INCIDENTAL EXPENSES 31 



hundredweight and sold for $6.10. In this case the 

 margin between cost and selling price at market neces- 

 sary to balance accounts was $1.52, or $1.01 margin be- 

 tween initial and final cost in the feed lot.* In other 

 words, about one-third of the cost per hundredweight 

 of taking a feeder home, fattening, and returning him to 

 market consists of freight, shrinkage, commission, and 

 stockyards charges. These figures do not include hogs, 

 labor, nor manure, which items are treated separately. 



As stated, the average cost per hundredweight of 

 the 130 steers was $4,267 in Chicago. The average cost 

 at feed lots, just as they came from the cars, was $4,654, 

 including freight, commission, feed, and shrinkage. It 

 therefore cost $0,387 per hundredweight to get these 

 cattle home. Of this expense, $0,257 per hundredweight 

 was caused by shrinkage in weight, $0.0817 by freight 

 (including $2.00 per car terminal charges), $0.0438 by 

 commission and $0,004 by feed bills. 



In order to determine the influence of freight rates 

 in calculating the above margin required to balance 

 accounts we may use a series of freight rates in calcu- 

 lating the above margins, using in each case a stocker 

 rate equal to 75 per cent of the rate of fat cattle. In 

 that way we find that the margins necessary to bal- 

 ance accounts are as follows: 



Freight rates $0.10 $0.15 $0.20 $0.25 



Market margins.... 1.52 1.60 1.68 1.77 



Feed lot margins. . . 1.01 1.00 .98 .97 



These figures show that a difference of five cents in 

 the freight rate on fat cattle involves a corresponding 

 difference of about eight cents in the margin necessary 

 to come out even. 



It is assumed in the above calculations that the 

 shrinkage in shipment to market is the same in each 

 instance, viz., 22.5 pounds per steer. If the actual 

 transaction described above be used as a basis, and 

 various amounts of shrinkage assumed, we may de- 



*Based on feed lot weight taken after preliminary feeding period. 

 Necessary margin based on £ • ' - '" weight after arrival at 

 Champaign would be $1.16. 



