The Bridgeport times and evening farmer., 1918-04-20
PACKERS DO NOT
 CONTROL PRICES

An unprejudiced and open minded person, if he studies the marketing Of live stock and meats in the stock yards and in the meat markets, will be struck by the intensity of the com petition. It is not generally realized what a close relationship there is be- tween the prices of live stock and the prices of dressed meats and that the difference between these two prices is accounted for by expense of slaugh- tering and marketing, and that only a small fraction of a cent per pound is left for the packer as net profit.
 Fresh meats are perishable; they have to be sold by the packers with in a few days after the animals are slaughtered for whatever price they will bring, rather than let them spoil. The dsmand for meat constantly f1uc- tuate-. in different markets and for different qualities and cuts; and one of the most difficult parts of the packers business is to supply the large consuming markets with amounts sufficient to meet these vary ing demands. Since all the large packers have branch houses in cities
 
 ill disposing of meat makes the prob lem all the more difficult. If one house has stocked up with too much meat, and has to sacrifice it at low price to keep it from spelling the other packers naturally suffer.
 The price that the packer can af- ford to pay for live stock depends very largely on what he is able to get for. his meat. When the meat trade is brisk in New York and other big consuming markets, the packers become active bidders for live stock in Chicago and other western markets and this naturally forces the prices up.
 Out of the margin between the two sets of fiuctuating prices those of live stock on the one hand, those of meat and by-products on the other-the packer has to pay his expenses and get his net profit. Although he loses during some weeks in the long run , he is able to obtain for himself a fraction of a cent a pound net profit on all meat sold.
 By-Products and By-Product Indus
 
 l The figures given above on profits l include the returns from by-products, for the utilization of which the pack | ing industry is famous. It is true that as the packing industry has developed | it has gradually found methods of saving more. and more of what was originally waste. Forty years ago | thousands of tons of offal, none of which is now wasted, were carted from | the packing plants and discarded. As a result of utilization of by-products, the spread between prices of live stock and the prices of meat has been great ly reduced; the more the packer can 1 get for by-products, the higher the price he can afford to pay for live animals and the lower the price he can afford to charge for the meat
 Since it is so frequently said that the packer makes his profits out of the by-products, it is we'll to under stand the relationship between the by-products, as such, and the indus tries which use these by-products as raw materials in the manufacture of other commodities. When animals are slaughtered and dressed. many parts which are not sold with the car cass, have to be carefully processed and prepared, before they become sal able and useable, and the preparation of these by-products is an important and integral part of packing house operations.
 Some of these separate manufac- turing departments which include soap manufacturers and glue manu- lecturers, make good profits and oth- CTS do not. In no case would the packers if they worked together, have a sufficient part of the business tc have a monopoly control over any ot
 these by-product industries. Some t of these separate industries rely al } most entirely on packing house by 7 products for their raw materials; oth $ CTS have to purchase a large propor 9 ton of their raw material from tht 2 outside
 9 Just how far the packer should gt : in operating these separate establish
 ments is a difficult problem. WheI
 a by-product industry gets the bull
 of it's material from the packin:
 house, there is ample justification fo = the packer to empark Tn Sucn enter S prise; there iG less handling of ma t terials, and the packer does not hay, : to rely on outside markets for tn disposal of his offal Furthermore = there is a certain saving in overhea'
 expense. Even where the by-pro
 duct industry gets only small par
 of it's material from the packin!
 house, it still may be more economi | cal and hence a public benefit to en | gage in such an industry, especialI, v l if the packers selling organization r can be used in. disposing of the pro \ duct