Marketing is related to cheese in two ways: First, the purchase of the raw material, the milk; and secondly the sale of the finished product, the cheese.

321. Buying milk.—The method of paying for the milk differs in the various cheese sections and factories. At some factories a stated price is paid for the milk or the fat. This is usually in terms of 100 pounds of milk or for each pound of fat. This is the practice with concerns possessing large capital. Other factories make the milk into cheese and after each sale, the expenses necessary for operating the factory are deducted and the remainder of the money divided among the patrons. This money is divided either on the basis of the number of pounds of milk or of fat delivered. The question arises as to which is the better method to buy milk for cheese-making, or the fairest way to divide the money received from a sale of cheese.

322. Cheese yield basis of buying milk.—Let us suppose that at a cheese factory there were five patrons: (A) delivered 100 pounds of milk testing 3 per cent fat; (B) 100 pounds of milk testing 3.5 per cent fat; (C) 100 pounds of milk testing 4.0 per cent fat; (D) 100 pounds of milk testing 4.5 per cent fat; and (E) 100 pounds of milk testing 5.0 per cent fat. Table XXVI shows the actual number of pounds of cheese containing 37 per cent moisture which 100 pounds of milk containing different percentages of fat will produce. The cheese sold net for 20 cents a pound.

TABLE XXVI

This table shows the amount of money each patron should receive if the money were divided on the basis of the actual yield of cheese.

323. Fat basis for payment of milk.—Let us suppose that the same five patrons delivered the same quantity of milk testing the same percentages of fat and that the cheese sold for the same price. A total of 20 pounds of fat was delivered and the cheese sold for $10.598; by dividing this amount by the pounds of fat delivered, the price or value of one pound of fat is found to be $.5299. Multiplying the pounds of fat each patron delivered by the price a pound would give the amount of money due each patron.

TABLE XXVII

324. Weight basis or pooling method for payment of milk.—By this system, each patron would receive an equal price for 100 pounds of milk. If the same supposition is taken as before, there would be 500 pounds of milk delivered and the cheese sold for $10.59; each 100 pounds of milk would be worth $2.12. As each patron delivered an equal weight of milk, each would receive an equal amount of money, or $2.12.

325. Fat-plus-two method for payment of milk.—Some workers have thought that by adding two to the fat test, the division of money would be more nearly the true cheese-producing value of the milk. The amount due each patron is figured as in the fat basis, except that two is added to the fat test and this is used as the basis of division. If the same suppositions were used as before, each patron would receive the amount shown in Table XXVIII.

326. Comparison of methods.—The best way to judge the different methods of paying for milk is to compare them with the true value based on the actual cheese yield as shown in Table XXIX.

TABLE XXVIII

TABLE XXIX

A careful study of the above table shows that the pooling system is in favor of the dairy-man with the poor milk, and that the fat basis favors the dairy-man with the rich milk. This is due, of course, to the fact that the casein does not increase in the milk quite in proportion to the fat. With the pooling system or fat basis of payment, no account is taken of the casein; but the fat-plus-two system is an attempt to recognize the casein, but considers the percentage of casein in all milk to be the same. This method is in favor of the dairy-man with milk low in fat, but not to the extent of the pooling system. The latter system considers the cheese-producing power of all milk to be the same. It favors the dairy-man with low-testing milk. The fat basis for payment recognizes only the fat and is an advantage to the dairy-man with the high-testing milk but not to the extent that the pooling system is in favor of the low-testing milk. The fat-plus-two method recognizes 2 per cent of casein in the milk. This favors the dairy-men with low-testing milk. Other methods136 of paying for milk have been devised. Because the actual yield of cheese from the milk of different herds cannot be easily determined at the cheese factory, this method of payment cannot be employed. In localities in which all the dairy-men have the same breed of cattle and there is not a wide variation in the fat percentage, the fat basis is usually found to be the most satisfactory way to pay for the milk.

327. Laws governing the production and sale of milk.—Many states have laws regulating the sanitary conditions under which the milk may be produced. These laws relate principally to the condition of the stables, the health of the cow, the food given the cow, and the care of the milk. The following law137 of Wisconsin is a good example:

Most states have laws which determine the legal standard of milk. Any one selling milk which does not meet this standard is liable to be fined. The laws of most states prohibit the taking of anything from the milk or the adding of anything to it. This prohibits the skimming and watering. Skimmed-milk must be sold as such.

328. Marketing of cheese.—There are many different methods138 of selling cheese. Each is adapted to certain conditions and each has its advantages and disadvantages. In cheese sections, the customary method of selling is on the board of trade, which is the meeting of the cheese-buyers and factory salesmen. They meet at a given place at a certain day and hour each week. Every board has its officers. There are different ways in which a board of trade may be operated. In some cases there is a large blackboard divided into columns. In the first column, the salesman writes the name of the factory and the number and kind of cheese offered for sale. At the top of the other columns are the names of the different cheese-buyers. The president usually opens the sale at a stated time and asks that all cheese be placed on the blackboard. When this is done he states that they are ready to receive bids on the cheese. The buyers then write the price a pound they wish to pay opposite each lot of cheese and in the column headed by their names. After all the bids have been received and placed on the board, the presiding officer states that a certain length of time, usually fifteen minutes, will be given the salesman to withdraw his cheese if he does not think a high enough price has been offered; this is indicated by the salesman stepping to the blackboard and erasing the factory name and number of boxes. At the close of the stated time, the presiding officer declares the cheese offered on the board sold to the highest bidder. The purchaser then gives the salesman directions for shipping.

Sometimes a board of trade has a committee of one member elected by the factory salesmen and one elected by the cheese-buyers. These two members elect a third and these three constitute the price committee. This committee meets each week and determines what the price shall be. This is known as the ruling. The factory salesmen and cheese-buyers then try to make private sales. By this method no one, except the persons concerned, knows exactly what price is paid for the cheese. Usually, a price above the ruling is paid.

At Quebec, Canada, there is a cheese-selling organization with government assistance. On paying a certain fee, any cheese factory may join. All the factories belonging to the organization ship their cheese to a central cold storage where the cheeses are examined and graded by a government inspector. A cheese from each vat is tried. These cheeses are separated into white and colored lots, then graded according to quality. When the total number of cheeses in each lot is known, the lots are sold at auction. The purchaser must accept the cheese as graded. The better grades of cheese bring about the same price as on the market, but the advantage lies in the selling of the lower grades. Ordinarily, the purchaser takes advantage of the salesman when the cheeses are undergrade. The success of this plan depends on the accuracy of the person grading the cheese. This method seems to be growing in popularity, because the cheese-buyer can purchase large amounts of cheese at one time and be sure of the quality. A small fee, about one-twelfth of a cent a pound, is charged for handling the cheese. Similar organizations are in operation in Wisconsin. The boards of trade and selling organizations deal almost entirely in Cheddar cheese.

329. Mercantile exchanges.—In the larger cities are exchanges where cheese is bought and sold by jobbers. This cheese is mostly Cheddar. The prices paid these jobbers tend to fix the daily price of cheese. These prices are published daily, for example, in New York Price Current. Some factories ship their cheese directly to these jobbers. The following are the cheese rules of the New York Mercantile Exchange adopted May 4, 1915:

330. Marketing perishable varieties.—Soft cheeses, such as Cream, NeufchÂtel, Cottage, are usually sold to jobbers or directly to retail stores. They have a very short commercial life, hence cannot be held long before delivery to the consumer. From the jobber, cheese usually goes to the wholesale grocer and then to the retail dealer and finally the consumer. Most jobbers have cold storages so that they can hold cheese without injury to quality. (See Fig. 74.) The kind of cheese marketed in any locality depends on the tastes of the residents. For example, the South usually desires a highly colored product, thinking this color indicates more fat; in the Cheddar group New England demands a soft pasty quick-curing cheese, thinking that softness is a sign of more fat and richness; England wants a rather dry, well-cured, highly flavored cheese. Canadian Cheddar cheese has been standardized as far as possible to appeal to the English market. A long ripening period keeps capital tied up through the further time required for delivery. This has led to the sale of much of the cheese almost or entirely unripe. So much of the product has reached the consumer without characteristic varietal flavor that large numbers have acquired the habit of purchasing and even preferring cheese only partly ripe.

The time during which cheese should be held at the factory depends on the variety. Some are shipped as soon as made, including those cheeses with sour-milk flavor only. Others have to be cured in the factory from six to eight weeks. Cheeses in paper or tin-foil should be neatly wrapped and carefully put in the boxes. The box of cheese should be neat, clean and attractive. Cheeses not wrapped should have a firm rind to hold them in shape. The boxes should be clean and the weight of cheese neatly and plainly marked. In the case of Cheddar cheese, it may be paraffined at the factory, but if not, this is usually done at the cold storage of the jobber. The cheeses usually have some time to cure or ripen while being handled by the various dealers.

331. Distribution of price.—The final selling price of cheese is a composite of all the changes that have gone before; or conversely, the farmer, the maker, the carrier and the distributors (wholesale, jobbing and retail dealers) must all be paid from the final price of the product. A study of this problem in Wisconsin has been made by Hibbard, and Hobson.139 The general facts as determined for Wisconsin have fairly wide application to the manufacture and sale of cheese.

Economic success in handling cheese is dependent on proper provision for the sale of the product. Where the output is small, a personal market can be created and maintained. This eliminates all profits intervening between the maker and the retailer. If the business reaches a volume beyond the possibilities of direct sale to the retailer, some selling organization is necessary. Where the number of producers is great and the selling machinery is well organized, the cheese factory becomes a producer of a commodity which is turned over to existing selling agencies. This condition is well established for Cheddar, Swiss, Brick and Limburger cheese. The soft cheeses other than Limburger have thus far been handled principally by large companies, each of which has developed an expensive selling organization. A study of the map (Fig. 65) shows how the cheese industry is localized in particular sections of certain states. Individual factories have maintained themselves in widely separated places. This localization is due to the geographical conditions which make certain regions specially adapted to dairying, modified by the proximity to markets for milk as milk. There are many regions, however, well adapted to cheese production in which there is no development of the industry at present. New developments are now taking place in the mountain areas of the South, notably North Carolina and adjacent states, and in several centers of the western mountain states. Many other areas should develop the making of cheese in some form.The actual costs of making and selling cheese were found by the Wisconsin investigators to vary approximately as follows: (1) cost of making, 1.2 to 1.75 cents; (2) storage, ?8 cent a pound a month, or ? to ½ cent for the season; (3) transportation to distant points, $.20 to $2.50 for 100 pounds according to distance; (4) the local dealer, about 1 cent a pound; (5) the wholesale dealer, 2 cents; (6) the jobber or broker who occasionally intervenes, about ? to ¼ cent; and the retailer, 5.5 to 9 cents. The entire cost of selling at the time this investigation was made represented about one-half of the retail price of the cheese. The producer of milk received the other half of that price.

332. Standards.—Legal standards in the United States are thus far largely based on the specifications of American Cheddar. In so far as they are applied to other products, they operate merely to prevent or reduce the use of skimmed-milk. The analyses and limits proposed in the discussion of varieties or groups in this book represent the range of composition actually known to be associated with cheeses of typical quality. Efforts are now being made to establish definitions and standards of composition which will limit the use of cheese names to products conforming to the requirements for such varieties. Practically the only federal requirement thus far enforced in the United States is that 50 per cent of the water-free substance of the cheese must be milk-fat. Various states have local requirements but most of them include the federal rule as to fat. New York and Wisconsin now restrict the amount of water in Cheddar cheese to 40 per cent. Most states have laws regulating the manufacture and sale of skimmed-milk cheese.333. Laws relating to cheese marketing.—A cheese of foreign origin if made in this country must be branded to show that it is not imported. For example, Camembert made in America is labeled Domestic Camembert. Some manufacturers call it Camembert type of cheese. The same applies to other varieties of foreign cheese. If a variety is made under a trade-marked name, this prevents any other manufacturer from using that name. For example, a concern may make "Philadelphia" cream cheese; other concerns may make cream cheese, but they must call it by some other name.

The committee on definitions and standards for the Association of Official Agricultural Chemists has now undertaken to define the proper use of type names. This is intended to determine the proper limits of composition of cheeses in each variety and such essentials of physical identification as will insure the proper use of these names.

Certain states have laws which relate to the branding of the cheese to denote quality. If the cheese is made from whole milk, a brand may be applied to show this fact. This is usually called the state brand. If made from skimmed-milk, the cheese must be branded to show this. The following140 illustrate the laws relating to the state brand and skimmed-milk cheese:

Filled cheeses are those from which the milk-fat has been removed and other animal fats substituted. The laws of some states prohibit the manufacture of this product. The federal law relating to filled cheese permits its manufacture under license, taxes and government inspection.

The various states have laws regulating the length of time that the cheese may be held in cold storage.

Another important law in some states requires the cheese-maker to have a license. He must pass an examination to show that the principles and practices of cheese-making are understood.