POOLING BY COOPERATHT. MARKETING ASSOCIATIONS 7 



For these reasons some associations have developed a practice of 

 determining normal price differentials between the various jrrades of 

 their product on the basis of selling; experience, and usin*? these dif- 

 ferentials in the accountin^r of tlieir pooling ojicrations. 



As a bo()kke('pin<r method, this requires only one sales account, to 

 which all returns from sah's are credited and against which all direct 

 pooling expenses are charged. The total sales valui' of all the jjiod- 

 ucts of each grade is determined by iising the norrual price difl'er- 

 ential applied to the qiumtities in that grade. Authorized deduc- 

 tions are made from this total sales value. 



In pooling on a basis of quality, it is important not to carry refine- 

 ments in grading to a point beyond the requirements of the trade 

 or to a point at which added expenses involved exceed the market 

 differentials which are reflected back to the grower. This is well 

 illustrated by the exj)erience of a cooperative association in west<'i'n 

 New York that handletl barreled apples. Barreled api)les in the 

 past have been niaiketed in one principal size division. api)les 214 

 inches in diameter and larger being included in one package. To 

 the growers it seemed that the price range for this size division was 

 undidy wide and that a refinement of the sizing practice might be 

 advantageous. This situation in part pronijited the association to 

 adopt a policy of sizing its fruit in yj-inch grade divisions. After 

 three years' operations under this grading policy, the association 

 foimd itself confronted with a most dillicult sales i)rol)lem. A careful 

 study of their sales records showed an unusually high customer turn- 

 over. Upon further investigation of this phase of their merchandis- 

 iuL' policy, it was found that few buyers preferred to purchase bar- 

 rels of quarter-inch sized apples,' because such apples were not suited 

 for their trade. 



The average retailer is confronted with the problem of supplying 

 one housewife with large apples for cooking purposes, another with 

 small ai)i)les for children's use, and perhaps a third with a combina- 

 tion of sizes in a 25-cent pmchase. The variety in sizes was not 

 available in a barrel that contained apples imiformly sized in a 

 quarter-inch gradation, but the combination of sizes was available in 

 a barrel containing apples 2V2 inches and larger. The retailer coidd, 

 therefore, carry an arlcquate stock by purchasing a single barrel of 

 the old-style packing. Hence he liad a definite preference for the 

 older method of paclcing. 



The facilities of the United States Department of Agriculture 

 with respect to setting up Federal standards and providing super- 

 vision for neutral inspection and giading servicesdjased upon United 

 States standards have relieved several coopeiative associations of 

 the diflicult responsibility of gra<ling accurately superior and inferior 

 commodities with justice to the prodiicei-. to the as.so<'iation. and to 

 the buyer. 



LENGTH OF l'OOI,IN(; IM-.KIOI) 



Tn considering the time element in pooling, it is essential to get (he 

 j)roper balance l)etween (he growers' recjuirements and (he tlemajuis 

 of efficient managt^netd. (ifrowers' re(|uiremen(s include financial 

 needs as well a*- rewards for care in adjusting jiroductinn to market 

 demand. For in>-lance, in certain commodities, like peaches and early 



