THE SPRINGFIELD MILKSHED 17 



or market utilization of the product. Prices including any one of these elements, 

 however, may present a slightly incomplete picture so far as the dairyman is 

 actually concerned. They do, of course, at any particular point in the marketing 

 or pricing process provide a basis for making comparisons having particular 

 applications. 



The several routes by which the farm value of milk is derived are shown in 

 figure 4. 



The importance of price may be an indeterminable matter. If a difference of 

 50 cents per hundredweight is reasonable and if the additional income secured 

 thereby would have paid a grain bill or left a cash margin, then price is extremely 

 important. Even with an example of this sort, however, it is impossible to ignore 

 the income implication. 



Of the two elements determining the income of 1174 full-time shippers, which 

 had the greater effect on it — price or deliveries? A theoretical application of prices 

 to the volumes actually delivered by two dairymen will serve to illustrate the 

 magnitude of the forces involved. Extremes in price and volume have been used, 

 in order to emphasize the relationships. First, consider the shipper who had the 

 largest volume of deliveries. Had he received the lowest farm price in the group, 

 his annual income would have been $3557.24 lower than it was (a reduction of 

 45.1 percent). Then consider the shipper having the smallest volume of sales. 

 Had he received the highest farm price in the group, his income from milk would 

 have been $506.06 higher (a gain of 82.0 percent). 



The average shipper with annual sales of 74,000 pounds faced the possibility 

 of a variation of over $1000 in annual income depending upon whether circum- 

 stances, mostly beyond his control, permitted him to receive the highest or the 

 lowest price applicable in the shed. Differences of this magnitude in an industry 

 devoted, to, dependent on, and protected by the public cannot be indifferently 

 dismissed. It is also, perhaps, well to remember that probably all shippers at 

 some time and some shippers all the time have figured and do figure their milk 

 checks at some price other than the one received. The potential paper losses or 

 gains may have caused renewed pledges of appreciation or of determination. If 

 more positive action has been lacking, despite the effect of such variation on in- 

 come, it has been due to the mollifying influence of Milk Control. 



Sample areas were selected as a basis for determining the geographical pattern 

 of certain price characteristics. They were chosen so as to allow for as many 

 probable causes of variation as possible. Area 2'* is contiguous to the Spring- 

 field-Holyoke-Chicopee market and on the fringe of the Hartford milkshed. 

 Area 12 is on the western fringe of the Springfield-Holyoke-Chicopee shed and 

 somewhat isolated from any other sizable market or supply. Area 6 is on the 

 eastern edge of the Springfield-Holyoke-Chicopee shed and is also a part of the 

 Worcester supph . 



The experience of sample groups of shippers was used in evaluating price charac- 

 teristics on a dealer basis. The producers' settlement plan in the Springfield- 

 Holyoke-Chicopee area was and is of the familiar "dealers' choice" and the effect 

 of ratings and seasonality are more susceptible to analysis if treated in this man- 

 ner. Since the larger dealers operate throughout the entire shec^ in the procure- 

 ment of their supplies, a respresentative group of shippers was chosen from each 

 one cf them for study. Except for errors of "omission" or "commission," the 

 records of these shippers would probably provide the widest and most varied 

 experiences. 



"Figure 6. 



