UNIVERSITY OF CALIFORNIA 
 
 COLLEGE OF AGRICULTURE 
 
 AGRICULTURAL EXPERIMENT STATION 
 
 BERKELEY, CALIFORNIA 
 
 CIRCULAR 338 
 January, 1936 
 
 SOME ECONOMIC ASPECTS OF 
 
 REGULATING SHIPMENTS OF 
 
 CALIFORNIA ORANGES 1 
 
 H. E. WELLMAN 2 
 
 INTRODUCTION 
 
 The purpose of this circular is to present in nontechnical form the re- 
 sults of an analysis of the major factors which have influenced the sea- 
 sonal average f.o.b. prices of California oranges and the application of 
 the results to the problem of estimating the effects upon returns to 
 growers of regulating the volume of orange shipments. 3 
 
 Two types of regulation will be considered : ( 1 ) limitation of the total 
 volume marketed for the season in years of large crops relative to the 
 buying power of the consumers; and (2) regulation of the flow of ship- 
 ments to market during the season even though the total supply avail- 
 able for the season is not excessive. 
 
 In the analysis summer oranges and winter oranges will be considered 
 separately. Summer oranges are those shipped during the six months 
 May through October, which, for California, consist mainly of Valen- 
 cias. Winter oranges are those shipped during the six months November 
 through April, which, for California, consist mainly of Washington 
 Navels. During the six months May through October, California nor- 
 mally contributes over 90 per cent of the United States shipments of 
 oranges, but during the six months November through April, this state 
 normally contributes only 50 to 55 per cent of the United States ship- 
 ments of oranges. 
 
 1 Paper No. 60, Giannini Foundation of Agricultural Economics. 
 
 2 Associate Agricultural Economist on the Giannini Foundation, and Associate 
 Agricultural Economist in the Experiment Station. 
 
 3 Details of the price analysis as well as a discussion of the methods employed 
 are omitted. 
 
 [1] 
 
2 University of California — Experiment Station 
 
 SUMMER ORANGES 
 
 Iii figure 1, shipments of California summer oranges are represented by 
 the solid line. It will be noted that there has been a pronounced upward 
 trend in shipments. This upward trend is likely to continue for some 
 years to come. Of the 135,500 acres of Valencia oranges in California in 
 1934, 16,700 acres, or 12 per cent, were nonbearing, while a considerable 
 proportion of the 118,800 acres in bearing had not yet reached the age 
 of full-bearing. 
 
 20 
 18 
 
 16 
 n 
 
 a 
 °12 
 
 r-i 
 
 eio 
 
 i 8 
 
 I . 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 S 
 
 UPMEN' 
 
 rs-y 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 t 
 
 y 
 
 
 \y 
 
 
 % 
 
 i / 
 
 
 
 
 J 
 
 
 
 7\ 
 
 ^ # 
 
 'IV 
 
 i 
 
 
 
 
 
 x 
 
 _,- 
 
 # x 
 
 w \ 
 
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 *** 
 
 PRICES — \ 
 
 i 
 
 t 
 
 % 
 \ 
 
 
 
 
 / s 
 
 .-«*- 
 
 
 
 
 
 i 
 
 r 
 
 \ 
 
 1 
 
 *. 
 
 
 y 
 
 
 
 
 
 
 
 
 
 
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 »«■•» 
 
 s 
 
 
 
 
 
 
 
 
 
 
 
 
 
 L0 
 
 O 4» 
 
 4^5 
 3<S 
 
 «-« C\l IQ 
 
 IQ lO K> 
 
 0b Ok 01 0> <J* Cft O* O* <7* C7V O* 
 
 >Hr4i-4 r4 r4 r-i r4 r* fi r4 iH 
 
 Year, May-October 
 Fig. 1. — California summer oranges : shipments and seasonal 
 average f.o.b. prices, 1922-1934. 
 
 Despite the upward trend in shipments during the first half of this 
 period there was no downward trend in prices, which are represented by 
 the broken line. In fact the trend of prices from 1922 to 1928 was also 
 upward. The fact that the trend of both shipments and prices of summer 
 oranges was upward from 1922 to 1928 is prima-facie evidence that there 
 was an increase in demand for summer oranges during this period. 
 
 In recent years, however, the demand for summer oranges has been 
 reduced. For example, both shipments and prices during each of the 
 three years 1931-1933 were lower than in 1929. 
 
 Another significant fact brought out in figure 1 is that the year-to-year 
 fluctuations in shipments have been generally accompanied by fluctua- 
 tions in prices in the opposite direction ; that is, a decrease in shipments 
 from one year to another was generally accompanied by an increase in 
 
Cir. 338] Regulating Shipments of California Oranges 
 
 prices, while an increase in shipments from one year to another was 
 generally accompanied by a decrease in prices. 
 
 Factors Affecting the F.O.B. Prices of California Summer Oranges. — 
 Variations in the seasonal average f.o.b. prices of California summer 
 oranges are caused by numerous factors. Not all of these factors, how- 
 
 TABLE 1 
 
 Seasonal Average F.O.B. Prices of California Summer Oranges and 
 
 Important Factors Affecting Them, 1922-1934 
 
 Year, May-October 
 
 F.o.b. price 
 
 California 
 
 orange 
 shipments 
 
 Index urban 
 
 consumers' 
 
 income 
 
 Index com- 
 peting-fruit 
 production 
 
 Average num- 
 ber of Valen- 
 cias per box 
 
 
 ; 
 
 2 
 
 3 
 
 2 
 
 5 
 
 1922 
 
 1923 
 
 1924 
 
 1925 
 
 dollars per 
 box 
 4 64 
 2.73 
 
 3 12 
 5.26 
 3.59 
 
 4 11 
 
 5 74 
 2.69 
 5.87 
 2 27 
 1.82 
 1.78 
 2.74 
 
 thousand 
 boxes 
 4,528 
 10,063 
 10,086 
 6,669 
 10,813 
 12,160 
 9,154 
 17,735 
 9,306 
 16,426 
 16,011 
 15,884 
 15,210 
 
 per cent 
 
 79 
 
 94 
 
 88 
 
 96 
 101 
 102 
 104 
 110 
 101 
 
 85 
 
 64 
 
 63 
 
 71 
 
 per cent 
 
 99 
 108 
 100 
 100 
 133 
 
 82 
 112 
 
 91 
 
 96 
 122 
 
 85 
 
 83 
 
 79 
 
 number per 
 box 
 
 1926 
 
 1927 
 
 1928 
 
 1929 
 
 207 
 227 
 208 
 250 
 
 1930 
 
 1931 
 
 1932 
 
 1933 
 
 1934 
 
 212 
 240 
 233 
 233 
 246 
 
 * Dashes indicate data not available. 
 
 Sources of data: 
 
 Col. 1 : Compiled from records of the California Fruit Growers' Exchange. Prices are the weighted 
 average prices received for oranges shipped during the six months May through October, and include 
 prices of packed fruit and loose fruit on a packed-box basis. 
 
 Col. 2: Compiled from records of the California Fruit Growers' Exchange. 
 
 Col. 3 : Unpublished index compiled by the Agricultural Industrial Relations Section of the Agri- 
 cultural Adjustment Administration. 1924-1929 = 100. 
 
 Col. 4: Index of United States production of fresh apples, apricots, peaches, pears, plums, and 
 cantaloupes, and United States shipments of grapefruit, shipments of oranges other than from Cali- 
 fornia, and imports of bananas during the six months May to October, inclusive. 1925 = 100. 
 
 Col. 5: Compiled from records of the California Fruit Growers' Exchange. 
 
 ever, can be measured with the data now available. In this analysis the 
 following were measured: (1) California shipments, (2) trend of de- 
 mand, (3) buying power of consumers, (4) competing-fruit production, 
 and (5) average sizes of Valencia oranges. While most of the variations 
 in the seasonal average f.o.b. prices of California summer oranges from 
 1922 to 1934 can be accounted for by the factors measured, others have 
 also had some influence. During the three years 1931-1933, lack of con- 
 fidence on the part of the trade in the stability of orange prices was a 
 factor of some importance. 
 
 The seasonal average f.o.b. prices of California summer oranges from 
 1922 to 1934 are given in table 1, column 1. The volume of shipments is 
 the closest approximation to the supply of California summer oranges 
 marketed and is given in column 2. In figure 2 the shipments of Cali- 
 
4 University of California — Experiment Station 
 
 fornia summer oranges are measured along the horizontal scale, the 
 seasonal average f .o.b. prices along the vertical scale. The diagonal curve 
 is designed to measure the average relation that has existed between 
 shipments and prices. It is adjusted to the situation that existed in 1929. 
 In that year shipments amounted to 17,735,000 boxes ; the average f .o.b. 
 
 8.00 
 7.50 
 7.00 
 6.50 
 6.00 
 
 u M 
 
 °- ° 5.50 
 
 £ 4.00 
 3.50 
 
 3.00 
 
 2.50 
 
 2.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 _J - — 
 
 __^_ 
 
 
 --.,,-. 
 
 ,_^_j 
 
 
 ^~~ — ~- — - 
 
 IT i IT 
 
 ~~< r 
 
 i 
 
 1 
 
 " 1 
 
 7 8 9 10 11 12 13 14 15 
 California shipments — million boxes 
 
 16 17 18 
 
 Pig. 2. — California summer oranges : estimated effect of changes in shipments 
 upon seasonal average f.o.b. prices (adjusted to 1929 situation). 
 
 price was $2.69 a box. This curve shows that, if shipments in 1929 had 
 been the same as they were in 1927, when they amounted to 12,160,000 
 boxes, the price would have been around $4.60 a box, but that, if they 
 had been the same as they were in 1925, when they amounted to 6,669,000 
 boxes, the price would have been around $7.00 a box. 
 
 The validity of the relation between shipments and prices indicated 
 by the diagonal curve in figure 2 rests upon one of the fundamental laws 
 of price. It is this : At any given time, the greater the amount of a com- 
 modity to be sold, the lower must be the price at which it is offered in 
 order that it all may find buyers, and conversely the smaller the amount 
 of a commodity to be sold, the higher may be the price obtained. 
 
 This law of price rests upon three separate and distinct conditions. In 
 
Cir. 338] Regulating Shipments of California Oranges 5 
 
 the first place, a person's capacity to derive satisfaction from any one 
 commodity is limited and his satisfaction diminishes as more and more 
 of that commodity is consumed. In the second place, there are great 
 differences in the incomes of consumers. And in the third place, there 
 are considerable differences in the desires of people. These three condi- 
 tions explain why at any given time a small supply of oranges brings a 
 high price, while a large supply brings a low price. When the crop of 
 oranges is small, it can all be sold to people who have large incomes or 
 who desire oranges keenly. But when the crop is large, there are more 
 oranges than these people are willing to consume, and the remainder 
 must be sold to people with lower incomes or who desire oranges less 
 keenly. And in order to induce this latter class to buy, it is necessary to 
 lower the price. 
 
 There are, it is true, some people who buy the same quantity of oranges 
 at high prices as they do at low prices, but these are consumers who are 
 above the margin. There are always some consumers just on the margin 
 to whom, at the ruling price, the purchase is just worth while. They will 
 either cease buying entirely or reduce their purchases when the price 
 goes up and will increase their purchases when the price goes down. It 
 is the presence of these marginal buyers that causes total consumption 
 to decrease or increase with rising or falling prices. Thus, other condi- 
 tions remaining the same, a rise in the price to consumers checks pur- 
 chases, a fall in the price to consumers stimulates purchases. 
 
 Thus, the diagonal curve in figure 2 illustrates the situation that exists 
 with regard to the supply and price of summer oranges at a given time. 
 The same situation may exist over a period of time if there is no change 
 in demand. As has already been mentioned (p. 2), however, there was 
 a substantial increase in demand for summer oranges prior to 1929. That 
 is clearly shown in figure 3, in which the trend of demand is represented 
 by the diagonal curve. 4 The level of demand in 1929 is taken as the base 
 and is shown on the vertical scale as zero. The trend of demand in the 
 other years is measured from the base year. Figure 3 shows that a given 
 quantity of summer oranges would have sold for about $2.90 a box less 
 in 1922 than in 1929, and for about $0.25 a box more in 1934 than in 
 1929, provided the actual demand had coincided with the trend. It will 
 be noted that from 1922 to 1928 the trend of demand rose rapidly, while 
 from 1929 to 1934 it rose only slowly. Many factors have contributed to 
 the upward trend in demand for summer oranges. Among the more im- 
 
 4 Statistically this curve shows the average relation that has existed between time 
 and the seasonal average f.o.b. prices after simultaneously eliminating the vari- 
 ations in f.o.b. prices associated with variations in the volume of shipments, the 
 index of urban consumers' incomes, the index of competing-fruit production, and the 
 average number of oranges per box. 
 
University of California — Experiment Station 
 
 portant ones have been the development of new outlets, extensive adver- 
 tising, and active participation of nutrition workers in advocating the 
 wider use of oranges. 
 
 The actual demand for summer oranges has fluctuated about the trend, 
 being sometimes above and sometimes below it. In those years when the 
 actual demand was above the trend, f .o.b. prices were, of course, higher 
 
 ♦0.80 
 ♦0.40 
 
 * -0.40 
 o 
 
 •H 
 
 tt 8-0.80 
 
 Al 
 
 °. £.-1.20 
 
 ■h --1.60 
 
 S "°-2.oo 
 
 -£.40 
 
 -2.80 
 
 -3.20 
 
 
 Year. May-October 
 Fig. 3. — California summer oranges: estimated trend of demand (base year, 1929). 
 
 than they would have been if the actual demand had coincided with the 
 trend, while in those years when the actual demand was below the trend, 
 f .o.b. prices were correspondingly lower. Since 1930 the actual demand 
 has been continuously below the trend. 
 
 In discussing the demand for oranges, misunderstanding will be 
 avoided if a clear distinction is made between an increase in demand 
 and an increase in consumption. The two concepts are entirely distinct, 
 yet they are frequently confused. An increase in demand means that 
 more of the commodity will be purchased at the same price or that the 
 same quantity will be purchased at a higher price. The fact that the 
 consumption of a commodity has increased is not prima-facie evidence 
 that the demand has increased. An increase in consumption and a de- 
 crease in demand may occur simultaneously. For example, the consump- 
 tion of summer oranges in 1931 was over seven million boxes larger 
 
Cir. 338] Regulating Shipments op California Oranges 7 
 
 than in 1930, yet the actual demand for oranges was lower. The reason 
 for the larger consumption, despite the lower demand, was the great 
 reduction in prices from $5.87 a box to $2.27 a box. If there had been no 
 decrease in the actual demand for oranges in 1931, prices would prob- 
 ably not have fallen below $3.10. 
 
 Three of the factors affecting the price of summer oranges have been 
 chiefly responsible for the fluctuations in the actual demand about the 
 
 ♦0.20 
 
 - 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 -0.20 
 
 -0.40 
 o 
 
 &. x-0.60 
 
 -:! 
 
 o £-0.80 
 • o. 
 
 % I" 1 * 00 
 
 £ -§-1 20 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 ° -1.40 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 -1.80 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 6 
 
 3 6 
 
 5 It 
 
 1 7! 
 
 > 8 
 
 8 
 
 5 9 
 
 9 
 
 5 1C 
 
 10 
 
 S 110 
 
 Index urban consumers' income 
 Fig. 4. — Estimated effect of changes in the index of urban consumers' incomes 
 upon the seasonal average f .o.b. prices of California summer oranges. 
 
 trend. These are (1) changes in the buying power of consumers, (2) 
 changes in the volume of competing fruits, and (3) changes in the qual- 
 ity of the oranges. 
 
 The factor most responsible for the actual demand for summer 
 oranges being below the trend since 1930 was the low buying power of 
 consumers. As a measure of the buying power of consumers in the United 
 States, the index of urban consumers' income has been used. This index 
 is given in table 1, column 3. In figure 4 the index of urban consumers' 
 income is measured along the horizontal scale, the seasonal average 
 f.o.b. price of summer oranges along the vertical scale. The diagonal 
 curve shows the effect of changes in the index of urban consumers' in- 
 come upon the price of oranges. As consumers' incomes increase, the 
 same quantity of oranges can be sold at higher prices and conversely, 
 as consumers' incomes decline, the same quantity of oranges brings 
 lower prices, other conditions remaining the same. In 1929, when the 
 
8 
 
 University of California — Experiment Station 
 
 index of consumers' income was 110, the diagonal curve in figure 4 shows 
 that the price of oranges was about $0.15 a box higher than it would have 
 been if the index had been at 100, while in 1933 when the index was at 63 
 the curve shows that the price of oranges was about $1.45 a box lower 
 than it would have been if the index had been at 100. 
 
 The second factor which has caused the actual demand for summer 
 oranges to fluctuate from year to year is the supply of other fruits on 
 
 70 
 
 9 100 110 120 
 
 Index competing-fruit production 
 
 Fig. 5. — Estimated effect of changes in the index of competing-fruit production 
 upon the seasonal average f.o.b. prices of California summer oranges. 
 
 the market. If these other fruits are available in ample supply with 
 resulting low prices, they will offer greater competition to oranges than 
 if their supplies are short and prices high. If cantaloupes, for example, 
 are unusually cheap this year, the family will eat cantaloupes at break- 
 fast more frequently and, of necessity, since there are only 365 break- 
 fasts in a year, some other fruit, perhaps oranges, less frequently. With 
 the information now available, it is not possible to determine exactly 
 what products compete with summer oranges nor to measure accurately 
 the influence of each product. For the purpose of this analysis, an index 
 of the supply of fruits which are believed to compete more or less closely 
 with summer oranges was constructed. This index is given in table 1, 
 column 4. 
 
 In figure 5 the index of the supply of fruits competing with oranges 
 is measured along the horizontal scale, the seasonal average f.o.b. price 
 of summer oranges along the vertical scale. The diagonal line shows the 
 
Cm. 338] Regulating Shipments of California Oranges 
 
 9 
 
 effect of changes in the volume of competing fruits upon orange prices. 
 Thus, in 1927 when the production of competing fruit was 82 per cent 
 of normal, the diagonal line indicates that the price of oranges that year 
 was nearly $0.20 a box higher than it would have been if competing-f ruit 
 production had been normal. On the other hand, in 1926 when the pro- 
 
 ♦o.io 
 
 210 
 
 215 220 225 230 235 240 
 
 Average number of oranges per box 
 
 245 
 
 250 255 
 
 Fig. 6. — Estimated effect of changes in the average sizes of Valencia oranges 
 upon the seasonal average f.o.b. prices of California summer oranges. 
 
 duction of competing fruits was 133 per cent of normal, the diagonal 
 line indicates that the price of oranges that year was nearly $0.35 a box 
 lower than it would have been if competing-fruit production had been 
 normal. 
 
 A third factor which has caused the actual demand for summer 
 oranges to fluctuate from year to year has been the variations in quality. 
 Consumers, by and large, will not pay as much for oranges of low 
 quality as they will for those of high quality. One of the factors relating 
 to the quality of oranges is size. The average number of Valencia oranges 
 per box each year from 1926 to 1934 is given in table 1, column 5. In 
 figure 6 the average number of oranges per box is measured along the 
 horizontal scale, the seasonal average f.o.b. prices along the vertical 
 scale. The diagonal line shows the effect of changes in the average size 
 of oranges shipped upon f.o.b. prices received. When the crop runs 
 heavily to small sizes the same quantity of oranges brings a lower price 
 than when the average size of the oranges is larger. For example, in 
 1929 when the crop averaged 250 oranges per box, the diagonal line 
 indicates that the f.o.b. price that year was nearly $0.25 a box lower 
 
10 
 
 University of California — Experiment Station 
 
 than it would have been if the number of oranges had averaged around 
 210 per box. 5 
 
 From the five factors — shipments, trend of demand, buying power 
 of consumers, production of competing fruits, and average sizes of the 
 oranges — it is possible to explain most of the variations which have 
 occurred in the seasonal average f.o.b. prices of California summer 
 
 TABLE 2 
 California Summer Oranges: Estimated and Actual F.O.B. Prices, 1922-1934 
 
 
 Prices 
 estimated 
 
 from 
 shipments 
 
 only 
 
 Adjustments in prices for 
 
 Prices 
 
 explained 
 
 by 
 
 five 
 
 factors 
 
 Act ual 
 prices 
 
 Col. 6 
 
 Year, 
 May-October 
 
 Trend of 
 demand 
 
 Consumers' 
 income 
 
 Fruit pro- 
 duction 
 
 Average 
 sizes 
 
 minus 
 col. 7 
 
 
 / 
 
 2 
 
 3 
 
 4 
 
 5 
 
 6 
 
 7 
 
 8 
 
 1922 
 
 dollars 
 per box 
 8.12 
 5.47 
 5 47 
 7 04 
 5 12 
 4.58 
 5.88 
 2.69 
 5 80 
 3 06 
 3.19 
 3 23 
 3 44 
 
 dollars 
 per box 
 -2 90 
 
 dollars 
 per box 
 -0.59 
 —0 12 
 -0 27 
 
 dollars 
 per box 
 +0 01 
 -0.08 
 00 
 00 
 -0 33 
 +0 18 
 -0 12 
 +0.09 
 +0.04 
 -0 22 
 +0 15 
 +0 17 
 +0 21 
 
 dollars 
 per box 
 
 dollars 
 per box 
 4.64 
 2.75 
 3 08 
 528 
 
 3 63 
 
 4 10 
 
 5 70 
 2 69 
 5 90 
 2 39 
 1.98 
 2 01 
 2.72 
 
 dollars 
 per box 
 
 4 64 
 
 2 73 
 
 3 12 
 
 5 26 
 
 3 59 
 
 4 11 
 
 5 74 
 2 69 
 5 87 
 2.27 
 1.82 
 1.78 
 2.74 
 
 dollars 
 per box 
 
 1923 
 
 -2 
 -2 
 -1 
 -1 
 -0 
 -0 
 
 +0 
 +0 
 +0 
 +0 
 +0 
 
 52 
 12 
 68 
 20 
 60 
 13 
 00 
 05 
 10 
 15 
 20 
 25 
 
 -0 02 
 
 1924 
 
 1925 
 
 1926 
 
 1927 
 
 1928 
 
 +0 04 
 -0.02 
 -0.04 
 +0 01 
 +0 04 
 
 +0 
 +0 
 +0 
 +0 
 +0 
 -0 
 
 -1 
 -1 
 
 -0 
 
 02 
 04 
 06 
 14 
 02 
 37 
 38 
 46 
 97 
 
 +0.02 
 -0 10 
 +0 01 
 -0 23 
 -0 01 
 -0 18 
 —0 13 
 —0 13 
 -0 21 
 
 1929 
 
 
 1930 
 
 -0 03 
 
 1931 
 
 1932 
 
 1933 
 
 1934 
 
 —0 12 
 
 -0 16 
 -0 23 
 +0 02 
 
 * Dashes indicate data not available. 
 
 Sources of data: 
 
 Col. 1 : From figure 2. 
 Col. 2: From figure 3. 
 Col. 3: From figure 4. 
 Col. 4: From figure 5. 
 
 Col. 5: From figure 6. 
 
 Col. 6: Figures in col. 1 plus or minus corresponding figures 
 in cols. 2 to 5 inclusive. 
 
 Col. 7: From table 1, col. 1. 
 
 oranges. This is shown in detail in table 2. For example, in 1934 ship- 
 ments amounted to 15,210,000 boxes. If shipments in 1929 had amounted 
 to only 15,210,000 boxes, the price would have been around $3.44 a box 
 (fig. 2). Figure 3 shows, however, that the trend of demand for oranges 
 in 1934 was $0.25 a box higher than in 1929, so $0.25 must be added to 
 $3.44. The index of consumers' income in 1934 was 71, and figure 4 
 shows that the price was $0.97 a box less than if the index had been 100, 
 so $0.97 must be subtracted. The index of competing-fruit production 
 in 1934 was 79, and according to figure 5 the price of oranges was $0.21 
 a box higher than it would have been if the index of competing-fruit 
 production had been 100, so $0.21 must be added. The average number 
 
 5 An increase in the sizes of oranges from an average of about 200 per box would 
 probably not result in higher prices than would prevail for the same volume averag- 
 ing between 200 and 210 oranges per box. On the other hand, a decrease in the sizes 
 of oranges from 250 per box would probably result in still lower prices. 
 
Cm. 338] Regulating Shipments of California Oranges 
 
 11 
 
 of oranges per box in 1934 was 246, and figure 6 shows that $0.21 must 
 be subtracted. The price explained b}^ the factors mentioned, therefore, 
 is $2.72 a box. The actual price in 1934 was $2.74 a box or $0.02 a box 
 higher than the price explained by the factors mentioned. 
 
 8.00 
 7.50 
 7.00 
 6.50 
 
 o 6 
 
 •H 
 
 3 4 
 
 
 V 22 
 
 
 
 
 
 
 
 
 - 
 
 \| 
 
 X 
 
 
 
 
 
 
 - 
 
 - 
 
 
 25 *V 
 
 
 
 
 
 
 - 
 
 - 
 
 
 
 >»28 
 30 V 
 
 26*w 
 
 
 
 
 - 
 
 - 
 
 
 
 
 \ 
 
 •v 
 
 
 
 - 
 
 - 
 
 
 
 
 
 
 32^ 
 
 
 - 
 
 - 
 
 
 
 
 
 
 33* 
 
 3lN*2 
 
 9 
 
 
 ^^___ _^ 
 
 
 
 . _^ 
 
 r- - 
 
 
 s __ 
 
 
 
 _ 
 
 i — r 
 
 i 
 
 ili ill 
 
 i 
 
 1 5 i 
 
 » 7 ( 
 
 l 9 1 
 
 11 1 
 
 Z 13 1 
 
 4 
 
 15 1 
 
 5 17 1 
 
 8 
 
 2.00 
 
 California shipments — million boxes 
 
 Fig. 7. — California summer oranges : relation between shipments and seasonal 
 average f .o.b. prices after simultaneously eliminating the trend of demand and vari- 
 ations in f.o.b. prices associated with variations in the index of urban consumers' 
 incomes, in the index of competing-fruit production, and in the average number of 
 oranges per box. 
 
 Table 2, column 6, shows the estimated prices for the other years, the 
 estimates being obtained in the same way as for 1934. Column 7 shows 
 the actual prices, and column 8 shows the differences between the esti- 
 mated and the actual prices. The factors measured account for nearly 
 all of the variations which have occurred in these seasonal average f.o.b. 
 prices of summer oranges during the thirteen years 1922-1934. The 
 greatest differences between the actual and the estimated prices are in 
 1931, 1932, and 1933. The reason for these differences will be discussed 
 later (p. 17). 
 
 Although nearly all of the variation that occurred in the seasonal 
 average f.o.b. prices of California oranges from 1922 to 1934 can be 
 
12 
 
 University of California — Experiment Station 
 
 accounted for by the five factors measured, it does not necessarily follow 
 that they are the only ones that affected prices. Other factors such as 
 condition of the oranges, confidence of the trade in the stability of the 
 market, and export demand are also important. It appears, however, 
 that with the exceptions of 1931, 1932, and 1933, factors other than 
 
 5.20 
 4.80 
 4.40 
 4.00 
 •2 * 3.60 
 
 e a. 
 
 * £2.80 
 
 a co 
 
 •H 
 
 * 2.00 
 1.60 
 1.20 
 0.80 
 
 
 
 
 
 
 
 
 - 
 
 - 
 
 
 
 
 
 
 
 - 
 
 - 
 
 
 
 
 
 
 
 - 
 
 - 
 
 
 
 
 ^ 1934 
 
 
 
 29 
 
 - 
 
 
 
 
 ^^•, 
 
 1933 
 
 
 - 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 . . — 
 
 n 
 
 _ r 
 
 
 r 
 
 ■ 
 
 " 
 
 
 1 
 
 12 13 14 15 16 17 
 
 California shipments — million boxes 
 
 Fig. 8. — California summer oranges: supply-price curve adjusted 
 to various demand situations. 
 
 18 
 
 those measured either did not vary much, 6 or if they did vary they were 
 correlated with one or more of the five factors measured. 
 
 Effect Upon Returns to Growers of Limiting the Volume of Summer- 
 Orange Shipments. — In arriving at an approximation of the net 
 effect of changes in the volume of summer-orange shipments upon f .o.b. 
 prices and returns to growers, it is necessary to eliminate the influence 
 of the major factors, except shipments, which have affected prices. In 
 figure 7, each dot represents, for the year indicated, the shipments and 
 seasonal average f .o.b. prices of California summer oranges after simul- 
 taneously eliminating the trend of demand and the variations in f .o.b. 
 prices associated with the variations in the index of urban consumers' 
 
 6 Since correlation merely measures the extent to which changes in one factor are 
 associated with changes in another, the importance of a factor cannot be determined 
 if there has been no change in its position during the period under consideration. 
 
Cm. 338] Regulating Shipments of California Oranges 
 
 13 
 
 income, the index of competing-f ruit production, and the average num- 
 ber of oranges per box. The diagonal curve 7 either passes through or very 
 close to all of the dots, with the exception of 1931, 1932, and 1933. This 
 curve may be designated the "supply-price curve" for California sum- 
 mer oranges. Its slope indicates the approximate effect of changes in 
 the volume of shipments upon the seasonal average f.o.b. prices. Its 
 position may be adjusted upward and to the right or downward and to 
 the left in order to coincide with the demand situation prevailing in a 
 given season. 
 
 TABLE 3 
 
 California Summer Oranges : Estimated Effect of Shipping an Entire Crop of 
 
 Various Sizes Upon F.O.B. Prices, Total Value to Growers, and 
 
 Average Eeturns per Acre, Under Demand Conditions 
 
 Similar to Those of 1934 
 
 Shipments 
 
 F.o.b. price 
 
 F.o.b. price 
 
 minus 
 
 74 cents* 
 
 Value on trees 
 
 Average 
 returns 
 per acref 
 
 / 
 
 2 
 
 3 
 
 4 
 
 . 5 
 
 13,000... 
 
 thousand boxes 
 
 dollars per box 
 3 54 
 3.16 
 2.81 
 2.74 
 2.49 
 2.19 
 1 99 
 
 dollars per box 
 2.80 
 2.42 
 2 07 
 2.00 
 1 75 
 1 45 
 1.25 
 
 thousand dollars 
 36,400 
 33,880 
 31,0£0 
 30,420 
 28,000 
 24,650 
 22,500 
 
 dollars 
 306 
 
 14,000 
 
 285 
 
 15,000 
 
 261 
 
 15,210 
 
 256 
 
 16,000 
 
 236 
 
 17,000 
 
 207 
 
 18,000 
 
 189 
 
 
 
 * The average cost of picking, hauling, packing, and selling amounted to $0.74 a packed box in 1934. 
 t The bearing acreage of Valencia oranges in 1934 amounted to 118,800 acres. 
 
 In figure 8 the supply-price curve for California summer oranges 
 has been adjusted to three different positions, namely, 1929, 1933, and 
 1934. 8 The middle curve, representing the 1934 situation, shows that the 
 actual demand for oranges in that year was materially less than in 1929 
 but materially greater than in 1933. In 1934 shipments amounted to 
 15,210,000 boxes ; the average f.o.b. price was $2.74 a box. This middle 
 curve shows that, if shipments in 1934 had amounted to 13,000,000 
 boxes, the average price would have been around $3.55 a box, while, if 
 shipments had amounted to 17,000,000 boxes, the average price would 
 have been around $2.20 a box, with, of course, the assumption that there 
 were no changes in the other factors which affect orange prices. 
 
 Table 3 is designed to show the relation between the size of the Cali- 
 fornia summer-orange crop and returns to growers under the demand 
 conditions which prevailed in 1934, if the entire crop is assumed to 
 
 7 The curve in figure 7 is identical with the curve in figure 2. 
 
 8 Only the lower part of the curve in figure 7 is shown in figure i. 
 in figure 8 were drawn so as to be parallel on an arithmetic scale. 
 
 The three curves 
 
14 
 
 University of California — Experiment Station 
 
 have been shipped. Column 2 shows the probable prices of summer 
 oranges which would have prevailed in 1934 if shipments had been the 
 same as those given in column 1, and are derived from the middle curve 
 in figure 8. With a cost at 74 cents a packed box for picking, hauling, 
 packing, and selling, column 3 shows the equivalent price per packed 
 box on the trees. Column 4 shows the probable total returns to the grow- 
 ers for the fruit on the trees, and column 5 shows the probable average 
 returns per acre on the trees. The average return per acre for summer 
 
 TABLE 4 
 
 California Summer Oranges, 1934: Estimated Effect of Limiting Shipments 
 
 Upon F.O.B. Prices, Total Value of the Crop, and 
 
 Average Eeturns per Acre 
 
 Shipments 
 
 F.o.b. 
 price 
 
 F.o.b. price 
 
 minus 
 
 60 cents* 
 
 Value at 
 receiving door 
 
 Cost of 
 
 picking and 
 
 hauling at 
 
 14 cents 
 
 Value on 
 trees 
 
 Average 
 
 returns 
 
 per 
 
 acref 
 
 1 
 
 2 
 
 3 
 
 4 
 
 5 
 
 6 
 
 7 
 
 thousand 
 
 boxes 
 
 15 210 
 
 dollars 
 
 per box 
 
 2.74 
 
 2.81 
 3.16 
 3 54 
 
 dollars 
 
 per box 
 
 2 14 
 
 2.21 
 
 2.56 
 2.94 
 
 thousand 
 dollars 
 32,549 
 33,150 
 35,840 
 38,220 
 
 thousand 
 dollars 
 2,129 
 2,129 
 2,129 
 2,129 
 
 thousand 
 dollars 
 30,420 
 31,021 
 33,711 
 36,091 
 
 dollars 
 256 
 
 15 000 
 
 261 
 
 14 000 
 
 284 
 
 13,000 
 
 304 
 
 
 
 * The average cost of packing and selling in 1934 amounted to $0.60 a packed box. 
 t The bearing acreage of Valencia oranges in 1934 amounted to 118,800 acres. 
 
 oranges in 1934 was $256. If the 1934 crop had been short and shipments 
 had amounted to only 13,000,000 boxes, average returns per acre would 
 have been over $300, whereas if the crop had been large and shipments 
 had amounted to 18,000,000 boxes, average returns per acre would have 
 been less than $200. 
 
 Table 4 is designated to show the effect upon returns to growers of 
 limiting shipments through the withholding of oranges from the market. 
 Column 2 shows the probable prices of summer oranges that would have 
 prevailed in 1934 if shipments had been limited to those given in col- 
 umn 1. With the cost of packing and selling at 60 cents a packed box, 
 column 3 shows the price per packed box at the receiving door of the 
 packing-house. Column 4 shows the value of the total shipments at the 
 receiving door. With an average cost for picking and hauling of 14 
 cents per packed box, column 5 shows the total cost of picking and haul- 
 ing 15,210,000 boxes. Since the entire crop must be picked and hauled 
 if total shipments are curtailed, the total cost of picking and hauling 
 remains the same, irrespective of the volume sent to the products plant 
 or dumped. Column 6 shows the probable total returns to the growers 
 for fruit on the trees, and column 7 shows the probable average returns 
 
Cir. 338] Regulating Shipments of California Oranges 
 
 15 
 
 per acre on the trees. As already stated, the average returns per acre for 
 summer oranges in 1934 were $256. If shipments had been limited to 
 14,000,000 boxes, the average returns would have been increased in the 
 neighborhood of $30 an acre. These figures are based upon the assump- 
 tion that the entire industry would have participated in the limitation. 
 The extent to which limitation of California summer-orange ship- 
 ments would result in an increase in returns to growers depends to a 
 considerable extent upon the size of the crop and upon the demand con- 
 
 TABLE 5 
 
 California Summer Oranges : Estimated Effect of a Eeduction in Shipments 
 
 Upon Total Value of the Crop at the Eeceiving Door of the 
 
 Packing Plant Under Various Demand Situations 
 
 Shipments 
 
 Estimated value of crop with demand 
 situation similar to 
 
 
 1929 
 
 1933 
 
 1934 
 
 1 
 
 2 
 
 3 
 
 4 
 
 thousand boxes 
 15,000 
 
 thousand dollars 
 43,650 
 45,640 
 47,320 
 
 thousand dollars 
 21,900 
 25,340 
 28,470 
 
 thousand dollars 
 33,150 
 
 14,000 
 
 35,840 
 
 13,000 
 
 38,220 
 
 
 
 Effect of reduction from 15 to 13 million boxes. . 
 
 +3,670 
 
 +6,570 
 
 +5,070 
 
 ditions prevailing at the time. Table 5 shows the estimated effect of a 
 reduction in shipments of California summer oranges upon the total 
 value of the crop at the receiving door of the packing-house under three 
 different demand situations ; namely, 1929 when the index of consumers' 
 income was 110, 1933 when the index was 63, and 1934 when the index 
 was 71. It will be noted that the greatest gain from limitation of ship- 
 ments occurs in a year of lowest consumer demand and the smallest gain 
 in a year of highest consumer demand. A reduction in shipments from 
 15,000,000 boxes to 13,000,000 boxes would have resulted in an increase 
 in gross returns of about 8 per cent in 1929, about 15 per cent in 1934, 
 and about 30 per cent in 1933. 
 
 In summarizing this part of the analysis, the following conclusions 
 may be stated : (1) That in years of large crops limitation of shipments 
 of California summer oranges during the season as a whole would result 
 in increased prices and returns to growers, and (2) that limitation of 
 shipments is more effective in increasing returns to growers in years of 
 low consumers' buying power than in years of high consumers' buying 
 power. 
 
 Effect Upon Returns to Growers of Regulating the Flow of Summer- 
 
16 University of California — Experiment Station 
 
 Orange Shipments During the Season. — During the decade 1920-1930 
 conditions in the California summer-orange industry were such that 
 the large marketing organizations, through adjustments in their ship- 
 ments, were able to maintain an effective regulation of the total move- 
 ment from the state, which prevented extensive market gluts with their 
 accompanying price cutting. During that period the demand for sum- 
 mer oranges increased even faster than the supply, with the result that 
 the trend of prices was upward. With the pronounced decrease in the 
 buying power of consumers for the past few years and in face of large 
 crops, the large marketing organizations acting independently were 
 unable to keep the total movement from the state nicely adjusted to the 
 market demands. Under these conditions prices in eastern markets at 
 times fell below the cost of transferring the oranges from the trees to 
 these markets with resultant "red ink" returns to growers, and whole- 
 salers and retailers found the handling of oranges to be a hazardous 
 business. The net effect of this situation was a reduction in prices and 
 returns to growers. 
 
 In order to avoid the disastrous effects of glutted markets upon re- 
 turns to growers, shippers handling approximately 90 per cent of the 
 Valencia orange crop entered into an agreement in the summer of 1932. 
 This agreement was designed to regulate the flow of Valencia orange 
 shipments from the state in accordance with the market demands. After 
 about four weeks' operation the program was abandoned because one 
 marketing organization withdrew from the agreement, and the remain- 
 ing organizations felt that, with only about 80 per cent of the crop 
 under the program, they were placed in too disadvantageous a position 
 to continue regulation of shipments by themselves. Shortly after the 
 beginning of the 1933 Valencia season, a new agreement was developed 
 under which a program for regulating the flow of shipments to market 
 was carried on until the close of that season. The consensus of opinion 
 among the marketing organizations was that the regulation of shipments 
 under the programs in 1932 and 1933 contributed to the stabilization of 
 the market for Valencia oranges during the period of regulation and 
 resulted in larger returns to growers than would otherwise have, pre- 
 vailed. 
 
 While judgment regarding the effect of regulation of the flow of 
 orange shipments during the season upon returns to growers must rest 
 largely upon qualitative rather than quantitative analysis, the analysis 
 of f.o.b. prices of summer oranges presented in the previous section 
 affords some indication that the voluntary programs in 1932 and 1933 
 were not so effective as the programs in 1934 and 1935 under the Market- 
 ing Agreement for Shippers of Oranges and Grapefruit Produced in 
 
Cir. 338] Regulating Shipments of California Oranges 17 
 
 California and Arizona. Figure 7 shows that the adjusted f.o.b. prices 
 in 1932 and 1933 are below the supply-price curve, whereas the ad- 
 justed f.o.b. price in 1934 is slightly above it. 9 The analysis of prelimi- 
 nary data for 1935 indicates that the adjusted f.o.b. price in 1935 is 
 substantially above the supply-price curve. 10 In both 1934 and 1935 vir- 
 tually all shippers participated in a coordinated program of regulation 
 of orange shipments, whereas in 1932 and 1933 shippers handling some 
 10 per cent of the total volume remained outside the program. In some 
 weeks these nonparticipating organizations shipped as much as 20 per 
 cent of the total shipments of that particular week. Thus, a few shippers 
 partially nullified the actions of the larger group. Probably also, in view 
 of the abandonment of the 1932 program after a month's operation, the 
 trade was not fully confident in 1933 that shipment regulation would 
 be continued throughout the season. 11 
 
 It is generally accepted by marketing organizations that a larger 
 quantity of fruits and vegetables can be moved into consumption at a 
 higher price to growers on a stabilized market than on a demoralized 
 one. Experiences with several commodities have demonstrated this gen- 
 eral tendency and various students have explained the underlying 
 principle. 12 
 
 In discussing the relation between changes in price and consumption 
 of oranges, it was pointed out (p. 5) that a reduction in price to con- 
 sumers generally results in an increase in consumption, while an increase 
 in the price to consumers generally results in a decrease in consump- 
 tion. There is also a definite relation between changes in prices and pur- 
 chases by the trade, but the direction of the movement is opposite to that 
 of consumers, and the response of dealers is to expected prices, while 
 the response of consumers is to present prices. In fact there are two laws 
 of supply and demand, a consumers' law and a dealers' law. A reduction 
 in the price to consumers generally results in an immediate increase in 
 sales, but a reduction in the price to the trade, if a further drop is antici- 
 pated, generally results in a decrease rather than an increase in sales. 
 
 9 The f.o.b. prices in figure 7 have been adjusted by eliminating the trend of de- 
 mand and the variations in f.o.b. prices associated with the variations in the index 
 of urban consumers' income, the index of competing-fruit production, and the aver- 
 age number of oranges per box. 
 
 10 In addition to the regulation of the flow of shipments, two other factors, namely 
 a favorable export market and increased expenditure for advertising by the Cali- 
 fornia Fruit Growers' Exchange, contributed to a higher actual f.o.b. price in 1935 
 than that explained by the five factors measured. 
 
 11 Factors other than regulation of shipments may be contributed to the differ- 
 ences between the adjusted prices in relation to the supply-price curve (fig. 7). 
 
 12 Taussig, F. W. Is market price determinate? The Quarterly Journal of Eco- 
 nomics 35(3):394-411. 1921. 
 
 Commons, John E. Institutional economics, p. 555-58. The Macmillan Co., New 
 York. 1934. 
 
18 University of California — Experiment Station 
 
 The sequence of relation between unregulated shipments, prices, and 
 volume is about as follows ■ Unregulated shipments lead to excessive 
 supplies in wholesale markets ; excessive supplies lead to price cutting 
 and a weak market ; falling prices lead to reduced purchases by the trade 
 and loss of interest in featuring the product. Some time elapses before 
 the lower prices are passed on to consumers and, consequently, a prompt 
 increase in consumption fails to materialize. Thus, the immediate effects 
 of allowing the market to become congested are lower prices to growers 
 without a corresponding drop in prices to consumers, reduced move- 
 ment into trade channels, and loss of interest on the part of dealers in 
 handling and promoting the product. It may take weeks to regain the 
 former interest of the dealers, and during that time the market outlet 
 is restricted. 
 
 As contrasted with gluts and falling prices, regulated supplies and 
 stable prices facilitate the flow of oranges through the trade channels 
 into consumption. Dealers are not much concerned whether wholesale 
 prices of oranges in eastern markets are $3.50 a box or $2.50 a box, yet 
 this difference of $1.00 a box means the difference between solvency and 
 bankruptcy to many growers. The dealers' primary concern is in price 
 stability. If they have reasonable assurance that their competitors will 
 not be able to buy more cheaply tomorrow than they can today, they are 
 active buyers and therefore aggressive sellers. But if the prospect of 
 returns from handling oranges is uncertain, jobbers and retailers turn 
 their attention to other products. It must be remembered that there are 
 a large number of fruits from which dealers may choose those they 
 desire to handle. 
 
 WINTER ORANGES 
 
 United States shipments of oranges during the six months November 
 through April for the years 1922-23 through 1934-35 are shown by the 
 vertical bars in figure 9. The crosshatched portion of the bars represents 
 California shipments, the open portion shipments from other states, 
 principally Florida. The solid line represents the seasonal average f .o.b. 
 prices of California winter oranges. During the thirteen years shown in 
 figure 9 the trend of total shipments was upward. Between 1922-23 and 
 1928-29 shipments from both California and Florida were increasing. 
 Since 1928-29, however, no further upward trend in California ship- 
 ments has occurred. On the other hand, the trend of shipments from 
 Florida has continued upward. 
 
 From 1924-25 to 1929-30, f.o.b. prices of California winter oranges 
 were maintained at a relatively high level. Since 1929-30, however, f.o.b. 
 prices have been greatly reduced. Average prices during the five years 
 
Cm. 338] Regulating Shipments of California Oranges 
 
 19 
 
 1930-31 to 1934r-35 were less than one-half as high as the average of the 
 previous five years. 
 
 Factors Affecting the F.O.B. Prices of California Winter Oranges. — 
 In the analysis of variations in the seasonal average f .o.b. prices of Cali- 
 fornia winter oranges three factors were measured : ( 1 ) United States 
 shipments of oranges during the six months November through April ; 
 
 36 
 
 32 
 
 1 28 
 •Q.o20 
 
 d o 
 
 H 
 
 •si 
 
 £ 12 
 
 E3~1 T0TAL SHIPMENTS 
 CALIF. SHIPMENTS 
 
 Year ending in April 
 
 Fig. 9. — United States shipments of winter oranges and seasonal average 
 f.o.b. prices of California winter oranges, 1922-23 to 1934-35. 
 
 (2) trend of demand ; and (3) buying power of consumers. With certain 
 exceptions, which will be referred to later (p. 23), these three factors 
 account for most of the variations in the seasonal average f.o.b. prices 
 of California winter oranges during the past thirteen years. Among the 
 factors other than those measured which exert considerable influence 
 are competition of other fruits, particularly grapefruit, 13 the quality 
 of the oranges, 14 the percentage of the total winter-orange supply con- 
 tributed by this state, and the confidence of the trade in the stability of 
 the market. 
 
 The seasonal average f.o.b. prices of California winter oranges from 
 
 13 As yet the author has been unable to construct a satisfactory index of the pro- 
 duction of fruits competing with winter oranges. It is his belief, based upon general 
 observation and discussion with experienced managers of marketing organizations, 
 that grapefruit competes more keenly with oranges than does any other product. 
 
 14 Variations in the average sizes of California winter oranges from year to year 
 apparently exert little influence upon the seasonal average f.o.b. price. The variation 
 is not so great as in the case of summer oranges and the average size is not so small. 
 
20 
 
 University of California — Experiment Station 
 
 TABLE 6 
 
 Seasonal Average F.O.B. Prices of California Winter Oranges and Important 
 
 Factors Affecting Them, 1922-23 to 1934-35 
 
 Year, November-April 
 
 California 
 f.o.b. price 
 
 United States 
 
 orange 
 
 shipments 
 
 Index urban 
 
 consumers' 
 
 income 
 
 
 1 
 
 2 
 
 3 
 
 1922-23 
 
 dollars per box 
 2.71 
 2 12 
 3.60 
 3.50 
 3.45 
 4.39 
 2.80 
 4 45 
 2 17 
 1 80 
 1.43 
 1 65 
 1 80 
 
 thousand boxes 
 17,966 
 22,969 
 19,845 
 19,586 
 22,715 
 18,983 
 27,961 
 20,057 
 29,513 
 27,052 
 24,417 
 28,080 
 30,663 
 
 per cent 
 88 
 92 
 92 
 101 
 102 
 
 1923-24 
 
 1924-25 
 
 1925-26 
 
 1926-27 
 
 1927-28 
 
 101 
 106 
 
 1928-29 
 
 1929-30 
 
 106 
 
 1930-31 
 
 92 
 75 
 
 1931-32 
 
 1932-33 
 
 61 
 70 
 73 
 
 1933-34 
 
 1934-35 
 
 
 
 Sources of data: 
 
 Col. 1 : Compiled from records of the California Fruit Growers' Exchange. Prices are those received 
 for fruit shipped during the six months November through April, and include prices of packed fruit 
 and loose fruit on a packed-box basis. 
 
 Col. 2: Compiled from records of the California Fruit Growers' Exchange, and from Crops and 
 Markets. 
 
 Col. 3: Unpublished index compiled by the Agricultural Industrial Relations Section of the Agri- 
 cultural Adjustment Administration. Average 1924-1929 = 100. 
 
 5.20 
 
 4.40 
 
 ' O3.60 
 
 .a 
 
 "S "2.80 
 ° .2 
 
 d 
 o 
 
 2.00 
 
 1.20 
 
 I I I I I I I 
 
 17 18 
 
 19 
 
 29 SO 31 32 
 
 20 21 22 23 24 25 26 27 28 
 United States shipments — million boxes 
 
 Fig. 10. — Winter oranges: estimated effect of changes in United States shipments 
 upon California seasonal average f.o.b. prices (adjusted to approximate 1928-29 
 situation). 
 
Cm. 338] Regulating Shipments of California Oranges 
 
 21 
 
 1922-23 to 1934-35 are given in table 6, column 1. United States ship- 
 ments of winter oranges for the same years are given in column 2. In 
 figure 10, United States shipments of winter oranges are measured along 
 the horizontal scale, the seasonal average f .o.b. prices of California win- 
 ter oranges along the vertical scale. The diagonal curve is designed to 
 measure the average relation that has existed between United States 
 
 ♦0.40 
 
 o 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 5 -0.40 
 
 ^•*-0.80 
 • u 
 
 O 4) 
 
 C -.1.20 
 
 ~* rt 
 
 £3-1.60 
 o o 
 
 ^ -2.00 
 o 
 
 .2.40 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 cvj cucMC\ievJcvic\jr>ioio«oioio 
 
 o> o» o» o» o» o> o» o> o»o>o» Ot o» 
 
 Year ending in April 
 
 Fig. 11. — Winter oranges: estimated trend of demand (base year, 1928-29). 
 
 shipments and California prices. It is adjusted to the approximate situ- 
 ation that existed in 1928-29. In that season United States shipments 
 amounted to 27,961,000 boxes, the price of California winter oranges 
 was about $2.75 a box. The curve shows that, if shipments in 1928-29 
 had been as large as they were in 1934-35, when they amounted to 30,- 
 663,000 boxes, the price would have been around $2.45 a box, while if 
 they had been as small as they were in 1926-27 when they amounted to 
 22,715,000 boxes, the price would have been around $3.65 a box. This 
 curve then represents the relation that exists between United States 
 shipments and California f .o.b. prices of winter oranges at a given time. 
 Over a period of time the position of the curve changes with changes in 
 demand conditions. 
 
 The trend of demand for California winter oranges from 1922-23 to 
 1934-35 is shown by the diagonal curve in figure ll. 15 The level of de- 
 mand in 1928-29 is taken as the base and is shown on the vertical scale 
 as zero. The trend of demand in other years is measured from the base 
 
 15 Statistically this curve shows the average relation that has existed between time 
 and the seasonal average f .o.b. prices after simultaneously eliminating the variations 
 in f .o.b. prices associated with variations in the volume of shipments and in the index 
 of urban consumers' incomes. 
 
22 
 
 University of California — Experiment Station 
 
 year. As in the case of summer oranges (see fig. 3), two distinct move- 
 ments are noticeable, a rapid rise during the first half of the period and 
 a slow rise during the latter half. During neither period, however, was 
 the rise as great as for summer oranges. The actual demand for winter 
 oranges has fluctuated about the trend, being sometimes above and some- 
 times below it. The chief factor responsible for the year-to-year fluctua- 
 tions in the actual demand for winter oranges has been the change in the 
 buying power of consumers. 
 
 ♦0.20 
 
 
 
 -0.20 
 
 -0.40 
 
 4» 
 O 
 
 O. x-°' 60 
 
 ** 
 
 <J fc-o.eo 
 
 * £-i.oo 
 IX 
 
 P £-1.20 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 •H 
 ft 
 
 » -1.40 
 -1.60 
 -1.60 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 55 
 
 60 
 
 65 
 
 70 
 
 75 80 85 90 95 
 Index urban consumers' income 
 
 100 
 
 105 
 
 110 
 
 Fig. 12. — Estimated effect of changes in the index of urban consumers' incomes 
 upon the seasonal average f .o.b. prices of California winter oranges. 
 
 The effect of changes in the buying power of consumers upon the 
 prices of California winter oranges is shown in figure 12. The index of 
 urban consumers' income (see table 6, col. 3) is measured along the 
 horizontal scale, the seasonal average f.o.b. prices of California winter 
 oranges along the vertical scale. The diagonal curve shows the effect of 
 changes in the index of consumers' income upon the price of oranges. 
 For example, in 1928-29, when the index was at 106, the curve indicates 
 that the price of oranges that year was about $0.10 a box higher than it 
 would have been if the index had been at 100, while in 1932-33, when 
 the index was at 61, the curve shows that the price of oranges that year 
 was nearly $1.70 a box lower than it would have been if the index had 
 been at 100. 
 
 Table 7, column 4, shows the prices estimated from the three factors 
 measured, namely: (1) United States shipments, (2) trend of demand, 
 
Cir. 338] Regulating Shipments of California Oranges 
 
 23 
 
 and (3) index of urban consumers' income. Column 5 shows the actual 
 prices, and column 6 shows the difference between the estimated and 
 actual prices. The greatest differences are in 1924-25, 1925-26, 1930-31, 
 1931-32, and 1932-33. 
 
 Effect Upon Returns to Growers of Limiting Winter-Orange Ship- 
 ments. — In arriving at an approximation of the net effect of changes in 
 
 TABLE 7 
 
 California Winter Oranges : Estimated and Actual F.O.B. Prices, 
 1922-23 to 1934-35 
 
 
 Prices 
 
 estimated 
 
 from United 
 
 Adjustments in prices 
 for 
 
 Prices 
 explained 
 by three 
 
 factors 
 
 Actual 
 prices 
 
 Col. 4 minus 
 
 Year, 
 November-April 
 
 States 
 
 shipments 
 
 only 
 
 Trend of 
 demand 
 
 Consumers' 
 income 
 
 col. 5 
 
 
 1 
 
 8 
 
 3 
 
 4 
 
 5 
 
 6 
 
 1922-23 
 
 dollars 
 per box 
 4 75 
 3.61 
 4 31 
 4 37 
 3.66 
 4 51 
 2 74 
 4.27 
 2.56 
 2.87 
 3.32 
 2 73 
 2.45 
 
 dollars 
 per box 
 -1 73 
 
 dollars 
 per box 
 -0.32 
 -0.20 
 -0.20 
 +0.02 
 +0.04 
 +0 02 
 +0.10 
 +0 10 
 -0.20 
 -0.86 
 -1.67 
 — 1 11 
 -0 95 
 
 dollars 
 
 per box 
 
 2 70 
 
 2 11 
 
 3 22 
 3.86 
 
 3 44 
 4.45 
 2.84 
 
 4 40 
 2 42 
 2 10 
 1 77 
 1.77 
 1.68 
 
 dollars 
 per box 
 2.71 
 2.12 
 3.60 
 3 50 
 
 3 45 
 
 4 39 
 2.80 
 4 45 
 2.17 
 1 80 
 1 43 
 1 65 
 1.80 
 
 dollars 
 per box 
 +0 01 
 
 1923-24 
 
 1924-25 
 
 -1 
 -0 
 -0 
 -0 
 -0 
 
 +0 
 +0 
 +0 
 +0 
 +0 
 +0 
 
 30 
 89 
 53 
 26 
 08 
 00 
 03 
 06 
 09 
 12 
 15 
 18 
 
 +0.01 
 
 +0 38 
 
 1925-26. .. 
 
 -0 36 
 
 1926-27 
 
 +0 01 
 
 1927-28 
 
 -0 06 
 
 1928-29 
 
 -0 04 
 
 1929-30 . . 
 
 +0 05 
 
 1930-31 
 
 -0 25 
 
 1931-32 
 
 1932-33 
 
 -0 30 
 -0 34 
 
 1933-34 . . . 
 
 -0 12 
 
 1934-35 
 
 +0.12 
 
 Sources 6f data: 
 
 Col. 1: From figure 10. 
 Col. 2: From figure 11. 
 Col. 3: From figure 12. 
 
 Col. 4: Figures in col. 1 plus or minus corresponding figures 
 in cols. 2 and 3. 
 
 Col. 5: From table 6, col. 1. 
 
 the volume of winter-orange shipments upon prices and returns to 
 growers, the same procedure is adopted as was followed in the case of 
 summer oranges. (See p. 12.) In figure 13 each dot represents, for the 
 season ending in April of the year indicated, the United States winter- 
 orange shipments and seasonal average f .o.b. prices of California winter 
 oranges, after simultaneously eliminating the trend of demand and the 
 variations in f .o.b. prices associated with the variations in the index of 
 urban consumers' income. The slope of the diagonal curve 16 indicates the 
 approximate effect of changes in the volume of United States winter- 
 orange shipments upon the seasonal average f .o.b. prices of California 
 winter oranges. This curve may be designated the "supply-price curve" 
 for winter oranges. Its position may be adjusted upward and to the right 
 16 The curve in figure 13 is identical with the curve in figure 10. 
 
24 
 
 University of California — Experiment Station 
 
 17 18 19 20 21 2Z 23 24 25 26 27 28 29 30 31 32 
 United States shipments — million boxes 
 
 Fig. 13. — Winter oranges: relation between United States shipments and Cali- 
 fornia seasonal average f.o.b. prices after simultaneously eliminating the trend of 
 demand and variations in f.o.b. prices associated with the variations in the index of 
 urban consumers' incomes. 
 
 3.60 
 3.20 
 
 - 
 
 
 
 
 
 
 
 
 
 
 - 
 
 S 2.80 
 
 *c 
 
 a. H 
 ^2.40 
 
 2 u 
 
 c -2.oo 
 
 | 31.60 
 
 O O 
 
 2 1.20 
 0.80 
 0.40 
 
 
 
 - 
 
 
 
 
 
 ^< 
 
 1928-2 
 
 9 
 
 
 
 - 
 
 - 
 
 
 
 
 
 
 1933- 
 
 34 
 
 
 
 - 
 
 
 
 w 193 
 
 £•33 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 - 
 
 23 
 
 24 25 26 27 28 29 30 
 United States shipments — million boxes 
 
 31 
 
 32 
 
 Fig. 14. — Winter oranges : supply-price curve adjusted to various demand situations. 
 
Cm. 338] Regulating Shipments of California Oranges 
 
 25 
 
 or downward and to the left in order to coincide with the demand situ- 
 ation prevailing in a given season. 
 
 In figure 14 the supply-price curve for winter oranges has been 
 adjusted to three different positions, namely, 1928-29, 1932-33, and 
 1933-34. 17 The middle curve, representing the 1933-34 situation, shows 
 that the demand for winter oranges in that year was materially less 
 than in 1928-29 but materially greater than in 1932-33. In 1933-34 
 
 TABLE 8 
 
 Winter Oranges, 1933-34: Estimated Effect of Limiting United States 
 
 Shipments Upon California F.O.B. Prices, Total Value of 
 
 the Crop, and Average Eeturns per Acre, with the 
 
 Same Percentage Reduction in All States 
 
 Shipments 
 
 California 
 f.o.b. 
 price 
 
 F.o.b. 
 price 
 minus 
 
 60 
 cents* 
 
 Value 
 
 at receiving 
 
 door 
 
 Cost of 
 
 picking 
 
 and 
 
 hauling at 
 
 14 cents 
 
 Value 
 
 on 
 trees 
 
 Average 
 
 Total 
 
 Other states 
 
 California 
 
 returns 
 per acref 
 
 1 
 
 2 
 
 8 
 
 4 
 
 5 
 
 6 
 
 7 
 
 8 
 
 9 
 
 thousand 
 boxes 
 
 thousand 
 boxes 
 
 thousand 
 boxes 
 
 dollars 
 per box 
 
 dollars 
 per box 
 
 thousand 
 dollars 
 
 thousand 
 dollars 
 
 thousand 
 dollars 
 
 dollars 
 
 28,080 
 
 15,509 
 
 12,571 
 
 1.65 
 
 1.05 
 
 13,200 
 
 1,760 
 
 11,440 
 
 121 
 
 27,000 
 
 14,912 
 
 12,088 
 
 1.80 
 
 1.20 
 
 14,506 
 
 1,760 
 
 12,746 
 
 135 
 
 26,000 
 
 14,360 
 
 11,640 
 
 1.96 
 
 1.36 
 
 15,830 
 
 1,760 
 
 14,070 
 
 149 
 
 25,000 
 
 13,808 
 
 11,192 
 
 2.13 
 
 1 53 
 
 17,124 
 
 1,760 
 
 15,364 
 
 163 
 
 24,000 
 
 13,255 
 
 10,745 
 
 2.32 
 
 1.72 
 
 18,481 
 
 1,760 
 
 16,721 
 
 177 
 
 * The average cost of packing and selling in 1933-34 amounted to $0.60 a packed box. 
 t The bearing acreage of Navel oranges in California in 1934 amounted to 94,300 acres. 
 
 United States shipments amounted to 28,080,000 boxes. The average 
 California f.o.b. price was $1.65 a box. The middle curve shows that if 
 United States shipment in 1933-34 had amounted to 26,000,000 boxes, 
 the average price would have been around $1.95 a box, while if United 
 States shipments had amounted to 24,000,000 boxes, the average price 
 would have been around $2.30 a box. 
 
 Table 8 is designed to show the effect of limiting United States ship- 
 ments of winter oranges upon prices and returns to California growers 
 under the demand conditions which prevailed in 1933-34. Here it is 
 assumed that the same percentage reduction in shipments would be 
 made in all states. Column 4 shows the probable prices of California 
 winter oranges that would have prevailed in 1933-34 if shipments had 
 been limited to those given in columns 1, 2, and 3. With the cost of 
 packing and* selling at 60 cents a packed box, column 5 shows the price 
 per packed box at the receiving door of the packing-house. Column 6 
 
 17 Only the lower part of the curve in figure 13 is shown in figure 14. The three curves 
 in figure 14 were drawn so as to be parallel on an arithmetic scale. 
 
26 
 
 University of California — Experiment Station 
 
 shows the value of the total shipments at the receiving door. With an 
 average cost of picking and hauling at 14 cents per packed box, column 
 7 shows the total cost of picking and hauling at 12,571,000 boxes. Since 
 the entire crop must be picked and hauled, if total shipments are cur- 
 tailed, the total cost of picking and hauling remains the same, irrespec- 
 tive of the volume sent to the products plant or dumped. Column 8 shows 
 the total returns to the growers for fruit on the trees, and column 9 
 shows the average returns per acre on the trees. The average return per 
 
 TABLE 9 
 
 Winter Oranges, 1933-34 : Estimated Effect of Limiting California Shipments 
 
 Upon California F.O.B. Prices, Total Value of the Crop, and Average 
 
 Eeturns per Acre, with No Reductions in Other States 
 
 Shipments 
 
 California 
 f.o.b. 
 price 
 
 F.o.b. 
 price 
 minus 
 
 60 
 cents* 
 
 Value 
 
 at receiving 
 
 door 
 
 Cost of 
 
 picking 
 
 and 
 
 hauling at 
 
 14 cents 
 
 Value 
 
 on 
 trees 
 
 Average 
 
 Total 
 
 Other states 
 
 California 
 
 returns 
 per acref 
 
 1 
 
 2 
 
 8 
 
 4 
 
 5 
 
 6 
 
 7 
 
 8 
 
 9 
 
 thousand 
 boxes 
 
 thousand 
 boxes 
 
 thousand 
 boxes 
 
 dollars 
 per box 
 
 dollars 
 per box 
 
 thousand 
 dollars 
 
 thousand 
 dollars 
 
 thousand 
 dollars 
 
 dollars 
 
 28,080 
 
 15,509 
 
 12,571 
 
 1 65 
 
 1.05 
 
 13,200 
 
 1,760 
 
 11,440 
 
 121 
 
 27,000 
 
 15,509 
 
 11,491 
 
 1.80 
 
 1 20 
 
 13,789 
 
 1,760 
 
 12,029 
 
 128 
 
 26,000 
 
 15,509 
 
 10,491 
 
 1.96 
 
 1.36 
 
 14,268 
 
 1,760 
 
 12,508 
 
 133 
 
 25,000 
 
 15,509 
 
 9,491 
 
 2.13 
 
 1 53 
 
 14,521 
 
 1,760 
 
 12,761 
 
 135 
 
 24,000 
 
 15,509 
 
 8,491 
 
 2 32 
 
 1.72 
 
 14,605 
 
 1,760 
 
 12,845 
 
 136 
 
 * The average cost of packing and selling in 1933-34 amounted to $0.60 a packed box. 
 t The bearing acreage of Navel oranges in California in 1934 amounted to 94,300 acres. 
 
 acre for California winter oranges in 1933-34 was $121. If United States 
 shipments had been reduced from 28,080,000 boxes to 26,000,000 boxes, 
 and all states had participated proportionately in the reduction, the 
 average returns per acre to California growers would probably have 
 been around $150. 
 
 Table 9 is designed to show the effect upon price and returns to Cali- 
 fornia growers from a reduction in the shipments of California winter 
 oranges alone. This table has been worked out in the same way as table 8 ; 
 the difference here is that the entire reduction is assumed to have taken 
 place in California shipments. It will be noted that while some increase 
 in returns to California growers of winter oranges is indicated from a 
 reduction of their own shipments, it is relatively small. For example, 
 whereas table 8 shows that a reduction in total United States shipments 
 from 28,080,000 boxes to 26,000,000 boxes, if made proportionately by 
 all states, would result in an increase in returns per acre to California 
 growers of nearly $30, table 9 shows that if the same total reduction in 
 shipments is brought about by a reduction in California shipments alone, 
 
Cir. 338] Regulating Shipments of California Oranges 27 
 
 the resulting increase in returns per acre to California growers would 
 be only $12. Attention should also be called to the fact that if there is 
 no control of orange shipments from states other than California and 
 there is a limitation of shipments from California, shipments from other 
 states during the six months November through April might be in- 
 creased. If this should occur, the gain to California growers from limit- 
 ing their own shipments would be correspondingly less. 
 
 As in the case of summer oranges (p. 15), limitation of shipments of 
 winter oranges is most effective in increasing returns to growers in years 
 of low demand conditions and large crops, while in years of high demand 
 conditions and small crops, limitation of California shipments of winter 
 oranges alone may result in reduced rather than increased returns to 
 growers. 
 
 From the foregoing analysis it is concluded that limitation of Cali- 
 fornia shipments of winter oranges alone would result in increased re- 
 turns to California growers in years when there is a large United States 
 crop of winter oranges and a relatively large percentage of that crop is 
 produced in California, and when the buying power of consumers is 
 low. In this connection attention is called to the lower curve in figure 14, 
 which represents the supply-price schedule for winter oranges adjusted 
 to the 1932-33 situation. If the United States winter-orange crop in that 
 season had been as large as in 1934—35, when total shipments amounted 
 to 30,663,000 boxes, it is doubtful if the entire amount could all have 
 been sold at prices equal to the costs of marketing. In fact, this curve 
 indicates that shipments in excess of 29,000,000 boxes would have meant 
 an f .o.b. price in California that season of less than 70 cents a box. 
 
 Effect Upon Returns to Growers of Regulating the Flow of California 
 Winter-Orange Shipments During the Season. — The qualitative analy- 
 sis presented in connection with the discussion of summer oranges, which 
 indicated that regulation of the flow of shipments during the season to 
 prevent temporary market gluts results in increased returns to growers, 
 is applicable to California winter oranges, and, therefore, will not be re- 
 peated (p. 17). To be most effective, however, regulation of the flow of 
 winter-orange shipments from this state should be accompanied by simi- 
 lar regulation of orange shipments from other states. But even in the 
 absence of effective regulation of shipments from other states, regulation 
 of the flow of shipments from California alone would probably result in 
 larger returns to California growers than would otherwise prevail. 
 
 The analysis of the California winter-orange prices indicates that the 
 adjusted seasonal average f .o.b. prices of California winter oranges were 
 lower in seasons of unregulated shipments than in seasons of regulated 
 shipments. Figure 13 shows that the adjusted prices are considerably be- 
 
28 University op California — Experiment Station 
 
 low the supply-price curve in 1930-31, 1931-32, and 1932-33, slightly 
 below it in 1933-34, but above it in 1934— 35. 18 In the other years, with the 
 exceptions of 1924-25 and 1925-26, the adjusted prices virtually coin- 
 cided with the supply-price curve. 19 As in the case of California summer 
 oranges, the flow of shipments of California winter oranges was fairly 
 well regulated to the market demand prior to 1930-31. With the great de- 
 crease in the buying power of consumers during the depression, and with 
 continued heavy crops, market gluts became more frequent. At times 
 prices in eastern markets fell so low that growers received no returns for 
 the fruit sold at those prices. Lack of effective regulation of shipments, 
 which was apparent particularly in 1931-32 and 1932-33, was partly re- 
 sponsible for the relative low adjusted prices in those years. Since Jan- 
 uary, 1934, shipments of California oranges have been more carefully 
 regulated to market demands under the marketing agreement and li- 
 cense. Thus, shipments of winter oranges from California were under a 
 coordinated program of regulation for over one-half of the 1933-34 
 season and for all of the 1934-35 season. The adjusted price of California 
 winter oranges was less than one-half as far below the supply-price curve 
 in 1933-34 as it was in the previous three seasons, while in 1934-35 the 
 adjusted price was above the supply-price curve. 
 
 CONCLUSIONS 
 
 The seasonal average f.o.b. prices of California oranges are affected by 
 the volume of oranges shipped, by the quality of the oranges, by the 
 trend of demand for oranges, by the volume of competing products on 
 the market, by the buying power of consumers, and by the confidence of 
 the trade in the stability of orange prices. 
 
 The volume of oranges shipped and the confidence of the trade in the 
 stability of orange prices can be influenced by regulation of shipments. 
 
 In seasons of large crops, relative to the buying power of consumers, 
 prices and returns to California growers of summer oranges can be mate- 
 rially increased through limitation of the volume of shipments. 
 
 The extent to which prices and returns to California growers of 
 winter oranges can be increased, through limitation of California ship- 
 ments alone, is much less than in the case of summer oranges. But even 
 here, in years when very low demand conditions coincide with large 
 national crops of oranges and where an unusually large proportion of 
 the crop is produced in California, limitation of California shipments 
 
 18 The f.o.b. prices in figure 13 have been adjusted by eliminating the trend of 
 demand and the variations in f.o.b. prices associated with the index of urban con- 
 sumers' incomes. 
 
 19 No satisfactory explanation has been found as to why adjusted prices were rela- 
 tively high in 1924-25 and relatively low in 1925-26. 
 
Cir. 338] Regulating Shipments of California Oranges 29 
 
 alone will result in some increase in returns to California growers over 
 what they would otherwise be. 
 
 The market for both summer and winter oranges produced in Cali- 
 fornia can be stabilized through the regulation of the flow of shipments 
 from this state which prevents temporary gluts and scarcities. Such 
 regulation will enable a larger quantity of oranges to be moved into con- 
 sumption at a higher level of prices to growers. 
 
 Limitation of shipments for the season as a whole is a device to be used 
 intermittently ; regulation of the flow of shipments during the season, 
 without actual limitation of the total supply, is a device to be used con- 
 tinuously. Limitation of the total supply placed on the market will prove 
 beneficial in years of acute emergency situations ; that is, when prices 
 and returns to growers would otherwise be at distressingly low levels. 
 Regulation of the flow of shipments during the season will prove bene- 
 ficial under nearly all conditions, and its use in years of surpluses, by 
 facilitating the movement of oranges through trade channels into con- 
 sumption will reduce the size of that surplus. 
 
 27m-2,'36