Meat Packing, an industry on the deck;

              by Maurice McGill
The author wishes to express his appreciation
to Iowa Beef Packers, Inc., for their cooperation
in preparing this article.
"Gentlemen, this industry is on the deck. It has hit the
bottom and has only one way to go — up." This statement
was made recently to a group of financial analysts by
A. D. Anderson, president of Iowa Beef Packers, Inc., as
he discussed one of the largest, most important industries
of the United States — meat packing. These comments,
coming from the president of the newest member in the
family of major meat packers, were greeted with some
skepticism by many of the analysts. A careful review of
the industry's history reveals a record of many cyclical
changes, but with a distinctly downward trend. Ander­son's
comments were based on experience much deeper
than the four-year history of his company. He was at­tempting
to explain that the spectacular growth of Iowa
Beef Packers, Inc., is directly related to a major evolu­tionary
development in the meat-packing industry, the
second major development in this century.
Major meat packing companies realized substantial
profits and obtained a major portion of their growth in
the early 1900's when, prior to the Consent Decree of
1920, they controlled not only the meat slaughtering and
packing facilities, but also the major stockyards through
which most livestock were marketed. Cattle have histori­cally
been raised in the western regions of the United
States where they feed on the vast expanses of grassland
until they are about six months old. Western cattlemen
traditionally left cattle on the range during the spring and
summer months and took them off the range during the
fall. At that time, the breeding stock was selected, the
herds were culled and all other cattle were transported
to the Midwest.
This "fall run" would flood the stockyards with thou­sands
of slaughter and feeder cattle. From this vast supply,
farmers in the Midwestern states selected sufficient num­bers
of feeder cattle to consume their recently harvested
grain crops and the remaining cattle were sent to slaugh­ter.
The movement of cattle from the Western to the
Midwestern states was based on simple economics; it was
MEAT PACKIN6
An Industry nn the Deck
cheaper to transport the cattle to feed supplies, primarily
corn, than it was to transport feed to the cattle, particu­larly
in view of the fact that in doing so, the cattle were
moved closer to the larger Eastern population centers
where they would ultimately be consumed. Inadequate
refrigeration and transportation facilities made it impera­tive
that meat slaughter plants be located close to the
consumer. Consequently, Chicago, Boston, Philadelphia,
New York and other Eastern cities became major meat
packing centers.
In the early 1900's a small revolution took place in the
industry. As refrigerated rail cars made long distance
MAURICE L. McGILL, manager in the Kansas City office,
joined TRB&S in 1959. He is in charge of management serv­ices
and is also a member of the Practice Development
Committee.
A member of the Systems and Procedures Association,
National Association of Accountants, Junior Chamber of Com­merce,
AICPA and Missouri Society of CPA's, Mr. McGill
also serves on the Advanced Management Committee of the
Kansas City Chapter of the Administrative Management
Society.
Mr. McGill received his B.S. and M.A. degrees from Mis­souri
University in 1958 and 1959. In the May, 1959 CPA
examination he received an Elijah Watts Sells Honorable
Mention Award for scoring in the top eight out of more than
eleven thousand participants.
A native Missourian, he is married and the father of two
girls.
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