104 ILLINOIS STATE DAIRYMEN'S ASSOCIATION 



From the above mentioned Statistical abstract, I calculate 

 the yearly per capita production of butter as follows : 



Year Lbs. per Capita 



1850 13.6 



i860 14.8 



1870 13.5 



1880 16.1 



1890 19.1 



1900 19.4 



1910 17.4 



Gain in population in 1900- 19 10 . . . .20.3% 



Gain in butter 1899-1909 8-5% 



10.3% less butter per capita in 1909 than in 1900. 



The supply of dairy products this year is more abundant, 

 but it is yet to be seen whether this is the temporary result of a 

 wet season or a permanent change in the industry. 



Hence a higher price of butter is consistent with supply and 

 demand. The farmer has received 95% of this advance in 

 price. In the last decade his land has nearly doubled in cost, 

 and the cost of his labor has grown considerably, thus increas- 

 ing his cost of production. By the expenditure of more sani- 

 tary barns and labor the farmer is producing a more wholesome 

 product but at greater cost. 



Increased demand, decreased supply, and increased cost of 

 production justify an advance in the price of butter. But the 

 price has advanced very little. The reason for that is that a 

 retail price of 40 cents a pound is to the limit of what the ma- 

 jority of consumers think they can afford to pay. An excessive 

 price of butter curtails consumption and drives people to sub- 

 stitutes. When the price falls to normal levels consumption 

 does not respond and prices fall abnormally low. Thus the pro- 

 ducer suffers a loss in the end because the high price was for 

 a small volume and the low price is for a large volume. 



The winter price of the best grade of butter is as high as 

 the consumer can afford to pay and the dairyman cannot ex- 

 pect a better reward from an increase in price of such butter. 



