Most country bankers freely accept cattle paper because it is readily rediscounted in the country’s financial centers. But many of them urge the borrowing feeders to keep accounts and determine accurately their profits and losses.
This is to the interest of the feeder and the cattle industry as a whole. For if the business is ever to be placed on a cost-of-production basis for the reckoning of market prices, it must be done by an accumulation of thousands of actual tests in feeding practice. It is plain that each individual feeder could not set or ask a certain percentage of profit, since a poor judge of stock and a careless feeder would demand more for an inferior product than the more efficient feeder would ask for a better article.
The feasibility of any such scheme of regulating prices does not now appear, but it is clear in any case that each lot of cattle would have to be appraised at what their production ought to cost, considering quality, and not what it actually did cost.
Bankers now recognize cattle loans as good investments, and the skilled stockman has access to needed funds.
Losses on Declining Markets
THAT the packing industry suffers with the livestock producers on a falling market was never more clearly emphasized than in the year 1919. Armour and Company’s losses on dressed beef alone amounted, in the twelve months, to several million dollars; and on the sale of pork products the losses were even greater.
These losses are figured on the basis of the primary sales, which include not only the meat but the hides and all other by-products derived from the animals.