CALIFORNIA AGRICULTURAL EXPERIMENT STATION CIRCULAR 373 SEPTEMBER, 1947 CALIFORNIA ASPARAGUS ECONOMIC STATUS 1946-47 Sidney Hoos and H. Fisk Phelps ;♦::;-:!::-;! :.;k:.-: .:■■:, -:-!:■•■« ■•'■-;■::■ 1 100 Id 2 80 a: 01 o 60 H O O o i: 40 < d 20 i- 3 CALIFORNIA ASPARAGUS UTILIZATION AND FARM PRICE 1920 1930 1940 200 160 o i- o o o c - - 4 NEV / JERSEY^ •*- k/ * * ■ ^ - " WASHIN GTON-x • ••♦•••••...«* *' —4 1 1 » * •• •• • • ••« 1920 1925 1930 1935 1940 1945 however, on the basis of the present and prospective trends in acreage and yield, assuming that age distribution of asparagus beds remains relatively con- stant. Although California acreage (fig. i) has followed a slight downward trend over the last seven years, the present acreage will probably be main- tained. This, in conjunction with slightly increasing yield (fig. 5) experienced during the past eight years, can be expected to result in state production re- maining at about the present level— or possibly a little higher— for several years. In the other major producing states— New Jersey and Washington— both acreage and yield per acre (fig. 5) have been increasing steadily over the past ten years. Production is likely to continue its present upward trend in both of those states (fig. 4). For the United States as a whole, the constant or the slightly decreasing trend in California asparagus production will probably be more than offset by the increasing trend in production in the other states; thus, United States asparagus production probably will continue to increase grad- ually for several years. Production statistics do not completely reflect the final use of asparagus. First, some quantities included in production data may not be marketed be- cause of economic conditions, prorate and marketing agreements, or disease. Second, part of the crop is processed, while the rest is shipped to fresh market. And third, production for processing may go into either canned or frozen out- lets. It is necessary, therefore, to consider utilization data to get a more com- plete picture of the trends in the use of harvested asparagus. . CALIFORNIA ASPARAGUS: ECONOMIC STATUS USE OF HARVESTED PRODUCTION In California, canning now takes about 60 per cent of harvested production, fresh shipments 25 per cent, and freezing 1 5 per cent. In the United States as a whole, harvested produc- tion going into fresh use in- creased steadily from 1922 to 1932, then gradually de- creased with great yearly fluctuations. In 1918, asparagus going into fresh-market channels made up over 40 per cent of the total harvested production. Although the proportion had increased to almost 70 per cent by 1932, it then decreased so that by 1945 only 25 per cent of the total production was utilized in fresh form. The amount of harvested production used for canning in the United States increased steadily during the entire period 1918 to 1945, except for a sharp drop in 1931 and 1932, and again in 1937 and 1938. Although the absolute quantity canned increased over this period, the percentage of the total har- vested production canned showed marked fluctuations. Making up 57 per cent of the total production in 1918, the proportion canned increased to almost 70 per cent in 1922, decreased to slightly over 30 per cent in 1932, and grad- ually recovered to 60 per cent by 1945. Figure 5 YIELD PER ACRE OF ASPARAGUS IN CALIFORNIA, NEW JERSEY, AND WASHINGTON 1918-1946 200 1920 1925 1930 1935 1940 1945 10 CALIFORNIA EXPERIMENT STATION CIRCULAR 373 Figures on the use of asparagus for freezing were first reported in 1937, when about 5 per cent of the total United States harvested production was used for freezing purposes. For the last three years, both the absolute quantity frozen and the percentage of total production frozen have increased. In 1946, almost 15 per cent of total production went into commercial freezing. California. The use of harvested asparagus in California (fig. 6) has shown somewhat different trends from those for the United States. The quantity going into fresh-market channels increased during the ten-year period 1922- 1932, but since then has followed a gradual downward trend. In 1918, the proportion of California harvested production used fresh was 25 per cent. By 1932, fresh usage had increased to over 50 per cent of the total, but gradu- ally returned to the 25 per cent level in 1945— about the same as for the United States as a whole. The quantity of California harvested production moving into canning channels increased strongly from 1921 to 1929 (fig. 6). After a sharp decrease to 1932, canning use increased again to 1936 and then fell to a lower level in 1938, about which it fluctuated through 1945. The percentage of California harvested production used for canning has followed a steady downward trend; comprising 75 per cent of the total in 1918, the proportion canned had decreased to 47 per cent by 1932, and then recovered so that, in 1946, 61 per cent of harvested production was used for canning. The extent to which Cali- fornia's importance in the canning industry has decreased is brought out in Figure 6 UTILIZATION OF CALIFORNIA HARVESTED ASPARAGUS PRODUCTION 1918 " 1946 150 1945 CALIFORNIA ASPARAGUS: ECONOMIC STATUS 11 figure 7. In 1934, California packed about go per cent of all asparagus canned in the United States. Since 1941, however, this state has accounted for about ()o per cent of the total pack. This change in percentage is due mostly to in- creases in tonnage packed in other states. California asparagus for freezing is more significant from the viewpoint of its potential growth than from the quantity now used by the frozen-food in- Table 2 CARLOT SHIPMENTS OF FRESH ASPARAGUS BY STATES OF ORIGIN (Railroad cars) Period or year California Georgia Illinois New Jersey South Carolina Washing- ton Others Total United States Average 19201924 469 2 149 215 140 6 3 983 1925-1929 1,393 88 165 120 409 94 18 2,287 1930-1934 2,608 113 109 18 539 84 92 3,563 1935 1939 1,636 70 31 1 343 41 65 2,186 1940-1944 2,178 10 6 11 116 85 8 2,213 Annual 1945 829 11 12 111 18 981 1946 1,287 3 12 2 57 12 1,373 Figure 7 CANNED ASPARAGUS PACK IN CALIFORNIA AND OTHER STATES AS PER CENT OF UNITED STATES PACK 1934- 1946 100 12 CALIFORNIA EXPERIMENT STATION CIRCULAR 373 dustry. In 1945, about 14 per cent of the production was frozen. The develop- ment of varieties more suitable for freezing will help to expand the frozen- asparagus outlet. The proportions of California harvested production going into both fresh and canned channels have remained fairly constant since 1932— at about 35 per cent for fresh use and 60 per cent for canning. In 1946, frozen utilization showed a marked increase, and the upward trend is likely to continue with the growth of the frozen-food industry. Fresh Shipments. The production of asparagus for fresh-market use is con- centrated in relatively small areas in a few producing states. From these "sur- plus" producing areas, the greater portion of the season's fresh supply is Table 3 PERCENTAGE DISTRIBUTION BY GEOGRAPHIC DIVISIONS OF CALIFORNIA CARLOT SHIPMENTS OF FRESH ASPARAGUS Period or year Average 1933-1937 1938-1942 Annual 1943 1944 1945 1946 New England 11.3 11.9 8.9 7.7 5.7 9.0 Middle Atlantic East North Central West North Central Mountain Pacific Per cent Others 47.9 21.9 7.3 2.5 5.1 46.6 26.5 6.0 2.2 3.7 42.7 26.4 6.7 2.7 4.9 44.7 26.9 7.5 4.0 3.9 41.1 27.7 6.3 6.3 8.8 49.9 25.5 4.2 2.6 3.6 4.0 3.1 7.7 5.3 4.1 5.2 shipped to the great consuming centers of the nation. Reliable data are avail- able only for carlot shipments (table 2) of fresh asparagus. But carlot ship- ments do not give a complete picture because an increasing amount of shipments in the eastern states have been made by truck movement, especially to local and near-by markets. Thus, carlot shipments give an exaggerated pic- ture of California's importance as a shipper of fresh asparagus, relative to other states. However, they do give an adequate picture of the state's ship- ments to middle western and eastern markets. The distribution of California's carlot shipments of fresh asparagus has shown few significant changes over the last fourteen years. Table 3 compares the percentage of California's shipments sent to the various geographic re- gions of the United States from 1933 to 1946. During the war years the decrease in percentage of California shipments to the New England and Middle At- lantic states was accompanied by a corresponding increase in shipments to the Mountain and Pacific states. In 1946, however, the prewar distribution of shipments again prevailed to a great extent. CALIFORNIA ASPARAGUS: ECONOMIC STATUS 13 FARM PRICES Farm prices of asparagus in 1946-47 exceeded peak wartime levels. How- ever, wartime influences cannot be expected to continue indefinitely. The season's average prices received by farmers for as- paragus in all states have shown three distinct trends during the 1918-1946 pe- riod: increasing from 1918 to 1922; decreasing from 1923 through 1933; and rising sharply since 1934. The farm price for fresh-market asparagus in the major producing states is shown in table 4. During the period 1918-1932, the price in California was below the average for all states, but since 1933 (except for 1945) it has aver- aged well above the prices in Washington and New Jersey, as well as the average for all states. California fresh shipments to eastern markets occur in the early weeks of the season, when the market price is high and before eastern shipments are large enough to depress the market price. The farm price for processing asparagus (table 4) is the average of the prices paid for the two types of asparagus used for commercial processing— regular white and all green. The prices paid growers for each type have followed the same trends and fluctuations over the last fifteen years. However, the prices for all-green asparagus have been higher than those for regular white. During the last ten years this differential has been relatively constant, at about $20 per ton in favor of the all-green. The differential is influenced not only by the increased preference of consumers for the canned all-green asparagus, but also by the higher farm production costs. Farmers have to pay asparagus cutters Table 4 SEASON'S AVERAGE FARM PRICE FOR FRESH-MARKET AND PROCESSING ASPARAGUS Fresh market Processing Period or year California Washington New Jersey Average all states California Dollars per crate Dollars per ton Averages 1918-1922 1923-1927 1928-1932 1933-1937 1938-1942 Annual 1943 1944 1945 1946 2.16 2.05 1.86 1.25 1.61 2.75 2.70 2.70 3.30 2.49 1.87 1.05 1.17 1.85 2.05 2.15 2.15 2.37 2.44 1.66 1.13 1.52 2.50 2.10 2.80 2.45 2.56 2.41 1.94 1.25 1.50 2.44 2.36 2.76 2.62 83.00 83.00 74.00 71.79 91.24 151.30 153.30 168.00 183.00 14 CALIFORNIA EXPERIMENT STATION CIRCULAR 373 14 Figure 8 CALIFORNIA SEASON'S AVERAGE FARM PRICE FOR FRESH-MARKET AND PROCESSING ASPARAGUS 1918 -1946 Z> O Q. a: iii a. 600- < NEW JERSEY .**' <**'' ■•** ^^ ILLINOIS 1935 ^—■■"^ 1940 I > *■ 1945 Illinois have remained relatively constant. Only twelve years ago, California accounted for about 90 per cent of the total United States canned-asparagus pack. But during the 1934-1941 period, the California proportion decreased and that of other states increased. Since 1942, the proportion of the total pack canned by the various states has been relatively constant, with California con- tributing about 60 per cent; New Jersey, 15 per cent; Illinois, 9 per cent; and the other states, 16 per cent. Three distinct levels of total United States canned shipments have been in evidence over the last thirteen seasons (fig. 12). Each level has been higher than the previous one, with the third level 50 per cent greater than the first. This has resulted largely from the influence of government purchases for ship- ment to the armed forces and the allies. Shipments into domestic civilian chan- nels increased gradually from the 1934-35 season to 1942-43, then decreased with a sharp drop in 1945-46, but increased to a new high in 1946. Exports of canned asparagus were relatively constant from 1934-35 to 1937-38. For the next four seasons, exports were about half the previous period. During the war years, shipments to war services greatly increased total shipments into other than civilian channels. By 1946-47, export shipments declined almost to the level of the middle 1930's. California Canned Pack and Shipments. The asparagus-canning industry in California has shown several distinct phases since 1918. From that date through 1929, the canned pack increased steadily to over 2.6 million cases. After a sharp drop in 1932, the pack increased slightly until 1936. Since 1936, two trends have been in evidence (fig. 11): a decreasing one to 1941, and a rising one from 1942 to 1946 when a record high pack was canned. 18 CALIFORNIA EXPERIMENT STATION CIRCULAR 373 The two types of asparagus used for canning in California have shifted con- siderably in importance since 1930 (fig. 13). In that year, 90 per cent of the asparagus canned was regular white and the remaining 10 per cent all-green. The pack of regular white asparagus decreased gradually from 1930 through 1946, while the all-green pack was relatively constant from 1933 to 1941, and then increased steadily through 1946. By 1946, the regular white pack was only 42 per cent of the total pack, while all-green made up 58 per cent of the Table 5 CANNED ASPARAGUS PACK IN THE UNITED STATES AND THE MAJOR PRODUCING STATES California New Jersey Illinois United States Actual cases in thousands Average 1934-1938 1939-1943 Annual 1944 1945 1946 2,074 1,988 2,436 2,480 2,783 132 484 590 432 624 160 321 315 362 396 2,513 3,225 3,833 3,921 4,443 Figure 12 UNITED STATES SHIPMENTS OF CANNED ASPARAGUS TO CIVILIANS AND TO EXPORTS AND WAR SERVICES SEASONS, 1934-35 TO 1946-47 5.0 TOTAL SHIPMENTS 1935" 36 CALIFORNIA ASPARAGUS: ECONOMIC STATUS 19 total. The increase of the all-green pack is associated with the expansion of asparagus canning in other states; California is the only state which cans the regular white pack. Statistical demand studies of California canned asparagus have shown that the volume of annual shipments by packers is influenced not only by canners' f.o.b. prices, but also by the level of income in the country. At a given price, shipments tend to be greater when consumers' income is high than when it is low. The statistical studies also support the view that the canned-asparagus Figure 13 CANNED PACK OF REGULAR WHITE AND ALL-GREEN ASPARAGUS IN CALIFORNIA 1930-1946 2500 / ^ — ALL GREEN 1930 i i 1935 i i i 1940 1945 pack of other states affects the demand for and shipments of California canned asparagus. The pack of other states competes with the California pack. This is important to California growers of asparagus for canning, as well as to can- ners in this state, because the pack of other states has been increasing. The major data on pack, carry-over, and shipments of California canned asparagus are shown in table 6. The average carry-over during the 1930-1935 depression period was more than twice the carry-over during the previous rela- tively prosperous period, 1925-1930. As purchasing power and economic activity increased from the middle i93o's through 1946, the carry-over each season has gradually been reduced. These adjustments in carry-over, plus the opposite adjustment in the pack each season, have resulted in a relatively con- stant annual supply available for shipment. Agreements. As early as 1933, some California growers of processing aspar- agus and some packers wanted to establish a formal procedure to set the pack and take care of an expected surplus. But no plan was introduced, since it proved impossible to bring the opposing factions into agreement. Although no formal agreement was set up the following year (1934) the California 20 CALIFORNIA EXPERIMENT STATION CIRCULAR 373 Table 6 CALIFORNIA PACK, CARRY-OVER, AND SHIPMENTS OF CANNED ASPARAGUS Period or season Carry-over March 1 (from previous year) Pack Total supply available Shipments Actual cases in thousands Averages 1925-26 to 1929-30 1930-31 to 1934-35 1935-36 to 1939-40 1940-41 to 1944-45 Season (Mar.-Feb.) 1945-46 300 614 413 256 152 126 190 2,236 1,955 2,061 2,105 2,480 2,783 2,259 2,536 2,569 2,474 2,361 2,632 2,910 2,449 2,206 1,977 2,069 2,109 2,506 1946-47 2,720 1947-48 packers operated under a government license, and a committee fixed the pack as well as established minimum prices to growers. The next season (1935) the pack was fixed under AAA marketing agreement which also included a schedule of minimum prices to growers. A series of agreements under state legislation began in 1936. In that year and the following, the California asparagus-canning industry was governed by agreements authorized by the California Marketing Agreement Act passed in 1935. Although no growers' prices were set nor was the pack limited in size, the agreement provided for inspection and grading, limited the length of the packing season, and restricted the grades which could be canned. The California Marketing Act of 1937 served as the general authority for canning-asparagus agreements from 1938 on. The marketing orders set up under the Act provided for the inspection of all asparagus delivered to can- ners, and established minimum grading requirements. Also beginning in 1938, a Proration Program Committee for canning asparagus was established under authority of the Agricultural Prorate Act, with authority to fix the maximum seasonal pack and to set a closing date for deliveries for canning. These fea- tures were used in varying detail during the following years, and it is of interest that the use of controls over prices to growers has been less prevalent than the use of controls over the quality of the asparagus canned. During the war years, control over the quantity packed was not exercised, although control over the quality of the pack was maintained. Since it is likely that canning-asparagus controls will continue, the major features of the various programs are sum- marized, for convenient reference, in a separate appendix. The tables and figures appearing in this circular are summaries of more detailed tables, which are published in a separate Statistical Supplement in mimeographed form and which give the sources in detail. This supplement and a summary of California Canning Asparagus Controls may be obtained by writing to the Giannini Foundation of Agricultural Economics. 61m-10,'47(A5397)