206 THE MARKETING OF WHOLE MILK 



changing, thus making other types of farming so much 

 more profitable that farmers would not be satisfied with 

 the same rate of profit as prevailed in the basic period. 



The formula method should, however, be a valuable 

 guide in price determination in connection with collective 

 bargaining, particularly if its basic elements are kept up 

 to date, so that the formula will accurately show current 

 changes in major costs from time to time. 



Another proposal that has been made for price deter- 

 mination by a ready method is to take prices of certain 

 regularly quoted commodities, like butter, cheese, or 

 butter and corn as a basis. It should be pointed out, how- 

 ever, that butter is, to a large extent, produced in sections 

 where grain growing is the main enterprise and that butter 

 and most other milk products can be stored for long pe- 

 riods, and hence their prices would tend to be more uni- 

 form as between seasons of shortage and surplus than are 

 milk prices. 



In the Minneapolis-St. Paul market during the year 

 1919 and well into 1920, the cheese market has been the 

 basis of prices, but, owing to the unnatural behavior of 

 cheese prices in 1919, this basis has proven unsatisfactory 

 and will either be given up or revised. The plan is thus 

 described by one of the officers of the Twin City Milk 

 Producers' Association: 1 



"In the fall of 1918 we began to base our price of milk 

 on the Plymouth, Wisconsin, cheese market. We averaged 

 the quotations of Twin Cheese on the Plymouth market 

 each month, multiplied them by 10, assumed a 10 pound 

 yield of cheese per 100 pounds, and added a differential of 

 70 cents per hundred pounds, to cover the cost of trans- 

 portation to the dealers' plants, and the value of the whey. 



1 Letter to the writer, Mar. 29, 1920. 



