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1924 



March 5, 1924 



The Illinois Agricultural Association Record 



Page 3 



What is Co-operative Marketing 



Doing in Illinois and How? 



\ 



What is cooperative marketing 

 doing for us in Illinois? Is it 

 getting a better price for our 

 products, and if so what are the 

 things that make it possible to 

 get a better price? 



Is it wider distribution that 

 makes it possible for a coopera- 

 tive association to sell better, or 

 is it because a cooperative can 

 standardize and improve the 

 quality of the product? Does a 

 large volume sold through a co- 

 operative marketing organization 

 make it possible to get a better 

 price? Can a co-op sell for less 

 cost than every man selling his 

 own product? 



The Record will attempt to get 

 the answer to these questions for 

 our own cooperative associations 

 here in Illinois. We are starting 

 with the Illinois Fruit Exchange 

 in this story. In the next several 

 Issues we will take up other or- 

 ganizations. After this kind of 

 a survey has. been made of our 

 leading cooperative marketing 

 projects it may be that a sum- 

 mary of facts can be made. Any- 

 way it won't do any barm to 

 look for the answer to what co- 

 operative marketing is doing for 

 us and how it is doing' it. 



The Illinois Fruit Exchange 

 with headquarters at Centralia 

 has marketed two crops. In 1922 

 It sold 1,100 carloads of fruits 

 and vegetables for members and 

 In 1923 it sold 600 cars. 



Higher Prices 



The average price to growers 

 for fruits and vegetables sold 

 through the Illinois Fruit Ex- 

 change has been higher than the 

 average price received by outside 

 growers. This is the opinion of 

 Manager A. B. Leeper and of 

 many growers interviewed. It is 

 impossible to get the average 

 price of outside growers to make 

 a comparison. The fact that sev- 

 eral large growers have joined 

 the exchange of their own ac- 

 cord in the past year supports 

 the argument. 



We are starting on the as- 

 sumption that thS exchange has 

 netted the grower an average 

 higher price than outside grow- 

 ers have received. If you differ 

 with this assumption, let's have 

 the facts you have. 



Standardization 



Mr. Leeper placed standac^iza- 

 ,tion and quality at the bead of 

 the list in the several factors 

 that made it possible for the ex- 

 change to get a better price. The 

 market demands a standard prod- 

 uct, he says. The better the 

 quality the better the price. He 

 thinks it is impossible to get a 

 uniform product without the pro- 

 ducers' own marketing associa- 

 tion. The exchange has pro- 

 moted standardization and qual- 

 ity and has attained it to such a 

 degree that it has been a factor 

 in increasing the price. 



Wilier Distribntinn 



Chicago was the chief market 

 for fruits and vegetables before 

 the exchange started. The ex- 

 change is in touch with about a 

 hundred markets every day in 

 the .selling season. In 1922 it 

 sold produce on 115 different 

 markets snd in 1923 on 98 mar- 

 kets. 



This wider distribution has 

 been the second large factor in 

 getting a better price through 

 cooperative marketing. By avoid- 



ing glutted markets and selling 

 on markets where supply is short 

 and demand is better, an in- 

 creased price has been secured. 



Less Selling Expense 



The exchange has lowered the 

 cost of selling to some extent. 

 The usual commission charge for 

 selling is ten per cent. In 1922 

 the exchange cost was eight per 

 cent and in 1923 it was a little 

 lower. Experience shows that 

 the cost of packing and grading 

 is less wh«n done at central 

 points through the cooperative 

 association than for every man 

 to do this work for himself. 

 Obstacles 



The exchange needs more vol- 

 ume of business. Mr. Leeper 

 says that volume must be had to 

 do efficient cooperative marketing. 

 Without volume it is hard to get 

 standardization and hard to get 

 wide distribution which are the 

 two chief things that have made 

 cooperative marketing worth 

 while, according to the experi- 

 ence of the exchange. 



One of the greatest hold-backs 

 of the work is the lack of inter- 

 est in the association by mem- 

 bers. A number of members dis- 

 regarded their contracts with the 

 association. They have publicly 

 criticized the organization rather 

 than taking the attitude that it 

 is their own organization. 



One reason for this, Mr. 

 Leeper states, is that the associa- 

 tion has not given out full infor- 

 mation about the association. A 

 field service to keep members in- 

 formed would help this condi- 

 tion, he believes. 



What Memben Think 



What are the biggest benefits 

 that cooperative marketing has 

 brought to fruit growers in Illi- 

 nois? What are the biggest draw- 

 backs to successful cooperation? 

 These questions were asked of 

 several members of the Illinois 

 Fruit Exchange by a representa- 

 tive of the Record. 



"The biggest benefit from co- 

 operative marketing thus far is 

 grading and putting our fruit in 

 proper shape for the market," 

 said W. L. Cope, Tonti. "Und«r 

 the old system every fellow puts 

 up his packages as he sees fit 

 but now the stuff must come up 

 to quality requirements. This 

 boosts prices to both tiie oJv- 

 sider and members of the ex- 

 change. The exchange practically 

 sets the price with its quality 

 product. Marketing is now by 

 known grades, quality and sizes. 



"The biggest draw-back to our 

 success IS that many of the mem- 

 bers epcpect too much ■ of coopera- 

 tive marketing." 



What Newman said 



E. W. Newman, Cobden, said 

 that the biggest benefits of co- 

 operative marketing as he sees 

 them are grading, orderly mar- 

 keting and wide distribution. 



"Our biggest draw-back is that 

 the exehangfe was oversold," ho 

 said. "Members expect too much 

 of it. If prices aren't always 

 higher through the exchange than 

 from local dealers, many are prone 

 to say that it is a failure. Lack 

 of interest in the organization on 

 the part of members is another 

 draw-back." 



Grading Biggest Benefit 



"Grading by size and quality is 

 the main benefit "that cooperative 



TAX-EXEMPT BONDS 

 MENACE TO SOUND 

 FINANCES-WATSON 



I.A.A. Man Tells Farmers' Institute 



That Stopping Them Will Help 



Remedy Conditions 



"The first and most important 

 step in correcting the present un- 

 sound tax conditions is stopping 

 the further issue of tax-free se- 

 curities at the earliest possible 

 moment," said John C. Watson, 

 in charge of Taxation and Sta- 

 tistics for the I. A. A., in an ad- 

 dress before' the Illinois Farmers' 

 Institute at Dixon, February 21. 



"If the revenue history of the 

 United States in the last few 

 years has demonstrated anything, 

 it is that high surtaxes are not 

 compatible with a practically un- 

 limited issue and supply of tax- 

 exempt securities. The decreas- 

 ing receipts from the higher 

 brackets of the revenue act are 

 clear proof of shifting of invest- 

 ments in order to avoid taxation." 

 Objections 



According to Mr. Watson, large 

 sums of taxable moneys and 

 credits have been withdrawn from 

 industry and business enterprises 

 for investment in tax-exempt 

 bonds. The difference in interest 

 rates between taxable and non- 

 taxable securities is frequently 

 spoken of as a tax paid by the 

 owner of the otherwise tax- 

 exempt security, but such a dif- 

 ference is inflexible and cannot 

 be fixed according to the ability 

 of the owner to pay. It is not 

 uniform with taxes on other 

 property of like value. It is not 

 properly distributed, all the 

 revenue going to the department 

 of government issuing the bonds. 



"Unless the issue of such se- 

 curities is stopped," said Mr. Wat- 

 son, "they will probably destroy 

 our income tax laws. Payers of 

 the normal tax and of the low- 

 est surtaxes are likely to rebel 

 when they know that men of 

 great wealth and of high incomes 

 are escaping the tax." 



Most be Done - "I" ' 



In Mr. Watson's opinion, an 

 attempt to save the tax-free 

 feature of the Federal Land 

 Bank bonds will only delay the 

 stopping of the issue of other 

 tax-exempt securities, and in the 

 long run it will be better for the 

 farmers to give it up provided it 

 is eliminated for all other se- 

 curities. "At the best, an amend- 

 m e n t eliminating tax-exempt 

 bonds can scarcely be put into 

 effect before 1928, but it can 

 eventually be done because it 

 must be done. That may be poor 

 logic, but it states a fact." 



marketing has brought to our lo- 

 cality," said Norman W. Casper, 

 New Burnside. "It has also 

 practically made a market for 

 us, " he declared. "One of the 

 ^easons why we organized at 

 Ozark was because local buyers 

 often failed us by not being there 

 when we needed them. As it is 

 now, when buyers come in they 

 come to our packing house to fill 

 their orders. 



9 



"A good example of how the 

 exchange practically built up a 

 market for us was in the case of 

 Kinna'ird apples. They were 

 practically unknown on the mar- 

 kets. We built up a demand for 

 them and sold them for as much 

 as $4.50 per barrel While out- 

 siders were content with 11.50." 



Stephenson Farm 

 Bureau Has Market 

 Place In Freeport 



The latest addition to the list 

 of farmers' markets under the 

 supervision of county farm bu- 

 reaus is the one at Freeport 

 which was opened February 2 by 

 the Stephenson County Farm Bu- 

 reau. It is located on the first 

 floor of the building in which the 

 farm bureau office is situated. 



There are 11 booths where 

 farm bureau members display 

 farm produce to customers. An 

 average of from »250 to $300 

 has been done each Saturday re- 

 cently. G. F. Baumeister is in 

 charge of the market. The home 

 bureau cooperates in the project, 

 a unit of the organization having 

 charge of a lunch booth each 

 market day. 



Push Farm Relief 

 Bill Hardy Says 

 Monmoutlt Man 



"Push the McNary-Haugen bill 

 hard!" is the gist of a letter 

 from William Beste of Mon- 

 mouth, Illinois, expressing the 

 views of the farmer regarding 

 this legislative measure. Mr. 

 Beste writes: 



"Am just in receipt of my copy 

 of the Record and note with de- 

 light that it contains something 

 relative to the McNary-Haugen 

 bill. 



"What concerns the rural pop- 

 ulation just now is how their 

 status in the economic life of the 

 country can l)est be equalized 

 with that of the city dwellers. 

 After the war the farmers' busi- 

 ness was thrust on the rocks 

 when the Federal Reserve board, 

 following a period of propaganda 

 in which the farmer was made 

 the goat for the high cost of liv- 

 ing, instituted a policy of forced 

 liquidation. Special legislation, 

 such as the Esch-Cummins act 

 and the Fordney-McCumber tar- 

 iff, since enacted has tended to 

 keep agriculture down. Why 

 should a policy of protection be 

 made to work for the benefit of 

 one class of citizens and denied 

 to others? 



"The McNary-Haugen bill now 

 before Congress must have the 

 utmost support from farmers and 

 farm organizations, and particu- 

 larly the farm press, if it is to 

 get very far. What is needed to 

 put this bill through is a noise 

 loud enough to t>e heard in 

 Washington. Only one farm 

 paper that I know of has given 

 much emphasis to this bill. A 

 united campaign of the farm 

 press and a persistent appeal for 

 its passage from the farmers 

 themselves and their organiza- 

 tions would put the bill over. 

 Lets concentrate on this thing 

 and do it quick. I would suggest 

 that each and every farm organi- 

 zation ask its members to write 

 their congressmen urging favor- 

 able action on this bill." 



Fruit Co-op Elects 

 Board of Directors 

 To Serve This Year 



The board of directors elected 

 by the Illinois Fruit Exchange 

 for 1924 were, W. L. Cope, Ton- 

 ti; O. V. Cummins, Dix; N. W. 

 Casper, New Burnside; R. K. 

 Loomis, Makanda; R. B. Enii- 

 cott. Villa Ridge; Frank Lanter, 

 Belleville; and .1. D. Snedeker, 

 JerseyvUle. \ 



FRUIT EXCHANGE 

 WILL REORGANIZE 

 UNDER CO-OP ACT 



Improved Pooling, Larger Ipnnage, 

 And Field Service Seel As 

 Greatest Needs i 



Reorganization of the ; Illinois 

 Fruit Exchange as the j Illinots 

 Fruit Growers Exchange under 

 the Illinois Cooperative Market- 

 ing act was, unanimousll- voted 

 by delegates at the third anooai 

 meeting at "Centralia. I^ebruary 

 19. As contracts Of mei^l>ers in 

 the exchange expire, thjey may 

 join the new organixatioli which 

 will take over the worU of the 

 present exchange as its puslneaa 

 is liquidated. 1 



Manager A. B. I.«eper, lin mak- 

 ing recommendations fo^ 1924, 

 stressed the following I points: 

 Fir«, it is important tbat every 

 member realize that be it a part- 

 ner in this business and Itake the 

 same in^rest in its development. 

 Second, that the flnanciijg of lo- 

 cal associations is an op^n prob- 

 lem and must be meti by the 

 members interested in that par- 

 ticular locality. Third,-! that in- 

 creased tonnage will lo» er over- 

 bead costs both of the ixcbange 

 and local associations. 



Pooling Sliimid lie im[>roved 



Fourth, that the poo ing sys- 

 tem should be improved by ex- 

 tending over a larger territory 

 and a longer period. The aver- 

 age of the season prid « shows 

 the advisability of largjr pools. 

 Fifth, that as soon as jthe ton- 

 nage will justify the exjijense. the 

 exchange should establish a field 

 service department, wliich jje- 

 partment should be bealied ^by a 

 man competent to adkise the 

 members in matters o^ prodjtc- 

 tion as well as grading and pack- 

 ing. _ I 



Mr. Leeper stated that the ex- 

 change had marketed 1464 cars 

 of fruits and vegetable^ in 1923 

 through the Federated Fruit and 

 Vegetable Growers, Inci Thirty 

 more cars are now Inl storage. 

 With cars sold to track buyers, 

 approximately 600 cirs were 

 marketed during the yekr by tbe 

 exchange and its localk. These 

 shipments went to 98: markets 

 in 20 states. | 



Prices Farorab^ 



"The prices receive^ by the 

 Illinois Fruit Exchange| compare 

 very favorably with tbdse of any 

 other producing' sebtion of the 

 entire United States, " ; said Mr. 

 Leeper. "The year ^923 has 

 demonstrated more forcibly than 

 ever before the necessity' of qual- 

 ity production. ! 



"Each year intensifies competi- 

 tion with other prodi^cing sec- 

 tions and the growers jof Illinois 

 can no Jonger afford to depend 

 upon their geological Ibcation to 

 help them dispose oL qoor grade 

 products. If the Uliiiois Fruit 

 Exchange is to succeed as it 

 should, the members |nust pro- 

 duce a product that dan be of- 

 fered to the trade of j«st a little 

 higher standard than t^e average 

 that is produced In thi* section." 



The report of Normjn W. Cas- 

 per. New Burnside, ! secretary, 

 showed that the Illinois Fruit Ex- 

 change had done a bjusiness of 

 approximately $1,OOOJOOO since 

 its organization in 192|1. He de- 

 clared that the biggest need of 

 the exchange is more ^onnage of 

 fruits and vegetables! to lower 

 overhead costs. M»ny large 

 growers are ready fo^ eoopera- 

 tiire marketing now, hi said. 



1 



