20 BULLETIN 979, U. S. DEPARTMENT OF AGRICULTURE. 



The broad, general character of the demands at terminal markets 

 frequently makes it advantageous for shippers to consign their va- 

 rious grades of hay to them. Certain grades, because of their 

 peculiar character, can generally be consigned to an advantage be- 

 cause the} 7 sell better when the buyer is at hand to see what he is 

 buying. 



However, only large markets with a large local demand or dis- 

 tributing markets with a broad shipping demand can generally be 

 used advantageously for consignments by a country shipper. The 

 needs of small markets are quickly filled and hay arriving when there 

 is little demand must frequently be sold at a heavy discount to pre- 

 vent demurrage or storage charges. To obtain the best results from 

 consignments, shippers must themselves know the requirements and 

 practices at the markets to which they consign their hay, as well 

 as the facilities the markets have for handling. They must also keep 

 informed as to supply and demand. 



One of the principal advantages of consigning is that the shipper 

 may offer his hay in large open markets and may have a representa- 

 tive trained in the practices of that market to look after liis interests 

 for him. If so instructed the commission merchant will dispose of 

 the shipper's hay only upon his order so that the shipper may always 

 control the sale. Another advantage of consigning is that it provides 

 a means of marketing hay when it is difficult to sell it by any other 

 method. 



One of the principal difficulties which shippers are likely to en- 

 counter in consigning hay is the wide fluctuation in price which fre- 

 quently occurs at markets where the bulk of hay received consists 

 of consignments. When a good price and demand prevail at any 

 market, all shippers naturally take advantage of those conditions 

 with the result that receipts soon exceed the demand and prices de- 

 cline sharply. All shipments are then diverted or stopped until an- 

 other period of light receipts follows and prices advance. The same 

 thing is then repeated. For this reason many shippers continually 

 receive unsatisfactory returns for their consigned hay. 



From observations made at a number of markets it appears that a 

 policy of continued consignments is more satisfactory than consign- 

 ments made only when prices are quoted unusually high at some 

 market. Another difficulty arises from the fact that consignments 

 are frequently subjected to more stringent grading rules at terminal 

 markets than are enforced in some consuming sections so that al- 

 though comparable grades are quoted higher, the hay does not 

 actually bring so much money as when sold at a lower price to less 

 particular buyers. 



Shippers who are not familiar with the grade requirements and 

 market practices at the markets to which they consign their hay are 



