i63 COOPERATIVE MARKETING 



come into bearing in California.* These plantings will in 

 a few years increase the output of Washington navel 

 oranges by almost one-half, and will double the crop of 

 Valencia oranges and lemons. Under such circumstances 

 the question of how to make the markets expand at the 

 same rate as production is a grave one indeed. The general 

 economic proposition that the demand for products at a 

 remunerative price governs the quantity that will be fur- 

 nished does not apply without qualification to the conduct 

 of the citrus industry. 



At the time these new plantings were made there was 

 undoubtedly a prospect of making profits either through 

 the production of fruit or the production of land values; 

 often, unfortunately, only the latter. But some seven or 

 eight years must elapse before citrus trees come into full 

 bearing, and in that interval the situation may easily 

 change so that under the new conditions there would not 

 be the slightest inducement for expanding production. In- 

 deed the acreage already planted may not be yielding any 

 interest on the investment at all, yet the capital put into 

 these new plantings cannot be shifted, and production is 

 'going to increase as the trees mature, even though the de- 

 mand is not adequate to absorb smaller supplies at prices 

 that afford a net income to the grower. Moreover, this 

 enlarged production is likely to be permanent, for after 

 $i,ooo has been expended to bring each acre into bearing 

 the grove is not going to be abandoned, though the fruit 

 does not return the actual money outlay for its production. 

 Any hope of not losing the capital value of the grove de- 

 pends on giving it thorough care, therefore costs are about 

 the same whether the grove yields a profit or a deficit. The 

 annual cost of maintenance is extremely high. 



* California Fruit Growers Exchange : Report of the Field Depart- 

 ment, April 9, 1915. 



