June, 1941J Local Structure of Milk Prices 37 



Another factor tending to deter the shifting of markets is the use of 

 a base rating system or some similar device, whereby a new producer has 

 to take, for a time, a lo\\'er price than do regular producers. In Jefferson, 

 after December 1936, producers selling to Boston were no longer paid on 

 a base rating plan. Berlin producers, on the other hand, have received 

 payment according to base rating plans throughout the period covered by 

 this study; such plans, however, often assigning bases according to no 

 very definite rule. Following the abandonment of the base rating system 

 in the Boston market, a provision in the Federal Order required new pro- 

 ducers in that market to accept Class II prices for the two months im- 

 mediately following their entry into the market. 



Different methods of payment and price quoting make it difficult 

 for producers to compare prices. It is entirely probable that many pro- 

 ducers in Jefferson were not aware whether the price which they received 

 for milk in a particular month ^^■as higher or lower than that received by 

 a neighbor for milk of comparable quality, because of the different 

 methods of quoting prices. Berlin prices were usually quoted on a quart 

 basis, Boston on a hundredweight. When to this difference were added 

 different base-rating systems and butterfat differentials, the difficulty of 

 comparison became great. 



The factors associated with personal likes and dislikes have had an 

 important influence in the Jefferson area. Loyalties between producer and 

 handler were in many cases very strong. Likewise, strong dislikes have 

 prevented producers from supplying particular handlers. Producers' suspi- 

 cions (even though they may have been entirely unfounded) that rating 

 systems \\-ere misused, false butterfat tests reported, or other unfair prac- 

 tices carried on, have been influential in determining to what handler milk 

 was sold. 



While evidence on the enforcement of sanitary regulation was diffi- 

 cult to obtain, studies made in 1937' indicated that Boston requirements 

 were somewhat more rigorous than those of Berlin and were probably 

 more stringently enforced, the Berlin health department being handi- 

 capped by small funds. Farmers who were questioned on the relative dif- 

 ficulty of satisfying the requirements of both markets, while not unani- 

 mous, generally believed that it was ^easier to qualify to ship to Berlin 

 than to Boston, but that the difference was not great. 



Particularly in the latter part of the period studied, an important 

 fnctor to be considered was that producers selling to Boston had assurance 

 that all of their milk would be accepted and paid for at the prevailing 

 price. Those selling to Berlin, on the other hand, had in addition to a base 

 rating system which required them to accept Class II price for all milk 

 delivered above a certain quantity, no assurance that they might not be 

 asked to keep at home a portion of their production. 



Another factor in ^hich the markets differed was in the reputation 

 of their dealers for financial strength. A common observation, undoubt- 

 edly engendered by the past experience of certain producers who had 



^Corbett, et al, opus cit. 

 Bressler, opus cit. 

 MacLeod, opus cit. 



