HomeMy WebLinkAboutThe Brussels Post, 1947-9-17, Page 2CANAD
PACKE JMITE
REPORT TO SHAREHOLDERS
The twentieth fiscal year of Canada Packers Limited closed March 27th, 1947.
The following are the key figures, setting forth volume and profit, with the
comparative figures of the previous year: -
Year Ending
March 1947
Tonnage...............................................................:.......1,373,000,000lbs.
Profit after all charges except Income and
Note:
1. Tonnage, -weight of product sold, -was down ..,..„,. ...».».».................... 10%
$3,758,852
1,699,208
$2,059,644
Year Ending
March 1946
1208,997,520
,526,000,000
08,9,520
2
26,9U7,0001bs.
$4,620,712
2,803,931
$1,816,781
2. Dollar Sales were down only _._.......................:.
(reflecting an advance in average price of products sold of approxi-
mately 8%.)
3. While Profit before Federal Tax was down approximately ., ..... _ $860,000:
nevertheless, --because of the reduction in Income and E.P. rates
(applied to the lower Gross Profit) -Net Profit was up approxi-
mately ....... ................ ..-...... Anon non
The following is a comparison of the main items of the Profit and Loss Statement
with the corresponding figures of the previous three years. For clarity in comparing
years, each item is also expressed as a percentage of dollar sales.
Out of each Sales Dollar there was paid: -
For Raw Materials ..............__..........»,.._
Far Wages plus Salaries .. ............._...
For Services (General Expense) ».„».,.-
For Materials and Packages ._............-
For Taxes (Municipal, Provincial,
Federal) ..........._ ............._.......__.._...........».
For Wartime Inventory Reserve ...._-
For Depreciation on Fixed Assets ..:__
Remainder, -Profit from Operations_
Income from Investments, etc. ............
Total Net Profit for the year, on each
1944 1945 1946 1947
83.60c 82.35c 81.33e 80.21c
6.77 7.35 8.06 9.10
3.46 3.83 4.13 4.25
3,08 3.32 3.76 4.06
1.59 1.70 1,48 .98
.24 .25
.45 .41 .40 ,43
99.19c 99.21c 99,16c 99.03e
.81 .79 .84 .97
.01 .01 .03 .04
.82c .80c .87c 1.01c
The products handled by the Company fall into four groups, -viz: -
Live Stock Products; comprising all products derived from
live animals: -
Meats, -Beef, Veal, Pork products, Lamb and Mutton;
By -products, -Hides, Skins, Tallow, Bones, Tankage, etc.
Tonnage of this group .. ,., .. 460,000,000 lbs.
Other Farm Products, comprising, -
Butter, Eggs, Cheese, Poultry, Frosted Foods, Fruit,
Vegetables, etc,
Tonnage
Non -Farrar Products, comprising, -
Edible Oils, Shortening, Soap, Fish, Fertilizers, Stock
Foods, etc.
Tonnage , . ,
*Manufacturing, comprising,-
Canned
omprising,Canned Meats (sold chiefly to UNRRA) and Canned Fruits
and Vegetables.
1,373,000,000 lbs.
The outstanding feature of the year's result was the extremely small profit derived
from the first two groups, viz. Live Stock Products, and Other Farm Products.
Total weight of products in these groups was 667,000,000 lbs.
equivalent to .. . ,M , , ,,,, 35/sc per 100 lbs,
otherwise .
Profit as percentage of Sales _,__.._„„....... ................. 1/6 of I%
On the other two groups, totalling 706,000,000 lbs., net profit was $1,752,673,00
Profit as percentage of Sales ......... ...... .»..................__........_. -.. 2.6%
The very low profit on Live Stock and Other Farm Products was due to conditions
arising out of war controls. On all these products, especially meats and poultry,
supply was much below demand, and prices paid by black market operators were,
for Long periods, above the equivalent of the established ceiling prices.
During those periods, processors who respected the ceilings were forced either to
buy the live stock at prices involving loss, or to withdraw from operations. For
the regular firms in the Packing Industry to cease purchasing live stock was, of
course, impossible. Therefore, the losses had to be taken,
In this situation, the record of the Packing Industry as a whole was a highly
creditable one. With only rare exceptions, inspected packers, large and small,
scrupulously adhered to the regulations and did everything in their power to assist
the officials of thc Wartime Prices and Trade Board.
On their part the directing officers of the Board made a strenuous and continuous
effort to enforce ceilings. But the task was a difficult one.
The difficulty was that of securing evidence. Only two persons, the seller and
the buyer, knew the facts of illicit transactions. As both these persons were ex-
posing themselves to heavy penalties, they were most undependable witnesses. The
record of the illicit transactions, in the accounts of seller and buyer, furnished no
evidence. Goods were invoiced at ceiling prices. Payments in excess of ceiling
were in currency, and were made 'under the counter'.
In the main, violations were confined to processors on the fringe of the Industry,
These persons found themselves in a position to greatly increase their volume,
at margins of profit much higher than normal. The fact that they were spread
throughout the cities, towns and villages of all Canada made the task of catching
up with then a very difficult one. In relation to offences, there were extremely
few convictions.
Under war conditions, steps had to be taken to ensure an even distribution of the
available food. The necessary war effort could not otherwise have been sustained.
The Wartime Prices and 'trade Board was set up for this purpose. It was directed
at the top by a group of men of the highest ability and character. The job they
did was one of the most essential of Canada's total war effort, On the whole
it vans highly successful. But its enforcement of ceilings in respect of food left
much to be desired.
The following notes are set down in the hope they may prove useful in the field
of animal products, if the necessity to establish controls should again arise: -
1. When food la scarce and purchasing power high, enforcement of ceilings
is a most difficult task. I'he public may unreservedly endorse the print -talc
of price control, but public opinion, of itself, cannot be counted upon to
check illicit operations.
2. Only by co alert and firm Enforcement Branch, can controls be made
effective. The post of Chief Enforcement Officer calls for a man with
the highest qualifications of ability, courage and cool judgment.
3. In respect of meats, illicit transactions begin at the stage where the meats
pass from the processor to the retailer. But the retailer is clearly an
unwilling participant. He does not wish to pay more than the ceiling
prier, and with intelligent leadership could be secured as an ally of the
Enforcement Branch,
4, Enforcement is bound to fail unless penalties are severe enough to deter
offenders, (A fine of a few hundred dollars is no deterrent to a violator
who is making illicit profits of thousands,)
5. Cancellation of licence is the ultimate and the only effective deterrent.
This is a drastic penalty which should be imposed only in case of flagrant
and repeater' violations, involving the head or principal officers of .the
firm.
Only a few cancellations would be necessary,
•Atthouglf the foods processed to this department ere farm products, -meats, vege-
tables, fruits, nevertheless the operation 1c one which docs not form a necessary, or
customary, part et packinghouse operations. `ritelant required for the processing is
spaatallzcd and expcnslvc, 1115 tor these reasons blot these operations are segregated
as Manufactoring.
One result of black market operations was that producers received a higher
price for their live stock than the equivalent sot the ceiling
It is only just to point out that this involved no breach of the regulations, either
technical or amoral, on their part. Their auinrals were sent to market as usual,
and were sold on the market, openly, to the highest bidder. No other system
was possible,
The Wartime Prices and Trade Board wisely refrained from imposing ceilings
on live stack: This was tried in United States and proved completely unworkable.
In view of the extremely pour results on live stock and other faun products,
it was fortunate that volume in the other two groups was high, and profits normal
(one-quarter cent per lb.).
In the fourth group the chief product was one developed in the Laboratories
of Canada Packers, viz. Canned Blood Sausage, All this product was sold to
UNRRA. As suggested by the name, the product contains a substantial per-
centage of cooked blood (from inspected animals). This gives it a high protein
content. Other ingredients add important calcium and carbohydrate values. Be.
cause of ifs high nutritional value, convenient form and comparatively low cost,
Canned Blood Sausage was a very useful food for UNRRA distribution.
Once this product had been accepted by UNRRA, the Canadian Meat Board
directed that the formula should be passed on to all Canadian plants equipped
to produce it. Shipments of Blood Sausage foamed a very important part of
Canada's total sales to UNRRA. During 1946 total shipments from Canada
were 63,000,000 cans.
While this quantity was small in relation to UNRRA's over-all relief shipments,
nevertheless it is gratifying that a product developed entirely in a Canadian
laboratory should have played even as substantial a part in the relief programme
of 1946. -
With the winding up of UNRRA, orders for Canned Blood Sausage have ceased.
It was essentially an emergency food. Notwithstanding its high nutritional value,
and low price, its colour subtracts from its appeal to the civilian consumer.
•
The experience of this year proves again the wisdom of the Company's policy
of diversification. In 1927 when Canada Packers was formed, live stock plus
other farm products comprised 79% of the Company's total volume. In the
year under review, the corresponding percentage was 49%, More than half
the volume and 85% of the profit were contributed by groups three and four.
It will be recalled that following World War I, deflation of food prices set in
during July, 1920, -approximately eighteen months after Armistice Day. That
deflation was brought about by the fact that, by July, 1920, food supplies had
begun to catch up with effective demand,
Following World War II, it was expected that the greater destruction of property
and the greater displacement of population, in Europe, might result in a more
prolonged period of dislocation. However, it seemed likely that the restoration
of normal food conditions might follow the same general pattern as in 1919-20;
-i.e. a period of advancing prices, to be followed at some time either by a
slide or a collapse.
(It is important to remember that the world's food supply is produced from
year to year. If one year's crop is inadequate, hunger [perhaps starvation) may
be the result. However, a bountiful world crop in the following year can at
once restore normal conditions. The hunger of thc previous year does not carry
oven)
World War II ended with V -J Day, August 15th, 1945. That is a full two
years ago.
But, as yet, world food supplies have not caught up with demand. Prices of
most staple foods arc not only above those of V -J Day, but actually, in the case
of many essential foods, are stll at an all-time high.
The following table gives a comparison of prices (in Canada) of animal products
and cereals from 1939 to 1947.
CANADIAN FARM PRICES, 1939-1947
Good Steers, live, Toronto
Hogs, B-1 dressed, Toronto
Lambs, live, Toronto ,...........
Chickens, Milk Fed A,
Toronto ..........»,.,.......- ..............
Eggs, 'A' Large, Toronto
Creamery Butter, Toronto
Cheese, f.o.b. Factory,
Wheat, No. 1, Nor.,
Oats, No. 2 C,W.,
Ft. Wm. .
Barleys No, 1 Feed,
Corn, Ontario Yellow,
Toronto .............................
*Subsidies, Federal plus Provincial.
t Official Wheat Board price, March 1939, 80c.
t Wheat Board to make participation payment in 1950.
§ Equalization payments.
It will be seen' that each price in July, 1947 is at the high point of the eight -
Average
March
1939
6.78
12.25
Average
March
1941
8.62
11.93
Average Average
March March
1943 1945
11.54
17.80)
1.62)*
14.92
11.77
17.16
9.10 11,14 15.931
24/a
21'/a
213/4
283/4
35 /a
11 14/a)
)*
59/af 76/4
28'/, 353/4
323/4
33/,
8/3a)*
35
35
g�5)*
Average
July
1947
14.47
22.01)
,97)*
17,21
39
393/4
50/s
21%r�* 20)* 253/4) *
97/e 1.251: 1.55$
51 513/4) )§ 65
353/4 503/4 613/4 64/) 93
2286334 1,17 1.27/0§ 1.27
p
But all these -prices would be higher still except for the operation of controls,
The chief control exists in the fact that (by mutual governmental agreement)
Canadian foods arc not permitted to move to the United States,
In that country, prices for the same products throughout the same period arc
shown in the following table.
UNITED STATES FARM PRICES, 1939-1947
(Chicago Market)
Average Average Average Average Average
March March March March July
1939 ° 1941 1943 1945 1947
Steers, 1200/1500 lbs. _ 11,50 11.30 15.95 16.25 30.68
Hogs, light (live) ,._„- 7.70 7.80 15.60 14.75 26.00
Lambs, live ................... ... 9.25 10,90 16.30 16.40 24,48
Chickens, Spring ,,.,,___ 223 22/ 28
29 41
Eggs, Standards ,,,,,,»».»__ lbs
Butter, 90 score ».....,»»»„- 2334 , 3044 47/ 4134%, -. 65344
WheatCheese, »twins
. „..................._ 113 144/4 23/4 23/a 33,A
/4 91/ 1.49 1.76. 2.36
Oats 32/ 39/a 643/4 823 1.01/0
Barley .......................» ,.,...... 47 57 92 1.24/ 1.75
Corn _ ....................»..,»..,,.......,» 513/4 693/4 1.02 1.20/ 2.393
The startling fact regarding the two preceding tables is that United States and
Canada arc two of the chief food -s rplus countries of the world, That prices
in these two 'surplus' countries should have remained at these record levels
is due to three main factors: -
1, The pull on North America supplies due to the acute shortage of food
in Europe. (This shortage is aggravated by the fact that political dis-
harmonies prevent certain natural movements of food;-c,g,, grain from
Eastern to Western Germany.)
2. The fact that in United States and Canada, purchasing power, -anti
consequently domestic demand for foods, -is et an all-time high.
3. The further fact that, in the face of this record demand (export plus
domestic), production of live stock in United States and Canada seems
definitely headed downward, Inspected slaughtcrings of Cattle and Bogs
for the last three years have been es follows: -
UNITED STATES CANADA
1944
1945
1946
Cattle
13,960,337
14,538,405
14413,325
Hogs Cattle Hogs
1,354,104 8,766,44I
1,820,127 5,683,727
1,666,310 4,253,511
69,016,982
40,959,809
44,393,920
Is it possible to forecast the course of live stock prices in Canada for the years
immediately ahead?
No attempt at -a comprehensive answer to this question will be made. But all
the following factors have a bearing.
Prices cannot continue to advance indefinitely. At some point they must
level off, and at a later date a substantial decline seems inevitable.
However, the innnediate trend in Canada seems upward rather than down-
ward.
This is certainly the case in respect of flogs. An advance of 2c per 1b.
in the price of Wiltshire Sides Inas been announced for September 1st, The
present Bacon contract with England would seem to ensure the maintenance
of the September 1st level until the expiry date of the contract, -viz.
December, 1948.
As to Cattle, the fart that Steers in United States are selling at twice the
Cat tdian price would indicate that the immediate price trend night also
be upward.
It must be remembered, however, that the great Beef exporting areas of the
world are South America and Australasia. In both these areas, Cattle prices
are much lower even than the present Canadian level Whentransportationfacilities are restored, prices of Beef on the open world markets may soon
be brought to a level based upon costs in the exporting countries.
•
In the present period of acute shortage and record prices, it ,erns difficult to
recall that the ten-year Period immediately Mop the war was one of burden-
some surpluses and ruinous prices.
The war crisis brought about a clearer realization of the fact that a nation's
chief asset is the physical health of its citizens. An understanding of problems
' of nutrition has been advanced as in no previous period. Each nation will make
the better feeding of its people is main objective. Except for widespread economic
peri
breakdown,od, the world demand for food will be •higher than in the pre-war
Whatever happens, it is unlikely that the ruinous food prices of the 1930's will
ever recur.
Nevertheless, a time will undoubtedly cone when food -surplus countries will
have to 'compete' for the available world markets. When that time comes, melt
food -exporting country will be forced to offer its surplus in the form of those
products which it can produce most efficiently.
In the case of Csmadsy-one of the chief food -surplus countries, ---two products
stand out. These are the two food products which, above all others, Canada
can produce in competition with the world. ti
They are Wheat and Bacon.
There seems little danger of Canada reducing her Wheat productiojtt
the record of the last two years is proof that a serious danger docs cxis , in the
case of Hogs.
Between 1944 and 1946, inspected Hog killings were cut in half. Only by in-
creasing and maintaining Hog production can Canada make her Agriculture safe,
The main objective of Canadian agricultural policy should be immediately to
build up her Flog population. For her Wiltshire Bacon there is an immediate,
and continuing market,- namely Great Britain. And Great Britain needs Canada's
Bacon more urgently than ever before.
Ontario and Alberta arc the two chief Hog -producing Provinces, In both these
Provinces thc Departments of Agriculture have recently launched active cam-
paigns to stimulate I3og production. The Ontario Hog Producers' Association
and the Alberta Livestock Co-operative Limited have joined actively in these
campaigns. It is to be hoped other Provinces will take similar measures, especially
Saskatchewan, Manitoba and Quebec.
It is felt that this year a more extended reference than usual should be madc
to Labour relations,
The Directors recognize without reserve, that the first claim on the earnings
of the Company should Ise that of Employees,-thc men and women of all ranks
whose working lives arc spent in the Company's service, ,
Plant Employees arc represented by their Union, -the United Packinghouse
Workers of America. With the Union, except at times when negotiations are
under way, relations have been cordial and co-operative. This. is mentioned be-
cause widely published threats to strike, each time an agreement is being negotiated,
may have given Shareholders, -and the public generally, -a wrong impression.
During the war period advances have been frequent and substantial.
Following 5 a summary of the advances: -
During 1941, 1942 and 1943, Cost of MEN WOMEN
Living Bonuses reached a total for men
of $4.60 per week, and for women 18.4%
of their wages. In 1944 these were
converted to permanent hourly increases
In addition to this the following
successive general increases were
negotiated: -
In the agreement of 1943 ...__ .... .. 5 • c per hr.
In thc agreement of 1945 - 6,8%r,
equivtlent to .....................................:...... 5 c er hr.
In thc agreement of 1946 .....................
..... 5 c per hr.
93/4c per hour. 7e per hr,
5 c per hr.
33/4c per hr.
10 c per hr.
Total rate increases from 1939 to 1946 ... 29'/c per hr. 253/4c per hr.
In addition, there have been many upgradings and individual increases. These
with the above general increases have resulted in raising average rates per
hour as follows: -
MEN WOMEN
August, 1939, average rate per hour ..... , 50.8c 32.8t
March, 1947, average rate per hour ........._ 88.1c 63.5c
30,7c
93.6%
Percentage increase _ _........ 73.4%
The average advance in hourly rates throughout all Canada, for
the sanea Dominion Department of
Labour, hasrbeenas published bythe .
The increase in hourly rates does not, of course, represent a cor-
responding advance in 'real' income, ---that is, in income meas-
ured by purchasing power. Subtractions must be trade for
increase in the cost of living, also for Income Tax;- the latter
offset to some extent by Family Allowance payinents. It is prob-
able, too, that the actual increase in the cost of living is some-
what greater than that reflected in the official table of thc
Dominion Bureau of Statistics, --viz. .............
However
when all
real Inconse of Plant Employees, have been made, the increase in
not less than plo ees y + as compared to 1939, is certainly
And this in spite of a substantial reduction in number of hours
worked (1939, -average weekly hours 46/.4; l946, -average
weekly hours 423/4), If hours worked had bcen the same, increase
in real income would have been at least ........................
Biggest,
Not Best
• By
ANNA WILSON
'1 sad hint hooked and was play.
tag him," Sol's voice drifted across
the wisteria -to Cal's porch as Cal
held forth in the local store, "Then
he went round that old rock that
sticks out just beneath Calder's Bend
an,l my line snapped. I just saw his
tail flicker as he broke water witls
my hook still in his mouth ind-
well, yott know how it is, boys." Cal
could hear the laugh Sol always got
when he talked of Old Rusty, "It's
always the big one that gets away,"
Never 1,new a man so set on
catching Old Rusty as Sol was -used
to spend a lot of time fixing up fancy
flies and such, but he never had a
bit of luck. Used to swear the big
fish laughed at him, especially after
the big picnic.
The picnic was over at Calder
and everybody knew that botls Sol
and Jim Cady' aimed to take Nancy
• Brain. Yodel never know Sol and
Jinn were brothers. Sol was so up
and coming while Jim was tall, lanky
and never loolced much in his clothes,
but steady, with a slaw smile,
Cal had goic down the stream to
sit by the big cam when Sol and
Nancy came down. Sol was pleading
with Nancy and once it looked as if
she was giving in.
"1'm not sure, Sol," Nancy was no
fool and didn't want to make a mis-
take. "The things you do don't seen
so terribly important but they show
tip a lot -but in marriage a man
needs-"
"What docs a mean need, Nancy?"
Sol's voice shook,
"0h, egurage and endurance and
sportsmanship -a lot of things."
Her eyes suddenly lit up, "Tell
you what, Sol, everybody here has
tried to catch Old Rusty. Let me see
you try,"
Sol went off for his line and
Nancy came and sat down by Cal.
She looked downright miserable,
Old Rusty always lay ont under
it big rock right across from where
Nancy sat with Uncle Cal, Sol spent
all of 20 militates trying out flies. Ife
was satisfied at last, anti cast with
a flourish, It seemed as if Sol had
all the luck in the world for Old
Rusty rose to the Ily and snapped.
Sol let out a whoop, and started to
play the big fists that rushed away
downstream and Sol followed letting
54,6%* out lis reel. Rusty
thatsharpoldlimc tone outcrop a d
snarled the line. Cal could hear Sol
losing his temper and lloundei•iog in
the brush and it came to him that
Rusty must have got away.
34,8%'t
35%
22%.
Over and above these rate increases, important supplementary privileges have
been granted. These include:
after 1 year -1 week,
Improved vacation schedule; -now after 5 years -2 weeks,
1 after 20 years -3 weeks,
Rest periods with pay -10 minutes, morning and afternoon,
Night work premium -5c per hour over corresponding day rates.
Guaranteed minimum of 373/4 hours work per week -or pay in lieu of work.
Pay for eight public holidays.
These suppplementary privileges represent an annual cost to the Company of
approximately ........_...... .. ..........».. ............ - roto inn
Following the practice of previous years, an important share of tlae profits was
distributed to Employees in the form of Bonus.
The sura distributed at the year-end was _ $1,250,000,
(Bonus distributed in Marchi 1939, was -$216,000,)
'Me praeticc of profit sharing has been in operation for thirteen fiscal years.
Within that period, total profit-sharing payments have been ............... $8,910,000.
Total Dividends to Shareholders within the same period have been ... $9,550;000.
Total Sales for the same period have been .
Toronto, August 29th, 1947,
$1,716,000,000.
J. S. McLI11AN,
President,
*Preliminary figure for October, 1946,, reported in Department of Labour News
tDmnooiihraoJatb947.
n Bureau oStitics Cost of Living Index for Judy 1st, 1947, basis
August, 1939 equals 1(10.
1r7xtra 'Copies of this report -are available and to Zona as thea last; Witt be
mailed to anyone requesting fhcita. Address to
aanada Packers limited, Tor'on'to 9.
"Well, Nancy," said Cal, placidly,
"it's not likely Rusty'll bite again.
Maybe, we should go and say some-
thing to Sol," Just then Sol casae
back, his face red and angry and a
gaping rip 155 his pants, revealing a
long, angry scratch, Nancy's inde-
cision was forgotten as she started
to patch up Sol, dabbing him with
iodine from Cal's pocket kis It did
look as if Nancy hail at last made
rap her mind, but just then someone
called for Sol to come and meet
Senator Rand, Sot went off, patting
Nancy's hand,
"I'il just fax the senator up,
Nancy, and be right bacic-boy, we'll
have something to toll then, won't
we, ]coney?" He laughed at Nancys
desperate, "Wait, Sal;"
Somehow they had forgotten
about Jim --the moss was so soft that
they came right up behind him tun,
seen,
"R4tsly," Nancy scarcely breathed
for Jit. raps Plnyinp i/tc big lith ---/re
played, it steadily, grimly, tcithoett
moving and this time the big JrSIs
knead he'd. refer lois mailer as Jins
reeled limo in.
It was fighting desperately es Jim
toolc it and he detached the two
looks from its mouth gently --then
Jim did a funny thing, "You're a
grand fighter, Rusty," Ile saicl softly,
and threw the big fish back in,
Cal and Nancy stole away quietly
on the soft grass, Nancy was
thoughtful, you could tell. -
Yes, folks said afterwards that Sal
looked higher than Nancy Brain '
When he married the senator's
daughter, but Cal smiled cagily When
Nancy married Jim,