A marketing agreement and order for California fresh Bartlett and fall and winter pears, plums and Elberta peaches, affecting about 6,000 growers, was put into effect in May 1936, and replaced the agreement and license which had previously been in effect. The program under the agreement and order provides for prorating shipments for specified periods, regulating shipments by grades and sizes, and regulating daily shipments by what is known as the car concentration plan.

Plums were the first crop for which regulatory measures were put into effect under the agreement and order in 1936. Most of the small plums could not be sold at prices high enough to cover marketing charges. Small fruit was generally of poorer quality than the more mature fruit shipped.

Appropriate size-regulations for 16 of the major varieties of plums shipped were put into effect in an effort to reduce the volume of sales and standardize the quality of fruit shipped. Grower returns increased from about $45,000 for the week ending June 20 to slightly more than $200,000 for the week ending July 18. During this period, though approximately the same quantity of fruit was sold each week, there was a marked increase in the proportion of larger sizes shipped. California Elberta peach shipments were subject to grade and size regulations under the marketing agreement program from July 3 to September 1. Shipments were limited to U. S. No. 1 grade or better, and the regulations required that 80 percent of the shipments be 75 or larger and not over 20 percent below size 80. As a consequence, the 1936 shipments were of unusual uniformity in quality and pack. Growers had the most successful season in recent years. In spite of a 500-car increase in Elberta shipments from 1935 to 1936, prices to growers were 5 to 8 cents per box higher.

For California interstate shipments of Bartlett pears, two types of regulation were used, namely limitation of sizes to be shipped and the car-concentration plan. Shippers were not permitted to ship in interstate or foreign commerce any pears smaller than size 180. In addition, each day from July 6 to September 6, only that quantity of Bartlett pears it was deemed advisable to ship, was permitted to move out of designated railroad or precooling concentration points. When accumulation of pears at concentration points became too great, loading for shipment to these points was restricted.

Despite the fact that shipments in the 1936 season were more than 1,000 cars above the 1935 total, prices per box to growers were within 3 cents of the 1935 price, and total returns to growers were about $1,000,000 greater.

Under a surplus-removal program that supplemented the marketing program, 140,000 boxes of Bartlett pears were purchased for relief distribution. The purchase program removed surpluses of pears that were depressing the prices on both the fresh and canning market. Removal of the surplus brought about a firmer situation in cannery prices for growers in California, Oregon, and Washington through the rest of the season.

Approximately 1,400,000 bushels of apples were bought in the principal producing States during 1936 for relief distribution. These purchases relieved a critical storage supply situation, at the request of growers and shippers. Apples are not included among the products for which marketing agreements and orders are authorized under the Agricultural Adjustment Act.

PROGRAMS FOR WALNUTS AND PECANS

Steadily increasing production of English walnuts in the United States during a period of restricted consumer purchasing power has resulted in serious marketing problems during recent years.

The increase in domestic production of merchantable walnuts for sale in the shell offset the sharp decline in imports of unshelled walnuts, with consequent oversupply in the face of curtailed domestic demand. Total domestic production of merchantable walnuts plus unshelled imports averaged 698,000 bags annually during 1925 to 1930, as compared with an average of 681,000 bags during 1931 to 1935. Notwithstanding marked reduction in prices for domestic nuts, total disappearance of unshelled walnuts since 1930 has averaged only 513,000 bags annually.

Since the beginning of the 1933-34 season the walnut industry has operated under a marketing-agreement program limiting domestic supplies of merchantable walnuts to existing demand, and diverting surplus tonnage into export and shelling channels. This program has made it possible for total returns to growers to be increased, although returns from the surplus tonnage have averaged approximately 50 percent of domestic prices for unshelled walnuts. Under the 1935-36 program, over 557,000 bags of domestic walnuts moved into domestic consumption in shelled form, and approximately 254,000 bags were diverted. At the close of this season, 93,000 bags were carried over by packers into the following season.

Prices received by walnut growers for merchantable unshelled walnuts averaged 21.4 cents per pound during the period 1924 to 1928, inclusive. In 1932, growers received slightly over 9 cents. During the past 3 years, 1933-35 inclusive, total returns to growers for merchantable walnuts have averaged approximately 11.2 cents per pound.

Export markets for unshelled pecans are being developed through the operation of a diversion program inaugurated in the 1935-36 season. Under this program approximately 800,000 pounds of unshelled pecans were sold abroad during the 1935-36 marketing

season.

The diversion program to encourage exports of pecans is being continued during the 1936-37 season. The need for continued encouragement of export outlets arises largely from further increases in production. The 1936 crop of improved pecans amounted to approximately 17,000,000 pounds, compared with an average of 13,000,000 pounds produced during the 4 preceding years, and an average of nearly 14,000,000 pounds during the 10 years, 1926-35.

PROGRAMS FOR THE CITRUS INDUSTRY

During 1936 the citrus industry in the California-Arizona area continued to operate under the provisions of a marketing program that has been continuously in effect since 1934. In the early part of 1936 a proposed marketing-agreement program for the Florida citrus industry was considered at a public hearing and later was made effective for the 1936-37 season, which starts in September.

The marketing agreement and order in the California-Arizona area provide for controlling the volume of fruit shipped by handlers in interstate commerce and to Canada, under regulations recommended by the control committee and approved by the Secretary of Agriculture.

The marketing agreement and order issued for the Florida citrus industry provide not only for regulating the volume of fruit shipped out of the State each week, but also for restricting shipments of grades below U. S. No. 2 and of price-discounted sizes.

During recent years, increases in production have made it more and more difficult for citrus growers in all citrus-producing regions to market their crops. At the beginning of the 1936-37 marketing season, official estimates indicated a citrus crop for all areas totaling approximately 88,000,000 boxes, the largest crop on record, and over 11,000,000 boxes greater than the crop in the 1935-36 season. Record production was indicated in each producing area.

While the marketing agreement program in effect for the CaliforniaArizona area is largely designed to assist the industry in the orderly movement of oranges to market, the program in effect for Florida was made operative for oranges, grapefruit, and tangerines.

GRAPEFRUIT PRODUCTION BREAKS RECORDS

The most acute difficulties at the opening of the 1936-37 marketing season appeared to be centered around the marketing of grapefruit. National production of grapefruit was estimated at around 28,000,000 boxes, or 7,000,000 boxes more than in any previous season. Of this total, Florida appeared to have 17,500,000 boxes, which is only about 1,000,000 boxes less than the national grapefruit crop in the 1935-36 season. This State is the principal grapefruit-producing State, Texas ranking second with slightly less than one-half of Florida's production.

The marketing program, insofar as grapefruit is concerned, was supplemented at the beginning of the 1936-37 season with a program under which the Agricultural Adjustment Administration purchased surplus fresh fruit for relief distribution and, in addition, planned to purchase later in the season canned grapefruit juice for relief use. Purchases were to be carried out through the whole season in all of the grapefruitproducing areas of the country, in order to support the efforts of growers and shippers in improving marketing conditions.

Actual buying of surplus grapefruit started in Florida during the last week in October and was followed with purchases in Texas. By the end of 1936, a total of 622,500 boxes was bought in the two areas. Surplus grapefruit sold to the Agricultural Adjustment Administration was purchased in Florida on the basis of 46 cents per standard field box loaded bulk in cars, with 31 cents of this price scheduled to go to growers. Purchases in Texas were made on a comparable price basis, with growers scheduled to receive a tree price for grapefruit of $7.50 per ton.

II. MARKETING PROGRAMS FOR DAIRY PRODUCTS

ECONOMIC STATUS OF THE DAIRY INDUSTRY

The dairy industry during 1936 experienced further gains in the economic recovery which began in 1933. The estimated cash receipts of farmers from sales of dairy products in 1936 were about 1.4 billion dollars. This represented increases of 11 percent over 1935, of 25 percent over 1934, and of 43 percent over 1933. The 1936 receipts were 26 percent below the 1925-29 average.

Several major factors have been associated with this improvement in the economic status of dairy farmers. These include a decrease in numbers of milk cows and a lower volume of total milk production, a marked improvement in demand conditions, an upward trend in dairy products prices, the Federal and State marketing programs, the disease-elimination programs, and Government purchases of dairy products.

The number of milk cows on farms reached a peak, about January 1, 1934, of 26,931,000. At that time the number of cows per 1,000 population was the largest since 1900 and total numbers the largest on record. The combined influences of the 1934 and 1936 droughts increased beef prices, and the disease-elimination programs have resulted in a decrease in milk cows of nearly 7 percent to 25,041,000 on January 1, 1937, on which date there were about 1.5 percent fewer milk cows than on the same date in 1936. The number per 1,000 of population is slightly smaller than the 35-year average and about in line with the long-time trend. The greatest increases in numbers of milk cows before 1934 occurred in the principal manufactured-dairy-products areas. Those areas were particularly affected by the droughts of 1934 and 1936 and have showed the greatest decreases in milk cows in recent years.

Total milk production on farms reached a peak estimated at 104.7 billion pounds in 1933, although farmers were feeding light rations and production per cow was low. As a result of the decrease in the number of milk cows and the shortage in feed-grain and hay supplies caused by the 1934 drought, estimated total milk production in 1934 was about 101.5 and in 1935 about 101.8 billion pounds, or about 3 percent below the 1933 production. Because of the drought total milk production in 1936 appears to have been only slightly above the 1935 total.

During the first half of 1936, production apparently averaged 2 or 3 percent above the 1935 level, higher production per cow more than offsetting the smaller number of cows. As the drought burned dairy pastures to the poorest condition on record, milk production declined sharply, particularly in the drought-affected butter-producing areas. By September 1, total milk production appeared to be down to 8 percent below the rate on the same date in 1935, and 5 percent below the level for September 1, 1934. Autumn rains resulted in remarkable recovery of pastures, while favorable prices for dairy products stimulated grain feeding, and an unusually large proportion of the cows were milked. Total milk production during the last 3 months of 1936 averaged well above the level for 1935.

The upward trend in farm prices of dairy products since the low point of the depression continued in 1936. Farm prices of dairy products as a group declined sharply from 157 percent of the prewar level in 1929 to 71 percent in March 1933. The averages for the last 4 years were 82 percent in 1933, 95 percent in 1934, 108 percent in 1935, and 120 percent in 1936. The 1936 average was the highest since 1930, though still 24 percent below the 1929 level.

FLUID MILK MARKETING AGREEMENTS AND ORDERS

The amendments to the Agricultural Adjustment Act, approved August 24, 1935, authorize the Secretary of Agriculture to enter into marketing agreements with milk producers and distributors, and to issue orders in conjunction with such agreements. The terms of a

marketing agreement are applicable and binding only upon the parties signing the agreement, while the terms of an order, similar in practically all important provisions to those of the marketing agreement with which it may be issued, apply to all persons or firms engaged in handling milk in the current of interstate or foreign commerce, or milk that directly affects the movement of milk in interstate or foreign com

merce.

The principal provisions included in marketing agreements and orders for fluid milk markets relate to: (1) Classification of milk according to use and fixing or providing a method for determining the price of milk entering each use; and (2) prorating to producers the proceeds of sales to handlers. The Agricultural Adjustment Act as amended authorizes several methods of prorating to producers the proceeds of sales to handlers, these being, (1) the individual-handler pool, (2) the market-wide pool without rating, and (3) the market-wide pool with rating.

At the close of the calendar year 1936 fluid milk marketing licenses were in effect in Battle Creek, Mich.; Denver, Colo.; Des Moines, Iowa; Detroit, Mich.; Fort Wayne, Ind.; Kalamazoo, Mich.; Leavenworth, Kans.; Lincoln, Nebr.; Louisville, Ky.; New Bedford, Mass.; Omaha-Council Bluffs, Nebraska-Iowa; Quad Cities (Rock Island, Moline, and East Moline, Ill., and Davenport, Iowa); Richmond, Va.; San Diego, Calif.; Sioux City, Iowa; Twin Cities (Minneapolis and St. Paul), Minn.; and Wichita, Kans.

In

Orders were in effect in the District of Columbia; Dubuque, Iowa; Fall River, Mass.; Kansas City, Mo.; and St. Louis, Mo. A marketing agreement was in effect in Topeka, Kans. During the year 11 licenses were suspended or terminated. several markets the licenses were superseded by marketing agreements or orders. In six markets suspension of the licenses was not followed by further programs under the act. These markets were Atlanta, Ga.; Evansville, Ind.; Grand Rapids, Mich.; Newport, R. I.; Phoenix, Ariz.; and Tucson, Ariz. Orders replaced licenses in Boston, Mass.; Dubuque, Iowa; Fall River, Mass.; Kansas City, Mo.; and St. Louis, Mo. In Topeka, Kans., a marketing agreement was developed to take the place of the license in that market.

In only one market, the District of Columbia, was an order issued where no license was previously effective. The Boston marketing order issued in February 1936 was the only one suspended during the year.

Various circumstances have occasioned these changes in the milkmarketing program. During 1936 much work was done looking to replacement of licenses by marketing agreements and orders under the amendments to the Agricultural Adjustment Act. In markets where there was much non-compliance and no general disposition to carry forward a supervised plan under a marketing agreement or order, or both, licenses have been terminated. In each case the license has continued in effect until it became clear that it no longer served a useful purpose and that there was not a sufficient desire for a marketing agreement or order.

The licenses still in effect at the end of 1936 remained because of a desire in the markets for continuation of assistance afforded by such plans and because there had not been sufficient time to complete, in

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