i 



tical experience, folluwini; graduation 

 from an agricultural college. Should less 

 be required for one who is expected to 

 lead in dealing with our marketing prob- ' 

 lems? 



Second, is tha lack of any coordinated 

 and comprehensive livestock marketing 

 program. Only on the larger terminal 

 markets is there now any effectiveness 

 in coordination of sales effort. And that 

 has been rather more incidental than in- 

 tentional— largely because the weaker 

 sales firms are finding that they must 

 keep more in line or see all of their busi- 

 ness go to other agencies. The time has 

 come whe» all progressive market 

 agencies — both exchanges and roopera- 

 tives — should agree on a sound market 

 program and let the country know they 

 are standing behind it. 



Were it possible to discontinue imme- 

 diately the weak salesmen and weak 

 firmg on every market — concentrating 

 all the business in the hands of the re- 

 maining strong firms and strong sales- 

 men — sailing could be done more effec- 

 tively, service could be improved, and 

 charges could be somewhat reduced. But 

 the Improvement In sales would far out- 

 weigh the savinps resultingr from reduc- 

 ttoii of market charges. 



So loHK as packers can keep stockmen 

 divided Into sectional or state prroups, or 

 keep them squabblinr among: themselves 

 over direct marketing, local markets, etc., 

 ^ust so loniit will the development of 

 any cofnprehensive marketing program 

 he delayed. 



Wenk iialrii .%K*nFlra 



Thiral, Ineffective sales agencies — hoth 

 privately-owned and cooperative — have 

 constituted obstacles to fair prices. Stork- 

 men can no longer afford to support In- 

 effective agencies. The time Is now here 

 when stockmen should Insist that every 

 adequately financed cooperative do its 

 Job as It should be done, or quit. Some of 

 1 the tragic failures of recent years. In the 

 ' Uvestoek marketing field, are chargeable 

 t» a few Ineffective cooperatives or to the 

 Incompetence of their leaders. The In- 

 dustry will not tolerate more such blun- 

 ders. Moreover, there have been suffi- 

 cient con.splcuous success to show that 

 effectively directed cooperatives can do 

 the job. 



Fonrlh. packers' buying practices have 

 often constituted obstacles to fair prices. 

 This Is two-sided. Packers have fre- 

 quently declined to pay such premium as 

 outstanding quality J\istlfled. On the 

 other hand, commission men hare too 

 ■>ften iBslsted that less desirable animals 

 go In at the full price. 



Stockmen cannot afford to assume or 

 lo believe that packers' buying practices 



llnois Legislature 



For Wheeler Amendment 



are beyond Improvement. Men| 



the 



trade realize that unsound practices, detri- 

 mental to both packer and prodiic< r are 

 in operation — and wish they mlcht be 

 promptly eliminated. Said one prominent 

 pacleer operator, recently: "My own opin- 

 ion Is that both the packer and the pro- 

 ducer are suffering under the present 

 set-up. The packers need to make some 

 rather drastic Inquiry Into their own mis- 

 takes." Possibly that will not be done 

 until stockmen develop a strong enough 

 marketing program so that they have a 

 more effective voice In determining how 

 livestock Is to be sold. 



Flffli, lack of standardization of prod- 

 ucts has long been a more serious ob- 

 stacle. Whether In beef, bacon or lard, 

 the abseaee of standardized (and Iden- 

 tifiable) quality ef products — to consumers 

 — has been a great handicap to effective 

 distribution and to fair prices. 



Consider beef as an example. In what 

 proportion of the country's retail shops 

 can aarone ge% good beef? And if the 

 shop does carry some good beef, .how can 

 the buyer who does not know! how to 

 judge beef be at all sure of getting the 

 good beef? Beef cattlemen are at the 

 fork In the road Right now they have 



BEF. C0LLIII8 



A House Resolution memorializing con- 

 gress to enact the Wheeler Amendment 

 to the Farm Credit 

 Act reducing inter- 

 est rates on past and 

 future farm loans 

 to 3 '/a per cent until 

 1937 was unani- 

 mously passed at 

 Springfield recently. 

 The r e s o 1 u tion 

 was introduced by 

 Rep. Dennis Collins 

 of DeKalb county 

 who has a good rec- 

 ord on agricultural 

 legislation. It calls 

 attention to the fact that interest rates 

 have been reduced since the Farm Credit 

 Act was passed nearly two years ago, 

 and urges all Illinois congressmen to 

 support the amendment. 



the opportunity of a "generation to de- 

 velop a quality market for qnallty hrrf. 



Unless that Is done it is quite possible 

 that our beef cattle business will be 

 gradually drowned under the steadily In- 

 creasing numbers of dairy cattle. 



In various sections a strong movement 

 is developing. Its objective being to com- 

 pel government grading and branding of 

 all meats. Sufficient to say. there are 

 sound objections to such a movement. I 

 prefer the Canadian system, giving the 

 Department of Agriculture supervision of 

 all commercially graded and branded beef 

 and setting up definite standards to which 

 each commercial grade must adh<*re. Some 

 packers have spent large sums in ad- 

 vertising their house brands. I believe 

 they should be encouraged to keep and 

 to use them — under government super- 

 vision, to insure fair and equitable grades 

 and grading. 



Irrrgnlar Frrlsht Ralrx 

 Sixth. irregular and discriminatory 

 freight rates and freight tariffs consti- 

 tute one of the peak obstacles of the 

 whole series. Subsidization of areas, sec- 

 tions or groups — through preferential 

 freight rates and freight tariffs — and con- 

 sequent comparative penalization of 

 others, must be stopped. If the Interstate 

 Commerce Commission cannot, or will not, 

 make the needed adjustments, then Con- 

 gress should be asked to order a thorough 

 overhauling of freight rates and freight 

 tariffs on livestock, meats and meat prod- 

 ucts, over the entire nation. A sound and 

 permanent system of livestock marketing 

 Is Impossible so long as transportation 

 subsidies — In one form or another — favor 

 certain sections and certain interests at 

 the expense of all the rest. 



Seventh, the doctrine that wherever or 

 however the stockman sell his livestock 

 he is sure to get their full market value — 

 that "competition" assures him a fair 

 price and full value wherever or however 

 he sells, either solves completely and 

 automatically all of the stockman's mar- 

 keting problems or It. Itself, constitutes 

 ■me of the major obstacles in the way of 

 f.tir livestock prices. Stockmen cannot 

 study this problem too carefully. Appar- 

 ently the same set of data may be the 

 basis of quite different conclusions In 

 this respect. 



For example. In their 1935 Yearbook — 

 one of the most attractive publications 

 you will see anywhere — Swift & Company 

 devotes some seven pages to "Central 

 Markets and Livestock Prices." This sec- 

 tion says that (1) livestock prices are 

 determined by demand and supply: f2) the 

 price of meat depends upon what the 

 consumer Is able to pay, and that com- 

 petition between packers sees to it that 

 live animal prices stay In line with the 

 price consumers pay for meats; (3) that 

 packer competition keeps prices at all 

 livestock markets In line with each other: 



<♦) (lackers who buy at country points 

 usually pay prices In line with central 

 market prices — that producers would not 

 sell direct unless they did receive central 

 market prices: and (5) after all there is 

 just one market — the Great United States 

 Market, that "it seldom makes any differ- 

 ence to which nearby public market a pro- 

 ducer con8ign.*a his livestock because any 

 market to which he consigns Is but a seg- 

 ment of the Great United States market, 

 and prices In all the segments, whether 

 country prices or central market prices, 

 must be in line with one another. Compe- 

 tition sees to that." 



What About Itf 



Such a statement, by so outstanding a 

 company, cannot be lightly passed over. 

 No agricultural college or agricultural ex- 

 periment station, or stockmen's organiza- 

 tion, has as many skilled economists and 

 statisticians devoting their entire time to 

 livestock marketing problems as has Swift 

 & Company. Is there, then, any basis for 

 arriving at different conclusions than 

 those presented la the Swift Yearbook? 

 It appears that there Is a sound basis for 

 arriving at other conclusions. 



Stockmen who In recent months lost 

 hundreds of thousands of dollars by sell- 

 in;? cattle and hogs In the country for 

 much less than their terminal value (be- 

 cause the man out on the farm was not 

 posted on how rapidly the market had 

 changed) seem not to agree that It made 

 no difference where they sold their live- 

 stock; some even doubt that they did re- 

 ceive "central market prices." 



Moreover there Is a definite evidence 

 that different markets do not stay In line. 

 Mr. Knute BJorka. Bureau of Agricultural 

 Economics, United States Department of 

 Agriculture, made a most thorough study 

 of this question. 1 The following excerpts 

 are quoted from the statement of his find- 

 ings: 



". . . . the major trentlM. — la price be- 

 tiveen markefn are mnrh the Hame. Yet, 

 a careful examlDntlon of the data aho^vs 

 that these price relatlonHhIps are anbjeet 

 fo ronsMernble variation. \ mtndj of day- 

 to-day and week-to-neek price quotation* 

 at the different markets reveaU atriking 

 diKalmllarltlrs." (p. .tA9>. 



**.... The data on yearly price dif- 

 ferentlala aa a n-hole ... do [not] Indl- 

 rate that the five prlneipal marketa move 

 together, eMtabllahIng a ronafatent ayatent 

 of pricea nhleh rnuld be counted on by 

 minor markets In their aeveral virlnltiea.** 

 (p. 372). 



**. . . The outatanding eonelualon, 



hfkn-ever. appeara to he that . . . the re- 

 latlonah'pM between the aeveral marke'a 

 atlll ahoYv a high degree of variability and 

 do not Indicate that the price liond lie- 

 tn'een them haa been eatahllahed on a 

 permanent haala.** (p. 373). 



**Short time InHueneea . . . may enuar 

 the prloea at a given market on a partic- 

 ular day to move In a ^vay n-hlrh hna lit- 

 tle or no relation to what la happening at 

 other marketa." <p. SH'i). 



**..., The moat common eharaeterlatir 

 of hog price ditferentiala between ter- 

 minal marketa la change from year to 

 year, month to month, week to iveek, and 

 day to day* in fact. It la rather unnanal 

 for a dllferential .... to remain the 

 aame between two marketa for tivo aue- 

 eeaalve periods. Even day-to-day ehaagea 

 In ditferentiala occur approximately fonr- 

 Aftha of the time." <p. 407). 



Two View Points 



The results of an Illinois studv2 agree 

 with the findings of Mr. BJorka. the Illi- 

 nois bulletin showing great variability In 

 the dally price differences between all 

 markets studied, as well as In seasonal 

 variations. 



Here. then, stockmen have fwo very dif- 

 ferent views presented. One Is to the ef- 

 fect that markets automatically keep In 

 line with each other, hence returns will be 

 comparable wherever the stockman sells. 

 The other aaya that dllferentiala between 

 markets are conatantly changing, that M 

 may make a great deal of difference which 

 market the atoekman aelecta on any par- 

 ticular day. My own view la definitely 

 the latter one. 



The statement that competition keeps 

 prices In line should also be given carefifl 

 attention. May stockmen safely assume 

 that competition — effective buying compe- 



1 "The Cooperative Marketing of l.lve- 

 atork," Brookinga Inatltntion, Waahlng- 

 toa. D. C. I93I, pp. .t6»-4O0. 



2 "Price Differencee Between Hog Mar- 

 keta," lllinola Agricultural Experiment 

 Station Bnlletinn :<ko. I'rhana. lllinola. 

 in.t2. 



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A. A. RECORD 



