282 APPENDIX B 



1. Determine the approximate value of skim milk. 



2. Determine the basic price of milk. 



3. Deduct the value of the skim milk in one hundredweight of 

 whole milk from the basic price per hundredweight. 



4. Divide the remainder by the basic test. One-tenth of the 

 quotient will then give a differential which would be fair to all. 



To illustrate: The present price of whole milk testing 4 per 

 cent is $3.60 per hundredweight. If the value of the skim in 

 that amount of whole milk is 80 cents, then $2.80 represents the 

 value of the four pounds of butterfat. Two dollars and eighty 

 cents divided by 4 equals 70 cents, one-tenth of which would be a 

 fair differential. The table on p. 283 carries this illustration 

 still farther. It compares 4 per cent milk at various prices per 

 hundredweight and with various differentials with 3 per cent 

 milk and 5 per cent milk. Assuming that the skim milk is 

 worth the same in the various milks (which is approximately 

 correct), it shows, for example, that when 4 per cent milk sells 

 at $2.00 and butterfat is at 30 cents, a differential of 3 cents 

 would be fair to producers of other grades; but a differential of 

 7 cents would give the man with 3 per cent milk but 16.7 cents 

 per pound for the fat content, while the man with 5 per cent 

 milk would get 3 8 cents per pound of fat. 



It has frequently been suggested that the basic test should be 

 uniform throughout the state. At present Cleveland, for exam- 

 ple, has a basic test of 3.5 per cent, whereas at Columbus the 

 basic test is 4 per cent. What are the advantages or disadvan- 

 tages of making the Columbus basis 3.5 per cent? Producers 

 are advocating such a change, dealers opposing it. 



Would a high or a low basic test have any influence on the 

 quality of the milk reaching the Columbus market? A careful 

 study of the accompanying table will show that so long as the 

 differential is so adjusted as not to penalize the producer of one 

 grade of milk as compared with the producer of some other 

 grade, the quality of milk coming to the city will not be in- 

 fluenced at all by the selection of any particular basic test. It 

 may be, however, that with payment regularly made on a butter- 



