—Lancaster Farming, Saturday, March’,3o,l96B.
26
Ammon Gives Positive Action Ideals
Richard I. Ammon, executive
director of the Northeastern
Poultry Producers Council re
cently presented his ideas on
the poultry situation at the
Southeastern Pennsylvania Poul
try Meeting at Quakertown. Am
mon’s topic was "Egg Produc
ers At The Cross-Roads. Which
Way Is Best?” His text where
he lists his five “Positive ac
tions we might take individually
and collectively as an industry,”
is reported in part as follows:
“ First is our started pullet
buying and selling practices.
While orderly buying and sell
ing are practiced in some areas,
too much of it is still quite spec
ulative. Too many producers
still take a chance on picking
up their replacement stock at
bargain prices buying pul
lets ‘off the shelf’ or, having en
tered into an advance order
agreement, think nothing of can
celing the order shortly before
delivery often for n<J better
reason than that they found
something that appeared to be
better or cheaper The practice,
of course, has been worked both
ways Sometimes started pullet
growers will renege on an order
because they found a higher
priced buyer On a falling egg
market, this practice becomes a
form of Russian roulette to see
who is stuck with the pullets.
And since no one can afford to
destroy 20-vveek old pullets, they
all find a home, they all produce
.. and thus contribute to over
production at the very time
when it hurts most
“As Harold Florea pointed out
in a recent editorial in Poultry
Tribune, the answer to this prob
lem is self-discipline and fair
play We’ve got to develop a
code of ethics in this industry by
which orders and agreements
are honored and a man’s word
is as good as his bond Produc
ers should order their replace
ment stock well in advance of
needs and on a firm agreement
which could only be cancelled
for certain specified, emergen
cy reasons. Pullet growers, in
turn should honor such agree
ments and discontinue ‘specula
tive’ raising
“A second positive action we
could take is to give up the spe
cial privilege accorded farmers
long ago of using the cash ac
counting system of bookkeeping
This was first proposed to the
industry at a summit confer
ence of industry leaders held in
Cincinnati m 1961 It proved
very unpopular then, but a lot
of producers have since come to
realize that cash accounting has
become an instrument of self
destruction for the egg industry
“When you are on the cash ac
counting basis and enjoy a good
year, it’s only good business
and perfectly legal business, at
that to make forward pur
chases of all manner of inputs
and pay for them in the current
tax year in order to reduce your
tax obligation Theie is consid
erable evidence to indicate that
this was at the bottom of much
of the expansion that took place
in 1965, 1966 and 1967
“On the other hand, produc
ers who use accrual accounting
may not be able to grow as rap
idly, but they will have a much
better chance of coming through
a period of low prices m sol
vent condition If producers were
gn en a period of time to change
over to accrual accounting with
out penalty, this stimulant for
expansion by tax postponement
would be removed As a result,
the whole industry would be
healthier and individual opera
tors would still retain their free
dom to make decisions and to
grow
‘ A third positive action also
comes under the heading of ‘self
disciphne’ It has to do with re
porting, tabulating and dissem
ination of "production and mar
keting statistics. USDA statisti
cal reports are used throughout
the industry for literally thou
sands of decisions daily. I be
lieve the government’s statisti
cians are honest men who are
trying to do the best possible
job. That’s not to say that USDA
reports and the techniques used
to produce them can’t be im
proved. My pet gripe is that in
this day of computers and all
kinds of electronic gadgetry, we
still have to wait nearly two
years for the agricultural cen
sus reports.
“More importantly, though, is
the admitted inaccuracy of
many of the reports. Statisti
cians can only compile and re
port what’s given to them and
today a large volume of eggs
completely by-passes the dealers
and handlers who report the sta
tistics. In addition, there are a
number of sizeable operators
ivho refuse to report anything,
to say nothing of the long-held
suspicion of many that some de
liberately distort the reported
figures.
True or not, the fact remains
that inaccurate reports upon
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which important business deci
sions are made are worse than
none at all. So it seems to me
here might be another plank for
our platform of ethics. But let’s
go one step further and sit down
with the government statisti
cians in an honest effort to im
prove the reporting, tabulating
and disseminating of production
and marketing statistics.
“My fourth suggestion for pos
itive action has to do with our
egg price discovery system and
price reporting by Urner-Barry.
Seems to me that all most folks
have done in recent times is
damn the system without sug
gesting a really workable alter
native. A recent top-notch sci
entific study of the New York
Mercantile Exchange and Ur
ner-Barry’s reporting indicates
the system has been remarkably
accurate in consistently ‘discov
ering’ or developing true mar
ket value for eggs Now that
doesn’t mean it’s perfect, but it
does indicate to me that the
least we should do is stick with
the system and try to improve
it.
“There are a number of things
we could do For example, while
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they still leave much to-be de- other a.lot more'than was ever
sired. Right now, NEPPCO,* in -the case in the past. I commend
cooperation with our southern these men and would hope .that
friends, is attempting to haVe before long we could establish a
thd quality standard for the top whole chain of such clearing
grade of eggs traded on the Ex- houses across the country.
change upped to 90% Grade A „ My fl(lh and linal proposal
or better. It s now 80%. With a f or positive action concerns our
‘f ( P r “ e ; we 1 probably cooperatives. I know this still
get 85%. But if all the produc- raises the fur of some of my in
ers who trade with New York dependenti commercial friends,
based Exchange members rais- but famep cooperatives are as
ed a ruckus, we d get it up to much a tof our fr „ enter .
90% in no time. We believe this prise syatem as any ot hfer form
would not only stimulate more of business entity. True> they
trading on the Exchange, but once were g ran t e d certain ad
would produce a price for a vantages oV er their independent
product -that m o r e closely re- competitors, but so were the as
sembles the quality of eggs be- lines and man other industries
ing traded throughout the coun- in - their forma tive years.
ry 0 ay ‘ “Unlike airlines, though, our
“Then there’s the problem of egg m ar k e t ing cooperatives
the’Urner-Barry market report- have never enjoyed outstanding
er. The more information he has growth .or success. The princi
available on inventories and egg pal reason, in my judgment, lies
movements across the country, with their producer patrons. In
the more accurate will be the too many cases, the producer
price he reports and the less used his co-op as a dump for
he will have to rely on Exchange eggs he couldn’t otherwise, sell,
and New York street trading for As a result, co-op eggs have not
his judgments. A group of egg had the best reputation in the
dealers in central Pennsylvania market place,
has been successfully operating “T hen, too, producers who
a clearing house for such infor- were elected to co-op boards of
mation for over a year. They directors were not business or
furnish this information regular- market oriented, they balked at
ly to Urner-Barry and in the (Continued on Page 27)
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