The Livestock Producer and Armour

Part 1

THE LIVESTOCK PRODUCER AND ARMOUR

The success of capital lies in ministering to the people, not in taking advantage of them

Philip D. Armour

1920 ARMOUR AND COMPANY CHICAGO

George B. Robbins C. H. MacDowell Everett Wilson Arthur Meeker Frank W. Waddell Charles W. Armour Laurance H. Armour J. Ogden Armour A. Watson Armour Philip D. Armour F. Edson White E. A. Valentine Frederick W. Croll Robert J. Dunham]

Foreword

THE year 1919, included as it was in the period between the signing of the Armistice and the ratification of peace, was logically a season of uncertainty, unrest and unsettled conditions. And yet American business, discounting all this, entered upon and passed through this period with full faith in a favorable outcome.

While prosperity was general, the processes of realignment of our economic relations hurt or temporarily hampered some lines of business. The livestock and packing industries did not escape entirely unharmed.

Naturally, proposed radical legislation, with accompanying agitation, and a slump in American meat exports, caused such violent disturbance of the livestock markets during the latter half of the year that both producers and packers became deeply concerned as to the immediate future of the industry.

No array of proved facts as to the low percentage of packer profits, no pointing out of the real factors controlling meat and livestock prices was sufficient to convince the disturbed element of the public and certain agents of the Government that packers’ operations on the existing large scale were justifiable.

Therefore, by a recent understanding with the Government, Armour and Company will dispose of all their interests in food production, not directly associated with and dependent upon the meat packing business. In addition, Armour and other packers agree to relinquish interests in stock yards and railway terminal properties at the various market centers. The terms of the understanding permit the retention of dairy and poultry products in view of the dependence of these on such refrigerating and distributive facilities as the packers have provided.

Both patriotism and enlightened self-interest command every citizen and business to make concessions and sacrifices in times of crises, whether of war or peace; and while Armour and Company felt that they were clearly within their rights in their operations previous to this understanding with the Government, it was plainly in the line of public service to make concessions that would clear the way towards public confidence in the development of the livestock industry.

J. Ogden Armour

How and Why Livestock Market Grew

THERE was a time, within the memory of men still active in the cattle business, when the capacity and demand of the local butcher shop measured the demand for fat stock and fixed the price as well.

On driving his cattle to the village, or negotiating for their sale, it was not uncommon for the stockman to be met with the news that a neighbor had got ahead of him and glutted the market with two or three or more meat animals. No matter how good the offerings, there was no present market at any price.

This was the condition of the livestock business in the “good old days” before the establishing of the great packing centers; before the development of economical systems of slaughtering, saving the waste, and distributing dressed beef quickly and continuously to the remotest parts of the country.

No stockman now considers the demand of the local butcher as a serious factor in making or breaking the market for his cattle. If he is feeding a carload or more, he has an approximate date set for the finishing of his feed. By keeping in close touch with the supply of cattle in the country, their movement and the trend of prices, he chooses what appears to be the most favorable day and ships them to the market.

Even if he is feeding only a few head, the disposal of them is not dependent upon local demand. He may double-up with his neighbors to make up a car. He may belong to a shipping association that makes a business of collecting small lots into carloads for direct shipment, and although he sells to the local stock buyer, his knowledge of what his cattle are worth at the central markets enables him to secure a fair price.

So it has come about that world demand determines prices and governs buying activities in every town and village where livestock is purchased. For local butchers everywhere are governed by prices at the central markets. The truth is that the most successful butchers no longer do their own killing, but buy their beef from packers’ branch houses in the larger cities and towns or from “route cars” running from packing plants or branch houses into the smaller communities.

In doing this they get better beef at lower cost than by local slaughtering, and they can serve their customers with a safer and more satisfactory article because the animal is killed and the meat prepared under the stringent government inspection and sanitary regulations that are practiced only in the larger establishments. This insures absolute freedom from diseased conditions and careless handling.

Practical butchers, who are also feeders, have proved by test that they can ship their beef cattle hundreds of miles to the big packer, have them slaughtered, dressed and returned at less cost than they can do their own killing. This is possible because the utilization of every scrap of the animals in valuable by-products, and the saving in labor by wholesale slaughtering and handling, pay all expenses, including the freight both ways, and leave a margin for the butcher besides.

The local butcher or livestock producer can little better afford to kill and prepare his own beef than he can afford to tan the hide and make his own shoes. There was a time, even in America, when the farmer himself actually did these things. He also sheared his own sheep by hand, while his wife and daughters spun the wool into yarn and wove cloth for the family clothing. Progress has made such methods absurd, unprofitable and impracticable.

But the great machinery of economical production and distribution was not built in a day, or a year, or a decade. Armour and Company’s activities began more than fifty years ago. At first the packing house was only a butcher shop on an enlarged scale, preparing and handling pork products almost exclusively. Cattle were killed for local consumption only, as there was no such thing as cold storage, refrigerator car lines or branch houses for the distribution of fresh meats.

In those days the offal from the packing houses was thrown away or buried, as is still done to considerable extent by the small butcher at the present time. The by-products industries, by which hundreds of valuable articles are now created from what was once waste, were developed through long years of scientific investigation and experimentation.

The efficiency of the Armour organization of today is the result of the accumulated efforts of thousands of trained scientific and business minds, applied through half a century to the solution of the problem of factoring and furnishing food supplies for the nation and the world by the most direct and efficient means.

Nothing less than a great and thoroughly organized concern could effect the economies that make such achievement possible. Armour and Company’s growth has been, and is, simply the natural expansion of a great industry keeping pace with the progress of the producer.

Re-investment and Expansion Policy

Part 2

NO amount of criticism, investigation, misrepresentations or “exposures” has ever shaken Armour and Company’s faith in the fairness and final endorsement of the great body of American livestock producers.

That the consumer found grievance in recent high food prices and attributed his troubles to the packer or producer, or both, was perhaps not to be wondered at, though his reasoning was not sound. That competing food distributors should object to the extension of packer efficiency to general food distribution is easily understood from these competitors’ viewpoint.

The retirement of Armour and Company from all lines of production and distribution not directly associated with meats and livestock by-products, was in response to these disturbed elements of public opinion. But these restrictions of packer activities in no way affect the relations of mutual confidence and dependence between Armour and Company and the livestock producers.

The fundamental things remain, and they are these: The livestock industry must continue to exist and expand; producers must be rewarded with fair profits; livestock markets must be maintained and made more convenient; and the markets for meat products must be enlarged and extended.

To these basic facts Armour and Company have pinned their business faith, and upon them shaped their policy. Ninety per cent of the profits of the Company have been re-invested in the business and are represented today by great packing plants at sixteen market centers, and many branch houses throughout the country, together with refrigerator car lines connecting the livestock markets with the consuming centers of the nation.

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