PRODUCT-COSTS TO MILK DEALERS 



Table 5. — Deliveries per Day per Dairy to Dealers 

 IN Group I and Group IV. 



Selected Months, 1935 



♦Average daily deliveries in 1935=100 



The product requirements which the two groups of dealers expected their 

 producers to satisfy differed substantially with respect to size of average daily 

 deliveries and butterfat test. Average deliveries per day per dairy were 223 

 pounds for group I compared to 155 pounds for group IV. The maximum was 

 243 pounds in May and the minimum 202 pounds in November for the high-cost 

 group, contrasted with 186 and 127 pounds for the same months for the low-cost 

 group. The spread varied from 58 to 75 pounds or from two-thirds to nearly 

 a full 40-quart jug. 



The distribution of producers among dealers of the two groups also indicates 

 that volume of production was a factor to be considered. Out of a total of 267 

 full-time producers selling dealers in group IV, 75 percent produced on the 

 average more than two 20-quart jugs daily; 50 percent produced more than three 

 20-quart jugs daily; but only 13 percent produced more than six 20-quart jugs 

 daily. Among the 224 producers selling the dealers in group I, 88 percent on the 

 average produced more than two 20-quart jugs daily; 75 percent produced more 

 than three daily; and 33 percent produced more than six daily. The data are 

 given in table 6. 



The average butterfat test of purchases ranged from 3.88 to 4.02 percent for 

 dealers in group I, and from 3.71 to 4.07 percent for dealers in group IV. (Table 

 7.) Differences in the requirements of the two dealer groups are not too evident 

 in the comparison of the average butterfat content of their purchases. There is, 

 however, a slight difference in favor of group I. 



The high proportion of producers with a small volume of business who sell the 

 low-cost group may be accounted for by a number of factors other than direct 

 selection. It is possible that many of the so-called small producers were just 

 getting into the dairy business in 1935 and, not having been available in the 

 selective takings of the high-cost group, gravitated to their only alternative. 

 This process is the opposite of positive; it is, in fact, apt to be very passive. 

 Newcomers in an industry may be expected to be uninformed concerning much 

 of its organization. When in addition their volume of business is small, it is also 

 conceivable that there is not much incentive to become informed. 



