413] BUTTER PRICES ^9 



wholesale prices rise and fall together rather closely. This 

 of course is due to the fact that the market is well organ- 

 ized in New York City where the retailer, jobber, and 

 wholesale dealer, through whom the forces of competition 

 can very sensitively vibrate, are in close touch with one an- 

 other. 



Another fact that becomes more apparent when relative 

 prices are charted, is that wholesale prices rise and fall as a 

 rule before the retail prices. This happens of course be- 

 cause the wholesale dealer takes the initiative in raising or 

 lowering prices. Diagram V., on which relative retail prices 

 for the North Atlantic Division and relative wholesale 

 prices for New York City are charted, shows this fact. 



THE DIVISION OF THE CONSUMER^ PRICE 



Between the price paid to the farmer for the butter fat 

 and the price paid by the consumer for fresh creamery 

 butter there is a margin of about $0.09. It may be more 

 or less than this amount depending upon transportation 

 charges and temporary conditions in the trade. This mar- 

 gin represents the cost of production at the creamery, the 

 freight charges, local delivery charges, and the amounts 

 taken by the wholesale dealers, jobbers, and retailers for 

 receiving and passing the commodity to the consumer. 



The United States Bureau of Labor Statistics has made 

 an investigation of the division of butter prices paid by 

 consumers, the results of which are published in Bulletin 

 no. 164. Table no. 18 gives the average amounts of all 

 the margins as well as the average price received by the 

 farmer and the retailer during June and December for the 

 years 1904, 19 10, and 191 1, of butter shipped from the 

 North Central states to Cleveland, Pittsburgh. Cincinnati, 

 and Philadelphia. 



The average margin of the creamery for the year accord- 



