PRODUCING MARKET MILK IN NORTHWESTERN INDIANA. 15 
The -average cost of producing 100 pounds of milk from all the 
cows on which records were obtained in each of the winter and sum- 
mer seasons can be found in the financial statement in Table 7. 
DETERMINATION OF BULK LINE COST. 
During the last 2 or 3 years a number of methods have been 
developed for determining the price of milk on a cost of production 
basis, and these plans are being used by a number of communities 
as a basis for milk prices. If in these plans the figures that are used 
merely represent the average cost of production, it is evident that 
practically one-half of the producers whose costs are above the 
average will not be sufficiently well compensated for their efforts. 
This will have a tendency to discourage production and decrease the 
available supply. On the other hand, it would not be advisable to 
pay a price based on the least economical producer since this would 
encourage his poor methods and stimulate an overproduction by the 
more economical producers. 
Between these two extremes there is a point under which the 
greatest volume of milk is produced. Such a point or line of demarca- 
tion has been designated as the bulk line. This bulk line, shown in 
figures 5 and 6, is arbitrarily placed to eliminate that milk which is 
produced at a relatively higher cost as compared with the bulk of the 
milk produced, and yet is high enough to stimulate a corresponding 
increase in the low-cost herds. 
If these figures are used in determining a price for milk it is ques- 
tionable whether the credit for appreciation on cows should be 
allowed, since it is doubtful whether normal market conditions 
would ever produce an appreciation on cows. Furthermore the appre- 
ciation in the value of cows due to market conditions gives a " paper 
credit " rather than real credit since the cows were not actually sold. 
PERCENTAGE COMPARISON OF FACTORS IN MILK PRODUCTION. 
With the exception of November, the gross feed and bedding cost 
in Table 9 ran higher during the winter months than during the 
summer months. With this one exception there was apparently no 
large variation in the feed cost from month to month within any 
season during the two years. 
Since the manure and soiled bedding resulted from the feed and 
bedding used by the cows, the credit for these latter items was 
subtracted from the cost of feed and bedding when making a com- 
parison of the net feed and bedding cost by months. The cost of 
feed and bedding minus the credit for manure and bedding gave the 
net feed and bedding cost. When the credit for manure and bedding 
was subtracted, there was no large variation in the cost of feed from 
month to month throughout the two years with the exception of 
