2002 



MARKETING 



MARKETING 



regions. They are non-profit corporations organized 

 under the laws of California. Stock is issued to each 

 member in proportion to his bearing acreage, to the 

 number of boxes he ships, or in equal amount to each 

 grower. The management is in the hands of a board of 

 directors chosen from among the growers. A packing- 

 house is owned or leased and properly equipped. No 

 profits are accumulated nor dividends declared. 



As the fruit is assembled in the packing-house, that 

 of each member is kept separated until it is inspected 

 and graded, which gives a basis for making the returns 

 upon the "pool" system. An association may market 

 any part of the crop at any time during the picking 

 season they desire and, in some cases, this privilege is 

 extended to the individual members. 



The length of the "pool," whether a week or a month, 

 depends upon the desires of the association. Each 

 association has a brand name for each grade of its fruit, 

 and this name and label is the exclusive property of 

 the association. When a carload is ready for shipment, 

 it is marketed through the "district exchange" of which 

 the local association is a member. 



The district exchange. The local exchanges are 

 federated into seventeen district exchanges, which are 

 non-profit corporations. There may be one or more in a 

 community, depending upon local conditions. Their 

 function is to act as a clearing-house in marketing the 

 fruit for the local exchanges through the California 

 Fruit-Growers' Exchange and to act as a medium 

 through which most of the business relations between 

 the Exchange and local associations are handled. 



The district exchange officers order the cars from 

 the railroad and see that they are placed at the various 

 local exchange packing-houses. They keep a record of 

 the cars shipped by each local association, with their 

 destination, and receive the money from sales through 

 the head office and turn it over to the local exchanges. 

 Other functions are to keep the growers informed 

 through the head office of all phases of the citrous 

 marketing business, and place this information before 

 the local associations, where in turn it is passed on to 

 the growers, and return the proceeds to the associa- 

 tions. 



The central exchange. The California Fruit-Growers' 

 Exchange is a non-profit corporation formed by the 

 seventeen district exchanges and managed by a board 

 of seventeen directors, one from each district exchange. 

 The headquarters is in Los Angeles. Its function is 

 to furnish marketing facilities for the district exchanges 

 at a pro rata share of the cost. The directors hire a 

 general manager and assistants. Bonded sales agents 

 for the principal markets of the United States and 

 Canada are appointed and managed from this office. 

 Telegraphic advice is received every day from these 

 agents of the sale of each car, together with information 

 on the conditions and prospects of the market. This 

 information is sent daily in a bulletin form to the local 

 associations. The business is on a cash basis and 

 prompt accounting returns are made to the growers 

 through the district exchange. Other functions are the 

 attention to any litigation that may arise in connection 

 with the marketing of fruit, handling all claims, con- 

 ducting an advertising campaign and endeavoring to 

 develop new markets. This work is supported by levy- 

 ing an assessment against each district exchange for the 

 pro rata share of the expenses on a basis of the number 

 of boxes shipped. In the Exchange, every shipper 

 reserves the right to regulate and control his own ship- 

 ments, to develop his own brands of fruit, to use his 

 own judgment as to when and in what manner it shall 

 be shipped and to what markets it shall be shipped, and 

 the price he is willing to receive; reserving the right 

 of free competition with all other shipments including 

 the members of the same organization. 



Membership in the Exchange is voluntary. A grower 

 may withdraw from a local association at the end of the 



year; the local association may withdraw from the 

 district exchange, and the district exchange may with- 

 draw from the central exchange. One-third of the entire 

 shipments are sold at public auction and the remainder 

 through unrestricted private competition. There is no 

 uniformity in price of the different brands. 



The Exchange is organized in several divisions: Sales, 

 Legal, Traffic, Advertising, Field, Insurance and Mutual 

 Protection, and a Supply Department which furnishes 

 materials used in packing-houses and groves at cost 

 to members. 



(b) A Canadian organization. 



As the California Fruit-Growers' Exchange is the 

 largest agricultural cooperation for marketing purposes 

 in the United States, so the United Fruit Companies of 

 Nova Scotia is a prominent example of successful 

 cooperation by Canadian apple-growers. This com- 

 pany is located in the famous Annapolis Valley apple 

 region of Nova Scotia. There are forty-eight coopera- 

 tive companies in this Valley; forty are federated into a 

 central association, which is incorporated under the 

 name of the "United Fruit Companies of Nova Scotia, 

 Limited." The membership of the subsidiary compan- 

 ies varies from ten to one hundred twenty, the average 

 being about forty. Each company owns a warehouse or 

 central packing-house where the fruit must be packed 

 by experts under the direction of the company manager 

 and an inspector sent from the central office, who has 

 the authority to order repacking, if in his judgment it 

 is necessary. Orchard- or home-packing by the indi- 

 vidual members is not permitted. It is the business 

 of each company manager to become acquainted with 

 each member and with the type and grade of fruit he is 

 growing. Before picking, the manager sends to the 

 central office an estimate of the crop of his members and 

 its condition. Pickers may be sent from the central 

 office to assist the local growers. The picking and 

 hauling is done under the direction of the local company 

 manager. This rule has been found desirable to prevent 

 large quantities of fruit from being delivered at the 

 central packing-house unexpectedly. Fall apples may 

 be hauled to the packing-house in unheaded barrels, as 

 they are usually packed at once; but winter apples are 

 delivered in tight barrels. Every barrel has the growers' 

 name marked upon the side and a receipt is given for 

 the quantity and variety delivered. The deliveries of 

 every day are recorded in a book in which one or more 

 pages are assigned to each member. On the left side 

 are the series of columns, one for each variety, under 

 which is recorded the date and number of barrels 

 delivered. On the right page is a record of how these 

 apples were graded or "packed out." 



The business of marketing the entire output of all 

 the subsidiary companies is performed from the central 

 office, which is at Berwick. This office maintains and 

 directs an organized force of salesmen. European sales 

 are conducted through the London office and the 

 South American business through the Buenos Ayres 

 office. The apples of all the local companies are pooled 

 and the returns made to all upon the average selling 

 price of each grade of each variety. 



Some of the advantages to the growers that have 

 been brought about by the cooperation, in addition to 

 better prices, are the convenience of an improved type 

 of box-car especially adapted for shipping apples in 

 extremely cold weather, and a shorter shipping time 

 for transatlantic shipping, and better boats. 



Cooperative buying is an important function of the 

 association. The central office makes large purchases 

 of supplies directly from the manufacturers, thus secur- 

 ing the lowest price, as all the cost of selling, bad debts 

 and other expenses are eliminated. The supplies are 

 shipped in carlots directly to the central packing-houses 

 of the local companies and, upon arrival, the members 

 are advised and come with their teams to haul home the 



