<2 ST 25^ iipiiliiililllffl li liii! ! f'tatc Qfnlbgc of J^^gricultutp At QJarnell UniuEraitH 3tlfata, N. ^. INVESTIGATION AND ANALYSIS OF THE PRODUCTION, TRANSPORTATION INSPECTION AND DISTRIBUTION ■; 7, OF MILK AND CREAM IN NEW ENGLAND DISTRIBUTED BY THE NEW HAMPSHIRE STATE DEPARTMENT OF AGRICULTURE CONCORD, N. H. Cornell University Library The original of tiiis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924003052549 Investigation and Analysis of the Production, Transportation Inspection and Distribution of Milk and Cream in New England ISSUED BY THE Boston Chamber of Commerce July, 1915 PREPARED FOR THE COMMITTEE ON AGRICULTURE OF THE (aj ^ / ^ 3 ^ Boston Chamber of Commerce Theodore N. Vail, Chairman President American Tel. & Tel. Co. Nathaniel I. Bowditch Farmer William H. Bowker Bowker Fertilizer Co., Mfrs. Agricultural Supplies Dr. Kenyon L. Butterfield President Massachusetts Agricultural College George H. Ellis George H. Ellis Co., Printers Henry D. Forbes Vice-President National Shawmut Bank Edgar W. J. Hearty Maynard & Child, Merchants Richard Hittinger The Hittinger Fruit Co., Growers Jesse B. Hubbard Fitzgerald, Hubbard & Co., Bankers & Brokers John C. Runkle Vice-President Barrett Mfg. Co., Roofing & Paving Materials By the SPECIAL COMMITTEE ON MILK John P. Bowditch George H. Ellis John C. Runkle Walter E. Smith Lyon Weybtim, Counsel in Charge John C. Orcutt, Secretary Assisted by Mr. G. C. White Transportation Specialist of the Office of Markets and Rural Organization, United States Department of Agriculture, Washington, D. C. Prof. R. Hay Ferguson Extension Professor in Agricultural Economics of the Massachu- setts Agricultural College. Fat< Total ^ Solids Solids NOT FAT Water Variations in the Contents ofCows'Nilk THE REPORT AS A UNIT This report intentionally has no index, and the reader is earnestly warned against reading only one particular part and consider- ing it to the neglect of the other related parts. Every attempt has been made to condense the report into fewer pages. It is admittedly long, but necessarily so, dealing as it does with a great and widespread in- dustry involving so many problems. It records an exhaustive survey of every phase of the industry in its relation to the whole. Only by gaining a thorough understanding of all of the problems involved may the reader hope to secure an accurate idea of the exist- ing conditions in the entire industry, and how they may be improved. REASONS FOR THIS INVESTIGATION It has been apparent for some time that the production and distribution of milk in the New England States is not on a sound economic basis, and that there is something radically wrong with the way in which this important industry is now being conducted. It is obvious that the opportunities in the industry are far from being fully realized. Milk has always been a staple article of consumption with all classes, and is among the best and cheapest foods on the market. The large cities of southern New Eng- land would naturally look to the adjoining territory for their supply. This territory (northern and central New England) is well able to support a flourishing dairy industry — and dairying should naturally be the largest single branch of New England agriculture, our greatest single industry. Generally speaking the per capita consumption of milk in the United States has been steadily increasing; but in certain districts of New England the per capita consump- tion has been decreasing for the past ten years, and the amount required has been dra-\yn from a larger and larger territory, and from districts more and more remote. In short, despite the increase in our urban population, the output of the principal agricultural industry in the im- mediate adjoining territory has declined. Country districts, which ought to be flourishing, are at a standstill. No one has appeared to understand the cause of the difficulty, or to have comprehensive ideas for its solution. The Committee on Agriculture of the Boston Chamber of Commerce, in view of' this situation and at the request of the New England Milk Producers Association (an 5 organization of about 2,000 New England farmers), has made this investigation in the hope of being able to throw a strong light upon the fundamental causes of the difficulty and of being able to work out suggestions for its solution. This investigation has been conducted in cooperation with the agricultural agencies of the various New England States. The Federal Department of Agriculture also has rendered assistance in the transportation features. It appeared necessary, first, to obtain exact facts as to conditions now existing in New England regarding pro- duction, transportation, inspection, grading and distribu- tion; second, to make a thorough analysis of this informa- tion, studying the methods adopted by railroads and cities elsewhere; third, to make, if possible, recommenda- tions helpful in putting the industry on a sound basis. The report has two divisions. The first outlines the present conditions in each phase of the industry, under- taking to give the reader a mental picture of how milk and cream are produced, transported, processed, inspected, graded and distributed, and giving the costs and principal problems connected therewith: the second contains com- ments and suggested recommendations. PRESENT AND PAST CONDITIONS IN THE MILK AND CREAM INDUSTRY IN NEW ENGLAND CONDITIONS TEN TO FIFTEEN YEARS AGO; PRODUCING TERRI- TORY, AND WHAT WAS DONE WITH THE PRODUCT Butter and Fifteen years ago, M,aine had 72 creameries, cheese jsjg^ Hampshire 24, Vermont 240 (including about 30 cheese factories), Massachusetts 20, and Connecticut 19, which sent their entire product to market as butter or cheese. Source of Boston received its milk supply from a radius supply to of I2S to ISO miles, and the other large cities Boston and . ^^ ^ ^ f , ^ ' . . ,. ... other large ^^ New England from their immediate vicinity. cities. The sale of cream was only beginning ; previous to this period it was a very small factor in the milk industry. PRESENT CONDITIONS Maine To-day, 55 of the 72 creameries in Maine creameries. g^j-g owned by four companies which ship the greater part of their product as whole milk, cream and skim milk; making butter in the surplus season of the year only. Creameries In New Hampshire and Vermont, from 60% elsewhere ^q 75% of the creameries are owned by eight England. ^"^ ^^^ dealers who are shipping the greater part of their product as whole milk, cream and skim milk, and are making butter of the surplus. In Massachusetts and Connecticut there are about 30 creameries which are selling, for the most part, cream and butter, their output being small in comparison with the 7 big dairy sections of New Hampshire, Vermont, Maine and Quebec. Creameries, In the Province of Quebec, there are nearly etc., in J gQQ creameries and cheese factories, which are selling their product as cream, butter or cheese. Eastern In the eastern part of New York State, on the New York. Fitchburg Division of the Boston & Maine Railroad and the Delaware & Hudson Railroad, there are now about six creameries or milk plants owned by two Boston dealers, who ship whole milk and cream to Boston. Great growth Since 1910 there has been a remarkable in sale of increase in the sale of cream not only for ice- cream but for general family use, in cooking, in serving fancy dishes in the hotels, restaurants, etc., and in candy manufacturing, until now the price paid for cream establishes largely the basis for the price paid for milk. Source of Metropolitan Boston receives about 20% milk supply. Qf j^.g j^jiij. supply locally and 80% from Maine, New Hampshire, Vermont, Eastern New York and Con- necticut. With the possible exception of eight or ten New England cities of over 100,000 population, all the cities and large towns receive their milk supply from local producers. Cream Metropolitan Boston receives its cream supply. supply from Maine, New Hampshire, Vermont, Quebec and New York. All the other large cities and towns in New England receive their cream supply from about the same sources as Metropolitan Boston. No duty Previous to 1910 there was a duty on milk, on milk cream and butter coming in from Canada, and cream. . ... , At present there is a duty on butter only. Milk and cream come in duty free. ANALYSIS OF THE INDUSTRY AS IT IS TO-DAY I. PRODUCTION Analysis of Evidence Secured at Public Milk Hearings held throughout the Six New England States Parties j^ cooperation with the Federal Depart- with'tiie ^ ment of Agriculture, the State Departments of Chamber. Agriculture, the State Agricultural Colleges, the State Granges, the State Dairymen's Association and county agents of each state respectively, sixteen hearings were held throughout New England in the latter half of 1914. Centers in which hear- ings were held by the committee. Putnam, Conn. . . Hawleyville, Conn. Providence, R. I. . Portsmouth, N. H. Concord, N. H. . Whitefield, N. H. Boston, Mass. . Worcester, Mass. Springfield, Mass. Newport Junction, Me. Augusta, Me. Auburn, Me. Bellows Falls, Vt. Rutland, Vt. . Burlington, Vt. St. Johnsbury, Vt. August 26 August 27 September i September i6 September 17 September 26 October 15 October 16 October 17 November 11 November 12 November 13 December 1 1 December 12 December 29 December 30 About 2,500 farmers attended these hear- ings, representing between 70% and 80% of the milk-producing towns in New England. Towns represented. Information sought. The farmers were examined on the following general points: 9 What it costs per year to keep a cow. The average production per cow per year. Value of the calf. Value of manure. Other problems incident to the production of milk. Their views as to what ought to be done. COST OF PRODUCTION The questioning in each instance developed the fact that the items entering into the cost of keeping a cow could be divided into three, main heads, — feed, labor and over- head charges. 1. *Feed, — hay, ensilage, grain and pasture. 2. t Labor. 3. Overhead charges. a. Interest on money invested in cow. b. Insurance on cow. c. Taxes on cow. d. {Depreciation of cow. e. ||Barn rent. f. Bedding. g. Keep of bull. h. Incidentals, — light, medicine, veterinarian, tools, heating water in winter, salt, etc. Necessary The above are the items which necessarily Items. enter into the cost of keeping a cow. From the total of these items the value of calf and manure is deducted to get the actual cost of keeping a cow for milk production. * Feed. Hay, clover, alfalfa, were figured at the market prices that could be received for the same in the barn on the farm; grain 'for what it co-sts plus delivery to the farm; pasture according to its value, taken in comparison with hay and grain; ensilage at its estimated value, l3 to $4 per ton. tLabor. Labor was charged at the local market price for just the time it takes to care for the cows. J Depreciation. Depreciation was reckoned in two ways: (i) depreciation over a period of 3, 5 or 8 years, as to deaths, injuries, loss of udder quarters; (2) depreciation as to the high- est selling value of the cow as compared to its final value for beef. II Barn rent. Barn rent was charged on a basis of what it would cost to erect a stable to keep the number of cows the producer maintains. Keeping of The number of producers who kept a accurate strictly accurate record of all the above items records increasing. ^as naturally small. During the last five or ten years, however, more attention has been given to the question of the cost of keeping a cow, and the number of producers who have kept accurate records has been rapidly on the increase. As a matter of fact, it was shown that it has been only within the last seven to ten years that serious consideration has been given to an analysis of the items of cost in the keeping of a cow. Thirty-four More accurate figures were furnished by cow test ^j^g producers of Vermont than by the pro- in Vermont. ducers of any other part of New England. It was shown that Vermont was the largest dairy state in New England and supports 34 cow test associations. Opinions The testimony given by the farmers in the vary. various sections of New England naturally showed a wide range of opinion as to the value of calf and manure, and as to the amounts and prices charged for the individual items. The peculiar conditions in each locality proved to be a large determining factor. Taken over New England generally, under varying conditions and with varying degrees of efficiency (varying ability) and varying accuracy as to items of cost, the following range of figures represents fairly the evidence obtained at the hearings. It is clear from the inconsis- tencies in these figures that they furnish no real basis for determining the actual cost of production. Total Cost Producer No. I Producer No. 2 Producer No. 3 1. Feed, — hay, grain, ensilage, pasture. $49.40 fci-54 $68.00 2. Labor, 17.72 18.15 45-00 3. Overhead charges, a. Interest on money invested in cow, 3-00 5-85 10.00 b. Insurance on cow. ■45 ■37 3.00 c. Taxes on cow. 2.15 •75 d. Depreciation of cow, 5.00 9-75 20.00 e. Barn rent, 2.86 2.00 1. 00 f. Bedding, 2.00 1. 00 5.00 g. Keep of bull, 2.86 3.00 5.00 h. Incidentals, — light, medicine, veteri- narian, heating water in winter, salt, etc., 1.50 •50 5.00 $86.94 SJ92-9I $162.00 Credits Value of calf, $1.00 $11.00 $5.00 Value of manure, 5.00 10.00 1500 $6.00 $21.00 $20.00 Net cost to keep a cow, $80.94 $71.91 $142.00 (These figures show that it costs No. 3 almost twice No. 2 to keep a cow.) Variation in Figures obtained on production varied from production. ^ggg ^q 15,000 lbs. per year. In the above three instances, the amount of production per cow was as follows: No. 3 8,000 lbs. No. I No. 2 5,293 lbs. 6,590 lbs. The cost of 100 lbs. of milk to each was, therefore,- $1-5291 $1.0911 $1,775 Cost per quart, — $0.0332 $0.0237 $0.0385 The two fundamental factors entering into the cost of a quart of milk are the net cost of keeping a cow per year and the amount of milk the cow produces in a year. VARIATION IN THE FACTORS GOVERNING THE COST OF PRODUCTION The several factors entering into the foregoing result varied widely in the different sections of the producing territory according to the grade of stock kept, the methods of feeding, and the character of the soil. Variation in 1. The evidence showed that farmers in Massachusetts, kind and value Connecticut and Rhode Island valued hay at $15-^20 per of hay fed. ton in barn, while in Maine, New Hampshire, Vermont and Quebec at j!8-jSi2 per ton for the same grade, as it costs around $7 per ton to bale and transport it to Boston. The general farmer raises 50 to 200 tons of hay, but the majority could market only a small percentage of this as No. I hay; if it were all baled and sold it would hardly grade as No. 2 hay. Nearly all farmers are feeding timothy and natural grass; only a very small per cent are feeding clover. Silos. Probably less than 20% of the farmers have silos. Es- Pasture timates on pasture varied, but the pastures vary to a considr values. erable extent, depending on whether they are good for one, two, three or four months. This will vary in the farms in each locality according to the condition of the pastureland. Labor in care 2. Labor was subject to wide variation, — $15 to $45 per of cow. year, per cow. In many sections, farmers stated that they could not market their labor in winter in any other way ex- cept in the care of cows. Estimates of cost of boarding a hired man were from $7.50 to $22.50 a month. Bedding and 3. Many farmers bed with left-over hay and straw and its effect. do not charge anything for it. There was some difference of opinion as to whether or not sawdust and shavings were detrimental to the soil. Depreciation 4. In Massachusetts, Connecticut and Rhode Island, most in value. ot the farmers buy cows at $70 to $110, milk them one to four years, then sell them for beef at $20 to $60, according to the size, condition of cow and market price for beef. This depreciation of $20 to $60 is divided over the number of years the cow is kept. Appreciation In Maine, New Hampshire, Vermont, Eastern New York in value. and Quebec, the majority of farmers are raising calves and young cattle, so as to sell their cows when they will bring the best price, letting the depreciation come on the subsequent owner. Many farmers claimed that they had no depreciation, but all appreciation. 13 Depreciation on Very few took into account the depreciation to be figured account of over a series of years (5, 8 or 10 years) because of sickness, death, etc. death, loss of calves, bunches on knees, sore teats, and loss of one or more quarters of the bag, etc. Value of 5. The value placed on a calf ranged all the way from $1 calf. to $10. Value of a calf up to a week old only should be credited to the cow; i f a pure bred animal and of good pro- d ucing family, it should greatly raise the value of the calf. Value of 6. One of the widest variations was found in the estimated manure. value of manure (from $30 per cow in greenhouses and market- garden districts of Massachusetts, Connecticut and Rhode Island, to $5 in other localities). There seems to be very little definite or accurate knowledge as to what manure is really worth to the land for the raising of crops, or the effect of certain kinds of bedding on the quality of the manure and on the land. Most of the estimates were guesses of $10 to $15, which the farmer had heard had been given out by experiment stations. Old theory. If many farmers are depending on the value of the calf and manure for their return for the labor in keeping a cow, as many stated was their usual method of figuring (calf and manure oflfset the labor charge), then many farmers on their estimates were proved to be getting a poor return for their labor. LACK OF ACCURATE KNOWLEDGE OF COST OF PRODUCTION AMONG FARMERS It appeared that the situation was further complicated by the fact that producers generally had no accurate knowledge of a number of important factors affecting the cost of production on their farms. Wide range 1. This was particularly true in regard to the number in production, of poun4s of milk per cow. While figures obtained by the committee ranged from 3,500 lbs. to 15,000 lbs. per year, it was clear that there are many cows in New England producing under 3,500 lbs. per year. It is exceedingly doubtful if most of the cows in New England are pro- ducing much more than 3,500 to 4,000 lbs. per year. Small percent- The evidence demonstrated that while in many towns age of pure there are from 5 to 25 producers who have pure bred bulls breds. and some have pure bred cows, as a matter of fact the ma- jority do not have either; and outside of the cow test asso- 14 ciations a disappointingly small per cent weigh or measure, although there has been a great increase in weighing in the last three or four years. High percent- Probably 80% of the farmers have no accurate idea of age without what their cows are producing each year in pounds of milk, records. to say nothing of their test in butter fat. Bam rent. 2. Many barns are used not only in stabling cows, but for horses, hens, tools, hay and grain. Cows should be charged only what it would cost to build a stable to handle the number of cows kept by the farmer. Very few charged the cows with only a proportionate part. The feed is charged at the price that could be obtained in the barn. What 3. Comparatively very few farmers had taken any ac- comprises count of incidentals, such as light, medicine, heating water incidentals. in winter, veterinarian, salt, curry combs, shovels, etc. All of these items are necessary and cost money and should be reckoned in the cost of keeping a cow. All of the figures can be obtained by accounting for the total amount of each one of the items for the entire herd, then dividing by the number of cows, to obtain the individual cost. The total production of each cow, however, should be kept separate, as should also her butter-fat test . OTHER FACTORS AFFECTING PRODUCTION The lack of any standardized methods of production and of accurate knowledge of costs is due partly to tem- porary, partly to permanent, causes. The evidence indi- cated the following as the principal factors in producing and continuing this condition : Conunercial 1. The selling of milk and cream and the commercial dairying a creamery and cheese factory are not old, established indus- new industry, tries. Fifty years ago saw the first commercial cheese fac- tory, and thirty-six years ago the first commercial creamery. General shipping, to any great extent, of milk and cream by cars began less than forty years ago. Formerly, farmers sold from their farms, for their cash income, corn, oats, wheat, hay, beef, sheep, wool, eggs and poultry, homemade cheese and butter, wood and logs. 2. One great factor in the situation is the varying amount that the milk check contributes to the total amount of money received from all products within the year. Producers are of two main classes. Milk produc- a. Producers whose milk and cream check is 90% of their tion the main total income. business. 15 Milk produc- b. Producers whose milk and cream check is io% to 60% tion as a side of their total income; who are selling market-garden produce, issue. eggs, poultry, hay, onions, tobacco, apples, potatoes, pigs, hogs, young stock, cows, wood and logs. The (a) producer is generally more concerned about his dairy business than (b) producer, who is making milk a side issue and does not pay much attention to breeding, feeding, amount of production as compared with ^a) producer, but (b) producers are a big factor and produce in the aggregate much milk and cream for the market. Advent of 3. Many foreigners are taking up farms and producing foreigners. milk, working the entire family on the farm. Few of these figure labor costs, but their milk and cream come into direct competition with the producer who figures each item. DISSATISFACTION AMONG PRODUCERS Producer's Although the cost of production varies greatly and is not solution. accurately known, producers are practically unanimous that they are not receiving enough for their milk. The producer's solution is more money for his milk, ranging from 4 cents to 6 cents a quart at his door. Test and It also developed that the producers suspected certain price dealers of not giving them an honest test for butter fat. In suspected. soijie localities it was claimed that dealers paid producers a higher price for their milk or gave them a bonus for hauling milk, so as to keep peace in the locality, and prevent producers from getting together. Deduction The dealers in some instances charged the producers for for sour or shortage, sour milk and frozen cream, for which the producer frozen tnilk. claimed he was not to blame, having delivered his product to the dealer in good condition and full measure. Monopolistic It was also brought out that, in certain instances, dealers methods. entered creamery districts offering the producers higher prices until such time as the dealer could secure control of the local creamery, when the prices paid producers would be reduced to make up for the higher prices previously paid. 16 II. COLLECTING, TRANSPORTING, PROCESSING, AND DISTRIBUTING Analysis of Facts Brought Out in Conference with New England Dealers. Comparison with Methods in Use Elsewhere The committee held meetings and had conferences with all the large dealers in the Metropolitan District of Boston, Connecticut and Rhode Island and with nearly all the small dealers in the Metropolitan District of Boston. Professor R. Hay Ferguson, working under the auspices of the Office of Markets and Rural Organization of the United States Department of Agriculture and the Massa- chusetts Agricultural College, has made a very thorough detailed investigation of the cost of the distribution of milk and cream in other cities and towns in Massachusetts. (It is expected that a report of his work will be issued later.) Mr. G. C. White, transportation specialist of the Office of Markets and Rural Organization, in cooperation with the secretary of the committee, spent two weeks in New England investigating at first hand, methods and costs of transportation. GENERAL OUTLINE To whom Milk and cream is collected, transported, dealers processed and distributed by the dealers to — family trade in bottles, retail stores in bottles, and to wholesale trade in cans. The distribution of milk and cream is made to the distant consumer by the following operations: 17 1. Collection from the Producer. Fewer Milk and cream are collected by team, or farmers j-^y motor truck, hired by the producer or producuo dealer, or by the producer bringing his milk car or plant, and cream to the country plant, creamery or car. Fewer producers are now bringing their o'WTi product to the car. The system of having teams or trucks collect the milk and cream is growing rapidly in most of the producing sections. In Connecticut, Rhode Island, Massachusetts and the southern part of Vermont and New Hampshire, the greater part of the milk is loaded on the cars directly from the wagons of the producers or collectors. 2. Country Milk and Cream Plant. Location of There are no country plant or railroad country plants, charges when farmers or collectors bring their product directly to the dealer or car. In Maine, the northern part of New Hampshire, Ver- mont, New York and Quebec, the greater part of the product is brought to a country plant where the following operations may take pla-ce: Various a. The milk is cooled, recanned and loaded into cars. operations b. The milk is separated, the cream is pasteurized, cooled, in country canned and loaded into cars. The skim milk is cooled, canned plants. and loaded, or it may be condensed and loaded into large cans or barrels. c. Milk and cream are received, run through separators, and then stand- ardized by being brought together in such proportions as to make a certain grade of milk with a known specified butter fat, as 3%, 3^% or 4%. d. Milk is pasteurized, cooled, canned or bottled and loaded into cars. e. Cream is received, pasteurized, cooled, canned and loaded into cars, or made into butter, as business may demand. 3. Transported on Cars. Railroad Railroads handle both milk and cream under transportation, different methods; some at the same rates for both and others at different rates. (This is explained in detail under the heading of Railroad Transportation.) 18 4. City Milk and Cream Plant. City milk Some of the city plants are on side tracks, plant. Van- ^j^g ^^^.^ unloading directly on the platforms ; ous operations , . 111 of processing. Others are not so situated and the cans are trucked to the plants. The various operations through which milk and cream pass in being processed before distribution to the consumer are as follows : a. Milk and cream that have been pasteurized in the country is either bottled or recanned or put in storage. b. Milk that has not been pasteurized generally undergoes the following '■ processing ": Unloaded 1. Unloaded, strained and pumped into large tanks where and mixed. it is mixed. Put through 2. Put through a clarifier (,a centrifugal machine, a clarifier. somewhat like a separator, which removes the dirt and sediment) . Pasteurized. 3. Pasteurized (.heating the milk to 145 degrees, holding it at this temperature for thirty minutes). By this means the bacterial germs of typhoid, diphtheria, scarlet fever, septic sore throat and tuberculosis are killed and the high bacteria count is reduced. Cooled. 4. Cooled to between 45 and 50 degrees. Bottled, 5. (a) Put in bottles and then in cases, which are put canned and in refrigerators and there held until they are delivered to stored. the family trade or the retail stores; or (b) put into cans and then into refrigerators until delivery is made to the wholesale trade. Most of the cream is pasteurized in the country. If not, this is done on arrival at the city plant. It is then bottled, canned, cooled and stored in the same way as milk. Size of Milk is put in quart and pint bottles to containers. deliver to family trade and retail stores, and in 8^- and 20-, 2 if- and 40-quart cans to deliver to the whole- sale trade. Cream is put in quart, pint and half-pint bottles for family and retail store trade and in 8|-, 20-, 2i|- and 40- quart cans for wholesale trade. 19 Butter fat In natural cow's milk the butter fat varies, varies. (-ggg p^gg ^_) (-pj^g Iggal standards of butter fat vary in each state according to the state law. See table, page 41, for varying standards.) In cream, the butter fat varies from 15% to 44%. Some companies make the following grades: 15%, 17%- 20%, 22%, 24%, 26%, 30%, 34%- 38%, 40% and 44%- (This is done by standardizing, — combining butter fat and skim milk.) CLASSIFICATION OF DEALERS The dealers (distributors) fall, broadly, into five classes: 1. Large dealers, handling daily five cars, or over, of milk and cream, whose supply comes from several states and the Province of Quebec. (Four in greater Boston.) 2. Dealers handling one to five cars daily, whose supply comes from one or two states and locally. (Twelve in greater Boston.) 3. Cream dealers, that is, those whose business is largely handling cream, whose supply is from two or three states or Quebec. (Six in greater Boston.) 4. Small dealers, operating from one to ten retail wagons, whose supply of both milk and cream comes from large dealers or from local producers. (Five hundred and over in greater Boston.) 5. Producers who are putting out a special or certified milk. (This class is very small, handling less than i% of the trade. On account of its special character, it has not been treated in this report.) SYSTEMS OF BUYING MILK AND CREAM FROM THE COUNTRY PRODUCER A great variety of methods is practiced in New England in determining the price and terms at which the dealer buys from the country producer. The following may be described : 1. Methods of Buying Milk. Various a. On the 8|-, 20-, 20J-, 21J-, 40-, 46-qt. can or jug, or systems. 100 lb. basis, regardless of butter fat or barn score. (Exam- ple, 26 cents to 40 cents per 8J-qt. jug; $1.50 a 40-qt. jug, or $1.25, $1.50 or $1.80 per 100 lbs.) b. lOO-lb. basis with a minimum standard for butter fat plus a bonus for extra points butter fat. ($1.25 per 100 lbs. for a minimum standard of 3.6% or 3.8% butter fat, giving 5 cents or 10 cents per hundred for each additional tenth of a point butter fat; for instance, on a 3.8% basis and a lO-cent point premium, a 4% milk would bring $1.45, if $1.25 was the base price of 3.8%.) c. Same basis as (b) with the addition of minimum standard for barn score and premium for extra points barn score. (Suppose company was giving a premium of 10% for a barn score of 68 or over, this would be added to the base price.) d. Butter fat basis plus amount for hundred weight of skim milk. (Ex- ample, if the price was 38ji lb. for butter fat and yoji for hundred weight for skim milk, a 4% milk would be computed as follows: 4 x 38 =$1.52 for butter fat (100 lbs. —4 lbs. fat = 96 lbs. skim milk; 96 lbs. x yo)^ = 67$! for skim milk. ?i.5a+. 67 = 12.19 per 100 lbs., or 4-7/10 per qt. The process would be the same for any milk, just changing the per cent of butter fat in com- putation.) e. Butter fat basis plus amount for hundred weight of both butter fat, milk and skim. (Same process as (d) except you use total weight, on a basis of 38ji lb. butter fat and 70fi per hundred weight, multiply 4% by 38 and then add 70f!.) 2. Methods of Buying Cream. a. Butter fat basis entirely. (So much per lb. butter fat, — Babcock test.) b. Butter fat basis plus hundred weight of butter fat, and skim milk. (So much per lb. butter fat, plus 30(!, 40?!, 50ji, 6oi per hundred weight of butter fat and skim milk.) 3. Types of Agreement between Dealer and Producer. Variation a. Six months contract with prices quoted. in buying b. Six months or years contract with prices quoted, contracts. producer agreeing to deliver not over 10% above or below the amount stipulated by him. c. Making price month by month, quoting perhaps one or two weeks in advance; no special contract with producer. d. No contract with producer; he sends milk, dealer sends check, paying what he chooses. e. No special contract with producer, but agreeing to pay for butter fat, based on Boston Chamber of Commerce quotations for butter. Averaging the four weekly quotations for a month's price to producer. f. Same as (e) but agreeing to pay a premium over Chamber's quotations. 4. Time of Payment to Producer. No unifonn a. Every week. system of b. Every two weeks. payments. c. Once a month for the previous month. d. On the 5th day for the preceding month. On the 13th day for the preceding month. On the 15th day for the preceding month. On the 1 8th day for the preceding month. On the 20th day for the preceding month. On the 25th day for the preceding month. On the 25th to 30th day for the preceding month. On the 30th day for the preceding month. e. Two or three months in arrears. 5. Price Producers Receive. Range of f he price the producer receives varies producers according to the locaHty and according to the during the system by which the milk and cream is bought, year. It is utterly impossible to give an adequate estimate as to what the general price is. (Each producer should know in his own locality.) Prices in localities near large towns and cities range from 4 cents to 6 cents per quart at the farmer's door — generally no stipulation as to butter fat. In some of these localities, a lower price is paid in summer, unless the farmer agrees to produce an even quantity. In the localities where car shipments are made, or milk and cream are collected or brought by the farmer to the country plants, the prices vary from $1.10 a hundred weight in May and June, to $2.20 in December; and prices for butter fat will vary from 2512; to 39(4 per lb., and prices per hundred weight of skim milk from 30?! to "jo^; and the price per 8|-qt. can will vary from 25?^ to 45^^. Bonding law. Maine, New Hampshire and Vermont have laws requiring the dealer to furnish a bond securing payment for the milk and cream bought in the state. METHODS OF RAILROAD TRANSPORTATION There are about 75 cars of milk and cream moving in New England daily, of which about 60 come to the Metro- politan District of Boston. Methods of Milk and cream are handled in the following a^^eLT^ ways by the railroads operating in New England, Eastern New York and the Province of Quebec — as express, excess baggage, in cars leased to dealers (dealer leasing car per trip or per annum, doing his own loading, unloading and icing), and in carloads in passenger milk-train service (the loading, unloading and icing being done by the railroad within the state of Massa- chusetts under the Saunders Law; also outside of Massa- chusetts in Boston & Maine Railroad territory on a guaranty of 5,100 quarts). Free transpor- In all cases of leased cars, both ice and care- tation for taker are provided by the dealer, although the railroad company furnishes free transportation for one or more caretakers. Milk and cream are handled over the railroads operating in New England and the Province of Quebec as follows: New York, New Haven & Hartford Railroad Various 1. As express by the express companies, methods of 2. As excess baggage by the railroad company, the different 3. In cars leased from the railroad, the dealer doing his railroads. own loading, unloading and icing, always paying minimum carload rate, and for an excess over 8,925 quarts. Boston & Albany Railroad 1. As express by the express companies. 2. As excess baggage by the railroad company. 3. In milk cars, operated under the Saunders Law (per can rate, rail- road loading, unloading, and icing the milk.) Boston & Maine Railroad 1. As express by the express companies. 2. As excess baggage by the railroad company. 23 3. In milk cars, operated under the Saunders Law (per can rate, railroad loading, unloading and icing the milk). 4. In cars leased from the railroad, dealer loading, unloading and icing his own milk, always paying minimum carload rate, and excess over 8,925 quarts. 5. In cars operated by the railroad, on a guaranty of 5,100 quarts, the railroad company loading, unloading and icing the milk when there is a guaranty of 600 8J-qt. cans or 5,100 quarts in 40 miles of straightway track. Rutland Railroad 1. As express by the express companies. 2. As excess baggage by the railroad company. 3. In cars leased from the railroad, dealer loading, unloading and icing his own milk, always paying minimum carload rate, and excess over 25,000 lbs. (9,088 qts. in 40-qt. cans). Maine Central Railroad 1. As express by the express companies. 2. In cars leased from the railroad, dealer loading, unloading and icing his own milk, always paying minimum carload rate, and excess over 8,925 quarts. Central Vermont Railroad 1. As express by the express companies. 2. As excess baggage by the railroad company. 3. In cars leased from the railroad, dealer loading, unloading and icing his own milk, always paying minimum carload rate, and excess over 12,000 quarts. Canadian Pacific Railroad 1. All cream is handled as express by the express companies. 2. AH milk is handled as baggage by the general baggage departments. RATES FOR RAILROAB TRANSPORTATION Express The express service is governed by the rates. regular tariffs of the express companies. Icing is not included under these tarififs. Excess The excess baggage rates are contained in ra?ef ^* the published tariffs of the railroads, which authorize the carrying of milk on regular passenger trains, icing not included, with the exception of the Maine Central, which carries no milk as excess baggage. 24 Minimum car- On freight or passenger train service, in car- loads.Boston & [^^^ jg^-g^ ^j^g dealer leases the car (doing his own service 25^ loading, unloading and icing) under a regular less than published rate, at so much per year, according passenger. ^q distances, paying always for a minimum car- load of 8,925 quarts (except on the Rutland Railroad, where the minimum is 25,000 lbs., and on the Central Vermont, where the minimum is 12,000 quarts). An extra charge is made per quart for each quart carried in excess of the minimum carload required. The freight and passenger train rates are the same except on the Boston «& Maine, where the freight charge is 25% less than the passenger charge. The cream rate on the New York, New Haven & Hart- ford is 50% more than milk rate. Saunders Law In the state of Massachusetts, by virtue of m Massa- ^j^g Saunders Law, the railroads are compelled CllUS6ttS< to load, unload and ice the milk. This milk is carried on a per can rate, the rate increasing with each more distant zone. Bulk of The bulk of the milk and cream is handled product under the leased car system by the Boston & bv Boston Maine Railroad, either from its own territory & Maine. or from the Maine Central, Canadian Pacific, Central Vermont, Rutland, or Delaware & Hud- son Railroad. Boston & Maine System of Rates for Leased Cars in Passenger Service Boston & 1st zone, 1-75 miles, $125 per mile per year. Maine 2d zone, 76-125 miles, $112.50 per mile per year ad- leased car ditional to the $125. rates. 3d zone, 126 miles and over, $75 per mile per year in addition to the S125 and $112.50. Maximum charge, $18,000; minimum charge, $5,000, per year per car. When cars are operated in freight train service, the charge is 75% of the above rates. (For baggage rates see pages 27 and 28.) 25 Maximum This maximum charge under the above rates charges. jg reached at i66 miles, so that milk or cream is carried by the Boston & Maine for greater distances — 300 miles and more, in some instances — at the same price as for 166 miles. Cream is carried at the same rate as milk. Small branch Because of the many little branch lines of imes make railroads in New England, on which only one system a natu- ^^^ ^^ milk is produced, the leased car system ral monopoly, has built up a natural monopoly. Each dealer has largely his own territory, and the result is that in 75% of the New England territory the producer has no one to whom to sell except the dealer operating the car in his locality. Consequently it is practically impossible for the producers to secure competitive bids for their products. N.Y., N.H. & In Connecticut, Rhode Island and Massa- H.R.R.sys- chusetts, under the excess baggage rate (no tem of rates. ..>., ,.> -jt-i-nt tt n icmg) 01 the New York, New Haven & Hartford Railroad, the rates are as follows: 1-20 miles in SJ-qt. can — milk .6 of a cent per qt., cream .9 of a cent per qt. 20-50 miles in 8^-qt. can — millc .7 of a cent per qt., cream I cent per qt. 50-99 miles in 8§-qt. can — milk .8 of a cent per qt., cream i.? of a cent per qt. 100 miles in 8J-qt. can — milk .9 of a cent per qt., cream 1.4 of a cent per qt. (If shipped in 10-, 21- or 40-quart containers or in 20-, 30-, 40-, 50 — 100 can lots, the rates are a little less per quart.) In Connecticut the leased car rates are a flat rate of $125 per mile for carloads of 8,925 quarts. (For illustra- tion, the leased car rate from Jewett City, Conn., to Boston is .00338 per quart, and from Willimantic to Boston, .00342 per quart.) Boston & Albany In Massachusetts, under the Saunders Law, Saunders ^j^g railroad loads, unloads and ices the milk. The rates on the Boston & Albany are approx- imately .6 of a cent per quart for an 8|-quart can from 26 Barre, East Brookfield, Palmer, or South Framingham to East Cambridge, Massachusetts. A small reduction from this rate is made for shipping 2i|- and 40-quart cans. Typical rates. Appended hereto is a table showing the cost per can and per quart for shipping milk and cream between various points in New England. (The rate applies to both unless otherwise noted.) TABLE * ' Massachusetts Miles In baggage cars Per 8i-qt. can Perqt. No. Wilmington to Oak Grove 12 2fi .00235 Princeton to Worcester 16 2fS .00235 Barre to Worcester 31 zi .00352 West Acton to Peabody 46 \i .0047 Pepperell to Boston 50 4(5 .0047 Charlemont to Boston 128 6fi .007 New Hampshit Miles a In baggage cars Per 8J-qt. can Per qt. Leased cars Per qt. No. Hampton to Lynn 38 zi .00352 .00153 Dover to Boston 68 5f! .0058 .00026 Plymouth to Boston 125 ti .007 .0046 Lancaster to Boston 210 Maine 6fi .007 .00469 Miles In baggage cars Per8i-qt. can Per qt. ' Leased cars " Per qt. No. Berwick to Boston 78 Sji .0058 .00297 Gorham to Boston 120 6(4 .007 .00441 Farraington to Boston 198 No baggage rate .00414 Belfast to Boston 246 No baggage rate .00414 Dover and Foxcroft to Boston 256 No baggage rate .00414 Quebec Miles In baggage cars Per 8J-qt. can Per qt. Leased cars Per qt. Lenoxville, Que., to Boston 278 H .007 .00552 fW. Shefford, Que., to Boston 302 28(i B.&M. .01725 41(5 Dominion Express 69(4 Cream in 40-qt . cans * There are no leased cars in Massachusetts. Larger sized receptacles are proportionate or slightly lower. Where there is sufl&cient milk to warrant operating car between points, in Massachusetts the rate is ic above the baggage rate per 8J-qt. can covering the care and ice. Outside of Massachusetts, larger-sized receptacles are proportionate or slightly lower. fNo leased car rates from West Shefford. (Cream only is shipped from Canada.) 27 Swanton to Boston Newport to Boston Bellows Falls to Boston TABLE (continued) Vennont Miles 300 232 "4 In baggage cars Per 8}-qt. can Per qt. 6(4 .007 6(4 .007 6(4 .007 Leased cars Per qt. ■00552 .00552 .00422 B. & M. R. R. Rutland R. R. Brandon, Vt., to Boston In baggage cars Milk per Cream per Miles 40-qt. can 114 61 2Bfi 20(4 40-qt. can 28(4 30(4 Leased cars Per qt. 175 '48(4 '.012 per qt. $37.71 per car 8,925 qts. .00422 21.00 per car 25,000 lbs." .00288 ^SH fe8.7i 2.0145 per qt. .007 10 No. Bennington, Vt., to Boston (via Bellows Falls) B. &M. R.R. Rutland R. R. Milk per Cream per Miles 40-qt. can. 40-qt. can. 114 106 28(4 '53?! 28(4 fo7-7i per car 8,925 qts. 35ji 26.25 per car 25,000 lbs.* '63(4 J!63.96 ^01325 perqt. '.0157 per qt. Per qt. .00422 .00288 .0071 Randolph, Vt., to Boston Milk per Miles 40-qt. can B. & M. R. R. 143 28fi Central Vermont 33 20(4 176 '48(4 Cream per 40-qt. can 28(4 30fS '58?S Per qt. 2(45.21 per car 8,925 qts. .00506 15.00 per car 12,000 qts.f .00125 .00631 ^012 per qt. ".0x45 per qt. * Rutland carload specified " milk in cans." (25,000 lbs. - t Central Vermont carload specified " milk or cream." 28 • 227 40-qt. cans or 9088 qts.) DISTRIBUTION OF MILK AND CREAM The distribution of milk and cream may be divided into three classes: In bottles 1. To family trade in bottles. to famUy 2. To the retail stores, generally in cases of twelve-quart and retail bottles or twenty-pint bottles eath. Many of the distribu- stores. tors furnish refrigerators and also ice to the retail stores. In cans to 3. To the wholesale consumers in cans. This includes wholesale hotels, restaurants, boarding-houses, institutions, delicatessen trade. shops, drug stores, bakeries, ice-cream manufacturers, candy manufacturers, etc. Estimated As near as it can be estimated, taking the percentages in ^q^qI amount of milk and cream delivered in Greater Boston as 100%, it is divided up approximately as follows: Greater Boston To family trade, in bottles To retail stores, in bottles To wholesale consumers, in cans Milk 20 to 25% 20 to 25% 50 to 60% Cream 5 to 15% 10 to 20% 50 to 75% In smaller In cities of 100,000 population, or less, the cities. retail store trade and the wholesale trade diminishes (there being fewer hotels, restaurants, board- ing-houses, candy manufactories, etc.), and per cent to family trade increases. In cities of 5,000 to 25,000 the proportion to family trade is 80% of the total. VARIATION OF COST OF EACH OPERATION PER QUART Cost (Varying Figures of Different Companies) Collection. Lowest $0.0025 $0.0001 I0.002 Highest .015 .0191 .011 Usual .00625 .0066 .003 Country plant. Lowest Highest Usual .0075* ■0025 .01125 .004 .0034 .0048 .004 * Includes pasteurization. 29 VARIATION OF COST OF EACH OPERATION PER QUART Cost Railroad Lowest transportation. Highest Usual Wholesale trade. (Continued) (Varying Figures of Different Companies) I0.OO44 $0.0039 .0103 .0091 $0,005 .OO43S City plant. Lowest Highest Usual .005* .0040 .0085 .0070 •0135 $0.0068 Distribution family trade. Lowest Highest Usual .0225 .0500 .0300 .0386 •0235 Retail stores. Lowest Highest Usual .01 .0100 •350 .015 to .02 .0188 .0219 .0205 .0095 Lowest Highest Usual ■005 .004 .0103 .00529 .0128 ,0047 .0113 From the above table of costs it appears that there is a considerable variation between the highest and lowest cost of each individual item. This has a marked effect on the " usual cost," since it frequently places this "usual cost " at a widely different figure from that representing the cost of processing the greater part of the milk coming into Metropolitan Boston. Taking Up Each Point: Collection. The cost of collection from the producer and delivery to the country plant or car ^'aries from Jj* to iH per quart, depending on the length of the route, the character of the roads, whether hilly or level, the regularity of amounts collected per day throughout the entire year, and the total amount per day the entire route will average. Local conditions govern this entirely. Country Expenses vary here from H to lH, depending almost plant. entirely on the number of quarts put through the plant, and the number of operations necessary before loading on * Does not include pasteurization. 30 the car, and the great variation in the monthly receipts of millc and cream (since the overhead expenses remain practically the same throughout the twelve months, and in many sections there is an extreme variation in the monthly receipts; receive more in April, May, June and July than in the other eight months). Transportation This varies from H to i J^ in leased cars, according to the on railroads. distance, the number of railroads the car uses, the number of days the cars fail to carry the minimum number of quarts which must be paid for per carload, the number of days the milk and cream has to be iced, and the number of stops necessary to complete a carload (this requiring the services of one or more caretakers). Rates on milk and cream shipped by express and as " excess baggage " are not given in the table or compared, as this will be found under the head of Railroad Transportation. City plant. The cost varies from H to i^, depending on the over- head charges of the plant, the arrangement and machinery in operation, the regular amount of the milk put through and the cost of labor and ice. Distribution, Family trade. The cost here varies from 2jji to sjf in bottles, depending on the loss in bad bills (average monthly bill of 30 quarts, $2.70; many move or avoid payment, bill too small to pay for costs of collection, but the aggregate is a substantial amount), non-return of bottles, the density of the population, the number of stops required to deliver a load (depending on whether the customer takes a pint, quart or two or three quarts), and the average number of quarts that are carried through the year (which varies from 200 to 400 quarts per team). On many routes people are away during the summer, leaving a team for months with only half of its regular load. Retail stores. (Bottles in cases.) The cost of delivery to the retail stores varies from li to 2jfi, depending on the distance traveled, the number of stops necessary to deliver a load (10 to 35), and whether or not two trips can be made in a day. Wholesale The cost to the wholesale consumer varies from H to li, trade. depending on the number of stops, the distance, the number of trips a two-horse team or motor truck can make in a day, and the size of the container, whether 8-, 8|-, 20- or 40-quart or 2i|-quart container (a 20-, 2li- or 40-quart container costing H to H per quart less to handle). 31 DIFFICULTY OF REDUCING COST OF FAMILY DISTRIBUTION Delivery It will be readily seen that the total cost of to family collection in the country, the operation of trade . , expensive. country plant, railroad transportation and city plant expenses is a little over or under 3«!, and that the cost of distribution to the family trade is 2t^ to 5(i, to the retail stores lyi to 2^, and to the wholesale trade |{i to i^. The greatest single item of cost is, there- fore, delivery to the family trade, equaling the cost of collec- tion, country plant, railroad, transportation and city plant expense. Dealers claim no saving of money in a central delivery. The dealers assert that there can be no re- duction in delivery expenses, as they are now approximating the highest possible efficiency from their teams and men. The dealers state that despite duplication of delivery on certain streets, a central delivery, though saving time, would mean no saving in expense for the following reasons : Loss of 1. Each company would have to maintain motor trucks or teams and two-horse teams to carry its product to central plant delivery, trucks. which would be useless the rest of the day. Difficulty 2. It would be impossible for one motor truck to so ar- in stacking range or stack a load as to carry the various brands and a load. different sized bottles of the dealers operating in any given territory, so they would be readily accessible for quick de- liveries. (There might be 20 different brands in ten or twelve different sized containers.) No means to supply extra wants. Bigger loss in bottles. Extra expense to collect bills and solicit trade. 3. Customer could not secure extra milk without notice, as driver could not carry extra milk impartially for all dealers. 4. There would be a tremendous loss in bottles, as no one could look after the particular interest of each dealer as the individual dealer's own driver does. 5. Each dealer's driver now acts as solicitor for new trade, collects bills and bottles. It would be necessary to hire a man to do this additionally. 32 Necessary to 6. The cost of advertising would be increased by the loss advertise. of advertising through the elimination of individual teams. THE AVERAGE DEALER'S LACK OF KNOWLEDGE OF THE COST OF OPERATING Large While the committee has received coopera- percentof ^^^^ from all the dealers, and some very with no accurate figures from a few, the majority detailed costs, could not furnish much definite data as to individual items of cost of operation. This makes it impossible to estimate accurately the variation in cost items and to determine how they may be reduced. Many dealers do not keep themselves posted on the new methods of processing, testing, grading, etc., but continue the older methods. Some antagonism exists between small and large dealers. The committee found some small dealers, however, who felt no antagonism against the big dealers and who were operating fully as efficiently. Here again it was found to be largely a question of bookkeeping and the grasping of up-to-date methods. PRICES RECEIVED BY DEALERS FOR MILK AND CREAM MUk. Family Retail store Wholesale trade trade trade In quart bottles, Si to lOli 6i to 8i In pint bottles, iU to 5(5 3i to 4f! Price per quart in -SJ-, 120-, 40-qt., etc., cans, 5-T%i to 7i Cream : In Quart Bottles. (Varying percentages and prices of different dealers.) To family trade To retail store trade Light, 17%* 30(4— 15% 25(4 25ji 17% 25(4— 17% 20fi — 15% 22fS Medium, 26% 40(4 — 25% 35(4 40(4 26% 35?4 — 25% 26(4 — 25% 32)4 Heavy, 40% 6o(i]— 40% 50(4 60(4 40% 50j4 — 40% 39f4 — 40% 44)4 In Pint Bottles. To family trade To retail store trade Light, 15% 14(4—17% 15)4 17% iH—^5% i2)4 Medium, 25% 18(4 — 26% 20(4 25% I4<4 — 25% 17(4 Heavy, 40% 27(4 — 40% 30i4 40% 20(4 — 40% 23(4 * Per cent butter fat. 33 In One-Half Pint Bottles. To family trade Light, 15% 8?!— 17% 8^ Medium, 25% liji — 26% lOfi Heavy, 40% 15^ — 40% I5f< To Wholesale Consumers. To retail store trade 15% ei to 7i— 6ff 25% 9i to loi — 8^ 40% lli to I2j< — II»i In gallon containers In lo-gallon containers Per cent fat Price per qt. Price per qt. 44% 42^ 40(i 40% 39^ 36i(4 to 37^?S 37% zH 34i>! 35% 34^ 22U 33% 33f^ 2,0-^Tsi 30% 30JS 28H 25% 26?; 24c to 32^ji 20% 22^ igi 18% 20(i nU 17% 20i ni 15% l(,\i to 20fS Prices dealer From the above table it will be seen that receives from ^j^g average prices received by the dealer for retai/store Tn\\k. delivered to family trade is QfS per quart, trade. and to retail stores, 6^ to Si per quart. It is difficult to estimate the average price paid by retail stores, — it would range between 6|ji and 7^ in some sections and 7^ to 7|fi in others, depending upon competition and the density of population. Retail store The prices charged the consumer by the prices. retail stores vary from "ji. to 9ft. Again it would be difficult to estimate the average price, because it varies according to the policy of the retail stores (whether selling at cost to attract trade, or for convenience of customers, or selling at a profit). Wholesale trade price. 6i. The wholesale price for milk varies from 5(4 to 7(i!; perhaps an average would be roughly 34 Bottle Some dealers charge the retail stores from charge. ^^ ^^ ^^ j^j. bottles; probably not more than 25% or 30% of these stores, however, charge their customers. Summary of In summarizing, the dealers receive about pnces dealer q^ ^ quart for regular delivery to family trade, 6ji to 8fi (with a varying average usually of 62?^ to 7(i5 and 7|?i) for delivery to the retail store trade (sometimes being paid for the bottles, although this is not generally the case), and about 6(ji per quart for delivery to the wholesale trade in cans. Prices The Consumer who has milk delivered to his consumer door regularly by a dealer pays 8(i ,to loi, usually about 9^, according to the locality. Pints are generally sold at $i or billed to consumers at 4|^ on monthly accounts. The consumer purchasing from retail stores pays Jf. to <)i, and in many instances 2^ to 5^ for the bottle. Growth in The dealers assert that the pint-bottle use of pint business is growing, not only on account of hard times, but because of its convenience. They maintain that it costs much more to handle two pint bottles than one quart and that they should receive an extra cent for the pint. Variation in Prices received for cream sold to the family cream prices g^j^j retail Store trade vary as much as does the of'butter fat P^*" ^^^^ o^ butter fat; in wholesale trade, prices and butter fat vary so considerably as to make comparisons impossible. (See price table for variations.) Skim Milk is brought from the country in cans and sold directly to bakeries, hotels, restaurants and boarding- houses. One large company is bottling and selling it to 35 retail stores at zi per quart. Retail stores sell to the con- sumer at 4fi per quart. Wholesale prices of skim milk vary so much as to make comparisons of no special value. TIME OF PAYMENT FOR MILK AND CREAM BY THE CONSUMER The majority of milk and cream sales are made payable at the following times : When dealer 1. Cash on delivery, gets his 2. Cash once a week. money. 3. Cash once in two weeks. 4. Cash once a month. Where Tickets are used, for which the money is tickets received in advance, in Hartford and New are used. . . , . .. . Haven, Lonn., and m Lewiston, Auburn and Portland, Me. It is impossible to state the percentage of money col- lected, but there is a tendency to get the monthly and the bi-weekly accounts on a weekly basis. 36 III. PROBLEMS IN SALE AND DISTRIBUTION AS BROUGHT OUT IN CONFERENCES WITH THE DEALERS DECREASE IN CONSUMPTION General consumption of fluid milk for cook- ing purposes as well as individual consump- tion has decreased per capita in the last ten years, partly for the following reasons: Decrease in fiwd milk consumption Food value 1 . Lack of knowledge of the food value of milk as com- unknown. pared with other food products. Much 2. Agitation has lessened public confidence. agitation. High price. 3. High prices (consumer not realizing the food value). Hard times. 4. At present, hard times in business have to some extent cut down the quart consumption to pints. Increased 5. Some of the wholesale trade are using condensed and use of con- evaporated milk and milk powder instead of whole milk or densed milk skim milk, on account of price, convenience and even quality and milk of the product as compared with whole milk and skim milk. powder. 6. Ice cream manufacturers use both condensed milk and milk powder to give body to their product. 7. Family trade is using condensed milk in the place of whole milk for the following reasons; Reasons for a. It is convenient, increase. b. It will keep without ice. c. It is thick, and some prefer it to whole milk, especially for coffee. d. Prizes are given for saving the wrappers. e. It is well advertised. Milk powder It is difficult to estimate the extent to which in its infancy, ^j^g condensed and evaporated milk and milk powder are cutting into the fluid milk trade, as it varies so 37 considerably with the wholesale users, in different sections. It is clearly a very important factor of competition in the selling of fluid milk and cream, and is increasing. The manufacture of milk powder is apparently in its infancy. CUT-THROAT COMPETITION AMONG DEALERS Intense com- There is intense competition among all petition for classes of dealers. Many dealers have at various cream'trade times a surplus product to dispose of, and are often willing to sell to a competitor's trade at a considerable discount under market price. This tends to make chaotic the general wholesale trade. This condition has been made possible by the slight attempt on the part of the producer to bring about an evenness of production. Other difficulties growing out of this extreme competition are: Methods 1. Wholesale buyers of milk and cream asking and some used. dealers offering to give a cash or trade bonus for a six months or years business. 2. The loaning of money by distributors to wholesale consumers in return for their exclusive trade. LACK OF A STANDARDIZED PRODUCT No special Milk and cream are sold on the basis of no standard. special Standards as to cleanliness or butter fat (with the exception of the fact that state and city standards are supposed to be complied with). Milk may range from the minimum legal standard to 8% fat. The bacteria count varies by hundreds of thousands. Great Cream is sold to a great extent by trade variations in names, as "heavy," "medium," "light," iTa^ ;' breakfast," "No. 9-" "12," "17," etc., instead of by designating the percentage of butter fat, which varies to a considerable degree in the products put out under these various trade names. 38 GREAT VARIATION IN CONSUMPTION Fanuiy trade. In some districts 10% to 6o% of the family trade leave the city for one to four months each year. Many families go away for Saturday and Sunday, making a two-day surplus for the dealers. Restaurants. Many restaurants, etc., in business districts do not keep open on Sunday, but the dealers must receive the milk produced on that day and dispose of it. Wholesale On hot days during June, July and August, trade. ^j^g consumption of milk and cream by hotels and restaurants, drug stores and ice-cream dealers will run 20% to 30% above normal. This is a vital factor in supply- ing and distributing to the wholesale trade. 39 IV. INSPECTION, GRADING AND STANDARDS Conference The committee held a conference with repre- with health sentatives of the State Boards of Health of the New England States, the Province of Quebec, and the local boards of the large cities and towns in New England. The committee has also had many personal interviews with state and local health officials and milk inspectors. It appeared to be the opinion of the majority that dairy inspection should be under the supervision of the State Board of Health, with uniform rules and regulations; and that city inspection should be under the supervision of local boards. Some favored compulsory pasteurization of all grades of milk; others did not favor it. It was agreed that the New England States and the Province of Quebec ought to cooperate in establishing uni- form standards, rules and regulations in inspection and grading. Two divisions The inspection of milk and cream falls into of inspection. ^^^ divisions: dairy inspection in the country, and city inspection of milk plants and of the milk and cream on wagons and in the retail stores. Country Some of our large cities of over 100,000 inspection. population inspect the dairies in their im- mediate vicinity; Boston is probably the only city which inspects its out-of-state supply, which aggregates 75% to 80% of the city's milk and cream. 40 Several inspec- In some places, the farms are visited by tions for some inspectors from three or four different cities, others none ^^^ State Board of Health and the Bureau of at all. Animal Industry ; while in other sections there is no inspection whatsoever. This is especially true of sections producing cream. Various kinds of score cards are used, and the regulations are far from uniform. City The cities of New England, with the ex- inspection. ception of a very few, collect samples from dealers and stores and maintain a laboratory for an analysis of fats, solids and bacteria. The City of Boston has in- spectors stationed in all of the large city-distributing plants. No official grading. At present there is no official grading of milk in New England, but there is sold com- mercially in addition to the ordinary market milk a certified and an inspected milk which have not been discussed in this report. Standards not uniform. Legal standards for butter fat, solids not fat (see bottle diagram on page 3) and total solids vary in the different New England States from no standard for fats in the state of New Hampshire (no legislation), to a standard of 3.35 in Massachusetts. The fat of cow's milk varies from 2.5 to 8%. Following is a table giving the variations in legal standards. Fat Solids not fat Total solids Standard for cream Ice cream standard per cent, fat Maine, 3-25 8.50 11-75 18% 14% New Hampshire, none none 12. 18% 14% Vermont, 3-25 9-25 12.50 18% 14% Massachusetts, 3-35 none 12.15 15% 7% Connecticut, 3-25 8.5 11-75 16% none Rhode Island, 2.5 none 12. none 8% or 6% with fruit New York, 3- 8.5 II-5 18% 41 V. PRINCIPAL POINTS BROUGHT OUT BY THE INVESTIGATION The foregoing review of the present situation points to the following conditions as the essential causes of the difificulty: LACK OF A STANDARDIZED PRODUCT The value of a particular quart of milk or cream depends on its cleanliness and the percentage of butter fat and solids not fat which it contains (see diagram on page 3). These percentages vary greatly with different quarts. Butter fat can be readily measured when the farmers offer their product to the dealer, and the farmers or dealers can, by proper mixing or standardizing, control it in the product which they offer to the public. These percent- ages, together with the cleanliness of the product, should govern both the price paid by the consumer and that received by the producer. It is apparent that the methods now prevailing in the trade fail to give these factors the emphasis which their fundamental importance deserves. The minimum legal requirements in the various states are far from uniform, and no well-recognized grades of milk and cream have yet been established in the trade. The farmer receives prac- tically the same price irrespective of the quality of his product; the consumer pays about the same whether the food value of what he buys be high or low. While many farmers and dealers do attempt to base their transactions on the cleanliness and percentage of solids in the product, the lack of any well-defined and recognized standard and the indifference of consumers tends to discourage such 42 dealings. " Milk '' is sold without definite description, and the general result is a lack of incentive to both farmers and dealers to improve their product. LACK OF ACCURATE KNOWLEDGE OF COSTS AMONG FARMERS Partly as a result of the absence of a standardized prod- uct, partly because of the difficulty and expense of keeping records, farmers now sell their product without accurate knowledge either of its value or its cost to them. This ignorance hinders improvement being made in methods of production and tends to destroy the cordial relations which should exist between the country producer and the city dealer. When the producers fail to prosper, they attribute it to the low prices paid by the dealers. The dealers, on the other hand, are apt to regard as extortion every attempt by the producers to raise prices. To remedy this condition, the producers must acquire an accurate knowledge of their cost of production sufficient to enable them to eliminate waste and to ascertain definitely the minimum price requisite to yield them a profit. THE LEASED-CAR SYSTEM OF TRANSPORTATION It has been pointed out in the foregoing pages how the leased-car system tends to give a buying monopoly to the dealer in each producing district. This usually makes it impossible for the farmers to secure competitive bids or to send their product directly to the city market, thereby pre- venting their obtaining the best price their product can command, and weakening their incentive for improvement. LACK OF SYSTEMATIC METHODS OF DISTRIBUTION AMONG DEALERS Dealers generally, especially in the retail trade, have not had the means of ascertaining the exact cost of the different methods of distribution and sale. The throwing of 43 surplus milk on the market has produced cut-throat competition and has prevented dealers from cooperating in developing systematic methods of distribution. This has resulted in the continued use of wasteful methods, in unnecessary expense, and in general confusion and dis- organization costly to all. THESE CONDITIONS CAN BE REMEDIED The above conditions must be remedied in whole or in part before the difficulty can be solved. To assist in correcting some of these conditions, suggestions and recom- mendations are made. It must be borne in mind that it was by the cooperation of all parties interested that this analysis has been made and that only by cooperation can the following suggestions for improvement be carried out. Considering that within the last five years each New England agricultural college has established an extension service, that over forty of our sixty-seven counties have county agents (agricultural advisers), that state and federal agricultural agencies are doing more and more for the farmers, dealers and consumers, and that farmers' associations are being rapidly formed, there is reason to believe that the necessary cooperation to secure these suggested changes can now be had. 44 SUGGESTIONS AND RECOMMENDATIONS I. A FIRST-CLASS PRODUCT THE PRIME ESSENTIAL The consumer demands a good, clean milk and cream. Insistence upon good, clean milk and cream is important for two reasons: Health. 1. Clean milk and cream is essential for the public health. 2. Clean milk and cream is worth more commercially to the producer, dealer and con- sumer, because — Commercially. a. It will keep a greater length of time, thus protecting distributors and consumers against loss, assuring them a prod- uct of greater value, and justifying the producer in asking a higher price. b. It will increase confidence, thereby increasing con- sumption, with a resulting benefit to the producer, carrier and dealer. c. Clean commercial cream will not only keep longer but will make better ice cream, better pastry, better flavoring and better butter. Among the essential considerations in the production of good, clean milk and cream are — Important 1. Cow's udders and flanks should be thoroughly cleaned factors. before each milking. (Clipping udder twice or more a year would facilitate this.) 2. Milker's hands and clothes should be clean. 3. Utensils should be clean and if possible steriUzed, and a small-mouthed pail should be used. 4. Milk and cream should be cooled to 50 degrees or less immediately after milking and kept at this temperature. 45 Involves This involves extra labor in the keeping of awor . ^j^g ^Q^ ^^^ painstaking care in milking, as well as the use of cold water or ice. In summer, ice is a necessity. No special This extra labor costs money, and the farmer inducement. ^^^^ therefore, in most instances failed to produce good, clean milk because, despite his increased expense, he would receive no higher price. II. GRADING AND LABELING At present As demonstrated in the preceding pages, stendard™* there are many different systems upon which milk and cream is bought and sold. The states have varying standards for butter fat, solids not fat, and total solids. The states and muni- cipalities have varying requirements as to sanitary condi- tions (bam score, bacteria count, etc., etc.). Milk and cream are not officially graded. The farmer is not paid on the basis of butter fat and bacteria count. The consumer has no way of knowing the butter fat and bacteria count in the milk and cream which he buys. NEW YORK CITY'S PLAN New York City has a plan by which the sanitary char- acter of milk and cream is designated by grade "A," grade " B " and grade " C." A specified standard for each grade is established for the minimum number of bacteria in the raw stage before pasteurization and also after pasteurization. 46 Present Standards for Grading in New York City. Bacteria Count Before After pasteurization pasteurization Bam score Grade A, raw, Milk 60,000 75 Cream 300,000 Grade A. pasteurized. Milk 200,000 Milk 30,000 68 Cream 150,000 Grade B, pasteurized, outside Milk 300,000 Milk 100,000 55 of city, 1,500,000 in city Cream 500,000 Grade C, pasteurized, manu- No limit Milk 300,000 40 facturing purposes onlj', • Cream 1,500,000 (All milk and cream except grade " A " raw have to be pasteurized.) Grade and If grading and labeling is to be established **''®^- here, an important factor would be the en actment of uniform laws and regulations giving boards of health power to issue licenses to dealers and to enforce rules and regulations for grading and labeling. Designation Every milk and cream container should be on label. labeled as to its butter-fat content and sanitary character under the designations, for instance, of grade "A," grade " B," grade " C." If sold raw, the date of produc- tion* could be stamped on the container, or if sold pasteur- ized the date of production* and of pasteurization.* Every container of milk and cream so labeled would show to the consumer — 1. Its sanitary character. 2. Its butter-fat content. 3. Date of production if raw. 4. Date of production and pasteurization if pasteurized. Skim milk and buttermilk should be labeled "Skim Milk" and " Buttermilk," with the addition of " A," " B " or " C," to show its sanitary character. Sour milk should be labeled " Sour Milk." This will enable the consumer to ascertain exactly what he is buying. The consumer can then choose the grade he wishes and obtain it by paying the current market price. * Day of week only is necessary. 47 The producer can then be paid according to the character of the milk he produces (butter fat and bacteria count). standard!- It has been suggested that, in view of the zation. g^.^^^ variation in the butter-fat content of natural cow's milk (2^% to 8%), were standardization of milk and cream undertaken, it would make it possible for the consumer to purchase the exact quality of milk (as to its richness in butter fat) which he might desire. Some of the milk and most of the cream sold in New England is now being standardized. CO-OPERATION OF BOARDS OF HEALTH Some may contend that small cities and towns cannot inspect and grade milk and cream because of the cost of a laboratory, etc. Attention is called to the cooperative milk inspection and testing laboratory that is carried on jointly by Canton, Needham, Framingham, Wellesley, Weston and Belmont, Massachusetts. By this means it is possible to engage a thoroughly competent man, maintain a good laboratory, and do efficient work, at a proportionate cost which is not prohibitive. SYSTEM OF BUYING Uniform There should be as nearly as possible one buymg system, uniform system of buying and selling (so much per pound for butter fat and so much per hundred- weight for skim milk (solids not fat) ; and this price should be based on a specified bacteria count). Milk and cream below this specified bacteria count should command a less price. (See bottle diagram.) Example: Under 20,000 bacteria, 35fi lb. butter fat, and 6oji cwt. for Base price. skim milk (solids not fat). Over 20,000 and under 50,000 bacteria, 331S lb. butter fat, and 40(( cwt. for skim milk. Over 50,000 and under 100,000 bacteria, 30^ lb. butter fat, and 20fi cwt. for skim milk. 48 These are fictitious prices and standards, for illustration only, but it is substantially the same system used by two of the largest buyers of milk and cream in the country. This system would be fair to producers, dealers and consumers. m. PRODUCERS SHOULD ESTABLISH COUNTRY MILK STATIONS MANY EVILS UNAVOIDABLE IN DIRECT DELIVERY TO THE CAR Receiving To grade milk and cream it is practically a plant for necessity to have milk and cream plants, processing. Collections in all directions from the producers could be made by motor trucks or horse teams. The milk and cream of each producer could be weighed daily and a sample taken for butter fat; twice- or three times a week tests could be made for bacteria count. Present The picking up of milk and cream, a few system not cans at a station, to secure a carload, is un- satisfactory for the producer, railroad company and consumer. It makes it practically impossible to grade the milk and cream. Furthermore, the milk and cream on station platforms is exposed to the sun, and the rise in temperature causes the bacteria to multiply by hundreds of thousands, and lessens the keeping quality of the milk and cream. Dealer At present the general farmer has very little sets price. voice in determining the price to be paid for his milk and cream. He takes what the dealer offers, which is generally the price for no special grade of product and is influenced largely by the yearly surplus. Information Proper arrangements as to time of payment on credits. ^^^^ should be insisted upon by the producers. In the exercise of ordinary business judgment the producer 49 should ascertain the credit standing of any prospective purchaser of his product . If he carries a checking account with his local bank undoubtedly the bank will assist him in securing this credit information and advise him on his collections. The establishment of country plants would simplify the question of credits for the producers. CARE OF SURPLUS IN THE COUNTRY Surplus very In addition to producing good, clean milk important ^^^ cream and grading it, the producers, to factor. , , r ^ r . assure themselves ot greater returns tor their product, would do well to process it and to make arrange- ments to care for the surplus. Too much emphasis cannot be laid upon the taking care, in the country, of the surplus ; manufacturing it into butter, skim milk or cheese. As pointed out previously, this surplus item is one of the most serious causes for the present chaotic condition in the industry. FUNCTIONS OF THE COUNTRY MILK AND CREAM STATION Milk plant. A plant could be built beside the track in each producing territory, to receive milk and cream and perform wholly or in part the following operations : Processing. 1. Weigh, test and grade. 2. Pasteurize. 3. Separate and standardize. 4. Cool, can and bottle. 5. Make butter and condense, or otherwise utilize the surplus and the skim milk. Where these plants are located in the vicinity of small cities or large towns, local deliveries can be arranged either directly by the manager of the plant or through dealers who will obtain their supply from these plants. In many places, this milk could be transported by motor truck very advantageously; but it would be wise usually to have the plant beside the track to receive coal and to ship the surplus. 50 COST OF PLANT AND SUGGESTIONS FOR FINANCING AND MANAGEMENT How money A plant, well built and equipped, would may be raised, ^^g^ ^^.^^ $2,000 to $20,000, according tO its capacity and the number of operations carried on. The plant could be owned by the farmers and business men of the locality. Money could be raised by the issuing of non- voting preferred shares to the business men and investors locally, and voting common shares to the farmers. Directors. A directorate of five in number might be composed of three farmers, one business man and the cashier or treasurer of a local bank. Reason for Cooperative creameries have failed in the previous p^^g^ largely because of inefficient management (a poor bookkeeping system, no allowance for depreciation, no allowance for surplus, no safeguard pre- venting one or two persons from gaining control of the company, and the lack of knowledge of new methods of testing, manufacturing and marketing). Careful survey The directors should give careful thought of local ^Q g^ji local conditions before making arrange- ments for the exact type of plant needed by the locality. Arrangements can then be made for the collec- tion and grading of the milk and cream. The company may then process its own milk and cream and sell to a dealer a specified amount, taking care of its own surplus in the form of cream, butter or cheese; or it may lease the plant to a dealer at a specified figure for the entire output. BENEFITS TO BE ANTICIPATED Fixing tl»e The producers would then have facilities for price. ^i^g disposal of the;ir product in the manufactur- ing of butter or cheese, if they are unable to secure satis- factory prices from the dealers. 51 Producers may look forward to receiving more for their product when they cease to allow others to furnish them their cans, to collect (taking all grades, little or much), to dictate price and to process, grade and market their milk and cream. Railroad We believe that the railroad companies companies should do all in their power to encourage the farmers and business men of each locality in the building of milk stations. Value of a A milk plant is important to the prosperity milk plant to q£ ^]^g community. A certain small plant, commvmity. n • i i • r not well equipped or managed, m one oi our New England localities, paid the farmers last year nearly $100,000, which brought as much money into the community as many manufacturing establishments em- ploying one hundred and fifty to two hundred men each. It is obvious that, if the farmers, business men, bankers and railroad company of a given community are not interested in the building of such a plant for the benefit of their own locality, they should hardly expect outsiders to perform this service for them. MANTJFACTtmiNG CREAMERIES DESIRABLE IN REMOTE DISTRICTS In distant In localities far from the railroads, it is localities, doubtful if the farmers should try to sell butter more f^^^^ milk. It would be more profitable to put profitable. up a plant to separate, and either sell cream or make butter or cheese. There is a large market in New England for good fresh-made butter, and cheese. Buying cream on grade would further the making of good butter. (This is well demonstrated by the results obtained by three Vermont cooperative creameries, which, with the assistance of the State Commissioner of 52 Agriculture, had an expert from the Dairy Division of the United States Department of Agriculture to advise and assist in grading and manufacturing.) CO-OPERATION OF PLANTS FOR EFFICIENCY There is no reason why several of these plants should not cooperate in the hiring of an expert to supervise. By the plants buying supplies collectively and studying the cost of operation, the manufacturing expense could be kept down and any new methods of manufacturing or operating could be taken advantage of. IV. IMPROVEMENTS IN FARM ECONOMY IMPORTANCE OF SKIM MILK ON THE FARM Value of The value of skim milk for the feeding of skim milk. calves, hogs and poultry has never been accurately determined, and is very little appreciated by the farmer. 1. He does not know how to feed skim milk properly in combination with grain and grass feeds to realize the most from it per hundred pounds. 2. He markets his calves, hogs, poultry and eggs in such a way as to realize very little cash for his skim milk largely because of his failure to properly prepare and grade his product. It may be that in the near future these milk plants will serve in this connection as a means for the grading and marketing of eggs and poultry. IMPORTANCE OF MANURE ON THE FARM Considering not only the necessity of conserving the fertility of the soil but also of realizing the largest return from each one of the three products of the cow, — milk, calf and manure. It is surprising that serious efforts have not been directed previously toward ascertaining definitely the value of cow manure to the soil, and the effects of vari- ous kinds of bedding on the soil. In this the experiment stations may be of great assistance to the farmers. 53 PRODUCERS MUST KNOW THE COST OF PRODUCTION The producer must know, first, how much it costs to keep his herd, and from this he can easily determine what it costs him to keep a cow. The record of production and butter-fat content should be kept for each individual cow, as well afe the value of the calf and average value of manure, to determine the following items: 1. Whether he is feeding efficiently — feeding right rations and in right combinations. 2. Whether he is breeding properly. 3. Whether the cow is producing enough milk and butter fat to make her profitable. With a perfect understanding and appreciation of these items, the farmer will not be willing to sell his milk for less than it costs him to produce it;' not understand- ing these items, he may unknowingly sell his article at a loss.* CO-OPERATION IN STUDYING COST OF PRODUCTION Necessity The operations in the raising of crops on the for records. average farm are not large enough to justify the hiring of a bookkeeper or accountant. The average farmer is too busy and many times too tired after his work to keep his own books. Cow test Producers may come to know these items associations, qJ g^g^ through COW test associations in fimtfing^clubs. localities where there are enough cows to warrant them. In localities where there are not enough cows to warrant these associations, clubs or associations for weighing and figuring can be worked out by the farmers in co-operation with the county agent, * (From Conn. Dairymen's Association Secretary's Report, January i, ipis. mentioning the conditions existing among the Connecticut dairymen.) " A few, to be sure, are making good and seemingly are content, but there are too many of our dairymen who do not realize the actual cost of the milk, cream or butter they produce, and for this reason are in no position to demand a price for their products to yield them a reasonable profit. " This lack of knowledge should not exist in this age of progress. It has a tendency to lower the prices as a whole and puts dairying on a level with the most ignorant producer." 54 Extension Service of the Agricultural College, State De- partment of Agriculture, or the Dairy Division of the United States Department of Agriculture. This is a pre- requisite to improvement, as the production of milk, calves and manure is as distinct a business in itself as the opera- tion of the land for the raising of crops. Suggestions for Cow test associations have been exceedingly co-operative useful. UsuaUy twenty-six or more farmers combine in emplo3Tng a man to weigh and test their milk and feed, and advise them of more efficient methods of feeding and breeding. It is possible that in a given locality farmers can combine in units of ten, fifteen or more, and have the same man who tests the cows keep books showing the essential operations in the crop manage- in em of the land and other Uve-stock items ; or a cow test association might employ an extra man to keep the books. The dividing up of expense in this way among several laxmers will bring the cost down to a point where no isrmer can afford to be without such service. c-j-v test In Northern Vermont, there are fifteen associations in farmers who are employing, in addition to a ew ngian . (,Q^_^gg|-gj.^ an agricultural college giaduate who advises them as a consulting engineer would a mer- cantile, railroad or mining company. These farmers are prosperous. They have probably better records than in any other section of New England. (Vermont has already 34 cow test associations; New Hampshire, 5; Massachu- setts, 4; Maine, 5; and Connecticut, i.) Co-operation Boards of trade, chambers of commerce, to carry out merchants' associations, farmers' associations recommen - ^^^ county agents should encourage the keeping of pure-bred sires by the farmers in their locality and strive to increase yearly the percentage of pure-bred cows. They should also see to it that cow 55 test associations are formed, weighing and accounting clubs or associations are formed, and that there is a satis- factory plant in the district for the sale of milk and cream. Farmers to Producers must first organize in local corn- organize munities before they can work effectually together as a county, state or New England unit. A difficulty of the farmers' milk producers' organiza- tions in the past has been the covering of a wide territory, including so many communities that were scarcely organ- ized. Furthermore, their local branch organizations had no plants to which to deliver milk and cream, but were obliged to sell direct to the dealers. With these handicaps it was almost impossible to accomplish anything definite. Federation of As local communities become organized, they local organiza- ^^^ combine into a section, county, state and New England organization, to be kept fully informed as to proper legislation, methods of manufacture and transportation, and prices to be paid and received in the different sections. (From Editorial in the Saturday Evening Post of December 20, 1913, Quoting Mr. How- ard Elliott, President of the N. Y., N. H. & H. R. R.) "In the last census year Connecticut manufacturers produced two hundred and thirty- three million dollars, and Connecticut agriculture — including some duplications — only thirty-seven miUion dollars. That proves, we should say, that manufacturing is more profit- able than agriculture, — but profitable to whom? Probably not to a great many of the two- hundred-and-odd thousand wage-earners who, with their dependents, make up the larger part of the state's population. " There is opportunity for thousands of those wage earners on Connecticut's unculti- vated or half-cultivated land; and they would be there if half the organizing talent directed to Connecticut manufactures had been directed to Connecticut agriculture. " ' There are at least two reasons for the success of Danish agriculture,' says Mr. Elliott. 'One is the intensity of agricultural effort; the other is the resort to cobperation among farmers. In Denmark the farmers have cooperative dairies, cooperative slaughter houses, and cooperative societies to export live stock and eggs. Of the total milk production, seventy-seven per cent comes from cooperative dairies.* " By cooperative organization, such as exists in Denmark, Connecticut agriculture can succeed, too." 56 V. REFORM IN RAILROAD TRANSPORTATION A. BAD RESULTS OF EXISTING METHODS There are now practically four ways of transporting milk and cream in New England. Present 1. Express. systems. 2. Excess baggage. 3. Leased car. 4. Per can rate, the railroad company loading, unloading and icing the car. (Massachusetts Saunders Law.) Wide differ- Some roads charge the same rate for milk encesinpres- ^^j^^^ cream; others charge a higher rate for ent systems „ , , .... and rates. cream, bome roads have one rate for shippmg, — a passenger or freight rate ; others allow a reduction of 25% for any shipments in freight service. Some rates are computed on a zone basis; others on a fiat, per-mile basis. Producing and The great milk producing territory is consuming Maine, New Hampshire, Vermont, Quebec scctioiis* and eastern New York. The great consuming territory is the one hundred and sixty-three incorporated cities and towns in Massachusetts, Rhode Island and Connecticut, which have a population of between five and six millions. Express and It is probable that cream and some milk baggage. .^jjj always be shipped by express. Efforts should be bent toward securing good containers that may be insulated or covered to keep the temperature down. Some cream and probably some local milk will be shipped as excess baggage, but in general this method is unsatis- factory because of the high temperature in summer and the difficulty in grading. Leased car The leased car system, which is the system system has under which the greater part of the milk and conditions cream in New England is transported, has tended to give the dealers a monopoly of the 57 buying territory, and in 75% of the localities this con- dition already exists. (See map at end of book.) With the exception of about 25% of the localities, the farmer has had to accept what the dealer has offered, and it has been im- possible to secure competitive bids. This tends to build up an antagonism between the farmer and the dealer, making it less probable that the farmer will strive to produce for the dealer a good, clean article. An exceedingly bad condition exists when the pro- ducers of any one section are unable to reach the consuming centers at a rate and with service somewhere near as satisfactory as the dealer, and are not able to invite com- petitive bids for their product. Operation of The so-called Saunders Law, enacted in Saunders Law. Massachusetts in 1910, compels the railroad to load, unload and ice milk and furnish the same rate per can for one can as for one thousand cans. This operated distinctly against the Massachusetts farmer, as the large dealers immediately went into Maine, New Hampshire and Vermont, Quebec and eastern New York, where, as inter- state business, they could lease a car and bring in milk at a much lower rate from the sections where it could be bought more cheaply. B. RAILROADS SHOULD CARRY MILK FOR ALL AT UNIFORM RATES Abolish The leased car system should be abolished, leased car Representatives of the New York, New Haven estebUsh^per ^ Hartford Railroad Co., Boston & Albany, can rate. Boston & Maine, Maine Central, Central Ver- mont, Rutland Railroad, Delaware & Hudson, and Canadian Pacific could meet and arrange a uniform rate for milk and cream per can, based on a zone or flat rate per mile, the railroads performing the loading, unloading and icing. The rate for milk should be lower than that for 58 cream. All deductions on account of freight train service should be abolished. The rate for a carload when the shipper loads at not more than two stations in a given section, and does his own icing and unloading, should be at a percentage less than the per can rate. The rates should be uniform throughout New England. This will enable groups of farmers to ship to the market at an equal advantage with the dealers, or to secure com- petitive bids from the dealers. System This is substantially the same system that satisfactory jg j^^ vogue on the Pennsylvania, New York Central and Canadian Pacific roads. Some dealers in New England claim that the railroad cannot properly take care of the milk and ice it. The fact that it is done satisfactorily in other parts of the country is evidence that it can be well done here. Importance of State and local boards of health should pro- temperature, hibit the shipment of milk and cream at a temperature above a fixed maximum. The railroads should not be expected to reduce the temperature of milk and cream in transit. The establishment of country milk plants will greatly facilitate the carrying out of this recom- mendation. VI. IMPROVEMENT IN CITY DISTRIBUTION A. CO-OPERATION AMONG DEALERS Dealers' Competition among dealers in Boston is so co-operative strong as to point to animosity in some in- stances. While there should be keen com- petition, there is no reason why the dealers should not have an organization and meet regularly to discuss subjects 59 of mutual interest, viz., return of lost bottles, loss in bad bills, use of ticket system, grades, standards, etc., etc. These items are of vital interest to all, and, so long as prices are not discussed, the danger of being accused of combining would be very remote, and there would be little likelihood of disagreements among members of the organizations. No one company should be allowed to control the trade. The animosity existing among the dealers is not only detrimental to themselves, but to the public as well. B. SOME METHODS FOR REDUCING COSTS Wholesale and In the analysis of distribution it was shown retail store ^j^g^^ ^jjg ^^^^ q£ delivery to wholesale trade in delivery fairly • u ^ ^ ^ -i efficient. ^^^^ '^^^ averagmg ^p per quart; to retail stores, in cases of bottles, iji to 2^, with an average of iff5; and to family trade, 2ji to 5ji, with an average of about 3fi or slji. It is difficult to see how the cost of delivery to the whole- sale trade may be reduced. A possible small saving might be made in the delivery to the retail store by the use of motor trucks and two-horse teams. Use of tickets The cost of delivery to the family trade an aid in cutting might be reduced by the introduction of the trade ticket system which has worked successfully in the West and some cities in New England, as well as in Montreal and Toronto, Canada, where large amounts of milk are delivered to the family trade. The consumer pays a dollar or even less for tickets which he puts out each day in the empty bottles for the amount of milk and cream he wishes. This assures to the dealer his money in advance, prevents loss by bad bills, and secures the return of his bottles daily. It also simplifies book- keeping. The ticket system will enable the price of milk and cream to the consumer to be raised or lowered in 60 fractions of a cent. At present it can be done only in units of our smallest coin (one cent). The success of the ticket system depends upon the cooperation of a majority of the dealers and the consumers . Service costs If the consumer wishes his milk and cream money. delivered at his door, the regular amount and extra amount as he desires it, and does not pay special attention to the return of the bottles and is not willing to put out tickets, then he must expect to pay a higher price to cover the cost of this service — loss in bottles, loss by bad bills, additional cost of bookkeeping, etc., for this must be charged pro rata to the consumer in the price per quart. If the consumer obtains his milk and cream at the retail store and returns the bottle, he is performing part of the service of delivery and should obtain his milk at a lower price than if it were delivered to him. In congested districts, this is the most economical method of handling milk and cream. Municipal or The suggestion for a municipal or central central delivery company has never been tried in practice, and an experiment alone would prove whether it would be satisfactory. The advisability of its establishment would of course depend upon peculiar local conditions. (Refer to discussion on page 32.) C. BETTER COST ACCOUNTING Cost K the dealers, large and small, were to in- accounting, gii^u better systems of bookkeeping and cost accounting, they would know the exact variation in the cost items and the reasons for the variations . They should also be constantly informed of new methods in processing, testing, etc. Small dealers can co-operate,as can the producers, in having their bookkeeping and testing done. In doing this, they can more successfully compete with the large dealer. 61 VII. ADVERTISING THE FOOD VALUE OF MILK AND ITS PRODUCTS Food value. Milk, cream, skim milk, buttermilk and butter are among the best and cheapest foods on the market. Like other food products, they should be advertised. As producers become organized, they can join with the dealers in the advertising of the food value of milk and its products. Skim milk. Skim milk is simply milk with the fat extracted, but containing all other solids. (See diagram of quart of milk.) It has a food value which has never been properly emphasized. Its value for drink- ing and cooking purposes should be brought to the atten- tion of the public by proper advertising. Confidence To restore and increase the confidence of the consumer in their product, the producers, carriers and dealers must see to it that their milk is clean and properly graded. This will facilitate the education of the public in the food value of milk and its products and will lead to an increased demand, to the ultimate benefit of producer, carrier and dealer. VIII. IS THE PRODUCER TO GET MORE FOR HIS PRODUCT? Must grade, The question of the producer getting more process and money depends largely on the grade of his surplus. product and his ability to process and market it. It is improbable, as long as the producer operates individually, as he is now doing, that he can secure more for his product. 62 Importance of Were the suggested recommendations carried carrying out ^^^^ there is reason to hope for a substantial recommenda- . . . tions. mcrease in prosperity among New England farmers and dealers, and for securing to our large consuming population a good, clean, fresh product of milk, cream and butter, at reasonable prices. If agitation, individualism and lack of cooperation continue, the dairy business in New England will materially suffer, thus not only seriously affecting the bankers, mer- chants and railroads dependent upon the farmer for trade, but also reacting upon the prosperity of the large centers of trade in New England. An average in- mean crease of even $ioo per year in the individual prosperity. incomes of our New England farmers will add, roughly speaking, $20,000,000 per year to our general prosperity. 63 Cornell University Library 257.B7C4 vestigation and an^'V^if °' |,'?,,^ Pj',?.!']"' 3 1924 003 052 549