The Nonpartisan Leader Newspaper, June 7, 1917, Page 8

e et Egg Bulls and Egs Bears A Discussion of the Marketing Question and What the Farmer Can Do to Beat the Speculators } CIENTISTS have been able to make a good many improve- ments upon nature. They have developed cows that will give many times more milk than their ancestors, horses that will haul more weight. Wheat and flax that will resist disease better. They have been able, too, to breed hens that will lay more eggs during the course of the year, but there is one improve- ment they haven’t been able to perfect vet. This is the hen that will lay as many eggs in the winter, when they are high, as in the summer, when they are cheap. When the scientists invent such an animal, the cold storage men will be put out of business. Until that time cold storage is a necessity, because the consumer demands eggs in the winter, the same as in summer. It happens, though, that 75 per cent of the eggs that go into cold storage are produced in normal years during April and May. These eggs arrive at market in better condition that those produced Ilater, when the weather is warmer and hens are beginning to get broody. In fact the storage men claim that they can take an egg in April, put it in cold storage, take it out in September and that it will be a better egg then than the average run of “fresh” September eggs, The fact that the bulk of the egg buying of the jobbers is confined to two months, however, makes market manipulation easy. The producer is in a worse position than the wheat pro- ducer when it comes to being forced to sell on a low market, and watch.the price climb as soon as he has sold. For while the wheat producer can hold his wheat, provided he has enough money to carry him, the egg producer has to sell his product at once or suf- fer a total loss through deterioration. NORMAL, FAIR EGG SPREAD IS 11 CENTS There are reasonably good profits for the middlemen in the egg business anyhow. Carl W. Thompson, the egg expert of the federal office of markets, has figured out that the normal neces- sary addition to the cost of a dozen eggs from the time it leaves the pro- ducer’s hands until it reaches the con- sumer, is 111-3 cents. This includes cost of collecting eggs from the farm- er, cases, fillers and packing, trans- portation to the city, cartage to the storage plant, candling and grading, storage and insurance charges, de- livery to the retailer and operating ex- penses of the retailer. It includes, be- sides these items, clear profit to the shipper, jobber and retailer, amounting to 314 cents. : But ordinarily, there is a good deal more of a ‘“spread” than 111-3 cents between the price paid to the farmer and the price paid by the consumer. - This year, with farmers selling for 25 cents and 50-cent storage eggs pre- dicted for next winter, the’ “spread” promises to reach 25 cents.. As normal profits to the shipper, jobber and re- tailer are figured in the 111-3 cent spread, any profit above this figure, it may be seen, is a gambler’s profit, pure and simple. How do the egg men take this prof- it? Just the same as the grain specu- lators do, by market manipulation. During the months of April and May, as has been said, 75 per cent of the storage eggs are secured. So during these two months every big egg dealer is a “bear.” To hear him talk, the country’s egg crop promises to be the biggest on record. The American fam- ily has quit eating eggs and there threatens to be practically no demand. The professional egg man at this time of the year is a professional pessimist. It means money in his pocket. But just the same he manages to pick up all the eggs he can, paying the lowest prices possible. SOME PRODUCERS HAVE BEATEN GAME After the buying season is over, though, the outlook changes. The pro- fessional egg man discovers that the supply of eggs was greatly undercalu- lated. The demand, he learns, promises to be greater than ever. He changes overnight from a killjoy bear to an optimistic bull and joyfully joins with his fellows in the pleasant game of whooping up the price to the con- sumer. It is the wheat exchange game all over again. It looks like a pretty hard game for Egg producers, like other producers, can elim- inate one or two middlemen by voluntary co-operation. To eliminate other middlemen and secure full control of the market, public ownership of storage and marketing machin- . ery is needed. the egg producer and the egg consumer to buck. In a preceding article the question was asked: Can you beat it? ‘Well, a start has been made in that direction. Some groups of farmers, in various parts of the country, have been able to beat the egg gamblers out of a considerable share of their excess profits and maybe from their experi- ence the egg producer of the North- west can learn some lessons. Over at Dassel, Minn.,, a number of farmers formed a club in 1907. Their idea seemed to be principally to talk over their problems together and see how they could better their conditions. A good many of them raised poultry THERE'S NO DEMAND! THE PRICE OF EGGS IS DROPPING! be determined. The secretary of the club attended to the marketing. The members of this “egg circle,” as they call it, have found a good demand for their eggs, always a few cents above the ordinary market price. Their co- operative plan worked so well with selling their product that they decided to tackle another branch of the game, that of purchasing supplies. All their feed is bought now by the club at wholesale prices. Also the club has taken up the sale of livestock for mem- bers. It does an $85,000 business annu- ally. In another Minnesota locality, near Duluth, eggs are marketed in this same In April and May the egg speculator, in the garb of a bear, knocks down the price of eggs. Then you see the same speculator in the winter in the shape of a bull, boosting up the price of eggs. over include dirty eggs, oversized eggs and eggs, either as their main source of income or as a sideline. They found that the present system of dealing in eggs is a bad one. The average coun- try store, in taking eggs over, buys on ‘“case count.” The eggs that he takes and undersized eggs and eggs with thin shells, none of which will stand storage. Although the jobber who puts the eggs in cold storage is able to sell these eggs at not more than a cent or two below market price to hotels, restaurants and bakeries, he does not pay so much for the “current receipts.” because they have to be graded and often candled to get “storage *pack.” Consequently the country grocer has to lower the price a few cents on the case count system to protect himself. The whole system puts the farmer who produces clean, fresh, uniform sized eggs at a disadvantage and the result is that there is no incentive to be careful and the constant tendency is toward production of a lower grade of eggs. - FARMERS DECIDE TO DO THEIR OWN GRADING The farmers at Dassel decided to take up egg marketing through their club and do their own grading, instead of paying the jobbers a profit for doing it. They used their club organization for this purpose. Each farmer stamp- ed his own eggs with an identifying mark so that if any complaint was made by purchasers the blame could Northwestern farmers ean’t afford to buy feed for flocks of poultry today. But what if a state-owned elevator and flour mill were sup- plying farmers with screenings, bran, shorts and middlings at cost?, manner through a co-operative cream- ery. Each farmer grades his own eggs and stamps them with his individual mark and the packages are put out under the brand of the creamery. A retail store in Duluth, which handles all the other creamery products, also takes the eggs, paying more than the market price for them. In this way most of the middleman’s profits are eliminated. The cost of handling the eggs in this instance amounts to only 1 cent a dozen, in place of the custom- ary 111-3 cents or the 25 cents that. promises to be charged this year. To show what the farmer will do in the production of good eggs, when given a chance, it is said that during the first year and a half of operation under the new system, during which time about 20,000 dozens of eggs were handled, only two complaints were made in re- gard to quality of eggs. These northwestern experiments were confined, however, to virtually direct marketing between producer and consumer. They djdn't attempt to solve the storage problem. So let us turn to California and see the result of another and entirely different step to- ward direct marketing on a broader scale. A CALIFORNIA HELPS SOLVE PROBLEM California is one of the biggest egg- producing states. The climate en- the year around, but even there most . courages hens to lay more nearly ali of the layers take a vacation in the winter months. The egg producers for years have felt that the market was being manipulated against them, that it was being systematically ‘beared” out of all proportion to the laws of supply and demand, during the spring, the months of big egg production, for storage purposes, while later equally systematic efforts were made to ‘“bull” the market. The California egg producers had ancother complaint. Egg quotations were taken from sales on the Dairy ex- change. But the Dairy exchange was manipulated so that all the sales there were of “washed” eggs, an inferior grade, unfit for storage. On the “street” outside of the exchange, virtually all the sales were made, and these were of eggs fit for storage, commanding a price some cents per dozen above the inferior ‘“washed” eggs. But the egg buyers, traveling through the state, based their prices to the producers on the “washed” egg sales of the exchange which were branded as ‘“official”’ instead of the “unofficial” prices on the street, which represented the actual state .of the market. There were .8 great many similar abuses. To remedy them the egg pro- ducers organized themseives a year ago. They call themselves the Poultry Producers of Central California, but they are known generally as the “mil- lion hen men,” because there are more than a million hens owned by the pro- ducers’ in the corporation. The cor- poration grades eggs for its members. It has a representative of its own on the Dairy exchange, and it has suc- ceeded in having the rules of the ex- change changed so that price quota- tions now are for eggs suitable for storage instead of the inferior *“wash- ed” eggs. Since they control the egg output of a million hens, members of the Poultry Producers of Central California have noticed, too, that the San Francisco market comes much more nearly to conforming with other egg markets when -prices change. It used to be that even after eggs went up in every other part of the country, the ‘“bears” were able to keep prices the same at San Francisco. SOMETHING TO THINK ABOUT These are just first steps that comse paratively small groups of egg pro=- ducers in various parts of the country have taken to better their interests. They do not solve the problem. In many aspects they do not even begin to touch the problems of egg produc- tion in such states as North Dakota, South Dakota and Montana. The three big difficulties of the egg producers in these states are being docked in prices because of lack of grading, high prices of feed and lack of control of the market, which puts the producer at the mercy of the “bear™ early in the season when eggs are produced, and the consumer at the mercy of the “bull” later in the year, when the eggs are consumed. The writer of this article is not go- ing to attempt to solve the egg prob= lem. He is just going to throw out a few suggestions, which men who have given the matter some thought, believe look toward a solution: ‘Would or would not a state-owned terminal elevator and flour mill give the farmer a chance to get dockage, screenings, bran and other by-products of wheat, suitable for poultry feed, at a lower price? 5 Would or would not a system of state-owned cold storage plants enable the farmer to store his poultry and eggs and prevent the speculators from controling the K market and fixing prices? ‘Would or would not the poultry in= Qustry of the northwestern states amount to something, instead of being & hazardous sideline as it is now, if the state should take charge of some of the marketing branches, and cut out some of the “spread” represented in the dif- ference between 25 cents a dozen to the producer and 60 cents a dozen to the eonsumer? CAN'T SCARE THEM Only a dunce thinks he can'dispose of the Nonpartisan League by calling it Socialistic. The farmer can no longer be scared stiff by setting up a bogie man and yelling *Boo!” In days agone that used to take the place of logic— BOTTINEAU COURANT, :