6 New Hampshire Experiment Station [Bulletin 332 



dealers and individual farmers, to influence, or even to set milk prices in 

 New Hampshire, such efforts have usually rested on very uncertain bases. 

 To such fundamental questions as: "What is the proper relationship of 

 producer prices between two markets?", "What will be the effect on pro- 

 duction of certain price policies?", and "What schedule of prices will 

 bring stable market conditions?" no precise answers were available. While 

 this study does not assume to answer all these questions, or even any one 

 of them completely, it should provide information which will serve as a 

 much better base than that which has previously been available. 



Under the subject of prices, there are a number of distinct sub-divi- 

 sions. Perhaps the first subject to be investigated is an historical one, the 

 history of milk prices in New Hampshire. Accordingly, a brief account 

 of the historical background of present prices is presented in the next 

 section of this report. 



Having sketched the background, the next topic studied is the pres- 

 ent price structure in the market. By taking prices paid by the various 

 dealers in New Hampshire and Boston markets and making the appropri- 

 ate deductions from those prices, we may obtain a cross section of prices 

 actually received by producers in different parts of New Hampshire. 

 Such a cross section will indicate the actual producer price at the farm 

 for milk of 3.7 percent butterfat at a particular point of time and will 

 show the relationships of markets to one another at that time. 



It is realized that such cross section analysis gives little information 

 on the actual price relationships which have obtained in past periods and 

 which presumably have influenced production into its present structure. 

 Such iriformation, however, will be analyzed in another portion of this 

 price study, in which sample areas where two or more markets compete 

 for milk have been selected for detailed analysis of the effect of various 

 producer prices on the market in which that production was sold. 



In these sample areas, detailed information for an eight-year period 

 regarding individual prices received and method of payments form the 

 basis of the study. A section of this study has to do with producers' re- 

 sponse to prices in regard to the markets in which milk is sold. 



As an indication of the dangers incident to price-fixing where price 

 data are either lacking or are disregarded, a brief account is given of an 

 attempt at price fixing in the city of Berlin, New Hampshire, by the first 

 New Hampshire Milk Control Board. 



Finally, conclusions from this study together with those of the three 

 preceding pubhcations are brought together in a single section. Their 

 usefulness to those concerned with milk prices is indicated and suggestions 

 for applying the conclusions are made. 



HISTORICAL BACKGROUND 



Without a knowledge of the evolution of the supply situation, many 

 of the present institutions and practices are difficult to understand. Ac- 

 cordingly, an attempt is now made to give an account of the changing 

 supply factors in New Hampshire. In this section are presented only the 

 more important developments and they are handled briefly, with no at- 

 tempt at detailed or exhaustive treatment. This is not intended to be a 



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