HAMPSHIRE COUNTY FARMERS' MONTHLY 



Fjiriii I'rodiirtN I'rice Spreads jire Studieil 



Continued from page 1, column 1 

 were marketed in the New York district. 

 The average retail price per box on extra 

 fancy and fancy grades was $5. Out of 

 this price the grower's portion per packed 

 box was only $1.18. Moreover, this 

 amount was in no sense a net return to 

 the growers. It had to cover such mar- 

 keting expenses as the cost of boxes, pa- 

 per, nails, labor, overhead charges, etc., 

 amounting altogether to about 40 cents 

 a box. There was consequently left to 

 the grower after these expenses had been 

 paid 78 cents a box. From this 78 cents 

 he had to deduct all of his expenses of 

 production, which include such costs as 

 pruning, spraying, irrigating, thinning, 

 fertilizing, picking, equipment mainten- 

 ance charges, hauling to central packing 

 houses, taxes, and interest on investment 

 in orchards and equipment. It should be 

 noted, too, that these figures deal only 

 with the best grades of apples. Returns 

 to the growers of apples of smaller size 

 and inferior grade were undoubtedly 

 -mailer. 



After every necessary charge is met, 

 therefore, the grower's share of the $5 

 which the consumer pays for a box of 

 extra fancy Winesap apples in New York 

 is pretty small. The important question 

 is. Do the other persons engaged in get- 

 ting this product to the consumer fare 

 relatively better? On this point the de- 

 partment does not express a definite opin- 

 ion. It does, however, figure out the 

 .'ihai'e of the final price which goes to each 

 link in the distributing chain, and it 

 throws some light on the forces that de- 

 termine the varying shares. 



Various Distributing Forces Take Toll 



Thus the retailer is credited with tak- 

 ing $1.87, or 37.4 per cent, of the total 

 retail price. But this is the retailer's 

 gross margin, not his net profit. Before 

 realizing a profit he has to meet many ex- 

 penses. These include moving the box of 

 apples from the jobber's warehouse to the 

 retail store, clerk hire, delivery costs, cred- 

 it expen.ses including los.ses from bad 

 debts, shrinkage in quantity or quality of 

 the apples, cost of wrapping material, 

 building costs such as rent or taxes, in- 

 surance, depreciation, etc., and other 

 items. The chief function of the retailer 

 is the distribution of boxed apples to con- 

 sumers in lots of less than one box. 

 Where he must make many sales to sell 

 an entire box, his expenses are of course 

 increased. 



In the same way the jobber's margin is 

 made up largely of unavoidable distribu- 

 tion costs. On the apples covered in this 

 .study the jobber's margin was 49 cents, 

 or 9.8 per cent, of the total retail price. 

 The wholesaler's margin was 39 cents, or 

 7.8 per cent of the total retail price. The 

 jobber, it is pointed out by the depart- 

 ment, has distinct sei-vices to perform in 

 the marketing of boxed apples. He has 



to buy apples in central wholesale mar- 

 kets, transfer them to jobbing centers at 

 his own expense, and sell them to retail- 

 ers. Similarly the wholesaler, who buys 

 in car lots and sells to jobbers in less than 

 car lots, has to pay storage charges, un- 

 loading and handling expenses, charges 

 for delivery to jobbers' trucks, credit ex- 

 penses, and losses due to shrinkage of 

 fruit in cold storage or in handling. 



Transportation charges took 80 cents, 

 or 16 per cent of the total $5 retail price. 

 Shipping organizations' market margins 

 averaged 27 cents, or 5.4 per cent of the 

 total retail price. This margin included 

 not only the expense incurred in assem- 

 bling and shipping apples but also charges 

 levied by outside agencies for .selling 

 functions. Service costs, in short, were 

 the main cause of price spreads at evei-y 

 stage in the process of distribution. 



Improved Distribution Recommended 



Accordingly, the department is making 

 investigations to find out how these costs 

 can be reduced. They are aff'ected by the 

 efficiency of the methods used in handling 

 commodities. An important influence is 

 the business environment in which any 

 particular distributing process is done. 

 Another factor is the adequacy of the 

 facilities used. It has been figured, for 

 example, that about 25 per cent of the 

 trucking charge for handling fi-uits and 

 vegetables in New York City is due to 

 idle time occasioned by the use of un- 

 suitable facilities. Service costs, says 

 the department, are the important point 

 of attack in any study of price spreads. 

 The line of advance would seem to be in 

 the direction of improvement in handling 

 facilities, speeding up sales processes, ef- 

 fecting economies in packing, transporta- 

 tion, and handling in wholesale and re- 

 tail markets. In other words, more effi- 

 cient service at each stage in the mar- 

 keting process ofl'ers a better prospect of 

 increased returns to the grower than a 

 lessening of the net profits of wholesaZe 

 jobbers and retailers, since these profits 

 are only a fraction of the total price 

 spread. 



I 



What an appreciated gift 



a box of good hosiery 

 does make 



EVERY SORT HERE 

 FROM SHEER SILK TO 

 HEAVY WOOL SPORT 

 HOSE. 



MERRITT CLARK & CO. 



IVORTHAMPTON, MASS. 



^^B^^i^^^^^esiei ao i acn cicooocKK 



Corona is the standard Portable 

 Typewriter. 

 ^ Take it with you. Set it anywhere. 

 Will do anything a big machine can 

 do. 



$50.00 cash or small monthly pay- 

 ments. 



NORTHAMPTON 



COMMERCIAL COLLEGE, Inc. 



Agents 



76 Pleasant Street 

 Noi'thampton, Mass. 



$Bia^^^5eCiCOOe^^^^B S } gO COC<!3i|g 



|{:ii.Hing- Knster Rroilers 



Continued from page 1, column 3 



square foot each thereafter. Shavings or 

 cut alfalfa hay makes a desirable litter 

 for covering the floor. 



When chicks are confined trouble from 

 tail and toe picking is sometimes ex- 

 perienced. This is simply a bad habit 

 largely due to idleness. Keeping the 

 birds busy and contented aids in its pre- 

 vention. Sunlight on the floor may start 

 them to toe picking. Whitewash over the 

 windows will prevent the sun from shin- 

 ing on the floor and at the same time let 

 in light. If the birds once get started to 

 picking each other they can be kept un- 

 der control by darkening the room. This 

 may be accomplished by hanging grain 



Demand a battery that gives 



you lasting satisfaction — 

 plenty of power and care- 

 free service. Then see that 

 you get an Exidc. 



The G. P. Trowbridge Co. 



129 King St. 



NORTHAMPTON, MASS. 



Phone: 480 



