Table 12. Price Spread on 100 Pounds of Milk at $3.53 per Hundredweight. 

 Utilized in the Production of Various By-Products — 1955 



* Skim dumped. 



Average price-cost spreads on surplus products for dealers as a group 

 are lower than these spreads earned on fluid sales. The practice of selling 

 cream only results in skim milk losses. 



As skim milk production depends on cream sales, it would be opportune 

 to re-examine methods of procuring cream as currently practiced. It is 

 generally assumed that the handling of skim milk is unprofitable for small 

 dealers and dealers without facilities for by-product manufacture. How- 

 ever, these same dealers face a demand for cream from their customers. 

 They must then decide whether to buy the cream or process their own. 

 This decision will depend on the location of a market for surplus milk and 

 on the supply of cream. In addition they buy surplus products from other 

 dealers to supplement their fluid sales. If there is no market for surplus 

 milk as whole milk, then there is no alternative but to separate into cream 

 and skim milk. This may well be the case for many New Hampshire dea- 

 lers and is a basic reason for the waste of skim milk. 



Table 13. Approximation of Total 



Milk Surplus (Whole Milk Equivalent) 



in New Hampshire — 1955 



Statewide Surplus 



The total surplus milk handled in New Hampshire in one year as milk and 

 as products is approximately 75 million pounds milk equivalent. Of this 



amount, 34 million pounds is pro- 

 duced as a result of the fluid milk 

 sales and is in excess of fluid requi- 

 rements. Half of the surplus is pro- 

 duced at seasonal peaks and cannot 

 be used in the normal dealer busi- 

 ness. Therefore, it is disposed of as 

 whole milk, priced considerably be- 

 low the blend price. The other half 

 is used by dealers to produce cream, 

 cottage cheese, and by-products to 

 meet consumer demand. Of this 17 



13 



