198 THE MARKETING OF WHOLE MILK 



has in many instances led to revolt on the part of the 

 farmers, who have organized for the purpose of fixing 

 prices themselves. This was the prime object of most 

 of the earlier associations. 



More recently, however, each side has come to recognize 

 that the other side may justly have something to say. 

 As a result there has more often been some sort of col- 

 lective bargaining, such as has already been described. 1 

 In connection with such collective bargaining, however, 

 there is usually lacking a tangible basis by which the two 

 sides can arrive at the same figure. Cost of production 

 and market prices of certain milk products have both 

 been advocated as automatic price determinants. Most 

 frequently suggested, especially during the past few years, 

 has been cost of production. Although this determinant 

 had earlier received considerable attention, often in at- 

 tempts to show that the producers were getting too low 

 a price for their milk, there had been little or no serious 

 attempt to bring about the use of such cost as a basis for 

 prices until after our entrance into the war. At that time 

 price-fixing came into vogue, and the most natural basis 

 for fixing prices was cost of production. Producers who 

 had been firmly convinced that they were getting too low 

 a price eagerly grasped at cost of production as the proper 

 basis for price determination. 



It is not, however, a satisfactory basis. In the first 

 place, cost of production varies from time to time, from 

 farm to farm, and from producer to producer. To average 

 these costs, as is often suggested, would not do, since, as 

 already pointed out, one-half of the producers would at 

 once find themselves selling milk at a loss and would stop 

 producing. Then again, cost and demand vary independ- 



1 See Chap. V, Sec. 4. 



