EXPERIMENT STATION BULLETINS. 529 



growth of a better and faster transportation service are nevertheless 

 at bottom strictly local in their range. There are for example no City 

 Prodnce Exchanges anywhere upon which milk is bought and sold in 

 the way in which farm staples are bought and sold nor any large ship- 

 ments of milk from city to city nor any nation-wide dealings in milk of 

 any sort. Furthermore, while means of transportation have helped to 

 some extent the natural field for broad milk marketing, city regulation of 

 milk supply has served in practice to limit the sources from which a 

 supply may come, so that the fact still stands of a fixed city dependence 

 upon a single country area for a supply of milk. 



The fact of this limited market for milk, which has just been des- 

 cribed, gives rise to at least two further peculiarities of milk selling, 

 as compared with the selling of other farm products, which deserve 

 attention. Tlie first of these is the circumstance that the milk supply 

 of a city may be easily monopolized by its producers. This milk has 

 at tlie time of its production a fixed city destination owing to the Board 

 of Health inspection which it undergoes. It has no competition from 

 other milk areas on account of its fraility in shipment and it therefore 

 becomes for any city a definite and tangible supply drawn from known 

 and fixed sources. Under these conditions the producers of milk have 

 onh^ to organize and a monoi:)oly of the milk supply of any city is 

 strictly within their hands. 



Secondly, the contract method of sale between producer and dealer, 

 which is the fixed method of selling milk in the milk trade, stands in 

 markfi] contrast witli the open competitive method of selling other farm 

 products. Contract selling of milk is indeed obligatory upon the pro- 

 ducer in view of the big fixed outlay relative to daily output w^hich is 

 found in a dairy herd and the further fact of the fi'ailty of the product. 

 Every sale of milk by a producer is a forced sale, since milk is so perish- 

 able and so limited as to market that it must be sold as soon as produced. 

 Under these conditions the dairyman can only secure his rights by 

 having them stated in a contract. On the other hand, the dealers 

 anxious to have an adequate and reliable supply of milk and buying 

 only from a limited and inspected or authorized area of milk production, 

 readily gives these contracts, since he too wishes to safeguard himself 

 from irregular or new competition. 



The milk contract then, which is the basis of trade between the pro- 

 ducer and the distributor is indispensable. Contracts of this sort have 

 in brief the following features, so far, at least, as those used by Detroit 

 dealers are concerned. They refer always to the price of the milk, the 

 grade, and usually to the place and times of delivery. 



Discussing these items in order we find that the milk prices stipulated 

 by milk contracts belong to that class known as prices made by agree- 

 ment. Customarily the dealer announces a periodical price which he 

 is willing to pay, being scaled up or down for the different periods of 

 the year in accord with the milk flow or shortage of the various seasons, 

 and the varying demands of the city consumer. Thus the price is 

 always low for the spring months, while the winter and fall prices 

 usually range toward the maximum. Prices also are influenced 

 by the distance over which the shipments must be made in order to 

 reach market, and by the circumstance as to whether or not there is 

 local competition. Local competition springs from the demands of 

 nearby condensaries, local creameries, or the bids of competing cities. 



