The Hood River glacier. (Hood River, Or.) 1889-1933, 1917-02-01
Money Talks
TO
Fruit Growers
BY
Northwestern Fruit Exchange
No. 7
Economics Ofthe Industry
TO FRUIT GROWERS:

| In my previous talks to you-Nos. 2
to 6-l have taken you through the
preliminary organization of the EX-
CHANGE and told you something Of
the men who started it and the men
who run it. Now | want to tell you
something of the practical operations.
First. however, want to analyze the
economic position Of our industry as it
looks to me, for believe that in order
to solve any problem we have FIRST got
to understand that problem. Now. as
far back as six and half years ago,
when we started, we we're impressed
with the difficulty of the task of mar
keting the fruit and produce of the
Northwest to advantage, especially as
compared with such other large indus.
tries as citrus fruits, bananas, etc.
Apples, particuary, are produced In
every state in the Union in some guam
tity. as we'll as in every country under
the sun in the temperate zones. Our
orchards are in disadvantageous posi-
tion. economically. as they are $500
miles from the average Of our markets.
and the transportation cost is very
high, relatively to the value of the
commodity. Furthermore. the North.
west produces only small fraction of
| the national total-less than 10 per
cent--while the big bulk Of the produc-
tion is produced in territories close to
our markets. 1t costs SO cents per box
or at the rate of $l.65 per barrel to de-
liver our apples to the principal mar
kets. That is the VENTILATED
freight rate: it costs us about 81 per
barrel if refrigerated. Now. In the
big barreling districts in the East and
Middle West, the growers can deliver
| packed apples in barrels on board the
cars and sell the fruit at 81 .65 to 81 per
barrel and make profit. Don't you
see what great handicap we are la
boring under? However. this is not
necessarily discouraging, if we once
understand what we are up against and
manage our business intelIigently,
though the handicap will surely break
US if we fail to realize the situation
and fail to meet it. The thing that we
have got to depend on is our ability 10
produce large crops that will average
high per cent of extra fancy quality
Frankly, don't believe. and never
have believed. that there is chance on
earth for the district, the neiehortood
or the individual that cannot produce
crops that will grade high per cent of
extra fancy. Our extra fancy fruit is
highly finished product. which stands
out above anything grown anywhere in
the world. However. in order to real
ize prices which show US profit, this
| fruit must sell for more to the consum.
er than barreled fruit. and in market.
ing any comparatively high-priced ar
ticle. it is necessary TO employ modern
salesmanship and extremely skilled ad-
vertising. In other words, our crop has
got to be banded along very different
lines indeed from those on which bar
relied fruit is handled, as the economic
position of boxes and barrels are very
different. 1t is absolutely necessary
| that we spread our crop out thinly over
the markets of the world. Faulty dis.
tribution. congestion of certain impor-
tant markets, etc., are peculiarly DAM
| aging to our particular commodity.
Now, it is easy enough to say, I'VE
must have the widest possible distribu-
tion," but it is lot harder to actually
accomplish it. Yet that is the true
function of any marketing agency that
expects to survive in this Northwestern
fruit deal, and we in the EXCHANGE
built our machinery on that basis. Our
purpose was to establish all institution
which would produce efficient SER
VICE FOR THE FRUIT AND VEG.
| ETABLE GROWER in the whole pro.
cess of converting his produce into
CASH, and which would safeguard the
growers interests in every phase of (a)
selling, (b) transportation, (c1 account
ing.
There is lot more-a very great
deal more. indeed-required than mere.
ly to sell tho produce. You see, it is
only the occasional large buyer or spec
alator who can afford to 60 to the ex.
pense of sending representative 5000
miles across the continent to buy his
supplies. The statistics will show that
less than one per cent of the 10, 600 car.
lot buyers in the United States and
Canada Ito say nothing of the thou
sands of buyers in foreign countries)
nave ever been represented in person at
shipping points here in the Northwest.
In other words over SO per cent of the
buyers STAY AT HOME. Seeing that
they will not come to us. obviously we
must 20 to them, if we want them to
ouy our fruit. The great majority of
these dealers have an outlet for only 2.
3, to 10 cars in season, and 1t We
expect to realize maximum values for
our products, we have got to get as
many of these dealers handling our
product as possible. II we were willing
to CONSIGN our produce to them, we
wouldn't have to 60 to them to arrange
that, but we don't want to consign; we
want to SELL to the trade outright at
a firm price. That means salesmanship
and personal representation.
These stay-at-home buyers naturally
won't pay for the car until they can
inspect it and be sure they are getting
what they fought, hence. almost univer.
sally terms in the fruit business and
produce trade are CASH AGAINST
THE DOCUMENTS ON ARRIVAL
AND INSPECTION.
In other words, the seller must guar.
antee to deliver his merchandise in
sound condition according to the speci.
ications of the sale. This means that
the railroads must do their work eff
ciently; must deliver the shipment in
reasonable time; must attend to the
proper refrigeration or proper ventila.
tion; must protect the shipment from
freezing, or cooking, etc. Like other
human institutions, railroads are not
infallible; frequently they fall down in
their service, causing damage to the
fruit and consequent rejection and loss.
THEREFORE. a really efficient mar.
keting agency must maintain a first
class TRAFFIC. DEPARTMENT to
look after the growers interests in
| Transportation matters. Then, after
the fruit is safely delivered to the buy
er comes the matter of collection and
Of proper accounting to the owners of
the fruit. This is not as simple as 1t
sounds, as shall presently show.
In my next talk. | shall tell you
about the organization, personnel and