Summary and Conclusions 



The profitable utilization of milk receipts in alternative outlets is a problem 

 for all milk dealers. The problem arises because consumer purchases of 

 fluid milk are relatively uniform throughout the year while milk production 

 varies widely from one season to another. Milk dealers therefore have a 

 difficult problem in maintaining a close balance between milk receipts and 

 fluid sales. This problem is particularly serious in the northeast dairy region 

 where milk sold for fluid uses brings much higher returns than milk used 

 in manufacturing. 



Independent milk dealers operating small and medium size plants have 

 less flexible operations and more restrictive outlets for milk than do large, 

 multiple plant firms. Because of this it was assumed that small independent 

 plants might operate most profitably by maintaining a very close balance 

 between milk purchases and fluid sales. 



This study was designed to ascertain for small independent milk dealers 

 the relative importance of the methods of balancing used and reasons for 

 preferring the most commonly used method. The data were obtained by 

 individual interviews with 201 milk dealers in four of the northeast states 

 and from related published material. 



The problems of operating a small independent fluid milk processing plant 

 were found to be similar irrespective of whether the plant was located in 

 a surplus producing state or a deficit area. The study disclosed no relation- 

 ship between the percentage of surplus handled and the location of the plant, 

 the seasonal pattern of receipts in the area, or the total surplus within the 

 state where the plant was located. 



To ascertain the method of balancing preferred by a dealer and his reasons 

 for preferring that method, an attitude analysis was made using the scalogram 

 technique. It was found that most independent milk dealers (78.5 per cent) 

 preferred to maintain a very close balance between milk receipts and fluid 

 sales throughout the year. The primary reason for this preference was that 

 these dealers considered this the most profitable way in which to balance. 

 The analysis showed that about 97 per cent of the dealers were of the opinion 

 that this type of balancing was most profitable. However, market restrictions 

 or regulations and personal factors accounted for the disparity between the 

 method they preferred to use and the method they believed to be most 

 profitable. Thus, in spite of the fact that about 18 per cent of the dealers 

 were favorable to maintaining a close balance between receipts and fluid 

 sales because it was more profitable, market restrictions and personal factors 

 influenced them against attempting to balance receipts with fluid sales. The 

 presence of manufacturing facilities in a dealers' plant did not influence 

 his preference for a particular type of balancing. 



An analysis of the balancing operations actually used by these dealers 

 supported the findings of the attitude investigation reported above. Of the 

 201 dealers studied, 167 attempted to maintain a close balance between 

 receipts and fluid sales. Of these 167 dealers, eighteen per cent were able 

 to balance producer receipts with fluid sales without outside sales or pur- 

 chases. Most of the remaining dealers in this group attempted to balance 

 producer receipts with fluid sales as much as possible and then purchased 



