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diff --git a/old/51244-0.txt b/old/51244-0.txt deleted file mode 100644 index 821b714..0000000 --- a/old/51244-0.txt +++ /dev/null @@ -1,1271 +0,0 @@ -Project Gutenberg's The Livestock Producer and Armour, by Armour and Company - -This eBook is for the use of anyone anywhere in the United States and most -other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms of -the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you'll have -to check the laws of the country where you are located before using this ebook. - -Title: The Livestock Producer and Armour - -Author: Armour and Company - -Release Date: February 18, 2016 [EBook #51244] - -Language: English - -Character set encoding: UTF-8 - -*** START OF THIS PROJECT GUTENBERG EBOOK THE LIVESTOCK PRODUCER AND ARMOUR *** - - - - -Produced by Emmy, MWS and the Online Distributed -Proofreading Team at http://www.pgdp.net (This file was -produced from images generously made available by The -Internet Archive) - - - - - - - - - - - THE LIVESTOCK - PRODUCER AND - ARMOUR - -[Illustration] - - _The success of capital lies in ministering to the - people, not in taking advantage of them_ - - Philip D. Armour - - - 1920 - ARMOUR AND COMPANY - CHICAGO - -[Illustration: _Directors of Armour and Company_ - - George B. Robbins - C. H. MacDowell - Everett Wilson - Arthur Meeker - Frank W. Waddell - Charles W. Armour - Laurance H. Armour - J. Ogden Armour - A. Watson Armour - Philip D. Armour - F. Edson White - E. A. Valentine - Frederick W. Croll - Robert J. Dunham] - - - - -Foreword - - -THE year 1919, included as it was in the period between the signing of -the Armistice and the ratification of peace, was logically a season -of uncertainty, unrest and unsettled conditions. And yet American -business, discounting all this, entered upon and passed through this -period with full faith in a favorable outcome. - -While prosperity was general, the processes of realignment of our -economic relations hurt or temporarily hampered some lines of business. -The livestock and packing industries did not escape entirely unharmed. - -Naturally, proposed radical legislation, with accompanying agitation, -and a slump in American meat exports, caused such violent disturbance -of the livestock markets during the latter half of the year that both -producers and packers became deeply concerned as to the immediate -future of the industry. - -No array of proved facts as to the low percentage of packer profits, -no pointing out of the real factors controlling meat and livestock -prices was sufficient to convince the disturbed element of the public -and certain agents of the Government that packers’ operations on the -existing large scale were justifiable. - -Therefore, by a recent understanding with the Government, Armour and -Company will dispose of all their interests in food production, not -directly associated with and dependent upon the meat packing business. -In addition, Armour and other packers agree to relinquish interests -in stock yards and railway terminal properties at the various market -centers. The terms of the understanding permit the retention of dairy -and poultry products in view of the dependence of these on such -refrigerating and distributive facilities as the packers have provided. - -Both patriotism and enlightened self-interest command every citizen -and business to make concessions and sacrifices in times of crises, -whether of war or peace; and while Armour and Company felt that they -were clearly within their rights in their operations previous to this -understanding with the Government, it was plainly in the line of public -service to make concessions that would clear the way towards public -confidence in the development of the livestock industry. - - J. Ogden Armour - -[Illustration: Running against a “glutted market” in the “good old -days.” Today the stockman’s market is nation-wide.] - - - - -How and Why Livestock Market Grew - - -THERE was a time, within the memory of men still active in the cattle -business, when the capacity and demand of the local butcher shop -measured the demand for fat stock and fixed the price as well. - -On driving his cattle to the village, or negotiating for their sale, -it was not uncommon for the stockman to be met with the news that a -neighbor had got ahead of him and glutted the market with two or three -or more meat animals. No matter how good the offerings, there was no -present market at any price. - -This was the condition of the livestock business in the “good old -days” before the establishing of the great packing centers; before the -development of economical systems of slaughtering, saving the waste, -and distributing dressed beef quickly and continuously to the remotest -parts of the country. - -No stockman now considers the demand of the local butcher as a serious -factor in making or breaking the market for his cattle. If he is -feeding a carload or more, he has an approximate date set for the -finishing of his feed. By keeping in close touch with the supply of -cattle in the country, their movement and the trend of prices, he -chooses what appears to be the most favorable day and ships them to the -market. - -Even if he is feeding only a few head, the disposal of them is not -dependent upon local demand. He may double-up with his neighbors to -make up a car. He may belong to a shipping association that makes a -business of collecting small lots into carloads for direct shipment, -and although he sells to the local stock buyer, his knowledge of what -his cattle are worth at the central markets enables him to secure a -fair price. - -So it has come about that world demand determines prices and governs -buying activities in every town and village where livestock is -purchased. For local butchers everywhere are governed by prices at the -central markets. The truth is that the most successful butchers no -longer do their own killing, but buy their beef from packers’ branch -houses in the larger cities and towns or from “route cars” running from -packing plants or branch houses into the smaller communities. - -In doing this they get better beef at lower cost than by local -slaughtering, and they can serve their customers with a safer and more -satisfactory article because the animal is killed and the meat prepared -under the stringent government inspection and sanitary regulations -that are practiced only in the larger establishments. This insures -absolute freedom from diseased conditions and careless handling. - -Practical butchers, who are also feeders, have proved by test that they -can ship their beef cattle hundreds of miles to the big packer, have -them slaughtered, dressed and returned at less cost than they can do -their own killing. This is possible because the utilization of every -scrap of the animals in valuable by-products, and the saving in labor -by wholesale slaughtering and handling, pay all expenses, including the -freight both ways, and leave a margin for the butcher besides. - -The local butcher or livestock producer can little better afford to -kill and prepare his own beef than he can afford to tan the hide and -make his own shoes. There was a time, even in America, when the farmer -himself actually did these things. He also sheared his own sheep by -hand, while his wife and daughters spun the wool into yarn and wove -cloth for the family clothing. Progress has made such methods absurd, -unprofitable and impracticable. - -But the great machinery of economical production and distribution -was not built in a day, or a year, or a decade. Armour and Company’s -activities began more than fifty years ago. At first the packing -house was only a butcher shop on an enlarged scale, preparing and -handling pork products almost exclusively. Cattle were killed for -local consumption only, as there was no such thing as cold storage, -refrigerator car lines or branch houses for the distribution of fresh -meats. - -In those days the offal from the packing houses was thrown away or -buried, as is still done to considerable extent by the small butcher -at the present time. The by-products industries, by which hundreds -of valuable articles are now created from what was once waste, -were developed through long years of scientific investigation and -experimentation. - -The efficiency of the Armour organization of today is the result of the -accumulated efforts of thousands of trained scientific and business -minds, applied through half a century to the solution of the problem of -factoring and furnishing food supplies for the nation and the world by -the most direct and efficient means. - -Nothing less than a great and thoroughly organized concern could effect -the economies that make such achievement possible. Armour and Company’s -growth has been, and is, simply the natural expansion of a great -industry keeping pace with the progress of the producer. - - - - -Re-investment and Expansion Policy - - -NO amount of criticism, investigation, misrepresentations or -“exposures” has ever shaken Armour and Company’s faith in the fairness -and final endorsement of the great body of American livestock producers. - -That the consumer found grievance in recent high food prices and -attributed his troubles to the packer or producer, or both, was perhaps -not to be wondered at, though his reasoning was not sound. That -competing food distributors should object to the extension of packer -efficiency to general food distribution is easily understood from these -competitors’ viewpoint. - -The retirement of Armour and Company from all lines of production -and distribution not directly associated with meats and livestock -by-products, was in response to these disturbed elements of public -opinion. But these restrictions of packer activities in no way affect -the relations of mutual confidence and dependence between Armour and -Company and the livestock producers. - -The fundamental things remain, and they are these: The livestock -industry must continue to exist and expand; producers must be rewarded -with fair profits; livestock markets must be maintained and made more -convenient; and the markets for meat products must be enlarged and -extended. - -To these basic facts Armour and Company have pinned their business -faith, and upon them shaped their policy. Ninety per cent of the -profits of the Company have been re-invested in the business and -are represented today by great packing plants at sixteen market -centers, and many branch houses throughout the country, together with -refrigerator car lines connecting the livestock markets with the -consuming centers of the nation. - -It requires no argument to show the livestock producer that his -interests and profits are inseparably associated with these properties, -and it is quite as plain that the necessities and conveniences of the -consuming public are dependent upon and served by them. - -America and the world will continue to demand more and more meat and -other products from livestock. Agriculture will not successfully -continue without the production of meat animals. So the future reveals -no reason why Armour and Company should not continue the policy of -re-investing their earnings in the business that gives the most direct -and substantial support to the basic industry of animal husbandry. - -[Illustration: The packer must, with utmost carefulness, balance his -daily purchases against his daily sales.] - - - - -Aspects of Big Business Explained - - -THE simple recital of an ordinary day’s doings of Armour and Company’s -beef department will make plain a number of things that may appear -mysterious to a casual observer. Each day, at the opening of the -market, the manager of the beef department must carefully weigh the -possibilities of his sales and shipments of beef carcasses against the -receipts of cattle of the quality demanded by his trade. And he must -buy accordingly. - -The prevailing idea that, because of cold storage facilities at -the packing centers, unlimited numbers of cattle of all grades and -qualities can be absorbed and slaughtered, is wrong. For even though -cold storage capacity were unlimited, beef cannot be held. Each day’s -kill must find room in chill and storage rooms by the shipment of about -an equal number of carcasses _out_ of storage to Armour’s branch houses -located in all parts of the country. - -These branch houses must, in turn, dispose of each shipment promptly to -make room for new arrivals. Each branch manager receives a memorandum -of the cost of the beef, and of course is expected to sell it at a -profit. But he _must_ sell it within a very limited time, even if he -cannot show a profit. - -Local conditions determine this. He may meet with unforeseen -competition in the kind of meats he has ordered, or the demand for -meats may have fallen off for one or a dozen of reasons, or for no -discoverable reason at all. These known and unknown influences on the -demand govern his market and he has to accept the situation, depending -on evening up the score under more favorable conditions. - -Of course a decline or advance at one or a few branch house points, -from merely local causes, does not materially affect the market at the -packing centers, but any widespread fluctuation from general causes is -immediately reflected in cattle prices at all of the great markets. - -The best way for a producer to learn what determines the price he gets -for his livestock is to visit the nearest Armour branch house and get -first hand information on the facts that govern meat prices at the -final market. - -Any Armour branch manager will welcome visitors and willingly answer -questions. He will explain not only the factors that influence the -general level of prices, but will point out why cuts from certain types -of beef carcasses are in constant demand at the highest prices, while -similar cuts from other carcasses are neglected and sell materially -lower. - -There is a type of beef carcass that is best and commands the best -price, and it costs no more to produce than an inferior type. The same -is true of mutton and pork. Any Armour branch manager will show you -what these types are and the Armour Farm Bureau will furnish, without -charge, information on improved methods of producing the sort of -animals that are most in demand for meat purposes. - -One aspect of the big packing business, the importance of which is not -generally appreciated, is refrigeration. It is not too much to say that -without ample means of refrigeration, both in storage and in transit, -no fit and adequate supply of fresh meats and dairy products could be -supplied to the public. - -Food refrigeration originated with the meat packing business early in -its history. At first only storage refrigeration was practiced for -the purpose of conserving and equalizing the supply of fresh meats -for local or near-by consumption. Then came the conception of transit -refrigeration, and the refrigerator car was invented, primarily for the -purpose of shipping fresh meats from the producing centers of the West -to the consuming centers of the East. - -From the transportation of fresh meats, the extension of the service -to the carrying of fresh fruits, vegetables and dairy products was a -natural and easy step, resulting in the development and maintenance of -the great orchard lands and fruit and market garden areas from coast to -coast, and the tremendous expansion of the indispensable industry of -dairy farming all over America. - -To the livestock producer refrigeration in storage and in transit means -everything. Without it the great packing interests could not exist and -livestock husbandry would revert to the primitive and unprofitable -conditions prevailing fifty years ago and described in the preceding -chapter. - -These facts explain why Armour and Company have persistently -opposed every attempt to deprive them of the exclusive use of their -privately-owned refrigerator cars and turn them over to the railroad -companies for general use. To maintain the necessary constant movement -of meat products Armour must have an adequate supply of these cars -every day in the year. Extended experience has proven that they would -not and could not be supplied by any form of railroad administration, -either governmental or corporate, yet devised. - - - - -Declining Livestock Prices and the Causes - - -BRIEFLY outlined herewith is a resumé of what are accepted as the chief -causes contributing to the sharp decline in livestock prices during -1919. - -The discontinuance of Government orders for beef was the principal -thing which affected cattle prices in the late spring. From being a -purchaser the Government became a seller in the domestic market. Added -to this, there has been unusual labor unrest, large supplies, agitation -against the high cost of living, low foreign exchange rates, and the -English boycott against high prices. - -The falling off in hog prices was far more serious than in the case of -beef, because normal demand for hogs is based on the consideration of -large exports, while the market for beef is primarily and principally -domestic. - -The great demand for American pork products which was confidently -expected from European countries did not materialize, because of the -extraordinary and unforeseen development of exchange conditions which -made purchases on the American market practically impossible. - -The earlier part of 1919 was marked by an unprecedented export of pork -products, reaching in the month of June the high point of over 400 -million pounds. From this point the drop was sharp and continuous, -month by month, the figures for October showing total exports of less -than 120 million pounds—a falling off of 70% in four months. These -later exports were on orders booked earlier in the year, and not on new -business. - -Added to these principal factors, and aggravating them, were attempted -boycotts of meat and proposed radical legislation for the regulation -and restriction of the packing industry, and the resulting condition -of uncertainty up to the very closing weeks of 1919, when the -understanding between the packers and the U. S. Department of Justice -was made public. - -The big question is, What of the year 1920? While nothing positive can -be predicted, better conditions is a practical certainty. The domestic -consumption of beef is increasing to a gratifying degree; the arranging -of international credits and the opening of foreign markets is a matter -of comparatively short time. European need for pork products will be -urgent and excessive for a considerable time, and this will not only -take care of our surplus hogs, but will react favorably upon the market -for cattle and sheep. - - - - -Standard Breeds _of_ Beef Cattle - - -ABERDEEN-ANGUS - -Early maturing; transmits polled character; high dressing percentage; -high proportion valuable cuts. - -[Illustration: Aberdeen-Angus] - - -SHORTHORN - -Greatest weight for age; dress out well at slaughter; quiet -disposition; strong milking tendencies. - -[Illustration: Shorthorn] - - -GALLOWAY - -Prepotent; adapted to rugged regions; high carcass value; valuable hide. - -[Illustration: Galloway] - - -POLLED SHORTHORN - -Characteristics similar to Shorthorn except polled; some strains dual -purpose. - -[Illustration: Polled Shorthorn] - - -HEREFORD - -Best grazing breed; matures early; fattens rapidly; good weight for age. - -[Illustration: Hereford] - - -RED POLLED - -Strictly dual purpose; fair grazers; early maturing. - -[Illustration: Red Polled] - - - - -The Livestock Situation - - -RIGHT now is a good time to stick to the middle of the highway of -common sense. As shown in earlier chapters, the conditions adverse -to the business can be only temporary, and even the losses incurred -may be turned to profit in the end, if the livestock men shall learn -the lesson of economy and efficiency of production and more complete -co-operation among themselves and with the packing industry. - -Recent experiences will impel some producers to curtail or discontinue -their operations temporarily, but others will take their places and -quantity of production will be maintained while quality will be -increased. - -High-priced land, grain and labor will compel stockmen to grade up -their herds, to discriminate more closely in the purchase of feeding -stock, to improve feeding methods and to keep exact records of costs. -For at the higher level of costs and values all around, as compared -with prewar times, both the risks and rewards of the business will be -greater. - -As co-operative activities are extended among producers, it may be -found advisable for livestock associations to employ expert buyers -at the various markets whose duty shall be the filling of orders for -association members, for the choice of feeders cannot be safely based -on personal fancy. The only true guide is unbiased judgment as to what -the market demands in the finished product and what type of feeding -cattle will yield the result. - -An experienced buyer of keen judgment, constantly in touch with the -market, should prove as valuable to producers as the expert buyer of -fat cattle is to the packer. - -Such expert selection of feeders would take the guesswork out of the -first and most important step in feeding. - -Generally speaking, the consumers’ demand is constantly for better -meats from comparatively young animals. Taking the situation the -country over with present prices of feed stuffs considered, it has been -found that beef cattle make most money for the producer if not held -past the age of two years. But there is no hard-and-fast rule for the -guidance of every individual producer; the heavy, well-finished cattle -always bring high prices. Only by keeping an accurate feeding record -can the producer decide for himself what policy is most advantageous in -his case, or determine when his steers stop making sufficient gains to -compensate him for the feed required. - - - - -Armour’s 1919 Livestock Purchases - - -RISING prices of farm land and feed have changed entirely the -character of livestock received on the market as compared to twenty -years ago. The period following the war shows all conditions more or -less accentuated, and one can trace very definitely the tendency to -market animals younger and to feed to lesser ripeness than prevailed -in the earlier years of the last decade. In 1919 Armour and Company -purchased 12,235,451 head of livestock, while in 1918 they purchased -11,398,131. Yet the animals bought last year weighed actually fewer -pounds, in spite of their greater numbers, than those received the -year preceding; the former weight being 3,740,347,223 pounds and the -latter 3,939,278,534 pounds. Furthermore, the animals of 1919 cost over -nineteen million dollars more. The following table presents these facts -on a percentage basis: - - Increased number animals 1919 over 1918 7.3% - Decrease in total weight animal purchases 5.0% - Increase in cost of animals 3.7% - Increased price per pound live weight 1.2¢ - -Probably the fundamental factor in bringing about these conditions, -which are distinctly unfavorable from a quality trade standpoint, is -the feeder’s expectation of declining prices. This attitude has driven -all the animals to market almost as soon as they were in merchantable -form. The late winter months of 1919-20 saw an opposite tendency among -hog feeders, but this was not sufficiently marked to check the general -trend. - -Another factor in stimulating this hurried marketing has been the -belief that more money could be made by selling the grain crop than by -feeding it. This has given short rations to many animals that would -have made suitable market records if handled properly, but it has -enabled farmers to cash in their grain and meat crops while prices were -relatively high. - -In terms of permanent agriculture it would have been better to leave -a greater share of this cash invested in a further development of -livestock, but the war order against feeding wheat placed the situation -in some western states beyond the control of the average stockman. As a -general practice in production this incomplete utilization of livestock -must be deplored, although one cannot criticize the tendency under the -special market conditions of 1919 and early 1920. - - - - -Financial Aspects of Livestock Industry - - -ONE of the most significant and gratifying gains in the livestock -business during the decade just past is the recognition of its -financial soundness. This is reflected in the changed attitude of -financiers and investors towards cattle paper. While a decade ago -bankers in the great financial centers looked with suspicion upon -such securities, now bankers and business men throughout the country -purchase approximately $500,000,000 of cattle paper annually and regard -it as among the safest investments. - -Melvin A. Traylor, President of the First Trust and Savings Bank -of Chicago, declares that “loans on livestock are the best of all -investments,” and President Thos. P. Martin, of the Oklahoma Stock -Yards Bank, Oklahoma City, agrees with him. This latter bank loaned -$45,000,000 in seven years to cattle producers in Oklahoma, Texas and -New Mexico, only fifty dollars of the amount loaned being lost. It is -doubtful if any other industrial securities could make a better or even -an equal showing. - -There is still some difficulty in arranging loans in some sections of -the country, where bankers have not yet realized the changed conditions -of the business and farmers have not given the proper emphasis to the -improvement of livestock production. But generally speaking the cattle -feeder with good judgment in the breeding and selection of feeders -meets with no obstacles in financing his operations. - -Most country bankers freely accept cattle paper because it is readily -rediscounted in the country’s financial centers. But many of them urge -the borrowing feeders to keep accounts and determine accurately their -profits and losses. - -This is to the interest of the feeder and the cattle industry as a -whole. For if the business is ever to be placed on a cost-of-production -basis for the reckoning of market prices, it must be done by an -accumulation of thousands of actual tests in feeding practice. It -is plain that each individual feeder could not set or ask a certain -percentage of profit, since a poor judge of stock and a careless feeder -would demand more for an inferior product than the more efficient -feeder would ask for a better article. - -The feasibility of any such scheme of regulating prices does not now -appear, but it is clear in any case that each lot of cattle would have -to be appraised at what their production _ought_ to cost, considering -quality, and not what it actually _did_ cost. - -[Illustration: Bankers now recognize cattle loans as good investments, -and the skilled stockman has access to needed funds.] - - - - -Losses on Declining Markets - - -THAT the packing industry suffers with the livestock producers on a -falling market was never more clearly emphasized than in the year -1919. Armour and Company’s losses on dressed beef alone amounted, in -the twelve months, to several million dollars; and on the sale of pork -products the losses were even greater. - -These losses are figured on the basis of the primary sales, which -include not only the meat but the hides and all other by-products -derived from the animals. - -Such deficits do not mean that the Armour organization, as a whole, -suffered a net loss for the year. But there is no mystery about the -methods of countering these deficits. They are offset by the profit -made in manufacturing by-products into merchantable commodities. -Each by-product industry in the Armour organization is placed on its -own responsibility. It must pay to the beef, hog, or sheep killing -department the market value for its raw materials—the same price it -would pay if it purchased on the outside market. - -For example, the beef department buys its cattle to the best possible -advantage in competition with other buyers, and sells the beef at the -best price obtainable. The hides go to the tannery at prices ruling on -the open market. If the Armour tannery cannot pay this price the hides -go to outside buyers. To sell at less would be favoring the tannery at -the expense of the beef department, or robbing Peter to pay Paul. - -The same business methods are pursued with every scrap of the animal, -whether used in making glue, soap, sand-paper, drugs, fertilizers, or -any other commodity. - -While on this basis Armour and Company sustained heavy losses in their -meat departments, the by-product industries showed profits, as they -usually do, because their products are not so perishable and are not so -much influenced by market fluctuations. - -These by-product industries are, in short, the insurance of the packers -against crippling losses, and may be likened to the activities of the -up-to-date livestock farmer, who diversifies his operations by feeding -cattle and hogs and by keeping fowls, sheep and dairy cows, so that if -he loses on cattle or hogs he may offset his losses by better prices -for lambs, wool, butter, eggs, poultry, or a money crop. - - - - -Why Prices Fluctuate - - -PRICES for livestock are not controlled by packers, and only to a -limited extent by the supply of cattle in the market. They go up or -down in response to the price the consumer is willing to pay for meat. - -Note how closely the two lines in the chart, representing prices of -cattle and dressed beef, follow each other through the two and a half -years covered by the graph. America’s twenty million food shoppers -determine the dressed beef price, by their willingness or refusal to -accept beef at the price asked in competition with other food. And -naturally dressed beef prices react directly and at once on cattle -prices. - -It is often necessary for the packer to take a marginal loss on beef in -order to stimulate demand, but he must at once hedge against this loss -by buying cattle cheaper. He tries to fit the price he pays for cattle -each day to the price he is obtaining for beef. Only by so doing can he -maintain his business on present small margins. Large receipts of fish, -poultry, game, eggs, vegetables or fruit at certain seasons also affect -the price the public is willing to pay for beef, and this is reflected -in the price the packer can afford to pay for the live animal. - -It is plain that the packer cannot determine retail meat prices, simply -because he cannot say to the consumer at the butcher’s counter, “You -must buy meat and you must pay such and such a price.” Because he -cannot do this he cannot control the prices of livestock. - -[Illustration: WHAT MAKES THE PRICE OF CATTLE - -THIS CHART SHOWS THAT DEMAND BY CONSUMERS IS THE BIG FACTOR] - - - - -What Efficient Distribution Means - - -LIVESTOCK producers are, of course, engaged in an absolutely -indispensable industry. Of scarcely less importance is the packing -business. For upon food production and preparation depend all other -industries and activities. - -But it is profitable and enlightening to ask, of what use would be -production and preparation without means for delivering the food to the -consumer? The mere asking brings realization of the prime importance -of ample and uninterrupted transportation and distribution of packing -house products to consumers through the retailers of the country. - -And this, in turn, brings us to the consideration of the packers’ -salesmen in the hundreds of cities and towns throughout America, which -as a whole make up the final market for the producer’s livestock. - -With the sale of his meat animals by the commission man at the primary -market, the owner seems to witness the end of the transaction as far as -he is concerned. But does he? - -Could the commission man sell and the packer buy the livestock if it -were not for another salesman and another buyer out at the farthest end -of the market system transacting business with each other in the retail -market? - -Again the question answers itself. For the packer’s salesman is -literally the salesman of the livestock producer at the final market, -upon which all other markets depend. The advertising and educational -activities conducted by the packer continuously broaden and intensify -the ultimate market for the products which the livestock man produces. -It devolves upon these agencies to keep the meat products moving -towards final consumption, just as the man at the measuring spout of -the old-fashioned threshing machine had to keep the grain out of the -way and prevent congestion. - -There are two distinct divisions of the process of turning livestock -into available meat supplies. First, the production, shipment and sale -of livestock. Second, the preparation, transportation and distribution -of meat products to retailers. The two are interrelated and absolutely -dependent one upon the other. - -The opportunity for organized producers to take complete possession -of their end of the process by assuming control of the stockyards, is -offered in the passing of that control from the packing industries by -virtue of the recent understanding with the U. S. Government. - -[Illustration: The packer’s salesman is literally the farmer’s salesman -in the thousands of “final markets” throughout the land.] - - - - -Farming as a Business - - -ALL business undertakings are ventures. Under the best of conditions -there are fat and lean years, and the possibility of failure, due to -poor management, lack of capital, or adversity, is always present. - -Farming is no exception. It is in essence a business proposition, and -should be so regarded. - -A knowledge of crops, of soils and tillage, of livestock breeding -and feeding and other purely agricultural subjects constitutes but -one side of the farming industry. On top of this come the important -matters of business management—the buying of seeds, fertilizers, feed -stuffs, livestock and general equipment and supplies; the erecting -and maintenance of buildings; the arrangements for necessary credit; -keeping in touch with market conditions and prices; the hiring of -help, and finally the establishing and operation of an accurate -cost-accounting system. - -Yet when all is said and done, records indicate that farming offers -more chances of success than almost any other line of business -endeavor. A retail merchant, according to statistics, has from two -to four chances in ten to conduct his business successfully for -fifteen years; a manufacturer has from two to seven chances to do the -same. Farming is conspicuous for its small percentage of out-and-out -failures. Living is practically assured, which gives the farmer a -distinct working advantage to begin with. He enjoys a cash market and -is not called upon to suffer bad debt losses. He is in an industry that -is absolutely essential, which cannot be destroyed by any shifting of -circumstances. - -The greatest need is doubtless for cost-accounting systems which will -serve as a guide, not only to prevent unwise purchases, but to indicate -wise expenditures in improvements that will bring a good return on -investment, and to show definitely the amount of profit obtained on -each transaction. Next to this in importance is perhaps the need -for a thorough understanding of crop rotation and the principle of -diversified farming as a means of offsetting losses in one line with -gains in another. The securing of credit to enable expansion, and the -adoption of labor-saving devices are also essential. - -Profits and losses in farming must be reckoned, as in all other -businesses, on averages over a term of years. But the future -offers better assurance than ever before to the man who is a good -agriculturist and at the same time a skillful business manager. - - - - -We Stand or Fall Together - - -WITH some elements of the American public there seems to persist the -conviction that the great packing concerns are seeking the injury of -livestock producers to their own enrichment. How such an idea can be -seriously harbored by thinking men is hard to understand. For the -packing industry to plan for the farmer anything but prosperity is to -endanger or destroy the source of supply of the raw material by which -it lives and grows. - -It should be perfectly plain that the packers are selfishly interested -in encouraging the producer. Their selling efforts are directed towards -disposing of the largest possible volume of meat products, at the best -price obtainable in competition with other foods, in order that they -may maintain large volume of livestock purchases at prices that will -encourage both quantity and quality of production. - -Between the producer and the consumer, between the buying and the -selling price, the packers operate upon a smaller margin of profit than -any other large industry. On invested capital they have realized an -average of about 9 per cent over a term of years, on volume of sales -about 2 per cent, and on each pound of meat less than one-half of a -cent. - -At the same time the risks of the business are greater than in other -lines, both on account of the perishable nature of the product and the -violent fluctuations of food prices, the causes for which cannot always -be foreseen. - -The comparative low prices of hogs and pork products at the end of 1919 -is a case in point. The packing business entered upon the year in the -belief that the world shortage of food would maintain pork prices at -high levels for a number of years; that European demand would absorb -even a larger surplus of American hogs than the pre-war period. The -earlier months of 1919 confirmed this belief. The foreign demand was -very brisk, exports reached unprecedented volume and prices were -maintained. - -Then came the unlooked-for event. Foreign exchange rates fell to so low -a point that Europeans could no longer afford to buy American meats. -The packers extended credit for a time, but the limit of safety was -soon reached, and when the year closed very little American pork was -being exported and no new contracts were being made. - -The result was great loss to both producers and packers. Armour and -Company alone packed millions of pounds of pork during the period of -high prices, much of which was still in the course of curing when the -slump in the market came. - -But the conditions that caused this decline and loss are exceptional -and only temporary. The great foreign need for American meats still -exists—the greatest need in the world’s history. The ability of Europe -to buy will be restored with the full restoration of peace and the -arrangement of international credits. The result will be a return of -profits and prosperity to both producers and packers of pork. - -The facts to keep in mind are these: - -First, there must finally be a realignment of prices on all livestock -and meats, to levels below the prevailing high war prices. A fair -balance must be struck between the interests of the consumer and those -of the producer. Prices for meat must be sufficiently attractive to -consumers to insure an adequate volume of sales; on the other hand -prices for livestock must be sufficiently high to encourage production. -Only on this basis can the industry thrive. - -Second, the utmost care must be taken in breeding and buying of feeding -stock and the most exacting economy practiced in feeding methods. - -Third, the producer must realize that the packer is his natural ally -in maintaining the prosperity of the two inseparable branches of the -livestock industry—production and packing. - -It is a reassuring sign that producers and packers are already getting -together on a platform of better understanding of their mutual -interests, both for protection against disturbing agitation and -legislation and for the correction of whatever inequalities or abuses -may exist in the shipping and marketing of livestock. - -Armour and Company’s Farm Bureau was established three years ago as a -point of contact with livestock men, through which better methods of -breeding, feeding, shipping and marketing could be promoted. - -Being in constant touch with the requirements of the markets, Armour -and Company know the types of meat animals which are most demanded -and which bring the largest profit to the stockman. The Farm Bureau -has available many facts regarding the economical production of these -types, and these facts can be had by addressing the Bureau, care of -Armour and Company, Chicago. - - - - - -End of the Project Gutenberg EBook of The Livestock Producer and Armour, by -Armour and Company - -*** END OF THIS PROJECT GUTENBERG EBOOK THE LIVESTOCK PRODUCER AND ARMOUR *** - -***** This file should be named 51244-0.txt or 51244-0.zip ***** -This and all associated files of various formats will be found in: - http://www.gutenberg.org/5/1/2/4/51244/ - -Produced by Emmy, MWS and the Online Distributed -Proofreading Team at http://www.pgdp.net (This file was -produced from images generously made available by The -Internet Archive) - -Updated editions will replace the previous one--the old editions will -be renamed. - -Creating the works from print editions not protected by U.S. copyright -law means that no one owns a United States copyright in these works, -so the Foundation (and you!) can copy and distribute it in the United -States without permission and without paying copyright -royalties. 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