Comparison With Prevailing Price Difference 



Prices on the Boston market are established under the Federal Milk 

 Marketing Order No. 4 by use of the "Boston Formula". The minimum 

 prices at retail and at the farm are established by the Control Board of 

 the New Hampshire Department of Agriculture. This Board acknowledges 

 the influence of Boston prices and establishes differentials with that market 

 so that price changes in the two markets coincide. The state is divided 

 into three price zones, where the Control Board establishes minimum prices. 

 These zones are shown on Map 5 as of January 1. 1950, with a total vari- 

 ation in price between zones of 40 cents per hundredweight. A com- 

 parison of market differentials under this competitive pricing procedure 

 and those historically existing is given in Table 6. 



Table 6. Comparison of Theoretical Market Price Differences and Those 

 Established by the New Hampshire Milk Control Board* 



May-June 



Boston 



Manchester 



Concord 



Portsmouth 



Nashua 



Keene 



Laconia 



Berlin 





 -11 

 -21 

 - 8.5 

 -10 

 -29 

 -25 

 -36 



*CIass I prices delivered city plants Boston and Class I prices delivered plants in New Hampshire. 

 TNovember-December 1947 plus 15% production to approximate 1918. 



With the recommended price differentials existing through the Boston 

 milkshed, it would pay producers to ship to those markets where trans- 

 portation costs were least. The total mileage of milk movements would 

 be reduced and savings in scarce materials effected. 



The new milkshed boundaries for the fall months which would be 

 the outer perimeter of the annual milkshed are shown on Map 6. Com- 

 parison of this with Map 2 will give an approximation of the shifts that 

 would be made and the savings effected. It is inevitable that the supply 

 will vary through the year and the adoption of these milkshed boundaries 

 assumes that adequate facilities are available for handling milk in excess 

 of current fluid requirements for flush seasons. 



The varying farm prices would then enable similar shifts in retail 

 prices, assuming that processing costs remain the same. Within the out- 

 lined milksheds are still other smaller markets competing for supplies with 

 the larger markets. Some slight adjustment of these areas would be neces- 

 sary if every market were included, but the general areas remain the same. 



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