The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1929-08-08

their plants than to the terminal
market and establish their buying
points. If packers do not base
their decision on transportation
alone, the producer also must avoid
decision made on that basis alone
More important factors must be
given their proper consideration.
The direct buying system places
the power of grading, allowing for
| fill and shrink and establishing a
price, squarely in the buyers hands
Such matters as competitive bid
ding, standard grades and price
established by supply and demand.
do not bother the direct buyer. In
the last analysis this system sub
stitutes for those vital fundamen-
tails, the bargaining ability of an
expert buyer whose purpose is to
secure cheap livestock supplies for
a packer.
The resulting price is not COM
parable with that at the terminal
market. Pigs of good quality may
be low graded. Excessive deduc-
tions can be made for fill or hogs
may be weighed when empty. Any
thing is allowable so long as the
producers keep coming. A direct
buying packer says that the ma
jority of the livestock he receives
is obtained without advance agree
ment but the first indication he
receives is the arrival of the car
load itself. That, of course, is
simply shooting them out in the
dark and he has his own way as
to sale conditions. Yet under di-
rect buying methods of marketing
the producer, deprived of compel
ition for his goods and standard
grades and fill agreements, is just
as much at the packers mercy,
regardless of agreements as the man
who ships without advance notice.
Both offer their hogs to the pack
er for whatever he wishes to pay.
Any successful marketing system
should establish the price to be
paid, in fair maner. Direct buy
ing does effect prices but not con-
structively. 1t may effect them in
different ways but always with the
same result, the price lowered. 1t
moves demand to a point where it
cannot be measured. With suffi-
cient supplies obtained by direct
buying, the packer demand is re-
moved from the terminal. Bidding
loses it's briskness.
Packers who buy on the termin-
al and are compelled to compete
with the cheap meat furnished by
direct buying, refuse to pay high
prices and wait for a decline. The
demand lessons, the price lowers.
With smaller volume of trade,
terminal measurements of supply
and demand are less active and
less accurate.
The direct marketing methods
effect on prices is at the best de-
pressing. In the most highly de
veloped form possible, when the
terminal market does not exist, the
only method of fixing prices will
be to have them set by the packer.
Price will not rest upon value, as
determined by supply and demand,
but on what the packer wishes to
pay.
The big fundamental of direct
buying is to secure packer supplies
cheap and it is founded upon such
principles as will accomplish that
result. Producer interest is second.
airy.
The question of which market
system, is up to the farmer and now
is the time to answer it. If direct
buying is to increase to a point
where individual buyers are either
lined up with them or crowded out
it will be impossible to sell on the
terminal market in less than cal
load lots, thus leaving no choice tt
the small producer. Once firmly
established. direct buying will b,