 factory at harvest time. Profitable some years. Stores if prices not satisfactory in the fall. 118 University of California — Experiment Station thought advisable to merely present, in tabular form, such data as were obtained. Tables 82, 83, 84, 85, 86, and 87, summarize the prin- cipal points covered in the interviews with these shippers. The most outstanding difference in operations between these other districts and the Sebastopol and Watsonville districts was in the method of sale. The former sold the bulk of their pack to cash buyers locally while the latter sold mostly by wire through brokers. Among the brands reported by shippers were "Mountain Boy," "Big Red," "Bret Harte," "Sun Red" and "Mountain Apple." GROWERS' FINANCING AND MARKETING PROBLEMS SEBASTOPOL DISTRICT In this area a special study was made of the use of credit by grow- ers and the relation of the source of credit to the growers' marketing methods and practices. Confidential reports from 188 growers in the area showed that in 1929, 106, or about 57 per cent of those replying were using credit as follows : Amount Per Cent of total Mortgage credit $450,045.00 86.9 Production credit 42,325.00 8.2 Marketing credit 25,225.00 4.9 Total $517,595.00' 100.0 The prevailing rate of interest was 7 per cent on all classes of credit, although the rates varied from 6 per cent to 8 per cent. Com- mercial banks supplied over three-fourths of the marketing credit for this group of growers, and shippers supplied less than 10 per cent. (See tables 88 and 89.) Growers were asked what type of marketing organization they thought would best solve their marketing problems. Of 186 replies to this question 140 favored a cooperative marketing organization, 38 favored private organizations, and 8 had other ideas. Service Rendered by Marketing Agencies. — In order to obtain an idea as to how satisfactory present marketing services are, growers were asked how many different shippers they had dealt with in the past five years. A total of 186 answered the question. Of 139 now members of cooperatives, 76, or 54 per cent, stated that they had dealt with the same cooperative for the entire period, while of the 37 who have dealt with independent packers only 8, or 21 per cent, have stayed with the same shipper for that length of time. Of 88 growers Bul. 501] Marketing California Apples 119 who gave reasons for changing from one shipper to another 34 stated that they expected larger returns, 31 reported unsatisfactory service, 8 reported poor management on the part of the shipper, and 16 gave varying replies. TABLE 88 Marketing Credit as Eeported by 25 Growers in the Gravenstein Producing Area* Interest rate Amount Per cent of total amount Number of loans Per cent of total loans 8 7 6 No rate reported $ 1,700 20,850 2,000 675 6.74 82.66 7.93 2.67 5 14 1 5 20.00 56 00 4 00 20.00 Total $25,225 100.00 25 100 00 "Including Sebastopol, Forestville, Healdsburg, Santa Rosa, and Sonoma. TABLE 89 Source of Marketing Credit Eeported by 25 Growers in the Gravenstein Producing Area Agency Amount Per cent of total amount Number of loans Per cent of total loans $19,800 3,000 2,425 78.49 11.89 9.62 17 1 7 68.00 4 00 28.00 Total $25,225 100 00 25 100.00 TABLE 90 Growers' Attitude Toward Marketing Agencies Serving Them Number replies Service satisfactory- Service fair Service unsatisfactory Connection Number replies Per cent Number replies Per cent Number replies Per cent 131 31 89 16 68 52 17 3 13 10 25 12 19 38 Total 162 105 65 20 12 37 23 The question was asked: "Are you satisfied with the service ren- dered by the present marketing agency?" Of 131 members of coop- eratives who replied, 68 per cent answered "yes," and 19 per cent "no," while 13 per cent stated that the service was fair. Among 120 University of California — Experiment Station patrons of private shippers (31 answers) 51 per cent answered "yes," and 39 per cent "no" and 10 per cent reported the service as fair. One of the most important reasons for sending out the question- naire to growers was to ascertain the sentiment of the community regarding the type of marketing agency best suited to local needs. As shown in table 91, 59 per cent of the replies recommended one large cooperative, 25 per cent suggested a federated type with several local units, and the remainder indicated satisfaction with existing conditions. Most of those who wanted one large cooperative listed a federated type as second choice, and vice versa. TABLE 91 Growers ' Opinions of the Type of Marketing Agency Best Suited to Marketing Needs of the Gravenstein Apple Industry Type of agency Number of replies Per cent 111 47 5 11 14 59 25 3 Present situation 6 7 Total 188 100 GROWERS' OPINIONS AS TO TYPE OF MARKETING AGENCY BEST SUITED FOR GRAVENSTEIN APPLE INDUSTRY Per cent of replies qo too One \arqe coop. 64 Federated coop. 27 Several orqariizahon$6 Clearing house 3 Fig. 11. — Growers clearly favored one large cooperative. (Based on table 91.) WATSONVILLE DISTRICT In the Watsonville area there are two types of growers, (1) those who pack their own crop and (2) those who sell to or through packers and shippers. In the survey of shippers' operations and practices, a view of the grower-packer problem was obtained, but to gain an idea of the financial condition of the smaller growers who sell their crop to the local packer, and to learn their attitude toward local condi- Bul. 501] Marketing California Apples 121 tions and current market facilities, required personal interviews. Hence the sample was smaller than in the Sebastopol area. Of those interviewed approximately 75 per cent were owners while the balance were either tenants or managers. In the Sebastopol region practically all apples are sold on a con- signment basis to independent packers or to cooperative marketing organizations. Methods of sale are, therefore, fairly uniform and growers' returns depend upon general market conditions or upon the particular market to which the crop is sent. Only four growers reported packing and selling their own product. In contrast to the Sebastopol situation, there are approximately one hundred different growers in the Watsonville area who pack and sell their own crop. However, the smaller growers contract with the grower-packer under various types of agreements. (See page 109.) The question was asked : " Do you sell your crop in advance of the marketing season in order to get money to carry on production opera- tions?" To this 70 per cent replied that they did not, and 30 per cent that they did or sometimes did. From these replies it is impos- sible to conclude just what percentage of growers do actually obtain credit from buyers to whom they sell, but evidently a gcod many do. In answer to the question, "Why do you sell before the shipping season if it isn't to get credit?" some replied that it was customary to sell before the shipping season began, that it was the best practice to sell this way, or that they wanted to know definitely what their crop would bring. Market Agency Affiliations and Attitude Toward Service Ren- dered. — Fifty per cent of the growers interviewed sold their crop to independent packers, 7 per cent sold through local cooperatives and 2 per cent sold through commission men. Twenty per cent reported selling through channels other than those enumerated while 2 per cent used a combination of all the agencies listed. Seventy per cent of the growers stated that they had dealt with more than one agency in the past five years. Approximately 30 per cent stated that the service of the agency they were using was satis- factory or fairly satisfactory, another third that they were not satis- fied, while the remainder did not reply. Seventy-eight per cent stated that they were not satisfied with existing marketing facilities ; 7 per cent said they were satisfied, and 16 per cent did not answer. The complaints of those who were dissatisfied were, in order of the num- ber of times mentioned : 122 University op California — Experiment Station (1) "Poor distribution of the product because of disorganized condition of shippers." (2) "Too much price variation and too much difference between the prices paid by the consumer and those paid to the producer." (3) "Returns obtained were low." (4) "Improper and undependable grading of fruit." (5) "Storage facilities poor." Time of Sale. — Eight per cent of the growers stated that they had sold in 1928 before the shipping season began while nearly 35 per cent reported selling in advance of the shipping season in 1929. This brings out the fact that in a short crop year, as in 1929, buyers com- pete for volume early in the season, while in years of large crops, as in 1928, they can easily obtain the volume they care to handle. In years of heavy production the market is, then, entirely a buyers' market; but when the crop is small it is a growers' market. Methods of Sale. — The question was asked, "Is it more desirable to sell your crop for a lump sum than to sell by packed grades ? ' ' The answers were about equally divided. Some thought, that it was advis- able to pack. Others figured selling for a. lump sum avoided risks of crop damage in packing and transit and avoided loss due to price fluctuation. The growers were asked if they had had any unsatisfac- tory results from contracting the sale of their crop, about one-third failed to reply, one-third said they had, and one-third that they had not had any unsatisfactory results from contracting. The last question was, "What suggestions can you make for im- proving present marketing conditions?" Some of the suggestions follow : "Centralize distribution and divert surplus into by-products." "Centralize assembling and distribution." ' ' Cooperative marketing and more storage facilities. ' ' "Need a nation-wide marketing agency." "•Daily reports on apple prices similar to egg quotations would help." "Better organization, and more cooperation." "Ship only first-class fruit and standardize the packs." "Cheaper credit would help." ' ' Sell on the trees at a flat price for a period of from 3 to 8 years. ' ' Bul. 501] Marketing California Apples 123 APPLE STORAGE The storage operations of various factors in the trade have been discussed above (pages 87 to 91 and 103 to 113). Here consideration is given such phases of apple storage as the quantities stored, the movement in and out of storage, the costs of storage, and the difficul- ties encountered. Quantities of Apples Stored. — Cold-storage space in the United States increased from 200,000,000 cubic feet in 1914 to more than TABLE 92 Apple Ccld-Storage Holdings in the United States, 1915-1928 (Thousands of Bushels)* Crop Year Oct. 1 Nov. 1 Dec. 1 Jan. 1 Feb. 1 March 1 Apr. 1 May 1 June 1 1915-16 11,067 16,323 14,439 12,708 9,726 5,952 3,105 912 1916-17 9,780 13,476 12,396 10,155 7,326 4,635 2,424 795 1917-18 9,888 14,067 13,797 11,871 8,490 5,349 2,034 477 1918-19 11,256 14,784 12,882 9,315 5,316 2,868 1,140 375 1919-20 2,913 13,569 17,769 16,587 13,572 9,486 5,097 2,418 639 1920-21 1,632 13,425 20,361 19,158 15,315 10,950 6,630 3,357 1,335 1921-22 2,376 10,929 17,217 16,287 12,939 9,270 5,790 2,832 942 1922-23 4,356 16,563 20,229 19,443 16,128 11,631 6,942 3,210 831 1923-24 2,781 20,742 30,297 29,088 23,529 17,895 11,613 6,240 2,304 1924-25 2,460 17,274 22,419 20,019 15,699 11,283 6,864 3,429 1,197 1925-26 4,266 22,467 28,194 25,536 21,153 15,900 9,942 4,954 1,875 1926-27 3,612 21,321 31,458 28,068 21,905 15,342 9,423 4,794 1,605 1927-28 3,114 17,976 23,493 20,535 15,923 11,097 7,363 4,134 1,808 1928-29 4,893 26,199 31,177 27,156 20,577 13,524 8,154 3,771 1,173 *Sources: 1915-1927. Rauchenstein, Emil. Economic aspects of the apple industry. California Agr. Exp. Sta. Bul. 445: 30, 1927. 1927-28 from U. S. Dept. Agr. Yearbook 1S28: 767. 1929 and U. S. and Dept. Agr. Bur. Agr. Econ. monthly issues of Crops and Markets. 600,000,000 cubic feet in 1925. 35 The quantity of apples placed in cold storage each season has also increased. In 1915 the December 1 holdings were 16,323,000 bushels compared with 31,177,000 bushels on the same date in 1928. The peak of cold storage holdings of apples in the United States has usually been reached on the first of December. The figures for this month show that total holdings have reached the 31,000,000 bushel mark in the 1923 and 1926 seasons, whereas prior to that time 20,000,000 bushels was the record. 35 McKay, A. W., et al. Marketing fruits and vegetables. U. S. Dept. Agr. Yearbook 1925:680. 1926. 124 University of California — Experiment Station In California, the peak of storage holdings is reached slightly earlier in the year. A total of 2,600,000 bushels were reported on November 15, 1928. 36 (See table 93 and Figure 12.) The total quantity placed in cold storage varies from year to year with the size of the crop and particularly with the size of the com- mercial crop. TABLE 93 Cold Storage Holdings of Apples iist California; in a House in Watsonville, California; and in a House in San Francisco, California, in Boxes, 1927 and 1928 Seasons* California holdings Watsonville house San Francisco house Date 1927 1928 1927 1928 1927 1928 Sept. 15 136,259 490,986 1,058,157 1,733,655 2,106,632 2,186,020 2,065,705 1,848,129 1,637,038 1,454,120 1,229,513 990,779 861,585 685,330 528,418 398,061 276,740 172,451 100,733 64,360 43,031 30,650 30,694 74,363 388 176 958,809 1,753,943 2,368,197 2,600,251 2,546,815 2,447,690 2,269,244 2,190,969 1,913,108 1,625,790 1,384,014 1,130,680 886,338 673,521 493,231 346,009 201,669 106,867 66,812 35,048 20,288 26,889 26,024 29,987 147,407 257,747 286,202 294,919 293,328 281,136 258,451 238,424 199,282 166,334 137,526 120,191 97,160 77,030 55,366 36,554 15,604 3,679 18 13 7 7 11,491 78,835 185,659 296,553 393,495 395,888 406,900 396,038 374,869 345,858 294,557 230,561 175,973 130,076 81,938 58,556 44,015 25,063 10,069 3,339 2,219 423 122 100 612 3,059 26,177 94,413 173,872 217,362 221,809 213,984 202,864 183,964 161,352 135,123 117,676 99,596 80,095 63,508 50,787 38,155 27,892 17,248 12,293 8,390 5,669 4,782 3,893 8,378 Sept. 30 47,311 Oct. 15 123,624 Oct. 30 Nov. 15 192,503 225,675 Nov. 30 223,114 Dec. 15 209,355 Dec. 30 188,717 Jan. 15 170,609 Jan. 30 149,632 Feb. 15 123,434 Feb. 28 106,883 Mar. 15 89,930 Mar. 30 75,027 Apr. 15 Apr. 30 61,315 45,918 May 15 34,383 May 30 23,386 June 15 June 30 July 15 July 30 13,296 8,503 4,981 3,445 Aug. 15 Aug. 30... 2,490 2,129 *Data from semi-monthly reports of cold storage. California. Courtesy O. W. Holmes. U. S. Dept. Agr., Bur. Agr. Econ. San Francisco, Peak In and Out Movements. — The peaks of 'in' and 'out' move- ments vary from year to year with the date of maturity of the crop and with market conditions. In 1929 the movement into storage was delayed because of late maturity. In the Watsonville district one cold storage plant reported the peak 'in' movement as follows: 1925-26 season, October 6 to 15; 1926-27 season, September 15 to 21 ; 1927-28 season, September 26 to October 4 ; and 1928-29 season, October 7 to 15. se Market News Service Reports, IJ. S. Dept. Agr. Bur. Agr. Econ. San Fran- cisco, California. Bul. 501] Marketing California Apples 125 An example of the effect of market conditions on the 'out' move- ment was observed in the short crop year of 1921. The crop went into storage at high prices but on January 1, 1922, storage stocks were above the five-year average fcr the period from 1917 to 1921. 37 Average prices in January, 1922, at New York were $3.01 a box as compared with $3.36 a box in October, 1921. Thus market condi- tions delayed the 'out' movement. COLD-STORAGE HOLDINGS OF APPLES IN CALIFORNIA; 1927 AND 1928 SEASONS 2325 2,450 2,100 - x 1,750 o a X 1.400 (A •n Z 1,050 o j TOO 350 • *-,.. /■*" '1928 Season / %/ / \ / ■V 1 > / / 1 / \ \ \ \ j 1 f ^ > i \ _ ' <\ \ 1 f I 192 7 Sqgh lonv k It \ 1 1 . \ -1 1 \ \ II ^^ V II N> if x> s ^^ I i 1 1 | 1 1 i 1 15 30 15 30 15 30 15 30 15 30 15 30 Sep*. Oct. Nov. Dec. Jan. FeA>. 15 30 15 30 15 30 15 30 15 30 15 30 Mor, Apr. Moq June Jul** A03- Fig. 12. — Apples move into storage rapidly from the beginning of October through the month of November when storage holdings reach their peak, and move out gradually after the middle of December. (Data from table 93.) Some idea of the peak movements may be gained from reports on total holdings. An increase in total holdings indicates an 'in' move- ment and vice versa. From table 94 it is evident that peak ' in ' move- ments in California occur in October, since holdings increase about 1,000,000 boxes at that time. On the other hand, there is no well- defined peak for the 'out' movement. Total California holdings decrease at about the rate of 100,000 boxes each 15 days from November 30 to June 15. The peak movements in and out of storage are, however, different for the several varieties of apples. Table 94 indicates the periods of storage placements and withdrawals. 3' U. S. Dept. Agr. Yearbook 1925:865, 867. tables 179-180. 1926. 126 University of California — Experiment Station Managers of cold-storage plants reported that the length of time that apples were held by those who placed them in storage depended to some extent on the district in which the fruit was produced. For example, the Newtown produced in the Soleclad and Greenfield dis- tricts in Monterey County, California, was known as a long-keeper. Likewise, the Winesap and Rome Beauty varieties from the Big Pine region in southern California were reported to store well. Difficulties Encountered in Storage. — The several varieties of apples present different problems in storage. With the Gravenstein the principal difficulty was reported to be the development of bitter- pit. Most storage operators stated that their experience with this variety was limited. However, outside of the development of bitter- TABLE 94 Peak in and Out Movements of Apples in Storage in California Houses by Varieties* Variety Peak in movement Peak out movement November and December. October and November March to May. October February and March. February and March. *As reported by cold storage plant managers in California. pit in some lots they stated that the Gravenstein kept satisfactorily for short periods. Usually three weeks was the maximum length of storage. The Bellflower was said to develop bitter-pit or "fungus" 38 as the trade termed it, to a marked degree in some instances. In Los Angeles, where the bulk of California Bellflowers are marketed, the risk of bitter-pit developed was said to be the cause of a decline in specu- lative operations in this variety by wholesale dealers. (It was noted on page 113 that Watsonville shippers reported that the wholesale trade had forced them to store.) A further trouble with Bellflowers was stated to be rapid ripening. This was held to be a factor inherent in the variety. With the Newtown, internal browning caused the greatest diffi- culty, particularly when it was stored for a long period. Storage temperatures were reported to affect the development of this disease. 88 This term is decidedly inappropriate, in asmuch as a causal organism has hot been isolated, bitter-pit being held to be a physiological trouble. Bul. 501] Marketing California Apples 127 Plant managers reported less difficulty at 36° Fahrenheit than at lower temperatures. Scald was stated to add to storage difficulties with Newtowns, but was not reported troublesome except where diffi- culties were experienced with ventilation. Other varieties of apples were said to keep satisfactorily in stor- age. Only one manager reported difficulty and that was with the Jonathan. He had experienced some trouble with 'soft scald.' TABLE 95 Cold Storage Bates on Apples, per Standard Apple Box' City Quantity Rate for first month Rate succeeding months per month Rate for season 300 boxes or more Cents 9 10 11 Cents 5 6 7 Cents 25 50 to 300 boxes 30 35 10 12 15 7 9 11 50 to 300 boxes 23 10 12 15 6 8 10 50 to 300 boxes 23 8 10 6 8 Detroit, Chicago, Cleveland, Albany Carload 9 6 25 *California Railroad Commission No. 41, cold storage warehouse tariff 6-A, p. 6 Item 120. Sept. 18, 1929 ; and statements of cold storage plant managers. tWatsonville houses have a special rate on apples stored loose in boxes. This is 8 cents for the first month, 5.4 cents for each succeeding month, and 20 cents for the season. Jin case shipment goes to export, San Francisco houses assumed the cartage charge. Financing by Storage Companies. — None of the California storage companies studied made a practice of financing the person who placed apples in storage other than advancing freight and handling charges. Only one house reported carrying the storage charge. In New York, one large storage company financed up to 50 per cent of the market value of the apples. In Philadelphia, one house reported financing up to 85 per cent of market value. Storage companies in Cleveland, Ohio ; Detroit, Michigan ; and Albany, New York, financed and adver- tised this fact on their rate cards. Storage Space Available for Apples. — The amount of space avail- able for apples in the various plants that were visited in California 128 University of California — Experiment Station varied from 350,000 cubic feet to 3,250,000 cubic feet, but two had 3,000,000 or more. In New York, the capacity of one of the largest houses was reported as 8,500,000 cubic feet. While all of this space might be available for apples, the various houses, except in the Wat- sonville district, also stored other products in this space. TABLE 96 Cost of Constructing and Equipping a 205,000 Box Cold Storage Plant Item Cost $ 7,273.50 2,117 00 Spur track 1,546 95 1,823 54 Foundation and floors 16, 000 00 7,000 00 Balance of building 88,975 00 900 00 Coils, fans and bunkers 20,958.00 21,042 00 Warehouse equipment 1,789.55 562 25 Construction bond 2,323 12 6,982.65 324 82 Total. . $179,618.48 Storage Rates. — Storage charges in California are regulated by the Railroad Commission. The rates effective in 1929 are given in table 95. Cooperative cold storage houses are permitted to store for their members at cost. One such house reported an average cost of 9 cents per box per season. This house has operated ten years. Another house reported its cost as 8.13 cents per box per season. Cost of Construction. — A matter of considerable interest to apple growers is the cost of constructing and equipping a cold storage plant. Through the courtesy of Mr. M. L. Cox, Manager of the Apple Grow- ers Cold Storage plant at Watsonville, California, the data in table 96 are available. This house has a capacity of approximately 205,000 boxes. Bul. 501] Marketing California Apples 129 APPLE SUPPLIES AND WHOLESALE PRICES Trends in Apple Production. — Statistics of apple production are usually classified as (1) total United States production, (2) commer- cial production, (3) production in the barreled apple region, and (4) production in the boxed apple region. Estimates of commercial pro- duction prior to 1916 are not available, but complete data on the other three phases of production are furnished by the United States Department of Agriculture for a considerable period. In table 97 the data for total United States, commercial, barreled apple, and boxed apple production since 1890 and 1916 are presented. The trends of commercial production and production in the boxed apple regions are decidedly upward. On the other hand, the trend of production in the barreled apple region is downward. The trend in total United States production is slightly upward if one considers the whole period since 1890, but if one considers only the period 1909 to 1928 the trend for total United States production is slightly downward. Apple Prices and Production. — Prices of California apples are to a large extent influenced by total United States production. The position of supplies, the rate of movement to market, and many other factors also exert an influence. However, growers too often blame the marketing machinery or the management of marketing enterprises for unsatisfactory prices when the principal trouble has been burden- some supplies. In table 98 the relation between apple production and prices is pre- sented. Prices have been converted into purchasing power by divid- ing actual prices by the all-commodity index to make allowance for the changing value of the dollar. It is well known that prices of most things are higher now than they were during the period 1910 to 1914. If all prices went up at the same rate, a bushel of apples would buy as many goods at one time as at another. But they do not. Hence prices over a long period cannot be compared without making allow- ance for changes in the buying power of the dollar. This has been done in column 4, table 98. A comparison of the items year by year in column 1 (total United States production) and column 4 (purchasing power, or adjusted price) shows that price is influenced to a great extent by total pro- duction. This is particularly true in years of exceptionally heavy or exceptionally light production. 130 University of California — Experiment Station TABLE 97 Apple Production in United States in Boxed Apple Region, Barreled Apple Region, and Commercial Production, 1890-1928 Total* U. S. production Barreled apple production Boxed apple production Commercial production Crop year Thousands of bushels Thousands of bushels Thousands of bushels Thousands of bushels 1 2 3 4 1890 80,142 198,907 120,536 114,773 134,648 219,600 232,600 163,728 118,061 175,398 205,930 135,500 212,330 195,680 233,630 136,220 216,720 119,560 148,940 145,412 141,640 214,020 235,220 145,410 253,200 230,011 193,905 166,749 169,625 142,086 223,677 99,002 202,702 202,842 171,725 172,389 246,524 123,693 184,920 75,876 193,584 116,184 108,741 128,628 212,565 227,664 154,254 109,134 169,425 196,587 126,555 201,030 184,239 220,656 124,752 202,233 107,631 134,700 130,863 123,252 198,147 210,219 124,929 226,197 208,569 176,220 126,597 137,295 91,539 183,315 46,448 152,028 138,999 126,741 119,595 183,975 76,050 121,998 3,966 5,322 4,353 6,033 6,021 7,035 4,935 9,474 8,928 5,973 9,342 8,946 11,301 11,442 12,975 8,469 14,487 11,928 14,241 15,258 18,287 15,873 25,002 20,481 27,003 21,441 28,362 40,152 32,331 50,547 40,368 52,515 50,676 63,843 44,505 52,794 62,550 47,406 63,022 1891 1892 1893 1894 1895 1896 1897 1898...... i 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 80,241 67,023 74,229 78,447 1917 1918 1919 1920 101 715 1921 64,671 1922 95,835 1923 107,808 84,039 99,738 1924 1925 1926 117,357 78,051 105,924 1927 1928 *Table 128, U. S. Dept. Agr. Yearbook 1928: 764, 1929. tThe Apple Situation in New York. Cornell Ext. Bui. 172: 112-114. 1928; and U. S. Dept. Agr. Bur. Agr. Econ. Crops and Markets 5: (12) 445. 1928. Same as JU. S. Dept. Agr. Yearbook 1920: 653, U. S. Dept. Agr. Yearbook 1923: 732 and 1U. S. Dept. Agr. Yearbook 1928: 765. Bul. 501] Marketing California Apples 131 TABLE 98 Total Apple Production in the United States, New York Prices, and Purchasing Power Crop year 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 Total production* thousands of bushels 80,142 198,907 120,536 114,773 134,648 219,600 232,600 163,728 118,061 175,397 205,930 135,500 212,330 195,680 233,630 136,220 216,720 119,560 148,940 145,412 141,640 214,020 235,220 145,410 253,200 230,011 193,905 166,749 169,625 142,086 223,677 99,002 202,702 202,842 171,725 172,389 246,524 123,693 184,920 Price per bushel, t average Sept. to May $1.25 0.52 83 1.18 0.94 0.79 56 1.10 1.22 0.90 0.98 1 50 0.73 0.95 79 1.32 1.10 1.11 1 32 1.22 1 45 1.07 0.98 1.43 0.97 1 00 1.58 1.70 2.53 2.51 1.89 2.61 1 71 1.55 2 24 1.90 1 37 2.55 2.11 All-commodity index, % average Sept. to May, 1910-1914 base 93 95 104 96 98 102 101 100 113 157 189 204 232 180 145 159 154 159 158 150 150 152 Purchasing power per bushel, 5 Sept. to May; 1910-1914 base $149 0.68 1 04 1.62 1.33 1.13 83 1 54 1.70 1.10 1 21 1 80 0.82 1.09 .89 1.61 1.18 1.19 1.39 1 17 1.51 1.09 0.96 1 41 97 0.89 1.00 90 1.24 1.08 1.05 1.80 1 07 1 01 1 41 1.20 0.98 1.70 1.39 *U. S. Dept. Agr. Yearbook 1928, 764, Table 128. ■(•Calculated by the authors from figures in Tables 201 and 202 U. S. Dept .Agr. Yearbook 1923: 739: table 128 U. S. Dept. Agr. Yearbook 1927: 839; and data subsequent to 1927 furnished by Dr. O. C. Stine, U. S. Dept. Agr. Bur. Agr. Econ. JAs reported by Warren and Pearson in "Farm Economics," monthly publication of Cornell Uni- versity. ICalculated by dividing the price per bushel in column 2 by all-commodity index in column 3. WHOLESALE APPLE PRICES AT SAN FRANCISCO, JULY TO NOVEMBER, 1926 AND 1927 *3.CO 2.60 - J ulcj to 1 1 1 November 1926 — - \ *x4ra Foncij 2.60 ZAO Red Jur i-^1 r_ DelU .ious " ^. >>- i^ZZO J) zoo CaliF. .>_/ -..._.. k A \ f r«. Spifx«nb«r q a 't. ra F v 1- 1.80 — "\ "\ ^Gra v«ma f ^Jonoikan h ► E r * ? i "1 1 t 1 j l-CO L20 4em _As< rqch an^ 1 -v J \ own >/ \_1 B«u£l ower r-^J ■ tVrn^r j I * ' L i L i I i i — -n^H 16 23 30 6 15 20 27 July Auqust 10 17 ZA I 8 16 25 I 8 1625 September October November r A.ZOt -4.00 3.80 3-60 3/40 320 July to November 1927 .c; Om Delicious _ Extra fajgM ' *«r 1^29 .Or« . Oeli C iaus ., Extra Faneu, 1 120 ~ Or. . Spi *e/.fa er-q- > < 2 SO .0 J -J Gr-o> gn S Cir._- T~ l*\r* Fane y tt a. „£.40 L = 2.20 ZOO 1.60 1.60 _ Ait roch »n S" L. \ I I 1 ;- >+©w /Vint* F r Be r*ar*e t 1 n £j ;**=J r "-""\ 6el "1 flowi •"I "J rV^T— t »~Tv-sN\h > 10 17 23 30 6 13 20 27 4 12 19 26 3 10 17 24 31 7 15 22 Julu, August September October November Fig. 14.— The San Francisco apple market is relatively stable; prices for given varieties remain unchanged for considerable periods. When prices change the prices of all varieties tend to move in the same general direction. (See also fig. 13.) (Data from Daily Market News Service Reports, Bur. Agr. Econ. San Francesco, Calif.) 134 University of California — Experiment Station Seasonal Apple Prices. — It has been shown above that the general level of apple prices is influenced to a large extent by total supplies. Within a given season, however, apple prices fluctuate considerably as a result of a number of factors. Hence the actual price movement is never exactly alike in any two seasons. However, there is a ten- dency for prices to advance from September to May and then to decline from May to August. Wholesale Apple Prices at San Francisco. — San Francisco is an important market for a considerable quantity of California apples. The prices prevailing in this market are, therefore, of interest and importance to California apple growers. Figures 13 and 14 present a comparison of wholesale apple prices at San Francisco by varieties for the period from early July to late November for the years 1926 to 1929. From these figures, observa- tions as to the relative selling prices of varieties of apples may be made. It is at once apparent that Astraehans sell at a discount compared with Gravensteins. On the other hand Ked Junes bring a consider- able premium. Again it is evident that the San Francisco market pays a premium for Newtowns as compared with Bellflowers. Further- more, it will be seen that the Delicious is the highest in price in most cases, being equalled in price only in November, 1929, by the Spitzen- burg. However, the Spitzenburg is a favorite in the San Francisco market second only to the Delicious in most instances. The position of the Winter Banana is interesting. It sells at a premium compared with Newtowns and Bellflowers and in 1928 sold for more than the Spitzenburg. This indicates that the San Francisco Market does not discriminate against yellow varieties. The Jonathan occupies a middle position between the Spitzenburg and the Newtown. A few points worthy of note brought out by figures 13 and 14 in addition to the relative prices for various varieties are: (1) The San Francisco market is a relatively stable market ; prices for given varie- ties remain unchanged for considerable periods; (2) Gravensteins sell to advantage in this market even when in competition with late varieties; (3) prices of all varieties tend to move in the same general direction. Wholesale Prices and Supplies at Los Angeles. — The Los Angeles market is the most important California market for apples from the Watsonville district. 39 Hence, prices in this market are of more than 39 Beasley, C. H. Production, standardization and marketing of California apples. California Dept. Agr. Mo. Bui. 16(10) :512, 1921. Bul. 501] Marketing California Apples 135 passing- interest to growers and shippers in this district. Sebastopol growers are also interested in the Los Angeles market owing to the fact that considerable quantities of Gravensteins are sold there. An attempt to compare relative prices for various varieties in the Los Angeles market for a period of years proved futile because quota- tions were not on a comparable basis. California apples are sold loose in unlidded boxes, Idaho apples are sold in baskets, while North- WHOLESALE APPLE PRICES AND TRACK HOLDINGS AT LOS ANGELES JULY TO NOVEMBER, 1929 180 5 12 19 26 2 9 16 23 30 9 16 23 30 7 14 21 23 4 12 19 26 O July August September October November Fig-. 15. — The periods when track holdings are increasing are usually periods of declining prices on the Los Angeles market. (Data from Daily Market News Service Reports, Bur. Agr. Econ., Los Angeles, Calif.) west apples are sold packed and wrapped. Furthermore grades were not readily comparable. The bulk of California apples were of the 1 Combination' grade, Idaho apples were principally of the 'Fancy' grade, 40 while Northwest apples were largely of the 'extra fancy' grade. However, figure 15, constructed from data available for the 1929 season, gives some idea of the relative position of the various varieties of apples on the Los Angeles market. Here it will be noted that Jonathans and Bellflowers are preferred varieties. The Bell- flower, it will be seen, sells at a premium over the Newtown. Thus there is a marked contrast in the relative position of these two varie- 40 The Idaho grade was called < Combination ' but corresponded to the Cali- fornia ' Fancy ' grade. 136 University of California — Experiment Station o g <1 & O o □Q g EH to g p < O 5 Ph w a Ph S to a a> to * o (1 CO boxes 9,720 1,889 9,625 0) a Ph doll ITS per box 1.65 2.05 1.88 CO O C (N CO -u boxes 26,325 3,075 14,812 29,175 0> O "E Ph dollars per box 1.53 2.87 2.53 2.37 co >> 73 o 03 ll boxes 17,010 8,860 11,615 40,327 37,065 0) o 'E Ah dollars per box 1.89 3.06 2.84 2.49 2.84 +3 05 S3 bD < >> c3 o CO G>^ OOcOOiOOCNO S r^onr^.-HcoCTj'-i^H h ooo©coa>a>f^t^- 2 b-" r~* co csT >o aT rtT "i" ^ H N N H M 00 M CD _o 'E Co H hSioiom^ooMuso) ^^^-H-HOOl^— (1-H03CM O cocsi> c3 o CN J. CO u"5 O W5 UO O i— 1 1(5 S OOOi'OlOCDCOcNICO £ COOOCNr-IOOCOOOO 2 ■* « m o t)i io oo co *° CN| CO r-C CO i— 1 •* CM 'E Ph °*COHNlOO!U5MN O »NNCNMHP3rtCC CO >s 03 O 05 boxes 430 18,270 17,575 12,800 62,260 7,290 60,610 17,040 0) ■g Ph co H ^'Ot^OSOOOcOT-HOOO "o SNHNMH^HTji -*3 ft 1-8 05 >> c3 T3 O t-, CO boxes 18,200 9,615 6,040 69,450 35,729 o "C Ph <5 2 : r^ »o c» o> : O ,° "° : o N co ffl .; O "o ca : N N N h : CN ^ ft 05 O 73 a S3 +j or* boxes 14,600 3,304 CD _o "E Ph dollars per box 2.68 2.61 co >> 53 73 O co ca :::::: H :::::: O :::::: iO ::::•: 0) s 'E Ph eo H : : • j : 'o & : : I I : : •« a i ; ; ! ; ; u 1* N M Ml ifl (O N OC N N N IN IN N f) Q3 Oi Oi Oi Oi 03 C7 OS CN Bul. 501] Marketing California Apples 137 ties on the Los Angeles market as compared with the San Francisco market. (See page 54.) The influence of market supplies on prices at Los Angeles is also illustrated in figure 15. The periods of heavy track holdings are usually periods of declining prices. Los Angeles has been called a 'pocket' market (page 73), which, no doubt, accounts for the fact that track holdings have such an important influence on prices. Once supplies are on the Los Angeles market they must be sold or put into storage for they cannot be advantageously diverted to other markets. It is important to growers and shippers, therefore, that shipments to Los Angeles should not be excessive at any one time. Watsonville shippers already realize this and it is the aim of the Watsonville Apple Packers and Growers Association to regulate the flow of apples to the market. (See page 115. ) 41 Auction Prices for California Gravensteins and Supplies of These in New York. — The New York market is an important one for Cali- fornia Gravensteins. As was shown in the survey of New York whole- salers' and jobbers' operations (page 12) the California Gravenstein was considered as the only early eating apple reaching that market. It was also brought out in the survey of Sebastopol shippers (page 103) that most shippers sold some of their pack on the New York market. Practically all of the California Gravensteins sold in New York in carloads are sold on the New York auction. This fact has led several to believe that there might be an opportunity to realize higher prices for Gravenstein apples on the New York market if the quantity offered on the New York auction were regulated by shippers. In order to obtain information on this point, data covering prices and quantities on the New York auction market were collected. These are presented in table 99 and figure 16. It is evident from figure 16 that in some years, as in 1926 and 1928, there is considerable relation between the quantity sold at auc- tion and prices but that in other years, as in 1923 and 1929, there is little or no relation between the two. Again, in some years prices seem to be influenced by California supplies during a part of the season, but are independent of such supplies during the remainder of the season. 41 Certain other studies have also shown the importance of carlots on track as a price influence. See Rauchenstein, E. Factors affecting the price of water- melons at Los Angeles. Hilgardia 3:310. 1928; and Hedden, W. P. Studies of market supply, price, and sales as a basis for control of distribution of perishables. Jour. Farm Econ. 8(2) :213-226. 1926. 138 University of California — Experiment Station GRAVENSTEIN PKICES AND QUANTITIES SOLD AT AUCTION IN NEW- YORK BY TEN-DAY PERIODS, 1922-1929 4.00 Jul^ Auqust September By Ten Dag Periods Zr*A 3rd |s* 2nd 3rd 1st 2r»d 3rd July August September By Ten Day Periods 3rd 1st 2nd 3rd Is* 2nd 3rd J I L Bone*-, A 4-/ \ ' V 1923 -46,000 6QOOO 36.000 - 24,000 12,000 z 1925 - 3&000 "° 1927 J I I L 4dOOO X) 3€*000 a 24,000 E 3 z 2r*d 3rd 1st 2nd 3rd let 2r,d 3rd Bq Ten Daq Periods Julq Auqust September 1929 Price -^ _ Boxes'-^ s s / / / / \ \ \ \ \ ! [ I 1 1 1 12,000 48,000 Q) t 36/300 Si ZA.OQO ». 12,000 5 Z 3rd \%\ 2nd 3rd Is* 2nd 3rd By Ten Datj Periods July Auqust September Fig. 16. — Prices of Gravensteins on the New York market are influenced not only by quantities of Gravensteins sold but by other factors as well. (Based on table 99.) Bul. 501] Marketing California Apples 139 The general lack of correlation between quantity sold and prices is accounted for by the fact that the California Gravenstein is on the market at a time of the year when several soft fruits are available and by the fact that apples from other sources, such as cold-storage apples early in the season, local supplies during the season, and apples from the Northwest late in the Gravenstein season, influence prices for Gravensteins. Controlling shipments of Gravensteins to the New York auction market offers little opportunity, therefore, of influencing prices to any marked extent. GRAVENSTEIN PRICES, NEW YORK AUCTION, JULY TO SEPTEMBER, 1928, BY BRANDS. AVERAGE OF SIZES, 113 'S TO 150 'S - \ — t V 4 / , i "\ / / A / N \ ^.^ t A \ 1/ \ '••^1 ' ^ ^ fl i ^ \* '^. k£5^ ; V w w - * & \\ / v -vS 4 Av Br Br eraqe and No and No i — - i — Br Br and No 3 and No 4 m— ,..,. i ■- *1 3.O0 zeo &2O0 i.eo 1.60 1.40 \2X> LS 25 27 IO 14 16 20 22 ZA 28 31 August H* 1 II 13 17 September Fig. 17. — Prices obtained at the New York auctions for given brands are not consistent. Only one brand stood out consistently as distinctly superior. (Data from daily reports on deciduous fruits, New York Daily Fruit Reporter. Courtesy Stewart Fruit Co., San Francisco, Calif.) It will also be noted from figure 16 that in most years prices dur- ing the early part of the season are the highest. This gives evidence of the fact that the Gravenstein deal is a quick one because during the early part of the season the quality is not the best. The outstand- ing exception to the high-price situation early in the season was the year 1925. This was, however, a year of light production for the Cali- fornia Gravenstein, supplies being sold before apples from the North- west were available. The tendency for the New York prices to be high early in the season has induced shippers to send a part of their pack to New York at the earliest possible date. Some of these ship- ments have lacked color and maturity and this has no doubt been responsible to some extent for the general tendency for the New York prices to decline during the middle of the season. 140 University of California — Experiment Station Im o JO s CD Q. m In O O NNOM3W to CO t— 1--00 CM CM CN •*f CD CC OOCO its itSitS T3 O O O OONM CO COCO 00 O CM CM CM its CO CO CD CO CO CO l> O0 00 CM O its i-H CO o ^t* "5 J>^ 00 00 ItS i-l CO OS cocbi-^ >> w C 1 co oo : \ its coco co : cboo 00 00 MOWOOOMCN^lOOJlNa TtOfltOXXXXCSOOO-HNN "5i-H I cboo : 00 CM 1 be 3 <3 o o O CM O iO CO CO CO CO t^ t~- 00 00 I : OCM CO CO Its CD 00 00 CM OCO CO "5 00 T3 o o O CM OCO CO cor-oooo CM CM its its CO CO CO CO t> t> 00 00 OOtOMNNN its its its CO CO CO 03 iflO : i : rj<»b : o a ft CM->*0 t^OCM its o co co co its oo O »-h o> a> b-OOOOOOOOOTcbocMCMCM j j 0000 : CM 05 bfl O O CM CM OCO «5 CO cob- 00 Oco moo OCO Its its its CO oo o o OOOU5MM : : eo t>» l>« l>- oo oo : CM CM CM ItS Its CO CO CO O j 1 j 1 (obcONNXXXO ::::■::::: 1 : ! 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[ t^t— 000000O : McOcOcOb-OOOOOOOOOOOOOOOOOOOOOOCM : co o o co its co co its o o COifliOONXXOOO i 00 its CO its CO Tt> i ft 1 i i i : : : : : i i [ i i 1 no co co i i : [ : : : \ : : : i 1 l>od>b CO its >, »-5 COO ceo : 1 hCO i : [ : { : : : i : :. [ : 1 -«jJibl> coo ; 00 O j T3 1 o o o co co o o ; 5 N0006XOO ': co co co O O O O o O O its i i : : :_ 000000OOOOOOOCM | | | | | { | | | : j CM CM COCO CO CO 00 00 CM CO O : COOOO [ c ioo CM"0 OlOJ^CO CM CM CO >b cb a (- c 1 ■M 1 I 1 1 'i X I I I 1 E t I 1 [ 1 ( 'I I 11 i 1 s Bul. 501] Marketing California Apples 141 o CO o o O o o 73 o c o ** 1 1 1 1 1 1 ! : 1 1 1 ! 1 1 "5 I 1 I 1 I 1 1 I 1 I 1 1 1 G r 83 CO CM u O O O o o ft, T3 o o o *""i:J!il!i:J:iJ **:!!':«!! j i : j !! j >> o G r* 3 ft, M 0) O o o o T3 O o O (M i j : : : i f : i : : .; f id : j : f f f , f j j j { : : CMC© : >> o G r* 3 ft. OS (-1 Xi o o O o O ftl OO : : : f : idid f j f i j f : T3 o o o oo ;;;;;;; >oiO ::::::: oo io o j f : f j f f : j f f eocoo|||||||||:| CO : : : 00 >> CO | | i CM U Cp £> o o o O O co I : i : : : : 1 i .; i I i I I I : : f : | oo : f 1 i f i f i I I i | : f : i i j : : f T3 O O "5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ! Ill ! 1 co co { : : i : i if i ! : : : : co co : : : : i i : | : : | | ■off; "* : 1 a M : : : • ■ i i : 00 :::::•: 1 O :::::::::: i :::;:: : f f f cm : j i : : : 1 : j : i : : i i : i j : : : ° 1 1 1 1 1 1 1 1 1 1 1 1 1 id i :: : :::{:{:: j if f ::::::::: f CM CO CO CO l>. 00 OOOO CO u > o G r 03 50 ::::::• : Tjl : f : : { f j eo> o G ft CM f f i f f f f f Tttto-Hioo : : : cocooooio : | | : | i | | | ■^o f coco : u ~ 00 00 00 00 | ; | | | | | | | | 1 NNOOONOIM : | NM-*>OiOtCN00 i : i f NOOtO CM id i« CO >> o G r 03 00 : 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 : 1 1 HNOooa N«0»hin(N : : : : : I ■«*< Tj< T-1 ^H CO CO 00 00 o CO eg a >> G '3 A O ° 10 L 0) Q. O 1 1 1 1 1 1 1 1 24 JULY 7 14 21 AUGUST Price and Percentage spreads J I I L 17 24 31 JULY 7 14 21 AUGUST Fig. 19. — The difference or spread between retail and wholesale prices may be expressed in cents per unit or in per cent of retail price. In the lower portion of the above figure both methods are used. 150 University of California — Experiment Station The percentage margin or spread must not, however, be confused with the margin or spread in cents per pound. In table 107 and figure 19, the spread is also shown in cents per pound. This varied from approximately 1% cents a pound to 6 cents a pound. It will be noted that the spread in cents per pound (price spread) declined as the Gravenstein season progressed. In Los Angeles, the fall in spreads accompanied the decline in both retail and wholesale prices. The same situation prevailed in the San Francisco and East Bay cities but the decline in wholesale prices was not as marked as in Los Angeles. There is a tendency for retailers to seek to maintain spreads at about a constant amount per sale. To the extent that they can do this the percentage of spread to retail price will rise as retail prices fall. This situation was found to exist especially in the Los Angeles market (table 107 and fig. 19). The tendency for the percentage price spread to rise as prices fall has been shown to prevail in the retailing of certain other perishable commodities. 46 ACKNOWLEDGMENTS The authors are indebted to representatives of various agencies for information upon which this bulletin is based. 0. W. Holmes, Marketing Specialist of the Bureau of Agricultural Economics, San Francisco, California, made available to the authors data on cold- storage holdings. Dr. 0. C. Stine of the same bureau at Washington, D. C, furnished data to complete price series. B. H. Critchfield, in charge of the California Division of Markets; E. C. Merritt, Manager of the Sebastopol Apple Growers Union; J. R. Durbin, Manager of the Gravenstein Apple Growers Cooperative Association, and H. A. Legault, of the Stewart Fruit Company gave the authors access to important price data. E. R. French of the Food Marketing Research Council; W. C. Hackleman, E. E. Conklin, K. S. Branch, G. R. Blunt, and W. H. Steinbauer, all of the Market News and Food Products Inspection Service, gave special assistance in the surveys of eastern markets. Farm advisors, horticultural commissioners, agricultural high school teachers, and secretaries of chambers of commerce, col- lected and reported retail prices. H. A. Weinland, Farm Advisor of Sonoma County, and H. L. Washburn, Farm Advisor of Santa Cruz County, assisted in making the survey of shippers' operations and practices. 46 See discussion by Erdman, II. E. American product markets, p. 367-374. D. C. Heath & Co., Chicago. 1920. Bul. 501] Marketing California Apples 151 Martin H. Blank, Assistant in Agricultural Economics; L. D. Mallory, Research Assistant in the Division of Agricultural Econom- ics, and A. H. Bledsoe, senior student in the College of Agriculture, assisted in the collection and analysis of the data. Mrs. Ruth Howe, Research Assistant in Agricultural Economics, assisted in the analysis of data collected in the consumer and retail price surveys. Credit is also due to C. H. Beasley of the State Department of Agriculture; Edwin W. Gaumnitz and George K. York of the Cali- fornia Division of Markets ; Wesley 0. Ash of the United States Department of Commerce ; Ralph H. Taylor of the Agricultural Leg- islative Committee of California ; W. P. Allewelt of the United States Department of Agriculture ; E. E. Everhart of the California Develop- ment Association, and E. J. Faul, Secretary of the Watsonville Apple Growers and Packers Association, for assistance in planning and conducting this study. To Homer Harris, Secretary of the Associated Produce Dealers and Brokers of Los Angeles; 0. W. Holmes, Marketing Specialist of the Bureau of Agricultural Economics at San Francisco, California, and F. W. Kroll of the firm of Jacobs, Malcolm, and Burtt of San Francisco, California, the authors wish to express their appreciation for the reading and criticism of the part of the manuscript covering the survey of wholesalers' and jobbers' operations and practices. 13m-12,'30