20 BULLETIN 558, U. S. DEPARTMENT OF AGRICULTURE. 



sideration being given to the possibility of its deterioration when 

 shipped to distant points. The elevator operator must remember also 

 that at some seasons of the year several days or even weeks may elapse 

 before enough grain of any particular grade will be received to make 

 a carload and an opinion must be formed of the prospective changes 

 in the market during the interval. Many farmers dislike to bother 

 with fractional prices. As terminal prices are quoted in eighths of a 

 cent, and as freight rates are seldom figured in even cents per bushel, 

 the country dealer frequently must decide whether or not he will add 

 the fraction to his profit. 



Many farmers and country dealers are influenced to too great an 

 extent by local conditions when attempting to interpret market quo- 

 tations and anticipate the probable trend of prices. In order to 

 analyze the market and to forecast its bent, it is necessary to take 

 country-wide and even world-wide conditions into consideration. 

 The failure of a wheat crop in one or two counties of a State would 

 hardly influence wheat prices generally to any appreciable extent, 

 but a resident of such a community often fails to consider the relative 

 importance of a local crop to the country's total production. 



While all of the factors here enumerated enter into the establish- 

 ment of the price by the country-elevator operator, in actual practice 

 he usually bases his quotation on one or two of the most important 

 elements, either the bids of a certain dealer or the fluctuations in the 

 cash or future market at a certain terminal with which he is familiar. 

 For example, a dealer finds that during a certain season the to arrive 

 bid of a near-by terminal is the best market obtainable for his grain. 

 Upon receipt of this bid freight charges are deducted, together with 

 an amount deemed sufficient to cover the cost of plant operation and 

 profit. 



While most dealers employ this method of price making, good 

 buyers are always observing, consciously or otherwise, all of the 

 various influences here discussed. When an opportunity to " spring 

 the price " presents itself, either by taking advantage of a better 

 price from a consumer, retailer, or some other market, or by proper 

 use of storage, the farmer usually receives the benefit of it, for the 

 dealer is always eager to be in a position to pay better prices than 

 his competitors and thereby handle the major portion of the grain 

 produced in his vicinity. 



After a dealer has determined the prices for the standard grades, 

 the prices for grain of other grades offered must be given atten- 

 tion and the necessary amount to deduct from, or add to, the 

 price of standard grades must be ascertained. " Cuts " on " off " 

 grades vary widely and require deep study, and a dealer may suffer 

 heavy losses if a considerable amount of off-grade grain is produced 



