Comparative Advantage on Feed ingredients. 



It has been noted previously that transportation costs on milling-in- 

 transit items shipped to New Hampshire in mixed feeds or for mixing by 

 local mills are equalized, and most of the mills serving New Hampshire are 

 not required to pay extra charges on milling-in-transit items used in their 

 mixed feeds."" On non-transit items, the weight of advantage would appear 

 to rest with local mills. 



Primarily within the area of non-transit items each mill serving the 

 local market would theoretically have the opportunity to exploit its par- 

 ticular location by using those ingredients and preparing those feeds which 

 would take advantage of any rate advantages it might have. In practice, this 

 opportunity would be somewhat limited by the consideration of obtaining 

 approximate nutritional equality with the products of other mills. 



Hence, it is concluded that local mills are generally in a favorable 

 competitive position insofar as ingredient costs are concerned when compared 

 to other mills shipping grain-feeds to New Hampshire. No information is 

 available to enable an appraisal of comparative milling costs or total costs 

 to be made. There is also a possible exception to the preceding statement, 

 occurring when, and if, mills outside New Hampshire are able to control 

 prices and/or supplies of certain key ingredients through corporate struc- 

 tures or informal agreements. 



*»' 



Transportation to Retail Distributing Points. 



Because of the relatively smaller costs of out-shipments under milling- 

 in-transit privileges, it is usually advantageous to grain mills to deliver large 

 orders by freight rather than truck, even though the distance may not be 

 great. This situation tends to favor a system of local retail outlets; dis- 

 courage long-haul trucking of grain feed into New Hampshire from one 

 central location to local users or handlers; and limits the effectiveness of 

 either bagged or bulk delivery of grain-feed from local mills to distant 

 users. Hence, the grain mills, both private and cooperative, have built up 

 a network of local stores or local dealers, though some grain-feed moves 

 direct from mill to farmer in carloads. 



A survey of the grain companies serving New Hampshire indicated 

 that over 95 percent of volume shipments from mills to local retail outlets 

 or farmers arrived by rail. The exceptions to the general pattern occur 

 where retail outlets or farmers are located relatively close to local mills 

 or where rail facilities are no longer available. 



A recent example of the latter situation is found in the discontinuance 

 of the Suncook Valley Railroad line between Suncook and Barnstead. Estab- 

 lished retail distributing points, such as those at Epsom. Chichester, and 

 Pittsfield, which formerly received grain by railroad car. must now rely 

 upon truck hauls from the mill or other railroad unloading points. The 

 same is true of carlot distributors or farmers receiving in carloads. 



Figure 3 shows the locations of railroad lines serving New Hampshire 

 as of 1954, and some discontinued since 1940, and the location of retail 

 dealers. With present technology and conditions, the abandonment of a 



*One exception might be materials arrivino; at eastern port cities such as Boston. 

 Inland mill locations would be at a disadvantage with respect to total rail freight on 

 rail shipments originating at port cities, but the disadvantage would pertain only 

 to that part of the feed which the mill reshipped back to coastal areas. 



15 



