surplus milk to nearby farmer members of the organization. More complete 

 use of New Hampshire surplus and a working arrangement with these 

 plants may be a substitute for a dealer-owned plant in New Hampshire. 



Transportation Plan 



The use of either scheme would necessitate a working plan for transporta- 

 tion of milk and cream to and from New Hampshire dealers. Modern tank 

 trucks make this a low cost possibility with their combination cans and tank 

 conveyances. 



There is already a large trade between dealers in by-products. The advan- 

 tage of a centralized operation, from the reduced cost possible by economies 

 of scale in processing and distribution, would increase the total returns from 

 the sale of milk. 



SUMMARY 



1. The milk sold by New Hampshire dealers in excess of fluid sales 

 varies from 18 to 25 percent of their total milk purchases. 



2. The major sales of surplus milk are as cream and cream products. 



3. The majority of skim milk produced as a by-product of cream sales 

 is wasted. 



4. The peak milk production months in New Hampshire do not coincide 

 with the peak consumption months for milk and milk products. This creates 

 both disposal and procurement problems for dealers. 



5. Additional supplies of surplus products are purchased in processed 

 form even though excess fluid milk is being sold on surplus fluid markets 

 at little or no profit, and skim is being wasted. 



6. Under present utilization patterns, the price-cost spread for the sale 

 of fluid milk exceeds the price-cost spread for the sale of surplus products 

 produced by New Hampshire dealers except when the skim milk is included 

 in the sale. The returns from surplus milk sales are reduced because skim 

 milk is wasted. 



7. The total surplus products handled by dealers in the state approxi- 

 mate 75 million pounds of milk equivalent. Of this amount 34 million is a 

 by-product of the fluid milk industry and available within the state. 



8. The surplus milk is processed or sold by individual dealers but if 

 processed in one place would provide sufficient milk to operate a plant effi- 

 ciently, eliminate waste of skim milk, and provide other products currently 

 sold by dealers at reduced cost. 



A continued study of the operational problems associated with such a 

 plant would be beneficial to the industry and is currently underway. 



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