26 New Hampshire Experiment Station [Bulletin 332 



of adjacent towns while at the same time sections of Haverhill are not 

 included, the influence of outside markets can be largely eliminated and 

 the study can be confined to producers who have the two alternative 

 markets from which to choose. 



The two country stations had been in existence for a number of 

 years before March, 1931, the beginning of the period under study. The 

 Boston station, until December, 1936, was a Grade A station and produc- 

 ers selling to it were in a position to obtain Grade A premiums for milk 

 of that quality. Aside from these premiums, producers generally enjoyed 

 favorable bases under a base rating system. This is indicated by the premi- 

 um which Boston shippers enjoyed at North Haverhill over those deliv- 

 ering milk to Lancaster, a premium much greater than differences in 

 freight rates would justify. (Appendix Tables 5 and 6). 



In December 1936, a strike was called by some of the cooperatives 

 supplying the Boston market and many Haverhill producers diverted milk 

 from the North Haverhill plant to cooperative plants elsewhere. Owner- 

 ship of the plant changed hands early the following year and most of 

 these producers returned to North Haverhill. Following the change in 

 ownership. Grade A premiums were no longer paid and the base-rating 

 system was abandoned. 



Shipments to Manchester from the country plant at East Haverhill 

 began in the twenties and have continued ever since, the plant being op- 

 erated by one of the largest distributors in that city. All through the peri- 

 od covered by the study, milk delivered to this plant was purchased on a 

 base and surplus system. 



Conditions in the Haverhill area have remained relatively stable 

 throughout the period of this study. Except for a short time during the 

 milk strike and change in plant ownership in 1936-37, producer-dealer 

 relationships were good, and as shown in figure 10, shifting between 

 markets was infrequent. 



Price Relationships Between Manchester, New Hampshire and Boston 



Selection of a price basis for comparing the relative attractiveness of 

 two markets to the producer offers several difficulties. Illustrative of 

 them, is the question of whether or not association dues should be deduc- 

 ted. From one standpoint, a portion, at least, of such dues may be re- 

 garded as capital investment, later to yield a return to the producer, and 

 represented by a certificate of some kind. Another viewpoint would de- 

 duct all such dues on the grounds that insofar as present and past returns 

 are concerned, the actual prices received after all deductions are made, are 

 most significant. Similar difficulties arise all along the line. 



No completely satisfactory price series can be selected for the pur- 

 pose of determining the prices to which producers react in selecting their 

 markets. Different producers pay attention to different price quotations. 

 Some apparently make their decisions on the basis of prices quoted for 

 "base" milk at the plant, others consider prices for all milk at the farm, 

 some deduct hauling charges and dues, some deduct neither and some, 

 one but not both. Often, prices quoted by producers do not refer to milk 

 of the same butterfat content, and faulty price comparisons may result. 



