feed are about the same. At 100 percent return of No. 1 bags the rebate 

 would almost equal the reduction in bulk prices because of the elimination 

 of bags. To the extent that bags returned are graded down into No. 2's or 

 3's, the net saving on bulk would be increased. Most of the difference in 

 cost of bulk and bagged feed at the present time is due to an added "bulk 

 discount" of about $.15 per 100 lbs. or $3 per ton. This may be viewed 

 as an incentive to get farmers to shift to the bulk method, or as an estimate 

 of what the feed companies think the net savings to them warrant passing 

 back to the farmer. From preliminary appraisals it seems difficult for feed 

 dealers to realize savings on delivery route costs unless bulk-delivery equip- 

 ment can be operated close to capacity*. There are some additional invest- 

 ments in facilities at the mill, but some economies in mill operation. Present 

 "bulk discounts" may be revised in light of future cost experience. 



However, farmers may continue to realize some net savings on bulk 

 feed. These savings, if projected at the rates in Table 5 should permit 

 farmers to pay for the cost of bulk bins within a relatively short time. Cost 

 of bulk bins may not exceed cost of building materials if the feed companies 

 continue their present policies of furnishing technical advice or labor in 

 constructing the bins. It may be possible to use farm labor at odd times, 

 resorting to a carpenter's service for framing in some cases, or for the com- 

 plete job in only a few cases. 



Table 5. Net Savings Per 100 lbs. to Producers on Bulk Feed as Compared to 

 Bagged Feed, Cash and Delivered, 1954 



1 Based on 4 ton minimum on bulk and load of 4 ton or over on bagged feed. 



2 Based on 5 ton quantity discounts for both bagged and bulk feed. 



2 Based on 4 ton minimum on bulk and load of 5 ton or over on bagged feed. 



* Based upon 100 percent return of No. 1 bags. To the extent that there are damaged bags involved, 

 this average figure would be reduced, and the net savings on bulk increased. 



Indirect Savings. 



In the handling of bagged feed there is generally some loss experienced 

 through damage to the bags themselves. There is little reason to expect any 

 difference in spoilage of feed under either the bulk or bagged method, but 

 there might well be more wastage using the bagged method. This wastage 

 would be due to spillage from damaged grain bags and to feed adhering 

 to returned bags. 



Data from nine New Hampshire poultry farms show considerable var- 

 iation with respect to the proportions of bags returned for credit which 



* Bui. 426, op. cit. 



