Marketing Margins for Butter

Excerpts from the report Preface: Changes of a far-reaching nature have been taking place in the production and marketing of butter. These changes are bringing about a fuller utilization of both the fat and nonfat solids in milk produced by farmers and a more effective use of the labor, supplies, equipment, and transportation services applied in the marketing of butter. Greater efficiency is reflected in the fact that during the period of war and postwar inflation, the marketing margin per pound of butter has increased considerably less than the amount which would reflect the declining value of the dollar. The butter industry has been beset by severe competitive conditions. At the consumer end of the marketing process, there has been a great increase in the use of margarine and other nondairy fats. At the farm level, the increased capacities of creameries and the need for greater flexibility of operations has created for many plants serious problems of acquiring sufficient supplies of cream or milk for efficient operation. Butter also has attracted attention because it is one of the dairy products which has been purchased and stored as part of a Government program to support farm prices of milk and butterfat. This report contains observations of specific shipments of butter from a representative group of creameries in Minnesota and Iowa. It is believed that the accounts of the services performed and the charges made by each agency taking part in the marketing process will help farmers and consumers get a better understanding of how butter is marketed.