30 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. 



with the dates the butter is placed in storage and removed from 

 storage, while others require only the date of removal. Many States 

 have no such requirements. 



THE RATES FOR STORAGE OF BUTTER. 



The rates for storage of butter vary in different cities and with 

 different storages. The following schedule is found to prevail with 

 many cold-storage companies: 



12| cents per hundredweight per month for less than car lots. 

 10 cents per hundredweight per month for car lots. 

 25 cents per hundredweight per month for small lots stored 

 for 30 days or less. 



The customary rate with small storages is one-fourth of a cent 

 per pound per month. 



FINANCING OF STORAGE OPERATIONS. 



Formerly it was customary for storage operators to negotiate loans 

 on butter through banks, but now many cold-storage houses handle 

 the loans themselves and hold the warehouse receipt as collateral 

 security. The usual interest rate charged on loans is 6 per cent. The 

 charges for insurance range from $4 to $15.50 per $1,000 valuation, 

 depending upon the construction, location, and equipment of the 

 building. These are based upon a yearty period and rebates are made 

 when the butter is carried for a shorter time. The amount loaned 

 on butter varies from 60 to 70 per cent of its value. It is often con- 

 venient for butter distributors to deal directly with a storage com- 

 pany in obtaining loans and insurance, and storage companies acting 

 as agents in these lines facilitate their business and fill their rooms. 

 They can also handle smaller accounts and make larger advances, 

 as they have the butter in custod}^. 



MARGINS ON STORAGE BUTTER. 



The margins on storage butter depend upon a number of factors, 

 such as the keeping quality of the butter, the marginal difference be- 

 tween the price paid and the market value of the butter when it is 

 removed from storage, the costs of storage, and the expense of han- 

 dling it. It is customary to estimate the carrying charges roughly 

 at one-fourth cent per pound per month. The following statement 

 illustrates the approximate costs for interest, storage, and insurance : 



Interest on 100 pounds butter at 28 cents for six months at 6 per cent $0. 84 



.Storage on 100 pounds butter at 10 cents per hundredweight per month 



for six months . 60 



Insurance at rate of 42 cents per .$100 for six months : . 1176 



Cost per 100 pounds for 6 months $1. 5576 



Cost per 100 pounds per month .2596 



