PRODUCT-COSTS TO MILK DEALERS 



Cents per hundredweight 

 100 



JFMAMJ JASOND 

 — Standard Deviation of Dealers' Prices 



on Pool Price 

 ---Percentage of Class H in Market 



Figure 3. The Relationship Between the Percentage of Class II Milk in the Market and 

 the Variation of Dealers' Product-Costs from the Market Average 

 Monthly— 1935 



Eleven of the principal Use-Plan dealers had reductions in their Class II dis- 

 posal; one had only a very slight change upward; and one had a very substantial 

 increase. Two dealers who disposed of 44 and 50 percent of their June deliveries 

 as Class II had reductions of 29 and 35 percent respectively in July. The dis- 

 tributor whose disposal of deliveries in Class II was relatively low had an increase 

 of 45 percent in July as compared to June. The Class I-Class II price ratio 

 declined from 3.14 in June to 2.76 in July. 



The joint operation of these forces was responsible for the marked reduction 

 from June to July in the spread in dealers' product -costs. 



The inverse relationships which existed during the last half of 1935 between 

 the percentage of Class II milk in the market and the variation in dealers' product- 

 costs — unsound as they may appear — were and probably are normal for this 

 market, with the exception of the extreme changes from June to July in the 

 spread of dealers' product-costs. Biological forces, management practices — 



