TWENTY-FIRST ANNUAL YEAR BOOK— PART VII 537 



In so far as the charts show any relation at all between the prices 

 of the better grades of cattle and the receipts at the seven western mar- 

 kets, it is that the total of these receipts influences very little the price 

 paid for these cattle at Chicago. This is probably due to the fact that the 

 per cent of the total of such cattle produced in the entire com belt that 

 are marketed on the Chicago market is so large that Chicago has some- 

 thing of a monopoly in the determination of the price of these grades, and 

 that the receipts of cattle at the river and other markets, even when these 

 are large, contain such a small per cent of these better grades of fed 

 steers that their influence as a price factor is comparatively negligible. 

 It is the supply of such cattle coming to Chicago that apparently influ- 

 ences the Chicago price and that price largely determines the level of 

 prices for the same grades of steers at the other markets. 



These charts of the comparative variations in the daily prices of cattle 

 and of similarly named grades of beet while they show how the two 

 prices move up and down in comparative unison, do not indicate with 

 any exactitude that there is anything approaching a normal or basic 

 spread between the two prices. Assuming that the bulk of the good 

 steers will dress out around 58 to 60 per cent of beef, the prices of by- 

 products remaining fairly constant, if beef advanced or declined $2 per 

 hundredweight, a corresponding variation in the live animal would be 

 around $1.20. But no such exactitude can be looked for, or can ever be 

 expected. The price of beef varies from day to day and from market to 

 market, and there may be as much as $3 difference in the wholesale price 

 of the same grade of beef in different cities on the same day. And altho 

 the prices of beef at the three leading eastern markets usually move in 

 the same direction, there is a great deal of difference in the rapidity of 

 change, and altho the level of prices tends to be restored after it has been 

 disrupted by local conditions at some of the markets, it usually takes some 

 little time before a shifting of supplies can bring about this equalization. 

 And in packing house practice there is no attempt made to sell beef at 

 a fixed margin of gross profit above cost, for it can not be done. Ordi- 

 narily, the beef is sold for the highest price at which the supply can be 

 moved, and cattle are bought at such prices that the resultant beef sales 

 over periods of time will show a net profit; but in the process of securing 

 this net profit some beef is sold at no profit, some at a loss, and some at 

 a very good margin. In order to try to determine something as to the 

 nature of this spread, weekly graphs have been kept, made on the basis 

 of steers dressing out 60 per cent, costing at the top range of quotations 

 for good steers, and the beef selling at the top range for good steer beef. 

 The test from which the percentages of the different by-products was 

 secured was made on a lot of forty-seven steers averaging around 1,400 

 pounds live weight. The prices used are the average weekly range of the 

 top of good steer beef, and quotations for packer steer hides and tallow 

 as given weekly in the National Provisioner. The price of edible by- 

 products is set arbitrarily at 10 cents a pound, and of inedible at 5 cents, 

 as there are no figures available showing what should be the weighted 

 prices of these. Obviously, results obtained under such conditions are 

 good only for comparative purposes, but as the same methods and same 

 sources are used each week, the varying results are useful as showing the 



