MILK PRICES i 9I 



eral ways. Each farmer, for example, feeds his cows a 

 little more grain. He may house them a little more com- 

 fortably keep them in on cold days, etc. He feeds less 

 milk to calves and pigs. He may even curtail consump- 

 tion of milk in his home; perhaps he buys oleomargarine, 

 for example, so as not to have to skim any of his milk in 

 order to provide butter for the family. Finally, he may 

 keep his cows longer, /'. e. y each farmer, instead of turning 

 off some of the older cows, as he usually does, and replac- 

 ing them with heifers, may milk both the old cows and 

 the heifers, thus increasing the size of the herd. All of 

 these influences would become operative with an attrac- 

 tive increase in price, some of them quickly, others more 

 slowly. With a decline in price the reverse operation 

 would take place. In addition to the above changes, of 

 course, an increase in price in a given market will attract 

 milk from other markets, whereas a general increase in 

 the price of milk will attract milk from other uses. This 

 last point is an important one, particularly in such sec- 

 tions as the milk sheds of New York, Milwaukee, or 

 Toledo, where so large a proportion of the milk is manu- 

 factured into the various milk products. 



There has been much said during the past few years 

 regarding the relation between cost and price. The idea 

 has often been advanced that price should equal cost plus 

 a "reasonable profit." Much of the discussion has been 

 by people who assumed that there is a definite figure 

 representing the cost of producing milk in general, as though 

 all milk of market grade cost the same amount. This, 

 of course, is untrue, for costs vary about as widely as do 

 men and cows and the conditions under which they live. 



Again it has been suggested that price should equal 

 average cost plus a "reasonable profit." But to average 



