The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1916-04-01
HOW SUGAR PRICES ARE FIXED.
Ultimate Figure Paid by Householder Affected by Many
Different Influences That Become Operative Before
Consumer Is Reached-Effect of Tariff Has Been to
Decrease Cost TO American Householder
From Facts About Sugar.

have been planted, the worlds pro-
duction is fixed for that year. subject
only to the fluctuations of crop yields
due to weather conditions. This Is
supply. Moreover, tits the invariablo
rule, so far as the United States is
concerned, that practically the entire
crop is sold during the year by the
primary producers and only an in
significant fraction held over by any
middleman, so the entire crop goes
into consumption annually, with no
surplus to affect the market.
At the other end of the line are the
daily purchases of the housewife from
the grocer. multiplied by twenty mil
lion The chief factor affecting these
purchases is the general prosperity Of
the country. This is the demand
Between the producer and the re-
taller are the refiner and jobber, each
carefully watching the probable
course of the market as lit is affected
by the fluctuations Of supply and de-
mand, but as poWerless to control the
final result, under present day COM
petitive conditions, as he would be to
control the tides.
The middleman, though Unable to
decree an arbitrary increase or de-
supply and demand, still remains a
factor III price making. The ten
dency to absorb part of profit be-
fore passing it along is universal.
Retail prices, therefore, do not re-
spond materially to slight changes in
the wholesale price. As a matter of
fact they respond more quickly to adj
vances than they do to declines.
For example, the average price of
raw sugar in January, 1905, was
5.125 cents pound. The price stead
ily declined until by November it was
3.440 cents, q decrease. of 1885 cents.
This gives an opportunity to see how
much the consumer benefits under fa-
vofable conditions The records show
that the retail price during this period
declined from 6.194 cents to 5.499
cents. Of the decline Of 1885 cents
sumner received .745 cent, OF less than
half. At the same time the refiner
increased his margin between the cost
Of raw sugar and the Wholesale price
of refined from 1912 per cent to 20
As per cent; the jobber increased his
sales margin from 1.53 per cent to
4.56 per cent, and the retailer in
creased his from "a per cent to TO- 3
7 tss55 saar eRat IS Bureau Of . sahh8n
Statistics Bulletin No. 12I. Sugar
Prices from Refiner to Consumer
page 30.1
This is not an exceptional instance.
The rule is invariable that lower
price of raw sugar means a. larger
profit to each middleman involved,
and that a higher price of raw sugar
means lower pTofit.
! One of the most important remain
ling factors affecting the price fixing
problem is the effect on the sugar
market of the domestic supply 1t is
| in connection with this factor that the
true effect of the sugar tariff on prices
can be measured and judged. 1t is
an undeniable, historical fact that,
under a protective tariff, the domes-
| tic production of sugar in less than
two decades has been so stimulated
that homegrown sugar now supplies
half the consumption needs Of the
nation. In 1876 the average whole
sale price of refined sugar was 1851
cents q pound and the production of
domestic sugar was almost negligible.
In 1915, the average wholesale price,
even with the advance caused by the
war, was 5.65 cents, and the domestic
product over 100000 tons. No
such decrease in price and increase in
production could have taken place
without tariff protection for domestic
| producers.
AS an increase in supply tends to
lower sugar prices from what they
otherwise would be, it is apparent that
the real effect of the sugar tariff on
prices has been to decrease the cost
of sugar to the American consumer.