Purchasing Fertilizers in New Hampshire 19 



The formula given for mixing a 5-10-5 fertilizer and the cost of in- 

 gredients as compared \\ ith a factory-mixed product of the same analyses 

 are shown in Table 10. Gross savings here amounted to $8.00 a ton. Six- 

 teen other comparisons were made on home-mixed vs. factory-mixed 

 products of the same analyses, using 1940 prices. Gross savings ranged 

 from $1.95 to $7.65 a ton, or from 5.1 per cent to 22.7 per cent of the 

 ready-mixed price. The average gross saving was $4.77 a ton, or 13.3 

 per cent of the average price for the commercially mixed product. 



CASH AND VOLUME DISCOUNTS 



Credit vs. Cash Purchases 



A large part of the fertilizer is no\\' purchased for cash in New 

 Hampshire. In the case of 76 farmers making purchases in 1940, about 

 90 per cent were cash purchases. Definitions for cash vary all the way 

 from cash on delivery to 30 days. Ordinarily, 10 days is considered cash, 

 and a few concerns use seven days. 



Farmers can make material savings by adhering to the 10-day period. 

 iMost fertilizer companies offer 10 per cent from the October 1 time 

 prices when cash is paid within 10 days after date of purchase. Some 

 dealers, ho\\'ever, charge the full price regardless of the time of purchase 

 if cash is not paid. Most fertilizer companies adhere to the time price 

 schedules where payment is not made within 10 days. 



A schedule of discounts has been set up by most companies. A man 

 \vho purchased fertilizer on March 1 and paid for it on April 1 would 

 get a 6 per cent discount from the time price; if on May 1, a 5 per cent 

 discount, and so on. 



As in many cases where products are purchased on time, the addi- 

 tional cost represents a very high annual interest rate. Our farmers 

 normally buy a rather small amount of fertilizer before March 1. If pur- 

 chases of a fertilizer were made on March 1 with a time price of $39.70 



Table 12. — Savings Through Cash Payment for Fertilizer 



Note: This example illustrates savings per ton which could be made by a per- 

 son buying fertilizer in March and paying cash within 10 days, or borrowing 

 money from the bank at 6 per cent and paying cash as compared to taking credit 

 for various periods. (Companj^'s price $39.70 a ton on October 1.) 



