The Livestock Producer and Armour 2

The Livestock Producer and Armour 2

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.