Lemon market order's bitter taste [BYBy F. Philip Stinchcomb.
ON Sept. 23, lemons in Oxnard, Calif., supermarkets were priced at $1.29 a pound, $2,580 a ton, and tons of lemons were rotting on the ground less than 10 miles away. Why? Back in 1937, the 75th Congress passed the Agricultural Marketing Agreement Act, which enabled farmers to develop and implement self-help programs to regulate the marketing of certain crops. Lemons became one of the crops.
The market order system, with the power of United States law behind it, is a lemon for consumers all over the US. The grower's association nominates 11 of their members, and the secretary of agriculture appoints them to be the Lemon Administrative Committee. No tax dollars are involved. The committee is financed by assessments on the growers. The committee has the power of the US behind it to enforce its market orders: a government-protected monopoly on the sale of lemons.
The market order does not set prices, per se. Each week the LAC determines how many lemons the market needs and authorizes the growers to ship for those needs. Of course, if estimated market needs are low, prices on the retail market will be higher and association growers can often sell their surplus to export and the juice market with no restrictions. The market orders apply only to the sale of fresh lemons in the US.
During the early part of this year, several lemon growers attacked the system of market orders and tried to have it voided. During that period lemons sold in the supermarkets for as little as 20 cents a pound. This opposition failed and recently a source in the office of the LAC said a market order for lemons has been and is now in effect.
The stated major objective of the market order is to tie harvesting to market demand. This, it is said, results in a fair price to the grower and a stable price with continuous supply to the consumer.
On Oct. 5, one supermarket quoted lemons at 79 cents each, weighing out to $1.78 per pound. Four days later, another supermarket offered lemons for 49 cents each. A bargain? No! They weighed out to $2.01 a pound, $4,020 a ton.
The current prices quoted in the local markets raises questions. What is stable? If a price fluctuation from 29 cents to $2.01 a pound over six months is stable, what is unstable?
The citrus growers say the practice is to protect a fair profit to the grower and (this ``and'' is always a part of the statement) to assure stable prices with a continuous supply of fruit to the consumer.
Two dollars and one cent a pound. Mind you, now. Lest you forget. We are not speaking of peacock's tongues. We speak of lemons, the little yellow-skinned fruit that grows abundantly on cultivated citrus trees in California's Ventura County, US lemon acreage leader.
Recently when asked why, with the vaunted price stabilization, lemons in two supermarkets were quoted from $1.78 to $2.01 a pound, the source in the LAC replied that it was due to ``sour-rot,'' a problem in Districts 2 and 3, but the price would soon be down.
It does appear that the market order, a government-protected monopoly, enhances the grower's profit when lemons are plentiful and gouges the consumer deeper when lemons are purported to be scarce.
F. Philip Stinchcomb, a retired businessman, is a free-lance writer.
