WITH some elements of the American public there seems to persist the conviction that the great packing concerns are seeking the injury of livestock producers to their own enrichment. How such an idea can be seriously harbored by thinking men is hard to understand. For the packing industry to plan for the farmer anything but prosperity is to endanger or destroy the source of supply of the raw material by which it lives and grows.

It should be perfectly plain that the packers are selfishly interested in encouraging the producer. Their selling efforts are directed towards disposing of the largest possible volume of meat products, at the best price obtainable in competition with other foods, in order that they may maintain large volume of livestock purchases at prices that will encourage both quantity and quality of production.

Between the producer and the consumer, between the buying and the selling price, the packers operate upon a smaller margin of profit than any other large industry. On invested capital they have realized an average of about 9 per cent over a term of years, on volume of sales about 2 per cent, and on each pound of meat less than one-half of a cent.

At the same time the risks of the business are greater than in other lines, both on account of the perishable nature of the product and the violent fluctuations of food prices, the causes for which cannot always be foreseen.

The comparative low prices of hogs and pork products at the end of 1919 is a case in point. The packing business entered upon the year in the belief that the world shortage of food would maintain pork prices at high levels for a number of years; that European demand would absorb even a larger surplus of American hogs than the pre-war period. The earlier months of 1919 confirmed this belief. The foreign demand was very brisk, exports reached unprecedented volume and prices were maintained.

Then came the unlooked-for event. Foreign exchange rates fell to so low a point that Europeans could no longer afford to buy American meats. The packers extended credit for a time, but the limit of safety was soon reached, and when the year closed very little American pork was being exported and no new contracts were being made.

The result was great loss to both producers and packers. Armour and Company alone packed millions of pounds of pork during the period of high prices, much of which was still in the course of curing when the slump in the market came.

But the conditions that caused this decline and loss are exceptional and only temporary. The great foreign need for American meats still exists—the greatest need in the world’s history. The ability of Europe to buy will be restored with the full restoration of peace and the arrangement of international credits. The result will be a return of profits and prosperity to both producers and packers of pork.

The facts to keep in mind are these:

First, there must finally be a realignment of prices on all livestock and meats, to levels below the prevailing high war prices. A fair balance must be struck between the interests of the consumer and those of the producer. Prices for meat must be sufficiently attractive to consumers to insure an adequate volume of sales; on the other hand prices for livestock must be sufficiently high to encourage production. Only on this basis can the industry thrive.

Second, the utmost care must be taken in breeding and buying of feeding stock and the most exacting economy practiced in feeding methods.

Third, the producer must realize that the packer is his natural ally in maintaining the prosperity of the two inseparable branches of the livestock industry—production and packing.

It is a reassuring sign that producers and packers are already getting together on a platform of better understanding of their mutual interests, both for protection against disturbing agitation and legislation and for the correction of whatever inequalities or abuses may exist in the shipping and marketing of livestock.

Armour and Company’s Farm Bureau was established three years ago as a point of contact with livestock men, through which better methods of breeding, feeding, shipping and marketing could be promoted.

Being in constant touch with the requirements of the markets, Armour and Company know the types of meat animals which are most demanded and which bring the largest profit to the stockman. The Farm Bureau has available many facts regarding the economical production of these types, and these facts can be had by addressing the Bureau, care of Armour and Company, Chicago.