Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-03-03

L
The statistics of margins between prices
of cattle and prices of beef since 1898 are
shown on the basis of the live cost of
all cattle at four plants in different pack
ing centers as compared with the average
price of beef sold by leading packer in
nine important cities.
On this point the report says:
THE average margin for the whole pc
riod from January, 1898, to June, 1904
first half of 1903 namely, 1921, and the
highest margin was in the last half of
1902, namely, 1902. The margin in the
last half of 1903, instead of being excep-
tionaly high, was below the average, as
also the margin for the first half of 1904
The year 1868, instead of being characterize
ed by unusually high margins. had, in fact,
the lowest average margin for the whole
period for which a reliable record is OBJ
tainable.'
1t cannot be emphasized too strongly that
changes in the margin between prices OF
cattle and prices of beef are of little value as
basis for judging the movement of profits.
This may readily be appreciated from
the mere fact that on the average only "a
to 81 per cent of the live weight of cattle
is retained in dressed beef. Although the
value of the by-products is very important
factor, it is invariably, in the aggregate,
much less than the live cost of that part of
the animal from which these by-products
are obtained. Consequently, when the price
margin between the prices of cattle and
those of beef in order to make up for the
cost of waste material in the live animal.
In comparing the margin between prices
of cattle and prices of beef, exhaustive
study was made of the value of byprod-
ucts, and since the difference between the
maximum and minimum value of such prod
ucts per head the past two or three years
has much exceeded the total profit of the
packers, this has been most important
feature of the investigation. Thus the price
of hides, the most important byproduct
of cattle, after reaching a maximum in 1902
declined sharply in 1903 and 1904.
The average price received for all hides
sold by the Armour, Swift, and SchwarZ-
child & Sulzberger companies from ten
packing plants fell from Ills cents in the
second half of 1902 to OF cents in the sec
ond half of 1903. this representing decline
in the net value of the hide per head from
s6.93 to 1919 Prices of oleo oil and stearin
likewise reached their highest level in 1902
and fell rapidly in the summer of 1903.
partly as the result of ELECTROMAGNETIC
legislation, causing loss of over 81 per
head in the value OF fat. These are the
principal by-products of cattle. The others
together are worth only little more than
$3.50 per head, and their values have not
varied sufficiently to seriously affect the
margin between the prices of cattle and OF
beef.
The error which would arise from consid-
ering the margin between the price of beef
and the price of cattle as an indication OF
profits is Wen SHOWN ny the idCl that the
true average margin between the live cost
of all cattle killed by the Armour, Swift,
and Schwarzschild & SulZberger companies
at their leading plants for the year 1904
was cents per hundred pounds greater
than during the preceding twelve months,
So 10, as compared with SOP AS matter
Of fact, the computations of the bureau
showed that there was virtually no change
in the profits of the business between these
two periods, the profits being 1871 cents per
hundred pounds of dressed beef in 1923,
and 1875 cents in 1904.
Methods Of Computing Results.
AS already stated, the bureau has made
it's computations from the records Of the
companies The bureau has had access to
all the price records of the leading pack
ing companies and also to all the accounts
and records, excepting line accounts,
which determine the profits of the packers
on beef and it's by-products. Owing to the
fact that the records of Morris & Co., the
Cudahy Packing Company, and the Ma
tional Packing Company did not adapt
themselves to the methods followed, the de-
tailed computation of profits was made for
three companies only, Armour & Co., Swift
& Co.. and the Schwarzchld & Sulzberger
Company.
The computations made covered ten
plants, killing upward of 100000 cattle,
and were based on the total number of cat
and the live cost Of all dressed beef cattle
together with a moderate number of infer
rior grades). The actual cost of operation
and administration of the various depart
ments was ascertained from the bookkeep-
ing records and actual quantities and val
ues were taken for the leading by-product
items.