Powell, Gordon R.

Shafer, Carl E.

Texas A&M University

U r y" " S L-650
Marketing
South Texas
Winter Carrots
TEXAS &eM UNIVERSI1Y
TEXAS AGRICUL1'U1tAL EXTENSION SERVICE
J. E. Hutchison, DiIeaor, CDlJep Statioo. Texas,e ....
Marketitlg
South Texas
Winter Carrots
ARL E. H FER D GORDO R. POWELL'*'
The price received by Texa grower for
winter carrots i influenced by everal factors
including the quantity of carrot produced in
Texas and competing area, quality, consumers'
ta te and buying power, the volume of other
vegetable available and marketing costs. 1-
though grower understand that large crops
u ually bring low prices, the use of a detailed
analysis can as ist grower in determining the
effect of crop ize and other factor on pri e,
o that the expected total alue for crop of
variou sizes can be e timated.
This leaflet reports some of the re ult of
a preliminary analysi on South Texa carrot
price is ued by the Department of Agricul-
tural Economics and Sociology, Texa A&M
University.'*''*'
Several important questions for the grower
and hipper of South Texas carrots are: (1)
What i the pre ent trend in carrot consump-
tion in the U. S.? (2) How does the seasonal
volume of carrot production affect the prices
which growers receive? (3) What are the ea-
onal pattern for carrot upplie and carrot
pri e in the U. S.? (4) How doe the produc-
tion of winter carrot in California affect pri e
of arrot in Texa and how do California and
Texa price compare?
The preliminary analy i ha given an weI'
to me of the e que tion , but a more detailed
tudy will be neces ary to an wer other. How-
ever, the e an wer mu t be evaluated continu-
ally because of changing ituations in production
and marketing.
>II< Assistant Professor, Department of Agricultural Eco-
nomics and Sociology, and Extension Fruit and Vege-
table Marketing peciali t, Te as A&M University.
Total Carrot Consumptio
Th con umption of carrot per per on In
the U.S. declined from 8.7 pound during
1950-52 to 7. pound during the 1961-63 pe-
riod, a 10 percent drop. t the arne time,
however U. . population increa ed by almost
21 percent, and total U .. carrot con umption
in rea ed by 8 percent. If projected growth
in population materialize and the average
con umption of carrot i maintained at the
present level, U.S. carrot consumption in 1968
will be about 11 percent more than in the 1961-
63 period.
Demand For Carrots
lthough the rate of carrot consumption i
of intere t, it i the demand for carrot which
has economic importance. The economic con-
cept of demand refer to the effect that quan-
tity produced and marketed has on the price
level while the effect of other price influencing
factors is held constant. Demand is estimated by
analyzing price and quantity movement dur-
ing past years. Of further interest i the "elas-
ticity of demand" concept, or how total crop
value change as crop size and price change.
The demand for Texas winter carrots has been
inelastic in that when production increased,
other things beino' equal, total crop value to
growers dropped. The inelastic nature of the
demand for Texas carrots is illustrated in the
following section.
Texas Winter Carrot Prices
Prices received by grower in Texa for
winter carrot are influenced by everal factors;
the major one being quantity of carrot mar-
keted during the ea on. Since Texa and
California upply practically all of the winter
carrot marketed in the U.S., grower price in
Te a are influenced by changes in the pro-
duction level in both of the e area. Separa t-
ing the effect of Texa and California pro-
duction during 1958-1963 period, gave the fol-
lowing estimated relation hips: (1) s Texas
annual winter production increa ed 10 per·
cent above the 6-year average, the corre pond-
ing price to Texas grower dropped by almost
20 percent, and (2) an increase in California's
winter production of 10 percent above the
6-year average was associated with a reduced
price to Texas gTowers of slightly more than
10 percent.
Line FG below, represents the above price
relationships and indicates the following pro-
duction-price-crop value situations for South
Texas winter carrots if we assume that Califor-
nia's annual winter production remained con-
stant at the 6-year average of 1,692,000 hundred-
weight:
F
'i I. 50
Co)
...
..
a.
..
Co)
11.00
...;
e
o
~ .50
)0(
{!.
0 ........v-L1l:-__1--__...,I-__-..L-_---J
2000 3000 4000 5000
Texas winter carrot production
(1000 cwt.
6000
Texas
Production
(1000 cwt.)
3,000
4,000
5,000
Estimated
Texas Price
to Growers
(dollars/cwt.)
2.04
1.37
.69
Estimated
Texas Crop
Value
(1000 dollars)
6,120
5,480
3,450
Based on the 6-year period, the demand was
inelastic because as production in Texas and/or
California increased by some percentage the
season's average price to Texas growers gener-
ally dropped by a larger percentage and re-
duced the total crop value.
The relation hip between Lower Valley
F.G.B. shipping point price and the volume
of rail shipment from Texa and from Cali-
fornia were similar to tho e between Texa
grower prices and winter production. hen
rail hipment from Texa and/or California
increased ignificantly above their re pective
6-year averages, the total value of the season's
shipments generally decrea ed.
The demand for carrot actually originate
at the con umer level where retailers presum-
ably attempt to price carrots according to the
quantity available per time period. The de-
mand is passed back to the grower through the
marketing channels. Since growers are the
first group to own the crop, they feel most of
the impact of the crop's size on price. If
supplies are hort, the grower's price should be
relatively high. In turn, if the rate of hip-
ment is high, grower's price will be relatively
low.
Monthly Price Movements
For Carrots In The U. S.
Carrot prices at the grower, wholesale and
retail level tend to be lowest during the fall,
winter and spring months and highest during
the ummer. Retail price and the price re-
ceived by grower for carrots tend to move
together during the year. Unloads of carrots
at 41 U .. citie are generally greatest during
the winter ea on and retail price are generally
lowest during the winter sea on. When Texas
is the dominant supplier in the winter market.
total unloads per month are the highe t of the
year and carrot prices to o-rower in the U.S.
are generally lowest of the year. California
provides mo t of the U.S. carrot supply during
the ummer and receives the highest prices of
the year becau e the total carrot upply per
month i usua Jly lowe t during the ummer.
California And Texas Carrot Prices
Prices received for California winter carrots
in U.S. wholesale markets, F.G.B. shipping
points in California and by California growers
are consistently higher than prices for Texa
carrots at these levels. This difference in price
could be due to some buyers' belief that Cali-
fornia carrots are superior to Texas carrots.
Conclusion
The South Texas carrot industry's economic
problems can be broadly classed under quantity
and quality. (I) How many carrots should be
produced and shipped per season and how can
growers adjust winter carrot production in
Texas to provide the desired rate of shipments?
(2) Why do California carrots consistently re-
ceive higher prices than Texas carrots and can
this price difference be resolved? (3) If Texas
carrots are of equal or better quality than Cali-
fornia carrots, can this fact be presented to the
wholesale buyers and consumers?
The price and market analysis underway at
present should provide a better view of the
total market situation faced by South Texas
growers and shippers. As more experience is
gained in use of existing information and as
market analyses assist where possible, decisions
based on this accumulated information can pro-
vide more orderly marketing for South Texas
carrots.
**The complete report is contained in: A Preliminary
Analysis of Price and Demand Relationships for South
Texas Winter Carrots, Departmental Information Re·
port No. 65-1, Department of Agricultuml Economics
and Sociology, Texas A&M University, 1965.
Cooperative Extension Work in Agriculture and Home Economics,
Texas A&M University and United States Department of Agri-
culture cooperating. Distributed in furtherance of the Acts of
Congress of May 8, 1914, as amended, and June 30, 1914
5M- 7-65


English

Marketing South Texas Winter Carrots.

Texas A&amp;M Repository

U r y" " S L-650MarketingSouth TexasWinter CarrotsTEXAS &eM UNIVERSI1YTEXAS AGRICUL1'U1tAL EXTENSION SERVICEJ. E. Hutchison, DiIeaor, CDlJep Statioo. Texas,e ....MarketitlgSouth TexasWinter CarrotsARL E. H FER D GORDO R. POWELL'*'The price received by Texa grower forwinter carrots i influenced by everal factorsincluding the quantity of carrot produced inTexas and competing area, quality, consumers'ta te and buying power, the volume of othervegetable available and marketing costs. 1-though grower understand that large cropsu ually bring low prices, the use of a detailedanalysis can as ist grower in determining theeffect of crop ize and other factor on pri e,o that the expected total alue for crop ofvariou sizes can be e timated.This leaflet reports some of the re ult ofa preliminary analysi on South Texa carrotprice is ued by the Department of Agricul-tural Economics and Sociology, Texa A&MUniversity.'*''*'Several important questions for the growerand hipper of South Texas carrots are: (1)What i the pre ent trend in carrot consump-tion in the U. S.? (2) How does the seasonalvolume of carrot production affect the priceswhich growers receive? (3) What are the ea-onal pattern for carrot upplie and carrotpri e in the U. S.? (4) How doe the produc-tion of winter carrot in California affect pri eof arrot in Texa and how do California andTexa price compare?The preliminary analy i ha given an weI'to me of the e que tion , but a more detailedtudy will be neces ary to an wer other. How-ever, the e an wer mu t be evaluated continu-ally because of changing ituations in productionand marketing.>II< Assistant Professor, Department of Agricultural Eco-nomics and Sociology, and Extension Fruit and Vege-table Marketing peciali t, Te as A&M University.Total Carrot ConsumptioTh con umption of carrot per per on Inthe U.S. declined from 8.7 pound during1950-52 to 7. pound during the 1961-63 pe-riod, a 10 percent drop. t the arne time,however U. . population increa ed by almost21 percent, and total U .. carrot con umptionin rea ed by 8 percent. If projected growthin population materialize and the averagecon umption of carrot i maintained at thepresent level, U.S. carrot consumption in 1968will be about 11 percent more than in the 1961-63 period.Demand For Carrotslthough the rate of carrot consumption iof intere t, it i the demand for carrot whichhas economic importance. The economic con-cept of demand refer to the effect that quan-tity produced and marketed has on the pricelevel while the effect of other price influencingfactors is held constant. Demand is estimated byanalyzing price and quantity movement dur-ing past years. Of further interest i the "elas-ticity of demand" concept, or how total cropvalue change as crop size and price change.The demand for Texas winter carrots has beeninelastic in that when production increased,other things beino' equal, total crop value togrowers dropped. The inelastic nature of thedemand for Texas carrots is illustrated in thefollowing section.Texas Winter Carrot PricesPrices received by grower in Texa forwinter carrot are influenced by everal factors;the major one being quantity of carrot mar-keted during the ea on. Since Texa andCalifornia upply practically all of the wintercarrot marketed in the U.S., grower price inTe a are influenced by changes in the pro-duction level in both of the e area. Separa t-ing the effect of Texa and California pro-duction during 1958-1963 period, gave the fol-lowing estimated relation hips: (1) s Texasannual winter production increa ed 10 per·cent above the 6-year average, the corre pond-ing price to Texas grower dropped by almost20 percent, and (2) an increase in California'swinter production of 10 percent above the6-year average was associated with a reducedprice to Texas gTowers of slightly more than10 percent.Line FG below, represents the above pricerelationships and indicates the following pro-duction-price-crop value situations for SouthTexas winter carrots if we assume that Califor-nia's annual winter production remained con-stant at the 6-year average of 1,692,000 hundred-weight:F'i I. 50Co).....a...Co)11.00...;eo~ .50)0({!.0 ........v-L1l:-__1--__...,I-__-..L-_---J2000 3000 4000 5000Texas winter carrot production(1000 cwt.6000TexasProduction(1000 cwt.)3,0004,0005,000EstimatedTexas Priceto Growers(dollars/cwt.)2.041.37.69EstimatedTexas CropValue(1000 dollars)6,1205,4803,450Based on the 6-year period, the demand wasinelastic because as production in Texas and/orCalifornia increased by some percentage theseason's average price to Texas growers gener-ally dropped by a larger percentage and re-duced the total crop value.The relation hip between Lower ValleyF.G.B. shipping point price and the volumeof rail shipment from Texa and from Cali-fornia were similar to tho e between Texagrower prices and winter production. henrail hipment from Texa and/or Californiaincreased ignificantly above their re pective6-year averages, the total value of the season'sshipments generally decrea ed.The demand for carrot actually originateat the con umer level where retailers presum-ably attempt to price carrots according to thequantity available per time period. The de-mand is passed back to the grower through themarketing channels. Since growers are thefirst group to own the crop, they feel most ofthe impact of the crop's size on price. Ifsupplies are hort, the grower's price should berelatively high. In turn, if the rate of hip-ment is high, grower's price will be relativelylow.Monthly Price MovementsFor Carrots In The U. S.Carrot prices at the grower, wholesale andretail level tend to be lowest during the fall,winter and spring months and highest duringthe ummer. Retail price and the price re-ceived by grower for carrots tend to movetogether during the year. Unloads of carrotsat 41 U .. citie are generally greatest duringthe winter ea on and retail price are generallylowest during the winter sea on. When Texasis the dominant supplier in the winter market.total unloads per month are the highe t of theyear and carrot prices to o-rower in the U.S.are generally lowest of the year. Californiaprovides mo t of the U.S. carrot supply duringthe ummer and receives the highest prices ofthe year becau e the total carrot upply permonth i usua Jly lowe t during the ummer.California And Texas Carrot PricesPrices received for California winter carrotsin U.S. wholesale markets, F.G.B. shippingpoints in California and by California growersare consistently higher than prices for Texacarrots at these levels. This difference in pricecould be due to some buyers' belief that Cali-fornia carrots are superior to Texas carrots.ConclusionThe South Texas carrot industry's economicproblems can be broadly classed under quantityand quality. (I) How many carrots should beproduced and shipped per season and how cangrowers adjust winter carrot production inTexas to provide the desired rate of shipments?(2) Why do California carrots consistently re-ceive higher prices than Texas carrots and canthis price difference be resolved? (3) If Texascarrots are of equal or better quality than Cali-fornia carrots, can this fact be presented to thewholesale buyers and consumers?The price and market analysis underway atpresent should provide a better view of thetotal market situation faced by South Texasgrowers and shippers. As more experience isgained in use of existing information and asmarket analyses assist where possible, decisionsbased on this accumulated information can pro-vide more orderly marketing for South Texascarrots.**The complete report is contained in: A PreliminaryAnalysis of Price and Demand Relationships for SouthTexas Winter Carrots, Departmental Information Re·port No. 65-1, Department of Agricultuml Economicsand Sociology, Texas A&M University, 1965.Cooperative Extension Work in Agriculture and Home Economics,Texas A&M University and United States Department of Agri-culture cooperating. Distributed in furtherance of the Acts ofCongress of May 8, 1914, as amended, and June 30, 19145M- 7-65

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Marketing South Texas Winter Carrots.

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Texas A&M University

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Marketing South Texas Winter Carrots.

Abstract

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Texas A&M University

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