Dollar sales, capitalization and earnings of leading food and tobacco corporations

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Dollar sales, capitalization and earnings of leading food and tobacco corporations
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173
UNITED STATES DEPARTMENT OF AGRICULTURE
Bureau of Agricultural Economics


DOLLAR SALES, CAPITALIZATION AND EARNINGS OF LEADING
FOOD AND TOBACCO CORPORATIONS












By A. C. Hoffman, Agricultural Economist


Washington, D. C.
February 1938


D-- NIV OF I -


E R __
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"-"_US DEPOSITOI


.. .. ....


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DOLLAR SALES, CAPITALIZATION AID EARNINGS OF LEADING
FOOD ArD TOBACCO CORPORATIONS



By A. C. Hoffman,k/ Agricultural Economist



Contents
Page

Introduction ... ... .. ...... .... .......... 1
Dollar sales of leading food corporations ........ 2
Grocery chains ....... .. ... .. ..... .. .... .... 3
Dairy companies ........................... .. 3. .
Meat packers ........ ........ ............... 4
Flour millers ................................. 4
Fruit and vegetable canners ................... 5
Miscellaneous food corporations ............... 5
Capitalization ............................... .... 6
Earnings .......... .......................................... 7
Ratios of earnings to capitalization ............. 7
Margins of profit ................................ 8



Introduction

Large-scale corporations have become increasingly important in
the processing and distribution of farm products during the last 20
years. This development is exemplified by the growth of the national
chain-store systems, dairy corporations, baking companies, end similar-
sized organizations in nearly all branches of the food arid tobacco
industries.

Basic to this development has been the application of new
methods of processing, manufacturing, end distributing farm products.
Some of these methods could be used to advantage only by large concerns.
Other factors have been the improved means of transportation and com-
munication which have made it possible to conduct business enterprise
on a wider scale. As a result of this development, new marketing
methods and new channels of distribution have grown up alongside of
the old.


1/ The writer wishes to acknowledge his indebtedness to John F. McShea,
principal fiscal accountant, Field Investigation Section, Agricultural
Adjustment Administration, who assisted with the accounting phases of
this study; and to Joseph F. Herrick, Jr. who did the computations.









-2 -


American farmers have an interest in this subject for two
reason: first, they want the distributing mechanism for their prod-
ucts to be as efficient as possible; and, second, they realize that
as the marketing system becomes concentrated into fewer hands there
is an increasing need for public scrutiny and regulation in order to
prevent unfair trade practices and monopolistic gains at the expense
of farmers or the consuming public.

The first part of this report summarizes trends in the amounts
of business done by leading food corporations and compares these
amounts with the totals for their respective lines of industry. The
second part deals with the earnings of these corporations.

The statistics of the corporations were compiled mainly from
their consolidated balance sheets and income accounts as reported in
Moody's Manual of Investments. For the years since 1934, the data
were checked with the financial reports filed by the corporations
with the Securities and Exchange Commission. The methods used in
handling the data are explained later in the tcxt and in the table
footnotes.

It should be emphasized that the earnings ratios and profit
margins shown in tables 10 and 11 cannot be used tn indicate that
profits in any particular industry are either reasonable or unreason-
able at any given time. Moreover, comparisons of these ratios for
different industry groups will not serve as an accurate measure of
the relative rates of return on invested capital in such groups. The
figures as to earnings shown in this report are mainly for the purpose
of indicating relative changes in profitability from year to year, for
which purpose they are thought to be reasonably satisfactory.


Dollar Sales of Leading Food Corporations

The annual dollar sales of 21 leading food corporations, by
industry groups, for the period 1919 to 1936, are shown in figures 1
to 6. The industry groups include (1) grocery chains, (2) dairy
companies, (3) meat packers, (4) flour millers, (5) fruit and vegetable
canners, and (6) miscellaneous food corporations. There are other
large companies in other branches of the food and tobacco industries,
but their sales could not be shown because they do not report them in
their financial statements.

Sales of the leading corporations in each of the above groups
are compared with the total volume of business done by all handlers
engaged in the same type of enterprise, as indicated by census
figures. (See heavy line at top of charts.) These comparisons can-
not be used in all-cases to show the exact percentages of the total
business done by the corporations, but they provide a good indication
of the relative growth of such corporations during the last 15 years.












Grocery chains

Dollar sales of the five leading grocery .hains for the period
1919-36 are given in figure 1. The hart also shows an estimate of
the total sales of 3il -roacery t:nd cormbinEtion (that is, groceries and
meats) stores, based on the Census of Distribution. The scale of thp
chart is logarithmic so that the slope of the lines indicates the per-
centage change in dollar sales.

All of the five Thains showed a tremendous growth in volume of
business during the 1920's, most of them having increased it at least
five-fold. But this rapid expansion was halted at least temporarily by
the depression. Since that time the dollar sales of the grocery chains
have fluctuated approximately in proportion to changes in food prices.
In terms of physical volume of food products handled, their business
has shown comparatively little growth since 1929.

The combined sales of these five chains amounted, in 1929, to
about $1,805,000,nCo0, or almost 25 percepr.t of the total business done
in all grocery and combination stores,L/ as reported by the U. S.
Census of Distribution. Their percentage in 1935 was approximately the
same as that of 1929. The Great Atlantic & Pasifi? Tea Company, largest
of the chains, showed sales in ex-ess of $1,0'D,00',000 in 1929, which
was about 14 percent of the total business of all grocery and combina-
tion stores as reported for that year.


Dairy companies

In the dairy industry the two most important corporations are
the National Dairy Products Corporation and The Borden Company. Both
control extensive facilities for manufeaturin,7 dairy products and for
distributing fluid milk. The National Dairy Products Corporation was
incorporated in 1923 and rapidly acquired -control of fluid milk facili-
ties in most of the larger iLties of the country. In 1930 it purchased
the properties and assets of the Kraft Phenix Cheese Corporation, which
gave it control of extensive facilities for the processing and distri-
bution of cheese and related products. The Boiden Company is about the
same size as the 11ational Dairy Products Corporation and engages in the
same general type of business.

The sales of the four leading dairy corporations, as compared
with an estimate of the total sales valuL of all dairy products, are
shown in figure 2. The Borden Company more than trebled its sales
fram 1921 to 1929, while the National Dairy Products Corporation
expanded its business from about $20,000,00C in 1924 to almost
$375,000,COO in 1930. Two smaller dairy companies, the Beatrice
creamery Company and the Fairmont Creamery Company, have remained


Y/ Does not include sales of fruit markets, delicatessen stores, meat
shops, and miscellaneous food retailers.









- 4 -


largely in the field of butter manufacture and produce distribution.
They are sizable :or.panies and operate orn a national basis, but they
have not shown the growth of the first two companies.

A om,)arison of' th.e sales of the four leading dairy companies
with the estimated value of all dairy produ-ts is not entirely satis-
fartory be-ause the dairy companies handle somp thins other than milk
produ-ts. It is evident, hov.ever, that thp proportion of the dairy
produ-ts handled by su-h companies has increased greatly during tho
last 10 years. As of 1925, the -orrbined sales of these four companies
represented 15 percent of the estimated value of dairy products as
given by Jensus fic-ures; in 1929, ,5 percent; arid in 1935, 39 percent.

Large-:,,cale haidlin;g of dairy products is not confined to the
above-mentioned dairy companies. The meat packers have for years been
important factors in the distribution of butter and -heese. The two
big packers (Swift anci Armour) rank next to the INational Dairy Prod-
ucts Corporation and The BT:.rden Companyv in volue of milk products
handlet. M-ntion should ciso be m-.de of the Crnation Company and the
Pet YMilk C.rr.ni:', tO.e two largest manufacturers of -ondensed and
evaporated miie it. N-ext to their, r&nks th?, Xit eh.ouse !Lilk Company, sub-
sidiary of the &rest 4,tlantir 2-Id iPa.ifi? Tea Ccnprany.


vMeat peakers

I',irat a"-: in_- _i- an in'dustr:' vw.hi-.- for r.any years has been large-
ly 'entrsnlized in thp ends of a fe'; large rpatkinr' corporations. The
last 15 years h-.-ve therefore not witnPssed tnie changes that have taken
place in most of' tne other food industries. During and irnr,-.diately
followin,- tae .;urld '.War there was some ternden,'- toward d, -entralization
in meat pa-kinc as si.ail int-rior ra-kers sprang up thiroughout the
Corn Belt. Lore rF'Pntly, however, the larger packers have ac-quired
some of thesu interior plants, so that control is again tending
slightly toward ,eritralization, although slaur;-.ter still remains
partially decentralized.

The sales i'f the four le-aCinr pa-Lers since 1919 are shown in
figure 3. Th".e -osition of these -c.r.pani=s, both in relation to each
other and to t:. industry as a whole?, h.-s not chan,-ed greatly in the
last 15 y-ars. &Sift a-nd jArmour .-. di. a business of around a
billion ,ollars in 9.', as co...red -.:ith 3 million dollars for Wilson
and ,268 ;::iilion ior -Judahy. Tl-t 'ombin.--. sales of' Saift and Armour were
64 r?tcrnt of the tot'l, value of kir- house products in 19I1, 55 per-
cent in 12'9, a.d 1 : *:r,:.nt in 135. Thui, prorcrtior. cf r.meat products
h.-ndled b: th-s',_ two firms is not so ar'e as the above percentage would
indicate, for t .cir dollar saris ir.n-'lud: ma: 'ro.ts oth-r thn m-ats.


Flour nillctrs

Flo'.w r.illing r',.quir--s -onsiderabiL ?anital and for years has
been earri.d on by i,-,-a firr:s of fair si:c-. It was rot until the








-5 -


last 15 or 20 ye-rs, however, that these firms have been consolidated
into organizations of national scope.

The largest corporation Pn-aged in flour milling is General
LiLls, In-orporated. This -orpor-tion w:as fcrned in 1928 for the
pum-ose of ac-u:irinc' the bu',rness and pr-,perties of a number of exist-
rin." 2omrranies -w.ni2h were sizablp enterprises in themselves. T]et sales
of C-enerai Mills for the ypar 1936 were about 160 million dollars.

The next largest company is the Pillsbury Flour Mills Company,
whose sales in 1936 were .bout 69 million dollars. Third in size is
the Coimnander-Larabpe e"or, o_'c.tion, control of w'.ich passed to the
Ar her-Laniels-MAidland Co::,ptany in 193%.

The flour sales of these three companies amounted in 1935 to 29
percent of the total flour sales for the United States in that year.2/


Fruit and vegetable canners

Although the bulk of t--e fruit end' ve-etable pack is still put
up by small, independent c-nnc r-, there has been !a notable trend in the
direction of lar-re.-scale oI1-.i' t ion in this industry since the World
War. The two largest cannin- ::... are the *alifornia Packing Corpora-
tion and Libby, M'Ji1eill and LiL,. The former was incorporated in 1916
to -onsolidate the properties o.. several pa?king firms in California.
Most of its ?anning operatouic.- z._-1 on the Pacific Coast, but it also
has some plants in th.e MidK]> ;',-3t. Libby, 1.,ciJill and Libby was at
one time operated as a subsidiary of Sjift and Company, but this rela-
tionship was ordered to be broken by the terms of the Packers' Consent
Decree.

In addition to these two firms, there are a half-dozen or more
-ompanies with a voli-ri of business roughly comparable to that of the
Minnrmesota Valley Can:.ing Ccimr.:any, whose sales are shown in figure 5
along ;vith those of the\ California Packing Corporation and Libby,
McNeill and Libby. Most of these canning corporations have been organ-
ized since the World War and rePr-resent a definite change in an industry
formerly comprised almost entirely of small firms.


Miscellaneous food corporations

Two of the most ramnified food companies are the :.General Foods
Corporation and Standard Brands, Inc. DurinG the 1920's these two
companies acquired the plant fac-ilities and the patent rights of a
large number of food products. For the most part these products are
made under special patented pro-esses and are highly-advertised.


3/ Federal Trade Co.cmission, Agricultural Income Inquiry, Vol. 2,
Chapter IV, pare 576. (Unpublished.)








- 6-


The General Foods Corporation was incorporated in 1922 as the
Posture Cereal Company, this name having been changed to the present
title in 1929. Tre organization manufactures and sells more than a
score of food products, some of whi.h are well-known cereals, jello,
chocolate products, cake flour, tapioca, and coffees. General Foods
a.-so controls patents for the nuick-freezing of food products.

Standard Brands, Inc. is a slightly smaller organization of the
sare type as General Foods. Among its products are a nationally
advertised coffee, baking powder, yeast, and other products.

Dollar sales of both these corporations increased tremendously
during the 1920's as new products were added under their expansion
program (fig. 6). At the outset of the depression this program was
brought to a stop at least temporarily. There have been few important
acquisitions by either ol the compaosnies since that time.


Capitalization

The total capitalization of 30 lpadinn food and toba-co com-
panies for the years 1921-36 is shown in table 7. The capitalization
of each corporation represents the sum. of its outstanding sto-k,
surplus, surplus reserves, and long term debt, minus any intangible
items su-h as patents and goodwill. The figures thus provide a -rough
measure of the total tangible investments of the various companies,
except in so far as they may have changed their capitalization through
a revaluation of' their assets.

Some of the companies had investments in securities and fixed
assets that were not used in connection with their principal business
enterprises. In most -ases thLse could not be separated satisfactorily
on the basis of thc published financial statements and were therefore
not deducted from the capitalization as shown.

A change in the capitalization of a corporation may represent
either or both of two things: (1) a chanrp in investment due to the
(Tow.th of the business; and (2) a revaluation of the assets (either up
or down). Most of the increase in the 'apitalization of the various
corporations prior to 193C represents an increase in investment due to
expansion of the business enterprise, although some of it may also have
been due to a writing-up of their asset values. Wherever the amount
of such a-.preciation was reflected in the published financial state-
r-.ents and usually it waEs lot a deduction for it was made from the
e&u.-italization as describec above.

The increase in ca.7italization prior to 1930 is showm in table 7
to have been most marked in the case of the grocery chains and the
dairy *ormanies. It will be recalled from. the previous discussion
(r&a'e 3) that it was in these fields of food distribution that some of
the most striking large-scale developments occurred during the 1920's.
Only the bi, meat packers, whose preeminent position in the industry








- 7-


is of years standing, failed to show a substantial capitall growth from
1921 to 1930.

Following 1930 the capitalization of many of the corporations
showed a decrease. This decrease is due mainly to a scaling down of
asset values rather than to a decrease in the actual size of the
business enterprise.


Earnings

Table 8 gives the earnings of the same corporations whose capi-
talization was shown in tables 7. These earnings usually represent
gross sales, minus cost of sales, operating expenses, and depreciation.
In other words, they are the amount of money available for interest on
bonded debt, stock dividends, and federal income taxes. In some cases
the income from the outside investments of the corporEtions was included
and in others it was not, depending on the accounting practice followed
in making up thu financial statement. In all cases, however, the same
measure of earnings for each -ompany was used for the entire period,
so that 2ormparisons Lre valid as butwen different years.

In all eight of the food and tobacco groups shown .in table 8,
earninGs of the corporations fell off sharply as a result.of the
depression, but have turned up again during the last several years.
The drop was particularly marked in the case of the meat packers and
vegetable canners, some of which showed an operating deficit because
of the decline in prices of inventory stocks. ELrnings of the tobacco
companies helo up through 1932, but dropped off nearly 50 percent in
1933. The grocery chains followed a somewhat different pattern from
that of most otier corporations in that their ep-rnins declined steadily,
but not precipitously,, until 1936.

The combined earnings of all the corporations shown in table 8
ranged iron as high as 349 million dollars in 1930. to as low as 222
Million in 1933 and 220 million in 1935. In 1936, the last year for
which figures are available, their earnings were approximately 262
million dollars.

For several industry groups (notably the chain stores, dairy
companies and tobacco companies) the volume of earnings increased
steadily in the years prior to 1930. This was due almost entirely to
the growth of the companies involved rather than to an increasing rate
of return on the invested capital.


Ratios of Earnings to Capitalization
The profitability of a corporate enterprise is measured by its
rate of return on invested capital. It is not possible to ascertain
from the balance sheets of most corporations exactly what their capital
investment is. Total capitalization as described earlier will usually
provide a close approximation to the amount of capital invested in the








-8-


business,-/ but in using this figure the previously-mentioned qualifi-
cations as to over-capitalization and revaluation of assets should be
kept in mind.

Table 10 shows the ratios of earnings to capitalization for
the 30 food and tobacco corporations. For reasons already pointed
out the ratios shown in this table cannot be used to indicate that
the profits of the corporations in any of the industry groups are
reasonable or uiireasoneble at any piven time. The significance of the
ratios lies mainly in the c.enges that have taken place within each
SindustryX __oupi from year to year.

For all the corporations taken together the ratio of earnings
to capitalization varied from 15.20 percent in 1929 to as low as 9.48
*percent in 1933. (Table 10.) Beginning with 1934, the ratio turned
upward and stood in 1936 at 11.89 percent. These figures indicate
that despite a substantial increase in earnings during the last three
years, the profitability of these corporations is still somewhat below
what it was in' 199 and 1930.

In the case of the grocery chains, the ratio of earnings to
capitalization tended to decrease steadily during the whole period
1926-35, and in 1936 it was less then half what it had been 10 years
earlier. Somewhat the same situation existed with other rapidly-
growing corporations in other branches of the food industry. The meat
*packers and the canners were the only groups in which the ratio of
earnings to capitalization had regained pre-depression levels by 1936.


Margins of Profit (Ratios of earnings to
dollar sales)

The margins of profit for the leading grocery chains, dairy
companies, and meat packers are shown in tab-e 11. These margins
were computed by dividing the earnings by the dollar sales of the
companies in each of these groups. The pE:rciLntages thus obtained are
not to be confused with the rate of profit or invested capital. What
they represent is the percentage of the corporations' sales (or gross
income) reta-ined for the payrlent of interest, dividends, and federal
income taxes. Because of differences in the tyie of enterprise and


4/ The Federal Trade Commission, in its recert inquiry on agricultural
income, has invest irated the rate of return on invested .-apital for
many of the corporations engage, in handlingc food and tobea.co products.
The rates of return as found by the Corr-issicr. (table 9) compare very
closely with the ratio of earnings to -apitalization as shown in this
report (table 10). Such differences as there are in the two sets of
figures are to be accounted for mainly by differences in accounting
practice, in accounting dates, and in the number of corporations in-
cluded in each industry group.








-9 -


the volume of business done with a given capital investment, not much
sirri'icanrce c..r be ,atta.he6 to a cor.parison of profit margins for the
different industry group.z. The margins are useful mainly as an indi-
cation of change from ye-r to year.

For the grocery chains the margin of profit hc.s trended down-
ward almost continuously, since 1'926. This is true for each of the
five chain s*,'scms as Vwell as for the average of all of them. It
irLQiates ta-it the per2erntage of the consumer's dollar retained by
the chains for interest and dividends is lower than it formerly was,
although this does nit ne?-mssarily mean that their rate of profit on
invested capital is -orrespondinzly lower.

In the 2.E'SC of t1ie dairy companies, profit margins averaged
from 6 to 7 percent rrior to the -epression, dropped as low as 3.21
percent in 1234, and were 4.4 percent in 1936. The meat packers,
after snowing an operating deficit in 1931, have sin-e had profit
margins as high or higher than in pr -2erression years.

Profit : srgins for other food and tobacco groups could not be
calculated because dollar sales wore not reported in earlier years by
many of the corporations.








10

SALES OF FIVE LEADING GROCERY CHAINS COMPARED WITH
ESTIMATED TOTAL SALES OF ALL GROCERY STORES
DOLLARS I,. o I I I --- 1
(MILLIONS)


6.000


4.000





2.000





1,000

800

600


400





200





100

80

60


40


10 1-
1919


.1T. I


U.S. DEPARTMENT OF AGRICULTURE


1923 1925 1927 1929 1931 1933 1935 1937
NEG 32112J BUREAU OF AGRICULTURAL ECONOMICS


Uata from table 1.


FIGURE I











- 11 -


Table 1.- Sales of five leadig .-_rrcery chains cnmparcd with estimated
total food sales of all grocery and combination str.res, 1912--36

: 7Stimated *l.es f _


total : The ren.at
Year food sales : Atlantic
all stores : & Pacific
I/ : Tea Co.
S 1 ,0a0 -r s
dollars dollars


:The Kroger:


The


:Grocry & Amrierican
B Baking : Stores
: Co. : Cc.

dil ,nrs doIlars
doU-i-lir d~ot a rs_


: : First
: Safewy e ationn.1
: Stores, : Stores,
: Tnc. : Inc.

i ;o i, nr,
,I,-rs ,Lolla-prs


6,470,456
7,132, 2m7
5,441, 065
5,735,177
6,249,372
6,249,372
6,543 394
6,985,151
6,235,151
7,352,791
7,352,79:1
*? 3 5'?3 ?34
,;,543, -784
5,955,761
5,294,.10


6,352,42,


194, .347
235,30r,3
2 F.4
246, -1
532,3 33
o52,093
44f.023
574,077

,5 Li ;
761 ,503
972,799
1 53, 693
1.0 35 .327
1,^03,325
364,048
319,617
342,0'16
372. 2'
'07 371


1J Total net sales ,"f fon.- in groc-ry and c.rnibinti-in stores for the
years 1929 .nd 1925 wers cr-moile,-I from the Tr. S. Census .-f Distribution
for these years. For other :,ei=rs s.ie- in sch stores were estimated
by means of an index n",;.niber b,,e. on .zstimnted cOnsTriers' ex:peni t'.ires
for food. (Domne, Robt. R. Tn'" Mera-:.rement of Arn cricn.r. Wealth. Ta.ble
XXIII.)
? Moody's Manual of Inve-strients: Inu.-li:.trials. 19. lr -,ita for The Gre't
Atlantic and Pacific Tea Co. and First .atior.al Stor,.--, Inc.. compiled
from reports oublisned in Commerial and Finnncinl Chronil,.


1919
1920
1921
1922 P
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936


50,706
44,351
53,75"-s
74, 339
9",125
116,255

11, 261
(.. f L D", ""-) '-1' ,.
fr. i, -j. l_
28s, 611 i
267,094
2e4 ,571
213, 167
2.,7'5,692
221 175
2 r, 2 .3
24 7,


7), 6.4'0
l'5,^05
1 -1, r)52--7
36,0,68
35, 36
94,580
93,179
1'8, 336
116,?52
12 ',5
137,312
14, ,3 546
142.770
135, .7.2.3

115,454
109 3397
114 ,J, 5
115,867
115 ,333


1 2,41.8
19,247
o 2 '7~.
c8, 6-2


'I' 2;9 5
p'.p 73-04
>- C ,t i..
S4, 574
1if3, J 74
213 ,l, '6



4
2Z19,235
246.,734
222,173
220 157

"24", .93
341;, 173


9,875
9 ,625
10,491
11,477
12,499
43 977
59,032
64,444
75,885
107,635
i13, 197
j17 ,634
1'0., 893
105,313
1 1 1 ,323
119,575
12", P'.33






12


SALES OF FOUR LEADING DAIRY COMPANIES COMPARED WITH
ESTIMATED TOTAL SALES VALUE OF DAIRY PRODUCTS
(SALES OF INDIVIDUAL COMPANIES INCLUDE SOME PRODUCTS THAT ARE NOT DAIRY PRODUCTS)
DOLLARS
(MILLIONS)


6.000_______

Estimated total sales value
4.000 of al dairy products ------
(Based on data from
Census of Manufactures
and Bur Aqr. Economics)


2.000




1.000 ------

Boo

600


400

National Dairy 0;00000
Products Corp.

200
The Borden
Company N ^

Beatrice
100 -Creamery Co.

8o



60


g0 L ,LIL_______, _
1919 1921 1923 1925 1927 1929 1931 1933 1935 1937
U.S.OEPARTMENI OF AGRICULTURE NEG 32111 BUREAU OF AGRICULTURAL. ECONOMICS


Data from table 2.


FIGURE 2











- 13 -


Tabl-e 2.- Sal,:s r-,f four loading dairy co:nna:iies comDarcd with
estimated total sales value of .J.Liry nrcducts, 1l1l-36


Estimated
t:-tcl spies
Ye-ir value of
Pall dairy
nroducrs V.

d 1orC
dnillars


: -. ... v- cf
: "Tatioral :
: Dairv : B. r i ,
P rro ,ictr : e ry
: Cor, :1 -'iJ '

1,dQ_ 1,72C
d;_i.iJars^ dolln^r s


: The P.-nr n
: Cc'noan,,-


i .J.-


: 'airm.-ont
r resme ry
: Co~Many
: (Del.) 3J

^-1
5 t1_"rz.


: 1,6n5,345


1,863,33

1,963,9S-3


~~ 10 15'



1, 24,003

1,311, '95

1i, 01,215


1 ,567
20,131
i05,E77
134 .50
ie5 ,S0
212,:32
5. ,021
374,553
320 ,738
95 2,."-

2p7,-I 15
2?P,-4i
329 172


35,051
33 "74

53 ,4'7
56:3 2
S2,311
ret,057

A4, .3C
54, 233
57, 117
-'' 6^7


1j ;,234
120, 294
9., 330
o905

1 i 745
109 ,687



1'2, ,47
138,350
323,427
.-In.-42

2194,5. 7


225,724
l5 7'33
2L,3. 845
82,~A
F LA 3-i


-6,399
23, 3565
33,521
'3 3,027
35, .374
7. 504
52r 32`,3
4/
47,747
J 51,536
36, 295
29, '531
3", 317
40.371
42,22'5
46,005


l/ ."".e valle of fluir


.liik aAe zre.mn s!!1-. i.1


19'" .o,' been


-bt" in9 f- rm


the 1930 C.ns'us -f 'Di.-t A but i'" w.i.th shew sales y r,-'taii i'-rid whil 'sale
district ators. F:r r-.-ar:. oti.r-- t',nnc.n ir .9 1ales '.ave bren e:timr.tc c. e the
basis of t.,e Unitrnd St.9t-&: rc.irl nrico -f flu-id milk ar cnm-ile, b',-:r trhe
Bureau cf L-bor StIatistics : nr t-e e.timrtr censt,',ti,:, f fl,'i-d. milk anrA
cream as reort.el by the Burcu-i of Agricult-ural 'Lconc.nics. Ti.-ese etimnat,-s
of the value of fluid milk ar,1. cr.a-n sale: are intende- only t-.:, how th
trend from ,ear to yenr.
2J Moc-ly's ''anual- of ITvestmerts: tvr'istrial s.
3/ Before 1 229 was know:.. a.- ir.io-n C'ro..rery Cr,. ("T-bra.ka.)
4/ Not -vaiiable.
5/ Fourteen-month oerind.


1919
19P20
1921
1922?
19 23
1924
1925
1926
1927
1928
192
193.'
1931
1932
1933
1934
19:35
1936







14


SALES OF FOUR LEADING PACKERS COMPARED WITH
TOTAL VALUE OF MEAT PRODUCTS
(SALES OF MEAT PACKERS INCLUDE SOME PRODUCTS OTHER THAN MEATS)
DOLLARS
(MILLIONS)
8,000


6,000


4.000







2,000








1,000

800


600




400







200


100 -
1919


1921


US. DEPARTMENT Of AGRICULTURE
Data from table 3.


1923 1925 1927 1929 1931 1933 1935 1937
NMEG 3Z2110 BUREAUU OF AGARICULrURAL. ECONOMICS


FIGURE 3












- 15 -


Table 3.- S3les of foLur leading meat packers c:-mpared with
total value (to manufacturer) of meat and all
by-nTroducts, of mEat packing, 1919-36 ij

'ota]. %:alue Srles of --- .. .
S,f meat : Swift : Wilson : Cud hv : Armour
Yecr and meat : and : and : Packing : and
products 2 Comoanv : Company Company : C:'mr)an:,
1,00 i1.000 doar 3 1,000 1,000
: dollars dol lars dollars dollars dollars


4, 246, 291

2,200,942

2,585,3804

3,050,286

3,057,216

U,434,654

2,130,323

1,490,035

2,362,569


1, 20 K.
1,00 0"

650.000
750, 200
775 ,OO
875,"r0,
950,^0'
925, ror


900,020
710 '0
?S r,) n


539 ,00,

619 ,00
767 227
331 672


7 195,000
285, 000
295, n000
31n,000
270 o, o000o
212,136
145,400
141,093
179,821
223,013
253,226


305,`97
233,302
173,695
160,164
190,290
203,753
224,491
231,727
233,325
251,156
267,960
231,407
181,482
133,314
124,278
151,391
130,213
201,606


900,o000n
600,00",
651,146
300, 000
800 ,("00
9 "0, non



900, "0r',!
/ 900,000
9r^0),000

900,00"
900, 000
668,000
468,0-)
452,0'0
564,0 0
683,000
748,935


L/ SnIes of meat packers include other products than meat and meat
products, and are therefore not strictly comparable with the figures
shown in column 1.
2/ U. S. Biennial Cenu.-- of Manufactures.
3J Moody's Manual of Investments: Industrials,
4/ Eight-month period.
5/ Adjusted for a twelve-month period.


1919
1920
1921
1922
19 ?3
1924
1925
1926
1927
1923
1929
1930
1931
193?
1933
1934
1935
1936






16


SALES OF THREE LEADING FLOUR MILLING CORPORATIONS COMPARED
WITH TOTAL VALUE OF FLOUR AND OTHER GRAIN-MILL PRODUCTS
DOLLARS I ------|
(MILLIONS)


1921 1923 1925 1927 1929


I


1331 1933 1935 1937
NEGC 3ZiI BUREAU OF AGRICULTURAL ECONOMICS


FIGURE 4


6.000


4.000




2.000




1,000
800

600


400




200




I00
80

60


40


10 1-
1919


US DEPARTMENT OF AGRICULIuRE
Data from table 4.










- 17 -


Table 4.- Sales of thr-:e lee1ing flour milling cornor.tions
compared with tnrtal value (to manufacturer) of flour
and other grain-mill products. 1919-56

Total value : .Sales of-
S of flour : OGenpral : Pillsbury : Commander-
ear mill : Mills, : Flour : Larabee
products _] Inc. J/ Mills Co. : Coro.
S 1,100 ~ ,000 j1,0C 1, ,000
dollars dollars dollar.-s dollars

1919 2,052,434 90, .69
1920 64,?97
1921 : 1,179,740 49, 4)
1922 : 4 4,45:-
1923 : 1,048,577 3a ,r80 53,42-'
1924 : 105,947 70,7,1
1925 1,298,015 128, 469 83, 256
196 111,614 79,954
1927 1,148,760 115, ;3 39,311
1028 : 1?3,5 21 41,549
1929 : 1,030, 269 1'53,072 42,647
1930 12?,746 39,639
1931 : 598,041 87,166 20,472
1932 : 85,886 17,473
1933 574,210 118,092 10,737
1934 145,074 5/
1935 : 853,219 147,380 66,8-i7
1936 159180 69,130


2J Moody's Manual of Investments: Industrials.
3/ Figures from 1925 to 1927 are for Royal Milling Co., Washburn
Crosby Co., Red Star Milling Co., Rocky Mountain Elevator Co., and
Kalispell Flour Mill Co.
4/ Ten-month period.
5/ Control passed to Archer-Daniels-Midland Company. Sales of
Commander-Larabee Corporation no longer published separately.








18


SALES OF THREE LEADING FRUIT AND VEGETABLE CANNERS AND VALUE
OF CANNED AND DRIED FRUITS. VEGETABLES, JELLIES, ETC. 1919-36
DOLLARS
I MILLIONS I


600


400----

Total value, canned and dried
fruits, vegetables, jellies, etc.

200 -------- --------







80
SaLibby McNeill,
60 --and Libby i -- f -

\California ./
40 Packing Go.





20 ---





10

8

6
Minnesota Valley
Canning Co.
4 --


1 -
1919


1921 1923 1925 1927 1929 1931 1933 1935 1937


U. & DEPARTMENT OF AGRICULTURE


Data from table 5.


NEG 34066 BUREAU OF AGRICULTURAL ECONOMICS


FIGURE 5










- 19 -


Table 5.- Sales of three leading fruit and vegetable canners
comoarer with total value of canned and drie8 fruits,
vegetables, jellies, etc., 1919-36

STotal value, :. Sales of -ir_.
S canned and : California Libby, : Ninnesota
Year dried fruits, Packing Mcei : Valley
S vegetables Pacn : : Canning
jellies, etc. i Comony and : Company
: 1,000 1,,090 1,0l0 l,O,,
dollars dollars do-llars do 11 a r

1919 : 548,0283 69, 221
1920 : 47,516
1921 : 365,717 57,775
1922 57,440 477
1923 515,316 59,655 789
1924 : 64,420 990
1925 616,071 69 776 1,100
1926 1,154
1927 572,346 1,591
1928 2,52
1929 : 750,342 3,423
1930 : 3,647
1931 : 513,001 2,476
1932 40,316 2,166
1933 439,938 47,459 2,875
1934 : 54,336 56,142 1, 699
1955 649,644 58,188 59,87-5
1936 61,750 74,392


iJ1 U. S. Biennial Census of Manufactures.
2/ Moody's Manual of Investments: Industrials; also Poor's
Industrials.




I
20


SALES OF GENERAL FOODS CORPORATION AND
STANDARD BRANDS, INC. 1919-30
3LLARS
MILLIONS


General Foods Corp.

100

so


60 Standard Brands, Inc.



40






20





0 1 1 1 1 1 1
1919 1921 1923 1925 1927 1929 1931 1933 1935 1937
U S DEPARTMENT OF AGRICULTURE MEG. 3213 UREAU OF AMICUAL IYiOMOi


FIGURE 6


Table 6.- Sales of General Foods Corporation and
Standard Brands, Inc.. 1919-36


Sales of V : Sales of I7
Year : General : Standard :: Year : General : Standard
:Foods Corp. : Brands. Inc. :: : Foods Corp. : Brands. Inc.
1,000 dollars 1,000 dollars :: : 1,000 dollars 1.000 dollars

1919 : 21,046 31,952 :: 1928 : 101.037 64,004
1920 : 21,910 32,687 :: 1929 : 128,037
1921 : 17,774 37,194 1930 : 117,464 89.760
1922 : 17,877 38.507 :: 1931 : 88,272
1923 : 22,205 41,233 :: 1932 : 835,535
1924 : 24,248 46,443 :: 1933 : 83,281
1925 27,387 56,646 :: 1934 100,449
1926 : 46.896 62,952 :: 1935 : 109.161 102,040
1927 : 57,288 64,668 :: 1936 : 122,462 114,976

]/ Moody's Manual of Investments: Industrials. Sales not given for dates
not shown.






Table 7.- Total capitalization of leading food and tooacco corporations,
oy industry groups, 1920-36 L/


Five food
Year chains

1.,000
dollars


lq2o
1 W
1O21
1q22
1923
1 q,-,4
1925
1926
1927
1928
129
1030
1931
1932
1933
1934
1935
1:36


:1_
:12d


68, 362
83,171
101,807
125,797
146,o69
192,158
245,770
271, 069
290, o49
300,409oq
303,001
307,015
308,783
311,325


:'our dairy
comoanies
3/


1,000
dollars




72,229
98,4o4
128,791
144, 823
131 10,377
275,506
354,166
377,857
36o,6q6
342,203
326,244
307,968
295,768


. o.ar meat
oac.cers
"


1., 000
dollars
772,355
7 q1, 020
798,987
850,418
874,159
881,874
887,825
883,693
872,3551
864,091
849,479
813,505
767,077
74o,751
712,886
697,361
708,487


Three : Three : Three
flour : fraiit rnd : bakin :
millers: vegetable : companies:
5] : canners 6 : jj :


1,OO0
dollars


86,077
88,684
91,877
92,004
90,905
92,199
94,013
95,717
97,783


1,000
dollars
117 65,390
11 72,187
lW 71,439
ll 74, 918
l1 79,281
85,185
88,096
91,255
55,537
100, 1E4
10q,270
107,189
91,717
87,605
92,796
94,792
97,361


1,000
dollars


hiscel- :
lAneous :
food com-:
oanies F/:


1,000
dollars


24o,446
228,776
71,373 220,939
83,513 232,409
244,,4q2
258,340
276,692
113,128 304,802
113,328 342,825
113,768 366,o4q
111,945 363,997
101,733 355,930
89,878 352,533
85,668 351,2o6
83,277 348,466
829275 349,481


Four
tobacco
c-.)anies


1,000
dollars

336,525
338,655
357,904
386,671
407,686
424,254
455,355
453,056
529,9%7
583,708
6o4,324
616 ,4o6
612,497
597,103
573,504
551,317


: Total
Stwenty-nine
: corporations

l,OLO
dollars








2,023,499
2,262,911
2,445,6, 5
2,471,790
2,40o5,5q8
2,344,363
2,284,024
2,220,q4q
2,200,032


f/ Total capitalization represents the sum of the outstanding stock, surplus, surplus reserves,


Great Atlantic and Pacific Tea Co., First National Stores,
, ind Safe'.av Stores, Inc.


and long term dtbt.


Inc., Kroeer Grocery anid Baking Co., American Stores


ilational Dairy Produacts Corporation, Borden Company, Beatrice Creamery Co., and Fairmont Creamery Co.
Swift & Co. Armour & Co. Wilson & Co.. and Cudahy Packing Co.
General Mills, Inc., Pillsbury Flour Mills Co., and International i._illin, Co,
Libby, ii,cieill and Lioby, California Packing Corporation, and Minnesota Valley Canning Co.
Continental Baking Corporation, General Baking Coimpany, and Vard Baking Corporation.
generall Foods Corporation, Standard Brands, Inc., National Biscuit Co., and'Corn Products Refining Co.
American Tobacco Co., Liggett and Myers Tobacco Co., R, J. Reynolds Tobacco Co., and P. Lorilliard Co.
Excluding Swift & Co.
Two companies only, Minnesota Valley Canning Co. omitted.
Four companies only, Safeway Stores, Inc. omitted.
Three companies only, Fairmont Creamery Co. omitted.


-


V
2J
Co.
3_/
w


5!



121
lil


. ... ....... .... ...... .....








I'aole 8.- Zarnings of leading fo,,d and tobacco corporations,
by industry Froups, 1Q21-36 I/

Si Four : Tnree : : iscel- : Four : Total
Fi.e r Three frait and : Three laneous : tobacco twenty-nine
::: meat fri and
Year :fo .d i sairy packers :.. r : vep'etaole akin food companiess cnroorations
Scriains companies __ millers canners 3/. companies, companies: / 4/
1,. .C 1,-COO 1,000 ,0 1, 1,0C,0 1, 'JOO 1 ,000 1,0 O0
dollars dollars dollars dollars doll-irs dollars dollars dollars dollars

1021 54,774
122 5, ,930
lV3 5219 ,5i01
1925 16,e86 35,295 9,56e 71,357
1I26 f 32,346 21,9'3 32,b2 1. 119 6d,137 73,463
192/ 36,767 23,319 1,324 5,411 64,339 (6,928
19&d 45,Fil / 32,4E2 31,(0( 11.Y-78 9,645 IQo00 70,434 o,165 300,2o6 ,
1929 52,52 4 50,551 29,894 12,? 9 9, 43- 19,842 79,38 89,471 343,Qhi
1I30 52,668 57,45 c2,55o Q,313 3, 33 15,5/6 7E,5LO 0lo E45 349,33 5
1931 54,69F 48,597 17 -2,3q 7,161 / -9 ,164 13,5t2 yO,462 1l4.028 292,340
1Q32 44:14, 25,6bF6 2,091 7,446 Z7 -9,671 9,055 56,546 107,359 24,77
1933 43,44 6,6L41 35,177 8,219 ,0u7 6, l2 5E,110 60,295 222,253
1931 3 6,025 l,% L44.8 52 9,019 7,3r2 5,qj4 52,017 70,813 227,63
1935 34, 35 21,23C 7 U,746 7,b, 119 6,,2 49,101 '0.2q7 2167q
1936 35,919 29,b5a 39,21 9,749 q,61 9,7 6u,977 79,321 661 ,6C2

SExplanation: 1,. companies in eacti group are tae sur.ne as tnose in the corresponding group of tabe 7.
Unless otherwise indicate, tneir earnings as shown in tnis table represent tne amount of money a.ailaule
for interest, federal income taxes and stock dividends.
2/ Prior to 130, tnre earningss of Swift anJ Go. have been omitted because the figurt;s were not obtainable
on a basis comparable witn tnnt of later years. Therefore tne appregate earnings ofi 'tne four packers since
1930 c..nnot be compared with the earnings of tnU tree companies sho-wn for the previous yufrs.
3/ In the case of Liuuy, tiicNtill & Lijby, the earnings reurusent tLe balance for dividends only, rather
tnan the amount available for interest, taxes, and dividends.
4/ In the case of two of the companies, the earnings represent the balance for dividends only.
W/ Excluding Swift & Co.
For three companies only, Fairmont Creamery Co. omitted.
L/ Indicates deficit.





















Table 9.- Rate of return on invested ,:aoital for processors
and distributors of agricultural products, as found
by the Federal Trade Commission, 1929-35 l/

Six l Ten : Eleven : Eleven : Four whole- : vour'een
Year chain : dairy : meat : flour : sale baking : tobacco
.. g rocers_ companies packerser s : .miill.e.rs.:..._^a.. : companies :_omanies._
: Percent't Percent Percent Percent Percent Percent

1929 : 23.24 15.66 5.56 11.36 15.71 15.48

1930 : 19.36 14.16 5.11 8.39 11.80 17.13

1931 : 19.73 12.29 .96 6.71 9.45 18.23

.1932 17.03 6.34 .74 5.19 6.53 18.63

1933 16.51 4.39 6.67 6.65 5.64 10.23

1934 : 13.58 5.14 6.86 7.96 4.88 14.35

1935 : 12.48 8.15 4.87

Source: Federal Trade Commission Report on Agricultural Income"Inquiry
Principal Farm Products, Volume I, Chapters 1 and 2, page 20q.
Rvrnpubli shed. )
I/ Changes in these figures from year to year com.npare very closely with
those shown in table 10.







24


EARNINGS OF LEADING FOOD AND TOBACCO CORPORATIONS
EXPRESSED AS PERCENTAGES OF THEIR CAPITALIZATION. 1925-36
PERCENT I
Five food chains
25 -----





15





5______________ Four dairy
S-compani companies es






30
F grours ob da____i I_-_.__ ________


30

25 Four tobacco
companies










0 -----______ Three bak. ing .
0- ____________ Fortbco_____________ ____________
20pconpaes











30 T
15 -All groups








0 Three flourThree ruit and








5 --'ml e trr
30------- ---------------#-- ------------







5 T Four x ,, /
meat packers _..c p
20 Al groups-- ;l


1925


*27 '29 '31 '33 '35


U S DEPiRTMENT OF AGRICULTURE

-Data from table 10.


MEG. 34065 BUREAU OF AGRICULTURAL ECONOMICS


FIGURE 7


... ........ .... -
















: Five
Year : food
: chains
: Percent


1025
1926
1927
1 g:: E
1929
1930
1931
1932
1933
1934
1935
1936


25.71
25.17
23.88
21.37
19.43
18.86
14.71
14.34
11.73
11.02
11.54


Table 10.- earnings of leading food and tobacco corporations expressed as
percentages of tneir capitalization, 1925-36 _/

: Four :Four meat: Three :Tnree fruit: Three :Miscella- : 'our : All
: dairy : packers : flour :and vegeta-: baking :neous food: tobacco : corpor
:comlpanits: 2/ : millers :ble cannurs:comuanles:companies :companies: tions
Percent Percent Percent Per. ent Percent Percent Percent Percent


16.86
17.05
Ib. 10
18.01
18.35
16.22
12. 86
7.12
4.86
5.70
6.89
10.03


6.12
5.63
3.19
5.46
5.28
5.01
3/ -.29
.39
4.84
6.29
6. E5
5.62


13.45
14.50
10.21
7.78
8.19
8.91
9.59
7.86
9.97


10.06
8.76
5.93
10.10
9.42
3.37
3/ -8.5

9.14
7.92
6.46
9. 8


16.86
17.51
13.69
12.12
8.90
7.58
6.87
7.53
12.00


24.05
23.25
23.11
23.16
21.45
19.36
15. 9
16.48
14. 81
14.09
17.45


17.50
17.32
16. 9
16.6o
16.E8
18.65
18.81
11. F47
17.42
9.84
11.86
12.26
14.39


14.8 4
15.20
14.28
11.83
10.22
9.48
9.95
9.89
11.8q


Ij/ Exolanation: The percentages in this tale %sere commuted by dividin? the earnings of the com-
panies in each industry grop (table ) by tneir total capitalization (table 7).
2/ Swift & Co. excluded in the years prior to 1930.
3J Indicates deficit.


-**" I i5 ,,MOOR








26


PROFIT MARGINS OF LEADING GROCERY CHAINS,
DAIRY COMPANIES, AND MEAT PACKERS, 1925-36

PERCENT


7
\ Four dairy companies
6


5


4 Five grocery chains




2 %




S --- "-----Four meat packers-


0
1925 1927 1929 19,1 1933 1935
DEFICIT. 14


U. S. DEPARTMENT OF AGRICULTURE


Tear


1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936


NEG. 34067 BUREAU OF AGRICULTURAL ECONOMICS


FIGURE 8

Table 11.- Profit margins of leading grocery chains, dairy companies,
and meat packers, 1925-36 V/

earnings as percent of salem


Five grocery chains 2/


Percent


3.42
3.12
3.07
2.91
2.92
3.14
2.90
2.97
2.35
2.09
2.09


Four dairy companies 3/


Percent

5.54
6.63
6,30
7.27
6.65
6.72
6.89
4.75
3.36
3.21
3.42
4.40


S Four meat packers 4/


Percent



1.29
2.14
2.02
1.85
5/ -.14
.23
2.95
2.96
2.58
1.96


I/ The profit margins have been computed by dividing the earnings of the corporations as shown
in table 8 by their dollar sales.
2/ Great Atlantic & Pacific Tea Co., First National Stores, Inc., Kroger Grocery & Baking Co.,
Safeway Stores, Inc., and American Stores Co.
3/ National Dairy Products Corporation, Borden Co., Beatrice Creamery Co., and Fairmont Creamery
Co. (Del.)
4/ Swift & Co., Armour & Co.. Wilson & Co., and Cudahy Packing Co. Swift & Co. excluded prior
to 1930.
5/ Indicates deficit.


1937




S mF ;




UNIVERSITY OF FLORIDA


3 1262 08921 5221




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