8 



MASS. EXPERIMENT STATION BULLETIN 173. 



Pkocessing Costs and Delivery Costs. 



The costs of distributing milk fall naturally into two classes — prepa- 

 ration for delivery or processing, and delivery to customers. The trans- 

 portation of milk from the producer to the dealer is an additional item 

 of expense, but usually the producer deUvers his milk to the dealer. In 

 this study the transportation cost has not been considered. The anal3''sis 

 of costs begins with the preparation of the milk for dehvery and ends 

 with the collection of monej'' from customers. 



Simple as this analysis appears, a number of items cannot well be 



idlaA 



Distribution 



Balance 



lOO ~ 



Cost of Distribution 



^ 79 1 



franspontation / xlioo * 



""Cost ofTra noportc t ion 



Farmer Receives 

 4ioo + 



U V 



When the consumer pays 9 cents. 



charged exclusively either to preparation or to delivery — administration 

 and clerical expenses, light, telephone, etc.; insurance and taxes, perhaps; 

 slu-inkage, spoilage and bad debts. In the summary of costs these have 

 been called "overhead" expenses; usually they might well be distributed 

 between processing and delivery. 



From the standpoint of health, pure, clean milk is as necessary as a good 

 water supply. Milk just drawn from a healthy cow under sanitary con- 

 ditions is at its best, and could it reach the consumer in tliis condition it 

 would be ideal. To preserve it and to overcome the bad effects of un- 

 healthy stock, unsanitary methods and conditions in the barn and reduce 

 to a minimum the unavoidable deterioration in handling, transit and 

 storage, milk has to be "prepared" for the customer. This preparation 

 may be called "processing," and, so far as the distributors interviewed 



