REPORT OF THE CHIEF OF THE BUREAU OF MARKETS.

UNITED STATES DEPARTMENT OF AGRICULTURE,

BUREAU OF MARKETS, Washington, D. C., October 9, 1920.

SIR: I have the honor to transmit herewith a report of the work of the Bureau of Markets for the fiscal year ended June 30, 1920.

Respectfully,

GEORGE LIVINGSTON,

Chief of Bureau.

Hon. E. T. MEREDITH,

Secretary of Agriculture.

Deep interest in current questions involved in the marketing of our agricultural products is manifested in all sections of the country; the discussion of marketing problems occupies a great deal of time at public gatherings of farmers and other persons concerned, and a great deal of space in the press, especially in rural and trade papers, is devoted to presenting various aspects of the subject. Many people who appreciate the relation between adequate agricultural production and satisfactory marketing conditions are deeply concerned over the situation which will confront the farmer during the next few years of the reconstruction period and many feel an actual fear for our national prosperity should production be curtailed. Therefore, it is probable that the consideration of marketing problems will continue to occupy the foremost place in the thoughts of both producers and consumers. There is a deep-seated dissatisfaction in many quarters on account of the apparently faulty functioning of our marketing machine, and a great deal of criticism arises because many people seem to feel that nothing effective is being done to combat the high cost of living, discriminations, unfair practices, unjust profits, unnecessary middlemen, unfair prices. manipulation, speculation, hoarding, improper grading, inadequate facilities for transportation and storage, and other evils of the day. Many persons believe that these evils can be corrected only by the substitution of a complete new system for the old order of things and others wish to cure all marketing difficulties by legislation. It is believed, however, that the majority of careful investigators, while recognizing and deploring existing imperfections, fully realize the impossibility of successfully substituting immediately any new scheme for the present complicated system, which is the slow growth of centuries. One of the important fundamental problems confronting marketing agencies is the education of the public to a point where it will generally realize

that the present marketing system is a product of evolution; that improvements must be made gradually by changes in method and procedure and by eliminating specific recognized evils; that it is impossible to set up instantly a perfectly efficient and automatically operated new marketing machine; and that it is also impossible to cure all economic ills by legislation. The public must appreciate also that marketing is quite as much a problem for the attention and consideration of the consumer as for the producer.

Ever since its institution, the Bureau of Markets has realized that certain objects must be accomplished before any generally noticeable marketing improvements could be made. Standards for farm products and the containers in which they are packed must be established; prompt, accurate, and disinterested domestic and foreign market. information must be made available to all parties concerned in the process of distribution; impartial inspection must be maintained; the problems inherent in the organization and operation of farmers' cooperative organizations must be solved; the business practices of the various marketing agencies must be improved; accurate and complete data concerning the cost of marketing must be available; and efficiency in handling, storing, and shipping farm products must be increased. In all these directions measurable progress has been made and in the following pages of this report will be found a fairly complete statement of the ground covered during the fiscal year just closed.

During the year especial attention was given to questions bearing on the effective distribution of the information collected by the bureau, the publication of The Market Reporter, studies regarding the cost of marketing, the compilation of statistics on marketing, the development of a service to deal with foreign marketing, and the standardization of additional commodities.

Distribution of market information.-The question of distributing in an effective way the information collected by the Bureau of Markets has for many years been a difficult one. The market news services have been developed to a point where they very effectively meet the requirements of the agencies concerned in marketing or distributing the commodities dealt with, but until recently it has not been practicable to summarize the information issued through these various services and make it available in comprehensive form. The publication of The Market Reporter, discussed below, was a move in this direction, but the problem has not yet been completely solved.

It is felt that the market information of the bureau should be put into the hands of the farmer in simple, convenient form with the least possible delay. He has no time or inclination during a large part of the year to read extended summaries or long detailed tables, much less to analyze, interpret, and combine them, or to consider them in conjunction with other significant information, and yet it is vital that he should have information of this kind and be in a position to act upon it. This problem is being attacked as energetically as possible, and consideration is now being given to the development of a special service for weekly farm papers through which market information in suitable form should be placed in the hands of four to six million subscribers.

Plans are being made to increase our collection of motion pictures, to add to our lantern-slide lectures and exhibits. and to work out

other means for effectively and graphically presenting the work in all parts of the country.

The Market Reporter.-The first issue of The Market Reporter appeared on January 3, 1920. Its publication was undertaken because it was desired to have a medium for the presentation in convenient form of marketing information of both general and special interest, and of current as well as permanent value for the use of producers, dealers, and consumers. The large number of favorable comments received from the readers of the publication is very encouraging, and although it is only a few months old, it has clearly demonstrated its usefulness and has come to occupy an important place as a source of market information that heretofore has been inaccessible, or not available in convenient form. For the time being, it is sent free to anyone who individually requests it and indicates a need for it. The information contained in The Market Reporter reaches a great many readers because its articles are copied or quoted widely by magazines, rural and trade papers, and by the daily press. As the bureau desires to make The Market Reporter of maximum practical value, an inquiry will be made to determine the use that is made of the information published in its columns and the occupation of its readers. Wherever this study may indicate the desirability of so doing, changes in form or in character of information published will be made.

Studies of the cost of marketing.-Information regarding the cost of marketing must be available to supplement data concerning the cost of production. Exact, dependable information should be at hand showing what proportion of the consumer's dollar is received by the producer and the various marketing agencies, and indicating the economic justification for the existence of each link in the chain of marketing.

The retail marketing of meat is now being studied and it is hoped that this work can be completed at an early date. A survey of the marketing of milk and potatoes which has recently been instituted will be prosecuted with all possible vigor, and efforts will be made to determine the cost of marketing certain products through farmers' cooperative marketing associations. Effective steps should be taken to obtain information which may make it possible for cooperative organizations to improve their operating methods and it is believed that a comparison of their marketing costs with the costs of individual firms or corporations selling the same product may throw much light on the relative efficiency of the two.

The use of uniform, suitable accounts by various types of marketing agencies would be of great assistance in obtaining dependable data regarding the cost of marketing and should be the means of effecting important economies. Every effort, therefore, will be made to promote the use of the accounting systems already published and to hurry to completion those which have been partially finished. Suitable forms of accounts will be suggested to the industries whose costs are studied.

Compilation of market statistics.-Realizing the desirability of having in available form up-to-date, accurate, and complete statistics concerning the marketing of agricultural products, steps were taken during the year to form a statistical section in the bureau. In the course of our work, especially in connection with the market

news services, we have collected and distributed in mimeographed form extensive data relating to marketing conditions, receipts, shipments, supplies, prices, etc. When issued, this information was of current value and has been largely used in studying market fluctuations over short periods. Many of the files, however, now cover a period of years and when these figures are tabulated, summarized, and analyzed by a competent statistician they should indicate significant trends and be of great assistance in the analysis of fundamental factors affecting marketing conditions. These data should be of especial value, because they will be compiled from a general rather than a special standpoint and will be nation-wide rather than local in scope. At present, consideration is being given to the issuance of a comprehensive annual summary of marketing information in statistical form.

Foreign markets service.-The importance of developing a foreign markets service to obtain and disseminate information relative to our foreign trade in agricultural products has been evident to this bureau for some time, and since 1916 investigations have been conducted concerning the marketing of American agricultural products in foreign countries, preparatory to establishing a service of adequate size and scope when sufficient funds should be made available by Congress for its support. World markets have a deep and far-reaching influence on domestic markets and prices, but, although approximately 50 per cent of our exports last year consisted of agricultural products, and although the prices of some of our largest staple crops, such as wheat, cotton, and wool, are made in foreign markets, so little attention has been given to conditions which our farm products encounter in foreign fields that we have been without fundamental information which is of vital importance to our prosperity.

Other governmental agencies are interested in certain phases of our foreign trade, but they have never attempted to cover agricultural commodities in any adequate, systematic, or comprehensive way, and the Bureau of Markets, so far as it has been able to proceed with the funds in hand, has been developing a pioneer project.

In the annual report for the last fiscal year mention was made of the fact that in June, 1919, representatives were sent to South America to study the markets for purebred live stock and to acquaint South American producers with the merits of the stock raised in this country. The United States produces some of the best purebred live stock in the world, in rapidly increasing numbers, and the desirability of finding an outlet for it is evident. Most of this live stock is raised under climatic conditions similar to those prevailing in the Argentine Republic, Uruguay, Paraguay, and southern Brazil, where 60 to 90 per cent of the total industries consists of livestock work. Both Argentina and Uruguay have many high-grade herds, the great live-stock show at Palermo, Argentina, being considered one of the best in the world. Brazil, in the past, has not given so much attention to live stock improvement, but is now taking rapid steps in that direction. For all of these reasons this seemed a most promising field to survey and this conclusion was justified by the fact that the trip of our representatives brought out excellent prospects for the development of a profitable trade. As a result of the contacts they established it appears that business was transacted up to June 30, 1920, amounting to over $400,000. The results of this

trip have been so promising that it has been deemed advisable to keep a representative in South America and arrangements are now under way for the establishment of a permanent office there.

Brief mention also was made, in the last annual report, of the fact that in May, 1919, an agricultural trade commissioner had been sent to the United Kingdom to study the markets for agricultural products and to make regular reports, by letter and cable, for the information of American producers and exporters. Reports of conditions affecting American trade have been rendered regularly, and much advance confidential information of importance has been received. As an illustration it may be stated that the first information regarding the shipment of 300,000 carcasses of Australian lambs to this country was received in a cablegram from our commissioner on February 28. This was widely published and had the effect of steadying the domestic market. A special investigation was made of fruit marketing which made it clearly evident that much can be done to reduce present losses in transportation and handling. Prompt infor mation was forwarded regarding British food and trading regula tions, and numerous important reports published in England, but not heretofore received by us, were sent to the bureau. This work has proved its value, and is a strong recommendation for the appointment of several experienced trade commissioners to be sent abroad to aid in developing foreign markets for our agricultural products.

Our experience has indicated also the desirability of building up a staff of experts in Washington to obtain, summarize, and make public information concerning world supply and demand for the principal commodities, including production and carry-over, trend of consumption, trend of trade, etc. With the development of large cooperative societies of producers this information should be of vital importance and in great demand within a relatively few years.

Heater car devised.--Enormous losses are caused annually because large quantities of fruits and vegetables are frozen in transit. Last winter shippers of apples in three States-Oregon, Washington, and Idaho filed claims against railroads amounting to over $3,000,000 to cover losses from freezing. To assist in reducing such losses, the Bureau of Markets has distributed as widely as possible information relative to the proper methods of loading and heating both refrigerator and ordinary box cars. Recently, as a result of investigations, we have practically completed the design for heating equipment for use in connection with the United States standard refrigerator car, the specifications for which were drawn up in this bureau. Experiments have shown that a refrigerator car, equipped with this heating system, will protect fruits and vegetables from freezing, even at a temperature of 40 degrees below zero. Service tests, to adapt this heating system to practical every-day conditions, will be carried on during the coming winter.

Standardization of wool.-Various statements issued in the past have emphasized the importance of standardization work, which is basic to improvement in marketing. In the other sections of this report mention may be found of the work which has been done in connection with the standardization of such commodities as rice and other grains, fruits and vegetables, hay and live stock. The wool standardization work being our most important recent undertaking in this line should be emphasized at this point.