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dcmand for most agricultural products is of that nature and that 

 is a major part of tlic reason that many of our farm programs, 

 used to support agricultural commodity prices, operate on the 

 basis of government purchase of surplus supplies. Removing a 

 relatively small quantity of a commodity from the marketing sys- 

 tem, results in a relatively larger increase in the market price 

 for that product. 



For individual growers that means that prices usually would 

 have to fall by a fairly large amount to clear the market in times 

 of a modest increase in market supplies available. In other words, 

 price-cutting or price-wars must be quite severe for very large 

 crops to stimulate consumer buying enough to sell the entire crop. 

 Likewise, during those same times, selling less, by grading more 

 selectively or simply not taking the surplus to the market, would 

 have a relatively greater effect on the market price and, therefore, 

 would increase total revenue. Most growers have probably noticed 

 this effect in times of short crops resulting from adverse weather 

 conditions , etc. 



Of course, for this result to occur, essentially all growers 

 must follow the same practice so that market supplies are, in 

 fact, reduced. Each grower must choose to follow such practices 

 independently and voluntarily, however, since agreements of this 

 nature among producers would be a voilation of antitrust laws. 



Realistically there is not a single price, but instead, pro- 

 bably a narrow range of prices that could be used successfully. 

 Where in that range a grower sets his price is a matter of policy 

 and philosophy, and also a matter of long run plans. Some mar- 

 keters have a philosophy of taking all they can get - charging 

 "what the market will bear" - while others are content to get wh„^ 

 they need. Obviously, if you plan to be in business for some time 

 it is important that your prices create a favorable image among 

 shoppers, but must also provide a reasonable profit (return- to- 

 your investment in the business) in addition to a satisfactory 

 wage for the time devoted to that part of the business. 



Most growers perfer a single price for all customers. Cer- 

 tainly, that is a simple and straightforward policy and may help 

 to avoid hassles over who is entitled to a reduced price. Per- 

 sonally, I prefer a multiple-pricing system that offers customers 

 an incentive to buy larger quantities for preserving, especially 

 in times of large crops. 



No matter how good your product, nor how attractive your 

 price, it will all go for naught if consumers don't know about it. 

 Advertise freely in newspapers and on radio - even TV for large 



at 



