40 New Hampshire Experiment Station [Bulletin 332 



During the years 1934 - 37, some 31 producer-distributors and 16 

 dealers supplied the city of Berlin (population approximately 20,000) 

 with milk and cream. A little over one-third of the milk \vas handled by 

 producer-distributors and nearly two-thirds by dealers buying all, or 

 most, of their milk from producers. Practically all of the producer-dis- 

 tributors lived to the north ^^•ithin a few miles of the city. In addition, 

 most of the small dealers secured the bulk of their milk from this same 

 section of the milkshed. The larger dealers, however, who supply about 

 one-third of the market had to go farther afield for most of their supplies. 



The normal area of supply for the large dealers had for some years 

 before the advent of the Milk Control Board been in the town of Jeffer- 

 son, distant by road about 21 miles. 



To complete the picture of the Berlin market, it must be kept in 

 mind that milk is available some 40 miles away in the state of Maine. 

 Normally, this milk moves southeast to Auburn, but price relationships 

 can become such that it will enter the Berlin market. 



The first New Hampshire Milk Control Board had emergency pow- 

 ers to set producer and resale minimum prices. On June 15, 1935, it availed 

 itself of those powers and set the following price schedule in Berlin: 

 "Milk, retail in quart bottles— 11 cents. Dealers to pay producers six cents 

 per quart or |2.78 per cwt. for milk delivered at their plant and sold as 

 fluid milk with a butterfat differential as set by the Boston Market Ad- 

 ministrator. Surplus to be paid for at prices estabHshed by the Boston 

 Market Administrator." Prior to the control board action. Class I milk 

 had been paid for on the basis of $2.33 per cwt. ($2 per 40 quarts). 



Prices paid by Berlin dealers to producers in Jefferson throughout 

 the three years immediately preceding control averaged only 10 cents 

 above the Boston prices in the same area. 



The producer price schedule set up by the Control Board resulted in 

 prices above those previously in force and also above the Boston price in 

 the Jefferson area. Whereas the premium of Berlin price over Boston 

 price (composite, at the farm in Jefferson with trucking charges de- 

 ducted) for the year preceding control had averaged only seven cents 

 per cwt., immediately after control the differential became very wide. 



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 

 v/ould have received a net premium during control of 69 cents per cwt. 



or one mid one-halj cents per quart above the Boston retiirji in the same 

 area. 



Prices set by a control agency are not only prices within an area at 

 which producers may sell but also they are prices below which the dis- 

 tributor cannot buy. In most New Hampshire markets this distinction is 

 meaningless as there is no alternative market, or markets, in which the 

 distributor may buy— all are under the control of the agency or else are 

 so distant that transportation expenses are too great to make them eco- 

 nomically practicable. This is not so of Berlin. Within 45 miles milk is 

 available in a market m hich, so far as the first New Hampshire Milk Con- 

 trol Board was concerned, was not under control. In other words, the 



