CALIFORNIA PLUMS ECONOMIC STATUS, 1950 Jerry Foytik CIRCULAR 398 OCTOBER, 1950 ^* * CALIFORNIA PLUMS: Utilization of Crop and Farm Prices, 5-Year Averages, 1909-1948 j Not Utilized |:£i£i1 Shipped Out of State Used Fresh in State Processed The California plum industry has undergone important changes during the past 30 years. This circular reviews the factors responsible for these changes and indicates the situation in prospect. Here is the situation Acreage . . expanded rapidly until 1929, declined during the 1930's, in- creased gradually since 1942. Now there are more trees in the San Joaquin Valley, in the older ages, and in the 4 major varieties. This is the outlook A further increase of 20 per cent in bearing acreage is indicated for the immediate future. Expansion will cen- ter in San Joaquin Valley; will be large for Beauty, Santa Rosa, Duarte, and President varieties. Yield . . remained at 2 tons per acre until 1935, increased rapidly to 3% tons thereafter. Yield varies widely from year-to-year, between varieties, and district-to-district. Production . . increased because of expanding acreage until 1930, and because of increasing yield since 1935. Marketings . . are largely limited to fresh consumption; sales almost equally divided between the California market, other private sales (including exports) the New York auction, all other auctions. Sale of 4 varieties ex- panded from 15 to 60 per cent of the total. Grower prices . . are lower for local than for interstate fresh sales— still lower for processing. Average price seems to be determined by consumer purchasing power and to lesser extent by available supplies of plums and other fruits. If good cultural practices (now being employed) are not abandoned, a yield of almost 4 tons per acre seems likely. Probable changes in acreage and yield point to a crop of 80,000 to 100,000 tons per year, depending on weather. Unless processing can be expanded entire crop will continue to be used fresh. Relatively more plums will be sold at California markets and earlier in season, before other fruits become plentiful. Increased sales from San Joaquin Valley, smaller shipments from Sacramento Valley are indicated. Course of prices for years ahead can not be charted. Price reductions are suggested by increased production of plums and other fruits. If consumer purchasing power continues at present high level, or goes higher, this danger may not develop. The Author: Jerry Foytik is Assistant Professor of Agricultural Economics and Assistant Agricultural Econ- omist in Agricululral Experiment Station and on the Giannini Foundation. CALIFORNIA PLUMS Economic Status, 1950 California plums are used chiefly for fresh consumption, mainly in the heavily populated industrial region of the north central and northeastern states. They account for 30 per cent of the fresh de- ciduous tree fruits shipped from the state. In the United States commerical produc- tion of plums is confined principally to a few specialized producing areas in Cali- fornia and to about 16 major varieties. These varieties show striking differences in tree growth and productiveness, in physical characteristics and in consumer acceptance. Plums are marketed in a stag- gered fashion throughout the season (May-September) in accordance with progressively later maturity dates of the successive varieties. Since 1933 the in- dustry has turned to compulsory pro- grams for marketing its crop. Regulations of out-of-state plum shipments, resem- bling restrictions employed under federal legislation for other specialty commodi- ties, have been promulgated during most seasons of the past sixteen years, exclu- sive of the war period. Will the shifts in geographic location and varietal composition of plum acreage and the recent trend toward higher yields raise production and fresh shipments to higher levels in the immediate future? Will it pay to plant additional acreage and, if so, what varieties will prove most profitable? Questions such as these are important to those who are interested in growing and handling plums. Definite answers cannot be given. Yet, by consid- ering past shifts and current trends, in- telligent projections for the future can be made for several of the factors affecting prices. Demand, which depends largely on the probable level of consumer pur- chasing power, cannot be estimated with any degree of assurance. It may be well to clarify the meaning intended by the commodity designated as a "plum." Originally, "prune" and "plum" were used to name the fruit of many hundred varieties comprising sev- eral different species. A distinction in meaning evolved gradually and is cur- rently recognized by the industry. "Prune" designates a variety which can be and normally is dried without removal of the pit. The term refers to both the fruit in its fresh state and to the dried product. "Plum" specifies a variety grown primar- ily for other uses— i.e., for fresh use, can- ning, freezing, crushing, and jam- and/or jelly-making. The "fresh prune," which is produced extensively in the Pacific North- west, is equally well-suited and has been utilized in substantial volume for fresh use, canning, and drying. Throughout this circular these terms will be used in the sense indicated. Here is the production and utilization picture Production. Plums can be grown suc- cessfully in most fruit-producing areas because the many different varieties have varying growth habits and widely differ- ent requirements as to moisture, climate, and soil conditions. In practice, however, the conditioning influence of these and other factors has limited commercial pro- duction in California to the interior val- leys of the central portion of the state and to the surrounding foothill regions. The Placer and lower San Joaquin Valley districts, each producing about two-fifths of the crop, are the important plum grow- ing sections. Substantial quantities are also produced in the Sacramento River [3] area— that is, in Sacramento, Solano, and San Joaquin counties. The remaining production is grown either in regions adjacent to these major districts or, on a limited scale, elsewhere in the state in conjunction with the production of other fruits. Production has been restricted primar- ily to some fifteen or twenty varieties in greatest demand for fresh consumption. At this point it is well to distinguish be- tween the Japanese and European vari- eties. The former— represented by such varieties as Beauty, Santa Rosa, Wickson, Duarte, and Kelsey— are typically me- dium to large in size, heart-shaped, and usually crimson or red (but never blue or purple) in color. They are early bloom- ers and have the advantage of being mar- keted early in the season before the main avalanche of summer fruits arrives. Most European plums (such as Tragedy, Sugar, and President varieties) are smaller in size, roundish or oval in shape, and usu- ally blue or purple in color— though the important canning plums, which are Eu- ropean varieties, are yellow and often large. A substantial portion of the production of fresh prunes from the Pacific North- west—equal to about half the California plum crop— is marketed fresh just as the plum season draws to a close. Michigan is the only other state which produces plums on a commercial scale. Its small crop, averaging 5,000 tons, is utilized primarily for jam- and jelly-making. In addition small quantities of California prunes occasionally are consumed in fresh form. Except during the late 1920's and the 1930's (while the average crop remained at approximately 60,000 tons), produc- tion of California plums increased stead- ily by about 2,500 tons per year. Figure 1 indicates that this upward trend in pro- duction was primarily the result of in- creases in bearing acreage until about 40 < §30 < 20 10 100 80 c 60 3 ° -1 1920 1925 1930 1935 1940 1945 1950 Fig. 1. Production, Bearing Acreage and Yield, California Plums, 1919 to 1949. [4] 1930, and of a sharp increase in yield since 1935. Annual variations in produc- tion are due largely to changes in yield, the result of fluctuations in weather. Such short-run changes are fairly large, amounting to as much as 20 per cent from the average in one year out of five. Thus, during an average decade, extreme weather conditions result in one crop being more than 20 per cent above "nor- mal" and another at least 20 per cent below "normal." For a complete explanation of changes in production it is necessary to examine the factors producing the variations indi- cated in figure 1. This requires a study of varietal and geographical shifts in acreage, changes in the age of trees in bearing acreage, modifications in cultural practices, and changes in grower returns. To make suitable estimates of probable future production consideration must be given to these factors rather than a simple projection of the individual trends of acreage and yield. The above changes will be discussed in detail later in this circular. Meanwhile we are able to state the main conclusion to be reached : a continued upward trend in production for the immediate future is indicated by present acreage and prob- able trends in yield. Within a few years an average crop of 100,000 tons is indi- cated. It is well to bear in mind the as- sumptions upon which this projection is based: 1. Good cultural practices will be con- tinued in the principal producing areas, even if prices decline. 2. Tree removal will be confined pri- marily to the less productive varieties and will be considerably less than during the 1930's. 3. Yield per acre will increase because more of the bearing trees will be at or near full production, bearing acreage in San Joaquin Valley (where yields are higher) will increase relative to that in other areas, and bearing acreage in all districts will shift to the more productive varieties. Utilization. California plums are used chiefly for fresh consumption within the state and in the central and eastern states. Since 1909-1913 the quantity marketed fresh rose from about 90 to over 97 per cent of the harvested crop. Although most plums are sold at markets outside Cali- fornia, local sales are increasing in rela- tive importance. Only small quantities are processed. Quantities not utilized were negligible until the depression of the 1930's but have been substantial during about half of the years since 1931. Data showing the utilization of the California plum crop for 1909-1948 are tabulated in table 1 on page 6. Canning, the only important process- ing outlet during normal times, uses only a small quantity of plums, and is largely limited to green or yellow varieties (espe- cially Green Gage, Jefferson, Washington, and Yellow Egg) which are not produced for fresh shipment to eastern markets. During the entire period since 1909 the amount sold to canners fluctuated between 1,000 and 4,000 tons, with an average of about 2,000 tons. An additional 5,200 tons of plums were frozen or crushed for remanufacture into jams and jellies, on the average, during 1943-1946 when gov- ernment requirements for these products were very large and berry production was small. These circumstances no longer exist and plums are not now used for these purposes. The proportion of fresh sales absorbed by intrastate markets remained at 10 per cent until about 1930 but increased stead- ily thereafter to the current figure of 20 per cent. This shift corresponds closely to the rapid population growth in Cali- fornia. Per-capita consumption at both local and eastern markets doubled during the past forty years and continues to be about four times greater in California than in the rest of the country. As a result fluctuations in harvested production are paralleled closely by [5] Table 1. Production and Utilization of California Plums, 1909-1948. Produc- tion, total * Quantities utilized for: Five-year average All sales Fresh marketings Canning Other Total Out-of- state Intra- state process- ing! Tons.fresh weight 1909-1913 1914-1918 1919-1923 1924-1928 1929-1933 23,000 33,400 49,200 59,000 62,400 60,600 71,800 80,800 22,800 33,200 49,000 58,800 57,300 60,300 66,900 79,900 20,600 30,800 45,900 56,100 55,400 58,500 64,400 74,700 18,600 27,400 41,700 49,600 47,600 48,300 51,200 59,700 2,000 3,400 4,200 6,500 7,800 10,200 13,200 15,000 2,200 2,400 3,100 2,700 1,900 1,800 1,200 2,200 1934-1938 1939-1943 1,300 1944-1948 3,000 * Difference between total production and all sales consists of small amounts used directly by the farm household (200 tons per year until 1930 and 300 tons thereafter) and quantities not utilized for the period since 1931. t Includes quantities frozen and crushed which were negligible until 1942 and were not reported separately. changes in fresh marketings, particularly of plums shipped to out-of-state markets. As stated, production is likely to average 100,000 tons within the immediate future. Unless processing is increased very mate- rially—which appears very unlikely- fresh consumption, both locally and at eastern markets, must be expanded to absorb 20 per cent more plums than the average for recent years. This situation will be particularly pressing if favorable weather helps to produce a bumper crop. Such a large quantity available for fresh sale may create a serious surplus prob- lem—unless consumer purchasing power continues at or above current high levels. Both acreage and yield have undergone some changes Acreage. Information on plum acreage for the period preceding World War I is incomplete. But production and utiliza- tion figures for these years suggest that acreage increased substantially during several decades before 1919. Bearing acreage almost doubled during the 1920's, declined substantially from 1930 to 1942, and increased gradually since 1942. The present bearing acreage (26,600 acres in 1949) is 15 per cent below the 1929 peak (31,600 acres) and 25 per cent above the low level (of 21,200 acres) for 1942. Half of the 33 per cent reduction between 1929 and 1942 has been offset by recent addi- tions. Important changes in the varietal, age, and geographical distribution of the total acreage have occurred and continue to take place. Fortunately, detailed acre- age data have been collected by the Cali- fornia Cooperative Crop and Livestock Reporting Service for the period since 1936. The changes indicated for this pe- riod are of interest since they have a strong influence on future production. Attention may be focused on the main recent changes by considering the 1936- 1946 period as 2 five-year intervals. Dur- 6] ing this decade reductions in acreage were confined mainly to the first five-year interval; increases were concentrated mostly to the second period. At the end of this decade acreage was only a few hundred acres greater than at the begin- ning. However, significant shifts occurred among the varieties represented, in the geographical distribution of acreage, and in the age composition of trees. When large reductions in acreage are made, trees of the less profitable varieties are usually removed, particularly in the older plum-growing districts. An expan- sion in acreage, on the other hand, tends to consist of plantings of the more desir- able varieties, especially in sections where higher yields prevail. Figure 2 shows the significant shifts in varietal and geo- graphical composition of plum acreage which took place between 1936 and 1946. Examination of this chart shows that during 1936-1946 two changes of con- siderable importance took place : 1. Acreage in San Joaquin Valley ex- panded considerably (40 per cent) . This increase was offset by reductions of 10 and 30 per cent in Placer District and in Sacramento Valley, respectively. 2. A large increase in acreage planted to early varieties occurred in San Joaquin Valley, whereas acreage of these vari- eties decreased by a considerably smaller amount in the other two important pro- ducing areas. San Joaquin Valley acreage remained constant between 1936 and 1941 and ex- panded by 40 per cent over the next five years. For the other districts considered as a whole a sharp reduction of 22 per cent (about 4,200 acres) during the first five-year interval was followed by a mod- erate increase of 2,200 acres. As a result of these changes in the geographical dis- tribution of plum trees, the proportion of the plum acreage located in San Joa- quin Valley rose from 29 to 41 per cent of the total within a span of ten years. 12 c o U) c a San Joaquin Valley Placer District Fia • •*. • .".v.* •• Late season Midseason Early season Sacramento Valley Other Counties 1936 1946 1936 1946 1936 1946 1936 1946 2. Varietal Classification of California Plum Acreage by Major Districts, 1936 and 1946. [7] Acreage declined from 21 to 14 per cent in the Sacramento Valley, and from 42 to 37 per cent in Placer District and con- tinued at 8 per cent for the balance of the state. A similar pattern is apparent in the case of varietal changes. Acreage of the three early varieties (Beauty, Santa Rosa, and Climax) increased 65 per cent (from 4,300 to 7,100 acres) in San Joaquin Valley and declined by 25 per cent (from 5,500 to 4,100 acres) in the other dis- tricts. For late plums (Duarte, Kelsey, President, and Grand Duke) and mid- season varieties (including minor vari- eties) acreage did not change appreci- ably. About three-quarters of the increase in San Joaquin acreage during 1936- 1946 was due to a doubling in the acreage of Santa Rosa plums. In addition, acreage was increased substantially for Beauty and Duarte plums and to a lesser extent for President and minor varieties. It de- creased in the case of the "six other vari- eties" enumerated separately (see table 2) . In the other districts a small increase in acreage of Santa Rosas only partly offset the large reduction for other early varieties. Acreage of other plums was decreased somewhat, especially for mid- season varieties in Sacramento Valley. These changes are brought out in more detail in table 2. The four varieties shown individually are the only varieties ( of the ten enumerated separately by the Crop Reporting Service) with significant acre- age increases after 1941. Age of Trees. While the industry was expanding, almost one third of the total acreage consisted of nonbearing trees. The proportion declined after 1923 and averaged only 11 per cent during the 1930's. Because of an increase in plant- ings since the early 1940's, the propor- tion of nonbearing trees has increased again. With tree removals at a low level during the past ten or fifteen years, the proportion of older bearing trees has in- creased so that in 1946 half of the acreage consisted of trees 17 years or more since planting. During this period the proportion of young bearing trees declined from 57 to Table 2. Acreage of California Plums, * 1 936, 1 94 1 , and 1 946. Variety State total San Joaquin Valley f Other districts 1936 1941| 1946 1936 1946 1936 1946 Santa Rosa Acres (total bearing and nonbearing) 5,080 3,390 1,900 2,830 13,200 9,120 5,640 27,960 5,300 2,370 1,900 2,260 11,830 6,300 5,690 23,820 7,880 2,640 2,670 2,530 15,720 6,130 6,430 28,280 2,850 1,080 110 530 4,570 2,670 960 8,200 5,330 1,510 570 740 8,150 2,130 1,180 11,460 2,230 2,310 1,790 2,300 8,630 6,450 4,680 19,760 2,550 1,130 2,i00 1,790 7,570 4,000 5,250 17,820 Beauty Duarte President Four listed varieties Six other varieties § . All other varieties . . All varieties * Does not incorporate the recent revisions in acreage data made by the California Crop and Livestock Reporting Service since only state totals were changed — and not substantially. f Includes Fresno, Kern, Kings, Madera, San Joaquin, Stanislaus, and Tulare counties. t The 1941 acreage includes 8,240 acres in San Joaquin Valley and 15,580 acres in other districts. § Includes Burbank, Climax, Grand Duke, Kelsey, Tragedy, and Wickson varieties. [8] 12 10 o o 2 6 San Joaquin Valley Placer District Sacramento Valley Older bearing trees (17 years or more) Younger bearing trees (16 years or less) Nonbearing trees Other Counties 1936 1946 1936 1946 1936 1946 1936 1946 Fig. 3. Age Classification of Plum Acreage by Major Districts, 1936 and 1946. 32 per cent of the total acreage. At pres- ent a large proportion of the acreage located in San Joaquin Valley and of that planted to the four major varieties ( Beauty, Santa Rosa, Duarte, and Presi- dent) consists of younger trees, including large numbers of nonbearing trees. On the other hand, plum trees in the other districts and of the less important vari- eties are much older and include only small numbers of nonbearing trees. The shift in the age composition of plum acreage occurring during 1936- 1946 is shown in figure 3. The most sig- nificant change is the large increase in nonbearing acreage in San Joaquin Val- ley. In this region new acreage has been planted on an extensive scale whereas only a small number of bearing trees have been removed from production. At the present time the total acreage is almost equally divided between nonbearing, young bearing, and old bearing trees. For the remainder of the state the distribution of acreage among these age categories is 7, 33, and 60 per cent, respectively. The bulk of the 1946 nonbearing acre- age (75 per cent of the total) was located in San Joaquin Valley and included 3,000 acres of the four major varieties and 500 acres of all other plums. The balance of the nonbearing acreage (located largely in Sacramento Valley) consisted of 60 per cent planted to the four major vari- eties and 40 per cent to all others. Over half of this nonbearing acreage was planted to Santa Rosas, 10 per cent to Beauty plums, and 20 per cent to Duarte and President varieties. The remaining 20 per cent consisted of varieties other than these four. These variations in the age composi- tion of plum acreage, when considered against the background of other changes, have an important influence on realized yield. And, aside from any indirect ef- fects operating through differences in yield, they have a significant bearing on [9] changes in the varietal composition and geographical sources of plum supplies during the next few years. Unless elimi- nation of trees follows a pattern substan- tially different from that experienced in the past, by selecting reasonable assump- tions with respect to plantings and tree removals, it is possible to forecast the acreage of old and new bearing trees in prospect 3 years hence. By 1953 the current nonbearing acre- age (of over 3,000 acres), if still stand- ing, will be of bearing age and the 2,000 acres now remaining from plantings made during 1933-1936 will have shifted from the younger to the older tree classi- fication. If tree removals continue to be small during the next few years, less than 1,000 acres of older trees will be taken from production by 1953. On this basis— which appears plausible— the total bear- ing acreage will increase by over 2,000 acres (to almost 29,000 acres). The in- crease will be almost equally divided be- tween young and old bearing trees. About three-quarters of the new bear- ing, less than half of the shift from young to old bearing trees, and only a small part of the tree removals are expected to occur in San Joaquin Valley. It appears likely, therefore, that within a few years the bear- ing acreage in this region will increase substantially (possibly by about 25 per cent). Over half of these bearing trees will still be under seventeen years old, and consequently capable of producing heavy yields. For the remainder of the state it is expected that total bearing acre- age will not change appreciably and that two-thirds of the bearing trees will con- tinue in the seventeen-years-and-over cat- egory. About half the increase in bearing acreage in prospect for the entire state during the immediate future probably will consist of Santa Rosa plums, mostly in San Joaquin Valley. Most of the re- mainder will be accounted for by Beauty, Duarte, and President plums. A further decline in the bearing acreage of several varieties is indicated since tree removals (and possibly top working to other vari- eties) will exceed new plantings. Yield. Figure 1 shows that the trend in average yield during the past decade is sharply different from that of the preced- ing twenty years. Yield fluctuated about an average of 2 to 2% tons per bearing acre for the period ending with 1935 and increased rapidly thereafter to about 3% tons. In view of the low yield (relative to the trend) experienced in 1947 and 1948 and the high yields during the immedi- ately preceding years, it is difficult to indicate the probable yield for the next few years. When due allowance is made for shifts in the varietal, geographical, and age distribution of plum acreage, however, a figure of 3.5 to 4.0 tons ap- pears to be a reasonable estimate for the immediate future. The long-run movement in yield is de- termined by forces other than weather. The most important of these factors are the varietal composition and geograph- ical location of the bearing acreage, the proportion of trees at or near full matur- ity, and the cultural practices followed. Although the extent to which each affects yield is not known, the significance of their combined influence is shown by the rapid increase in average yield during recent years. Some varieties are more productive and more regular bearers (when properly pollinated) than others. In some cases yields differ by as much as a factor of 2 or 3. The Japanese varieties generally come into bearing and reach full produc- tion at much earlier ages than do Euro- pean plums. The flat, fertile lands of the San Joaquin Valley, in addition to pro- ducing larger sizes of individual fruit, give a higher yield per acre than the hilly areas of Placer District. It has been esti- mated that the usual yield for good com- mercial orchards averages about 8 to 10 tons in lower San Joaquin Valley, 4 to 5 tons in San Joaquin County, 4 tons in the [10 Placer District, and 2 tons in Solano County. These yields are averages for actual varieties being produced and re- flect varietal and age as well as geograph- ical differences in yield. It is not possible to indicate by how much yields actually do vary at different ages, for different varieties, and in different districts because the information has not been gathered on this basis. Rootstocks, depth of soil, fertilization and irrigation practices, pruning and thinning, control of diseases, number of trees planted per acre, and similar factors exert a considerable influence on yield. It may be presumed that over the years cultural practices have improved and that the better practices currently in use are tending to increase average yields. Probably these improved practices will be continued unless prices fall so low that expenditures in this direction become prohibitive. But even if this happens, the better care of trees taken during recent years will continue to have some benefi- cial effect, though with decreasing ampli- tude, on yields of the immediate future. In view of these considerations, plus the changes in varietal and geographical distribution and the age classifications of the trees outlined above, an average yield of 3.5 to 4.0 tons per bearing acre within the next few years can be expected. Fresh interstate shipments use the hulk of the crop Preparation and Handling. Plums are perishable and undergo profound changes after being harvested. As the plums ripen, their flesh softens and ultimately becomes overripe. Since overripe and wasty plums in the retail bin, even when of good flavor, are not profitable, wholesalers and re- tailers prefer firmer, i.e., greener, plums which hold up better during numerous rehandlings. The more mature plums, al- though requiring more careful handling to avoid bruising, have a better flavor. It is clear that the first problem encoun- tered in shipping plums is that of deter- mining just when the fruit should be picked to combine suitable carrying and handling character with good dessert quality. In addition, proper packing, care- ful handling, and prompt precooling and transportation are necessary. Although ranch packing is still prac- ticed, it has been largely replaced by cen- tral houses, which are equipped to handle the fruit rapidly and to cool it as soon as possible after harvest. Today shipping agencies usually collect the plums from various producers, pack them, assemble the cars, and make shipments and sales. After considerable experimentation the standard four-basket crate has been found to be the most satisfactory container for shipping plums to distant markets with a minimum of bruised and cut fruit. About 95 per cent of the plums shipped from California are packed in this crate. Some large size plums are shipped in peach boxes. Occasionally, the lug con- tainer is still used, especially for the very small sizes. Each of the four baskets in the crate contains three layers of plums of approxi- mately uniform size, separated by paper skims. The number of plums packed in a basket depends upon their size. Because the baskets taper toward the bottom, the lower layer usually is packed with one fewer rows than the middle and top layers. The number of plums contained in the upper layer is used to designate size. Thus a 4 x 5 size marking means that the middle and top layers each contain 20 plums (five rows of four plums each) while the bottom layer contains 16 plums. This gives a count of 56 plums per basket or 224 per crate. Similarly a 5 x 5 designa- tion means 70 plums in each basket (25, 25, and 20 in the three layers), that is, 280 per crate. In other words, the larger [11] 80 60 | 40 20 40 30 20 10 1920 1925 1930 1935 1940 1945 1950 Fig. 4. Out-of-state and Intrastate Fresh Shipments of California Plums 1919 to 1949. the size designation (for example, 5x5 compared to 4 x 5) , the smaller the indi- vidual plums. Eastern shipments are made almost en- tirely by railroad. Although some straight cars are loaded, the bulk of these ship- ments consists of several varieties. Not infrequently, plums are shipped in mixed cars with other fruits (especially peaches and pears) . The market, however, prefers not to receive many small lots of ten to twenty crates each. As a consequence, there has been a definite tendency to ship only a few varieties in each car and this is one of the factors leading to a reduction in the number of varieties being produced for shipment to out-of-state markets. During recent years much criticism has been directed toward the large distribu- tive margins and possible inefficiencies in the marketing process. Actually, how- ever, very little information is available to show just what this margin is, what the costs of distribution are, how thor- oughly consumers are supplied, and what economies might be effected. Many im- provements, for example, in transporta- tion, have been introduced to reduce fruit losses and to make the handling of more mature fruit possible. Still there is a real need for securing faster movement, better equipment, and lower costs. The following is a discussion of the source and destination of shipments to out-of-state markets and of their varietal and size composition since such supplies normally constitute the major portion (about 80 per cent) of the entire Cali- fornia plum crop. Total Shipments. The significance of out-of-state shipments to California plum producers is shown by figure 4. Ship- ments from the state increased steadily (except during the decade of the 1930's) from 20,000 tons for 1909-1913 to 60,000 tons for recent years. Sales of fresh plums within California increased more rap- idly-from 2,000 to 15,000 tons during this period. As a result, the proportion of fresh marketings represented by local sales rose from 10 to 20 per cent of the total during the past four decades. 12 While adequate information on the geo- graphical pattern of plum consumption is not available, a general indication of the distribution of shipments can be se- cured by tabulating unload data and by compiling information from shippers' manifests— summarized in table 3. These figures are not completely satisfactory because they have not been corrected for diversions made after the shipment is started on its way to eastern markets. (It is common practice to bill a car to Omaha, Des Moines, or some other intermediate point and then route it to its final desti- nation a few days later depending on the shipper's "feel of the market.") Informa- tion on unloads is limited to data com- piled at 66 cities and therefore is also incomplete. However, these statistics do show that the bulk of the interstate shipments is destined for markets in the northern states, primarily the industrial region ex- tending from Chicago to New York City. About 85 per cent of the total is sold in these markets. Shipments to southern markets averaged 150 cars until 1940 and increased to over twice this amount dur- ing recent years. Western states other than California receive 100 to 150 cars annually. Exports, principally to Cana- dian markets, have been increasing and averaged almost 400 cars, or 10 per cent of the total, during the past decade. Shipment by Districts. Out-of-state shipments of California plums vary con- siderably by districts with respect to both seasonal movement and trend in total shipments. One-quarter of the plums from San Joaquin Valley are shipped by June 15, one-half by June 26, three-quarters by July 15 and the remaining quarter after mid-July. Shipments from this area increase rapidly to a peak movement by mid- June (almost one-quarter of the sea- son's total being shipped during June 21- 30) and decline substantially with each subsequent ten-day period. In contrast, Table 3. Destination of Interstate Shipments and Unloads at 64 Cities, California Plums, Cars, 1929-1947. Region* 1929-1933 1934-1938 1939-1943 1944-1947 Domestic North East Destination of interstate carlot shipments t 1,669 1,767 144 132 3,712 249 3,961 1,720 1,232 146 103 3,203 374 3,577 1,632 1,500 212 93 3,437 280 3,717 1,457 2,261 331 126 4,175 368 4,543 North Central South West Total Exports Total Domestic North East Unloads at 64 cities J 1,260 634 121 27 2,042 1,368 624 115 29 2,136 (not available) 2,031 987 276 52 3,346 North Central South West Total * The regions correspond to those used by the U. S. Bureau of Census. t Not corrected for diversions. | Incomplete since data are not compiled for all stations at which plums are unloaded. 13] shipments from Placer District move ap- proximately two weeks later and extend over a longer period of time. This com- parison in the shipment of plums should not be assumed to imply that for each variety shipments from San Joaquin Val- ley precede those from other areas by two weeks. Actually, the first shipping dates for the different varieties from this area lead those of other districts by only a few days. The difference in seasonal movement of all plums is largely due to the fact that in San Joaquin Valley a larger proportion of the total shipment consists of the earlier maturing varieties than is the case for other districts. This contrast in seasonal pattern of interstate movement assumes particular importance because of the difference in trend of shipments from the various dis- tricts. As might be expected from the discussion of acreage given above, sub- stantial shifts in the relative volume shipped from the different producing areas are taking place— see figure 5. Inter- state shipments from Sacramento Valley declined steadily throughout the past two decades from about 1,000 to 250 cars. Except for year-to-year fluctuations, out- of-state shipments originating in the Placer District continued at an average of approximately 1,700 cars. For San Joa- quin Valley, shipments remained at an average of 1,200 cars until 1935 and then increased rapidly to a volume approxi- mately twice as large for 1944-1948. In addition, a small volume of plums is shipped from the minor plum-producing areas of the state. Thus on a relative basis, shipments from Sacramento Valley and Placer District decreased from 25 to 6 and 43 to 39 per cent of the total state c E Q. 1c & a -£ l Sacramento Valley 1930 1935 1940 1945 Fig. 5. Interstate Shipments by Districts, California Plums, 1928 to 1949. [14] 1950 » CD 43 O N » M t« CO 00 O O b" CO V tfl M W N M OI CO OI 00 OI CO 2 a tN N N N M co h cq h cq OI • o £ kl o p. M 4a CO X •o IO OI ^ CO en cm P '8 C^ l> l> co c- IQ O) 00 O) CO l> E O C*. OI OI OI OJ 0101010101 OI ! ! CD £? S ¥■8 C! C9 SO- H tJI H CO « O O CO rH iH lO OI rH CO CD fc "S o CO en CO CD x'S's 1 o O H H rl W (OOH-C* w ?1« CO io CO OI rH g •a CD ■8 -fi cd a p. HI E Si o X "5 > t« (OH OM W N W N M io h ^ h eq oo g <^ ^ b ■a w CO rH rH oq cq co o O p fit 'B CO to o p CD O Ol rH o •43 o '•5 |4 p. c © to X CD Ph io ^ co co q CO IO >fl IO ifl -t— ^< ^J« rH t* OI CO OI OI •<* oS "> 1 2 £cb DO Tf OI t> 00 OI o CD °12 CM W rH © OI -r- CO OS l> OS oo £oq "<3 «2 H rl jq H CO rH IO CO rH rH O IO . CO CO C i- a 2 - £ 2 CD 00 1 a. 2 'Cf en CO t- OS CO H CO tO H IO H M t- CO Ifl io CO O) rH to co to co a h cq h h co a w 4-1 8 CO p 2* CO CD If o cd a rH of "* o a o ■B CM O O OI ^ O) lO t» ^t IT) M OI 43 1 |p rH o t* H IO H ^ CO CO ^ 00 CO 00 CO n '•5 CD 5? CO bo CO OS o •«tfO"tfcocM h eq ri h t»« rH of cq CO cd CD rH CO 5 p CD < t» cd O CD *• s CO OJ o C- OI CT5 tO "^ to cq o co >o i> CO co o> eq « h C5 CO CO CO (N G3 CO P) "" 2 ^ w cq cq w rH OI rH rH CO 00 o >» ^ * CO OJ T- CO TJ 2 3 •a "53 ►- p CD I 1 »l .2 3 r? CD N 'w 1 CD s CD M »*• ,-sCD •-" CD is ° cc3 co i» O i °* H CD CO h CD P, "8 > In CD •c 1 ^5 3 -g a a 80 %m > < k. o o u L. Q- a> O) 140 a; > < r 120 o 0) CO 100 <-t- +- c / A 7 K/\ i i i -A.~ t y L i tt) 4.00 2 T 2.00 £ c o < 800 400 C. Late season Varieties 1 /\ Sales AyWyVU V Price 1 1 '■1 A a >C\V i i 4.00 2.00 1921 1925 1930 1935 1940 1945 1930 Fig. 9. New York-Chicago Auction Sales and Prices by Varietal Groups, California Plums, 1921 to 1949. [22] Grower prices — their past tendencies are explored General Level. The average prices re- ceived by California plum producers have varied widely over the past several dec- ades. The 1943 crop was sold for the high- est average price, $147 per ton, compared to the lowest returns of $19 received in 1932. From 1909 to 1948, plum prices (for naked fruit at the first delivery point) averaged $60 per ton and fluctuated gen- erally between $40 and $75— though lower or higher prices were received in some seasons. Prior to about 1930, how- ever, demand for fruits and vegetables generally was rising and extremely low farm prices prevailed only when bumper crops were produced and marketed. By 1930-1932 this situation was drastically changed. There was a serious divergence between supply and demand. In the case of plums, the farm price dropped pre- cipitously from $72 per ton in 1927-1929 to an average of $28 for 1930-1932. Prices increased, but only gradually dur- ing the next decade, to $50 in 1941, and then rose sharply to approximately $115 for 1943-1948. The high level of farm prices prevailing during the 1940's, when the production of plums and competing fruits was appreciably above those of previous years, suggests that the level of consumer purchasing power should be considered as a very important factor re- sponsible for price variations. A general indication of the relation between variations in farm prices of plums and fresh sales and nonagricultural income can be secured from the data sum- marized in table 6. During the period 1919-23 to 1944-48 U. S. population in- creased from 84 to 109 per cent of the average for 1935-39. Consequently, fresh sales and nonagricultural income in- creased considerably less rapidly on a per capita basis. It will be noted that when fresh sales remained approximately con- stant (during the middle portion of this period) the decline in farm prices was roughly parallel to the decrease in non- agricultural income. This type of compar- ison, however, is quite limited. Further comment on factors affecting prices is deferred to a later portion of the circular. Farm prices are not available on a vari- etal basis. Some indication of how prices for different varieties sold fresh have changed relative to each other can be secured by subtracting marketing charges from auction prices. Adjustments for variations in the net contents of the crate Table 6. Average Farm Prices for California Plums Related to Fresh Sales and Nonagricultural Income, 1919—1948. Average for: Farm price of Calif, plums Fresh sales, Calif, plums Nonagricultural income Total Per capita Total Per capita ' 1935-1939 = 100 1919-23 191 162 117 99 197 311 78 95 94 99 109 127 93 104 103 100 106 116 89 112 95 96 152 267 106 1924-28 123 1929-33 99 1934-38 97 1939-43 147 1944-48 254 [23 and for differences in marketing charges, if any, would be necessary. This informa- tion is not being presented since it is felt that by referring to the material given on auction marketings suitable comparisons can be made. By Outlets. The highest price is received for plums shipped to interstate fresh mar- kets and the lowest for those canned. Prices for plums sold fresh within the state generally are considerably below prices for interstate sales. They averaged 25 to 30 per cent less during 1909-1929 and about 15 per cent less thereafter. In 1944 and 1945 intrastate prices were somewhat above those received in inter- state markets. This was probably due to the severe hail and wind damage to plums occurring during the former year and to the operation of effective OPA price ceilings in the latter. The price differential between sales in these two fresh outlets may be expected to continue to narrow in the immediate future as a relatively larger proportion of the total crop is marketed fresh within the state. If, however, regulations issued under the marketing control program serve to widen the usual spread between the grade-size composition of plums shipped to out-of- state markets and the composition of those sold locally, the price differential may become greater instead of smaller. Considerably lower prices usually are paid for plums used by processors. Or- dinarily the cannery price is 25 to 50 per cent below that established for fresh sales. Still lower prices were received during 1943-1947 for plums frozen and crushed— 75 and 25 per cent, respectively, of the cannery price. This does not neces- sarily mean that growers producing plums for the processing outlet earned a lower net return per acre. Varieties used for canning generally yield a larger tonnage and require somewhat different (and pre- sumably cheaper) cultural practices. To make a valid comparison of the relative profitability of producing cannery plums and those sold fresh, information on rela- tive yields and costs as well as prices would be required. Factors Affecting Prices. There ap- pears to be a definite relation between the consumer's income and his consump- tion of plums. Separate studies for plums have not been made, but it is felt that the general pattern revealed for other fresh fruits is applicable. For this reason it is of interest to indicate the relationship of one of these expenditure studies. The results, showing per capita consumption of fresh noncitrus fruits by income cat- egories of nonfarm families in 1941, are summarized in table 7. This tabulation, which agrees with findings secured from other similar studies, shows that as family income increases, the consumption of fresh fruits also increases. In addition there is a relationship be- tween the availability of plums in stores and the size of the city. According to a recent survey conducted by the Depart- ment of Agriculture (August 1949), plums are more generally available in the larger cities. For example, in cities of over 500,000 population almost half (43%) of the food stores had plums for sale compared to one quarter (23%) of the food stores in cities under 10,000. A study of quite a different type has been made to determine the principal f ac- Table 7. Consumer Income Related to Purchases of Fresh Noncitrus Fruits, 1941. Income level of nonfarm families (dollars per year) Consumption of fresh noncitrus fruits (pounds per year) Under 500 42 500 to 999 70 1,000 to 1,499 92 1,500 to 1,999 112 2,000 to 2,999 131 3,000 to 4,999 160 5,000 and over 248 [24] tors responsible for variations in auction prices during the period 1922-1943.* Although this statistical analysis cannot be discussed here, it may be well to sum- marize the major findings: ( 1 ) An increase in nonagricultural in- come was associated on the average, when other factors remained constant, with a substantial increase in auction prices. The influence of this force became weaker as the season advanced. (2) Likewise, a decrease in the volum sold was accompanied on the average b] an increase in auction prices— when th< effect of other factors was held constant (3) Sales during successive time pe riods are definitely interrelated in the sense that current prices are affected by sales made earlier during the season, as well as by current marketings. (4) Supplies of other fruits, especially those marketed more or less simultane- ously, have a definite but not large influ- ence upon plum prices. For example, changes in supplies of early peaches (from Southern states) are related to var- iations, in the opposite direction, in auc- tion prices for midseason plums. (5) Plums of different sizes are close substitutes for one another. Plums of one size may be substituted for those of an- other size without materially affecting the prices received. (6) Price is considerably more respon- sive to changes in sales during the peak of the season than earlier or later. The outlook indicates changes in relative varietal prices Growers are vitally concerned in the prices realized at terminal markets be- cause the levels prevailing there de- termine farm prices. The statistical analysis just mentioned indicates that auction prices are influenced mainly by the level of consumer purchasing power and the volume sold. As indicated, a substantial increase in plum production and, therefore, in the volume available for shipment to eastern markets appears probable in the next few years. Of course, if existing acreage is drastically reduced, the larger crop will not be forthcoming but a large curtail- ment in acreage would be necessary to reduce production below the average for recent years. If production continues to expand in the pattern presumed in this report, the volume available for inter- state shipment will be increased consider- ably and will have a price-depressing * See Foytik, Jerry. "The California Plum Industry: An Economic Study," Chapter IV. (Berkeley, September 1949, typewritten). influence on the average auction price. A forecast, or even a rough estimate, of the course of consumer purchasing power for the future cannot be made with any degree of confidence. In the event that it does recede from the current high level, auction prices for plums will tend toward lower levels. Costs incurred for marketing services— which start with hauling the plums to the packing shed and end when the fruit is sold at terminal markets— must also be considered when discussing farm prices. These charges are substantial. For exam- ple, during the interwar period about 70 per cent of the auction price was required to cover marketing charges and 30 per cent remained to pay the grower for all expenses involved in producing plums. They tend to be fairly rigid. At least mar- keting charges decline more slowly when farm prices decline. This means that as terminal market prices are decreased prices to farmers are depressed at a more rapid rate. Thus in 1949 the auction price for plums decreased 15 per cent below [25] the average for the preceding four sea- sons compared to a decline of 40 per cent in the farm price. Finally, attention should also be called to the fact brought out early in this report that a larger proportion of the plums shipped to interstate fresh markets prob- ably will consist of early varieties. As a result the pattern of prices between vari- eties and weeks of the season which exists at present will be further modified in the direction of continuing the general trends noticed for the past two or three decades. It appears that prices of some varieties, notably Santa Rosa, Duarte, President, and possibly Beauty, may decrease rela- tive to the average for all varieties. At the same time prices for some of the cur- rently less important varieties are likely to improve relative to the prices for the major varieties. 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 can be obtained by writing to the Giannini Foundation of Agricultural Economics, University of California, Berkeley 4. [26] 10ra-10,'50(045)W.P. /2« AGRICULTURE • . . Contains brief, easy-to-read progress reports of agricultural research, and is published monthly by the University of California College of Agricul- ture, Agricultural Experiment Station. FIELD CROPS ORCHARDS TRUCK CROPS LIVESTOCK CALIFORNIA AGRICULTURE offers information useful to the farmer and food processor, together with announce- ments of other publications dealing with farm subjects as they are issued by the College of Agriculture. Upon your request, your name will be added to the mailing list to receive CALIFORNIA AGRICULTURE with- out cost. 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