COST OF MARKETING DAIRY PRODUCTS 247 



The price of butter is regulated by supply and demand. 

 Butter is marketed on a comparatively small margin. Ac- 

 cording to Weld the Minnesota creameries receive a net price 

 of about two cents less than the New York quotation. The 

 commission of 5 per cent for selling, plus the freight to New 

 York, will amount to between two and three cents per pound 

 for Minnesota and Iowa creameries. Adding this to the net 

 price obtained by the creamery gives the wholesale price of the 

 butter in New York which, in this case, means that the Min- 

 nesota butter is sold in New York at a fraction of a cent above 

 New York quotations. The cost of .marketing Kansas butter 

 is explained by Macklin, 1 (Table XVII) and the cost of mar- 

 keting Wisconsin butter is presented by Hibbard and Hobson 

 in Table XVII. 



Due to the fact that butter is handled on a small mar- 

 gin, it becomes more difficult for the smaller creameries to 

 eliminate the middleman or commission merchant. The larger 

 creameries most often find it to their advantage to establish 

 their own special markets. Some have a special marketing 

 department, the butter being turned over to that department 

 from the factory at a definite price. The marketing department 

 here also stands as the middleman between the factory and the 

 retail dealer, and all expenses in connection with selling are 

 charged against that department. 



The retail price of butter varies in different cities. The 

 charges for handling a pound of butter range from about 

 three cents to seven cents. Five cents may be considered 

 an average. This is a reasonable margin for handling butter, 

 as it has to be held under refrigeration and delivered to the 

 consumer. 



The amount paid by retailers and consumers above highest 

 New York quotations for Extras is presented by Warber 2 

 in Table XX. The same investigator also found that branded 

 butter allows a greater margin than butter which is not branded 

 (Table XXI). By this is not necessarily understood that 



1 Bulletin No. 216, Kansas Experiment Station, 1917. 



2 U. S. Dep. of Agriculture, Bui. 682, 1918. 



