New Iberia enterprise and independent observer. (New Iberia, La.) 1902-1944, 1919-11-22
TELLS SENATORS
ABOUT BEEF COSTS
This May Throw Some Light on
7 the Price You Pay for
! Beefsteak.

Testifying recently before body o
senator's In Washington, q vice-presi
dent Of one of the large packing con
Germs IF. Edison White Of Armour ant
Company made the astounding state
lment 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 vel
nigh incredible to the average man
Yet 1t was 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, Eyes, but
the packers are shrewd: what they dc
not make on the beef they more than
make up on the hides"
But even this illusion was destined
10 be shattered. Mr.. White explained
that his statement included everything
that was derived from the steer ~
,purchased- hide, fat. even the In.
'testines which are used largely fer
isausage castings.
Make Money, Nevertheless.
Well the packers make money-how
10 they do IT. Mr.. White admitted
that they did. quoting figures secured
81 auditors Of the Food Administra.
tion, to the effect that packers profits
on food commodities Of all kind last
year were $40 cents on each dol.
lar taken in. These would include
such things - sausage, shortening,
canned meats, ETC.. In addition to fresh
meats, hams and bacon. On al the
products Of his company, Mr.. White
explained, comprising both foods and
anedible commodities, the profits dur
ing the same period were / $40 cents
- each dollar sale.
All Of which would lead many to
oay that the packing business 10 not
well understood. It isn't. Yet % one
1t the leading industries Of the coun-
ny, ito workings and, above al, its
profits, ehould be familiar matters to
~. It u quite useless to orats against
the high cost Of living without digging
anto some Of these fundamsntalA
Dy.Preduets &C Market Values.
One Of the most enlishtening bits Of
NJ. Whites testimony was his ex-
planation Of the way In which cost
Price Of beef IL arrived At Il . steer
q bought at $12600 and hides are
Nginginx elA.o0 IN the opeQ market,
then jf066 Il credited to the cost Of
the steer. Il hides are selling ct $500
chat amount IL credited. The visceral
,1at, o3al and everything else that
Uones from the steer are nkswise
credited at their prevailing market
Ralues. What remains II taken % the
cost price Of the meat The beef car.
cas- 10 then shipped to one Of the 10
cal distributing branch houses. and
the manager there ID given the cost
price with instructions to sell the beef
at profit II he can. But In any event,
whether the local market be lively or
dull, he must sell for what he can get.
for the commodity 10 perishable one
and must be sold.
aanufacturers Profit On Dy.Preduc&s.
However, there II another hitch to
the packing business, quite as little
understood apparently, that goes to
show how q loss on fresh meats may
be accompanied by profit on the to-
tai amount Of business done. Take,
for example, the banjo strings afore-
mentioned. which are made from the
.intestines Of sheep. The department
that makes banjo strings (and like
wise surgical ligatures, tennis strings,
etc., 'buys' the intestines from the
aheep-killing department, paying *
actly the same price that these bring
when sold to the outside market On
this basis the string department manu-
features Its strings and sells them,
bringing a profit into the business
In like manner the fertili1er depart
ment buys blood and tankage; the soap
department buys fats: the glue depart
ment buys hoofs, horns, bones and
slnews; and 20 on through the list Of
Sby- products" The fertilizer. the
sour and the glue, just ~ the music
strir g. bring in q manufacturers
prof..
In al cases these by-products,
whether they be sold to outside man.
ufacturers or to one Of the manufac-
turing departments in the business Cat
the same prevailing market price,, are
credited to the cost Of the meat por-
ton Of the animals, just ~ In the In
stance Of the hides mentioned above.
Thus the utilization Of by-products"
system Of which we have heard much.
and the method BY which It 10 con-
Quoted, show the packers manufactur-
ing profit on = great variety Of COM
modities ranging al the way from
pharmaceutical to glue. do, in reality.
bear the burden Of fresh meat priceA