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Show TSJjivestockJ Los Angeles, April 30, 1934 Hog prices have suffered severe decline in values during the present month, largely due to the inability of the meat packers to merchandise pork and pork products at a profit, after paying the producers, transportation agency and the federal processing tax. As the matter now stands, with good butcher hogs selling at less than $3.50 a cwt. in the middle west, the processing tax . of $2.25 a cwt. means a tax far in excess of fifty per cent of the market value of live hogs. While it is very evident that the rank and file of pork producers are favorably inclined toward the agricultural agri-cultural adjustment administration, many producers are of the opinion that the processing tax should be sharply reduced. Producers understand under-stand that the cost of the hog control program niust be paid for out of I funds derived by the processing taxes. Yet there is a growing feel-, feel-, ing that the tax should not exceed I $1.00 a cwt. until hog prices have i shown considerable advance. Yet, as ! the situation now stands, it is esti-I esti-I mated that it would take two years at the present rate of processing tax to foot the control and reduction bill. It is doubtful if purchasing of hogs by federal agencies, in order to force hog prices higher, would actually work out to the best interests of the hog growers. When price's of pork are so high as to be out of line with other competing food products, it might very well mean that the public will be weaned away from pork, possibly pos-sibly resulting in permanent loss of consumer interest and buying. It may be found that some products competitive to pork will have to carry compensation taxes, and probably prob-ably this is fair, inasmuch as under the present conditions, other foods, not subject to high processing taxes and thus cheaper in retail 'shops probably are enjoying public favor. Hog growers are discouraged over the present situation. Here on the Pacific coast, packers are cutting down on hog slaughter and are finding find-ing it very difficult to move pork, j Prices have dropped to a very low j level, with best grain-fed hogs now quoted on the Los Angeles market at $4.25, no higher than the extremely low level of a year ago. Yet the price of pork to the consumers is much higher than a year ago, due to the fact that, with $2.25 processing tax added, the cost of the live hog to the packer stands at $6.50, an increase of more than fifty per cent over a year ago, when there was no processing tax. j It must be understood, of course, that the federal program is calculated calculat-ed to reduce hog numbers which eventually should rid the market of burdensome surplus and thus bring I about some permanent betterment in values. It should also be borne in mind that, while hogs are now being sold for the most part at less than production costs, the more than one million growers who signed contracts should soon begin to receive benefit payments, the first payment to be $2.00 a head on the 75 per cent of the number marketed during the past two years. The total payments will be $5.00 per head, less administration costs. n |