12 New FIampshire Experiment Station [Bulletin 332 



with large quantities of milk used as fluid cream in flush periods of the 

 year. 



Methods of Payment 



All sorts of different bases for payment for milk have been used in 

 New Hampshire. While much milk has been (and still is) sold on a flat 

 price basis of so much per quart, regardless of butter-fat content, even- 

 ness of production, etc., large amounts have changed hands on the basis 

 of intricate price formulas. 



At the time when shipment of fluid milk to Boston began to be of 

 importance to New Hampshire dairymen, payments were made on the 

 basis of a theoretical Boston ])rice/ Farm prices were calculated by de- 

 ducting varying amounts from the Boston price depending on the dis- 

 tance from Boston of the station to which the milk was delivered. Prices 

 were adjusted twice a year, April 1 and October 1. (This situation existed 

 at least during the period of 1874-1897.) 



During the twelve years, 1886-97, theoretical Boston prices averaged 

 32^ cents per 8^ quart can in summer and 36 3/5 cents in winter. 

 From these prices, deductions depending- on distance were made. 

 For stations betw^een 17 and 23 miles from Boston 8 cents 



23 and 36 9 cents 



36 and 56 10 cents 



56 and 76 11 cents 



and 1 cent more for each additional 20 miles 



These prices were agreed upon six months in advance, but the"joker" 

 seems to have been that the stipulated price was only paid for such milk 

 as was sold again, plus a small excess (5 per cent). All surplus beyond 

 this was made into butter on the farmer's account, at a value of the aver- 

 age of the jobbing price for butter quoted by the Chamber of Com- 

 merce, the farmer being charged 4 cents per pound for making. In 1896 

 the butter value of the surplus milk, less the cost of making, was 1 3 cents 

 per 83^ quart can, or slightly over 71 cents per cwt. In 1897, surplus 

 averaged 13 1/3 cents per 83^^ quarts. 



The amount of surplus was sufficient in May, 1897 to reduce the 

 composite price by 2.26 cents per 8^ quart can (about 12 cents per cwt.) 



By 1905, the method of payment existing in the late 1890's had been 

 changed.^ Instead of being paid for surplus milk on the basis of its butter 

 value, a method by which (within certain limits) the buyer agreed to 

 take all milk at a flat price was put into effect. By this plan the price was 

 cut 2 cents per 8}4 quart can (about 11 cents per cwt.), the deduction 

 being termed a "carrying charge." In addition to this "carrying charge" 

 a type of rating plan was put into effect whereby producers delivering 

 amounts varying from their ratings by more than one-sixth would re- 

 ceive a lower price. Ratings were to be based on farmers' predictions of 

 intended production, adjusted pro rata to the probable demand in the 

 market. 



The diversity of methods of payment for milk had not disappeared 



1 Whitaker, George M., "The Milk Supply of Boston and other New England Cities," U. S. D. A. 

 Bur. of Dairy Industry Bui. 20, 1898. 



2 Whitaker, George M., "The Milk Supply of Boston, New York, and Philadelphia," U. S. D. A. 

 Bur. of Animal Industry Bui. 81, 190S. 



