The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-02-14
THE FUTURE OF MEAT PRICES

The head of the firm of Armour &
Co. has made public a statement re-
garding what he terms the new rela-
ton between the meat packers and
the public-new in that the packers
are no longer to be purveyors of gem
eral food lines and are to confine
themselves to the slaughtering of
livestock and to the manufacturing
and distributing of meat and by-prod-
ucts and the so-called dairy products.
This change in the conduct of bust
ness. Mr.. Armour says. is the result
of the desire on the park of the meat
packers to aequiesce in the govern
ments demand that they take such
action as will forever remove any and
all fear that too great a portion of the
nations food supply will be handled
by too few business firms.
After going at considerable length
into the history and business methods
of his company Mr.. Armour takes UP
the question of the probable influence
of the new relation on the price of
meat to the consumer. On this fea-
ture of the situation he says:
The packers hope that the new ar
rdngement will not make necessary
any increase in the gross margin on
which meat is handled It must be
evident. however. that some way must
be found to make up for the loss oc-
casioned by our getting out OF the
grocery business. If a sales organiza-
ton works only part of the time-as
during a dull season. the expense of
distribution is naturally increased. If
the withdrawal from the grocery bust
ness makes it impossible for us to
operate our plants or refrigerator cars
at or near capacity it cannot help but
increase our overhead charges and
such increase must necessa rily be re-
Elected in the cost of the product we
handle.
REIMBURSEMENT of financial interest
in stock yards may or may not have
an effect upon the price of meat The
stock yards have been operated eff
GENTLY and the cost of the service rem
dered has been remarkably low. If
the yards in the future are conducted
with economic efficiency-and EAR
mour & Co. sincerely hope that they
Will-expenses will not advance
enough to have an appreciable effect
upon the price of meat; but if eff
cheney is lessened and If costs mater
tally increase the price Of meat will be
affected adversely to the best inter
ests of the consuming public
The future trend of meat prices,
however, cannot possibly be greatly
affected by the change in the manner
of conducting the packing industry
Inasmuch as some So per cent of the
wholesale cost of the finished product
I is represented by the cost of the raw
material purchased by the packer. it is
evident that in this IS per cent lies
the answer as to whether prices will
go up or down. The cost of the live
meat animal is diependent largely uDor
the cost of corn and other feeds and
labor and such factors as taxes and
freight rates. These factors are not
affected by the arrangement brought
about by the attorney general. If the
farmers cost of production drops thru
decrease in the price of corn or labor
or other things which he must needs
have in order to produce cattle, the
price of nseat will come down, but il
these costs continue to climb as they
! have in the past several years, there
will be no reason to expect cheaper
meat.