20 Bulletin 85 



tomary condition of the local wheat market emphasizes this lack. 

 Every year millers and grain wholesalers base local prices on the price 

 for wheat at terminal market points. The growers have always taken 

 the stand that inasmuch as the Salt River Valley is not a district of 

 surplus production, and practically no grain or flour goes outside the 

 State, the local market prices should be the prices at terminal market, 

 plus the freight necessary to bring grain into the Valley. There has 

 been no attempt on the part of the two factions to compromise on this 

 matter and neither side has cared to make a clean-cut statement of the 

 issues at stake. It will be noted that while comparatively little wheat 

 is annually imported, there are considerable quantities of flour shipped 

 into the Valley, largely from Kansas points. The contention of the 

 farmers is that if the Kansas miller can afford to buy wheat at terminal 

 market prices, convert it into flour, pay the freight on this flour to 

 Valley points, and sell this flour in competition with that manufactured 

 locally, the local miller should be able to purchase wheat on the basis 

 of terminal prices, plus the freight to Valley points and operate as 

 profitably as the Kansas miller. The growers, however, fail to recog- 

 nize the fact that most of the flour so imported is hard wheat flour, 

 while much of that manufactured from Valley wheat is milled from 

 semi-hard wheat. There is an active demand for both classes of flour 

 in Arizona, but there is a price differential of 40 cents to 50 cents per 

 100 pounds in favor of the hard wheat product. The local miller thus 

 has an argument which is more or less sound. It would appear from 

 a careful investigation of the entire situation that the proper price for 

 local wheat should lie somewhere between the two price extremes men- 

 tioned. A fair scale of prices would encourage grain production in 

 the Salt River Valley greatly and by increasing the volume of their 

 business should enable grain handlers to operate with no reduction of 

 annual profit, but on a slightly smaller margin of profit per 100 pounds 

 of grain handled. As matters now stand, it is annually an open ques- 

 tion as to what will be the price basis for Valley grain. 



Four flour mills were in active operation in the Salt River Valley 

 in 191 7. The daily flour output of each of these mills approximated 

 50 to 60 barrels per 1 1 hour run. The two Phoenix mills consolidated 

 7iear the close of the 191 7 season. Another Valley mill was destroyed 

 by fire and will be rebuilt on a modern scale in time to care for the 

 1918 crop. Hence, there will be three large flour mills in operation 

 during the 1918 season. Less than one-half of the flour milled in the 



