MARKETING OF BUTTER 425 



Speculating in Futures. Buying or selling for future de- 

 livery is not as common in the butter business as on the grain 

 market, though ,it is participated in to a limited extent by the 

 speculative element in most markets. The purpose of buying for 

 future delivery is based on the hope of the buyer to sell at a 

 higher price at the time of delivery, thereby making a profit. The 

 object of selling for future delivery lies in the assumption of the 

 seller that he may be able to buy at a reduced price and thereby 

 reap a profit. It is obvious that buying and selling for future de- 

 livery is purely a speculative transaction which may yield profit- 

 able returns, but which involves the usually high risks char- 

 acteristic of all speculation. 



Methods of Payment. As previously stated, dairy butter 

 sold direct to customers or by parcel post, is usually paid for by 

 cash on delivery. In the case of hotels, restaurants, etc., the 

 dairy farmer usually collects weekly or monthly and sometimes 

 at the end of the season. Dairy butter sold to the country store 

 is generally paid for in trade. 



Creameries selling direct to retail stores make their collec- 

 tions weekly or monthly. In the case of doubtful customers it is 

 advisable to demand remittance with the order or to deliver the 

 butter C. O. D. 



Payments for shipments to the wholesale trade in distant 

 markets involve more or less delay. If butter is sold on com- 

 mission, usually several weeks elapse before the returns arrive 

 and even in the case of "track sales" and "delivered sales" several 

 days and often one to two weeks are required for the payments 

 to arrive. In the meantime the farmers have to be paid and the 

 supplies and package have to be purchased. This is often too 

 great a financial strain on the creamery whose operating capital 

 is generally exceedingly limited. 



This difficulty is most commonly taker! care of by permis- 

 sion, on the part of the wholesale receiver or the commission 

 man, to allow the shipper to draw on him to the extent of a large 

 portion of the shipment of butter at the time of shipment. The 

 creamery attaches a draft to the bill of lading and the receiver 

 or commission man settles for the balance upon arrival of the 

 goods or upon their sale, respectively. Banks that pay interest 

 on the balance of the creamery account, invariably discount these 



