EIGHTEENTH ANNUAL YEAR BOOK— PART V 295 



January 119. % July 83.7% 



February 114.3% August 94.2% 



March 106.5% September 96.7% 



April 94.2% October 109.2% 



May 73.2%, November 118.3%o 



June 70.6% December 120.3% 



I believe this method of estimation to be reasonably accurate and 

 acceptable. It has been used as a basis of adjusting the price 

 of milk in several dairy sections. 



Based upon a method similar to the above the producers and 

 distributors in the vicinity of Chicago have recently agreed upon 

 a temporary winter price of $3.22 per 100 pounds. Paying this 

 price the Chicago distributors will deliver milk in Chicago at a 

 price of 12 cents per quart. . 



From all of the data I have been able to secure it would seem 

 that a fair average annual cost of producing market milk in Iowa 

 is between $2.75 and $3.00 per 100 pounds. There are, of course, 

 many producers who are able to produce market milk at a lower 

 cost and others who cannot afford to sell their milk on the basis 

 of this cost. So long as the quality of the dairy herds and kind 

 of management they receive vary over an extreme range from 

 good to bad, the cost of producing milk with any individual herd 

 or on any individual farm will remain an individual problem. Bet- 

 ter herds, cows that will produce more milk in return for the feed 

 consumed, and labor expended, is the principle factor in produc- 

 ing milk at a low cost. 



The following table shows the cost price of producing 100 pounds 

 of milk based upon the above percentage table and an annual av- 

 erage cost of $2.75 to $3.00 per 100. 



Min. 



January 3.27 



February 3.14 



March 2.93 



April 2.59 



May 2.01 



June 1.94 



July 2.30 



August 2.59 



September 2.66 



October 3.00 



November 3.25 



December 3.31 



Annual average 2.75 



The above table shows the cost price. It is of course appreciated that 

 the producer is entitled to a reasonable profit. Assuming that a reason- 

 able profit is 10% then the selling price for December milk based on an 

 average cost of $3.00 would be $3.61 plus 36c, or $3.97 per 100 pounds. 



