페이지 이미지
PDF
ePub

FIGURE 8

Price Spreads for Hogs and Pork, Annual Data

FARM AND RETAIL VALUES AND MARKETING MARGIN ¢ PER LB.

[graphic]

19601

COMPOSITE RETAIL PRICE PER POUND OF PORK
VALUE OF 1.82 POUNDS OF LIVE MOG (EQUIVALENT TO 1 POUND OF PORK AT RETAIL) LESS LARD AND INEDIBLE BYPRODUCTS

U.S. DEPARTMENT OF AGRICULTURE

AGRICULTURAL MARKETING SERVICE

Marketing margins for pork were relatively stable during the period 1919 to the beginning of the depression of the 1930's. Margins narrowed sharply during the depression years, reaching an alltime low of 9.3 cents a retail pound of pork in 1933.

As prices recovered, marketing margins first widened and then tended to narrow gradually until World War II. When price ceilings were removed after World War II, retail pork prices, hog prices, and marketing margins all increased sharply. In 1 year, from 1946 to 1947, margins widened from 12.4 cents a pound retail weight to 17.9 cents, the greatest annual increase in pork marketing margins ever recorded.

The marketing margin for pork then tended to widen gradually to 25.6 cents a pound in 1955. Pork margins declined slightly in 1956 to 24.9 cents. In 1957, however, farm-to-retail marg resumed their upward trend and averaged 27.1 cents a retail pound, the highest on record. The substantial increase in farmto-retail price spreads from 1956 to 1957 resulted in part from increases in both packer and retailer margins.

POULTRY AND EGGS

Poultry and eggs are the only major group of farm foods on which farm-toretail price spreads have declined in recent years. Further decreases in these spreads are not unlikely, particularly on eggs. Poultry and eggs accounted for about 10 percent of the retail cost of the total market basket of farm foods in 1956, and for about 16 percent of the total farm value. The farm-to-retail spread was smaller for this group of products, relative to the retail cost, than for any other major product group.

Egg8.-Retail prices, farm values, and farm-to-retail price spreads on eggs generally have declined since 1949. Spreads, however, have decreased less than prices. As a result, the general trend in the farm share of the retail price of eggs also has been downward. The 1957 average farm-to-retail price spread of 18 cents a dozen was only slightly above the lowest annual average spread of 17.8 cents registered in 1953 and substantially below the high 1952 spread of 20.4 cents. But with 1957 retail prices and farm values at their lowest level since 1949, the farm share of the retail price was down to 67 percent from 71 percent in 1949 and 1951 and 73 percent in 1953.

Further declines in egg marketing costs and margins are not unlikely. Several cost-reducing changes in marketing channels and practices are being adopted

[ocr errors]

rapidly by the egg trade. These include: (1) Reduction in numbers of egg handlers and frequency of handling individual eggs, through the bypassing of city wholesalers and associated distributors by large country assemblers and other integrated assembler-grader-distributors and retailers; (2) adoption of improved methods of grading and handling eggs in plants; (3) increases in number of specialized egg farms; (4) increases in buying of eggs from farms on the basis of U. S. consumer grades; and (5) increasing movement of grading and cartoning operations from city to country plants.

Two examples indicate the potential for reducing costs. The average farmto-retail price spread on eggs in New York in 1957 was 28.6 cents a dozen; in Los Angeles it was 16.8 cents. In Los Angeles, eggs move directly from farms to integrated assembler-grader-distributors and then to retailers. Modern, lowcost handling methods are used and eggs are bought from farms on the basis of U. S. grades. In contrast, adoption of such modern marketing practices is only beginning in New York, and large volumes of eggs still move through as many as five different marketing firms in going from farms to consumers. Again, a large midwestern assembler-grader-distributor of eggs is moving graded and cartoned eggs frim his country plant directly to retail stores in a large eastern city at a cost of only 11.5 cents a dozen. With an average store margin of 10 cents, the farm-to-retail spread in this case is 21.5 cents a dozen, substantially less than when less efficient practices are followed.

Chicken fryer8.-Retail prices and farm values of chicken fryers have declined sharply since 1949, reflecting pronounced increases in production and marketing efficiency. Both retail prices and farm values reached new lows in 1957. Farm-to-retail price spreads, however, have decreased only slightly. Since 1949, spreads have varied on an annual basis within the narrow range of 21.1 cents and 23 cents a pound, ready-to-cook basis. The 1957 spread was 21.7 cents a pound. As a result, the farm share of the retail price of fryers declined to 55 percent in 1956 and 1957, compared with 64 percent in the years 137)-52.

Studies of processing and other marketing costs indicate that the efficiency of these operations has been increased markedly in the last decade by the adoption of improved machinery and better marketing methods. At the same time, marketing firms have increased the volume of services provided, including complete evisceration, and cutting, packaging, and freezing operations. These services and rising wages and prices of other production items appear almost to have offset economies from improved technology and distribution practices. Further improvements in both production and marketing efficiency are likely, but these may be offset by costs of additional marketing services which must be provided to meet consumer demands.

Turkeys.-Available data on price spreads and marketing costs for turkeys are too limited to provide an accurate picture of their trends. However, it is known that the turkey industry has changed its production, processing, and distribution practices and technology in much the same way as the chicken-fryer industry has. In fact, many firms process and market both types of birds, using the same processing equipment and techniques and similar distribution practices.

There are indications that the turkey incastry is slowly moving toward making turkeys as much a part of American menus in all seasons as chicken fryers Dow are. The pronounced changes in production and marketing practices which necessarily must be a part of this development undoubtedly will have important impacts on production and marketing costs, prices at all market levels, and price spreads on turkeys.

MARGARINE AND SHORTENING

A much larger proportion of the consumer's dollar goes for marketing charges for oilseeds than for many other agricultural products hecause a great deal of processing is required to convert the oil contained in soybeans or cottonseed into the principal consumer products, margarine and shortening. Marketing charges took about 80 percent of the consumer's dollar in November 1940, 60 percent in 1947, and over 70 percent in November 1955. These charges cover many services which have been affected by increased costs and the rise in the general price level.

The average retail value of soybean and cottonseed oil in margarine and shortening in Chicago increased about 75 percent between 1940-41 and 1955–56. But the average farm value of the oil contained in these 2 oilseeds increased by close to 90 percent.

Increases in farm values for oil occurred prior to 1947-48 (fig. 9). Since 1947–48, farm oil values have decreased by 40 percent for soybean oil and closa

to 50 percent for cottonseed oil. Retail oil values also fell from their 1947-48 peak when the value of oil in margarine was reduced by about 30 percent and oil in shortening by about 20 percent. Marketing charges or price spreads also adjusted downward for margarine, but not to the same extent that farm oil values did. Shortening margins have increased slightly since 1947–48.

FIGURE 9

FARM AND RETAIL VALUES OF VEGETABLE OILS ¢ PER LB. *

In margarine (retail),
SOYBEAN
Chicago

COTTONSEED A-
-- In shortening (retail),
45

Chicago
Farm value

[graphic]

30

15

0 1940-41

[blocks in formation]

U.S. DEPARTMENT OF AGRICULTURE

AGRICULTURAL MARKETING SERVICE

FIGURE 10

Farm-to-Consumer; Sales in Chicago

MARKETING MARGINS FOR SUGAR $ PER CWT.

[graphic]
[ocr errors]
[ocr errors]

1940

1945

1950

1955

U.S. DEPARTMENT OF AGRICULTURE

AGRICULTURAL MARKETING SERVICE

SUGAR

From 1950 to 1955, the marketing margin, or farm-to-retail spread, increased 15 percent on cane sugar marketed in New York and 24 percent on cane sugar marketed in Chicago (fig. 10). The marketing margin on beet sugar from the midwestern beet producing area marketed in Chicago increased 14 percent. There was a similar increase in the margin on beet sugar produced in the Western States and marketed in Los Angeles, Calif., and Seattle, Wash. There was a 20-percent increase in the marketing margin on beet sugar from the midwest producing area marketed in Chicago. In comparison, the average increase in the farm-to-retail spread on all foods in the market basket was 17.6 percent for the same period.

COTTON PRODUCTS Research on margins and costs for marketing cotton, financed with regular funds, shows that the spread between the retail cost per family of 42 representative items of cotton clothing and household furnishings and the farm value of the cotton used in their manufacture increased moderately in 1956 and 1957. However, the spread continued below the highs of the late 1940's and early 1950's (table 4). The farm value of cotton used in 1957 averaged about the same as in the preceding 4 years, but was 20 percent below the high of 1951. Retail cost of these items increased in 1957 for the second consecutive year, but remained about 5 percent below the record 1947 and 1951 levels.

These changes resulted in some shifts in the farmer's and marketing system's relative shares of the consumer's dollar spent for cotton textiles. In 1957, the farmer's share averaged 12 percent and the marketing margin 88 percent-the same as in 1947—compared with 15 and 85 percent in 1931. The farmer's share of the consumer's dollar spent for individual items differed considerably from the average and, for some items, the changes over time were marked. For example, farmers received 22 percent of the consumer's dollar spent for overalls in 1951 and 15 percent in 1957. Comparable figures for work shirts were 18 and 14 percent and for business shirts 9 and 8 percent.(fig. 11).

[merged small][graphic][merged small][subsumed][merged small][subsumed][merged small][merged small]

Although the share of the consumer's dollar going to all marketing agencies has not changed greatly since 1947, several significant changes occurred in the margins of particular groups of agencies. Average margins for manufacturers of 17 major kinds of unfinished cloth declined moderately in the 1956–57 season, and, although still 7 percent above 1954-55, were 49 percent below 1947-48. In contrast, gross margins for wholesale dry goods firms increased in 1956 and were 3 percent above those of 1951 and 7 percent above 1947. Margins of retail dry goods stores in 1956 remained about unchanged and were 3 percent abore margins for both 1951 and 1947. Margins for merchandising raw cotton also have risen moderately, reflecting increased charges for warehousing and transportation services and added costs of carrying larger stocks.

TABLE 4.--Cotton products: Average retail cost of a family's purchases of 42 articles

and of 3 individual articles of clothing, farm value of equivalent quantities of cotton, marketing margin, and farmer's share of retail cosi, 1927–57 1

[blocks in formation]

1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1910 1911 1912 1913 1914 1915 1916 1917 1918 1949 1950 1951 1952 1953 1951 1955 1956 1957 5 1954:

March.
June.
September

December 1955:

March.
June
September

December 1956:

March
June
September

December 1957:

March
June

Sentember
Overalls;

1951 1952 1953 1954 1955 1956 1957 5

$31. 82
30. 56
29. 65
28 08
24. 96
22. 52
24. 10
25. 90
24. 24
23. 82
24. 46
23. 30
22. 96
23. 10
25. 51
32. 51
34. 32
37. 01
40. 44
49. 78
59. 34
59. 49
52. 94
51. 22
59.35
56. 36
56. 25
55. 25
54. 95
55. 86
56. 46

$3. 69
4.02
3. 74
2. 51
1. 48
1. 10
1. 98
2. 54
2. 41
2. 61
2. 40
1. 82
1. 90
2.07
3. 01
4. 13
4. 40
4. 55
4. 88
6. 26
7.09
6. 99
6. 34
7. 57
8. 63
7. 91
6. 91
7. 01
7.06
7.02
6. 91

$28. 13
26. 54
25. 91
25. 57
23. 48

21. 42
4 22. 12
4 23 36
421.83

21. 21 22. 56 21. 48 21.06 21.03 22. 50 28. 38 29. 92 32. 46 35. 56 43.52 52. 25 52. 50 46. 60 46. 65 50. 72 49. 45 49.31 48. 24 47. 89 49. 84 49. 55

6 5 S 10 10 11 10 8 8 9 12 13 13 12 12 13 12 12 12 14 15 14 12 13 13 12 12

[blocks in formation]

See footnotes at end of table.

« 이전계속 »