The figures under February and Aug- 

 ust represent the amount the Creamery 

 would pay above or below the market 

 range as indicated in column at left. 

 The February August figure also indi- 

 cate bids received from the same cream- 

 ery within one year. In August this 

 creamery submitted a bid averaging 

 2.9c higher than the February bid. 



These prices do not represent what 

 the producer would get because sta- 

 tion costs must yet be deducted. At 

 that time they amounted to at least 

 four cents per pound butterfat. 



Taking the present 90 score butter 

 market, say at 26 cents, what would 

 the producer get for butterfat delivered 

 to station in accordance with the Feb- 

 ruary bid.' 26c less 2c=24c station re- 

 ceives. Deduct 4c for station costs 

 which leaves net to the producer at 20c 

 per pound or six cents under the mar- 

 ket. Producers' Creamery of Peoria 

 operates on a twice a month payment 

 plan. On Friday, October 6, the Board 

 of Directors determined the price to be 

 paid for butterfat for the last half of 

 September. The price for Grade A fat 

 was set at 30c and grade B at 28c. The 

 weighted average of these two was 

 28.6c. The 90 score market for the pe- 

 riod was 26.7c. Thus the creamery paid 

 1.9c over the market as compared to 

 six cents under the market as shown 

 above the same butter price level. 



The present butterfat price therefore, 

 is 7.9c higher per pound butterfat than 

 was provided in the February 1928 bid 

 received at Mason City. In addition 

 to the price paid by Producers' Cream- 

 ery of Peoria for the period, 3.17% 

 was rfiade on fixed investments. 



Lower bids were received than the 

 one shown above. The above bids are 

 used to show the change in attitude on 

 the part of a single creamery from 

 February to August. A lower bid was 

 received earlier by the Geneseo pool 

 as follows: 



Bu«er Station I 



Market Price Bid 



24c — 28c 5c under market 



29c — 33c 4c under market 



34c — 38c 3c under market 



39c — 43c 2c under market 



It is conservative to assume, on the 

 basis of experience, that the influence 

 cream pools had on the butterfat-butter 

 margin, amounted to at least 3 cents 

 per pound butterfat. In the light of 

 experience of creamery operations, the 

 margin has been narrowed 2c more, 

 making a total of 5c, multiply this 

 nickel a pound by the amount of but- 

 terfat produced in Illinois and you get 

 approximately $2,500,000.00 more 

 money to Illinois producers because of 

 cooperative efforts assuming that all 



cream producers got the benefit of the 

 program. We have abundant evidence 

 from various sources that the above 

 statement is a fair one and reflects ac- 

 curately experiences had in other states. 

 The influence on narrowing the but- 

 terfat-butter margin through the estab- 

 lishment of cooperative creameries is 

 forceably brought out in a study of 

 Nebraska creameries by the Farm Credit 

 Administration for the period 1925- 

 1935 — (Bulletin No. 11, Wash. D. 

 C). 



The following table and chart show 

 the result of cooperative effort along 

 this line: 



Farm 

 Price 

 ofB 

 Chicago Farm fat cor- 

 butter Price rected for 

 YEAR price B Fat overrun Margin 



1925 42.15c 36.5c 29.43c 12.72c 



1926 41.66c 36.5c 29.47c 12.19c 



1927 44.28c 40.0c 32.25c 12.03c 



1928 45.22c 43.0c 34.68c 10.54c 



1929 43.20c 4l.7c 33.68c 9.52c 



1930 34.79c 30.7c 25.63c 9.l6c 



1931 26.50c 22.4c 18.06c 8.44c 



1932 19.90c 15.6c 12.63c 7.27c 



1933 20.31c l6.6c 13.36c 6.95c 



1934 I 24.40c 21.7c 17.35c 7.05c 



1935 I 28.65c 26.4c 21.27c 7.38c 



The above table shows that the mar- 

 gin in 1924 averaged 12.72 cents per 

 pound butterfat and in 1930 was nar- 

 rowed to 6.95, a difference of 5.77. 



Since prices for butterfat have now 

 been established by Illinois coopera- 

 tives to a point about in line with its 

 true value, our creameries now have 

 new problems confronting them with 

 reference to price. Each creamery is 

 ref>orting from time to time, prices 

 that are "out of line," fictitious or 

 decoy prices. 



The question is always raised: "How 

 can they do it?". The new manager 

 of the Champaign Producers plant was 

 recently called to a town where a co- 

 operative station i6 operated. Three 

 private stations also are operated in 

 this town. One of these stations was 

 paying a price 4c "out of line." When 

 the creamery manager arrived at the 

 co-op station, he found the other two 

 station operators there in the interest 

 of getting the high fellow "in line." 

 At this time a producer came in with 

 a can of cream. His first question was, 

 "What are you paying today?". Upon 

 being told, he reported that he could 

 get 4c more down the street. He was 

 advised to take advantage of the higher 

 price but before leaving agreed to allow 

 each of the three buyers to take a 

 sample of his cream. Each sample was 

 tested and each valued the can of 

 cream independent of the others. The 



£OOft«*TIVtS 



'26 192? 21 1924 '30 1931 32 1933 



OPERATING MARGINS BETWEEN CHI- 

 CAGO STANDARD BUTTER PRICES AND 

 NEBRASKA BUTTERFAT PRICES, 1925 TO 

 1935. 



producer soon returned and submitted 

 his check on comparing with each of 

 the other three, the producers' check 

 was just one cent larger than either of 

 the others would have paid, yet the 

 prices had been quoted 4c higher. 



This is a typical example of many 

 such experiences reported in each of 

 our nine creamery districts. Many pro- 

 ducers are wondering what it is all 

 about. Some are setting out to find 

 out for themselves. They divide their 

 shipments and in this way do not 

 have to depend on tests. The largest 

 check is the one that counts. This type 

 of experiment is showing many good 

 producers that it pays to market their 

 cream through their own creamery, 

 that "Your Producers Creamery is 

 your insurance of better prices." 



7S0 Attend Meeting 



Schuyler- Brown 



In September 1931, 35 farmers were 

 interested enough to attend the first 

 annual meeting of the Schuyler-Brown 

 Service Company. On September 19, 

 nearly 750 attended the company's 

 ninth annual meeting at Mt. Sterling, 

 according to Brooke Edmonston, presi- 

 dent. 



Net sales were $128,281.39 for the 

 year. Cash refunds totaling $12,338.- 

 52 were paid to 566 Farm Bureau mem- 

 ber patrons or an average of $21.89, 

 Manager Ralph Almgreen reported to 

 stockholders. Principal speaker was G. 

 W. Bunting, Illinois Farm Supply Co. 



Farm management records show that 



corn yields four to five bushels more an 

 acre after clover is pastured than 

 after clover is cut for hay. 



26 



L A. A. RECORD 



