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Mrs. WERBELL. The cantaloup was 30 cents and the honeydew was 40 cents.
Mr. ANFUSO. Mr. Ogren.
Mr. OGREN. I will have to depend on one of the gentlemen from the market to give the conversion.
Mr. FISHER. To help the ladies get the true picture, I think, while giving the farmer's price, he ought to give the freight rate along with it, what it costs to get it here. I mean sometimes the freight is almost comparable to what is paid to the farmer.
Mr. ANFUSO. They wanted to discuss that later. Let us have the whole thing.
Mr. OGREN. During the week ending September 28, prices of honeydew in the San Joaquin Valley were $1.87 on 6 to 8 size jumbo crates. Mr. ANFUSO. How
in a crate?
Mr. AnFuso. You paid 43 cents, a spread of 25 cents. For the cantaloup it was 30 cents you paid ?
Mr. WERBELL. Fourteen cents a pound.
Mr. FISHER. That would be a 36—a small 36, but that is what I would pay for it. Mr. Anfuso. We want to thank you for your cooperation.
Mrs. WERBELL. I paid 30. That is reasonable because some stores were even higher.
Mr. FISHER. May I say this: That the freight rate was higher than what was paid to the farmers.
In that particular instance, which is cantaloup, the freight amounted to more than what the farmer was paid.
Mr. Anfuso. Do you have the figure on the freight?
Mr. OGREN. I might say that the prices received by the farmers are lower than these prices I am giving you here. These are the shipping-point prices.
Mr. ANFUSO. The shipping price.
Mr. Fisher. The cost of packing goes into that, and grading, and so forth.
Mr. ANFUSO. All right. Again I thank you, Dr. Campbell, and you ladies for being here. You are welcome to stay. I hope you do not have to go for a while.
You may get into other controversies.
We are very happy to present a panel to discuss the lettuce and apple situation.
First, take lettuce. Mr. Harry C. Crean has come all the way from Salinas, Calif., to be here. He is a grower of lettuce in California. Mr. Crean, would you sit there for a moment? And Mr. Jack Fried. Do we have Mr. Kinker here?
Mr. FISHER. He is not here.
STATEMENT OF HARRY E. CREAN, SALINAS, CALIF.
Mr. CREAN. That is right. Not only lettuce, and to give a picture up to date. I operate approximately 1,400 acres, and on that produce head lettuce, broccoli, celery, and so forth. Throughout the year I probably produce 2,000 crop-acres.
That comes about because we have a spring crop and then in the fall we have a fall crop of the vegetables.
Mr. ANFUSO. Suppose I ask you some questions. You grow, say, 24 heads of lettuce and you pack them in a crate; is that right?
Mr. CREAN. Most of the cartons that are packed contain 24. That is the desirable size. There are other cartons that contain 30 heads and some that contain 18.
Mr. ANFUSO. Let us take the 24 heads in a crate. What do you get for those ?
Mr. CREAN. What do we get ?
Mr. CREAN. For example, I am interested in the head of lettuce here. It may have come from my own farms. The cost of production is approximately three and a quarter cents.
Mr. ANFUSO. Three and a quarter?
Mr. Crean. The cost of harvesting, the cutting and the packing in the container and hauling into the cooling plant and putting on the car is approximately the same. That would make it about 612 cents loaded and ready to leave for the eastern markets.
Mr. ANFUSO. All right. We have 61/2 cents. Then you pay for icing and freight, do you not?
Mr. CREAN. First the lettuce has to go through a process of vacuum cooling. We package differently now than 5 or more years ago. That cost is 15 cents a carton for the vacuum cooling:
Mr. ANFUSO. That is per carton. That is less than a penny per head.
Mr. CREAN. That is right. Approximately two-thirds of a cent. Then the carton is ready to start its trip back here to these ladies
that do the shopping, and then the freight and refrigeration charge sets in.
Mr. ANFUSO. Do you have any idea of those costs? Mr. CREAN. Very well. Mr. ANFUSO. Please tell us. Mr. CREAN. Approximately 51/2 cents from Salinas on all heads of lettuce, and Salinas is approximately 100 miles south of San Francisco in Monterey County, right down here, where it comes in on the B. &0., or the New York Central or the Pennsylvania Railroad haul is the same until it is delivered into New York, and that is about—well, it is $1.32 to $1.34 per carton. You can figure out what that would be with 24 heads in the carton.
Mr. AnFuso. Now, you sell to a jobber, do you?
Mr. CREAN. We try to ad this stuff on board cars and sell it f. o. b., to various buyers throughout the United States. For example, many firms in the East have their own buyers on the west coast. Some of the largest chainstores like A. & P., and Kroger Grocery & Baking, they have buyers on west coast food companies.
Then there is an organization called Food Fair. I do not know whether from New York or Philadelphia. They are large operators. They have a little difficulty with the Government at the present time. I do not know what that is about. These people have their own buyers there.
Mr. ANFUSO. You mean in California ?
Mr. ANFUSO. Is there a market there where the lettuce is displayed ? How is the buying done in California ?
Mr. CREAN. It comes in from the fields and it is ordinarily a half refrigerator carload that is carried on the truck from the fields to the cooling plant. These fields where the lettuce is produced range anywhere from 2 miles to 42 miles from the cooling plant.
When they arrive at the plant they are unloaded by lift trucks which lift the whole truckload off and set it on the floor and that particular load is waiting its turn to go through the cooling plant and while there the buyers come down and then open the flaps, pull out a head, tear them all apart, looking for burn, slime, decay and all of the other things that go along with the horrors of producing perishable vegetables.
As a rule, the buyer is very cautious. He wants something that what we call will ride well, so that it is delivered in an attractive appearance in the eastern market so that it will make a better sale. Sometimes they buy-most of the time they do not.
One day last May, I do not recall the day, it was a horrible day in my business, which is one of many. I loaded 17 or 18 cars of lettuce. I didn't sell one of them because there was an awful lot of lettuce going out at the time.
Mr. ANFUSO. What happens then?
Mr. CREAN. Then we pick out a receiver in Minneapolis, Chicago, New York, and we consign a car to him. They sell it for our account, that is why I say we many times take what is left.
Mr. ANFUSO. You take any price you can get?
Mr. CREAN. Any; and sometimes when we consign a car to the eastern market, when the market is glutted, that is no one's fault, except the consumers, because they are not eating enough of it. That car will be broken and will start to make sales—that is, the receiver willand he cannot finish up, he cannot clean up the car soon enoughmight have it on hand 5, or 6, or 7 days and some may be dumped. There might be a freight deficit. It might be from one to six
İt hundred dollars. We pay that. After producing the car of lettuce, consigning it, you might say paying someone to take the gift of a carload of lettuce. That does not happen frequently, but it happens every year to some of the producers. That is the worst part of it.
Let us take a car—take this car that this gentleman said was good lettuce.
Mr. FISHER. That was the top.
Mr. CREAN. You can go down on the Washington Street Market and probably buy a dozen truckloads of good edible lettuce that will satisfy any of these ladies here from $2.75 to $3.50.
Mr. FISHER. That is right.
Mr. CREAN. The top price does not always indicate that the quality is of the best. Many times a car will come in-someone will send in an order—a hundred cars go out and the price is $4.50. The next that goes out is $4.25. It comes out of the same field, same quality, same market, same receiver. However, I do not know whether that would account for the wide differential in the prices of these heads named here. I noticed some was 23, some 29. I haven't examined them but just looking at them here, one is a little stale on this side. But they seem to be about the same size and weight.
The car that started to ride from Salinas to New York State, after it comes in here, then it is unloaded.
Mr. ANFUSO. Where is it unloaded ?
Mr. CREAN. If it is on the New York Central it is on the train tracks, 33d Street. If it comes in on the Pennsylvania they have to lighter it across, do they not?
Mr. FISHER. Either that or ride it to Jersey City. They truck it over or lighter it if they want to unload on the New York side.
Mr. ANFUSO. They put it in barges, if it is coming to New York City—they put it in barges and then it comes down here to the market, is that right?
Mr. FISHER. Loaded across the North River.
Mr. Anfuso. You are interested in this. Suppose you bring in this freight car-whether you bring it into New Jersey or in at 33d Street, when do you sell it, and to whom? Mr. CREAN. We consign it, let us say. Mr. ANFUSO. To whom do you consign it?
Mr. CREAN. Senanski and Nathan, Irving Okum when they were in business, Heller.
Mr. Anfuso. What names are you mentioning?
Mr. Anfuso. You consign it to any one of these receivers, is that right?
Mr. CREAN. That is right. As a rule particular growers and shippers will work with particular receivers.
Mr. ANFUSO. You have your set of receivers, is that right?
Mr. Anfuso. Had the price been fixed when the lettuce left California ? It has not, has it?
Mr. CREAN. No.
Mr. ANFUSO. No price has been fixed, you just consign it, you send it on consignment, is that right?
Mr. CREAN. Yes.
Mr. CREAN. When the car comes into New York. There was a car arriving last night, I think, in New York, midnight.
Mr. FISHER. The Congressman was there.
Mr. CREAN. They open at night. The car is unloaded and the merchandise displayed on the walk down there and the buyers look at it, and that is when the trading starts. That is when the sale is made.
Mr. ANFUSO. In other words, you have no guaranty and no way of knowing what you are going to get
Mr. CREAN. None at all.
Mr. CREAN. That is it exactly. The only time that we have a guaranty, and even then it isn't a guaranty, is when we sell a car f. o. b., to a buyer at a shipping point.
Mr. ANFUSO. In California?
Mr. McINTIRE. Is that f. o. b., at shipping point, or do you guarantee delivery?
Mr. CREAN. When we sell it—when we sell out there, we sell on terms f. o. b., acceptance. Whenever one of our cars arrives with over a certain percentage of defects we get that back, too.
Mr. MCINTIRE. That is not f. o. b., acceptance final transactionit is condition on arrival.
Mr. CREAN. That is right. I would say that less than one hundredth of 1 percent of all of the lettuce produced in the State of California and Arizona—they are winter producers-less than that percent is sold f.o. b., acceptance final.
Mr. McINTIRE. How much of that produce is sold for diversion without a consignee?
Mr. CREAN. Without a whom? What you call a tramp car?
Mr. CREAN. At times of lessened production, maybe 5 to 10 percent of the daily loadings. But normally, I do not think it would be over 1 or 2 percent.
Mr. ANFUSO. I suppose that when the lettuce gets here you are in no position to take it back, therefore, you must sell it at any price, is that right? Mr. CREAN. Yes. Mr. ANFUSO. Do you think that that is a healthy situation?
Mr. CREAN. No. I would not say it was a healthy situation, but then again it is not the consumers' fault. We produced it. We loaded it. No one else is at fault but ourselves when we run the stuff out. It is just a method of doing business in the industry. There are certain commodities handled 100 percent on consignments.