VII. Cooperatives and Bulk Assembly of Milk 



1. Proprietary Dealer's 

 Decisions to Change 



So far as concerns the milk 

 handled in Northern New England 

 by proprietary dealers, decisions to 

 change to the receiving of milk at 

 the plant in bulk have, of course, 

 been made by the dealers and not by 

 milk producers. The decision making 

 has rested either with the owner or 

 with a small group of directors and 

 a manager. The techniques of an- 

 nouncing the decision to change are 

 similar. Announcement of a dead- 

 line to producers that only milk from 

 farm tanks will be purchased begin- 

 ning at a certain date is one tech- 

 nique. This has met with various de- 

 grees of success. In some cases the 

 producers organized opposition to 

 the change over and in others the 

 producers complied. Some modifica- 

 tions of deadlines have been neces- 

 sary according to local conditions 

 and producer reactions. Adjustment 

 is, in general, proceeding. Some pro- 

 ducers have shifted to dealers ac- 

 cepting cans; and. when no such al- 

 ternative is available, they have either 

 gone out of business or planned for 

 a change-over. 



Dealers who have shifted to bulk 

 milk have presumably been interested 

 in cost savings in the process of re- 

 ceiving milk, as well as in the quali- 

 ty of the product. A recent study of 

 some fluid milk plants in Georgia 

 shows a very substantial percentage 

 of saving, on direct labor and equip- 

 ment, in the receiving of milk in 

 bulk as compared to receiving it in 

 cans. 1 



2. The Decision for Farmer 

 Cooperatives 



In the case of farmer cooperatives, 

 however, the decision making pro- 

 cess is more complicated. Farmer 

 members are represented on the 

 board of directors. The plant man- 

 ager operates under the orders of 

 the directors. Therefore, a change- 

 over plan must come from producers 

 before action can be taken. The re- 

 action of producers varies with size 

 and with plans for growth. Cooper- 

 atives do not necessarily have smaller 

 producers than do independent deal- 

 ers. Similarly, cooperative members 

 are not less likely to have plans for 

 growth than other producers. The 

 apparent time lag in the adoption of 

 bulk assembly by farmer cooper- 

 atives will likely be overcome as the 

 potential loss of the larger producers 

 to milk handlers with tank assembly 

 exceeds the cost of bulk-milk prem- 

 ium payments by the general member- 

 ship and the cost of necessary facili- 

 ties. 



Some members of producer co- 

 operatives were already torn between 

 their loyalty to the cooperative and 

 the apparent advantage of shipping 

 to a dealer using a tank truck. The 

 pressure on the directors can be ex- 

 pected to grow, forcing a change to 

 be made. Indeed, this factor had al- 

 ready had some effect. This trend 

 may be unpopular with those pro- 

 ducers who shifted to cooperatives 

 from private dealers because of the 

 tank ultimatum. Their voices and 

 their voting strength will influence 

 different cooperatives in different de- 



1 James C. Taylor and Ralph W. Brown. "Fluid Milk Plants in the Southeast — 

 Methods, Equipment, and Layout," a Marketing Research Report of the U. S. De- 

 partment of Agriculture, scheduled to he published in 1958. 



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