a periodic check for eggs or milk. This interval in most instances would 

 correspond to the 7-10 day period suggested as qualifying for a "cash" 

 discount. 



Within the concepts outlined, it is suggested that an average charge 

 be included in feed prices which would be sufficient to permit the carrying 

 of a share of accounts up to 30 days without penalty in the form of "addi- 

 tional charges'. However, in the interests of financial stability for both the 

 producer and the feed dealer, long-term credit (over 30 days) should be 

 carefully watched. For most producers, credit needs can be met more reason- 

 ably by regular lending agencies than through customary store credit rates. 

 In the long run, the feed dealer would be doing the producer a service by 

 suggesting this approach, and would also cut down on one of the big 

 headaches in the feed business today. The preceding observations relate 

 particularly to enterprises producing eggs or milk, which yield regular re- 

 turns. There is probably a place for some extension of credit on rearing 

 laying flock replacements, particularly where the grower can finance to a 

 point where credit needed to complete the growing period is equal to or 

 less than the meat value. Feed credit is widely used in broiler financing, 

 both in contract growing and by independent producers. Here, returns 

 are obtained in total several times a year. Certainly, feed credit has been a 

 necessary adjunct to the rapid expansion of broiler production, but just 

 as certainly, such credit has not always been wisely extended. 



Quantity Discounts and Charges for Delivery on Bagged Feed 



These two areas may be somewhat related, i.e., charges for delivery 

 sometimes vary with quantitative amounts. Generally, they are not well 

 developed in terms of breakdowns, at least from posted or printed price 

 sheets. It is known that in actual practice there are many separate and 

 varying bases used for determining prices, even between producers of 

 comparable size. The objective in these areas should be to standardize and 

 break down discounts and charges in some detail and roughly in relation- 

 ship to relative costs for handling various quantities. 



It was mentioned previously that some quantity discounts do not start 

 until purchases reach 5 tons. Others apply to "1 ton and over". There 

 appear to be a number of points at which quantity discounts could logical- 

 ly be established to bear some relationship to relative costs. These are 

 shown in Table 8. 



In the absence of comprehensive data, the "steps" in Figure 4 were 

 interpolated at the points listed in Table 8 from the curve of calculated 

 values using loading time (converted to time per ton) as the dependent 



Table 8. Points for Consideration in Establishing Quantity Discounts 



Quantity Discount Per Ton Reason 



Under 1 ton none Below minimum 



1.0- 2.9 tons $1.00 Upper 15% of customers 



3.0- 4.9 tons 2.00 Large customer 



5.0- 9.9 tons 3.00 Truckload 



10.0-14.9 tons 4.00 2 truckloads 



15.0-19.9 tons 5.00 3 truckloads 



20.0-24.9 tons 5.50 Minimum to average carload 



25.0 tons and over 6.00 Full carload 



16 



