The Livestock Producer and Armour 1

The Livestock Producer and Armour 1

The Livestock Producer and Armour

 

Author: Armour and Company

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.