June, 1941] Local Structure of Milk Prices 15 



In order that prices in the various markets might be comparable, a 

 uniform period has been selected in which to make the comparison. This 

 period is the month of March, 1939. Several factors were responsible for 

 selection of this particular time. March is a month neither of scarcity 

 nor surplus as far as milk production is concerned. It falls about midway 

 between the short month of November and the flush month of June. The 

 second factor influencing the selection of March, 1939, was that this was, 

 at the time of commencing the collection of price data, the most recent 

 complete month. Another factor in its favor was that this month was a 

 relatively settled month as regards most of the milk markets. No very 

 drastic price changes took place. 



Data regarding prices in this month were obtained from several 

 sources. Among these were the New Hampshire Milk Control Board, 

 which furnished data for practically all New Hampshire markets; and 

 the Boston Milk Administrator, who announced for the month of March 

 the equalization prices at the various stations located in New Hampshire. 

 While the prices paid by the Boston market were already announced 

 in composite form and applied to milk delivered at the country stations, 

 those obtained for New Hampshire markets were frequently expressed 

 as Class I and Class II prices from which the composite prices had to be 

 calculated. Various deductions had to be made before actual farm prices 

 could be determined. 



Most studies on prices of milk have dealt with averages. Such a pro- 

 cedure may be of great value in discovering trends and relationships, but 

 it also tends to conceal many significant facts. Throughout this series of 

 studies an attempt has been made to get behind the averages to the indi- 

 vidual producer and distributor. This approach brought to hght many 

 interesting things when applied to the location of milksheds. It showed, 

 for instance, that instead of having smooth, clearly defined boundaries 

 producers are intermingled at the edge of two milksheds. An average ex- 

 pressed in terms of the boundary on a map would therefore not represent 

 the actual situation at the edge of the milkshed. 



The same is true in the case of producer prices and dealer prices, 

 even in a particular market. By averaging the various producer prices in 

 an area, many significant relationships between these prices are eliminated. 

 For instance, two markets may be found to have approximate equal aver- 

 age prices to producers for milk. If such markets are adjacent, the con- 

 clusion may be drawn that because they have about the same average 

 prices, producer prices will be about equal and a relatively stable relation- 

 ship will exist. Actually, this may not be the case at all. Producers, even 

 within one of the milksheds, may be receiving radically different prices 

 and the comparison between the two markets may show striking differ- 

 ences in price relationships if individual producer prices are considered 

 rather than average prices. 



One of the difficulties in considering individual producer prices is 

 that of summarizing and generalizing. In this study we have attempted 

 to overcome such difficulties by the use of price charts. 



In figure 4 an attempt has been made to present a typical New 

 Hampshire market (Nashua) from the standpoint of the prices received 



