12 MASS. EXPERIMENT STATION BULLETIN 304 



consumers, it has amounted to only about 5 per cent. There has been no in- 

 crease in the number of distributing agencies in the period since 1930, although a 

 number of new applicants for licenses have tried to qualify for entering the 

 market. Nevertheless during the last few years there have been considerable 

 changes in the general set-up of the market which have resulted in decreased 

 sales of local milk. For a period of years the Newburyport market has been 

 supplied by milk from local sources, with small-scale local dealers and distributors 

 maintaining about an even volume of business from steady customers. During 

 the last few years, however, some of their business has been lost to dealers handling 

 mostly outside milk. This business was gained by the dealers largely through 

 advertising and improved methods of distribution. Some of the local producer- 

 distributors have been slow in adapting themselves to the changing conditions 

 of the market and have not done as much as they might to make their product 

 more attractive to the consumer. 



The conservatism of local distributors has, however, prevented price under- 

 cutting for gainine new business, in spite of the fact that there has been noorganiza- 

 tion of distributors nor any price agreement among them. The trend of retail 

 milk prices in Newburyport has followed closely the general level of milk prices in 

 other similar markets of the state, with the prevailing price of 10 cents per quart 

 in the middle of 1932. However, with a decline of several hundred quarts in the 

 average daily sales of milk since 1930, and the loss of another several hundred 

 quarts in favor of outside milk, the local producers have maintained their regular 

 output with a gradually narrowing market outlet for their milk. As in the other 

 two markets, producers of fluid milk for local markets ha\'c been facing the 

 problem of radical readjustment in their production policies, due to changing 

 supply conditions in their previously dominant market outlets. It is becoming 

 more and more evident that their former strategic advantage of higher fluid 

 milk prices and no considerable surplus to contend with is rapidly vanishing 

 under the equalizing influences of a competitive milk supply from an outside 

 producing area. Once this fact is realized the producers for secondary markets 

 will find it imperative to enter the established large producers' organizations to 

 pre\-ent the ruinous effects of an outside surplus in their markets. 



Wholesale and Retail Distribution of Milk 



The proportion of milk sold b\' distributors to restaurants, stores, and other 

 agencies was highest In Newburyport and lowest in Attleboro, the figures being 

 32.4 per cent and 19.2 per cent respectively. (Table 9.) In all the markets the 

 proportion of milk sold on a wholesale basis was greater for the dealers than for 

 producer-distributors, the widest difference being in the Newburyport market, 

 where several dealers sold their milk almost exclusively at wholesale. One of 

 the reasons for the comparatively low proportion of milk sold at wholesale by 

 the dealers in Attleboro market was that a group of chain stores operating in 

 this market was importing its supply from outside areas independently of local 

 distributors. Inasmuch as the wholesale prices for milk ranged from 2 to 4 cents 

 per quart lower, the producer-distributors with a lower percentage of milk sold 

 on a wholesale basis averaged a higher price than the dealers for their total sales 

 of milk. Much of this differential was lost, however, in more frequent concessions 

 from the prevailing price level in their retail trade. 



