PRICES AND QUALITY OF CREAMERY BUTTER. 9 



large quantities to Chicago each year during the storage season. 

 They have found that on account of the demand for storage opera- 

 tions, the requirements of the Chicago market at that season of 

 the year are equally as discriminative as those of New York. Since 

 at this time the prevailing prices of butter are determined largely by 

 the demands of those buying for storage purposes, the quality of 

 butter demanded for storage becomes the basis of the current quo- 

 tations, and thus the standards for surplus butter in Chicago and 

 New York tend to coincide during the season when a large portion of 

 current market receipts are bought for storage purposes. 



RELATION OF WHOLESALE PRICES TO JOBBING AND RETAIL 



PRICES. 



Buyers who are expert judges of differences in the quality of 

 butter will pay varying prices for different lots which they have 

 personally inspected, but the market reporters who collect the in- 

 formation upon which the various wholesale price quotations are 

 based do not have general access to the records of private business 

 transactions between the first-hand market receivers and jobbers or 

 retailers. This situation has naturally raised a question as to the 

 complete reliability of market reports or price quotations as issued 

 under present conditions. The open sales " on exchange," which 

 serve as a convenient basis for determining current quotations, gen- 

 erally amount to less than 5 per cent of the daily market transactions ; 

 and they are therefore considered insufficient to serve as a fair index 

 of prevailing market values. 



To check the relationship of quality to wholesale and retail prices, 

 it was originally planned to compare the quality of certain repre- 

 sentative lots of butter from known shippers with the prices paid by 

 receiver, jobber, retailer, and consumer. It was found practically 

 impossible, however, to arrange such cooperation on the part of the 

 wholesale dealers as would permit the obtaining of reliable data on 

 both the quality of butter and the prices at which it was sold in nor- 

 mal business transactions. During one week when this was at- 

 tepapted practically every lot from the creameries cooperating in this 

 investigation was reshipped immediatelj'' upon its arrival in Chicago 

 to jobbers in distant cities. Furthermore, receivers were reluctant 

 to give names of buyers and the terms of sale on some lots because 

 they feared that to do so might jeopardize their trade relations with 

 some desirable customers. 



It was deemed necessary, therefore, to reverse the method of inves- 

 tigation by observing the goods sold to retailers under normal market 

 conditions. By this method it was Dossible also to study the quality of 

 butter in relation to prices at which it was sold by various representa- 

 tive retail dealers located in different parts of the city which catered 

 53153°— 18— Bull. 682 2 



