That Consumer*s Dollar 



Quality Cream Processed In Farmer-Owned Plants Will 

 Increase The Farmer's Share 



By Frank Gougler 



THE division of the consumer's dol- 

 lar is constantly changing. Pro- 

 ducers are interested in the share 

 they are getting. The more they get 

 the more they have to spend and that 

 helps other lines of business. 



Studies made of 14 major food com- 

 modities in March. 1933, revealed that 

 producers were receiving only 31c of 

 the consumer's dollar spent for these 

 foods. Sixty-nine cents was absorbed 

 by processors and distributors. Recent 

 surveys indicate producers are now 

 averaging about 45.6c of the con- 

 sumer's dollar. 



There are many ways whereby pro- 

 ducers can get a larger share of the 

 consumer's dollar. I want to discuss 

 only one of these. Normally processing 

 and distributing takes the lion's share 

 of the consumer's dollar. Why should 

 not producers perform this function 

 themselves? In Illinois we are now do- 

 ing this with cream. 



In the task of processing butterfat. 

 producers may look to four principal 

 sources for additional income: (1) nar- 

 rowing the spread between the Chicago 

 butter market and the price paid for 

 butterfat; (2) operating large volume 

 efficient creameries; (3) making better 

 butter, and (4) keeping the profits 

 which normally result from processing 

 butterfat. 



More Money For Partners 



Farmers of Illinois until recently 

 have given little attention to market- 

 ing butterfat co-operatively. Study 

 these interesting comparative figures 

 showing prices received by producers 

 thru co-operative creameries in Wis- 

 consin and prices paid farmers in Illi- 

 nois covering a period of 12 years. For 

 the period 1923 to 1934, inclusive, pa- 

 trons of the Grantsburg, Wisconsin. 

 Co-operative Creamery received an 

 average of 7c more per pound butterfat 

 than Illinois farmers. During 1923-1928 

 they received an average of 9.6c more 



while during 1929-1934 the spread was 

 only 4.8c. A glance at the chart re- 

 veals that Wisconsin producers re- 

 ceived a price considerably above the 

 Chicago 90 score market, while Illinois 

 producers have received a price under 

 the Chicago market. ., 



In establishing our producer-owned 

 creameries in Illinois we insist that a 

 minimum volume to start with must 

 be 1,000,000 lbs. of butterfat the first 

 year. This should be increased to 2,- 

 000,000 lbs. the second year and con- 

 tinue until the bulk of available cream 

 is .secured. It is estimated that by add- 

 ing the second million pounds the cost 

 of processing a pound of butter can be 

 reduced Vic per pound on the entire 

 volume, which amounts to $5,000 sav- 

 ing in operating cost on two million 

 pounds. This should convince every 

 patron of a co-operative creamery that 

 it is to his interest to induce his 

 neighbors and friends who are not pa- 

 trons of the cooperative to join. 



The higher prices received for but- 



terfat by Wisconsin producers is in 

 part due to the fact that they have 

 been producing a better product. 

 Members of a co-operative creamery 

 will bring about improvement of their 

 product more rapidly than can be done 

 without such an organization. Produc- 

 ers soon learn that better butter is 

 worth more than inferior butter. When 

 farmers who sell through their own co- 

 operative realize that the butter is still 

 their property, they take more inter- 

 est in the quality of the cream from 

 which it is made. i ."].;■%;'■■• .!' 



Land O'Lakes Creameries launched 

 a grading system in 1922 when only 10 

 per cent of their butter scored 93. In 

 1933, 65 per cent made this grade. The 

 spread in price between lowest grade 

 butter and 93 score will average 5c 

 per pound over a period of years. 



It is fair to assume that owners of 

 private creameries purchase butterfat 

 from producers in order to make a 

 profit out of the processing operation. 

 It is also fair to assume that a co-op- 

 erative plant can be operated just as 

 efficiently as a plant owned by an in- 

 dividual, therefore, profits made in co- 

 operative plants should go to the pro- 

 ducers. Here as some examples: 



Farmers Creamery Company of 

 Bloomington. from February 9, 1933 

 to November 30, 1934 returned to pro- 

 ducers profits amounting to $28,431.53. 

 Producers Creamery of Peoria started 

 (Continued on page 7) ., • . ; 



l«23 



CENTS 

 PERia 



SO 



40 



30 



20 



lO 



1927 I928I92? 



1933 1934 



AVERAGE 90 SCORE CHICAGO BUTTER A\ARKET\,.^.^* 



PRICE PAID PATRONS BY GRANTSBURG, WISCONSIN 



COOPERATIVE CREAMERY 



AVERAGE PRICE RECEIVED BY ILUNOIS FARMERS 



^a 



■4 



i 



I. A. A. RECORD 



