CO-OPERATIVE MARKETING

Pecan Research
------------ Wm. P. Bullard, President, National Pecan Growers Exchange, Albany, Ga. In talking to you Texas growers I am not unmindful of the fact that you have different conditions from what we have in Georgia in the paper shell industry. I understand that your problem is practically all seedlings at the present time and grown along the water courses mostly: and many of them gathered on shares, and a great deal of them go into the hands of little merchants in the small towns. Co-operative marketing means getting together and condensing the sale of any product, and is based on the principle of the elimination of competitive selling in that commodity. This is basic and a co-operative cannot vary from it without danger. It means the elimination of speculation and the saving and giving back to the grower what in California is termed speculative or independent profits. This increases the returns to the growers, but does not necessarily increase the price to the consumer, and in fact in a well-organized co-operative the cost to the consumer is often materially lowered, while distribution is greatly increased and the returns to the grower pat on a 52 FOURTH ANNUAL SESSION basis of profit. There are many instances where a languishing industry has been put on a profitable basis through co-operative marketing. When walnuts, for example, were sold hit or miss by everybody growing them, and later by numerous associations, each competing against the other, returns to the grower went so low that in many cases the orchards were lost under mortgages and in other instances dug up to make way for more profitable crops. Finally, the splendid California Walnut Growers Association was evolved out of the wreckage, with the result that the growing of walnuts became so profitable that there are now one hundred thousand acres planted to walnuts, and another one hundred thousand acres planted to almonds. Texas seedlings have largely been considered pick-ups, and for that reason it is more difficult to get producers interested than it is in the paper shells, the growing of which is a highly specialized business with large investments, and consequently growers more deeply interested. The conditions surrounding your harvest and the way your nuts trickle into the markets offer difficulties in the way of gathering them all together under one head of co-operative marketing. Therefore, I understand that many of the conditions surrounding our paper shells are entirely different from the problems that attend your big seedling industry. I used to think that seedlings would not come much into competition with budded nuts, but my experience is that every year you have a big seedling crop, and then the market for paper shells is not, on the whole, quite as good as in times of small crops with you. I have come more and more to believe that the marketing of both the paper shells of the Southeast and the seedlings of Texas and Oklahoma and Louisiana must find some common ground upon which to amalgamate, and until this is done neither the paper shell nor the seedling end of the industry will ever come entirely into their own. There is no reason why the seedlings of Texas and other States could not be cracked and sold in vacuum packages---at least that part of them that could not be sold in the shell-just as well as walnuts and almonds are sold both in the shell and in the cracked state, cracking done by the marketing organizations themselves. Of course this is a picture that is considerably in the distance and will require time and thought as well as money to work it out, but I do not believe it is a mirage. Mr. Moore in the splendid Pioneer Press wrote well a few months ago when he said that it was a mistake to say that we have the world for a market. I think, however, that it is correct to say that we have the possibilities of the world for a market---for the larger nuts in the shell and the smaller nuts in the form of a vacuum pack. I say we have “possibilities" because such a market does not exist now; but by proper and united effort on the part of the growers, both paper shell and seedlings, this can be a consummation of the future. I do not think the Texas growers received enough money for their nuts this last year. Shortly before the harvest began, I noticed that the big nut cracking concerns lowered their price of meats, and I said it must have been done for the purpose of lowering the price of seedling nuts. Lowering the prices of meats by the big shellers meant that the little crackeries throughout TEXAS PECAN GROWERS' ASSOCIATION 53 the country---and there are many of them now---would have to lower their prices, and consequently establish a low price for the seedling nuts, and such was the result. I though then that it might have been a concerted action on the part of the big shellers to do this so that they could fill their coffers full of nuts at a few cents per pound less than they would otherwise have had to pay, and that would make in the aggregate big profits to them. Lowering prices of meats meant a drop in seedlings not only in the West but in the Southeast---in Georgia and other Southeastern States where seedlings are grown. Of course general economic conditions and the buying power of the people always have a great deal to do with lower prices in any commodity, and I am not prepared now to say that economic conditions did not have a good deal to do with the lowering of the price of meats early last fall; also I am loath to charge combination and confederation on the part of big business houses. It is easy to make these assertions, but sometimes difficult if not impossible to prove. But no less an authority than Mr. R. E. Woodson, than whom there is no better posted man in the game, and especially in the seedling end of it, tells me that he estimates the seedling crop of 1923 all over the country at not over sixty per cent of the 1921 crop, and we all know that the 1922 seedling crop was practically nothing. Therefore, nothing short of very bad economic conditions and much lower buying power of the people could have justified the price of meats, and consequently the prices of the 1923 seedling crop. Now it seems to me that in order for you Texas growers to reap just rewards for your product, you should begin to consider very seriously the question of co-operative marketing. Surely you have the financial means and have the broad co-operative spirit among your big pecan growers, both of which are necessary to put over such an organization. It would be attended the first few years with trials and tribulations, but it is perseverance and sticking at it that brings success, and if you start right and stick at it steadily and long enough you will succeed. While I am not meaning to criticize the State Department for the grades promulgated by it some time ago, as the State officials doubtless did what they think was right, yet from a marketing standpoint I unhesitatingly say that there are too many grades. I am not sufficiently acquainted with the quality and percentages of meats according to which your seedling nuts are sold, but I unhesitatingly say that from the standpoint of size you do not need one-third as many as have been laid down. If I am not mistaken, there are about eleven grades provided. But barring the question of quality, you do not need more than three from a selling standpoint. The National Pecan Growers Exchange does not handle a great many seedlings, as most of our members do not have seedling trees; but we handle some seedlings, and we have never found it necessary to divide them into more than two grades, the small and the larger sizes, and without knowing more about your product I venture the suggestion that two, or three grades at the very outside would cover your requirements fully from the size standpoint. When you have too many sizes or grades you complicate the problem, and selling should be done upon as simple and uncomplicated a basis as possible. The sales manager does not want to be hampered with too many grade refinements, and neither does the trade. The Exchange of which I have had the honor to be the head for the past 54 FOURTH ANNUAL MEETING six years has more than doubled its membership the past year, and is handling nuts from all over Georgia, Florida and Alabama, and has a few members in Mississippi and Louisiana and the Carolinas. We are planning soon to establish local or sub-exchanges at other points where production justifies, and it is our hope, and we do not think it an idle dream, to extend our handling and selling service to the growers of Texas, at which time we believe that arrangements can be worked out satisfactorily whereby the growers of Texas seedlings as well as paper shells will join hands with us. Please bear in mind that the National Pecan Growers Exchange is organized on a plan that is broad and elastic enough to meet the needs of the entire pecan growing area of the United States; while the headquarters is in Albany at present, yet as production grows doubtless the head office will be moved further west, where it will be more nearly in the center of production. It was started at Albany, Ga., because that is the headquarters of the paper shell industry; but we do not want to be regarded in any sense as sectional or as confined to the budded varieties, and as we come west due and proper representation on our Board of Control and Management will of course be provided for, so that every section co-operating with the Exchange would be amply and satisfactorily represented. I thank you for your attention and opportunity to address you.

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