That Consumer's Dollar 



Qtiatity Cream Processed In Farmer-Owned Plants Will 

 Increase The Farmer's Share 



By Frank Gougler 



THE tliviSKiti <if till' (.onsunicr s dol- 

 lar is constantly changing. Pro- 

 ducers are interested in the share 

 !h(y arc getting. The mavo they get 

 iht ninrc they have to spend and thai 

 iiclps other lines of business. 



Studies made of 14 major food coni- 

 Moditles in March. 1933. revealed that 

 producers were receiving only 31c of 

 I he consumer's dollar spent for these 

 foods. Sixty-nine cents was absorbed 

 by proci s.sors and distributors. Recent 

 surveys indicate producers are now 

 averaairg about I.T.Br <>f the con- 

 -iimer'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 thesf. Normally processing 

 and distributing takes the lion's share 

 of the consumer's dollar. Why should 

 not producers perform this fimction 

 th< ni.selves'.' In Illinois we are now do- 

 .rig this with cream. 



Ill the task of proce.ssmg butterfat. 

 1 loducers may look to four principal 

 vourcev for additional income: (1) nar- 

 rowing the .'tpread liPtween the Chicag(> 

 butter market and the price paid for 

 iuitterfal; f2) operating large volimii' 

 i-flicienl creameries: (3) making better 

 'outter. and (1) keeping the profits 

 which normally result from processii'g 

 i'littf-rfnt. 



More >lo«»c> For Farmers 



Fainieis of Illinois imtil recentlv 

 iiave given little attention to market- 

 .ng butterfat co-operatively. Study 

 these intere.sting comparative figures 

 showing prices received by producers 

 ihrii co-operative creameries in Wis- 

 ionsin and prices jiaid farmer;, in Illi- 

 nois covering a period of 12 years. For 

 the period 1923 to 1934. inclusive, pa- 

 trons of the Grantsburg. Wi.sconsin. 

 Co-operative Creamery received an 

 •iverage of 7c more per pound butterfat 

 than Illinois farmers. During 1923-1928 

 they received an average of 9.6<- more 



while during liC.i-lit.'U iht sprer.d was 

 only 4.8c. A glance at the chart re- 

 veals that Wiscon.sin 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 increa.sed 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 b;- 

 reduced ''4C 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- 



icrfal l)\ Wisconsiii producers is in 

 part due to the fact that they havt- 

 been prf)ducing a better product. 

 M(-mb(M's of a co-operative creamery 

 will bring about impiviveir.ent of their 

 product more rapidly than can be doni 

 without such an organization. Produc- 

 ( rs soon learn that better butter >s 

 worth more than inferior butter. When 

 farmers who sell through their own cc- 

 <>perati\-e realize that the butter is stil! 

 their properly, they take more inter- 

 est in the c|uality of the cream frotn 

 uhieli it is made. 



Land O'Lakes Cr(>ameries launched 

 ii grading system in 1922 when only 10 

 per cent of their butter scored 93. In 

 l!t,''.3. (i.5 per cent made this grade. Tlit 

 spread in price between lowest grade 

 butter and 93 score will average .>c 

 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 al.so fair to assume that a co-op- 

 (■rative plant can be operated just as 

 elTiciently as a plant owned by an in- 

 dividual. Iherelore. profits made in co- 

 operative plants should go to the pro- 

 ducers. Here as some examples 



Farmers Creamery Company of 

 Blooniington, from February 9. 1933 

 to November 30, 1934 returned to prc- 

 (lucers profits amounting to S28.431.53. 

 Producers Creamery of Peoria started 

 • ('(■ntiiincd mi pag:e Ti 



1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 



pet 



riu- 



ro 



AVERAGE 90 SCORE CHICAGO BUTTER A^ARKET\,^.-^• 



PRICE PAID PATRONS BY GRANTSBURG, WISCONSIN j 



COOPERATIVE CREAMERY 



— • AVERAGE PRICE RECEIVED BY ILLINOIS FARMERS 



I. A. .\. KK((»R1» 



