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I. A. A. Record— April, 1934 



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Q u ad C i t i e s Ma r ket 



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waits 



Firm and Prompt Action By Government Needed to Iron 



>-'.-->'-''-^:^V-^^^ Out a Bad Situation '''■^'■)'.''^'i\-^'':-^^.-:.^ 



■ ¥F THE federal government ever had 



■ >*• an opportunity to do an important 



service for a group of its citizens, that 

 opportunity exists in the dairy indus- 

 try at the Quad Cities of Moline, E. 

 Moline, Rock Island, and Davenport. 



: For more than a year milk pro- 

 ducers in that area have been re- 

 ceiving little better than butterfat 

 prices although extra expense is in- 

 volved in producing, check testing, 

 and delivering a daily milk supply to 

 the four cities. At the retail price of 

 5c and 6c per quart, the dealers ob- 

 viously are not getting fair compensa- 

 tion for their labor and investment. 

 And while the consumer is getting a 

 break in the form of an unusually low 

 price, he is in danger of having the 

 quality of milk delivered constantly 

 lowered. ■:■■■■::■■:..' /■■ V •. 



All this and more was brought out 

 in a two-day hearing held by the Ag- 

 ricultural Adjustment Administration 

 at the Blackhawk Hotel, Davenport, 

 Mar. 5-6, where a marketing agree- 

 ment which treats all producers on an 

 equal basis through a pool plan was 

 presented for consideration. \.. 



Well Attended 



At the request of Chief Examiner 

 John T. Pearson, the agreement was 

 read point by point by Paul E. 

 Mathias of the I. A. A. legal depart- 

 ment representing the Quality Milk 

 Association. Testimony and evidence 

 from producers, producer-distributors, 

 dealers, consumer representatives, and 



farmers noticed as they passed the 

 cream station that the price had been 

 changed from 37 cents to 40 cents, 

 which still was seven cents under Chi- 

 cago standards. "We figured that the 

 meeting had been worth while," said 

 Mr. Lynch. 



In 1933 after the Fermers* Cream- 

 ery Company was organized at Bloom- 

 ington, the price of butterfat there 

 was only 2.13 cents under the Chicago 

 90 score butter market. At the pres- 

 ent time the price is only 1.98 cents 

 under the Chicago market. These com- 

 parisons show the effect co-operative 

 creameries and cream pools are having 

 in benefitting not only their patrons 

 but also all farmers who sell butterfat. 



officials of the Quality Milk and Illi- 

 nois-Iowa Milk Producers Associa- 

 tions on the proposed plan and mar- 

 ket conditions was recorded and taken 

 back to Washington for further con- 

 sideration. Attendance varied from 200 

 to 400 at the various sessions. 



The proposed agreement provides 

 for a Class I, or fluid milk, price of 

 $1.60 per cwt. Quality Milk presented 

 an amendment raising this to $1.70 in 

 line with the $1.75 price at Chicago 

 and $1.85 at St. Louis. ^^. ; : ; 



The Class II (manufactured) price 

 would be 3% times 92 score Chicago 

 butter, plus 20% plus 20c per cwt. 

 .The Class III price in the proposed 

 agreement is 3% times 92 score Chi- 

 cago butter plus 15 per cent. 



One distributor, Anderson of Peer- 

 less Dairy, objected to the Class III 

 price. Quality Milk offered several 

 proposals for handling surplus milk. 

 One is to process all surplus milk in 

 the plant of the Farmers Co-operative 

 Dairy Products Corp., a subsidiary of 

 Quality Milk, on a non-profit basis, 

 and turn the proceeds over to the 

 market administrator to be figured in 

 the pool price. 



Another proposal is to have all 

 dealers pay the same price for surplus 

 milk as is paid by the farmers surplus 

 plant. -■ ■ • :/..••■:' -. ■ ■ - ■ 



A third plan is to sell all Class III 

 milk to the distributors at the price 

 named in the agreement (3% x 92 

 score plus 15%) in which case Quality 

 Milk would close its plant providing 

 distributors agree to take all the milk 

 for a period of one year or more. 



Market Administrator 



The proposed agreement provides 

 for a market administrator who will 

 have access to dealers' books and rec- 

 ords, supervise the market, collect a 

 check-off of 5c per cwt. on all milk, 

 4c of which would be turned over to 

 the respective producers associations 

 on their members' milk. In case of 

 non-members, the administrator would 

 retain the entire 5c check-off to es- 

 tablish weighing and check testing and 

 inspection service similar to that now 



Uncle Sam Takes A Hand 



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given by the-j^o-operatives to tlieir 

 members. ■■'"■■'■■■ •^.■'>"- ■■'".■ ^■:'-' ■■ 



Chief objection to the pool plan 

 came from producer-distributors who 

 are now selling all their own milk, 

 and in some cases neighbors' milk al- 

 so, at retail. 



Both Quality Milk Association and 

 the Illinois Agricultural Association 

 vigorously supported the pool plan 

 realizing that this promises the only 

 relief from a chaotic market situation 

 in which both producers and dis- 

 tributors are suffering. 



Spokesmen for the Illinois-Iowa 

 Producers Association which was set 

 up a year ago with the support of or- 

 ganized distributors following their 

 refusal to arbitrate or pay a fair price 

 to producers represented by Quality 

 Milk Association, did not oppose the 

 pool but expressed the belief that 

 there should be only one producers'^ 

 association on the market. Quality 

 Milk Association has offered member- 

 ship in the organization to members 

 of the other group, and to non-mem- 

 bers, but has not agreed to change 

 its setup in accordance with dealers' 



wishes. •-. ■r^:.. ..■■■■■.■. ■■■■■■: ...... : - - ■• 



"B" Voting Stock 



Quality Milk Association members 

 insist that the tie-up with the Illinois 

 Agricultural Association through the 

 "B" stock which they voted to the I. 

 A. A., be maintained for their own 

 protection, that the influence of 60,000 

 organized farmers and the counsel and 

 judgment of an experienced staff is of 

 considerable value to them. The Qual- 

 ity Producers recognize that in union 

 there is strength. The distributors are 

 against the "B" stock set-up appar- 

 ently because they believe they will 

 have a better opportunity to control 

 the market if the aid and influence of 

 the state-wide organization is with- 

 drawn. 



When the Quality Milk Association 

 was first organized in 1930 there was 

 a wide spread between the price paid 

 farmers by most of the distributors 

 and that charged the consumer. On 

 (Continued on next pafc) ! 



