€ tfcrctrii^ xrf Igrictilhirc|31 Iltbcral Hrts M/Echnolojgg STATION BULLETIN 436 APRIL 1957 COMPETITION FOR NEW ENGLAND APPLES ON UNITED STATES MARKETS 1 . Market Prospects for Growers By Joseph Gartner and J. R. Bowring AGRICULTURAL EXPERIMENT STATION UNIVERSITY OF NEW HAMPSHIRE DURHAM, NEW HAMPSHIRE Foreword This bulletin is the first in a series dealing with economic problems of the fruit and vegetable industries of New Hampshire and of New England. It is an approximation of the competitive position of the New England apple industry in the United States and what this means by way of market potentials for growers. COMPETITION FOR NEW ENGLAND APPLES ON UNITED STATES MARKETS 1. MARKET PROSPECTS FOR GROWERS By Joseph Gartner and J. R. Bowring* Apple Production in the United States COMMERCIAL apple production in the United States has been char- acterized by year-to-year fluctuations which can be attributed in part to the proclivity of the apple tree itself. A tree producing a large crop one year will in turn produce a small crop the following year. During the 1930's, the vacillations in the supply of apples appeared in 2 year cycles. After 1941, there appeared two three-year cycles and one four-year cycle. The extent to which the war efifort, climatic conditions, and other factors caused these irregularities in the production cycle is difficult to measure. Probably no one factor can be held responsible for this interruption of the production cycle. ( Total United States commercial production of apples has been declining at a slow and constant rate since 1934.) — 1500 J — I — I — I I I I i I I I 1935 1940 1945 1950 1955 Figure 1. United States and New Hampshire commercial apple production having value, 1934-53. * Mr. Gartner was a graduate research assistant and Dr. Bowring is Associate Economist for the New Hampshire Agricultural Experiment Station. This bulletin is based on a master's thesis submitted by the senior author to the University of New Hampshire in 1956. The authors are indebted to Prof. William Drew, New Hampshire Agricultural Experiment Station, for his review and criticism. Although there is a similarity in year-t()-}-ear fluctuations in production, the long run trend in apple production for the United States has been decreasing while New Hampshire and Xew England production has l)een increasing. This divergency in production patterns is of importance to our ;uaalysis of the future outlook for the industry. Upon examination of the supply patterns of various regions throughout the United States, it was found that the year-to-year production fluctua- tions common to New Hampshire and the Uniterl States also existed for (ther regions. * The number of a])ple farms and of apple trees in the United States has declined continually since 1930. Numbers of trees dropped from 1 16,303.353 in 1930 to 50.559.124 in 1950. Numbers of farms growing api^les during this time interval dropped from 2.297,074 in 1930 to 1,556.71 6 in 1950. However. the rate of decline in the number of apple trees and farms for tlie United States has recently slowed down. Proc'uction in New Hampshire New Hampshire has followed the general pattern of farm and tree re- duction which is characteristic of the United States as a whole. Since 1930. both farm and tree numbers have been declining as shown in Table 1. The decrease in numbers of farms and trees during 1940-1950 as corn- Table 1. Trends in Apple Far.-ns and Tree Numbers in the United States and New Hampshire, 1930-1950 1930 1940 1950 Percent 1930-40 Change 1940-50 United States -Vpple Farms Total Trees Bearing Trees X'on-Bearing Trees 2.297.074 116,303.353 88.8+8.124 27.455.229 1.814,095 71,277.106 57.786.575 13.490.531 1,556.716 50.559.124 39.497.427 11,061,607 —21.0 —38.7 40.0 —50.9 —14.2 —29.1 —31.6 —18.0 Average Trees Per Farm 51 39 New Hampshire M —23.5 —17.9 F'arms Growing Apples Total Trees liearino- Trees Non-Bearing Trees 8,748 705.941 460,076 245,865 5,471 455.757 366,108 89,649 4,0881 378,828 326,108 51,839 —37.5 —35.4 —20.4 —63.5 —25.3 —16.9 —10.7 42.2 .Average Trees Per Farm 81 83 93 3.7 12.0 Source : Based on data taken from the United States Census of Agriculture, United States Department of Commerce, Bureau of the Census, 1930, 1940, 1950. 1 The number of growers dependent on apples as their major source of income is e.stimated at 700 to 750. pared with 1930-1940 however has slowed down remarkably. The reduc- tion of numbers of farms giving up apple production during 1940-1950, however, as compared with 1930-1940 might be an underestimation be- cause of a redefinition of farm size in the 1950 census. The percent of farms moving out of apple production in New Hampshire is considerably larger than the percent reduction of farms for the United * See Appendix, Figures 5, 6, 7, 8. States. The percentage decline of bearing trees for New Hampshire has been smaller than the decline for the United States. This indicates that New Hampshire apple orchards are increasing in average size relative to United States apple orchards. The number of non-bearing trees in New Hampshire, however, declined a great deal more between 1940 and 1950 than did the proportionate rmmber of non-bearing trees in the United States. These changes indicate that production in New Hampshire will proliably decline more rapidly in the future relative to the United States. Since no statistics on age dis- tribution of trees in New Hampshire are available, it is difficult to deter- mine when and if the downward turn in production will occur. Much will depend on the current rate of new planting. Apples are the most important fruit produced in New Hampshire. Pro- ducers harvest and market between 400,000 and 1,500,000 bushels annually. Apple sales contribute approximately 3.2 percent to the total farm market- ing receipts in the State, ranking sixth in the total amount contributed to agricultural income. Although ten New Hampshire counties produce apples, commercial apple production is most highly developed in the southern part of the state. The three major apple producing counties (Hillsborough, Rocking- ham, and ^lerrimack ) contained approximately 77 percent of the total number of trees in 1950. I93S Figure 2. Average prices received for apples by New Hampshire, New England, and United States growers, 1933-53. Price Variations Apple prices are extremely variable, not only from one season to another, but within the season as well. Average prices received by farmers in the United States have varied from less than $1.00 a bushel in some seasons to more than $3.00 in others during the past 20 years. Within season prices tend to be lowest during the fall months, increase during the winter months, and reach a peak in the early spring. The increase in price is due to diminishing quantities available and increasing cost of farm or com- mercial storage. If storage of apples takes place on a consideralile scale, it decreases available supplies on the market and tends to raise the price. At the same time the prospective price of later sales should increase by the cost of storage. Figure 2 shows average farm prices for apples received by United States. New England, and New Hampshire growers over a period of 21 vears. It is of interest to note the close relationship between these price series. This indicates that apple prices received by New Hampshire growers are part of the structure of prices in New England and these in turn bear a definite and stable relationship to the average prices in the United States. The spread between the average prices received in the United States. New England, and New Hampshire, except for several years, has been fairly constant. The similarity of direction of price movement and the constant spread would indicate that there is one market for apples, differing be- tween regions due to cost of transportation and premiums paid for variety and quality of apples. Changes in Demand The per capita consumption of fresh apples in the United States has de- clined from approximately 50 pounds in 1931 to al^out 25 pounds in 1947. The drop in consumption during the 1930"s was much more severe than during the 1940's. Since 1948, consumption appears to have leveled off ■d^ abuut 25 pounds per capita. Figure 3. Average United States per capita conisuniption of apples, fresh and processed, in pounds, 19.30-5.3. The large drop in apple consumption during the 1930's can not neces- sarily be attributed to the drop in consumer income. Historical evidence of the relationship between producers' gross income from sales and apple production in New Hampshire shows that total income from apples has increased during periods of increased production. Similarly gross income from apple sales has declined with declines in apple production. This could well mean that programs to restrict supplies sold will not necessarily increase the income of New Hampshire growers. (See Figure 4.) The continuing downward trend in consumption during the 1940's while in- come was obviously increasing can perhaps also be explained bv the avail- ability of competing fruits during practically every month of the year. Tremendous strides were made in both the transportation and refrigeration of fruits and vegetables during the war and post-war years. As a result, the consumer has now available many fruits throughout the year that he was not able to acquire during the 1930's, and it is reasonable to expect a drop in apple consumption. 1940 1945 Figure 4. Relation between New Hampshire farm income from apples anrl size of apple crop, 1933-53. Farm income has been deflated by the wholesale prices of all commodities. The per capita consumption of processed apples, on the other hand, has shown a slight increase. From approximately 0.9 pounds in 1930, the con- sumption of processed apples has increased to an estimated 3.0 pounds in 1949. The increase has been mainly in apple sauce and canned apples. Consumption of dried apples remained almost constant. Frozen apples were introduced during the late 1930's. Consumption started increasing during the war years and then declined. Canned apple juice consumption increased slightly but not at the same rate as apple sauce and canned apples. The increased consumption of processed apples was not large enough to compensate for the decrease in fresh consumption. Utilization Apples are marketed for fresh fruit sale or for processing. The amount utilized as fresh fruit among regions will depend partly on the varieties commonly grown in the region, nearness to consuming centers, prices, and available processing outlets. Table 2. Percentage of Apple Production Used Fresh in the United States and New England, 1934-1953 Year Untied States New England 1934 69.6 73.1 1935 87.2 77.6 1936 70.4 76.9 1937 64.1 79.1 1938 71.5 73.1 1939 60.2 77.6 1940 70.2 80.0 1941 65.2 81.6 1942 61.4 76.1 1943 66.5 82.1 1944 64.2 77.1 1945 70.9 80.0 1946 63.6 78.6 1947 68.4 81.5 1948 72.6 85.5 1949 60.6 82.4 1950 61.5 80.7 1951 62.3 83.3 1952 69.7 86.0 1953 67.5 84.3 Source: Production, Farm Disposition. Value and Utilization, Bureau of Agri- cultur'al Economics, United States De- partment of Agriculture, 1934-195^. The relative amount utilized in each form varies not only among regions but also from year to year. The utilization from year to year will depend on market demand and prices. Table 2 shows the percentage of production consumed as fresh in both the United States and New- England for a period of years. A larger percentage of apples m New England go into the fresli fruit market than for the United States as a whole. The percentage of the total apple crop used fresh m the United States has remained fairly constant over the past 20 years usuallv fluctuating between 60 and 70 percent of the total production. On the other hand, New England's contribution to the fresh fruit mar- ket during this same time interval has increased. The higher farm prices of New England apples rela- tive to United States prices can in part be explained bv the larger pro- portion sold on the fresh fruit market. Assessing the Competition for New England Apples Major Markets Maine New Hampshire, and Vermont are ordinarily surplus producing J^^e^r Massachu et^ts, Rhode Island, and Connecticut*, because of their breer PoptS are more deficit areas. Consequently the movement of : fl a^ Js is g'enerally from northern New England toward g.tU^^^^^^^ New England and to major consuming areas lying outside of ^^xv tnglancL ^.e two primary markets for fresh New England ^.PPj- J^.^^^ J^^ and Boston In recent years, however, small quantities of fiesh apples have alTo been shipped to'such markets -Baltimore W^^^^^^^^^ and Cleveland Table 3 shows the receipts of fiesh apples m tne incw York Ciya"d Boston markets during 1953^ It will be noted that a arger quantity of apples was shipped into New York City from New England '''sl^Tda'iy m:r£;^r New England apples are the 1-ger cities w-mnn New England and in tlie bordermg states. For Nevv Hampshire such dties as Concord, Manchester, and Portsmouth ^ '"' ''^^^^^t^ts of Haverhill and Lawrence in Massachusetts are usually the recipients oi "pples that are not shipped mto New York, Boston, and other large con- suming centers. * Supply and demand in Connecticut are frequently in balance. 8 Tlie ap])les not sold as fresh are Table 3. Receipts of New England Grown processed into cider, vinei^^ar, apple ^'^'^ ^PP'" °" the New York City and Boston ^ . . , 1 • 1 r Markets by Origin, 1953 sauce, juice, and dried or trozen =-=7-3-=n:=T====: apples. Within New Hampshire Origin Markets there are only a few commercial States New York Citv Boston processing plants and a limited num- ber of cider plants. Competition by Varieties and Time of Shipment Competing areas can be classified by the varieties thev grow and by the time of arrival on the market: Total 1074 880 (carlots)i (carlots) Maine 44 61 New Hampshire 55 11 Vermont 659 24 Massachusetts 190 771 Rhode Island — — Connecticut 126 13 1. Those regions producing the i Carlot usually contains approximately same varieties and shipjiing to the 525 eastern crates. same market at the same time as Source: Unloads of Fresh Fruits and Xe\y England growers will present Vegetables at New York City and Boston, the strongest competition to New P-^'- A., United States Department of England producers. 2. Those regions producing the same varieties but shipping to the com- mon market at a different time will furnish less competition than those regions in 1 . 3. Those regions producing a different variety but making it available in the market place at the same time as New England growers will be stronger competitors than those that grow the same variety but ship at a different time. The degree of competition that this type of region fiu'uishes, will depend in part on the cross-elasticity of demand for the two varieties.* 4. Those regions shipping to markets other than New England markets will compete to a lesser degree than the previous cases. Since, as was noted, the prices of apples throughout the United States are interrelated, these regions will indirectly influence the price in New England markets. Major Varieties Grown in Four Regionsf The major varieties of apples grown in the four regions under considera- tion are Delicious, Winesap, Macintosh, Rome Beauties, and Staymen. Of the average 1942-1951 production in these regions, 29.1 percent were Delicious, 15. were Winesap, 13.8 were Macintosh, 8.7 were Rome Beau- ties, and 6.8 were Staymens. The remaining 25.7 of the production was Gravenstein, W'ealthy. Baldwin, Ben Davis and Gano, Cortland, Golden Delicious, Northern Spy, Rhode Island Greening, and some minor varie- ties. New England — The varieties of most economic significance for New England are Macintosh and Baldwin. Other varieties such as Delicious, Cortland, and Northern Spy are also grown, but contribute less to growers' incomes. * Cross-elasticity of demand for a variety with reference to a second variety is the percentage change in the quantity taken of the first variety resulting from a percentage change in the price of the second variety, all other factors being held constant. fNew England, Mid-South Atlantic, Mid-West, and Far-West. 9 CO -o c o Total of 13 rieties Stay- men CD I— 1 OO'— 'O"— 'ON'— ii^lQ t-t CO O.00 OOlOt^ |o. 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O .S rt > •T3 C > 00 CM CO o ro 1^1 -^ Ov ^^ ^ <^ <^ fv) ri- iM (^ •-; jr; ro 'i- 1^ CO 00 "^J "^ CO 00 ^ (^1 "~' 00 00 t^ lO t^ -— "-' 0 NO lO CO NO CO ■* ^^ CVl O t^ lO NO On "^ -* Tf CO On "^ CO 1^1 NO CO CO NO '— ' '— I CO O NO "^ o "^ "^o O t^ -— ' On nO_ ■-h" no" co' CM UO I NO -I I O CO CO o CN] 00 NO On CO 00 u-> CO CO"^ ■— ' O On ON liO 00 CM CnI O90t> U-) CN) CN) CO in o 1^1 CO ON CO On CO O CO 00 CO <^l CO t^ ON LO 'T ,— I CN) rN) ^^ ,— I lO i-O f^l ' — ^ Ti" O VO OO l^l (^ ON NO ,— 1 ,— ( NO r^ LO o o ^ rl- --^ ON T-i t^ ON NO CM LO '— ' On CO •— 1 ,— I NO LO CM CM ^ CO >— ' CO NO I <^1 IT) I ^- co 00 1 Ov ^ I 0^ >— < o CO "^l O 'I' 00 CO -o 00 Si •^1 o 00 NO LO LO ON CD 00 (^1 no' 0\ CO CO cm" ON 00 (V) LO 1^ NO ■* 00 LO O ■* "^ Tf CO ^ ■— ' ^1 -^ r^ ^ CM LO CO CM LO >— 1 (^ Cn) CO CN LO NO ^ I LO NO ' — ' t^ ^ o -o rt LO CO ^Nl O C^l -* O CO t^ LO t^ ■* -t ^ CO r-H LO NO T ,__, '^1 CO CO LO 00 ■rl- -i- -^ C3N ^ ■-^ j^^^ rvj ON ,-H O ■— ' t^ CN) •rl- CNJ -rj- t^ NO On 00 I On l^ CO CO CO C^J 00 ON CO SON "—I On NOn:^ 1 — I ■'^ CO LO 00 ON 1^) CO 00 o NO 1^ LO CO NO o" CN) CM C5 NO CO NO NO CM IT) 00 ^ 00 CO o 00 NO NO -i- CO .— 1 00 o ^ lO CO cm' _ C rt > u ■4-J O r2 New Y New J( Pennsv S 1- > en u O c o -C — J"'^' «J be 3 "rt > '6 2 '^ '« _™ |> .-- C o i/> O I -^ ^ 11^ [II H 20J=lSS O be ■£ _ ,, E^'p o o ^-^ OS ^'S CO NO_ cm" c _o O aJ OJ :2 s o H o n U. o •^ t— OX) %< ^+-1 o CO LO -t-» ON »— H s ^ p in *.*-» rt _w O, ctJ OJ Q > C/l >^ -O rt >-» r- t/) .2 -*-• tu u (U a -^-J T3 'S O :3 Ph ^ JJ in "o. • o 0? oi o c o c OS W^ ^ T3 C .2' 3 -a o c oJ 0; C O a) o -I-' .:d Oj r- Mid-South Atlantic — ^The Mid-South Atlantic states grow approx- imately eight major varieties. The larger number of varieties grown can he attributed to the greater divergence in climatic conditions in this region. X'irginia and West Virginia specialize in such varieties as Ben Davis, Gano. Rome Beauties and Staymen while New York, New Jersey, and Pennsylvania produce mostly Baldwin, Macintosh, and Rhode Island Greening. Mid-West — The predominant varieties grown in the Mid-West are the Delicious and Macintosh, and account for approximately 34 percent ot the apples grown in this region. Other varieties grown are Northern Spy, Golden Delicious, and Baldwin. These three varieties comprise about 233 percent of total average production. Far West — The Far West specializes in one major variety. The Delicious apple accounts for roughly 50.6 percent of the total production of 13 major varieties studied for this region. Of this 50.6 percent the State of Washington produces about 44.4 percent. The other varieties of eco- nomic significance in this region are Winesap, Rome Beauty, and Graven- stein. These three varieties combined amount to about 45.8 percent of the total production. An area shipping to the same market at the same time as New England growers will furnish stronger competition than one that ships when New England apples are not on the market. Knowledge of these peak shipments from various states makes it possible to identify direct and indirect com- petitors of New England apples. The Boston Market The marketing season for New England apples extends from July through May. At either extreme of this span the amount of apples shipped into Boston from New England is negligible. The peak of New England apple shipments occurs from November through February.* Therefore, this is the time interval which is of extreme importance to New England growers. A large influx of apples from another state at this time could result in a drastic reduction in the price paid to New England growers. Maryland, West Virginia, Pennsylvania, Missouri, Idaho, and California show no particular peak in the arrival of their respective apple shipments into the Boston market. One can assume that the shipments to Boston are spread evenly throughout their particular marketing period. New York, New Jersey, and Oregon reach their respective peaks of shipments to Boston after New England shipments have dwindled. Virginia and Wash- ington both reach their peaks during the New England peak. Although Washington and \^irginia do not raise the same varieties as New England, these two states furnish the strongest competition during January and February, in the height of the Macintosh marketing season. New York and New Jersey grow similar varieties as New England but their peak arrivals do not coincide with New England's. Therefore, their competition is not as strong as that of Washington and Virginia. The New York City Market In the New York City market the marketing season for New England apples starts earlier than on the Boston market. The peak shipments into New techniques of storage are lengthening this market period. 11 the New York City market extend over a k)nger period of time. The peak of shipments from Vermont starts two months sooner to New York City than to Boston and the ])eak of shipments from Connecticut ends one month earlier. It should he noticed that New York. New Jersey, X'irginia, and Penn- sylvania ship into New York City all year round. This can he attrihuted to their production of l)oth fall and summer varieties. The peak shipments of these four states coincides with the peak shipments from New England. Therefore these states furnish the strongest degree of competition in the New York City market. Oregon and Washington reach their respective peaks after New England shipments of apples to New York have sul^sided. Therefore, these two states can he considered as indirect competitors as compared with New ^'ork. New Jersey, A'irginia, and Pennsvlvania. Areas of Strongest Competition In Boston the strongest competition faced hy New England growers comes from Washington and Virginia. A certain degree of indirect com]ietition is provided by New York, New Jersey, and Oregon. The competition that faces New England in New York City comes from New York, New Jersey. Virginia, and Pennsylvania. The major indirect competition comes from Oregon anrl Washington. Changes in the Contribution of Regions to the Major Markets An attempt will be made here to quantify the strength of competition that New England faces and has faced in the past. Cities other than Boston and New York City are considered here since changes in the competitive picture in these cities will indirectly affect New England growers. A demonstration of physical shipments hv regions of origin to ynnnt of destination is not the most desirable way of measuring competiton. Over a period of years the production of apples fluctuates almost constantly, resulting in drastic increases and decreases in shipments to the various markets. Therefore, a better yardstick to measure competition than a historical observation of physical quantities is the percentage change in the supply of apples that regions contribute to each of the markets over a ];eriod of years. If the percentage contribution of a region changed over a span of years, then the change in the percent contributed might have been due to either : 1 . a change in the total supply of apples within the con- tributing region, or , 2. a change in the demand for apples between regions relative to one another. The reason the analysis is based on regional shipments rather than state shipments is because many apples lose their identity during the marketing process. To illustrate, many New Hampshire apples are shipped into Massachusetts. There they are repacked and sold by Massachusetts market- ing agencies in the Boston and New York City markets as Massachusetts grown apples. These apples often find their way back to some of the larger New Hampshire cities and towns. In an analysis made on a state basis, it would be quite possible to overestimate one state's contribution and underestimate another's. To compensate for such discrepencies, it is neces- sary to deal with regional shipments rather than individual state contribu- tions. The probability of some New England apples being shipped to an- other region and then returned to New England is quite small. Therefore, the regional approach is more accurate with available statistics. 12 Shipments by Regions, 1946-1953 The period chosen for observation was from 1946 to 1953. Complete data on apple shipments preceding 1942 are not available. The years 1942, 1943, 1944, and 1945 were not considered because of the war-time restrictions on both trucking and railroad shipments of all commodities. These restric- tions probably prevented many distant regions from shipping into such eastern markets as New York Citv, Boston, and Washington, D. C. It was expected that an eight-year period, 1946 to 1953, would be sufficient to indicate any trends if they were present. Statistics on railroad shipments of apples into the various cities is ac- curate. However, truck unloads are estimated to be between 60 and 90 percent complete among the cities observed. During the pre- and post-war years the usual carlot shipments contained approximately 525 eastern crates or 756 western boxes. The percentage contributed to each market was calculated from data on total shipments from the various regions into each market. By dividing total market supply into each regional contribution to that market, it was possible to arrive at the percent contributed by the individual regions. Tab!e 5. New England Shipments to Various United State: Markets a-. Percentage of Total Receipts, 1946-1953 Cities Y( ?ars 1946 1947 1948 1949 1950 1951 1952 1953 .A.tlanta * _ , , .6 — — Baltimore Trt Tr .1 .6 1.1 2 1.7 Boston 43.3 62.0 73.8 65.5 73.0 70.7 61.8 59.5 Chicas,o — — — — — — .7 1.4 Cleveland — .1 — — — .9 14 5 New York 4.5 6.8 9.7 12.5 15.2 14.5 12.8 14.9 Philadelphia .7 1.4 2.6 4.5 4.6 J.O 3.1 5.9 Pittsburgh Tr Tr Tr Tr Tr Tr 2 2 4.2 Washington — — — 7 1.2 2.2> 1.6 4.7 Source : Based on data compiled from Unloads of Fresh Fruits and Ve-getables. P. M. A., United States Department of .Agriculture, 1946, 1947, 1948, 1949, 1950,1951,1952,1953. * — indicates .1 percent or less of the total market, t Tr indicates no trucking data were available. New England Shipments Table 5 shows the percent contribution to various markets throughout the United States from 1946 to 1953 by the New England states. It will be noted that the market area for New England apples extends approximately 500 miles outside of New England. Very few apples are shipped to markets located further. The major outlets for New England apples in 1946 were Boston, New York City, and Philadelphia. In the Boston market no dis- cernable trend is noticeable. In New York City, Philadelphia, and Wash- ington, however, there appears to be a general tendency for New England to have increased its share of these markets. This indicates that the New England growers are bettering their position. In addition to increasing its share of the 1946 markets. New England has also acquired new markets. The new markets which have been opened to New England growers are Chicago, Cleveland, and Pittsburgh. Increases 13 in the contribution to established markets and the acquisition of new outlets for apples has influenced the competitive position of New England growers. It should be noted that there is no apparent trend in the Boston market. The percentage of shipments into Boston depends on year-to-year fluctua- tions in the supply of apples. In markets further away there is a definite upward trend in the percentage of total market receipts from New Eng- land, which would indicate that the yearly supply of apples does ncjt aflfect the quantity of apples shipped into these markets. If this is so, then the Boston market is the dumping area for surpluses, while the more distant markets are the recipients of a fairly even flow of apples. WHienever one region increases its share of a market, one or another of the regions supplying this market must have reduced its share of the market or have withdrawn from the market altogether. In order to deter- mine the effect of New England's increased shipments on other regions, it is necessary to examine the individual regions and the changes that have occurred in their contribution to the different markets. Mid-South Atlantic Shipments The percentage contributed by the ^lid-South Atlantic regions to the various markets is shown in Table 6. It can be seen that this region has increased its share of the New York City market over the past eight years. In Chicago there has been an apparent decline in the percentage contri- buted while the percentage contributed in Philadelphia has remained fairly constant. In the remaining cities, Atlanta, Baltimore, Boston, Cleveland, St. Louis, and Washington, no apparent trends are noticeable. Table 6. Mid-South Atlantic Shipments to Various United States Markets as Percentage of Total Receipts, 1946-1953 Cities Years 1946 1947 1948 1949 1950 1951 1952 1953 Atlanta 33.2 32.6 44.2 22.3 20.0 53.3 64.4 38.0 Baltimore Tr* Tr 64.3 63.8 55.1 65.6 77.4 58.2 Boston 22.6 12.2 8.4 5.5 6.6 9.2 16.6 10.2 Chicago 4.1 4.5 2.8 1.4 2.1 3.0 i.7 1.4 Cleveland 15.0 19.9 27.0 27.4 28.0 24.4 26.6 16.1 Detroit Tr Tr Tr Tr Tr .9 2.3 1.6 Kansas City 3.6 ■> Tr Tr Tr Tr Tr 1.3 St Louis 3.2 1.4 1.1 .3 ./ .9 2.8 1.0 New Orleans 8.7 3.8 — 1 — 3.9 16.2 4.4 New York 50.5 55.6 56.4 56.1 54.7 59.5 64.5 57.5 Philadelphia 68.0 68.4 66.3 65.1 hbX) 07.9 80.0 66.0 Pittsburgh Tr Tr Tr Tr Tr Tr 01.7 21.0 Washington 54.4 65.3 64.8 74.8 54.8 75.1 82.1 58.7 S-'urce: Based on data compiled from Unloads of Fresh Fruits and Vegetables, P. M. A., United States Department of Agriculture, 1946, 1947, 1948 1949, 1950, 1951, 1952, 1953. * Tr indicates no trucking data were available. t — indie ites .1 percent or less of the total market. Mid-West Shipments The only common markets for the Mid-West and New England are Chicago, Cleveland, and Pittsburgh. Table 7 shows the contribution to the total market by the Mid-Western region. This region has increased its 14 Table 7. Mid-West Shipments to Various United States Markets as Percentage of Total Receipts, 1946-1953 Cities Years 1946 1947 1948 1949 1950 1951 1952 1953 Atlanta .8 6.7 4.3 ?,7.S 9.4 13.1 7.?> 19.9 Raltimore Tr* -> — t — — — .1 2 Boston — -> .1 — — — 2 fr Chicago 46.1 27.8 28.9 41.6 35.9 40.8 ,i."i..'i 28.2 Cleveland Tr It^.S 19.4 32.8 17. S 33.6 45.4 44.1 Denver Tr Tr Tr Tr Tr Tr 6 5.0 Detroit Tr Tr Tr Tr Tr 56.8 65.7 53.6 Kansas City 46.3 Tr Tr Tr Tr Tr i7.2, St. Louis 58.7 44.6 44.0 62.1 43.6 50.5 44.7 46.1 Xevv Orleans 4.S 1.4 5.6 i.l 5.0 New York .1 — — .1 — — — — Philadelphia — .5 2 — — — 2 — Pittsburgh Tr Tr Tr Tr Tr Tr 7.1 12.1 Source : Based on data compiled from Unloads of Fresh Fruits and \'egetables, P. M. A., United States Department of Agriculture, 1946. 1947, 1948, 1949, 1950, 1951, 1952, 1953. * Tr indicates no trucking data were available. t — indicates .1 percent or less of the total market. share in only one market. Altanta. In Chicago and St. Louis no definite trend is noticeable. It should be noted, however, that shipments into New York City (1946 and 1949) occurred only when the Mid-West had a larger than usual share of its home markets. This indicates that New Eng- land is likelv faced with competition from this region only when a very Table 8. For West Shipments to Various United States Markets as Percentage of Total Receipts, 1946-1953 Cities Y ears 1946 1947 1948 1949 1950 1951 1952 1953 Atlanta 41.1 46.8 43.0 31.8 38.1 25.4 21.4 31.2 Baltimore Tr* Tr 34.5 34.9 30.6 30.9 20.5 31.0 Boston 25.1 7? 7 15.6 25.3 17.5 15.6 13.6 22.1 Chicago 52.7 60.3 58.8 46.1 52.7 53.5 51.4 61.8 Cleveland 39.0 50.2 51.2 37.5 37.6 33.1 22.6 34.0 Dallas Tr Tr Tr Tr Tr Tr 91.0 95.8 Fort Worth Tr Tr Tr Tr Tr Tr Tr 82.5 Denver Tr Tr Tr Tr Tr Tr 95.7 91.1 Detroit Tr Tr Tr Tr Tr 37.9 30.0 42.2 Kansas City 43.4 63.1 Tr Tr Tr Tr Tr 57.7 St. Louis 36.8 73.9 47.9 ?>?>.l 49.8 44.8 47.2 49.4 Los Angeles 99.0 98.7 99.2 98.6 98.4 97.4 98.1 96.9 Oakland 100.0 100.0 100.0 99.7 100.0 100.0 100.0 99.5 San Francisco 80.9 100.0 99.9 100.0 100.0 99.9 97.4 99.0 New Orleans 79.4 93.0 82.7 75.8 83.7 New York 37.6 35.0 33.1 28.2 28.4 13.7 20.3 23.5 Philadelphia 26.8 26.5 28.5 27.1 25.4 23.6 13.5 25.0 Pittsburgh Tr Tr Tr Tr Tr Tr 23.1 29.7 Seattle Tr Tr Tr Tr Tr 100.0 100.0 100.0 Washington 31.0 33.9 34.6 23.4 30.5 21.7 11.6 23.8 Source : Based on data compilied from Unloads of Fresh Fruits and Vegtables at Various United States Cities, P. M. A., United States Department of Agri- culture, 1946, 1947, 1948, 1949, 1950, 1951, 1952, 1953. * Tr indicates no trucking data was available. IS c 00 .2 ^ n 0\ -4-» »— H n lA -o^ o •-\ o i-^ H P-< ■ O CI. rt 3 ry) ^-^ 00 c _o '5) 0) Of (1) 9 a 3 CO J) Ji a o 1:2 C O U OS i_t^ a. r- "" r1 o a CD ir^ 1^1 n On t^ On U-) lO <^1 ^Tcn'no'no" ro 00 "+ ■— I li^ O 00 00__ OO'vo'^OO" lO Tj- LO CO rN] CO 00 CM O NO O LO Lo 1^] ro ro '^frNToo'^" o ro r^'^^ u^ -^ -^ 00 T3 c _0 0) c UJ o -^ '-t- o O O ■=f u-; ^ u-i ro r-^. O ^ CM CM i>J CO ON 00 oc<^r On i-T) On'oo' u-j r-; o (>i C^l fNl CNJ ro Tj- IT) Pvl O ON 00 CO :^ rf^CVl_O0_^O0_ o'on'io no" o cor^ CO cvi^oo t^^*^^ Cvf^'-H Cvf c u CD On ^3 u s §^ o §:=: y u o On On On On ON On On On On_ i-r(Nfro'"_L I I I i^ o .' 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(vfcoTt (5 16 o l-O O '^ ■— I "^1 O \D ^^ '-t- ^ o_ ^ oq lo'oCii-Tod -1- ro O '^ '^ Ol lO lO oo CO lO lO CO ■— ' o'^o oo'vc lO ro U-) On ' ON of -a:' 00 TH o o Tf lo oi '^1 O) ro CM t^ LO ^ ON '— ; oo o u-j 00 O '-'^ eg ^ CM r^ U-) r^ t^ <^i ro "^ VO O 00 o u-To' I^ 1^ ro 00 ro_'-<^0\^ON rCioio Ox On 0\ (^ On On On On On_^On — TrN]' ro ' o o o o o o 0,0.0, Cvf r^' -t O-^ 0\L0 vONO 1 — I "^ o'oo" CO '^1 + ^ NC o NO NO CO V J= 0 rfl H u*> 0\ ;::; '""' s , ' . , 2 °.i 0 < U, -(2 0 ,£5 c L. 3 OJ ns C OJ oj 0 ^ >.CL, IJ ^^ ~ CQ n j3 (U 0 03 u ■^H E j3 1^ z3 !Ll c i:t 0 Dh 0 0 * C2 ^ ^ 'r^ 00 Tf <^ CN Cvf on' 00 V3 t^ o_ , J" 00" CV) LO ro 0 0 i^ r^ \C i^ 00 ON in -H -+' ■^" ^^ UO LO NO |-^_ — . <3N_ 0 no' 00 o'^ Ton' no' 0 NO 00 r^ 1 — 1 1 — 1 0 tC OJ Q in '^1 X) -+ ^ (^ ^^ (^ 1 ON 0 ^) I^_<^I_On ^i''^)'oo'on' •" ^ ^ -1- 1^ 0 + l^— ,X^_00_ ^On'u->'j^" 0 10 CO NO Ph "- ON NO no" On NO 1 O 3 '^ -* o o p -r Ln in ro t< o Ot^ O 00 r\r»-H ,-lNO o <^v NO'"^ O 01 f^ \j-> NO 00 -+ O NO NO O NO (-N1 .— ( ^1 00 ^-. CO ^-' 1^ On in I^ NC -t ON in on^ Cc'nO "* •— ' O NO 1^1 O C5 Ln •— "_"^ ^'rvf rrTin •On On On On ON On O^ On On O O O : O O ■■ O O c ^1 O) o, l^' m + Q CO CIh o in 3 O Oh o_o ni 0 < 0 J2 ^ , D (U QJ 0 ^.CM '— 1 OJ m C4= Oj O nJ u ;H ^ 5 Q _ 5 r/) ~ aj 4J s D X S --o « o 5 . w; .:: *- ft. ^ 3 - t ■ o ,- — 2 o t o n "d a. i: J3 « - iC ■^ 0 1) s -^ 0 QJ 0 ^ .t: u C 6 = X W w -; 17 large supply of apples is produced in the Alid-West region. In such markets as Dallas. Fort Worth, Denver, and Detroit, trucking data were not avail- able for most of the observed years. Therefore little can be stated about the trends in these particular markets. Far-West Shipments Table 8 shows the percentage that the Far West contributes to various markets throughout the United States. It will be seen that the Far West has declined considerably in New York City, Baltimore, Atlanta, and Washington, There has also been a decline in the percent contributed to the Boston and Philadelphia markets. However, this drop has been slight in comparison with the decrease in New York City, Atlanta, Baltimore, and Washington. In Chicago and St. Louis no trends are apparent. In the western markets, Los Angeles, Oakland, and San Francisco, the percentage contributed has been fairly constant. In the other markets shown in Table 8 not enough data are available to make any definite statement about changes in the percent contributed to the total market. Market Summary New England has increased its share of the market in New York City, Philadelphia, and Washington. New markets which have been opened to New England growers are Chicago, Cleveland, and Pittsburgh. In none of its major markets has there been a drop in the contribution such as has occurred for some of the other producing regions. The Far West has lost its share of those markets where New England has gained. In the Mid- West region little change has occurred since 1946. Only in Atlanta, has this region increased its share of the market. In all other markets no definite trends were noticeable. The Mid-South Atlantic region has increased its share of the New York City market. In Philadelphia, the percent contributed has been fairly constant while the percent contributed to Chicago has declined. In all the other markets there were either no trends noticeable or not enough data were available to observe any change if a change were present. Potential Markets and Competition The following analysis provides us with estimates of the surplus or deficit supply of apples by the four major apple growing regions. The amount of surplus or of deficit will indicate the degree to which regions will be importing apples or shipping to markets outside the region. The estimates are based on 1948 production. The 1950 census of popula- tion and consumption by income groups is based on the 1948 Food Con- sumption Surveys of the USDA The results as shown in Table 9 indicate that the largest surplus apple supply region is the Far West with 28 million bushels, follow^ed by the Mid-South x\tlantic Region with almost 8 million bushels and the New England Region with 365,000 bushels. The Mid-West Region is deficit by over five million bushels and con- tains potential markets for the surplus producing regions. Estimating the Future Competitive Position Besides identifying New England's competitors and evaluating the strength of their competition, it is the purpose of this study to determine the long run competitive position of New England in 1965. More spec- 18 ^ -2 u t-H o H oj O O X3 O o fv.f ^ o d y—* jo lo Cvf OC •o" u T3 c 0 o> c ajn ULi -*-' ^ — \ Q. c/ ? Oi^ c ^1 -d o I-. PL, 1 t3 1 C ^"^^ rt -«-* , u in C O U Q -t-t + Q ■n»^ H C/3 '^ n c 't: 0 ro VD OO <^f 1^ t^ — t ro ^1 1^ rr; + 'i- tC Ti- 00 OS ro7 On NO ' CnT r^ CO 5 < .2 I ii -6 -5 ^ Dh O Tt Tl- o oo-t "1 lO rot^ O CM CM CM '^ O _ Plh I -d ^ c ^ rt + _3 "a c .2 -♦-< ej O 0) is Ph c; o Ti- LTi uS j I _2 c .2 -f-» u O PL, nC ro >-0 LO (^ Tf u-5 1^1 O rv) ^fo -"To"':}-"' 'I- LO On OO NO -hO^ON_.C5.u-5_ /V] r^] ,— ( r^ ^\ .2 "■*-» Oj 3 o, 0 PL^ U) -g O. §^ t-, On On Cn T On ON ON •^ ON_ 0\On. OJ f—t i^fro rt o o 1 O ioif- O OO tj O OO — , C^l" r^ '^ 00 NO (On in 00 lOfMTt- 1 — 1 Ti- oo_^iio ^_^ »— < On On lono" ir> NO •^1 X^ On OO CO 0,Tj-^ " ON_ O, 'M oo'"oo'"^'M Ti- cs .2 (2 I-. & o ^ On On On -rt ■*-• On_^ 0\ On_ c ^(^f ro ol o 1 1 1 O CO CD o H O 05 o OO o eg ro Tf' ro rO fO OO t^ ■■O NO 00 On O On CD '^I nO_. 0_^ oC'^f NO'Tj-'ro' ro m ">! O "^1 ro^oq^tv^ro fM^ ocTu^ o""— I "nT 2 o PL, OJ ._ LO^ ^ Ttro r^rND'oo" o PL, nj ■— I f^l ro nJ O O CD CD O ^ o o o 0 0,0^ C^f CO Tt-' ON ON ON 0 On On CON T^ C0n_On_On_.^ '-TcNf'rr rt O o o o o ~ o o o 0.0^0^ cm'^otj-* o. a a, o On an oT < ^ •4 "o c „ V n 2 4) cB « CTJ a, V- T3 p 0) CJ O 3 . "C r3 CH tn .^ ~ .2 4> t- *^ .a a •« o o o *' i! g-O p- ^ Q - "2 a" ac o 2 JO <| •- _ " .5 ID o a §25 3 ^ be tn « ^ C O ^ O > ^ Ufe o « -^ CB s s « o i °^ J: ^ « a o «; "o c« ■- 3 . 0/ £ X • _J U g H W S o U o Z 19 ilically, the problem is to estimate the changes in the supply of apples, population, and per capita consumption of apples so that a fairly accurate picture can be derived concerning New England's future. The general trend in apple production during the past 20 years has been downward for all regions but New England (see Appendix, figures 5, 6, 7, 8). Con- tinuation of these trends will find New England in a favorable position for market expansion. Two possible situations with respect to the variables affecting the future of the apple industry are considered here. Only two alternatives were postulated because they seemed to be the most likely to occur in the next 10 years. First Assumptions — In the first situation, the assumptions are (a) that income distribution will be the same in 1965 as it was in 1950; (b) that the average per capita consumption (jf apples levels olT, therefore, the same average per capita consumption figures bv income classes can be applied in 1965 as was used in 1948; (c) that apple production within all regions considered has leveled off at the 1948 figure;* and (d) that changes in population numbers will occur within the individual states. Second Assumptions — In the second possil)le situation in 1965, the assumptions are that (a) income distribution is held constant; (b) average per capita consumption by income groups is again held constant; (c) the same population changes are postulated as before, but (d) it is assumed that the general production trend by regions for tlie past 20 years will continue at the same rate until the year 1965. Thus, in assumption one, everything is held constant except population. In assumption two. population and supply of apples are varied while the rest of the factors are held constant. Assumption One Assuming that our first assumptions will prevail in 1965, the situation facing the growers in the various regions is shown in Table 10. New Eng- land will have decreased its surplus of apples from 365,000 bushels in 1948 to approximately 125,000 bushels. This reduction is due to the increased total consumption assumed as a result of the increase in population within New England. This movement toward a closer lialance of the consump- tion-production relationship alleviates somewhat the problem of surplus disposal. However, before any definite statement can be made about the New England apple grower's relative position, a closer examination must be made of the regions that compete with New England. Referring again to Table 10 it can be seen that the surplus in the Mid- South Atlantic region will have been reduced by approximately 950,000 bushels from 1948 (Table 9). As a result of this reduction it is safe to assume that fewer apples from this region will be available for shipment into New England and other markets. This reduction of apple shipments will reduce the competition that New England apple growers have to face, and will make it easier to dispose of New England apples. The Mid-West was a deficit area in 1948. As a result of the assumptions postulated in Assumption One, the deficit will be increased by more than one million bushels. This increase in the deficit will probably result in a * Production in 1948 was relatively low so that this may be an underestimation. 20 a. E ^,^ 3 c/} c/5 C jQ o v^^ U c 'rt o -*-» ■*-» O H 03 IM Clh.2 C 'U J2 3 rS O 3 1- o c o o GO m o o <=>- 3 \o x; ^o o o <= 3 00 X: --;^ <^] OO in t^ CO On CM O rO 1 — 1 fO NO o ' 1^ 00 T— ( u-} NO* lO lO_ ro Ov o ^4 I^' Son' oq lO y—i '— ' o CO + ON + ro 1 ON CO ^_^ NO ' vo" rC (^f \J-> ■* J^ (M r— * 00 •d •d ' lJ o o o u .—V u '"-' u. ^~^ pL, 1 D-, Oh 1 -t3 sj^ -a . . ID ^^ C 4-j , . <— oj "tj ro ZJ ^■G tn "-C t/i u^ ■vi U: a (U C ! o ^I ^j (^] rv -; iM '^1 rvj fN 1 ^1 r%j '^1 '^ 1^1 rv] rvj ro o °. 3 NO in in i^' in_^ On"^^ ON _- On o u --"* Oh 1 ^^ w C -*-» Oj 'G t/ ur 3 OJ O Q U 5 + o •— ^ F — ' f/) 3 3 CO n o 3 o NO '"O in in On -rf in ^ I ~ "^1 1^1 m o '^1 o -1- in On CO NO •^_pON_^0_in (^f i^l'^ro On' c .2 ■*-» js "3 a, Q 04 Uc ^ cu
  • :z ON On On o On CN On 'O On_Cn_On c r-Ti^f rn Oj oooo ooo CO o o <^l ro Tt 00 NO On in 00 in f^i -^ 00 in -+ 1 — 1 ^r 1 — 1 ON_^ On in no' in 'sO '^1 t^ On COCO ^.^,^, On nC -^f oo'oo'ro'^) C .2 +-» iS o. o PLi u ^ OJ lU > ?^ On On On O On C?N CN 'C' On_ On_^ On_^ ^"(N)' rn rt o oooo ooo ooo (M'f^"-*' ro 00 r^ 00 ON o OJ NO^O__ No'-^'fO 1^1 O i^J t^ rn (M rn rn NO NO On__0^ oT^.f rn in rnoq_ odin no'-— •"cvf 00 On ^I ^ O 00 ro i-o in ■— ' .— 1 C0_^0_'^l_'^_ o6"on oo'i^foo' rn ■!+ .— I t^ t^ 00 o i^ in ^ -^r*-^ ro O On 3 O 3 a. o Ph ON ON ON 0 On On ON T-) 73 On_On_On_^ g is ^rvf rn 03 O I I I I (— I o o o o '^ ooo o_^o_^o_ 3 .2 -f-j J5 3 3. o Cm u & •z, On On ON o ON ON ON Td "a On_^ On On__ r^ ^i^f irT c5 o CD ooo ooo o_oo O-i ro"^ S U P i: -= a 3 E PS ^ o C X. :j )H H at 21 larger quantity of apples moving into this region from the current supplying regions ( Alid-South Atlantic and Far West). In Table 10 it will be seen that the surplus in the Far West has been reduced by approximately one million bushels since 1948. This reduction may again result in a smaller quantity of apples leaving this region and moving into New England and competing markets. Assumption One Summary Under our first assumption New England will have reduced its supply of surplus apples. The Mid-South Atlantic and Far W^est will have reduced tlieir supply of surplus apples. The Mid-South Atlantic and Far West regions will also have reduced the surplus they have to contend with. As a result, fewer apples will be shipped into New England markets, thereby lessening the competition that New England growers have to face. Secondly, the increase in the deficit in the Mid-West region will result in more apples moving into this region than previously, which will in turn probably result in a decrease in the number of apples coming into New England markets. So, it can be seen that the amount of competition facing New England growers will be reduced because: 1. the New England surplus will be re- duced, 2. the surplus of the Mid-South Atlantic and Far West regions will also be reduced, and 3. the increase in the deficit in the Mid-West region will pull some apples away from traditional New England markets into the Mid-West markets. Assumption Two Table 11 shows the situation prevailing as a result of the assumption of a continuation of past production trends by regions. New England is the only region where the production of apples has been increasing since 1934. The remaining regions. Mid-South Atlantic, AIid-\\'est, and the Far West, have all been declining. As a result of the increase of apple production in New England and the very slight increase in population, the surplus with which New Eng- land growers will be faced in 1965 will be approximately 2^ million bushels. Here again, no evaluation of New England's competitive position can be arrived at until the other regions are examined as well. In 1948 and under our first assumption, the Mid-South Atlantic region was a surplus area. However, as a result of the downward trend of apple production and the increase in population this region will now have a smaller surplus. The Mid-W^est, as previously, will still be a deficit area. However, the deficit will not be as large as before. The Far-West will still be a surplus region. However, the surplus is smaller than it was in 1948 and under Assumption One. This will result in smaller shipments of apples out of this region than in 1948 and the first assumption. Assumption Two Summary Under Assumption Two New England will be in a better relative position than it was in 1948. The Mid-South Atlantic will now have a smaller surplus which will increase the possibility of New England expanding its markets and reducing its surplus. Since New England is closer to the Mid-South Atlantic and Mid-West regions than is the Far West, New England should be able to take advantage of any lower transportation costs and compete successfully for the Mid-South Atlantic and Mid-West markets. 22 Therefore, under both assumptions Xew England growers will be in a better relative position in the long run than they have been in the recent past. It should be noticed that under both assumptions, income distribution was assumed constant and no consideration was taken of processed apples. If the assumptions included a trend toward a more equal income distribu- tion, then total consumption would probably be greater than is postulated under either assumption. If it had been assumed that per capita consump- tion of processed apples remained fairly constant, then an increase in population would result in an increased total consumption of processed apples. Some apples may be diverted from fresh to processed use so that the estimated supply of fresh apples in both assumptions would be an over- estimation of total fresh supply. 23 Summary and Conclusions The major apple producing regions of the United States considered in this study were the Far West, Mid-West, Mid-South Altantic and New England. Short-run year-to-year apple production has fluctuated in the same general direction in all four regions. However, long-run apple production from 1934 to 1953 has not moved in the same direction. Since 1934, New England apple production has been increasing while production in the other three regions has been declining. Apple prices received by New Hampshire growers are part of the structure of prices in New England which in turn bears a definite and fairly stable relationship to United States prices. Change in the demand for apples usually comes about because of: a change in the price ratio of apples and other substitutable fruits, and changes in consumer tastes, income, fixed commitments, and / or increased knowledge. Since two distinct situations may bring about a change in the demand for apples, it is of considerable importance to know which has occurred when formulating marketing policies. If the change in demand was brought about by a change in the relative prices, then a readjustment of the price ratio would undoubtedly cause the consumer to shift back to his or her original purchasing pattern. If the change in demand, however, was brought about by a change in tastes, income, and so on, adjustment of the price ratio would probably not bring about the desired goal. Thus, it may be necessary to supplement a change in the price ratio with other appropriate methods of influencing demand to obtain the desired objectives. The per capita consumption of fresh apples in the United States has been declining since 1930. The per capita consumption of processed apples, on the other hand, has shown a rather slight increase. Since 1948, per capita consumption of fresh apples has leveled off at approximately 25 pounds per person. However, the increased consumption of processed apples was not large enough to compensate for the decrease in fresh con- sumption. Competition by Varieties and Time of Shipment In order to evaluate the competitive position of one region relative to others, it is necessary to identify the competing regions or states within the regions. Knowledge of the competitors makes it possible to observe the behavior of producers in these areas and as a result adjust accordingly. The major varieties grown in New England are Macintosh and Baldwin apples. The other areas where a considerable amount of Macintosh are grown are New- York and Michigan. Baldwins are primarily grown in New York, and smaller quantities of Baldwins are also raised in Ohio and Michigan. In the Boston market the states shipping at the same time as New Eng- land growers are Virginia and Washington. New York, New Jersey, and Oregon apples generally come into Boston after New England shipments have dwinclled. In the New York City market the major direct competitors of New England apples are New York, New Jersey, Virginia, and Penn- sylvania. Oregon and Washington reach their respective peaks after New England shipments of apples have subsided. It should be noticed that New England growers faced different competitors in each of the two markets 24 mentioned and therefore the adjnstnients to l)e made in the New England apple indnstry will depend im which of the twn markets is of primar\' in- terest to New England. New Markets Since 1946. New iMigiand has increased its share of the markets in New York City. Philadelphia, and Washington. New England has also heen able to gain entrance into Chicago. Cleveland, and Pittsburgh markets into which they never shipped before. The region which apparently has lost in the markets that New England has gained is the Far West. The Mid-South Atlantic region has increased its share of the New York City market, remained fairly constant in Philadelphia, and has declined in Chicago. In the other cities there were either no trends noticeable or not enough data were available to observe any change if a change were present. Prospects for New England The problem was to determine the long-run competitive position of New England so that growers would have a rough idea of what to expect in the future and therefore adjust their farm operations accordingly. To arrive at a clear picture of the future of the New England apple industry it was necessary to estimate change in the supply of apples, population, and per capita consumption of apples. With this knowledge it then became possible to determine into which regions New England would find entrance. Two alternative situations with respect to the variables affecting the future of the apple industry were considered. The two alternatives were chosen because they seemed to l)e the most likely to occur in the next 10 years. Both assumptions indicated that New England growers will be in a better relative position in the long run than they have been because New England as a whole will decrease its surplus and should be able to increase its sale of total apples. See Tables 10 and 11. The analysis of the competitive position of the New England apple in- iiustry shows that New England growers as a whole have had an improved competitive position relative to growers in other regions. Opportunities for profitable production expansion are present in this region. The benefits from expansion and the potential gains from increased sales of apples will vary between producers. The size of the farm, the capital investment, and the combination of resources available will deter- mine whether growers can adapt their orchards to changes in market op- portunities. For example, three major management adjustments which could be made are 1. to increase production by improved cultural practices with no change in capital or size of farm, 2. to increase the number of trees without additional investment in equipment, buildings, or permanent labor, and 3. to increase acreage of bearing trees through increases in land, labor, and equipment. 25 Appendix 1935 1940 1945 Figure 5. New England total apple production, 1934-53. 2 30 1935 1940 1945 1950 1955 Figure 6. Mid-South Atlantic total apple production, 1934-53. 26 o- 10 1935 Figure 7. Mid-West total apple production, 1934-53. 1935 1940 1945 1950 Figure 8. Far West total apple production, 1934-53. n 630.72 K532 no. 426-450 DATE DUE HOV 4 '^4 ■AY 19^ S«c^^«^ ^^T.23igg i F32a *■ Nil