12 BULLETIN 682, U. S. DEPARTMENT OF AGEICULTTJRE. 



parison of actual market values of exactly the same grades of butter ; 

 but either actual or potential competition between numerous cream- 

 eries producing in excess of local market demands has tended to 

 establish a fundamental level of prices between such market centers. 

 The retail prices in some of the cities of the country, however, may 

 sometimes be out of line with the basic prices of the larger butter- 

 distributing centers: First, because definite and dependable market 

 reports on creamery butter are not available for many cities in dif- 

 ferent parts of the country ; and, second, because country creameries 

 generally have no direct trade connections in such cities. Most coun- 

 try creameries can choose only between such large wholesale dis- 

 tributing centers as New York, Philadelphia, Chicago, and San 

 Francisco. There are not many wholesale butter merchants in any 

 other American cities who have won the patronage of a large num- 

 ber of creameries, and consequently there is little direct competition 

 between different creameries for market outlets in a large number of 

 different cities. This lack of direct competition between a large num- 

 ber of different creameries for various market outlets in various cities 

 has enabled certain large centralizer creameries, which maintain 

 their own distributing organizations in cities like Denver, Colo., 

 Omaha, Nebr., Sioux City, Iowa, St. Paul and Duluth, Minn., De- 

 troit, Mich., Milwaukee, Wis., and Columbus, Ohio, to sell at prices 

 which temporarily may be higher than those received by some local 

 country creameries. 



Figure 3 compares the prevailing average retail prices of creamery 

 butter in some of the larger cities of the United States. These prices 

 are based on the reports of representative retail grocers which are 

 made monthly to the Bureau of Labor Statistics,^ United States 

 Department of Labor. Although there are differences in prices re- 

 ported by different retailers within the same city, the average yearly 

 prices show that, on the whole, consumers generally pay higher prices 

 for butter in some cities than in others. 



The variations in the margins between the lines which show the 

 retail prices in the various cities and the line which shows the basic 

 Chicago wholesale quotation, represent roughly the differences in 

 transportation costs from various sources of supply. The combined 

 costs and profits of both the wholesale and retail distribution within 

 a city, are indicated by the margin of difference between the whiole- 

 sale price quotations of Chicago and the average of the prevailing 

 retail prices in that city. 



COMPETITION BETWEEN COUNTBY CEEAMEEIES AND CENTEAMZEBS. 



As a rule the wholesale prices of centralizer creameries are in 

 line with the Chicago quotations, except for occasional increases 



1 Bulletin 84 of ttie U. S. Bureau of Labor Statistics, entitled " Retail Prices of Food, 

 1915-1916." 



