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History
of the Vineland Co-Operative
Produce
Auction Association Inc.
By
Charles
C. Bylone
President
I would like to take this opportunity to talk to you about the history
and success of one of the largest produce auctions on the east coast; "the
Vineland Cooperative Produce Auction Association Inc". It is known as the
leading farmer owned and operated produce auction in the entire country.
In 1861, a land developer named Charles K. Landis purchased 48 square
miles of land from R. Wood for $7.00 an acre. He stayed on a farm on the
northwest corner of Main Road and Park Ave. At that time, Main road was
called" Horse Bridge road". In 1885 he bought 3,500 acres east of
Panther Creek and called it "New Italy". Two large bronze monuments
were placed on Panther Road, one mile apart. They were the panther and a
cornucopia.
Mr. Landis noted that the sandy loam soil conditions were ideal for the
production of grape. He promoted his idea by asking Italian immigrants who had
this knowledge of grape production to come to this area (New Italy).
He offered them 20 acres of land, which they had to clear and farm for
the growing of grapes.
When the Italian immigrants came to this country, they settled mostly in
the south Vineland and East Vineland (New Italy) areas. This migration took
place in the late 1800's.
In 1882, Dr. Thomas B. Welch and Harry Upham formed a partnership for the
manufacture and sale of unfermented wine. This partnership started the company
called "Welch's Grape Juice". The company lasted only a few years and
later moved to western N.Y. State.
The Italian immigrants discovered that the land in Vineland was more
suited for the production of vegetables. They began to produce sweet potatoes,
pickles, peppers, black berries and strawberries.
In the South Vineland area, they began a more intensified farming of
early vegetables. Such examples were early lettuce, carrots, beets, parsley,
cabbage and many other varieties.
The farmer hauled his produce to the local freight station to be shipped
to the commission houses in New York and Philadelphia. The freight stations were
located in Vineland, Bridgeton, Rosenhayn and Norma. The vegetables were packed
in barrels, hog heads, burlap bags, and hampers.
In 1883, 100,000 quarts of blackberries were marketed for .03 to .06
cents per quart. In 1886, 1600 tons of grapes were harvested at .10 cents per
pound. In 1896, the production of blackberries increased to 247,100 quarts. In
1882, 2000 quarts of strawberries brought $125.00 at .06 cents per quart.
In the 1920's, trucks became a more practical way of shipping produce to
local markets. The local buyers purchased their own trucks and began to pick up
produce at the farms. This was more convenient for the grower. It eliminated the
long haul to the freight station by horse and wagon.
Thus the farmer was able to remain at home and take care of business on
the farm.
Prices on the commodities shipped were often incorrect and misleading.
The farmer had no way of knowing if the price was good enough for him to
continue to ship produce to the market. The farmers began to look for other ways
to market produce.
In the early 1900's, the concept of auction markets began in New Jersey.
In 1912, the Hammonton co-op was the first auction in the area. The Cedarville
co-op started in 1928 and the Vineland produce auction began in 1930 and became
a co-op in 1931.
On April 30, 1930, a group of South Vineland growers formed a committee
to begin a produce auction in Vineland. They met with the officials from Landis
Township and obtained a gravel pit on north main road to be used as a produce
auction market. It was located along the side of the main avenue fire hall near
oak road. Five acres was given to the board by the Landis Township Committee and
a 99 year lease was prepared by the committee to be renewed every seven years
for one dollar.
Jack Thornborrow
President
Joseph Moslo
Vice-President
Oswald Stern
Secretary
The
first directors of the board of directors were: Frank Miller, Harold Clark, Alex
Tonetta, Lou Campregher, Joseph Castognola and Joseph Scarpa
A bid was accepted on May 4, 1931 to construct an auction block shed at a
total cost of $437.00. The bid was from John J. Ferrari. Mr. Alfred Pagnini was
made clerk of the market at $20.00 per week. The by-laws were prepared by the
county board of agriculture and accepted by the board on May 4, 1931. Mr.
Douglas reed was accepted as the auction master and auctioneer at $30.00 per
week or $5.00 per day. Mr. Rose, from the division of markets of the state of N.
J., assisted the board in forming and setting up the first auction. Mr. D.
Babbitt, Cumberland county agriculture agent was also helpful in this early
formation.
The first auction was held on May 21, 1931 at 12:00 p.m. Circulars were
mailed to all farmers and buyers advising them of the date and time of the sale.
The Franklin growers produce association asked permission to use the Vineland
auction to sell their produce at a cost of one cent per package.
Mr. Harry Richardson of Minotola, N.J. was awarded the privilege of
having a soft drink and sandwich booth at the auction on June 10, 1931. On July
10, 1931, Sam Ronchetti sr. was hired as a helper at $1.25 per day.
On July 8, 1931 , the secretary purchased the first adding machine from
Smead Brothers in the amount of $65.00. A payment plan of $10.00 down and $5.00
per month was set up. On august 12, 1931, the board of directors made a motion
to cut expenses and reduce the auctioneer’s salary from $5.00 to $2.50 per
day.
In October of 1931, Louis Ferrari was accepted as a director to replace
Joe Castignola who resigned. Mr. Rose, from the division of markets, Mr.
Babbitt, Cumberland county agent and Mr. Ross, the Atlantic county agent, spoke
of the advantages of having a sweet potato market at the auction. Better quality
standard packaging would attract buyers and better prices.
A meeting of sweet potato growers was held at the Panther Road Hall, East
Vineland on December 7, 1931. Mr. Alex Tonetta appointed the following growers
to the sweet potato committee:
Angelo Gabordi John J. Braidi Paul Deola
Louis Campregher John M. Dematte Angelo Perri
It
was noted that the committee locate a suitable building to market sweet
potatoes. Mr. Dave Raffo and Viano Brothers stated that they would donate their
buildings as sweet potato loading stations. The buildings would be free of
charge to the farmers. Mr. Raffo's loading station was located on Panther road
and Italia Avenue. Sales were every day except Friday and Sunday at 2:00 p.m.
In 1932, a membership drive was held at the Panther Road. Hall. Speakers
were called in from Cedarville and Glassboro to give a report on their market
operations. It was suggested that a large crowd attend this meeting. It was
agreed that the Vineland Produce Auction would return $1.00 of the $2.00
membership fee back to the farmer. The membership fee would be $1.00 per year.
This was done to attract more farmers.
The first annual meeting was held on February 10, 1932. The following
were elected directors: Angelo Perri, John Ronchtti sr, and Albert Gallina. On
March 9, 1932, new fees were established at city hall. Selling fees were as
follows:
up to .75 fee .01
.76 to 1.50 fee .02
over 1.50 fee .03
Strawberries
.03 per crate and 2% of the selling price for bundles of vegetables. Sam
Roncehtti sr. was hired as auction master at $2.50 per day.
On June 2, 1932, the auction started a morning sample sale. The samples
should represent the load and must be taken from the middle of the load. All
fees or commissions shall be the same .03 per dollar or 3% of the selling price.
It was also noted that the auction master's salary be $25.00 per week.
In March of 1933, an addition was built to our existing building at a
cost of $131.00. Supplies were purchased from Kimble and Prince for building
materials and Jessie Morie for blocks and concrete. In the same year, Mr. Ben
Ronchetti and Mike Trucano were hired at $4.00 per week as platform boys. It was
also decided to take $1.00 membership fees from the farmer's check. The auction
could only take $1.00 membership fee if the check was over $10.00.
In 1934, the auction discussed the matter of handling packages with Mr.
William Dilk & Sons Inc., basket manufactures. No capital was needed to
purchase baskets. A discount of 6% was given the auction with an additional 2%
for cash.
The
first produce buyers were the following:
Viano
Bros.
Dandrea Produce
Morris
l. Mole
Joseph
Yore Ralph Dauito sr. M April Bros.
Musto
Bianchi
From 1969 to 1979 all but three auctions closed. Swedesboro, Landisville
(no auction), Hightstown and Vineland auctions are still open. At the present
time, there are three operating in New Jersey. The Vineland Produce Auction
accounts for more than 95% of auction sales in the entire state.
The Vineland Auction owns 40 acres of land, has 140,000 square feet of
loading docks and handles 60 different commodities. The auction operates 34
weeks as an auction and is open year round for supplies and direct sales.
About 40% of our business is done on a direct sales program and 60 % is
auction sales. We have 550 active members and handle most of the fresh produce
produced in the six southern counties of the state. Our average farm is 75 to
100 acres of intense farming and 100 % irrigation and also described as a family
farm.
The auction has increased its business from $ 2.5 million dollars in the
1962-63 season to over $46 million in 1990. Also, the auction has sold more than
7 million packages this year compared to 1.4 million packages in 1962. The
office personnel consists of one auction master, one assistant manager, two
auctioneers, four warehouse employees and five office clerks.
The auction's regular sale starts at 11:00 a.m., which is known as a
"sample sale." it operates everyday except Friday and Sunday. We have
about 140 farmers in line on a dally basis. After the sale is made, the farmer
has to make deliveries by 4 o'clock, unless the farmer and buyer agree on a
earlier or later time. When the produce is delivered, the sample is checked
against the remainder of the load. Once the produce is inspected and leaves the
auction premises, the produce is the responsibility of the buyer. If the produce
is rejected, the buyer, the manager and the farmer review the load. If found not
to be of good quality, misrepresentation of the sample, etc., the farmer can
negotiate a cheaper price or, the buyer can reject the load.
The auction is now serving certain markets, such as New England and
Canada, which represent about 60% of our sales in the spring. Also the Midwest
markets and as far south as Miami. One hundred percent of our produce is shipped
through the trucking industry. We ship eighty to ninety tractor-trailer loads of
fresh produce on a daily basis and 200 to 300 trailer loads on weekends.
Another interesting point to note is that in the year 1930, when the
auction began, the cost to the grower to sell his produce was 3 % and that
figure was changed in 1991 to 4%. Out of the 4%, the farmer receives a 2.5 %
patronage dividends refund. The operating cost of the auction is 1.5 %. All net
income is allocated to the members with 20% paid for the current year and the
remaining 80 % is retained and paid out after eight years. I can't think of any
other marketing method that can operate so cheaply and offer such good service
to its growers.
Auctions
have certain advantages over other methods of
First:
Because buyers must openly bid against each other, auctions provide the
opportunity for growers to receive competitive prices. Buyers have equal
opportunity to bid on grade and quality their trade demands. Growers can receive
a price even for low quality produce. However, price differentials provide
strong incentive for growers to produce the best quality possible.
Second:
Auctions result in wide publicity of prices reflecting supply and demand
conditions to growers, buyers and or other interested parties. Market
information is readily available and rapidly disseminated. Quotations for
private sales of produce are often based on prices determined at the auction.
Third:
Auction markets require less capital investment than other common marketing
methods because they can concentrate on selling produce, not on packing,
inspecting or transporting.
A produce auction removes from the grower, the burden of collecting
accounts and determining the reliability of the buyer. The grower is assured of
receiving payment on a regular basis. In addition, the grower’s liability for
marketing losses ends at the delivery of the produce. Accounting and credit are
valuable services often provided to members by auction markets.
Auction selling, despite its many attractive features, has certain
limitations. It requires buyers and their representatives to be physically
present at the sale. Often, growers are more dissatisfied with existing
marketing methods or institutions than buyers. Therefore, growers who want to
establish an auction market must be sure it satisfies the need of buyers as well
as their own. Even if they too, are interested in market improvements, they
cannot be forced to patronize an auction market if they believe it does not
serve their interests. Because of its competitive nature, an auction might
result in a loss of market power for buyers. Unless the auction can compensate
them in some other way, buyers might reject it as a method of produce
procurement. The most important incentive for buyers to patronize an auction is
availability of an adequate volume of produce. Larger growers often find it
advantageous to sell vegetables directly to buyers through sales agents.
Supermarkets today, are the primary retail outlet for produce. Chain
stores procure more produce directly from production areas. Most chain stores
prefer to buy from local dealers who buy from the auction rather than place
their own buyers at the auction markets. As a result, local dealers functioning
as buying brokers grew in size and importance as they reached out to service
clients all over the eastern and mid-western U. S. and parts of Canada. These
brokers began to concentrate their purchases at auction markets where they could
obtain the most quantity and variety of produce.
Buyers
The heartbeat of every auction is its buyers. There are about 35 buyers
who regularly purchase produce at the Vineland Produce Auction. Most buyers are
local dealers who could best be described as buying brokers. They play the
important role of assembling quantities of produce from several sources into
larger economical units. Most of their purchases are filling orders that have
already been negotiated.
In the early 1950's, the board of directors decided to have its members
standardize its packing methods. All produce containers must be marked as to
grower's name, address, quantity and quality.
This makes it easier for the buyer to bid because all buyers are bidding
on the same unit and quality. This method speeds up the sale and cuts down on
the time the buyer must spend at the auction.
The auction provides, free of charge to the buyer, dock space and an
office. The amount of space a buyer is given depends on the volume of business
he does with the auction. Each space or stall is about 600 square feet. The
average buyer has from 1 to 6 stalls with the larger buyers having 20 spaces.
The buyers provide all office equipment, forklifts and personnel to operate
their business. He pays on utility bills except phone services.
All buyers must be bonded through the state of N. J. Their bond ranges
from $3,000.00 to $50,000.00. We on the board of directors feel that the bonding
of the buyers is inadequate and are asking the state legislature to increase the
bonds to $100,000.00. Non-bonded buyers may purchase at the auction depositing
their driver’s license with the cashier and paying cash after the bidding is
complete and his produce is received. Many buyers operate their businesses all
year from the office at the produce docks.
The Board of Directors holds an annul meeting with the buyer to discuss
market improvements. As a result, it was determined that some method of
pre-cooling should be provided to extend a shelf life of our produce. The board
has decided that the auction will supply the platform space and the buyer will
supply the type of cooling they feel is necessary. Buyers want specific volume
of uniform-consistent quality. Consistency of quality is important for all
packages in a grower's shipment and, as much as nature allows, from day to day.
The wide variety of products available at one location has been the key
to Vineland's success. The availability of truckers in the Vineland area has
been very helpful. Growers need to keep alert to the buyer's needs and attempt
to address those needs. The Vineland Produce Auction serves producers and
buyers. In fact, it is becoming a major produce terminal.
Like
any other business, a cooperative is judged largely on how it performs; that is
how it benefits its owners. The Vineland Produce Auction unquestioningly has
done well for its member-owners. It has provided an orderly market with
competitive prices for all its produce. The cooperative earned net savings and
returned them to the cooperative members while it made necessary capital
investments. A marketing cooperative can be successful only to the extent that
it also satisfies the buyer's needs and is acceptable to them. The board of
directors has recognized this fact and has been able to keep an adequate number
of buyers competing at the auction as increased amounts of produce is offered.
It has done this by paying attention to the buyers needs.
Future
Plans
The Vineland cooperative is interested in maintaining its pattern of
growth for the future. A major constraint to growth in sales is the time
required to auction the produce. The board of directors is now working with
Rutgers cooperative extension to install electronic data processing equipment.
The department of agriculture's division of markets has played an important role
in the success of the Vineland Produce Auction.