MILK PRICES 207 



"Beginning August i, 1919, we used and are still using 

 a sliding differential, varying from 40 to 60 cents per 

 hundred pounds, in order to make some allowance for 

 the variation in supply. During the past few months, 

 on account of the cheese price being so much lower than 

 butter, we have not been at all satisfied with our present 

 price basis. When our present contracts expire July 31, 

 we hope to base our price either on butter or cheese, with 

 a sufficient differential added to make a price somewhere 

 near the cost of production." 



In the New York City district, beginning April, 1919, a 

 similar plan was tried, but seems to have proved inade- 

 quate. In the spring of 1920, when milk prices fell out of 

 line with prices of butter and cheese, the milk dealers 

 refused to continue to use the plan. 1 The producers re- 

 jected a plan proposed by the dealers, and there the matter 

 stands (June, 1920). It is likely, however, that some 

 modification of the method will be used in the future. 

 The basis was the New York butter and cheese prices. 2 

 The butter price taken was the average of daily prices of 

 92 score butter on the New York market for one month. 

 Allowing for 4.176 pounds of butter in 100 pounds of milk 

 (3.6 per cent milk at 16 per cent overrun), the butter value 

 of milk could be calculated. Thus the January, 1920, 

 price of milk was computed on December 20 by averaging 

 butter prices from November 20 to December 19, which 

 gave an average butter price of $0.732 per pound, making 

 $3.06 for i oo pounds of milk. Adding $>i.i6 as the value 

 of skim milk per 100 pounds of whole milk gave a value 

 of $4.22 as the total butter and skim milk value for Jan- 



1 Dairymen's League News, Mar. 25, 1920, p. i. 



2 Milk Reporter, Jan., 1920, for detailed methods of calculation and price 

 schedules. 



