There will be opposition here before the hearing ends. The CHAIRMAN. All right, sir. Mr. MORTON. That ends my presentation. Senator PEPPER. That is a very good statement, Mr. Morton. The CHAIRMAN. Our next witness is Mr. Lee Recker, Auburndale, Fla. Mr. Recker. STATEMENT OF LEE RECKER, ON BEHALF OF THE ADAMS PACKING ASSOCIATION, INC., AUBURNDALE, FLA. Mr. RECKER. Mr. Chairman and members of the committee, my name is Lee Recker and I am manager of the canning division of the Adams Packing Association at Auburndale, Fla. I am here representing our growers since our company is a stock cooperative composed exclusively of growers who produce in excess or in the neighborhood of 2,000,000 boxes of fruit each year. Our company is a member of the Florida Canners Association and also of the National Canners Association and I am a director in each of these associations. I would like to state here that if any testimony is presented by either of these associations in opposition to the present amendment such action is contrary to the wishes and desires of our company and we think contrary to the interest of our company and our growers. I would like to present to the committee some information and figures on what the Florida growers are getting out of their fruit, what they got last year, what they are getting so far this year. year. First, I will tell you what our company's experience was last We are a stock cooperative and do not operate for profit; we return to the grower the net after we have paid our processing expenses out of our sales. The CHAIRMAN. How long did you say they have been operating? Mr. RECKER. Our company has been engaged in citrus marketing for 20 years and citrus canning 7 years. Senator HOEY. How does your company return that—cash or how? Mr. RUCKER. Cash refund. Last year we refunded our growers on the tree 38 cents a box for all of the grapefruit that our association handled and for oranges we refunded them 57 cents a box; that is, on the tree. As an indication that our own operation is not too inefficient or burdened with too many extra expenses, I would like to compare that by what price was paid by the independent or cash buyers. As against our 38 cents a box the independents paid 381/2 cents a box on the tree, and on oranges as against our average of 57 cents a box the independent canners paid 5112 cents a box, so we were slightly below them on grapefruit and a little above them on our returns with oranges, which places us on the average. This year to date, of course, our own operation will not be closed until the end of the season. We have no way of knowing what our returns will be at this moment. The independent cash price that has been paid to date this year has been about 41 cents a box delivered cannery. Now, it costs about 25 cents a box-some will do it for 20 and others will cost 25-to deliver it from the tree to the processor. Qut of that 41 cents the grower is getting something between 16 and 21 cents a box on the tree, whereas last year he was getting 37 or 38 cents a box. On oranges to date this year, the average price paid by the independent canners has been 93 cents a box delivered cannery, and it costs in the neighborhood of 30 to 35 cents a box to deliver those oranges to the processor, which means that the grower is getting around 38 cents to 53 cents on a box, which is about what he got last year. To bring us right up to date, the present offering price from Florida by the cash-buying canners for grapefruit ranges as low as 20 cents per box for some varieties up to a high of 35 cents a box for the best and those are delivered at cannery. Senator PEPPER. About how much does it cost to produce that box of grapefruit on the tree and a box of oranges on the tree? Mr. RECKER. In our own case, of course, we have bigger growers and smaller ones. I would say on an average our own growers' cost would run between 40 and 45 cents a box to produce grapefruit and 60 to 65 cents a box to grow oranges; that is, before any harvesting is done. That will not return them any profit; that will simply amortize their investment. Senator PEPPER. That is on the tree, and picking and transportation has to be added to that? Mr. RECKER. Picking and transportation has to be added to that. Now I would like to carry the facts a little further to show you the situation clearly. Senator PEPPER. Excuse me just a minute. Was there any abandonment of grapefruit or oranges or either in Florida last year, to your knowledge? Mr. RECKER. I think the Federal Marketing Committee estimated there were about 900,000 boxes, I believe, was their estimate, and something in excess of 3,000,000 boxes of grapefruit that was never harvested because the offering price was less than the cost of harvesting. Senator PEPPER. Do you anticipate at the present prices and has it been true of past prices, that there will be any abandonment of fruit in Florida this year, citrus fruit, or has there been any abandonment? Mr. RECKER. I would say that on the basis of present indications there will be in excess of 5,000,000 boxes that will never be harvested. Senator PEPPER. Because they cannot get the cost of production? Mr. RECKER. The cost of harvesting. Senator PEPPER. Yes. Mr. RECKER. They would like to get the cost of production if they could. I have here two issues of the Washington Evening Star, one of February 26 and one of March 4 of this year. Those were the days in which the grocery advertisements appeared. I submit them for the record if the committee would like to have them. Senator PEPPER. Just read illustrative instances. Mr. RECKER. This particular one happens to be the advertisements of the Safeway Stores but the A. & P. and other stores have prices which are strictly competitive. On both of these weeks they were selling No. 2 cans, three cans for 23 cents. They were selling the large 46-ounce grapefruit juice for 17 cents a can. Senator PEPPER. How much does that have in it? Mr. RECKER. The No. 2 has 18 fluid ounces, and the tall can has 46 fluid ounces. The CHAIRMAN. Those prices are unprofitable to the producer? Mr. RECKER. I would like to go further and show you what the producer gets out of those prices; that is, on the basis of the No. 2 can that is $1.84 a case for a 24-can case. Of that $1.84 cents, taking out Safeway's normal mark-up, the freight, our packing costs, the cash discount that we allow them, we get 30 cents a box out of that fruit delivered cannery, and taking off 222 cents as being the average harvesting cost, that left the grower 712 cents for the fruit that went into that case for which Safeway Stores received $1.84 cents; that was on the No. 2 can. On the 46-ounce can, Safeway sold the case at $2.04 and the grower still got 712 cents on the tree for the fruit that went into that can to produce that juice. The CHAIRMAN. They were not doing very well, were they? Now it is our feeling that with some kind of marketing controls, the low prices that have prevailed in the last few years might be improved. We are strongly in favor of adoption of the amendment to the Marketing Agreement Act. The CHAIRMAN. I see. Mr. RECKER. The first step, of course, is to amend the act so that the industry can then determine whether they want a marketing agreement on the canning operation. We would like to have a favorable report from your committee. The CHAIRMAN. Will there be opposition developed here, do you think? Mr. RECKER. I think there will be testimony developed in opposition to this amendment, yes, sir. Senator PEPPER. You feel that if this law were amended as proposed and the authority that it confers to exercise, that it would be possible to get the grower a higher price by limiting the volume of fruit that might be available for the cans? Mr. RECKER. I do, Senator Pepper. Senator PEPPER. In cases where you have a big surplus? Mr. RECKER. We have had this situation this year. The market on both canned and fresh citrus dropped to very low levels in December; that is, the value of the fruit. Unfortunately, the product, the canned product, that was produced in December and early January is only now being marketed here in Washington, D. C.; and these prices reflect the canners' costs, back 60 days ago. Today we are beginning the marketing of our Valencia crop which is our better crop and which has always brought premium prices all over our earlier varieties, yet the producers have to compete with these low canned costs that occurred 60 days ago. If through the agency of a marketing agreement our entire operation could be leveled off it would be of immense value to the industry and they could get the better price for the better oranges to which they are entitled. The CHAIRMAN. What will help out this situation? We are all in favor of the producer getting a fair price for what he is growing. I do not know of anyone who would oppose anything on that ground. Mr. RECKER. Our position is this, Senator: We ask first that the mechanics be set up whereby the industry can help itself. We do not ask you or any governmental agency to bail us out, but we do want this mechanical means whereby we can market our crops in an orderly manner. It is possible that some of it might have to be diverted to other uses than the canned uses. The byproducts end of the industry has not been developed, in my opinion, to the extent that it could be done. I do not believe in abandonment of fruit. I think some use should be made of that Florida crop, of every box of that Florida crop, but when you throw it all into one or two channels and do not develop new markets or new channels for the portion that is now a surplus the industry is never going to improve. Senator PEPPER. Mr. Recker, will you give us some illustrations as to how the authority contained in the present Marketing Agreement Act has been exercised to the benefit of the growers with respect to fresh fruit? Mr. RECKER. Yes. I am not a member; Mr. Saurman who will follow me is a member of that committee. Senator PEPPER. We can get it in greater detail from him? Senator PEPPER. This is simply a proposal to apply the fruit that goes into the can, the law that exists in connection with fresh fruit? Mr. RECKER. I would like to say this: That the general manager of our company, Mr. Morrow, was a member of the Marketing Agreement Committee in Florida and is at the present time an alternate member and that he is 100 percent sold on the value of marketing agreements. Senator PEPPER. We thank you, Mr. Recker. The witness offers for the record issues of the Washington Evening Star of February 26, 1948, and the Evening Star of March 4, 1948, and asks that anything pertaining to the price of citrus juice appearing in those papers be carried in the record. The CHAIRMAN. That will be done. (The information is as follows:) [From the Evening Star, Washington, D. C., Thursday, February 26, 1948] FOR GOOD HEALTH'S SAKE, SERVE . . . CANNED CITRUS JUICES! Here's your chance to make a big savings on your favorite citrus juices. It's really an opportunity to stock up on health, because each kind is extra rich in vitamin C. Safeway offers zestful, golden orange juice, tangy grapefruit juice, and a taste-tingling blend of both. You can keep your family interested in citrus juices by serving a different one every day. Fill the pantry now while prices are low at Safeway. Orange juice, Full o' Gold, unsweetened, three No. 2 cans, 29 cents. Grapefruit juice, three No. 2 cans, 23 cents. Grapefruit juice, 46-ounce can, 17 cents. Blended juice, Blend o' Gold, unsweetened, two 46-ounce cans, 37 cents. [From the Evening Star, Washington, D. C., Thursday, March 4, 1948] SERVE HEALTH! GET YOUR FAVORITE CANNED CITRUS JUICES AT SAFEWAY Grapefruit juice, Town House, three No. 2 cans, 23 cents. The CHAIRMAN. Our next witness is Mr. A. V. Saurman, chairman of the growers administrative committee of the Florida Federal citrus marketing agreement, Clearwater, Fla. Mr. Saurman? STATEMENT OF A. V. SAURMAN, CHAIRMAN, GROWERS ADMINISTRATIVE COMMITTEE OF THE FLORIDA FEDERAL CITRUS MARKETING AGREEMENT, CLEARWATER, FLA. Mr. SAURMAN. I am from the west coast of Florida, Senator. I have a prepared statement which I would like to read. The CHAIRMAN. Go right ahead, sir. Mr. SAURMAN. My name is A. V. Saurman, of Clearwater, Fla. I am a citrus grower and have been a member of the citrus marketing agreement committees in Florida since their organization in 1939. At present I am chairman of the growers administration committee of this agreement. My appearance in support of S. 2173 is on behalf of this committee. Senator PEPPER. Mr. Chairman, I have just received a telegram dated March 8 which reads as follows: A. V. Saurman, Clearwater, one of our directors, and Counts Johnson, our attorney, representing our organization along with others in committee hearing on proposed amendments permitting canning industry have Federal marketing agreement. Present chaotic demoralized condition in industry my opinion due large measure to uncontrolled activities of canners who now handle approximately 70 percent grapefruit and 55 percent oranges and this will probably increase. My opinion stabilization impossible with such large volume without control or regulations. Our organization the growers and many canners in State will appreciate your cooperation and assistance. C. C. COMMANDER. Mr. SAURMAN. I also represent Farm Bureau citrus growers as a member of the American Farm Bureau's national citrus committee and as secretary of my country Farm Bureau in Florida. Senator Pepper put in the resolution from Pinellas County, which is the county that I refer to here. |