« PreviousContinue »
Again, on similarity: Chickens, grade A fryers and broilers from the Del Mar Virginia Peninsula which pay market price. I am sorry that Congressman McIntire is not here, but for the same quality U. S. Government grade A or the top quality frying chickens from Maine we pay 2 and 3 cents over the market.
The same chickens from the Del Mar Virginia Peninsula with a broken breastbone, a broken wing, or a bruised skin, may be bought 2 cents below the market.
So when anyone buys them and eats them they all taste fine, but they do not look alike.
I am interested to see that the farmers make a profit and make some money, so that they do not come running to the chainstores, the supermarkets, and the independent merchants for help, because they do.
And why does that affect us because these campaigns are planned in advance. Last year they wanted us to go all out on pork. Well, if we are going to have a pork sale next Wednesday we buy our pork the previous week. The big operators buy their pork a month in advance, 3 weeks in advance, but we are all going to put it in a pork campaign. When we go into the market to buy pork the price has gone up. That has happened to us on all campaigns to help farmers, whether they were potatoes, or orange growers. Right now we have the most ridiculous one of all, to give the pea packers—the dry-pea packers-help to support the thing.
I have here the report which shows some of the differences which I am sure that you have seen. This gives the market, and this is yesterday's, October 8.
California Bartlett pears went from 5.45 to 7.20.
Believe me, many of these fruits look alike. I do not know if the spread between what the farmer receives and the consumer pays is too high. For me the above sentence is too vague. What farmer? What crops! Where does the farmer live? What is included in the farmer's income? Are subsidy payments included? Are soil-bank payments included! Why not include all of the money spent to buy and store surplus crops? Without this support prices might still be lower.
I posed these questions to Dr. Wilcox and some other members of the committee and I was told that subsidy payments, soil-bank payments, and so forth, are included. I didn't know that. This I do know.
Mr. Anfuso. You have been doing yeoman service in this field, and we are grateful to you and we hope that you can come to see us in Washington.
Mr. BILDNER. Any time at all.
(The prepared paper by Mr. Bildner, together with excerpt from the Producers' Price-Current are as follows:)
[Producers' Price-Current, New York, Tuesday, October 8, 1957]
PAPER PREPARED BY JOSEPH BILDNER, PRESIDENT, KING'S SUPERMARKET,
IRVINGTON, N. J. "I don't know if the spread between what the farmer receives and the consumer pays is too high."
The above sentence is too vague.
What farmer? What crops? And where does the farmer live? And what is included in the farmer's income?
Are subsidy payments included ? Are soil-bank payments included? And why not include all the moneys spent to buy and store surplus crops? Without this, support prices might still be lower.
This I do know:
The food retailers, independents, supermarkets, and chains are operating on the smallest profit of any industry.
Nobody, but nobody, works on an average profit of 1 to 2 percent per dollar of sales. This was accomplished by the American self-service supermarket. All over the world people are learning about the American way of life through the self-service markets. Last month a supermarket was opened in Yugoslavia.
I am proud to follow the trail blazed by Clarence Saunders and Michael Kullen.
"Do it yourself is a growing fad everywhere except in the kitchen.” House wives can do it, but they prefer to have it done for them.
When did you last enjoy some homemade grape jelly?
When did you last see a cellar with homemade dill pickles and a barrel of sauerkraut?
When did you last see jars of home-canned string beans or tomatoes in your pantry?
When was the last time your wife or mother made chili sauce or catsup or tomato paste?
In fact, when were you last served anything homemade?
I get instant coffee my maid doesn't like to clean coffeepots, and we have an automatic coffeemaker at home.
I like my eggs scrambled ; I get them boiled-my maid doesn't like to clean frying pans.
I like fresh-made hotcakes. I get frozen ones to pop in the toaster-my wife says they are better-the batter is better.
The only fresh vegetables I get at my home are in the salad family; lettuce, tomatoes, cukes, and celery. My maid and my wife can't be bothered shelling peas or lima beans, or with string beans, cauliflower, broccoli, or spinach. These vegetables we always get canned or frozen. The only ones who rate fresh vegetables in our home are my grandchildren. Grandma knows that fresh vegetables have something that growing children need.
We have an apple tree in our yard, but I get canned applesauce and canned baked apples. We use canned pineapple, canned peaches, canned pears. I am lucky they don't freeze or can watermelon.
The only time I get fresh-fruit salad at my home is when my son and his family come for dinner. My son likes fresh-fruit salad.
What do you think I said when I saw washed and cleaned sliced raw potatoes in our icebox? I blew my top. They retail at 2 packages for 33 cents—the farmer gets about 2 cents a pound—the consumer pays over 20 cents a poundbut they sell.
Here's the situation with working wives :
Women who work and have no maids are buying foods that are easy to prepare and foods that are ready to "heat and eat," such as frozen dinners, meat and chicken pies, cakes, desserts, and so forth.
How can I preach to others, “Don't buy prepared foods that cost more, that costs lots more do it yourself and save,” when I can't get it done in my own home.
Even during Thanksgiving and Christmas we sell very little fresh cranberries. Most cranberries are sold canned.
We don't even sell fresh fish in our stores; we only sell frozen. The frozen fish that we sell is all cleaned, no bones, no waste-it must be what the consumer wants. In the past couple of years, prepared fish sticks that only require heating are our best sellers. In fact, most of the frozen fish may be a better buy than fresh fish.
In our markets we can't even sell fresh beets.
Do you know we sold canned water? Actually, this water was intended for emergency use, but was bought by some fishermen and hunters.
Do you know we sell canned iced tea? Some women find it easier to buy this product. All they have to do is add ice cubes.
Some wives would rather buy these convenient foods than hire cooks or other help. If they hired a cook, they could buy flour and bake their own bread and cakes. They could buy chickens and clean them, and so forth. But even the cooks quit if there is too much cooking. Even the cooks don't like to bake; they prefer to use a ready-baking mix. They even prefer frozen pies, frozen cakes; in fact, most cooks prefer anything that is ready. Cooks don't like to cook.
On the retail level, price is only one of the many reasons why consumers shop at any particular food market. There are consumers with all kinds of tastes, small and large incomes, etc. There are all kinds of stores catering to these customers' tastes. Many customers want personal service such as telephone and delivery and charge accounts. Obviously they pay more for the same merchandise than those who buy self-service and take it home themselves.
Shelf-service supermarkets have reduced the cost of doing business an average of 25 percent in the past 25 years. All these savings have been passed on to the consumer in lower prices. All segments of the food industry are to be commended for this achievement.
It isn't enough to compare prices paid to the farmer with prices paid by the consumer. Mrs. America has developed an excellent taste. She wants top quality. Mrs. America wants leisure hours for outside interests. Many other costs not apparent at first glance add to the final price paid by the customer.
For example, at Riverhead, Long Island, the farmer sells his potatoes at approximately 2 cents per pound. This means the farmer gets about $1 for a 50-pound bag—which is supposed to pay for planting, growing, harvesting, bagging, and cost of the bag, too. It costs approximately 20 cents to bring these potatoes to one of our markets. Our cost laid down is then $1.20. Our retail price will range from $1.39 to $1.49, under 3 cents per pound. However, modern housewives prefer to buy frozen french fries with a retail price of 32 cents a pound.
We have just taken in a new item which is somewhat more reasonable. These are ready-to-fry sliced potatoes which sell for about 20 cents a pound. Compare both there prices to the cost of bulk potatoes.
Let's look at frying chickens. Live chickens from 312 to 4 pounds cost 18 cents per pound and sell for about 23 cents per pound.
Let someone else do the plucking and buy them New York dressed and the cost is 23 cents per pound and the retail is 29 cents per pound.
Most chickens today are sold eviscerated and someone else has done the cleaning, too—the cost rises to 33 cents per pound and the retail is 39 cents per pound.
Chicken production is 5 times what it was 10 years ago-controlled quality, evisceration, constant merchandising and promotion by chainstores, supermarkets, and independents has moved this quantity.
Since many women want to shop and cook at their convenience, frozen poultry is becoming more popular.
For the convenience of having a frozen chicken the cost rises to 49 cents per pound and the retail to 59 cents per pound. Some housewives want only the select portion. Frozen breasts cost 73 cents and retail as high as 95 cents per pound. Those who prefer just chicken drumsticks are willing to pay 99 cents per pound.
The spread is small on many frozen food items such as fish and vegetables. With increased consumption, the price of frozen chickens will also come down.
Turkeys: Without evisceration and freezing, our industry could not begin to move the tremendous amounts of turkeys that we produce.
Now let's look at quality, the only kind of eggs we sell at Kings are New Jersey grade A (with seal) eggs. We pay 61 cents for large white eggs and sell them for 69 cents. Our gross profit is in about 10 to 12 percent. We buy these eggs from a dealer at 11 cents over the market; 61-cent eggs delivered to us were bought from the farmer for 50 cents. Now let's see what the dealer did for this 11 cents. He inspects the eggs, discards the blood spots and cracks. This costs him approximately 4 cents. He puts the eggs in a carton at a cost of 244 cents. He delivers the eggs to the stores at a cost of 112 cents. He puts the eggs in an egg crate at a cost of 12 cent per dozen. His overhead is 142 cents per dozen. The dealer's total cost is 934 cents, leaving him a profit of 144 cents per dozen. When mama used to buy eggs directly from the farmer all of these extra costs were avoided—but let's face the facts—she didn't get the consistent quality and the eggs she had to throw out more than made up for the difference that she pays today.
Our butter is Government grade A and grade AA. On 92-score grade A butter we pay 314 cents over the market. This means our processor buys the product, stores it, rolls, wraps, and delivers it to our stores for 344 cents per pound. We sell butter which costs 661/4 cents for 71 cents—approximately 5. to 6 percent over the market. This butter bought at 6734 cents retails for 75 cents.
Armed with this information, one has to look at the so-called "price spread" quite differently than the uninformed bystander. The supermarket has done a great service to the country by uplifting the quality standards, and the health of the Nation has benefited. Convenience foods have made it possible for: women to be emancipated from the drudgery of the kitchen and has allowed them leisure time for many other productive pursuits.
Without these conveniences many married women would be unable to hold the jobs they have. The convenient foods have made it possible for women to earn money—which is spent for cars, appliances, television, etc. A very famous businessman defined a bargain as being bargain when the customer gets exactly what she wants and in terms of quality and convenience Mrs. Consumer's greatest bargain can be found in the food markets of today.
Mr. ANFUSO. Let me introduce into the record this telegram which has just been received, addressed to me as chairman of the Consumers' Study Subcommittee of the Committee on Agriculture. I quote the telegram :
Skyrocketing consumers prices indicate the need for extensive Government surveillance and continued activity of your committee. It is not healthy to see the housewife paying ever-increasing prices at a time when the price to the farmer is being continuously depressed. I urge and emphasize the need for diligent and intensive examination in the spiraling increases in price of all foods with a special emphasis upon milk and bread. Respectfully,
SENATOR JAMES J. CRISONA. I might say that Senator Crisona has been for many years interested in the plight of the housewife and has been very much disturbed in the senate of this state as to the increased cost of living and we are grateful to him for the contribution which he has made to our committee.
If there is nothing else, this committee stands adjourned.
Let me thank you on behalf of every member of the committee for coming down and cooperating with our efforts.
Thank you very much.
(Without objection by the chairman, the following communications and statement submitted to the subcommittee are inserted in the record :)
Food INDUSTRY ALLIANCE, INC.,
New York, N. Y., October 17, 1957. Hon. VICTOR L. ANFUSO, Chairman of the Subcommittee on Agriculture,
House of Representatives, Washington, D. C. DEAR HONORABLE CONGRESSMAN ANFUSO: As counsel and executive secretary to Food Industry Alliance, Inc., I should like to state for the purposes of your recent New York committee hearings, that the statement given your committee by Mr. Joseph Bildner of Kings Supermarkets, a member of this association, to the effect that "Mr. Unterberg does not represent my opinion or that of the majority of the members of Food Industry Alliance” is incorrect in the respect that Mr. Unterberg represents the opinion of the majority of the members of Food Industry Alliance.
Mr. Unterberg was retained to act as attorney for this organization for the purposes of investigating the trading-stamp practices as they relate to the food industry. It is definitely the opinion of the vast majority of the members, including those who now employ the practice of trading stamps, that trading stamps are an evil inflicted upon our industry and they definitely increase food prices and the cost of business operations.
Mr. Bildner had no authority to act on behalf of this organization. Our spokesman with respect to trading stamps is Mr. Harold Unterberg of the Law Firm of Unterberg & Unterberg, Esqs., of 52 Broadway, New York City.
It is the hopes of Food Industry Alliance. that you graciously incorporate this letter as part of the recent New York hearing of your subcommittee.
With sincere respect for your never ceasing energies and devotion for the people of the State and city of New York, I remain, Yours most admirably,
FRANKLIN H. KOCHMANN, Counsel and Executive Secretary for Food Industry Alliance, Inc.