Balancing Problems of Independent Milk 

 Dealers Operating Small and Medium 



Size Plants 



Arthur D. Jeffrey* 



An economic problem in the handling of milk by independent milk dealers 

 operating small and medium size plants develops from their attempt to 

 maintain a close balance between their purchases from producers with the 

 quantities needed for fluid sales. The seasonal variation in receipts from 

 producers and the relative uniformity in fluid sales of these single plant 

 firms results in a shortage of milk during certain times of the year and a 

 surplus at other times. 1 It appeared that the independent nature, small size, 

 and relatively large number of these plants places them in a poor bargaining 

 position for the sale of excess milk or for the procurement of milk in times 

 of shortage. For this reason the present study was initiated to determine: 



1. What policies and methods of balancing milk supplies with 

 fluid sales are used and which of these appear to be most 

 desirable for independent dealers operating fluid milk plants 

 of small and medium size. 



2. What factors influence a dealer's decision in the method 

 used to balance milk supplies with fluid sales. 



Method of Study 



The procedure used in the study was to ascertain by personal interview 

 the reasons why dealers do or do not use particular methods of balancing 

 milk receipts with fluid sales and then to analyze the procurement and dis- 

 posal policies to see if the reasons conform with their actions. It was assum- 

 ed that the attitudes held by these dealers toward a particular type of balanc- 

 ing was an expression of their reason for the method used. Thus, the reasons 

 for a particular balancing operation were investigated by a measurement 

 of attitudes. 



A survey was made of 201 milk dealers in four northeastern states, namely, 

 Vermont, New Hampshire, Massachusetts, and West Virginia during 1956 

 and 1957. The answers to the attitude questions were analyzed by the scalo- 

 gram technique. 2 This measure permitted a determination of the factors 



* Assistant Professor, Department of Agricultural Economics, Cornell University 

 and Coordinator, NEM-13. 



1 Variations in daily and weekly receipts and fluid sales may result in a temporary 

 shortage or excess of milk but such variations are not investigated in this study. 



2 Stouffer, Samuel A., et. al., Measurement and Prediction, Vol. IV, Studies in Social 

 Psychology in World War II, Princeton University Press, 1950. 



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