American Agriculturist, October 20,1923 
How Buyers Figure the 
Price of Potatoes 
C. E. LADD 
O N September 21, New York State 
potatoes were quoted at $3.30 per 
150-pound sack in Pittsburg-. The price 
in other nearby markets was about the 
same. 
This is the way that the cash price 
to farmers is calculated by the ship¬ 
per or by farmer-owned cooperative 
shipping associations. The freight 
rate from central New York points 
to Pittsburgh is 28% cents per hun¬ 
dredweight 'or 42% cents per sack. 
Subtracting this from $3.30 leaves 
$2.87%, the price of a sack of pota¬ 
toes on the track at the loading point. 
The usual carload contains 240 sacks 
or 600 bushels of potatoes. Therefore, 
240 sacks at $2.87% total up to 
$689.40, the carload selling price. Sub¬ 
tract from this: 
Cost of loading, grading an^l 
sacking. 
240 sacks . 
Brokerage for selling . 
Draft collections by bank 
Buyers margin to cover other 
costs, losses, bad debts, 
profits, etc. 
267 
$30.00 
25.00 
10.00 
1.72 
50.00 
Total. $116.72 
Net. $572.68 
Dividing $572.68 by 600 bushels 
equals 95 cents per bushel paid to the 
grower for his potatoes. 
If a cooperative shipping association 
is handling the potatoes an amount 
about equal to the buyers margin is 
ordinarily put into the so-called “Re¬ 
serve Fund” to cover the same costs 
and losses as listed above. Under very 
careful management a small amount 
of this may be returned to the grower 
at the end of the year. Under ineffi¬ 
cient management or if the association 
has too much invested in buildings or 
too high an “overhead cost” of operat¬ 
ing, none of this may be returned. 
Losses due to damage to potatoes in 
transit, freezing, poor grading and 
various other causes are much' larger 
than one would expect. If potatoes 
do not arrive in good condition at the 
market point the buyer may refuse to 
accept them unless the seller makes a 
deduction in the price. Whenever the 
market price declines, buyers inspect 
the potatoes very critically to find a 
cause for rejection and consequent re¬ 
duction in prices. If the price is 
di’opping rapidly irresponsible buyers 
may refuse the potatoes altogether. 
This places the shipper at the mercy 
of the buyei' as the potatoes must be 
moved quickly to escape demurrage 
charges. 
These losses from deductions in sell¬ 
ing prices, poor grading, freezing, etc. ' 
will ordinarily amount to enough in a 
season to average from $10 to $15 per 
car for every carload shipped by the 
cooperative association or commercial 
shipper. ___ 
HOLD HAY OR SELL NOW 
Would I be money ahead by pressing a 
stack of hay this fall? Buyers are paying $12 
a ton, which I do not think is high enough. 
On the other hand, do you think it will be 
higher and would it pay me to hold until 
spring? — L. J. F., New York. 
There are several factors that enter 
into your problem and deal with your 
personal situation. In the first place, 
much depends on your financial condi¬ 
tion. If you need money right away, 
obviously it will be a risky thing for 
you to hold your hay until spring. 
There are many other factors to tak§ 
into consideration, such as shrinkage, 
fire hazard and the possibility of a 
declining market. 
If you have noticed the news from 
“among the farmers” and “county 
notes” in American Agriculturist of 
recent issues, you will note that re¬ 
ports from some parts of New York 
indicate that the hay crop is going 
to be short. Then again other sec¬ 
tions report a good hay crop. New 
Jersey’s hay crop was a miserable 
failure. New Jersey always has been 
a buyer of hay, but she will have to 
buy more this year. Then again the 
extremely dry season compelled farm¬ 
ers to feed earlier than usual and 
much of their reserve hay supply was 
consumed early this fall. 
It all depends on the quality of your 
hay whether or not you will get top 
(Continued on page 274) 
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