University of California College of Agriculture Agricultural Experiment Station Berkeley, California STATISTICAL ANALYSIS OF THE ANNUAL AVERAGE F.O.B. PRICES OF CANNED CLINGSTONE PEACHES, 1924-25 to 1936-37 by H. R. Wellman June, 1937 Contribution from the Giannini Foundation of Agricultural Economics Mimeographed Report No. 59 UNIVERSITY OF CAI LIBRA R BRANCH CF ' COLLEGE OF. AGIUJ STATISTICAL ANALYSIS OF THE ANNUAL AVERAGE F.O.B. PRICES OF CANNED CLINGSTONE PEACHES, 1924-25 to 1936-37 H. R. Wellman The purpose of this report is to present the results of an analysis of the major factors which have influenced the annual average f.o.b. prices received for canned clingstone peaches by canners in California from 1924-25 through 1936-37. It should be clearly recognized that the results presented herein explain only what has occurred. They do not forecast what will occur i in the future. The analysis is intended merely as a guide to those interested in estimating either the probablo price at which a given quantity of canned peaches can be sold or the probable quantity of canned peaohos which can bo sold at a given prico under specified con- ditions. In this analysis tho avorago relationships which prevailed from 1924-25 through 1936-37 betwoon tho f.o.b. prices of cannod olingstono peaches and three factors wore measurod. Theso thrco factors aro (l) total shipments of California cannod poaches, (2) index of urban con- sumer's incomo in tho Unitod Statos, and (3) adjustod indox of prices of competing cannod fruit. It is not to be supposod that thoso throo factors are tho only ones which havo affoctcd tho annual average f.o.b. prices of cannod clingstone poachos from 1924-25 through 1936-37, or that thoy aro tho only onos which will affect tho avorago f.o.b. pricos during tho coming years. Noithor is it certain that tho relationships between tho f.o.b. prices of cannod clingstone poaches and the factors measured will bo tho same in tho future as thoy wore on the avorago during tho poriod covered by tho analysis. The f.o.b. prices usod in this analysis aro weighted avorago pricos for all grades and sizos of cars. During the six months January through May 1937, the avorago f.o.b. prico per case for No. 2-| choico clingstone poaches was 5 por cont abovo the average f»o.b» prico for all grades and sizos of cans. -t Associate Agricultural Economist in tho Experiment Station and Associate Agricultural Economist on tho Giannini Foundation. 2. TABLE 1 Annual Average F.o.b. Prices of California Canned Clingstone Peaches and Important Factors Affecting Them, 1924-25 to 1936-37 California Index Adjusted Year F.o.b. cannod urban index prices June through May prico peach consumers ' competing shipments income canned fruits 1 2 3 4 dollars . 1,000 per cent per cont per case cases 1924-25 4.21 6,918 92.1 122 1925-26 3.78 10,367 98.7 101 1926-27 3.66 10,727 101.2 98 1927-28 3.17 13,203 101.6 93 1928-29 3.22 12,963 105.8 88 1929-30 4.08 9,572 106.6 96 1930-31 2.88 11,020 94.1 91 1931-32 2.55 7,527 78.0 83 1932-33 1.97 9,922 61.8 102 1933-34 2.31 9,280 67.4 103 1934-35 2.69 9,132 71.7 107 1935-36 2.51 11,030 77.3 96 1936-37 2.66 11,186 88.0* 83 * Preliminary — subject to revision. Sources of data: Col. It Compiled from reports by cannors. Prices arc weighted average prices of cannod clingstono peaches received by canners, f.o.b. cannery or dock, for all grades and sizos of cans on an unadvertisod basis. Regular brokerage, cash discount, swell allowance, labol allowance, and case allowance are includod. Col. 2: Compiled by the Cannors League of California and the Canning Peach Industry Board. Figures include both clingstones and freestones on a No. 2-gr basis. See tables 3 and 4. Col. 3: Simple averago of the monthly indices of National Income, Excluding Agricultural Income, Average 1924-1929 equals 100, compiled from the U. S. Dept. Agr. Bur. Agr. Econ. The Agricultural Situation, current issues. Col. 4: For sources and method of construction soo table 5. ■ ■ »_ , - • »- • ': t 1 f *5 * 1 .1 „. . Fig* 1* — California canned peaches: Average f.o.b. prices received by canners related to (A) shipments of canned peaches, (b) index of urban consumers' income, and (c) adjusted index of prices of competing canned fruits. 1924-25 to 1936-37. 6 7 8 9 10 11 12 13 14 Total shipments — million cases On the average (a) a change of one million cases in total shipments of canned peaches has been accompanied by a change in the opposite direction of 16 cents a case in the average f.o.b. price of canned clingstone peachos (B) a change of 10 points in the index of urban consumers' income has been accompanied by a change in the same direction of 45 cents a case in the average f.o.b. price; and (c) a change of 10 points in the adjusted index of prices of competing canned fruits has been accompanied by a change in i the samo direction of 20 cents a case in the average f.o.b. price. -•.ii j TABLE 2 Actual and Estimated F.O.B. Prices of California Canned Clingstone Peaches 1924-25 to 1936-37 Year June through May 1924- 25 1925- 26 1926- 27 1927- 28 1928- 29 1929- 30 1930- 31 1931- 32 1932- 33 1933- 34 1934- 35 1935- 36 1936- 37 Prices Adjustment Adjustment Prices Actual estimated Residuals for consumer Residuals for competing explained Col. 1 prices from from income from fruit prices by three minus fig. 1A fig. 1A from fig. IB fig. IB from fig. 1C factors col. 7 1 2 3 4 5 6 7 a o dollars dollars dollars dollars do 11a rR Hnl 1 a re uui io.i b Qoiiars dol lars per case per case per case per case \J C- 1 LiU-w) C P cl L-dotr per case per case 4.21 4.18 ♦0.03 -0.36 +0.39 +0 AA A OR n nr. -U .UQ 3.78 3.64 +0.14 -0 .06 +0 20 + 0 OP O.oU +U.18 3.66 3.58 +0.08 +0.05 +0.03 o .o y +U .U / 3.17 3.19 -0.02 +0.07 -0.09 -0.14 3.12 +0.05 3.22 3.23 -0.01 +0.26 -0.27 -0.24 3.25 -0.03 4.08 3.76 +0.32 +0.30 +0.02 -0.08 3.98 +0.10 2.88 3.53 -0.65 -0.27 -0.38 -0.18 3.08 -0.20 2.55 4.07 -1.52 -0.99 -0.53 -0.34 2.74 -0.19 1.97 3.71 -1.74 -1.72 -0.02 +0.04 2.03 -0.06 2.31 3.80 -1.49 -1.46 -0.03 ♦0.06 2.40 -0.09 2.69 3.83 -1.14 -1.28 +0.14 +0.14 2.69 0 2.51 3.53 -1.02 -1.02 0 -0.08 2.43 +0.08 2.66 3.51 -0.85 -0.54* -0.31* -0.34* 2.63* +0 .03* * Preliminary -- subject to revision. Sources of data: Col. 1 Col. 2 Col. 3 Col. 4 From table 1 , col. 1. Readings from diagonal line in fig. 1A. Col. 1 minus col. 2. Readings from diagonal line in fig. IB. Col. 5: Col. 3 minus col. 4. Col. 6: Readings from diagonal line in fig. 1C, Col. 7: Col. 2 plus col. 4 and col. 6. i 1 nan® .: ■.-.»' 5. TABLE 3 Pack, Carryover, Shipments and Exports of California Canned Peaches 1932-33 to 1^36-37 Year, June Carryover from Available Carryover into through May Pack preceding year for shipment following year Shipments Exports 1 2 3 4 5 6 1,600 1,000 1,000 1,000 1,000 1,000 cases* cases* cases* cases* cases* cases* 1932-33 6,438 4,845 11,283 1,361 9,922 1,733 1933-34 10,309 1,361 11,670 2,390 9,280 1,799 1934-35 8,598 2,390 10,988 1,856 9,132 1,126 1935-36 11,216 1,856 13,072 2,042 11,030 2,307 1936-37 10,711 2,042 12,753 1,567 11,186 1,300 t * No. 2g- can basis. Includes both clingstones and freestones. f Preliminary — subject to revision. Sources of data: Cols. || 2, and 4: From tablo 4. Col. 3: Col. 1 plus col. 2. Col. 5: Col. 3 minus col. 4. Col. 6: Compiled from U» S. Dept. Com. Monthly summary of foreign commerce of the United States, monthly issues. Pounds wore converted to casos on the basis of 45 pounds per case. During the 12 years 1924-25 through 1935-36 an average of 17.2 per cent of the shipments was exported. ^ J* } I . . , . .! »• "■?•*/ > %(!ijn':.3'. t *>.4wti h-jfiidi -••r> J 3 .J »' 6. TABLE 4 Pack and Carryover of Canned Clingstone and Canned Freestone Peaches, California, 1932-1937 Pack Carryover on Juno 1 Year Clingstones Freestones Total Clingstones Freestones Total 1 2 3 4 5 6 cases* cases* casos* CCS OS* ca sos* cases* 1932 1933 1934 1935 1936 1937 6,413,972 10,243,976 8,258,344 10,850,492 10,236,033 23,542 65,144 340,011 365,769 475,091 6,437,514 10,309,120 8,598,355 11,216,261 10,711,124 4,826,031 1,359,322 2,388,702 1,835,681 1,929,309 1,497,640 18,776 1,920 1,746 20,494 112,591 69,039 4,844,807 1,361,242 2,390,448 1,856,175 2,041,900 1,566,679 * No. 2g can basis. Sources of data: Compiled by tho Canners League of California and the Canning Poach Industry Board, The pack figures do not include peaches packed directly into fruit salad and fruit cocktail, but do include canned peaches re- manufactured into thuse items. Tho pack of 10,236,033 casos of clingstones in 1936 does not include 115,619 cases of pickled peaches . Tho carryover figures arc total stocks on hand sold and unsold. TABLE 5 Construction of Index of Prices of Canned Fruits Competing with Canned Peaches, 1932-33 to 1936-37 Year Prices Relatives of p ri ces Unadjusted Index of national Adjusted June Canne d Canned index of com- income excluding index of com- LIU U Ugll Bartlett Canned Canned Bartlett Canned pC I lllg OCLIU1CU not i cr mrt a A May pears apricots pineapples pears apricots pineapples fruit prices income fruit prices 1 2 3 4 5 6 7 8 9 dollars dollars dollars per 1924-29 1924-29 1924-29 1924-29 1924-29 1924-29 per case per case dozen cans = 100 = 100 = 100 = 100 = 100 = 100 1932-33 2.48 2.23 1.60 52 58 70 63 62 102 1933-34 2.64 2.37 1.80 55 62 79 69 67 103 1934-35 3.05 3.47 1.80 64 91 79 77 72 107 1935-36 2.92 2.93 1.80 61 77 79 74 77 96 1936-37" 2.94 2.83 1.80 61 74 79 73 88 83 * Preliminary — subject to revision. Sources of data: Cols. 1 and 2: Compiled from records of canners. Prices are weighted average prices for all grades and sizes of cans, f .o.b. cannery. Canned Bartlett pear prices are for the Pacific Coast; canned apricot prices, for California. Col. 3: Opening prices for No. 2.\ Sliced Fancy Pineapple, Hawaii, as given in Western Canner and Packer, 1937 Yearbook, p. 85. Cols. 4, 5, and 6: Prices given in cols. 1, 2, and 3 in per cent of their 1924-29 averages ~ canned Bartlett pears, $4,783; canned apricots, $3,848; and canned pineapples, $2,292. Col. 7: Weighted combination of relatives given in cols. 4, 5, and 6, using following weights: canned Bartlett pears, 3; canned apricots, 2; and canned pineapples, 6. Col. 8: From table 1, col. 3. -a Col. 9: Col. 7 divided by col. 8.