22 



New Hampshire Experiment Station 



[Bulletin 332 



PERCENT] 



so 



' '.'.'.'■■ '.'.'.' " ' ' 





''''!'' I 



'■■■■' ' 



Tiiar- 



"U» 



■q»'« 



isar 



'lafl 



la 



Fig. 8. Relative prices paid at the plant for Zl milk sold to three 



MARKETS ^ 

 ^ For data on which this figure is based, see Appendix Table IV. 



and while based on only a cross section analysis, this chart does give some 

 idea of the magnitude of price differences between delivery points located 

 at different distances from the primary market. 



Prices vary from an average of |2.848 for Nashua, N. H. (in the 

 southern part of New Hampshire and within 40 miles of Boston) to 

 $1,780 in Lancaster, in the northern part of the state. This maximum dif- 

 ference of $1,068 is much greater than can be accounted for by differ- 

 ences in transportation costs to the Boston market. Taking into account 

 the location differential of 46 cents per hundredweight which producers 

 located within 40 miles of Boston receive and the transportation costs, the 

 difference between prices at Nashua and Lancaster would be only about 

 60 cents per cwt. (assuming milk at Nashua were shipped by rail). 



Whether or not the price structure as shown in figure 7 will be 

 stable is a question upon which some light is shed in a later part of this 

 report. The immediate explanation of the price differentials between 

 markets in the south and north of New Hampshire is that the former are 

 largely local secondary markets while the latter are delivery points to the 

 Boston market. Whether because of provisions in the Federal Order for 

 the Boston market or for other reasons," in the past few years the Boston 

 market has carried a very much greater proportion of Class TI milk, than 

 have secondary New Hampshire markets. This resulted in higher com- 

 posite prices returned by local markets than the Boston market, even 

 though the latter market might have a higher Class I price. 



1 See the statement regarding Order No. 27 (The New York Order) by S. McLean Buclcingham, 

 Milk Administrator, State of Connecticut, March 1, 1940 (mimeographed). 



