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Cedar Rapids Gazette (Newspaper) - May 13, 1974, Cedar Rapids, Iowa Study Absolves Middleman Of Marketplace Villainy By Brian B. King WASHINGTON (AP) — Last year, U S food prices rose laster than they had in more than a quarter-cetmiry and farmers received their highest share in one "marketbasket index” in 20 years But at the same time. says a significant new study by agriculture department economists, the after-tax profits of the large agribusiness food corporations held at an average 2.4 percent of sales, a decade-old level However, the after tax profits of the 15 leading retail supermarket chains, for the first nine months averaged "0.5 percent of sales, slightly less than a year earlier but much below the historical average of slightly over I percent,’ the study said. ( ontroversial The $100,000 Economic Research Service study, quietly released earlier this month, is important because, in the period since those first nine months, the issue of middlemen's markups and profits in the farm-to-table marketing chain has become increasingly controversial and farther forward on the general political stove. Agriculture Secretary Earl But/, in one of his rare agreements with organized consumer groups, frequently has raised pointed questions about the apparently higher retailers’ and wholesalers’ shares of the groeery-buyer’s devalued dollars. Farm groups have joined in. along with members of congress from both urban and rural regions. The 48-page analysis was ordered by congress to provide an objective study of the components of the grocery bill — who gets how much for doing what. Gray Arguments 'Its effect may he to turn previously black-and-white ar* gui.i'ients on the issue into a more gray battlefield. The study shows that middlemen's spreads last year rose I i percentage points faster than the 5.3 percent rate for the general economy. But it also notes that, for the last two years, the margin has given way to farm prices as the chief cause of frtid-price hikes, that the wages of those who work for the middlemen are tilt' key to the margin increases and that "windfall profits" are not an element For example, the researchers found the farm-to-market ju ice spread continuing to widen to the point where, last year. 51) cents of every dollar spent on food served at home and TS Gents of every dollar sjient on food away from home went for '“marketing.” Profits Decline But the last graph in the booklet shows the leading supermarkets’ percentage profits in a steady decline since 197(1 and those of the giant food-manufacturing corporations little changed in Kl years. The analysis is the first of its kind since the comprehensive 1964 National Commission of Food Marketing study, although the agency compiles monthly farm-retail price-spread information on a "marketbasket” of 65 items a hypothetical average family buys each year. Because different factors are involved, the statistics differ somewhat from other government and private marketbasket surveys For example, the official figure for food price infla Hon for 1973 is I t 5 percent above the 1972 level, this study uses 17.3 percent. Figures Costs Another I SDA agency’s marketbasket guideline jails the same thing iii more identifiable terms. Using a "low-cost" plan developed by nutritionists and economists, it figures the cost of food at home for a week for a hypothetical family with two elementary-school children to have been $36.70 hist April. $411 St) whtui the 1973 food ju ice increase rate peaked iii August and $43 70 two months ago. For middle-mcome families and those under the "liberal plan,” Hit' increases wert' not as steep $47.31) to $52.70 to $55. ll); and $58.1(1 to $84.50 to $88 90 But what tin* research service study dealt with was "what are you paying for?" when you buy any of the 19 leading farm-food items Labor (cists "Labor is Hit' largest component of the processing margin for most products, followed by packaging costs,” it found Indeed, the summary notes, "Nearly half of the marketing bill in recent years has gone for labor costs. Labor costs for all marketing services rose 8 percent in 1973 to over $40 billion" of Hit' $134 billion sjient oil U.S. farm-produced food, $51 billion of which went to the farmers "The largest share of the labor bill went for food processing. However, increases for retailing, wholesaling and away* Thousands of Children Face Starvation rn By Charles E. dinner WASHINGTON (UPI) - It got to be a family joke when Mom used to say, “Eat everything on your plate; there are children starving overseas.” It turned out it wasn’t a joke . . . nor is it now . Thousands, probably hundreds of thousands, of children face starvation. The governments of the rich food growing countries tell governments of the poor developing countries that there simply is not enough food to go around Sticks Limited Don Paarlberg, an economist of the agriculture department, was questioned recently by Asian newsmen about prospects for getting U. S. food relief to countries in immediate dire need "There are very limited stocks presently," Paarlberg said. "You can’t fed people out of nonexistent shocks.” Reviewing t’rre world food situation. Paarflberg said "the average main in the less developed country eats better than his father did.” In the past, there wt*re problems "we weren’t aware of because we didn’t have all this communication.’*’ he said "We are sensitized.” Indeed, e&amples of some of the oversells hunger that Mom vaguely h«>ard about can be seen on television almost every night, subject to film availability and editors’ choices. Now th*'re’s a new version of Mom. Rather than advising, "Clean up your plate,” she urges; "Eat less." This gray haired British lady is a kind of fairy godmother to millions of the world’s most impoverished children, most of whom have probably never heard her name. Her name is Barbara Ward After making public pleadings, buttonholing politicians, and generally trying to remind the leaders of the affluent world that they ought to do something about the less fortunate, she is turning to the families — the average citizens in the industrial world. Restraint "Look," she said on a recent swing through Washington, "the kids out there are dying.” Regents Favor Acceptance of Donated Farm COUNCIL BLUFFS - The State Board of Regents has recommended to toe Iowa executive council the acceptance of a 285-acre Hamilton county farm for Iowa State university. The board action came at its meeting here last week. The farm, located a half-mile east of Williams, is a gift to the university from Jessie V. Coles of Greenbrae, Calif , a 1915 graduate of the ISU college of home economics. Dr. Coles made the gift in memory of her parents, John Wesley Coles and Eda e. coles. She said she wants the farm to be used "to assist education and research in agriculture.” She acknowledges a sentimental interest in the farm because she had grown up there in the early 1900s Dr. Coles was on the faculty of the University of California at Berkeley w hen she retired in 1981. Under the terms of the gift, proceeds from the farm are to be used to aid research or provide scholarships in agriculture until the year 2000. The present tenant is also to Ik* retained until that time if he so desires. After the year 2000 the university may dispose of the farm or use the proceeds from it as it sees fit Analysts Predict Upturn In Tiiqht Wheat Reserve "Why don’t families with an income above a certain level exercise a voluntary constraint on food consumption, say Kl percent reduction?” That would create instant stocks, she said "You can’t help being rich; you can’t help being consumptive,” she told a handful of American congressmen recently, pointing out that efforts to help the underdeveloped world won t work without American support. "If you’re 41) percent of the world economy, you can’t take yourself out.” she said Her message: Don’t put so much on your plate; there are thousands of children overseas who are literally starving. - WB.I ii Slater Holstein Recognized as Iron Grandma' OLIN — A registered Holstein owned by Jay Slater of Olin has been recognized as an "iron grandma” of the Holstein breed for producing over HNI tons of milk The cow, (.’loverbrook Master Dotty 4889717, produced nearly I OO. OOO quarts of milk during her lifetime. Her output stands at 221,685 pounds of milk and 8.158 pounds of butterfat By Bernard Brent*-r WASHINGTON ((UPI) — The nation’s shrunken wheat reserve is about to show an upturn for the ‘first time in three years, reaching a more comfortable total of 533 million bushels by mid-1975, agriculture department analysts said this week. The report ws.s issued on the heels of a formal government estimate that The 1974 winter wheat crop Would reach a record I 612 bullion bushels — when farmers, complete a harvest which already has begun in southerly parts of the wheat belt. Experts said that if spring wheat production reaches the potential indicated by March planting intentions, the result would be a total 1974 winter* spring w Neat crop of 2.172 billion bushels. The new total is 99 million bushels above previous forecasts a nd by far the largest in history, dwarfing last year’s record of 1,711 billion bushels. Experts said that when the 1974 crop goes to market in the year strafing July I, they can foresee demand for 810 million bushels in U S. food and livestock feed markets compared with 784 million bushels in the current season. But export sales are expected to drop to I billion bushels compared with this season’s record of 1.2 billion bushels. The predicted total demand in the new season of I 81 billion bushels, subtracted from the predicted crop of 2.172 billion bushels, would leave 363 million bushels to add to carryover reserves on July I, 1975. The reserve would then reach the 533 million-bushel mark. IT S THE SEASON FOR GARAGE SALES GET RESULTS WITH A CLASSIFIED AD DIAL 398-8234. Schwartzhoff Heads Soil Commissioners WAUKON—John Schwartzhoff has been re-elected chairman of the Allamakee county soil conservation district. Other officers elected include: Lloyd Median, vice-chairman; Leon Schoh, treasurer. and Mary Winters, secretary. Force for Peace American agriculture abundance is a powerful force for world peace. American farm products are helping relieve hunger and are promoting economic growth in newly developing countries as well as alleviating widespread famine. Steffens Cow Has Top Record DECORAH — Erbie Steffens of Decorah had the highest record cow in the Dairy Herd Improvement Assn. program for the 10-month period ending in March. His registered Holstein completed a record of 20,500 pounds of milk and 790 pounds of butterfat, according to Duane Engelhardt and Oscar Lembke, DULA supervisors in Winneshiek county. The second high record, completed on the Ernlo Holstein farm of Ossian, was 769 pounds of butterfat. A cow in the McClintock and Ryan herd of Decorah had the other 700-pound record at 711 Town Novi One Failure Could Set Off Food Shortage UNITED NATIONS, N. V. (AI*) — The head of the Food and Agriculture Organization says that a crop failure this year in just one major producing region “would cause a widespread food shortage.” Director General Addeke IL Boerma said although most wheat crops look good, reserve stocks are even lower than before and “the world will depend for its grain supplies on this year’s harvests more than in any year since 1945.” In a prepared speech, he said the most dangerous possibility was "a shortfall in the vital Asian rice crop later this year if there is not a heavy enough monsoon.” Ile said his organization was thinking of what governments could do to meet such contingencies. Boerma was among speakers at the opening session of a conference on the role of international organizations in the food and energy crises, sponsored by the Aspen Institute for Humanistic Studies, the Overseas Development Council, the Institute on Man and Science and the Kettering Foundation. The unofficial conference, bringing U. N. officials and delegates together with experts, continues through Sunday. RENT A NEW PIANO $ IA00 Per Month Only IU No Cartage or Drayage subject to office approval Ail Rent Will Apply lf You Decide To Buy! TK KL TS available at Hilthrunner Musk Co (or all coni errs ut Muncher Vuditorium, University of Iowa ll I ETHIC IWK It** IIC SECOND STREET SE USDA Budget About 62 percent of the S. department of agricul-ire budget for 1972 was used ir programs that were not rictly farmer oriented such I foreign relations, defense, md distribution and nprovement of natural •sources. Froo checking with no tory leo charges and na gimmicks. For personal and business accounts. Another tree service from the Home of the Free. DR. CRAVEN Of HUST PUAC TIC! UM! TED TO DENTURE WORK I I J I rf Ay* ST C*dof ii lo D*t Mor>*» * Mot CKI Gfy City_ GUARANTY BANK & TRUST CO. 3rd St. & 3rd Ays. Downtown • 1819 42nd St. NE 191 Jocolyn Dr. NW Phone 362-2115 FACTORY TRAINED SERVICE Opart Mom. and Thor*. 'Til 9:00 P M PEOPLES I Ulti'ill! 215 1st Ave. SE Phone 366-2436 from home eating during Hie jiast decade have been a third greater than for processing," the analysis found Over-all, grocery buyers spent $18 billion more on I .S farm foods last year, while farmers received $12 billion more than iii 1972. For only the second time since 1951), returns to farmers rose more than marketing costs, it said Other Facts Among the other facts compiled and analysed by the I SDA team The higher prices farmers received accounted for nearly 75 percent of the increase iii the retail prices as tile farm value of the surveyed goods rose 33.5 percent. The over all farm-to retail spread rose slightly faster than general inflation, at 6.5 percent higher than 1972. All marketing — transportation, processing and distribution — rose 7 8 jiercent while labor, as the major component part, rose 8 percent. The greatest price increase at the farm level was for poultry and eggs, 77 percent higher than 1972. The retail and farm prices and farm-to-retail spreads were all above average for meat, poultry, eggs and fresh vegetables Although the price spread for fats and oils fell 4.9 percent, the retail price rose It).7 percent on the strength of a 53.6 jwr-eent boost at the farm level Bakery and cereal products went up 18.3 percent at the farm level and 11.3 percent in the supermarkets, lint the middlemen’s spread, for bakers and millers, rose only 3.9 percent. Summer Events Involve 4-H Members from Linn The Linn county 4-H extension youth committee has selected award winners to attend out-of-county events this summer. The winners include: State 4-11 Conference — Barb Green, Carolyn Henderson, (’indy Stark and Diane Visiisei, Cedar Rapids; Debbie Becker, Center Point; Ed O’Connor and Connie Powell, Central City; Suzanne Brinner, Janice Christensen, Julie DeWoody, Laurie Jordan, Paula Martin, Julie Scott, Patsy Stephens and Nancy Westbrook. Marion; Joann Lawrence, Mariann Lawrence, Monticello; Patty Cribbs, Dean Mallie, Steve Scott and Diane Viktor, Mt. Vernon; Gayla Bentrott, Springville; Randy Rommann. Walker, and Bill Schrader,i Walford. .Washington Citizenship Short Course — Barb Green, Mike Dohnalek, Carolyn Henderson and Cindy Stark, Cedar Rapids; Debbie Becker and Keith Kadlec, Center Point; Karen Boss, Coggon; Wayne Jones and Tim Mackey, Ely; Joel Frederick. Lisbon; Janice Christensen, Donna Foley. Douglas Jordan, Laurie Jordan, David Martin. Paula Martin, Reagan Robinson, Julie Scott, Patsy Stephens and Mark Jordan, Marion; Brian Kirkpatrick, Dean Mallie, Steve Scott and Diane Viktor. Mt. Vernon; Becky Merritt, Brad Merritt and Mark Nie-tert, Springville; Joe Eiala, Walker; and Bill Schrader, Walford rd. ( amp delegates include: ..('amp delegates State leadership camp — Patsy Stephens, Marion, and Bill Schrader, Walford; conservation camp Lettie Olmstead, Toddville’ and co operative leadership camp Diane Visiisei, Cedar Rapids, and Brian Kirkpatrick. Mt. Vernon. Other summer camping experiences planned this summer include a junior day camp and an interstate 4-H exchange with Colorado. The day camp will be held June 20 at Pinieon Ridge, Central City, and June 24 at Palisades Kepler state park, Mt Vernon. The interstate exchange trip will In* conducted from June 27 to July 2. Ready for Pickup The Iowa Conservation Commission has delivered a load of trees and shrubs to Palisades-Kepler State park near Mt. Vernon for those who have ordered the plants earlier this spring. They can In* picked up by contacting Roil Williams, park ranger, at 895-8039. Visit Now York tonight by long distance Travel the USA for 75 0 (or less) Any weekday after 5 p.m. and all weekend, you can trave! by phone out-of-state and talk 3 minutes for 750 or loss on calls you dial direct.* •Dial it yourself rates apply on all interstate dialect calls (without operator assistance) Irom business or residence phones anywhere iii tho contineu tat US (except Alaska) and on (ails placed v»ilh an operator where direct dialing facilities aru not available Dint direct rales do not apply to person-to-person, coin, hotel guest, uedil card and collect culls, and on calls charged to another number A little monoy still goes a    ..    .    _ long way on the telephone. Northwestern Bell / ;

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