University of California College of Agriculture Agricultural Experiment Station Berkeley, California Statistical Analysis of the Annual Average F.O.B, Prices of California Canned Asparagus, 1925-26 to 1949-50 by Sidney Hoos April 1950 Contribution from the Giannini Foundation of Agricultural Economics Mimeographed BepoJTt No, 106 UBKARY rnt i irrj OF AGRICULTXJRB DAVIS statistical Analysis of the Annual Average F.O.B. Prices of California Canned Asparagvis, 1925-26 to 1949-50 Sidney Hoos^''' This report is another in the annual series issued hy the Giannini Fovindation of Agricultural Economics for use iiy the California canned asparagus industry. The report summarizes the results of statistical analyses of the annual average f .o.b, prices of California canned asparagus and is based on data for the period beginning with the 1925-26 marketing season and ending with the 1949-50 marketing season. The war years 1941-42 through 1945-46 are excluded from the analyses because of the abnormal conditions prevailing then, such as federal price control. The primary purpose of the report is to provide canning asparagus growers, and the packers, distributors and purchasers of canned asparagus, with the latest available statistical analyses of the major factors which have influenced the chfiuiges in the annual average f.o.b, prices of California canned asparagus. Such major factors include the domestic movement of canned asparagus from California canners, the level of nonagricultural income in the country, and the volume of asparagus canned in other states. Those price-influencing factors are shown, for the period under consideration, in table 2 appended to this report. The f.o.b, prices of California canned asparagus are industry average prices; they are based on records of canners and reflect actvial operations of the canneries packing asparagus in California. The domestic movement of California canned as- paragus has been derived from statistics issued by the Asparagus Advisory Boards and the Canners League of California j the total movement from canneries has been 1/ Associate Professor of Agricultural Economics, Associate Agricultural Economist in the Experiment Station and on the Giannini Foundation. •.■tro-'-'' ■M.-'i adjusted for exports from California (San Francisco and Los Angeles ports) to derive the movement to the domestic market. The index of United States non- agricultural income is based on reports issued by the United States Department of Commerce, The data on canned asparagus pack of states other than California are from reports issued by the National Canners Association and the Canners League of California, Specific sources for the several series of data, and more detailed specifications, are noted in explanatory footnotes to tables 1 and 2, In the statistical analysis, the average relationships which prevailed, during the period from 1925-26 through 1949-50 (excluding 1941-42 through 1945-46), between the f.o.b, prices of California canned asparagus and three major factors were measured. These three major price-influencing factors include (l) domestic shipments of California canned asparagus, (2) nonagricultural income payments in the United States, and (3) volume of asparagus canned outside of California. Figure 1 shows graphically the average relations between the f.o.b, price and each of the major factors or independent variables, as determined by equation 1 in table 3, Expressed in numerical terms, these average relations are as follows for the period of years under consideration: (a) With both the nonagricultural income payments and the volume of asparagus canned outside of California held constant, a change of 100,000 cases in domestic shipments of California canned asparagvis was on the average accompanied by a change in the opposite direction of about 10 cents a case in the f.o.b, price of California canned asparagus. This relation is shown graphically by the line in panel A of figure 1. (b) With both domestic shipments of California canned asparagus and the volume of outside pack held constant, a change of 10 per cent in the index of nonagricviltural incme payments was on the average accompanied ■'r:.\ • it.: - ■ ■ ■ .-O : . T .... . V;..-; ,i,:t:- ; 3. Ijy a change in the same direction of about 40 cents a case in the f.o.b, price of California canned asparagus. This relation is shown graphically tsy the curve in panel B of figure 1, (c) With both domestic shipments of California canned asparagus and nonagricultural inccane payments held constant, a change of 100,000 cases in the volume of asparagus canned outside of California was on the average accompanied by a change in the opposite direction of about 10 cents a case in the f.o.b, price of California canned as- paragus. This relation is shown graphically by the line in panel C of figure 1. Differences between the actual prices and those estimated by equation 1 of table 3 are given in table 4, column 3, The differences are also plotted as deviations from the respective net regression lines in figure 1, The differences, expressed in terms of per cent of the actual price, vary from about two tenths of 1 per cent in 1926-27, 1928-29 and 1929-30 to about 9 per cent in 1947-48 and 1949- 50. The average f.o.b, price for California asparagus in 1949-50 was the highest of any year in the analysis. Such an average price occxu*red in the face of a pack in 1949 which was exceeded only once in postwar years (1946) and was exceeded only twice in prewar years (l929 and 1930), The 1949-50 marketing season opened with a carry-over from the preceding year of 130,000 cases, which supplemented by the 1949 pack, resulted in 2,755,000 cases available for shipment. During the year, almost 2,5 million cases were moved from California canneries. Exports, although slightly higher than in the previous year, wore less than during the immediate postwar years and substantially less than the prewar average exports. The level of nonagricultural money income in the country continued favorable and undoubtedly supported the relatively strong market demand for California canned asparagus. 'f ■ •,,!••■ :<■■ ,;.;;.i.1.> •■ • ■ ■ -- , t :? V .■; I' ■ .1 ' 4 A fact of some importance to growers and packers in the state is that the 1949 pack of canned asparagus outside California was the highest on record. The statistical analysis indicates that asparagus canned outside of California is competitive in sales with asparagus packed in California, Hence, the growth and position of canned asparagus produced in other states merits careful con- sideration in the formiilation of production and marketing policies and programs for California canned asparagus. I Figure 1 5. Net Regression of F.O.B. Prices of California Canned Asparagus, 1925-26 to 1949-50, on: A, Domestic Movement of California Canned Asparagus; B, Index of U.S. Nonagricultural Income Payments; and C, Pack of Asparagus Canned Outside California 50 100 150 200 250 300 X, : Index of U.S. Nonagricultural Income Payments (1935-39 <= 100) i ■ 6. Figure 1, continued M K O U o a 1-1 O 7.0 6.0 I 5.0 o o •H « 4.0 o (c) X, = 6.065676 1*4 0.000960 X, 3.0 0 500 1000 4&-50 ft 47-48 1500 2000 X 4' Pack of Asparagus Canned Outside California (1,000 cases) t 7. TABLE 1 Pack, Carry-over, Shipments and Domestic Movement of California Canned Asparagus, 1925-26 to 1949-50 California Year March through February Carry-over from preceding year Available for shipment Total movement California exports California domestic movement 1 2 5 4 5 6 in 1,000 cases 1925- 26 1926- 27 1927- 28 1928- 29 1929- 30 1,745 2,236 2,190 2,338 2,673 170 251 407 402 269 1,915 2,487 2,597 2,740 2,942 1,664 2,080 2,195 2,471 2,619 325 278 358 408 506 1,339 1,802 1,837 2,063 2,113 1930- 31 1931- 32 1932- 33 1933- 34 1934- 35 2,663 1,747 1,313 2,135 1,914 323 958 1,059 454 276 2,986 2,705 2,372 2,589 2,190 2,028 1,646 1,918 2,313 1,980 329 264 245 376 412 1,699 1,382 1,672 1,937 1,568 1935- 36 1936- 37 1937- 38 1933-39 1939-40 2,238 2,350 2,072 1,796 1,849 210 305 522 576 450 2,448 2,655 2,594 2,372 2,299 2,143 2,133 2,018 1,922 2,126 438 411 325 251 257 1,705 1,722 1,693 1,661 1,869 1940-41 1942-43 1 Oil X AA ■JLOrtO— 'X'X 1944-45 2,182 1,578 2,258 2,071 2,436 173 399 307 220 177 2,355 1,977 2,555 2,291 2,613 1,956 1,670 2,345 2,114 2,461 116 (n.a.) in a ) (n.a.) 1,£ 40 194^6 1946- 47 1947- 48 1948- 49 . 1949- 502/ 2,480 2,783 2,259 1,983 2,625 152 126 189 174 130 2,632 2,909 2,448 2,157 2,755 2,506 2,720 2,274 2,027 2,498 (n.a.) 251 282 17&/ 2,489 1,992 1,893 2,325 1950-51^/. 257 a/ Preliminary, subject to revision, (n.a,), not available. b/ March through December 1948, Sources of data: Cols, 1-4: Canners League of California and Asparagus Advisory Boards, Carry- over figures are total stocks on hand, sold and unsold. Col. 5: Compiled from reports of United States Bureau of Foreign Commerce, United States Department of Commerce. Shipments from ports of San Francisco and Los Angeles only. Pounds converted to cases on the basis of 34 pounds per case. Col, 6: Column 4 minus column 5, 8, TABIE Z Annual Average F,0,B, Prices of California Canned Asparagus and Important Factors Affecting Them, 1925-26 to 1949-50 (excluding 1941-42 through 1945-46) Year March through February F.O.B. price of California canned asparagus Domestic move- ment of Cali- fornia canned asparagus Index of U, S, nonagri cultural income (1935-1939=100) Canned asparagus pack of states other than California 1 2 3 4 dollars per case 10,000 casesV per cent 1,000 c ases 1925- 26 1926- 27 1927- 28 1928- 29 1929- 30 $6.01 5,69 5.44 5.63 5.69 134^ 18o)gQP 184, pO 206, rab 211,W) 110 114 115 119 123 A O 48 37a/ 4ca/ 53 1930- 31 1931- 32 1932- 33 1933- 34 1934- 35 5.64 5 54 4.10 3.49 4.30 170^ 194,11^0 157 110 94 72 71 80 10C&/ 142 20 184 235 1935- 36 1936- 37 1937- 38 1938- 39 1939- 40 4.55 4.75 5.22 4.48 4.44 170 ,'{300 172 000 169,006 166,0^5' 187,j^0 87 103 106 101 108 281 438 631 607 671 1940-41 4,68 184,^0 117 927 : (war years) * • ? / . 1946- 47 1947- 48 1948- 49 1949- 50^/ 6.86 7.21 8.32 8.59 249, dOp 199,^ 189,1^0 232 , 0M 258 285 306 309 1,659 1,658 ■ 1,715 1,865 , ..1.1. 1 i a/ Preliminary, subject to revision. ^ Ij^fO cases rounded to nearest ithousand. Sources of data: Col. 1: Years 1925-26 to 1935-36 compiled from records of canners, Years 1936- 37 to 1948-49 f rcan reports of Asparagus Advisory Board and records of canners. Col, 2: From table 1, column 6, Col, 5: All figures obtained from the following sources, converted to 1935-1959 base by dividing by 62,22; 1925-26 to 1928-29: U,S,B.A.E. mimeo, dated 2/2/42; 1929-30 and all subsequent years tStatistical Supplement to Survey of Current Business, July 1947, table 48j Survey of Current Business, montW^r issues and weekly supplements; 1949-50 reflects data through January 1950. (Continued on next page.) Table 2 continued. 9. Col, 4: Years 1925-26 to 1932-33 from U. S. Dept. of Commerce, Biennial Census of Manufactures, with 1926-27, 1928-29, and 1930-31 estimatedj years 1933-34 to 1941-42 compiled from Canned Food P&ck Statistics, National Canners Association; years 1942-43 to 1949-50 derived from data in Canners League of Galifomia, Asparagus Report, December 9, 1949, San Francisco, G ■ • ■ - It" ■'■ • 1 Oj <■ . TABLE 3 California Canned Asparagus Regression Coefficients and Auxiliary Constants for Miiltiple Regression Analyses Covering 1925-26 through 19^9-50 (excluding 1941-42 through 1945-46) Equa- tion Dependent variable Constant term Net regression coefficients^/ (figures in parentheses are t-ratios) Adjusted co- efficient of multiple cor- relation "R Xg ^3 log,Q(X3) \ t t2 1 2 3 4 5 6 7 b 9 10 11 1 ^1 -12.594223 -0.009885 9.775417 -0.000960 /It /NT ■7li'7A\ .UJL C* (O) 0.9707 -423.854186 -34.929064 390.053079 \j . j'-t'D iy) -0.030135 0.7365 3 ^1 -10.649874 -0.009469 (2.702337) 8.564089 (13.944589) -0.056642 (3.807408) 0.9691 4 -337.025724 -33.094791 (2.702337) 335.961800 (3.312785) -1.563127 (1.359706) 0.7232 5 1 ^1 3.520163 -0.008764 (2.544671) O.C27772 (5.162778) -0.101366 (4.074592) -0.004046 (0.827487) C.971I+ 6 ^2 207.910367 -34.407126 (2.544671) 1.347813 (3.056947) -4.273985 (2.163785) -0.388403 (1.308644) 0.7087 a/ X, » Annual average f.o.b, price of California canned asparagus; in dollars per case (see table 2, coliunn 1) . X2 - Domestic movement of California canned asparagus; in units of 10,000 cases (see table 2, column 2). = Index of nonagricultural income payments in the United States, 1935-1939=100 (see table 2, column 3) • Xi^ = Canned asparagus pack of states other than California; in units of 1,000 cases (see table 2, column 4). t = Time in years; origin at 1935-36. ' — "1 ,-3jt*itQATSC- — (2-< .1 . . J ■ ■■ 1 (5 - ■) >. <■ -r) ~c ..V, {7:- ' 1) ■ t ■: f J . J z:^ (r ! ■ — , 1 -0* 00r¥?6 1 (T3- ■ • 0 ' " ~ '"^ " 1 1 1 — -.4 X ■ 1 ^. 1 . \Jt --' '■ , i_. 1' h= A TO ' .IT ; 1 ! • 1 nj- -> . - ' coi.- €. . . - :f ci . vry'i.-'Efcg CO- jjep teste 8 a yon cot. -£si^\- IVBTE 3 11. TABIE 4 Actual and Estimated F.O.B, Prices of California Canned Asparagus 1925-26 through 1949-50 (excluding 1941-42 through 1946-46) Year March Difference : Percentage diffe .r— through Actual Estimated col. 1 minus ence: col, 3 as i February price price col. 2 per cent of col. 1 1 2 3 4 1925-2S ftfi m 1926-27 5.69 5.70 -0,01 -0,2 1927-28 5.44 5.71 -0.27 -5,0 1928-29 5.63 5.62 0.01 0.2 1929-30 6.69 5.70 -0.01 -0,2 ■ \J. WD 1 T 1951-32 5.54 5.19 0.35 6.5 1932-33 4.10 3.89 0.21 5.1 1933-54 3.49 . 3.41 0.08 . 2.S 1934-35 4.30 4.23 . 0.07 1.6 1935-36 4.55 4.41 0.14 S.l 1936-37 4.75 4.96 -0.21 -4.4 1937-38 . 5.22 4.93 0,29 5,6 1938-39 4.48 4.78 -0.30 -6,7 1939-40 4.44 4.79 -0,35 -7.9 1940-41 • 4.68 4.91 -0.23 -4.9 • (war years) : 1946-47 6.86 6.93 -0.07 -1.0 1947-48 7.21 7.84 .-0,63 -8.7 1948-49 8,32 8.19 0.13 1.6 1949-50 8.39 7.66 0.73 8.7 ! 1 Sources of data: Col, 1: From table 2, column 1, Col. 2: Based on equation 1, table 3. .50 'to Bsal-rt ,0.;).^i .be • •rriaLf.j'nA. • -j.v. i-'i §id:bixIoXi>) OB~^•)^?X■ rfgjc ."v.: 1 .:i . j j3 B « loo j aoxre Izui'^k ■■■■ 5! .loo i A L__i , »- ■..- ^ r~ — 1 s f , — 1 i—— ~ ' '■ .1 1 ■■■■■ 1'— i I > — 1 — .. ..I so.0-4? ■ IG.O- • .C'fj.fi' «•• 10. 0 . ■ i..r, j ..... ... n '■ ■ 1 .■ i -.^ . ^' : / ■ I i "-, • ' 1 • • S3,d .■• I 05 .0-. 1 , i f . (aTjjss'i -iiiw) ■ 1 • O.X-V ' ec..a , xs,v. ..' ! : -...^ . Sv.*J. It ' - - - - . ^ t. IL.. • :jD