June, 1941] Local Structure of Milk Prices 41 



West Paris, Maine, area was a free market so far as the Berlin distributor 

 was concerned, no minimum price below which he could not buy being 

 in existence. 



When this is the case, it is difficult to raise prices in a particular mar- 

 ket beyond the point where milk purchased in that area becomes more 

 expensive to the dealer than that which he can obtain in an uncontrolled 

 market. 



Normally, the net composite price in the West Paris, Maine, area 

 received by producers selling to the Boston market, averages five cents 

 per cwt. over that received by similar producers in Jefferson. In addition 

 to this, transportation charges from West Paris to Berlin averaged six cents 

 per cwt. over those from Jefferson to Berlin. Therefore, in order to pro- 

 cure milk from Maine, a dealer ordinarily would have to pay 11 cents 

 per cwt. or approximately one-fourth of a cent per quart more at the 

 plant in Berlin than he had been paying in Jefferson, and to the extent of 

 this difference, a control agency could raise the net price to be paid in 

 Jefferson without providing any price incentive for dealers to shift to 

 Alaine for their milk supply. 



But the increase in price from $2.33 to $2.79 per cwt. for Class I milk 

 at the city plant was more than sufficient to stimulate Berlin dealers to 

 look elsewhere than Jefferson for their milk. It has been noted above, 

 that anything over an 11 or 12 cent per cwt. increase in controlled New 

 Hampshire markets would put the uncontrolled Maine markets in a favor- 

 able position, assuming, of course, that dealers and producers could shift 

 from one market to another without trouble or expense. As a mattei* of 

 fact the trouble and expense involved in such a shift are considerable and 

 v/ithout sizable savings no shift is likely to be made. 



In Berlin, potential savings were so large that the shift was made by 

 the two largest dealers selling in that market. These dealers, selling be- 

 tween them some 2000 quarts daily in Berlin, shifted about two-thirds of 

 their purchases from Jefferson to Maine when the Control Board came 

 into the market. Shortly after control ended they were once more pur- 

 chasing practically all of their milk in New Hampshire.' This supply of 

 milk amounted to nearly one-half the milk purchased by dealers and 

 about 30 per cent of all milk distributed in the city. 



Other Bedin dealers made only small shifts in source of supply, 

 though some stated that had the Control Board kept the same policy in 

 operation they would have been forced to shift more of their purchases 

 from New Hampshire into Maine. 



This shift from New Hampshire to Aiaine sources of supply was not 

 made without difficulty. The cooperative organization which was active 

 in the Aiaine area opposed shift of producers away from their regular 

 market. 



A factor which made it easier for dealers to enter the Maine area was 

 the establishment of a trucking service from Maine points. This service, 

 \\ hich operated only during the period in which Berlin milk was under 



^Prices offered at Auburn, Me., followed closely those of the higher Lancaster series, (see figure 13). 



