LOCATION OF PRODUCTION 



The location of potato production will be based upon: (1) availability 

 of physical factors of production, such as soil, climate, and land ownership^, 

 (2j the location and size of markets, (3) the cost of transportation, and (4) 

 established trade contacts. 



The price at which potatoes can be produced must be at least equal to 

 the market price less cost of transportation. If transportation charges should 

 rise without a similar increase in market price, to the extent that producers 

 fail to reduce costs of production, it will be more difficult for them to stay in 

 tliat market. 



Similarly, if one producer is given a lower transportation rate than 

 another, he will be able to undersell his competitor and take away some, if 

 not all, the market. Given equal production costs, this will force the one 

 producer to look elsewhere for markets or to retire from production. 



The relative costs of transportation between areas which supply New 

 Hampshire markets must be considered when measuring their competitive 

 advantage. With this in mind, the carlot rates from typical shipping points 

 in Maine and New Hampshire are compared in Table 4. The markets 

 chosen are four of the larger markets in the southern part of the state for 

 which subsequent price data are discussed. 



Table 4. Carlot Freight Rates per 100 Pounds of Potatoes^ 



Destination 

 From Manchester Concord Keene Portsmouth 



NEW HAMPSHIRE 



Berlin $.44 S.43 $.43 $.42 



Lancaster .43 .42 .42 .42 



Colebrook .47 .44 .46 .44 



MAINE 



Dover-Foxcroft .33 .34 .39 .30 



Houlton .40 .40 .48 .40 



Presque Isle .47 .47 .55 .47 



Under the present rate structure, it costs less per mile to ship from 

 Presque Isle, Maine to Manchester, New Hampshire than it does from 

 Colebrook, New Hampshire^. Potatoes shipped from Dover-Foxcroft, Maine, 

 to Manchester cost 14 cents less per hundred than potatoes shipped from 

 Colebrook. 



New Hampshire producers receive some protection on the Keene market 

 bv reason of a zonal increase in rates from Maine relative to northern New 

 Hampshire. 



The implications of these rate differentials to the location of production 

 it' New Hampshire are that: (1) Northern New Hampshire producers are 

 at a disadvantage in competition with Maine growers on the larger state 



^This will be taken up in a another bulletin on potato-production problems. 



"Additional heater charge of S2.65 per day for refrigerator cars in New Hampshire. The charge for 

 Maine potatoes is $10.00 per car irrespective of time. 



^For example, Presque Isle to Manchester, approximately 382 miles at $.47 equals $.123 per mile 

 and Colebrook to Manchester, 180 miles at $.47 equals $.261 per mile, more than twice as much. 

 The comparable rates for 1933 were Colebrook to Manchester $.23, and Presque Isle to Manchester $.395, 

 showing recent rate changes have worked to the disadvantage of Colebrook producers. 



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