46 BULLETIN 1414, TJ. S. DEPARTMENT OE AGRICULTURE 



campaign. The effect of advertising is quickly dissipated if the 

 consumer is unable to procure the product in question when lie asks 

 for it. 



An organization that advertises its products to the consumer as- 

 sumes the responsibility of maintaining satisfactory quality, an 

 adequate supply, and fair prices. 



RELATION OF PRODUCTION TO COOPERATIVE MARKETING 



In the five years, 1920-1924, shipments of fruits and melons in- 

 creased 31.7 per cent from 346,369 cars to 456,469 cars; shipments 

 of vegetables increased during the same period 41 per cent from 

 345,572 cars to 487,238 cars. The population of the United States 

 during the same period increased approximately 8 per cent. In other 

 words, shipments increased over four times as rapidly as population. 

 (See Table 2.) Consequently, there has been an increase in the per 

 capita consumption of fruits and vegetables, but in obtaining this 

 increase the growers have been obliged to make concessions in price. 

 It may be possible to increase further the per capita consumption of 

 fruits and vegetables, but this opportunity is limited, if returns to 

 the growers are to be brought in line with prices of other com- 

 modities. Efforts in this direction are handicapped also by high 

 transportation charges, terminal costs, and wholesale and retail mar- 

 gins which make the retail price of most fruits and vegetables appear 

 excessively high to city consumers. These margins will be high so 

 long as the consumer demands the present service. 



Some economies may be effected in the performance of marketing 

 services, but the opportunities at present price levels for reducing 

 the cost of the physical handling of the product are small. The 

 shipper of western boxed apples, as an example, deals in car-lot 

 units containing 750 boxes. The average consumer buys approxi- 

 mately 6 to 8 per cent of the contents of one box at one time, or one 

 one-hundredth of 1 per cent of the car-lot unit. In other words, the 

 original car lot may be sold to the consumers in more than 10,000 

 units of approximately 3 pounds each. This conveys some idea of 

 the services and the actual handling of the product necessary to dis- 

 pose of a carload of apples to the ultimate consumer. An analysis 

 of marketing costs for northwestern apples in 1922-23 showed a 

 combined retail and jobbing margin of approximately 47 cents of 

 every dollar spent by the New York consumer. 14 



Considering fruits and vegetables, as a whole, it seems probable 

 that the price is influenced chiefly by the available supply. This may 

 not be true of a particular fruit or vegetable. Returns to apple 

 growers, for example, have no doubt been depressed in part because 

 of the tendency of the consumers to substitute oranges and other 

 fruits when the prices of these competing fruits are comparable with 

 those of apples. The use of grapefruit, strawberries, and canta- 

 loupes as breakfast fruits has increased, and these products tend 

 to compete with apples, as well as with each other. The demand 

 for a favorite fruit may be a greater factor than the supply in 

 affecting the price of the products mentioned. Or the increased use 



14 Some facts about margins and costs in marketing fruits and vegetables in the port 

 of New York district, the Port of New York Authority cooperating with the United 

 States Department of Agriculture, April, 1925. 



