10 MASS. EXPERIMENT STATION BULLETIN 389 



Relative Importance in the Springfield- Holyoke-Chicopee Market 



The handling of premium milk is a very minor activity. The volume was 

 equivalent to 4 percent of the full-time Grade B supply. The number of shippers 

 was but L61 percent of the Grade B group. Even these ratios overestimate the 

 situation, since the data on premium milk include a few shippers who switched 

 from B to A and vice versa. There is little question but that the shippers of 

 premium milk were a select group. The average daily deliveries of the full-time 

 Grade A shippers were 399.0 pounds compared to 195.0 for the Grade B group. 

 Average fat content (a minor factor) was 4.03 compared with 3.91. Variation in 

 deliveries'' was confined to narrow limits, from a low of 92.5 percent in February 

 to a high of 107.2 percent in August; while for the balance of the shippers in the 

 shed, the extremes were 90.2 in November and 114.2 in June. Data on bacteria 

 count were available only for the deliveries made by shippers of Grade A and 

 Vitamin Milk.^ Comparisons of this characteristic are therefore not possible. 



So far as value is concerned, the product which the group of premium shippers 

 sold had an average net price of $3,110 per hundredweight, compared with $2,462 

 for the deliveries of the Grade B group; a difference of 1.39 cents per quart. The 

 extreme prices received by individuals in the premium group were $2.50 and 

 $3.84 per hundredweight; a difference of 2.8 cents per quart. Although there 

 were several kinds of premium milk, the shipper receiving the highest price shipped 

 Grade A without the furbelows of added vitamins. 



The existence of a premium market within the general market introduces several 

 interesting questions. There is in the first place the effect of such a market on 

 producer-distributor relationships. Does such a market operate as an additional 

 check on (Grade B) producers by being a false incentive? In a previous study 

 we have shown the wide spreads between dealers' product-costs^ for the Grade B 

 supply. Producers who supply the low-cost dealers are anxious to move up the 

 ladder to supply the high-cost dealer since high dealer product-costs generally 

 mean high producer prices. It is natural to wonder whether a similar ladder 

 exists with the dealers who handle premium milk? Are the shippers of Grade B 

 eager to be on the premium list? Without exception, in unequalized markets, 

 progress up the pathway of higher prices for milk is by invitation. Under such 

 circumstances, do shippers for the most part become subservient to the dealers? 

 The border between subserviency and common sense is probably a very narrow one. 



There is in the second place the relationship between the prices paid to shippers 

 of premium milk and the costs involved in meeting the requirements. Whereas 

 under State Statutes Grade B or Market Milki" may have a bacterial count of 

 400,000 colonies per cc. Grade A-Raw may not have more than 100,000. The 

 lower maximum bacteria count is for the most part the important quality standard 

 of cleanliness around the cattle, barns, milk houses, and pens and must be lower 

 than is necessary in Grade B production. Achievement of these standards^i 



'Seasonality of production in terms of the daily average for the year. 



8"It is difficult to determine exactly what bacterial standards are pertinent to Grade B producers. 



(Laws and Regulations Governing the Production of Grade B Milk in New England, R. G. Bres- 



sler, Jr., N. E. Research Council on Marketing and Food Supply, June 1938.) 



^Average price of all milk bought from dairy farmers. 



'""Rulesand Regulations " Milk Reg. Board, May 8, 1935. . r n 



"The standards which must be met in the production, distribution and composition ot milk 

 before it may be offered to the public are many. They are subject to state regulation, local regula- 

 tion, and dealer regulation. In the absence of local regulations, those promulgated by the state 

 apply. These state laws and regulations, therefore, may be thought of as minimum requirements 

 to which producers in any town must comply. (Bressler, op. cit. p. 1) The dealer may require 

 shippers selling to him to meet even more stringent regulations than those in force by state or local 

 ordinance. 



