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Wholesale Distribution of Meat and Meat Products, with Special Reference to Omaha, Nebraska, As a Meat Packing Center Dissertati

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Wholesale Distribution of Meat and Meat Products, with Special Reference to Omaha, Nebraska, As a Meat Packing Center Dissertati WHOLESALE DISTRIBUTION OF MEAT AND MEAT PRODUCTS, WITH SPECIAL REFERENCE TO OMAHA, NEBRASKA, AS A MEAT PACKING CENTER DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State U niversity By REX VANCE CALL, B. A., M. B. A. The Ohio State University 1955 Approved by: Adviser Department of Business Organization ACKNOWLEDGMENTS The author is deeply indebted to his academic adviser, Dr. Theodore N. Beckman, whose assistance and advice has made possible the completion of the research for, and the writing of, this manuscript. Full acknowledgment is also made here for the suggestions and counsel of the other members of the reading committee, Dr. H. H. Maynard and Dr. A. J. Wright, in connec­ tion with the preparation and conclusion of this study. For direct aid in making the research, the author is indebted to William D. Hardy, Elwood G. Derrick, T. W. Wendell, Wayne S. Bartley, all executives of packinghouses, wholesale or retail establishments in Omaha, Nebraska, who furnished much of the data used in this study. ii TABLE OF CONTENTS Page LIST OF T A B L E S ...................... ,................ vii LIST CF CHARTS . ...................................... Xi Chapter I. INTRODUCTION * ......................... 1 Purpose of the Study Need for the Study Scope of the Study Objectives of the Study Methods Used in the Study II. THE MEAT INDUSTRY IN THE UNITED STATES * . 6 Centralization and Beginning Large-Scale Industry 10 Decentralization of the Industry ........ 11 Factors Leading to Decentralization .... 15 Increased Use of Motor Trucks; Develop­ ment of Market Information; Standardiza­ tion and Grading; Increased Technology in Refrigeration; Direct Marketing of Live­ stock. Present Location of the Industry.. 22 Relative Position of the Meat Packing Industry Among United States Industries » ........... 27 Production Workers............... 27 Cost of Materials............... 31 Value of Product ..................... 32 Value Added by Manufacture ............. 33 Importance of Meat Packing in Leading States . 34 III. THE MEAT INDUSTRY IN OMAHA, N E B R A S K A .... 36 iii Chapter Page Livestock Market ..................... 36 Establishment and Growth............... 37 Relative Importance of Omaha as a Live­ stock Market........................ .. 40 Quantity as a Basis; Quality as a Basis Packing I n d u s t r y ........................... 46 History and Development............... 46 Present Status of the Industry .......... 49 Omaha's Packing Plants ................. 55 Meat Distribution . ..... 59 IV. CHANNELS OF DISTRIBUTION OF MEAT PRODUCTS IN OMAHA 63 Packer-to-Retailer-to-Consumer Channel .... 63 Territory Served ..... ............. 64 Competitive Aspects ............. 69 Competition on Basis of Price .......... 69 Competition on Basis of Service ..... 72 Packer-to-Wholesaler-to-Institution or Retailer- to-Consumer........................... 75 Share of Wholesale Business 75 Typical Wholesalers . ................. 79 Competitive Aspects ................... 81 Packer-to-Institution-to-Consumer , .......... 82 V. TRANSPORTATION OF MEAT PRODUCTS............... 86 Relative Usage of Rails and Trucks ...... 86 Use of Trucks for Transportating Meat and Meat P r o d u c t s ....................... 95 Advantages of Using Trucks ............. 106 Disadvantages of Using Trucks .......... Ill Use of Rail Transportation for Meat Products . 112 Effects on Wholesaling..................... 117 VI. SPECIAL PROBLEMS ARISING FROM SELF-SERVICE, PRE­ CUTTING AND PACKAGING ' 120 iv Chapter Fage Self-Service .............................. 122 Influence on Buying Habits of Retailers . 129 Quality; Prepackaged Products; Branded Merchandise; Quantities; Time of Purchase and Delivery, Influence on Packers ................. 133 Attitude of Labor Union ............... 138 Precutting and Packaging ................... 139 Retail Level...................... 139 Ivholesale Level ......... 143 Packer Level ........................... 145 Advantages of Precutting and Packag­ ing at Packer Level; Disadvantages of Precutting and Packaging at Facker Level, VII. SPECIAL FROBLSL.fl ARISING PRO'-' FREEZING MEATS . 155 Frozen Food Locker Plants ................. 155 Freezer Food Plans and Home Freezers ..... 160 Freezer Food Plans......... 160 Home F r e e z e r s .................... 162 VIII. SPECIAL PROBLEMS INCIDENT TO GRADING AND INSPECTION 165 Grading ............................ 165 Grading of Beef; Grading of Hogs; Grading in the Packinghouses, Inspection ............ ......... 176 Federal Meat Inspection; Omaha City Inspec­ tion. IX. ORGANIZATION FOR DISTRIBUTION............ lSl Decentralized Sales Organization ........... 1&3 Plant Sales; City Sales; Car Routes; Credit Department; Traffic; Local Delivery; Order Handling; Selection and Training Salesmen; Buying Livestock; Buying Supplies and. Equipment. v Chapter Page Centralized Sales Organization . ............ 193 Product Divisions] Sales Departments. X. SUM&EY AND CONCLUSIONS....................... 200 BIBLIOGRAPHY........................................ 230 vi LIST OF TABLES Number of Meat Packing Establishments and Total Value of Product, United States, 1848-1947 ........ 12 Federally Inspected Slaughter: Regional Distribution Hog Slaughter at Principal Markets and. at Other Points in Corn Belt States, Fiscal Years 1920, 1925, 1930, 1940, and 1945 ................................... 14 Rural Roads in United States— Approximate Mileage, 1821 - 1951 ....................................... 17 Total Value of Livestock in United States Per Cent by Divisions ......................................... 24 Rank in Quantity of Specified Items of Livestock Pro­ duction or Sale, by Divisions, 1949^ 1944* 1939 • . 25 Total Livestock Slaughtered in the Corn Belt States, 1948-1952 ......................................... 26 Total Livestock Slaughtered in Selected States, 1948-1953 ......................................... 28 Total Cattle Slaughtered in Selected States, 1942-1953 ......................... .......... 29 Relative Position of the Meat Packing Industry Among United States Industries, 1937-1951 . ...... 30 Importance of Meat Packing Industry to the Economy of Thirteen Leading States According to Number of Employ­ ees, Salaries and Wages, and Value Added by Manufacture 35 Livestock Movements in the West (in carloads), 1880-1882 .................................... 37 Total Receipts and Shipments of Livestock in the Union Stock Yards, Omaha, Nebraska, 1884-1292 ....... 39 Total Receipts of Livestock in, and Ranking of, Lead­ ing Livestock Markets, 1921-1953 • • .............. 41 vii Table Page 14. Total Receipts of Cattle and Calves at Chicago and Omaha Public Markets, 1947-1953 ............... * ♦ • 42 15. Beef Steers Sold for Slaughter at Chicago, Omaha, and Sioux City by Grade, 1952-1953 ............. • 43 16. Disposition of Livestock at Omaha Public Markets and Total United States Slaughter, 1900-1053 ...... 47 17. Relative Importance of Leading Packing’ Centers Accord­ ing to Selected Criteria, 1947 51 18. Livestock Slaughter at Nine Leading Packing Centers, 1950-1953 '................ 52 19. Meat Products Manufacturing by Employment, and Report­ ing Units, Nebraska and Pouglas County, First Quarter,- 1 9 5 1 ......................................... 54 20. Monthly Employment and Total Wages in Meat Products Industry in Nebraska, 1948-1953 . 54 21. Meat Packers Classified According to Selected Criteria, Omaha, Nebraska, 1954 ............................. 68 22. Disposition of Livestock from Stockyards to Local Packers, Omaha, Nebraska, 1951-1953 • 70 23. Number of Packinghouse Salesmen and Method Used in Contacting Customers, Omaha, Nebraska, 1954 ....... 73 24. Merchant Wholesalers of Meat and Meat Products in Selected Metropolitan Areas, 194$ .................. 76 25. Wholesale Establishments in the Meat Industry in Omaha, Nebraska, 1939-1948 78 26. Percentage Change in Receipts of Livestock by Truck and by Rail, All Public Markets and Omaha Public Market, 1930-1953 ................................. 87 27. Truck Receipts as Percentage of Total Receipts of Livestock at Principal Public Markets, 1939-1950 . 89 28. Changes in Percentage of Total Unloads or Receipts by Truck, of Livestock at Principal Markets, 1939-45 Peak to 1950 90 viii Table Page 29. Number of Tons of Animals and Animals Originated by Class I Railways in the United States, 1947-1953 • • 91 30, Drive-in Receipts of Livestock as a Per Cent of Total Receipts at All Principal Markets and at Omaha Market, 1951-1953 92 31» Livestock Received in Omaha Market by State of Origin and Type, 1953 96 32. Livestock Shipped From Omaha Livestock Market by Truck and by Rail, 1950-1953 97 33* Disposition of Livestock From Omaha Livestock Market by Destination and Type, 1953 97 34. Percentage of Meat and Meat Products Transported by Truck and Rail in Normal "Wholesale Area Surrounding Omaha, Nebraska, 1940-1953 . ...................... 102 35. Comparison of Carload and Truckload Rates on Fresh Meat and Packinghouse Products from Omaha, Nebraska, to Selected Shipping Points, 1954 .................. 108 36. Number of Tons of Selected Animal Products Originated by Class I Railroads in the United States and Central Western Region, 1947-1953 ....................... * • 114 37. Meat Markets and Combination Stores (Groceries and Keats) in Nebraska, 1929-1948 122 38. Number Self-Service Meat Stores in United States, • 1948-1952 ......................................... 124
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