MARKETING OF BUTTER 423 



1. Track Sales. By track sale is understood F. O. B. (free 

 on board) shipping point. By this method the responsibility of 

 the shipper ceases when the butter is placed on the car, or on 

 ship board, at the shipping point. The buyer pays the freight, 

 cartage, assumes the risk of transportation and the price is 

 definitely fixed. From the shipper's, or creamery's point of 

 view this is the most advantageous method of selling butter 

 to the wholesale trade. In order to sell butter under this agree- 

 ment the creamery must previously satisfy the receiver of the 

 uniformity of quality, workmanship, composition and color of 

 butter the creamery is capable of supplying. This is usually done 

 by trial shipments. The receiver agrees to pay a definite price, 

 based on market quotations of the leading markets F. O. B. 

 track. The creamery knows exactly what it is going to get 

 for its butter at the time the butter is shipped and payments 

 are made upon arrival of the goods at the market. 



2. Delivered Sales, or F. O. B. Market. In this method 

 of sale the shipper's responsibility ceases when the butter has 

 reached the market of the buyer. The shipper pays the freight, 

 cartage, and assumes the risk of transportation. The price de- 

 pends on market prices on the date of arrival of the goods at 

 the market. Agreements to buy butter on the above basis are 

 usually also entered into upon receipt of trial shipments rep- 

 resentative of the quality of the average run of butter man- 

 ufjactured by the contracting creamery. While not as ad- 

 vantageous to the creamery as method No. 1, because the 

 price is determined at the market end and because the shipper 

 has to pay the freight and assumes the risk of transportation, 

 this method is by far preferable to the commission sales. Both, 

 in method 1 and in method 2, the butter sells at prices based 

 on market quotations. It is important that prices should not 

 be based on the score of the butter. According to methods 1 and 

 2 the buyer agrees to pay the price stipulated on the basis of 

 market quotations, as long as he is willing to accept the butter. 

 Should the butter of some shipments not measure up in quality 

 to the trial samples, the buyer will still pay the price agreed 

 upon, but will notify the creamery of the defect, so it may be 

 remedied promptly. ,In case the quality continues to be inferior 



