MARKETIlSrG PRACTICES OF CEEAMEEIES. 11 



market quotation plus a premium less freight ; market quotation plus 

 a i^remium less freight and cartage; or market quotation plus a 

 premiiun less freight, cartage, and commission. 



Of those Wisconsin creameries which sold on the basis of the Elgin 

 quotation, approximately 70 per cent received the flat Elgin quota- 

 tion and the others a premium of from 1 to 4 cents above. When 

 the Chicago quotation was used, the flat quotation generally pre- 

 vailed although the net price received varied from ^ cent below to 

 1^ cents above. It is estimated that approximately 15 per cent of 

 the creameries of Minnesota sold their butter f. o. b. the shijjping 

 station; 85 per cent had freight charges deducted, and 37 per cent 

 were charged a commission. The chief reason for deducting a com- 

 mission was that many of the creameries were accustomed to it and 

 by allowing a commission to be deducted the gross price obtained 

 could be expressed in the form of a premium above the quotation. 

 By allowing a commission of 4 cent and a freight charge of approxi- 

 mately 1^ cents to be deducted, a creamery would receive a gross 

 price of 2 cents above market quotation, which actually was equal to 

 the quotation net at the shipping station. 



A common custom of the creameries was to forward their ship- 

 ments on order bills of lading and to draw a draft against the con- 

 signee which was passed to their local bank for collection or credit. 

 When a sight or demand draft is used it is attached to the original 

 copy of the " order " bill of lading. The draft usually is drawn to 

 cover from 60 to 75 per cent of the value of the shipment. One ad- 

 vantage of the order bill of lading is that the consignor has con- 

 trol of the shipment until the draft is paid, and the creamery's risk 

 of collection for the goods is reduced by that amount. The use of 

 this form of a bill of lading is desirable when demand or sight drafts 

 are used and shipments are made to firms whose financial standing 

 has not been ascertained. 



MARKET DISTRIBUTION OF CREAMERY BUTTER. 



The following method of wholesale market distribution of cream- 

 ery butter was found to be prevalent : 



Upon the arrival of a freight shipment of butter at a terminal 

 market, a notice was sent by the railroad to the consignee. The but- 

 ter was trucked to the receiver's salesroom, where it was weighed, 

 inspected, and held for sale or disposal. 



As a means of identifying the shipments from each consignor, the 

 receiver usually furnished the creamery with a rubber stamp or 

 stencil which was used on the top of each tub. This stamp gave the 

 name and address of the consignee, and the serial number of the 

 creamery. These stencil numbers were frequently removed by the 

 receiver before the butter was sold. 



