THE SPRINGFIELD MILKSHED 13 



2. In the operations of the price-making process. 



3. In the administration of the control law. 



4. In the designation of broad objectives and in the formulation of 

 policies designed to assure their attainment. 



The public welfare concept must be kept paramount so long as the dairy in- 

 dustrj- is the recipient of special privileges from the public. When the interests 

 of special groups crowd out the general welfare, then the privilege should be 

 withdrawn. 



Milk Transportation in the Springfield-Holyoke-Chicopee Milkshed 



Importance of Transportation 



Under competitive conditions efficiency' of operations by the entrepreneur is 

 highly significant. Such operations tend towards relatively low unit costs; 

 business changes are effected on that basis and users of the service can and will be 

 charged relatively low rates. 



Competitive conditions do not exist in the hauling of milk. Efficiency of opera- 

 tions is at least secondary to the objective of securing a supply of milk. The 

 charge that producers pay for service under such conditions supersedes service 

 in importance. 



Conclusions regarding the efficiency of service in the Springfield-Holyoke- 

 Chicopee milkshed may be drawn frcm the detailed study of conditions in the 

 Southwick-Agawam Area.i^ Other areas adjacent to the market would tend 

 towards similar conditions. Areas more distant from the market would tend to 

 have more efficient transportation operations although the service from the view- 

 point of individual producers may not be so satisfactory. It can be assumed 

 almost without qualification that the efficiency of milk transportation in the 

 competitive areas varies inversely' with the number of dealers operating in the 

 areas. 



The savings which producers might enjoy as the result of a transportation 

 service organized from the standpoint of efficiency rather than from the view- 

 point of market arrangements, are probably insufficient to stimulate more than 

 passing interest. A uniform reduction in the cartage rate of fifteen cents per 

 hundredweight on the basis of average daily deliveries of 182 pounds would save 

 producers only twenty-seven cents per day or in a 365-day year, $98.55. Com- 

 pared to the annual average market value of $1876.83, the potential saving is 

 small and the producer's first interest is to protect his $1800 outlet. 



Since 1933 the Federal Government and many of the state governments have 

 been concerned about the stability of their milk markets. The interest of the 

 governmental units is based on the assumption that (1) an adequate milk supply 

 is essential to public health and (2) that unstable markets are a threat to such 

 a milk supply. 



One factor contributing to market instability is the unevenness of dealers' 

 buying prices. The control agencies sought to overcome this factor by establish- 

 ing (1) uniform class prices and (2) proportionate sharing of the fluid and by- 

 product uses. Another factor tending toward unstable markets is the variation 

 in rates charged for transporting milk from the farms to the dealers' plants. 



'"Massachusetts Experiment Station Bulletin 363. 



