It has been shown that in the production of grain or other farm commodities the three elements, change in form, change in place, and potential change in time enter; while the factors entering are, nature, labor, and capital. These all must be present no matter which method of procedure is followed in the marketing. The cost of marketing must always be counted in the cost of production. A decrease in the cost of any element or factor will of course have its effect on the cost of the whole process. For example, it is claimed by grain merchants that where there is an opportunity to hedge there is less risk and consequently the profits of the middlemen may be less thus decreasing the cost of production. To get a concrete example of what part transportation bears in marketing the following analysis is made: _Elements Entering into the Cost of Marketing Wheat Grown in Kansas or Nebraska_ Farm Expense Cents per bushel Loading 0.25 If sacked, add about 5 cents per bushel. Highway Haulage A bulletin of the Bureau of Crop Estimates, U. S. Department of Agriculture gives the cost at 30 cents per ton-mile when horses are used and 15 cents per ton-mile by motor-car, the average distance being 9.4 miles, rough average, say 6.00 6.25 ----- Total cost of getting to local market 6.25 Local Elevator Unloading, storage, cleaning, and mixing, shrinkage. Overhead--interest on investment, taxes, insurance, office expense, depreciation, repairs, hired help, etc., and profit 3.00 3.00 ----- Total cost up to the commission merchant 9.25 Freight Terminal and hauling charge 16.00 Inspection and weighing at terminal .25 Profit of commission merchant 1.25 17.50 ----- Total cost up to the exporter 26.75 Exporter’s cost Elevation, loading into boat, etc. 1.25 Ocean freight (very variable), say 6.00 Insurance, leakage, etc., in transit .75 Overhead expenses of exporter 1.00 Profit of exporter 1.25 10.25 ----- Total to Liverpool market 37.00