PARAGRAPH 277-LEMONS. Nearly a year has passed since this increased lemon duty became effective, and whether or not the full amount of the increase is going to the lemon growers they themselves are best able to judge. It is our opinion that the growers will get this increase in full, amounting on the present output to some $750,000 per year. Under these conditions California ought to be able to expand its lemon business until it supplies the entire country with lemons, to do which the production will have to be more than doubled. FREIGHT-RATE CASES. For two or three years last past the railroads have been figuring on raising the orange rate above $1.15, we having had a letter from the president of one of the initial lines stating that it was a mistake to reduce the orange rate below $1.25 and that a general raise being in sight, the orange rate would be one of the first to be advanced. The railroads also have, during the last two or three years, been weighing our boxes of fruit from time to time with the evident purpose of raising the estimated weightanother method of advancing the freight rate. Following the increased import duty on lemons, the railroads, within 60 days, announced an increased freight rate, which, if permitted to become effective, would have resulted in the appropriation to themselves of a large portion of the benefit which Congress evidently intended to give to the growers alone. Before the increased freight rate became effective an injunction was granted by the United States court restraining the increased rate until the Interstate Commerce Commission could pass upon its reasonableness. The attempt to raise the lemon rate brought all these matters to a focus and complaint was made to the Interstate Commerce Commission. After full hearing and argument, the finding as to refrigeration charges was deferred until investigations now in progress are completed. On the lemon rate the commission has announced that $1.15 is unreasonable and that no amount in excess of $1 shall be collected. This finding means a saving to the California lemon growers on the present output of a quarter of a million dollars a year in freight alone. As to the orange rate, the commission has found that $1.15 is reasonable. As the crop increases and on that account the price received becomes somewhat less than the average of recent years and the railroads increase the minimum load, these new conditions will, we think, convince the commission that we are entitled to a dollar orange rate. Just when and how this result will be accomplished remains to be seen, but we consider it inevitable. The results obtained in increasing the import duty and in preventing an increase of the lemon and orange freight rates have taken an immense amount of work and a considerable expenditure of money, the necessary and legitimate cost running into many thousands of dollars. The wisdom of our action is certainly justified by what we have accomplished, and without organization and united effort the successful termination of these difficult problems could not have been attained. While some loyal growers and shippers outside of the exchange have paid their full share, it is well to remember that many others, some of whom are very insistent that the growers give them their fruit to market, contributed nothing toward these necessary expenses. DAMAGE BY ELEMENTS. During the past two seasons the character of our fruit has been seriously affected by damage from cold, making the market problem a very serious one indeed. While the fruit from all degree, it is probably true that in no section was the quality fully up to What it would have been had no damag wisdom in at the California end of the line in picking and occurred. Under these and care ha of. the fruit in the markets, in order the average, Tipor the last two seasons we had several years during which we suffered very d If any damage from cold. It is to be hoped that during PARAGRAPH 277-LEMONS. ADVERTISING. It is our opinion that one of the main reasons why our fruit has been successfully marketed during the past two seasons under adverse conditions is the advertising campaign carried on by the exchange. We have gradually extended our advertising features until during the past year a large part of the United States and Canada was covered, at a cost of some $50,000. The attention of the consuming public was called to the fact that our Sunkist brands of oranges and lemons are good to eat, and we are pleased to state that general satisfaction has been given by the fruit packed under that brand and consumption in the advertised territory increased by approximately 50 per cent. In connection with this advertising we have furnished to the consumers of our fruit an orange spoon at a minimum cost. Beginning this spoon business in December, the maximum number sent out amounted on May 1 to 10,000 daily. These spoons were mailed from our Chicago and Toronto offices, some 30 persons being employed in filing and filling the orders. In Chicago it was customary to receive daily 30 to 50 sacks of mail and to send out an equal amount. The exchange became in five months the largest purchaser of spoons in the world and the fourth largest purchaser of silverware. An extension of this advertising of our oranges and lemons along certain lines will undoubtedly result in a still larger consumption of our fruit at a reasonable cost. It is our judgment that in no other way can our continually increasing product be successfully marketed at fair prices. DISTRIBUTION. The exchange has, particularly in the past two years, succeeded in selling to many new customers and in opening up many new car-lot markets, and this is the more easily done on account of our advertising campaign. In Minnesota, for instance, a whole, saler who had never handled oranges, but had seen and believed in our advertising methods, bought a car from our Minneapolis office and asked for one of our employees to visit his town and help him inaugurate his first sales. This was done, the venture was successful, and this party is now one of our valued customers. The even distribution of the fruit, not only so as to keep a regular supply going forward through all seasons of the year but also in the markets themselves at any one time, is only possible through the exchange organization. Having a knowledge at all times of the destination of 60 per cent of the business, we can, to a very great extent, prevent a shortage of supplies in one market and the overstocking of another. All interests recognize the value of this even distribution, which is being handled each season more and more successfully. MARKETING. So much has been said in times past as to marketing that there is but little left to say now. We think all growers admit that without the exchange organization the large volume of fruit we now produce could not be successfully sold. While considerable progress has resulted during the past season from our efforts to generally improve our picking and packing conditions, we are very much pleased to be able to state that in some instances great advance has been made, with a result that in the great auction markets of the country exchange brands now occupy a most enviable position and have steadily sold at the top of the market. Inasmuch as some of our competitors who make a specialty of patronizing the auctions themselves admit that it costs the growers who operate through them 2 or 3 per cent, or from 7 to 10 cents per box more to sell than through the exchange, all growers can readily see the advantage the exchange system has. The entire selling cost in the exchange has in no recent year been so much as 3 per cent of the gross proceeds, and this includes commissions, brokerages, and all Los Angeles office and Citrus Protective League expenses. We seek no controversy with the growers and shippers who are not allied with us. We recognize the right of each to determine for himself what is best to do. The growers have obtained the best results in the years when there has been the least friction between the exchange and nonexchange interests, both in California and in the markets of the country, and when the exchange has had the greatest percentage of the fruit to sell. This last feature is one that should not be overlooked by those most interested-the growers themselves. PARAGRAPH 277-LEMONS. While we are not insistent that all growers should market their fruit through the exchange, we do believe that a strong exchange line-up is the best thing for all the growers, and that with increasing crops this becomes all the more necessary. With the increased expenses of advertising and of conducting these campaigns as to import duties and freight rates, which appear to be ever with us, and with the neces sity of opening new markets and expanding our marketing machinery, the cost of operation necessarily increases. We must therefore increase our volume of business if the expense is to continue moderate. Therefore all growers are vitally interested in the maintenance and upbuilding of the exchange, and each should consider carefully his own duty to the organization. A healthy growth in the exchange membership means the further success of the citrus-fruit industry, while a decline in the prosperity of the growers would surely follow a decline in the membership of the exchange. CALIFORNIA FRUIT GROWERS' EXCHANGE. LOS ANGELES, CAL., July 15, 1910. |