194 THE MARKETING OF WHOLE MILK 



farmer and therefore not only more quickly sees oppor- 

 tunity for gain in some other line, but can more readily 

 rearrange his operations so as to take advantage of this 

 alternative opportunity. 



Men who urge for farmers prices that will insure "cost 

 of production plus a reasonable profit " overlook the 

 fact that even if milk were 15 cents a quart and wheat 

 $7.00 a bushel some men would still be producing at a 

 loss because new and less efficient men are always at- 

 tempting to enter any business which promises profit, and 

 because older producers may temporarily become less 

 efficient. Thus there would quite certainly continue to 

 be "marginal producers'* in both the above senses, even 

 at those high prices. 



Section 2. Determination of Wholesale Milk Prices 



By wholesale prices we here mean the prices paid to pro- 

 ducers at country or city points receiving milk directly 

 from producers. These wholesale prices and their deter- 

 mination are of particular interest to us because it is at 

 that stage that price levels of milk are really determined. 

 It is there that all the complex forces of supply and de- 

 mand focus. Increased or decreased production is there 

 quickly observed, and changes in demand for milk for any 

 of its many uses are also quickly reflected. In general, the 

 use to which a particular lot of milk is to be put must be 

 decided upon within a few hours after it has been delivered 

 at a receiving plant. True, condensed and powdered milks 

 have many uses, and decision as to the particular use 

 need not be made for months or years. But in the case 

 of milk as it comes from the farm the perishability is so 

 great that within a very short time after it is delivered 

 at the plant definite decision must be made as to how 



