I work in a corrugated box plant where we make a LOT of scrap. There are blowers with ductwork (on the roof) from all of the machines that go to a central baler. The paper is misted with water as it fall down a chute into the baler to cut down on dust and to make the bales compact better. This is a continuous baler... the scrap drops in front of a ram that pushes it through a tunnel. The last 2 bales are still in the tunnel and with the weight and friction create enough pressure for the ram to push against. After a programmed number of ram cycles it will tie off the bale (depending on how long you want the bale). The bales are maybe 30" wide, 4' tall and about 7' long. They weigh around 1500# each. My best guess is that we make about 60 of these per day.
They get hauled off to a recycling center, but it is part of the same corporation so as far as cost it is hard to figure, since they can crunch the numbers however they want depending on which division of the corporation they want to make money. For example, we also get our rolls of raw paper from mills in the same corporation. We "buy" them from the mills. They want the mills to make money so we pay a lot for them. Our plant usually breaks even or makes a a couple hundred hundred grand a month, but we are expected to be a couple hundred grand in the red... but it still comes out as a net gain for the corporation- we are just here to eat up paper to make the mills money.

I am not a business person, so I can't explain when/why they want to do things the way they do. My guess is they want to the roll price to be high for when they sell them to other companies. I guess my point is that they probably want to keep the scrap prices low so they don't have to pay out a lot when they buy it from other companies. My company is large enough to have a lot of influence on the market values of paper.