Marketing California lettuce

distribution channels and marketing margins of lettuce in

movement from production areas to retail markets studied
Jerry Foytik
California lettuce growers receive ducing areas to the north come into the wholesalers to retailers in coastal north-
366 of the consumer’s dollar-to cover market and are sold chiefly at nearby ern California decreases substantially-
the costs of production, harvesting, and consuming markets. from 55% to 45% for small cities and
field packing-and the rest of the dollar Production from the Sacramento and from 80% to 50% for large cities.
goes for marketing costs: 30$ for pack- San Joaquin valleys is sold primarily in Wholesalers supply 95% of the small,
aging, transportation, wholesaling ; and the Central Valley. Supplies produced in 85% of the medium, and 75% of the
34qi for retailing. the San Francisco Bay Area are retailed large lettuce received by large city re-
The California retailer discards one largely in coastal northern California. tailers and about SO%, 70%, and 607;
head of lettuce for every 10 he sells, be- Lettuce originating in San Luis Obispo going to retailers in small cities. Whole-
cause of losses-from physical waste and Santa Barbara counties moves mainly salers located in small cities are a sig-
and spoilage-occurring throughout the to southern California. Salinas lettuce is nificant source of supply for small city
distributive system. distributed in substantial quantities to retailers, especially those in the north,
Cross-hauling is not a serious problem all three areas. but appear to provide none of the lettuce
in moving lettuce from producer to con- The relative importance of different retailed in large cities.
sumer. Lettuce from each producing area dealers in handling lettuce varies with
flows to nearby large consuming mar- geographic location, city size, season,
kets, and when such supplies are inade- and lettuce size.
Cost Components
quate, additional quantities are obtained Only negligible quantities are handled A crate leaving the field contains, on
from more distant sources. by truckers-dealers who usually buy in the average, 47.1 heads of lettuce. Of
Lettuce is marketed primarily by go- producing areas and sell to retailers. these, 42.8 heads are sold to consumers
ing from producers to wholesalers to About 30% of the retail sales in Cali- and 4.3 are unsalable because of spoil-
retailers. Appreciable quantities, how- fornia, representing one third of whole- age. This loss includes lettuce thrown
ever, are also handled by packers before salers’ supply, moves from producers to away during unpacking and the lettuce
reaching wholesalers or by truck-jobbers packers before reaching wholesalers. later spoiled or damaged in the store.
on the way from wholesalers to retailers. Truck-jobbers-dealers who buy prod- It is shown as part of the retailer’s
An investigation of the distribution uce mainly from wholesalers and follow margin.
channels used and marketing margins a regular route of delivery to retail At the time of the study, California
established-in moving California-pro- stores-handle 3% of the volume re- consumers paid an average price of 11.8f
duced lettuce to housewives within the ceived by large city retailers and 17% per head. Thus the sales value was $5.04
stateincluded a survey of 183 retail of the quantity sold by retailers in small per crate for the 42.8 heads sold by re-
stores, and the data obtained represented cities in southern California and 32% tailers.
approximately 31,500 crates. sold by retailers in small cities of north- From the average crate, retailers re-
Although eastern markets are the ern California. These proportions remain ceived $1.70-3470 of the consumer’s
major outlet for California lettuce, about approximately the same for each season dollar-to cover their expense and to
one sixth of the crop is sold within the and each lettuce size. Concluded on page 12
state. Almost one quarter of the lettuce Sales by producers directly to retailers
retailed in California during the winter are negligible in southern California
months - December-March - comes throughout the year and in the north CALI C O R N I A A G R l C ULTURE
from Yuma, Arizona. Thereafter very during the winter months. After March, Progress Reports of Agricultural Research
little lettuce arrives from out of state. such sales represent one fourth of the published monthly by the University of Cali:
fornta Division of Agricultural Sciences.
The California winter crop, one quar- medium lettuce and one half of the larger
ter of the annual production, is grown lettuce retailed in coastal northern Cali- William F. C a k i n s .. . . . .. . . . .
. .Manager
in Imperial Valley. Almost 60% of the fornia and one fourth of the large heads Agricultural Publications
acreage in later lettuce is in Monterey sold in the Central Valley. Retailers in W. Ct. Wilde.. . . . .. ..Editor and Manager
California Agriculture
County, 30% in five nearby counties- large cities obtain more of their supply
Articles published herein may be republished
Santa Cruz, San Luis Obispo, Santa Bar- from producers than do small city re- o r reprinted provided no endorsement of a
bara, San Benito, and Santa Clara-and tailers. commercial product is stated or implied.
Please credit: University of California
some 12% in other producing areas. Most lettuce moves through wholesale Division of Agricultural Sciences.
markets. About three fourths of the quan- California Agriculture will be sent free upon
request addressed to : Editor California
tity retailed north of the Tehachapi Agriculture University of Cahfornia 22
Distribution Channels Mountains and almost the entire supply Qiannini’ Hall, Berkeley 4, Californ/a.
To simplify the information in California
Insofar as possible, consuming mar- sold in the south are handled by at least Agriculture it is sometimes necessary to use
kets obtain their lettuce from nearby one wholesaler. Wholesalers supply 95% trade names of products or equipment. No
endorsement of named products is intended
producing areas. During the winter of the lcttuce received by stores in large nor is criticism implied of similar prodncts
which are not mentionid.
months-December-March-about 90% cities and 80% by stores in small cities
of the lettuce retailed in California comes in southern California, compared to 88%
from Imperial Valley and Arizona. As and 6 6 j ( for the Central Valley. After 141

the season advances, supplies from pro- March, the relative volume going from

2 C A L I F O R N I A A G R I C U L T U R E , DECEMBER, 1955
 GOATS Average Daily Production per Goat of Fat-Corrected Milk
Continued from preceding page ' Group C C o m p l e x Mix Group I C S i m p l e Mix
Dates Period
No. Pounds Number Pounds Number
duced the content of digestible protein of milk of goats of milk of goats
by 0.9%. As good quality alfalfa hay 4/ 14-4/24 .............. 1 7.94 18 7.76 17
would in itself supply an adequate
amount of protein, this difference is con-
4/24-5/3 ............... 2 8.39 18 8.00 16
sidered insignificant.
5/3-5/13 ............... 3 8.55 18 8.26 17
5/13-5/23 .............. 4 7.89 18 7.85 18
Concentrate Mixtures
5/23-6/2 ............... 5 7.77 18 7.63 18
6/24/12 ............... 6 7.63 17 7.77 18
Group I-Mixture
(Complex)
1 Group Il-Mixture
(Simple)
2
6/12-6/22 .............. 7 7.33 18 7.35 16
Amount Feed
6/22-7/2 ............... 8 6.89 18 6.88 17
Feed
Ibs.
Amount
Ibs. 7/2-7/12 ............... 9 6.84 18 6.70 18
Barley Barley
~

7/ 1 2-7/22 .............. 10 6.70 18 6.61 18

(rolled) . . . . . ... ..............
Corn
(cracked) ....
32.0

15.0
(rolled) 73.0 7/22-7/26 11
-
6.80 18
-6.84 18

Molasses Molasses Average ................ 7.52 7.44

(cane) ...... 10.0 (cone) .... 10.0
Milo Grain
(cracked) . . . . 15.5
OOt5 corrected milk per goat per day during in the table in column 2. Group I goats
(rolled) . . . . . 10.0 consumed an average of 1.11 pounds and
Coconut Meal
the first 10-day period, there was a dif-
(expeller) . . . 8.5 ference of 0.4 pound during the second Group I1 an average of 1.10 pounds of
Cottonseed Cottonseed
Meal (41%). . 7.0 Meal (41%) 15.0 period, due possibly to some difficulty in concentrates daily for each pound of
BoneMeal . . . . . 1.0 BoneMeal ...
1.0 adjusting the goats to the new feeds. butterfat produced in 10 days.
Salt . . . . . . . . . . 1.0 Salt ........ 1.0
- - During the third period there was a dif- The results from the two concentrate
Total . . . . . . . ,100.0 Total . . . . . . ,100.0
Digestible Digestible ference of 0.3 pound, and thereafter the mixtures-the simpler and more com-
Protein . . . . . 9.1% Protein . . . 10.0% difference between the two groups was * plex-were equally good. Furthermore,
Total Total
Digestible Digestible never greater than an average of 0.2 the 1954 feeding trials confirmed the
Nutrients . . . 73.8% Nutrients .. 73.4% pound daily per goat. During the 104 first year's study and showed that the
days of the feeding trial, Group I goats simple concentrate mixtures are satisfac-
Cottonseed meal was included in the averaged 7.52 pounds of fat-corrected- tory for both medium and high produc-
simple mixture as a safety factor in case milk and Group I1 goats averaged 7.44 ing goats. However, neither of the con-
good quality alfalfa hay could not be pounds. This difference is well within the centrate mixtures used in the 1954 study
obtained during the entire feeding trial. limits of experimental error. could be expected to be satisfactory had
In addition, it was desirable for both The average daily consumption of they not been fed with the high-protein
mixtures to be nearly equal in digestible concentrates by 10-day periods is given roughage alfalfa. A suitable mixture for
nutrient content, differing only in the use with a low-protein roughage, such
number of feeds making up the mixture. Average Daily Consumption of Concentrates by as oat hay, would contain 5% to 6%
10-Day Periods
Because the milk produced by individ- ~~
more digestible protein, equal to the 18%
ual goats varies in percentage of butter- Group I G r w p II to 20% total protein given in the anal-
fat, it was necessary-for purposes of Period No. of No. of yses of commercial feeds.
analysis-to convert all production rec- No. goats
'Oneen-
t = r goats tEy
ords to a common basis of 4% milk, S. W . Mead is Professor o f Animal Hus-
1 18 17 bandry, University o f California, Davis.
known as fat-corrected milk. Thus, it was 2 18 16
possible to compare the energy output 3 18 17 Omer Peck is Farm Advisor, Merced County,
4 18 18 University of California.
of Group I and Group I1 goats on a com- 5 18 18
6 18 18 H . H . Cole is Professor of Animal Hus-
mon basis during each one of the 10-day 7 17 16 bandry, University of California, Davis.
periods. 8 18 17
9 18 18 Mr. and Mrs. Don Beal and Mr. John Pia-
Although the two groups differed by 10 18 18 nezzi, o f Merced County, co-operated in the
11 18 18
an average of only 0.18 pound of fat- 1954 feeding trials.

LETTUCE tracting the retail and preretail margins and consumer prices, on the other hand,
Continued from page 2
from the price charged consumers. It is were lower in the first two categories but
specified at the-farm gate in order to higher in the third.
compensate for spoilage occurring within include the amount received by growers
the distributive system, but discarded at for harvested but unpacked lettuce. Jerry Foytik is Associate Professor of Agri-
the retail level. cultural Economics, University of California,
Davis.
The preretail margin was $1.50 per
crate, or 30%. Somewhat over three Variations This article is based on a study undertaken
jointly by the California Agricultural Experi-
fifths of this margin--92&-consisted of Spoilage, retail margins, and con- ment Station, the California Farm Bureau Fed-
charges for packing and container. sumer prices vary among the stores sur- eration, and the former Bureau of Agricultural
About one seventh-21$-was spent for veyed. Location, size, and type of store Economics-now largely in the Agricultural
transportation. The remaining oRe provide a partial explanation for such Marketing Service-U.S.D.A.
fourth--37&-was the wholesaling mar- differences. A more complete report, the seventh in a
gin including all charges, fees, commis- Generally, spoilage losses were con- series, entitled California Lettuce: Marketing
sions, and net profit for dealers between siderably higher in southern California, Channels and Farm-to-Retail Margins, 1948-
packers and retailers. in small stores, and in cash-carry stores 1949 is available by addressing the Giannini
Foundation for Agricultural Economics, 207
The farm price of $1.84, or 36% of than in the north, in larger stores, and Giannini Hall, University of California, Berke-
the consumer's dollar, is derived by sub- in credit-delivery stores. Retail margins ley 4.

12 C A L I F O R N I A AGRICULTURE, DECEMBER, 1955