Kew York Agricultural Experiment Station. 45 



be expected here from the fact that many of the herds are composed 

 of carefully selected, high-priced animals. 



The producers have been receiving 3.5 to 4 cents per quart for 

 their milk delivered to the retailer, the variation depending upon 

 the sanitary conditions surrounding its production. The careful 

 records of a herd 3 producing almost exactly 2,800 quarts per cow 

 show that the cost of the food consumed by such cows has been 

 steadily increasing and in 1908 amounted to 2.09 cents per quart 

 of milk produced. Inasmuch as the producer has an investment of 

 $680 per cow, if he is to receive 6 per ct. on his investment, he should 

 get $40.80 per year or 1.45 cents per quart to pay this interest on 

 his investment. Since the food cost amounts to 2.09 cents and the 

 interest on the investment to 1.45 cents per quart the sum of these, 

 or 3.54 cents, must be deducted from the wholesale price of the milk 

 in determining the balance left to pay the other expenses of opera- 

 tion of the dairy and of delivery of the milk to the retailer. 



On the basis of the above figures it is plain that the producer 

 who is selling his milk at 3.5 cents per quart is getting slightly less 

 than the value of the fertilizer and veal to offset his expense for 

 labor and supervision. On the same basis the producer selling at 

 4 cents per quart has a margin of 0.45 cents per quart in addition 

 to the fertilizer and veal to balance his running expenses. It should 

 be noted in this connection that this latter class of producers have 

 gone to extra expense in keeping their herds tuberculin tested and 

 in otherwise improving their sanitary conditions and this entails an 

 added expense which will consume a considerable portion of the 

 increased margin of profit. 



The financial situation of the average producer may be sum- 

 marized by saying that he spends his time in growing crops to make 

 milk to get fertilizer to grow more crops to make more milk to get 

 more fertilizer. He continues in business because he accepts less 

 than 6 per ct. upon his capital invested. His financial salvation 

 depends upon increasing the productivity of his land to the point 

 where it takes less than five acres to support a cow and increasing 

 the productivity of his cows so that they will produce more than 

 2,800 quarts per year. A part of the solution of his difficulties lies 

 in the possibility of an increased wholesale price for his product. 



The financial margins of the retailer are less clearly understood. 

 He is dealing in a very perishable product, he has a source of supply 

 which varies greatly in volume during the year and is supplying 

 a market which is subject to daily and monthly variations in demand. 

 He is disposing of his goods in small amounts, pints and quarts, 

 and the containers are fragile and expensive. Moreover, he is 

 being put to an increasing expense in the matter of machinery and 

 of supervision and he is being constantly hedged about by legal 

 restrictions. Finally his relative expenses of operation vary greatly 

 with the volume of business. Detailed statements recently fur- 



3 See footnote 2. 



