The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1929-08-08
The Little Pig Goes to Market

on the terminal market and the de-
mand for them is known and made
public through market reports
BUYER and seller have this inform
alton and the price is agreed to
on the basis Of it. The law of supply
and demand is allowed to operate
freely without any restraining force.
The result is comparable to sens
tive scale, price fluctuating with
increase or decrease of either sup
ply or demand.
The method of caring for varia-
tions is this: variations in quality
are met with variations in price.
The u. S. Bureau of Markets rec
ords show that the price spread
for different grades within the
same weight class is from ten cents
to a dollar and fifty cents per hun
dred. Quality animals are worth
more and on the terminal market
command better price.
Fluctuations in price from day
to day can be forecast on this sys-
tenn and, as result, stabilized.
When it appears that prices are
lowering because the daily supply
is too large, shippers are urged to
hold back their stock. If short sup
plies cause prices to rise more
stock comes on the market, thus
preventing excessive fluctuations.
For sixty-three years this system
has operated, setting both general
price level and individual lot price
accurately and fairly. 1t will con.
tinue to do so as long as producers
support it with their trade. The
only complaint, and that fact is re-
markable, is that this selling ser
vice costs something. The Bureau
of Rail Economics found the 1927
cost to be % cents of the dollar.
This includes everything except
freight charges. For this cost the
shippers stock is sold over the only
system that furnishes a fairly de-
termined price, standard grades,
and competitive buying, all of
which are necessities. This sys-
tenn is the shippers guarantee that
he receives full value for his goods.
Direct buying is the purchase of
stock by the packer from the pro-
Queer. This system has but recent
ly functioned in an important way.
1t was established by the packer
as a result of the intense compel
ition in the packing industry. The
packers position is this: There are
1888 packing houses in the coun-
try al of them struggling for Gus
toners.
Because the consumers naturally
buys where he gets the lowest price
it naturally follows that the way to
get trade is to undersell the other
packers. That means he must OBJ
tain cheap SUPPLIES of livestock,
When one packer discovers a
source of cheap supplies other
packers must follow suit or sell in
competition with those cheap sup
plies. The result is that they are
handicapped so severely that they
have no choice. The important
thing for the producer to under
stand is that the purpose of direct
buying is primarily to furnish the
packer with cheap supplies.
/ The arguments that have been
put forth for this system are that
it costs less to market pigs or cattle
by this method. While 1t is truer
there is no commission or yardage
charge deducted from the shippers
price, it is apparent that the cost
OF the packers private yards and OF
the packers private buyers, must
be deducted in some manner from
the shippers price. If this cost
is paid by the packer, then he pays
more for pigs bought over this
method than on the terminal mar
ket. Naturally, he would not Sc
up competing system if he wer,
to lose money by SO doing. Thi.
deduction can be made in man,
different ways but there remain.
the fact that this buying cost i,
placed upon the shipper.
A further saving in freigh
charges is also claimed. Simply be
cause stock ownership is movet
from producer to packer does no
mean that it can be Transports
free of charge. If producer il
situated so that freight to tn
direct buyers plant is less thar
freight to terminal market, it il
his duty to discover whether he re
ceives this saving or whether tn
packer keeps it. 1t is most impor
tant to decide whether the freigh
costs, which the Bureau of Railwa,
Economics found was 3.8 cents OF
the dollar in 1927, are importan
enough to ignore other vital fac
! tors affecting this marketing sys
tenn. Packers go to points wher