Frozen concentrated orange juice-Offers under announcement FV-321, amendment USDA BUYS FROZEN CONCENTRATED ORANGE JUICE The U.S. Department of Agriculture today announced purchase of 383,485 cases (equivalent to 1,150,455 gallons) of frozen orange juice concentrate as a surplus removal activity. The orange concentrate, bought with section 32 funds, will be distributed for use in eligible institutions through the direct distribution program of U.S. Department of Agriculture's Agricultural Marketing Service. These purchases are a result of offers received in response to USDA's announcement October 18 (press release USDA 3643-62). Shipments in cases of twelve 32-ounce cans are to be made during the period December 3 through January 12. U.S. DEPARTMENT OF AGRICULTURE, USDA REVISES FROZEN ORANGE JUICE PURCHASES DUE TO FLORIDA FREEZE The U.S. Department of Agriculture announced today it will consider requests for cancellation of contracts with citrus processors for 383,485 cases of frozen orange juice concentrate. At the same time USDA said it had deferred consideration of additional purchases which had been requested by the industry until the full extent of damage is assessed and the need for purchases is indicated. Extremely low temperatures in Florida's citrus-producing areas this week have resulted in heavy damage to the expected record-large citrus crop. USDA's Agricultural Marketing Service contracted with processors for the orange juice concentrate on November 13, as a surplus removal activity. It was to be delivered during the period December 3 through January 12 for distribution to eligible institutions. Contractors may address requests for cancellation of all or part of their contracts to the Director, Fruit and Vegetable Division, Agricultural Marketing Service, U.S. Department of Agriculture, Washington 25, D.C. AMS said that ample stocks of USDA-donated foods are available in the area to meet immediate emergency needs of migratory and other farm labor thrown out to work by the freeze damage to Florida crops. The USDA foods, taken from stocks already on hand in State and county warehouses and distribution centers, can be diverted to stricken areas for emergency use at the request of county officials. Additional shipments of USDA foods will be provided as needed. Foods used for emergency feeding will be replaced by AMS for the regular distribution programs to schools, needy families, and charitable institutions. USDA said it would continue to keep close watch on the Florida freeze situation and that it stands ready to extend any type of assistance which it is in a position to provide. DATA ON FROZEN ORANGE JUICE PURCHASES Mr. WHITTEN. Please insert a list of those from whom you purchased the orange juice, showing how much you purchased, the price at which purchased, how much you returned to them through cancellation of the contracts, and the market price on the date of cancellation, and the price at which they sold the juice. (The information requested follows:) EXHIBIT 1.-Frozen concentrated orange juice purchased under program DMP 135a, announcement FV-321 1 No concentrate packed under the contract. Contractor incurred out-of-pocket expense of $17,340 representing purchase of containers with lithographed lids pursuant to contract which are unusable. 2 None sold to date. Contractor claims conversion from 32-ounce cans to 6-ounce cans will cost more than $1 per case (12) of 32-ounce cans. 3 Less 4 percent commissions and cash discount. 4 Contractor packed 37,349 cases under the contract and to date reworked 36,904 cases at a cost of $1.3714 per case (twelve 32-ounce cans) to make it available for sale. $ Average. (Further information is provided in the replies of the contracting parties which follow :) FLOYD HEDLUND, INDIANAPOLIS, IND. Director, Fruit and Vegetable Division, Agricultural Marketing Service, USDA, Washington, D.C.: In reply your telegram our total pack this year of 32-ounce orange concentrate only 29,052 cases. As you know from our offer we intended pack school lunch order after December 15 and at time freeze had only small quantity packed against 80,000-case contract. Have sold 32-ounce juice January 1 through March 30 at prices ranging from $8.45 to $11.65 per case. In view large proportion growers participation in this year's production, insistence by Department that we fulfill school-lunch contract would have resulted in unreasonably low returns to growers who were hard hit by freeze. FLOYD F. HEDLUND, JOHN E. DODDS, Stokely-Van Camp, Inc. CHICAGO, ILL. Director, Fruit and Vegetable Division, U.S. Department of Agriculture, Retel April 9 quantity of 105,900 cases under canceled contract No. 12-25-0106409 was never packed and therefore never sold. Bid submitted and price based upon Government estimate of 120 million box crop. Inability to acquire fruit to complete contract determined by severe freeze. Libby incurred out-of-pocket expense of $17,340 representing purchase of containers with lithographed lids pursuant to contract which are unusable. Required performance of contract impossible without loss to Libby since fruit would have to be acquired at much higher prevailing market prices after freeze. WHITLEY, Libby, McNeill & Libby. PLYMOUTH, FLA. FLOYD F. HEDLUND, Director, Fruit and Vegetable Division, Department of Agriculture, Retel April 9 covering orange concentrate packed under the contract which was canceled December 20 after the disastrous Florida freeze. Thus far we have not sold or delivered any of the product to which you refer but soon will be engaged in recoverting and preparing for sale under our label to our regular customers at price in effect at time of delivery. The conversion and preparation consists of changing lids on cans and packing in new cases at a cost of over $1 per case of 32-ounce cans. We cannot determine at present the number of cases we must thaw, empty cans, pack in 6-ounce cans, refreeze and mark in forty-eight 6-ounce cases at additional cost to us. For your further information our base price in effect at present time is $2.55 per dozen 6 ounces. FRANK J. POITRAS, Secretary, Plymouth Citrus Products Cooperative. AUBURNDALE, FLA. FLOYD F. HEDLUND, Director, Fruit and Vegetable Division, Agricultural Marketing Service, Washington, D.C. Retel normally we pack only Valencia twelve 32-ounce frozen orange concentrate, however, 10,000-case contract quoted basis late December pack of midseason variety oranges which lower cost historically. In view of contract cancellation our first pack of 12 32 ounces was 1,484 cases January 30, 1963, and 9,807 cases March 18 through March 20, 1963, in spite of 81,000-case contract 12 No. 3 grapefruit sections which was ultimately canceled; we were only able to pack total of 63,631 cases which proved short of our needs. Thus far have purchased 14,520 cases to augment our supplies, first 10,000 cases twelve 32-ounce Valencia juice sold after freeze averaged approximately $8.66 case less 4 percent commissions and cash discount. Approximate average selling price 12 No. 3 grapefruit sections since freeze $5.45 case less 5 percent commissions and cash discount. FLOYD F. HEDLUND, ADAMS PACKING ASSOCIATION, INC., DADE CITY, FLA. Director, Fruit and Vegetable Division, Retel April 9 concerning cancellation contract No. 12-26-010-6408. At the time of the freeze and cancellation of the contract we had packed only 37,349 cases of the 158,085 cases. Depended on packing out of available fruit at then prevailing prices. Due to freeze fruit was available only in limited quantities and at high accelerated prices. After cancellation of contract we reworked 36,904 cases at a cost to us of $1.374 per case to make it available for sale. Of the reworked merchandise we have sold 4,285 cases at $11.65 per case and 1,210 cases at $13 per case. W. F. EDWARDS, INDIVIDUALS INVOLVED IN CANCELLATION Mr. WHITTEN. Now, who made the determination? Mr. SMITH. Assistant Secretary Duncan. Mr. WHITTEN. That determination was made without even a legal opinion or written opinion from your General Counsel, as far as you know? Mr. SMITH. Before an official determination was made, it was discussed with the Office of General Counsel. Mr. WHITTEN. Were you present? Mr. SMITH. At that, no. Mr. WHITTEN. You are speaking only from what was told you? Mr. SMITH. That is right. Mr. WHITTEN. Who signed the orders releasing this back or voiding the contract? Mr. SMITH. The person immediately in charge of the program is Floyd Hedlund, who is Director of the Fruit and Vegetable Division. He prepared the contract cancellations which were initiated by the General Counsel. Mr. WHITTEN. In how many other cases this year have you made such purchases and then canceled contracts or resold them to the original producers or processors? CANNED GRAPEFRUIT SECTIONS PURCHASED UNDER SECTION 6 Mr. SMITH. Under section 32, none. Under section 6, canned grapefruit sections. Mr. WHITTEN. Where was that done? Mr. SMITH. The canned grapefruit sections were contracted for in Florida. Mr. WHITTEN. Could we have the list of the people involved, a copy of the contract, the dates on which the determinations to release the parties from the contract was made, the price at the time of the original contract, the market price at the time the contract was voided on the part of the Government, and subsequently, together with what profits may have been made. Mr. SMITH. Yes. (The material requested is as follows:) |