Full text of Sugar Prices, From Refiner to Consumer : Bulletin of the United States Bureau of Labor Statistics, No. 121

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U. S. DEPARTMENT OF LABOR

BUREAU OF LABOR STATISTICS
CHAS. P. NEILL, Commissioner

BULLETIN OF THE UNITED STATES |
f W HOLE H I
BUREAU OF LABOR STATISTICS j ' ’ * \ NUMBER I L i
R ETAIL

P R IC E S

AND

SUGAR

COST

OF

L IV IN G

PRICES,

S E R IE S :

No.

FROM

REFINER TO CONSUMER




/ v \

MAY 14, 1913

WASHINGTON
GOVERNMENT PRINTING OFFICE
1913

7




CONTENTS.
Sugar prices, from refiner to consumer:

Page.

Introduction and summary.......................................................................... 5-18
Introduction..........................................................................................
5, 6
Summary............................................................................................... 7-18
The 1911-12 disturbance in prices..................................................
7, 8
Course of sugar prices 1001 to 1912................................................. 9-15
Margins and profits of refiners, jobbers, and retailers..................... 15-18
Making, refining, and selling cane sugar...................................................... 18-22
Raw sugar.............................................................................................. 18,19
Refined sugar........................................................................................ 19-22
Actual transactions and resultant gross margins of refiners, jobbers, and
retailers in February and August, 1901, 1905, 1910, and 1911................ 22-27
Market prices and resultant gross margins of refiners, jobbers, and retailers
on the 15th of each month, 1901, 1905, 1910, 1911, and 1912................. 27-36
Comparison of gross margins of refiners, jobbers, and retailers, based on
actual transactions and on market prices................................................. 36-39
Comparison of jobbed and retailers’ market prices in New York, Pitts­
burgh, and Chicago................................................................................... 39-42




3




BULLETIN OF THE

U. S. BUREAU OF LABOR STATISTICS.
w h o l e n o . 12 1.

WASHINGTON.

may i* , 19 13.

SUGAR PRICES, FROM REFINER TO CONSUMER.
BY N. C. ADAMS.

INTRODUCTION AND SUMMARY.
INTRODUCTION.

This report shows prices paid by the refiner for raw sugar and the
prices received for refined sugar by the refiner, the jobber, and the
retailer, successively.
The study was undertaken during 1911 when sugar prices were
exceptionally high, but it covers 1901, 1905, 1910, and 1912, as well.
It is confined to conditions in New York City, except the section
which shows jobbers7 and retailers’ prices in two additional cities,
Pittsburgh and Chicago. Approximately one-half of the 3,000,000
tons of cane sugar refined annually in the United States is melted by
New York refiners. No beet sugar is manufactured in New York
City.
Two questions are dealt with in connection with sugar prices:
First, the relation which exists between the price of raw sugar and the
price paid by the consumer for granulated sugar, and second, the cost
of distribution or the amounts added to the price of sugar as it passes
through various hands from th# refiner to the consumer.
In seeking a solution of these questions it is necessary to determine
the margins—difference between cost price and selling price—of the
various types of dealers handling sugar and then to compare these
margins during periods of low and periods of high prices. It would be
desirable, of course, to follow these margins throughout a long period of
time, but the immense amount of work involved in examining the records
of refiners, jobbers, and retailers makes such a task impracticable.
One winter month and one summer month in each of four years,
therefore, were selected for special study. The months were February
and August, in the years 1901, 1905,1910, and 1911. For these months
of 1901 it was not possible to secure data concerning retail prices.
Considering the eight periods selected, prices may be called normal




5

6

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

in February and August, 1901, August, 1905, and February and
August, 1910; prices were very low in February, 1911; prices were
high in February, 1905; and prices were high with a rapidly
advancing market in August, 1911. It would appear that every
possible condition of the market is exemplified in the periods selected.
February and August, 1901, followed declines in prices; February,
1905, followed a large rise, and August, 1905, a correspondingly heavy
decline; February and August, 1910, followed uneventful periods;
February, 1911, followed arapid and heavy decline; and August, 1911,
a phenomenal rise in prices.
It may appear to be a simple task to follow a given lot of sugar
from the vessel on which it is brought to this country until it reaches
the table of the consumer, but actually to accomplish this is an impossi­
bility. A cargo of sugar upon arrival may go direct to the refinery
for melting or it may be held in a warehouse for a longer or shorter
period and a portion enter into the melting of each of several months.
While refinery records are balanced each month, the sugar melted
during a month may come from every country from which imports
of raw sugar are obtained and the raw sugar may be of as many grades
as are known to the trade. In addition to this a considerable amount
of sugar is in process of refining at the beginning of the month and a
considerable amount also remains in process of refining at the end of
the month.
The product of the refinery is not a single description of sugar, but
may be any one or all of more than a score of grades, and, in addition,
the residue is marketed as sirup. The sugar when refined may be
packed in barrels or large bags, in which case the bulk of it is put in
small bags and reweighed by the retailers as sold, or it may be packed
in small bags or in cartons ready for delivery by the retail merchant
to the consumer.
In comparing prices of raw and of refined sugar it is customary to
compare the market prices on a given date, and such a method is
satisfactory when the market is fairly stationary, but that method is
entirely unsatisfactory when the market is either rising or falling,
for the reason that often no transactions, or very few transactions, are
made. Thus, when raw sugar reached the extremely high prices in
the fall of 1911, the refiners simply did not buy until they had exhausted
the large stocks laid in at much lower prices, and in August, 1911,
while the average market price for the month for 96° centrifugal sugar
was 4.88 cents per pound, the average actual cost price of 96° centrifu­
gal sugar melted by one of the large refineries was close to 4 cents per
pound. In like manner, when granulated sugar reached 7.25 cents
per pound wholesale, practically none was purchased at that price
by jobbers except when the large stocks purchased at lower prices
had been exhausted.



SUGAR PRICE S? FROM REFINER TO CONSUMER.

7

SU M M A R Y.

THE 1911-12 DISTURBANCE IN PRICES.

In 1891 the duty on raw sugar was reduced about 2 cents per
pound, causing the market price of raw sugar to drop from 5.68
cents per pound net cash to 3.5 cents, and from that time until 1911,
20 years, the price rose above 5 cents at only one period, January-*
March, 1905.
During the six months’ period from August, 1910, to February,
1911, the price dropped from 4.45 cents per pound to 3.42, or 23
per cent. At this time reports of a shortage of over 300,000 tons
in the Cuban crop effectually checked the decline and caused a mild
upward tendency, which lasted until the early summer, when a series
of unusual advances was started, ending in October with the market
price just under 6 cents per pound, a point unapproached, even,
for 20 years, and being 74 per cent above the low price of January.
The cause ascribed for this phenomenal advance was the report of
a prospective falling off of 20 per cent in the European beet-sugar
crop.
Owing to the improved outlook for the Cuban 1911-12 crop, and
to the marketing of the domestic beet crop, or to the reluctance of
refiners to buy at these inflated prices, there was a precipitate tumble
of 1 cent in the month of November, followed by a second drop of
1 cent during the five months ending in April, 1912, when the market
price was again under 4 cents per pound, it having taken, as shown
in the chart, page 9, just 10 months to complete raw sugar’s pyram­
idal course.1
Any fluctuation in the price of raw sugar is quickly reflected in
refiners’ selling prices. In this instance there was an advance in re­
finers’ market price of granulated sugar of over 2.1 cents per pound,
or 47 per cent, from the low price, 4.5 cents, in February, 1911, to
the high price, 6.615 cents, in October, followed by a drop of over
If cents, the net cash price on August 15, 1912, being 4.851 cents
per pound.
Jobbers’ selling prices usually follow refiners’ very closely. In
September, 1911, their list price rose to 7.25 cents per pound, an
increase of 51 per cent over the price of February, followed by a
drop of over 2 cents, the prevailing list price August 15, 1912, being
5.2 cents per pound.
Retail prices of sugar do not respond materially to slight changes
in the wholesale price. In fact, after the return to normal condi­
tions in the latter part of 1905, the average price in New York for
1 January 15,1913, the raw sugar price was 3.4S cents per pound, which equals the low price of Feb­
ruary, 1911,23 months previous.




8

BULLETIN OF THE BTJEEAU OF LABOB STATISTICS.

nearly six years1 was between 51 and 5J cents per pound; but in
August, September, and October, 1911, the total advance was oyer
2 cents per pound, the prices reported by retailers in the early summer
ranging from 5.14 to 5.71 cents, while in October the same firms
were selling sugar at from 7.14 to 7.71 cents per pound. However,
the marked decline in wholesale prices beginning in November was
quite closely followed by retailers, until in midsummer, 1912, con­
sumers were once more obtaining sugar at from 5.14 to 5.71 cents
per pound, with an average of 5| cents.
The net results to the various handlers of sugar of this extraordi­
nary fluctuation are somewhat problematical. Refiners, having made
very large contracts with jobbers at the low price of early July, were
deprived of abnormal profits, at least through July and August.
High prices were maintained, however, well into November.
Jobbers during July and August were selling at the advanced
prices and, owing to the low purchase price, were making unusual
profits, which, however, must have been partially absorbed by the
rapid decline in prices later on. In fact, while all jobbers probably
benefited to a large extent, it is doubtful if all of them continued
the harvest, owing perhaps to a lack of courage to continue buying
throughout the midsummer.
Retailers, as will be discussed later on, do not count upon much
direct profit from handling sugar, and as their purchases are for
immediate sale the higher prices charged by them merely followed
increased cost.
The effect upon the New York consumer, however, is apparent.
For nearly one year he paid from one-fourth of a cent to 2 cents
more for each pound of sugar used than he had paid during the
period of five and one-half years just previous and than he is paying
at present (December, 1912).
An aftermath of the 1911 condition came in February, 1912, when
raw sugar suddenly advanced 0.4 of a cent per pound. Throughout
the period of abnormally high prices and of the decline in prices of
the previous three months refiners had refrained from buying, other
than to supply their immediate needs, until they were short of
raws, and in consequence dealers in raws were able to demand higher
prices. Refiners and jobbers are said to have been apprehensive
of a return of very high prices and to have experienced a considerable
loss later on as a result of buying at this time. Some retailers
also made unusually large purchases, which resulted in heavy and
to them more serious losses. This was, however, a false alarm, the
advance lasting one month only and the general decline in retail
prices being checked very slightly thereby.




1 See footnote, p. 34.

SUGAR PRICES, FROM REFINER TO CONSUMES.

9

COURSE OF SUGAR PRICES, 1901 TO 1912.

The course of sugar prices during the years included in this report
may be observed readily by means of the accompanying chart. The
market prices upon which the chart is based will be found on pages

30 and 31, and, as stated there, they represent conditions on the
15th day of each month and therefore show only the general trend
of prices and not every actual fluctuation.
In trafficking in raw sugar the basis is “ 96° centrifugal/’ from the
price of which there are fixed variations for other grades and for other



10

BULLETIN OF THE BUBEATJ OF LABOB STATISTICS.

degrees of purity. Likewise the price of “ fine granulated in bar­
rels’ * is the basis used by refiners in selling their products. Conse­
quently 96° centrifugal and fine granulated in barrels are the grades
considered in this report, unless otherwise stated.
The more detailed study of refiners’ prices and margins is based
on data obtained from original records of the refineries considered.
Jobbers’ and retailers’ prices and other data were secured from
jobbers and retail dealers themselves. Market prices of raw sugar
and refiners’ posted prices of refined sugar in this report are from
Messrs. Willett & Gray, publishers of the Weekly Statistical Sugar
Trade Journal, and as reported by them are generally understood to
be the lowest net cash prices on the dates specified.
Probably the most significant figures of the inquiry are those
which show the gross margin between the price paid by the sugar
refiner for raw sugar and the price paid by the consumer for granu­
lated sugar. This gross margin shows the cost of refining plus the
cost of distribution and profit. Such figures are available for
February and August, 1905, 1910, and 1911, and are as follows:
C O M P A R IS O N O F A C T U A L C O ST O F R A W S U G A R M E L T E D T O P R O D U C E 1 P O U N D
O F R E F I N E D S U G A R A N D O F R E T A I L E R S ’ S E L L IN G P R IC E O F G R A N U L A T E D
S U G A R , F E B R U A R Y A N D A U G U S T , 1905, 1910, A N D 1911.

Date.

1905.
February............................................................................................
August.................................................................................................

Actual cost
of raw
Retailers’
sugar
selling
melted to
price of
produce 1 granulated
sugar, per
pound of
refined
pound.
sugar.

Excess of consumers'
cost over cost of raw
sugar.

Am ount.

Per cent.

Cents.
4.757
4.258

Cents.
6.194
5.684

Cents.
1.437
1.426

30.21
33.49

4.135
4.283

5.205
5.306

1.130
1.023

27.33
23.89

3.700
4.137

5.347
5.755

1.647
1.618

44.51
39.11

1910.
February............................................................................................
August.................................................................................................
1911.
February............................................................................................
August.................................................................................................

The cost, to the refiners reporting, of containers (barrels, bags,
cartons, etc.) for the refined sugar per 100 pounds has increased
slightly from year to year, and was as follows during the six periods:
Cost of containers per 100 pounds of refined sugar.
1005—February............................. ............................................... $0.131
August....................................................................................... 127
1010—Februar y
141
August....................................................................................... 130
1011—Februar y
145
August....................................................................................... 137




11

SUGAR PRICES, FROM REFINER TO CONSUMER.

A comparison of the price paid by the consumer for granulated
sugar with the price received by the refiner for the same grade of
sugar is of interest by reason of the fact that practically all sugar
purchased by families is granulated. The gross margin between
these prices shows the cost of distribution and profit of jobber and
retailer.
C O M P A R IS O N O F R E F I N E R S ’ A N D R E T A I L E R S ’ A C T U A L S E L L IN G P R IC E S O F G R A N U ­
L A T E D S U G A R , F E B R U A R Y A N D A U G U S T , 1905, 1910, A N D 1911.
Refiners’
sales of
sugar, aver­
age granu­
lated basis,
per pound.

Date.

1905.
February............................................................................................
August.................................................................................................

Retailers’
selling price
of granu­
lated sugar
per pound.

Excess of consumers’
cost over refiners’
sales price.

Am ount.

Per cent.

Cents.
5.738
5.015

Cents.
6.194
5.684

Cents.
0.456
.669

7.95
13.33

4.866
5.036

5.265
5.306

.399
.270

8.20
5.36

4.539
5.095

5.347
5.755

.808
.660

17.80
12.95

1910.
February............................................................................................
August.................................................................................................

1911.
February............................................................................................

The usual method of comparing prices of raw and refined sugar is
by the use of market quotations, but such a method, while satisfac­
tory with a fairly stationary market, fails to show actual conditions
when the market is either advancing or declining.
The table which follows shows for the 15th of February and August,
1905, 1910, and 1911, for 96° centrifugal sugar the lowest market
price and for granulated sugar the retailers’ selling price. Prices
for raw sugar are shown on the pound basis and also on the basis of
the amount required to produce 1 pound of granulated sugar or its
equivalent.
C O M P A R IS O N O F T H E M A R K E T P R IC E O F R A W S U G A R A N D O F T H E R E T A I L E R S ’
S E L L IN G P R IC E O F G R A N U L A T E D S U G A R O N T H E 15TH O F F E B R U A R Y A N D A U G U S T ,
1905, 1910, A N D 1911.

Date.

1905.

Excess of consumers’
Market
cost
over
market
price of 96°
price of raw sugar
Market
centrifugal Retailers’
required to produce 1
price of 96° sugar re­ selling price
pound of granulated
centrifugal quired to
of granu­
sugar.
sugar per
produce 1 lated sugar
pound.
pound of per pound.
granulated
sugar.
Am ount.
Per cent.

Cents.
4.940
4.125

Cents.
5.312
4.435

Cents.
6.194
5.684

Cents.
0.882
1.249

16.60
28.16

4.140
4 .3£0

February 15 .
August i 5 .........

4.452
4.720

5.265
5.306

.813
.586

18.26
12.42

3.510
4.920

3.774
5.290

5.347
5.755

1.573
.465

41.68
8.79

1910.
February 1 5 ...
August 15..........

1911.
February 15 .
August 15..........




12

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

A comparison of the price paid by the consumer for granulated
sugar and of the refiners, net selling price for the same grade of sugar
on the 15th of February and August for each of the three years
follows:
C O M P A R IS O N O F R E F I N E R S ’ A N D R E T A I L E R S ’ M A R K E T P R IC E S O F G R A N U L A T E D
S U G A R O N T H E 15TH O F F E B R U A R Y A N D O F A U G U S T , 1905, 1S10, A N D 1911.

Date.

1905.
February 15.......................................................................................
August 15...........................................................................................

Retailers’
Refiners’
selling
list price,
price,
granulated
granulated
sugar, per
sugar, per
pound.
pound.

Excess of consumers’
cost over refiners’ list
price.

Am ount.

Per cent.

Cents.
5.9C0
5. ICO

Cents.
6.194
5.684

Cents.
0.294
.584

4.98
11.45

4.8.!0
5.100

5.265
5.306

.415
.206

8.56
4.04

4.550
5.635

5.347
5.755

.797
.120

17.52
2.13

1910.
February 15.......................................................................................
August 15...........................................................................................

1911.
February 15.......................................................................................
August 15...........................................................................................

By a comparison of the preceding table with the first table on page 11
it is seen that in the six periods considered there was little variation
between the actual cost and the theoretical cost for distribution by
jobbers and retailers plus those dealers’ profits (as shown in the excess
of cost to consumers over refiners’ selling price) except in February,
1905, and August, 1911, the two periods of very high prices. As both
these periods followed periods of rapidly advancing prices, jobbers’
actual margins were considerably larger than their theoretical ones.
By a comparison of the table on page 10 with the last table on page
11 it is seen that in five of the six periods considered the actual cost to
the consumer for refining, for distribution, and for dealers’ profits,
etc., combined, was considerably greater than the theoretical cost,
based on market prices. The period in which they most nearly
approached each other was February, 1911, when j>rices, both of raw
sugar and refined sugar, were at a very low point following a period
of rapid declines.
These comparisons indicate that it is refiners’ actual gross margin
which varies most widely from the theoretical gross margin, and con­
sidering the complexity of the conditions under which refineries exist
this is not unexpected.
As a refiner must fulfill his contracts with his customers, notwith­
standing stoppage of his production from any cause, he is compelled
to carry a large stock of refined sugar. Moreover, while with a falling
market his customers do not make large contracts, but buy for daily
needs only, nevertheless he must continue manufacturing in order
that he may have on hand sufficient completed product to supply
their demands. These facts in turn demand an enormous invest­



SUGAE PBICES, FBOM EEEINEB TO CONSUMES.

13

ment in raw sugar. Refineries melt anywhere from 10,000,000 to
100,000,000 pounds of sugar in a single month. A single cargo of
sugar may weigh 3,000,000 pounds, which, at 4 cents per pound,
would cost nearty one-eighth of a million dollars, and supply a
refiner’s needs for a day or two only.
Under such conditions refiners, in addition to their ordinary busi­
ness as manufacturers, naturally become speculators on a large scale,
their profits being increased or lessened according to their adroitness
in buying. It might be expected that with a falling market consider­
able loss would be experienced, but the successful buyer guards against
losses at such times by refraining from making purchases much in
excess of his immediate needs, trusting to there being sufficient stock
in port for spot sales if his own supply becomes exhausted. With
a rising market large purchases are made habitually, the buyer,
when his judgment warrants, frequently taking long chances, as a
cargo of sugar from a distant port may arrive with a value far dif­
ferent from that which it had when shipped weeks previously.
The table and diagram on page 14 present a limited amount of
data, which serve to illustrate the results of refiners’ careful buying.
This table shows, for each of the months especially studied in this
report, the average polariscopic test of the raw sugar melted by the
refiners consulted and the average price paid for such sugar, also the
average market prices of raw sugar; and in addition, by percentages,
the time of purchase of raw sugar melted, together with a diagram
indicating the trend of market prices during the months in which
such purchases were made.
The market prices being for 96° sugar, in order to make an exact
comparison the actual, cost prices should be raised to prices for the
same polariscopic test before comparing. The average tests and
cost prices are simple averages of the reports obtained.
Using February, 1905, as an illustration, it is seen that the sugar
melted tested on an average 95.30°, and cost $4,786 per 100 pounds,
which netted a considerable profit to the establishments over the
market price of 96° sugar, $5.04S. A part of the sugar used was
purchased in August, 1904, when the price was 70 cents below the
February price. The xlugust, 1905, figures show 94.83° sugar cost­
ing $4,096, or 3.4 cents more than the market price for 96° centrif­
ugal. However, in this instance, there had been a decrease of 80
cents in the market during the preceding six months, but, owing to
fortunate buying, the loss in August was less than the gain in Feb­
ruary, despite the excess of the drop in market prices as compared
with the earlier rise.
In February, 1911, although the market price had dropped 50 cents
per 100 pounds below that of the previous December, the actual
cost of sugar melted and the market price of 96° centrifugal were the



H
4
K A W SU G A R : C O M PA R ISO N O F M A R K E T PR IC ES M T H ACTUAL PRICES p a i d FOR P A W SUGAR M E L T E D IN
A N D SH OW ING

FEBRUARY

A N D A UG U S Ty / 9 0 ! t 1 9 0 5 , / 9 / 0 , AND 19111

TIM E OP P U R C H A SE AND. ALSO CO URSE OF M A R K E T PR IC ES /A/ M O N T H S INW H/CH R A W SUGAR W AS P U R C H A S E O .
P R / C E ' S , p e r /O O p o u n o / f .

19 O S
FE BR U A R Y .

FEBRUARY.

vrg
vrg
Aeae Aeae Average Aeae Average Average
vrg price.
test.
price.
6°
96°
* 12 9 6 ° £407/ 9test.
44
price.
$ 5 ,0 * $

te st.

94(21° 4 .22S
P R O P O R T IO N

Year.
F eb ru ary

35.0

190/

PU R C H A SE D

Per cent.

1901

January

93.76• 3.974

2 3 .0

Ag s
uut
Sep tern her-

19 O t
1901
1901 .
190/
!90t
1901

Per cen t.

'fear.

Percent.

3 8 .5
3 4 .o

J905

4 .5
4 .5
S. 5

190S

19 OS

/.S '

9 .0

; .S
5 .0

3 3 .0

o f TOTAL

91.31°

4 .0 0 7

1 .0

3 .0
3 4.0

Q U A N T IT Y M E L T E D

19 0 S
t9 o S
190S

3 .5
96. S

t.s
9 .$
2.0
.5

94.97c 3.9S3

Year.

Per cent.

Yea r
.

Per cent.

1910
iO/o
i9/o

7.0

1911
l9 U

47.0

.S
20. S
8.0

Year.

19/1
1911
1911
191/
!9H
1911
19//

.

4 1 .0

1to 24. S
9 1o
io 4.5
19
4
l9/o
20
1

40. S

* ~S

22.5

Average market price
Average actual, price o f
S u g a r , m e lte d .

in F E B R U A R Y an d A U G U S T .

1910

22.0

1905

/1 Per cent
9
1io
90

Year.

1904.

260

94.85e 3.S77

191 0

Year..
/90S
J9oS

19 0 4
1904.
1904.
1904.

4 .0

JO CO
1900
_/ 9 0 0

1O PerSo
9I cent.
0
l$1 8.0

ea c h S p e cified m o n th a n d y e a r

93.49° 3.978

19/ /

Per cent
l.S

f.o

6.0
22.0

24.0
3.0
/ 2 .5
30.0

January
February
March
April
M ay

June
July
August

September

19/0
IS /Q

October

4.0
70

November
D ecem ber
TOTAL

______ TOTAL.
COURSE Q F M A R K E T

P R IC E S D U R IN G M O N T H S in w h ich

RAW S U G A R , m e l t e d in

Per

FEBR UARY and AUG UST,

W AS

19 1 0

PU R C H A SED ,

Per

1911

/ 00

/oo
FEB

APR. JUNE

AU6.

OCT.

DEC.

FEB

APR. -JUNE AUG.

p o u n d s.

#6 0
.0

$ 6.00

5 .5 0

S. 5 0

50
.0

5 .0 0

f

4 .5 0
4 .0 0
3 .5 0




V/

A.50
4 .0 0
3 .5 0

STATISTICS,

pounds.

O LABOR
F

O ctober
November
December

Year.

94.83° 4 .0 9 6

BUREAU

March
April
M ay
June
July

in

95.30° 4.786

O THE
F

Average marKef price
Average actual, price of
Sugar, melted.

AUGUST.
FEBRUARY.
FEBRUARY.
Average Average Average Average Average Average ~Jverage Average Average Average
price.
test.
price.
te s t
price.
test
price.
test
test
price.
$4880
$3,577
96°
96°
96°
S 4 .Q 6 2
$ 4 2 08
S4.408 9 6 9

BULLETIN

A V E R A G E M A R K E T P R IC E S AND AVERAGE A C T U A L

15

SUGAR PRICES, FROM REFINER TO CONSUMER.

same, and after harmonizing the tests it will be seen that the loss
was not great; while in August, following a rise of $1 per 100 pounds
in four months, there was a profit of about 80 cents.
It seems safe to conclude, then, that from long experience in buy­
ing refiners lose less in a falling market and, perhaps, gain more in a
rising market than the prices current would indicate.
MARGINS AND PROFITS OF REFINERS, JOBBERS, AND RETAILERS.

Supply and demand, modified by many factors affecting prices,
having established the price of raw sugar, the refiner, in determining
his selling price, must consider the cost of refinin andg of containers
for the completed product, together with the loss in weight of raw
sugar during refining, with a slight allowance for the sale of sirup.
incidentally produced. The jobber and retailer handle the com­
pleted product only, which is in no way changed by the former,
though the retailer usually reweighs it in small quantities, receiving,
however, some recompense through the sale of empty barrels.
It would appear, then, that the margins of these three regular
handlers of sugar have in common, interest, expense of selling,
and profit.
Refiners’ margins fluctuate widely. No effort has been made at
this time to ascertain the actual cost of refining, which undoubtedly
differs somewhat among the various refiners, though it is improbable
that either it or the expense of selling varies to any great extent
from month to month. On the other hand, the loss owing to the
considerable shrinkage in weight1 during refining fluctuates con­
siderably, following prices of raw sugar. Therefore variations in
refiners’ margins remaining after making allowances for changes in raw
sugar prices probably for the most part represent variations in profit.
1 The average yield of 100 pounds of 96° centrifugal sugar is said to be approximately 93 pounds of granu­
lated sugar, or equivalent, and 5 pounds of sirup. The actual yield of refined sugar and sirup from raw
sugar in three refineries during various months and years is shown in the following table:
A C T U A L Y I E L D O F R E F I N E D S U G A R A N D S IR U P F R O M R A W S U G A R IN T H R E E
R E F IN E R I E S D U R I N G V A R IO U S M O N T H S IN 1901, 1905, 1910, 1911, A N D 1912.

Yield.

Yield.
Average
test of
raw
sugar
melted.

94.93°
94.35°
95.84°
95. 70°
94.99°
94. 42°
96.00°
93.50°
94.64°
95.25°

Average
test of
refined
sugar
pro­
duced.

Per cent
of
refined
sugar.

Per cent
of sirup.

Per cent
of loss.

Average
test of
raw
sugar
melted.

99.84°
99.98°
99.97"
99.74°
99. 79°
99.95°
99.90°
96.26°
99.26°
99.23°

93.06
92.63
93. 48
94.63
93.39
91.30
94.19
96.19
93.75
93.11

4.46
6.50
4.42
3.31
4.98
6.87
3.54
.64
4.21
5.09

2.48
.87
2.11
2.06
1.63
1.83
2.27
3.17
2.04
1.81

95.02°
94.86°
95.77°
93.58°
93.85°
94.98°
94.95°
95.05°
94. 51°
93.71°

93478°—Bull. 121—13----2



Average
test of
refined
sugar
pro­
duced.

Per cent
of
refined
sugar.

Per cent
of sirup.

99.88°
96.29°
99.19°
99.78°
93.94°
96. 72°
99.32°
99.93°
99.92°
99.13°

92.52
96.69
95.22
90.31
90.23
95.56
93.66
92.70
91.85
91.74

5.62
1.38
3.03
7.73
8.13
2.41
4.63
4.91
5.60
4.82

Per cent
of loss.

1.86
1.93
1.76
1.96
1.64
2.03
1.71
2.39
2.55
3.44

16

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Jobbers’ margins are as a rule uniform, but these middlemen seem
to have settled upon sugar as an article to be sold as an attraction or
an accommodation to customers and without expectation of any
considerable direct profit, and it appears that quite generally their
margins from sales of sugar little more than coyer legitimate expenses
incurred.
Retail groceries are so numerous and contiguous that their prices
are subject to perpetual comparison, and sugar is such a constant
item in consumers’ purchases that any change in its price is subject
to quick detection and comment. Retailers therefore seem to aim
at a steady price for sugar rather than a consistent margin, trusting
to a future decline in cost to offset the effect of a period of close
selling. There may be variations in the retail prices of one locality
in New York as compared with another, but as a rule the range is
not a wide one.
In this connection mention may be made of the various large
grocery companies which have from 5 to 100 or more retail stores1
and which buy sugar directly from the refiners. The retail prices of
these stores are frequently the same as those of the small retailers,
but occasionally one of them may offer sugar at a low price, per­
haps below the small retailers’ cost, for the purpose of attracting
purchases of other goods on which there is a profit. Sometimes
these offers of sugar are made with a proviso that the customer’s
other purchases must aggregate a specified amount. In these cases
the margin on sugar can not be calculated, as it is indissolubly con­
nected with the profit on other goods or the value of the advertisement
to the establishment.
The difference between market cost and selling price on a specified
date is the margin commonly referred to by dealers in sugar. In
addition to tabulating margins computed on this basis (p. 27) this
report shows (p. 23) as completely as possible for specified monthly
periods the difference between actual cost and actual sales. A com­
parison of the two margins is made on page 37.
Refiners’ prices respond quickly to raw sugar price changes,
although when the market declines the downward tendency fre­
quently is somewhat less in evidence in prices of refined sugar.
Considering wholesale prices of refined sugar alone it is apparent
that they fluctuate with some regularity, usually reaching their
lowest point during the winter months. On this basis it has been
claimed that refiners systematically depress their prices at this
season for the purpose of obtaining a lever to force down the price
of raw sugar as the influx of Cuban sugar begins. It should be




1 Pages 35 and 30.

SUGAR PRICES, FROM REFINER TO CONSUMER.

17

remembered, however, that the Louisiana crop comes on the market
in midwinter, at which time also consumption is considerably lessened.
Naturally competition, coupled with a desire to stimulate sales, would
have the effect of lowering prices just as increased consumption during
the fruit season would tend to raise them.
During the 1901-1912 period studied there were two seasons which
were greatly at variance with the usual regular fluctuation in prices.
Both of them, however, were dominated by unusual conditions. The
winters of 1904-5 and 1911-12 were marked by abnormally high
prices, the first having been caused by a short beet crop in Europe,
while a shortage in the Cuban cane crop and a closely following
prospective falling off in the European beet crop were the greatest
factors in the upheaval of 1911-12.
The large increase in the consumption of sugar in the United States1
might lead one to expect a steady and well-defined increase in retail
prices, but a study of the prices does not show such a result, although
had this report ended with August, 1911, as was originally intended,
such an impression might have been given.
Completion of the report was delayed by the great amount of labor
involved in computing tlie actual cost of raw sugar melted in monthly
periods, and as the downward tendency of all sugar prices had become
so marked in the early part of 1912 it was deemed simple justice to
continue the relation of prices. This has been done to the end of
1912.
The fact that, previous to the universally disturbed period, August,
1911, to May, 1912, retail prices of sugar had retained a steady low
level for so long a period, coupled with the fact that they have re­
turned to that level, removes from sugar the reproach attached to
commodities whose prices consistently advance, but only intermittingly, and then slightly decline. This statement is not equiva­
lent to saying that sugar is sold to consumers at the lowest price com­
mensurate with allowing each dealer a fair margin of profit. Such a
study is beyond the scope of this report, and at best would be of
doubtful efficacy, for, while refiners’ margins—to refiners themselves,
at least—may be clear-cut and self-evident, the margins of the jobbers
and of the retailers are so interwoven with their entire mercantile
economy that the unconditional profit never could be more than
estimated.
Theoretically refiners are principally engaged as manufacturers,
but in fact they are also speculators in raw sugar. However, the
1 Per capita consumption of sugar in the United States, in pounds: 1901, 69.7; 1902, 72.8; 1903, 70.9; 1904,
75.3; 1905, 70.5; 19e6, 76.1; 1907, 77.5; 1908, 81.2; 1909, 81.8; 1910, 81.6; 1911, 79.2; 1912, 81.3.




18

BULLETIN OF THE BUBEAU OF LABOK STATISTICS.

profit from each of these species of commerce is uninvolved. On the
other hand, jobbers and retailers habitually sell sugar at only a slight
advance, not from philanthropic motives but because custom has de­
creed that this universally needed commodity shall be dealt in as a
so-called “ leader” at a price so attractive as to encourage buyers to
purchase other commodities yielding considerable profit to the sellers.
Therefore the simple margins between cost and sales of sugar by
no means adequately comprehend these dealers’ real margins of profit.
MAKING, REFINING, AND SELLING CANE SUGAR.
RAW SU G AR.

Sugar cane is grown in tropical and semitropical countries, and
mills for making raw sugar are run in connection with the cane plan­
tations. In these mills the juice is extracted from the cane and,
having been boiled, is run into centrifugal machines revolving at a
high rate of speed, which expels the molasses and leaves the sugar
crystals, or “ centrifugal sugar.” This forms the principal part of the
raw sugar used by New York refiners. The molasses is boiled and
again spun in the centrifugal machine, producing the lower grade
“ molasses sugar.”
A more primitive way of treating the cane juice, by evaporation
and draining, produces “ muscovado sugar.”
The market price of centrifugal, containing 96° of pur© sugar, is 50
cents per 100 pounds above that of 89° muscovado and 75 cents above
that of 89° molasses sugar. These sugars are packed in burlap bags,
in baskets or bales made of rushes, or in hogsheads, according to the
custom of the country from which they come.
New York refiners procure about one-half of their raw sugar from
Cuba, one-quarter from Hawaii, Porto Rico, the Philippine Islands,
and Java combined, and the remainder from various other tropical
countries. They buy from the owners themselves or through brokers.
Raw-sugar brokers are paid a commission of one-half of 1 per cent,
or even less, although they are said to have received 1 per cent a few
years ago.
On arrival in New York a cargo of sugar is landed at a refinery
dock, or transferred to a lighter or to a storage dock. If it has come
from Cuba the sugar is in bags holding approximately 300 pounds
each. A group of three or four bags is swung by a crane from the
ship to a truck on the dock. On one side of the truck is a United
States customs sampler or tester, and on the other side one employed
by the refiner or the seller of the sugar, each with a sharp scoop which
he plunges into each bag for a sample of the contents. These samples
are scraped into cans and then removed to the customs and public




SUGAR PRICES, FROM REFINER TO CONSUMER.

19

samplers’ testing places, where they are subjected to polariscopic
tests to ascertain the amount of crystallizable sugar contained
therein.
The trucks of sugar are first weighed by the customs weighers,
who use electric scales tested every hour. Duty on sugar is paid on
the customs’ weight and test. A public weigher then reweighs the
sugar, and the refiner pays for the sugar according to this weight
and to the test of the public sampler. In these days it not infre­
quently happens that the customs’ weight is protested by the refiner,
owing both to the careful customs’ weighing and the, perhaps,
“ liberal” weighing of the public weigher.
A cargo may be composed of one grade of sugar from a single seller
or made up of various grades from several sellers. Each grade of
each seller’s sugar is, of course, separately tested and weighed.
REFINED SU G AR.

At the refinery packages of raw sugar are ripped open and the con­
tents thrown into tanks of hot water, to which is added the liquid
resulting from thoroughly washing the containers themselves. The
liquor thus formed is pumped into other tanks, and filtered through
cotton bags suspended under them to remove all insoluble impurities.
The liquor is run next into iron cylinders packed with bone charcoal,
through which it filters very slowly till it is drawn off at the bottom
in a purified and decolored condition. This liquid sugar is boiled
in vacuum pans, refilled as evaporation sets in. When sufficient
crystals have formed the mass is spun in centrifugal machines, to
separate the crystals from the liquor, sprays of water washing the
crystals as the machines revolve. The crystals are placed in revolv­
ing horizontal cylinders, where they are dried and then turned out
as granulated sugar.
The liquor taken from the centrifugal machines is reboiled and
yields the soft or brown sugars, and after as much sugar has been
extracted as is economically desirable, the final residue is sold as
sirup.
Loaf sugar is made by running the mass from the vacuum pans
into molds where it drains and then placing the molds in ovens to
solidify the mass, which is afterwards cut into shapes desired.
Pressed cubes are made from moistened granulated sugar.
Usually a refiner’s chief product is granulated sugar, the other
grades of hard sugar or soft sugar being made in such quantities only as
the trade may demand. The greater part of the product is packed in
barrels or bags, holding 350 or 100 pounds, respectively, though, in
an increasing degree each year the custom is growing of packing the




20

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

sugar iii small cotton bags or in cartons of various sizes to suit con­
sumers. Two 50-pound or four 25-pound bags are shipped in one
burlap sack, while 10-pound, 5-pound, 3J-pound, or 2-pound bags are
packed in barrels, and cartons are packed in wooden cases.
The price of these small packages increases as the size decreases, at
present a barrel of 3^-pound bags of granulated sugar costing a jobber
25 cents per 100 pounds more than one holding loose granulated sugar.
Refiners sell their product by contract for a specified number of
barrels on the basis of the price of fine granulated loose in barrels,
there being a more or less fixed schedule of variations for other grades.
The following table shows by percentages the proportion of granu­
lated sugar, of other hard sugar, and of soft sugar, handled by one
jobber during February and August, 1910 and 1911:
P E E, C E N T O F G R A N U L A T E D A N D O T H E R H A R D S U G A R A N D O F S O F T S U G A R
H A N D L E D B Y O N E J O B B E R , F E B R U A R Y A N D A U G U S T , 1910 A N D 1911.

1910

1911

Grade.
February.

August.

February.

Granulated sugar:
In barrels and 100-pound bags...........................................
In smallei packages...............................................................

Per cent.
69
12

Per cent.
70.0
17.0

Per cent.
64.5
15.0

Per cent.
63.5
24.5

Total.......................................................................................
Other hard sugar............................................................................
Soft sugar...........................................................................................

81
16
3

87.0
9.5
3.5

79.5
16.5
4.0

88.0
9.5
2.5

Total.......................................................................................

100

100.0

100.0

100.0

August.

While this table shows the business of one establishment only, it
represents such a large proportion of the sugar business of New York
that it may be taken as a fair indication of the whole, except that as
T
soft sugar is so largely used by bakers, confectioners, etc., whose busi­
ness warrants their buying directly from refiners, the proportion of
that grade consumed is somewhat larger than the table indicates.
The table illustrates also the increase in the use of small quantity,
original-package sugar.
The following statement of refiners’ list prices on December 31,
1912, shows the variations from the price of fine granulated in barrels
which generally prevail for other grades.




21

SUGAR PRICES, PROM REFINER XQ CONSUMER.
M A R K E T P R IC E S O F R E F I N E D S U G A R .

[Refiners’ list, December 31, 1912. Regular terms 30 days, or cash, less 2 per cent in 7 days. Barrels
hold approximately 350 pounds of granulated sugar. Two 50-pound bags or four 25-pound bags aro
packed in one sack; bags holding 10, 5, 3A, or 2 pounds each are packod in barrels. Cartons are packed
in cases, 120 pounds net.}

Grade of sugar.

Fine granulated..............
D o .................................
D o .................................
D o .................................
D o .................................
D o .................................
D o .................................
D o.................................
D o ................................
D o .................................
D o ................................
Crystal domino granu­
lated.
D o ................................
D o .................................
Crystal dominoes............
D o .................................

Con­
tainer.

Price
Pounds
per
of
sugar. pound.

B arrel...
Bag
-P........
. . . d o ........
. . .d o ........
__ do........
. . . d o ........
. . . d o ........
do........
C arton..
. . . d o ........
.. . d o ........
. . . d o ........

350
100
50
25
10
5
34
2
5
3£
2
5

Cents.
4.90
4.90
4.95
4.95
5.05
5.10
5.15
5.20
5.10
5.10
5.10
5.20

. . . d o ........
. . .d o ........
. . . d o ........
. . . d o ........

3*
2~
5
2

5.20
5.20
7.40
7.90

Grade of sugar.

Extra fine granulated..
Standard granulated.. .
Coarse granulated...........
Eagle tablets....................
Cut loaf...............................
Crushed..............................
Mold A ...............................
Cubes..................................
X X X X Powdered........
Powdered..........................
Diamond A ......................
Confectioners7 A ............
No. 1 ...................................
Nos. 2 to 12, in 5-cent
ranges.
Nos. 13,14, and 15..........

Con­
tainer.

Pounds
Price
of
per
sugar
pound.
0 ).

B arrel...
__ d o ____
. . . d o ........
. .d o ........
. .d o ........
. . . d o ........
__ do........
. .d o ........
. . . d o ........
_ do........
_
d o ____
. . . d o ........
__ do........
. .d o ........

Cents.
350
4.90
350
4.95
350
5.00
C. 20
275
275
5.70
300
5.60
300
5.25
5.15
275
250
5.05
6.00
350
350
4.93
350
4.75
375
4.G5
375 4. G0-4.10

. . . d o ........

375

4.05

i Approxim ate weights.

It is the custom of refiners to transact all their business with their
customers through sugar brokers, who are, of course, paid by the re­
finers while depending upon their perspicacity in buying for jobbers
to retain them as customers. Generally a buyer, large or small, con­
tinues relations with a single broker for long periods. The broker’s
commission is 5 cents per barrel of 350 pounds for New York sales and
10 cents for outside sales.
Contracts call for the delivery of sugar as ordered by customers in
lots of at least 25 barrels during a specified period, usually 30 days.
From June, 1905, to December, 1910, refiners guaranteed prices till
arrival—that is, while the contract price was the maximum price paid,
refiners promised to give customers the benefit of any decrease in
price—but since the latter date the buyer has had no escape from the
consequences of ill-timed contracts. Consequently, with a declining
market the buying is of the hand-to-mouth variety, while with indi­
cations of a rise in prices everyone places contracts.
Anyone whose business warrants his purchasing in 25-barrel lots
may buy from a refiner, although, of course, the chief buyers are
jobbers. There are, however, several large grocery establishments,
with from 5 to 100 or more retail stores, which buy their sugar in large
quantities directly from refiners, as do certain groups of retailers who
cooperate for buying purposes, thereby making a considerable saving.
Refiners now sell at a fixed price, allowing a discount of 2 per cent for
cash in seven days, and deliver to their customers in New York. In




22

BULLETIN OF THE BUKEAU OF LABOE STATISTICS.

former years various trade discounts were allowed also, and special
discounts made to important buyers, while, previous to April, 1911,
the cash discount was only 1 per cent.
Jobbers, in turn, offer a discount for cash, usually of 1 per cent in
10 days, and deliver to retailers.
The ordinary city retailer buys one or two barrels or 100-pound bags
at a time and during the slack periods puts up the sugar in small
packages. The customary unit of sale in New York is 3J pounds,
one-quarter of the English “ stone.” The empty barrel sells for 15
to 25 cents to offset the cost of paper bags, of twine, loss in weighing,
and time. Eetailers deliver to customers or not, according to the
custom of their locality.
ACTUAL TRANSACTIONS AND RESULTANT GROSS MARGINS IN
FEBRUARY AND AUGUST, 1901, 1905, 1910, AND 1911.

This section treats of gross margins accruing to each handler of
refined sugar through actual transactions covering, as far as possible,
periods of a month’s duration. It is possible to compute adequately
such margins for refiners and jobbers, but owing to the retail grocer’s
custom of so largely selling for cash, and'of recording his infrequent
credit sales without details as to weight and rate, it is practically
impossible to compute accurately an average retail price for any past
period of time, as a week or month. It has proved possible, however,
to secure prices current on one day of a month from a sufficient num­
ber of establishments, and the 15th day was selected as most likely
to reflect the prevailing conditions of a month, and margins have been
computed by using the selling prices of that day and the actual cost
prices of the sugar sold.
In the following table, the data for which is confined to February
and August, 1901, 1905, 1910, and 1911, jobbers’ margins both for
each entire month and for the 15th day of each month are presented,
and in each case are found to agree so closely that they form a fair
connecting link between refiners’ margins for a month and retailers’
for the 15th day only.
The figures presented relate to the production and selling of so large
a part of the monthly product of refined sugar in New York, and were
in every case obtained from establishments so representative of
general conditions, that it is believed they reflect such conditions with
accuracy.
All the prices presented are net cash.




23

SUGAB PBICES, FROM REFINEB TO CONSUMES.
ACTUAL

T R A N S A C T IO N S A N D R E S U L T A N T G R O SS M A R G IN S , F E B R U A R Y
A U G U S T , 1901, 1905, 1910, A N D 1911.

Refiners.

Date.

Jobbers.

Gross mar­
Aver­
gin.
age
Aver­
cost of
age
Aver­
raw
sale
sugar,
age
per
granu­
meitod
pound
lated Aver­
to pro­
of re­
sugar
age
duce
fined
basis cost of
one
sugar,
price granu­
pound
all
per
lated
of re­
grades,
Per pound, sugar
fined
and of A m t.
cent.
sugar,
all
per
sirup
sales, pound.
includ­
pro­
of re­
ing
duced
aver­
fined
in
sugar.
age
mak­
cost of
ing it.
con­
tainers.

AND

Retailers.

Gross mar­
gin.

Gross mar­
gin.

Aver­
Aver­
age
age
sale of
cost of
granu­
granu­
lated
lated
sugar
Per sugar
A m t.
per
cent. per
pound.
pound.

Aver­
age
sale of
granu­
lated
sugar
Per
A m t.
per
cent.
pound.

1901.
February:
Cents. Cents. Cents. Cents.
Cents. Cents. Cents.
Cents.
For m o n th ..
4.603 5.220 0.617 13.40 5.247 5.244 5.500 0.256 4.88
5.244 5.500 .256 4.88
For the 15th
August:
For m o n t h ..
4.408 4.912 .504 11.43 5.042 5.130 5.450 .320 6.24
5.097 5.450 .353 6.93
Foi the 15th.

Cents. Cents.
0)
0)

1905.
February:
For m o n t h ..
For the 15th
August:
For m o n t h ..
For the 15th

4.888

5.641

753 15.41

5.738

5.805
5.792

6.025
5.995

.220 3.79
.203 3.50 ’ *6.’ 000

6. i94 6.194 3.’ 23

4.385

4.874

.489 11.15

5.015

5.061
5.049

5.228
5.224

.167 3.30
.175 3.47

5.222

5.684

.462 8.85

1910.
February:
For m o n t h ..
For the 15th
August:
For m o n t h ..
For the 15th

4.276

4.740

.464 10.85

4.866

4.855
4.853

5.080
5.101

.225 4.63
.248 5.11

5.087

5.265

.178 3.50

4.413

4.980

.567 12.85

5.036

5.049
5.033

5.263
5.277

.214 4.24
.244 4.85

5.172

5.306

.134 2.59

4.745

5.347

.602 12.69

5.529

5.755

.226 4.09

1911.
February:
For m onth. .
For the 15th
August:
For m o n t h ..
For the 15th.

3.845

4.528

.683 17.76

4.539

4.553
4. 554

4.751
4.750

.198 4.35
.196 4.30

4.274

5.126

.852 19.93

5.095

5.041
4.920

5.590
5.666

.549 10.89
. 74615.16
i

1 N ot obtainable.

Refiners’ sales are made on the basis of the price of granulated
sugar, but the making of granulated sugar and the making of other
grades are so indissolubly connected that refiners’ margins are com­
puted on the cost and sales of all grades. The average granulated
basis price is presented in a separate column, however, for purposes
of comparison with jobbers’ and retailers’ prices, which relate to
granulated sugar alone, and while it appears to be only a trifle higher
than the average sales price of all grades, it must be remembered that
the latter includes the few cents received from the sale of sirup, so
that the price of sugar alone is correspondingly lower and there is,



24

BULLETIN OF THE BXJBEAU OF LABOB STATISTICS.

therefore, between the two a slightly greater difference than is
apparent.
In August, 1911, the granulated basis is lower than the average of
all sales, the probable cause having been unusually large withdrawals
of the higher grades in this period, which was so disturbed as to upset
all traditions.
“ Refiners’ cost” for each month is an average of the actual cost
prices of raw sugar melted during each month by the refiners report­
ing, using the quantity which was melted to produce 1 pound of refined
sugar, plus the average cost of containers.
“ Refiners’ sale” is an average of the actual prices per pound
received for all refined sugar delivered during the month by the same
refiners, plus the price received for the sirup made in producing 1
pound of refined sugar. The margin, therefore, covers the cost of
manufacturing, including wages, the expense of selling, and profit.
As previously stated, the cost of manufacturing and the expense of
selling are probably not subject to great variations, so that in the
periods shown the profits probably varied largely, the margins ranging
from 0.464 of a cent per pound in February, 1910, to 0.852 in August,
1911.
“ Jobbers’ sale” in each instance is an average of the prices per
pound received for granulated sugar in barrels sold to New York
retailers by the establishments reporting during the period specified;
and “ jobbers’ cost” is an average of the prices paid for all such sugar
delivered to the jobbers. It is obviously unnecessary for New York
jobbers to carry a large amount of sugar in stock, so that these costs
are practically those of the sugar sold. The margins cover expense
of selling and profit.
“ Retailers’ sale” is an average of the prices per pound of granu­
lated sugar sold by the several establishments reporting, on the 15th
day of a month, and “ retailers’ cost” an average of the actual costs
of the same sugar.
Great fluctuations are shown in refiners and retailers’ margins, but
much more constancy in those of jobbers.
Refining sugar is a continuous operation, therefore the sugar melted
in any month is not entirely the sugar sold by the refiners during the
same period. Part of that sold (i. e., delivered) was in stock from
the previous month’s output, part was made from raws melted
toward the end of the preceding month, and part made entirely from
the melt of the month under consideration. Likewise, some of the
sugar melted remains in process at the end of the month, and will
appear as refined sugar in the following month. While a large part
of the sugar represented in refiners’ sales reappears in jobbers’ sales,
and also in a somewhat lesser degree in retailers’ sales, only a small



SUGAB PBICES, FE0M BEFINEK TO CONSUMES.

25

part of the sugar represented in refiners’ cost could have reached con­
sumers during the period shown.
Based on actual transactions during the eight monthly periods, the
gross margin realized by the refiners was highest—0.852 of a cent per
pound—in August, 1911, when the cost of raw sugar and containers
for the refined sugar and sirup was at the second lowest point, and
the gross margin was lowest—0.464 of a cent per pound—in February,
1910, when the cost of raw sugar and containers was only slightly
higher than in August, 1911. The highest average monthly cost of
sufficient raw sugar to produce one pound of refined sugar, including
cost of containers for refined sugar and sirup, was 4.888 cents, and
the highest average monthly price of the products of the refinery
(refined sugar of all grades and sirup) was 5.641 cents. The high
point for both raw sugar and refined sugar was reached February,
1905, and for that month the refiner’s gross margin was 0.753 of a
cent per pound. The lowest average monthly cost of sufficient raw
sugar to produce one pound of refined sugar, including cost of con­
tainers for refined sugar and sirup, and the lowest monthly price of
refined sugar was reached in February, 1911, when raw was 3.845
cents and refined 4.528 cents per pound, which gave the refiners a
gross margin of 0.683 of a cent per pound.
Jobber’s cost price, selling price, and margin are shown, computed
on the business for the whole of each of the eight monthly periods
and also on the business of the 15th of each of the months. Based
on transactions for each of the entire months, the jobber’s gross
margin was highest—0.549 of a cent per pound—in August, 1911, when
the jobber’s cost price was lower than during five of the eight months
for which data are shown. The jobber’s gross margin was lowest—
0.167 of a cent per pound—in August, 1905, when the jobber’s cost
price was a little higher than in August, 1911. The jobber’s cost
price and also his sales price was at the highest point in February,
1905, being 5.805 and 6.025 cents per pound, respectively, and the
gross margin 0.220 of a cent per pound.
The jobber’s gross margin based on the prices on the 15th of each
month agrees very closely with his margin based on transactions for
the whole of each month for each of the eight months under consid­
eration, excepting in August, 1911, when the gross margin on the 15th
was 0.746 of a cent per pound and the margin for the whole month’s
transactions was 0.549 of a cent per pound. This was the period of
unprecedented disturbance in sugar prices, and this difference in
August, 1911, is due to the fact that during the early part of the
month the margin was low and it began to increase with the rapid
advance in sugar prices which began just before the middle of the
month.




26

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Ketailer’s cost price, selling price, and gross margin on the 15th of
each month are shown for February and August, 1905,1910, and 1911,
but were not available for 1901. The retailer’s gross margin was
highest—0.602 of a cent per pound—in February, 1911, when the
retailer’s cost price was at the lowest point; his gross margin, how­
ever, at that time was only 12.69 per cent on cost price. The retailer’s
gross margin was lowest—0.134 of a cent per pound—in August,
1910, when the per cent of margin was only 2.59. The retailer’s cost
price and also his selling price was at the highest point in February,
1905, when his gross margin was 0.194 of a cent per pound, or 3.23
per cent of the cost price.
In attempting to follow lots of sugar from dealers in raw sugar, or
even from refiners, to consumers, only fragmentary data could be
secured, owing to the nonexistence of identification in records, never
sufficient to produce an adequate basis for comparison. The fol­
lowing table, however, presents some data of actual transactions of
refiners, jobbers, and retailers on specified dates, not, of course, show­
ing the successive prices charged for one lot of sugar, but probably
in each case representing two lots, or six in all:
A C T U A L T R A N S A C T IO N S M A D E IN N E W Y O R K F E B R U A R Y 16,1910, A N D A U G U S T 22,1911.

Fine granulated sugar.
R aw
Excess of
sugar:
consumer's
Refin­
Excess of
cost of 1
Refiner's sales. Jobber's sales. Retailer's sales. consumer's
er's
pound of
pur­
cost over
granulated
chase
refiner’s
sugar over
price
sale price.
cost of raw
Price
Price
Price
Mar­
Mar­
Mar­
per
sugar to pro­
per
per
per
gin.
gin.
gin.
pound. pound.
duce it.1
pound.
pound.

Date.

Feb. 16,1910............
Aug. 22,1911...........

Cents.
4.160
4.970

Cents.
4.9C0
5.635

Cents.
0.740
.665

Cents.
5.099
5.795

Cents.
0.199
.160

Cents.
5.143
6.000

Cents.
0.044
.205

Cents.
0.243
.365

Cents.
0.670
.656

1 100 pounds of raw sugar yields 93 pounds of granulated sugar (approximately).

On February 16, 1910, a refiner contracted for 450 tons of Cuban
96° centrifugal sugar at 2xf cents cost and freight, the total cost
after adding the duty, 1.348 cents, being 4.1605 cents per pound net.
On the same date he contracted to deliver as required to a cer­
tain jobber 500 barrels of refined sugar on the basis of 4.95 cents
for granulated, less 1 per cent for cash in 7 days, which equals
4.9005 cents per pound net. This jobber on the same day sold 1
barrel of granulated sugar to a retail grocer at 5.15, less 1 per cent
for cash in 10 days, equaling 5.099 cents per pound, and the retail
grocer in turn charged his customer 18 cents for 3J pounds, which
is at the rate of 5.143 cents per pound. Of course, the sugar con­
tracted for by the refiner in the ordinary course of events probably
would not reach the consumer for two months. Likewise the sugar
sold by the refiner might reach the consumer in a month’s time, and



27

SUGAR PRICES, FROM REFINER TO CONSUMER,

that sold by the jobber in four or five days. As the transactions were
made on market prices the resultant margins are not appreciably
different from those of the table of market prices in the following
section.
In sugar, as in all like commodities, each handler’s selling price
to-day is governed not altogether by the actual cost of the sugar
offered for sale,, but largely by the price charged to-day by the seller
next previous.
MARKET PRICES AND RESULTANT GROSS MARGINS ON THE 15TH
OF EACH MONTH IN 1901, 1905, 1910, 1911, AND 1912.

It is the custom of each dealer in sugar to compare the market
quotations on a given date and to speak of the difference between
cost price and selling price as margin, and this section aims to show,
by means of market prices, the gross margins apparently accruing to
dealers in refined sugar, and the difference between refiners’ selling
prices and consumers’ costs, on the 15th day of each month in 1901,
1905,1910,1911, and 1912. In studying the table on pages 30 and 31,
one should bear in mind, first, that it represents conditions on the 15th
day only of each month and, therefore, while the general trend is shown,
many actual fluctuations do not appear; and, second, that margins
computed on market prices are theoretical only. If prices were
steady, these theoretical margins and the actual margins would be
nearly identical. Refiners, however, rely on their perspicacity in
buying raw sugar for a large part of their profit, and jobbers likewise
are quick to take advantage of an opportunity to speculate in refined
sugar.
The following statement shows the relation existing between re­
finers’ margins computed on market quotations of raw sugar and
of refined sugar for the 15th day of a month and those computed
on average market prices for the entire month:
M A R K E T P R IC E S ( N E T C A S H ) P E R P O U N D O F R A W S U G A R A N D O F R E F I N E D S U G A R
A N D R E S U L T A N T G R O SS M A R G IN S F O R C E R T A IN M O N T H S A N D F O R T H E 15TH
D A Y OF ID E N T IC A L M O N T H S.

February.

August.

Average
for month.

15th day.

Average
for month.

Fine granulated...............................................................................
96° centrifugal..................................................................................

Cents.
5.240
4.242

Cents.
5.240
4.250

Cents.
5.075
4.071

Cents.
5.100
4.000

Gross margin........................................................................

.998

.990

1.004

1.100

Fine granulated...............................................................................
900 centrifugal..................................................................................

5.925
5.048

5.900
4.940

5.070
4.062

5.100
4.125

Gross margin........................................................................

.877

.960

1.008

.975

1901.

15th day.

1905.




28

BULLETIN OF THE BUBEAU OF LAB OB STATISTICS.

M A R K E T P R IC E S (N E T C A S H ) P E R P O U N D O F R A W S U G A R A N D O F R E F I N E D S U G A R
A N D R E S U L T A N T G R O S S M A R G IN S F O R C E R T A IN M O N T H S A N D F O R T H E 15TH
D A Y O F I D E N T I C A L M O N T H S — Concluded.

February.

Average
for month.

August.

15lh day.

Average
for month.

15th. day.

1910.
Cents.
Cents.
Cents.
Cents.
4.850
4.945
Fins granulated...............................................................................
5.123
5.100
4.140
96° centriiiigal..................................................................................4.390
4.208
4.408
.737

.710

.720

.710

Fin** granulated...............................................................................
9i>° centrifugal..................................................................................

4.548
3.577

4.550
3.510

5.680
4 . 8S0

5.035
4.920

Gross margin........................................................................

.971

1.040

.806

.715

Gross margin........................................................................
1911.

1912.
Fine granulated...............................................................................
5.492
4.900
5.586
4.851
4. G56
4.735
96° centrifugal..................................................................................4.050
4.089
Gross margin........................................................................

.836

.851

.801

.811

The following statement shows how closely one jobber’s list prices
of granulated sugar, on the 15th day of February and August, 1910
and 1911, indicated his average list prices for the whole of each
month in the two years. The same jobber’s sales prices of granulated
sugar are also shown. As every salesman exercises his discretion
about cutting prices, naturally average sales prices will always fall a
little below list prices.
C O M P A R IS O N

O F J O B B E R ’ S N E T C A SH L IS T P R IC E S A N D
P O U N D OF G R A N U L A T E D SU G A R .

S E L L IN G

1910.

P R IC E S

PER

1911.
j

February.

August.

February.

August.

15th
day.

Granulated sugar:
List prices, per pound......................
Average sale, per pound...................

Aver­
age for
month.

15th
day.

Aver­
age for
month.

15th
day.

Aver­
age for
month.

15th
day.

Cents.
5.099
5.008

Cents.
5.097
5.057

Cents.
5.297
5.239

Cents.
5.297
5.220

Cents.
4.752
4.725

Cents.
4.777
4.739

Cents.
5.792
5.749

Aver­
age for
month.

Cents.
5.757
5.602

August, 1911, is the only month of those shown in which any con­
siderable difference is apparent between the average for the entire
month and the price for the 15th day of the month either in list prices
or in average sales. This being the beginning of the period of dis­
turbed prices, it is natural that salesmen were slow in insisting upon
the higher prices, and, on the other hand, retail dealers probably
refrained from making purchases other than for actual needs after
the high prices started in during the latter part of the month.



SUGAR PRICES, FROM REFINER TO CONSUMER.

29

The raw-sugar prices and refiners’ selling prices quoted in the fol­
lowing table are supposed to be the lowest net cash prices on each
date. Jobbers’ and retailers’ selling prices are averages of the net
cash list prices of representative establishments. Jobbers invariably
avail themselves of refiners’ allowance of 2 per cent1 for cash in seven
days, and, while among jobbers the opinion prevails that only about
one-half of all their customers avail themselves of the customary 1 per
cent discount, as a matter of fact the New Y ork retailers furnishing prices
use this privilege consistently. Therefore in each case net cash prices
have been quoted. Retailers’ prices, although quoted per single pound,
are based on 3£-pound sales, the customary unit of sale in New York
City.
Three classes of retail establishments were eliminated from this
table: First, those buying direct from refiners; second, those handling
sugar packed in cotton bags by refiners; and, third, those sometimes
selling at cost or less in connection with a sale of other goods aggre­
gating a specified amount. Obviously, margins computed on the
prices of such establishments would be equivocal and misleading and
could not be compared with those of the ordinary retailer.
Refiners are so few in number that there can be little variation in
their published daily prices, except as one may advance the price of
some grade, sales of which for any reason he desires to check, or, con­
versely, lower the price of a grade of which he has an oversupply.
There is, however, nothing to prevent concessions to a customer as to
manner and time of delivery, etc.
Jobbers are more numerous, but there is a very great similarity in
their list prices. One jobber may reflect refiners’ prices with greater
rapidity than another, but no material difference exists in the long run.
Retailers’ prices in any one locality can not vary largely, and some
of the smaller retailers are at times forced to sell sugar below cost to
meet the price of some nearby competitor who may have a chain of
stores, who may have bought from a refiner, or who may consider the
advertisement from selling sugar at an exceptionally low price worth
liis while.
It is certain that in every instance sales actually were made at
the prices quoted for retailers, and it is probable that the same is
true of jobbers’ prices. Refiners’ prices, however, represent a differ­
ent state of affairs, for it sometimes happens that refiners neither
buy nor sell (i. e., make contract) during considerable periods of time,
owing to the unattractive condition of the market either to them or
to their customers. Therefore, while refiners’ selling prices are actu­
ally posted, it does not follow that any sales were made at the prices
given.




1 One per ccnt previous to April 1911.

30

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

M A R K E T P R IC E S (N E T C A S H ) P E R P O U N D O F R A W A N D R E F IN E D S U G A R A N D
R E S U L T A N T G R O SS M A R G IN S O N T H E 15TH O F E A C H M O N T H , 1901, 1905,1910,1911, A N D
1912.
[Raw sugar=96° centrifugal; refined sugar=fine granulated in barrels. W henever the 15th was £ holiday
the quotation is for the first subsequent business day.]
Refined sugar.

Refiners.

Raw
Year and
month.

1901.

price,
per
pound.

Jobbers.

Margin.
Sell­
ing
price,
Per
per
A m t.
pound.
cent.

Retailers.

Margin.
Margin.
Sell­
Sell­
ing
ing
price,
price,
per
Per
per
Per
A m t.
Am t.
pound.
cent. pound.
cent.

Cents.

Cents. Cents.
4.375 5.340
4.250 5.240
4.000 4.900
4.100 5.100
4.280 5.290
4.250 5.250
4.190 5.100
4.000 5.100
3 .7S0 5.000
3.750 4.850
3.720 4.650
3.750 4.650

Cents.
0.965
.990
.900
1.000
1.010
1.000
.910
1.100
1.220
1.100
.930
.900

22.06
23.29
22.50
24.39
23.60
23.53
21.72
27.50
32.28
29.33
25.00
24.00

4.047

5.050

1.003

24.78

(l)

January............
February.........
M arch................
A p ril..................
M a y ...................
June...................
J u ly....................
A u gu st..............
September___
October............
N ovem ber____
December.........

5.125
4.940
4.875
4.875
4.440
4.250
4.000
4.125
3.750
3.625
3.440
3.625

5.900
5.900
5.900
5.900
5.600
5. C O
O
5.150
5.100
4.900
4.550
4.350
4.450

.775
.960
1.025
1.025
1.160
1.350
1.150
.975
1.150
.925
.910
.825

15.12
19.43
21.03
21.03
26.13
31.76
28.75
23.64
30.67
25.52
26.45
22.76

5.990
6.020
6.089
6.089
5.841
5.841
5.346
5.249
5.198
4.752
4.554
4.653

0.090
.120
.189
.189
.241
.241
.196
.149
.298
.202
.204
.203

1.53
2.03
3.20
3.20
4.30
4.30
3.81
2.92
6.08
4.44
4.69
4.56

6.194
6.194
6.194
6.194
6.082
6.000
5.837
5.684
5.643
5.602
5.449
5.307

0.204
.174
.105
.105
.241
.159
„ 491
.435
.445
.850
.895
.714

Average.

4.278

5.256

.978

22.86

5.469

.213

4.05

5.870

January............
February.........
March................
A p ril..................
M a y ....................
June...................
Ju ly...................
A u gust..............
September____
October............
N o v e m b e r.-...
December.........

4.170
4.140
4.360
4.240
4.240
4.170
4.300
4.390
4 .3G0
3.900
3.900
4.000

4.900
4.850
5.200
5.100
5.200
5.100
5.050
5.100
5.000
4.850
4.550
4.750

.730
.710
.840
.860
.960
.930
.750
.710
.640
.950
.650
.750

17.51
17.15
19.26
20.28
22.64
22.30
17.44
16.17
14.68
24.36
16.67
18.75

5.099
5.116
5.199
5.199
5.265
5.281
5.198
5.314
5.199
5.066
4.785
4.950

.199
.266
2.001
.099
.065
.181
.148
.214
.199
.216
.235
.200

4.06
5.48

5.265
5.265
5.265
* " . ‘ i9* 5.265
.13 5.265
3.55 5.265
2.93 5.306
4.20 5.306
3.98 5.306
4.45 5.306
5.16 5.347
4.21 5.347

Average.

4.188

4.972

.784

18.72

5.139

.167

3.36

January............
February.........
March................
A p ril..................
M a y ....................
June...................
J u ly....................
A u gust..............
September___
October.............
N ovem ber____
December.........

3.000
3.510
3.860
3.920
3.860
3.890
4.300
4.920
5.750
5.960
5.120
4.875

4.750
4.550
4.650
4.606
4.802
4.900
5.050
5.635
6.015
6.615
6.070
5.635

1.150
1.040
.790
.686
.942
1.010
.750
.715
.865
.655
.956
.760

31.94 4.950
29.63 4.768
20.47 4.785
17.50 4.834
24.40 4.983
25.96 5.050
17.44 5.165
14.53 5.694
15.04 3 6.853
10.99 6.920
18.67 6.374
15.59 5.944

.200
.218
.135
.228
.181
.150
.115
.059
.238
.305
.298
.309

Average.

4.453

5.345

.892

20.03

.182

January............
February.........
March................
A p ril..................
M a y ....................
June...................
Ju ly...................
A u gust..............
September___
October............
Novem ber____
December.........
Average.

Excess of con-

Cents.
C
1)
0)
0)
0)
0)
0)

Cents.
0)
C
1)
(i)
C
1)
(l)
(i)
(i)
(i)
(i)
(l)
(i)
0

(1)
I1)
0)
0)
|

Cents.

over refiners’
selling price.

Per
cent.

Am t.

Cents.

i
i
i

.... !

___ i '

5.927

.

0.877

17.37

3.41
2.89
1.72
1.72
4.13
2.72
9.18
8.29
8.56
17.89
19.65
15.34

.294
.294
.294
.294
.482
.400
.687
.584
.743
1.052
1.099
.917

4.98
4.98
4.98
4.98
8.61
7.14
13.34
11.45
15.16
23.12
25.26
20.61

.401

7.33

.614

11.68

166
.149
.066
.066

3.26
2.91
1.27
1.27

2.016
.108
2.008
.107
.240
.562
.397

2.30
2.08
2.15
2.06
4.74
11.75
8.02

. 365
.415
.065
.165
.065
. 165
.256
.206
.306
.456
.797
.597

7.45
8.56
1.25
3.24
1.25
3.24
5.07
4.04
6.12
9.40
17.52
12.57

5.292

.153

2.98

.320

6.44

4.21
4.79
2.90
4.95
3.77
3.06
2.28
1.05
3.60
4.61
4.90
5.48

5.347
5.347
5.347
5.347
5.347
5.347
5.347
5.755
7.020
7.388
7.020
6.367

.397
.579
.562
.513
.364
.297
.182
.061
.167
.468
.646
.423

8.02
12.14
11.75
10.61
7.30
5.88
3.52
1.07
2.44
6.76
10.13
7.12

.597
.797
.697
.741
.545
.447
.297
.120
.405
.773
.944
.732

12.57
17.52
14.99
16.09
11.35
9.12
5.88
2.13
6.12
11.69
15.54
12.99

3.41

5.915

.388

7.02

.570 j

10.66

1905.

1910.

1911.

1 N ot obtainable.




2 Loss.

5.527

3 The price on Sept. 19,1911, was 7.185 cents per pound.

31

SUGAR PRICES, FROM REFINER TO CONSUMER.

M A R K E T P R IC E S ( N E T C A S H ) P E R P O U N D O F R A W A N D R E F IN E D S U G A R A N D
R E S U L T A N T G R O SS M A R G IN S O N T H E 15TH O F E A C H M O N T H , 1901, 1905, 1910, 1911, A N D
1912— Concluded.
Refined sugar.

Year and
month.

Raw
sugar
price,
per
pound.

Jobbers

Refiners.

Margin.
Sell­
ing
price,
Per
per
A m t.
cent.
pound.

Retailers.

Margin.
Margin.
Sell­
Sell­
ing
ing
price,
price,
Per
per
Per
per
A m t.
A m t.
pound.
cent. pound.
cent.

Excess of con­
sumers' cost
over refiners’
selling price.

A m t.

Per
cent.

Cents.
4.420
4.735
4.520
3.985
3.920
3.920
3.920
4.050
4.360
4.110
4.050
3.920

Cents.
5.390
5.586
5.488
4.949
4.900
4.998
4.900
4.851
4.998
4.802
4.802
4.802

Cents.
0.970
.851
.968
.964
.980
1.078
.980
.801
.638
.692
.752
.882

21.95
17.97
21.42
24.19
25.00
27.50
25.00
19.78
14.63
16.84
18.57
22.50

Cents.
5.663
5.599
5.745
5.380
5.215
5.248
5.149
5.149
5.182
5.033
5.033
5.000

Cents.
0.273
.013
.257
.431
.315
.250
.249
.298
.184
.231
.231
.198

5.06
.23
4.68
8.71
6 43
5.00
5.08
6.14
3.68
4.81
4.81
4.12

Cents.
5.959
5.796
5.837
5.673
5.592
5.551
5.510
5.510
5.510
5.469
5.510
5.429

Cents.
0.296
.197
.092
.293
.377
.303
.361
.361
.328
.436
.477
.429

5.23
3.52
1.60
5.45
7.23
5.77
7.01
7.01
6.33
8.66
9.48
8.58

Cents.
0.569
.210
.349
.724
.692
.553
.610
.659
.512
.667
.708
.627

10.56
3.76
6.36
14.63
14.12
11.06
12.45
13.58
12.46
13.89
14.74
13.06

Average.. 4.162

5.041

.879

21.12

5.283

.242

4.80

5.612

.329

6.23

571

11.33

1913.
January...............
February...........
March..................
A p ril....................
M a y ......................
June.....................
Ju ly......................
August.................
September.........
October...............
N ovem be r.........
December...........

The amount of refiners’ margin must not be interpreted as indi­
cating margin of profit, as cost of the considerable shrinkage in weight
during refining1must first be taken into consideration in addition to
cost of refining, cost of containers, etc.
Using February 15, 1910, as an illustration, refiners offered to sell
sugar, on the basis of the price of fine granulated in barrels, at 4.85 cents
per pound, a price which would have given them a margin of 0.71 of a
cent per pound above the cost (4.14 cents) of one pound of raw sugar,
to cover their cost of manufacturing and selling, interest, and profit.
Jobbers offered to sell at 5.116 cents what they could buy at 4.85
cents, giving them a margin of 0.266 of a cent per pound, which
happens to be abnormally large, but the entire wiping out of a
margin in the following month equalizes this unusual amount, and
an average of the 12 margins resulting from jobbers’ prices in 1910 is
0.167 of a cent per pound. The jobber, in addition to interest, has the
expense of selling to consider before profit begins.
Retailers’ margin at this time was 0.149 of a cent per 1 pound,
or 52 cents per barrel of 350 pounds. The New York City retailer
sells in 3J-pound lots, 100 lots from a barrel, and furnishes paper bags
and twine, costing about 10 cents for 100 lots. If, as generally
reported, 2 pounds is spilled and otherwise lost while reweighing
something over 20 cents has to be offset by selling the empty barrel,
which would produce from 15 to 25 cents. In this case, then, the
retailer, on an outlay of $18, without considering time consumed in
weighing and wrapping 100 packages, might realize 50 cents.
iSee p. 15.

93478°—Bui. 121—13---- 3



32

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Again considering 1910, a variation of 0.49 of a cent per pound is
found in prices of raw sugar, of 0.65 of a cent per pound in refiners’
selling prices, and of 0.53 of a cent per pound in jobbers’ selling
prices, while 0.082 of a cent per pound only is the range of the average
retail prices. During the greatest part of this period retailers un­
doubtedly handled sugar quite without direct profit. However,
during the first half of 1911, retailers’ prices kept the level which
they had assumed in 1910, although refiners’ and jobbers’ prices had
materially decreased, thus showing the probability that a steady
price held by retailers for a considerable period will eventually fur­
nish a profit commensurate with the loss resulting from previous
close selling. The upheaval of August-October, 1911, however, was
too violent to be disregarded, and the average retail price was
increased over 2 cents per pound.
A careful study of the figures for 1911 and 1912 shows that refiners,
jobbers, and retailers all increased their margins considerably. With
a market fluctuating so violently this is natural. Each dealer must
carry stock sufficient to provide for and hold his customers, but as
he knows a decline next week is likely to follow to-day’s advance
he guards against possible loss by using to-day’s advanced cost as
ground for making an even greater advance in his selling price.
It is probable that each seller of sugar raised his margins as much
as he felt his customers would stand and bought as discreetly as his
experience enabled him to do. It is probable also that during the
few months of greatly increased prices each dealer augmented his
profits sufficiently to leave a considerable balance after all the losses
inevitable with such fluctuations had been deducted.
The period of advanced prices, however, was not of long duration,
and to estimate even the amount of profit made by each class of
dealers would be difficult if not impossible.
As has been stated, the refiners’ margin shown in the preceding
table covers the loss of weight in refining, therefore the actual cost of
the raw sugar consumed to produce the refined sugar sold by the
retailer is not indicated by the figures in the column headed “ Raw
sugar price.” The column “ Excess of consumers’ cost over refiners’
selling price” is, of course, simply a total of jobbers’ and retailers’
margins and indicates the additional cost to consumers owing to
existing methods of distribution.
In order to arrive at an understanding of the approximate difference
between the price paid by the consumer for a pound of sugar and the
cost of the raw sugar needed to produce that pound the following
table has been prepared, using the previously mentioned formula.1
1 The average yield of 100 pounds of 96° centrifugal sugar is said to be approximately 93 pounds of
granulated sugar, or equivalent, and 5 pounds of sirup.




33

SUGAR PRICES, FROM REFINER TO CONSUMER.

M A R K E T P R IC E S P E R P O U N D O F R A W S U G A R , C O ST O F S H R I N K A G E I N W E I G H T
D U R IN G R E F IN IN G , A N D T O T A L COST O F R A W SU G A R R E Q U IR E D T O P R O D U C E
1 P O U N D O F G R A N U L A T E D S U G A R , C O M P A R E D W I T H R E T A I L E R S ’ S E L L I N G P R IC E S
O N T H E 15TH O F E A C H M O N T H , 1901, 1905, 1910, 1911, A N D 1912.
[The average yield of 100 pounds of 96° centrifugal sugar is said to be approximately 93 pounds of granulated
sugar, or equivalent, and 5 pounds of sirup.]

Cents.
0.331
.320
.301
.309
.322
.320
.315
.301
.285
.282
.280
.282

Cents.
4.706
4.570
4.301
4.409
4.602
4.570
4.505
4.301
4.065
4.032
4.000
4.032

.305

4.352

5.927

1.575

5.125
4.940
4.875
4.875
4.440
4.250
4.000
4.125
3.750
3.625
3.440
3.625

.385
.372
.367
.367
.334
.320
.301
.310
.282
.273
.259
.273

5.510
5.312
5.242
5.242
4.774
4.570
4.301
4.435
4.032
3.898
3.699
3.898

6.194
6.194
6.194
6.194
6.082
6.000
5.837
5.684
5.643
5.602
5.449
5.367

.684
.882
.952
.952
1.308
1.430
1.536
1.249
1.611
1.704
1.750
1.469

.322

4.600

5.870

1.270

4.170
4.140
4.360
4.240
4.240
4.170
4.300
4.390
4.360
3.900
3.900
4.000

.314
.312
.328
.319
.319
.314
.324
.330
.328
.294
.294
.301

4.484
4.452
4.688
4.559
4.559
4.484
4.624
4.720
4.688
4.194
4.194
4.301

5.265
5.265
5.265
5.265
5.265
5.265
5.306
5.306
5.306
5.306
5.347
5.347

.781
.813
.577
.706
.706
.781
.682
.586
.618
1.112
1.153
1.046

4.188

Average

Cents.
4.375
4.250
4.000
4.100
4.280
4.250
4.190
4.000
3.780
3.750
3.720
3.750

4.278

1901.
Jannarv.................
February...................................! ..............................
March.........................................................................
A p ril...........................................................................
M ay.............................................................................
June............................................................................
July.............................................................................
A ugust.......................................................................
September................................................................
October......................................................................
November.................................................................
December. ............................................................

Cost of
shrinkage
in weight
during
refining.

4.047

Year and month.

Jannarv................

Cost of
Retailers’
Excess of
raw sugar
selling
consumers’
required
price of
cost over
to produce
granulated
cost of
1 pound of
sugar
raw sugar
granulated
per pound. per pound.
sugar.

Market
price of 96°
centrifugal
sugar
per pound.

.315

4.503

5.292

.789

3.600
3.510
3.860
3.920
3.860
3.890
4.300
4.920
5.750
5.960
5.120
4.875

.271
.264
.291
.295
.291
.293
.324
.370
.433
.449
.385
.367

3.871
3.774
4.151
4.215
4.151
4.183
4.624
5.290
6.183
6.409
5.505
5.242

5.347
5.347
5.347
5.347
5.347
5.347
5.347
5.755
7.020
7.388
7.020
6.367

1.476
1.573
1.196
1.132
1.196
1.164
.723
.465
.837
.979
1.515
1.125

4.453

.335

4.788

5.915

1.127

Cents.

•

Cents.

C
1)

0)

1905.

February...................................................................
March.........................................................................
A p ril...........................................................................
M ay.............................................................................
June.............................................................................
July.............................................................................
A u gust.......................................................................
September.................................................................
October......................................................................
November.................................................................
December_________ __________________ ______ _
Average
1910.
.Tamiarv__________
February...................................................................
March.........................................................................
April...........................................................................
H a y ...........................................................................
June.............................................................................
July.............................................................................
A u gust.......................................................................
September................................................................
October.....................................................................
November.................................................................
December___________________________________
Average
1911.
Jannarv..................
February...................................................................
March.........................................................................
A p ril...........................................................................
M ay.............................................................................
June.............................................................................
July.............................................................................
A u gust.......................................................................
September.................................................................
October......................................................................
N ovem ber................................................................
December____________________ _____ _________
Average




iNot obtainable.

*

34

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

M A R K E T P R IC E S P E R P O U N D O F R A W S U G A R , C O ST O F S H R I N K A G E IN W E I G H T
D U R I N G R E F I N I N G , A N D T O T A L C O ST O F R A W S U G A R R E Q U I R E D T O P R O D U C E
1 P O U N D O F G R A N U L A T E D S U G A R , C O M P A R E D W I T H R E T A I L E R S ’ S E L L IN G P R IC E S
O N T H E 15TH O F E A C H M O N T H , 1901, 1905, 1910, 1911, A N D 1912— Concluded.

Cost of
Retailers’
Excess of
raw sugar
selling
consumers’
required
price of
cost over
to produce
granulated
cost of
1 pound of
sugar
raw sugar
granulated
per pound. per pound.
sugar.

Market
price of 96°
centrifugal
sugar
per pound.

Cost of
shrinkage
in weight
during
refining.

1912.
Januarv.....................................................................
February...................................................................
March.........................................................................
A p ril...........................................................................
M ay.............................................................................
June............................................................................
July.............................................................................
August.......................................................................
September................................................................
October......................................................................
November.................................................................
December.................................................................

Cents.
4.420
4.735
4.520
3.985
3.920
3.920
3.920
4.050
4.360
4.110
4.050
3.920

Cents.
0.333
.356
.340
.300
.295
.295
.295
.305
.328
.309
.305
.295

Cents.
4.753
5.091
4.860
4.285
4 .J8.5
4.215
4.215
4.355
4.688
4.419
4.355
4.215

Cents.
5.959
5.796
5.837
5.673
5.592
5.551
5.510
5.510
5.510
5.469
5.510
5.429

Cents.
1.206
.705
.977
1.388
1.377
1.336
1.295
1.155
.822
1.050
1.155
1.214

Average.........................................................

4.162

.313

4.475

5.612

1.137

Year and month.

In the above table market prices of raw sugar and retailers’ sales
prices are reproduced from the table on pages 30 and 31.1
In 1910, despite the fact that the average price of raw sugar was
higher than the average price of any year since 1905, the average
retail price in New York retained the steady level which it had held
for five years. Jobbers, too, seem to have sold particularly close, and
refiners’ theoretical margins were reduced. As a result, while the
average market price cost of sufficient raw sugar to make a pound of
granulated sugar was 4J cents, the consumer was paying only a little
T
over 5J cents for the completed product. In other words, according
to the market prices, the total cost of refining, plus the cost of selling
by three sets of dealers, and their combined profits, was less than
four-fifths of 1 cent per pound.2
The original cost and final selling price approached each other so
closely in no other of the years under consideration; but this period
of repression was followed immediately by the flurry in prices of
1911-12.
In 1911 the consumer paid about 1J cents per pound for refining,
selling, and profit, and in 1912 about 1^ cents. These figures, how­
ever, are considerably less than the yearly average of 1905, which
w over 1J ceftts, and the average for 1901, which was over 1\ cents
~as
per pound.
1Average prices of raw sugar: 1906,3.686 cents per pound; 1907, 3.756; 1908, 4.073; and 1909, 4.007. Aver­
age retail prices of granulated: 1906, 5.36 cents per pound; 1907, 5.265; 1908, 5.293; and 1909, 5.287.
2 The excess of consumers’ cost over actual cost of raw sugar melted b y refiners reporting was 1.13 cents
in February, 1910, and 1.023 in August, 1910.




SUGAR PRICES, FROM REFINER TO CONSUMER.

35

In considering this table, which is meant only to give approxima­
tions, it must be remembered that the consumer pays also for con­
tainers, which have been an additional expense to refiner and retailer.
As has been stated, the sale of the empty barrel or bag partly, at least,
reimburses the retailer, but the sale of his chief by-product, sirup,
does not so nearly compensate the refiner.
The cost to refiners of containers has increased during the last
10 years and the price of sirup, especially in 1911 and 1912, has
decreased. From the figures available, and those from the several
establishments reporting resemble each other so closely as to give
them additional weight, the excess of the average cost of containers
for 100 pounds of refined sugar over the price received for the sirup
resulting from the refining, in the years studied, was as follows:
1901 and 1905, 3J cents; 1910, 5J cents; 1911, 8 cents; and 1912,
over 9 cents.
Therefore', by deducting these amounts from the total differences
between original cost and final sale the average cost for refining, sell­
ing, and profit would be reduced to approximately 1J cents per pound
in 1901; 1J cents in 1905; f of a cent in 1910; and 1 ^ cents in 1911
and 1912.
While these theoretical figures show a large increase in 1911 and
1912 over 1910, they also show a marked decrease for 1911 and 1912
as compared with the earlier years 1905 and 1901.
In addition to the retail grocers, whose prices for sugar bought
packed loose in barrels furnish the averages presented in the tables
of this and the previous sections, reports were secured from four
other establishments, each having several retail stores and the
magnitude of their business enabling them to buy directly from the
refiners.
Two of these establishments deal very largely in sugar packed by
the refiners in cotton bags. The refiners’ price for 3£-pound cotton
bags of sugar generally is 25 cents per 100 pounds above the price
of sugar loose in barrels, and yet both these firms report that they
sell these bags without extra charge, as, owing to the great amount
of sugar handled, the saving in time, labor, and containers balances
the extra cost. As a matter of fact their prices are occasionally
higher than those of a large number of the retailers handling loose
sugar, but by no means regularly so, and one frequently and the
other occasionally sells at a lower price.
Of the two establishments handling loose sugar one of them so
often sells at a very low price as an inducement to attract purchasers
of other goods that his profit or loss on sugar alone is too problem­
atical to warrant the use of his prices.




36

BULLETIN OF THE BUBEAU OF LABOB STATISTICS.

The following tabic therefore shows averages of the prices of three
retail establishments, each having several stores, and who buy direct
from refiners, together with the retail averages presented on pp. 30
and 31, reproduced here for comparison.
C O M P A R IS O N O F A V E R A G E S E L L IN G P R IC E S O F G R A N U L A T E D SUGxVR, O F R E T A I L ­
E R S B U Y I N G F R O M J O B B E R S A N D O F R E T A I L E R S B U Y IN G F R O M R E F IN E R S .

1905

Month.

1910

1911

1932

Average retail sell­
ing price per
pound of granu­
lated
sugar
bought from—

Average retail sell­
ing price per
pound of granulated
sugar
bought from—

Average retail sell­
ing price per
pound of granulated
sugar
bought from—

Average retail sell­
ing price per
pound of granu­
late d
sugar
bought from—

Refiners
Refiners
Refiners
Refiners
Jobbers. direct (by Jobbers. direct (by Jobbers. direct (by Jobbers. direct (by
3 firms).
3 firms).
3 firms).
3 firms).

January..........................
February.......................
March..............................
April................................
M ay..................................
June.................................
July..................................
August............................
September.....................
October..........................
N ovem ber.....................
December......................

Cents.
6.194
6.194
6.194
6.194
6.082
6.000
5.837
5.684
5.643
5.602
5.449
5.367

Cents.
5.917
6.000
6.000
5.833
5.650
5.543
5.460
5. 460
5.417
5.283
5.167
5.267

Cents.
5.265
5.265
5.265
5.265
5.265
5.265
5.306
5.306
5.306
5.306
5.347
5.347

Cents.
5.524
5.524
5.524
5.524
5.714
5.714
5.714
5.714
5.619
5.619
5.523
5.523

Cents.
5.347
5.347
5.347
5.347
5.347
5.347
5.347
5.755
7.020
7.388
7.020
6.367

Cents.
5.524
5.523
5.333
5.333
5.333
5.428
5.619
5.904
7.238
7.333
6.952
6.286

'Cents.
5.959
5.796
5.837
5.673
5.592
5.551
5.510
5.510
5.510
5.469
5.510
5.429

Cents.
6.095
6.000
6.000
5.619
5.619
5.619
5.619
5.524
5.524
5.524
5.524
5.619

Average..............

5.870

5.583

5.292

5.603

5.915

5.984

5.612

5. 695

By comparing the cost prices as shown in the tables of this and the
preceding section, and making allowance for the extra cost of cotton
bags used by two firms, a fair idea of the actual margins of these
three establishments can be obtained. The use of cotton bags by
the two firms reporting probably began after 1905.
COMPARISON OF GROSS MARGINS, ACTUAL TRANSACTIONS, AND
MARKET PRICES.

The margins shown in the tables on pages 23 and 30 can not be
directly compared, as one refers to a single day and the other to an
entire month. Therefore, in order that an idea may be formed of
the difference existing between the two, the following table has been
prepared, using the two tables noted as a basis but necessarily limited
to the periods shown in the table of actual transactions:




37

SUGAR PRICES, FROM REFINER TO CONSUMER.

C O M P A R IS O N O F G R O SS M A R G IN S , B A S E D O N M A R K E T P R IC E S A N D O N A C T U A L
T R A N S A C T IO N S I N F E B R U A R Y A N D A U G U S T , 1901, 1905, 1910, A N D 1911.

Refiners.

Year and m onth, etc.

Aver­
age cost
of raw
sugar to
produce
1 pound
of re­
fined
sugar.

Jobbers.

Retailers.

Aver­
Aver­
Aver­
Aver­
Aver­
age sell­
age sell­
age
age
age sell­
ing
ing
cost of
cost of
ing
price of
price of
granu­
granu­
price of
granu­ Margin.
Margin.
granu­ Margin.
lated
lated
refined
lated
lated
sugar
sugar
sugar
sugar
sugar
per
per
per
per
per
pound.
pound.
pound.1
pound.
pound.

1901.
February:
Market prices......................
Actual transactions...........

Cents.
4.561
4.473

Cents.
5.240
5.130

Cents.
0.679
.657

Cents.
5.240
5.244

Cents.
5.500
5.500

Cents.
0.260
.256

August:
Market prices......................
Actual transactions..........

4.377
4.271

5.075
4.820

.698
.549

5.075
5.130

5.450
5.450

.375
.320

1905.
February:
Market prices......................
Actual transactions...........

5.428
4.757

5.925
5.593

.497
.836

5.925
5.805

6.045
6.025

.120
.220

6.045
6.000

6.194
6.194

0.149
.194

August:
Market prices......................
Actual transactions..........

4.368
4.258

5.070
4.842

.702
.584

5.070
5.061

5.253
5.228

.183
.167

5.253
5.222

5.684
5.684

.431
.462

1910.
February:
Market prices......................
Actual transactions...........

4.525
4.135

4.945
4.728

.420
.593

4.945
4.855

5.108
5.080

.163
.225

5.108
5.087

5.265
5.265

.157
.178

August:
Market prices......................
Actual transactions...........

4.740
4.283

5.128
4.938

.388
.655

5.128
5.049

5.297
5.263

.169
.214

5.297
5.172

5.306
5.306

.009
.134

1911.
February:
M arketprices......................
Actual transactions..........

3.846
3.700

4.548
4.509

.702
.809

4.548
4.553

4.776
4.751

.228
.198

4.776
4.745

5.347
5.347

.571
.602

August:
Market prices......................
Actual transactions..........

5.247
4.137

5.686
5.104

.439
.967

5.686
5.041

5.769
5.590

.083
.549

5.760
5.529

5.755
5.755

*.0 1 4
.226

1 Market prices= Fine granulated.
2 N ot obtainable.
3 Loss.

Cents.

Cents.
(2)
(2)

Cents.

(2)
(2)

Actual transactions« A ll grades refined sugar.

Referring to the figures for actual transactions in the above table,
the average cost of raw sugar to refiners is the average monthly cost
shown in the table on page 23 less cost of containers, and the re­
finers’ average sales prices are the average monthly prices shown in
the same table less sales prices of sirup. The figures for jobbers
and retailers are reproduced from the table on page 23, the figures
for the former being averages for the month, while those for the
latter are for the 15th of the month.
In place of the market prices for the 15th day of each month, shown
on page 30 for refiners and jobbers, averages for the entire month are
presented here. In the case of raw sugar the average cost of 1 pound
is augmented by the cost of the quantity lost in producing 1 pound
of refined sugar, as in the table on page 33. The market prices for
retailers are for the 15th of the month.



38

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

In presenting market prices refiners’ sales price becomes, of course,
jobbers’ cost, while the latter’s sales price becomes in turn retailers’
cost.
As explained on page 22, average monthly retail prices were not
available, hence average retail prices on the 15th day of each month
are used in both presentations. It is improbable that an average
of retail sales for the entire month would produce a result materially
different from that shown for the 15th day of the month. Especially
is this true for February, 1911, February and August, 1910, and
February, 1905. The quotation for the 15th day of each of those
months appears unchanged in the months immediately preceding and
subsequent. Therefore it may be assumed that there were no appre­
ciable changes in prices through those months.
The average price per pound dropped from 5.837 cents on July
15, 1905, to 5.684 on August 15 and 5.643 on September 15. In this
instance the average price during the first half of August may
have been slightly higher than that for the last half of the month,
but it is not likely that it was sufficiently so to have made a material
change in the average for the month from the figure for the 15th day.
The average price per pound on July 15, 1911, was 5.347 cents;
that on August 15, 5.755 cents; and on September 15, 7.02 cents.
During this much-agitated period prices changed with amazing
frequency, and it is therefore difficult to estimate accurately the aver­
age of actual sales during August, but there is every indication that
it was higher than the price on the 15th day.
For refiners we have the theoretical margin between market prices
of 96° centrifugal sugar and of granulated sugar to compare with the
margin between actual cost of all raw sugar melted and all grades of
refined sugar sold. But as has been stated the proportion of granu­
lated sugar of the total sales of sugar is very large, and it is probable
that if it were possible to arrive at the actual cost of the raw sugar
which produced granulated sugar in these periods to compare with
the average granulated basis prices the resultant margins would very
closely follow the margins between cost and sales of all grades.
In February, 1905, February and August, 1910, and February and
August, 1911, refiners’ gross margins resulting from actual transac­
tions were from 0.107 to 0.532 of a cent per pound greater than those
resulting from a comparison of average market prices, and in the three
remaining periods from 0.022 to 0.149 less. February, 1905, and
August, 1911, were both periods of very high prices following rapid
and large rises in prices, which combination of conditions resulted
as might be expected in considerable gains for refiners, while August,
1905, and February, 1911, when exactly opposite conditions prevailed,
left refiners with a loss of 0.118 cents per pound over the theoretical



SUGAR PRICES, FROM REFINER TO CONSUMER.

39

margin in tlie first instance, and contrary to what might have been
expected a gain of 0.107 in the second.
Jobbers not being manufacturers their actual margins and theo­
retical margins do not vary so widely as do those of refiners. In
August, 1911, however, when the jobbers’ margin on market prices
was extremely low the actual margin was in reality extremely high,
as the jobbers were selling at the advanced prices sugar bought at
the low price of early July.
Retailers’ margins, as has been discussed, are not a stable quantity.
On August 15, 1910, when their average selling price was their market
cost, the retailers were in reality selling at an advance of over oneeighth cent per pound; on February 15, 1911, when their market cost
was very low they retained their former selling price and profited
three-fifths cent per pound; whileon August 15,1911, instead of an ap­
parent slight loss, they were selling at an advance of over one-fifth cent
per pound.
As has been stated, in this report no attempt has been made to
arrive at the actual margin of profit. The sole object here is to
indicate as clearly as possible whether a gross, margin, computed on
actual transactions, produces a result for dealers different from the
margin computed on market prices, and the conclusion is apparently
justified that the former does result to refiners’ advantage consider­
ably, and, continuing the comparison, that jobbers and retailers
usually are benefited also, though to a limited degree only.
COMPARISON OF JOBBERS’ AND RETAILERS’ MARKET PRICES IN
NEW YORK, PITTSBURGH, AND CHICAGO.

Cane sugar from New York refineries naturally finds its greatest
market in the adjoining States, while the product of beet-sugar
factories ordinarily gets no farther east than the western border of
Pennsylvania. A considerable amount of cane sugar from New
York, however, finds a market in the Middle West, and the two
sugars to a considerable extent compete in many localities of that
region.
It was desired to present a comparison of the prices of jobbers and
retailers in a few important centers outside the New York district
with similar prices in New York City, and in making such a com­
parison it was necessary to start with one basis, the product of New
York refineries.
Cane sugar as a rule commands a price slightly higher than that of
beet sugar, usually from 10 to 15 cents per 100 pounds as sold by
jobbers, but it is not apparent that a very large number of con­
sumers distinguish between the two kinds of sugar; therefore, in
localities where both are dealt in, it is extremely difficult to obtain
records of retail prices of cane sugar alone with certainty. However,



40

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

great care was exercised in securing tlie figures presented, and it is
believed that they relate in every instance to cane sugar from New
York refineries.
The table which follows is based on market prices on the 15th
of February and August in the years 1905, 1910, 1911, and 1912.
Market prices of a sufficient quantity of raw sugar to produce 100
pounds of refined are reproduced from the table, page 33, and
refiners’, jobbers’, and retailers’ selling prices in New York from
the table, page 30. Jobbers’ and retailers’ selling prices in Pitts­
burgh and Chicago were obtained direct from the records of such
dealers in those cities.
J O B B E R S ’ A N D R E T A I L E R S ’ G R O SS M A R G IN S (B A S E D O N M A R K E T P R IC E S O F G R A N U L A T E D S U G A R ) A N D E X C E S S O F C O N S U M E R S ’ COST O V E R J O B B E R S ’ C O ST A N D
O V E R COST O F R A W S U G A R , I N N E W Y O R K , P I T T S B U R G H , A N D C H IC A G O , O N T H E
15TH O F F E B R U A R Y A N D A U G U S T , 1905, 1910, 1911, A N D 1912.

Date and locality.

Excess of con­
sumers’ cost
Refiners.
Jobbers.
Retailers.
Aver­
of granulated
age cost
sugar—
of raw
sugar to
produce
Selling Selling
Selling
one
Freight price
price
price
Over
pound charged granu­ granu­
granu­
Over
cost
granu­ jobbers,
lated Margin. lated Margin. jobbers’
lated
of raw
lated
sugar, sugar,
sugar,
per
cost.
sugar.
sugar. pound.
per
per
per
pound. pound.
pound.

1905.
February 15:
New Y o rk ___
P ittsb u r g h ...
Chicago............
August 15:
New Y o rk ___
P ittsb u r g h ...
Chicago............

Cents.
5.900
6.045
6.140

Cents.

Cents.

6.020

0.120

6.188
6.198

.143
.058

5.100
5.245
5.210

5.249
5.346
5.240

.149

4.850
4.995
5.070

5.116
5.165
5.127

5.100
5.245
5.320

.220

Cents.

Cents.
0.174
.336
.177

Cents.
0.294
.479
.235

Cents.
0.882

6.000

.435
.849
.760

.584
.950
.790

1.249
1.760
1.565

.266
.170
.057

5.265
5.964
5.286

.149
.799
.159

.415
.969
.216

.813
1.512
.834

5.314
5.396
5.358

.214
.151

5.306

1.008
.604

.206
.755
.537

.586
1.280
1.137

4.550
4.695
4.770

4.768
4.851
4.846

.218
.156
.076

5.347
5.964
5.500

.579
1.113
.654

.797
1.269
.730

1.573
2.190
1.726

5.635
5.785
5.860

5.694
5.527
5.953

.059
3.258
.093

2 5.755
7.464
7.000

.061
1.937
1.047

.120

.150
.225

1.679
1.140

.465
2.174
1.710

.150
.225

Cents.
5.312

5.586
5.736
5.811

5.599
5.816
5.833

.013
.080

.022

5.796
6.892
6.357

.197
1.076
.524

1.156
.546

.705
1.801
1.266

.150
.225

4.851
5.001
5.076

5.149
5.198
5.229

.298
.197
.153

5.510
6.138
5.786

.361
.940
.557

.659
1.137
.710

1.155
1.783
1.431

0.145
.240
4.435
.145

.110

.101

6.194
6.524
6.375
5.684
6.195

1.212
1.063

1910.
February 15 :
New Y o rk ___
P ittsbu rgh .. .
Chicago............
August 15 :
New Y o rk ___
P ittsburgh.. .
Chicago............

4.452
.145

.220
4.720
.145

.220

6.000
5.857

1911.
February 15:
N ew Y o rk ___
P ittsburgh.. .
Chicago............
August 15:
New Y o rk ___
P ittsbu rgh .. .
Chicago............

3.774
.145
5.260

1913.
February 15 :
N ew Y o rk ___
Pittsburgh. . .
Chicago............
August 15:
New Y o rk ___
P ittsbu rgh .. .
Chicago............
1 Loss.

5.091

4.355

2 The price on September 15 was 7.02 cents.




.210

3 Loss; actual transactions’ m argin = + 0.477.

SUGAR PRICES, FROM REFINER TO CONSUMER.

41

In New York refiners’ selling price is of course jobbers’ cost, but
in outside places freight charges enter into middlemen’s cost.
The freight rates between any two points are easily obtainable, but
the actual charges of refiners vary considerably, being influenced by
numerous and changing conditions. For example, the rate from
Philadelphia to Pittsburgh being somewhat less than that from New
York, the refiner in New York must absorb the difference to compete
with Philadelphia refiners; and in Chicago the rate from refineries in
New Orleans must be considered, as is illustrated by the very low rate
charged in August, 1905, which was caused by a railroad rate war, but
was effective for only a short time. The advance in freight charges
between February and August, 1911, was made in April, at which
time refiners began giving a 2 per cent discount for cash in place of 1
per cent.
The statements regarding net cash prices and list prices of jobbers
on page 28 apply here as well. However, the fact that jobbers’ mar­
gins here given may be slightly at variance with their actual margins,
and retailers’ margins correspondingly so, affects neither the retail
selling price nor, in consequence, the amount paid by consumers to
cover the cost of manufacturing and the distribution of refined sugar.
In 1905 refiners were making special discounts to important cus­
tomers, which, were they shown, would increase the margin of several
of the jobbers whose prices have been secured. While this practice
has been discontinued it is undoubtedly true that concessions in
methods of delivery, etc., are obtained by large buyers, which may
account for some of the very scant apparent margins computed on
market prices. Competition with beet sugar undoubtedly has an effect
upon these prices also so far as jobbers’ sales are concerned.
New York jobbers commonly speak of their margin as 15 cents per
hundred pounds, and in the long run it is probable that that amount
is near the average. The reports obtained in Pittsburgh indicate
that a like margin customarily accrues to jobbers in that city. Men­
tion should be made pf the peculiar condition existing in Pittsburgh
during the period of very high prices in 1911. While this table shows
an apparent loss in August, 1911, as a matter of fact the jobbers
reporting had all made contracts at the low price of early July, and
were therefore actually making 47.7 cents per 100 pounds instead of
losing 25.8. It is reported that one dealer having a very large con­
tract at the early July rate continued selling at only a moderate
advance throughout the entire disturbed period, and as all jobbers
were forced to meet his prices they were compelled to sell for some
time at prices below the selling price of refiners in New York. Of
course they appeared to be losing money, and it is a fact that they
were losing a good share of the profit to which they would have been
entitled had they continued their custom of selling 15 points above



42

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

the market. Competition between jobbers in Chicago is also very
keen and their apparent margins are extremely low.
Retail prices in each city in August, 1911, were considerably higher
than at any other period shown in this table, but the cost to con­
sumers for refining and distribution was greatest in February of that
year, when raw sugar was at its lowest point, and despite the fact that
retail prices were almost at their lowest. But this is not surprising,
owing to the retailers’ well-known disinclination to disturb his selling
price until forced to do so by a long continuance of either low or high
prices of raws.
While this table shows wide variations in the cost for distribution,
profit, etc., in each city, it is noticeable that in the three cities con­
sumers in Pittsburgh have paid most heavily, though of course one
should not overlook the additional charge for freight to localities
outside New York.