Clinton News-Record, 1946-06-20, Page 5'71I1.7IISDAY, JUNE 20, 1946
CLINTON NWS -RECORD
Increase in Price
RAGE FIVE
of Export Bacon Explained
L.W. Pearsall Provides
Statistical Breakdown
In response to a request from
--Ontario Hog Producers' Association,
L, W. Pearsall, secretary -manager,
% Canadian Meat Board, has written the
• following detailed explanation of
many questions now being raised by
hog producers in connection with the
recent increase in price of export
bacon:
There appears to be a general
• conclusion among producers that,
since there is a set price for export
bacon, this should in turn provide a
uniform and set value for hogs. This
is not necessarily the case,. and the
reason should be clearly understood
by the producer in endeavouring to
relate export price of bacon to the
price of hogs.
The meat board pays all packers
the same price, quality considered,
for bacon. at Canadian seaboard. This
provides what is considered a floor
price in the various areas, depending
on freight costs based on distance to
seaboard,
There is also a ceiling 'pried. on
domestic pork products which is some-
what higher than the export value.
Forsome time past, the meat board
has been requisitioning bacon for ex-
port supply to the point where it is
reasonable to assume that all domestic
products can be sold at the ceiling
price. Hog prices may, therefore,
-fluctuate between the floor and the
ceiling, and the average price will
depend on the percentage going into
export and the percentage left for
distribution in the domestic market.
For example, if only one out of every
ten hogs is exported and the packer
received domestic ceiling prices for
nine and export price for one, the
total value world be greater than if
nine hogs were sold at export price
and one in the domestic market.
Even if all hogs were sold at a
Hog Chairman
WILLIAM TURNBULL
Brussels, who is chairman of the Hog
Committee, Huron Federation of
Agriculture. Other members are
Charles Coultes, Belgrave, and W. R.
Lobb, Clinton, R.R. 2.
uniform seaboard price for export, it
would be exceedingly difficult, if not
impossible, to give the exact value for
the hogs at any given point or market.
As an illustration, two farmers are
in the market for feeder cattle. Even
if they could be assured of the same
price •on selling their finished cattle,
their ideas of feeder cattle values
might differ depending on eircnm-
CREDIT-
Where Credit Is Due
The Canadian Farmer has done an
amazing war job. He is now faced
with an even greater peacetime job -
feeding the world's starving people.
We shall be pleased to continue finding
the best possible market for your
poultry and eggs as vile have in the
past.
Livermore 'Egg Grading Station
Phone 214
In the Heart of the Business Section
Clinton
stan,ces. One farmer might feed more
efficiently. One has cheap grab's which'
might otherwise go to waste, where-
as, on the other hand; the cost of
grazing to the other farmer might be
substantially higher. These and other
factors would determine their ideas
on what they can pay for feeder
cattle.
The same conditions are applicable,.
although to a lesser degree in the
packing business. One packer operates
more efficiently and turns•out a bet-
ter Product. His overhead is relativ-
ely less and, what is more important,
he may be able to utilize by-products
to better advantage than another.
The value of by-products is an im-
portant factor in determining hog
values. To illustrate -a change of
two cents a pound In lard is equival-
ent to approximately 20 cents a hog
or 13 cents a hundred pounds, warm
dressed weight. All these factors
combined may not amount to more
than 10 or 15 cents on a hundred
pounds carcass weight; otherwise„
some packers would shortly go broke
and the others would get all the
hogs. These differences indicate why
it is impossible to give an exact value
for hogs and to endeavor to do so
would be very misleading.
Notwithstanding these variations,
however, it is impossible to give an
approximate value, and it is highly
desirable that the producer should
understand the basic factors in deter-
mining hog value, both export and
domestic. The following statement
shows what may be considered an
average out -turn from a good type
bacon hog carcass although there inay
be a variation of one or two per cent
in Wiltshre yield.
TABLE 1
Breakdown of 150 Ib. Warm Dressed
Carcass for Export
Weight
Pounds
Wiltshire sides 116.25
Head 8.62
1.23
3.77
•50
1.01
3.47
.68
2.40
Neck Fat 1.66
Blade Bone .58
Bones 4.13
Trim 1.61
Scrap .19
Shrink 4.00
Total 150.00
The following tables show the ex-
port prices being paid for bacon at
Canadian- seaboard prior to the price
increase on April 1, and also the price
schedule now in effect:
TABLE II
Price Schedule for Wiltshire Sides
from Hogs Slaughtered on and
after Jan. 2, 1945.
50-55 55-65 65-70 70-75
lb. lb. lb. lb.
A-1 $22,25 822,75 $22.25 520.20
A-2 21.75 . 22.25 21.76 19.70
B-1 21.65 22.15 21.65 19.60
B-2 21.05 21.45 21.05 19.00
TABLE III
Price Schedule for Wiltshire Sides
From 'Hogs Slaughtered on and
after April 1, 1946
50-55 55-65 65-70 70-75
ib. lb. lb. lb.
A-1 $24.96 525,50 524.45 $22.45
A-2 24.56 24.85 24.05 22.05
A=3 24.20 23.45
B-1 24.35 24.60 23.85 21.86
B-2 23.95 24.20 23.45 21.45
B-3 23.60 22.85
Prior to April 1, a 150 -pound warm
dressed "A" grade hog, priced at
$17.75 per 100 lbs., Toronto, less con-
demnation insurance, would cost the
packer $26.49.
Assuming this produced a Wiltshire
side grading A-1 sizeable (55-65 lbs.)
'and the packer received the top Wilt-
shire price of 522.75 per hundred
pounds, the packer's return for the
Tenderloin
Leaf Lard
IKidneys
Tongue
Feet
Tail
Fat
� d
The 1etail Merchants
m as
''(YOCY rely on ande active partici-
ien s,
] nein shej,sour community.
pants in the ilk our drtr moist hurrtes
Sfanyoneissicky, often, if a
up the prescription; andtelavailable,
doctor is not he can and will render firsy t -aid in an
emergency.
And isn't it marveutcher cater llous the m your
our
Iwantsa d whims? What woulYour
d you
_could you -do h without
them?
he ?every-
thing
ve 1'
hardware m tin tacks y -
thing you needs frons
o
And think of the seas swheelbarrows• sof specialty
merchants whom you rely o afor
r
shoes, wearing apparel,ther
and the thou your co nfort and one oLife simply
that add to smoothly without
could not run retail merchants.
NinCanada's obliging of a hundred retail
merchants no n life insurance and
thousands are valued policy-
ownerof them
owners in the Confederation Life
Association. Li
In this Seventy -Fifth Annive>,
Year, the Confederationi
tribute
Association is glad to pay'
publicly to the retail merchants
Canada.
Before you insure consult--
oriel
e 'ation Uj'e
TORONTO
HEAD OFFICE
Association,
d
CANADIAN FEDERATION OF AGRICULTURE
Statement of
CANADIAN FARMERS' ACHIEVEMENTS IN WARTIME
PIRO'DUCTION
Meats, Dairy Products, etc,
Cattle Sheep and
Marketings Lambs
(Yards & (Total
Hoge (inspected) Plants) Marketings)
Head Head
1,183,305 753,062
1,209,964 772,241
225,274 1,344,794 829,666
6,232,087 1,288,61.7 833,147
7,149,839 1,243,888 887,199
8,863, 000 1,528,947 1,039,691
Head
1939 3,628,369
1940 .. 5,456,844
1941
1942
1943
1944
Total 5 wan years - 34,000,000 6,615,600 5,114,000
Beef Mutton and
Pork Production Production Lasob
(000's omitted) lbs. lbs. lbs.
Av. '35-'39 625,120 '703,731,000 61,554,000
1940 865,404 717,467,000 52,630,000
1941 1,060,761 812,072,000 58,594,000
1942 1,189,098 822,530,000 56,732,000
1943 1,395,705 892,969,000 62,239,000
1944 1,504,586 960,991,000 63,542,000
Total 5 war years 5,915,554 4,206,049,000 293,737,000
Dairy Products
Butter
Production
lbs. (Creamery) lbs.
15,282 '254,773,000
16,000 264,724,000
1.6,549 285,848,000
17,488 284,591,000
1'7,519 311,709,000
17,604 298,252,000
Total Milk Production
(000,000's omitted)
Av. '35-'39
.1940
1941
1942
1943
1944
Total 5 war' years 85,160 1,445.000,000
Egg Purchase
Egg Production ' for Ebcport
(000's omitted) Doz. Doz.
Av. '35-'39 219,$32
235,525
244,468
280,688
315,608
350,948
1940
1941
1942
1943
1944
Cheese
Production
(factory) lbs
119,925,000
145,339,000
151,866,000
207,431,000
166,274,000
180,160,000
851,070,000
Wool
Production
lbs.
16,022,000
14,895,000
15,254,000
16,477,000
17,818,000
19,279,000
Woman Director
MRS. O. G. ANDERSON
Wingham, who is active in Federa-
tion work as one of the six women
of the Board of Directors of Ontario
Federation of Agriculture.
For reasons outlined earlier in this
letter, the meat board have always
considered that it would be incorrect
and misleading to name any arbit-
rary price for hogs as being equival-
ent to export value. On the basis of
available facts, however, it was con-
sidered that "A" grade hogs at Tor-
onto were worth from 517.65 to $17.75 Buying, killing and eat-
en the basis of export prices prior to ting
April 1. It was obvious that the
proportion of hogs going into the
15,336,000 5 domestic market at ceiling prices
37,756,000 during periods of short supply would
33,642,7501 raise the average value of all hogs
82,435,380 above these prices, but, on the basis
of export value, the above was con-
sidered to be a floor price. By reason
of increase in export bacon prices and
domestic price ceilings on pork, the
value of export hogs has been in-
creased by about $2.00 per hundred,
which would mean hog prices in Tor-
onto of 519.65 to 519.75 on "A" grade
hogs delivered. Whether or not the
indicated floor prices should be a
nickel or a dime higher or lower might
quite properly be questioned, but with
this basic information the producer
should be able to determine whether
hog, and it was on this basis the an- or not he is getting a fair return for
neuncement was made that the aver- his hogs in relation to export value.
age increase to the producer would Packers' expenses for killing,
be equivalent to about $2.00 per hog, Packers'
and curing also. vary as
between plants and are affected to
a considerable degree by volume. A.
plant with fixed charges, i.e., taxes,
insurance ,and interest on investment,
of say 5200 a week, and. killing 1,000
hogs weekly, has a cost for overhead
of 20 cents per hog, If the kill is
doubled, the overhead is cut in half
-to 10 cents per hog. The expenses
shown below are considered an aver-
age for Ontario plants. The freight
and icing costs from plants in west-
ern Canada would be substantially
greater. In submitting these costs,
it should be added that export packers
have claimed for some time that the
above allowances are not sufficient to
meet the higher wages now being paid
packinghouse employees and the in-
creased cost of supplies.
The following tables show the com-
parative export value of a 100 -pound
warm dressed weight "A" grade hog
carcass prior to and after the increase
in price for export bacon which be-
came effective on April 1:
TABLE IV
Export Value Prior to April 1
Total Revenue Packers Receive:
Por Hog Basis
1161% lbs. "A" grade No.
1 (55-65 lbs.) @ $22.75
per 100 Lbs, Canadan
seaboard , $26.45
Killing and cutting
credits , 3.15
$29.60
Total Expenses:
150 lbs. "A" grade car-
cass at 517.70 less 1%
condemnation insur-
ance , $26.42
Freight to seaboard, 118
lbs. @ 36c .43
Icing, 118 lbs. @ 10 .12
Curing and baling includ-
ing supplies 1.68
.97
TABLE V 29.62
Export 1Value After April 1
Total Revenue Packers Receive:
Per Hog Basis
1161% lbs. "A" grade No.
1 (55-65 lbs.) @ $22.50
per 100, lbs. Canadian
seaboard . $29.30
Killing and cutting
credits . 3.30
_ 532.60
Total Expenses: r
150 lbs. "A" grade ear-
cass @ $19.70 less 1/2%
condemnaton insuranee$29.40
Freight to seaboard, 118
lbs. @ 36e .43
Icing, 118 lbs. @ 10c .12
Curing and baling, in-
cluding supplies 1.68
Buying, killing and cut-
ting • .97
$32,60
era.
Total 5 war years 1,437,000 84,516,000
Canada's Food Exports During the War, 1940-44 inclusive
Bacon and Pork 2,677,000,000 lbs,
Beef, 1944 and 6 months of 1945 *197,562,977 lbs:
Cheese 601,500,000 lbs.
Eggs . 180,149,000 doz.
Evaporated Milk 180,000,000 lbs.
Butter • 18,500,000 lbs,
* (Equivalent 447,000 head cattle).
export porton of the hog at Canadian
seaboard would be $26.45 as compared
with the cost of the hog of $26.49.
It is quite clear that, at a hog price
of $17.75 in Toronto, the packer must
recover from the 29t/s pounds of by-
products listed above, the cost of pro•
cessing, including wages, plant ex-
penses, supplies, burlap,' curing ma-
terial and freight to seaboard. When
hogs were selling at 519.50 at Tor-
onto, the cost to the packer was over
52,50 more per hog than the value at
seaboard of the export portion of the
hog.
On April 1, the'pr•ice for "A" grade
No. 1 sizeable Wiltshire sides (55-05
lbs.) was increased from $22,75 to
525.20. This increased the export
value of a hog, from which is pro-
duced "A" grade sizeable Wiltshire
sides, from $26.46 to $29.30 Canadian
seaboard, or a total increase of $2.85
per hog. In terms of hog price, warm
dressed weight, this is equivalent to
an increase of $1.90 per hundred
pounds, warm dressed carcass weight
(285/150 x 100). In other words, all
other factors being equal, the increase
in price of bacon on the export por-
tion of the hog is equivalent to 51.90
per hundred pounds, warm dressed
weight, or $2.85 on a 150 -pound car-
cass.
At the sarne time that the export
bacon prices were increased, the war-
time prices and trade board increased
domestic ceiling prices on pork which,
ir. turn increased the value for a
portion of the by-products of an ex-
port hog. Some of the items such as
bone, scrap. and tankage material
were not affected, It was estimated
that this increase would be equivalent
to at least 10 cents a hundred pounds,
which should make the total increase
on an export hog $2.00 a hundred
made up of 51.90 on the export por-
tion and ten cents on the domestic
portion of the carcass. The total in-
crease in the hog price of $2.00 a
hundred on a 150 -pound carcass
would, therefore, be $3.00 per hog.
At the same time the premium was
reduced from $3.00 a hog to 52.00 a
34,000,000 HOGS
6,615,600 CATTLE
5,114,000 SHEEP
Enough meat to feed millions of people has been
producjed by Canadian Farmers during the past
five years. Enough to feed millions more, must
and will be produced in the years to come,
As a Tribute to Canadian Farmers we say
"WELL DONE!
CARRY ON!"
J. A. PETRIE
CHOPPING MILL
CLINTON
trvv.,P0,04.4'44vri'
Our Hats Are Off
To Canadian Farmers
1
The greatest agricultural production in history was accomp-
lished by Canadian Farmers during World War II. During
the coming years, they be called on to further increase this
record production to feed a starving world.
It is indeed a pleasure for "Your Favourite Builders' Supply
House" to join in this
SALUTE TO AGRICULTURE
swam
V. D. FALCONER
Lumber, Builders' Supplies
PHONE 97
Coal, Wood, Lime and Cement
CLINTON