Pricing Practices 



The egg marketing firms were asked how they determined prices 

 to be paid to producers. Nearly all of the firms surveyed (62 of the 65 

 answering) stated that they used the Boston Herald quotations as the 

 base price for producer payments. Other sources mentioned were Urner 

 Barry and the U.S.D.A. Market News. 



These firms reported that the price they paid to producers was 

 usually at the top or middle of the base price quotation and in a few 

 cases a premium of 1 to 5 cents over the base quotation was paid. In 

 most cases the premium was justified by the amount of processing pro- 

 vided by the producer such as cleaning, sizing and grading. When these 

 services were provided by the marketing firms, a discount of % to 1 cent 

 per dozen was applied to the price. 



When firms procured farm cartoned eggs from producers, the 

 premium over the base quotation was somewhat larger, ranging from 

 the top of the quotation to 3*4 cents over the top. Two-thirds of those 

 replying indicated that they furnished cartons and cases to these pro- 

 ducers. In the New England area most firms exchanged cases with pro- 

 ducers. 



Almost half of the firms indicated that an allowance was given to 

 producers for delivery to the plant. This allowance ranged from Y 2 cent 

 to 2 cents over the base price (plus any premium). One firm paid as 

 much as 6 cents over the base quotation for eggs cartoned and delivered 

 by the producer to the marketing firm. 



The marketing firms interviewed indicated considerable interest in 

 keeping informed of price changes. Most firms relied on the Boston 

 Herald quote for their primary source of information. A majority of 

 firms indicated that they made a number of telephone calls to keep 

 abreast of developments in the market. Included in the other sources 

 used were: the radio, U.S.D.A. Market News, Urner Barry, and North 

 American Poultry Cooperative Association. 



Procurement Agreements 



Slightly more than one-third of the firms interviewed had some sort 

 of marketing contract with producers. The majority of the agreements 

 were verbal. Provisions of these agreements included the ba>e price 

 to be used, the premium or discount on the base price, quality demand- 

 ed, and proportion of total production the buyer will take or the pro- 

 ducer must sell. 



Many contracts asked for 90-95 percent grade \ or better and 

 some required refrigeration at the farm. The contracts also covered the 

 number of shipments or pick-ups per week, penalties covering rejects 

 and whether payment was on the market of the day of pick-up or 

 -nine future market. 



Mori" than two-thirds of the eggs obtained from producers were 

 picked up lt> the marketing firms" own trucks. Phis varied from a high 

 of 94 percenl In Vermont to a low of 45 percent in Massachusetts. Con- 

 tracl haulers picked up 17 percent of all eggs purchased from producers 

 and varied from none in Vermont to 32 percent in Massachusetts. 



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