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' , CANADA PACKERS LIMITED REPORT TO SHAREHOLDERS The tenth fiscal year of Canada Packers Limited ended March 25th, 1937. Profit, after Depreciation, Bond Interest, and Income Income Tax, is $1,522,662.69 Equivalent, on 200,000 Shares, to....$7.61 per Share. Out of this sum it has been decided to distribute, as Dividends on the Common Shares, during the current fiscal year $3.00 per Share $ 600,000.00 The Profit applicable to the Common Shares is substantially higher than in any previous year. Shareholders may feel, in the circumstances, that a larger Dividend might have been justified. This was, in fact, considered, considered, but the decision was against, an increase because of the policy of Plant expansion to which the Company is committed. During the year .just closed, Plant extensions were made totalling , $1,067,030.72 and for the coming 1 year extensions have been authorized totalling approximately 1,150,000.00 In view of these heavy expenditures the Directors thought it necessary to conserve Working Capital, Shareholders may inquire whether so large a programme of Plant expansion was necessary. The answer lies in the fact that during the nine preceding years (i.e. since the Company was formed) net Plant expenditures expenditures had amounted to only $707,125.68 During all that time the main objective had been to build up Working Capital, which had increased from-- • 1927 .....$3,617,944.44 to 1936 7,042,457.71 Last year, it was decided to extend operations to the Pacific Coast, and as a first step a Plant was built at Edmonton, Alberta. This Plant cost approximately ., .$1,000,000.00 It is one of the finest industrial Plants in Canada, combining a beautiful beautiful exterior with high operating efficiency. Plans for the coming year include a new Plant at. Vancouver, B.C., also extensions and new equipment at several of the existing Plants. When this programme is completed Directors look forward to another period of rest in respect to Plant extension. Total Sales for the year were $72,699,519.48 Total Tonnage 774,270,797 lbs. The Net Profit (....$1,522,662.69....) is, therefore, equivalent equivalent to :-- 2,10% of Sales or to l]5c per lb. of product sold The above figures relate to total operations, including products other than those derived from Live Stock. On products derived from Live Stock, Profit is equivalent to: - 16.8c per 100 lb. i.e. l|6c per lb. ^ Sales increased from .$63,586,883.36) year ended March, 1936 to 72,699,519.48, year ended March, 1937 that is $ 9,112,636.12 .... or 14.3% Tonnage increased from .. ' 659,706,572 lbs. to.... 774,270,797 " that is,... 114,564,224 lbs. or 17.4% These large increases are due partly to new business deriving from the Edmonton Plant; also to increased exports of Bacon. But all Plants enjoyed an increased domestic volume, reflecting the improved economic conditions in Canada. That improvement, sc far as Agriculture is concerned, is indicated in the following table of prices of farm products. - ■ - FARM PRODUCTS Average Price - Month March . . Years 1930-1937 1930 1931 1932 1933 1934 1935 1936 1937 Wheat--No, 1 Northern Port Arthur $ .66=4 $ .63 $ .49 $ .68% $ ,81% $ .82% $1.40 Cattle---good Steers, 1,050 lbs. clown, Toronto .. Hogs--Bacons---f.o. b. .10.20 6,10 5.13 4.21 5.25 5.74 4.90 8.32 Ontario points . .12.75 7.19 4.40 4.61 8.36 7.43 8.15 8.16 Lambs--Good Handy-weig ;'hts, Toronto .11.86 9.21 7.30 6.42 8.47, 7.14 8.92 10.08 Hides--Native Packer Steers, Toronto . .131/2 .0914 .06 .0516 .08% .09% .13% .17 Tallow--Edible, Toronto . . .07=/* .05 .03% .03% .04% .07% .0578 .06% Wool--Lamb B, Toronto . . .29 .1714 .15 .15 .31 ,21 .35 .45 Over wide areas, Canadian Farmers are still suffering from a succession succession of crop failures. But in every other respect Canadian Agriculture has emerged from the. depression. The low point of the depression fell in the first quarter of 1988--i-e. just more than four years ago. It is difficult now, even to recall how bleak the outlook seemed at that time. Not only were prices of farm products at or near all-time lows, but there were heavy surpluses surpluses for which there seemed to be no external outlet,--at any price. That was particularly the case in respect of Wheat and of Cathie. All this is now changed. The surplus wheat has gone. At the end of the present crop year the carry-over will be less than in any year since 1926. And the price of Wheat (at Prairie points) is more than three times that of February, 1933. This disappearance of the overhanging surplus and the rapid advance in the price (and with it in prices of other Grains) was the signal which, to the Farmer, marked- the final passing of the depression. But this very event brought with it a complication in the Live Stock field:--particularly that of Hogs- Hogs are produced from Grains. The cost-of-production of the Hog is in direct ratio to the price of the Grains. Between March, 1936, and March, 1937, the price of Wheat advanced from .... 82c to .... $1.40 per bushel, and other'Grains in similar ratio. But the price of Hogs advanced not at all. This disparity in movement, as between Grain and Hog prices, presented presented a problem, to the Farmer which he had not had to consider for six years. Would he feed Hogs, or would be sell his Grain? The question became acute just at the beginning of the major breeding season, i.e., September. In that month Grains began a spectacular advance, and Hogs declined. The following table sets forth these prices,--Wheat and Hogs,-- (monthly averages), since March, 1936. Bacon .Hogs F.O.B. Ontario Country Points, per 100 lbs. $8.15 8.02 7.81 8.52 8.71. 8.89 8.13 7.66 7.24 7.86 8.18 7.93 8.16 March, 1936 ■_ April Wheat per bushel $ .82% .80% .76% May : June - .79% .92% July August - 1.02% September 1.03% October 1.10% November 1.08% December 1.20% January, 1937 1.24% February ■ 1.27 March :.%SS:S7Ï SSASSS 1.40 Under such conditions it takes some- courage breed sows (the progeny of which will be marketed from 10 to 12 months later), unless he has the necessary feed actually in his granary. Many Farmers,---perhaps most,--are not so situated. Hence there developed a good deal of hesitation, and since September there has certainly been some diminution in breedings. As to the extent of this diminution no statistics statistics are to be had, and the scale of it will not be known until the progeny arrive at the markets, July 1937, forward. On each farm the decision whether to breed or not to breed is an important one. It determines in advance that portion of farm operations for almost a year. (The litter is farrowed four months after breeding, and the Pigs arc marketed six to nine months after birth.) The f armer who breeds, thereby elects to market his Grain through the medium of Pigs. On the other hand, the decision not to breed, is equivalent to that of selling the Grain for cash. But the important factor to consider is clearly not the. relative price of Grain arid Pigs at the time the sow is bred. It is the average price of Grain for a period of 4 to 10|11 months forward, in relation relation to the price of Hogs on the marketing day (unknown) 10111 months away.* If, therefore, the Farmer seeks, at breeding time, to determine whether the sows should or should not be bred, he is faced with factors which are not known and cannot be known. But a study of the past comes to his aid, and enables him to base his decision on other and knowable factors. If a period of years is considered, it is found that, providing feeding methods are efficient, there is an assured assured Profit in continuously raising Hogs- This is not conjecture, but history. history. A Farmer cannot know, in the case of any particular litter, whether Hie Pigs will sell for a greater sum than the value of the Grain required to produce them- Nevertheless, he can be certain that if he feeds Hogs all the time, he will make a Profit, and a good Profit, as against selling his Grain. On the other hand, it is equally a matter of history that the in- and-out feeder generally gets in before a decline and out before an advance. (In discussions as to the Profit or Loss of producing Hogs, there is sometimes confusion on a most important point. During the last three years Hog prices have been high and stable. The low monthly average price for Bacons, f.o.b-, Ontario Country points, has been ....$7,14 per 100 lbs. The yearly averages have been as follows:-- 1934 7.85 1935 8.21 1936 8.10 The fundamental fact is that at such prices there is a sure Profit in growing feeds and converting those feeds into Hogs. It may appear that for a certain period prices of Grains may be high; and during that period, that Grains would sell for more than the Pigs which those Grains would produce. In such case the Farmer, if he feeds, would make less Profit- But he would not make a Loss. The feeder who does not grow his Grain, but buys it on the market, would make a Loss. For him. the fluctuations of the Grain market are a serious matter. But the Farmer who grows the feeds may continue producing Hogs in the assurance that during the life of the Ottawa Ottawa Agreement Hog production is the safest activity on the Canadian farm.) To the Farmer, therefore, who can count on the necessary feed, this conviction makes the problem a simple one. He need not even stop to consider whether he will or will not breed. But for the Farmer whose crops have failed year after year, it is a quite different matter. Without the Grain he cannot feed- The wide areas of crop failure of the last seven years have appreciably retarded increase in Hog production. Crop failures have in fact been the chief reason why Canada has not yet reached the Quota for Bacon allotted in the Ottawa Agreement of 1932. That Quota was the equivalent of 2,500,000 Hogs per year. Since 1932 there has been every incentive to increase Hog production. Prices have been high, and the Grain|Hog ratio favourable. And in spite of crop failures production has greatly increased. This is evident from the following table of Hog marketings and Bacon experts : *In the above discussion no mention is made of the other costs which enter into Hog production, including labour and plant overhead. These items are constants and therefore do not affect the argument, which has to do with fluctuating Grain prices. HOG MARKETINGS Month 1935 1936 % Inc. 1937 % Inc. January ... 297,325 275,553 -- 7.3 320,607 16.3 February ... 263,005 257,301 2.2 345,696 34.0 March ... 229,822 812,695 36.1 397,213 27.0 April ... 312,719 267,201 --14.6 337,236 26.2 May ... 228,556 275,376 20.5 June ... 204,540 310,686 51.9 July 226,147 .25 August „ 173,369 235,708 36.0 September ... 192,103 328,146 68.2 October ....S'. ... 287,855 375,081 30.3 November .......... 415,141 64.2 December .....Si. ... 301,631 471,468 56.3 Total ..2,969,311 3,745,498 26.1 BACON EXPORTS (In l terms of Hogs) January ... 113,378 100,473 11.5 134,864 73.9 February ...SS'S ... 123,043 92,088 -- 3.1 152,965 39.5 March .. 113,096 109,651 --25.1 138,146 50.0 April ,.. 69,549 77,547 --11.4 - 138,192 37.5 May .. 103,445 120,642 16.6 June 92,420 99,207 7.3 July .. 87,991 108,776 23.5 August L .. 68,791 96,128 39.7 September 51,978 92,014 77.0 October 54,328 115,818 113.1 November 95,936 130,495 36.0 December .. 62,107 146,902 136.5 Total .. 1,036,057 1 .,289,741 24,5 These figures give ground for thinking that if feed had been plentiful last Fall, and the Hog | Grain ratio favourable, Canada would now be well on the way towards filling her Bacon Quota in Great Britain. This question as to whether, (and how soon), Canada will achieve her Bacon Quota is the most important one in Canadian Agriculture. As to whether Canada will fill her Quota, there should be only one answer. For Canada is naturally, a Hog producing country, and this Quota gives her the opportunity, on the most favourable terms, of establishing herself in the greatest Bacon market of the world. / The opportunity lies in the fact that the Agreement permits her rapidly to increase shipments, and at the same time assures her a stable price. Such a situation never obtained before, and is inconceivable except under a Quota plan. At any previous time so rapid an increase in shipments would have brought about a drastic fall in price. But no fall has occurred, for the British plan is to keep the total quantity of Bacon approximately constant. As Canadian shipments increased, imports fro'm other countries were correspondingly correspondingly cut down. Canada's policy should clearly be to establish herself firmly while these conditions last. That Canadian Farmers have a grasp of the value of the Bacon Quota, is shown by their efforts to increase Hog production, ' But there is an element in the situation to which they are likely to give less thought than its importance merits, viz. ;--that time is of the essence of the situation, Canada is assured another three years of the Quota. Within that time it is most important. (a) That she take maximum advantage of the opportunity by filling the Quota. (b) That she keep in mind constantly the time will certainly come again when Canadian Bacon will have to compete, without preference, preference, with Bacon from Denmark and other European countries. countries. What will Canada's position then ho? Will Canadian Bacon he able to hold its place in such a situation? The answer hinges on a point which has received too little attention. It will depend upon, efficiency in breeding and Canadian feeding methods relatively to those of Denmark and other European countries. How do the efficiencies now compare? The answer brings us back to the fact that Hogs are produced from Grain or its equivalent. Exact statistics are not available, but the best informed view is that in Denmark, on average, 3% lbs. of Grain produce 1 lb. of Pig, whereas in Canada, on average, 5 lbs. of Grain are consumed in producing 1 lb. of Pig. In other words, that the cost of production in Canada as compared to Denmark is as , -- 5: 3% * i.e. as -- 20:15 i.e. as -- 4: 3 ' (Continued on Next Page) Factors In Live Stock Breeding A breeder of live stock is not exercising exercising wisdom or making the largest largest contribution to the development of farm animals when he takes into consideration only one or two factors in breeding. A great breeder takes in all factors. It is more difficult to develop a . herd of high producing cows of good type, strong and robust, than to simply produce a herd of good producers or of good form. We most thoroughly Relieve that all breeders Of dairy cattle should give the closest attention to the breeding of animals' that will be capable of making large records. B----3 Sunday School Lesson LESSON II God Provides A Leader -- Exodus 2: 1-22 ; 3:1-12 GOLDEN TEXT -- "Come now therefore, therefore, and I will send thee." Exodus Exodus 3:10. THE LESSON IN ITS SETTING Place -- The events surrounding the birth of Moses took place probably probably near the city of Tanis, one of the royal residences in the northeast of the Delta near the mouth of the Tani- tlc branch of the Nile. The call of Moses took place near Mount Sinai, located on the peninsula of Sinai: Time -- B.C. 1578--B.C. 1499. "Now Moses was keepinng the flock of Jehtro his father-in-law, the priest of Midian, and lie led the flock to the hack of the wilderness," That is, to the west of the wilderness, the east being in front. The wilderness was the tract of country south and west of Midian, reaching to the eastern eastern shore of the Gulf of Akaba. In these years of oblivion, when tie was quietly shepherding the flocks, there would be long hours during- every day when Moses would be by himself, face to face with nature and God, gaining mental strength and vigor from his contact with the simplicity and solemnity solemnity of nature. At the same time, he would be disciplining his body by spare and simple meals, by much constant constant walking in the open air, by the sleeping on the ground, short nights and early risings; while he invigorated invigorated his whole character. by communing communing with himself and with God, and by deep searchings of heart, sharp questionings of conscience, reflections reflections upon his past life and repentance repentance of his sins. "And came to the mountain of God, unto Horeb." (See also 4:27; 18:5; 24 13) Horeb and Sinai are throughout the Scriptures almost interchangeable This mountain is located on the peninsula peninsula of Sinai. The mountain may have had previous sacred associations but we do not know. It may have been called holy in this text because the writer knew of the great events that were later to take place on its sacred heights. "And the angel of Jehovah." We believe believe this to be none other than a manifestation of the Second Person of the Trinity, the Lord Jesus Christ. "Appeared unto him in a flame of fire out of the midst of a bush." This bush was a bramble bush, or a form of acacia. acacia. "And he looked, and behold, the bush burned with fire, and the bush was not consumed." It should be noted noted that the manifestation of God was not through the majestic oak or cedar, cedar, but through a common bush of the wilderness. "And Moses said, I will turn aside now, and see this great sight, why the busli is not burnt," Joseph Parker Parker lias suggestively arranged some of the words of this verse as follows: I will turn aside, and see -- Why not. And he remarks that many men turn aside to see why things are. Here is a man who turns aside to see w-hy things are not. God is always looking for the man who asks How. When a man takes life seriously enough to ask the reasons of things, God is all ready, to grant him his desire. "And when Jehovah saw that he turned aside to see, God called unto him out of the midst of the bush, and said, Moses, Moses. And he said, Here am I." God calls to men in different ways, sometimes by sending an angel, sometimes by misfortune, sometimes in great opportunity, sometimes in an hour of defeat, overwhelmed by a great sin, sometimes when travelling and a great vision of work is opened, often when reading a book, and most of all, when we are engaged in meditating meditating upon his word. "And he said, Draw not nigh hither and put off thy shoes from off thy feet, for the place whereon thou art standing is holy ground." God is about to call Moses to a great life-work; one thing is needed before God speaks --- a bowed and révérant heart. The command command of God to Moses to put off his shoes may be accounted for from the custom ill the East of wearing shoes or sandals merely as a protection from dirt.. When entering holy places the Arabs and Samaritans, and all MohammendanS, take off their shoes that the places may not be defiled by the dirt or dust upon them. "Moreover, he said, I am the God of thy father,, the God of Abraham, the God of Isaac, and the God of Jacob." These words are used by our Lord (Mark 12:26; Luke 20:37' to prove to the Sadducees the truth of the resurrection resurrection of the dead. The wards imply a' personal relation between God and man, which carries with it the germ of * eternal life. "And Moses hid his *' face; for he was afraid to look upon Gpd." Moses was to be the first preacher preacher of thq holiness of God. From his lips ; the people of Israel were to receive receive the. message, Be holy, I am holy I make holy (Ex. 19 :G ; 22.31; Lev. 11 4#,45; 19:2; 20:26; 21:8). His prepar- ation for being the messenger of the Holy One was here.