. Bulletin - Massachusetts Agricultural Experiment Station. Agriculture -- Massachusetts. PRODUCT-COSTS TO MILK DEALERS 11 and Class II milk, smaller differences are created in the product-cost when the ratio is low than when it is high. For example, in January when the Class I price was one and seven-tenths of the Class II price, a variation existed in the product-costs for each point difference in the percentage of milk in Class II. In June when the Class I price was three and one-tenths of the Class II price, each point variation in Class II caused a difference of cents in the
. Bulletin - Massachusetts Agricultural Experiment Station. Agriculture -- Massachusetts. PRODUCT-COSTS TO MILK DEALERS 11 and Class II milk, smaller differences are created in the product-cost when the ratio is low than when it is high. For example, in January when the Class I price was one and seven-tenths of the Class II price, a variation existed in the product-costs for each point difference in the percentage of milk in Class II. In June when the Class I price was three and one-tenths of the Class II price, each point variation in Class II caused a difference of cents in the dealers' product-cost. Cents 4 per hundredweight 3 - - - - Ratio of to CLE price «— Unit variation in product - cost * * Per cent 400. 300 - 200 100 JFMAMJJASOND Figure 5. The Relationship Between the Class I—Class II Price-Ratio and the Unit Variation in Product-Cost Associated with Each Point Change in the Percentage of Class II Milk Handled Monthly—1935 Cause of Variation in Percentage of Class II Handled by Dealers It is very significant that over a period of some duration, marked differences could continue in the proportions of Class II milk handled by the various dealers in the Springfield-Holyoke-Chicopee market area. The obviousness of the significance should be apparent, since it was these differences that accounted for the variation in the dealers' product-costs. It would appear for the most part that so long as all dealers had to use identical class prices they were not greatly concerned about the level at which their individual product-cost happened to settle. One might also expect that even though distributors were not sensitive to the situation their producers would initiate action which would tend to remove existing disadvantages. No such result has occurred, however, in this milkshed. The basic cause of variation in handlings of Class II milk by the dealers is the type of management, which expresses itself in business practice and business philosoph
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