4 Sr ECONOMIC SERIES No. 6. MINISTRY OF AGRICULTURE AND FISHERIES. Report The Trade in Refrigerated Beef, Mutton and Lamb. LONDON: PUBLISHED BY HIS MAJESTY’S STATIONERY OFFICE. To be purchased directly from H.M. STATIONERY OFFICE at the following addresses; Adastral House, Kingsway, London, W.C. 2; 28, Abingdon Street, London, 8,W. 1: York Street, Manchester; 1, St. Andrew’s Crescent, Cardiff ; or 120, George Street, Edinburgh; or through any Bookseller, 1925. Price 1s. 6d. Ned. MINISTRY OF AGRICULTURE AND FISHERIES, REPORTS ON AGRICULTURAL ECONOMICS. The Ministry of Agriculture and Fisheries is issuing a series of Reports on economic subjects connected with Agriculture, including methods of marketing home grown and imported agricultural produce as follows :— oo To No. 1. Co-operative Marketing of Agricultural Produce in England ~ and Wales. (Issued.) Post free 1s. 81d. No. 2. The ‘Stabilisation of Agricultural Prices: Report of a Committee appointed to enquire into this subject. (Issued.) Post free 1s. 71d. | No. 3. The Economic Resources of Canada in relation to British Food Supplies. Report by Sir Henry Rew, K.C.B. (Issued.) ~~, Post free 1s, 8d. No. 4. Large-scale Co-operative Marketing in the United States. (Issued.) Post free 1s. 9d. Ne. 5. The Co-operative Purchase of Agricultural Requisites in England and Wales. (Issued.) Post free 1s. 8d. No.8. The Trade in Refrigerated Beef, Mutton. and - Lamb. (Issued.) Post free 1s. 71d. Co No.7. .Report on Wool Marketing in England and Wales. . (In preparation.) B oo No. 8. Agricultural Credit in England and Wales. (In prepara~ tion.) N Co : i No. 9. Report on the Marketing of Potatoes in England and ~ Wales. (In preparation.) IE No. 10. Report on Egg Marketing. (In preparation.) Other Reports will follow. These Reports may be obtained, price 1s. 6d. each net (post free, prices being given separately), from the addresses given on the cover of this Report. D4Q 7 ECONOMIC SERIES No. 6. MINISTRY OF AGRICULTURE AND FISHERIES, Report MN The Trade in Refrigerated Beef, Mutton and Lamb. LONDON: PUBLISHED BY HIS MAJESTY’'S STATIONERY OFFICE. To be purchased directly from H.M. STATIONERY OFFICE at the following addresses: Adastral House, Kingsway, London, W.C. 2; 28, Abingdon Street, London, S.W. 1: vork Street, Manchester; 1, St. Andrew's Crescent, Cardiff: or 120, George Street, Edinburgh; or through anv Bookseller. 1925. Prere 18 6d Ned mn 16 FOREWORD. This Report gives an account of the trade in refrigerated seef, mutton and lamb, a trade which has grown considerably in recent years and now supplies practically one half of the requirements of Great Britain. It suggests that the British meat producer is facing a competition which is rapidly changing and intensifying. A few years ago, he had the market to himself in supplying the better-class trade and in providing for the needs of rural districts and many provincial towns. This is no longer the case. He now has to compete with powerful organisations which bring a more or less standardised, if refrigerated, product from overseas to the very heart of rural Britain. Knowledge of the marketing and distributing machinery at the disposal of imported meat is now a natural background for any study of the marketing and distribution of home-produced meat supplies. To such a study, the brief survey which this Report affords may, therefore, be regarded as a preliminary contribution. 5)24920 Wt 10956—9 4/229 2000 11/2 THE TRADE IN REFRIGERATED BEEF, MUTTON AND LAMB. 4771929 My 6 TABLE OF CONTENTS. ~InrrRODUCTION CHAPTER I. SrtaTisTICAL (i) Supplies (il) Prices IT. HISTORICAL (i) The United States - 7 . - (ii) Australia, New Zealand, South America III. PreseENT SOURCES OF SUPPLY - . ‘ (1) Australia - - - . - - (ii) New Zealand - - - . (iii) South America - - (iv) South Africa - - - - - IV. From OversEAs PASTURES To BRITISH PORTS (i) Dominion Trade - - - . (ii) The South American Trade - - - (iii) The part played by the Banks - - THE TRADE IN GREAT BRITAIN - (i) Some Types of Sale - - - - - (a) C.I.F. (Cost, Insurance and Freight) - (6) F.O.B. (Free-on-board) (¢' Ex-ship - = (d° Ex-store - - (e) Ex-stall - (ii) Surveys on Arrival (a) For Insurance - (b) For Quality - (ii) Wholesale Merchanting (a) General - - {b) The provincial trade - (¢) The London trade - (d) Cold storage - - (iv) Retail Distribution - - VI. COMBINATIONS IN THE INDUSTRY (1) Producers’ Control Movements - - - - (a) The New Zealand Meat Producers’ Board - (6) The Australian Meat Council - - - (ii) Merging of interests in processing and distribution CoNcLUDING OBSERVATIONS - List oF DiAarRAMS. TABLES AND I[LIL.USTRATIONS AGE 1 2 6 8 29 "9 “1 ) 21 31 22 22 “9 25 J 45 ‘8 ¢.8 48 50 51] 54 rr” INTRODUCTION. A study of the marketing and distribution of meat in this country has to take account of four classes of goods. First there is the meat which has been bred on farms in Great Britain; secondly, and from a marketing point of view closely allied, is the beef imported ‘“ on the hoof ” from Ireland, Canada, or elsewhere, whether for immediate slaughter or for fattening; thirdly, there are the imported supplies—such, for example, as Dutch pigs—which reach this country as fresh-killed meat, and, lastly, there are the supplies of meat which, owing to the distance of the country of origin, are received in a chilled or frozen condition. From the consumer’s standpoint, these classes can, for convenience, be reduced to two, namely, (1) fresh-killed meat and (2) chilled or frozen, the dividing line being the process of refrigeration. Of these classes, the trade in refrigerated beef, mutton and lamb forms the subject of the present Report and has been selected for description first, partly in order to form a background for and a natural introduction to a complementary investigation into the marketing, in this country, of livestock and fresh meat, and partly because, owing to its high degree of organisation, it presents, in any event, a simpler descriptive task. The trade in refrigerated pork is not covered by the present study, but has been reserved for consideration as part of an investigation now proceeding into the marketing methods and problems of the pig industry in this country. Refrigeration implies something more than distant origin and condition of the meat on arrival; it usually implies other differences, including a difference in price. It is true that fresh and refrigerated meat do not constitute simple price-groups in themselves, but, in the price-scale, Scotch, English (including stores which have returned to the market as finished beef) and Birkenhead (i.c., Irish and Canadian) sides belong, for example, to the upper end of the price-table, whilst chilled and frozen belong to the lower. In times of shortage of chilled or frozen supplies, the price-differential is less marked, but it is, nevertheless, a noteworthy factor as a rule. A further difference is that, with the exception of chilled beef, refrigerated meat can be held in cold stores, which form, as it were, a reservoir into which supplies can be conveniently diverted during times of excess and from which they may be withdrawn during times of shortage. This is, however, an advantage which, as time goes on, is tending to disappear, for the ideal condition, commercially, in which to bring meat to this country is chilled and not frozen and this, at bresent, implies consumption within five to six weeks of killing. Finally, careful grading gives the refrigerated-meat trade Some analogy to the package trade in other commodities. Carcases being graded according both to weight and quality, ay retailer can order his precise requirements from a wholesaler hy the mere mention of brand. quality and weight. In the A 2 r 94490 TAR do case of good freezing works, the grading for quality is so regular that the retailer can usually depend on obtaining what he has ordered without having first to examine the goods on the wholesaler’s stall, or at a cold store, before he completes the transaction. This is tending to reduce the significance of wholesale meat markets in the distribution of imported supplies. The fact that refrigerated and fresh-killed meat can be so sharply differentiated in a number of important respects, may, at first sight, lend colour to the view that in a series of studies dealing with the marketing of produce sold off farms in England and Wales, the present report is an intrusion. The large-scale production, processing and distribution which characterise the trade in refrigerated meat in the great exporting countries is not, however, without lessons applicable, with due adjustment, to the smaller farms, the infinitely smaller flocks and herds and the mainly individual butchering which mark the home-killed meat trade in this country. The price obtained for a steer in the country districts of England and Wales is necessarily affected by conditions ruling in the distant Argentine; similarly, English lamb prices are influenced by conditions in, say, New Zealand. Again the methods of distribution pursued by the importing firms which have brought ¢ dressed” meat into the very heart of the English countryside are bound to react on the marketing of home produce. Hence the marketing of home produced meat must needs take note of the marketing of imported meat, and the present position and structure of this great international industry which supplies roughly half the total quantity of beef, mutton and lamb consumed in this country, must be of interest to all who profit—or suffer—by the cheapness of its products. Similarly, as markets become world-wide, knowledge confined to one country, or part of a country, is not, of itself, a sufficient guide for intelligent production and marketing. Information must be co-extensive with the whole producing and marketing field. It remains to be observed that this Report is intended as a descriptive rather than as a critical survey of the machinery of distribution at the disposal of imported meat supplies. Detailed examination of the costs and profits of the various intermediaries engaged, directly or indirectly, in the trade has not been attempted, as most of this ground has recently been explored by the Royal Commission on Food Prices.* Nor has Smithfield Market been described in detail apart from the business conducted there, as the circumstances of this important market were fully investigated by the Departmental Committee on the Wholesale Food Markets of London which reported in 1921 + * Cmd. 2390. 1925. See also Report of Linlithgow Committee on Meat. Poultry and Eggs. Cmd. 1927. 1925. + Cmd. 1341. 1925. See also Report of Linlithgow Committee on Meat, Poultry and Eggs. Cmd. 1927. 1925. peep BEEF.VEAL MUTTON ano LAMB = SUPPLIES, 1900 1.800 1.700 L600 | 1.500 1.400 1.500 1.200 1.100 1.000 900 | 300) 00} 600 500 F 100 300 200 | 100 0 1909 1910 191 1912 1915 1914 1915 1916 1917 1918 1Si9 1920 1921 1922 1923 J 1900 1.800 L700 1600 | 1.500 1400 1300" 1200 1.100 1000 900 800 700. 600 | 500° 400° 300 200 100 0 Sch a el bo ey Bly Lay Bey es Bly AF TOTALS IN THOUSANDS OF TONS mp tas - ston lst bsselaraioio 4 5 ‘CHILLED. oh J ol | N | | CHILLED, § |15olt0909s wselearizzz lion! onl 73! 8! 61 siltsokoniel Fae, nooo Kash es et rslaolioglist rl aslohlarhisehaolieslien is HOME ET — “HOME GROWN. GE i oA berm hr 15481149 erase TOTAL iii iB dai RAG SSS a -~ a ta ec a D142. 10958.9/A/829. BODO 10 25. Mallw & Sons. Phato-Litha CHAPTER 1. STATISTICAL. (i) Supplies.—The annual volume in Great Britain, during the ast 15 years of home, as compared with imported, supplies of beef, veal, mutton and lamb, taken together, is shown approximately in Diagram A (opposite), while Table I, on p. 58, shows the position in Great Britain and Ireland, since the beginning of the present century, as regards meat supplies of all kinds, including pigmeat. Veal supplies in this and other Tables are classed with beef, and it is not possible to separate them. As far as this country is concerned, however, the quantity of imported veal consumed compared with imported beef, mutton and lamb, is insignificant. It will be observed that homeproduced beef furnishes about half of the total quantities of beef available for consumption; in the case of mutton and lamb, home-produced supplies represent a smaller proportion. It will be observed, too, that although the total supplies available for sonsumption in Great Britain have increased, slightly though it may be over pre-war figures, the quota of home-produced supplies nas steadily declined. There is considerable difference of opinion as to whether consumption per head is increasing in this country. Meat traders stated in evidence before the Royal Commission on Food Prices that, in their experience, less meat is consumed in middle-class households than before the war; the view that consumption per family is less than formerly was also supported by the evidence of a representative of the consumers’ co-operative movement. On the other hand, there is support for the view that the per capita consumption of meat among the poorer classes has gone up in recent vears. Importers certainly hold the view that consumption is increasing, but are influenced, no doubt, in this bv the larger quantities of imported meat now passing through their hands. The fact remains, however, that while the population has increased by roughly 4} per cent. since 1913, available supplies of heef, veal, mutton and lamb have increased by less than 2 per cent. over the average for the five years prior to the war, and if account is taken of the fact, which seems to be generally agreed, that there is now more wastage in the trade, judged by the quantities of meat sent to the soap boiler,* it seems probable that the total consumption of beef, veal, mutton and lamb, per head, over the country as a whole, has, in fact, declined somewhat since the vears preceding the war. Regarding the source of imported supplies, Table 1I, p. 59, shows the arrivals, month by month, for the year 1924, of frozen beef. mutton and lamb from Australia. New Zealand and South * Royal Commission on Food Prices. Sir Philip Proctor’s evidence, Q. 2397. f See also para. 4. “Report of Imperial Economic Committee.” ‘mcd. 24090 19925 America, and of chilled beef from South America. Diagrams* C, D, E and F (pp. 62 to 65) show the quantities of chilled beef, frozen beef, mutton and lamb, respectively imported into the United Kingdom from each of the principal supplying countries during the past twenty years. Diagrams C and D show the importance of South America in our beef supplies; South America is, at present, the only source of chilled beef imports. A small experimental shipment of chilled beef was sent by the S.S. Port Darwen from Melbourne in May, 1925, and efforts are being made, or may be anticipated, to supply chilled beef from Canada and New Zealand; these are, however, but interesting possibilities. Diagrams C and D, read together, show that chilled beef is increasing on British markets and frozen beef declining---the year 1924 recording the heaviest chilled and the lightest frozen beef imports since 1919. The decrease in frozen beef imports is due not only bo increasing facilities at the disposal of chilled beef importers for the sale of their produce, but also to the increasing demand for frozen beef in continental countries. Diagram E shows the growing importance of South America as a supplier of mutton and also the uncertainty of Australian supplies. The low shipments from Australia in 1924 were due bo the: effects of drought. New Zealand supplies reached their peak in 1921 and have since declined sharply. Perhaps the most interesting feature is the correlation between South American and Australian supplies in recent years; when Australian shipments have been low, those from the Argentine have tended apwards and vice versa. South America is, at present, the principal supplier of frozen mutton to this country. Diagram F shows not only the importance of New Zealand as a supplier of lamb, but also that during recent years shipments of this commodity have increased. The growing importance of South American shipments of lamb is of interest. In South America, considerable attention has been paid, in recent years, to breeding for the trade; the effect is shown in the increased totals over-the last four years, which have been round about two million carcases. As in the case of mutton, Australian supplies show . wide fluctuations; similarly, the decline in Australian lamb supplies in 1924 was due to drought. Total lamb imports have considerably increased in recent years, whilst mutton imports have declined ; this is due not only to the greater popularity of lamb, but also to the fact that lamb production gives a quicker turnover to the pastoralist as he is able to realise good prices after a few months’ feeding; moreover, holding sheep for wool during the past four years has been a more paying business than feeding for mutton and has been the rule. The total mutton and lamb imports by weight are still considerably less than the total imports of beef. | Cr) % After ficures prepared bv Messrs. W. Weddel & Co. (ii) Prices.—As the price structure of meat has been recently investigated by the Royal Commission on Food Prices, it has not been necessary to deal with the subject in this study. It is, however, of interest to note the changes in the general level of the wholesale prices of imported meat during the last 20 years, as taken from ex-stall returns of trade on Smithfield Market. (a) Chilled and Frozen Beef —Smithfield beef prices have varied to a greater extent than those of either lamb or mutton. [n 1905, Argentine chilled hindquarters were 4d. to 41d. per lb. There were some declines, but the tendency was upward in the years immediately preceding the war and, by 1917, prices stood at about ls. No supplies were offered after that year until the snd of 1919, frozen beef taking the place of chilled on the market because it could be more closely packed. In 1920, the price of chilled beef was again about ls., but, by 1922, it had dropped to about 6d., forequarters during the same period dropping from an average of about 81d. to 3}d. During 1924, hindquarters varied, on the average, from over 8d. to 4}d., and forequarters from over 5d. to below 2d: Chilled-beef prices are exceedingly unstable, and hindquarters may vary as much as 3d. per lb. in a fortnight. Australian frozen beef, in 1905, averaged about 3d. for hindquarters and 21d. for crops (i.e., the forequarter without the brisket, which is cut off before the beef is exported). Here, too, there was an upward tendency before the war which was emphasised after war broke out. In 1920, Australian hindquarters were sold at over 11d. per lb., but the average price, during 1921, was just over 6d. and, during 1922, about 4}d. During the same years, crops dropped from about 81d. to 4}d. and then to about 3d., though, during the course of each year, prices were, at times, considerably below these figures; indeed, the price was frequently merely nominal. Argentine frozen beef prices are usually slightly higher than Australian, those of New Zealand being about the same as Australian. Since 1923, frozen beef prices have been rising and, during 1924, Australian hindquarters varied between 41d. and slightly over 51d. (b) Lamb and Mutton.— Twenty years ago New Zealand lamb averaged about 51d. to 51d. per 1b. By 1909, the price had risen to about 6d. and, after a drop to below 5d. in that year—due to a sudden increase in total supplies—steadily rose to over 63d. in 1914. During the war, prices soared and averaged over ls. 1d. in the year 1918. During 1924, prices varied from below 11d. to over ls. 11d., the average for the year being about 113d. Australian and Argentine lamb are roughly 1d. per lb. less in price than New Zealand. New Zealand mutton which, 20 years ago, was about 41d. to 41d. per lb., varied, in 1924, from an average of 7d. to 9d. per lb., Argentine mutton being about id. and Australian mutton about 1d. less. CHAPTER II.—HISTORICAL. The frozen meat trade, now so important nationally and internationally, is of less than fifty years’ growth. Its rapid development may be traced to the coincidence of an exportable surplus and a ready overseas market. Refrigeration was, as it were, the spark which united these elements and made the international trade in meat possible. Before the invention of refrigeration and its successful application to ocean freight, various attempts had been made to realise the flocks and herds of the pastoral countries as exportable meat; canning had already been successful, and both canned beef and mutton were on the English market long before the frozen article made its appearance. Dried and salted beef and, more successfully, salted pork products were also articles of international commerce. But all these left the main problem unsolved, namely, that of placing in a distant consuming country an article of the same kind, capable of being prepared for the table in the same way, as meat killed in the consuming country itself. There was always, of course, the possibility of sending the animals over alive and to a degree this was, and is being, successfully done. The difficulty of carrying live animals long distances by sea has, however, always been a hindrance to the development of this branch of the trade, especially in the case of Australia and New Zealand. Moreover, it demands expensive freight arrangements and these entail relatively high selling prices with a consequent limitation of market. So far as the United: States, South America and Canada are concerned, both live and frozen meat have at times, reached the English market together, although of course, commanding different prices. (i) The United States of America.—The United States is not now an important source of meat supplies—except as regards pig-products. It was from the United States, however, that our first supplies of frozen meats were obtained, and it is. interesting to trace briefly the course of development within that country, because later on the results of the experience gained were applied to the development of the export trade with Great Britain. Moreover, although from the United States to-day, practically no chilled beef is shipped, the American companies which, between 1880 and 1890, built up great distributive businesses in Great Britain are now largely in control of our supplies of chilled meat from South America. These companies have always been distinguished by great enterprise and when decreasing supplies in the United States and cheaper supplies from the Argentine began to threaten their European organisation, they established meat works in the Argentine sothat they could continue their business. That the United States should have been the first to develop the consignment of frozen meat to this country was natural, for not only was the United States the nearest surplus-producing country to Great Britain—always excepting Ireland—but it possessed a long-established meat-packing industry. The trade with the British market, far from being an innovation in the seventies of the last century, was, therefore, in effect, a mere extension of a condition which had gradually and naturally arisen within the United States itself. Great credit, it is true, is due to the enterprise and commercial vision of the men who, between 1870 and 1880, entered the packing-trade and gave it its present character, but these men—Swift, Armour, Morris and others—owed much to the peculiar circumstances which gave them their opportunity. These circumstances were, briefly, the close settlement of the Atlantic States and the growth there of large industrial populations, on the one hand, and the steady westward movement of the cattle herds in search of cheap pastures, on the other; together they produced the economic environment which made possible a large consignment trade in meat within the borders of the country itself. In the development of this internal trade, there were three well-defined stages. First, there was the trade during the early settlement of the country and up to about 1850, with conditions somewhat similar to those obtaining in this country to-day where meat is produced near the centres of population. Butchers’ shops were individually owned and killing took place either on the butchers’ premises or on the farms themselves. The second stage came with the growth of population in the east and the concentration of cattle further west, when droving hecame necessary and with it the development of organised markets in the producing areas where farmers could dispose of their stock and unload on to other shoulders the responsibility for its movement from the farms to distant centres of consumption. The rapid growth of railroad systems, by forging a link between the two areas, emphasised the importance of such markets; they became convenient points of concentration and meetingplaces for east and west. In due course, they gave rise to the expert marketer whose special study was values and who, unlike the farmer, was in intimate touch with demand and prices. He acted as agent for the farmer, advised him as to market conditions, advanced cash on cattle shipped, marketed it on arrival, took over the whole business of salesmanship and generally performed the functions of the middleman. During this time, considerable packing was taking place in the marketing centres, though mainly confined to pork products. In point of fact, the packing industry in the United States goes back to the seventeenth century when, for the West Indian trade and later on for the English trade, both pork and meat were packed for export in barrels—hence the term packing-house products ”’ which is still applied to all *“ dressed >> meat in the United States. With the concentration of live stock in the west, the packingtrade moved westwards also and during the winter months great quantities of hogs were slaughtered and packed in salt or brine for the Atlantic States or for shipment to Europe. The trade was confined to the winter months, as in the heat of summer the meat became rancid before the pickle penetrated. The third stage of development followed the introduction of refrigeration which, by the artificial creation of winter conditions in the packing-houses during the hot summer months, enabled packing to be carried on throughout the year. Subsequent developments were the extension of refrigeration first to railway and secondly, to ocean transport. The word * revolutionise ”’ can safely be used to describe the effects of the introduction of refrigeration. Although after .Carré had invented it in 1861, many experiments had to be made before it became the efficient and reliable vehicle of to-day, it gave marketing a completely new aspect, so far as the United States was concerned, and greatly simplified the time factor. Hitherto, meat; once killed, had either to be * cured —a not too successful process in the case of beef and mutton—or sold in the course of a few days whatever the state of the market. Refrigerated meat could be held in the cool chamber for several weeks and marketed in good condition and in an orderly fashion according fo demand. It made possible, too, the concentration of the processes of killing and dressing, for it practically annihilated distances; districts hundreds of miles from the packing plant could now be served with meat as easily as the district in the vicinity of the plant itself. Large scale production also became possible; packers were no longer merely pork-packers but also oeef packers; the recruitment of the chemist and the engineer, the evolution of efficient machinery, the elimination of waste, the skilful utilisation of by-products. all naturallv followed. It was at this moment that such men as Swift, Morris and Armour entered .the business in Chicago, and it was largely due to their ability that the trade assumed its present form. Many difficulties had to be overcome, the railway companies were indifferent or antagonistic—they had a good freight trade in live cattle—the eastern butchers were opposed to the new meat, the public. were prejudiced against it. To overcome these obstacles, the packers set themselves to establish their own depéts and shops and to build their own refrigerator railway cars, so that, from their standpoint, the whole country became, in effect, one market worked from one centre, namely, Chicago, which developed into the greatest packing-centre in the world; to its stockyards live beasts were shipped from the south, centre and west, while from its packing-houses flowed the finished product to all the States of the Union. These developments soon brought the “ dressed ” meat from the packing centres in the middle west to the sea-board in the east; now ocean freight was brought into service to allow the further spread to Europe. Hog-products and salted beef were alreadv being forwarded to England in large quantities: refri- gerated beef naturally followed. At first, however, cattle on the hoof were exported—the first, it would appear, by Nelson Morris, in 1868, to London and Glasgow. Then, after an interval of five years, further live cattle were shipped to Glasgow, while shippings seem to have been fairly heavy between 1876 and 1885. In 1874, frozen beef ‘‘ as hard as stone” was shipped to Smithfield in boxes, but only in small quantities, and not, so far as price was concerned, very successfully. The first chilled shipment was made from New York on October 1st, 1875, by Timothy C. Eastman and arrived in good condition—a sample was sent to Queen Victoria—and it is with this shipment that the trade in chilled beef begins. Eastman, in the early days, had the business in his own hands, and two years after his initial shipment, was sending about 4,000 quarters per week. His success encouraged others. By 1880, all the steamship lines sailing between the two countries were fitted for carrying chilled beef. The refrigerating equipment in common use consisted of an ice box and fans to keep the cold air circulating. In other cases, a freezing mixture—salt and ice—was pumped along pipes between the hanging beef. The rapid increase of the trade can oe judged from the fact that the weight of chilled beef exported in the year 1887 was nearly 700,000 cwt. At first the beef was shipped to commission salesmen on Smithfield and other markets, but soon the packers began to acquire their own stalls and depots throughout the country, They complained that the commission men did not give them a “square deal”; it would appear, however, as though the urge to acquire their own depots came from two causes independent of the services of commission agents. In the first place, it is always difficult for an agent selling perishable goods to give satisfaction to a distant consignor, for decisions must be quickly made, and are easy to criticise when viewed in retrospect with a full knowledge of subsequent developments. The salesman, it should be remembered, has to decide upon one page of the book of marketing, the critic after the whole chapter is written. Secondly, the packers had already acquired experience of similar marketing problems in their own country, where they were building up a distributive organisation of their own, and naturally sought to apply the same solution elsewhere. The trade grew from its beginning in 1874 to its peak between 1900 and 1904, when the average export totalled nearly 22 million cwt. The big days of the trade were, however, already passing; the increasing population pushing further west involved close settlement of much land hitherto given to cattle raising or to the production of animal foodstuffs; the domestic demand mounted steadily, but supplies steadily declined. Meanwhile, competing beef-surplus countries were supplying a cheaper product to overseas markets*; in addition, the output from the * See ‘‘ Marketing of American Meat Products in Export Trade.” [J.S. Dept. of Commerce. April 1925. Argentine was growing fast. The centre of gravity moved southwards. In 1907, began the ‘ American invasion” of the Argentine and, except during the war period of phenomenal expansion, the United States ceased to be a serious contributor to our supplies of both frozen and chilled beef. In 1874, the amount exported was 1,095 cwt.; in 1913 it was back to 1,462 cwt.; the American export trade had been transferred to the Argentine. (ii) Australia, New Zealand, South America.—Similar in the problem which confronted each, these three countries were in a different position from that of the United States, for all were, and the last two still are, primarily pastoral countries with comparatively small populations engaged in any occupation other than farming. Whereas, before the introduction of refrigeration, cattle-raisers in the United States had, at any rate, important domestic markets among the industrial populations in the east and the cotton growers in the south, producers in Australia, New Zealand and South America were compelled to look overseas to give their flocks and herds a value. Prior to 1880, meat in these countries might almost be regarded as a by-product of the wool and skin trade; for local consumption, measured against supplies, was a very small factor. The routine followed, in general, was to skin the animal and consign the carcase to the tallow renderer. It is stated that, in 1850, for example, no less than 800,000 sheep and 73,000 cattle were rendered down, and that, at one works alone, 12,000 sheep were rendered down in four weeks. Apart from any question of food-wastage, these figures illustrate the limits imposed on pastoral industry by the circumstances of the time. Moreover, the market for tallow was not unlimited, so that a decrease in the value of hides and skins made the labour even of killing and skinning unprofitable, any increase in numbers becoming a liability which could only be met by slaughter and destruction. Even in New Zealand, where pasturage was abundant, this drastic method of dealing with superfluous stock had to be adopted on occasions. There was, however, a growing demand for meat in this country. Some indication of the increasing pressure on our meat supplies is given by the fact that during the thirty years from 1851 the population increased from under 28,000,000 to nearly 35,000,000, while the total number of cattle, sheep, and pigs in the country had declined to about 41,000,000. This pressure on an increasing demand on available supplies did not pass unnoticed, and evidence is plentiful that the subject provoked serious study and investigation in many quarters at this time. For instance, the Society of Arts, in 1866, appointed a committee to explore the problem of food supplies; one section of this committee gave special attention to meat. A prize of £100 was offered for the best method of preserving fresh meat, hut the Committee came to an end in 1881 without finding itself able to award the prize, although, in point of fact, the method of refrigeration, which was eventually to ensure abundant supplies both here and elsewhere, had already been successfully ittempted. In these early days, Australia seems to have led the way in practical experiments. The first successful method of shipping the flesh was that of canning, and Australian canned products were exhibited at the Great Exhibition in 1851. Following Liebig’s discoveries, extract of meat was also successfully prepared and exported. Used, at first, mainly by ships, by the year 1867 canned meats had become known on the English market, and, from that -time, have been regularly imported. Even to-day, when large quantities of frozen and chilled meat reach our shores, there is a large trade in canned meats from all the great meat-surplus countries. With the extension of refrigerating facilities even to the smaller cargo vessels, and with the opportunities of restocking from cold storage which are available to vessels at most of the great ports, canned meats are no longer an inevitable part of the dietary of a voyage, but they are still an important item of international commerce. At first they were relatively unsuccessful because they were not a substitute for fresh (i.e., home-killed or refrigerated) beef; now shat fresh beef can be so readily transported, they remain in demand because they are not so much a substitute as an alternative ministering to a different need. Frozen meat for millions of people is the dinner-table joint and does not have to face the competition of the tinned article; it is rather the bacon and ham of the breakfast table, or the meal carried to the mine or factory, which feels this competition. Canned meats are still, of course, an important item in ships’ stores, and as the ideal emergency ration whether on board ship, on the battlefield, or in the home, they are likely to retain a position of importance whatever may be the developments of the fresh meat trade. Moreover, as the demand is likely to continue, so the supply from countries which export fresh meat is likely to be assured, for canning provides an outlet (1) for cuts which are not in local demand; (2) for the parts trimmed off in dressing-meat either for export or for the local market, and (3) for beef and mutton which are not up to the quality required for the frozen meat trade, e.g., the ‘canners” in the United States and South American markets. Where meat-extract is specially prepared and is not merely the by-product of the freezing works, canning is also, as a rule, carried on. At times of low prices in the producing countries, the existence of canning outlets frequently helps to improve the producers’ returns; in the case of mutton, for example, the legs, for which there is always a good demand in this country, can be cut off and, if not sold locally, or if local demand is unsatisfactory, can be frozen and shipped, the rest of the carcase being canned—the process providing canned meat, meat extract and tallow. thus spreading the supply over more than one demand | The above references to the canned meat trade have been introduced because they arise naturally out of the early attempts to make meat an article of international commerce, and although they did not succeed in this full object, canned meats became, and have since remained, an important supplementary foodstuff in this country and among Europeans in the tropics. In times of war, the convenience with which canned meats can be transported is an important factor, and in every campaign since 1870 they have been in great demand. In the late war, the supplies were colossal; at the close, vast stocks were lying in this country and in every theatre of war. Moreover, it necessarily took some time for the canning. works to reduce their rate of output, so that, in 1919, the supplies of canned meats available were much in excess of potential peace requirements. As, at the same time, there were huge accumulations of frozen beef and of bacon, a very severe slump befell this commodity from which it took three or four years to recover. Between the years 1860 and 1880, many attempts were made to carry meat from the southern hemisphere. The history of these attempts has already been written.* It is sufficient to say here that it was in 1878, four years after the first consignment arrived from the United States, that frozen meat was first successfully brought from South America, and that it was not until the end of 1879 that a shipment was made from Sydney. In both these cases, the meat was frozen in chambers which had been specially fitted for the purpose, and not in freezing works on shore as at present. Between 1880 and 1890, both Australia and New Zealand, profiting by the early experiments, were able to build up a successful frozen-meat industry. The early history of the Argentine industry is similar to that of Australia and New Zealand except that, in the Argentine, the frozen-meat industry had to compete with two others— that of salt beef and of shipment on the hoof. It was not until the middle nineties that the trade in frozen meat became really regular and its progress rapid. In 1900, owing to an outbreak of foot-and-mouth disease in the Argentine, British ports were closed to cattle and sheep, and this stopped the trade on the hoof until 1903 when the embargo was removed, only to be reimposed after six months. The period of the first embargo coincided with the South African War; there were also labour troubles in Chicago and a drought in Australia, so that the call for Argentine frozen beef was very great. This gave the freezing companies an opportunity to consolidate their position, for the embargo on the export of live cattle increased the supply of cattle and sheep on offer to the freezing works at a time when the demand for frozen meat itself began suddenly to expand. ® See ¢“ History of the Frozen Meat Trade,” by Critchell and Raymond. a CHAPTER III.—PRESENT SOURCES OF SUPPLY. Surplus meat sufficient in amount to justify an export business has depended, in the past, upon large pastures of the ranch type, a condition only present in countries of large spaces and small populations. As such areas become closely settled and industrialised, lack of space, increasing costs of production and a rising domestic demand, relegate the export business to a secondary position compared with the internal trade and, indeed, as in the case of beef in the United States, combine ocradually to bring about the point in comparative costs at which imports become economically possible. Virgin areas which fulfil the export conditions are rare in the northern hemisphere—the hemisphere of population—but practically every important country in the southern hemisphere is suitable. Local conditions—drought, disease, lack of suitable grasses for building the meat demanded by modern taste—modify here and there this suitability, but these modifications, in view of the keen interest in agricultural problems, may, in time, be overcome. It follows, 00, that the regions suitable for meat production are confined to the temperate zone, though there are certain subtropical areas, such, for example, as Brazil and parts of Queensland, where altitude ensures a temperate climate, that can be utilised for the purpose. The tropics are unsuitable for the raising of rattle, but present great possibilities for the raising of foodstuffs which would enable larger herds to be carried in the temperate regions than would be possible without additional supplies of feed. * In the following summary of the present sources of supply, attention is, therefore, devoted solely to the southern hemisphere, because it is from southern countries that Great Britain derives practically all its supplies of refrigerated beef, mutton and lamb. Canada, it is true, supplies small quantities of frozen and chilled beef and smaller quantities of chilled and frozen mutton and lamb, but is more important as a supplier of cattle on the hoof, so that it falls more naturally into the study of the live-meat trade; but its potential importance in the trade in refrigerated meat must be borne in mind. This applies, too, to Eastern Asia, notably to Siberia and Manchuria. From the former, dairy-produce is exported in large quantities and, with improved transport facilities, closer settlement, and additional capital, a meat export business is possible ; time is, of course, a necessary factor. From Manchuria. some mutton is already exported. to this country. Regarding South America, attention is chiefly devoted to he Argentine and to Uruguay, which, being similar in general conditions, have been described together. Other States, namely, Paraguay, Chile, Brazil, Venezuela and Columbia, are not, at oresent, important as suppliers of beef, though supplies of mutton See Dr. FW. Shanahan © ‘“ Animal Foodstiiffe * 92 and lamb are received from Chile, and Brazilian beef is shipped in quantity to the Continent; some years must elapse before these States are in a position to export meat in considerable quantities and of the quality required by the English trade. Moreover, only parts of these States are suitable for cattle raising. Qur principal sources of supply are, therefore, Australia, New Zealand, Argentine and Uruguay. A paragraph on South Africa is added, not because the Union is an important contributor to our supplies at present, but because, in position and area, it has potentialities for a chilled and frozen trade, and has recently been supplying Continental markets. (i) Australia. (a) Beef.—This great Dominion ranks second only to South America as a supplier of beef to Great Britain, though the figures for 1924 show that it is at present but a very poor second. Nevertheless, now that beef is again a promising article of commerce, and, although authorities differ as to the possibilities that Australia offers, there seems to be little reason why Australia’s output of beef should not be materially increased. Every State in the Commonwealth is engaged to a greater or lesser degree in the meat-export trade, but the chief centres are in the eastern States, namely, Queensland, New South Wales and Victoria. The first of these is primarily the beef State, while the two last concentrate on mutton and lamb, their beef shipments being small and depending largely on surpluses or special cuts from the local trade of Sydney and Melbourne. Fair quantities of boneless beef are shipped to Great Britain from both of these ports, Melbourne boneless bull-beef having a high reputation on Glasgow market, where this commodity commands a ready sale owing to its leanness. Considerable quantities of beef are produced in northern New South Wales for internal consumption and export, and it is interesting to note that from one of the meat-works in that region, chilled beef is shipped to the populous districts further south. Beef is also produced in Northern Territory and in Western and Southern Australia. Queensland is the beef-exporting State of the Commonwealth ; the industry has, however, to contend with great difficulties compared with South America, its rival in European markets. First, the climate is normally dry and, at times, droughty, so that there is frequently a shortage of grasses. This, again, shows itself in the longer period needed for fattening, four, or as many as five, years being necessary in places. If rain does not fall towards the end of the year, the cattle do not finish well and a poor season results. The cattle are raised on stations and farms, whence they are driven to the meat-works near the coast. Stations in the coastal area are in a better position for supplying good cattle to the meat-works than inland stations, as railways are not. as yet, highly developed and cattle from distant stations p have to be driven in, which entails loss of condition. Indeed, when there is a shortage both of water and feed, the effects of droving on cattle are frequently severe and, at times of actual drought, may be disastrous. Insect pests, particularly the warble-fly and tick, are also troublesome. Then again, unlike South America, Queensland has a beef “ season,” that is to say, killing does not take place throughout the year. The season begins in the early months of the year according to the condition of the cattle coming forward which, in turn, depends on rainfall. Usually the season begins in February or March and may begin as late as April, although seme works may be able, by drawing on near cattle, to start operations aarlier than others. The end of the season is also uncertain. [f the rain has been heavy during the season so that there has been plenty of both water and feed, the cattle may be sufficient in numbers and finish to enable the works to operate until the closing months of the year. Sometimes, however, the season ands in or about the middle of the year, which means that the whole output for the season has been treated within three or four months. The curve of Australian beef supplies in Diagram D shows how erratic has been the output during the last few vears. Queensland beef is graded in three qualities, first quality known in the trade as “ g.a.q.”” (good average quality), second juality known as ‘““f.a.q.” (fair average quality), and third juality known as ‘“ second f.a.q.”” The last is not usually shipped to the English market, but is suitable for canning and, during the last three years, has been exported to the Continent. Some of the meat-works are strict in their grading and maintain a uniform standard so that the g.a.q. of their brand varies little from year to year. Others are said to be less strict, especially during a dry season.* Ambiguity is, perhaps, inevitable, in the interpretation of these qualitative standards. On the one hand, it is asserted that the term must signify good average quality of the particular season concerned, but this is, at once, a variable standard, for cattle which, in a good season, would be second guality may, in a poor season, be the best that are sent into the works. On the other hand, the merchant on this side naturally insists on the term being applied, not seasonally, but generally, that is to say, the standard must, for commercial purposes, be absolute and not relative to the conditions of any one season, Fortunately, this conception is receiving wide acknowledgment in the Dominion; it seems probable that the newly appointed Meat Council (see p. 50) will seek to establish high standards and to maintain them. Since 1920, the Queensland beef industry has been passing through a time of severe depression owing to the glut in European markets. In 1922, a bounty of ld. per pound was granted by See also para. 13, ‘“ Report of Immerial Economic Committes.” md. 249%. 19925. * the Commonwealth Government on all meat that was exported and this bounty was renewed the following year. By this means, the industry was enabled to continue, but in spite of it many producers lost heavily. During 1923, Australian beef on Smithfield fell to about 31d. per pound for sides ex-store, and, even at this price, met with a slow sale. In 1924, however, increased buying by Continental countries, including Germany, and especially the large demands of Italy for frozen beef, led to a considerable advance in price. The prospects for 1925 are even brighter for the Australian producer—provided that the Continent continues to buy. The meat trader classifies imported beef in the following order :—(1) South American chilled, (2) best South American frozen, (3) best Australian frozen, (4) best New Zealand frozen. South American frozen is, on the whole, from a better class of cattle ; it is also said to be dressed in a more marketable fashion than beef shipped from Australia and New Zealand. The difficulties of the Queensland producer have already been noted. Apart from uncertain weather conditions, and the distance from the European market, which are irremediable, the directions in which his economic position can best be improved would appear to lie in the development of a system by which supplies would: be spread over the whole year, by means of extensive irrigation in the producing areas, by schemes of fodder conservation, or by greater cold-storage accommodation for the meat, in the extension of railway facilities in producing areas remote from the coast, and, finally, in the improvement of the quality of the herds and of their rate of maturity.* Considerable quantities of Australian beef are sold in the provincial towns in Great Britain, but, in Smithfield, it occupies a minor position. Indeed, it is essential that Queensland should ship chilled and not frozen beef to this country if she is not to remain at a disadvantage in British markets compared with South America.t To prophesy is to invite disaster, but just as refrigeration made the meat trade possible, so some other invention may enable Australian beef to be placed on our markets with the regularity and of the quality of the South American article. Australians are fully alive to the difficulties and are sagerly seeking a solution. Much capital and a closer settlement of the vast areas of the Continent will be necessary to meet developments if, and when, a solution is found. As this would imply a flow of settlers from this country, the development of the Australian chilled beef industry has an important Imperial aspect. ~ (b) Mutton and Lamb.—Australia is pre-eminently a sheep countrv and though. in 1921. the total number of sheep in the * See also para. 15, ‘ Report of Imperial Economic Committee.” Cmd. 2499. 1925. | + See also paragraph 13, “ Report of Inter-Departmental Committee mm Meat Supplies.” Cmd. 456. 1919. | 5 Commonwealth exceeded 82 millions, as compared with over 23 millions in New Zealand, and over 46 millions in the Argentine, it ranks but third after New Zealand and South America as an exporter of mutton and lamb. The State of New South Wales contains more flocks than any other, and has always led in numbers except for a short period in the early sixties of last century. From the late seventies to the beginning of the present century, New South Wales carried more than half the total number of sheep in the Dominion; since that date, however, the proportion has fallen. Sheep farming in Australia is primarily a matter of wool-production, the flocks being chiefly merinos, which do not produce a carcase suitable for the British mutton trade, but, during the last 25 years, production for mutton and lamb has been aimed at, and, as a result, crossbreds have become commoner. In 1891, out of a sheep population of nearly 62 millions in New South Wales, over 60 millions, z.e., 97 per cent. were merinos; 30 years later, out of a sheep population of about 34 millions, the number of merinos had dropped to 71 per cent. The bulk of the mutton and lamb comes from New South Wales and Victoria. Producers in the latter State have devoted considerable attention to breeding for meat and, as a result, Victoria mutton and lamb rank high in the estimation of meat traders in this country; the best qualities have frequently rivalled the New Zealand product. The killing season in Australia begins in the late spring, that is about September, and usually extends over about six months. Here again the vagaries of the Australian climate influence the date when the season opens, the length of the season and the regularity and quality of the output. Asarule, the first consignments of Australian mutton and lamb are in the English market in November, and, at this period, command relatively high prices, as New Zealand and South American mutton and lamb do not put in an appearance antil the early months of the year. As with Queensland beef, there are three grades of Australian mutton and lamb— indeed, some works have a fourth grade— and they are known by the same terms ‘““ g.a.q.,” “f.a.q.,”’ and “second f.a.q.” Mutton and lamb are also graded for weight. Mutton varies, but is usually graded into under 48 1b., 48 Ib. to 56 1b., 56 1b. to 64 lb., and over 64 Ib. Sometimes ewes are graded “ under 64” and ““ over 64.” Heavy mutton (z.e., ‘“ over 70’) meets with only a limited sale. Lambs g.a.q. are graded into 28 to 36, 36 to 42, 42 to 48 and over 48 1b. Second and third-grade lambs are not usually sub-graded for weight, but an average weight for a whole parcel is given, as the carcases lack finish and are, therefore, as a rule, light-weights only. Owing to the demand for smaller joints, it frequently happens, however, that the second-quality lambs command a higher price than the heavier first quality.* See also para. 23. ‘ Report of Imperial Economic Committee.” ‘md. 2499. 1995. a First-quality lambs are usually graded at ‘‘ 42 1b. and under,” i.e., the two lower-weight grades are grouped together, and the average weight of the whole parcel offered is given. There are two ways of stating this average in the trade, namely, ‘ average — 1b.” and “average not to exceed — 1b.” The first is, apparently, an individual average, 7.e., each carcase must be that weight, with an agreed allowance of 1 lb. each way; in the latter case it is a bulk average, ¢.e., the individual carcases may be of any weight—unless a range of weight is stated—provided that the true average is not higher than that stated in the terms of sale. The grouping of carcases weighing under 42 Ib. for sale at one price is explained by the premium set upon light carcases, and this gives the average weight its importance, for it shows the buyer whether his purchase will contain a larger or smaller number of the lighter grade. First quality lambs, however, are not usually sold alone, but a percentage of second quality are included. Thus an offer from the Dominion may be of 10,000 Victoria lambs under 42 1b., average not to exceed 35 lb., 75 per cent. first quality, 25 per cent. second quality. The buyer bidding for such a parcel has a nice point of prices to decide, for, although he is bidding for two qualities, his normal business may be confined to first-quality goods, and, apart from weight variations, he will have to decide the exact price-relationship of the 2,500 second-quality lambs which he must buy in order to obtain 7,500 of first-quality. If he is a jobber,* he will, of course, endeavour to sell on exactly the same terms as he has bought. At times, a percentage of the heavier weights, i.e., over 42 1b., are included in an offer—the works adopting this practice in order to dispose of their heavy weights at a satisfactory price. Ability to do this depends on the general state of the forward market; in times of scarcity, the inclusion of heavy weights may be advantageous, but, in times of heavy surplus it would tend to depress the price offered for the whole parcel. The works operator, offering meat on the above system, is endeavouring, as far as possible, to pass over to the meat his method of buying the live animals. Buyers visit farms and sale yards and buy ‘ mobs,” including all grades, at a certain over-all price, though the buyers’ skill is such that they can quickly make an approximation of the proportion of each grade which their purchases include. The meat merchant, on the other hand, is interested only in such carcases as suit his trade in this country. It follows that the trade is most successful when the two agree; it is the task of the producer, therefore, to produce a carcase of the quality and weight which the meat-trader requires. | (ii) New Zealand.—Because of its climatic and other natural advantages, New Zealand holds the world’s premier position as an exporter of lamb. Its exports of mutton have also been high in recent years, though, in 1924, exports from South America * Qee pages 37-38. - — Po CS ~~ ~ ~ -~ re a — ~ A QUEENSLAND CATTLE STATION. ‘By the courtesy of the High Commissioner for Australia) TO 3 D - 3 & = A CANTERBURY (NEW ZEALAND) FREEZING WORKS. ‘By the courtesy of the New Zealand Publicity Department.) exceeded consignments from the Dominion. Its mutton and lamb, by reason of their high quality and reliable grading, command the highest price and meet the most regular demand of any that reach this country. The flocks are mainly found on the eastern slopes of the two islands. In South Island, the merino, the first breed introduced, was for many years the chief breed, and the merino-ewe was the foundation of the cross-breeds which to-day supply the famous Canterbury mutton and lamb. With the growth of the meat-export business, cross-breeding for mutton and lamb became zeneral, the English Leicester and later the Lincoln ram were >mployed to cross with the merino; the Black-Faced ram is also widely used. In the moister North Island, the Romney is the most popular sheep. Lincoln and Border Leicesters are also found in both islands, while the South Down is now largely used throughout both Islands for the fat lamb trade. The Hocks grew from between two and three million in 1860 to over twenty-six million in 1918—the peak year—but they have since leclined to about twenty-four million. In addition to the export of mutton and lamb, New Zealand, vith a cattle population of about 3} millions, has also an export ‘rade in frozen beef, though the trade is less extensive than in Australia. The stock is British in origin, Shorthorns, Herefords. md Aberdeen Angus being largely bred. During recent years, however, and more especially since the post-war slump overwhelmed the beef trade, increasing attention has been paid to dairying, which is now as important as the production of meat and wool, and great efforts have been made to produce the most satisfactory milk-producing herds. The cattle enumeration of 1921 showed that out of 3,139,223 cattle, over two million were cows and heifers, and as the results of the beef-export trade in the period 1921-4 were most discouraging, the dairy character of the herds has become still more pronounced. Considerable quantities of beef of the dairy type should, however, be available when there is an opening. With favourable markets, the production of beef could undoubtedly be increased, particularly if, as in the case of Australia, a practicable method could be devised which would enable the beef to reach this country in a chilled and not frozen condition. New Zealand beef, like Australian heef, would be improved by better dressing. The normal weights tor New Zealand ox-beef are slightly heavier than Australian. the juarters averaging 180-220 lb. The general treatment of meat for export is similar to that oursued in Australia. Most of the works are situated down the cast coast and, as there are 46 of them, the distances to be traversed by stock are nowhere great. The freezing works are owned by New Zealand or British companies, or by farmers’ co-operative companies, the latter being quite a common form of ownership. It would seem as though the common complaint of ~o-operative societies the world over. namely. that members tend ® to desert their societies in favour of proprietary concerns during times of high prices, is not unknown in the co-operative meatworks in both New Zealand and Australia. With regard to weight grades, first-grade lambs, 28 to 36 Ib, are known in New Zealand as ‘‘ twos,” 36 to 42 1b. as ‘ eights,” 42 to 48 Ib. as “fours.” ~~ As with Australian lamb, ‘ twos” and ‘‘ eights >’ with an average weight are usually sold together. The present high demand for light-weights applies also to New Zealand goods; for example, good second-quality lambs of about 32 lb. weight not infrequently command higher prices than “eights.” The New Zealand killing season follows after the Australian and usually begins in the North Island about November and in the South Island roughly a month later. The first ““ new season’s ”’ mutton and lamb usually reach this country, therefore, at the end of December, or early in January. With good and long seasons, there is always overlapping on the English market ; for, as New Zealand killing may go on into August, mutton and lamb of that season may be reaching this country as late as December, when new season’s meat from Australia is on offer. In January, February and March, mutton and lamb from both countries are arriving, also lambs from South America, so that during the first four months of each year, arrivals are generally heavy. The heaviest shipments of lamb from Australia usually arrive here in December, January and February, and the heaviest from New Zealand after February. The arrivals from South America are fairly uniform throughout the vear (see Table II, on p. 59). New Zealand mutton and lamb are famous for their excellence, a result of careful breeding and rigid grading. Not all the works have kept to the same high standard, but the Meat Board recently set up (see p. 48) has taken this question in hand, and no doubt the result will make for greater uniformity throughout the trade. South Island brands are usually assessed higher than those of North Island, but many of the latter leave little to be desired. From South Island come, of course, the famous mutten and lamb of the Canterbury Plain; though other brands may be equal in quality, the Canterbury brands stand highest in public favour, which is testimony to the value of good breeding followed by good grading. It is also an illustration of the ‘ package ” nature of the trade, for good brands sell on their name and reputation, which, however, take time to establish. It is sometimes alleged that lamb sold by butchers as Canterbury lamb has often no right to this description.* If this is so, and since Canterbury brands retain their character of excellence and continue to be eagerly sought after, it must be inferred that a discriminating purchaser who is supplied with the less well-known brands under the ¢ Canterbury” label must find them up to the presumptive standard or the practice could not continue. td. 2290. 1925. 'Q (iii) South America.—While New Zealand is predominantly the country of first-grade mutton and lamb, the Argentine and Uruguay are producers of first-grade beef and constitute the only area which is at present a large exporter of chilled beef. Attempts have been made at various times to ship chilled beef trom Australia and New Zealand, but, up to the present, such shipments have not been successful commercially, while recent regulations regarding the use of a preservative which promised success has again left the question one for further experiment. South America has several natural advantages as a meat supplier. It has, first, the advantage of position, meat vessels taking just over three weeks from the River Plate to London, as against five to six weeks from Australia. In addition, the meat works on the Plate are better placed for loading, so that a vessel can pick up a cargo and leave for England in a few days; whereas, after loading beef on the coast of Queensland, a ship may have to call at various ports to get a complete cargo, and may not be able to sail for several weeks. Again, both the Argentine and Uruguay are free from the devastating droughts which are such a disturbing and difficult factor in the Australian trade. It is not surprising, therefore, that a highly-organised and efficient industry should have been built up. There are experts who hold the view that the Argentine has reached the limit of its productive capacity under existing conditions, but there appears to be no general agreement on this important point. The cattle are mainly of the Shorthorn type; the basis of the herds is British, stock-raisers, for many years, having been eager buyers of British pedigree bulls. The cattle are largely fed on alfalfa—or finished off on it or on cake—and attain maturity at about 23 years of age, when they give about 800 lb. of dressed meat. Breeding and fattening are distinct businesses. The climate allows breeding practically all the year round, so that the export trade, unlike that of Australia and New Zealand, is not seasonal, though there is a decline in supplies during the Argentine winter until the new grass comes on. The cattle are frequently dishorned during the first two months after birth in order to avoid bruising during drinking or when heing railed. The buyers of the freezing companies buy at the farms or in the market, the cattle being bought at so much per head. In 1923, sale by live weight was made compulsory in Argentine, she object being to assure for the cattle-owner a fair sale. For various reasons, among them the fact that facilities for weighing were not universally available, the statute was suspended for six months, but it is now operative. After the cattle are bought, they are railed down to the freezing works (frigorifico), care being taken that they do not suffer in transit. Among the precautions adopted on the railways are locked couplings to prevent jolting and bruising, sprinklers so that cattle do not 20 get over-heated, abundant drinking water, and, in the case of long journeys, mid-way rests. Cattle from a distance are usually turned out to pasture near the frigorifico before being killed. The frigorificos are models of up-to-date efficiency, and it is true to say that no part of the beast is wasted. It is frequently asserted that the freezing companies sell the beef at or below cost and make their profits out of their by-products. The list of the by-products is imposing—hides, tallow, meat-extract, tongues, bails, kidneys, casings, glands, blood, &c.; hence, the freezing works are not only selling to the meat trade, but also to tallow merchants, manure merchants, and to merchants of medical requisites. This very specialised business is made possible by the large turnover and the regularity of the trade throughout the year. The cattle are graded broadly into three classes— chillers,” “freezers,” and ‘ continentals.” Formerly, buyers from the freezing works paid a head price for a * mob ” and sorted them out after purchase, but recently it has become more general to fix the price for the three classes separately. As ‘ chillers secure the higher price, it is probably better for the stock-raiser that the second method should be pursued, as it encourages improvement of herds. For the same reason, it would appear that the dead-meat method of payment is the soundest: it ensures for the producer a return measured not only by the weight of beef he has produced, but also by the care he has taken to grow good quality. After chilling, the beef is promptly shipped and, on arrival in this country, is promptly marketed. This is a necessity for chilled meat, as its limit of “ keeping ”’ is about five to six weeks, which largely explains the organisation of the trade. Directly a ship arrives, its cargo is sent to the various depdts to which it has been allocated, where it is sold even though prices drop seriously during the course of the day’s trade. If any of the steamers are held up, say, by a strike, and it is evident that discharge will be unduly delayed, the temperabure in the holds is lowered and the heef is sold as * frozen chilled.” In much the same way, when chilled beef is cheap, a Smithfield speculator may buy quantities to be sent from the ship to cold-store, there to be held until the price again rises sufficiently to cover storage and ensure a profit. Such beef is not, of course, sold as chilled, but as ‘“ frozen chilled,” and its price will depend on its condition and on the state of the frozen beef market. It is, on the whole, a dangerous speculation, as the heef may show “ signs of storage ” very quickly. The trifold classification into “ chillers,” * freezers” and “ continentals ” gives to the South American merchant the advantage of three markets. In this country, he disposes of his best, that is his chilled beef, and he also finds here the market for his good beef, which, not being quite of the standard demanded for the chilled trade, is yet of sufficiently good quality to suit the frozen beef trade in this countrv. a trade. as shown ~ A SouTH AMERICAN FRIGORIFICO. ‘By the courtesy of the Smithfield and Argentine Meat Company.) in Diagram D, on p. 63, which is considerable in spite of the growth +f the chilled-beef trade. For beef of lower quality and for cow beef, i.e., for his plain beef, he has the Continental market where iean beef is in demand, though in times of good Continental demand, frozen beef which would normally have found its way to this country is sometimes sent to the Continent. On the other hand, when a glut occurs on the Continent—and during the past few years this has not been infrequent—*‘ continental” beef is diverted to this country, where, however, its indifferent quality makes it a difficult commodity to sell. South America looms so largely as a supplier of beef that its importance as a supplier of mutton and lamb tends to be overshadowed. As regards mutton, Diagram E shows that South America has often been the largest single supplier in recent years, whilst its lamb shipments have been always less than those of New Zealand, but sometimes greater and sometimes less than those from Australia. (See Diagram F, on page 65.) The sheep population of the principal supplying areas in South America is, at present, estimated as being : Argentine, 12,000,000 (including Patagonia, 12,000,000); Uruguay. 17,000,000. Not all these flocks, however, are available for mutton production as, in many districts remote from railways, production for wool is the only purpose for which sheep are kept. In such districts, lack of transport facilities and the consequent enormous distances over which flocks would have to be driven on the hoof to reach a freezing works, render cross-breeding for mutton unprofitable. On the other hand, great improvement by crossing with stock imported from Britain, New Zealand and Australia has been made in the sheep of those parts of Argentine Uruguay and Southern Chile which are near to freezing works or railways. The killing season for mutton and lamb in the Argentine is usually from October to June, and is heaviest between November and March; further south, in Southern Chile and Patagonia, the season is later and shorter, usually starting in February and lasting to June. The shipments are fairly well spread over the whole year (see Table II, on page 59). (iv) South Africa.—Up to the present, this Dominion has not been an important source of supply, nor is it likely to become such for some years. The surplus available for export during the last three years—which have been very dry—has not been generally ap to the quality required on British markets. The exports of beef and veal for these years have been: 1922, 300 tons; 1923. 275 tons; 1924, 3,836 tons; the last figure shows that South Africa was able to take advantage of the recent improvement in the beef trade, the principal markets served being Italy and Belgium. This improvement in the export trade has enhanced the price of cattle in the Dominion; this should assist producers and encourage breeding for export. With a view to stimulating the export trade. the Union Government. in 1923. passed a » ) Beef Export Bounties Act authorising the payment of 1d. per Ib. on beef exported. There are 21 freezing works in the Union ; in Rhodesia, the Government have recently made an agreement with the Imperial Cold Storage Company which gives the latter a monopoly of treating cattle for export for seven years, after which the Government has the option to purchase any works erected. South Africa is well placed for the chilled-beef trade with this country, if other difficulties, including finance and quality of output, can be overcome. The number of cattle in the Union is over 9 million ; if Rhodesia and South-West Africa be included, the’ number exceeds 12 million. During 1925, South Africa entered the trade in slaughter cattle, small shipments of cattle being consigned on the hoof to both Great Britain and the Continent. CHAPTER IV. FROM OVERSEAS PASTURES TO BRITISH PORTS. It is a long journey from the wide open spaces of the southern hemisphere to the table of the British consumer. Starting from the pastures, the stock is drafted either to sales-yards, or direct from the farms to the freezing-works. Stock bought at salesyards are usually drafted at once to the works, but stock bought on farms await instructions as to the time of forwarding. On arriving at the works, the stock is usually rested in adjacent paddocks before being killed. The dressed and weighed carcases pass to a cooling chamber, where they hang for a day in order that all body heat escapes before they pass into the refrigerating chamber. Government Veterinary Inspectors examine all stock before killing and after dressing; every carcase passed fit for human consumption carries a certificate in the form of a tag which is fastened to it and remains attached until the carcase reaches the market in this country. After being frozen, the carcases are bagged” in cotton webbing—beef being also wrapped in hessian— and piled in a cold store attached to the freezing works where they remain until they are placed in the refrigerated holds of steamers bound for British ports. Chilled beef is not piled but hung both in store and ship. The control of these operations is the function of the companies which own the freezing works. Sometimes these companies have their own organisation for handling the meat on arrival here; sometimes they work through agents. Then again there are large importing firms which do not own freezing works but operate on the British market on their own account and obtain their suplies direct from overseas. The Dominion (i.e., the Australian and New Zealand) trade, and the South American trade are, however, distinct in their trading conditions and methods. Each has its own characteristic rrganisation and, for clearness, each is separately described. (i) Dominion Trade.— There are several classes of firms engaged in the Australian and New Zealand meat trade. Roughly they may be classified as follows :— (1) British firms owning works in the Dominions and possessing their own selling organisation or wholesale depots in this country. (2) Dominion firms owning works, with agencies in this country. (3) Farmers’ co-operative works in the Dominions having agents in this country. (4) Operators in both countries who do not own works. Before the meat-works in the Dominion open, they must have a certain head of stock at their command. In some cases, the works have their own farms. All the works have expert J { buyers who, long before the killing season begins, visit farms and form an estimate of the supplies likely to be available and, roughly, the proportion of each grade. Some buying may take place at this early stage, though, as a rule, both works and farmers do not care to commit themselves until they have some idea of probable london prices. To obtain this information, the London organisation or the London agents are freely consulted. In the case of British firms owning works in the Dominions, the proprietors are, of course, in close touch with the British market and they issue instructions to the works as to the prices which they should give for stock. The works management informs the London organisation whether buying can be done at the prices named. Frequently, the works are instructed as to the output required, the stock-buyers being left to follow the market to obtain supplies. When freezing works rely on agents in this country, the usual and most satisfactory method is to make or ask for a firm offer of meat. This preliminary offering may take place some weeks before the killing season begins. If, for example, the season is expected to open in October, the works may cable over to their London representative during September, or even earlier, an offer of 10,000 lambs at, say, 10d. per 1b., shipment to be made during October. The London representative will immediately offer these lambs to various firms and, if possible, endeavour to obtain a higher price than 104. If he obtains an offer of 10d. or above, he will accept and cable out to the works to that effect, adding, as a guide, whether the trade generally was ‘‘ interested ” in offers at that price. If he cannot get 10d., he will probably cable the highest counter-offer he has received. From this information, the works will decide upon a buying price which will show a profit after taking into account what will be obtained for the fall,” s.e., the skin and offal. The stock-buyers will be instructed accordingly, and will visit farms or sales and buy to cover the transactions already made. The speculative character of the business, both in the Dominion and in this country, can be seen from this simplified example. In the first place, the London buyer, in September, agreed to pay 10d. for lambs that may not arrive until well into December, and, between the time of his purchase and the time of the arrival of his goods, the market may change considerably. It should be remarked that shipment during October is fulfilled if the lambs are placed on board ship on or before October 31st, though the vessel may not sail for a considerable time. In the second place, the works have sold at 10d., and when they try to buy stock, they may find the market against them so that the deal shows a loss. Of the two, the works are in the better position on this one transaction, as presumably they would not have offered the agreed price unless they believed that they could buy to show a profit. It will be seen from the above, that the weeks which precede the opening of the season are of great importance to the freezing 23 companies and to the farmers, for it is in this period that initial prices are fixed and the first real information obtained regarding the season’s prospects. Estimates of the probable total output are prepared in the Dominion by the various works; these and particulars of the conditions of the stock and weather are cabled over for the information of traders in this country, who, equipped with similar details from other sources of supply, are enabled roughly to forecast selling prices. The works once opened, the stock-buyers continue to buy on the instructions of their employers. As the animals are killed and dressed, the British houses are advised, usually each day, by cable. The advice, as a rule, relates to round numbers of, say, 500 or 1,000, and gives quality and weights. The freezing works are in close communication with the shipping companies at the nearest port and make freight arrangements for their actual and expected killings so that they are usually able to advise the month of shipment at the same time as the other particulars referred to. When their advices are received in this country, the parcels are offered to various wholesale firms, unless the meat coming forward is the property of a firm owning wholesale depots in this country and is required for that trade. As the meat is sold on the basis of these advices, the works are informed by cable; if the meat is not sold, advice is usually given as to the best time for shipping, or as to the port to which the goods should be consigned. The freezing works are also kept advised as to the course of the market and furnished with any other relevant information, such as the offers or sales being made by competing firms. The freezing works reciprocate by advising of any changes which may occur in the Dominion, of reports regarding the operations of other freezing works, and of sales reported to have been effected in this country by competitors. Obviously, the methods pursued in any one case vary rather with the financial resources of the various companies engaged in the Dominion trade rather than with the type of trading organisation. This can be readily understood, as a trader with small capital must be careful in a business which is so speculative as the meat trade. It is often said that it is impossible to judge of the success of a meat firm on any one year’s trading, but that at least three years’ trading must be taken. A firm with good resources will usually follow the market on both sides. i.e., whether the market rises or falls in the Dominion, they will continue to buy and process; when the goods arrive here they will continue to sell, within certain limitations, whatever the prices may be. A firm with less eapital could not afford to pursue this policy, as one year of bad trading might devastate its resources; on the other hand, such a firm to operate with success needs good judgment at its head, as dodging in and out of buying and selling is a most difficult trading policy to maintain. Indeed, it must always be the aim of freezing works to ensure that, once the works are opened. stock passes throuch continuously rn 20 so that working expenses are spread over a maximum turnover, It is obvious, for example, that though a profit of 1d. per 1b. may be made on one transaction, subsequent events may load it with such a heavy proportion of the working expenses of the season as a whole as to turn it into a heavy loss. (ii) The South American Trade.—The organisation of the South American trade differs from that of the Dominions in that it is linked with a complete distributive system in this country. Few of the companies engaged in the meat business in Australia or New Zealand have any market stalls or dep6ts here; whilst, on the other hand, it is the exceptional South American company which is not in that position. As a result, the South American companies are able to sell directly to the retailer and are therefore, to a considerable measure, independent of any intervening middleman agency. Buying in South America is done on lines similar to those followed in Australia and New Zealand. Each works has its buyers who visit sales-yards and farms, but there is the important difference that, in South America, practically all the works are kept supplied with cattle and sheep whatever the orice; in the Dominions, some works may not be opened at all, or may be closed before the season is over if the price demanded for stock does not show a satisfactory margin when compared with the prices being realised for meat in Great Britain. This uncertainty of output is not present in the South American business, and, if it were, it would be exceedingly difficult to keep up the distributive organisation here, for if, for a few weeks of the year, the stalls and depots in this country had no supplies, the overhead selling costs would be prohibitive. At various times, Australian and New Zealand interests have expressed a desire to develop the ownership of stalls, depots and shops in this country, but it would appear that the problem of continuity of supplies will first have to be solved in their case before they can economically embark on this policy on a scale comparable with that of the South American companies. The South American meat trader knows approximately the absorbing power of his various branches in this country and the class of goods which each can take, so that, subject to the limitations which are noted below, he can instruct his works regarding the quantities they should ship each week. He has, as it were, a guaranteed outlet. Moreover, as the works are operating over the whole year, there is a clock-work regularity which is absent in the Dominion trade. In addition, there is agreement among the companies as to shipping space for chilled beef, and a conference of importing companies sits in London,* week by week, to allocate the freight from South America among the various companies represented. This is arranged on an * This conference breaks down from time to time as, for example. in 1911. 1913 and at the present time (August. 1925). 2 greed percentage basis which is presumably regulated, in each case, by the quantity which the company concerned is able to lispose of through its organisation. This, in theory at least, sets a limit to the efforts of each to increase its business at the expense of the others, for a company can never sell more than its freight allocation. The companies state that the careful arrangement of freight and its allocation are essential if gluts and shortages of chilled beef on the British market are to be avoided, though it should be noted that, even with this agreement, gluts and shortages not infrequently mark the trade through ships not keeping up to schedule, through bad weather, accident, or changes in demand. In spite of the agreement, considerable rivalry exists in practice between the two main sroups—the English and American companies—between which the trade is mainly divided.* The main difference between the Dominion and South American trades is, therefore, that the one must produce practically all its goods for a market which is problematical, while ‘he other has at least a continuous minimum demand. Moreover, while, in the Dominion trade, companies vary widely in their Functions, trading outlook and organisation, in the South American trade the type of company is practically uniform, namely, a trading organisation which owns works in the Argentine or Uruguay and, directly or indirectly, distributive stalls and depots in this country. Superficially, the Dominion trade looks unorganised, uncertain and haphazard, while, by comparison, the South American trade appears to be a well-made road along which supplies travel in orderly procession until they reach the retail distributor or, in the case of the enterprises associated with the Union Cold Storage Company, the consumer’s table. This orderliness does not, however, always obtain, for the prevision of the companies is limited by uncertainties. A delay of from, say, Thursday to Monday, through bad weather, or through breakdown at sea, may cause a shortage in one week and a surplus in the next. A heat-wave, or heavy arrivals of mutton, lamb or pork from other sources, may so curtail the demand for beef as to produce a surplus even though only normal quantities are being offered. Again, it is necessary to maintain works in continuous operation and to arrange that steamers, once chartered, are loaded to full capacity, or the meat will be marketed at a high cost. Unlike the Dominion trade, which pays freight only on actual meat shipped, the South American trade pays freight on the basis of shipping space chartered, so that unit-carrying charges for the trader are lowest when ships are filled to capacity. It frequently happens, therefore, that in order to keep down on-costs, meat is shipped in heavy quantities to a market which is known to be depressed. The problem which may, at times, confront the sompanies is to decide whether the loss incurred in selling large ‘ Ranart of Roval Commission on Food Prices.” Cmd. 2390. 1925. YERDIA RQ quantities of cheaply-marketed meat will be greater or less than that incurred in selling small quantities of meat handled at a oreater unit cost. It is not unusual in the summer months for supplies to be greater than demand, prices to be low and considerable losses to be made; but as the trade continues throughout the year, such losses are usually recouped when the market surns the other way. (iii) The part played by the Banks.—It may be convenient to consider briefly, at this stage, the part played by the banks in these operations. It is obvious that the freezing works could not go on operating if they had to stand out of their money until their goods were marketed. When a sale is made, the terms of the contract are usually cash against documents on arrival of the vessel at destination, and this may be many months later. Advantage is, therefore, taken of the facilities offered by the banks. An advance of a proportion of the value of the meat san be obtained in the producing country, against warrants, directly the goods are lodged in cold store. When the goods are shipped, the bill of lading, together with the freezing works certificate, which certifies that the goods have been properly frozen, and the insurance declaration, are handed to the bank, which then advances a further proportion of the cost which now includes freight paid in advance. The banker, in making these advances, is guided by the prices obtainable for similar goods at the same destination, and also by his judgment of the trend of the market. He endeavours, in other words, so to restrict his advance that he will be covered in the event of a sharp fall in prices. This system of marketing finance is of great value to the freezing works and makes it possible for them to continue treating. The advance is made on a bill drawn either on the freezing works’ representative in this country, at 30 or 60 days’ sight, or, in the case of a direct sale, it may be drawn on the buyer in this country. Frequently, an English merchant establishes a credit in the Dominion through his bankers in this country and, in that case, the bills will be drawn under that credit. In addition, a good deal of meat is “ passed through ” the bank. The documents, when handed to the bank, are forwarded to their representative in London and the bill is presented to the drawee for signature. CHAPTER V.—THE TRADE IN GREAT BRITAIN. (i) Some Types of Sale.— Most of the commercial terms common to import trades in general are in use in the imported meat trade, but are interpreted in a special manner. As a preliminary to a description of the trade in this country, it will be convenient to discuss these terms and their significance. They are of general application throughout the trade, but, except as regards ex-stall sales, they relate only to frozen goods, as chilled beef does not pass out of the hands of the producing and importing firms until that stage. (a) C.I.F. (Cost, Insurance and Freight)—This is frequently called a “forward ” sale, because the goods are sold for future delivery. The seller, either here or overseas, sells a certain quantity of frozen meat of given quality and weights, the goods to be shipped at a certain time, or by a named steamer, at the sale price cif. The price charged covers the cost of the goods, the freight and the insurance. When the vessel arrives, the seller presents to his buyer the bill of lading, freezing works’ certificate, and an insurance policy or certificate, which gives the buyer the right to apply to an insurance company in case of loss or damage. C.if. sales may be made before the goods are shipped—indeed, before the animals are killed—or at any time before the ship discharges her cargo. After the ship docks, however, it is not usual to sell c.i.f., but ¢ ex ship ”’—see later. When a buyer makes a c.i.f. purchase for shipment during a certain month, the seller informs him when the goods have been shipped and notifies the name of the steamer. The buyer, by >nquiring at the shipping company’s office, can find out when the ship will arrive. Frequently, goods on a ‘“ named > steamer, i.e., goods actually shipped, are of a higher value, or, at least, meet with a readier forward demand than goods scheduled for despatch in a named month. This is especially the case when supplies in the exporting country are short. and arrivals are nncertain. Some days before the docking of the vessel carrying the goods, the seller despatches an invoice to the buyer, so that the latter may make arrangements for payment. On the day of arrival, the seller or his representative takes up the documents from the bank by retiring the bill and tenders them to the buyer, who, after satisfying himself that they are in order, hands over a cheque for the full invoice amount. He then has the right of delivery from the ship, and, by presenting his documents to the shipping company, can arrange accordingly. If he wishes the goods to be cold stored, he will hand over his documents to the store he has selected; the storage company will collect the goods from the ship, will barge or van them to the store and pile them in the storage chamber. A landing account is then sent by the storage company to the buyer, giving the number and mark of the goods obtained from the shin. If these are not 20) in accordance with the bill of lading, the buyer claims for a shortage upon the shipping company. A merchant will sometimes speculate by making a c.if. sale without having the goods. This is done when forward prices are high and when, in his view, falling prices may be anticipated. In order to fulfil his contract, he will buy goods later on of the specification required; if he cannot do so, he is, of course, liable 50 damages for breach of contract to the extent of the loss of profit incurred by the buyer. Goods sold c.i.f. are usually sold on bill of lading weights. These are taken at the freezing works, the carcases being weighed after dressing and a percentage deducted for the loss of weight which always occurs on cooling and freezing. Upon these weights, the freezing company pays the freight, and they are stated on the bill of lading. If the buyer intends to send the goods direct from the ship to country depots, he usually arranges bo have them weighed at the ship’s side; if they go into cold store, they are automatically weighed as they leave the store. In this way, a buyer has a check on bill of lading weights and if the ex-store weights show a loss of over 1 per cent. of bill of lading weights, the seller gives the buyer credit for the whole amount of the shortage. The cold-store weights must be sent to the seller within 28 days of the discharge of the steamer, otherwise he is not liable to make up this shortage. The c.i.f. business must be handled with great care as disputes can easily arise. To obviate them, as far as possible, the British Incorporated Society of Meat Importers has drawn up a standard contract form based upon experience of disputes. (b) F.O.B. (Free on Board).—This method of sale differs from the above in that the buyer pays freight and insurance, the money being payable at the port of loading and not discharge. Such purchases are not usually made by merchants in this country, but may be made by their representatives in the producing country. By paying the freight and insurance. the goods can be sold ¢.i1.f. (¢) Ex-ship.—This method of sale is similar to a c.i.f. sale, except that, in this case, the seller pays the port dues. He, himself, presents the documents to the shipping company and issues a delivery order in favour of the buyer. As a rule, in making an ex-ship sale, a seller retains any insurance survey award (g.v.). This sale is usually made just before the ship arrives, or even while it is discharging; it is frequently made when a seller prefers to take the market prices of the day rather than to incur storage charges. From the buyer’s point of view, it has the advantage of being made when selling prices are known. By deducting the management rate (i.e., the cost of taking to store and the first month’s storage) from the ex-store market price of the day, the buyer can arrive at practically the equivalent sx-ship price. 2 (d) Ex-Store—If, when goods are placed in cold store, the holder does not wish to reserve them for his own stalls or shops, if he has any, he sells either *“ ex-store ”’ or *“ delivered to market.” [n the first case, the seller merely makes the sale at the price fixed per Ib. He informs the stock clerk in his office, who issues a delivery order in favour of the buyer; this calls upon the store to deliver to the buyer the quantity and quality named. The order, together with a provisional invoice, is sent over to the buyer who pays a cheque on account. The invoice must be provisional because as the sale is on ex-store weights, these cannot be ascertained until the goods are drawn. When the buyer has received his delivery order from the seller, he lodges it with the cold store. He can then draw as he requires. At the time of the sale, the seller informs the buyer of the number of days he is allowed in which to draw the goods. This is termed the period of “free storage,” at the end of which time, after notice has been sent to the buyer, the seller may instruct the cold-store company to weigh, at the buyer’s expense, any meat remaining undrawn. The object of this is to obtain the weights for final invoice purposes, and also to transfer any further storage charges to the buyer. When the buyer sells the whole parcel, or any part of it, he himself issues delivery orders on the store for any quantity within the limits of his purchase. In selling “delivered to market,” the seller defrays the charges incurred in placing the goods on any stall in the market which the buyer may direct. These amount to 4d. per stone of 8 lb., so that the difference in price between an ‘ ex-store ” and a “ delivered ” sale amounts to one-sixteenth of a penny per Ib. Frequently a buyer will buy goods on a delivered basis and sell them at the same price ex-store, i.e., his profit is 3d. per tone. ie) Ex-Stall— This term is applied to sales by a market stallholder to retail buyers. It calls for no explanation. (ii) Surveys on Arrival. (a) For Insurance.—On the arrival »f meat at a port in this country, it is usually surveyed by two expert surveyors for the assessment of damage for insurance purposes. As, however, the insurance contract covers a period of usually sixty days in cold store, the survey is sometimes postponed until this period has almost expired so as to include any damage which may have occurred in the cold store itself. The insurance covers damage arising from faults in the refrigerating machinery, damage through sea-water getting into contact with the meat, and broken shanks and mis-shapen carcases due to faults in handling and packing. The surveyors, one of whom represents the underwriter and the other the owner of the goods, =xamine 10 per cent. of the parcel, taken * as it rises,” %.e., not specially selected, and assess the damage over the whole consignment on the basis of the condition of the proportion examined. The two survevors must agree as to the assessment of damage; 24Q9N 3) their finding is then applied to the whole parcel. In the case of serious damage, the whole parcel may be examined. (b) For Quality—When a buyer has bought forward, and his goods on arrival are not up to what he considers to be the standard called for, he has the right to a * quality * survey. The buyer writes a note to his supplier telling him that the goods are not up to standard, demanding a survey for quality, and naming his representative. The seller thereupon names his representative. Neither must have any interest in the goods. After examination, they give their award, or, in the event of disagreement, the matter is referred to an umpire. If, as a result of such a survey, some of the goods are found not to be up to the standard of the sale, the buyer has the right to an allowance, or to invoice such portion back to the seller at the market price of the quality of the goods bought. If more than 20 per cent. are assessed as being below quality, the buyer has the right under his contract to reject the whole tender at the market price of the day. The losing party in a survey pays the costs—a provision which tends to prevent the calling of survevs for inadequate reasons. Quality surveys are more frequently called in times of falling prices than in times of rising prices, and this is regarded by producers as a grievance. While, on occasions, this grievance may be justified, it must be remembered that irregularities of quality are often passed over by the trade when business is brisk, because time is valuable and feeling more tolerant; when prices are falling and sales are difficult to arrange, a merchant has more time to examine his purchase, and is more disposed to look for faults than virtues. After all, the merchant would reply to the producer who felt himself aggrieved by the calling of a survey, that the remedy was in his own hands and that, by rigid and impartial grading, quality surveys would become almost a thing of the past. It may be observed that the surveyors employed are usually themselves salesmen, and although there is no reason to suppose that surveys are not carried out with fairness to both sides, yet, it follows, that circumstances must, at times, make impartiality difficult. There are surveyors who are not themselves traders, but there is no compulsion to employ them, nor is there a registered panel of approved surveyors, prepared by either producers or sellers, to do this work. (iii) Wholesale Merchanting. (a) General.—The principal ports through which frozen mutton and lamb and chilled and frozen beef enter Great Britain are London, Liverpool, Southampton, Manchester, Hull, Avonmouth, Newcastle and Glasgow, in the order of the magnitude of the trade; chilled imports are, however, confined to the first three. Formerly Liverpool was the business centre of the trade owing to its convenient situation for North Atlantic shipments, London being the finance centre. To-day this is entirely changed, the trade as a whole is now tending to focus on London. Table III on p. 60. shows the quantities » J? J of frozen beef, mutton and lamb received at the above ports from Australia, New Zealand, and South America and of chilled beef from South America during 1924. There are some slight differences in the class of goods shipped to each port— Glasgow, for example, takes large quantities of boneless beef, but is not a great importer of mutton. In Liverpool and the North generally—excepting, perhaps, Newcastle-on-Tyne— light carcasses and quarters are preferred, even if the quality is not so good. In London, heavier weights were at one time freely taken, which was convenient for importers, as they shipped their lighter weights to Liverpool and other outports and brought their heavier first-quality goods to London. During recent years, however, a change has occurred in the tastes of London purchasers, and now light weights are in as insistent demand as they are in the North. The result is reflected, for example, in the returns for second grade lambs of lesirable weights—from about 28 to 34 lb.—which frequently command a better price and meet a readier sale than first-grade lambs of from 36 to 42 1b. (see p. 16). This is, of course, due to the public demand for small joints, which also accounts for the demand for young beef. Heavy mutton—:.e., mutton over about 60 ‘1b.—is still in demand for certain special purposes, such as contracts for the Fighting Services, but, except in times of great shortage, it is only saleable at low prices, the carcase required being one that gives from 48 to 56 Ib. of dead meat. (b) The Provincial Trade.—Apart from London, meat is not, as a rule, stored at the ports, unless it is needed for local consumption, but is distributed ex-ship to the consuming centres. [n those large cities, such as Birmingham, Manchester, Liverpool, and Glasgow, which have wholesale meat markets,* there are usually imported meat sections in the markets, and, in these, the chief South American importers have stalls; in large cities and towns without wholesale markets, these importers have their own wholesale depots. The stalls or depots cater for the requirements of the retail traders in the town concerned, but, in addition, travelling salesmen visit butchers in the neighbouring towns and villages over a wide area, and, of course, price lists and the telephone are freely used. It can, therefore, be said that these great South American organisations penetrate into avery part of the country. Dominion firms have not this vast distributive system, although, by means of travelling salesmen and by correspondence, they may be in direct touch with provincial wholesalers. No New Zealand firm, as such, has depts or stalls in this country. [n the Australian trade, two Australian firms, namely, the NDueensland Meat Export Co. and Messrs. Walker of Sydney, * The scope and nature of these markets is at present the subject of snquiry by the Ministry as part of a national survey of markets and marketing facilities, a revort on which will be published in this series in {ue course. operate depdts or stalls indirectly through English registered companies. On the other hand, two English firms, namely, Messrs. Borthwick and the Union Cold Storage group, and one American firm, Messrs. Swift, each of which has its own distributive organisation in this country, also own meat works in the Dominions; the main operations of the two latter are. of course. sentred in South America. On the whole, therefore, it can be said that the South American trade embraces the wholesaling of the product, while the Dominion trade touches wholesaling only to a very limited extent and confines itself, in the main, to representation in the chief ports and to selling to the wholesale trade. In many towns, various wholesale meat-traders, not connected with the importing organisations, have stalls or shops and buy from the importers or, at times, direct from the overseas source of supply, which is usually the Dominions for this class of trade. Here and there, retail butchers are banded together in a loose form of wholesale buying association and, through their representatives, they purchase direct ex-ship, or even c.if., though this latter is risky and may, at times. strain collective-buying to the breaking point. Before a ship arrives at a port, its cargo is allocated and arrangements made to ensure its quick dispatch by rail or road to the points where it is required. Frozen goods not required for immediate sale are placed in cold store at the port or transported to a cold store in a centre convenient for subsequent distribution ; chilled beef is always sent direct ex-ship to depots for prompt sale. In wholesale meat distribution, the motor lorry, with trailer-van, is playing an increasingly important part because of its suitability for rapid point-to-point distribution of supplies. Most of the imported meat used in South Coast towns, for example, is now sent down by road over-night from London ; similarly, the towns in Lancashire, Yorkshire, Cheshire and North Wales and, occasionally, towns as far distant as Hull, Middlesbrough and Newcastle, are served by road from the ports of Liverpool and Manchester. For long journeys, insulated railway meat-vans are used; in hot weather the temperature is kept low by ice.* Chilled beef is necessarily distributed over a more restricted area, and those districts remote from ports which cannot be reached in a few hours by rail are usually supplied with the frozen variety. The travelling salesmen operating from the various depOts are acquainted with particulars of the goods coming forward and with the time of arrival of the ship; it is their business to collect orders from the retail trade. These orders are grouped and, if the retail customers are outside the range of the motor lorry, the goods are dispatched to the traders’ rallwav station bv meat-van which is frequently attached to a * See, however, paragraph 51, ¢ Report of Inter-Departmental Committee on Meat Supplies.” Cmd. 456. 1919. passenger train. Small orders, say, for a quarter of beef or for a few sheep, may be despatched in the guard’s van of a passenger train. Prices of frozen goods tend to one level throughout the sountry, allowing for variations due to rail or other haulage charges. This is only to be expected where so many traders have such widespread organisations, for if the market, say, in Manchester, is high on any day owing to short arrivals in Liverpool, ample supplies, from London or elsewhere, can be made available by the time that the market opens on the following morning. In times of superabundant supplies, prices throughout the country frequently do not even differ by the amount of the above charges, for pressure at the ports is relieved by consignment inland where prices fall in consequence. It frequently pays the importer to lose his haulage charges, if by so doing he can prevent a slump in any centre where he has large supplies awaiting sale. Although rail charges are a serious factor, meat traders are unable to take advantage of coastal steamers owing to the absence of refrigerated space. A good deal of the trade between British and Continental ports is done in non-refrigerator craft, particularly in cold weather. The reason for this absence of refrigerated space is that the movements of meat over short distances by sea are too irregular to justify its provision. If an importer requires meat at any port other than London, he endeavours to arrange for direct consignment to that port from the country of origin and so saves rail and handling charges, while the meat reaches its destination in better condition. There appears to be little logic in the distribution of supplies of imported meat in this country. Theoretically, at least, the meat ports are admirably placed for dealing efficiently with distribution, for each is surrounded with important consuming areas. Newcastle, for instance, serves the coal and steel areas of the North Riding of Yorkshire, Northumberland, Durham and Cumberland ; Hull is well placed for the West Riding and the North-East Midlands; Manchester and Liverpool for Lancashire, Cheshire, the West Riding, the Midlands and North Wales; the Bristol Channel ports for South Wales and the lower Severn basin; Southampton for the Southern and Western Counties, and London for the Home and Eastern Counties and the South Midlands. Enquiry into the distribution of meat by rail from these points shows, however, that, though each of the meat ports is regularly used, to some extent, for the distribution of supplies in its own area, each also contributes to the areas of the others. From Newcastle, for example, apart from railages within its own area, meat is railed to Edinburgh and Glasgow, Lancashire (including Manchester and Liverpool), South Yorkshire, the Midlands, and occasionally to London; meat is received—in the order of tonnage—from Liverpool, London, Hull, Manchester and Glasgow. Hull sends supplies to Lancashire, Yorkshire, the 26 Midlands and London, and receives from London, Manchester, Liverpool and Newcastle. Liverpool's heaviest railages are to London, the North-East Coast, the Midlands, the Eastern Counties south of the Humber, Scotland and North Wales, in addition to Lancashire and Cheshire towns, including Manchester; Manchester supplies are railed to the same destinations. Both Liverpool and Manchester receive supplies from all the other ports. The Bristol Channel ports serve principally the South Wales area, which, however, also receives supplies by rail from Liverpool and London. Southampton sends to London, and also receives from that port. Thus, from London, supplies are railed to all the other ports and, indeed, to almost every part of the country and to Scotland (Glasgow and Edinburgh). In an ideal system of distribution much of this despatching oy rail would be avoided, for the supplies for each area would be shipped to its own port, and the apparent waste of railing meat, say, from Liverpool to London, at the same time that meat of exactly the same kind was being railed from London to Liverpool, would not occur. The persistence of the present system is, however, due in the main to two factors. In the first place, each firm distributes its own meat without reference to the others, and meets its orders from any supplies which it may have available. It is natural, therefore, that cross-railings should occur where so many firms have organisations serving the same area. Secondly, there is the difficulty of arranging regular freight to any but the two chief ports; a shipping company may insist upon a minimum tonnage before a ship is sent to an out-port, and such a minimum may be beyond the local requirements of the importer. It may, therefore, in practice, be cheaper to bring meat to London or Liverpool and then to rail exact requirements to out-port districts than to ship supplies Jirect at the cost of excessive freight. In any event, the perishable nature of the goods and the uncertain nature of the trade would, at times, dislocate even the most carefully-planned system, though it is difficult to believe that a more efficient and, therefore, economical system of wholesale distribution, based on the various ports, could not be devised to the advantage of all concerned. (¢c) The London Trade—*‘ The wholesale meat trade of London is a trade unto itself and has no counterpart, even for comparative purposes, in this or any other country.”* The trade is grouped around Smithfield Market, which is not only the centre of the imported meat trade in this country, but is the greatest dead-meat market in the world. Table IV, p. 61, shows the quantities of meat of all kinds handled at the market, during 1924, from various sources of supply, including Great Britain and Ireland. The market is the property of the Corporation of the City of London, from which the stallholders hold # Appendix I., “Report of Departmental Committee on Wholesale Food Markets of London.” Cmd. 1341. 1921 37 their stalls on lease. Stalls are held on a weekly-tenancy basis, and therefore, in theory, any holder can be turned out on one week’s notice. In practice, holders are secure in their tenancy 30 long as they observe the Market rules and regulations; indeed, when a stall-holder gives up his stall, he usually has a tangible “ goodwill ” to dispose of to the incoming tenant, and astonishing prices are sometimes paid, so keen is the demand for stalls as a rule. The system works somewhat as follows. When a tenant is retiring, he lets it be known that his stall will be to let; offers are then made to him by individuals or firms who desire possession. Having fixed the price with one of these aspirants, the retiring tenant hands in his notice to the Corporation officials and, at the same time, the buyer of the ““ goodwill” lodges an application. The Corporation need not, of course, grant the vacant stall to this applicant; but, in practice, it usually does so after careful enquiries have been made as to his standing and jsosition. Buying and selling goodwill is, however, entirely anofficial, though it has the force of custom. * Running a stall is an expensive business. It is true that she rent charged by the Corporation is low, but tolls are levied ‘2s. 3d. per ton) on all meat sold. The stallholder’s staff includes salesmen, who stand on the front of the stall, scalesmen, cutters and also ‘ humpers,” who place the beef in the stall in the morning and hump it out to barrows when sold. As the business is done mainly in the early hours, this necessitates a larger staff than would be necessary if it were more evenly spread over the day. In addition, each stall has its own clerical staff. The stalls are held by various classes of salesmen, though ex-stall sales are always to the wholesale or retail butchering trade and to large-scale consumers such as restaurant and hotel proprietors. Some are held by salesmen who handle only homezilled meat which they have bought on their own account, or which they have received for sale on commission. These stallholders will be referred to in a subsequent report on the homemeat trade and need not, therefore, be discussed here. At Smithfield, where supplies of home-killed represent only about 17 per cent. of the supplies handled (see Table IV, p. 61), they are of secondary importance. Some stall-holders sell both English and imported and, in the latter case, they may be selling on commission or they may be jobbers. Stall-holding jobbers are salesmen who normally buy on their own account for immediate resale. Other stalls are held by jobbers who handle imported meat only. They have no representative in the sources of supply, but buy their requirements from the various importing firms in *airly large quantities and sell in smaller lots to the ordinary clients of the market. At times, they may receive goods from the importing firms to be sold on commission. which is usually © «Report of Departmental Committee on Wholesale Food Markets »f London.” Cmd. 1341. 1921. See also ‘ Report of Linlithgow Committee on Meat. Poultrv and Eggs.” Cmd. 1927. 1923 IR at the rate of 3d. per stone of 81b. In other words, a commission salesman may sometimes job, and a jobber may sometimes sell on commission. Lastly, there are the stalls held by most of the big American importing firms and some of the Australian; through these stalls they pass their own goods, though the Australian firms, owing to the seasonal nature of their supplies. are usually jobbers also and deal in goods from other sources. As most of the South American firms have their own stalls, it is difficult for stallholding jobbers to trade at a profit, particularly with chilled beef. This is bought from the importers early in the morning; the importers, however, do not restrict their sales to jobbers, but also supply the ordinary clients of the Market. Unless, therefore, the importer has one price for the jobber and another for the ordinary client, it is obvious that the former would not be able to make his business pay. That he is able, as a rule, to do so, is due to the fact that, apart from the long-established connection between the jobber and his regular customers, he renders services which enable him to obtain a slightly higher price than his clients would, ordinarily, be prepared to pay to the importing houses. For example, the jobber is usually easier in his credit terms than the importing houses. Moreover, he makes it his business to study closely the needs of his customers and buys early in the morning with those needs in view. Some of his customers require quarters of a defined range of weight or quality, and, in the general run which the jobber buys, he will arrange to have sufficient to meet these requirements; for surplus quarters he will have to find other customers. In addition, many of the jobbers cut up mutton and quarters of beef in their stalls and so are able to cater for those buyers who confine their purchases to certain classes of joints. This cutting trade is difficult as, though the jobber receives a high price for his special cuts, he may have to sell the less desirable cuts at a low price, and, not infrequently, may 9nd them unsaleable. It has to be remembered, too, that the jobber is a ‘ wholesale” wholesaler, so that, when he buys sarly in the morning from the importers, he is giving a wholesale order which should ensure for him a better price than that at which the importers would sell to the ordinary clients on Smithfield. Recently, it has been alleged that the importers have Jemanded from jobbers the ordinary market price and that, frequently, during the course of the morning, they have sold beef to retail butchers at a price lower than that charged to jobbers when the market opened. If this were to be adopted as deliberate policy, it is obvious that the present methods of selling chilled beef on Smithfield Market would undergo a orofound change. Chilled beef is the staple article sold at Smithfield; frozen beef is also sold on the market, but, except in times of short chilled supplies, the trade is small. Large quantities of frozen mutton and lamb are. however, ¢ pitched ’’ each morning. This 2 crade, though risky enough, is not so uncertain as the chilled oeef trade, as the article is less perishable. If a jobber overestimates his requirements, particularly of chilled beef, in the early morning, he may find it necessary to reduce his prices in order to clear. He always aims at having no unsold meat on his stall when the market closes at 1 o’clock, as meat left hanging has to compete on the following day with supplies brought fresh trom the ship or cold store and, unless a shortage develops and vrices stiffen, he may not be able to obtain a bid for his day-old eat. It is this element of perishableness, coupled with the regularity of arrivals, which makes the business of selling chilled beef so dangerous. Moreover, demand is anything but a stable factor and its changes can rarely be foreseen. Cheap mutton, a plentiful supply of cheap pork, a sudden change in the weather— any of these may lessen the demand for beef and cause its value to drop pence per lb. in the course of a single market. As soon 2s demand weakens, there is eager selling to avoid ¢ carry-over.” \[ost salesmen also know to their cost that it is bad selling policy to have a carry-over even in frozen mutton and lamb. The fundamental difference between the chilled and frozen trade is, however, that chilled beef must be disposed of on the day of ¢ pitching,” whereas frozen goods can be held in cold stores in and around the market, so that if a jobber under-estimates his requirements he can draw a further supply from a neighbouring store without delay. If necessary, also, he can re-deposit ansaleable frozen goods in store, though this reacts unfavourably on the appearance and, therefore, on the price of the meat roncerned. So far, only the stall-holding activities of the market have seen described, i.e., sales by stall-holders to the retailers and others who buy meat for immediate consumption. Viewed from this standpoint, Smithfield is merely a wholesale meat market resembling the wholesale meat markets in other parts of the sountry, and differing from them only as regards its size and in the higher proportion of imported to home supplies sold. Imithfield is, however, much more than a wholesale market; it also functions as an exchange where the merchandise sold is mainly titular, 7.e., drafts on goods lying in cold store, on ships in the docks or at sea, the transactions being limited to ex-store, ex-ship and c.if. dealings in frozen supplies. Engaged in this extra-market trade are specialist merchants, and it is not difficult to see how they have evolved and why they have made their home in and around the market area. When imported meats first appeared on the market, they were consigned to selected stall-holders for sale. Later, as the quantities coming forward increased beyond the power of any one stall to sell, it became necessary to spread supplies over as many stall-holders as possible. This was done, in some cases, by integration; on the one hand, a number of companies owning freezing works. including most of the American companies, themselves saw to the pitching of their meat and its sale through existing stall-holders, and subsequently through their own stalls ; on the other hand, some English meat traders, holding stalls, seeing the possibilities of this kind of trade, extended the other way, t.e., they established meat works in the producing areas. In other cases, the freezing works appointed independent agents in this country. In all cases, the disposal of meat from abroad came to depend on organisations which not only watched the arrival and storage of the goods, but also canvassed their sale among stall-holders in the Market, Further developments followed naturally. The new ““ walking *’ merchant, searching for business in the course of the morning in every corner of the vast market, might meet enquiries for goods which he could not satisfy from his own stocks, but which other importing firms were in a position to supply; to hold his customers, if for no other reason, he would himself buy to meet the demand. Trading between importers, themselves, became, therefore, a feature of extra-market dealings. From buying to meet a known and immediate demand, is but a short step to buying to meet a roughly-estimated future demand. forward dealing became, therefore, a function of the merchant connected, directly or indirectly, with a meat-works, for ag supplies left the works weeks before they could be sold by stallholders to the retail trade, he was mainly concerned with market bendencies and conducted his transactions on the basis of future prospects. These trading conditions led to the development of yet another type of merchant, namely, the jobber, who, in this extra-market trade, must be distinguished from the jobbing stall-holder already referred to. Ag a type, the ncn-stallholding jobbers arose out of the possibilities of the trade and the opportunity for speculation which it afforded. Though lacking the capital and perhaps the desire to establish a meat-works, they saw that by buying from the meat-works, or their agents, and selling to stall-holders and others on their own account, a small capital could be used to good effect. This is, perhaps, an ideal picture of the evolution of the large and important class of traders who are now established around Smithfield Market; its purpose is to bring out the scope and methods of a somewhat complicated form of business. It may be added that the importers, the agents of meat works, and the jobbing firms engaged in this extra-market trade all have their salesmen continually passing to and fro in the Market itself endeavouring to sell both to the stallholders proper and to each other. Not only are the supplies for resale on Smithfield stalls the subject of continuous barter, in this way, but much of the meat consumed in Greater London and in other parts of the country also changes hands on Smithfield by the same process. The importance of Smithfield is, in a measure, due, of course, to its size and to the vast quantities of meat that each year pass n and out of its gates. but it is to the oresence of the merchante ro fice page 47, 'MPORTED MEAT~ CHANNELS» DISTRIBUTION. DIAGRAM B fronicen) = 2 < n 2 > ENTS . COMPANIES FREEZING WORKS, ) 7 OTHER Freezing \ WORKS, ~~ /] BRITISH IMPORTER OWNING FREEZING \WORKS, / a _ y=/ REP-.3 RESENTA | OR AGENTOF OTHER FREEZING WORKS [ uy ~~ Yi k i f BRITISH inporregs MARKET STAL OR EPOT. . i on) J HE ‘Te OTHER SMARKET 5, OR . DepoTs. ~ YHOLESALE: HY = 2 2 ha KEY ] Saves. — Consumer RESALES, = ~~ ==— A ” OVA Z. IC 9SS.G A /BY MalhvZ Sona Phate! sha who walk its avenues rather than to the stallholders, as such, ‘hat it owes its prestige throughout the meat-producing regions of the world. The head offices of the great meat firms and of the agents, and jobbers, are close to Smithfield which is the common meeting place for all concerned in the trade. The Market, itself, closes at one o’clock, when the stallholders who have been at work since the early hours of the morning go home. The extra-market merchants return, however, to their offices near at hand, where their work is continued by telephone and sable, their arena being the whole international field in which meat is bought and sold. Diagram B, on the opposite page, illustrates the general run of transactions in the trade, and shows the omnipresence of the sxtra-market jobber. It will be noted that so far as the extramarket trade is concerned, there is cross-selling between the importers and the jobbers; moreover, particularly when the market is rising, goods may pass into the possession of an importer or jobber more than once, and may pass through the hands of several jobbers before reaching the retail butcher, ria a market stall. In fact, it is important to realise that the merchants engaged in the extra-market trade may all, at times, job to a varying extent, and the four functions of importer, jobber, wholesaler and retailer may even be performed by one and the same firm, as in the case of big firms which own a group of retail shops and buy c.i.f. and ex-store in large quantities for re-sale to jobbers and wholesalers. Moreover, an extra-market jobber may also have one or several stalls, that is to say, his main function may be that of stallholding wholesaler, but, in addition, he may buy and sell from and to importers and other jobbers. Turning now to the influence of Smithfield on the importedmeat trade of the country generally, it may be observed that she gradual concentration of control in London is leading inevitably to considerable changes in provincial organisation. Instead of developing semi-autonomous branches, the leading rms are tending to have merely local offices, the managers of xhich are under the direct control of the general management in London, the branch accounts being based on London books. This is inevitably attracting to the centre the ambitious men in the trade, who desire to share in the direction of policy— “here being little scope away from the immediate environs of Smithfield. It has the effect, too, of attracting supplies; it is sustomary for provincial port-authorities, in their advertisements, to show the large populations which their ports immediately serve: their aim is to divert supplies from the port of London, since a portion would, in any event, be railed into their areas after being landed. Yet the proportion shipped to London seems to grow, and one of the reasons would appear to be that meat companies, operating from London, naturally prefer to Lave as large a proportion of their geods as possible at the point 7. of immediate control. The trade being there, chances of ready sale are greater and a shipment coming to London has first the opportunities, without additional expense, of that market, and, failing a good market, can be conveniently railed to any other centre. Moreover, it is nearly always possible to obtain London freight in the producing-centre, whereas goods may have to wait some time for a steamer that is calling at other ports. Again, many importing firms are not represented in the outports and are therefore reluctant to ship to any other port than London anless they are able to sell their goods c.i.f., or unless there appears to be good prospect of a sale before the goods arrive, for when the goods are once landed, it is difficult for such firms to arrange the ordinary ex-store selling without incurring the expense of appointing an agent for the purpose. Reference has already been made to the fact that the fluidity of distribution of meat supplies in this country is such that supply and demand can be rapidly equated and prices maintained at a fairly uniform level. Whilst this is so, it is frequently alleged that, since all the importers on a provincial market have asually the same price for similar goods, these are fixed for the whole country by consultation among importers in London. It is evident, however, from the structure of the trade, and apart from any understandings, that the tendency to uniformity of prices follows naturally from concentration of control in one centre. Though Smithfield is not an ordinary produce exchange, yet, by the continuous movement of buyers and sellers, prices soon become level in that market; each firm with provincial oranches is in continual touch by telephone with them and, except for such movements as are purely local and transitory, country prices must tend to be stabilised somewhere around Smithfield prices. Moreover, the provincial managers look to London for their information and guidance, and both will be given under the influence of Smithfield. Since meat is a highly perishable article, there are, of course, limits to control from the centre, and a reasonable degree of initiative must be left to local managers who have to adapt their selling to the peculiar circumstances of their own locality, but this merely means that control is resilient and not that it is unreal and ineffective. (d) Cold Storage—Cold stores are the reservoirs of imported meat; they form an integral part of the distributive system and enable supplies to be roughly equated to demand. Nevertheless, large quantities of imported meat reach the consumer without passing through a cold store at all, for practically all the chilled and much of the frozen passes direct ex-ship to market-stalls, depots, and even retailers’ shops.* Distribution ex-ship is the ideal, for not only are the charges and extra handling avoided which are incidental to storage. but the meat * Less than one-third of the meat which comes into London is coldstored. (* Revort of Roval Commission on Food Prices.’ paracravh 263. ) arrives at the retailer's shop in its brightest condition. The circumstances of the trade, however, prevent this method from being applied to all frozen supplies; in the first place, demand is uncertain, and, secondly, killing in several sources of supply is seasonal—which, of itself, necessitates storage, if supplies are to be evenly spread over the year. Since 1914, cold storage accommodation in Great Britain and Ireland has increased considerably, owing to war requirements, and now amounts to over 45 million cubic feet, of which about 73 per cent. is available for meat storage. The principal sold stores are situated at the meat ports, the capacity at which, as given in the Report of the Royal Commission on Food Prices, is approximately as follows :— cu. ft. London - 17,495,000 Liverpool - 7,913,000 Manchester 3,630,000 Glasgow - 2,881,000 Southampton 1,859,000 Bristol - 1 850,000 Cardiff - 937,000 Hull - - 300,000 Newcastle - 580,000 Accommodation is also available at a number of provincial centres, of which the most extensive is at Birmingham, where the capacity is returned as approximately 797,000 cubic feet. Owners of cold stores comprise dock authorities, municipal authorities, the Union Cold Storage Company, several smaller sompanies, and a number of individuals. The accommodation is far in excess of peace requirements; a number of cold stores have been closed for some time, whilst thers have been working considerably below capacity. The tendency to store in the producing countries, for the purpose of regulating shipments of frozen goods, and the increase in the ratio of chilled to frozen beef consumed have each reduced the demand for storage accommodation. Since 1923, the small mutton and lamb shipments from Australia have had a similar effect. Carcases reaching cold store from a ship are placed in a chamber ‘ piled to marks,” 7.e., stacked according to the various marks to indicate quality and weight which are stencilled on sach carcase-cover. This arrangement facilitates selling and drawing from store. Goods are ‘ weighed in” only on request and at extra charge, and usually only when a seller has reason to believe that his bill-of-lading weights are inaccurate, or when he desires to be clear of any claim for short weight directly the goods are landed. Goods are always weighed as they leave the store, the proprictors issuing to the owners a weight note, giving the marks, the name of the ship from which the meat was received. and the total weight of the carcases drawn. ! * Storage rates are usually charged per ton, per month. They vary considerably in different parts of the country and, proporsionately to the price, are higher in the case of beef than of mutton. In London the first 28 days’ rate is at present 37s. 6d. per ton and is called the first month’s management rate. The rate covers the cost of collecting from the ship, conveying to the store, piling and delivering to the door of the store. The 28 days, it is interesting to note, are counted from the day on which the ship “ breaks bulk,” i.e., begins to discharge her cargo and not from when the goods enter the store, which may be several days later. After the first 28 days, the goods come on to a daily rate of 2s. per ton, with a maximum charge of 33s. for the second period of 28 days, 31s. 9d. for the third and fourth. and 30s. 2d. per ton for subsequent periods.* In theory, there is no limit to the time of keeping meat in a cold store, but in practice there is a limit. Moulds, for example, sometimes appear, while the meat is also liable to lose its fresh appearance. This “store staleness ”” does not necessarily affect the eating qualities of the meat; but, as meat is sold on its appearance, it frequently affects the wholesale price. If meat is allowed to remain in store after deterioration has set in, its value may depreciate altogether. When meat is being stored, the owner usually inspects it from time to time; he may do this by visiting the storage chamber or by having a few carcases “ pitched ” on a stall and examining them there. Apart from toss of condition, there is also a liability to loss of weight. Holding in cold store is a fairly common form of speculation. If prices fall because of heavy arrivals, and prospects seem to indicate that the surplus will be temporary and will be followed by a shortage, merchants buy with the intention of holding in store until the shortage begins to be felt. This often enough leads to considerable profits, and perhaps more frequently to considerable losses. It is usually a leap in the dark, for conditions in the producing centres may suddenly change and, instead of a shortage, heavy shipments may be made for weeks, so that the merchant, with charges mounting and his goods in danger of losing their freshness, may be compelled to sell on a depressed market. Again, he may have seriously under-estimated the quantities held in cold store here, and as these will be offered directly the market is favourable. the expected advance in price may not materialise. No publication of stocks of meat held in cold store in this country is made. The New Zealand Meat Producers’ Board, however, issues periodically a statement of shipments made and of stocks held in the Dominion. There are many advocates of a similar course in this country. The question was referred to by the Linlithcow Committee,* which expressed the view that * See also * Report of Royal Commission on Food Prices,” paraoraphs 261-263, also “Report of Imperial Economic Committee.” Cmd. 2499. 1925, para. 20. rt “¢ Renort on Meat. Poultry and Eggs.”? Cmd. 1927. 1923. in the interests of both producers and consumers it is desirable that information as to the total stocks of meat in cold store should be available at any time to the general public. The Royal Commission on Food Prices, after hearing the evidence on the question, reported that they were satisfied that ‘‘ the time has come to require proprietors of cold stores to supply this information at regular intervals to the appropriate authority.” The weight of opinion, both in the trade itself and among the public, may be said to favour publication of total stocks held. (iv) Retail Distribution.—The final link in the chain which connects producer and consumer is the retail meat-seller. Supplies collected from numerous stock-owners flow from the freezing works like a mighty river until, as they approach their ultimate destination, there is a great dispersion, the river ending, as it began, in small streams. There is, too, a similarity of method at the extremities, for farming and meat-retailing remain two of the most individualistic ‘occupations. There are said to be some 40,000* retail butchers’ shops in shis country, most of them individually owned and worked by the owner. On the other hand, there are many instances of retail butchers who own and manage several shops in one district. There are, again, the chains of shops established by various importing companies; most of these, however, have been absorbed by the interests grouped under the Union Cold Storage Company, which are now said to control 2,356* retail departments. Lastly, many retail co-operative societies have their own butchery departments which may consist of one or several shops; similarly, and notably in London, these are the meat departments of departmental stores. It may be noted that the American meat companies do not control retail shops either in this country or in she United States. Retail distribution is the most expensive operation in the brocess of marketing, because of the relatively limited volume of business which each unit can conveniently handle and of the multiplicity of services which are normally required. The costs of retail distribution, hence, therefore, retail prices, vary with the nature and extent of these services. In contrast to the general uniformity of wholesale meat prices throughout the country, retail prices are not uniform even in the same street. [n the wholesale trade in imported meat, the country can be regarded as, more or less, one market; in the retail trade, every own and almost every district in a town is a market in itself, and prices may vary from shop to shop according to the lemands of customers in such matters as calling for orders, credit, delivery, style of shop, and, finally but not least important, the kind of joint. These and other questions relating to the meat trade were fully investigated by the Royal Commission on Food Prices,t and it is unnecessary to discuss them here. * ‘““ Report of Royal Commission on Food Prices.” Cmd. 2390. 1925. * Cmd. 2390. 1925. Part V. See also ‘‘ Report of Linlithgow Comaiittee on Meat. Poultry and Eggs.” Cmd. 1927. 1923. LA The expansion of the imported meat trade throughout the country is, however, a point of importance which calls for more than a passing reference. As is shown in Chapter I, the quantity of imported meat consumed in this country has recently increased, both relatively and absolutely; it now occupies a prominent position in the retail trade. Before the war, home and imported supplies were usually handled separately, right to the table of the consumer. There was a trickle from the imported stream into butchers’ shops which also sold home-killed, but, as a rule, the sale of imported meat was confined to retail establishments which specialised in that trade. To obtain imported meat, therefore, the ordinary consumer had to buy from a shop which traded in nothing else and, owing to the prejudice against imported supplies, often incurred some social stigma in doing so. In 1914, there were many thousands of people in this country who had never, knowingly, tasted imported meat, and on thousands of butchers’ counters it had never found a place. To-day, however, bhis is entirely changed; people who, before the war, never ate imported meat, now eat nothing else, and though there are still many retailers who confine their trade to fresh-killed meat, yet the majority include imported meat in their buying, and many have gone over entirely to the imported meat trade: It is now common to find butchers, even with a high-class family trade, displaying a notice to the effect that all meat sold in their establishment is imported unless otherwise stated. The offering for sale of home and imported meat, side by side, in the same shop, makes the alternative an immediate one, and imported meat has now selling opportunities unknown and undreamt of ten years ago. The competition confronting home-produced supplies has, therefore, intensified enormously. It may be observed that under the Sale of Food Order, 1921, it is forbidden to expose for retail sale any imported meat unless such meat bears a label with the word ‘ Imported ” or words disclosing the country of origin, or unless a notice is exhibited in a conspicuous position indicating that only imported meat is on sale. The Linlithgow Committee remarked, in this connection, that < in some parts of the country serious efforts are made ¢ to enforce the provisions of the Order, not least, in a number “ of cases, by local retail meat-traders’ associations themselves; “ in others, the Order does not appear to be an effective “ instrument.” * During the war, meat was allocated under control in such a way that most consumers had, at times, to take their share of the imported article. This helped to remove the prejudice against refrigerated supplies, although much of the imported meat was somewhat poor in quality. Frozen goods of really good quality, as. for example, New Zealand mutton and lamb. * See also “ Report of Royal Commission on Food Prices.” (Cmd. 2390. 1925), para. 237 et seq.; also ““ Report of Imperial Economic Committee (Cmd. 2499. 1925), para. 53; also Clause 2. Merchandise Marks (Imported Agricultural Produce) Bill. 1925. { 7 certainly received a valuable advertisement. The spread of the trade has been assisted also by the comparative cheapness of the article and it is, perhaps, not surprising that in those industrial areas where wages are low and employment uncertain, great strides have been made in the sale of imported meat. The sontinuous nature of the supplies of frozen lamb has also exersised an important influence. Lamb and green peas used formerly to have the force of associated ideas, but now imported lamb is in free supply throughout the year. It is no longer an sssentially spring luxury, though its relatively high price may place it beyond the reach of many households. Its prevalence throughout the year, too, is exercising a natural reaction on mutton consumption and tending to reduce the demand for home-killed mutton as well as, of course, restricting the demand for the imported article. With his direct contact and personal influence, the retailer vields considerable power in the creation of consumer demand and in the matter of sales. Hence the effect of control on the butchering trade itself was of supreme importance, for it introluced many butchers to the trade in imported meat which enabled them to make satisfactory profits with the minimum of srouble and inconvenience. This undoubtedly had its effect after control was withdrawn, but it should be remarked that the majority of butchers still prefer to kill and dress their own meat, if possible, and regard the task of preparing a good carcase for sale as an art which yields the satisfaction that the exercise of judgment and skill alone can give. Finally, the spread of the retail holdings of the large importing houses should be noted; this is probably the most interesting feature of the retail meat trade at the present moment. Extension in this direction may be effected in two ways; the company may establish shops which enter into competition with those of sther retailers, or it may absorb established businesses. The latter is now the method usually adopted as, though it is the more expensive at the time, the fact that the.new business already has an established and regular sale enables it to be readily worked in the general organisation. Where the business absorbed has been engaged in the sale of home-killed meat, it will usually be arranged to continue this trade in order to retain goodwill, but it is obvious that the tendency must be for the sale of imported meat to be encouraged at the expense of the homeproduced article, since it is upon the sale of imported meat that the general economy of the large importing company is founded. [t must be remembered, too, that the power of a large company cannot be measured merely by its retail departments, but by the general resources which it commands. The entry of large importing houses into the sphere of retail distribution and its reaction on the sale of home-produced meat is worthy of careful attention. * See “ Report of Linlithgow Committee on Meat. Poultry and Eggs.” “nd 1027 19249. Ade } = CHAPTER VI—COMBINATIONS IN THE MEAT INDUSTRY. (i) Producers’ Control Movements. (a) New Zealand. —The New Zealand Meat Producers’ Board was set up in 1922 ; Is is of considerable economic interest as an attempt on the part of producers to control the marketing of their produce. The immediate cause of its formation was the slump in prices during 1921. With the collapse of the market and the knowledge that enormous quantities of beef were lying in store and en route, fraders in this country did not feel inclined to buy forward. For this they can hardly be blamed; the trader is always at a lisadvantage in his endeavour to judge the future; he has no precise information as to the quantities of meat in cold store in this country, his estimate of consumption is, at best, a matter of rule-of-thumb, while his information as to probable shipments may be seriously discounted by changes in the weather or other conditions prevailing overseas. Hence the note of caution which characterised the trade during the last six months of 1921. But the merchant has always this advantage over the producer—the produce must be marketed, and, as the merchant controls the marketing machine, so he can afford to wait until the goods are near his market before he commits himself to a purchase. So far as the New Zealand producer was concerned, his beef was being sold below cost and, even for fat lambs, his return was only about 41d. per lb. Events during December, 1921, and January, 1922, aggravated the situation. The first bids for forward delivery were on a low scale and, about Christmas, firstgrade North Island lambs were being sold at about 7d. per Ib. In January, however, a change took place, and prices for New Zealand goods began to rise. Merchants who had bought during December were able to re-sell during January at a handsome profit, though the producers had made a loss in supplying the goods. When produce is being sold at a loss, it is difficult for producers to realise, at a distance, that they have had a ““ square deal,” however fairly the merchants may, in fact, have been dealing with them. The New Zealand farmer came, therefore, to the conclusion that his only salvation lay in organisation; he determined to take effective steps to strengthen his position as a seller in the market. The Meat (Export) Control Board was accordingly set up, under the terms of the Meat (Export) Control Act, 1921/1922, The Board consists of eight members, five elected by the producers of meat for export, two appointed by the Government and one representative of stock and station agents. Though control is limited, by the Act, to the export trade and is not, at present, extended to meat killed for domestic consumption, the Board has the fullest powers to regulate exports and shipments, including the right to take over the whole meat-marketing organisation in any importing country. Expenses are provided for bv a levy of 2d. ver carcase of mutton or lamb and 1d. per quarter of beef exported, though, in fact, rates amounting to only half the charges authorised have so far been levied. The course of prices in Great Britain since January, 1922, has heen, on the whole, satisfactory for the New Zealand producer, 50 that the Board has had no reason to exercise its wider powers and to control the actual marketing of the meat here. It has exercised its authority in other directions, notably in the appointment of expert graders, in the elimination of small parcels from shipment, and in the reduction in the number of marks under which goods are shipped. By making freight contracts with the shipping companies on behalf of the producers as a whole, 't has been able to obtain reductions in, and a more economical use of, shipping freights, as well as a reduction in marine insurance rates and railway rates in New Zealand. It has also appointed a London representative who safeguards the interests of the producers in this country, and furnishes information, day by day, as to the trend of the British market. It is also represented in the Argentine. The Board watches the development of new markets and interests itself in the proper advertisement of New Zealand meats. It displays considerable public spirit by the regular publication of details of shipments and of quantities held in Dominion cold stores. The Board has been criticised for its action in regulating shipments. Since a normal season in Australia for mutton and amb ends about March and that in New Zealand about June or July, it follows that, if carcases were shipped as treated, mutton and lamb from these Dominions would arrive in the first eight months of the year and there would be no shipments during the remaining four. This does not mean that in the bare months there would be no frozen mutton or lamb on the market for, during the time of over-supply, the cold-stores would be utilised antil supplies were short. This, however, is not a desirable arrangement for, when arrivals are heavier than necessary to meet current demand, the day-to-day market is depressed out of proportion to the quantities arriving or on offer. There are always weak sellers on a market and, in a market for perishable or quasi-perishable goods, their presence may be disastrous. Moreover, the prices which merchants are prepared to offer for forward delivery are governed by the quantities expected from all sources at the time when their purchases will arrive, so that unnecessarily large shipments arriving together in, say, the sarly part of the year, will send down forward prices and also, of course, spot prices at the same time. The Board’s regulation of shipments is designed to avoid any such glut during the early part of the season; it also prevents the high prices which normally ruled after August, when supplies were scarce. These high prices do not pay the producer, because they are spread over a small portion of his output and are obtained at the cost of a low price for the rest. The Board aims at the ideal of an equated lemand and supply at any moment. In one sense, therefore. 30 the Board does keep up prices; in another sense the Board keeps prices down. In so far as the Board does not regulate the total quantities leaving New Zealand during any year, but merely distributes those quantities more evenly over the year, while, at the same time, fostering production, there is ground for the view that its operations are not inimical to the interests of the consumer. They are certainly calculated to reduce speculation, The price history of the New Zealand trade since 1922 has been a happy one, and would have been so without a Meat Board.* Correspondingly, the Board has been fortunate in being able to concentrate on important questions, such as grading and shipping, which could only be dealt with by action taken on behalf of the industry as a whole. Its problem has been comparatively simple; the works and ports provide convenient points from which to regulate shipments; the industry, whose interest it serves, is one of vital concern to the Dominion, and has the support of a strong body of Dominion opinion. Business is easy and pleasant when prices are satisfactory; it is during times of slump that a business organisation is tested out. So will it be with the New Zealand Meat Producers’ Board, if and when it is confronted with the real problem of prices and has recourse to its powers of taking over the sale of New Zealand meat in the world’s markets. (b) The Australian Meat Council.t—At first a voluntary organisation, established in 1922, with an honorary representative in London, the Australian Meat Council will, in a few months, be established by legal enactment when the Bills now before the State Legislatures are passed. In Queensland, New South Wales and Tasmania this has already taken place. The problem before the Meat Council of Australia is more difficult than that before the New Zealand Meat Producers’ Board, for the country is much larger and the interests to be represented are not relatively so important to the population of the country as a whole, so that pastoral problems assume less significance. In New Zealand again, the Board has to control an article—taking mutton and lamb together as one commodity— for which, at present, there is no real substitute from other sources at similar prices, a fact which enormously simplifies the problem of control. Beef is but a minor part of their task. In Australia, both cattle and sheep constitute the problem— the former, indeed, is the major factor. Distance, too, must affect the corporate feeling of the livestock industry in Australia; the producers of Northern Territory and Western Australia, for example, are separated by vast distances from their fellow pastoralists on the eastern slopes. In spite of the difficulties, it is the task of the Meat Council to view the whole pastoral industry as one unit. * See also ““ Report of Royal Commission on Food Prices.”” Cmd. 2390 1925, paragraphs 301 to 308. t See also ““ Report of Roval Commission on Food Prices.” Cmd. 2390 1025. paracrabhs 312-313. The organisation of the Meat Council is two-fold.” Each State will have its elected State Meat Advisory Board on which will be represented cattle-owners, sheep-owners and meatworks owners, while the State and Commonwealth Governments will each appoint an executive officer to the Board. Each State Board will advise the State Government on matters relating to the meat industry and will act as agent of the Australian Meat Council. Each Board will elect one or more representatives of the various interests concerned to form the Meat Council. Each Board will be authorised to collect from the stock owners In its own State a levy not exceeding one penny per head of cattle and one sixth of a penny per head of sheep. The levy so made ill be used to cover the expenses of both the State Boards and the Meat Council. The objects of the Council are to study the industry in all its respects, to improve grading and breeding, to look for foreign markets and generally to supervise the marketing of Australian meats abroad. The Council is represented in London and will probably be represented later in South America and the East. Unlike the New Zealand Meat Producers’ Board, it is a purely advisory body and has no executive power. Control of shipments, shipping space and overseas marketing are outside its scope. The Council has already secured better shipping facilities and a reduction in railway rates on cattle, but there are many matters awaiting early consideration. The grading from some Australian works is not completely satisfactory and this inevitably reacts on the Australian industry as a whole. Shipping can probably be speeded up and the processing of meat and byproducts more efficiently performed. There is, too, a vast field of research; among the problems awaiting solution is the discovery of a method by which chilled meat can be conveyed to England without loss of condition; other problems are the mitigation of droughts, the opening up of new areas for meat production, and the more even spread of supplies over the twelve months of the year. The task before the Council is not an easy sne, but the improved outlook which wool, and more recently meat, have given to the pastoral industry, should encourage efforts to increase production and to enhance the quality of the sroducts marketed. (ii) Merging of interests in Processing and Distribution.—This Report would not be complete without a brief reference to the srowth, during the past few years, of companies of great influence nd strength in the imported meat trade, having regard to the »ontrol which such organisations are in a position to exercise. Control may be exercised at any or all of the following taoces ‘— (1) supplies at the source; 2) the freezing works ; 5) wholesale merchanting '4) retail distribution ’ As regards supplies at the source, there is, in the nature of things, very little active participation by any of the large companies. They may, it is true, own ranches, but the business of farming does not readily lend itself to large-scale management, Nor is there much inducement, under ordinary circumstances, for a meat company to go into the cattle-rearing business, as the ownership of the works, in a country such as South America, may be said to be, of itself, the key position. In Australia and New Zealand, this is not the case, as not only are there many more works, but there is a strong body of public opinion opposed to the expansion of big business in the pastoral domain. Moreover, combinations in this field would appear to be coming from the producers themselves; the formation of a Meat Producers’ Board in New Zealand and of a Meat Council in Australia have already been noted; in the Argentine, the producers have, for some time, been endeavouring to follow suit, but so far with little practical result. With regard to the control of freezing works and of wholesale merchanting, it has already been noted that the principal companies in the South American trade are very powerful and practically command the outlet for Argentine cattle. Although several of these companies meet each week to arrange freight which is allocated by agreement,* they stoutly deny that the prices to be offered for cattle, or the price to be charged in European markets, are agreed or even discussed among them. Owing to its perishable nature, it would certainly be a most difficult task to fix prices for chilled beef in this country unless arrivals were also controlled, and in view of the occasional gluts of chilled meat it is difficult to believe that this is sytematically done. Agreement as to buying prices for cattle would, of course, sensibly weaken the position of the producer overseas. With regard to distribution in this country, the strength of the South American companies depends very largely on the elaborate and extremely efficient system of distribution which they have built up. Though, with the exception of the Union Cold Storage Company, which is an English concern, the companies operating in South America do not own retail shops, they have their own wholesale depots in each important centre of population and, through these, control the wholesaling of chilled beef. But even in this department, evidences of agreed policy are difficult to detect, as each local manager is keen for business and the necessity for prompt disposal imposes its own limitations on price agreements. Complaint seems to come in the main from traders who find the competition of the South American companies difficult to meet. Certainly, the amalgamation of interests into large-scale trading units should conduce to more efficient processing and distribution, smaller overhead charges and less waste. All that can be said is that, if a working agreement does or were to exist among the South American companies as to k Gee. however. footnote. Dace 26 wr prices to be paid to the producer and as to quantities to be shipped, their ownership both of works and means of distribution would place them in an unassailable position in the chilled beef trade. Their potential power in this respect has recently been the subject of investigation by the Royal Commission on Food Prices, which recommended that future developments should be closely watched by the proposed Food Council. Lastly, control can be attempted through the ownership of retail shops. This is a most difficult form of control to exercise— unless it is accompanied by control of supplies—as owing to the smaller capital needed for retail trading, competition more sasily arises. Butchering is a highly skilled trade, and its success largely depends upon the individual who works at the block. To operate the business in a large way, administrative abilities of a high order are essential; but, even given these, experience shows that multiple meat-shops not infrequently pay less than similar shops independently owned.* To sum up, it cannot be said that the British consumer, so far, has suffered from the growth of “ big business” in the imported meat trade. In the Australian and New Zealand trade, no company dwarfing the others has yet arisen or is likely to arise. There are grounds for uneasiness regarding chilled meat supplies, but, in this case, there are limiting factors, for though the American companies constituting the South American group are powerful, and two important firms, namely, Armour and Morris, have recently amalgamated, they are not sole operators on the market: there is a parallel British combination, namely, the Union Cold Storage Company, in addition to two smaller independent firms, one of which, the Smithfield and Argentine Meat Company, is British, and the other, the Sansinena Company, is South American. The high degree of perishableness of chilled meat, and the ‘ waywardness” of the market, impose limits to any price-fixing policy, which is again affected by the competition of fresh-killed supplies and by Dominion supplies of frozen meat. In the case of fresh-killed meat, for example, a telegram fetches supplies from, say, Liverpool, or as far away as Aberdeen for the next morning's trade. © wer © mort Af 7? val Commission on Food Prices.” Cmd. 2390. IO bg CHAPTER VII.—CONCLUDING OBSERVATIONS. The development of the frozen meat trade on the Continent since the close of the war has been phenomenal and is of great interest, as it has increased the demand for beef to an enormous extent. The chief importing countries are Ttaly, France, Germany, Belgium and Holland. Belgium is now also importing beef on bhe hoof from the Argentine, some at least of which will probably appear in London as fresh-killed. Before the war, trade in frozen beef with these countries was negligible compared with the English trade, and had no influence on the prices which English importers had to pay for their supplies. Increasing industrial development in continental countries implied, however, a steadily increasing pressure on their domestic supplies and a change was imminent. Western Europe was, in fact, rapidly approaching that point of development, that disparity between food production and consumption, which Great Britain had passed many years previously. The present continental demand for frozen beef is, therefore, not wholly attributable to war causes. Nevertheless, the war had an important effect. High prices led to inroads on the flocks and herds and reduced local supplies. At the same time, the regular supply of frozen beef bo the various continental armies cultivated a desire for meat among men who previously had eaten very little. Industry, too, was immensely quickened by the demand for munitions and by the development of local manufactures to replace imported manufactured goods. Indeed, in the post-war years, the increased continental demand for frozen beef, saved beef-production in the southern hemisphere from the disaster which in 1922 and 1923 might otherwise have overtaken it. At the end of the war, production was on a grandiose scale and huge stocks had accumulated in cold store. Prices, however, remained high until 1921, when, in common with all other commodities, they slumped. In that year, cold stores were so full bhat ships had to be used to store frozen meat for which there was no sale. Moreover, the high profits of the war period had induced great development among cattle raisers: many new men entered the business, buying their stock—largely by loans— at the enhanced prices then prevailing. Each producing centre, therefore, was full of eager sellers, who were compelled to sell in order to meet their commitments. This situation held throughout 1921 and 1922, and was not improved by the fact that beef sold to Germany at that time had eventually to be discharged in this country because, for various reasons, the German importers could not take up their documents. Serious losses on cattle were general, and many producers prepared to change over to sheep-rearing, or to dairying. Towards the end of 1923, what looked like a new era in the frozen meat trade began with the entry of Italy as a very large buyer. The closing months of that vear saw. for the first time since early in 1921, a really firm forward market for beef, which further improved with the return of stability in German trading conditions. The year 1924 was a record year for frozen beef imports into the Continent—the total being 459,000 tons as against 223,000 tons in 1923, 113,000 tons in 1922, and 20,000 tons in 1913. The results both in the producing areas and in Great Britain were evident throughout 1924; producers were able to make a profit on their cattle; consumers here were faced with higher prices. The early months of 1925 have shown a continued briskness, forward buying being more extensive than at any time in the previous four years. It is too early to say to what degree this exceptional continental demand is permanent. Experts differ widely and, until the situation clarifies, the beef trade in London must remain extremely speculative. There is the additional complication that continental cold-storage accommodation has been so extended recently that re-shipments from, say, Rotterdam or Hamburg, may be expected and do, in fact, arrive when the London market is more favourable than the continental. The business of the meat-merchants in this country has, therefore, become more difficult; he has now to include the Continent in his purview, not only as a rival for supplies, or as an outlet, but also as a reservoir from which supplies may be shipped at any moment to the English market. The demand on the Continent is generally for a much leaner beef than that supplied to this country, and, to meet this, thirdgrade steer-beef and cow-beef are freely taken. The * continental >’ quality of the Argentine and Brazilian trade appears to suit, as does also beef from South Africa. Plainness,” specially in Southern Europe, is at present demanded, and this is a convenience to producing countries in giving them an outlet for cattle which otherwise would have been canned, or not utilised at all. The preference for lean beef will probably pass, especially in Northern European countries, and already there is evidence to show that a higher quality beef can be profitably sold. The change will certainly be of benefit to Australian and New Zealand producers, who have a heavier quarter of beef to offer than the South American ‘continental ”’; during the last two seasons, considerable quantities of beef from these Dominions have, in fact, been sold to Italy, France, Belgium and Germany. Up to the present, the Continent has shown little desire for frozen mutton and lamb. for which Great Britain remains the principal market. As the course of prices in this country must, to a considerable extent, depend on the continental demand, the future development of the continental market is of great interest. On the whole, it would appear that the Continent has now become a regular absorber of frozen beef and that, in addition to the lower qualities, the higher qualities will be demanded in future. This mav tend to raise the price of all kinds of imported beef in 56 this country, and, by narrowing the margin between refrigerated and fresh-killed supplies, may afford a new and incalculable stimulus to home production. There are signs. too, that the East will shortly be a buyer. The position is somewhat complicated by the present position of mutton. Wool, until recently, has been such a satisfactory product that sheep have been fed for their wool and not for their meat. Hence the shipments of lamb and mutton have been governed more by the limit of feeding than by the question of meat; in other words, stock-owners have kept as many sheep as their pastures could carry, and have been competitors of meat-buyers at stock sales. As a result, the prices of mutton and lamb have been high and, on the whole, steady. The world’s flocks are not yet up to their pre-war level and it is, at least, doubtful if the world’s demand for wool is satisfied. Certainly, when demand and supply have, in fact, been equated on the wool market, more mutton will be available and this, in turn, may react on the price of beef, especially in this country which is the world’s great mutton and lamb market. In any event, if the recent slump in wool values continues. heavy shipments of mutton may be expected. Not only is the future obscure from the standpoint of consumption, but production cannot be forecasted with safety, and there seems no reliable measure of probable outputs, Indeed, all that can really be said is that Present tendencies betoken a firm market for beef for some time to come. Visibility, even in beef, is low, and in other meats it is even lower, so that the present is a most unsatisfactory moment at which to estimate its future in any direction. If, therefore, this Report has a leit-motif, it is that of change—changing condibions in areas of supply, changes in effective meat-exporting capacity, changes in the technique of refrigeration and transportation, changing tastes and demands in areas of consumption, and changes in the course which the flow of supplies is taking ; such being the case, instructive though it is hoped this brief survey may be, it is as well to bear in mind that the conditions described may be altogether different at the end of a few vears. Markets and Co-operation Branch, Ministry of Agriculture and Fisheries, August, 1925. LIST OF TABLES, DIAGRAMS AND ILLUSTRATIONS. PAGE Table I. Estimated supply of meat in Great Britain and Ireland 58 II. Monthly arrivals of refrigerated meat during 1924 - . 59 [II. Quantities discharged at British ports during 1924 - - 60 IV. Smithfield Market, 1924— Quantities marketed - - 61 Diagram A. Beef, Veal, Mutton and Lamb Supplies in Great Britain (facing) 1 B. Imported Meat—Channels of Distribution - (facing) 41 Cc Tir IR-Y r62 ¥ ) “mports into the United Kingdom, from : 63 principal supplying countries. 64 65 [llustration. Queensland Cattle Station Canterbury (New Zealand) Freezing Works South American Frigorifico facing) 16 (facing) 17 facing) 20 eT Be 7 Table I.—Estimated supply of meat in Great Britain and Ireland. (In thousands of tons.) ; Year nded 31st May. 901 1902 ‘903 | 904 905 906 907 908 909 ! 910 1911 1912 1913 1914 1915 1916 1917 [918 1919 1920 1921 1922 19231 1924. Beef and Veal. Mutton and Lamb. Pig Meat.. All Descriptions. Home. Im- : otal. | Total. | 3 0-81. Sgor REE REC ABET a Cal Home. | Imported. Total. [=Soa Een Ho Sd [=] Sm ae 8a rpg op Home. Imnorted. Total. a a 8e82 Eggs St ==& aR 2883 a CAS jal) Home. *Importe n Total. 741 773 728 721 131 745 760 745 i79 772 744 782 786 742 851 765 839 746 667 738 668 580 707 720 416 401 361 433 440 491 465 448 408 426 468 449 £77 53? 492 451 115 474 160 453 566 533 635 840 1,157 1,174 1,089 1,154 171 ,236 ,226 193 L187 ,198 1,212 1,231 1,263 ,275 343 216 254 220 7 2 Per cent. 64-0 65-8 66-9 62:5 62-4 60-3 62-0 62-4 65-6 64-4 61-4 63-5 62-2 58-2 63-4 62-9 66-9 R1-1 9-2 Tn 310 195 320 185 307 204 309 198 296 196 294 202 781 224 ~76 223 206 251 “24 238 327 203 240 256 329 260 281 288 283 238 282 207 ~04 171 -71 112 oT 29 NG 3 505 505 511 507 492 196 505 499 557 572 630 596 582 569 521 489 175 582 367 RAR 5.7 RQ . +74 : Per cent. | 61-4 63-4 | 60-1 60-9 60-2 59-3 55-6 55-3 54-9 58-4 51-9 57-0 55-3 49-4 54-3 R7-7 64:0 70-8 64-9 14.2 39-7 fc. 0-0 15-5 401 380 390 422 447 400 379 104 136 376 371 450 108 332 103 | 393 354 272 “42 AB 96 ~99 366 2Q9 425 422 350 368 276 75 360 383 | 349 278 273 222 987 235 367 451 446 aq 24 +06 328 363 Al AT" 826 802 740 790 822 775 739 787 85 654 Ad4 72 695 667 770 344 800 719 66 651 624 762 813 R96 Per cent. 48-5 47-4 52-7 53-4 54-3 51-6 51-3 51-3 55-5 57-5 57:6 58-3 58.17 49-8 52-3 46:6 44.2 27.8 31-6 37-6 | 47-4 52-4 45-0 19.7 1,452 1,473 1,425 1,452 1,474 1,439 1,420 1,425 1,521 1,482 1,442 1,672 1,616 1,355 1,637 1,440 1,497 1,289 ,147 225 1,169 1,325 1,299 [.32(¢ 1,047 1,024 937 1,030 1,039 1,092 1,068 1,077 1,042 976 1,078 [1,060 1,055 1,161 1,101 1,135 ,067 ,078 TE .-85 2,499 2.497 2,362 2,482 2.513 2,531 2,488 2,502 2.563 2.458 2,520 2,632 2.571 2,516 | 2.638 2.575 2.564 2,367 2.320 2.380 2.371 2.749 24 9 Lug 1,360 19.0 39 257 < Including the relatively small quantities of meat recorded in the Trade Returns under heading “ Meat Unenumerated ° From 1st April, 1923, imports do not include quantities imported into the Irish Free State from abroad 808% HE SH =a E53 58 fe CAS : Per cent | 58-1 59-0 60-3 58:5 58-7 56-9 57-1 57-0 59-3 60-3 57-2 59-7 59-0 53-9 58-3 55-9 58-4 54-5 49-4 51-5 49-3 52-1 17.7 QR. 92 hie, x Table II.— Monthly arrivals of refrigerated meat during 1924, from Australia, New Zealand and South America. A Xx py -~ January . February -March - - April - - May - ‘ June - - July - - August - September -October - November - December - Total Australia. 352,568 230,126 114,831 19,710 7,290 1,612 416 4,493 7,903 37,852 93,286 310,773 “90.860 Lamb (Carcases). New Zealand. 8,965 186,316 189,191 705,281 137,932 £17,802 679,238 317,749 314,927 185,526 57,170 24 467 '4 6924 564 South America. 197,991 196,701 155,471 274,669 251,313 148,045 292.314 152,743 155,465 110,212 71,395 143.649 € 079.968 Australia. 37,906 23,743 5,277 6,619 6,833 5,401 8,836 400 7,254 £5,292 23,289 41.288 212.998 Mutton (Carcases). New Zealand. 12,921 88,714 161,647 327,388 328,306 69,842 124,065 155,239 117,622 278,470 228,765 91.186 084 .16h 2 South America. 189,205 325,318 345,762 287,061 392,902 256,276 325,664 265,841 131,720 116,302 48,014 62.151 B.2.6 Frozen Beef (Quarters). Australia. New Zoaland. South America. 17,223 5,249 10,201 1,906 6,467 16,784 15,284 87,763 114,454 106,756 101,955 75,187 2,533 2,506 3,746 20,865 76,112 9,440 17,950 31,783 24,351 28,008 14,763 9,846 65,964 92,560 87,970 96,429 153,852 215,283 157,283 105,718 108,328 81,045 33,387 26,013 “5G. .S CoG 280.953 1.223.832 Chilled Beef (Ouarters). South America. 360,936 449,717 418,130 369,842 123,784 526,799 540,215 144,109 451,742 457,673 313,396 304.004 5.150.847 9 (From figures supplied by Messrs. W. Weddel & Co.) hs mp - Table ITI.—Quantities discharged at British Ports during 1924 from various sources of supply. Port of Discharge. Australia. Carcases. Mutton. Lemb. Quarters. Beef. New Zealand Carcases. Mutton. Lamb. Quarters. Beef. Carcases. Mutton. | South America. Quarters. Lamb. Beef. Frozen. | Chilled. a London - Liverpool -Southampton Newcastle - Hull - - | Avonmouth - Manchester - Glasgow . 166,328 41.297 3,083 1.520 867,023 278.736 15,014 18,748 1.339 269,023 249 564 4,359 5,205 8,815 21,763 500 1,844,167 110,874 16,047 278 22.799 3,973,577 503.095 108,649 19,314 19.929 233,727 28.3592 4,571 14.3083 1,691,326 881,992 28,082 23,909 56,622 50,967 13.372 1,261,423 651,572 42,899 18,582 40,511 53,446 11,535 779,782 314,556 17,921 49,083 54.935 7.5565 3,775,530 1,140,588 230.619 3.615 (From figures supplied by Messrs. W. Weddel & Co.) Table IV.—Smithfield Market, 1924. OUANTITIES MARKETED. Source of Supply. British and Irish - - Australian, New Zealand, South African North American South American Continental Totals Beef and Veal. Tons. 15.327 8,460 3,624 98,965 8.932 > 65.508 Mutton and Lamb. Tons. 23,359 78,499 117 24,986 6.723 “ry aw lr oa Total. Tons. 58.686 86,959 3,741 223,951 15,655 NC ~& . Percentage of Total Supplies. Per cent. 17-2 21-8 0-9 56-1 4-0 100 "From the Report of the Superintendent of Smithfield Market, 1924.) rinted under the authority of His Majesty’s Stationery Office By Eyre and Spottiswoode, Ltd., East Harding Street, K C. 4, Printers to the King’s most Excelient Majesty. A "e ig 3 wd 35% = & tog 1905 8.400 8.20¢ — BoOC 580c¢c 3.60C S.40¢C AzocC R00C LB0C $60C $400 $200 000 380C 3.600 3400 3200 5000 2800 — Leoo — 400. — 2200 — RoO0O — B00 — 1.6001 — L400, ™ 1200}— L000 — BOO, — 800 - too 200 ni — — — —— —— —— rap —— r— — es Ba wy» CHILLED BEEF. grig JPN re eo tok dels tot6 TT KEY. a ARGr lauer” NOAT: — ig + iG =r ond Diagram “MB 1019 M0 ivy - — od Ig a C. NY Malby & Sona Phoro-titho p hy 10968 .9/A/329 vi 5 8 3, 30: I me 3,400 3.300 2200! 3100 3.000 2.90C 2.800 2.700 2.600 2.500 R400 2.3500 2.200 2.100 t.000 1,900 — 1.800 — 1.700 — l.§00 — 1.500 :'— L.400! - 1,300 j— L.200— roo LLoo of - 900t— Boo | #4 700|— oy 1 Soo 400 300 2oc Loo D 0a “05 2006 C142. 10986. 9 /4 /20 3 "07 ng _ 1°98 YY? to08 1909 1910 Tanke KEY. ARGENTINA, ——— New ZEALAND. —. AUSTRALIA, — Urucuay. --—. NORTH AMERIC” ro MT 1913 LL Ed 1915 1918 eee 4 1917 ry Cr 1920 Diagram. [) “29 ~ 1923 | —-— 1924 1927 331304 h (> Malby& Sons. t hoto-litho s x tS 1. 400 1200 1.000 5.800 6.600 6.400 8.200 8.000 3.800 5.600 5.400 5.200 3.000 4.800 4.600 + 400 4.200 4.000 3.800 3.800 3.400 5.200 3.000 2.800 L.600 2.400 2.200 2.000 1,800 1.600 1.400 1.200 l. ooo 800 goo to0 Loo 0 Y)4 - = pn Baar ~ — poo 5 ? Piel. 10089. 3/4/8260. 7] 5 } y ‘0 4 MUTTON QL 1013 10 gis _go16 CT 1B Jed gmp 22 a2y SourH AMERIC New 7 AyeT— Le WIT Tod 5 1916 1517 MN 0 Malby& Sons Photo-Litho Diagram. : 3 « 8 1904 1905 1906 1907 1908 1909 190 on 111913 214 1915 1916 17 1918, Jo 020 1021 1022 2 1p 6.400, co 0 mm ree — REY - , - -_ ! Gd _ S0UTH AMERICA; ~~ - 5800 — New ZEALAND. —tcteet - 5600 — AUSTRALIA. ~~m mmr = . 5400 —— 5200 ~~ 5000 — 4800 — 4600 — 4400 — 420C — 4000 — 5800; — 3600 — 3.400, — S200 5.000 LBoO, — E600 — 2.400 — 2.200 — Loco 1.800 1.600 {400} L200 l,ooo 800! 600 400 200. 0 a 504 129% 18 SOT OS BE pi pb 5 101 im “ST Ep 19198 BO 1920 192i 1922 1935 124 Malby& Sons, Photo-Litho P143.40988.9/A329. a Cn since early in 1921, a really firm forward market for beef, which further improved with the return of stability in German trading conditions. The year 1924 was a record year for frozen beef imports into the Continent—the total being 459,000 tons as against 223,000 tons in 1923, 113,000 tons in 1922, and 20,000 tons in 1913. The results both in the producing areas and in Great Britain were evident throughout 1924; producers were able to make a profit on their cattle; consumers here were faced with higher prices. The early months of 1925 have shown a continued briskness, forward buying being more extensive than at any time in the previous four years. It is too early to say to what degree this exceptional continental demand is permanent. Experts differ widely and, until the situation clarifies, the beef trade in London must remain extremely speculative. There is the additional complication that continental cold-storage accommodation has been so extended recently that re-shipments from, say, Rotterdam or Hamburg, may be expected and do, in fact, arrive when the London market is more favourable than the continental. The business of the meat-merchants in this country has, therefore, become more difficult; he has now to include the Continent in his purview, not only as a rival for supplies, or as an outlet, but also as a reservoir from which supplies may be shipped at any moment to the English market. The demand on the Continent is generally for a much leaner beef than that supplied to this country, and, to meet this, thirdgrade steer-beef and cow-beef are freely taken. The ‘ continental > quality of the Argentine and Brazilian trade appears to suit, as does also beef from South Africa. ‘‘ Plainness,” specially in Southern Europe, is at present demanded, and this is a convenience to producing countries in giving them an outlet for cattle which otherwise would have been canned, or not utilised at all. The preference for lean beef will probably pass, especially in Northern European countries, and already there is evidence to show that a higher quality beef can be profitably sold. The change will certainly be of benefit to Australian and New Zealand producers, who have a heavier quarter of beef to offer than the South American continental”; during the last two seasons, considerable quantities of beef from these Dominions have, in fact, been sold to Italy, France, Belgium and Germany. Up to the present, the Continent has shown little desire for frozen mutton and lamb. for which Great Britain remains the principal market. As the course of prices in this country must, to a considerable extent, depend on the cortinental demand, the future development of the continental market is of great interest. On the whole, it would appear that the Continent has now become a regular absorber of frozen beef and that, in addition to the lower qualities, the higher qualities will be demanded in future. This mav tend to raise the price of all kinds of imported beef in oo | dD < Q ® 0 Oo hr a 0 = < J wv Q joo] 2 £ Ww 0 « ad 0 5) =o iN oo 2 oO 49 -~ 1 4 nl Les La ht + > Nb (J) vd i$) 38] 2 N nN 4 3 1