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Virgin Islands Agricultural Experiment Station Report No. 8 October 1974 Marketing Potential for LIVESTOCK PRODUCTS in the U.S. Virgin Islands > , Wa fe +h PR wy ~, ae | “ey am T? PP a i “Us + bd ah Ey (> Sa ih i 1 4 a | Vey A ‘ " fa ui mi Qy ‘ Lt & | i a 2 i yi) Wer © | ar GY? Kah! ital 2 i ta a4 td ie al ee as a4 sft a bs ae es { VIRGIN ISLANDS AGRICULTURAL EXPERIMENT STATION Fenton B. Sands, Director St. Croix, U.S. Virgin Islands Virgin Islands Agricultural Experiment Station Report No. 8 October 1974 Marketing Potential for LIVESTOCK PRODUCTS in the U.S. Virgin Islands College of the Virgin Islands Virgin Islands Agricultural Experiment Station Fenton B. Sands, Director St. Croix, U.S. Virgin Islands CONTENTS BOPeWOrd tse e aaa wen & oom Boo w cme EEE © He Leas Summary and Conclusions ............-55....000 0+ --> Factors Affecting Total Demand ............. Population ..............0 0000s a ex BSB DH@OPHE nx 2 cin y ware 9 we a Rom betes Consumer Preferences Prices of Complementary and Supplementary Products Demand for Livestock Products ..... Beek occ ccc ee ee ee pe ee ne nee bee eee ees Pork ...... ee POE cos ence esa geet eee EN EG oe Re oe ee ee SE Miscellaneous Meat Products ...............-555: Processed Meat Products ........00 00000025 Liver and Edible Offals ............ ae LO ee ee ee ee Milk and Dairy Products ................05--055-- Total Livestock Product Consumption . Local Marketing, Demand and Market Potential . . Marketing Channels .... «2.6... eee eee Beet a ei con w amen y toe e mre 2 nae net sd dE OB BROS | ww BEGEMS trees we sean oe seco oa eae em meet comes ua @ yee Hl eee BS Goat arid Mutton eas 2 ono aan < oon eos ow nee caw & me et Poultry and Eggs ... 2.25 sce eee nee eee, Fluid Whole Milk .............2.002-00005- Supermarket Distribution System ........----:: Institutional Distribution System © ................ Market Structure and Potential ...... eee < KF OoWOVUDUOeOOAnNnND DAWN Ce el ol OMAN NYNOO HL i) Oo FOREWORD “This report, “Marketing Potential for Livestock Products in the U.S. Virgin Islands,” is one of a se- ries of feasibility studies sponsored by the newly created Virgin Islands Agricultural Experiment Station, College of the Virgin Islands. These investigations were financed totally with Federal funds made availa- ble to the Station under the provisions of the Hatch Act, Amended. Preparation of this report was accomplished by contracting for the services of Dr. Richard W. Stam- mer, Assistant Professor, Department of Agricultural Economics and Marketing, Rutgers University, New Brunswick, N.J. Dr. Stammer conducted the study and wrote the manuscript for this report. The objective of these studies was to try to determine the agricultural enterprises, both plant and animal, that have economic potential on the Virgin Islands. It is my belief that the agricultural industry must be economically sound in order to be viable. On the Virgin Islands, agriculture has been on the decline since the early part of the 1960’s. The average number of farms, farmers, and production of agricultural commodities (with the exception of fluid milk) have all declined at a consistent rate. Among the questions which are uppermost in the minds of many people are: What factors have been responsible for these declines? Can these downward trends be stopped and perhaps reversed? What is the future of the agricultural industry, particularly on St. Croix where 85 percent of the farmland is located? This report on the marketing potential for livestock products, along with the others, sheds some light on these questions. These feasibility reports have also revealed the areas where lack of training and education on the part of the farmers has adversely affected production. These subjects have now become part of the new program of the V.I. Extension Service. At the same time, the lack of information about the response of crops and livestock in this environment, which also limits production, has been recognized. These gaps in our knowledge have become the basis for the planned research program of the V.I. Agricultural Ex- periment Station. Thus, these studies have given more direction to the efforts of the Extension and re- search programs of this land-grant institution. More importantly, the results of these studies are expect- ed to be beneficial to full- and part-time farmers, as well as to potential investors. This series of reports rests squarely on the belief that a revival of agriculture would contribute sub- stantially to the general welfare through increased output of goods and services and by providing addi- tional employment. Moreover, expanded production and marketing of farm products could provide greater, and in some cases cheaper, sources of nutritious foods for consumers. Amore fully developed agriculture would complement the major industry—tourism—in two ways. First, visitors would be pleased to be served local products, especially tropical fruits and vegetables, by hotels and restaurants where such products are often not now available. Second—and perhaps more important—an expanded agriculture would tend to preserve the environment of exotic tropical islands. Most visitors and some permanent and semi-permanent residents come to the Virgin Islands to seek this environment. If this attraction is destroyed, the basis of the major industry of the Islands will be under- mined. The Virgin Islands Agricultural Experiment Station gratefully acknowledges the cooperative assist- ance and contributions from many St. Croix farmers; Rudolph Shulterbrandt, Commissioner, V.I. De- partment of Agriculture and his staff; and Bennett S. White, Jr., project consultant and former USDA agricultural economist, now retired. Fenton B. Sands, Director March 1974 SUMMARY AND CONCLUSIONS The present and future market potential for locally produced meat products in the U.S. Virgin Islands is very good. In 1972, local production accounted for only 5 percent, by weight, of total meat consumption on the Islands. Local beef production accounted for 81 percent of local red meat marketings, and this comprised 16.8 percent of total beef consumption. However, it was estimated that even production of local beef could be expanded from 60 to 100 percent, at the present time and at present prices, without cre- ating an oversupply situation. Production of most other meat products could be expanded more than beef. Furthermore, a fairly large future growth in the demand for most meat products is expected because of a continued growth in population and per-capita income. For livestock products as a whole, the U.S. Virgin Islands are most self-sufficient in the production of fluid whole milk. In 1972, they produced 90 percent of total local consumption. It was estimated that at the present time and with present prices, production of fluid whole milk could- probably be increased 20 per- cent without creating an oversupply situation. It was also estimated that local demand would probably in- crease 100 percent by 1980, subject to qualifications on population composition, tourist expenditure, and composition of tourist population discussed in the body of this report. When one considers market potential, market structure, resource base, welfare considerations, and a cursory cost analysis, the most feasible areas for expanded livestock production appear to be grass-fed beef, fluid whole milk, and goat products. These en- terprises all would utilize a portion of the considera- ble grazing resources available on St. Croix. The fea- sibility of expanding production in grain-based live- stock enterprises depends on the feasibility of eco- nomically producing grain locally, since importing grain does not appear to be an economically viable alternative. Even if studies indicate the feasibility of producing local grain, new systems would have to be developed to facilitate the marketing of any consider- able expansion in the production of poultry or pork products. The present marketing system for beef and fluid whole milk is relatively efficient and probably capable of handling a doubling in local production. Finally, there will continue to be a small, fairly select market for locally produced large and extra large eggs and this market will probably double over the next ten years. This study has uncovered several potentially fruit- ful areas of further research, among which are the following: 1. Determine the relationships between the composition of tourist expenditures and the welfare and livestock consumption patterns of the resident population. 2. Determine local preferences for various live- stock products and examine how these pref- erences change with changes in consumer disposable income. 3. Examine the cost-benefit relationship between subsidizing, if necessary, local grass-fed beef production and improving the welfare of the Native population. 4. Examine ways of encouraging increases in local milk production, since the marketing system for this product is capable of handling more output and since milk provides the population with a relatively low-cost source of animal protein. 5. If it proves feasible to produce grain crops locally, a careful analysis of where this grain should be utilized is in order. There are sev- eral possibilities. First, grain could be used in the local dairy industry which has proven its economic viability. Second, it could be used to increase the output of poultry and pork prod- ucts. Third, it could be used as a basis for cat- tle feeding operations to supply butchers, independent grocers, and supermarkets. Or, grain could be used to feed beef for the insti- tutional market. All of these alternatives should be examined in some detail and the respective benefits costs and welfare implica- v tions for each possibility should be consid- ered. 6. Since there is a ready market for pork prod- ucts and an available supply of high quality garbage from the institutions, the feasibility of a more widely used and a better-managed garbage-fed hog operation should be exam- ined. 7. If the meat production industry does expand to a considerable extent, the feasibility of producing some processed meat products should be examined. There is a large demand for these products on the Virgin Islands and such an operation would result in a greater utilization of total livestock production. Marketing Potential for LIVESTOCK PRODUCTS in the U.S. Virgin Islands by RICHARD W. STAMMER The cost per unit of production and the underlying factors affecting the supply of livestock products in the U.S. Virgin Islands have been analyzed in several other reports in this series. This report concentrates on the demand for livestock products and the effects of the present marketing system structure on prices received by producers and paid by consumers. Thus, although this report can stand alone as a marketing study, it should be considered in conjunction with the other reports in this series when analyzing questions of economic feasibility. The relevant demand from the standpoint of live- stock producers is that which is derived from demand at the consumer level. The relationship between con- sumer demand and derived farm demand depends on the structure of marketing channels and the per- formance of the marketing system in assembling products from producers and distributing them to consumers. Thus, in determining the relevant de- rived demand, it was necessary to analyze both con- sumer demand and the performance of the market- ing system. The marketing system serving the Virgin Islands livestock industry is not a single system but actually a complex of four distinct but somewhat interrelated systems. In any analysis of Virgin Islands livestock marketing, we must recognize the special functions of these individual systems. Basically, they are: 1. A small-store marketing system on St. Croix selling primarily locally produced meat prod- ucts to the native population. These stores also market some imported non-beef prod- ucts. 2. A small-store marketing system on St. Thom- as selling primarily imported meat products to the native population. 3. A chain supermarket system on St. Croix and St. Thomas that imports high quality meat products and sells them to local continentals and some natives. A marketing system on St. Thomas and St. Croix that services the institutions dealing primarily with the tourist trade, that is, hotels and restaurants. The special functions and interrelatidns of these four systems will be analyzed in more detail later in this report. However, it should be recognized that they work jointly in supplying the total demands of the Islands, and if one channel does not operate ef- fectively, another must compensate or some sector will not be adequately served. FACTORS AFFECTING TOTAL DEMAND Total demand for any product is a function of many factors; the primary ones are population, con- sumer disposable income, consumer tastes and pref- erences, and the prices of complementary and sup- plementary products. In analyzing the demand for livestock products in the U.S. Virgin Islands, it be- came apparent that consumers were a quite heteroge- neous group with respect to tastes, preferences and per-capita disposable income. Thus, to facilitate the analysis, consumers were divided into three broad 1 groups: ‘natives, continentals, and tourists.’ Of course, these groups are not mutually exclusive nor are they homogeneous. For instance, a significant number of natives have consumption patterns similar to continentals because of their incomes or changes in tastes and preferences developed from a period of residence in the U.S. mainland. However, the sole purpose of this breakdown was to assist in the analy- sis, and it was useful for this purpose. Furthermore, in a general sense the marketing system as previously defined has been developed to serve the needs of these'consumer groups. Population Total resident and tourist populations in the U.S. Virgin Islands have been growing at a fairly rapid rate. From 1960 to 1970, resident population in- creased 94 percent and from 1970 to 1972 it in- creased another 12.6 percent (Table 1). By 1980, resi- dent population is projected to be 122,340—an in- crease of 44.5 percent over 1972. St. Croix’s rate of growth from 1970 to 1972 was approximately 3 per- cent greater than the rate for St.. Thomas. Past and projected population increases are attributed to a res- ident birth rate that exceeds the resident death rate and a net migration into the Islands. If the native and continental populations increase in the same proportion that presently exists, the growth in consumption of livestock products from 1972 to 1980 should be significantly larger than 45 percent because of changes in incomes, tastes and preferences. One complicating factor affecting this projection arises from assuming that continental and native populations will have the same proportions in 1980 as in 1972. Since the per-capita consumption of certain livestock products is considerably higher for continentals, due primarily to a higher average in- come and different tastes and preferences, a shift in this proportion would affect the demand projection. Unfortunately, there are no reliable data available indicating how these proportions changed over time or how they are projected to change in the future. There is some evidence, however, that in the past *The following definitions of consumer groups were used in this study: Natives were considered to be, for the most part, non-Caucasians born in the Caribbean area. Continentals were all Caucasians and other persons born outside the Caribbean area but residing principally in the Virgin Islands. Tourists were persons staying in the Islands for a period of less than six months a year. 2 Table 1—Population growth and projections, U.S. Virgin Islands, 1970-1985 Virgin St. Year Islands St. Croix St. John Thomas 1970 75,150 35,940 1,920 37,280 1971 79,830 38,510 2,040 39,280 1972 84.650 41,160 2,150 41,340 1973 89,620 43,900 2,270 43,450 1974 94,730 46,730 2,390 45,610 1975 99,980 49,650 2,510 47,820 1976 105,380 52,650 2,630 50,100 1977 110,910 55,740 2,760 52,420 1978 113,820 57,320 2,830 53,670 1979 118,080 59,680 2,930 55,480 1980 122,340 62,030 3,030 57,280 1981 126,600 64,390 3,130 59,080 1982 130,860 66,750 3,230 60,880 1983 135,110 69.110 3,320 62,680 1984 139,370 71,460 3,420 64,480 1985 143,630 73,820 3,520 66,290 Source: Virgin Islands Department of Health Table 2.—Air and cruise ship passengers landing in the U.S. Virgin Islands, 1965-72 Cruise Fiscal Air ship Total year passengers passengers 1965 354,370 109,340 463,710 1966 436,780 117,660 554,440 1967 516,300 133,360 649,660 1968 651,100 166,120 817,220 1969 772,500 213,540 986,040 1970 669,820 251,080 920,900 1971 657,060 253,870 910,930 1972 742,850 364,640 1,107,490 year or so net immigration of continentals has dec- lined.” This decline in net immigration, which has been attributed primarily to the Fountain Valley af- fair and related events, may be temporary, and, if so, it will have little effect on future consumption. But if the trend does become permanent, then the changing composition of consumers could result in a smaller increase in total demand than the percentage in- crease in total resident population. * The primary evidence of this decline is a decrease in property values in prime undeveloped land. Since the sup- ply of this land is relatively fixed, it appears that the de- crease was duc to a lessened demand. Primary buyers of this type of land are continentals. There is also some evi- dence of this decline in the consumption figures for vari- ous meat products. Changes in the tourist population also have a sig- nificant effect on demand, especially because tourists tend to consume a relatively high proportion of live- stock products. From 1965 to 1969, air and cruise ship passengers visiting the Virgin Islands increased 113 percent (Table 2). Because of the general eco- nomic conditions in the U.S. mainland in 1970-71, the number of tourists declined somewhat, but by 1972 total air and cruise ship passengers were above the level established in 1969. During the 1969—72 period, however, a dramatic shift, from the stand- point of livestock product consumption, occurred in the expenditure patterns of tourists (Table 3). Al- though total tourist expenditures over this period increased 8 percent, the amount spent in bars and restaurants decreased 39 percent. ‘This decrease in tourist expenditures on food items had a significant impact on livestock product consumption in the U.S. Virgin Islands during this period. The decline in tourist expenditures in bars and res- taurants during a period when total tourist expendi- tures were increasing was due to a shift in the compo- sition of the tourist population. The U.S. Virgin Is- lands were attracting more tourists who were interest- ed in taking advantage of the free port privileges in a single day’s shopping spree, but fewer tourists were spending their vacation on the Islands. This fact is also reflected by the 18-percent decline in tourist expenditures in hotels and in the relative increase in cruise ship passengers in relation to air passengers during 1969—72. The impact on St. Croix was even more marked than on St. Thomas. Tourist expendi- tures in St. Croix bars and restaurants declined 66 percent from 1969—70 to 1971—72, and expendi- tures in hotels declined 34 percent. Although it is difficult to predict the direction of tourist expenditures in bars and restaurants, it is ob- vious that this factor will significantly influence future livestock product consumption in the Virgin Islands. In summary, because population is an important factor affecting total demand for livestock and live- stock products, it seems apparent that increases in resident and tourist populations will cause a marked increase in the demands for these products. Income Most meat products are very income-elastic and, thus, the income levels of the resident population in the U.S. Virgin Islands will have a significant impact on total demand. Moreover, it is important to exam- ine not only average per-capita income but also distri- bution of income when analyzing changes in con- sumption. ‘ According to the 1970 census, the median cash in- come for all families and unrelated individuals in the U.S. Virgin Islands was $4,656—more than 1,000 percent over the 1950 figure (Table 4). In real terms, this increase in median income was approximately 730 percent. Distribution of incomes also changed significantly over this period. For instance, in 1970 10 percent of all persons reporting had incomes of less than $250, while 31 percent had incomes in excess of $10,000. In 1950, 14 percent of those reporting had incomes of less than $100 and more than 50 percent had annual incomes of less than $500. Improvement in both median income and the dis- tribution of income over the past 20 years has un- doubtedly had an impact on livestock product con- sumption in the Virgin Islands. However, there is still a significant proportion of the resident population that probably cannot afford to purchase these live- stock products in any significant quantity. Forty-five percent of all families had incomes of less then $6,000 in 1970 (average family size was five persons) and, 56 percent of unrelated individuals had incomes of less than $3,000. Also, the greatest impact of low income fell.upon the native Negro population where 55 per- cent of the households (average household size was 5.5 persons) have incomes of less than $6,000 and 64 percent of unrelated individuals had incomes of less than $3,000. Estimated per-capita income for all persons in the U.S. Virgin Islands was $1,992 in 1970, Negroes hav- ing an estimated per-capita income of $1,732. ‘These income levels are significantly below those of the U.S. mainland where average per-capita income of all per- sons was $3,910 in 1970. Income distribution was also quite different since in the U.S. mainland 26 percent of all families had incomes of less than $6,000, and 46 percent had incomes over $10,000 in 1970. The important factor, from the standpoint of live- stock product consumption, is that median incomes in the U.S. Virgin Islands have increased about three times as fast as median incomes in the U.S. mainland between 1950 and 1970. If this trend continues, the income gap between the mainland United States and the Virgin Islands will continue to narrow and many more persons will enter the meat consuming market and others will be able to greatly increase their meat purchases. It seems likely that median income for all 3 (%8+) 9628+ (%6I1+) 98¢6'4I+ (%01—) ose'6— LIL‘801 OSl‘I6 08+‘00I TIVLOL (%26+) +10°6+ (%0L+) 868°0I+ (%11—) +88I— S64'92 c6c’c] 6L¥ELI sainyipuadxa saIpO (%66—) SOL‘E— (%zE—) #89'%— (%I11—) 120I— - 6eg‘g 60¢'8 oss’6 syUBIne}sal 2 sieg (%¢ce+) goo'rIt+ (%LE+) 9¢8hI+ (%6—) scs'g— 882°C ZSt OF CBC bh saio}s sonbiy 2 sdoys 31D (%8I—) SL0°8— (%11—) ¢BbG— (%6—) 766'%— IITIZ $609 98 1°62 s[910H spurs] uIsitA “SD IV (%8+) ¢orst rar’ OIF LZ 848'6e IWLOL (%8S+) 960°b+ SStl 062'9 LOO'L saanjipuadxa 13410 (%99—) @eI't- ¥60'I 088‘2 9IZE syuBIne}soI ® sIeg (%9b+) 790°h+ 11621 C88 648'8 $a10}s Jonbr 2 sdoys 4j15 (%rE-) ZE9'E— F60'L 6686 92401 s[910H, 7 XTOI 3S (%st+) gee°et+ COP OL 0z4‘¢9 ZE9'OL TW.LOL (%Lb+) B16 b+ OFS SI cOs‘6 Zor'Ol sainjipusdxa 33y1O (%ce—) EBs'I— I€Z‘F 6729'S F1E9 SJUvINGsSaI 3 sIVg (%0e+) 1469+ LLE GF LEOCE 9Er'ce “sagoys Jonbiy 2 sdoys 315 (%bo—) Sb'b— LIO+I 662'9I 09+'8I $930} uyof 1g pue sewoyy 3S ZL-IZ61- ZL-1261 IL-OL61 - ° ° ZL-IL61 1L-0261 0L-6961 wary 0£-6961 IL-OL61 0L-6961 aduvyy) aduvy’) azuvy,) ZL-69G6I ‘SPURIS] ULFITA “S*f] ‘SeanyIpuedxe ys1Mo]—* a1quL, Table 4.—Cash income of families and unrelated individuals, U.S. Virgin Islands, 1969 All U.S. Virgin Islands St. Croix only Item Total White Negro Other Families 13,135 2,987 8,940 1,217 6,744 Percent of families with incomes less than $250 4 2 + 3 3 $3,000 17 7 21 14 17 6,000 45 19 55 48 47 $10,000 69 35 79 75 70 25,000 95 84 98 97 95 Median income $6,612 $13,373 $5,512 $6,272 $6,442 Mean income 9,062 16,082 6,884 7,889 8,926 Estimated per capita for persons in families 1,810 4,470 1,250 1,610 1,970 Number of unrelated individuals 8,112 1,605 6,444 393 4,137 Percent of individuals with incomes less than $250 20 9 22 21 19 $3,000 56 27 64 47 54 6,000 82 51 91 81 82 $10,000 92 75 98 95 93 25,000 99 97 99 99 99 Median income $2,479 $5,845 $1,948 $3,221 $2,637 Per-capita mean income 3,467 7,269 2,912 3,596 3,633 All families and unrelated individuals’ Median income $4,656 $10,299 $3,821 $5,381 $4,661 Mean income 6,873 12,996 5,052 6,841 6,914 Estimated per-capita income 1,992 4,830 1,396 1,732 2,168 Source: U.S. Census of population ‘Estimated from: U.S. census figures persons could double between 1970 and 1980. A doubling in income in combination with the project- ed population increases could result in nearly a 100- percent increase in resident livestock product con- sumption. No data are available detailing what has happened to per-capita incomes since 1970. However, in spite of what was projected in the previous paragraph, there is one situation that should be closely analyzed: the income effects of the aforementioned decline in tour- ist expenditures in hotels, bars and restaurants dur- ing the past few years. These declines could have a greater negative impact on low income persons than the positive effects generated by increased tourist expenditures in other categories. It should be re- membered that the upward income mobility of low income persons will have a greater impact on live- stock product consumption than any other changes in personal incomes. By observation, it appeared that a much larger proportion of low income persons were employed in hotels and restaurants than in any other sector of the tourist industry. Since both total wages paid and gratuities will decline in some proportion to expenditures in this sector, the $11.8 million decline in such expenditures in the past two years was bound to have a significant effect on the welfare of low in- come people. A decline in expenditures will also have an indirect effect. Because low income people will spend most of their income in the Islands and because they also have a very high marginal propensity to consume, the multiplier effect will be quite large and the decline in total income will be several times the initial decline in wages and gratuities. In addition, probably a larger 5 proportion of total expenditures in hotels, bars, and restaurants remains on the Islands than expenditures in other tourist enterprises. If this is true, then the multiplier effect of changes in tourist expenditures in these establishments will be much greater than for other tourist businesses and, thus, declines in these expenditures will have a greater impact on the total income picture for the Islands than increases in tour- ist expenditures in other areas. This whole area war- rants more research, but if the trend of the past few years is not altered, then the increase in total resident meat consumption between 1970 and 1980 will prob- ably fall quite short of the projected 100 percent. Consumer Preferences Environment, ethnic group, experience spectrum, and cultural background will all affect consumption patterns for livestock and livestock products. Thus, tourists, natives, and continentals will all have some- what different between-group and within-group con- sumption preferences. It was not possible, within the time limits of this study, to analyze the consumption patterns of the various groups comprising the Virgin Islands population. Also, the interpretation of per- capita consumption figures (as will be done later) does not yield a clear cut indication of tastes and pref- erences since per-capita income also has a significant effect on these figures. However, from observation and cursory analysis, it did appear that, as a whole, Virgin Islanders have a greater preference for goat, lamb, mutton, and poultry, and a lesser preference for dairy products and possibly pork than the average continental U.S. consumer does. For other products, it was more difficult to differentiate between prefer- ence effects and income effects. Some overall change in taste and preferences for the resident Virgin Is- lands population can probably be expected. Howev- er, this change will probably be very gradual and not have a large effect on meat consumption in the next 10 years unless there is a major change in the compo- sition of the resident population. Prices of Complementary and Supplementary Products The lower a person’s disposable income, the more conscious he is of price differences between supple- mentary products. Thus, there is a higher probability that he will change his consumption pattern when relative prices change. Since a large portion of the 6 resident Virgin Islands population would be classified as low income people, it was expected that any change in relative prices would cause some shift in consump- tion. Of course, because of personal tastes and pref- erences, most consumers will hold to some minimum level of consumption for some products. A much smaller portion of the Virgin Islands resident popula- tion will have a relatively small cross elasticity of de- mand for livestock products due to their relatively high incomes. Finally, tourist demands for livestock products are not very responsive to changes in meat prices, since raw product cost is a relatively small part of the cost of a meal away from home. Thus, meal prices are not as variable as raw product cost. In this study, some analysis was made of consumer shifts in response to relative price changes. Time did not permit a complete analysis of these shifts and only shifts between meat products were considered. How- ever, if livestock product prices increase relative to other food products, a shift away from livestock products will occur. This is especially true for low- income persons. If world demand for livestock prod- ucts continues to increase faster than world supply (which is quite possible) there will be a tendency for some shifting from livestock to nonlivestock food products within the Virgin Islands. This shifting will dampen the positive effects on consumption exerted by population increases and higher per-capita in- comes. DEMAND FOR LIVESTOCK PRODUCTS This section presents a brief analysis of the present demand situation, changes in demand over the past three years, and potential future changes in demand for each of the major product groups. This analysis depends, to a large extent, on functional demand re- lationships developed in the previous section of this report. Several types of consumption data are presented for each commodity. First, since the major portion of total livestock product consumption in the Virgin Islands is imported, an analysis of import data for 1970-72 is presented. These analyses will include data on total quantities imported, average price per unit of quantity imported, and point of shipment. Prices reported in the tables are f.o.b. shipping point; a delivered price can be derived by using the representative transporta- tion costs in Table 5. It should be recognized that a large part of meat shipments reported as being from Table 5.—Transportation rates per cwt. for full truckloads Frozen Point of packaged origin Poultry Carcass beef beef New York $2.96 $4.48 $3.25 Florida 2.78 4.22 3.04 San Juan 1:75 1.75 1375 San Juan, Puerto Rico are actually transshipments that originated in the U.S. mainland. Values shown in the tables, however, are f.0.b. San Juan. Per-capita consumption figures for livestock prod- ucts (1971 and estimated consumption) for the popu- lation of the Virgin Islands, together with a compari- son with U.S. mainland figures, are given in Table A— lin the Appendix. Beef From 1970 to 1972, total beef imports into the U.S. Virgin Islands declined 45 percent (Table A-2). During the same period, local beef production, which was about 16.8 percent of total consumption in 1972, increased by 20 percent. However, total beef con- sumption declined by 39 percent (Table 10). At first glance, this appears to be inconsistent, for during this period population was increasing and presumably per-capita incomes were also increasing. However, the decline in beef consumption reflects the full im- pact of the primary and secondary effects of declines in tourist expenditures in hotels, bars and restau- rants. Beef is the primary livestock product con- sumed by tourists and virtually all this beef is import- ed. Locally produced beef is consumed primarily by natives-and a small percentage of continentals. The correlation between beef imports during this period and tourist expenditures in bars and restaurants was .95. This figure indicates that a large part of the dec- line if beef consumption was directly attributable to a decline in tourist beef purchases. It is also believed that the previously mentioned secondary effects of the decline in tourist expenditures are reflected in beef consumption figures. Beef has the highest aver- age price per pound of any livestock product group- ing. Thus, when the incomes of low and low-middle income persons decline, the first meat item sacrificed would be beef, especially the higher grade and higher priced imported beef. Moreover, when wage and gra- tuity incomes for people employed in hotels, bars and restaurants decline, they purchase either more local beef or other less expensive food items. The future demand for beef depends largely on what happens to the tourist industry and other sources of employment. If tourist expenditures in hotels, bars and restaurants can be increased or even stabilized, or other employment opportunities opened up for residents, beef consumption should start to increase. Resident per-capita beef consump- tion was only 59 percent of that in the U.S. mainland and native per-capita consumption was only 51 per- cent in 1971. Thus, as the income level of residents increases, per-capita consumption and total con- sumption of beef should increase significantly, de- pending on what happens to beef prices in relation to other food prices. However, regardless of what hap- pens to total beef consumption, the production of locally produced grass-fed beef could probably dou- ble at the present time without creating an oversup- ply. Local production gives residents an opportunity to buy beef at prices that average about 25 percent less than imported beef. On St. Croix where most of the local beef is produced, butchers cannot supply their customers with all the products they wish to pur- chase. On St. Thomas there is practically no locally produced beef available. Furthermore, about 12.5 percent of the 1972 beef imports came from coun- tries outside the continental United States—New Zea- land, Argentina, Panama and the Dominican Repub- lic. Generally, this beef is grass-fed and it tends to supply a group of St. Thomas consumers similar to those supplied by local production on St. Croix. This imported beef is more expensive than locally pro- duced beef, but less expensive than the USDA choice beef imported from the U.S. mainland. Wholesalers indicated that this foreign beef is becoming harder to obtain and is getting more expensive all the time. Local producers could undoubtedly capture this market easily, the potential of which is at least 60 per- knt greater than present production. Thus, there isa large potential market for locally produced grass-fed beef and this market will exist for many years. Pork The overall trend in pork consumption is some- what similar to that for beef (Table A—3). From 1970 to 1972 pork imports declined 25 percent, local pork production declined 4 percent, and total pork con- 7 sumption declined 23 percent. Basically, two factors underlay this decline in consumption. First, the dec- line in tourist expenditures in hotels, bars and restau- rants had similar effects on pork and beef consump- tion. Second, the cause of the decline in pork con- sumption was a price effect. Pork production in the U.S. is quite cyclical and prices fluctuate widely from year to year (foreign pork represents only 1 percent of total consumption). Prices declined about 16 per- cent from 1970 to 1971 and consumption increased 18 percent over this period (beef consumption dec- lined from 1970 to 1971). In 1972 pork prices in- creased 17 percent, and this was associated with a 36 percent decline in pork consumption. Thus, pork consumption was affected somewhat by the decline in tourist expenditures (especially in 1972) but not to as great an extent as beef, and the price elasticity of demand for pork appears to be relatively high. As mentioned previously, a high price elasticity of de- mand is to be expected when a large proportion of consumers comes from low and middle-low income groups. Domestic pork production accounts for about 8 percent of total consumption. Most domestic pork comes from small backyard operations. Per-capita consumption of pork in the U.S. Virgin Islands is only 59 percent of that on the U.S. mainland. Native per-capita consumption is 38 percent of the U.S. figure. Thus, there is a very large potential market for local pork, not only because producers can easily capture a larger share of the present market, but also because the present market will undoubtedly expand as population and per-capita income on the island increase. Finally, pork consumption is not quite as dependent as beef consumption on tourist expendi- tures in bars and restaurants. Poultry From 1970 to 1972, poultry imports into the U.S. Virgin Islands and total poultry consumption both increased 7 percent (Table A~—4). It appears that most poultry products imported into the Islands are consumed by the local population. Native per-capita consumption of poultry products was approximately 2.5 times larger than per-capita consumption in the U.S. mainland. This is to be expected because poultry products were the lowest-cost source of meat protein and Virgin Islanders appear to have a stronger pref- erence for poultry than consumers in the U.S. main- land. The price effect on quantity consumed is evident from the data, but price elasticity is not as large for poultry as it is for beef and pork, because there-is no other lower cost meat product to which a consumer can switch when poultry prices rise. From 1971 to 1972, weighted average poultry prices increased 5.7 percent and total consumption declined 2.3 percent. There was evidence that a high cross elasticity of demand between various poultry products existed. This was shown by the large amount of consumer shifting between whole chick- ens, chicken parts, other poultry products, and poul- try livers in response to changes in relative prices. For instance, in 1972, the average price of whole chickens and chicken parts increased 12 percent and con- sumption of these products declined 28 percent. At the same time, price of other poultry products dec- lined 25 percent and the price of poultry livers dec- lined 76 percent, which increased consumption 275 percent and 2,300 percent respectively. Thus, al- though price elasticity for the total poultry group was relatively low, there was a large amount of substitu- tion between poultry products and the within-group cross elasticities were very high. Future total consumption of poultry products will probably increase at a slower rate than population and quite possibly total consumption could decline even though population is increasing. This is due to the fact that Virgin Islanders will most probably sub- stitute other meat products for a portion of their present poultry consumption as their incomes in- crease. Regardless of what happens to total consumption, there is a very large potential market for locally pro- duced poultry products. At present, local production accounts for only .1 percent of total consumption and most of this production comes from selling cull laying flocks. Producers indicate that the demand for fresh poultry is so strong that they can sell their entire flock to individuals in less than a day, in spite of the fact that they are selling only old hens. Miscellaneous Meat Products Native Virgin Islanders have a strong preference for meat dishes made from goat and lamb. Per-capita consumption for these products by the native popula- tion was approximately 210 percent larger than per- capita consumption in the U.S. mainland during 1972. From 1970 to 1972, imports of goat, lamb, and mutton increased 28 percent; local production de- creased | percent and total consumption increased 28 percent (Table A—5). In 1972, consumption of these products increased 25 percent even though prices rose 2 percent. Finally, goat, lamb, and mutton con- sumption were not affected by the primary effects of declines in tourist expenditures in bars and restau- rants, but they might have been affected somewhat by secondary income effects. At present, local production accounts for only 3.3 percent * of total consumption of goat meat, mutton and lamb. These products probably have the greatest market potential for local production of any meat product produced on the Islands. All of the imported goat meat was frozen and the majority of it was pro- duced in either Texas or New Zealand. At the time of this study, July 1973, butchers reported difficulty in obtaining goat meat. Moreover, the retail price was 14 percent higher than the price of locally produced sirloin steak. In the future, goat consumption should continue to increase as both population and incomes increase, and at a greater rate than the rate of population growth, assuming that the composition of the resi- dent population remains the same or that the propor- tion of natives increases. The 940 percent increase in consumption and 68 percent decrease in price of meat from bovine ani- mals between 1970 and 1972 represents a change in the composition of items reported in this classification (Table A—5). In 1970, the major import in this cate- gory was veal and it had a high average price. In 1972, the majority of meat imports in this category were cull cow beef, a much smaller percentage being veal. ‘This large increase in imports of lower grade beef indicates increased efforts on the part of the resi- dent population to obtain inexpensive beef. Processed Meat Products The price effect on the quantity of processed meat products consumed is quite evident over the past three years (Table A—6). The weighted average price of processed meat products decreased 14 percent over this period. This resulted in a 36 percent in- crease in the quantity of processed meat products * Actual local production is probably higher and may be as much as 5 percent of total consumption since a fairly large amount of backyard slaughtering of goats and lambs exists and poundages for these animals are not recorded. purchased as consumers shifted from other products such as beef and pork to processed meats. Future changes in demand for this classification of livestock products are somewhat difficult to predict because composition of the class is so varied. Some items are used primarily by institutions and their consumption is directly related to tourist expenditures in bars and restaurants; other products are used primarily by res- idents. Liver and Edible Offals Consumption of liver and edible offals bears some similarity to that for processed meat products. From 1970 to 1972, weighted average price increased 13.7 percent for these products and consumption declined 17 percent (Table A—7). However, in 1972, both prices and consumption increased. The indetermi- nate nature of the price effect on consumption is due to the fact that some of these products would be clas- sified as economically inferior goods while other products would be considered normal or even luxury goods. Also, some of the products are consumed primarily by tourists and continentals while others are consumed by natives. However, on the basis of an informal sample, it appears that the preference of Virgin Islanders for liver and edible offal products is at least equal to that of the average Continental U.S. consumer. At present, per-capita consumption of these products by Virgin Islands residents is about 40 percent of U.S. per-capita consumption. Hence, as _per-capita income in the Virgin Islands increases, consumption of liver and edible offals should increase at a rate greater than population growth. Eggs Between 1970 and 1972, imports of eggs into the Virgin Islands declined 5.3 percent, local production fell 13.4 percent, and total consumption declined 6 percent (Table A—8). Price of imported eggs did not change over this period. The primary reason for the decline in consumption was the decline in tourist expenditures in hotels, bars, and restaurants. Per- capita consumption of eggs by tourists is probably three umes that of the resident population, hence, any decline in meals eaten by tourists will significantly affect total egg consumption. The market potential for expanding local produc- tion is very large, since 91 percent of all eggs are now imported. Furthermore, most imported eggs are 9 mediums because large and extra large eggs incur a high degree of breakage in transportation. Local producers receive a premium price for their large eggs and have no problems in marketing their total production. In fact, local producers have not even tapped the chain store market. Per-capita consump- tion of eggs by residents in the Virgin Islands is ap- proximately 62 percent of the U.S. mainland con- sumption and this percentage should increase as in- comes increase. Thus, the consumption of eggs should increase at a faster rate than population growth, assuming that tourist expenditures in hotels, bars, and restaurants level off or start to increase. Along with projected increases in total demand, the egg market is also attractive since local producers have a virtual monopoly on large and extra large egg supplies. Milk and Dairy Products Fluid whole milk is the one livestock product in which the U.S. Virgin Islands is nearly self-sufficient. Estimated fluid whole milk and cream consumption for 1972 was 4,111,000 quarts, the Virgin Islands producing 90.2 percent of this amount (Table 6). Total fluid whole milk production within the Virgin Islands was, by necessity, estimated since it was not possible to obtain exact production figures for St. Thomas. Total production figures for St. Croix were supplied by Island Dairies and, thus, should be quite accurate. Total fluid milk consumption in the Islands was somewhat larger than fluid whole milk produc- tion since the processors on St. Thomas and St. Croix are reconstituting milk for the school lunch program and the processor on St. Thomas is selling some recon- stituted milk to consumers. However, the St. Thomas processor would not release sales figures for reconsti- tuted milk. Fluid whole milk consumption has continued to increase over the past 10 years, and from 1970 to 1972 it rose 22 percent which was approximately 1.74 times the growth in resident population. Even with this growth, per-capita consumption of fluid whole milk by Virgin Islands residents was still only 36 per- cent of that in the U.S. mainland. Thus, as per-capita incomes increase, total consumption of fluid whole milk should continue to expand at a rate considerably above population growth, and it is possible that con- sumption will double by 1980. Local production could probably be increased by 20 percent without creating an oversupply of fluid milk in relation to present prices. Local producers definitely have an absolute advantage in producing fluid whole milk because of the high weight-to-value ratio which Table 6—Milk production, U.S. Virgin Islands, 1959-1972 Percent Year St. Croix* St. Thomas * Total change ee ee: Quarts________-_---------- 1959 325,600 1960 398,600 1961 400,000 1962 473,200 1963 729,500 1964 880,400 526,200 1,406,600 1965 1,050,700 703,000 1,753,700 +25% 1966 1,232,300 838,000 2,070,300 +18% 1967 1,371,800 946,500 2,318,300 +12% 1968 1,414,000 990,000 2,404,000 +4% 1969 1,797,200 1,284,800 3,082,000 +28% 1970 1,895,100 1,413,000 3,308,100 +7% 1971 2,124,900 1,554,000 3,678,900 +11% 1972 2,007,100 1,700,000 3,707,100 +.8% Change from 1964 to 1969 ‘ +119% Change from 1969 to 1972 420% Change from 1964 to 1972 +163% 1 Production information was obtained from Island Dairies for St. Croix. 2 Production information for St. Thomas was estimated for 1964 and 1969 from census data and for 1972 from - data provided by St. Thomas Dairies; years in between were interpolated. 10 makes milk a relatively expensive item to transport. Imports of dairy products declined 30 percent from 1970 to 1972 (Table A—9). Again, the major reason for the decline was the decline in tourist ex- penditures in hotels, bars, and restaurants. Per-capita tourist consumption of these items is four times as large as per-capita resident consumption. However, most of these products are very income elastic and if per-capita incomes continue to increase, consump- tion of dairy products will grow at a considerably fast- er rate than population. Since per-capita resident consumption of these products was only 23 percent of Continental U.S. consumption, it would not be surprising to see total Virgin Islands consumption increase by 150 percent between 1970 and 1980. Total Livestock Product Consumption ‘The composite consumption figures for livestock products are presented in Table 7. From 1970 to 1972, total U.S. Virgin Islands consumption (in pounds) of livestock products declined by 5 percent. During this same period, population was estimated to have increased by 12.6 percent. The underlying rea- sons for this surprising decline in consumption are evident when the consumption patterns for individu- al products are examined. The consumption of prod- ucts that were most heavily demanded by tourists, or were relatively expensive, declined because of the primary and secondary effects of declines in tourist expenditures in hotels, bars, and restaurants. The consumption of products for which natives had a strong preference, or which were relatively low- priced, increased. Examination also showed evidence of high within-group and between-group cross elas- ticities of demand. It is expected that total livestock product consumption will increase in the future as both the island population and per-capita incomes increase. The magnitude of the increase in total con- sumption and the composition of this increase de- pend primarily on four factors: change in resident population, change in resident per capita incomes, changes in tourist expenditures, and changes in the composition of the resident population. LOCAL MARKETINGS, DEMAND AND MARKET POTENTIAL The data in Tables 8 and 9 indicate the trends in local meat marketings (excluding poultry) during the past four fiscal years. During this period local market- ings of beef increased 28 percent, pork 11.4 percent, goat .4 percent, and lamb decreased .4 percent. Total meat marketings (carcass weight) increased 25.5 per- cent. Approximately 65 percent of the increased beef marketings came from St. Croix; the remainder came from St. Thomas and St. Johns. Beef accounted for approximately 81 percent of local Virgin Islands red meat marketings during this period. Goat and pork marketings declined somewhat on St. Croix but in- creased on St. Thomas during this period; lamb mar- ketings declined on St. Thomas but increased on St. Croix. St. Croix produced 89 percent of the total Vir- gin Islands red meat marketings in 1970—71 and 86 percent in 1972—73. It should be cautioned that these figures represent marketings and do not neces- sarily represent an increase in production or produc- tion potential. In beef, for instance, an increase in marketings could have resulted from either an in- crease in herd production or increased marketing of breeding animals in response to higher prices or higher costs. The latter case would be one in which increased marketings meant decreased production potentials. Data indicating the percentage of total consump- tion supplied from local production for most Virgin Islands livestock products are presented in Table 10. By weight, local production supplied 26 percent of total livestock product consumption in 1972. Howev- er, this high percentage was due primarily to the fact that 90 percent of total fluid whole milk consumption Table 7.—Livestock and livestock product consumption patterns U.S. Virgin Islands Change Change Change 6 in con- in con- in con- Product sumption sumption sumption 1970-71 1971-72 1970-72 __._.___ Percent. --ssss5- Beef and veal —23 —21 —39 Pork +17 —34 —23 Goat, lamb, mutton +2 +25 +27 Poultry +10 —2 +7 Other meat products +5 +29 +36 All meat and meat products =2 —6 —9 Eggs —5 —1 —6 Milk and cream +11 +10 +22 Other dairy products 34 +6 —30 All livestock and livestock products —4 —1 —5 T1 Table 8.—Meat marketings in the U.S. Virgin Islands, liveweight basis 1969-1970 1970-71 1971-72 1972-73 St: CPR craze ere Pounds -- Beef and veal 994,460 1,181,880 1,465,700 Goat 10,910 9,500 10,100 Lamb 17,420 20,000 21,300 Pork 200,770 190,200 190,500 TOTAL 1,223,560 1,401,580 1,687,600 St. Thomas Beef and veal 95,000 153,400 210,100 Goat 6,000 2,380 7,600 Lamb 4,400 5,400 4,100 Pork 52,100 41,500 64,720. TOTAL 157,500 202,680 286,520 Total U.S. Virgin Islands Beef and veal 1,308,700 1,089,460 1,335,280 1,675,800 Goat 17,100 16,910 11,880 17,700 Lamb 26,600 21,820 25,400 25,400 Pork 224,600 252,870 231,700 255,220 TOTAL 1,577,000 1,381,060 1,604,260 1,974,120 Percent change from previous period —12.4% +16.2% +23% Source: Figures in the first 3 columns above are estimated from data on number of head slaughtered at the St. Croix and St. Thomas abattoirs. Figures in the last column are based on actual liveweight data for July 1972 to May 1973, plus an estimate of slaughter in June 1973. Table 9.—Meat marketings in the U.S. Virgin Islands, carcass weight 1969-70 1970-71 1971-72 1972-73 St. Croix Pounds ee ee Beef and veal 576,800 685,500 850,120 Goat 5,500 4,750 5,050 Lamb 8,700 10,000 10,650 Pork 140,500 133,150 133,350 TOTAL 731,500 833,400 999,170 St. Thomas Beef and veal 49,400 79,800 109,250 Goat 3,000 1,200 3,800 Lamb 2,200 2,700 2,050 Pork 36,400 29,000 45,300 TOTAL 91,000 112,700 160,400 TOTAL U.S. VIRGIN ISLANDS ‘ Beef and veal 746,000 626,200 765,300 959,370 Goat 8,500 8,500 5,950 8,850 Lamb 13,300 10,900 12,700 12,700 Pork 157,200 176,900 162,150 178,650 TOTAL 925,000 822,500 946,100 1,159,570 Change from previous year —12% +15% +22.6% Source: Data derived from Table 8 12 Table 10.—Local production and consumption of livestock products, U.S. Virgin Islands Product 1970 1971 1972 Beef and veal (pounds) Local production 713,520 649,560 857,630 Imports 7,679,730 5,786,680 4,255,740 Total consumption 8,393,250 6,436,240 5,113,370 Percent local production 8.5% 10% 16.8% Pork (pounds) Local production 169,640 169,260 163,050 Imports 2,438,600 2,889,700 1,842,000 Total consumption 2,608,240 3,058,960 2,005,050 Percent local production 6.5% 5.5% 8.1% Goat, lamb, mutton (pounds) Local production 20,640 18,325 20,365 Imports 463,010 473,110 593,890 Total consumption 483,650 491,435 614,255 Percent local production 4.3% 3.7% 3.3% Poultry (pounds) Local production 11,700* 10,800 9,800 * Imports 8,457,600 9,283,600 9,068,500 Total consumption 8,469,300 9,294,400 9,078,300 Percent local production 1% 1% 1% Eggs (dozen) Local production 165,191 * 154,150 143,100 * Imports 1,508,513 1,430,815 1,428,770 Total consumption 1,673,704 1,584,965 1,571,870 Percent local production 9.9% 9.7% 9.1% Milk & cream (quarts) Local production 3,308,100 3,678,900 3,707,100 Imports 50,388 44,700 404,300 Total consumption 3,358,500 3,723,600 4,111,400 Percent local production 98.5% 98.8% 90.2% Meat and meat products Local production 913,500 847,950 1,050,850 Imports 32,531,200 22,106,500 20,490,200 Total consumption 33,444,700 22,954,450 21,541,050 Percent local production 3.9% 3.7% 4.9% All livestock and livestock products Local production 8,273,700 8,988,800 9,235,800 Imports 29,105,500 27,080,600 26,423,600 Total consumption 37,379,200 36,069,400 35,659,400 Percent local production 229% 25% 26% *Source: U.S. Census of Agriculture * Based on a current estimated poultry population of 13,000 birds Note: Local figures in this table may differ somewhat from previous figures because these are on a calendar basis and previous figures were on a fiscal year basis. 13 was produced locally. Local production accounted for approximately 5 percent of total meat consumption in 1972, and this ranged from 16.8 percent for beef and veal to .1 percent for poultry. The 16.8 percent total consumption accounted for by local beef mar- ketings was up from 8.5 percent in 1970 because of the joint effects of a decrease in total consumption and an increase in local marketings of beef. The potential for expanding the market for locally produced livestock products is very good if the pro- per marketing channels are available to distribute the local production. However, it must be recognized that the U.S. Virgin Islands is very definitely a grain-defi- cit region and any grain-fed livestock enterprise must be based on imported inputs unless it is shown to be feasible to produce feed grains locally. If one assumes that it is not economically feasible to grow a large amount of feed grain locally and assuming that other costs of production are similar for the U.S. mainland and the Virgin Islands, then it is not economically feasible to raise grain-fed livestock on the Virgin Is- lands. This conclusion was reached thru an analysis comparing the cost of transporting a pound of final livestock product with the cost of transporting an equivalent amount of feed from Miami to the Virgin Islands. The results of this analysis are presented in Table A—10. On the basis of this analysis, it is not economically feasible to produce grain-fed beef, pork, poultry, or eggs within the Virgin Islands. Two possible exceptions to this conclusion are that it may be feasible to operate a garbage-fed hog operation and some egg producers can probably make a profit by exploiting their local favorable position in the market for large and extra large eggs. Hence, the most feasible livestock products for expanded production, based on market potential and a cursory cost analysis, are grass-fed beef, fluid whole milk, and goat. As noted earlier, goat is very much in demand on the Islands and imported supplies are scarce, high priced, and frozen. The market potential for expanding production of this product is very good. Fluid whole milk production also has a strong market potential because of its high weight-to-value ratio and the fact that milk is a relatively inexpensive protein source. At present prices, milk production could probably be increased 20 percent without creat- ing an oversupply, and there should be a good deal of future growth in the demand for milk. Grass-fed beef provides the native population with a source of beef that is cheaper and leaner than imported U.S. beef. 14 At present prices, the marketing of this product could probably increase 60 percent without creating an oversupply. Of course, the economic feasibility of expanding production of any of these products depends on costs and profits as well as market potential. Even if it does not prove economically feasible to expand produc- tion of a product such as grass-fed beef, the Virgin Islands government may want to consider the costs and benefits of subsidizing production as a part of a consumer welfare program. This would be especially advantageous to low or middle-low income natives. Finally, it should be noted that all three of these en- terprises would utilize the grazing resources that exist on the Islands. MARKETING CHANNELS The hearts of the marketing systems for locally pro- duced red meat products on the Virgin Islands are the St. Croix and St. Thomas abattoirs. These operations are run by the Virgin Islands Department of Agricul- ture, and virtually all of the beef, veal, goat, pork and lamb produced locally and marketed thru commercial channels is processed at one of the abattoirs, which also provide U.S.D.A. meat inspection and cold stor- age facilities. Some goats and sheep produced for home consumption do not go through the abattoirs, which charge 1¢ per pound liveweight for services. This charge also entitles the owner of the meat to store it at the abattoir for one week with no extra charge. The 1-cent per pound charge is considerably less than the estimated cost of operation which was 9 cents per pound (Table A—11). The 9-cent figure was estimated for the St. Croix abattoir through which most of the meat is processed. This figure may be somewhat lower for fiscal 1973 because poundage processed was high- er and because the V.1. Department of Agriculture hired an efficiency expert who initiated several operat- ing economies. The 8-cent difference between operat- ing cost and processing charge probably represents a consumer subsidy rather than an agricultural subsidy. Given present market conditions, if the full rate were charged most of the additional 8 cents would be passed on to the consumer. Finally, it was estimated that the St. Croix abattoir operated at approximately 35 per- cent of capacity in 1972. Hence, the slaughtering facil- ities on the Island do not present a bottleneck to ex- panded meat production since the abattoir could fairly easily triple its output. Beef As noted in the introduction, there are four fairly distinct marketing channels for beef on the U.S. Vir- gin Islands. One supplies natives and some continen- tals with local beef on St. Croix; one supplies natives and some continentals on St. ‘Thomas; one supplies beef to supermarkets on St. Croix and St. Thomas; and one supplies the tourist institutions on St. Croix and St. Thomas. Since the supermarket and tourist institution supply channels are essentially the same for all meat products, these will be discussed after the other channels are described. There are several channels for marketing locally produced beef on St. Croix. At the time of the study, there were two types of wholesalers operating on the Island. One type was a vertically integrated producer who also bought beef from other producers. He provided transportation from the farm to the abattoir and also delivered to butcher shops, independent grocery stores, and some local restaurants. Approxi- mately 90 percent of the beef wholesaled by this firm was from his own production unit. The other type of wholesaler purchased animals from local producers and provided transportation from the farm to the abattoir and also delivered to butchers, independent grocery stores, and local restaurants. Butchers were of three types: those who purchased only from wholesalers and paid a delivered price; those who bought cattle on the hoof (at farm) and paid a contract hauler to transport cattle to the abat- toir at a cost of approximately $5.00 per head and then provided his own transportation from the abat- toir to his store; and a third type of butcher who was similar to the aforementioned butcher except he also produced some of his own cattle. Small grocery stores and local restaurants pur- chased local beef from either of the two types of wholesalers. The production, wholesaling, and butch- er enterprises would all have to be classified as oligo- polist—that is, a small group having control of a commodity in a given market. At the time of this study, local beef sold at the farm for approximately 40¢ per pound liveweight and was wholesaled at ap- proximately 85¢ per pound carcass weight. Retail prices for local beef are presented in Table 11, col- umns | and 2. The weighted average price in butcher shops was estimated to be $1.25 per pound by using USDA conversion figures. After converting farm prices to retail equivalent prices, the farm-retail price Quality standards sought in carcass grading by a Federal meat inspector stationed at the St. Croix abattoir, are being pointed out to Dr. Fenton B. Sands (left), Director, V.I. Agricultural Experiment Station. spread was estimated to be 34¢ per pound. This farm-retail margin compares very favorably with the U.S. margin of approximately 37¢ per pound. Of course, the margin would be higher if the abattoir charged a price that equaled the full cost of slaugh- tering. However, the present marketing and distribu- tion system for locally produced beef ‘appears ‘to be operating relatively efficiently. The butchers and independent grocers on St. Thomas are supplied beef from wholesalers who purchase grass-fed beef from brokers in New Zealand and USDA standard and choice beef from brokers in the U.S. mainland. This sector of the wholesale beef industry has one dominant firm and a few much smaller fringe firms. The dominant firm wholesales sirloin steak from $1.55 to $1.80 a pound and chuck from $1.25 to $1.35 a pound. Retail prices for this beef are shown in column 3, Table 11. It was not possible to obtain enough infor- mation to calculate the farm-retail price spread for 15 this portion of the beef-marketing system. It should be noted, however, that consumers on St. Thomas pay more for grass-fed beef than those on St. Croix because of the joint effects of higher procurement costs and market performance. Pork The distribution system for locally produced pork on St. Croix is simpler than that for beef because there are no wholesalers. There are basically four types of producers, most of whom do their own mar- keting: (1) the producer selling only to individuals who pick up live animals at the farm; (2) the producer selling to individuals and butchers, both of whom pick up live animals at the farm; (3) the producer who transports live hogs to the abattoir and then delivers and sells carcass pork to butchers; and (4) the produc- er who sells and delivers carcass pork to independent grocers and individuals. The price of pork on the hoof varies from 40 to 55 cents a pound, and carcass pork varies from 80 cents to 90 cents a pound. This wide range of prices is due to the fairly unorganized nature of the pork market- ing system. Local pork retails for an average price of $1.25 per pound. ‘Thus, the farm retail price spread varies from 17 to 46 cents a pound as compared toa farm retail price spread of 38 cents per pound in the U.S. mainland. It thus appears that some sectors of the local pork marketing system are operating very efficiently and others are not. If it is economically feasible to expand local pork production, a more organized marketing system will have to be developed in order to effectively market the larger output. However, it should be noted that local production does provide consumers with pork at a price that is from 16 to 26 percent lower than imported pork products. Small stores on St. Croix buy some imported pork products from independent wholesalers. The price of pork chops from these wholesalers varies from 90 to 98 cents a pound and they sell for an average retail price of $1.35 per pound. The wholesale-to-retail price spread for these pork products varies from 30 cents to 39 cents, which is considerably above the av- erage wholesale-retail price spread of 19 cents in the U.S. mainland. Butchershops and small stores on St. Thomas re- ceive their pork through the same channels they re- ceive beef. Pork wholesalers servicing this market obtain their product from brokers in the U.S. main- land. The wholesale price of pork chops from this source varies from 90 cents to $1.45 per pound, de- pending on cut, and the average retail price in small stores was approximately $1.69 a pound. Table 11.—Comparative retail meat prices, U.S. Virgin Islands, June 20—July 1, 1973 Butcher Ave. small Ave. small Supermarket Supermarket Product shop prices, store price, store price, prices, prices, St. Croix St. Croix St. Thomas * Virgin Islands New Jersey ae Dollars iis coronas Sirloin steak (with bone) 1.40 1.55 2.69 1.85 1.59-1.69 Sirloin steak (clear) 1.45-1.50 1.69 — — T-Bone 1.40 —— 2.29 2.09 ~-—- Fillet 1.95 — 3.99 3.79 ——— Liver 1.10-1.20 — a 85 —- Ground chuck 1.10 — 1.49 1.29 1.09 Stew meat 1.10 1.25 1.49 1.49 1.39-1.49 Lamb chops 1.25-1.60 2.89 1.65-2.25 2.29-2.39 Pork chops 1.25 1.35 1.69 1.49-1.61 1.59-1.69 Goat 1.30-1.60 — wen —— ——— Whole .70 Fr és) 75 59-.79 59 Chicken legs Br) 89 .99 .99-1.08 .99 2The sample of stores on St. Thomas was much smaller than that on St. Croix; hence, these average price fig- ures may not be as statistically reliable as those for St. Croix. 16 Goat and Mutton The availability of locally produced goat and mut- ton for commercial sale is very limited and the chan- nels for marketing these products are very informal. A significant portion of the local sheep and goat herds is produced for home consumption, and, hence, the meat never enters commercial channels. The animals that do enter the commercial channels are usually purchased on the hoof by local butchers who provide the necessary transportation. Occasion- ally, however, some producer will deliver a dressed carcass to the butcher. Goats and sheep on the hoof sell for 55 to 60 cents per pound; dressed prices range from $1.00 to $1.15 a pound. A substantial amount of the goat products sold through local butcher shops is imported from Puerto Rico and Texas. These carcasses are frozen and wholesale for approximately $1.10 per pound. Retail prices for goat and mutton products range from $1.30 to $1.60 per pound. Thus, the farm-retail price spread for these products ranges from $.70 to $1.05 per pound, which is considerably greater than the spread of ap- proximately 59 cents in the U.S. mainland. Although these spreads may not be directly comparable, be- cause of different breeds and dressing percentages, most of the larger margin can probably be attributed to the unorganized nature of the marketing systems for these products. If production of goat and mutton products is expanded to any significant extent, more efficient marketing channels will have to be devel- oped. Poultry and Eggs The marketing system for local poultry products on St. Croix is fairly simple. Producers sell the largest quantity of their eggs through home deliveries, but some producers also deliver to small independent grocery stores, hotels, and restaurants. The price re- ceived for large eggs varied from $1.00 to $1.25 a dozen and the price received for mediums varied from 65 cents to $1.00 a dozen at the time of this study. No producers distribute to chain supermarkets at present. When examining these prices in terms of expanding production, it must be emphasized that present producers sell a relatively small volume of eggs to a specialized market. If egg production was expanded to any large extent, the eggs would have to be marketed through the more conventional chain store channels and producers could not expect to receive the premium prices they presently enjoy from their specialized channels. They could expect to re- ceive a price that equaled the Miami price plus trans- portation cost and a breakage factor. As mentioned previously, the breakage factor for large and extra large eggs is probably high enough that producers could obtain a somewhat premium price for these eggs. However, the market for large eggs that sell at 20 cents per dozen over medium eggs will still be quite limited. Local poultry meat production on St. Croix is limit- ed to the selling of cull birds by egg producers. These producers advertise the sale of their flocks in local newspapers and sell their birds live to individuals at from 60 cents to $2.00 each. Independent grocery stores on St. Croix and St. Thomas are supplied poultry and egg products by primarily two types of wholesalers. One type receives their poultry and egg products from a central distri- bution center in the U.S. mainland and distributes these supplies between independent groceries. They also supply one of the chain supermarkets with eggs. The other type of wholesaler operating primarily on St. Thomas buys eggs directly from large producers and poultry products directly from packers in the U.S. mainland. They then distribute these products to independent groceries and some hotels and restau- rants. The average wholesale price for medium eggs, at the time of this study, was 7342 cents a dozen and the average retail price was $1.00 a dozen in inde- pendent groceries and 86 cents a dozen in chain su- permarkets. The wholesale price for whole chickens varied from 55 to 74 cents a pound, depending on grade and wholesaler, and the wholesale price of chicken legs varied from 70 to 88 cents a pound. The retail price on whole chickens in small stores and butcher- shops varied from 70 to 85 cents a pound, and for legs from 75 to 99 cents a pound. Fluid Whole Milk The marketing system for fluid whole milk in the Virgin Islands is characterized by the existence of two ‘local monopoly processors, one on St. Croix and the other on St. Thomas. The processor on St. Thomas has a completely vertically integrated operation. He produces all the milk he processes and he delivers this milk to supermarkets, independent groceries, hotels and restaurants. He is the sole source of fluid whole milk on St. Thomas. This processor also reconstitutes 17 milk and sells it to supermarkets, independent gro- cery stores, retailers on other islands, and the school- lunch program. He also produces a fairly full line of dairy products. The delivered price of fluid whole milk on St. Thomas is 36 cents a quart and the deliv- ered price of reconstituted milk is 34 cents a quart. Prices in the supermarkets are 37 cents and 35 cents respectively. On St. Croix the only processor of fluid whole milk is partially vertically integrated but he also purchases milk from six other producers. This processor picks up milk at the farm, processes it, and distributes it to hotels, restaurants, independent grocery stores, and chain supermarkets. He also sells reconstituted milk to the school lunch program and produces some dairy products as a service item for some customers. This processor pays farmers 23 cents a quart for raw milk and wholesales processed fluid whole milk for 36 cents a quart. The out-of-store price for this milk var- ies from 37 cents a quart in chain supermarkets to 41 cents in independent grocery stores. ‘Uhus, the farm- retail price spread for fluid whole milk on St. Croix varies from 13.5 to 17.5 cents a quart. This compares quite favorably with the average farm-retail price spread of 15 cents a quart in the U.S. mainland. In fact, it appears that the fluid milk marketing system is operating quite efficiently on St. Croix in view of the following facts: 1. The U.S. mainland margin is based on half-gal- lons, which generally have a smaller farm-retail price spread than quarts. The St. Croix figures are based on quarts. 2. The capacity of the St. Croix processing facility is approximately 20,000 pounds a day, which is small in comparison to processing plants in the U.S. main- land. Hence, since St. Croix plants cannot achieve the economies of scale obtained by U.S. plants, a larger marketing margin would be expected. Supermarket Distribution System There are two chain supermarkets, Grand Union and Pueblo, providing a full line of livestock products to Virgin Islands consumers. These markets service both St. Thomas and St. Croix. Grand Union isa chain based in the U.S. mainland In their Virgin Islands stores, they market some local- ly produced beef products purchased from a local wholesaler but most of their fresh beef is imported from the U.S. mainland. They also market some fro- zen beef imported from Costa Rica. All the fluid milk 18 products marketed in the Virgin Islands Grand Un- ion stores are purchased from local processors, but most of the processed dairy products are imported from the U.S. mainland. In previous years, Grand Union has purchased sonie locally produced eggs but there were problems in obtaining a constant supply. At present, Grand Union purchases their eggs from a local wholesaler who imports them from the U.S. mainland. All of Grand Union’s chicken and pork products are imported from the U.S. mainland. Goat products are purchased frozen from Puerto Rico. The Grand Union Company has always followed a policy of purchasing local agricultural products when they are available in sufficient quantity and quality. This policy pertains not only to the Virgin Islands but also to the U.S. mainland. Hence, if sufficient quanti- ties of good quality locally produced livestock prod- ucts were available, it appears that the Grand Union supermarkets would potentially be a very viable retail outlet. All livestock products shipped to the Virgin Islands from the U.S. mainland by the Grand Union Compa- ny originate from their Washington, D.C. warehouse. From this warehouse, the products are transported by ship to Puerto Rico. The ships are then reloaded in Puerto Rico and sent on to St. Thomas and St. Croix. Pueblo Inc., the other supermarket chain serving the Virgin Islands, is a Puerto Rico-based firm. Ex- cept for fluid milk, Pueblo does not market any local- ly produced livestock products. All of the fresh beef marketed in Pueblo outlets is produced in the U.S. mainland from primarily two packing houses. ‘This beef is shipped out of the Port of New York. Frozen beef products, which comprise approximately 30 percent of total beef sales, are purchased from Costa Rica. All pork marketed in Pueblo outlets is frozen, and about 80 percent originates in the U.S. mainland and 20 percent from Puerto Rico All of the chicken products sold in Pueblo outlets originate in the U.S. mainland and are sold frozen. All eggs sold by Pueblo also are imported from the U.S. mainland. It was hard to gauge the feeling of Pueblo manage- ment towards the marketing of locally produced live- stock products. However, it appeared that Pueblo was not as amenable to marketing such products as was the Grand Union Company. Again, it may be possible to convince Pueblo management to market locally produced livestock products if they could be assured of a constant supply. Retail prices for livestock products in the two chains were virtually identical. It was not possible to obtain information on raw product prices paid or marketing margins utilized by these firms. However, at the time of the study choice steers in Omaha were selling at an average price of $46.50 per cwt.; hogs in Omaha at an average price of $39.80 per cwt.; dressed grade A broilers in New York for 45 cents a pound; and large white eggs in Chicago were selling for 56.5 cents a dozen. The comparison of average retail meat prices in the Virgin Islands and U.S. mainland supermarkets (lable 11) indicated that these chains were probably not exploiting their local competitive position and that their Virgin Islands marketing margins were probably similar to those in the U.S. mainland. This is especially true when the factor of additional handling and transportation costs is considered. There is also one discount supermarket operating on St. Croix that markets a very limited line of live- stock products. This line is comprised of fluid whole milk, frozen poultry and poultry parts, eggs, and some processed dairy products. All of these products except the fluid whole milk are imported from the _ U.S. mainland. Due to the nature of its marketing mix, this supermarket will probably not be a viable potential outlet for locally produced livestock prod- ucts other than fluid whole milk. Institutional Distribution System Except for fluid whole milk and some fresh eggs, most of the livestock products marketed through hotels and restaurants.are imported. ‘The only restau- rants utilizing locally produced livestock products are those catering to primarily the native market. ‘These establishments purchase their meat products from toca! butchers. All of the Hnid whole milk marketed through these institutions 1s produced and processed locally. The institutional livestock distribution system is dominated by two firms on St. Croix and three on St. Thomas. Two of the dominant firms operate on both St. Croix and St. Thomas. The third one on St. Thomas caters primarily to the native restaurant trade. A number of smaller firms also distribute some livestock products to hotels and restaurants, and at least one St. Croix hotel imports some of its livestock products directly from the U.S. mainland. These organizations account for probably no more than 5 percent of the total institutional business. The two dominant firms, which handle most of the business for institutions serving tourists, carry a very similar product line. ‘The livestock products handled by these firms are very high quality; all of the red meat is USDA choice or prime. Most of the red meat products are sold in portion controlled cuts, oven ready. All livestock products except butter, hams, and some cheeses are imported trom the U.S. mainland and they are shipped in containerized vessels from either New York or Miami. Butter, hams. and ap- proximately 75 percent of the cheese products are imported from Europe. A representative list of aver- age wholesale prices charged by these firms is pres- ented in ‘lable A— 12. On the basis of price, the institutional livestock market within the Virgin Islands appears to be a very attractive potential outlet for locally produced meat products. However, because ot several problems re- lating to grade and marketing services, this market 1s not, at Present, open to local producers. First. the nef soid in this market is all either USDA choice or prime and Virgin Islands producers would have to go into the feedlot business to produce these grades of product. Second, the institutions are service-oriented businesses and they are interested in a consistent year-round supply that would vary in quantity with the tourist season. They are also interested in buving from wholesalers who can supply a well-rounded product line and not just a few uems. This second fact would preclude Virgin Islands wholesalers trom marketing just a speciality product, such as lamb, to the insututions without also having a tairly complete line of other products, particularly beet. Conversely, if a beef line was developed it would probably be pos- sible and desirable to market some other livestock products through this channel. Third, institutional buyers demand a portion cut, oven-ready product. Providing this type of a product would necessitate developing a meat fabricating facility on the Islands. It should be realized that institutional buyers have a high demand for certain meat cuts, such as steaks, and little or no demand for other products such as stew meat and tripe. Therefore, a profitable institu- tional supply business depends, in part, on a second- ary market for products not demanded by the institu- tions. It is quite possible that this secondary market exists within the Virgin Islands among the low and middle-low income consumers. This would certainly be true if the secondary beef products were priced at a level similar to the locally produced grass-fed beef. 19 This could be done if the local institutional wholesal- er utilized a form of third-degree price discrimina- tion where, in a sense, he may take a small loss on sec- ondary beef products which would be more than offset by the higher profits obtained on products sold to the institutions. It should: be noted that this prac- tice would provide an economic benefit to low income consumers. Finally, it should be realized that the whole feasibility of this type of operation depends on the feasibility of producing grain-fed livestock on the Islands. ‘MARKETING STRUCTURE AND POTENTIAL Because of the present structure of the marketing systems for local livestock products, certain segments of total market potential are more easily realized than are others. The St. Croix system for marketing local beef products through independent grocery stores, butch- er shops, and restaurants serving the native popula- tion is fairly well developed. The present system could probably efficiently market twice its present beef production. This is particularly true since a large producer of local beef has embarked on a wholesale marketing operation and plans to expand his facilities in accord with raw product availability. Also, as men- tioned previously, the abattoir is operating at only 35 percent capacity and it could greatly increase its out- put. The present system could also supply expanded supermarket sales of local beef if an adequate supply was available. It should be realized that the market for grass-fed beef through supermarket outlets is Butchers preparing consumer-size cuts in a local meat market in Christiansted, St. Croix. 20 somewhat limited and will probably decline if con- sumers develop a preterence for grain-fed heef. Also, it may be difficult to convince the Pueblo chain to market local beef. The beet-marketung system could also efficiently market any grain-fed beef produced for consumption on St. Crorx. If the production of grass-fed beef on St. Croix was expanded beyond the level of local demand, at pres- ent prices, excess supplies could be shipped to St. Thomas where a ready market for this beef exists. To facilitate the distribution of this beef on St. Thomas, the St. Croix wholesaler would probably sell his beef to a St. Thomas wholesaler, such as Merchants Mar- ket, which has an established system for marketing imported grass-fed beef products to independent grocers and restaurants serving the native trade. With this type of distribution system, retail prices for grass-fed beef on St. Thomas could probably be re- duced. The present marketing systems for hogs. mutton, and goat products are very unorganized. If there was to be any substantial increase in the production ot these products, a more organized system would have to be developed to ensure efficient market perform- ance. It is quite possible that wholesalers presently marketing beef products would also provide market- ing services for these products if sufficient supply were available. Again, the excess abattoir capacity would facilitate the expansion of goat, mutton, and hog production since a new major processing facility would not have to be constructed. The marketing of poultry products is also very unorganized at the present time. Large scale egg production would require a much broader distribu- tion system than exists at present. In order to develop a broiler industry, an entirely new distribution would have to be established. This type of industry would also require a new facility:to process the broiler prod- ucts. Thus, there could be substantial marketing ori- ented costs associated with the development of a broiler industry. If production of meat products is increased on the U.S. Virgin Islands, consideration should be given to developing a facility to produce processed meat prod- ucts, which comprise over 15 percent of all meat products consumed on the Islands. ‘The production of processed meat products would result in a greater utilization of total livestock production and perhaps provide a relatively inexpensive source of animal pro- tein for local consumers. The marketing systems for fluid milk on St. Croix and St. Thomas are fairly well-developed and appear to be operating relatively efficiently. Both systems are capable of marketing the increases in total demand expected over the next 10 years. The processing of this expanding output, if available, will probably re- quire a two-shift operation at each of the processing plants and an expansion of delivery routes. However, if anything, this expanded production will probably result in more efficient marketing, since fixed re- sources will be more fully utilized and the percentage increase of variable inputs will probably not be as great as expanded output. 21 APPENDIX Table A-1.—Per-capita consumption figures, 1971, and estimated consumption Per-capita consumption for total population, U.S. Virgin Islands Product Estimated per-capita consumption for resident population U.S. Virgin Islands Estimated per-capita consumption for native population, U.S.V.I. Per-capita consumption for Continental U.S. ee ee Pounds____-- caterers — Beef and veal 74.7 63.5 55.3 108 Pork 35.5 28.8 23 60.2 Poultry 108 112 124 50.1 Lamb and mutton ay 5.91 6.4 3.1 Edible offals 5.0 4.5 3.3 11.1 Eggs (doz.) 18.4 16.7 14.8 26.8 Fluid milk and cream 43.2 38.2 25.4 107.2 Other dairy products 34.2 27.6 10.6 120.5 Explanation of Estimated Per-Capita Figures in Table A-1 Figures in the first column of Table A—1, per capi- ta consumption for the total population of the U.S. Virgin Islands, were estimated by dividing total island consumption by the sum of the tourist and resident populations. ‘Ihe figure for resident population was obtained from Table }. The estimate of tourist equiv- alent population, from the standpoint of food con- sumption, was made by using a set of data transfor- mations developed by Robert Bohall for use in the V.I. Agr. Exp. Sta. Report No. 2, “Fruits and Vegeta- bles: Production and Consumption Potentials and Marketing Problems in the U.S. Virgin Islands.” These transformations were: 1. Cruise ship passengers consume an average of one meal on the island, three meals equaling one tourist day. 2. Air arrivals spend an average of three tourists days on the islands. The average tourist day may be slightly longer, but this is partially offset by the fact that many Virgin Island residents travel to other areas for business and vacation. 3. Navy,personnel spend an average of two tourist days on the Islands. 4. Ferry passengers and Antilles Air Passengers were excluded from the analysis, since they tend to represent traffic which is offset by Virgin Islands busi- nessmen and tourists visiting other areas. 5. Each set of 365 tourist days represents one tour- ist equivalent resident. By utilizing these transformations, a tourist equiva- lent population of 6,320 was estimated for 1971, which meant the total food-consuming population was 86,150. The figures in Column 2 were computed by subtracting estimated tourist consumption from total consumption for the various food groupings and dividing by resident population. For purposes of this analysis, it was assumed that, on the average, tourists will consume twice as much beef and pork per capita and 1.5 times as many eggs as the average mainland consumer. This is due to the fact that peo- ple on vacation tend to consume more beef and pork and eat more full breakfasts than at home and also because tourists tend to have a higher average income than the average mainland consumer. ‘This last factor is particularly important in determining beef and pork consumption. In the other livestock product categories, it was assumed that tourists would have the same per-capita consumption patterns as the av- erage mainland consumer. Column 3 was calculated by subtracting the esti- mated consumption of various meat products by con- tinentals and tourists from total consumption and dividing by an estimated native population. It was assumed that continentals have the same consump- tion patterns as the average mainland consumer. Finally, all figures in Column 4, except those for beef and pork, were taken directly from published USDA figures on per-capita consumption. ‘The beef and pork figures had to be adjusted to make them compatible with Virgin Islands consumption figures, 23 because the Virgin Islands data contained a mixture of retail weight and carcass weight statistics. The data were adjusted by utilizing estimates that 75 percent of Virgin Islands beef consumption represented carcass weight and 25 percent represented retail cut weight, and 50 percent of pork consumption represented re- tail cut weight and 50 percent represented carcass weight. Table A-2.—Fresh-frozen beef imports into the U.S. Virgin Islands, 1970-72 1970 1971 1972 Average Average Average Point of shipment Quantity price per Quantity price per Quantity price per pound pound pound Pounds Dollars Pounds Dollars Pounds Dollars Miami 1,278,908 1.04 1,069,222 1.08 979,093 1.09 New York 25,644 87 161,941 1.47 160,796 1.66 San Juan . 5,818,977 .67 4,173,222 .66 2,529,330 68 Tampa 24,079 86 66,142 1,05 53,305 115 Foreign 532,120 .56 316,156 61 533,217 65 TOTAL 7,679,730 72 5,786,683 72 4,255,741 .78 Percent change from previous year —- — —25% 0 —26% +8% Source: U.S. Dept. of Commerce Table A-3.—Fresh and frozen pork imports into the U.S. Virgin Islands, 1970-72 1970 1971 1972 Point of origin Quantity Average Quantity Average Quantity Average and item price price price Cwt. Dollars Cut. Dollars Cut. Dollars San Juan Pork carcasses 11,008 43 15,159 38 9,585 40 Fresh ham shoulder 468 46 414 93 145 - 60 Cut pork (excludes offals) 4,890 49 5,695 47 2,118 68 Miami Pork carcasses — — 102 46 106 Al Fresh ham shoulder 77 .88 37 33 269 44 Cut pork (excludes offals) 2,968 63 3,128 50 3,127 58 New York Pork carcasses ——- — —- — 81 39 Cut pork (excludes offals) 2,045 .72 379 38 669 49 Tampa Cut pork (excludes offals) 2,688 46 3,656 43 2,075 58 Foreign . Pork ham shoulders 242 77 327 71 244 .69 TOTALS Carcasses 11,008 43 15,261 38 9,772 40 Fresh hams 787 -60 778 .60 658 57 Cut pork 12,591 09 12,858 46 7,989 .60 GRAND TOTAL 24,386 50 28,897 42 18,420 49 Percent change from previous year +18% —16% —36% +17% 24 Table A-4.—Poultry imports into the U.S. Virgin Islands, 1970-72 1970 1971 Point of origin Ave. price Ave. price Ave. price and item Quantity per pound Quantity per pound Quantity per pound Cut. Dollars Cut. Dollars Cut. Dollars New York Chickens 19 56 69 36 977 42 Chicken parts 53 34 141 45 915 43 Other poultry 114 90 17 Ra) 193 93 Poultry livers —_ — —- — 22 68 Miami Chickens 5,885 .33 4,140 31 4,280 355 Chicken parts 8,039 34 10,085 34 10,278 38 Other poultry 568 -60 2,629 39 12,541 34 Poultry livers 10 38 —- 138 47 San Juan Chickens 17,753 31 17,833 33 7,410 .33 Chicken parts 25,556 36 34,347 37 25,977 44 Other poultry 7,378 48 2,489 6 1,528 ‘05 Poultry livers 115 1,24 57 1.27 13,138 .30 Tampa Chickens 14,983 30 18,276 ioe 6,586 33 Chicken parts 4,080 32 2,672 32 6,246 345 Other U.S. ports Chickens — — —. — 350 43 Chicken parts 25 56 73 67 106 44 TOTALS Total chickens 38,639 31 40,317 32 19,602 34 Total chicken parts 37,753 35 47,328 36 43,522 .40 Total other poultry 8,059 49 5,185 48 14,263 -36 Total poultry livers 125 1.17 58 1.27 13,298 30 TOTAL ALL POULTRY 84,576 35 92,836 35 90,685 Of Change from previous year +9.8% 0 —2.3% +5.7% 25 Table A-5.—Miscellaneous meat products imports into the U.S. Virgin Islands, 1970-72 1970 1971 1972 Point of origin Ave. price Ave. price Ave. price and item Quantity per pound Quantity per pound Quantity per pound Pounds Dollars Pounds Dollars Pounds Dollars San Juan Meat of bovine animals 41,864 1.54 62,562 1.23 424,193 Bs ia, Goat, lamb, mutton 224,600 .63 235,325 52 194,900 49 Miami Meat of bovine animals 13,482 .76 86,942 52 42,347 .70 Goat, lamb, mutton 47,197 1.01 54,138 Pir 91,545 .78 New York Meat of bovine animals —— — 214 3.29 10,056 2.26 Goat, lamb, mutton — — 385 1.92 8,170 1.43 Tampa Meat of bovine animals — — 845 125 — — Goat, lamb, mutton 56,989 26 112,867 .29 67,193 34 Foreign Veal oa —_— 27,714 51 44,000 56 Goat, lamb, mutton 134,226 41 70,394 41 232,080 38 Corned beef 300,100 58 205,234 89 307,020 89 TOTALS Meat of bovine animals 55,346 1.35 178,277 Pit 520,600 43 Goat, lamb, mutton 463,012 61 473,109 48 593,890 49 Corned beef 300,100 56 205,234 89 307,020 89 TOTAL ALI. PRODUCTS 818,458 64 856,620 .64 1,421,510 5 Change from previous year 45% 0 +66% —14% 26 Table A-6.—Processed meat products imports into the U.S. Virgin Islands, 1970-72 1970 1971 1972 Point of origin Price Price Price and item Quantity per pound Quantity per pound Quantity per pound Pounds Dollars Pounds Dollars Pounds Dollars San Juan Pork, ham cured 798,714 .60 1,006,955 63 550,763 61 Other cured pork 84,661 .62 118,545 53 86,125 46 Dried beef, pork, poultry 67,937 48 57,341 54 65,259 49 Sausage, bologna, franks 392,143 54 384,195 Fi 29) 267,033 66 Canned meat products 231,881 .50 282,075 71 587,190 58 Other meat products (not canned) 27,492 76 91,543 36 558,724 30 Miami Pork, ham cured 29,248 82 76,944 83 27,576 1.02 Other cured pork 63,376 75 55,513 41 137,126 65 Dried beef, pork, poultry 16,685 68 8,309 80 45,652 59 Sausage, bologna, franks 105,701 77 109,351 81 141,977 83 Canned meat products 34,859 55 191,345 37 253,290 .40 Other meat products (not canned) 69,829 1.07 12,955 1.50 21,022 1.04 New York Pork, ham cured 2,721 52 28,005 65 51,977 .60 Other cured pork 17,665 31 27,750 24 20,970 .80 Dried beef, pork, poultry 24,216 40 6,825 39 5,300 54 Sausage, bologna, franks 26,043 .69 17,250 73 21,195 .82 Canned meat products 61,721 48 26,682 42 64,291 -80 Other meat products (not canned) 64,419 1.90 27,597 1.87 2,108 1,29 Other U.S. ports Other cured pork — — 64,438 .26 77,035 29 Dried beef, pork, poultry —— — 3,500 40 12,805 .54 Sausage, bologna, franks — — 10,700 9 12,960 41 Canned meat products 33,750 52 576 2.32 42,637 87 Foreign Pork, ham cured 201,381 75 194,380 A 221,169 14 Sausage, bologna, franks 87,810 wh2 57,368 67 51,503 77 TOTALS Pork, ham cured 1,032,064 64 1,306,284 .65 851,385 66 Other cured pork 165,702 .64 266,246 41 321,256 52 Dried beef, pork, poultry 108,838 49 75,975 55 129,016 93 Sausage, bologna, franks 611,700 61 578,864 62 494,668 72 Canned meat products 362,211 0 500,678 Bo | 947,408 53 Other meat products (not canned) 161,740 1.35 132,095 .79 581,854 33 TOTAL PROCESSED MEATS 2,442,260 65 2,860,142 61 3,325,587 56 Change from previous year +17% —6% +16% —8.2% 27 Table A-7.—Liver and offal imports into the U.S. Virgin Islands, 1970-72 1970 1971 1972 Point of origin Ave. price Ave. price Ave. price and item Quantity per pound Quantity per pound Quantity per pound Pounds Dollars Pounds Dollars Pounds Dollars San Juan Beef and veal 200,434 49 82,033 56 78,821 50 Lamb and mutton 200,180 61 184,244 54 127,900 53 Pork and other 232,772 25 83,031 .22 51,375 39 Tampa Beef and veal -— — — — 14,819 16 Pork and other 8,250 22 24,540 22 8,400 .16 Miami Beef and veal 37,836 52 39,241 34 121,717 73 Lamb and mutton 2,484 1.56 3,676 1.61 18,290 1.13 Pork and other 12,637 24 12,958 81 155,556 30 TOTALS Beef and veal 238,270 50 121,274 49 215,357 61 Lamb and mutton 202,664 62 187,920 56 146,190 .60 Pork and other 253,659 25 120,529 .28 215,331 31 TOTAL LIVER AND OFFALS 694,593 44 429,723 46 576,878 50 Change from previous year —38% +4.5% +34% +8.7% Table A-8.—Egg imports into the U.S. Virgin Islands, 1970—72 1970 1971 1972 Point of origin Ave. price Ave. price Ave. price and item Quantity per dozen Quantity per dozen Quantity per dozen Dozen Dollars Dozen Dollars Dozen Dollars San Juan Shell 704,190 42 664,830 46 420,440 49 Other 23,180 50 27,674 48 —— — Miami Shell 760,660 34 716,212 329 924,551 32 Other 20,480 .32 1,000 2 17,288 58 Tampa Shell — — 19,050 30 57,390 33 Other — —_ ey — = ous New York Shell —- — 1,550 34 9,100 46 Other — — 496 1.13 — - Total Shell 1,464,854 38 1,401,645 39 1,411,482 38 Other “43,659 41 29,170 .49 17,288 58 GRAND TOTAL 1,508,513 38 1,430,851 39 1,428,770 38 —5.1% +2.6% 1% —2.6% Change from previous year Table A-9.—Dairy imports into the U.S. Virgin Islands, 1970-72 1970 1971 1972 Point of origin Value Value Value and item Quantity per pound Quantity per pound Quantity per pound Pounds Dollars Pounds Dollars Pounds Dollars San Juan Evap. and condensed milk and cream 1,789,100 175 655,840 .21 740,630 18 Whole dry milk 241,960 — 103,570 — 38,400 — Non-fat dry milk 272,120 26 365,390 .24 204,790 .26 Fresh milk & cream (gal.) 7,310 1.29 10,421 1.50 9,734 2.20 Butter 195,100 61 130,930 55 129,610 48 Natural cheese & curd 366,620 44 443,680 47 626,500 41 Processed cheese 264,970 51 97,970 59 440,860 28 Miami Evap. and condensed milk and cream 5,630 21 40,595 21 33,840 .20 Whole dry milk 63,063 .26 10,475 34 12,450 27 Non-fat dry milk ——~ — 73,171 16 — _— Fresh milk & cream (gal.) 1,157 2.90 751 2.83 88,100 .90 Butter — —_ 92,701 52 67,239 td Natural and curd cheese 6,012 ef 15,423 PY 9) 15,967 93 Processed cheese 25,350 71 30,297 58 51,030 .63 New York Evap. and condensed milk and cream —_— — — 74,027 182 Whole dry milk 17,835 26 840 .89 40,000 .29 Non-fat dry milk 468,000 .10 198,080 12 221,236 .20 Butter — —_— 900 78 62,128 33 Natural and curd cheese 20,650 53 4,310 29 18,620 -29 Other U.S. ports Non-fat dry milk — _ —. —— 51,000 46 Butter —.? — 4,773 1.00 59,750 73 Foreign Fresh milk, cream 4,130 .38 —— — 3,231 93 Butter 656,649 23 625,706 .39 181,880 61 Cheese 69,799 47 51,973 54 51,360 .76 TOTALS: Evap. and condensed milk 1,794,730 18 696,437 .21 848,493 .20 Whole dry milk 332,862 25 114,884 .29 90,850 .25 Non-fat dry milk 740,137 16 636,642 19 447,027 .26 Butter 851,746 32 855,010 43 544,579 58 Natural cheese and curd 393,278 45 463,417 47 661,094 42 Processed cheese 290,318 53 128,068 59 491,894 31 Imported cheese 69,799 47 51,973 54 51,360 76 GRAND TOTAL (excludes fresh milk) 4,472,870 26 2,946,431 37 3,135,287 35 Change from previous year — — —34% +42% +6% —9% Fresh milk and cream (gal.) 12,597 1.14 11,172 1.59 101,065 1.03 Change from previous year — — —11% +39% +905% —35% 29 UVI Library Digitally signed by UVI Library DN: cn=UVI Library, c=US Date: 2002.07.07 15:05:19 -08'00' Signature Not Verified