The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-10-13
PACKER OF CHICAGO
TRIES TO EXPLAIN
HOG PRICE CHANGES

INV kttSS SsiEtstSES
]. F. Potter, state farm bureau presi- !
dent at Williamsport, Tenn, is curious
to know why the price of hogs fluctu- |
ates so sharply. He desires to know:
why are not hogs worth as much on
Monday as they are on Friday" This
is the question ne shot a. J. Ogden
Armour, by mail, and to which r. d.
McManus, of the Armour house, made
reply.
Mr.. McManus, replying for the pack
er magnate, ascribes 'the wide price
fluctuations, to the supply and demand
and to operations of spectators" He
says: There is also a definite de-
mand for 80 percent Of the hog for the
fresh meat trade, and heavy or light
receipts instantly affect prices"
Margins Are Narrow.
Contrary to the general feeling
among live stock growers, Mr.. Nc
Manus maintains that packers are con-
tent with small profits, and that their
rule is to run on narrow margins. That
! it is the volume of the annual turnover
which counts, rather than a high per-
centage of profit in any particular
week or month, DGCduS6 VI Adl net
conditions at the yards.
! "a little profit, all the time, insures
reasonable return at the end of the
year, on labor and investment, and
permits the business to grow" was the
way an old-time packer expressed it
years ago. In this packers differ but
little from the rest of the manufactur-
| ers who produce in the mass, for the
ne iS a manufacturer
How Price is Determined.
The packing business" explains
Mr.. McManus, sis conducted on a mar
row margin, and the price for raw
material any one day is determined
| largely by the price received for the
finished product on that day, even
though there be two or three days or
a week, or a greater length of time,
intervening between the Strengthening
of the animal and the marketing OF
the product thereof.
Even were receipts stabilized there
would probably be price fluctuations
because weather and business condi-
lions affect the demand for pork, and
fluctuations in the demand would
have to be reflected in the amount
paid for hogs"
Sounds Plausible.
The McManus statement sounds
plausible, but is by no meansa sufflc-
lent explanation. Nor is it probable
that any packer could clearly cover
the ground in few words, the prob
lem is so complicated and far reaching.
1t is fact of frequent observation,
however, that at times when supplies
may be under expectations, and when
order buyers and spectators are run
tv,; Al ~ VIZ hot nr1o mn
of the big packers withdraw from the
market, until the speculative demand,
and that from the city butchers, has
been supplied Such procedure acts as
a brake on any tendency to stage a
runaway market.
Wants Stable Market.
1--WE wish that the market might
not decline or advance more than Il
per day" says Mr.. McManus, land
we are endeavoring in every way to
make our business less speculative
and to put it on manufacturing basis
so that our profits will result from
service rendered in slaughtering, cur
ing and distributing from day to day
and week by week, rather than from
buying when supplies are plentiful and
hoping that future demand will make
a profit possible"
About Top Hogs.
: As all shippers know top" hogs
are not particular class of hogs, but
are merely those particular hogs
which brought the best price for the
day. In further explanation of why
1.-The style of hog which tops the mar
, ket is subject to change, Mr.. McManus
says:
. "At this moment it is found easiest
to market hogs which might be called
medium weight. The lard hog is not
; particularly strong, while there is a
, fair demand for those cuts which can
/. easily be secured from medium weight
hogs.
Under these circumstances it is
probable that medium hogs are top
, ping the market now. If a great de-
mand suddenly develops for lard over.
night, due to foreign inquiry or discov
\ cry of depleted stocks, heavy hogs
; would instantly gain favor, and in al
probability would be topping the mar.
: ket."
4 Demand Fixes the "Top"
/. Producers and packers cannot de
S termine which shall be top hogs II
|. is fixed by. consumptive demand, and
: until there is some way of getting the
: consumers to stabilize their demand
i from month to month it is impossible
. arbitrarily to designate certain grades
as tops" for definite period