SF ^Jh.9..t. ^ A- ■ I' ill UNITED STATES DEPARTMENT OF AGRICULTURE BULLETIN No. 456 Contribution from the Office of Markets and Rural OrKanlzatlon CHARLES J. BRAND. Chief Washington, D. C. Febraary 5, 1917 MARKETING CREAMERY BUTTER By ROY C. POTTS, Specialist in Marketing Dairy Products, and H. F. MEYER, Assistant in Marketing Dairy Products CONTENTS Page Introduction 1 Uniform Quality of Butter an Important Market Requirement 2 Packages for Bulk Butter 3 Preparing Packages for Bulk Butter . . 5 Consumers' Packages 8 Transportation Facilities for Butter . . 13 Wholesale Trade Organizations ... 16 Page Market Grades of Creamery Batter . . 17 Market Inspection of Creamery Butter . 20 Butter Quotations 21 Market Distribution of Creamery Butter 26 Cold-storage Methods and Facilities . . 28 Brands and Trade-Marks for Butter . . 31 Advertising and Salesmanship .... 35 Summary 36 WASHINGTON GOVERNMENT PRINTING OFFICE 1917 ^-0 ? D. of D. FEB 12 1917 UNITED STATES DEPARTMENT OF AGRICULTURE % BULLETIN No. 456 Contribution from Office of Markets and Rural Organization r^l ^S^'^^^ CHARLES J. BRAND, Chief ^^!^"^^ Washington, D. C. T February 5, 1917 MARKETING CREAMERY BUTTER. By Roy C. Potts, Specialist in Marketing Dairy Products, and H. F. Meyeb, Assistant in Marketing Dairy Products. CONTENTS. Introduction 1 Uniform quality of butter an important market requirement 2 Packages for bulk butter 3 Preparing packages for bulk butter 5 Consumers' packages 8 Wholesale trade organizations 16 Market grades of creamery butter 17 Market inspection of creamery butter 20 Butter quotations 21 Market distribution of creamery butter 26 Cold-storage methods and facilities 28 Brands and trade-marks for butter 31 Transportation facilities for butter 13 Advertising and salesmanship 35 Summary 36 INTRODUCTION. The purpose of this bulletin is to present in logical sequence general facts and information regarding the packing, shipping, and market- ing of creamery butter, which may be of interest to producers, dis- tributors, and consumers of dairy products, as well as students and dairy officials. It is not intended that this bulletin should contain only new facts, but rather to make available in one publication a great deal of information regarding the marketing of creamery but- ter, which is of general interest. It should not be implied from the statement of any existing method or condition that the department thereby approves of such method or condition. A discussion of the more complex economic phases of butter marketing has been omitted purposely with the intention of treating them in future publications after further investigation and study. A general survey and investigation was conducted in over 50 cities, in which the market requirements as well as methods and facilities for distribution were carefully studied. In each market visited numerous samples of butter were inspected and interviews were obtained with wholesale butter receivers, jobbers, brokers, man- NoTE. — This bulletin should be of special interest to manufacturers and distributors of creamery butter in the United States and of general interest to dairy farmers who sell cream to creameries. 61166°— Bull. 456 — 17 1 ►v^ / Xj to Y 2 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. agers of chain stores, retailers, restaurant and hotel proprietors, offi- cials of produce exchanges and butter boards, the official "butter in- spectors of the exchanges, managers of cold-storage warehouses, and officials of transportation companies. UNIFORM QUALITY OF BUTTER AN IMPORTANT MARKET REQUIREMENT. A frequent complaint made by the dealers and distributors in the markets is a lack of uniformity of the butter produced by many creameries, and an increasing quantity at certain seasons of inferior butter which is known as "undergrades." An inspection of this but- ter indicated that the inferior quality was often due to the use of cream of poor quality and to some extent to faulty manufacturing methods. The requirements of various markets differ widely in some particu- lars, and butter of certain characteristics which is acceptable on some markets may meet serious objection on others. An illustration of this variation is found in New York and Philadelphia where certain con- suming classes require butter of light color and salt, a firm waxy body, and a quick, fresh, sweet, clean flavor, while in Baltimore, Washington, and the markets of the South, the consumers generally prefer a deep yellow color, medium to heavy salt, and a reasonably fresh, clean flavor. Some markets require a high-flavored, firm- bodied, well-made piece of butter. Creamery men would do well to pay more attention to the importance of producing butter of the qual- ity demanded by critical markets if tliey wish to obtain the highest market prices for their products. They should also know the require- ments of the various markets and the channels of trade through which each grade of butter reaches that trade which demands it. In the larger markets there are buyers for every grade of butter. The large retail chain store and chain restaurant systems in many cities often are confronted with the problem of obtaining large sup- plies of butter of uniform quality for their trade. They usually have been unable to buy directly from local country creameries or to obtain their supplies from the smaller jobbers and have been obliged, therefore, to buy from the larger wholesale receivers or cen- tralizing creameries which may have large quantities of butter of a 'miform quality. The retail chain store system is becoming an im- portant factor in retail butter distribution. In some of the larger cities 40 per cent or more of the butter is retailed by chain stores. In many of the larger cities very satisfactory sales might be made to these stores by country creameries, if they produced butter of uniform quality and concentrated their product either at points within the areas of production or on the market where the chain store buyers could obtain such grades and quantities as they require. The employ- MARKETING CREAMERY BUTTER. 6 ment of an inspector-instructor by various groups of country cream- eries in order to standardize the quality of their product would seem to be a move in the right direction and could be followed by stand- ardization in methods of marketing and by the inspection of the butter and by branding it according to official grades. Greater uni- formity in quality of butter is of primary importance to successful marketing, and creamery butter makers should give this phase of the subject most careful consideration. COMMON FAULTS IN BUTTER. The more common faults observed in the markets in the quality of butter are : Soft, leaky, open body ; too much or not enough salt ; too high or too light color; metallic flavors; high acid, unclean, and old cream flavors; streaks and mottles; mold on butter, also moldy and dirty packages. Butter possessing such faults, although not always classed as " undergrades," is often discriminated against by the critical buyer. During those seasons when the market receipts are heavy and the market is weak such butter can be moved only at low prices, and often sells at 6 to 8 cents below the better grades. PACKAGES FOR BULK BUTTER. The two styles of packages used for bulk butter are the " tub " and the " cube." In the Middle West the creameries use the G3- pound ash tub very generally, while in the New England States a preference is shown for butter put up in spruce tubs, of 10, 20, 30, 50, and 60 pounds capacity. ^Mien the local production in New Eng- land is insufficient to supply the demand, spruce tubs often are shipped to creameries in Michigan, Wisconsin, Iowa, Minnesota, Ne- braska, and other western dairy States, as a premium of approxi- mately half a cent per pound is usually paid by the New England buyers for butter packed in these tubs. The use of the '"cube" is confined almost wdiolly to the creameries located in the Pacific Coast States. (See fig. 1.) This container for bulk butter is made of fir and spruce. The shooks used for making the cubes are usually surfaced only on one side, which is placed toward the butter. The outside of the cube is therefore very rough and does not present an attractive appearance. Foreign mar- kets to which considerable butter has been shipped from the Pacific coast have commented upon the rough surface of the cube and upon the lack of uniformity in size and net weight of the packages. The cube is a crude package in contrast to the containers used in New Zealand, which are neat, attractive, rectangular boxes, holding ex- actly 56 pounds, and are branded with the name of the creamery, export brand, and net weight on each end. 4 BULLETIlSr 456, U. S. DEPARTMENT OF AGRICULTURE. There has been considerable variation in the size of the eubes used, some holding 63 pounds, some 68, and others approximately 80 pounds. As a step toward standardizino- the size of the cube, the San Francisco Wholesale Dairy Produce Exchange recently ruled that butter offered on the exchange as " extras " should be packed in cubes Avith sides, tops, and bottoms one-half inch in thickness Fig. 1. — The cube is used on the Pacific coast for solid paclied bulk butter. Its inside dimensions are 12J inches by 12J inches by 13J inches. Its net weight is approxi- mately 68 pounds. and ends seven-eighths of an inch in thickness, lumber to be sur- faced on both sides, corners to be rounded, inside measurement 12^- by 12^ by 13^ inches, and net weight to be marked on each end. The net Aveight of such a cube would be approximately 68 pounds. Cubes of a uniform size, which are neat and attractive in appearance, would be much more satisfactory and highly desirable both for local and foreign markets. MARKETING CREAMERY BUTTER. 5 PREPARING PACKAGES FOR BULK BUTTER. Before packing butter into tubs or cubes they should be scrubbed thoroughly with a stiff bristle brush and strong hot alkali water until the wood is bright and clean. (See fig. 2.) Then it is well to soak them in a tank of strong brine, as it tends to hold in check the development of mold. The soaking of the tub or cube also increases its moisture content and tends to reduce the shrinkage of the butter. The package should be paraffined before the parchment paper liner is applied, especially if the butter is to be placed in cold storage for a number of months. The liners should be soaked in a strong Fig. 2. — White ash butter tubs which hold approximately G3 pounds of butter. The tub on the left presents an unattractive appearance, due to its moldy condition. Butter in clean tubs is sold more readily and at higher prices in the market. solution of brine and carefully placed in the tub or cube so that the butter is protected from direct contact with wood and presents a neat and attractive appearance when the package is opened for inspection. PACKING BULK BUTTER. In packing butter in tubs or cubes the parchment liners should be retained in the proper place and the butter packed solidly so that it is free from holes. (See fig. 3.) In some of the larger eastern markets a great deal of butter is retailed direct from the tub, and to some extent this is done with cubes on the Pacific coast markets. When tub butter is retailed in this way, the tub and liner are re- moved, and it is cut with a wire into three horizontal layers. De- 6 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. pressions and holes in the butter caused by wrinkled liners and care- less packing seriously injure the appearance of the butter, which should be neat and attractive to please the consumer. BRANDING TUBS AND CUBES. Butter shipped interstate in package form is required by Federal law to be branded with its net weight. Some States and cities require Pig. 3. — Tub butter which was poorly packed. The holes or pockets expose more surface, thus permitting greater shrinkage and development of mold. the net weight to be branded upon consumers' packages. The brand- ing of the tub and cube with the gross weight, net weight, and tare greatly facilitates the handling of bulk butter on the market. In the market inspection of a shipment of butter consisting of different churnings it would be convenient to have the number of the churning placed on each tub. The name or stencil number of the creamery and MARKETING CEEAMERY BUTTER. 7 the receiver's name and address should be stamped on the top of the tub or cube. The suggestions obtained from the practice in some for- eign countries of having the name, address, and license number of the factory printed on each end of the cube or container, and of burn- ing into the wood the net weight, are worthy of consideration. MARKET METHODS OF WEIGHING TUB BUTTER. Various methods of determining the net weight of butter in tubs are employed. (See fig. 4.) Some receivers accept the weights marked on the tubs by the creamery; others weigh each tub sepa- rately and mark upon the outside of the tub the gross weight in Fig. 4. — Each shipment of I)utter is weighed and inspected by the wholesale receiver upon its receipt in his cooler or butter cellar. full pounds. A numl)er of the tubs are then stripped and the aver- age net weight of actual butter in full pounds is obtained. The dif- ference is taken as representing the tare of the tub. The rules of the Chicago Butter and Egg Board provide that a sufficient number of tubs in each lot (not less than 10 per cent) shall be weighed. On the New York market (fig. 4), in determining the tare for the tub, the dealers usually make " test weights " as follows : Weigh 3 tubs out of 12 or under. Weigh 5 tubs out of 12 to 40. Weigh 10 tubs out of 40 to 100. Weigh 1.5 tubs out of 100 to 150. Weigh 20 to 25 tubs out of a carload. 8 BULLETIN 456, U. S. DEPAKTMENT OF AGRICULTURE. It is customary among the trade in weighing buttgi* to require " up-weights," that is, the beam of the scale must bahince against the upper rest, and when it does not the next lower pound is taken, frac- tional weights usually not being counted. Since the net w^eight amendment to the pure food law became ef- fective, distributors state that it is often unnecessary to weigh the butter, as the creamery's weights are accepted. It is very important, therefore, that creameries should weigh their butter correcth'^ in order to obtain full weights. An alloAvance of one-half to three- fourths pound usually is made by creameries for shrinkage. Since the Fig. 5. — In some markets a great deal of butter is retailed from tubs. value of butter is higher than it was jQixvs ago when the present mar- ket methods of weighing Avere first adopted, it is even more impor- tant now that accurate methods of weighing be employed. CONSUMERS' PACKAGES. The trend at present in the market distributicm of creamery butter is toward individual consumers' packages. The standard package most commonly used on eastern markets is the 1-poimd print Avhich measures 21 by 2^ by 4f inches. In New York City, Boston, Buffalo, Cleveland, Charleston, and New Orleans the practice of retailing butter from tubs is still quite prevalent. (See fig. 5.) A large por- tion of the butter retailed is printed, wrapped, and placed in cartons MARKETING CREAMERY BUTTER. 9 from tub butter. (See fig. 6.) Since tlte tub-shaped package is not the most desirable in some respects for cutting prints, a great deal of the butter distributed by the larger creameries is cut into prints at the creamery. Some creameries use the cube in preference to the tub for storage purposes, as it is better adapted to the cutting of prints. The standard cube (12^ by 12| by 13^ inches) used on the Pacific coast weighs about 68 pounds net and cuts out 64: full pounds of prints, thus leaving about 1 pounds of scrap to be repacked. A num- ber of creameries in Ohio and Indiana are using cubes for their Fig. G. — Wholesale distributors of butter in the larger markets use machines which cut and wrap the prints. The cartons are usually put on by hand. shipments to Cincinnati, Louisville. Columbus, and other markets, as the dealers find them to be more economical in cutting prints from the standpoint of investment in printing equipment, labor, and shrinkage. SHRINKAGE IN PRINTING TUB BUTTER. The shrinkage in cutting prints from tub butter due to the loss of free moisture and a slight overweight allowed on each print is a larger item than ordinarily is considered. It has been found to vary from one-half to H pounds per tub. The various factors which 61166°— Bull. 456— 17 2 10 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. influence the loss of moisture are the temperature or firmness of the butter when printed; the firm, loose, or leaky body of thfe butter; the condition in which the moisture is incorporated; and the equip- ment and method employed in cutting the prints. In order to avoid large shrinkages or losses in printing, some receivers sort out those tubs which have a firm body and in which the moisture is well incor- porated. With a loss of 1^ pounds per tub in printing loose, leaky- bodied butter, it is evident that receivers cannot afford to pay as much for such butter as for butter in which the loss in printing is less. Fin. 7. — Three styles of 1-pound butter cartons are used. The right one Is used by creameries in the Middle West, the center one is used in Vermont, and the one on the left on the Pacific coast. THE USE OF CARTONS AND RETAILERS' BRANDS. The use of cartons for print butter is increasing upon every mar- ket. Their advantages are that they make a more sanitary package which is more convenient for the retailer to handle, the quality of the butter is preserved longer, and, if branded with the name of the manufacturer or distributor, they furnish an advertising feature. (See fig. 7.) The larger chain stores handle print butter under their exclusive brands which are put up for them either at the cream- ery, by the jobber from whom they buy, or in their own butter print- ing department. Many retailers and wholesale distributors find it convenient and economical to furnish parchment wrappers and car- tons bearing their private brands to creameries which for a small extra charge put their butter up for them. MARKETING CREAMEEY BUTTER. 11 LESS-THAN-POUND PACKAGES. Two methods are used in marketing the less-than-pound packages. Some creameries use cartons which carry less than a pound. Others use a special frame on their printer and either halve or quarter the regular pound print (2^ by 2^ by 4f inches). Figure 8 shows this method of marketing one-fourth, one-half, and 1-pound prints, by using the 1-pound carton. The individual pieces of butter are wrapped separately with parchment paper, consolidated into a pound package, and the whole wrapped with wax paper. Wlien this method of putting up butter is employed an extra wholesale price of one-half to 1 cent a pound usually is obtained. In some cities a large portion of the butter is sold in these styles of packages. This custom is prevalent in the South and is increasing Fig. 8. — The standard carton used in the Middle West is 2J by 2J by 41 inches. It may be used for full-pound prints, four quarter-pounds, or two half-pounds. in the North, particularly among consumers who demand small amounts, or prefer their butter in this style on account of its greater convenience in serving. ORNAMENTAL PRINTS. The custom is still quite prevalent in some of the eastern markets to imprint on each roll, crock, or print of butter an ornamental design or emblem. Illustrations of some of these designs are shown in figure 9. This is accomplished by an attachment to the cutter, which produces the desired impression as the butter passes beneath it. At the smaller creameries hand molds are used. The general use 12 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. of these ornamental designs is decreasing and undoiibte^dly will become obsolete as individual consumers' prints in standard cartons come into more general use. Pig. 9. — Ornamental prints are prevalent in New England. They are expensive to make and very inconvenient to pack and ship. Fig. 10. — The unstandardized packages of New England require the use of various styles hy a creamery. A standard package would he more convenient and satisfactory. OTHER STYLES OF CONSUMERS' PACKAGES. Throughout the New England States various styles of consumers' packages are in use. (See fig. 10.) The more common are known as the flat pound, flat half-pound, half-i)oiind individual, 1-pound hotel bar, half-pound bar, western 1-pound prints, 2-pound brick, MARKETING CREAMEEY BUTTER. 13 5-poimd rectangular box, 5-poimd round box (^Yooden or fiber), and 10-pound tub. (See fig. 11.) This lack of uniformity means additional labor and expense for creameries when preparing butter for market. An effort is being made by the Vermont creameries to standardize the consumers' packages used in that State. The customary consumers' packages on the Pacific coast are the 1 and 2-pound flat prints. The United States Navy in its contract for butter requires that a part of its supply be put up by the cream- eries in 5-pound sealed tins. (Fig. 12.) Butter for export to the Tropics usually is packed in similar tins, with the weights based on the metric system, and ranging from approximately one-half to 25-pound packages. Fig. 11. — Tub butter is often repacked into smaller containers. The 5-pound wooden box is used as a consumer's package to some extent. The process is expensive as com- pared with cartoned prints. SHIPPING CONTAINERS FOR BUTTER. Fiber board, corrugated board, and wooden boxes are used as ship- ping containers for print butter. For city distribution, the fiber board boxes are used quite generally. When rehandling in transit is necessary or greater protection during the summer season is required, the wooden boxes often are preferred. TRANSPORTATION FACILITIES FOR BUTTER. In some sections the gi-eat bulk of the butter is shipped to the market by refrigerator freight. Throughout the dairy sections of the Middle West a regidar scheduled refrigerator dairy freight service is 14 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. operated by the railroads or fast freight refrigerator conipanies. to move the shipments of butter from the creameries to eastern markets. The butter is collected from the creameries along the line in iced cars by " pick-up " service, and at junction or division points entire car- loads are made up. The larger creameries which produce a carload or more of butter a week usually ship in carload lots directly from their plants. In distributing butter out of terminal markets such as Chicago, the various railroads extending into the South and East operate regular scheduled refrigerated package cars to certain cities where bulk cars are broken for distribution. In the more sparsely dcA'eloped dairy sections and particularly with the smaller creameries. Fig. 12.- — The butter exported to tropical countries is usually sealed in tins. The outside container is lined with corrugated fiber board and bound with strips of tin. which market in local and neighboring cities, express service is commonly used. Often exjDress service may be used to advantage in reaching a junction point on a railroad through which a regular scheduled re- frigerator car operates and from which refrigerator service by freight may be obtained to the market which the shipper desires to reach. Arrangements prior to shipping should be made with the re- frigerator car company to advance the local express charges, which they will later collect with the freight charges at destination. MARKETING CREAMERY BUTTER. 15 The shipping tag on each package should carry the necessary rout- ing instructions so that those handling the shipment may be fully in- formed of the service desired. The advantages of this arrangement are twofold : First, movement of the product under refrigeration over a greater part of the route is obtained; second, the transportation costs are often less for the com- bined express and freight services than the regular through express charges. REFRIGERATION SERVICE FOR BUTTER ON THE GREAT LAKES. Inland waterway service has not been generally used for butter transportation. During the past two years, with three boats on the Great Lakes equipped with refrigerator compartments, a consider- able quantity of butter was shipped by boat from Duluth, Minn., to Buffalo, N. Y., where much of it was reshipped by rail to eastern markets. This service has been generally satisfactory to those who have used it, and a saving in freight costs of approximately one- quarter cent per pound has been obtained. OCEAN AND COASTWISE TRANSPORTATION. Facilities for ocean and coastwise transportation of butter under refrigeration have been established to some extent. A large portion of the butter in coastwise trade is carried without refrigeration. This is true on both the Pacific and Atlantic coasts where the time between points is 48 hours or less. Some of the steamers have small refriger- ator rooms which are used for butter as well as for milk, cheese, and other perishable products. With the development of trade through the Panama Canal, steamers sailing from the ports of the Pacific coast probably will be equipped with refrigeration so as to handle butter, as there is an increasing surplus on the Pacific coast for which markets may be obtained in the eastern and southeastern parts of the United States or in export trade. COOPERATIVE CAR-LOT SHIPPING. In various sections of the United States country creameries have cooperated in obtaining a special scheduled " pick-up " refrigerator- car service, and in concentrating local shipments into carload lots. By this means freight charges have been less and the butter has reached the market in better condition. When a number of cream- eries are located on the same railroad or in close proximity to each other, cooperative car-lot marketing may be a great advantage. 16 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTURE. WHOLESALE TRADE ORGANIZATIONS. The wholesale receivers of butter, eggs, and cheese in the larger markets have formed trade organizations. Through such organiza- tions good fellowship is promoted and a meeting place or exchange room is maintained. At the meetings, which are usually held daily and are known as the " call " or " 'change," sales are conducted. These sales are in the form of an auction and each member has the privilege of posting his offerings and bids or listing them with the oiRcial in charge. In order to facilitate trading between the members HOLDINGS IN OP THC AStOCIATCD WARCHOUSCS •OTTBB POUNOa IN aTORASK caaa CABEB IN aToajkaa STORAGE HOLDINGS IN BOSTON ■ UTTCII riao . Itll 1014 taia ia<4 TOTALS DIPTEREHCC - PRCVIOUa VCEI - tNO. - - 3ND. ■ ■ 4TH. - ■ UTTER CREAaED rORVEEK RCKRa. LABT TR. CREARED PCKRa. ESaa CARER CAREa BOSTON COMPARATIVE RCCCIPTS •UTTKR caaa \ fSfl 1014 laia iai4 Tua* ■ oils TUOO aona OAaia CAOca HONDAV TUEaOAV THURRDAT PRIDAV RATURDAV TOTALR FOR WEEK - piBVIOUR " FOR CHCC8C ro-OAT lAHI OAT LAOT TEAO ^ 1 WCIK. THia TCAO ■UK. LAST TCA* POULTRY wiiVthi." »t » WtH. LAOT TIAI NEW YORK C OM PARATI VC RCCCIPTS AND PRICES II [. 1.14 lata caaa iai4 | MONDAY TUEROAT WERNER DAT THURRDAT FRIDAT RATURDAV TOTALR POR WEEK ~ PREVIOUR - roR CHICABO COMPARATIVE RCCCIPTS mo PRICCB I ■ ■!• OUTTC* lOM laia laaa iai4 I MONOAr >IOII»0» THURSOAV r»io»T ■AT U* DAY - raa ___! __^ A R K E T 8 WATERTOWN CHCC8C LAar sccit CANTON BUTTCR utaraccK CHCCSC uaTaccc CLOIN BUTTCR utar acH BOSTON TO-DAY LART TEAR oHicac NC« YORK 1 lUTTCa TO-BAT CREAMERY EXTRA8 FIRRTR lOTR. TKarcaoAT CREAMERT KITRAR FIRRTR RCTR. RCTa. EOaa TO-DAV WERTSRN EITRA PIRRTR PIRRTR TCaTEBOAr WERTERN EXTRA FIRRTR PIRRTR rcTa. BHCCai TO'OAT rcTa. TCOTiaBAT acTa. 1 CM ICAQO 1 lUTTCa TO-OAT EXTRAR Nai PACKINR RTDCR • CTR. TBaTEaOAT EXTRAR Nai RAOKINR RTOCK rcTa. caaa to-oat tcTa. YEaTKaOAY ■CTa. KANSAS CITY 1 caaa to-oat I TCaTCaOAT ! ST LOUIS 1 caaa to-oat VERTEROAT 1 Fig. 13. — The wholesale trade organizations in the larger markets maintain bulletin boards on which market Information is posted for the information of the trade. rules and regulations have been adoj^ted which provide (1) for the establishment of classes and grades of butter, (2) for an inspection service to apply these grades, and (3) for the adjustment of disputes in trading between members. Through the officers of the organiza- tion information is obtained for the members regarding the move- ment, prices, demand, and supply of butter in other markets and receipts at the local market. (See fig. 13.) They also obtain the benefiits of cooperative action in matters which are of mutual intei'est. MARKETING CREAMERY BUTTER. 17 such as State and city legislation, transportation and. terminal facilities, and improvement of produce markets and marketing facilities. MARKET GRADES OF CREAMERY BUTTER. Market grades of creamery butter are necessary in order to facili- tate trading and to establish market quotations for the various quali- ties. The purpose of grades is to establish a measure or standard for the qualities. A score card Avhich recognizes the relative importance of the following characteristics is employed for the purpose of grad- ing butter: Flavor (45), body (25), color (15), salt (10), and pack- age (5). This gives a total of 100 points and the score the butter receives usually determines its grade. The market grades of butter established by various wholesale produce organizations conform quite closel}' to a uniform standard. The interpretation or application of the grades by the butter in- spectors may vary on the different markets and in educational and commercial scorings. These differences are due to a different require- ment of quality which the inspector may use or a market may demand. Therefore butter scored 93 points by one inspector may be scored only 90 or. 91 points by another, and an inspection certificate for an " extra " issued in one market may not be accepted as an " extra " in another. The requirements of each grade of creamery butter as established for the New York, Chicago, and San Francisco markets established for the New York, Chicago, and San Francisco markets by the wholesale trade organizations at each market are given herewith. GRADES OF BUTTER ESTABLISHED BY THE NEW YORK MERCANTILE EXCHANGE FOR THE NEW YORK MARKET. Extras. — Shall be a standard grade of average fancy quality in the season when offered under the various classifications. Ninety per cent shall conform to the following standard ; the balance shall not grade below firsts : Flavor. — Must be sweet, fresh, and clean for the season when offered. Body. — Must be firm and uniform. Color. — Not higher than natural grass, nor lighter than light straw, but should not be streaked or mottled. Salt. — Medium salted. Package. — Sound, good, uniform, and clean. Firsts. — Shall be a grade nest below extras and must be good butter for the season when made and offered, under the various classifications. Ninety per cent shall conform to the following standard ; the balance shall not grade below seconds : Flavor. — Must be reasonably sweet, reasonably clean, and fresh. Body. — Must be firm and fairly uniform. Color. — Reasonably uniform, neither very high nor very light. Salt. — May be reasonably high, light, or medium. Package. — Sound, good, uniform, and clean. 61166°— Bull. 456—17 ^3 18 BULLETIN 456, U, S. DEPARTMENT OF AGRICULTURE. Seconds. — Shall be a grade next below firsts. Flavor. — Must be reasonably good. ^ Body. — Must be solid boriug. Color. — Fairly uniform, but may be mottled. Salt. — May be high, medium, or light. I'aelaKjc. — Good and uniform. Thirds. — Shall be a grade below seconds and may consist of promiscuous lots. Flavor. — May be off-flavored and strong on tops and sides. Body. — Not required to draw a full trier. Color. — May be irregular or mottled. Salt. — High, light, or irregular. Package. — Any kind of package mentionetl at time of sale. Extra creamery may score either 91, 92, or 93 points at the discretion of the butter committee, who shall determine the required score from time to time in such manner that it shall represent an average fancy .quality in the season when offered. But butter scoring more than required for extras shall be deliver- able on a contract for extras, and may be branded as such at the request of seller or buyer. Any change in the standard score required for extras shall, after authorization by the butter committee, be announced by the caller at the opening of the next regular call and posted iipon the bulletin board of the exchange and be effective 24 hours later. The minimum score of Firsts shall at all times be 4 i)oints below the score required for Extras. The minimum score of Seconds shall be .5 points below the minimum score required for Firsts. The minimum score of Thirds shall be 7 points Itelow the minimum score I'equired for Seconds. GRADES OF BUTTER ESTABUSHED BY THE NEW YORK BUTTER AND EGG EXCHANGE (INC.) FOR THE NEW YORK MARKET. This Exchange was organized in the spring of 1916 and adopted the same grades for Extias, Firsts, Seconds, and Thirds as the New York Mercantile Exchange. In addition a grade known as Specials was adopted with the following requirements : Specials shall be the highest standard grade of fancy quality in the season when offered of creamery butter. Ninety-five per cent shall conform to the following standard and the balance shall not grade below an Extra. Flavor. — Must be the sweetest, freshest, and cleanest for the season when offered and nmst have a pronounced aroma and quick flavor. Body. — Must be firm and uniform. . Color. — Not higher than natur;U grass nor lighter than light straw and can not be wavy, streaked, or mottled. ASfo//.^Medium salted. Packaf/e. — Must be clean, uniform, and in good condition and the Itutter must be solidly packed. GRADES OF CREAMERY BUTTER ESTABLISHED BY THE CHICAGO BUTTER AND EGG BOARD FOR THE CHICAGO MARKET. Extras. — Shall consist of a grade of butter scoring 93 points or higher. Flavor. — INIust be fine, sweet, fresh, and clean, and good, sweet, and clean if held. Body. — Must be firm and solid, with good grain or texture, free from salviness. MARKETING CREAMERY BUTTER. 19 Color. — Must be nniforra, neither too light nor too high. Salt. — Well dissolved, thoroughly worked in, not too high nor too light. Package. — Good and sound as required in classification. Extra firsts. — Shall be a grade of butter scoring 91 points or higher. Flavor. — Must be fresh, clean, and sweet, and fairly clean if held ; all other requirements same as extras. Firsts. — Shall be a grade of butter scoring 87 points or higher. Flavor. — May be faulty but must be fairly good. Body. — Fairly good grain and texture. Color. — Fairly luiifonu. Salt. — Not unreasonably high or light. Package. — Good and sound as required in classification. Seconds. — Shall be a grade of butter scoring 80 points or higher. Flavor. — May be unclean. Body. — Must be fairly smooth boring. Color. — May be irregular or mottled. Salt. — May be irregular, high, light, or uneven. Package. — Same as required in firsts. Thirds. — Shall be a grade of butter scoring 75 points or higher. Flavor. — May be off, old, or strong tops and sides. Body. — May not be smooth boring. Color. — Mixed or streaked. Salt. — Irregular. Package. — Miscellaneous. Packages to be used. — Creameiy tubs, hardwood, about 60 pounds (for extras shall be standard white ash with wood hoops). All other style of package must be specified. GRADES OF CREAMERY BUTTER ESTABLISHED BY THE SAN FRANCISCO WHOLE- SALE DAIRY PRODUCE EXCHANGE FOR THE SAN FRANCISCO MARKET. (The grade is not determined by the score alone.) Extras. — Extras shall consist of the highest grade of butter. Score. — Score shall average 93 points or higher for creamery or dairy ; 90 per cent shall be up to the following standard, the balance shall not grade below " firsts." Flavor. — Flavor must be quick, fine, fresh, and clean, if of fresh make, and good, sweet, and clean if storage stock. Body. — The body must be firm and solid with perfect grain or texture, free from salviness. Color. — Color must he luiiform, neither too light nor too high ; good straw-color standard. Salt. — Salt must be thoroughly dissolved ; not too high or too light salted. Package. — Packages must be good, uniform, sound, and clean, and free from labels, brands, or stencil marks. All fresh California butter, either squares or solid packed, grading " extras," to grade as such and be a good delivery when sold under the spot call, and in the absence of any agreement to the contrary, shall be packed, when in squares, in new, white wood 60-pound cases, parchment lined ; and when solid packed, shall be packed in cubes, whose inside dimensions shall be 12^ by 12^ by 13* inches, parchment lined, and the cubes shall weigh not less than 63 pounds nor more than 68 pounds net weight. 20 BULLETIN 456, U. S. DEPARTMENT OF AGRICULTUEE. Prime firsts. — Prime firsts shall be a grade just below extras scoring 90 points or higher for creamery or dairy; 85 per cent shall be up to ftie follow- ing standard, the balance shall not grade below " firsts.'* Flavor. — Flavor must be good, sweet, clean, and fresh for all current make, and good, sweet, and clean for held. All other requirements shall be the same as for " extras." Firsts. — Firsts shall be a grade just below prime firsts, scoring 87 points or higher for creamery or dairy; 85 per cent shall be up to tlie following standard, the balance shall not grade below " seconds." Flavor. — Flavor must be good, sweet, clean, and fresh for all current make, and good, sweet, and clean for held. All other retiuirements shall be the same as for "extras." Seconds. — Seconds shall consist of a grade just beiow firsts. Score must be 80 points or higher for either creamery or dairy. Flavor. — Flavor must be fairly good and sweet. Body. — Body must be solid boring. If ladles, must be 90 per cent solid boring. Color. — Color must be fairly good, although it may be irregular. Salt. — Salt may be irregular, high, or light salted. Package. — Packages must be good and sound, but may lie second hand. Thirds. — Thirds sliall consist of a grade just below seconds. Score must average 70 points or higher. Flavor. — Flavor must be reasonaI)ly good, may be strong on tops and sides. Body. — Body must be fair l)ornig if creamery or daii\v and at least 50 per cent bore and full trier if ladies. Color. — Color defective, mixed, or streaky. Salt.— Halt irregular. Package. — Package fairly uniform. MARKET INSPECTION OF CREAMERY BUTTER. In applying the grades established by an exchange, an inspector is employed or some person is appointed to make the inspections. In making an inspection a portion of the tubs in the lot is examined. The rules of the New York Mercantile Exchange provide that sam- ples shall be drawn from each lot of "one mark and invoice," meaning one shipment from a single creamery, as foUoAvs: Inspect 5 tubs from lots of less than 25 tubs. Inspect 8 tubs from lots of 25 to 50 tubs. Inspect 15 tubs from lots of 50 to 100 tubs. Inspect 20 tubs from lots of 100 or over. The rules of the Chicago Butter and Egg Board provide for the sampling and -inspection of 5 tubs from lots of less than 50 tubs, and 10 tubs from lots of 50 to 100 tubs. Whenever the butter is quite irregular in quality the inspector may increa.se the number of samples until he is satisfied Avith his score for the lot. As the grade of a lot of butter usually is determined by the inspection of less than 20 per cent of the tubs, it is possible that the tubs inspected may not truly represent the average grade of the entire lot. The particular tubs in- MARKETING CREAMERY BUTTER. 21 spected may be those of a cliiirning of a lower or higher grade than the other tubs. It would be possible to avoid this if creameries would give each churning a consecutive number, and number the tubs of each churning accordingly. (See par. 6, p. 33 of Iowa State brand requirements.) In this way one tub from each churning could be inspected. This practice would also be a convenience to receivers and buyers in selecting tubs of the same (juality or of a single churning. DUTIES OF OFFICIAL MARKET INSPECTORS. INIost of the butter sold on the " call '' is bought subject to official inspection, and in such sqles the certificate of inspection is delivered to the buyer with the butter. When requested to do so the inspector also may certify to the grade of butter received by members of the exchange from creameries or sold privately by them. In some mar- kets butter purchased for export, for the Govornnient, or for private, municipal, or State institutions must bear the official stamp of the inspector. In trading between members of the exchanges, a certifi- cate is issued but the packages are not stamped unless it is requested. In some markets the inspector is regularly employed by the ex- change, while in others one of the members of the exchange may be appointed to serve as inspector, since there are but few sales on " call " and inspections are rather infrequent. Most of the butter is accepted from creameries by the wholesale receivers without an official inspection. Even in the market distribu- tion of the butter it is largely a matter of bargaining between the salesman and the buyer. The receiver or buyer is the judge of the quality, and his inspection is spoken of as being " over the trier." If the price and quality are satisfactory, official inspection is unneces- sary. Official market inspection of shipments from creameries are more frequent on a weak market or when the trend of prices is lower than on a firm market when prices are advancing. Such a practice has been criticized, and it has been proposed that the State creamery associations should maintain inspectors on the larger and more im- portant markets. It has also been suggested that the Federal Gov- ernment might maintain an inspection service on the principal mar- kets and at points of concentration. Such a service would require the promulgation of Government grades for butter. BUTTER QUOTATIONS. Butter quotations are usually intended to serve as an index of the wholesale market value of certain grades of butter. Formerly the wholesale trade organizations exerted a considerable influence upon butter market quotations through quotation committees. In most markets at present the quotations are determined by market-reporting 22 BULLETIN 4o6, U. S. DEPARTMEXT OF AGRICULTURE. agencies. The methods employed in arriving at the quotations vary someAvhat in the different markets. It is the usual custom for a mar- ket reporter who is acquainted with the wholesale receivers and job- bers on the market to interview these dealers and obtain current in- formation from them regarding the condition of the market, Ijuying and selling prices of the various grades of butter, and the general movement of receipts. He also attends the meeting of the exchanges where he interviews members of the wholesale trade organization and notes the offers and bids on the " call.' "With this general informa- tion he is able "to make a report of the market prices of butter which when published becomes the market quotation. INFLUENCE OF EXCHANGE TRADING ON QUOTATIONS. In a few markets the quotations for butter are established in accordance with the method just described, and the exchange trading has a considerable influence on the quotations. The sales on the " call " represent a very small percentage of the total receipts. Therefore it is apparent that the market reporter should be able to detect irregularities in the offers and bids in order to establish a quotation which reflects the actual market value. When market values are continually underquoted, the paying of premiums over quotations usually results. Exchange trading, therefore, which reflects the true market value of butter, must be free from manipula- tions. That the New York Mercantile Exchange, the Chicago Butter and Egg Board, the Elgin Board of Trade, and the San Francisco "Whole- sale Dairy Produce Exchange have a widespread influence on the price and movement of creamery butter is genera 11}^ recognized. The New York Mercantile Exchange meets at 10 each morning, eastern time ; the Chicago Butter and Egg Board it 9.30, central time : and the Elgin Board about 12 m. on each Saturday. Various methods of effecting sales on " call " are employed. Usually the offerings are numbered, and the bidder stipulates the number of the lot for which he is bidding. A sale is effected Avhen- ever a bid and offer of the same grade coincide. During the " call " the offers, bids, and sales are usually posttd on the blackboard or •' call " board. THE BASIS FOR MARKET QUOTATIONS. The true basis for a market (flotation is the price at which the majority of the sales of a definite grade are made. By majority of the sales is implied the sales made inuler the free influence of the law of supply and demand. The greatest difficulty in establishing accurate market c{uotations at the present tme is to obtain the price MARKETING CREAMERY BUTTER. 23 at which actual sales of butter of a definite quality are made. Pres- ent quotations are largely estimates and approximations of market values. The following reports of the butter markets at Chicago and New York were taken from the sources given and indicate the information which is considered of interest and value to producers and distribu- tors of butter. It may be well to note that butter prices were at the climax for the season at the time these reports were made, having reached 38 cents at New York and 36| cents at Chicago. Butter was mostly out of storage and current receipts in ready demand. Lighter buying by the retailers, attributed to curtailed consump- tion due to the current prices, had resulted in an unsettled feeling and slightly lower prices ruled during the following two days. The range between the lower and better grades was the narrowest for the season. The statements which are here presented in italics deserve especial notice. New York, Wednesday. ^Iarch 22, Chicago, Thi-ksday, March 23. 1916. 1916. (From the Producers' Price-Current.) Butter. This week. Keceipts, Monday, pkgs.. 5,041 Receipts, Tuesday i 11,241 Keceipts, Wednesday 9,834 Last week. Last year. (From Daily Trade Bulletin.) The receipts at Chicago (not in- cluding tlu-ough shipments) for tlie days mentioned ^vere as follows : Butter. 5,268 4,305 12,058 11,366 8,819 : 8,948 Total I 26,176 26,745 24.679 The present supply of fresh cream- ery is barely equal to current wants, and the market maintains a^ firm posi- tion. There is a loss of trade in some directions, due to the advanced retail Ijrices, but receipts from the usual sources of supply are not increasing materially as yet. Another carload of CaUfomia butter in to-day, but not available at the present writing. Fur- ther shipments in transit, and this may relieve the situation somewhat. Tran- sactions on 'Change this morning in- cluded seven lots of 25 tubs each, creamery extras, at 38^. Open busi- ness was very generallj' at that price, but the feeling was strong enough to give sellers some advantage, and it did not always require inspected goods to go at that rate. The higher This week. Last week. Last year. Mondav Tubs. 9,840 8,675 8,387 4,805 Tubs. 8,079 6,832 7,908 4,843 Tubs. 9.794 Tuesdav 8,927 Wednesday 8,366 Thursday 5,649 Total 31,707 27,662 32, 736 A steady feeling exists and prices practically unchanged. Neic York tvas reported l