352 



AMERICAN BKF. JOURNAL 



September 



THE PACKERS' PROFITS 



Notes on the Cost of Packing and Selling the Honey Crop 

 —By M. G. Dadant 



MORE and more, in these days of 

 reconstruction and of revis- 

 ion, we hear criticism of the 

 jobber, of the wholesaler and of the 

 retailer, and an urgent demand 

 evei-ywhere for the elimination of the 

 middleman. 



Before discussing specifically the 

 case of the honey producer and honey 

 seller, a frank elaboration upon the 

 "middleman" seems advisable. 



In the earlier days, the middleman 

 was a negligible quantity. Either 

 the head of the family produced all 

 the family required or else he bar- 

 tered with his neighbors — a case of 

 from producer to consumer. By and 

 by, modes of travel and of inter- 

 course were established, the bartering 

 became more general. By gradual de- 

 velopment we came to a period when 

 the head of the family depended for 

 many things upon exchange with 

 neighbors or with distant peoples. 

 This was true as far back as the time 

 of the Phoenicians, a flourishing peo- 

 ple, devoting their time to trading 

 along the shores of the Mediterranean 

 and even in the countries of northern 

 Europe. 



Eventually was evolved the present 

 period of specialization, where many 

 men spend their whole lives in one 

 single pursuit, exchanging the result 

 of their labors for commodities pro- 

 duced by the labor of others, in this 

 country or in far-away foreign lands, 

 with middlemen to execute the ex- 

 change, trading coffee for honey, or 

 shoes for raw hides. 



So specialization means middle- 

 men, and the greater the specializa- 

 tion, the more middlemen required, 

 most certainly with all the oppor- 

 tunity for incident evils, but not with- 

 out compensating advantages. 



Moreover, the more middlemen, 

 jobbers, brokers, wholesalers, packers 

 (or whatever you are minded to call 

 them), we can interest in the hand- 

 ling of a given commodity, the 

 greater the competition amopg them, 

 the less profit they will take and the 

 better distribution they will give us. 

 Arguing on this basis, and for our 

 own selfish interests, we should en- 

 courage occupation of as many mid- 

 dlemen as possible in distributing 

 such a commodity as honey. Not that 

 it is better for the distributor, but 

 rather that it is better for us, the pro- 

 ducers, or the consumers. They bid 

 up on buying, they attempt to under- 

 bid each other on the selling. 



If each individual producer en- 

 deavored to sell his own products di- 

 rect in these days of specialization, he 

 might succeed if his output were 

 small, but, with more than he could 

 dispose of locally in a small way his 

 costs of marketing would become ex- 

 cessive, in fact far above those of the 

 individual who made a business of 

 trading. The smaller producer may 

 dispose of his crop, the larger must 



leave the sales to a class who devote 

 their entire time to it. 



The mere fact that there arc profit- 

 eers among the jobbers, etc., should 

 not blind us to the fact that ve can- 

 not do without the whole class. The 

 profiteer should be eliminated, and I 

 believe that this is appreciated as 

 much by the honest and conscien- 

 tious middlemen (who are in the 

 large majority) as by the producer 

 and the ultimate consumer. 



Turning now, more specifically to 

 honey and honey prices, I have been 

 fortunate in getting from the diff"er- 

 ent honey packers, figures on the 

 items that enter into the retail price 

 of honey — what proportion of the re- 

 tail price paid goes to the producer, 

 how much is distributed along the 

 road to the handlers, how much for 

 labor, freight, containers, labels, 

 leakage, losses, etc. 



An average of these figures, which 

 were slightly variable, but in all 

 cases within comparatively close 

 range, is shown in the accompanying 

 table: 



In all instances, in order to get a 

 working basis, honey at 10 cents per 

 pound, f. o. b. packer's station, was 

 used. Cost of packing materials are 

 fairly constant and vary only with 

 the distance of packer from his source 

 of supply. 



The item of overhead, including as 

 many items as it does, and based on 

 specific cost sheets, though large on 

 the larger packages, is well within 



reason, as is the packer's charge of 

 6 per cent profit. 



There only remain the profits of 

 jobber and retailer, which alone make 

 up 34 per cent of the whole. These 

 do look large. Bear in mind, how- 

 ever, that these are gross profits, from 

 which must be deducted freight, 

 handling, damage, delivering, inter- 

 est, etc. One point which might go to 

 show that these two classes are not 

 getting an excess is that so vei^y few 

 wholesalers and retailei's handle 

 honey. Were the profit excessive 

 there would be an inducement to push 

 honey I'ather than other syrups. The 

 reverse is usually the case. Why? Is 

 the margin of profit larger in other 

 syrups? Possibly it is the cheaper 

 price. More likely it is the better dis- 

 tribution and the better advertising. 

 The syrup people spend millions on 

 advertising. How much has been 

 spent on honey? 



The small individual honey pro- 

 ducer will assure us that the prices 

 figured are too high, that he can sell 

 cheaper. But can he afford to sell 

 cheaper? Has he figured his costs? 

 What does he charge for his time? If 

 he sells 500 pounds of honey in 10- 

 pound cans, can he put it up as 

 cheaply as one who cans honey day in 

 and day out with modern equipment? 

 There are many items which the small 

 producer will avoid, but will not his 

 heavier expenses for containers, sell- 

 ing, etc., offset this, if figured on a 

 real cost basis? 



The farmer no longer butchers his 

 hogs and cattle to sell. He cannot 

 afford to. His distribution costs 

 would be too high. He specializes in 

 production. 



What, then, can be done to stabilize 

 the sales of honey? Wherein is the 

 present honey-selling industi'y suffer- 

 ing? 



In the first place, there is a lack of 

 co-operation. Not only is this true as 

 between the individual beekeeper's, 

 but also as between the producer and 

 the honey packer and honey seller. I 

 may be selling my honey in 10-pound 

 cans at .$2.25, whereas my neighbor 

 sells for $1.00. I may be selling at 

 $1.50 while the packer will have to 

 ask $2.50 to make a normal profit. 



Under these circumstances honey 

 sales are bound to suffer; the con- 

 sumer who buys my neighbor's honey 



I*"ricliun top pailb, attraulivrly lai'clc-d, make idtal conlaiiui> lur local ?alc5. 



