June, 1941] Local Structure of Milk Prices 35 



In June, 1935, the first New Hampshire Milk Control Board set pro- 

 ducer and retail prices in the Berlin market. The producer price schedule 

 set up was sharply above that previously in force and above the Boston 

 price in that area (see fig. 13). Had producers in the Jefferson area been 

 paid on the same monthly surplus basis as they were for the year and a 

 half preceding control, they would have received a net premium during 

 control of 69 cents per cwt. or 07ie and one-half cents per quart above 

 the Boston return in the same area 



Actually, those producers in Jefferson who continued to ship to Ber- 

 lin during tiie period of control did not receive this "hypothetical price", 

 but received a somewhat lower return which averaged 46 cents per cwt. 

 or one cent per quart above the Boston return in the sa?Jie area. 



This increase in producer price was more than sufficient to stimulate 

 Berlin dealers to look elsewhere than Jefferson for their milk, and the two 

 largest dealers in that market shifted nearly two-thirds of their purchases 

 from Jefferson to Maine, outside the New Hampshire Milk Control 

 Board's authority. Shortly after control ended in November, 1936, pur- 

 chases swung back again to New Hampshire, 



The second New Hampshire Milk Control Board, in setting prices 

 in Berlin made no drastic changes to the existing price structure in the 

 market. 



(b) Boston Shippers 



Producers in Jefferson had been shipping to plants in Lancaster for 

 many years before the period considered in this study. Ownership of 

 plants had changed from time to time but throughout the years at least 

 (^ne buyer was always doing business and changes of the plant to ^\ hich 

 milk was delivered were few. 



Considering the period under study, a single Boston plant received 

 milk in Lancaster until December, 1936. In that month, a strike was called 

 by some of the cooperatives supplying the Boston market and many Jef- 

 ferson producers diverted their milk from the Lancaster plant. Within 

 a short time of the calling of the strike, plans were made to build a co- 

 operative plant in Lancaster and, while actual construction was not com- 

 pleted for some time, from December 1936, milk was received and paid 

 for by the cooperative on the same basis as if a plant were in operation. 



From the time the strike was called, two different composite prices 

 have been paid to producers shipping to Lancaster, depending upon the 

 organization to which the milk is delivered. For a few months, these prices 

 differed materially, but since August 1939, the differences have amounted 

 to only a few cents (an effect of the deduction of differing association 

 dues, etc.). 



Price Relationships Between Berlin, New Hampshire, and Boston 



As was the case with Haverhill, and subject to the same qualifications, 

 the price series used for comparison are composite prices with trucking 

 costs and association dues deducted, expressed on a 3.7 per cent butterfat 

 basis. 



