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Wanted: A Larger Share 

 oF the Consumer s Dollar 



By Frank Gougler and J. B. Countiss 



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STORY is related that a 

 minister with his small daugh- 

 ter entering church one Sun- 

 day evening, dropped 50c into the 

 collection box. When the congregation 

 had departed after the services the 

 ; minister checked up on the evening's 

 ] collection. To his surprise the box 

 contained only the lone 50c piece he 

 : had deposited. Noting her father's dis- 

 appointment the little girl remarked, 

 "Dad, if you had put more in you 

 ; could have taken more out." 



This statement applies quite gen- 

 erally to life. We all recognize that 

 we usually get just about what we 

 pay for. It is true of co-operative ef- 

 fort. A good example is seen in the 

 Farm Bureau movement. Illinois has 

 the highest Farm Bureau membership 

 fee of any state in the Union. And 

 our state leads all others in Farm 

 Bureau accomplishments, ^v^:::.^ 



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: V A Marked Difference ^ /:;: 



The same holds true in co-operative 

 marketing. Studies tnade of the dif- 

 ferent methods of marketing mijk in 

 Illinois reveal this fact in a striking 



- manner. Where producers own their 

 own processing and distributing plants 

 they fare best of all. Bargaining as- 

 sociations are much better than no 

 organization at all. The records show 

 a marked difference' in the percent- 

 age of the consumer's dairy dollar go- 

 ing to the producer in these various 



; situations. 



For example, last year a co-oper- 

 ative milk marketing association in 

 Illinois that controlled the product 

 from producer to consumer was able 

 to return to its producers out of every 



, dollar spent by the consumer for dairy 

 products, approximately 60c. On the 



• other hand, as an average, for all of 

 our milk bargaining associations in 

 Illinois, only 40c out of the consum- 

 er's dollar spent for milk dribbled 

 back to the producer. The bargaining 

 association, however, was found to be 

 of much more value than no associa- 

 tion. This is proved by conditions at 

 Danville before that market was or- 

 ganized. Prior to late last fall, the 

 producers here had never been or- 

 ganized. Producers were receiving 

 only 20c of the consumer's dollar 

 spent for fluid milk and cream. Con- 

 ditions among the dairymen got so 



desperate that they were forced to 

 organize. , vi;^ 



In order to bring out the com- 

 parison more clearly, let us assume 

 that on a given market consumers 

 spend annually |100,000 for milk and 

 other dairy products. According to our 

 experience in Illinois, where producers 

 own their own facilities for distribu- 

 tion, $60,000 would go back to the 

 producers. Markets with bargaining 

 associations would return $40,000 to 

 producers, while on unorganized mar- 

 kets, only $20,000 reaches the pro- 

 ducers' pockets. V 



Such facts explain many other 

 startling revelations. For example, it 

 was reported recently that the presi- 



Producers get nearly 60c of consumer's dairy 

 dollar where they process and distribnte their 

 own milk. 



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dent of one of the large national chain 

 dairies received a salary of $100,000 

 in 1929 which was increased to $168,- 

 000 in 1933. During this same period 

 prices to producers went tumbling to 

 unprecedented low levels. This dem- 

 onstrates that private owners of dis- 

 tributing facilities are not going to 

 relinquish their hold on profits even 

 from sympathy for the producer when 

 he is in distress. The salary of this 

 one man is sufficient to employ fifty 

 good managers for co-operative plants 

 and much more and better services 

 could be rendered to producers by 

 fifty good plant managers. 



If producers of agricultural prod- 

 ucts are to see better times they must 

 strive to get more of the consumer's 

 dollar. In a recent issue of the Con- 

 sumer's Guide, it was shown that it 

 required during 1929 fifty-two cents 

 of the consumer's dollar to process 



and distribute fourteen major foods. 

 In March, 1933 it took 69c and in 

 March 1934 it took 62c. In short, ifs 

 twice as profitable to process and disr 

 tribute as it is to produce.. 



Why should not the producer then 

 give more of his time and attention 

 to processing and distributing his own 

 products? This is exactly the pur- 

 pose of establishing co-operative 

 creameries in Illinois. 



Co-operative creameries can return 

 to producers more money for their 

 butterfat than private plants will or 

 can pay. Abundant evidence is avail- 

 able to prove this point. In handling 

 butterfat after it Is produced there arc 

 three steps involved; namely, as- 

 sembling, processing and selling. The 

 first of these none can do better than 

 the producers themselves. This comes 

 largely from the fact that a state-wide 

 system is able to allocate definite 

 territory to each plant which makes 

 it possible to save money by avoiding 

 wasteful competition between plants 

 in butterfat procurement. .. 



The cost of processing butterfat in 

 co-operative plants may not be done 

 any cheaper than is done in other 

 plants. But co-operative institutions 

 are in much better position to make a 

 better product. The difference comes 

 from the fact that as producers sell 

 their product to privately-owned 

 plants their interest in that product 

 ends when pay is received for the 

 butterfat. The producer has little or 

 no interest in the quality of butter 

 tp be made, since it isn't his batter. 

 When producers s^U butterfat through 

 their own plants the producers' atti- 

 tude is quite different. In this case, 

 the butter is still his butter and he 

 realizes that butter of higher quality 



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Producers ;et only 39c of oonsumer'i doUar 

 when milk is sold to private procaiiors mmi. 

 distributors. 



sells for more money, costs less to sell 

 it and results in increased consump- 

 tion. Then tjo, through the cooper- 

 ative system, with the producers or- 

 ganized it is much easier to carry on 

 educational work than with unorgan- 

 ized producers. Here is some support- 



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JULY, 1934 



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