The daily star-mirror. (Moscow, Idaho) 1911-1939, 1919-10-09
TELLS SENATORS
ABOUT BEEF COSTS
This May Throw Some Light or
the Price You Pay for
Beefsteak.

IeSLIIyluK TeCclltiJ De1olC u ivy ~
senators in Washington, a vice-presl'
lent of one OF the large packing con
Germs IF. Edison White of Armour ano
Company made the astounding state
ment that so far in their fiscal year
which would cover the. past eight OF
nine months, his company had made
no money whatever on beef
This statement is doubtless well
nigh incredible to the average man.
Yet it vas made In full knowledge that
The senators had access to the COM
pany's books.
Recovering from the first shock, this
same average man will say, Yes, bur
the packers are shrewd; what they DO
not make on the beef they more than
make up on the hides"
But even this illusion was destined
to be shattered. MI. White explained
that his statement included everything
that was derived from the steer as
purchased-the hide, fat, even the in
testines which are used largely Tor
sausage castings.
Make Money, Nevertheless.
Well the packers make money-how
do they do 1t? Mr.. White admitted
that they did, quoting figures secured
by auditors of the Food Administra-
ton, to the effect that packers profits
on food commodities of all kind last
year were l $40 cents on each dol
lar taken in. These would include
such things as sausage, shortening
canned meats, etc, in addition to fresh
meats. hams and bacon. On all the
products of his company, Mr.. White
explained, comprising both foods and
inedible commodities, the profits dur
ing the same period were / $40 cents
on each dollar sale.
All of which would lead many to
say that the packing business is not
well understood. 1t isn't. Yet as one
of the leading industries of the coun
try, it's workings and, above all, its
profits, should be familiar matters to
US. 1t is quite useless to crate against
the high cost of living without digging
into some of these fundamentals.
B~y-Products at Market Values.
One of the most enlightening bits OF
Mr.. Whites testimony was his ex-
PLANTATION Of the way in which cost
price of beef is arrived at. Ii a steer
is bought at $1,000 and hides are
bringing $500 in the open market,
then $500 is credited TO he cost OF
the steer. If hides are selling at $3.50
that amount Is credited. The viscerai
fat, onal and everything else that
comes from the steer are lkeWlse
credited at their prevailing market
values. What remains is taken as the
cost price Of the meat. The beef car
cass is then shipped to II OF the TO-
cal distributing branch houses, and
the there is given the Q s
price with instructions to sell the beer
at a profit if he can. But in any event,
whether the local market be lively or
dull, he must sell for what he can gel
for the commodity is a ~perishable n
and must be sold.
Manufacturers Profit on By-Produets.
However, there is another hitch to
the packing business, quite as little
understood apparently, that goes TO
show how a loss on fresh meats may
be accompanied by a profit on the TO
tal amount of business done. Take,
for example, the banjo strings afore-
which are made from the
Intestines of sheep. The department
that makes banjo strings (and ike
surgical l%igatures, tennis strings
~huys" the intestines from the
;heep-killing department, paying ex
sctly the same price that these Drlng
when sold to the outside market. On
his basis the string department manu-
lectures its strings and sells them,
a profit into the business.
In like manner the fertilizer depart
nent buys blood and tankage; the soap
buys fats; the glue depart
nent buys hoofs, horns, bones ana
,inews: and so on through the list OF
'by-products." The fertilizer, the
and the glue, just as M music
trjnqs. bring in a manufacturers
In all cases these b~y-products,
whether they be sold to outside
;facturers or TO one Of the manufac-
uring departments in the business tat
he same prevailing market price)' are
redfted to the cost of the meat por-
OF the animals, just as !. the In
lance Of the hides mentioned above.
vhus the Civilization of by-products
ystem of which we have heard mucn,
the method by which 1t IS con-
ucted. show the packers manufactur-
70 profit on a great variety OF com
ranging all the way from
.harmaceuticals to glue, do, in reality
ear the burden of fresh meat prices