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MAY 1953 



MARKETING 
ACTIVITIES 




U.S. DEPARTMENT OF AGRICULTURE 

Production and Marketing Administration 
Washington 25, D.C 



IN THIS ISSUE 



EFFICIENCIES IN SELF-SERVICE RETAIL MEAT DEPARTMENTS 
By Edward M. Harwell 



Page 3 



New techniques which will boost output of self-service meat retail- 
ers are the result of a study made by the author, Dale Anderson, Paul 
Shaffer, and Robert Knowles, all USDA marketing specialists* in coopera- 
tion with personnel of grocery chains and equipment suppliers. 

"SILENT SALESMAN" FOR EGGS 

By Dr. L. B. Darrah and Peter L. Henderson Page 7 

Dr. Darrah, Professor of Marketing, Cornell University, and Dr. Hen- 
derson of PMA's Poultry 'Branch participated in a study which led to the 
development of a retail display case for eggs which not only maintains 
quality, but "sells" the product. 

NAMO CONFERENCE Page 10 

Part One of a report on the conference of the Atlantic States Divi- 
sion of the National Association of Marketing Officials held at the 
U. S. Department of Agriculture in April. 

ACREAGE ALLOTMENTS AND MARKETING QUOTAS FOR WHEAT 

By John C. Bagwell Page 15 

The author, head of the Production and Adjustment Division, Office 

of the Solicitor, USDA, answers some questions about a pretty complex 
piece of legislation. 

ABOUT MARKETING Page 20 



MARKETING ACTIVITIES 



Vol. 16 



No. 5 



Address all inquiries 



A Monthly publication of the Produc- 
tion and Marketing Administration of 
the United States Department of Agri- 
culture, Washington, D. C. The print- 
ing of this publication has been ap- 
proved by the Director of the Bureau 
of the Budget (March 2h, 1953). Copies 
may be obtained from the Superintendent 
of Documents, Government Printing Of- 
fice, Washington 25, D. C, at a sub- 
scription price of $L.75 a year (do- 
mestic), $2.25 a year (foreign), pay- 
able by check or money order. Single 
copies are 15 cents each. 



to: 



J. Grant Lyons, Editor, 
MARKETING ACTIVITIES, 
U. S. Department of 
Agricul ture, 
Washington 25, D. C. 



Material in this publica- 
tion may be reprinted with- 
out special permission 



Efficiencies In Self-Service 

Retail Meat Departments 



By Edward M. Harwell 

Substantial increases in the amount of meat that can be prepared for 
retail sale by employees of self-service meat markets are possible through 
the adoption of techniques recently developed by marketing research spe- 
cialists of the U. S. Department of Agriculture. These new methods of 
increasing man-hour production include proper work methods , newly design- 
ed equipment, and more efficient layout. They are the result of a series 
of studies made by the Marketing Facilities Research Branch of the Pro- 
duction and Marketing Administration, 

Practical application of the new work methods and equipment in the 
self-service meat departments of 7 of the chain stores which cooperated 
in the studies have led to a preliminary estimate of increased output in 
those operations averaging 23 percent. 

Reports on two phases of the studies, (1) receiving, blocking, and 
cutting and (2) packaging and displaying, are now being prepared for pub- 
lication and should be available soon. Further study is being made in 
connection with the over-all layout of these operations. All the studies 
were made under provisions of the Agricultural Marketing Act of 19U6, 

The studies of self-service meat market operations were made in sev- 
eral stores of 3 cooperating chain store organizations. An analysis of 
labor requirements in typical self-service meat markets showed that two 
functions - retail cutting and packaging - accounted for 6.5 percent of 
all of the man-hours necessary in their operation. Most of the improve- 
ments developed through the studies covered these operations. While the 
published reports of the studies will give more detail, a brief summary 
of some of the results of the research follows: 

In breaking down wholesale cuts of meat into retail cuts, a device 
was developed which removed the smear from each retail cut of meat as it 
was cut on the power saw and increased productivity on those items cut 
on the power saw by 22 to 33 percent. ("No Smear Meat Sawing," MARKETING 
ACTIVITIES, March 1953.) 

A new cutting table was designed and tested which brought all tools 
and materials within easy reach of the operator. Empty pans were stored 
at table top level, and the wrapping paper was suspended above the pans. 
Waste receptacles were placed on casters and positioned beneath the cut- 
ting table. Slots were provided in the table for waste disposal. The 
power saw was placed at right angles to the cutting table to minimize 
walking distances. It was found that placing the retail cuts on boards 
or trays should be performed as a part of the wrapping operation rather 



May 1953 



3 



than as a separate operation. As a separate function it means an addi- 
tional handling of each package. 

A single conveyor carrying unwrapped meat to the wrappers and wrapped 
meat to the pricing operation caused confusion and productivity loss. 
Two conveyors, one above the other, to separate wrapped meat from unwrapped 
meat, were found to be little better because of the additional fatigue 
created by having the operators work at an awkward level. Gravity con- 
veyors on both sides of the wrapping station, one feeding unwrapped meat 
to the operators and the other carrying wrapped meat to the pricing table, 
offered a solution to the problem of improved product flow. 

A new wrapping table was designed which increased wrapping produc- 
tivity and reduced operator fatigue. (Figure 1). This "easy-reach" table 
had all materials positioned within arm's length of the operator, includ- 
ing pans on either side for wrapped and unwrapped meat. A new type of 
film holder for sheet cellophane was developed and incorporated in the 
improved wrapping table. This "fold-over" wrapping film tray conserved 
storage space and facilitated grasping each sheet of film. A stool was 
provided at this operation for alternate sitting and standing. 




Figure 1. The "easy-reach" meat wrapping table. 

Marketing Activities 



Two types of label printing machines, the separate label printer and 
the combination scale and label printer, were evaluated. Both offered 
substantial savings in labor. In addition, the separate label printing 
machine printed complete labels from a roll of blank paper, thus elimi- 
nating the need for a label supply for each commodity sold, in addition 
to cutting label material costs by more than 50 percent. 

Studies on four common types of prepackaging scales showed one of 
these types to be slightly more productive and employees made fewer mis- 
takes in reading it. A tare attachment was developed to eliminate the 
need for physically weighing the packaging materials in making a tare 
adjustment. This device consisted of a pointer attached to the tare knob 
on the scale. A white card was inserted in a frame to the rear of the 
pointer and colored or numbered lines were drawn on the card to indicate 
the weight of the various tares. The operator needed only to turn the 
indicator to the proper line for each tare set. 

A pricing table was designed which incorporated the separate label 
printer and the scale which proved to be most accurate. (Figure 2) A pan 
dolly rack designed to hold six pans of wrapped meat was used by the pric- 
ing operator for temporary storage after the product had been priced. 
Fewer trips to the display cases were necessary with the pan -dolly rack. 
Previously, each pan was carried individually to the display area. Al- 
ternate sitting and standing facilities also were provided for here. 




Figure 2. A meat pricing table arranged to obtain maximum production. 
May 1953 5 



Size of pan loads was found to be an important factor in market pro- 
ductivity. Larger pan loads mean less time per package for the many han- 
dlings in the market when a pan is used to handle the product. The 12 by 
30 inch pan was found to be superior to the 12 by 2h inch pan because of 
the increased capacity. 

Room For Improvements 

It was found that a number of opportunities existed for improving 
self-service meat market layout. Designing a good layout consisted of 
tying together the successive operations in a market in such a manner 
that there is a smooth, continuous flow of product with a minimum number 
of product handlings and a minimum amount of walking. To obtain proper 
layout it was necessary to adhere to the following basic principles: 

(1) The cutting operation should be as near the cooler as possible. 

(2) Pans of product from the cutting operation should be placed on 
a gravity conveyor located adjacent to the cutting table. 

(3) This gravity conveyor should connect the cutting operation with 
all wrapping stations. 

(h) A second conveyor adjacent to the opposite side of the wrapping 
tables should connect each wrapping unit to the pricing operation. 

(5) The pricing operation should be as near to the center of the 
display cases as possible. 

(6) Display cases should be serviceable from the rear to eliminate 
interference with customer traffic. 

Improved equipment methods and layout developed in the studies were 
installed in 7 test stores of the 3 cooperating food chains. Data were 
obtained on market productivity for several months preceding and follow- 
ing the installation of the improvements. Productivity in these stores, 
based on company records, increased from 19 to 31 percent after improve- 
ments were installed. The average increase for the 7 stores was about 
23 percent, according to preliminary estimates. Productivity of similar 
stores in the same areas during the same periods remained relatively con- 
stant. 

The installation of proper equipment and layout will not, in itself, 
automatically bring the desired increased productivity. Only through 
proper personnel retraining in the new methods and on the new equipment, 
can the potential results be realized. Continuous follow- through, to in- 
sure that employees are following the new techniques, not only is neces- 
sary to maintain increased productivity, but could also result in still 
further production gains. 

As soon as the reports on the studies upon which this article was 
based are available, they will be noted under the "About Marketing" sec- 
tion of a subsequent edition of MARKETING ACTIVITIES. 



6 



Marketing Activities 



Silent Salesman" For Eggs 



By Dr. L. B. Darrah and Dr. Peter L. Henderson 

A new type display case for eggs in retail stores has been developed 
that has extra "eye appeal, " provides excellent quality protection through 
a new system of refrigeration — and apparently sells many more eggs than 
the usual method of display in retail stores. The self-contained and 
portable display unit, which really fills the bill as a "silent salesman," 
was evolved in the course of an egg marketing research project conducted 
by the Cornell University Agricultural Experiment Station and the Poultry 
Branch, Production and Marketing Administration, USDA. 

In preliminary tests of the effectiveness of the new display case, 
under actual store conditions, egg sales were so increased that the ad- 
ditional gross profits realized would have paid for the equipment in less 
than three years. Gross profit on the investment in the case in its 
first retail store test was about 35 percent a year. Egg sales during 
the three weeks when the case was used in a Rochester, N.Y. retail store 
were substantially higher than in the check periods both before and after 
the unit was used. 

A subsequent test in the Binghamton-Corning area of New York State 
resulted in a 9 percent increase in egg sales when the display case was 
used in super market stores. In this test the display case was left in 
each store for only one week. The work in Rochester indicated a growth 
in sales during the second and third weeks of the test, suggesting that 
an increase of over 9 percent might occur with continued use of the case. 

Behind the development of the new egg display case were four years 
of egg marketing research by the Cornell University Experiment Station 
in New York State, which had revealed the following major problems: 

1. In heavily populated New York State only about one-half the con- 
sumers buy their eggs in retail stores. They give as one of the important 
reasons for not doing so their belief that they can obtain higher quality 
eggs from other sources. A State-wide study found that about 92 percent 
of the eggs offered for sale by retailers were labeled Grade A, but upon 
inspection only about one-third were determined to be Grade A. 

2. Another problem was the lack of refrigeration facilities for 
eggs held in temporary storage for later sale in retail stores. A study 
made in July and August 19^9 showed that of all eggs so held, 27 percent 
of those in large stores, 36 percent of those in small stores, and hi 
percent of those in medium sized stores were not held under refrigeration. 

3. Related to this lack of refrigeration for eggs held in temporary 



May 1953 



7 



storage was the temperature of eggs on display, which ranged from a low 
of about freezing up to 80° F. Less than 27 percent of the eggs covered 
in the same study were being displayed under proper temperature conditions, 
from k5 to 55° F. 

k* A final problem turned up by the studies was the small amount 
of display space allotted to eggs in stores and the fact that they were 
usually crowded in between dairy and other similar products. Stores with 
adequate display space were found to have consistently higher egg sales 
than comparable stores with inadequate displays. 

On the basis of these findings it was decided to develop a pilot 
model egg display case which would provide the proper temperature condi- 
tions to maintain quality and, at the same time, permit the eggs to be 
properly displayed in adequate volume. Such a case was worked out and 
tested under retail conditions. Since then an experimental commercial 
model, with certain modifications, costing approximately $L|.00, has been 
brought out. 




PH0 T O roUPTFSY OF PAIL FY AND PERKINS CO. , VTICA, MICHIGAN 



This is a commercial model of the display case described in this article. 
It can be made in different sizes to fit in available store space. 

8 Marketing Activities 



Refrigeration in the glass-fronted case comes from refrigeration 
plates which act as partitions and as the outside ends of the display 
area, circulating cold air directly and more uniformly through the egg 
cartons. 

Another feature of the unit is a panel above the case for display of 
pictures of egg dishes, explanations of the various uses of the eggs dis- 
played, price information or other promotional material. Since the case 
is completely self contained and portable, it can be moved to the best 
location in the store for egg sales. 

Research under which the case was developed was financed in part with 
the Agricultural liar ke ting Act of 19^6 funds. Copies of the report giv- 
ing details of the case "A Store Display Case for Eggs," may be obtained 
from the Department of Agricultural Economics, Cornell University, Ithaca, 
N. Y. , or from the Office of Information Services, PMA, U. S. Department 
of Agriculture, Washington 25, D. C. 



MEAT RETAILING COSTS VARY BY VOLUME HANDLED 

Meat retailers could lower their per-pound costs of operation by in- 
creasing the volume of meats they handle, according to the Bureau of Ag- 
ricultural Economics, USDA. This finding is from a report on an Agricul- 
tural Marketing Act study made by the Bureau in Harrisburg, Pa., Topeka, 
Kan., and Bridgeport, Conn., to develop basic data looking toward lower- 
ing retail costs and thus helping to increase distribution efficiency in 
the retail meat trade. 

The study revealed that meat departments handling less than 1,000 
pounds of meat a month (wholesale weights) had operating costs ranging 
from 20 to 25 cents a pound, while those handing over k, 000 pounds month- 
ly had operating costs of only 8 or 9 cents a pound. Stores handling rel- 
atively low volumes of meat, particularly those handling under 1,000 
pounds monthly, could cut per-pound operation costs by boosting volume 
since they would get more efficient utilization of their labor. 

Labor is the chief cost item in running a meat department, ranging 
from 65 to 70 percent of total operating costs, the report noted. Rent 
is the second most important operating cost and ranged from 5 percent of 
the total of such costs in Harrisburg to about lh percent- in Bridgeport. 
Payments for light, heat, and power; license and insurance, depreciation 
of equipment ; containers and wrapping materials ; maintenance; advertising; 
and miscellaneous varied from 22 percent of total operating cost in Bridge- 
port to about 30 percent in Harrisburg. 

Copies of the report, "Costs of Retailing Meats in Relation to Vol- 
ume," are available from the Division of Economic Information, Bureau of 
Agricultural Economics, U. S. Department of Agriculture, Washington 25, D. C. 
A summary of the repert appears in the May 1953 issue of BAE's publica- 
tion, "The Agricultural Situation." 



May 1953 



9 



NAMO Conference 



Because of the importance of the subjects covered and the extremely in- 
teresting discussions that resulted at the recent meeting of the Atlantic 
States Division of the National Association of Marketing Officials, a 
fairly comprehensive report of the proceedings has been prepared. Due 
to its length, however, the report will be carried in two ins tallments ; 
the second part to appear in the June issue of MARKETING ACTIVITIES. 



Increased participation of State agricultural and marketing agencies 
in programs of the U. S. Department of Agriculture - particularly those 
relating to distribution of farm products - was foreseen by Department 
representatives at the 1953 annual conference of the Atlantic States Di- 
vision of the National Association of Marketing Officials. The meeting 
was held in Washington, April 20 through 22. 

Those attending the meeting also heard that distribution has suc- 
ceeded production as the country's major agricultural problem and that 
there will be increased emphasis in this field, including research and 
service work, even though substantial economies are to be affected through- 
out the Federal government. 

Most of these points were developed by Whitney Gillilland, Assistant 
to Secretary of Agriculture Ezra Taft Benson, who discussed the relation- 
ship of the Department with State agencies, and Roy W. Lennartson, Assist- 
ant Administrator for Marketing, Production and Marketing Administration, 
who welcomed those attending the meeting. 

Other highlights of the meeting were discussion panels on cooperative 
Federal-State projects under the Agricultural Marketing Act of 19U6; poul- 
try grading programs, particularly the use of "bonded" graders; whether 
cooperative Federal-State meat grading is possible; effects of the pro- 
posed Interstate Commerce Commission regulation on "trip leasing" of motor 
trucks carrying agricultural products; and the possibilities of market 
news service for cut flowers. 

The session also was marked by the attendance of NAMO national pres- 
ident, Charles J. Carey, Chief of the Division of Markets, California, 
who expressed pleasure with the interest shown in Agricultural Marketing 
Act work. He invited those present to a "National Workshop" at the Uni- 
versity of California at Berkeley, August 7 to 15, which will cover sev- 
eral important phases of marketing service work, and urged all who pos- 
sibly could to attend the annual meeting of NAMO in San Diego, Cal., Oc- 
tober 26 to 30. 

The conference was opened by Clement A. Lyon, president of the At- 
lantic States Division of NAMO, and director of the Division of Markets 
and Standards, New Hampshire Department of Agriculture, who introduced 
Mr. Lennartson. 

Greeting those in attendance at the meeting, Mr. Lennartson, pointed 



10 



Marketing Activities 



to the wide marketing experience of Secretary of Agriculture Benson and 
his top assistants to predict increased emphasis on "this matter of dis- 
tribution, to the end that the proper instruments be provided producers, 
distributors, and others in an attempt to better the welfare of the Ameri- 
can farmer." 

Commenting on the concern in Congress and elsewhere over the ever- 
widening spread between what producers get and what consumers pay during 
the current period of easing agricultural prices, Mr. Lennartson said 
that while it was not possible for those in marketing to correct all these 
ills, "it is incumbent upon all of us to pay a lot more attention to the 
services being rendered and the costs they are taking out of the distri- 
bution picture." 

Mr. Lennartson saw no "serious effect" on inspection and grading work 
or regulatory work from tightening of Federal and State expenditures, but 
warned that USDA and the States must work closely together to do a better 
job with about the same amount of money they have had in the past. He 
expressed hope that changes within PMA would result in better represen- 
tation of State marketing agencies in AMA "matched fund" projects, but 
added that because demands for these funds always have been double or 
triple what was available, it looks like "a rationing process for some 
years to come." 

With respect to market news, the Assistant Aduinis trator said that 
a careful survey of this service has been made for each individual State 
and during the year USDA representatives will contact each State to dis- 
cuss the program further. He assured the conference that the Department 
has no intention of telling State officials that "this is how it is going 
tc be," but that there will be a full discussion of the market news pro- 
gram for each State so that the Department can report back to Congress 
"the extent of progress we are making in getting a better balance between 
Federal and State contributions to the program." 

USDA and State Relations 

Discussing the effect new USDA policies will have on State relations, 
Mr. Gillilland, Assistant to Secretary Benson, foresaw increased partici- 
pation by State agencies in programs of the Department. Recalling cam- 
paign speeches of President Eisenhower and policy statements of the new 
Secretary, he said: 

"I think you can be sure that there will be increased participation 
in Department programs on the part of the States; that there will be an 
increase in Department interest in the States and in marketing and mar- 
keting research." He added that this matter is receiving a "great deal 
of attention" and that committees are working on it. 

The Assistant to the Secretary also called attention of the confer- 
ence to the pledge of Secretary Benson to "go forward strongly" in the 
field of marketing and marketing research. Although the Administration 
is pledged to economy, and the Department is making substantial cuts else- 
where, he said, more funds 'than heretofore are being sought for all De- 



May 1953 



11 



partment research work and about the same as in previous years for mar- 
keting research under the Agricultural Marketing Act. Expansion of mar- 
keting research by private industry also is being sought by Secretary 
Bens on , he added. 

"I can assure you that under its new administration the Department 
of Agriculture will support an adequate program of research and educa- 
tion in production, marketing and the utilization cf farm products," Mr. 
Gillilland concluded. 

Discussion by Sta t e Marketing Officials 

In the discussion panel which followed, J. H. Meek, Chief of the 
Division of Markets, Virginia, stressed the fundamental interests of the 
States and USDA in "cooperation rather than duplication" to solve market- 
ing problems, and urged that some of the funds saved by the Department 
in other fields be put into research or service work where they would 
be matched by the States or where the work would be self-supporting. 
He said that while a lot has been dene in standardization of food and 
farm products at wholesale, retailers and consumers have just been touched. 

George Chick, Chief, Division of Markets, Maine, said that a com- 
mittee, representing State departments of agriculture and marketing a- 
gencies on market service work, felt that Title II of the Agricultural 
Marketing Act of I9U6 was not being carried out as Congress intended 
and has asked for a conference with the Secretary of Agriculture and 
the chairmen of the House and Senate Agricultural Committees. The speak- 
er said that there was no question of the sincerity of the people who 
have been in charge of this work, but that they have had toe many addi- 
tional duties to perform. He also complained that there are no repre- 
sentatives of the State agencies on the AMA commodity advisory committees 
and felt that this might be the reason those groups gave "only slight 
attention" to marketing service work. Mr. Chick added that the marketing 
work of the Department should be channeled through marketing specialists 
and not production specialists. 

John A. Winfield, Director, Division of Markets, Nortn Carolina, de- 
clared that if the Department of Agriculture is interested and anxious 
to find solutions to the fast changing problems in marketing, it will 
get along with the States, particularly if the work is done cooperatively. 

Federal-State AMA Projects 

Leighton G. Fester, Chief, State Marketing Service Staff , PMA, traced 
the history of Federal-State projects under the Agricultural Marketing 
Act and said that the time has come to reevaluate these marketing pro- 
grams to select those that are going to be "most vital." Among the changes 
in marketing that are going to need attention, he listed the by-passing 
of terminal markets, decentralization of processing plants, the increasing 
importance cf local and concentration markets, and the steadily increasing 
amount of agricultural commodities moving by truck. 

"We have to consider if the programs now under way or planned for 



12 



Marketing Activities 



the future are paying their way by helping solve specific marketing prob- 
lems and if our service programs are meeting the needs of farmers and the 
trade in intelligently marketing agricultural products," Mr. Foster de- 
clared. "Are we accomplishing anything, and can we demonstrate the need 
of carrying on?" 

These questions, he said, should be particularly and carefully an- 
swered in the presentation of Federal-State projects to AMA advisory com- 
mittees since these groups help determine the allocation of funds for such 
work. He urged the State project leaders to submit reports showing that 
their work has been constructive, has had tangible results, and detailing 
these results. Such information, he explained, has been lacking until 
this year and there was no opportunity to present the case for these pro- 
jects to the AMA commodity committees. 

"How much we can get allocated for State work projects will depend 
upon how well we can present our case to these committees," Mr. Foster 
emphasized. "We in the Department are helpless unless you can give us 
the tangible results." 

States Lack Funds 

In the discussion of this matter several conferees decried the lack 
of State funds which prevent them from participating in the program. 

"With no State money and the present outlook for Federal funds, it 
looks like we are going to be orphans," said Louis A. Webster, Director, 
Division of Markets, Massachusetts. 

Warren W. Oley, Director, Division of Markets, New Jersey, added 
that his State also had no funds for this AMA work, but "not because of 
lack of interest in this valuable program." Outlining some of the mar- 
keting work that has been done in his State, he said that his organiza- 
tion is obtaining information from other State AMA projects that can be 
applied in New Jersey. 

"Changes are coming constantly in marketing," Mr. Oley pointed out. 
"We are the men that have to keep up with them if our marketing work is 
to click in our own States." 

Walter S. Mason of the New York Bureau of Markets outlined the mar- 
ket report work being done in that State through AMA projects and stated 
that there was no doubt that marketing methods are changing, with the 
chain stores and supermarkets going to the source (producers) for the 
farm products they buy. He said that his State has a proposed project to 
explore this situation and also to do something to improve the methods of 
packaging used on regional and farmers' markets. 

State Problems 

F. W. Risher of the State Marketing Bureau, Florida, and secretary 
of the Atlantic States Division of NAMO, described a problem in his State 
where cattle buyers, dealing directly with growers, are "picking up the 



May 1953 



13 



tops of herds" leaving only lower grade cattle for the auction markets 
from which prices are reported. He asked if a study of this, designed 
to give producers better price information, would lend itself to an AMA 
project. 

Mr. Lennartson, who was present, thought that it would. He also 
commented on Mr. Mason's remarks and cited the project work accomplished 
in New York as good examples of AMA projects. 

Mr. Carey discussed briefly work being done under similar projects 
in his State on alfalfa hay and country cattle sales. 

At a later session on AMA projects, J. E. Youngblood, director, South 
Carolina State Agricultural Marketing Commission urged closer coordination 
and organization of this work. He cited his State's peach marketing prob- 
lem, caused by the introduction of earlier varieties in the various grow- 
ing areas which have brought about an overlap of marketing seasons, and 
thought that a current AMA study of this situation would prove helpful. 

W. L. Cathey, Chief of Markets and Marketing, Georgia, said that un- 
like the trend in other eastern States, chain stores are patronizing the 
farmers' markets there, and cited 1952 sales totaling $1|2 million on the 
Atlanta market alone, as compared with $38 million the previous year. 

Benjamin P. Storrs, Chief, Division of Markets, Connecticut, felt 
that the increase in purchases by truckers direct from farmers in his 
State has been helped by good roads and better packing by the growers. 
He said that farmers are not afraid of being cheated in selling direct 
to truckers if J -hey can get market information promptly via radio and 
newspapers. 

Marketing Service Projects 

Discussing AMA State marketing service projects at a later session, 
William C. Crow, Director, Marketing Facilities and Research Branch, PMA, 
stated that there has been no time when the need for this work was great- 
er than at present. with more demand than ever from producers, handlers 
and consumers to cut costs and the necessity for finding outlets for 
abundant crops. He urged the State officials to hold these projects to 
useful and practical marketing improvements and to eliminate any "incon- 
sequential stuff." He emphasized that project leaders should: 

"Know the real problems, find the answers and get results. Research 
results are no good unless they are put to work. . . Only when we get re- 
sults will we get anywhere in selling this program. " 

Mr. Crow also urged that good annual progress reports be turned in 
by the States on each individual project, showing what the problem was, 
what was done, and what was accomplished. He stressed that this was nec- 
essary to give the AMA advisory committees a clear picture of the work 
since they recommend funds for these programs. States with "know-how" 
should help States that are just getting started in the marketing service 
field, he added. 



Ill 



Marketing Activities 



Questions And Answers On 
Wheat Allotments And Quotas 

By John C. Bagwell 

Wheat supplies will be unusually large in the 1953-5U marketing year 
that begins this coming July 1. On the basis of prospects in May, 1953 
wheat production will amount to a little more than 1 billion bushels,, The 
carry-over of old-crop wheat on July 1 is expected to be in the neighbor- 
hood of 575 million bushels. Allowing for some imports, total supplies 
would be about 1,600 million bushels, which would about equal the former 
record established in ±jk2-h3. 

Existing farm legislation provides for acreage and marketing restric- 
tions when supplies of wheat get out of line with demand. Because there 
is a possibility of restrictions on 195U-crop wheat, many questions are 
being asked about the manner in which the restrictions may be put into 
effect. Some of the more frequently asked questions, and their answers, 
are as follows : 



Q. Under what legislation are restrictions on wheat established ? 

A. The Agricultural Adjustment Act of 1938, as amended. 

Q. What are the types of restrictions used ? 

A. Acreage allotments and marketing quotas. 

Q. On what crops may restrictions be placed ? 

A. Quotas may be used only for wheat, corn, cotton, tobacco, rice, and 
peanuts. Allotments may be used for other field crops as well. 

Q. Who proclaims the national wheat acreage allotment ? 

A. The Secretary of Agriculture, who "proclaims" the allotment for the 
next crop of wheat. 

Q. What is the latest date the Secretary may make this proclamation ? 

A. Not later than July 15. 

Q. How large must the national wheat acreage allotment be? 



May 1953 



15 



A. An acreage large enough to produce a crop which, together with the 
carry-over and imports, will make available a supply equal to a normal 
year's domestic consumption and exports plus 30 percent of such consump- 
tion and exports. The national acreage allotment, however, must not be 
less than 55 million acres. 

Q. How is the national wheat acreage allotment apportioned? 

A. The national acreage allotment is apportioned to States, to counties, 
and finally to individual farms. 

The apportionment to States, and to counties within States, is made 
on the basis of the acreage seeded for production of wheat during the pre- 
ceding 10 calendar years, with adjustments for abnormal weather and trends 
in acreage during the 10-year period. The county acreage is apportioned 
among individual farms on the basis of tillable acres, crop-rotation 
practices, type of soil, and topography. 

q. When marketing quotas are not in effect, are producers penalized for 
failure to comply with acreage allotments established for their farms? 

A. There is no penalty except the producer is not eligible for price 
support as a "cooperator" (90 percent of parity through the ±95h crop) 
but instead is entitled to only such support as the Secretary in his dis- 
cretion may make available to "noncooperators . " 

Q. Who determines that a marketing quota program is required ? 

A. The Secretary of Agriculture, who "proclaims" the national wheat mar- 
keting quota, in accordance with AAAct provisions. 

Q. What legal formulas must the Secretary follow in making his determi- 
nation that quotas are required? 

A. The AAAct provides that the Secretary must proclaim a national mar- 
keting quota by July 1 if he determines (l) that the total supply of wheat 
for the next marketing year will be more than 20 percent larger than the 
normal supply, or (2) that the total supply of wheat for the current mar- 
keting year is not less than the normal supply, and that the average farm 
price for 3 successive months of the current marketing year has not ex- 
ceeded 66 percent of the parity price. 

The following illustrations, applicable to the 1953-5U marketing 
year, will clarify the manner in which "total supply" and "normal supply" 
are determined: 

Total supply ; The carry-over at the end of the current marketing 
year — June 30, 1953 — would be added to total production from the 1953 
crop. To this would be added the estimated imports for the next market- 
ing year (1953-5U). The resulting grand total would be the "total supply" 
as defined in the AAAct. 

Normal Supply ; The domestic consumption for the current marketing 



16 



Marketing Activities 



year (1952-53) would be added to the estimated exports for the next mar- 
keting year (1953-5^). To this total would be added 15 percent as an 
allowance for carry-over reserves. The resulting grand total would be the 
"normal supply" as defined in the legislation. 

Q. What is the latest date the Secretary may proclaim a national market- 
ing quota ? 

A. Not later than July 1 for the marketing year that begins on July 1 of 
the following calendar year. 

Q. Do producers have any voice in determining whether the marketing quota 
program shall become binding upon them? 

A. Yes. The AAAct provides that "the Secretary shall conduct a referen- 
dum, by secret ballot, of farmers who will be subject to the quota. . . 
to determine whether such farmers favor or oppose such quota. If more 
than one-third of the farmers voting in the referendum oppose such quota, 
the Secretary shall, prior to the effective date of such quota, by pro- 
clamation suspend the operation of the national marketing quotas with re- 
spect to wheat." 

Q. What is the latest date the Secretary may conduct this referendum ? 

A. Not later than July 2k for the marketing year that begins on July 1 
of the following year. 

Q. Is the national marketing quota proclaimed in terms of bushels ? 

A. No. After the Secretary determines that the supply is such as to 
require quota program, he proclaims that fact and, in the language of the 
law, "during the marketing year beginning July 1 of the next succeeding 
calendar year and continuing throughout such marketing year, a national 
marketing quota shall be in effect with respect to the marketing of wheat. " 

Q. How are the individual farm marketing quotas determined ? 

A. They are based on acres — not bushels. 

The process starts with the proclamation of a national acreage allot- 
ment. The national acreage allotment is apportioned, as already described, 
to States, counties, and finally to individual farms. Generally speaking, 
the marketing quota for an individual farm is the quantity of wheat pro- 
duced .on the farm acreage allotment. 

Q. Are any producers exempt from the marketing quota program ? 

A. Yes. The program does not apply to any farm on which the acreage 
planted to wheat does not exceed 15 acres. This is true regardless of 
the si z e of the farm acreage allotment. 

Q. What happens if a producer overplants his farm acreage allotment? 



May 1953 



17 



A. If the farm acreage allotment is exceeded, the "farm marketing ex- 
cess" must be determined. The farm marketing excess is computed, in terms 
of bushels, on the basis of the normal production of the excess acreage. 

Q. May the "farm marketing excess" be marketed by the producer ? 

A. Yes. But the producer is subject to a penalty per bushel equal to 
5>0 percent of the basic loan- rate. (The basic loan rate on l°52-crop 
wheat was $2.20 per bushel.) 

Producers may postpone or avoid the penalty by storing the farm mar- 
keting excess in accordance with regulations issued by the Secretary, or 
by delivering such excess to the Secretary for disposal. Until the farm 
marketing excess is stored, delivered, or the penalty paid, the entire 
crop of wheat is subject to a lien in favor of the United States for the 
payment of the penalty. The purchaser is required to pay the penalty, 
although he may deduct an amount equivalent to the penalty from the price 
paid to the producer. 

Q. Does overplanting the farm acreage allotment affect the producer's 
e ligibility for price support ? 

A. Yes. As pointed out earlier, the producer is not eligible for price 
support as a "cooperator . " 

Q. What would be the effect on the price support level should producers 
disapprove marketing quotas for wheat? 

A. The Agricultural Act of 1 Q U9 provides that "the level of price sup- 
port to cooperators for any crop of a basic agricultural commodity, ex- 
cept tobacco, for which marketing quotas have been disapproved by pro- 
ducers shall be 50 percent of the parity price of such commodity. . 

Q. What are the principal differences between acreage allotment and mar- 
keting quota programs for wheat ? ' 

A. The marketing quota program might be described as "an acreage allot- 
ment program with teeth." 

Specific differences are these: 

1. In the absence of a national emergency, a national acreage allot- 
ment must be proclaimed by the Secretary each year, even though the sup- 
ply situation is such as not to require the proclamation of a national 
marketing quota. A marketing quota program, on the other hand, can be 
proclaimed only when the supply (or price) level reaches a certain point 
specified in the AAAct. 

2. An acreage allotment program as such need not be approved by 
producers; marketing quota programs must be. 

3. No "penalties" attach to noncompliance with an acreage allotment 
program as such; "penalties" are assessed on excess marketings when quotas 

18 Marketing Activities 



are in effect, and "noncooperators" are ineligible for price support at 
the level applicable to "cooperators. " 



Acreage allotments for wheat have been in effect six times since 
1938, as follows: 



Acreage allotments were proclaimed for the 19k3 and 1951 crops but 
were terminated under the emergency powers of the AAAct. Acreage allot- 
ments for the crops of 19hh-h9 inclusive and for 1952 and 1953 were dis- 
pensed with under the emergency powers of the AAAct. Marketing quotas 
have been in effect only for the 19^1 and 19^2 crops of wheat. 



1953 CAM ED FRUIT AND VEGETABLE "SET-ASIDE" PROGRAM 

The USDA administered program requiring earners to set aside certain 
quantities of their 1953 fruit and vegetable packs for Armed Services 
purchases will take somewhat smaller quantities of the commodities this 
year than during 1952. 

Similar to programs in operation during the past two years and 
during World War II, the "set-aside" requirements cover 22 specified can- 
ned fruits and vegetables and for this year will amount to approximately 
5.3 percent of "base packs" of the canned fruits covered and approximate- 
ly 7.5 percent of the specified canned vegetables. 

The percentage of the base pack of canned fruits to be set aside 
ranges from 3.8 percent on peaches up to 22.8 percent on blackberries. 
Other fruits covered are apples, applesauce, apricots, blueberries, cher- 
ries, R.S.P., sweet cherries, Kadota figs, fruit cocktail, Bar tie tt pears, 
purple plums and pineapple. For canned vegetables the percent of the 
base pack to be set aside runs from 3.8 on green peas to 28.1 for sweet- 
potatoes. Other canned vegetables are asparagus, lima beans, green or 
wax beans, carrots, sweet corn, tomatoes and tomato catsup. 

Under the order putting the program into effect, the Department 
will compute each canners 1 set-aside quantity from "base pack" information 
previously reported, or in the case of new canners, from a report cover- 
ing their applicable base packs. Actual procurement of the canned fruit 
and vegetables will be handled by the Office of the Quartermaster General, 
Department of the Army. 



Crop 



Acres 



1938 

1939 
19U0 

19U1 
19U2 
1950 



62,000,000 

55,000,000 
62,000,000 
62,000,000 
55,000,000 
72,776,000 



May 1953 



19 



ABOUT MARKETING 



The following addresses and publications, issued recently, may be 
obtained upon request. To order, check on this page the publications de- 
sired, detach and mail to the Production and Marketing Administration, 
U. S. Department of Agriculture, Washington 25, D. C. 

Publications : 

Consumer Purchases 'of Fruits and Juices in March 1953. April 1953. 
15 pp. (PMA.) (Printed) 

Egg Marketing Facilities in the Winston-Salem, N. C, Trade Area. 
March 1953. 21 pp. PMA in cooperation with North Carolina Dept. of Ag- 
riculture and North Carolina State College of Agriculture and Engineer- 
ing. 21 pp. (Processed) 

Margins on Fluid Milk in the Duluth-Superior Marketing Area 19hl-kQ» 
Marketing Research Report No. 32, January 1953. 55 pp. (PMA) (Printed) 

An Evaluation of Various Ratios for Classification of Cotton Fibers 
for Maturity. March 1953. (PMA) (Processed) 

Carlot Shipments of Fresh Fruits and Vegetables by Commodities, 
States and Months Including Boat Shipments Converted to Carlot Equivalents 
Calendar Year 1952. April 1953. 22 pp. (PMA) (Processed) 

Review of Program Operations - Commodity Credit Corporation, Fiscal 
Year 1952. 21 pp. (PMA) (Processed) 

Summary of Regional Cold Storage Holdings for 1952. March 1953. 
30 pp. (PMA) (Processed) 

Cotton Quality Statistics United States, 1951-52. Statistical Bulle- 
tin No. 123. 1953. 63 pp. (PMA) (Processed) 

Test of a Mechanical Refrigerating Unit Designed to Maintain Low 
Temperatures in Motortruck Transportation (An Interim Report) March 1953. 
18 pp. (PMA) (Processed) 

Fruits and Juices Availability in Retail Food Stores, February 1953. 
April 1953. 25 pp. (PMA) (Processed) 

* * 

(Be certain you have given us your name and full address when order- 
ing statements or publications. Check only the individual items you wish. ) 

NAME 

STREET 



CITY ZONE STATE 



20 



Marketing Activities