MILK PRICES 199 



ently and often inversely. For example, it may, and in- 

 deed often does happen, that at certain times cost of pro- 

 duction rises because of failing pastures and increases in 

 the cost of feed, while at the same time the demand falls 

 off. In fact, whereas demand is fairly constant through- 

 out the year, cost of production varies largely in a seasonal 

 way. (See Figures 7 and 9.) Furthermore, even in specific 

 instances, actual cost of production is extremely difficult to 

 ascertain because of joint costs. It is not the cost of a 

 given product, but the joint costs and profits of a comple- 

 mentary set of enterprises that the farmer considers or 

 should consider in deciding whether or not to produce 

 milk. 1 



Cost of production, however, can be useful to dairymen 

 in the matter of price determination. In the first place, 

 properly determined costs show the individual producers 

 whether they can as individuals continue to sell milk at 

 prevailing prices. In the second place, an accurate knowl- 

 edge of costs is a convenient basis from which to start 

 in collective bargaining. It gives a strong leverage for a 

 minimum price high enough to include most of the pro- 

 ducers and may forestall public criticism or court pro- 

 ceedings. In case there is a question of fixing prices, as 

 in war time, a knowledge of costs is exceedingly valuable. 

 Its value here, however, may be overemphasized. Its 

 principal service in this connection would seem to be in 

 safeguarding a necessary industry in case of temporary 

 depressions or in safeguarding the public when there is a 

 temporary shortage with its attending high prices. In 

 such cases a study of the range in costs would enable 

 whatever public body had the matter in hand to establish 

 prices at such points as would cover costs of most of the 



1 Taylor, H. C, Agr. Econ. y Chap. XXVIII. 



