392 FIELD CROP PRODUCTION 



credit, immediately have made available $80,000 for the 

 purchase of more grain. When the grain arrives, the 

 amount of the draft, together with the commission charges, 

 is deducted from the gross receipt from the sale. The 

 system of credit existing between the country dealer and 

 the commission merchant is a valuable service to the coim- 

 try dealer. 



418. Price of grain. — Country elevators usually re- 

 ceive by mail each morning prices of grain from the ter- 

 minal market, or if a sudden change occurs, they may 

 receive the new quotation by wire from their representa- 

 tive. The price offered for grain at the country elevator 

 is based upon the price prevailing at the permanent 

 market. In quoting prices to local sellers, the country 

 dealer deducts from the terminal market price the cost 

 of freight, the commission charges, a reasonable margin 

 which differs with the different grains according to the 

 amount of risk run in handling them, and a fair profit, 

 including cost of operating the local elevator. Thus, 

 if the freight cost to the primary market is 3 cents per 

 bushel, the commission charge 1 cent, and the margin 

 and profit and cost of operation 5 cents per bushel, the 

 price offered by the local dealer will be 9 cents less than 

 the price at the terminal market. 



419. Prices at the terminal market. — Prices of grain 

 that prevail at the terminal market are dependent upon 

 several factors, chief among which are : the favorable- 

 ness of weather and other conditions for growing the 

 world's crop, the probable yield, the supply and demand 

 of importing countries and the yield and prevailing price 

 of substitute crops. All of these factors have an appre- 

 ciable influence upon the prevailing prices. Weather, 

 insects, and diseases play no small part in establishing 



