FACTORS INFLUENCING TI‘IE DECISION OF MILK PRQDUCERS WHO ENTERED AND LEFT THE DETROIT, CLEVELAND AND TOLEDO MILK MARKETS Thurs for rho 9.9m oi M. S. MICHIGAN STATE UNIVERSITY Ronald E. Kemp: I959 THY“¢‘ " " “DIARY 0M _ moms Li? 3133th 130 State Univ. inpar FACTORS INFLUEI‘EING THE DECISION OF MILK PRODUCEIB WHO ENTERED 1ND IEF'I‘ THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS By ATHESIS Submitted to the School of Graduate Studies of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 1959 The author wishe aim to all who assl {separation of the ma Special thanks i guidance in the plan: fh‘atihlde is ex; aim-ca throughaut 1 gestions in the prep: Ranks to Dr. A: macript and offer A. Ippmciation is ‘mlal assistance .. The author is j 39 Detroit market, 33316111“: this st mm, and for hi}. ACKI‘DWLEDGMENTS rl‘he author wishes to express his sincere gratitude and appreci- ation to all who assisted in any way during this study and in the preparation of the manuscript. Special thanks is given to Dr. Glynn McBride for his valuable guidance in the planning, supervising, and editing of this thesis. Gratitude is expressed to Dr. Gerald G. Quackenbush for his guidance throughout the author's graduate program and for his sug— gestions in the preparation of-this thesis. Thanks to Dr. Anthony I. C. Koo for taking the time to read this manuscript and offer suggestions. Appreciation is expressed to Dr. L. L. BOger for furnishing financial assistance throughout the author's graduate program. The author is indebted to George Irvine, Market Administrator for the Detroit market, and all persons who assisted in arranging the financing of this study under a special grant to Michigan State Uni- versity, and for his assistance in providing statistical data. Appreciation is also expressed to Howard G. Eisaman, former Market Administrator for the Cleveland market; to U. U. Hurwitz, Market Administrator for the Cleveland market, and his staff, particularly to Charles I. Schumacher, Acting Market Administrator; to Fred W. Issler, Market Administrator for the Toledo market and his staff, particularly to R. J. Quaintance, Acting Market Administrator; and to Russell R. Palmer, chief milk inspector for the Detroit Department of Health, for their cooperation and assistance in providing statistical data used in this study. Thanks are also due the nearly six thousand dairy farmers who took the time to answer the mail questionnaire from which this study was made. The author also wishes to acknowledge the unselfish assistance and cooperation by staff, secretaries and graduate students of the Agricultural Economics Department . Finally, sincere appreciation to 11W wife, Clare, for the encourage- ment and understanding she gave throughout the study, especially when the going got tough To her I am also indebted for her assistance in typing the first draft. FETUBS It. U'fli DIERED All SubIIfitted State U I“. ' t FACTORS INFLUENCING ms DECISION OF MILK PRODUCERS WHO ENTERED AND LET THE DETROIT, 0mm, AND TOLEDO MILK MARKETS By Ronald E. Kampe AN ABSTRACT Submitted to the School of Graduate Studies of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics Year 1959 11:6 primary winflnence the m narket with Data used in no entered or le mfg the period Producers uh 1’13 to the dairy afi‘ke’c were div timed m produ. Of “1088 who Il‘fiducers, 87 per per Center the n. 33 Price. fill—Pt? ABSTRACT 'flle primary plrpose of this study was to examine factors which may influence the producer's decision to enter or leave a particular milk market with special emmasis on the importance of price. .Data.used in this study were based on a survey of 5,967 producers who entered or left the.Detroit, Cleveland, or Toledo milk markets during the period from January 1, 1953 to July 1, 1956. Producers who joined the markets were grouped and analyzed accord- ing to the dairy product they'formerly produced. Producers who left a. market were divided into those who continued and those who discon- tinued'lilk production. Of those who joined the market, 63 per cent of the former inspected producers, 87 per cent of the former manufacturing producers, and 35 per cent of the new producers indicated their decision was influenced by price. Thirtyhseven per cent of the producers who left for other markets and 1:2 per cent of those who discontinued milk production indi- cated they'were influenced in their decision by price. 'With the exception of new producers, "price" was the most frequently mentioned reason. Producers joining the Toledo market mentioned price most frequently and Cleveland joiners mentioned this reason least often. “Action of the dairy" and "convenience" of producing Grade A.ndlk were mentioned second to price by former inspected and manufacturing producers respectively. Producers who left for other markets indicated "inspection.trouble" second to price. iv ”proximately 60 mi '{0 per cent of t: he average producer 15 per cent (tiring ti Kinny-two per fer cent of the form necessary to qualifs serage inspected p: “9336? mamlfacturi he aha-"Lysis o ~€ general conch: 1) Price is a Join or 1e. other than 2) his “era; Months Wit for a 10111 3) (her ED 1‘: than the Whit, Apprdthately 80 per cent of the producers who joined the markets and 70 per cent of those who left expected to receive a price increase. The average producer planned to increase his herd size by approximately 15 per cent during the next twelve months. Ninetybtwo per cent of the former manufacturing producers and 67 per cent of the former inspected producers indicated an investment was necessary to qualify as a producer in one of the three markets. The average inspected producer made an investment of $1095.27 and the aVerage manufacturing producer invested $1h01.72. The analysis of the data included in the study support the follow~ ing general conclusions: 1) 2) 3) h) 5) Price is a.major factor in the decisions of producers who Join or leave a particular milk market, but various reasons other than price are also influential in their decision. The average producer considers joining the market for 18 .months with manufacturing producers contemplating the change for a longer period than inspected producers. Over 60 per cent of the producers considered no other market than the one they joined indicating that producers have, or exhibit, little choice in the selection of a.market. Producers who left the three markets were generally satis- fied with the market as indicated by the number who plan to re-enter o Ibunger producers are more inclined to transfer to other markets or change to another enterprise or occupation.because they are less permanently established in dairy farming and generally'have the advantage in other Job opportunities. 6) Dairies generally have more influence in the decision of the more specialized producer on the medium to large farms. 7) bet milk 131‘ economically markets and : 5) Monthly prim of producers who join loo] 9) All three me: a favorable ' 7) lbst milk producers consider an inspected market to be economically advantageous over manufacturing or cream markets and strive to become more specialized. 8) Monthly price fluctuations have little effect on the number of producers who joined the market indicating that those who join look at the long term price. 9) All three markets expanded geographically thus indicating a favorable price in peripheral areas of the market. vi I INTKJDUC TIC! II REVIEII OF L 1 Intr or; c Specific HI HEEODOL-j 31 Study S. 3647112an Disp’; s :- Detr Cle‘q To 16 Clas TABLE OF CONTENTS CHAPTER I INTmDUCTIONOOOOOOO0..OOOOOOOOOOOOOOOOOOOOOOOO0.0.0.0000... Objectives.............................................. Theoretical Framework................................... HmtheSi-SOOCCOCOOCOOOO0.000.000...OOOOOOOOOOOOOOOOOOOOO II REVIm OF LITERAmREOOCOO...0.0.0.0....OOOOOOOOOOOOCOOOOOO. IIltrOdIlCtionoooooooooooococo...0000090000000...ooooooooo Specific Studies of the Supply Response................. III “momma...OOOOOOOOOOOOOOOOOOOOCO0.00000000000000000000. Study Setting........................................... Sampling'Unit and Response.............................. ‘Disposition of the Sample............................... .Detroit Joiners...................................... Cleveland Joiners.................................... Toledo JOiners....................................... Classification of Producers Who Left the markets..... Those Who Left Detroit............................... Those Who Left Cleveland............................. Those Who Left Toledo................................ Analytical Procedure.................................... N m WEED...OCOOOOOOOOOOOOOOOOOOOO00.00000000000000000. Introduction............................................ Method of Analysis...................................... Section I: Factors Associated With Producers Joining or Leaving a Market..................................... The Geographic Location of the Producer.............. Age of Producers Entering or Leaving the Markets..... Size of Farm......................................... Percentage of the Farm Owned......................... Tenure on Present Farm............................... Time Spent at Dairy Farming.......................... Number of Years Producers Shipped to the Three Markets........................................... Size of Herd......................................... Per Cent Income from Milk............................ vii Page 1 «3—4 \1 mun—I w an commas ppppp TABLE OF CONTENTS - Continued CHAPTER Page Reasons for Joining or Leaving a Market.............. 77 Price Increase Expected.............................. 89 Mbnth Producer JOined or Left........................ 93 Length of Time Producer Considered His Action........ 98 Other Markets Considered............................. 101 Investment Necessary to Qualify for Grade A.......... 102 .Decision of Producers if Prices Rise or Decline...... 105 Number'Nho Plan to Re-Enter the Market............... 107 Section II: Dependency of Variables.................... 109 Month Producer Joined................................ 110 Geographic Location of the Producer.................. 119 Per Cent Income from Milk............................ 126 Size of Farm......................................... 130 Percentage of Farm Owned............................. 133 Age of the Producer.................................. 135 Size of Herd During Last Twelve Months............... 138 Size of Herd Expected Next Twelve Months............. 139 Section III: Decisions to Join a Market as Related to Price................................................ lh2 Results.............................................. 11.1.3 Group I--Detroit JOiners Tabulated by Months......... lh3 Group II--Cleveland Joiners Tabulated by Months...... 1h5 Group III--Toledo Joiners Tabulated by Months........ lh6 Group IV--Detroit JOiners Tabulated by Periods....... lh9 Group V--Cleveland Joiners Tabulated by Periods...... lh9 Group VI--Toledo JOiners Tabulated by Periods........ 152 Summary of Regression Equations...................... 152 v SUMMARIANDCONCLUSIONS.................................... 155 APPENDIX I 165 APPENDIX II....................................................... 177 BIBLIOGRAPHY 181 viii G aaaaa a IBIS " " ":1 J Toledo Min. 1.2 Average Dal J ‘I . Cleveland , 3-3 Average Ola DGII‘Olt, Cl 3-4 timber or } Cleveland, Mail Chest: 35 Respondent. Product ‘1: 3'6 Resmndent Dail‘y Prod 3'7 Respondent “06mm T] 3'8 Dairy Pro Detroit 1‘! 39 Dairy Pr: Cleve-’18:}: 31‘) D311- '3’ Pr Toledo 1’ .ol LDQatior Joined 1 L2 Locatim hinted DEtrgit 4-4 LEE Of Detr -< TABLE 3.1 3.2 3-3 3-14 3-5 3-7 3.8 3-9 h.l h.2 h-3 LIST OF TABLES Page Average Number of Producers in the Detroit, Cleveland, and TOleO Niel-kMarketSoooooo00000000000000coo-oooooooooooooocoo Average Daily Production Per Producer for the Detroit, Clevelarld, am TOledOMiJ-k MarketSOOOOOOOOO......OOCOOOOOOOO Average Class I and Blend Price Received by Producers in the Detroit, Cleveland, and Toledo Milk Markets . . . . . . . .. . . . . . . . . Number of Producers Who Entered and Left the Detroit, Cleveland, and Toledo Milk Markets and Those Responding to Mail QlleStionnaireSooooooooooo0.0.0000...00000.0000000000000 Respondents Who Joined the Detroit Milk Market and the Dairy Product They Previously Marketed....... .............. ....... Respondents Who Joined the Cleveland Milk Market and the Dairy Product They Previously Marketed................... ... Respondents Who Joined the Toledo Milk Market and the Dairy PTOdUCt They PreVimlSly Marketed.......OOOOOOOOOOIO 0.00.0... Dairy Products Marketed by Respondents After Leaving the DetI‘Oit MketOOOoo00.0000000000000000000000000000.oto.on... Dairy Products Marketed by Respondents After Leaving the Clevelalld MarketOOOOOOOOOOO...00.0.00...0.00.00.00.00....... Dairy Products Marketed by Respondents After Leaving the 1:0le Market-[00000.0000000000000000...on...00000000000000... Location by Zones of Former Inspected Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets...... Location by Zones of Former Manufacturing Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets...... Location by Zones of New Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets . . . . . . . . . . . . . . . . . Age of Former Inspected Milk Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets . . . . . . . . . . . . . . . . . 15 16 16 19 20 21 22 .23 2h 25 I10 111 Ill LISIOF TABLES - Cont: TEE 4.5 Age of Former 1'1; Detroit, Clevel: 3.6 Age of New Prod Toledo Milk Marj 4'7 lee Distributio t8 1'5”? 01' Producer Milk Yarkets a:- “9 Age of Produce: Markets and Die the Detroit , C1 all Acres Operated JOined the Bat LIST OF TABLES - Continued TABLE Page 11 .5 Age of Former Manufacturing Milk Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets . . . . . . . . . . . . . . . . . )15 14.6 Age of New Producers Who Entered the Detroit, Cleveland, and TOledO Milk Hal'ketSCOOOCCCOOCOCO......OOOCOOOOOOOOOOO0...... h; h.7 Age Distribution of Dairy Farmers by Economic Slbregions . . . . h? b, .8 Age of Producers Who Left the Detroit, Cleveland, and Toledo Milk Markets and Continued Producing Milk................... h8 )1.9 Age of Producers Who Left the Detroit, Cleveland, and Toledo Markets and Discontinued Milk Production.................... 118 h.10 Acres Operated by Former Inspected Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets............. 19 h.ll Acres Operated by Former Manufacturing Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets...... 50 14.12 Acres Operated by New Producers Who Joined the Detroit, Cleveland, mm TOledo Mil-k MarketSOOQOOOOCOCOOOOOO0.000.000. 51 14.13 Acres Operated by Producers Who Left the Detroit, Cleveland, and Toledo Markets but Continued to Market Milk.............' 51 h.lh Per Cent of Acres Owned by Former Inspected Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets.. 53 11.15 Per Cent of Acres Owned by Former Manufacturing Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk mrketSOOOOOOOOO....OOOOOOOOOOOOCOOOOOO.......OOODOOOOOOOOOO 5h 11.16 Per Cent of Acres Owned by New Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets................. 5h 11.17 Per Cent of Acres Owned by Producers Who Left the Detroit, Cleveland, and Toledo Markets and Continued Producing Milk.. 55 h.18 Tenure on Present Farm of Former Inspected Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets...... 56 h.19 Tenure on Present Farm of Former Manufacturing Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets...... 57 LIST OF TABLES - Continued TABLE Page 14.20 Tenure on Present Farm of New Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets................. 58 14.21 Tenure on Present Farm of Producers Who Left the Detroit, Cleveland, and Toledo Markets Who Continued Production on mower Mamet.........OOCOOCOOO0.0.0.000...00.0.0.0....0000 58 14.22 Years in Dairy Farming Indicated by Former Inspected Producers Who Joined the Cleveland and Toledo Markets....... 60 14.23 Years in Dairy Farming Indicated by Former Manufacturing Producers Who Joined the Cleveland and Toledo Markets... .... 61 1; .214 Years in Dairy Farming Indicated by New Producers Who hterw the Clevehm arld TOledo Mar'kets C O O O O O O O O C C O I C O O D O O O 61 14.25 Years in Dairy Farming of Producers Who Left the Cleveland and Toledo Markets and Continued Producing on Another Market 62 14 .26 Years Shipped to the Detroit, Cleveland, and Toledo Markets by Producers Who Discontinued Production. . . . . . . . . . . . . . . . . . . . 63 14.27 Years Shipped to the Detroit, Cleveland, and Toledo Markets by Producers Who Continued Production on Another Market.. 611 14 .28 Average Number of Cows Per Producer Who Left the Detroit, Clevela-Ild’ 811d TOledO Mj-lk mrketSCCOOCC‘.......O........... 67 14.29 Average Number of Cows in the Herd During the Past 12 Months; Average Number of Cows Expected in the Herd During the Next 12 Months; and Present Facilities for Cows; as indicated by Former Inspected Milk Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets................. 68 14.30 Average Number of Cows in the Herd During the Last 12 Months; Average Number of Cows Empected in the Herd During the Next 12 Months; and Present Facilities for Cows; as Indicated by Former Manufacturing Milk Producers Who Entered the Detroit, Cleveland and Toledo Maxkets................... 69 h.31 Average Number of Cows in the Herd During the Last 12 Months; Average Number of Cows Expected in the Herd During the Next 12 Months; and Present Facilities for Cows; as Indicated by New Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets.......................... 70 . _ ”Q ENE-”TABLE w “-9 1‘, 32 Per Cent Incor Producers km Milk Markets . h. ..33 Pa 1' Cent 1:132! Milk Pmduce“5 Milk Markets .. .331. Per Cent Inco: Entered the D»; 4.35 Per Cent Inca.“ the Detroit, C Discontinued I :36 Per Cent Inca“. the Detroit, C ccnbimed PI"OC 4'11 Per Cent IDCO" Producer-s W23 Mk Markets 2 38 Per Cent Inc an ‘ (hears Todwelling 2-: w '19 Est ImmIfi-ap- Ma:- keted Inert L40 H351, Importan Kalketed Ma. CiGVeland’ 01‘ “*1 1‘ost I mpoI-t , ELtEr tire Di: LlBT OF TABLE - Continued TABLE Page 14.32 Per Cent Income from Milk Indicated by Former Inspected Milk Producers Who Entered the Detroit, Cleveland, and Toledo m MarketSOOOOOOOO0.0000.0....0.0.......OOOOOOOOOOOOOOOOOO 72 14.33 Per Cent Income from Milk Indicated by Former Manufacturing Milk Producers Who Entered the Detroit, Cleveland and Toledo Mil-k MarketSOOO0.00......0.0.0.0.........OOOOOOOOOOOOOIOOOOO 72 14.314 Per Cent Income from Milk Indicated by New Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets..... 73 14 .35 Per Cent Income from Milk Indicated by Producers Who Left the Detroit, Cleveland, and Toledo Milk Markets and Discontinued Production.................. ................... 73 14 .36 Per Cent Income from Milk Indicated by Producers Who Left the Detroit, Cleveland, and Toledo Milk Markets and contmled PrOducj-rlg MflkCCOOOOOCOCCCCOO......OCOOCOCCOOOOOOO 7h 14.37 Per Cent Income from Milk Indicated by Former Inspected Milk Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets and Their Location by Zones.................... 75 14.38 Per Cent Income from Milk Indicated by Former Manufacturing Milk Producers Who Entered the Detroit, Cleveland, and Toledo Milk Markets and Their Location by Zones............. 76 14 .39 Most Important Reason Why Producers Who Had Formerly Marketed Inspected Milk, Decided to Enter the Detroit, Cleveland, or Toledo Milk Markets........................... 78 14 .140 Most Important Reason Why Producers Who Had Formerly Marketed Manufacturing Milk, Decided to Enter the Detroit, Cleveland, or Toledo Milk Markets................. .......... 80 14.141 Most ImportantiReason Why New Milk Producers Decided to Enter the Detroit, Cleveland, and Toledo Milk Markets....... 81 14.142 Reasons Why Former Inspected Milk Producers Decided to Enter the Detroit, Cleveland, and Toledo Milk Markets . . . . . . . . . . . . .' 82 14.143 Reasons Why Former Manufacturing Milk Producers Decided to Enter the Detroit, Cleveland, and Toledo Milk Markets....... 814 xii _.__— LIST OF TABLES - Continued TABLE Page 14.1414 Reasons Why New Producers Decided to Enter the Detroit, Cleveland, and Toledo Milk Markets.......................... 85 14.145 Reasons Given by Producers, Who Continued Producing, for Leaving the Detroit, Cleveland, or Toledo Milk Markets...... 86 14.146 Reasons Given by Producers Who Left the Cleveland, and Toledo Markets for Selecting Their Present Market........... 87 14.147 Reasons Given by Producers, Who Discontinued Production, for Leaving the Detroit, Cleveland, or Toledo Markets........... 89 14 .148 Expected Increase in the Price of Milk Per Hundred Weight, as Indicated by Producers Who Joined the Detroit, Cleveland, or TOledO Mil-k MametSOOOOOOOOOOOOOOO.....ODOOOOOOOOOOOOOOOO 90 14.149 Average Expected Increase in the Price of Milk Per Hundred- weight as Indicated by Former Inspected Milk Producers and Former Manufacturing Milk Producers Who Joined the Detroit, Cleveland or Toledo Milk Markets.........4................... 92 14 .50 Expected hcfiase in the Price of Milk Per Hundredweight, as Indicated by Producers Who Left the Detroit, Cleveland, or ‘ TOledo mm Markets.....CCCCOOOOOOO.........OOOOOOODOOOOOOOO 93 14.51 Month Former Inspected Milk Producers Entered the Detroit, \ Cleveland, and Toledo Milk Markets.......................... 914 14 .52 Month Former Malnlfacturing Milk Producers Entered the Detroit, Cleveland, and Toledo Milk Markets.......... . . . 96 14.53 Month New Producers Entered the Detroit, Cleveland, and TOlwo mnlk MMkets...‘.0C.....OCOOC......OOOCOOOCCCOOOOOOOO 96 14.514 lbnth Producers Who Continued Producing Left the Detroit, Cleveland, and Toledo Milk Markets.......................... 97 14.55 Month ProducersiWho Discontinued Production Left the Detroit, Cleveland and TOledO Market....n..."Nun...“........... 98 14 .56 Time Former Inspected Milk Producers Considered Entering the Detroit, Cleveland, and Toledo Milk Markets.. . .. . ... .... . . . . 99 14.57 Time Former Manufacturing Milk Producers Considered Entering the Detroit, Cleveland, and Toledo Milk Markets. . .. .. .. . . .. . 100 xiii LIST OF TABLES - Continued TABLE Page h.58 Number of Other Markets Considered by Producers Who JOined the Cleveland and Toledo Mfllk Markets....................... 101 h.59 Number of Markets Considered by Producers Who Left the Cleveland and Toledo Markets in Addition to Their Present marketOOOOOOOOOOOOOOOOOOO......OOOOOOOO...OOOOOOOOOOOOOOOOOO 1.02 u.60 Producers Who Indicated Investment was Made in the Past Two Years to Qualify as an Inspected Milk Producer for the Detroit, Cleveland, and Toledo Milk Markets, Classified According to the Former Disposition of Their Milk........... 103 h.6l Average Costs of Fixing up to Sell Inspected Milk on the jDetroit, Cleveland or Toledo Milk Markets as Related to the W or PrOduCt Formerly PrOducedCOCCOOOOOO...OOOOOOOOOOOCOO 10h h.62 Response Indicated by Producers to an Increase or.Decrease in the Price of Milk in Detroit, Cleveland, and Toledo Mkets......OOOOOOOOCOOQOOO.......OQOOOOOOO0.00.00.00.00... 106 h.63 Decision of Producers Who Left the Detroit, Cleveland, or Toledo Market Relative to Plans to Re-enter the Market VimaTwo Year PeriOdOOOO....OOOOOOOOOOOOOOOO0.00.0000... 108 h.6h Significant and Non-significant Chi-square Relationships Existing Between the Most Important Reasons Producers Joined and Certain of Their Characteristics........................ 111 14.65 Relationship or’the Month Former Inspected Milk Producers JOined the Detroit, Cleveland, and Toledo Milk Markets, and the Most Important Reason They Gave for Joining............. 112 14.66 Relationship of the Month Former Inspected Milk Producers Jbined the Detroit Market and the Most Important Reason They Gave for JOiIfl-ngOOOC0.0......OCOOOOOOOOOOO‘...O. ......OOO... 111‘ h.67 Relationship of the Menth Former Inspected Milk Producers Joined the Cleveland Market and the Most Important Reason They Gave for JOiningOOOOOOOO......OOOOOOO......OOOOOOOOOODO ll; h.68 Relationship of the Mbnth Former Manufacturing Milk Producers Who Joined the Detroit, Cleveland, and Toledo Nfilk Markets, and the Most Important Reason They Gave for Joining 116 xiv LIST OF TABLES - Continued TIBLE Page h.69 Relationship of the Month Former Manufacturing Milk Producers Who Joined the Detroit Market and the Mbst Important Reason They Gave for Joining...................... 118 h.70 Relationship of the Month Former Manufacturing Milk Producers JOined the Toledo Market and the Most Important Reason They Gave for JOj—rlingCOCOCCCO........‘OOOOCCOCOOOCCOO 119 h.7l Relationship of the Location of Former Inspected Milk Producers Who JOined the Detroit, Cleveland, and Toledo Milk Markets, and the Most Important Reason They Gave for Joining 120 h.72 Relationship of the Location of Former Inspected Milk Producers Who Joined the Detroit Market, and the Most Important Reason They Gave for JOining...................... 122 h.73 Relationship of the Location ofFormer Inspected Milk Producers Who Joined the Cleveland Market, and the Most Important Reason They Gave for Joining...................... 123 14.714 Relationship of the Location of New Producers Who Joined the Detroit, Cleveland and Toledo Mfilk Markets and the Mbst Important Reason They Gave for Joining...................... 12h h.75 Relationship of the Location of New Producers Who Joined the 'Detroit Market and the Most Important Reason They Gave for Joj-ningOCOCOOCOOOOOC0.0CO0.00.000..........CCCCOCOOOCOOOOOC. 125 h.76 Relationship of the Per Cent Income Received from Milk Production by Former Inspected Mhlk Producers Who JOined the jDetroit, Cleveland, and Toledo Milk Markets and the Most Important Reason.They Gave for Joining...................... 127 h.77 Relationship of the Per Cent Income Received from Milk Production by Former Inspected Milk Producers Who JOined the Detroit Milk Market and the Most Important Reason They Gave for Joining................................................. 128 h.78 Relationship of the Per Cent Income Received from Milk by- Former Manufacturing Milk Producers Who JOined the Detroit, Cleveland and Toledo Milk Markets and the Most Important Reason They Gave for Joining................................ 129 h.79 Relationship of the Per Cent Income Received from Milk Production by New Producers Who Joined the Cleveland Milk Markets, and the Most Important Reason They Gave for Joining 130 XV LIST OF TABLE - Continued TABLE Page 14.80 Relationship of the Acres Operated by Former Inspected Milk Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets, and the Most Important Reason They Gave for JOiningoooooo0000000000000...000000000opoooooooooooooooooooo 131. 14.81 Relationship of the Acres Operated by Former Inspected Milk Producers Who Joined the Detroit Milk Market, and the Most Important Reason They Gave for Joining...................... 132 14.82 Relationship of Acres Operated by Former Inspected Milk Producers Who Joined the Cleveland Milk Market, and the Most Important Reason They Gave for Joining...................... 1314 14.83 Relationship of the Per Cent of Acres Owned by New Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets, and the Most Important Reason They Gave for Joining‘......... 135 14 .814 Relationship of the Per Cent of Acres Owned by New Producers Who Joined the Cleveland Milk Market, and the Most Important Reason They Gave for JOj-ningOCCCOOOOOCOOO......OOCOCCOOOCCOO 136 14.85 Relationship of the Age of New Producers Who Joined the Detroit, Cleveland, and Toledo Milk Markets, and the Most Important Reason They Gave for Joining...................... 137 14.86 Relationship of the Age of New Producers Who Joined the Cleveland Milk Market, and the Most Important Reason They Gave for JOj—Ifi—ngOOOOOOOOOOOOOOOOO....OOOOOOOOOOOOOOO00...... 137 14 .87 Relationship of the Size of Herd During the Last Twelve Months Indicated by Former Inspected Milk Producers Who Joined the Detroit Market, and the Most Important Reason They Gave for Joining....................................... 138 14.88 Relationship of the Size of Herd Expected During the Next 12 Months Indicated by Former Inspected Milk Producers Who Joined the Cleveland Milk Market, and the Most Important Reason They Gave for Joining................................ 139 14.89 Relationship of the Size of Herd Expected During the Next l2 Months Indicated by Former Manufacturing Milk Producers Who Joined the Detroit Milk Market, and the Most Important Reason They Gave for Joining................................ 1140 LIST OF TABLES - Continued TABLE Page 14 .90 Relationship of Various Independent Variables to the Number of Former Manufacturing Milk Producers Who Joined the DetrOith-JkMarket EaCh mnth‘..0......OOOOOOOOOOOOOOOOO..0 mh 14 .91 Relationship of Various Independent Variables to the Number of Former Manufacturing Milk Producers Who Joined the Clevelandm-lkmarket EaCh mont1100000......CCCOOOOOOOOOO...O m7 14 .92 Relationship of Various Independent Variables to the Number of Former Manufacturing Milk Producers Who Joined the Toledo Milk Market EaCh mnthOOOO.........OOOOOOOOOOOOOO00.00.00... 11.1.8 14 .93 Relationship of Various Independent Variables to the Number of Former Manufacturing Milk Producers Who Joined the DetrOitHilkMa-rketOOOOOCOOO...............QOOOOOOOOOOOOOOOO 150 14.914 Relationship of Various Independent Variables to the Number of Former Manufacturing Milk Producers Who Joined the Clevelam Mj-Jk ka9t0.0...............O'OC...‘......OOOOOOO 151 14.95 Relationship of Various Independent Variables to the Number of Former Manufacturing Milk Producers Who Joined the TOledOMj-J-k Market....OOO0.0.0.0..OOOOOOOOOOOOOOOOOO00.0.00. 153 xvii LIST OF FIGURES FIGURE Page 1 .Detroit, Cleveland, and Toledo Milk Markets................. 13 2 Location by Counties of Respondents Entering the Detroit Milk Marks-b.0000.0.00.0.0...00.0.00.........OOOOOOOOOOOOOCOO 31 3 Iocation.by Counties of Respondents Leaving the Detroit MilkMarket....OOOOQ......OOOOOOOOO......OOOOOOOO0.00.0.0... 32 h Net Gain and Loss by Counties of Respondents in the Detroit Milk mats.......................COCCCOCCOCCCOOOOOC0...... 33 5 Location by Counties of Respondents Entering the Cleveland Mil-k Hal‘ketOCOOO00.0.0.0...OOOOOOOOCOOOOOOOOOOOOOOOOOOOOOOOO 3h 6 Location by Counties of Respondents Leaving the Cleveland mm mr‘ketCCCOO...C.OCOCOOOOC............‘OOCOOOOIOOOOOOOO. 35 7 Net Gain and Loss by Counties of Respondents in the Cleveland mlk Markets.....O.........OOOOOCOOOOOOO0.0.0.0000 36 8 Location by Counties of Respondents Entering the Toledo Milk MarketOOOOOOOOOCO.........OOOOOOOOOOOOOOO....CO...0.0.000... 37 9 Location.by Counties of Respondents Leaving the Toledo Milk MarketSooooooooooooooo0000000000.00.00000000000009000000.00. 38 10 Net Gain and Loss by Counties of Respondents in the Toledo Mil-kmetOOQOOOOOOOOOOOOOOOOO......O........OOOIOOOOOOOOOO 39 CHAPTER I INTRODUCTION The supply of milk in a market is a function of the number of producers in that market and the level of production of these producers. In a competitive economy these factors are theoretically a function of price. If the price of milk rises, existing producers will produce more, some producers considering discontinuing production.will.continue to produce, and an.increased number of new producers will be attracted to the market. The opposite is expected if the price falls. In practice, however, the function of price in a.milk market may not bring the expected supply response in the short run. In addition to price, other factors may influence the actions of producers as much or more than the price of milk in a particular market. Objectives It is the task of this study to examine factors which may influence the producer‘s decision to enter or leave a particular milk market. The importance of price as a,determining factor will'be evaluated as ‘well as other economic and institutional factors which may influence the decision of the producer. Various characteristics of the producer and his farm enterprise will be analyzed to determine if there is a significant relationship between producers with these characteristics and their decisions to enter or leave the market. Theoretical Framework Economic activity revolves about three key elements: 1) human wants which are varied and insatiable, 2) recources which are limited, versatile, and capable of being combined in varying proportions to produce a given commodity, and 3) techniques for utilizing resources to produce goods and services which satisfy wants.1 The price system in a free enterprise economy operates in such a manner that resources are used to produce the quantities of the goods and services which contribute most to aggregate want satisfactions. This is achieved through the interaction of the laws of supply and demand. 'Jhe law of demand may be stated as: The greater the amount of a given commodity offered for sale upon a given market at a given time, the lower will be the price at which the entire amount can be sold.2 here are these principle reasons underlying the operation of the law of demand. Not all people have the same desires for the same commodity, nor are they equally able to pay a given price. Even if people had the same original desire for a commodity and the same purchas- ing power, it would still be necessary to lower the price in order to induce them to consume additional quantities because of what is known 3 as the principle of Diminishing Marginal Rate of Substitution. ~ Richard H. Leftwich, The Price System and Resource Allocation, (New York: Rinehart and Co., Inc., 1955), p. 10. 2li‘rederich Lundy Thompson and Richard Jay Foote Agrimflture Prices, (New York: McGraw-ffill Book 00., Inc., 1952), p. E. 3J. R. Hicks, Value and Capital, (Oxford: Clarendon Press, l9h6), p. 20. . This principle implies that as a commodity is consumed the (utility of the last unit consumed diminishes and the marginal rate of substitution of this commodity for money is also diminishing. The law of supply is similar to the law of demand with the exception that it applies to the supply of a commodity rather than to the consump- tion. The law may be simply stated as the higher the price offered to producers for a product or services, the more of that product will be made available to buyers in a specific market at a specific time. The interaction of the laws of supply and demand in a free economy determines the market price for that commodity. If demand for a product is greater than the supply available, the price will increase. This increased price stimulates greater supply, either through additional resources applied in the production of a commodity, or by additional units released from storage. If the supply becomes too great, the price will fall. Eventually an equalibrium price position, or a position from which there is no net tendency to move, will be reached.1 The term “net" tendency is used to emphasize that it is not a state of inactivity but instead represents the balance between the forces of supply and demand. The source of supply is also affected by many factors. Von Thunen, a German land owner and economist, developed a theory of the relation- ship betwem differences in location and land utilization.2 It was laeorge J. Stigler, The TheorLof Price, (New York: Macmillan 00., 19511.), Po 111.. . 2Raleigi Barlowe, Land Resource Economics, (Englewood Cliffs, New Jersey, 1958): P0 330 illustrated that the differences in land use could be attributed directly to variations in transportation costs. These in turn were dependent upon such factors as ease of transportation, weight, bulk, and perishability of the product. The land near the market would be used intensively and would be utilized primarily for products that are perishable, heavy, or bulky to transport. In the milk industry von Thunen‘s theory would assume that the first zone nearest the market would be devoted to the production of fluid milk, the next zone devoted to cream production, and the follow- ing zone would be devoted to the production of butter, cheese, and other manufactured products which are less perishable and are easier to transport. is transportation facilities improve and become less expensive, all zones would expand, thus forcing the cream and butter zones farther may from the market area. The geographical location of milk producers who entered and left the markets will be observed to determine if any evident change in the milkshed area corresponds to this land use theory. The geographic location of the milkshed from the market will be observed to determine if this also substantiates von Thunen’s theory. If the whole United States were to be considered as one narket, the surplus production ores will be centered in the Wisconsin-Minnesota 1 area. If the data available substantiate this theory of differences 10. G. Quackenbush, “Price Interrelationships in Dairying,n Michigan State University, Agriculture Economics Department, mimeo- gram 0 in land use, all the milkshed areas will extend wherever possible in the direction of the Wisconsin-Minnesota surplus area. The milkshed areas of the three markets might also suggest the interaction of Fetter‘s Law of Markets. According to this law the boundary line between the territories tributary to two geographically ,competing markets for like goods is a hyperbolic curve.1 At each point on this line the difference between freight from the two markets is just equal to the difference between the market prices, whereas on either side of this line the freight difference and the price difference are unequal. The relation of price in the two markets determines the location of the boundary line and the lower the relative price, the larger the tributary area. If the three markets do conform to Fetter‘s Law, we would expect an expanded or contracted milkshed, depending on the extent to which each market is able to compete with neighboring markets. Hypothesis 'Within this theoretical framework we may state the hypothesis as follows: Producers decide to enter or leave a particular market because of price. In the present study we shall be concerned about that part of the supply function resulting from producers who enter or leave a market 1G. G. Quackenbush, "Some Marketing Principles: The Perfect Market, Von Thunen‘s Principle, Fetter‘s Law of Markets," Michigan State University, Agriculture Economics Department, mimeograph. because of price. Other factors including characteristics of the producer-and his dairy enterprise and concerning his attitudes and actions will also be considered. More specific hypotheseS'will be formulated at appropriate points in the analysis. CHAPTER II REVIEV OF LITERATURE Introduction Important studies have been made on the total agriculture supply response as well as on single commodities. However, little work has been done on the effect on supply resulting from producerst decisions to discontinue producing or to change from one market to another. While this study deals with the factors influencing producerst decisions to enter or leave a particular market, a broader understanding of the supply response as it relates to the milk industry can be valuable in understanding the decisions of producers to enter or leave a market. Specific Studies of the Supply Response The impact of technology on the milk supply is investigated in a studyby French and Walz .1 Dairy farming has traditionally been con- sidered a long-run business and current specialized capital outlays, such as bulk tanks, tend to keep it that way. Dairy farmers thus become less prone to move into other lines of work. Technological changes tend to have an even greater output-increasing effect in the aggregate dairy industry than in some other types of farming. “Charles E. French and r. c. Walz, "Impacts of Technological Developnents on the Supply and Utilization of Milk ," Journal of Farm Economcs, Vol. 39, December, 1957, pp. 1159-1170. A further statement on technology and supply is given by Wheelerl who concludes that recent technological developments are leading to a higher degree of specialization on dairy farms and to increasing outplt per farm, but not to any significant increase in farm size as measured by the number of workers in the regular labor force. In city milk markets there is likely to be intense competition between nearby and distant producers which is likely to increase with peripheral areas accounting for more than a proportionate share of any change in total production. Even though prices remain constant the amount of capital needed per man has been increasing substantially. Many valuable insights into the response of producers to price are found in a study of acreage response. Nerlovez emphasizes the reaction of farmers to the price they expect rather than to last year’s price. nus expected price is influenced only to a limited extent on last year's price. It may be that statistical estimates of supply response havefibeen too low because of incorrect use of the price factors to which farmers react. Farmers revise the price they expect in the coming year in proportion to the error they made in predicting price during the present period. 13. G. Uneeler, “The Impact of Technological Changes on Milk Production," Journal of Farm Economics, Vol. 37, December, 1955, pp. 996-10014. ”Marc Nerlove, "Estimates of the Elasticities of Supply of Selected Agriculture Commodities," Journal of Farm Economics, Vol. 38, HO. 2: My, 1956: PP- 1469'5090 Halvorson,l in a study of the elasticity of supply covering the period from 1927-1957, found that in the short run of a year elasticity ranged from .15 to .30 with strong indications that it has increased in recent years and is now in the upper part of this range. Estimates of longer-run elasticity indicate it to be in the range of .35 to .50 with indications that it, too, is now near the upper end of this range. Producer response is occurring at a more rapid rate in recent years so that the long-run adjustments are not as long as they used to be. A. further study on supply elasticity:a indicates that from 1921- 19141 the year to year change in production was about 2 per cent. This indicates rather stable production which results in a low elasticity due to: 1) heavy fixed investments, 2) the lack of good alternatives, and 3) major dependence on family labor. Major adjustments in the dairy industry are likely to be relatively more costly than in most segments of agriculture and will not be made quickly and easily or in response to temporary relative price change. Brinegar3 has outlined some characteristics of the milk industry in relation to the geography of milk supply. within milk sheds, milk distant from market is usually overpriced in terms of the prices lfiarlow W. Halvorson, "The Response of Milk Production to Price ," Journal of Farm Economics, Vol. 140, December, 1958, pp. 1101-1113. 2118er W. Halvorson, "The Supply Elasticity for Milk in the Short hm,“ Journal of. Farm Economics, Vol. 37, N0. 5, December, 1955, p. 1183. 3George K. Brinegar, “Economic Effects of Regulations and Price Fixing in the HiJk‘Industry,“ Journal of Farm Economics, Vol. 39, December, 1957, pp. 1173—1185. 10 received by farmers near the market, while among markets, milk tends to be overpriced in deficit areas and underpriced in surplus areas. This would lead to the conclusion that in the future a large percentage of milk for a particular market will come from more distant areas. Federal marketing orders have their effect on supply also as shown by Gannmitzl in referring to a Federal Order Study Committee on pricing policies in federal orders. If the conclusions of the committee are correct it appears that fluid milk prices, and average prices, under marketing orders are abnormally high. If such is the tendency, operators of manufactured dairy product plants will probably be forced to enter the fluid business, or the manufacturing operations will become subsidiaries of fluid operations. The tendency of marketing orders to expand or consolidate is emphasized by Henderson.z It was found that in the two year period between 1956 and 1958, twenty-one of the sixty-three marketing areas defined by Federal orders were revised and enlarged. These areas were enlarged by an average of 143 per cent with three areas'more than doubled. More adequate transportation facilities have contributed to the enlarge- ment or consolidation of these orders . This along with improved methods of handling milk, from the farmer to the. consumer, have tended to break 1E. H. Gaalmfitz, "Economic Problems Associated with Milk Marketing Orders," Journal of Farm Economics, Vol. 37, December, 1955, pp. 1017- 1021. 2Ellen Henderson, "Our Changing Fluid Milk Market," Agriculture HarkBtiIl , v01. )4, N00 2, Febmary', 1959, p. 70 down existing market boundaries causing them to overlap to the extent Jthat consolidation or expansion of markets is deemed necessary. The present study will point out some of these changes in the marketing areas. The results of a study by Jones and Quackenbush:L indicate that pro— ducers who entered and left the Detroit market were strongly influenced by price and other economic factors. The great bulk of producers shifted from manufacturing milk outlets to the Detroit market, with an expected price gain of a dollar or less per hundredweight. Considering the investment necessary to qualify for inspected milk production and the increase in gross receipts expected by the average former manu- facturing producer, it was concluded that shifting to fluid production was a higlly profitable venture for former manufacturing producers. The implications were that the Detroit market would have difficulty maintaining prices at a level of one dollar above manufacturing prices without inviting many new producers . These studies present valuable insights on the characteristics of the nature of the supply response in milk production. The studies cited generally support the proposition that milk production is relatively stable and is not very responsive to price, particularly in the short run. The studies also point out some of the difficulties facing adminis- trators of fluid milk markets in regulating supply to demand. 1E. B. Jones and G. G. Qiackenbush, Milk Producers Entering and Leaving the Detroit Market, Bulletin 397, Michigan State College, East Lansing, Michigan, April, 1955, p. h. CHAPTER III METHODOLOGY Study Setting The Detroit, Cleveland and Toledo milk markets were selected for detailed study. These marketing areas are regulated by federal milk marketing orders. Marketing orders are authorized by the Agricultural Marketing Act of 1937. A major objective of the act is to achieve a uniform minimum price to producers which reflects prices and supplies of feed as well as other supply and demand conditions in the area and that is necessary to obtain an adequate supply of pure and wholesome milk.1 These marketing areas are shown in Figure 1. The Detroit area includes all of Wayne and portions of Macomb, Monroe, Oakland, St. Clair and Hashtenaw counties in Michigan. The Toledo area includes the territory within the corporate limits of the city of Toledo, Ohio, and adjacent territory in the counties of Monroe, Michigan and Lucus and Hood counties, Ohio. The Cleveland marketing area includes all of Cuyahoga County and adjacent territory in Ashtabula, Lake, Lorain, and Medina counties all in the state of Ohio. 1The United States Department of Agriculture, Marketing, The Year- book of igiculture, 19514, United States Government Printing Office, “3811111813011, DC Co ..._.— -al __. |llr I I II I . II II. :1 1. ll ..Ii' l3 Figure 1 Detroit, Cleveland and Toledo Milk Markets, as Defined by Federal Order Numbers 21;, 30, and 75, 1956. 1h Provisions of the orders regulating the three markets vary. The Detroit and Cleveland markets operate under a market wide pool. Under this plan all producers shipping to a particular market receive a uniform price, adjusted for transportation differentials and butterfat content, regardless of how his milk was utilized. In contrast the Toledo market operates under an individual handler pool. Under this system all producers shipping milk to a particular handler in the marketing area receive a. uniform price for their milk. This price might differ, however, from the price paid to producers shipping to another handler in the same market area if the utilization of the plants differed. All. three marketing orders include a supply-demand adjustment prOViSion. The purpose of this provision is to provide a means of ad- justing the price of Class I milk to an over or under supply inrelation to that is considered to be an adequate amount of fluid milk for . Class I plrposes. Country receiving stations were operated in the Detroit and Cleveland milkshed areas. The Toledo market, being smaller, procured milk from a smaller area and all milk was hauled directly from the producers to the processor. The average number of producers in the three markets during the study period is shown in Table 3.1. All three markets experienced in- creases in the number of producers in 1953 over 1952. Detroit continued to show an increase in 1951l, while the number of producers in Cleveland 15 TABLE 3.1 AVERAGE NUMBER OF PRODUCERS IN THE DETROIT, CLEVELAND AND TOLEDO MILK MARKETS, 1953-1956 H Detroit Cleveland Toledo Number Change from Number Change from Number. Change from Year Previous Year Previous Year Previous Year (Per cent) (Per cent) (Per cent) 1953 12,822 +h.o 8219 40.5 2003 +7.1 19514 13,165 +2.6 8038 -2.2 1979 -1.2 1955 12.903 '2-0 7929 -1.h 1911 '3 .14 1956 12,5h8 -2 .8 7368 -7 .1 1780 -6.9 Source: Compilation of Statistical Material, FederalWOrder No. 75, Prepared by the Marketing Administrator, cm, Ohio, October, 1956; Federal. Order No. 2h, Prepared by Marketing Administrator, Detroit, Michigan, January, ,1959; and Federal Order No. 30, Prepared by Marketing “ministrator, Toledo, Ohio, November, 1958. and Toledo declined slightly. The number of producers, however, declined in 1955 and in 1956 in all three markets. Average daily production per producer increased in all three markets during the entire study period. Table 3.2 shows this increase and the percentage change from the previous year. Table 3.3 illustrates the average Class I price and the annual average blend price for the three markets from 1953 through 1956. The Class I price is the amount paid by the processor for milk utilized. as fluid milk. Milk utilized for other purposes is purchased at a lower price and the resulting average price paid by processors for all milk is called the blend price. The differential between the Class I price and the blend price in the Detroit and Cleveland markets is quite similar while the differential in the Toledo market is less. Itf|- 16 TABLE 3.2 AVERAGE DAILI PRODUCTION PER PRODUCER FOR DIE DETROIT, CLEVELAND AND TOLEDO MILK MARKETS, 1953-1956 r Detroit i Cleveland Tgledo Pounds Change from Pounds Change from Pounds _ Change from Year Previous Year Previous Year Previous Year (Per cent) (Per cent) (Per cent) 1953 310 +7 .3 297 +7 .2 290 +13 .7 19514 3143 +0 .9 312 +5 .1 31h + 8 .3 1955 366 4-6-7 3h]- +9 .3 3h? +10 .5 1956 388 +6.0 366 +7 .3 388 +ll.8 Source: Ibid . T1313 3 .3 AVERACECLASSIATIDBImDPRICEyRmEIVEDBIPRODUCERSINniE DETROIT, mm, AND TOLEO MILK MARKEls, 1953-1956 . Detroit Cleveland Toledo Year Class I Blend Class I Blend Class I Blend Price Price Price Price Price Price ------------ Dollars----------- 1953 mm h.27 h.88 hill ho6l hill 19514 ' h-29 3.91 h-LL6 11.05 11.32 34.35 1955 h-hO h-OS h.h8 h.11 11.31 L11; 1956 11.65 h.26 h.86 hllS h.70 h.56 __ yDollars per cwt., 3 .5% milk, f.o.b. market. Source: Ibid. 17 This indicates that the Toledo market had the highest per cent Class I utilization of the three markets. Actual average per cent Class I utilization during the study period shows a range from 70.1 per cent to 72 .7 per cent in the Detroit market, 67 .0 per cent to 73 .5 per cent in the Cleveland market, and 82 .0 per cent to 88.7 per cent in the Toledo market. Sampling Unit and Response The Detroit, Cleveland, and Toledo markets were selected for detailed study. Mail questionnaires were sent to all producers who entered or left the three markets during the period from January 1, 1953 to July 1, 1956. Follow-up questionnaires were sent to all pro- ducers who did not respond to the first questionnaire. Information received from the Detroit market during 19 53 is not included in this study since these data were analyzed and published in a previous 1 study. The names and addresses of producers who joined the markets were provided by the marketing administrator for the Cleveland and Toledo markets and by the Detroit Health Department for the Detroit market. The market administrator of each market provided the names and addresses of all producers who left the three markets during this period. Questionnaires from those who entered the market were returned by 55.9 per cent, 36.0 per cent, and 52 .6 per cent of the producers in 1Jones and Quackenbush, pp. 935., p. 13. ' a r‘ s . . r. '7 '“K O "N , t ”v "1 O '18 the Detroit, Cleveland, and Toledo markets respectively. In the case of those who left the market 51.14 per cent, 33 .2 per cent, and 52.5 per cent of the producers in the Detroit, Cleveland and Toledo markets responded. Information regarding the number of producers who entered and left the three areas and the respondents is summarized in Table 3.1;. Because of the large number of respondents and the proportion of the population they represent, the sample is assumed to be representa- tive of the entire number who entered and left the three markets . Producers were asked questions which might indicate factors that influenced their decision to enter or leave a market, as well as the direct question as to why they decided to make the change. A sample of the questionnaire is found in the Appendix. Disposition of the Sample Producers _1lho Entered the Markets. Tables 3.5, 3.6, and 3.7 indicate the number and proportion of respondents to the questionnaire who joined the Detroit, Cleveland, and Toledo milk markets respectively for each year of the study. The producers are classified according to the product they produced before entering these markets. Producers who did not answer the (pestion were not included in computing per— centages as their former production was unknown. Detroit Joiners . More than one-half the respondents who entered the Detroit market had previously produced manufacturing milk. The percentage for the total study period was 58.9, or about six our of every ten, who joined. Former inspected milk producers accounted for . A N a fi .1 a . a n . o a a C x . , . a n a . a A _ A a m 1. _V ,, e . a n a a n p a . m a a a r H a 7 a a m . 19 .aeeem were. as seeded see 3653 seem 3% Sea}: m.mm ©.mm N.mm 0.0m :.Hm m.mm Apnea semv announcemmm amm mam read 63 $5” mama . epeeeeeeeem 52 amp norm 8% 3mm 23 peer meafidddfiemeea wmlmmmd Hagen. w.mm w.ww P.0m m.om :.:: ©.Nm Apnea nemv weqouqodmom me am a8” a: 2N m5 388088 wma om Hmm on: om: mmm ween memHsedoHpmoea omma w.Hm o.mm ©.mm ~.mm m.Hm H.Hm Apnea nsmv unseededmom HS mod so: 8m mar mom epeeeeeemem omm mma moma Nam mama mmm seem monfimesoapmesd mmma m.mm p.mo m.wm m.mm m.:m m.mo Apnea somv mpnmenonmmm .EH :9 .8: arm «hm mmm apnoenogmom mmm now mnoa New mmoa Hmw perm menfimqnoapmosa am? W3 4.3 $3 9mm e e fined .83 mpeeeeeeeem sea and 0mm mam = = messagedmem mqw mam 0mm no» \m. \fl. seem mendsqqofipmenc mmma $3 893% J1 £3 eeeeeee peed t Tease seen eeeaea Seats fiesta I emaaummaa .gogmma .5: .8 cfinzommmm smog... a: 8% HS. oases a: gene .aHofimn use ES 92 _g or: mmmBnoE no mamas #4.. a 20 28 .2 per cent of the totals farm separated cream 7.1 per cent; and new producers represent only 5.8 per cent of those who joined. TABLE 3.5 RESPONDEN‘JB wno JOINED THE DETROIT m MARKET AND THE DAIRY . PRODUCT THEY PREVIOUSLY MARKETED, 19511-1956 F; - -------- Year ------------ Dairy Product 195k 1955 1956 Total Previously (II-503W (bl-LL85) (N-173) (Na-1161) Marketed --------Percent ----------- Inspected milk 21.9 311.0 30.1 28.2 Hamifacturing milk 614.8 55 .1 52.6 58.9 m.- Separatw Cream 7.6 6.0 902 701 New producer 5.7 14.9 8.1 5.8 Total 100.0 100.0 100.0 100.0 ’ Eli/"ll" in this and subsequent tables refers only to the number who responded to the question(s) and consequently will vary between tables. Hhile two and one-half years is not sufficient time to determine trends, it is interesting to note the percentage decline from year to year in those who enter from the former marmfacturing group. Cleveland Joiners. Former inspected milk producers represent the majority of those who joined the Cleveland market with 59.2 per cent compared to 32 .2 per cent former manufacturing producers. Approximately the same proportion of new producers joined the Cleveland market as joined Detroit with 6.14 per cent of the total. Former farm separated cream producers, however, accounted for only 2.2 per cent. -— I D I ...... , . A , . ... n ._ — .— .... n... —- — .— .. ~— -. a — —. ... -— -— —< . T J . j - - s .‘ . o . _ 7 , .‘ .—. o— ._ ..- ~ — — .— __ -— ...- — ..- .- o D I t . D n D I i . ‘ O S O I A . . , — — - . . . _ .—\ '—I \ ‘ 1 *fi w o , Q , . P‘ D . 21 TABLE 3.6 RESPONDENTS wHO JOINED lliE CIEVEIAND MILK MARKET AND THE MRI PRODUCT THEY PREVIOUSLY MARKETED, 1953-1956 ’1 / - - - ------- Year ----------- Dairy Product 1953 1951; 1955 19 56 Total Previously (Ii-225) (IV-322) (bl-293) (NI-130) (II-970) Marketed : -------- Per cent ---------- Inspected Milk 53 03 S7 07 62.1 66.2 59 .2 Manufacturing milk ' 36.11 35.1 30 .0 22 .3 32.2 Farm separated cream 2 .7 1.9 l .7 3 .8 2 .2 New pr0ducer 7 06 503 6.2 707 6.14 Total. 100 .0 100 .0 100 .0 100 .0 100 .0 Again the time period is not sufficient to determine trends although observations may be justified. Tne proportion of former inspected an producers increased from year to year while the per cent of former manu- facturing producers declined. If this is the trend, it could be the result of an ever increasing proportion of fluid producers available in' the milkshed compared to manufacturing producers. Although there is a lack of evidence in this study to support an explanation for such a trend it could mean-this market will, to an ever increasing degree, he in competition with other fluid markets for new producers. Toledo Joiners. Approximately the same proportion of producers in each classification can be observed in the Toledo market as was evident in the Cleveland market. Former fluid producers represent the majority of those who joined with 62.0 per cent of the total. Former marmfactur- ing milk producers account for 32 .5 per cent, new producers h.9 22 per cent, and farm separated cream producers only 0.6 per cent. The declining proportion of manufacturing producers and the ins creasing number of inspected producers can also be observed in this market. In the analysis section of this study, farm separated cream pro- ducers are grouped with manufacturing milk producers unless specifically stated otherwise . TABLE 3.7 RESPOMJEMTSWHO JOINED 'IHETOLEDO MEKMARKETAMD THE DAIRY PRODUCT THEY PREVIOUSLY MARKETED, 1953-1956 A .L— -----------Year------ ..... Dairy Product 1953 19514 1955 1956 Total Previously (ll-130) (N'lZO) (II-97) (IV-19) (NI-366) Marketed -----------PerCent-- ------- Inspected milk ' 58.5 60.0 71.1 52.6 62 .0 Manufacturing milk 37.7 31.7 25.8 36.9 32 .5 Farm separated cream 1.5 ---- ---- ---- 0.6 New producer 2.3 8.3 3.1 10.5 14.9 Total. 100 .O 100 .O 100 .0 100 .O 100 .0 Classification of Producers Who Left the Markets. The number of respondents to the questionnaire who left the Detroit, Cleveland, and Toledo milk markets during the years under study are sulmnarized in Tables 3.8, 3.9, and 3.10. Producers were Classified as to whether they were still producing milk for sale and those still producing were further classified as to the milk product they produced after leaving ....-. 7...... u.” ...—~— 23 the market. Percentages show the proportion who are still marketing milk and the product they are producing as well as those who have discontinued production. Those Who Left Detroit. A large proportion of the producers who left the Detroit market are no longer producing milk for sale. Nearly three out of every four, or 72 .8 per cent, decided to discontinue milk production (Table 3.8). Of the 103 who are still producing, 295 are producing for other fluid markets. During the period of the present TABLE 3.8 DAIRY PRODUCTS MARKETED BY RESPONDEN'JB AFTER ‘ LEAVING IHE DETROIT MARKET, 195he-1956. 4 — - - - - ----- - Year ---------- Dairy Product 1951; , 1955 1956 Total Marketed (NI-572) (N-695) (NI-216) (NIT-11483) --- -------- Percent-----~-- Inspected milk 21.5 21.9 9.2 19.9 Manufacturing milk 6.3 5.6 14.2 5.7 Farm separated cream 2.1 0.1 --- 0.9 NO reply i #190 ' 0.6 0.5 Oi Total marketing milk 30 .9 28 .2 13.9 27 .2 Not marketing milk 69.1 71.8 86.1 72.8 Total 100 .0 100 .0 100 .0 100 .0 study the Detroit market gained 327 respondents that had formerly pro- duced for another fluid market and lost 295 to other inspected fluid markets, leaving a net gain of 32 producers. Adjusting these figures for a 100 per cent response, to correct for the difference in the 2h proportion who responded in each group, leaves a net gain of 11 pro- ducers or 0.9 per cent of the. total inspected producers who changed markets. Those Hho Left Cleveland. The majority of those who left the Cleveland market are still producing milk for sale (Table 3.9). A large proportion of the 56.1 per cent who were still in production were producing for other fluid markets. Cleveland gained 5711 re- spondents from competing fluid markets while losing 525. Adjusting these figures for a 100 per cent response for each group leaves a net gain of 13 producers or 0.11 per cent of the total fluid producers who changed markets . TABLE 3.9 DAIRI PRODUCTS MARKETED BY RESPONDENTS AFTER LEAVING THE 013m MARKET, 1953-.1956. nun-co—un-n-o-YeaIP-uunu- nnnnn Dairy Product , 1953 1951; 1955 1956 Total Marketed (N-29o) (N-hOl) (N-hOh) (NI-169) (N-l26h) --- ------- Percent---------- Inspected milk h2.7 112.2 h2.6 35.5 hl.5 Manufacturing milk 13.8 11.2 9.6 20.1 12.5 Farm separated cream 0.7 0.7 1.0 0.6 0.8 No reply 0.7 1.0 2.2 0.6 1.3 Total marketing milk 57.9 55.1 55.1; 56.8 56 .1 Not marketing milk 112.1 1114.9 1111.6 143 .2 113.9 Total 100 .0 100 .0 100 .0 100 .O 100 .O 25 Those Who Left Toledo. The Toledo market resembles the Detroit market in that the majority of those who left decided to discontinue producing milk (Table 3.10). The 3149 who discontinued producing milk represents 6h.7 per cent of the total leaving the Toledo market. TABLE 3 .10 DAIRY PRODUCTS MARKETED BY RFBPONDENTS AFTER LEAVING THE TOLEDO MARKET, 1953-1956 . -------- --Year----------- Dairy Product 1953 1951; 1955 1956 Total Marketed (N-IOh) (N-l71) (N-171) (N-93) (bi-539) - - ------- Per cent ---------- Inspected milk 21.1 29 .2 l9 .9 20 .h 23 .2 ”1111:30th milk 1408 909 1.1.1 1601 1001‘. Farm separated cream 1.0 0.6 ~---- ---- 0.11 No reply 1:.0 1.8 1.2 1.1 1.3 Total marketing milk 27.9 111.5 32.2 37.6 35.3 Not marketing milk 72.1 58.5 67 .8 62.1; 611.7 Total 100 .0 100 .0 100 .0 100 .0 100 .0 There were 227 former fluid respondents who joined the Toledo market and 125 respondents who left for other fluid markets during the three and one-half year study period. These figures adjusted for a 1(1) per cent response show a gain of 1914 producers, or 29.0 per cent of those who changed, suggesting that the economic or institutional factors effecting these shifts in the three market areas favor the Toledo market. nthongh all markets experienced a gain, the percentage was not as great for Detroit and Cleveland as was the case in the Toledo market. 26 Reasons given by producers for this movement will be discussed in another section of the study. Analytical. Procedure In addition to testing the hypothesis that producers decide to enter or leave a milk market because of price, various other factors which might influence their decision were examined. Comparisons were made of characteristics of the producers who entered and left the three markets and of certain selected characteristics of their farm enter— prise. Statistical analysis in the form of simple regressions and chi- square analyses were employed. Comparisons were made between markets, between groups of producers, and between the different years included in the study in an attempt to discover factors which might have influenced producers to enter or leave the three markets. The null hypothesis, that producers enter a market regardless of the price differential between manufacturing and Class I, or manu- facturing and blend, was tested by employing various simple regression models. The general model used was I II a + bx + u where _I_, the depend- ent variable, is the number of producers who joined the market during a specific month; 3. is the constant value; b is an estimated parameters 5 is the independent variable or price differential; and _u_ is the unexplained residual. The different variables employed in the model are outlined in the analysis section of this study. 27 Chi-square analySis was used to determine if the most important reason producers gave for joining was significantly related to certain characteristics of the producer. Various groupings of the different reasons given for joining the markets were made in an attempt to deter- mine if a relationship existed. CHAPTER IV THE ANALYSIS Introduction The pirpose of this study, as previously stated, is to examine the role of price in the producer's decision to enter or leave a milk market. Various other factors or- characteristics were also tabulated, examined, and classified into two categories; 1) characteristics of the producer and his dairy enterprise, and 2) attitudes, actions, and reasons indicated by producers for joining or leaving any one of the three markets . Comparisons were made between producer groups based on their former type of production and between the three markets to determine if certain patterns existed which might have a bearing on the producer's decision to enter or leave the markets. - The characteristics of the producer and his dairy enterprise which were tabulated and compared include: 'me geographic location of the producer Age of the producer Size of the farm Percentage of the farm owned Tenure on present farm Number of years shipped to the three markets Size of herd Per cent of income from milk. 00-4 axe-urn: N |-I 28 29 Attitudes, actions and reasons for joining or leaving a particular market were solicited from producers in these categories: Reasons for joining or leaving a market Price increase expected Month producer joined or left Length of time producer considered his action Other markets considered 6) Investment costs necessary to qualify for Grade A 7) Decision of producer if prices rise or decline 8) Number who plan to re-enter the market. 0147me The assumption was made that differences found to exist between markets or between producer groups would shed some light on the reasons underlying the producer's decision to change markets. Method of Analysis In the first section of the analysis the various factors or characteristics were tabulated according to markets and by the former production of the producer. Differences were noted between markets and between producer " groups ." The second section deals with analysis by chi-square computation where. selected characteristics of the producer or his farm enterprise were compared to the most important reason pro- ducers gave for joining the market. The third section utilizes simple regession models to test the relationship of the price differential between Class I and manufacturing milk and the number joining the market during selected months. Tests were also made by comparing the differential between the blend price and the manufacturing price with selected months in which producers entered the market. 30 Section I Factors Associated with Producers Joining or Leaving a Market The Geographic Location of the Producer. The geographic location of producers who entered or left a market were plotted to determine if a consistent pattern existed withlegard to their actions. Figures 2, 5, and 8 show the geographic location by counties of producers who entered the Detroit, Cleveland, and Toledo milk markets respectively, and those who left are indicated in Figures 3, 6, and 9. All markets seem to follow a consistent pattern with the milkshed area for each market expanding to include proportionately more pro- ducers from the outlying areas. In the Detroit area a large percentage of those who joined from the outlying area are former manufacturing milk producers while in the Cleveland and Toledo areas the number of former inspected and manufacturing milk producers are about evenly divided. This indicates that perhaps the number of producers supplying the Detroit market could be increased by inducing mamlfacturing milk pro- ducers to join while it appears the Cleveland and Toledo markets must rely as much or more on inspected milk producers fOr any increase. Producers who joined the markets were tabulated according to three concentric zones within each market. Zones were established to coincide as nearly as possible with the location differentials provided in the Detroit and Cleveland marketing orders. Fifteen mile radii were arbitrarily combined in establishing the zones. The first zone 31 Legend 11 Inspected Milk Producers x Manufacturing Milk Producers X Farm Separated Cream Producers X New Producers Each symbol (7.) represents one producer. Each symbol (1:) represents two producers. xx 1‘ ,7 I 7 (XXX!!! “ xx ,xxxxxxtm " x xxx: I 1‘“ “h‘ x‘ K‘II‘ i“y\‘ "*K ’0‘" "'— xw x 1.2 flaunt: g, ' “UH” puma ashram xtxld x‘uru‘ *“ NH] '11th 1.x w v. mun” “u “ML " lint I “a 1: MM ‘1 In: xxx XXX“ ‘9 “*‘x ‘/x I an“! walnut ML: 1", x Xx: axxux reflux! MI- xxxu xxx)“ xx 't , I “x mun Manx ‘ * uxxx n“ It! a“ but, “u “an x: 3&qu x‘ six! ant! fl! XIX! K“l I‘XK ‘xfi‘lg ’Kx/ X‘A {jail "I’ i. I xx “ lthxx ‘1‘“ " an“ in. xxxxxx 1 Detroit "" " "0”“ ‘**'~’ xxxxxx I "‘ ’ I ‘ X aunt/xxx I X I at“. tutti a, x it! titan x 1 x x \ é um x x ' Z e I __f"\———-—-‘ I t— 4 L1 Location by Counties of Respondents Entering the Detroit Milk Market, 1951:4956. 4%! l -.ill It, TlvlltlF Illn I ll ..|.I IL .. l, 1.‘.. 32 Legend X Producers Who Left the Market and Continued Production X Producers Who Left the Market and Discontinued Production Each symbol (/) represents one producer. Each symbol (X) represents two producers . xaxxflx I V xx IV xlllf an!“ 3,”va K)! xi’il.xrlil‘ ‘221241 ‘ilfifl I12?! [11'11 illfl16" up I!!! Xx XXIX/t ,‘x,{ I I!!! Y] XKXKI‘: $11! Air-t (KAlKl 1‘ ""' (xiii! p: Ill-(l I XIX u DetrOlt a X i I u Ill! xiiiv xylsui I 11“" siivi 5x11 In! '7 a IX/JK!‘ I!!! II aw w‘ll lillxl x i XXI xx‘xxfll ‘ X l I XX YIYXV IJtXK Figure 3 Location by Counties of Respondents Leaving the Detroit Milk Market, last-1956., 33 Leeann X Net gain X Net loss Each symbol (I) represents one producer. Each synbol (x) represents two producers. KX(XKX Xililfll Y'VY X Xxy flxxx lift {11“, [I111 y!!! V!!! V! xxxxx 1 rillx xxt/ / XX' 1!!! kill nwvr "" was ' v X XX xx ‘1 A! M I / Figural; Net Gain and Loss by Counties of Respondents in the Detroit Milk Markets, 1991-1956. XXII "/ Ll xxxx YXXXX Karl“r XXIV Kl?! IXX)‘ I!!! 30000 #— [Xx XXX/ {xx xxxxx xXxI yxxx xxxxx xxxx XXI X/ X/h XX/ 3h Legend XInspected Milk Producers xMamxfacturing Milk Producers xFarm Separated Cream Producers XNew Producers Each symbol (l) represents one producer. Each symbol (1:) represents two producers. Vila W“ )(XX/ [KAI x va¢ 11,; XXX xxx: XVI x x, xxx /x wa xxxyxxx XXKYXKXV'ZODB ”Xx Y A I txx/ /xx I/ Y// xxx) x‘x YKK : X x XXX! xx Ix an! Xx y x// Ixxx x‘tlx _.—JL.___lxx /}'x Xxxx x y// Xx YiXu’x XXV x Xx: xxx Vrrxxx :Y5 XX] X! XXK‘Vxxr xx Xx X xx x" x x.xxxrx xx / XXX/ ’ , xx1x~ xxxx KKKX/ KK/ [ I X xxxx YXXI x I Zone HI X xxx Zone L xx Figure 5 Location by Counties of Respondents Entering the Cleveland Milk Market, 1953-1956. M X Producers Who Left the Market and Contimed Production X Producers Who Left the Market and Discontinued Production Each symbol (7.) represents one producer. Each symbol (x) represents two 35 Figure6 location by Counties of Rospondents Leaving the Cleveland Milk Market, 1953-4956- producers. # Xx XII x/x Xxx X XXXXX/ x). :30“ H " xxx xxx“)! ‘1‘) :x ‘(KXKX‘ 1 x xxx xxwx'xx xxx xxxxxx x” was “my!“ x u xxx Cleveland ”m x (I!!! ”ixI‘ {yrx / xKxI " "‘ "“ x q... xxxx x/ )‘X/ xxx xx xxx xxxxx fix” ”our xxx)‘ xx x xx “0000‘ ‘ an!" r)! II XXX! ”now g" X)! H *x’ Xxxxx an mu xxx gyfi‘l N Xit » (M62) (Ir-18) (N-lhé) - ---- ~ ------- Percent---------‘--- I 66.7 72 .6 100 .0 73 .3 fl 2808 ’408 """'""" 1501 III LL05 22.6 ...-n.- 11.6 Total 100 .0 100 .O 100 .0 100 .O O t c—‘ _. .... r .7. .... -—. .— .. ’< .. .—— a. ... .— l O -—~-—~<-. D ”...“..— . _ o a . . . . I’ I :2 L: I . . ,1 p—_—_~ O I. O l I . u l \ u I —‘ u- ~ —- _ u.- h2 In Figures )4, 7, and 10 the net loss and gain for each market can be observed. In each market the close-in counties display a loss. Conversely, those that reveal a gain are the outlying counties of the milkshed. It could be generalized that the reduction of producers in the close-in counties probably indicates a small potential for expansion coupled with the overall reduction of dairy producers in the three market areas as Observed in Table 3.1. The net gain of producers in the outlying areas indicates themarket supply area is spreading with an increasing amount Of the supply of inspected milk being attributed to this outlying area. The Observed expansion of the marketing area also substantiates the theOry of location and land utilization developed by von Thunen. As transportation becomes more readily available and less expensive, all zones expand, thus forcing the cream and butter zones further away from the market. Figures 2 through 10 show the result of this expansion and the incorporation of former manufacturing producers in the fluid market. This is particularly evident in the Detroit area. The geOg'aphic location of the milkshed market also tends to sub- stantiate von Diunenis theory. When the United States is considered as one market, - the surplus production area will be centered in the Baconsin-Minnesota surplus area. All three milkshed areas tend to locate in the direction of that surplus area and the expansion is primarily in that direction also. ‘ - the fact that the three milksheds expanded in several directions, including that of the Wisconsin-Minnesota surplus area, might be i . explained in terms of Fetter‘s Law Of Markets. The three markets, being in competition with eaCh other, as well as with other markets, would tend to expand into areas where the price, less freight costs, is greater than their competitor‘s price. If the price of milk in a particular market increased while the price remained the same in competitive markets, expansion would theoretically occur in all di- rections. However, the expansion of a particular'merket might not be due entirely to price. Institutional factors such as hauling routes, availability of a.handler, nonreconomic preferences, etc., might cause the Observed expansion. Further detailed study would be necessary to determine why the milksheds expanded as they did. Hbile there is a.lack of information at this point to determine the degree of influence of price as a factor in the expansion of these market areas, we might conclude that the market did provide institutional arrangements making it convenient for these producers to join. Reasons given for joining by producers in each of the zones will be analyzed in a later section of this study} Age of Producers Entering or Leaving the Markets. It was hypothe- sized that the producer is concerned with receiving the most favorable price for'his product. Thus it was presumed that the age of a producer would be a.determining factor in qualifying for Grade A, as fixed assets needed for Grade A.production generalIy accumulate with age. Ages of producers for the three markets are summarized in Tables h.h through h.8. 14h _ A comparison of the age distribution of former inspected producers who entered the market shows that 56.1 per cent, 5h.8 per cent, and 63.0 per cent of the producers who joined the Detroit, Cleveland, and Toledo markets respectively, were under 16 years of age (Table Luh). TABLE 14.14 AGE OF FORMER INSPECTED MILK PRODUCERS NHO ENTERED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Age Detroit Cleveland Toledo Total (YearS) (N-312) (NI-51:8) (Ii-216) (N-1076) ---- ------ -Percent--- ------- 214 or less 1.1.08 1.1.02 1402 14.3 25 - 3h 23.1 21.1. 21,.5 22.5 145 - 5h 23 .1 21.0 19 .9 21.14 55 - 6h llul 111.1; 11.1 13.7 65 and Over 6.7 9.8 6.0 8.2 Total 100 .0 100 .0 100 .0 100 .0 A logical reason is not evident as to why the Toledo market experi- ences the youngest group of joiners. The same pattern, however, exists in the former manufacturing group with. still larger percentages in the younger age group (Table h.5). In this group we Observe 61.8 per cent, 66.2 per cent, and 75.9 per cent of the joiners in the Detroit, Cleveland, and Toledo markets respectively, are under the age of NS. The larger propOrtions of joiners under 15 years of age observed in the former marmfacturing group and the new producer group (Table 14.6) would coincide with what might be the expected pattern. 115 TABLE 14.5 AGE OF FORMER MANUFACTURING MILK PRODUCERS wHO ENTERED TRE DETROIT, CLEVELANO,ANO TOLEDO MILK MARKETS, 1953-1956 Age Detroit Clev‘eland Toledo Total (Yam) (II-71:1) (r326) (N-Jlé) (Iv-11483) ------------ Percent---------- 214 or less 1; .l 6.1 5 .2 1“? 25—314 28 .7 29 01 37 01 29 e7 35-1th 29 .0 31.0 33 .6 30 .0 15-51; 23 .3 l7 .8 15 .5 21.1 55-614 11.5 12 .6 6.9 1.1.3 65 311d 0m 3 all. 3 014 107 3 .2 Total - 100 .0 100 .0 100 .0 100 .0 TABLE 14.6 ACE 01" New PRODUCERS NR0 INTERBI) THE DETROIT, CLEVELAND AND TOLEDO MILK MARKETS, 1953-1956 _ Age Detroit Cleveland Toledo Total (16m) 01-63) (DI-58) (N-l7) (II-138) ------------ Percent--e-------- 21; or less 19.0 29.3 29 .1; 214.6 25-31; L2 .9 39.7 141.2 1.13 35—1414 20.6 20.7 11.8 19.6 "' 1207 609 11.8 1001 55‘614 1408 107 "" 2.9 65 and over - l.7 5.8 1.5 Total 1.00 .0 100 .0 100 .0 100 .0 It seems reasonable to assume that the majority of new producers would come from the younger ranks as young farmers establish themselves as dairy farmers. It follows that former manufacturing producers who 116 make the change to Class I production would also come, to a large extent, from the younger age group as they improve their position as a dairy farmer. However, there is little conclusiVe evidence in compar- ing the markets. With the exception Of a younger age group joining the Toledo market little difference was observable. A more pronounced difference is notable in the age distribution of those who joined the markets as compared with all dairy producers of the area. Table 14.7 is a tabulation, based on the 1951; United States Census of Agriculture, of the age distribution of all dairy producers in the three market areas. It should be noted that the census age distribution shows the largest proportion of producers in the “115 and over" age group. This would probably indicate that it is the younger age group of produCers'who are more prone to make a change either in markets or in the class of milk they produce. Tables 14.8 and 1;.9 indicate the age distribution of producers who left the three markets. Those who left the market but are still pro- ducing milk for sale are found in Table h.8. Since all producers who left had produced inspected milk, it is interesting to observe how closely the age distribution coincides with that of former inspected milk pro- ducers who joined the three markets. In the Detroit market 56.1 per cent of the producers who joined were under 145 years of age as compared with 57 .2 per cent for those who left. In the Cleveland market a similar pattern was Observed with 5h.8 per cent of the joiners under age 145 while 53 .6 per cent of the quitters were under this age. LL? TABLE Luz ACE DISTRIBUTION OF DAIRI FARMERS BI ECONOMIC SUBRECIONSl/ Age - - - - - - Economic subregions ---------- (room) -28- -RB- 49- -50- Total ----------- Percent---------- 21;, or less 1.8 1.6 1.5 0.9 1.6 25 - 3h 15.1 13.0 13.2 10.9 13.5 35 " 1.1.14 23 .14 22 08 23 .7 22.9 23 03 1:5 - Sh 22.1; 211.5 23.8 23 .9 23.5 55 - 61; 21.6 20.5 22.0 22.1. 21.6 65 and over 15.7 17.6 15.8 19.0 16.5 Total 100.0 100 .O ' 100 .0 100 .0 100.0 ySubregLons 1:9 and 50 coincide with the Detroit milkshed; 118 and 19 coincide with the Toledo market; and 28 and NB coincide with the Cleveland milkshed. Source: United States Census of Agriculture: 1951;, Size of Operation by Type of Farm, Vol. 3, Part 2. U. S. Government Printing Office, washimgton, D. 0., pp. 503, 527, 531, and 535. A wider difference existed in the Toledo market. Here 63 .0 per cent of the joiners and 146.14 per cent of the quitters were under age 15 . It seems apparent from these data that the Detroit and Cleveland markets attract the various age groups in about the same proportion as other markets attract producers away from them. The Toledo market, however, appears to attract a larger proportion of the younger aged producers (under 1.5) than are lured away by competitive markets . When the producers who left the three markets and discontinued production were tabulated (Table h.9) it was evident that this group followed closely the UnitedStates census age distribution of all h8 TABLE 11.8 AGE OF PRODUCERS WHO LEFT THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS .AND CONTINUED PRODUCING MILK, 1953—1956 .Age ,Detroit Cleveland Toledo Total (Years) (Iv-38h) (bl-679) (II-179) (N-12u2) ----------- Per cent - - - — - ~ - - — - at 2D or less 1.8 2.2 1.7 2.0 1 35" hh 33.3 ’ 30.5 27oh 31.1 K hS - 5h 22.7 l9.h 2h.6 21.2 1 55 - 6b. 1D.1 17.1 19.0 16.11 65 and over 6.0 9.9 10 .0 8.7 Total 100.0 100.0 100.0 100.0 dairy farmers of this area. It would seem logical to expect producers who discontinued dairy production to be from an older age group'when we consider health, retirement, or a general reduction of farm activities TABLE 11.9 m 01’ PRODUCERS HBO LEFT DIE DETROIT, CLEVEMND, AND TOLEDO NIL: mums AND DISCONTINUED PEELK PRODUCTION, 1953—1956 _.4L_‘ I _) ,Age Detroit Cleveland Toledo Total (rears) (II-911) (Iv-mu) (bl-281) (bl-1666) --------- ‘- - Per cent - - - - - - - - - - 2h or less 1.5 3.0 h.3 2.h 35 - hh 2h.2 2h.7 26.3 2h.7 145 - 5h 19.2 19.1: 19 .6 19.3 55 - 614 21.5 19.1: 19 .9 20.7 65 and over 20.0 16.0 13.2 17.7 Total 1(1) .0 100 .0 100 .0 100 .0 h9 accompanying this age group. The data presented do not substantiate this explanation. With the exception of the Detroit market with 20 .0 per cent of the producers in the 65 and over classification, which exceeds the census distribution for that age group, the age distribu- tion for those who discontinued producing is generally younger than the census distribution for each category. Size of Farm. Information was sought regarding the number of acres operated by producers entering and leaving the three markets to determine if a. relationship existed between the size of the farm and the type of product formrly produced. It was hypothesized that pro- ducers on the larger farms would be more likely to have assets necessary to qualify for the more favorable prices associated with inspected milk production, which in turn influences their choice of markets. The above situation was found to be generally true as indicated in Tables 11.10 through 11.13. Former inspected milk producers in each of T1313 14.10 ACRES OPERATED BI FORMER INSPECTED MILK PRODUCERS‘WHD JOINED TREanTRCIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Acres Detroit Cleveland Toledo Total Operated ‘ (ll-316) (N'513) (N'ZZh) (II-1053) -----------Percent---------- D0 and under .6 1.2 .9 .9 m. ". 80 8.2 903 301 707 161 "' 200 1602 1207 20.1 1503 2&1 - 280 h.7 9.9 8.9 8.2 281 and over 21.2 16.8 27 .3 20.3 Total 100 .0 100 .0 ~ 100 .0 100 .0 o , v- n I .—.. , . | , k a n . g k ._ — .... 2.. __ __ _. 2 ‘ / \ . , . . . . . n .... ..l .... .... .... .... .. .. u -- ... .— — .... ... .< ... ,. ... .. 4 I I Q .- n ( -e u \ § . . n " n ... r ( u ‘ .— H D — v p .. . n . 50 the markets operate larger farms than former manufacturing producers, who in turn operate larger farms than the category of new producers. This difference is pm'ticularly marked in the Toledo area as compared to Detroit and Cleveland. It is interesting to note that the producers who left to Join another market operated smaller farms on the whole than former inspected producers who joined. 1 mar 111.11 ACRES OPERATED BI FORMER MANUFACTURING MILK PRODUCERS WHO JOINED TEE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Acres Detroit Cleveland Toledo Total Operated (N-316) (N-Sls) (IV-22h) (IV-1053) ----' ------- Percent--- ------- 1:0 and under 1.2 2.0 0.8 1.11 141 "‘ 80 909 1206 13014 10 09 121 - 160 22 .1 19 .11 26.9 21.9 161 - 200 16.5 18 .7 17 .7 17 .2 201 " 21.1.0 10 08 6 05 12 06 9 09 2141 "' 280 603 8 08 1.1. .2 607 281 and over 15 .0 12 .6 10.1 13 .9 Total 100 .O 100 .0 100 .0 100 .0 The data appear to support the hypothesis that increased farm acreage is a factor in the producer's choice of a market. The trend toward increased size of farms presents the situation where. an increas- ing number of producers might be expected to qualify for, and choose inspected mill: markets. 51 TABLE 11.12 ACRES OPERATED BI NEN PRODUCERS WHO JOINED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953—1956 h ‘ AL‘ A‘ v Acres Detroit Cleveland Toledo Total Operated (NI-62) (NI-50) (NI-17) (Na129) ----------- Per cent - - - - - - - - - - 1.0 and under 3 .2 ---- ---- 1.6 14.1 "' 80 21.]. .2 22 .0 l7 .6 22 05 81 " 120 1103 214 .0 29 01.]. 18 06 121 "' 160 22.6 2200 1706 2107 161 - 200 12 .9 111.0 11.8 13 .2 2111 - 280 3.2 ---~- 5.9 2.3 281 and over 9 .7 8 .0 5 .9 8 .5 Total ’ 100 .0 100 .0 100 .0 100 .0 TABLE 11.13 ACRES OPERATED BI PRODUCERS NR0 LEFT THE DETROIT, CLEVELAND, AND TOLmO MILK MARKETS BUT CONTINUEDTO MARKET MILK, 1953-1956 Acres Detroit Cleveland Toledo Total Operated (N-385) (N=678) (N-178) (N-12111) ----------- Per cent - - - - - - - - - - 110 and under 1.3 3.11 0.6 2.3 14.1 " 80 10.7 1509 8.1.1. 13 02 81 "' 120 , A 1506 2105 214. .1 20 .1 161 - 200 20 .0 . 111.7 16.3 16.6 21.1.1 " 280 607 5.2 5.6 507 281 and Over 12.7 11.7 13.5 12.2 100 .0 100 .0 100 .0 100 .0 Total Q s n . o .— .. —. r-n ... ._ .. H --..— D \ _ I a c. —. n ~ u 1. . _ . . . . . . . . —. ... o— '- -. .— ... u D t O b r. ' O .. 52 Percentage of the Farm Owned. In addition to acres operated, a response was solicited regarding the portion of the farm the producer owned. Tables h.lh through 11.17 are a tabulation of this information indicated by those who joined or left the three markets. It was hypothesized that producers who owned a large proportion of their land would have the necessary assets to capitalize on the price differential available for inspected milk production. If the hypothesis were true we would assume that former manufacturing producers, or those who formerly lacked the improvements necessary for production of in- . spected milk, would own a relatively smaller amount of the land they operated than the former inspected producers. than the three markets were analyzed separately it was found that data collected from the Toledo and Cleveland producers tended to sub- stantiate this hypothesis, while data from Detroit producers tended to be inconclusive. There were 28 .6 per cent of the former manufacturing producers in the T01edo market who owned 81 per cent or more of the land they operated. This is in contrast to the 35.8 per cent and 111.0 per cent of the former inspected producers who Joined and left this market respectively. Likewise the Cleveland market tends to substantiate the hypothesis. In this market 116 .11 per cent of the former manufacturing producers owned 81.0 per cent or more of the land they operated. 0f the former inspected producers who joined and left this market, 51.1 per cent and 53 TABLE 11.111 PER CENT OF ACRES ORNFD BI FORMER INSPECTED MILK PRODUCERS wRO JOINEJ Em DETROIT, Cm, AND TOLEDO MILK MARKETS, 1953-1956 Acres Owned Detroit Cleveland Toledo Total (Per cent) (N'317) (N‘513 1 (N'Zzh) (N'105h) - - --------- Per cent ---------- None 18 .3 22 .11 25.9 21.9 1-10 -- O .3 0 .14. 0 .3 1.1-20 103 O 06 O .9 O .9 21’30 1.1.01 108 3 01 2 07 31-140 11.1 2 .7 7 .1 1|. .1 1.1.1‘50 8 OS 6.1.1 8 00 7 01.1 Sl-w 2 08 3 05 7 01 1.1 01 61-70 7 .9 he? 5 oh 5 .8 71‘80 501.1» 509 6.3 508 81‘90 14 01-1- 14 09 5 01-1- 1-1. .8 Total 100 .0 100 .0 100 .0 100 .0 .4. .4 19.5 per cent respectively, owned 81 per cent or more of the land they operated. However, in the Detroit market 51.0 per cent of the former manu- facturing producers owned 81 per cent or more of the acres they operated as compared to 1.7 .6 per cent of the former inspected producers who Joined and 51.9 per cent of those who left this market. Khan the totals for the three markets were compared little difference was observed. The proportion of producers who owned 81 per cent or more of the acres they operated were 1;? .5 per cent of the former manufacturing producers, 117 .0 per cent of the former inspected producers who joined, and 119 .0 per cent of the former inspected producers who left. 5h TABLE 14.15 PER CENT 0F ACRES OWNED BI FORMER MANUFACTURED MILK PRODUCERS WHO JOINED THE DETROIT, CLEVELAND, AND TOLEDOMJLK MARKETS, 1953-1956 __ ‘ Acres Owned Detroit Cleveland Toledo Total (Per cent) (N-760) (N-293) (Iv-1.19) (LI-1172) ----------- Per cent - - - - - - - - - - None 11.2 2h.2 h0.h l7.h 1910 - —- 0.8 0.1 11‘20 106 101—I. 107 1.5 21.30 2 02 3 cl 2 05 2 05 31‘140 5 .0 )4 01 2 .5 h as D1950 6.2 5.5 9.2 6.3 51-60 5 .9 5 .1 S .9 5 .7 61970 8.6 5.8 5.0 7.5 71-80 8 .3 14014 3 014 608 81‘90 502 2 .14 107 1.]. .2 91-100 115 .8 1414 .0 26.9 13 .5 Total 100 .0 100 .0 100 .0 100 .0 TABLE h .16 PER CENT 0F ACRES ONNED BI NEH PRODUCERS wRO JOINED TEE DETROIT, . CLEVELAND, AND. TOLEDO MILK MARKETS, 1953-1956 Acres Owned Detroit Cleveland Toledo Total (Per cent) (Ni62) (Ni50) (Nil?) ‘ (Ni129) ----------- Per cent — - - - - - - - - - none 27 ch 3600 58 08 314. .9 1-10 - -- - - 11-20 - - -- -- 21-30 -- -- 5 .9 0 .8 31-10 h.8 -- -- 2 .3 ill-50 3 02 14 00 "" 3 01 51.3) 8 01 600 "" 602 61‘70 8 .1 "' S 09 1.1 .7 71-80 ' 3 .2 2 .0 -- 2 .3 81-90 1.6 2 .0 -- 1.5 91-100 ha .6 50 .0 29 .1; 1414 2 Total 100 .O 100 .0 1CD .O 100 .O 55 TABLE 11.17 PER CENT OF ACRES OHNEI BY PRODUCERS wHO LEFT THE DETROIT, CLEVELAND, AND TOLmO MARKETS AND CONTINUED PRODUCING.MII.K,.1953-l956 Acres Owned Detroit Cleveland Toledo Total (Per cent) (Na-385) (N=678) (N-178) (NI-12141) --- -------- Percent----- ----- None 114.0 21.2 21; .l 19 .1; 1-10 0 .3 0 .3 -- 0 .2 1.1-20 0 .8 0 .9 1.1 0 .9 21‘30 2 cl 2 02 1.1. 05 2 as 31-10 3 .6 2 .1 5 .1 3 .0 1.1-50 6.2 6.0 6.2 6.1 51-60 5 .5 6.5 6.2 6.1 61.70 8 .1 5 .3 6.7 6.1; 71-80 7 05 600 501 601-1» 8090 5.7 2.5 2.2 3.5 91-100 D62 D7 .0 38 .8 ES .5 Total 100 .0 100 .0 100 .0 100 .0 —— W Viewing together the size of the farm (acres operated) and the portion owned (per cent acres owned) it appears that the milk product that farmers market is more dependent upon the number of acres operated than on the percent of the acres owned. It would appear that as dairy farms become larger, an increasing number of these producers will make the necessary improvements to qualify for inspected milk production which in turn will influence their choice of markets. Tenure on fresenti‘irm. Producers were asked to indicate the number of years they have been operating their present farm. It was assumed that producers with more tenure would be more able to have 56 qualified for the price advantage possible in the production of Class I milk which in turn will influence their choice of markets. Answers elicited from producers are tabulated in Tables h.18 through h.2l. TABIE 14.18 TENURE ON PRESENT FARM OF FORMER INSPECTED PRODUCERS wRO JOINED TEE DEIRJIT, CLEVEmID, AND TOLEDO MILK MARKETS, 1953-1956 fl ' m ‘1': r- Iears Detroit Cleveland ’ Toledo Total (W308) (M5311) (N‘ZIS) (N'1057) - - --------- Per cent ------ - - - - 5 .O and under 35 .7 3b, .8 30 .7 3D .3 505 " 1000 1795 20.6 25.6 20 .7 10 .5 "' 15 .0 12 e7 15 .0 11400 11.1.01 1505 " 20.0 9.7 12.2 1801 1207 2005 " 3000 1,300 902 7014 909 30 as and over 1.1014 8 02 1.]. 02 8 .3 Total 1.00 .0 100 .0 100 .0 1.00 .0 44‘ It should be noted that answers to this question support the Ob- servation that former inspected milk producers have been operating their present farm longer than former manufacturing milk producers as indicated by the percentage distribution of the two groups. Producers who left the three markets were also observed to have operated their farms longer than manufacturing producers, thus adding support to the above hypothesis that farm tenure is a factor in the producer‘s choice of a market. It is interesting to observe the difference between the three malkets. There appears to be a tendency for producers who joined the 57 Detroit market to have greater farm tenure than those joining the Cleveland and Toledo markets. Thirtyhfour and one-tenth per cent of the former inspected producers and 21.9 per cent of the former manu~ facturing producers who joined the Detroit market had been operating their farms for 15.5 years or more. This compares with 29.6 per cent TABLE 14.19 TENURE ON PRIEENT FARM OF FORMER MANUFACTURING PRODUCERS WHO JOINED THE DETROIT,_CLEVELAID, AND TOLEDO MILK MARKETS, 1953-1956 fi Tears Detroit Cleveland Toledo Total (NI-7E3) (N-326) (N-117) (N-ll86) - - - - - - - - - -,- Per cent ----- ~ - - - - SAD and under 36.6 39.0 h9.6 38.5 505 " 10.0 2506 2601.1. 20.5 ' 2503 1.005 " 1500 1509 1308 15014 _ 1503 1.505 "' 2000 8.6 908 Sol 806 20.5 "' 30.0 805 700 707 8.0 30.5 and over h.8 h.0 1.7 h.3 Total 100.0 100.0 100.0 100.0 of the former inspected producers and 20.8 per cent of the manufacturing producers who joined the Cleveland market. The Toledo joiners indicated 29.7 per cent former inspected producers and lh.5 per cent manufacturing producers operated their farms for 15.5 years or more. However, the opposite pattern appears to be true of producers who left the three markets. ‘Hith this group greater tenure appeared in the group of Toledo producerS'with hh.6 per cent indicating they operated their farm 15.5 58 TABLE 11.20 TENURE ON PRESENT FARM OF NEw PRODUCERS WHO .10an THE DETROIT, CLEVEmm, AND TOLEDO MILK MARKETS, 1953-1956 Yem's Detroit Cleveland Toledo Total (IV-62) (N-Sl) . (N-17) (N-130) ----------- Percent----—----- 5.0 and under 87.1 86.3 88.2 87 .0 505 "' 1000 3.2 1107 509 609 1005 " 1500 1409 "" """" 2.3 1505 "' 2000 106 2.0 "" 105 20.5 - 30.0 1.6 -- 5.9 1.5 30.5 and over 1.6 - -- 0.8 Total 1.00 .0 100 .0 100 .0 1.00 .0 TABLE 14.21 TENURE ON PRESENT FARM OF PRoDUCERS 'le0 LEFT TEE DETROIT, CLEVELAND, AND TOLEDO MARKETS WHO CON'JIDIUED CTION 0N ANOTHER MARKET, . 1953-195 . . . Tears Detroit Cleveland Toledo Total (N-386) (N-679) (N-l77) (II-121.2) ----------- Percent-----—---- 5.0 and under 30 .1 29.1 26.0 29 .0 505 " 1000 2208 2207 1306 2101.]. 1005 "‘ 1500 11.1.00 1.14014 1508 114.05 1505 "' 20.0 13 02 9.6 10 .7 1009 A 20.5 "' 30.0 1001 11.1.03 15.8 13 02 3005 and over 908 9.9 18 01 1.1.0 Total 100 .0 100 .0 100 .0 100 .0 3” This question was not asked of producers who discontinued pro- ductinn. 59 years or more, compared with 33 .8 per cent of the Cleveland and 33.1 per cent of the Detroit producers. The above situation may suggest that producers join the Toledo market sooner after establishing them- selves on a farm and continue producing longer than do producers in the Detroit market with Cleveland producers being observed somewhere between the two. Additional. study, howeVer, would be necessary to substantiate this observation. Line Spent at Daily Farming. Producers from the Cleveland and Toledo markets were also asked the length of time they had been engaged in dairy farming. It was hypothesized that farmers who have produced milk for an extended period of time might be motivated to qualify for the higher prices of fluid milk production and would be more likely to decide to choose an inspected milk market. The overall distribution (Tables 1.22 through 11.25) supports the above obserVation and shows a marked similarity to the pattern observed when "time on present farm" was tabulated. Former inspected milk pro- ducers indicate they have been engaged in dairy farming longer than manufacturing producers. Those in the latter group, however, have been operating dairy farms longer than the new producers. The producers who left the Cleveland and Toledo markets but con- timeto market milk in other markets, also indicate they have been engaged in dairy farming longer than manufacturing producers. It is of interest to note, however, the dissimilarity in the dis- tribution pattern of those who left the two markets . The difference in the distribution between former inspected producers'who entered and TABLE 1L.22 TEARS IN DAIRI FARMING INDICATED BI FORMER INSPECTED PRODUCERS WHO JOINED THE CLEVELAND AND TOLEDO MARKETS, 1953-1956 A Years Detroit-y Cleveland Toledo Total (N-528) (IV-205) (IV-733) ------- Percent------- 5.0 and under 23.7 23 .9 20.2 5.5 " 10 00 22 09 3102 28 .8 1005 " 1500 1609 1 111.06 16.2 15 as "' 20 .0 1601 11406 1507 2005 "' 30 .0 1.103 9.8 10 09 3005 and over 901 509 802 Total 100 .0 100 .0 100 .0 y Detroit producers were not asked this question. those who left is not as great in the Cleveland market as was observed in the Toledo market. Eighteen and one-tenth per cent of those who discontitmed production for the Toledo market had a milk production record. dating back for 30.5 years or more, while 5.9 per cent of the former inspected producers who joined the market had produced milk for this length of time. Conversely, when the under 5.5 year category is Observed, 23 .9 per cent of those who joined this market and 11.1; per cent of those who withdrew were tabulated in this category. Differences as goat as these were not evident in the Cleveland market. 61 TABLE h.23 YEARS IN DAIRI'EARMING-INDICATED BY'FORMER MANUFACTURING PRODUCERS WHO JOINED THE CLEVELAND AND TOLEDO MARKETS, 1953-1956 Years Detroitl/ Cleveland Toledo Total (N-308) (bl-113) (ll-1121) ------ Per cent - - - - - - - - 5Q0 and under _ 32.5 37.2 33.7 f 5.5 - 10.0 29.9 ‘ 29.2 29.7 .: 1.005 "' 1500 11.1.09 11.1.02 1.1.1.07 ‘ 1505 " 2000 1101.]. 907 1009 $05 "' ”.0 708 808 8.1 30.5 and over 3.5 0.9 2.9 Total 100.0 100.0 100.0 A/Detroit producers were not asked this question. TABLE L21; mm Ill DAIRI FARMING INDICATED BI NEw PRODUCERS wRO ENTERED TEE CLEVELAND AND TOLEDO MARKETS, 1953-1956 Tears Detroitl/ Cleveland Toledo Total (AI-1.8) (Na-15) (Na-63) ------ Per cent - - - - - - - - 5.0 and under 97.9 93.3 96.8 5.5 - 10.0 -~ 6.7 ‘ .6 10.5 - 15.0 -- -- - 15 05 "‘ 20 0O -- ..- ...... _ 2005 " 3000 201 "" 1.06 30 05 and over -"' - ~- Total 100.0 100.0 100.0 l/Detroit producers were not asked this question. 62 The above situation gives further support to the assumption that producers join the Toledo market sooner after becoming established as dairy farmers and continue producing longer than do producers in the Cleveland market. Further observations regarding this assumption will be made in the following sections . TABLE h.25 IEARSINDAIRIFARJENGOFPRODUCERSHHO LEFTTHECIEVEIMIDANDT O MARKETS AND CONTINUED PRODUCING ON ANOTHER MARKET, 1953-195 Tears Detroit-y Cleveland Toledo Total (N-656) (II-166) (N-822) ----- --Percent------- 5 .0. and under 16.3 ll.11 15.3 505 "' 1000 21.1.07 1801 23 01.1. 1005 " 1500 1605 2101 17 01.1. 1505 "' 2000 1502 1206 1.1407 2005 " 3000 1507 1807 1603 30.5 and over 11.6 18.1 12.9 Total 100 .0 100 .0 100 .0 513018 question was not asked ot those who discontinued producing. Detroit producers were not asked this question. Number of Years Producers Shipped to the Three Markets. Tables 11.26 and h.27 show the distribution of producers according to the number of years they produced for the Detroit, Cleveland, and Toledo milk markets. ' The data in Table h.26 indicate that producers leaving the Cleveland market have generally been in the market a shorter period of time than 63 producers leaving the other two markets . Sixty-eight and three-tenths per cent of those leaving the Cleveland market shipped to this market for 10.5 years or less, compared to 56.0 per cent and 57 .8 per cent leaving the Detroit and Toledo markets respectively. Although 8.3 per cent have been shipping to the Cleveland market for 30.5 years or longer, 15 .1 per cent shipped to Cleveland for 20 .5 years or longer compamd to 18.9 per cent from Detroit and 18.3 per cent from Toledo during the same period. TABLE b.26 mm SHIPPED TO THE DETROIT, CLEVEuND, AND TOLEDO MARKETS BI PRODUCERS NRC DISCONTINUED PRODUCTION, . 1953-1956 Tears Detroit Cleveland Toledo Total (ll-89h) (N‘h69) ‘ (Ii-2810 (N'l6h7) ------;----Percent ----------- 5.0 and under 33 .3 112.9 32 .8 35 .9 S 05 "" 10 00 22 07 25 0h. 25 0O 23 09 1005 " 1500 1.600 908 1307 1308 1505 " 2000 901 608 1.002 806 2005'“ 30.0 1202 608 1,30)... 1009 3005 and over 607 803 LL09 609 Total ‘ 100 .0 100 .O 100 .0 100 .0 The largest distribution difference appears in the under 5.5 category where the difference is 9 .6 per cent between Detroit and Cleveland and 10.1 per cent between Toledo and Cleveland. No reason was evident to indicate why these differences existed. . bu...‘ TABLE h.27 TEARS SHIPPED TO THE DETROIT, CLEVELAND, AND TOLEJO MARKETS BY PRODUCERSTUTO CONTnTUED PRODUCTION ON ANOTHER MARKET, 1953-1956 A Years Detroit Cleveland Toledo Total (IT-372) (N-6hh) (bl-171:) (bl-1190) -----------Percent----- ------ 5.0 and under 19 .2 58 .5 37.1; 52 .5 5.5 - 10 .0 19.6 23 .0 3O .5 23.0 1005'. 1500 1005 709 806 809 1505 "' 20 00 509 506 908 603 2005‘ 3000 1206 30).}. 1.003 703 30.5 and over 2.2 1.6 3.1; 2.0 Total 100 .0 100 .0 100 .0 100 .0 Producers who left the three markets and are continuing production in another market were generally found to have been producing a shorter period of time in all three markets than were producers who discontinued production. Table 14.27 indicates that producers who left the Cleveland market had generally produced for this market a lesser number of years than producers leaving the Detroit and Cleveland markets . Eighty one and five-tenth per cent had produced for this market for less than 10 .5 years compared with 68.8 per cent from Detroit and 67 .9 per cent from Toledo during the same period. In addition 5.0 per cent from the Cleveland market had produced for 20 .5 years or more while 15.0 per cent from Detroit and 13.7 per cent from Toledo had produced for the same period. The pattern was consistent with the producers who discontinued 65 production although again no logical reason could be determined for this difference. Size of Herd. Wheeler:L concluded that technological developments are leading to a higher degree of specialization on dairy farms. It would follow that to be competitive a farmer would have to maintain a "3 certain minimum number of cows in his herd in order to spread these added fixed costs over more variable units. If a producer‘s herd is small and facilities inadequate for expansion without major expense, he may choose to discontinue his dairy enterprise rather than invest the capital needed for a more efficient unit. If this hypothesis is true we would expect to find a larger percentage of the producers with small herds discontinuing milk production. Table h.28 shows the average mImber of cows in the herd during the last twelve months for all producers who left the three markets, and the average number of cows producers who contizme marketing milk for sale expect to have in their herds during the next twelve months. In all cases, except in the Toledo market in 1956, producers who are still producing milk for sale had a larger average sized herd than producers who discontinued marketing milk. Producers who continued producing milk averaged 15 .2 per cent more cows per herd than producers who decided to discontinue production. It is also interesting to note that the average producer who con- tinues milk production expects to expand the size of his herd by 15.5 ff 2tWheeler, _o_p. 9313., pp. 996-1001;. per cent in the next twelve months . Regardless of whether or not this becomes a reality, the stated intention suggests a trend in attitude 7 toward larger herds. The overall distribution of answers indicate a trend toward larger herds (Tables 14.28 through 17.31). In all markets and with all "former production groups" the number of cows producers expect to have in their herd during the next twelve months is greater than the average herd size during the past twelve months. It is also interesting to note that the average producer in all markets had barn facilities that exceeded the number of cows he expected to have in his herd during the next twelve months . This indicates that perhaps farmers have the barn capacity to increase the size of their herd substantially without ad- ditional capital expense for buildings. If we assume that former inspected milk producers joining the three markets are representative of all producers in the market, the average producer has the barn facilities to increase his herd size by approxi- mately six cows, or one third. Facilities capable of still larger in- creases are evident with the former manufacturing and new producers. The average producer who had formerly produced inspected milk had a larger herd than former manufacturing or new producers. This appears to substantiate the hypothesis that as the herd size increases a larger number of producers will complete the necessary requirements for Class I production. AVERAGE NUMBER OF cows PER PRODUCER who LEFT THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 TABLE h.28 67 Discontinued ----- Continued producing - - - - - production Market Average Average Average and Number number of Number number of Number number of year respon- cows, last respon- cows, next respon- cows, last dents 12 months dents 12 months dents 12 months 1953 Cleveland 161 16.8 156 18.3 99 lh.6 Toledo 2 12.9 _£§§ 1h.5 12.7 Total 1'65 16.2 179 17 .8 1% 13 .9 1951; Detroit 167 19.9 161 21.3 306 1h.9 Cleveland 211 12.1 123 12.7 1g3 1h.6 TOIBdO l 09 l 09 l 1307 Toledo mi; 17 .3 “E? 19.1; "5’50 111.6 1955 Detroit 189 20.7 182 25.0 h29 15.h Cleveland 21h 16.5 209 20.1 16h 16.0 1'0]st 11405 1607 1,401 Total E56 18.0 Egg 21.7 692 15.3 1956 Detroit 29 19.1 25 22.3 166 15.8 Cleveland 93 17.3 90 20.1 65 16.7 Toledo lh.6 26 18.0 1 15.0 Total 17.0 21.1 .282 15.8 Total (all markets, all years) 12h5 l7.h 1176 20.1 1666 15.1 TABLE h.29 AVERAGE NUMBER OF cows IN THE HERD DURING THE PAST 12 MONTHS; AVERAGE NUTEEROPCCTSEXPETE)DTTHEHEEU1DURINGTEENEKT121ENTHS3AND PRmENT FACILITIES POR cows; AS INDICATED BY FORMER INSPECTED MILK PRODUCERS wHO ENTERED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Cows past 12 months Cows next 12 months Present facilities Market and Number Average Number Average Number Average year responr number respon- number responr number dents cows dents cows dents cows 1953 Cleveland 119 17.7 11h. 20.0 116 23.7 Toledo 7E 18.1 21 19.8 23.2 Total 19 17.8 185 20.0 189 23.5 l95h IDetroit 10h 15.5 107 18.1 108 21.9 Cleveland 180 13.11: 129 18 .g 182 2% .1 TOMO O 0 210 10 2 03 Total 35E 16. 351 18.9 360 22.2 1955 IDetroit 156 17.9 1h8 20.5 157 23.2 Cleveland 175 16.9 177 20.0 172 23.2 Toledo 68 18.1 6 22.0 65 23.2 Total 399 17.5 392 20.5 39 23.2 1956 ‘Detroit 51 16.8 50 19.h M9 22.7 Cleveland 79 16.5 8h 19.3 82 2h.3 Toledo 23.1 10 26.5 10 25.9 Totafl. 139 17.1. 19.8 23.8 Total 1953-56 Detroit 311 16 .9 305 19 .5 31A 22 .7 Cleveland 553 18.3 55h 19 .g ESS 3121 .8 Toledo 222 1 . 213 19. 1 .0 Total 1086 17.2 1072 19.8 1083 23.0 TABLE h.30 AVERAGE NUMBER OF CONS IN THE HERD DURING THE PAST :12 MDNTHS3 AVERAGE NUMBER OP cows EXPECTED IN THE HERD DURING THE NEXT 12 MONTHS; AND PRESENT FACILITIES FOR cows; AS INDICATED BY FORMER. MANUFACTURING MILK PRODUCERS wHO ENTERED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Cows past Cows next Present market 12 months 12 months facilities and Number Average Number Average Number Average year responr number responr number responr number I dents cows dents cows dents cows 1953 Cleveland 88 13.1 86 15.2 86 18.3 Toledo 5% 1b.? Q7 17.0 g8 19.6 Total 13.6 133 15.9 13 18.8 i95h Detroit 3 57 13 .3 35h 16.2 3 58 19 .2 . Cleveland 115 1h.3 112 17.1 117 25.0 TOlwo 12 0O 13 0 l 00 Total 559 13.h 505 16.2 509 19.1 1955 Detroit 293 13.6 291 17.0 292 20.1 Cleveland 89 12.8 91 16.2 87 19.5 Toledo 2 12.3 22 16.5 2 20.2 Total 50% 13 .11 MO}; 16 .8 HOE 20 .0 19 56 Detroit 106 lh.8 105 19.7 107 22.8 Cleveland 29 12.2 32 16.8 31 21.1 Toledo 6 11.3 6 16.2 6 25.2 Total 1171— 111.1 1713 18 .9 "1131" 22.6 Total 1953-56 'Detroit 756 13.6 750 17.0 757 20.1 Cleveland 321 13.h 32h 16.3 321 19.5 Toledo 13.2 111 15.8 113 18.7 1191 13.5’ 16.7 1191. 19.8 Tbtal TABLE 1;.31 70 AVERAGE NUMBER OF COVE IN 'IHE HERD DURING THE PAST 12 MDNTHS3 AVERAGE NUMBEROFCONBWTEDDN'ETEHERDDUREGEEENEXTIZTDNTHSsAM) PREENT FACEITIE‘S FOR COWS; AS INDICATED BY NEW PRODUCEI'B WHO ENTERED 'IHE DETROIT, CLEVELAND, AND TOLEDO MELK MARKETS, Total . 113 1953-195 6 Cows past Cows next Present Market 12 months 12 months facilities and Number Average Number Average Numb er Average year res pon- numb er res pon- numb er res pon— number ‘ dents of cows dents of cows dents of cows 1953 Cleveland 17 13 .9 17 16 .9 17 17 .9 Toledo 8 .3 10 .0 13 .3 Total 20 13 .1 20 15 .9 2O 17 .3 1951; Detroit 19 11 .1; 29 16 .0 27 19 . 2 Cleveland 16 13 .0 16 17 .E 16 23 .3 Toledo 8 12 .1 15 . 23 .0 Total [[3 12 .1 5E 16 .3 52 21 .1 1955 Detroit 20 13 .7 22 18 .1; 23 20 .2 Cleveland 10 113:2 16 1g .1; 15 12 .1; Toledo .0 l .0 1 .3 , Total 33 13 .0 fi . l7 .0 [.1 l9 .3 1956 Detroit 10 15 .0 11; 19 .2 11; 23 .3 Cleveland 5 10 .0 8 16 .1; 5 18 .2 Toledo 2 8 .0 2 21 .0 2 25 .0 Total l7 l2 .7 21: 18 .1; 21 22 .2 ‘ Total 1953-56 Detroit 1;9 ' l3 .1 65 17 .5 61; 20 . Cleveland Ag 12 .6 S? 13.5 53 19.11 TOlaiO l 1103 1i 1 02 l 20 0 12 .6 139 16 .8 13% 20 .2 71 Per Cent income from Milk. In the Detroit area producers who joined and left the market indicated a larger proportion of their in— come from dairy as compared with the proportion indicated by producers in’ the Cleveland and Toledo markets (Tables 1;.32 through 1;.36). This implies that a greater degree of dairy specialization exists in the Detroit market. If the percentage of income from milk is a determining factor in the decision of producers to enter or leave a market, it might indicate that producers in the Detroit market generally receive a. lm‘ger proportion of their income from milk before they decide to make a change. There is not sufficient evidence to explain why these distribution differences exist between markets. Former inspected milk producers and new producers receive a larger proportion of their income from milk compared with former manufacturing producers. This exemplifies the degree of specialization in dairy-ing by the three groups. It also suggests that as producers become qualified for Class I production they become more specialized in the dairy enter- prise. Tables 1;.37 and 14.38 point out the degree of dairy specialization by zones of former inspected milk producers and former manufacturing producers who joined the. three markets. It is interesting to note the similarity that exists. With both groups, former inspected and former manufacturing, and in both markets, Detroit and Cleveland, the distribu- tion of producers according to the per cent of income from milk and the zone more they live follow a similar pattern. 72 TABLE 14.32 PER CENT INCOME FROM MILK INDICATED BY FORMER DBPECTED MILK PRODUCERS HHO ENTERED THE DETROIT, CIEVEIAM), AND TOLEDO MILK MARKETS, 1953-1956 Per cent Detroit Cleveland Toledo Total income (N-280) (NI-522) (N-209) (anTOll) ---------- Percent---------- m 1.0 and under 1.8 1.0 0.5 1.1 1.1 "' 20 007 1.108 1.108 307 ‘ 2.1 " 30 306 1.302 1508 1101 l‘ 31 - 1;O 10.7 12.8 20.1 13.7 “‘- 51 "' a) 1406 S09 5.3 5.1-1- 61 “ 70 3.1014 306 1408 6.0 71 - 80 20.7 19 .9 8.1 17 .7 81 "" 9O 15 00 906 10 00 1102 90 and over 12.2 7.3 . 5.7 8.3 Total 100 .0 100 .0 100 .0 100 .0 TABLE 1;.33 PER CENT INCOME FROM MILK INDICATED BY FORMER MANUFACTURING MILK PRODUCERS NHO ENTERED THE DETROIT, CLEVELAND,AND TOLEDOMILK MARKETS, 1953-1956 Per cent Detroit Cleveland Toledo Total income (N-686) (NI-307) (Nu-103) (NI-1096) ---------- Percent---------- 10 and under 1.1; 2.6 - 1.6 ll - 20 2.8 5.9 6.8 1;.0 21 " 30 11.01 1603 1605 1301 31 - 1;0 114.6 18.6 20 .1; 16.2 14.1 "' 50 22 09 1905 28 02 22 0S 5]. "' 60 501 602 S08 S05 61 "' 70 707 505 14.08 608 71 "' 80 1807 1307 1.306 1608 81 - 90 8.0 5.5 2.9 6.8 90 and over 7.7 6.2 1.0 6.7 100 .0 1m .0 100 .0 100 .0 Total TABLE 14.314 PER CENT INCOME FROM MILK DDJICATED BY MEN PRODUCERS WHO ENTERED THE DETmIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Per cent Detroit Cleveland Toledo Total income (Nhhl) (Ni50) (Nhl7) (N8108) ---------- Per cent - - - - - - - - - - lo and under 2 0h ..- """" O 09 11 ~ 20 ~-- 2.0 -- 0.9 21 " 30 .000— 800 141.01 10 02 31 - To 7.3 8.0 -- 6.5 141 a 50 1202 LL00 23 0S 1002 51 "‘ w 2 0).]. 1).]. 00 """"" 7 ch 61 " 70 9 08 8 0O """" 7 0).]. 71 " 80 22 00 1.8 00 1108 18 05 90 and over 21; .1; 18 .O 11.8 19 .5 Total 100 .0 100 .0 100 .0 ICE .0 TABLE has PER CENT INCOME FROM MILK INDICATED BY PRODUCERS WHO LEFT THE . DETROIT, CLEVFTAKD), ANDJTOLEJO MILK MARKETS .AND DISCONTINUED PRODUCTION, 1953-19 56. 4—- Ffi Per cent Detroit Cleveland Toledo Total income (AI-767) (N-hal) (N-zué) (N-Ilhhh) ---------- Per cent - ~ - - - - - - - - 10 and under 0.9 2.1 2.8 1.6 11 "' 20 300 huh 707 1402 21 - 30 7.7 10.5 214.0 11.3 31 "' 11.0 909 1002 1508 11.00 51 "' a) 1407 506 I401 1408 61 -s 70 8.7 5.6 2.8 6.8 81 "' 90 1003 1205 13.01 909 90 and over 12.8 11.1 h.5 10.9 Total 100 .O 100 .O 100 .0 1 I " .- . p — ~— _._ a. u. '0..— -~._«._- 0 *' O r u 0 0 . 0 ~ ’— _ n ... 0‘. H ... H H.“ 7h TABLE h.36 PER CENT INCOME FROM MILK INDICATED BI PRODUCERS WHO LEFT THE ~ DETROIT, CLEVELAND, AND. TOLEDO MILK MARKETS AND CONTINUED PRODUCING MILK, 1953-1956 Per cent Detroit Cleveland Toledo Total income (N-th) (NI-598) (N-150) (N-1092) ----- -----Percent---------- 10 and under 0.3 3.0 14.0 2.3 1.1 "’ 20 009 6011 1.103 503 21 - 30 14.3 13 .2 16.7 10.9 f3. - 140 7.0 114.14 20 .7 12.9 "’ 50 1600 1909 1903 1806 51 " $ 505 600 303 S05 61 "' 7O IL.6 507 S014 705 71 - 80 22 .7 114.0 114.7 16.8 81 "‘ 9O 15 07 90,4 103 10 03 91 and. over 1600 800 303 909 Total 100 .0 100 .0 100 .0 100 .0 ‘ It would appear from these data that producers who joined from Zone I, being relatively close to a large fluid market, are inclined to possess a higher degree of daily specialization than producers joining from Zone II. Producers from Zone III, however, indicate a larger per cent of income from milk than those in Zone 11. The latter suggests that as we move from Zone II to Zone III producers tend to be more highly specialized in dairy when they decide to make the change to the Detroit or Cleveland market. More evidence would be needed, however, to verify this hypothesis. TABLE h-37 PER CENT INCOME FROM MILK INDICATED BY FORMER INSPECTED MILK PRODUCERS HMO ENTERED THE DETROIT, CLEVFTAND, AND TOLEDO MILK MARKETS AND THEIR LOCATION BI ZONES, 1953-1956 Per cent Zone I Zone II Zone III Total income ---------- Percent---------- Detroit (N-JJ47) (Na-89) (AI-bl) (Na-277) 1'50 30 06 LLB 03 29 03 3601 Total 100 .0 100 .0 100 .0 100 .0 Clevede (N-221) (Na-101) (N-181) (Na-503) 1-50 143 .9 65 .3 6h .1 SS .5 Sl-lm 601 0 2 :9: 0 2 Q 0 E Total 100 .0 100 .0 100 .0 100 .0 Teledo (AI-209) ' 1-50 66 .1 —- -- 66 .0 51-100 3} .2 -- -- 2g .0 Total 100 .0 100 .0 All markets (N-577) (N-l90) (N-222) (DI-989) 1-50 h8 . 57 J: 57 .7 52 .3 51-100 El0§ 1.206 Q20: Hi0] 100 .0 100 .0 100 .0 ' 100 .0 Total TABLE 1;.38 PER CENT INCOME FROM MILK INDICATED BI EORMER MANUFACTURING MILK PRODUCERS wHO ENTERED TEE DETROIT, CLEVELAND, ANDTOLEDO MILK MARKETS AND THEIR LOCATION BI ZONES, 1953-1956 Per cent Zone I Zone II Zone III Total income A ---------- Percent---------- Detroit (N-lSh) (N-3h7) (N-th) (N-62S ) l-SO M6 .1 61.1; 36.3 52 .6 Sl‘l-OO 5202 2806 62.] king Total 100 .0 100 .0 100 .0 100 .0 Cleveland (N-Ioo) (N-86) (N-lOl) (N328?) 1‘50 56 00 ‘ 76 07 60 all. 63 .8 51"].00 Q00 22.: 2206 3.6.2 Total 100 .0 100 .0 100 .0 100 .0 Toledo (N-lol) (N-lOl) 1-50 72 .3 -- -- 72 .3 51-100 2‘ oi "" "'" 220i Total 100 .0 100 .0 All markets (IT-355) (N'h33) (AI-225) (AI-1013) 1‘50 56 .3 61; oh 147 .l 57 .7 51‘100 gioi 2:306 5202 A20: 100 .0 100 .0 100 .0 100 .0 Total 77 figasons for Joining or Leaving a Market. In an attempt to deter- mine the most significant reasons for their decision, producers were asked to indicate why they decided to join or leave the three markets. Responses were solicited from those who Joined the markets as to the most important reason and as to additional reasons which were a factor in their decision. Producers who left the market were also asked to list the reasons for their actions. 'Bnose who continued production were questioned further as to the basis of'their choice of a new market. Table b.39 summarizes the most important reasons given by former inspeCted producers for joining the market. The data indicate that "higher price" is the most mentioned reason in each market with the exception of Detroit. It should be noted that 39 .0 per cent of the respondents in the Detroit area indicated they changed because of “action of dairy" as compared with 13.3 per cent in the Cleveland market and Lt.2 per cent in the Toledo area. However, a. large number of those who joined the Detroit market did not actually change markets. Sixty of the 121 producers who gave "action ‘of dairy" did so because the dairy to which. they shipped began marketing their milk within the city of Detroit. If these sixty respond- ents were excluded from the tabulations the 39 .0 per cent who expressed _ "action of dairy“ would become 24.1; per cent and all other categories would increase. "Higher price" would then become the most mentioned reason with 28.14 per cent of the responses and would make this category the most mentioned reason in each market. “Action of dairy" remains a 78 TABLE L39 MOST IMPORTANT REASON wHI PRODUCERS, WHO RAD EORMERLI MARKETED INSPECTED MILK, DECIDED TO ENTER TEE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS, 1953-.4956 Most Important Detroit Cleveland Toledo Total Reasony (Na-310) (N-528) (N-211) (N-10h9) ------- Per cent-------- To get a.higher price 22.9 31.8 62.6 3S.h 'Action of the dairy or its representative 39.0 13.3 h.2 19.1 Little additional expense for Grade.1 0.3 --- --- 0.1 Change necessary so decided to fix up to ship Grade A. 1.6 0.8 ---- 0.8 Only market that would take ‘ nfilk 5.8 3.8 0.5 3.7 Farm changed hands - ship where last producer shipped 3.9 h.3 1.9 3.7 Convenience 0.6 7.6 1.9 h.h thted to produce a'better Inspection and/ or milk dealer trouble 7.8 . h.0 0.5 h.h Miscellaneous 18.1 27.h 27.0 2h.6 Total 100 .0 100 .0 100 .0 100 .O yThrougiout the remainder of the thesis these reasons will be referred to respectively as: (1) “higher price," (2) "action of the dairy," (3) '‘little expense," (LL “change necessary," (5) “only market," 56; "farm changed hands," E7) “convenience,“ (8) “better quality milk,“ 9 "inspection trouble," 10) “miscellaneous ." ‘r 79 relatively more important reason in the Detroit market than in the other two. The reader will recognize that the underlying motivation for some of the other reasons given might be interpreted in terms of higher price, but in the analysis the eight reasons listed in the tables will be considered as separate and independent. 0f the three producer groups, the former milk producers (Table him) had the largest proportion of respondents who indicated "higher price" 1'“ as the most important reason they joined. "Action of dairy" was the next most mentioned reason glven and again indicates the influence of the dairy in producerst decisions. The new producer group, however, indicated "farm changed hands" as the most mentioned single reason (Table hid). This may indicate that the relatively inexperienced new producer is more immediately concerned with marketing his product than in making his decision on the basis (of comparative prices. Institutional factors, such as hauling routes, etc., may also make it more convenient for him to continue shipping to the same market as the former producer on the farm. Although frequently mentioned, the reason of "higher price" did not appear to be as important to this group as to the others. When producers were asked to indicate other reasons (questionnaire is found in Appendix) in addition to the most important reason which may hav‘e entered into their decision to join the markets, responses ranged from a few who indicated no other reason to those who indicated 80 TABLE hJAO MOST IMPORTANT REASON WHY PRODUCERS, wHO HAD IORMERLI MARKETED MANUFACTURING MILK, DECIDED TO ENTER THE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS, 1953-1956 Most Important Detroit Cleveland Toledo Total Reason (NI-738) (NI-300) (Na-1.10 ) (N-Illh8) -----I—-Percent-- ------ To get a higher price 66.5 h8.7 70 .9 62 .3 Action of the dairy or its representative 10 .8 h.7 3 .6 8 .5 Little additional expense for Grade 1 2.2 0.3 0.9 1.6 Change necessary so decided to fix up to ship Grade A. 5.6 5.0 1.8 5.1 Only market that would take . milk 1.5 8.0 h.6 3.5 Pam changed hands - ship where last producer shipped 1.1 h.7 5.5 2.1; Convenience 0 .9 h .3 ---- l .7 Wanted to produce a better qum‘by Of Milk 108 300 """"" 1.09 Inspection and/ or milk dealer trouble 0 .9 1.7 ----- 1.0 miscellaneous 8 .7 19 .6 12 .7 12 .0 Total 100 .0 100 .0 100 .O 100 .0 TABLE Ml HDST IMPORTANT REASON wHI MEN MILK PRODUCERS DECIDED TO ENTER TEE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS, 1953-1956 Most Important Detroit Cleveland Toledo Total Reason (N-Sé) (N-53) (N-lS) (N-12h) -------Percent -------- To get a higher price 23 .2 15.1 20 .0 19.1; Action of the dairy or its representative 8 .9 1 .9 6 . 6 5 . 7 Little additional expens e for Grade A 1.8 ---- ---- .8 Change necessary so decided to fix up to Ship Grade ‘ 306 ...-..— "’""'"'"' 106 Only market that would take milk 16.1 5.7 6-7 10.5 Farm changed hands - ship where last producer shipped 26.8 28.3 20 .0 26.6 Convenience ---- 9 .h 6 .7 h .8 Wanted to produce a better quality of milk ---- 3.8 ---- 1.6 Inspection and/ or Milk dealer trouble 3.6 --- ---- 1.6 Miscellaneous 16 .0 35 .8 ho .0 27 .h 100 .O 100 .0 100 .0 100 .0 Total . . ~ » H -... - _. *. ... ... ... ... . .- . .... t I 0 I v . I . .~. .-.. --_—_.... A u ..i. .1.-- . e --- ‘ O .- a O ‘ . v i A ......— v V t ..r-.-. ....- _. . ...-...-- H~p—-—- — \ L I I 82 many. The overall distribution of the responses given by former inspected producers are shown in Table h.h2. TABLE h .h2 REASONS MEI FORMER INSPECTED MILK PRODUCERS DECIDED TO ENTER THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Detroit Cleveland Toledo Total Rem“ (N=233) (LI-1.61.) (N-197) (IN-89m ------- Percen ------- To get a higher price 5h.1 55.2 89.8 62.5 Action of the dairy or its representative 29.2 28.2 28.9 28.6 Little additional expense to sell Grade A 39.1 _g/ g/ 10.2 Change necessary so decided to fix up to ship Grade A 20.6 12 .5 13 .7 111.9 Only market that would take Graie A milk 27 .9 111.0 3.0 15.2 Farm changed hands - ship where last producer shipped 12 .h lh.0 8.1 12.3 General convenience 15.9 13.6 9.6 13.3 wanted to produce a better quality of milk 17.2 _2_/ _2/ h.5 Inspection trouble 17 .23] 10.6 7.6 11.6 { Milk dealer trouble 3/ 15.5 5.6 9.3 Most profitable farm enterprise 26.6 _2_/ _2'/ 6.9 y Percentage for each market totals over one hundred due to multiple reasons given by some producers. 2/ Not asked of the producers in this market. Milk dealer trouble and inspection trouble are combined. khaki-i ' i. 83 Again "higher price“ stands out as an important factor, being mentioned by a majority of producers in each of the markets. It is interesting to note that although 89 .8 per cent of those who entered the Toledo market indicated "higler price“ to be a factor in their decision, only slightly more than one-half of the Detroit and Cleveland respondents indicated price as a factor. This indicates a large pro- :23 portion of those from the Detroit and Cleveland areas enter these F markets for reasons other than price. - -1 “Action of dairy“ was indicated by more than one-fourth of the producers in all three markets indicating the important role of the dairy in influencing producers to enter a market. A large proportion of the former manufacturing producers mentioned price as a reason for entering the market (Table h.h3). Other reasons mentioned most often include “little expense," "change necessary," ageneral convenience," and "better quality milk." “Action of dairy" was indicated by approximately one-fourth of the producers of this group. The wary of reasons expressed by new producers is Shown in Table him. Fifty one and nine-tenths per cent indicated the reason "farm changed hands" while only 3h.6 per cent said "higher price“ was . a factor. It is not apparent why relatively few of this group mentioned price as a reason for joining a market. The reasons given by respondents who left the three markets and continued producing on another market are summarized in Table 11.145. TABLE 11 .113 mm WHY FORMER MANUFACTURING MILK PRODUCERS DECIDED TO ENTER THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953—1956 814 Detroit Cleveland Toledo Total Ream“ (N-761) (N-329) (Na-112) (N-1202) --------Percen ------- To get a-higher price 89 .0 81.2 95.5 87.11 Action of the dairy or its representative 22 .7 28 .0 30 .h 2).; .9 Little additional expense to sell Grade A 311.2 g/ _2_/ 21.6 Change necessary so decided to fix up to ship Grade A 111.1 115 .9 50.0 )13 .3 Only market that would take Grade 1 milk 21.1; 13.7 13.14 18.6 Farm changed hands - ship where last producer shipped 3.7 10.6 15.2 6.7 General convenience 53 .1 51.1 h? .3 52.0 wanted to produce a better quality of milk 37.7 _2/ _2/ 23.9 Inspection trouble 1.3 2.1 5.1; 1.9 Milk dealer trouble 3/ h.0 0.9 1.2 Most profitable farm enterprise 29.6 g/ _2_/ 18.7 3/ Percentage for each market totals over one hundred due to mlti-p/le reasons given by some producers. 2 Not asked of the producers in this market. 2/ Milk dealer trouble and inspection trouble are combined. in .11 TABLE him REASONS MEI NEW PRODUCERS DECIDED To ENTER THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 Detroit Cleveland Toledo Total Re 38°“ (rt-52> (xv-18> (N-133) ~------Percenby------- To get a higher price 33 .3 30 .7 . 50.0 3h.6 Action of the dairy or its representative 12 .7 19 .2 27 .8 17 .3 little additional expense to sell Grade A 31.7 _2_/ _2/ 15 .0 Change necessary so decided to fix up to ship Grade A 17 .5 13.5 5.6 111.3 Only market that would take Grade A milk . 23 .8 26.9 5.6 22.6 Farm changed hands - ship where last producer shipped 52.1; 53.8 will 51.9 General convenience 19 .0 23 .1 22 .2 21.1 Wanted to produce a better quality of milk 3.2 g/ _2_/ 1.5 Inspection trouble --- 1.9 --- 0.8 Milk dealer trouble --- --- --- --- Most profitable farm enterprise 38.1 2/ :_2/ 18 .0 y Percentage for each market totals over one hundred due to multiple reasons given by some producers. yNot asked of the producers in this market. r—Oy— ...» 86 TABLE his REASOLB GIVEN BI PRODUCERS, HHO CONTINUED PRODUCING, FOR LEAVING THE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS, 1953-1956 Detroit Cleveland Toledo Total Reasmsl/ (N-388) (N-665) (N-177) (II-1230) -------- Percent-~------ To get a higher price 53.6 35.3 9.0 37 .3 Inspection trouble 29.6 31.6 117.5 33.3 7 Milk dealer trouble 9.5 10.8 6.8 9.8 A Muce hauling costs 10.6 12.0 2.3 10 .2 Dealer changed markets 0.3 1.11 1.7 1.1 Avoid expense of bulk handling 0.5 0.3 0.6 0.14 Better milk pick up time 0.5 1.2 --- 0.8 Farm changed hands 14.1 11.5 5.7 11.6 Miscellaneous 18 .8 26.6 30 .5 23 .1 _1/ Some producers gave more than one answer. It is interesting to note the differences in the response of producers from. the three markets. Fifty three and six-tenths per cent of the Detroit respondents mentioned "higher price" as a reason for leaving ' while 35 .3 per cent of those leaving the Cleveland market and only 9.0 per cent from Toledo express this as a reason. Former Toledo pro- ducers, however, listed "inspection trouble" as the most often mentioned reason with 117 .5 per cent of the respondents giving this answer. 87 This compares with 31.6 per cent of the Cleveland and 29 .6 per cent of the Detroit producers who indicated "inspection trouble" as a factor in their decision. When producers who left the Cleveland and Toledo markets were asked why they selected their present market, "best price" was the most mentioned reason (Table h.h6) . The Cleveland respondents appear to have been influenced more by economic reasons such as "best price" and F—m' “hauling costs less ." While "best price" was the most mentioned reason given by former Toledo producers, the reasons “only market available" and "more reasonable inspection" were mentioned by a larger proportion of the producers in this market as compared with Cleveland. TABLE hi6 REASONS GIVEN BY PRODUCERS wHO LEFT TEE CLEVELAMI AND MARKETSFOR SELECTING TEEIR PRESENT MARKET, 1953-195 Cleveland Toledo ‘ Total (N‘53h) (NhlhO) (Nh67h) -----Percent----- Reasons-y Best price p 4 33 .3 20.7 30-7 Only market available 9.9 111.3 10.8 Hauling costs less 19 .9 12.1 18 .3 More reasonable inspection 11.2 17 .9 12.6 Hauler shifted so producer followed 0.2 - 0.1 1 Influence of dealer or representative 13.9 6.1; 12 .3 Miscellaneous 26 .11 3h .3 28 .0 y These data were not available for the Detroit Market. Some producers gave more than one answer. 88 Various reasons were expressed by producers who discontinued producing milk (Table 11.147). The most mentioned reason, however, is associated with price as 1114.1 per cent from Detroit, 141.9 per cent from Cleveland, and 33 .14 per cent from Toledo indicated "cost of pro- duction too great and/or price too low.“ "Illness, age, or death" was the next most mentioned reason expressed by 19 .3 per cent of the F‘ respondents in the three markets. T Other miscellaneous reasons such as "sold cows ," “went into other “i work or enterprise," and "sold farm or quit farming," do not indicate the underlying reason for this action. Many economic factors would probably be mentioned if the underlying reason for these actions were probed. Responses by producers as to why they decided to join or leave the three markets do not conclusively support the hypothesis that pro- ducers enter or leave a market because of price. Although price is a major factor in the producers' decision, only in the former manufactur- ing milk group did a majority, of the respondents indicate “higher price" as the most important reason for joining the market. "Higher price," however, is a factor with a majority of the former inspected and manu- facturing milk producers as shown by the proportion who indicated this as a reason influencing their joining. A smaller proportion of those who left expressed "higher price" as influencing their decisionlto leave. In fact, only in the Detroit market did a majority of the producers who left for another market indicate "higher price" was a factor in their decision. 89 TABLE hit? REASONS GIVEN BI PRODUCERS, HMO DISCONTINUED PRODUCTION, FOR LEAVING THE DETROIT, CLEVELAND, OH TOLEDO MARKETS, 1953-1956 . . Reasons-y Detroit Cleveland Toledo Total (N-1068) (bl-552) (N-th) (N=l96h) - - - - - - - - Per cent - - - - - ~ - jDisease problem in cows 3.3 1.6 3.5 2.9 Inspection trouble 5.0 7.h 11.6 6.8 Illness, age or death 20.1 21.2 lh.0 19.3 Labor problems 12.9 17.11 1h.5 114.5 0pposed making major invest- ments 2.8 3.6 6.1 3.6 Cost of production too great-- price too low hh.1 h1.9 33.h hl.6 Sold cows 7.3 7.2 A.l 6.7 'UEDt into other work or ‘ enterprise 7.6 12.3 9.3 9.2 Sold farm or quit farming 13.2 114.9 1h.8 111.0 Miscellaneous h.7 10.0 1h.2 7.8 l/Eome producers gave more than one answer. Price IncreasexExpected. The majority of producers who joined the ' Detroit, Cleveland, and Toledo markets indicated price was a factor in their decision. ‘Hhen asked how much more per hundred weight they ex- pected to receive, a broad range of answers was stated. Table h.h8 summarizes the responses of 1607 producers who entered the markets. 90 TABLE 14.148 METER) INCREASE IN THE PRICE OF MILK PER HUNDRED HEIGHT, AS INDICATED BY PRODUCERS WHO JOINED 'JHE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS, 1953-1956 Expected increase per cwt. . $310633? Per cent P Less than before change 9.14 1 No increase expected 12.? ILL .01 - .214 6.3 025 "' 01-1-14 I 703 .115 - .61; 9.5 .65 - .814 12.7 .85 - 1.014 31.8 1.05 - 1.214 3.7 1.25 - 1.111; 2.6 1.145 and over 14.0 Total 100 .0 _J.___‘ It is interesting to note that over 22 per cent changed markets and did not expect a higher price. In fact, 9.14 per cent expected to receive less. Reasons other than price evidently influenced this group to make the Change. Of the group who did anticipate an increase in price, 514.8 per cent expected an increase of 65 cents or more while about one-fourth of the respondents expected less than 65 cents. Although it is the ex- pected price that influences the decision of producers to change markets rather than the actual price he receives, the response to this question 91 indicates that, if price is an important factor, small price increases Over their former market do not influence many producers . The majority of producers did not decide to enter the market until the expected price increase was 65 cents or more aboVe their former market. The price incentive needed to induce manufactured milk producers to improve their facilities in order to qualify for Class I production is greater than that needed to induce one who is already an inspected milk producer to change markets. Table 14.149 shows the number of former - .7 inspected and manufactured milk producers who entered the three markets and the expected increase in price per hundredweight. Former inspected milk producers were nearly evenly divided between those who expected a price increase and those who did not. Indications are that a large proportion of this group decided to change markets for reasons other than price. The average expected price increase indicated was 55 cents. Again we might assume that producers do not generally change markets for a small price differential. In contrast, 97 .8 per cent of the former manufacturing producers expected an increase. The average expected price increase was 93 cents. This suggests that this group is willing to make the necessary in- vestment to qualify as an inspected milk producer if the price dif- . ferential between manufacturing and inspected milk is approximately a dollar per hundredweight. 0f the producers who left the three markets and are producing for another market, about one-fourth expected no increase while 7.0 per cent H—-‘ 92 TABLE 11119 AVERAGE mm INCREASE IN TEE PRICE OF MILK Pm HUNDREDREIcmT AS INDICATED BI FORMER INSPECTED MILK PRODUCERS AND FORMER MANUFACTURING MILK PRODUCEIB wHO JOLNED TILE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS, 1953-1956 Increase exacted Producers Product number Average not Total formerly of amount expecting No nuMber marketed producers expected increase reply Producers Dollars Inspected milk Detroi 56 .91 69 .202 327 Cleveland 151 .h6 207 216 57h Toledo 139 .51 25 63 227 Tetal 3H6 .55 301 h81 1128 Manufacturing milk Detroit 558 .95 3 123 6814 Cleveland 221 .87 1h 77 312 Toledo 96 .96 2 21 119 Total 875 ~93 19 221 1115 -;/Thejnetroit questionnaires asked for a response if the producer formerly produced manufacturing milk. The Cleveland and Toledo questionnaires asked how much more the producers believed he was re- ceiving regardless of what his former production was. expected to receive less (Table h.50). .Approxinately-one half of the producers who left the Detroit market expected an increase in.price 'within a.25 cent to 6h cent range. This compares with 35.7 per cent and 18.1 per cent for the Cleveland and Toledo markets respectively. It appears from these data that producers who left the Detroit market expected a.better price situation in a new market than those who left 93 TABLE 1.50 mm INCREASE IN IRE PRICE OF MILK Pm MUNDREDNEIch, As INDICATED BI PRODUCERS NHO LERT TEE DETROIT, W, OR Tomo MILK MARKETS, 19532-1956 Expected increase Detroit Cleveland Toledo Total per M- (ll-213) (II-3h?) (NI-83) (II-6&3) -------- Percent-------- Less than before change 3.3 5.8 21.7 7.0 No increaseexpected 16.9 23 .6 147 .0 214.1; .01 - .21. 7.0 25.9 13.2 18 .1 .25 - .171; 25.1. 23.6 1h.5 23 .0 .145 - .a. 21.1. 12.1 3.6 15 .1 .65 - .81. , 7.5 To . ...- m .85 - 1.014 10.3 3.8 ---- 5.14 1.05 - 1.21; 2.1; ---- ---- 0.8 1.25 - 1.1;]; 0.9 0.6 ---- 0.6 1.15 and over 1.9 0.6 ---- 0.9 Total 100 .0 1.00 .0 100 .0 100 .0 -1-'/ These producers were delivering milk to another market. the Cleveland market, and former Cleveland producers expected to have this sane price advantage over former Toledo producers. Month Produtcer Joined or Left. Respondents were tabulated accord- ing to the month they joined or left the three markets to determine if the time of entering and leaving follows certain seasonal patterns and if so, to attempt to determine why they exist. Former inspected milk producers, joiIflng the Detroit market (Table h.51) appeared to follow a distinct seasonal pattern. The data / ... ... ... -_ .. ... ... V D f 7 a Q ) c A " I ' 0 g. Q -———_~ _———.— ...—..-.— b ...-......— ! ......g—... A I Q n I m .\ _fi 911 mNm FORMER INSPECTED MILK PRODUCEIs ENTERED THE DETROIT, CLEvaND, AND TOLEDO MILE HARKETS, 1953-1956. Honthy Detroit Cleveland Toledo Total (NI-257) (hi-1188) (ll-217) (bl-9801 - - --------- Per cent ---------- January 14 .14 8 .14 5 .l 6 .5 February 2 .9 9 .0 14 .6 6 .3 March 14 .0 12 .5 3 .7 8 .2 April 27 .6 8 .2 l6 .1 15 .14 Kay 15 .6 5 .l 2 .3 ‘ 7 .14 June L1 .3 S 01 l c 8 6 .1 July 12 .14 14 .9 7 .14 7 .6 August 8 .0 14 .7 13 .14 7 .6 September 14 .0 10 .1 12 .9 9 .0 OCtOber s all. 11 09 12 09 lo 03 November 3 .3 12 .1 12 .14 9 .7 December 1 .1 8 .0 7 .14 5 .9 T013“. 100 .0 100 .0 100 .0 100 .0 y Respondents were tabulated to the nearest full year. discloses that 66.9 per cent of the respondents joined during the months April through July. This was generally a low blend price period during which producers would not ordinarily be expected to Join. Due to the base plan, however, the seasonal price decline during the smnmer months is not as great for the Detroit market as that which generally prevails in other inspected markets. Therefore, those who joined during this period migIt be explained in terns of more favorable prices relative to their former market and the fact that these are the months immediately preceding the base forming months. Other joiners might be attributed to “action of the dairy“ during this period, particularly during the 95 month of April when the dairies to which these producers shipped began marketing their milk within the city of Detroit. Cleveland and Toledo respondents indicate a different time pattern for joining. With the exception of the 16.1 per cent who joined the Toledo market in April, the proportion who joined these markets during the period April through July is substantially smaller than for Detroit. These time periods follow closely the seasonal price pattern prevalent 5...“...1 in the markets with the most producers joining when the price is highest 1 during the fall and winter months . The overall distribution gives some evidence to support the hypothesis that producers join because of price. The proportion of former manufacturing milk producers who joined the three markets follow, to some extent, the pattern indicated by former inspected producers (Table 14.52). The Cleveland and Toledo pro- ducers generally joined during the fall and winter months while there were fluctuations in the distribution pattern exhibited in the Detroit market. Thirty three and one-tenth per cent of all Detroit respondents joined in' July and August, indicating again the possibility that the base establishing months that follow may have influenced their decision. The distribution of new producers (Table 14.53) shows considerable fluctuation with no seasonal pattern apparent. However, there appears to be a marked decline in the proportion who joined the Cleveland and Toledo markets during the summer months which might follow the seasonal price pattern in these markets. 96 TABLE 14.52 MiNTH FORMER MANUFACTURINCEK PRODUCERS ENTERED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 l] y Detroit Cleveland Toledo , Total ”“1 (N-660) (N-300) (N-m) (Iv-10714) ---------- Percent---------- Janual'y S 06 9 s7 7 .0 609 February 3 .5 7 .3 6.1 14 .8 March 2 .9 . 8 .0 7 .0 14 .7 April . 7 .l 5 .3 114 .9 7 .5 May 5 .3 5 .7 3 .5 5 .2 June 8 .6 S 03 3 OS 7 '2 my 1607 503 9 .7 12 08 August 16.14 5.7 14.14 12 .1 September 7 .7 8 .7 7 .0 7 .9 October 12 .6 12 .0 10 .5 12 .2 November 8.9 114.7 8.8 10 .5 December . 14.7 12 .3 l7 .6 8 .2 Total 100 .0 100 .0 100 .0 100 .0 yhes pondents were tabulated to the nearest full year. TABLE 14 .53 MONTH NEH PRODUCERS ENTERED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-19 56 Detroit Cleveland . Toledo Total Month-y (Ii-531 (N's?) (N‘161 (N-121) - - - - \- ----- Per cent ---------- Jarmary 5.7 3.8 18 .8 6.6 February 3 .8 3 .8 12 .5 14 .9 March 1.1.3 15 .14 12 .5 13 .3 April 5 .7 11.5 12 .6 9 .1 Hay 15 01 1105 18 08 11.1.0]. June 5 .7 5 .8 --- h .9 M’- 11.3 M ...-.- 1.1.09 August 9 .14 2 .0 6 .2 5 .8 September 3 .8 l3 .5 6.2 8 .3 October 9 .14 11 .5 6.2 9 .9 NOVQMber 1103 13 as 6.2 1106 December 7 .5 7 .7 --- 6.6 Total 100 .0 100 .0 100 .0 100 .0 _1/ Respondents were tabulated to the nearest full year. I‘ I! '1 f 97 Table 14.514 shows considerable fluctuation in the monthly distribu- tion of producers who left the three markets. As a consequence no observations could be made relative to seasonal price patterns for those who continued producing. With the exception of the Detroit market, there is no apparent evidence in the study to explain the heavy exodus of producers from these markets during the period of August through November . TABLE 14.514 Toms PRODUCERS, who CONTINUED PRODUCING, LEFT THE DETROIT, CLEVELAND AND TOLEDO MILK MARKETS, 1953-1956 H on my Detroit Cleveland Toledo Total (N-373) (N=6lh) (N-lSé) (NH—11:31 #- - - -------- Per cent ----------- January 8 .0 7 .7 5 .8 7 .5 February 6 .2 9 .14 13 .5 8 .9 March 14 .3 9 .14 13 .5 8 .3 April 8 .9 8 .8 7.7 8 .7 May 2 07 2 06 7 s7 3 03 June 5 .6 2 .14 8 .3 14 .3 My 9 .7 9 .0 8 .3 9 .1 August 12 .9 9 .1‘ 10 .3 10 .5 September 114 .7 10 .3 9 .0 11.5 October 12 .3 . 5 .5 7 .0 8 .0 November 9 .1 15 .2 5 .7 11 .9 December 5.6 10.6 3.2 8.0 Total 100 .0 100 .0 100 .0 100 .0 2/ Respondents were tabulated to the nearest full year. 98 The data summarized in Table 14.55 suggests that producers do not readily discontinue production during the summer months when pasture is available. There was lack of evidence to support further observ- ations in terms of either price or seasonal patterns. TABLE 14.55 MONTH PRODUCERS, who DISCONTINUED PRODUCTION, LEFT THE DETROIT, CLEVELAND AND TOLEDO MARKET, 1953-1956. Detroit Cleveland Toledo Total ”my (N-89u) (LI-1181) (LI-290) (Iv-1665) ----------Percent--------~-- January 6.7 10 .0 6.9 7 .7 February 8 .6 10 .2 11.0 9 .5 March 9 .5 9 .2 12 .l 9 .8 April 8 .8 7 .7 11.0 . 8 .9 May 6.8 6.9 10 .7 7 .5 June 3 02 2 OS 6.5 3 96 July 14.3 14.1 2 .8 h .0 mg'llSt 1103 6014 605 9 01 September 11 .3 10 .6 6.5 10 .3 OCtOber 10 06 9 07 S 09 9 05 November 9 .9 12 .3 9 .7 10 .5 December 9 .0 10 .14 10 .14 9 .6 Total 100 .0 100 .0 100 .0 100 .0 y Respondents were tabulated to the nearest full year. m of Time Producer Considered His Action. A period of con- sideration inevitably precedes the actual movement of a producer from one market to another. It was assumed important to consider the length of time producers considered changing as it could indicatehow rapidly producers move into a market in response to an incentive. 99 Table 14.56 shows the length of time inspected producers considered entering the market for the Detroit, Cleveland, and Toledo areas. In the Detroit market the time lag for considering the move was relatively shorter than the other two markets. Nearly 20 per cent stated they considered the change for a month or less and 60.9 per cent said they 7*. had seriously considered the change for six months or less . Approximately 20 per cent had considered the change for more than one year. 0 TABLE 14.55 TIME FORMER INSPECTED MILK PRODUCERS CONSIDERED ENTERING THE DETROIT, CLEVELAND, AND TOLEDO Mm MARKETS, 1953-1956. Detroit Cleveland Toledo Total mm (II-151) (IT-267) (IT-153) (IT-571) --------- .-Percent---------- 7 " 12 18 06 19 09 2503 2100 1.3 "' 18 1400 1.1 3.9 206 19 - 2h 7.9 17 .6 18.2 15 .2 Over 21A 806 1.301 20 .8 1.309 Total 100 .0 1.00 .0 100 .0 100 .0 The time leg for former inspected producers who joined the Cleveland market was slightly greater than that of Detroit with 148 .3 per cent instituting the change with six months or less of consideration and 31.8 per cent considering the decision for over a year. Of the former in- spected producers that joined the Toledo market, 39.0 per cent considered the change for 19 months or longer. The difference in the time lag ~ 100 for the three markets migit be attributed to a certain degree to the availability of the market concerned. As might be expected the time lag for former manufacturing pro- ducers (Table 14.57) is greater than that for inspected producers since economic and institutional factors are involved to a greater degree. ' A major problem facing the former manufacturing producer was that of meeting the health requirements of the fluid markets. Not only would this problem delay the decision to change but additional time would be needed to make the necessary improvements. TABLE 14.57 TIME FORMER MANUFACTURING MILK PRODUCERS CONSIDERED ENTERING TEE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, 1953-1956 W Months Detroit Cleveland Toledo Total. (NI-581) . (44-219) (II-88) (Nu-888) ----- ------ Percent----------- 1 - 6 31.0 25.6 314.1 30.0 7 - 12 2h.h 32.8 23.8 26.5 13 - 18 5.9 3-7 5.7 5.3 Over 214 18 .7 13.7 18 .2 17.14 Total 100 .O 100 .O 100 .0 100 .O Several tendencies are worthy of note. The average length of time spent in considering the change to another market was 18 .1 months for all respondents in the three markets. This might suggest that the pro- ducer is influenced to a greater extentby price over a long period rather than by short term economic incentives. The tendency is for 101 former manufacturing milk producers to consider a change in markets longer than former inspected milk producers. In addition former in- spected producers entering the Toledo markets tend to consider the change longer than those entering the Cleveland market, and those from 'Detroit tend to consider the change the longest. Little difference is ' noted in the length of time former manufacturing producers from the W separate markets considered transferring to another market. 1 Other Ehrkets Considered. Information was solicited from producers 1 relative to the number of other markets they considered before joining the Cleveland and Toledo markets (Table h.58). The same information was asked of those who left these two markets and joined another (Table 14.59). It was hoped to gain some insight as to the extent pro- ducers explore the possibility of Other markets before deciding on a particular one and to determine the extent to which markets compete with one another . TABLE 14.58 NUMBER OF OTHER MARKETS CONSIDERED BY PRODUCERS WHO JOINED THE CLEVELAND AND TOLEDO MILK. MARKETS, 1953-1956 Number of Markets Cleveland Toledo Total Considered (N-925) (N-363) (N-1288) -~-----Percent-------- None 62 09 68 .9 6’4 as 1 22 .3 18 .7 21.3 2 10 .6 9.14 10.3 3 14.0 3.0 3.7 14 002 -" 0.2 Total 100 .0 100 .0 100 .O 102 It is interesting to note the close similarity in the proportion of producers in the different categories in those who joined as well as those who left the three markets. Over 60 per cent from both groups, or approximately two out Of three producers, disclosed they considered no market other than the one they joined. About 20 per cent considered one additional market. TABLE h.59 NUMBER OF MARKETS CONSIDERED BY PRODUCERS WHO LEFT THE CLEVELAND AND TOLEDO MARKETS IN ADDITION TO THEIR PRESENT MARKET, 195391956 Number Of Markets Cleveland Toledo Total Considered (Nh6h8) (Nhlh7) (Nh797) - ------ - Per cent -------- None 68 as 67 03 68 a]... 1 19.8 20.h 19.8 2 8 .2 8 .2 8 .2 3 3.5 h.1 3.6 Total ’ 100.0 100.0 100.0 It would appear from these data that either no other market is immediately available for the majority of the producers, or that they do not shop around a great deal to select a market. Regardless Of the reasons, the results indicate that producers have, or exhibit, little choice in selecting a market. lEyestment Necessary to Quality for Grade A. The investment necessary to qualify as an inspected milk producer in the Detroit, ClBVeland or Toledo markets undoubtedly influenced producerst decisions to join one of these markets. Producers were asked to disclOse the -.. - 4!. , 103 amount they had invested in facilities during the past two years to qualify for one Of the markets to determine the proportion who had to invest as well as the average amount invested. As might be expected the percentage of former inspected milk pro- ducers that invested in facilities was the lowest (Table h.60). TABLE h.6o PRODUCERS‘WHO INDICATED INVESTMENT HES MADE IN THE PAST TWO TEARS TO QUALIPI AS AN INSPECTED MJI.K.PRODUCER FOR THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, CLASSIFIED ACCORDING TO TDT:PORMER DISPOSITION OF THEIR MILK, 1953-1956 m 4: ------Formerdispositionofmilk---:---- Farm Market Inspected Manufactur- separated New milk ing milk cream producers -----------Percent--- -------- Detroit (NI-327) (NI-68h) (N-83) (NI-69 ) 67 .0 9S .3 95 .2 82 .6 Cleveland (NI-572) (NI-317) (N-22) (N865) 6? .7 88 .3 9S .5 73 .9 Toledo (Ni-229) (N-ll9) (N-2) (NI-17) 69 .h 85 .7 100 .0 7O .6 All markets (N-Jl28) (N=1120) (NI-107) (NI-151) 67.8 _ 92.3 95 .3 77.5 Sixty seven and eight-tenths per cent Of the former inspected milk pro- ducers indicated investments were made. This compares with 92 .3 per cent for former separated cream producersland 77 .5 per cent for new Homers. 10h These data indicate that a large majority of the producers who joined the market were required to invest in facilities before they could enter. This investment in turn probably delayed their entrance into the market after the decision was made. TABLE 11.61 1 AVERAGE COSTS OF FIXING UP TO SELL INSPECTED MILK ON THE DETROIT, CLEVELAND, OR TOLEDO MILK MARKETS AS RELATED TO 11$ TIPEOF. PRODUCT FORMERLY PRODUCED, 1953-1956. . -------- Product formerly produced - - - - - - - - Market Farm and Inspected Manufactur~ Separated New All Year Milk ing Milk Cream Producer Producers ------------ - Dollars - - - - - - - - - - - - IDetroit 1951. 1258.10 1269.35 1906.22 995 .00 13115 .95 1955 853 .03 1268 .33 1351.15 1068 .211 11611 .18 1956 816.67 1563 .02 1671.88 1301. .17 13 65 .116 Cleveland 1953 1050 .811 17111 .89 2358 .33 776 .00 1331 .511 19511 953 .93 1186.93 1715 .00 1592 .00 1207 .75 1955 121.0 .76 1225.31 1500.00 1880.83 1287 .110 1956 1036.60 1752.50 2950.00 931.67 1282.13 Toledo . 1953 11113 .27 1751.36 1585 .00 780 .00 11123 .37 19 511 81.6.67 1532 .19 2 1110 .00 10118 .26 1955 15111.71 2101.50 g/ 1835.00 16211.03 1956 3191.25 1376.67 _2_/ 100.00 2128.75 All.markets and all years 1095.27 1101.72 1759.80 1111.15 1291.07 l/Nyerages are computed for the number Of respondents who submitted cost figures. g/No producers for this year. 105 A summary of the average amount producers invested during the past two years is shown in Table 11.61. The investment made by former inspected milk producers ranged from $10. for minor Changes to $17,370. for new facilities. The average for this group was $1095.27. Invest- ment ranged from $10. to $16, 620. for former manufacturing producers with an average of $1101.72 or $306.15 more than former inspected pro- ducers. Farm separated cream producers averaged $1759.80 for investments that ranged from $10. to $7990. New producers made an investment of from $10. to $8050. with an average of $1117.]..115 per producer. The average cost for all producers in all markets was $1291.07. I These data imply that investment necessary to qualify for inspected milk production is a factor in the decision Of producers to Change markets. Incentives must be attractive enough in the inspected milk market to encourage producers to make the needed investment. The avail- ability of capital required for this investment would be an additional factor influencing the producer’s decision. Decision of Producers if Prices Rise or Decline. In an attempt to gain insight as to the supply response, producers were asked to indicate what they 1:11th do .if there were a rise or decline in the price of milk (Table 11.62). It should be noted that 811.7 per cent Of the producers stated they would make no change if a price rise occurred. Fourteen and six-tenths per cent indicated they would produce more milk and 0.7 per cent said they would produce less. 106 TABLE b.62 RESPONSE INDICATED BI PRODUCERS TO AN DICKEASE OR DECREASE IN THE PRICE OF MILK IN DETROIT, CLEVFIAND, AND TOLEDO MARKETS, 1953—1956 Detroit Cleveland Toledo Total - - - - - - - - - - Per cent -‘- - - - - - 4 - - If Price Rises (Nhlth) (N‘979) (N‘377) (N*2h98) 1 Produce more 13.8 15.7 1h.1 lh.6 1 Produce less 0.5 1.0 0.5 0.7 Make no change 85.7 83.3 85.h 8h.7 . Total 100 .0 100.0, 100 .O 100 .0 '1 If Price Declines (N-1112) (N-965) (N-370) (N-Zhh'?) Produce more 9.9 8.5 7.8 9.0 Produce less h.0 5.2 7.8 5.1 Make no Change 69.6 69.6 73.8 70.3 , Stop producing 16.5 16.7 10.6 15.6 Total , ICE .0 1.00 .O 100 .0 1.00 .0 'Hhen.asked what their reaction would be to a price decline, the response of "make no change" was not as great as indicated for a price rise. Seventy and three-tenths per cent expressed this decision.while 15.6 per cent stated they would get out of the milk business. It is of interest to note that in the Detroit and Cleveland markets the proportion Of producers who said they would produce more milk if the price declined is greater than those who said they would produce less. The data suggest that a price change will bring varied responses, few of which follow the law Of supply. .Apparently'many'producers do not intend to adjust their production to a price rise or decline. In addition, some producers implied they would react in opposition to 107 the law of supply, i.e., they would actually produce more when the price declined and less in response to a price rise. The fixed assets associated with the dairy enterprise may be the underlying factor causing this reaction or it might be explained in terms of the need for a fixed income. Further study, however, would be necessary to determine the motivation underlying these responses . Number Who Plan to Re-enter the Market. A certain percentage of the producers who leave a market do so because of a temporary inter- ruption in their production for this market. In an attempt to determine the proportion who considered themselves only temporarily out of the market, producers were asked to indicate if they planned to rejoin within the next two years . Approximately one producer out of five who continued production indicated they planned to return to their former market (Table 11.63) . It is interesting to note the Similarity in dis- tribution in the three markets. It suggests that perhaps the ratio of one out of five might be a normal pattern rather than the result of conditions in a certain market. There is lack of evidence to explain why those who left a market plan to re-enter. We might assume that they were satisfied with the market but that there were circumstances other than their own decision which caused them to leave. Twelve and one-tenth per cent Of those who discontinued production stated they planned to resume shipping within two years. The above situation appears to be quite consistent in each market which would again lead to the conclusion that this proportion might. be generally upected to resume producing in their former market. TABLE 11.63 DECISION OF PRODUCERS wHO LEFT THE DETROIT, CLEVELAND, OR TOLEDO MARKET RELATIVE TO PLANSTO RE—ENTER THE MARKET WITHIN . A TWO IEAR PERIOD, 1953—1956 108 Detroit Cleveland Toledo Total ---- ------ Percent-‘---¥ ----- Producing on Another . Market (N-306) (NI-1192) (NI-132) (N-93o) Plan to resume 22 .2 l9 .3 22 .0 20.6 DO not plan to resume 77 .8 80.7 78.0 79 .11 Total 100 .0 100 .O 100 .O 100 .0 Not Producing Milk (NI-821) (NI-1155) (Ne-261) (N-1537) Plan to resume 12.9 12.3 9.2 12.1 DO not plan to resume 87.1 87 .7 90.8 87.9 Total 100 .0 100 .0 100 .0 100 .0 109 Section II Dependency of Variables Producers were analyzed to determine if a significant relation- ship existed between the most important reason they gave for joining the market and certain of their characteristics that might have in- fluenced their decision. This relationship was tested by the use Of the chi-square statistic. Categories chosen for analysis were: 1) Month producer joined 2 Geographic location of the producer (zones) 3 Per cent of income from milk 11 Size of farm 5 Percentage of the farm owned 6 Age of the producer 7 Size of herd during last 12 months 8 Size of herd expected next 12 months Producers in each category were analyzed with the "most important ' reason" for joining the market. The analysis was made using each of the three producer groups of the three markets combined, as well as separate analyses within each market. The null hypothesis, that these characteristics are independent of each. other, was tested. The term "independent," in this context, means the distribution of one characteristic should be the same regardless of the other 1 characteristic. Thus in Table 11.65, the proportion of producers who gave the reason "higher price" for the various months should be the same, or approximately so, as those giving the other reasons for the ”Wilfred J. Dixon and Frank J. Massey, Introduction to Statistical w, (New York: McGraw-Hill Book Company Inc.), p. 2211. corresponding months if the hypothesis of independence is to be accepted. The expected proportions for independence thus become those calculated for the column entitled “all reasons." All x2 tests in the study were tested at the .05 level of significance. Various x3 groupings of the "most important reason" were also employed. Thus Table h.65 illustrates the various “groupings" that were found to be statistically significant when the tests were made with former inspected milk producers to determine if a relationship existed between the nmost important reason" they joined and the month they joined. The column nother reasonsn results from the combination of all reasons given other than the one(s) listed as a separate column in the table. (The list of reasons appears in a previous section of the study, Tables h.39 through h.hl). Several of the reasons were combined since they were mentioned by too few respondents to be meaningful when analyzed separately} The significant and nonrsignifiCant categories for the combined markets, as well as for each market, are shown in Table h.6h. Only'those categories Observed to be statistically significant were tabulated and analyzed. Mbnth Producers Jbined. In reference to Table h.65, it appears that producers who join the market during the latter half of the year rather than the first were more inclined to mention "higher price." All.months, from June through January, indicated a larger than expected proportion of producers. It is not clear why this pattern exists as L..- TABLE 11.611 SIGNIFICANT.AND NONHSIGNIFICANT CHI-SQUARE RELATIONSHIPS EXISTING BETWEEN THE MOST IMPORTANT REASONS PRODUCERS JOINED AND . CERTAIN OF THEIR CHARACTERISTICS Combined Category Markets Detroit Cleveland Toledo I II III I II III I II III I II III MOnth joined S S N S S N S N N N S 0 Location (zone) S N S S N S S N N X. X X Incomefrommilk SSN SNN NNS NNO Sizeoffarm SNN SNN SNS NNO Percentowned NNS NNN NNS NNO Age of producer N N S N N N N N S N N 0 Present herd N N N S N S N N N N N 0 hpectedherd NNN NSN SNN NNO I Former inspected producers II Former manufacturing producers III New producers S Significant relationships N Non-significant relationships 0 Too few respondents to justify analysis I. Only one zone in the Toledo area these months do not completely coincide with the seasonal price pattern of the three markets. It might indicate the months when the price dif- ferential between the former market and the present market was the greatest. Further study would be required to determine if this were the case. It must be remembered, however, that the high percentages Observed during these months may not be due as much to "higher price" as to the lack of other more important reasons. Thus the degree of emphasis attached to each can not be determined. TABLE h.65 RELATIONSHIP OF THE MONTH FORMER INSPETED MILK PRODUCERS JOINED THEDETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, AND . THE IDST D’E’ORTANT REASON THEY GAVE FOR JOINING, ‘7 . 1953-1956 ------ Most important reason - - - - - - - - Higher Action of Other All Month Price the dairy reasons reasons (Nh37l) (N-200) (N-h78) (N-10h9) -- ------- ~Percent-- ------- -- January 8 03 14.05 603 607 February 11.6 6.5 9.6 7.2 March 5 .7 6.0 11.1 8 .2 May 11.9 18 .0 10 .3 9 .8 June 8 03 8 05 609 7 07 July 8 .1; 5 .5 6 .3 6.9 ill-811315 8 09 3 00 6 .5 607 September 10 .8 3 .5 7 .3 7 .8 October 15 .l 5 .0 5 .9 9 .0 November 8 06 1.1. as 10 .0 8 05 December 5 .1; 3 .0 5 .6 5 .0 Total 100 .0 100 .0 100 .0 100 .0 Chi-s quare groupings x“2 x2 at .05 d f All columns 130 .0 33 .9 22 Col. 1 and all others 711 .11 19 .7 ll CO]... 2 and all Others 79 00 19 .7 ll The proportionate distribution of producers who indicated " action of dairy“ also contributed to the dependency. April, May, and June show a higher than expected proportion of producers who indicated this reason. This deviation is also difficult to explain since May and June are generally high milk production months and dairies would normally be expected to refrain from recruiting additional producers. The distribution of producers who indicated " other reasons“ varied with each x2 grouping. As previously indicated, the percentage Observed in any one column is directly related to the distribution in the other columns. Therefore, uother reasons“ could be explained in a negative way by saying the higher than expected proportions observed here are the direct result of a less than expected proportion in the other reasons . In subsequent analysis of the x2 groupings this interpretation of "other reasons" will be assumed. men the former inspected milk producers from the Detroit market were analyzed using the same characteristics (Table 11.66) a slightly different pattern was Observed. The major variance from the expected appears as a larger per cent in June, July, and August for “higher price," and a higher than expected percentage in April and May from producers who answer "action of dairy." While the three summer months are not a period of seasonal high price, prices in the Detroit market are generally higher than other inspected markets in the area. Also, these months occur imediately prior to the base forming period in this market. Producers expressing this answer were possibly looking at the long run price rather than at the price prevailing during the month in which they joined. Their immediate concern may have been in establishing a base. The large proportion of those answering "action of dairy" during April and May might be explained by the number of producers who llll indicated this reason because the dairies to which they shipped began marketing their milk within the city of Detroit. TABLE h.66 RELATIONSHIP OF THE ADNTH FORMER INSPECTED MILK PRODUCERS JOINED THE DETROIT MARKET AND THE TEST. IMPORTANT REASON . THEI GAVE FOR.JOINING,.195h-1956, W ------- Most important reason - - - - - - - Higher Action of Other All Month Price the dairy reasons reasons (Ii-71) (N-121) (N-l18) (N-3lo) ------- - - - Per cent ~ - - - - - - - - - — January 8.5 1.6 7.6 5.5 February 1.11 3 .3 3 .1; 2 .9 March 2 .8 2 .5 7 .6 11 .5 April 16 .9 MB .8 20 .11 28 .7 May 9 .9 2h .0 111 .11 17 .1 June 15 .5 7 .1; 13 .6 11.6 m 16 09 7 014 12 07 13.06 August 11.2 2.5 7.6 6.5 September 2 .8 2 .5 11 .2 3 .2 October 8 .5 2 .5 5 .l 1; .8 November 5.6 2 .5 1.7 2 .9 December "' " 107 O 07 Total 100 .O 100 .0 100 .O 100 .0 Chi-s quare groupings x2 x2 at .05 d f All columns 511 .3 33 .9 22 Col. 1 and all others 22 .3 l9 .7 ll Col. 2 and all others 113 .3 l9 .7 ll A larger than expected percentage of the former inspected producers (Table h.67) who indicated they joined the Cleveland market because of "higher price" entered the market in June through October. With the 115 exception of March, a higher percentage Of those answering "action of dairy" joined in January through June. There is insufficient evidence to explain why this pattern existed. No significant relationship appeared when "months" and "reasons“ were analyzed using former inspected producers in the Toledo market. TABLE 11.67 RELATIONSHIP OF THE MONTH FORMER INSPECTED MILK PRODUCERS JOINED .. . THECLEVEIANDMARKETANDmEmSTIMPORTANTREASON i IHEI GAVE FOR JOIN1NG, 1953-1956 . - - - ----- Most important reason ------- Higher Action Of Other All Month Price the dairy reasons reasons (N-168) (N-70) (N-29o) (IA-528) ---------- Percent----------- January 9 .5 10 .0 6.6 8 .0 February 5 .11 12 .9 13 .1 10 .6 met]. 8 09 11 014 1.1.]. 01 12 01 April 6.0 1.2 .9 IO .7 9 .5 May 5 .11 10 .O 9 .3 8 .1 June 1.1.3 11.11 14.8 7 .8 Jilly 1408 " 14 as 1.100 August 5 .11 1.11 11.1 h.2 September 11.3 5 .7 7 .9 8 .7 October 16 .6 10 .0 5 .9 9 .8 Novelnber 8 09 5 07 12 .14 10 oh December 6.5 8.6 6.6 6.8 Total 100 .0 100 .0 1.00 .0 1.00 .0 Chi-s quare groupings ' x2 x2 at .05 d 1‘ All columns 116.7 33 .9 22 Col. 1 and all others 311.1 19 .7 ll Col. 2 and all others 1.1.1 19.7 ll ll6 Former manufacturing milk producers were analyzed using the same x2 groupings as were used with the former inspected group. When these groups from each market were combined and tested (Table 11.68) all the x2 groupings were Observed to be statistically significant. RELATIONSHIP OF THE MJN'IH FORMER MANUFACTURDIG MILK PRODUCERS WHO JOINE) TEE DETROIT, CIEVELAND, AND TOLEDO MILK MARKETS, AND THE TABLE h.68 I‘DST IMPORTANT REASON THEY GAVEFOR JOINING, 1953-1956 --------,-Mostimportantreason---~-- Higher Action of Other All Month Price the dairy reasons reasons (N-715 ) (N-98) (DP-335 ) (N-llh8) --~-------Percent----------- January 7 .8 2 .0 8 .7 7 .6 Fabmary' 1.1.08 7 cl 7 07 5 .8 March h.2 9 .2 7 .2 5 .5 April 7 .3 10 .2 9 .0 8 .0 May 5 OS 18 014 9 02 7 07 June 8 .O 19 .11 7 .5 8 .8 July 13 .7 11.2 6.8 11.5 “€113.13 1.3 .1 S 01 8 01 ll .0 September 7 .l 7 .l , 8 .l 7 .11 October 12 .O 3 .l 10 .l 10 .7 November 9 .2 11 .1 10 .1 9 .0 December 7 .3 3 .1 7 .5 7 .0 Total 100 .0 100 .0 100 .0 100 .0 Chi-square groupings x2 x2 at .05 d f All columns 80 .6 33 .9 22 001. l and all others 1111 .3 l9 .7 11 001. 2 and all others 52 .l 19 .7 ll Tl"? . 117 The distribution of this group shows a marked similarity to the former inspected group. 'With the exception of September, a higher than expected percentage of those giving "higher price" as a reason joined the market during June through January. Also a larger than expected proportion giving "action of dairy" entered the market during February throu gh June . The same explanation seems probable for the manufacturing group as with the inspected group. The lack of conformity with the seasonal price pattern and "action of dairy" given during a period of high milk production makes it difficult to explain the producers' reasons for joining. The distribution differences Observed were significant when manu- facturing producers who joined the Detroit market were tested (Table h.69). Producers indicating "higher price" joined during July through NOvember in greater numbers than expected. Those who answered "action of dairy" entered during February through June in numbers greater than would be expected for independence. A lack of respondents to the above two reasons in December and January also contributed to this dependency. The differences observed when former manufacturing producers from the Cleveland market were analyzed were not significant. 'Why a relation- ship existed in the Detroit market and not in this market is not Tapparent from the data at hand. A.significant difference was observed, however, when former manu- .facturing producers from the Toledo market were analyzed (Table h.70). TABLE 11.69 118 RELATIONSHIP OF THE MDNTH FORMER MANUFACTURING MILK PRODUCERS WHO JOINED THE DETROITMARKET AND THE MOST IMPORTANT REASON THEI GAVE FOR JOINING, 19511-1956. - - - - - - - Most important reason ------- Higher Action of Other All Month Price the dairy reasons reasons (N-h91) (N-80) (N467) (N-738) ----------- Per cent - - - - - - - - - - - January 7 .1 2 .5 9 .6 7 .2 February 5 .1 5 .0 3 .6 1L .7 March 2.2 10 .0 11.8 3 .7 April . 5 .9 12 .5 12 .o 8 .0 May 1.1. 09 20 00 lo 02 7 07 June 8 .8 21 .2 7 .2 9 .8 July 16 .5 ‘13 .8 10 .8 111 .9 August 16 .5 5 .0 12 .5 111.3 September 7.3 2 .5 7.8 6.9 October 13.6 2.5 7.8 11.1 NOVGMber 8 01.]. 3 08 8 .3 7 .9 December 3 .7 1.2 5 .11 3 .8 TOtal 1.00 .0 100 .0 100 .0 1.00 .0 Chi-s quare groupings x2 x2 at I .05 d f All columns 85 .11 33 .9 22 Col. 1 and all others 19 .7 l9 .7 11 001. 2 and all others 62.1 19 .7 11 As no seasonal pattern was apparent that might account for the depend- ency, a plausible explanation could not be found for the fluctuation Observed in the distribution. The x2 results obtained when the new producers were analyzed were too small to be significant when the markets were combined or when they 119 TABLE 11.70 REATIONSHIP OF THE MDN‘JH FORMER MANUFACTURING MILK PRODUCERS JOINED THE TOLEDO MARKET AND THE MOST IMPORTANT REASON THEI GAVE FOR JOIN1NG, 1953-1956 m l— -------Mostimportantreason-------- Month Higher Price Other Reasons All Reasons _ 01-78) (NT-32> (Na-11o) L -----------Percent--- -------- E January 6.1. 6.2 6.11 3 February 3 .8 12 .5 6.1; L. March 9.0 9.11 9.1 1; April 18 .0 9. 15 .5 May 5.1 3.1 h.5 June 1.3 12.5 11.5 Jilly. 1208 - 9.1 August 3.8 - 2.7 September 2 .6 l8 .8 7 .3 October 11.5 3 .l 9 .1 November 6 .11 12 .5 8 .2 December 19 .3 12 .5 l7 .2 Total 100 .O 1.00 .0 1.00 .0 Chi-square groupings x2 x2 at .05 d f All columns 27.1 19 .7 ll were analyzed separately. This would infer that no relationship exists between the month new produCers join and the reason they give for joining. We Location of the Producer (Zones). A significant dif- ference was observed when former inspected milk producers from the three markets were analyzed to determine if a relationship existed between the location of these producers by zones and the most important reason they joined (Table 11.71). 120 m 0.0 mi: 228 a? E» N .Hoo m 06 mtfim mafia an as a .Hoo .2 EN 93 . 9348 a H v 3 «H mwflumsonw ofiamlflo 0. 8H 0. 09“ 0. 8H 0. 8a 0. 03 o. 09 0. 8H 0. 8H 0. 08 dupes m.mm 9: 93 0.8 $3 Ema QR 0.2 mAm E 9% 0.9” mA: 0.8 0.9 m.om wow m.mm win HH gm 4. 8 in 0.8 in: 3a «.2 we 1.. mm H IIIIIIIIIIIIIIIIIIIIII pqmonomIIIIIItIIIIIIIIItIIIIIII $575 88.5 $11; 34qu $17.5 $33 $33 88.3 Era: 9033 98me mango. dawns mono.“ wand: p932" 5n 3E SSN i... 84.5 83 336 .858 nomad .35 ...a _ Iowans...” hoppom 3.3m H8304 llllllllllllllllllll commonpgfionmfipmozIIIIIIIIITIIUIIIIIII madame” .ozdfioh. m8 E8 was 59% “Eamon: $9 an a: flag a canon 92 .g .2053 an . name. om: gunman a gamma gem no 202.4% E mo hag .23: as 121 Producers located in Zone III mentioned "higher price,“ and those in.Zone I and II mentioned "action of dairy," more often than'would be expected if no relationship existed. It would appear that action of the dairy influences the decision of a producer to a greater degree in areas close to the market, while the price has a greater degree of in- fluence for those located a greater distance from the market. Although the number of those responding to any one of the reasons other than "higher price" and "action of daisy" is relatively small, these also contribute to the resulting relationship. A higher than expected proportion of those in Zones II and III indicated "only market." This could imply that a wider choice of markets was available to pro- ducers in Zone I resulting in the large proportion of producers in Zones II and III expressing this reason. Of the 39 producers who upressed "farm changed hands ,“ a comparatively larger percentage were located in Zone I and II inferring that producers close to the market are more inclined to continue shipping to the same market as the former producer. Producers located in Zone I responded with the reason "convenience“ more often than would be expected. "Convenience“ in this context refers to convenience of location, hauling, Grade A facilities and equipment, etc. It seems logical to assume that producers near the market would indicate this reason more often due to a more intensified milkshed area thus making it more “convenient" to obtain a market and transportation for their milk. 122 Producers located in Zones I and II tend to indicate "better quality milk." Those located in Zone II also tend to indicate "in- spection trouble“ more often than expected for independence. 'flle difference in distribution was observed to be significant when former inspected producers in the Detroit market were analyzed separately (Table b.72). Proportions higher than those expected if TABLE 14.72 RELATIONSHIP OF THE IOCATION OF PORMER INSPECTED MILK PRODUCERS WHO JOINED THE DETROIT MARKET, AND THE MOST IMPORTANT REASON THEY. GAVE FOR JOINING, 195h-1956. ------Mostimportantreason----_----- Higher Action Other ‘ All Zone Price of Dairy Reasons Reasons (NI-71) (N-121) (NI-118) (NI-310) I 38.0 68.6 104.1 52.3 II no .9 21.5 39 .O 32 .6 III 21 .1 9 .9 l6 .9 15 .1 Total 100 .O 100 .O 100 .O 100 .O Chi-square groupings x3 x2 at .05 d f 001. l and all others «7 .7 6.0 001. 2 and all others 21.2 6.0 independence existed were observed in Zones II and III for "higher pricen and in Zone I for uaction of dairy.“ These data infer that pro- ducers located a greater distance from the market are more strongly influenced by price while the close-in producers are influenced more readily by “action of dairy." 123 Former inspected producers in the Cleveland market are analyzed in Table )4.73. Producers in Zone III answered "higher price" and those in Zone II indicated "action of dairy" in proportions to indicate dependency. This again indicates the preference of "higher price" as the most important reason by producers living in the distant zone while “action of dairy" appears to be more prevalent in an area closer to the market. TABLE 1; .73 RELATIONSHIP OF THE LOCATION OF IORMER INSPECTED MILK PRODUCERS WHO JOINED THE CLEVELAND MARKET, AND THE MOST IMPORTANT RETSON THEY CAVE FOR.JOINING, 1953—1956 -------Mostimportantreason-------- Higher Action Other AIL Zone Price of Dairy Reasons Reasons (NiléB) (N570) (Nh290) (N3528) ----------Percent----------- I 23.8 4 hh-B 57.2 uu.9 II 15.5 35.7 18.7 19.9 III 60.7 20 .O 24.1 35.2 Total 100 .O 100 .O 100 .O 100 .0 Chi-square groupings x2 x2 at .05 d f Col. 1 and all others 72 .2 6.0 001. 2 and all others 15.5 6.0 The Toledo market could not be analyzed as all producers joining this market were observed to be located in one zone. A significant relationship was not evident when comparing location and the most 12h important reason expressed by former manufacturing producers. No plaus- ible explanation could be determined. The location of new producers, however, appeared to be related to the most important reason they gave for joining. Table b.7h shows the distribution when new producers from the three combined marketS'were observed. The distribution of "higher price" did not appear to be significantly dependent on location. A.significance was observed when producers answering "farm changed hands" were compared with their location. TABLE h.7h RELATIONSHIP OF THE LOCATION OF NEH PRODUCERS WHO JOINED THE DETROIT, CLEVELAND AND TOLEDO MILK MARKETS AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING, 1953-r1956 ------ - MOst important reason - - - - - - - Higher Farm Other All Zone Price Changed Reasons 'Reasons (II-2L) Hands (N-67) (N-12h) (N-33 ) - - - - - - - - - - Per cent - - - - - - - - - - I 66 .6 51 .5 88 .0 7h.2 II 16 .7 3O .3 6 .0 1h .5 III 16.7 18.2 6.0 11.3 Total 100.0 100.0 100.0 100.0 Chi-square groupings ....E... 253% .511. Col. 1 and all others 1.1 6.0 2 Col. 2 and all others 12.7 6.0 2 125 It appears from the distribution that Zone II and III producers would be more inclined to give this reason for joining than those in Zone I. This infers that new producers who are located in Zones I or II are more likely to continue to produce for the same market as did the previous tenant. When the markets were examined separately 8. significant relation- ship was observed only in the Detroit market (Table L75). TABLE 14.75 RELATIONSHIP OF THE LOCATION OF NEHPRODUCERS wHo JOINED THE DETROIT- MARKET AND THE MOSTIMPORTANT REASON THEY GAVE FOR JOINING, 195h-1956 . -------Mostimportantreason------- Higher Farm Other All Zone Price Changed Reasons Reasons (N-l3) Hands (N-28) (N-56) (Ii-15) I 69 .2 ho .0 78 .6 66.1 II 23 .1 60.0 1h.3 28.6 III 7.7 - 7.1 5.3 Total 100 .O 100 .O 100 .O 100 .O Chi-square groupings x2 x2 at .05 ' d f Col. 1 and all others 0.1; 6.0 Col. 2 and all others 10.3 6.0 New producers from this market followed approximately the same pattern as the combined group tabulated in Table n.7h. The distribution of those expressing uhigher price“ followed closely. the distribution of 126 all prOducers and therefore no significant relationship exists. The proportion indicating “farm changed hands" varied significantly. When new producers from the three markets were observed, "farm changed hands" was stated by a larger than expected proportion in Zones II and III. New producers from Detroit, however, indicated this higher proportion only in ZOne II. Factors responsible for this vari— ance was not evident. Per Cent Income from Milk. An analysis was made between the per cent of income from milk and the most important reason given for Joining. Table h.76 shows the relationship when former inspected milk producers from the three markets were analyzed. 1 significant difference was observed when producers answering "higher price," “action of dairy," and "other reasons" were analyzed and when those expressing "higher price“ and "other'reasons" were com- pared. The relationship between "action of dairy“ and "other reasons" did not prove significant. It appears from these data that, with the exception of the l per cent to 20 per cent group, producers receiving 60 per cent or less of their income from milk are more inclined to indicate "higher price" than those receiving more. The above situation is contrary to what would normally be expected to occur. Why producers who receive a small proportion of their income from milk mention "higher price“ more often than those receiving a larger percentage is not clear. Further study would be necessary to determine why this relationship exists. TIP r r“ ruff-W A pv‘ 127 TABLE M76 RELATIONSHIP OF THE PER CENT INCOME RECEIVED FROM MILK PRODUCTION BY FORMER INSPECTED MILK PRODUCERS WHO JOINED THE DETROIT, CLEVELAND, AND TOLmo MILK MARKETS AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING, 1953-1956 -------Mostimportantreason------- Per cent Higher Action of Other All Income Price Dairy Reasons Reasons from Milk (Ht-3117) (NI-178) (NI-LL28) (NI-953) ----------Percent--- ------- . l " 20 308 has 508 14.08 21 - 30 12.7 8.1:, 11.2 11.2 14.1 "‘ 50 2306 20.8 20.6 2107 51 "' 60 606 607 hall 5.7 61 " 70 (4.3 709 6.8 601 81 "' 90 1103 15 07 9 .8 1.101.]. 91 “' 100 hoé 9 06 10 01 800 Total ' 100 .O 100 .0 100 .0 100 .0 Chi-square groupings. x2 ' x2 at .05 d 1’ All columns 26.7 26.3 16 Col. 1 and all others 19 .2 15.5 8 Col. 2 land all others 9.55 15.5 v 8 When the inspected producers group in each market was analyzed, only Detroit indicated a significant difference (Table 11.77). The significant 3:2 grouping, “action of dairy" and "all others ," could be attributed mainly to the larger than expected proportion of those who received hlper cent or more of their income from milk and indicated “action of dairy." These observations follow a pattern 128 ‘ TABLE h.77 RELATIONSHIP OF 'JHE PER CENT INCOME RECEIVED FROM MILK PHDDUCTION BY FORMER IIBPECTED MILK PRODUCERS WHO JOINED THE DETROIT MILK MARKET AND THE MOST IMPORTANT REASON GIVEN FOR JOINING, 195h-l956 Per cent Higher Action Other All Income Price of Dairy Reasons Reasons from Milk (N-6LI) (NI-103) (NI-101) (Nu-268) --- ----- --Percent---------- l "‘ 20 105 109 1400 266 21 " 30 90h 109 2.0 307 hl - 50 18.8 19.11 18.7 19.1 51 " a) 105 608 5.0 11.09 61 "' 70 901‘ 1007 1209 1.1.2 71 - 80 23 .h 18 .5 20.7 20.5 31 " 90 9oh 23 .3 9.9 11;-9 91 9100 9.14. 12 06 1309 12.3 Total 100 .0 100 .0 100 .O 100 .O Chi-square groupings x2 12 at .05 d f All columns 26.2 26.3 16 0010 l and 81]. Others 15 0).]. 1505 8 Col. 2 and all others 16.8 15.5 8 similar to that observed when inspected producers from all markets were analyzed. The overall distribution of answers from former manufacturing producers in the three markets Show a significant relationship between per cent income from milk and the reason "convenience" (Table 14.78). The limited number of observations in this category may present a sample which is not representative for each income group. 129 TABLE 11.78 RELATIONSHIP OF THE PER CENT INCOME RECEIVED FROM MILK PRODUCTION BY FORMER MANUFACTURING MILK PRODUCERS WHO JOINED THE DETROIT, CLEVELAND, ANDIOLEDOMJIKMARKETSANDTHEMOSTIMPORTANT. REASON THEY GAVE FOR JOINING, 1953-1956 _‘__. - - - - - - - Most important reason ------- Higher Action All Per cent Price of Dairy Convenience Reasons Income (N- 658) (NI-83) (N'39 ), (N‘1035 ) --- ------- Percent---------- l " 20 5.2 702 ‘- 505 21 "' 30 1302 13 03 23 .1 130).]. 31 "' 14.0 1.1.1.06 1609 15014 15 08 Ill - 50 22 .3 22 .9 10.3 22.1 51 - 60 5.2 1.2 12.8 5.7 61 " 70 8.14 702 "" .701 91 - 100 6.2 13.2 10.2 6.8 Total ' y 100 .0 100.0 100 .0 100.0 Chi-square groupings x2 x2 at .05 d f 001. 1, 2, and all others 23 .3 26.3 16 Col. 1 and all others 10 .6 15.5 8 Col. 3 and all others 16.0 15 .5 8 The resulting fluctuation in distribution accounts for the dependency observed. No additional signifiCant relationships are noted. mien the three markets were considered separately regarding in- come, no N“3 groupings were observed to be significant. Only in the Cleveland market did a significant relationship appear when the new producer group was analyzed (Table H.79). Due to the 130 TABLE 11 .79 RRIATIONSHIP OF THE PER CENT INCOME RECEIVED FROM MILK PRODUCTION BY NEH PRODUCERS wHO JOINED THE CLEVELAND MILK MARKET, AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING, 1953-1956 1 - - - - - - - Most important reason - ------ Per cent Higher Farm Other All Income Price Changed Hands Reasons Reasons (N-7) (N-lh) (IV-25) (N-h6) 1 "’ 30 11403 701 1200 1009 31 - 60 111.3 57 .2 12.0 26.1 61 - 90 57.1 21.h 56.0 h5.6 Total 100 .O 100 .O 100 .0 ' 100 .0 Chi-square groupings x2 x2 at .05 d f 001. l and all others 0.8 7.8 3 Col. 2 and all others 10.11 7.8 3 limited number of observations, the validity of the observations is open to question. Proceeding with the supposition that the sample is representative, the 31 per cent to 60 per cent income group indicates "farm changed hands" more often than would be expected if no relation- ship existed. Size of Farm. A statistically significant relationship was ob- served between acres operated and the most important reason for joining expressed by fomer inspected milk producers of the three markets. The proportion of producers in each acreage category and the most important reason for joining are tabulated in Table 11.80. 131 TABLE 14.80 RELATIONSHIP OF THE ACRES OPERATED BY FORMER INSPECTED MILK PRODUCERS wHO JOINED THE DETROIT, CLEVELAND, AND TOLEDO MILK MARKETS, AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING 1953-1956 - - - - - - - Mbst important reason ------- .Acres Higher Action of Other All Operated Price Dairy' Reasons Reasons “3 (N-BSO) (111-190) (N'MLS) (N-9 85 ) 1 - - - - ------ Per cent - - - :r- - - - ~ - F ,_1 60 - less 1.7 2.1 3.6 2.6 ' 61 " 80 3 .14 608 603 5 01.]. 81 - 100 3.7 h.7 9.2 6.h 101 - 120 7.7 10.0 9.9 9.1 121 " 114.0 806 905 508 705 1111 "' 1& 114.9 1201 1.100 1206 161 "‘ 180 So? 603 702 605 221 "’ 2140 603 1,3 07 S 00 . 7 01 214.1 " 260 307 201 506 14.03 281 - 300 h.2 3.7 3.6 3.8 301.- over 20.0 15.3 15.3 17.1 Total 100 .0 100 .0 100 .O 100 .0 Chi-square groupings x2 x“2 at .05 d f All columns 5h.9 38.9 26 Col. 1 and all others 23.9 22.h 13 The data substantiate the expected concern with regard to price on the part of producers who operate larger farms with a greater capital investment involved. Producers who operate farms of 261 acres or more indicated "higher price" in larger proportions than operators of 120 acres or less. The category "other reasons" includes the largest proportion of small farm operations. l3 2 In the Detroit market a significant relationship may be noted when the x2 grouping "action of dairy" and "all other reasons" was tested (Table 14.81). TABLE 14.81 RELATIONSHIP OF THE ACRES OPERATED BY FORMER INSPECTED MILK PRODUCERS wHO JOINED THE DETROIT MILK MARKET, AND THE MIST IMPORTANT REASON THEY GAVE FOR JOINING, 195h~1956 - - - - - - - Most important reason - ------ Acres Higher Action Other All Operated Price of Dairy Reasons Reasons (N-69) (N-llé) (Nd—16) (II-310) --- ------ -Percent---------- & " less 105 1.7 3.14 203 61 - 80 5.8 h.3 6.9 5.6 . 81 " 100 508 206 7.8 503 101 - 120 10.1 6.0 13 .8 10.0 121 "' 11.10 1001 10 03 301-I. 706 lhl - 160 8.7 13 .8 8.6 10.6 161 " 180 703 6.9 609 700 181 - 200 10.1 7.8 10 .3 9.3 201 - 220 10 .1 0.9 5 .2 11.7 221 "‘ 214.0 508 1801 5.2 1003 21...]. " 23) 1.5 1.7 107 107 261 " 280 209 1403 206 303 281 "' 300 508 502 609 600 301 "’ over 1.1405 1601.1 1703 1603 Total 100 .0 100 .O 100 .O 100 .O Chi-square grouping x2 I:2 at .05 d f All columns 35 .1 38.9 26 Col. 1 and all others 9.3 22 .1; Col. 2 and all others 28 .3 22 .14 13 133 It appears that producers who operate 120 acres or less were influenced less by "action of dairy" than those with farms exceeding this amount. It is interesting to note that when "higher price" was analyzed with respect to acres operated the observed difference was not great enough to be significant. In contrast, the former inspected group in the Cleveland market indicate that the relationship between “higher price“ and acres operated is significant. As noted above, producers who operate 120 acres or less were less inclined to indicate price as an important factor than those operating 120 acres or more. The producers with 120 acres or less show a tendency to indicate “action of dairy" while those with 100 acres or less tend to favor “convenience" as well. The Cleveland market indicates that a significant relationship exists when all reasons listed in Table 14.82 were tested. In the Toledo market no significant relationship was observed when responses of former inspected producers were analyzed. Likewise, reasons expressed by former manufacturing producers and new producers did not indicate a statistically significant relationship when analyzed with acres operated. Percentage of Farm Owned. Among former inspected producer and manufacturing producer groups in the three separate markets, as well as the combined markets , a Siglificant relationship was not evident when the percentage of the farm owned was analyzed with the most im- portant reason for entering theimarket. A significant relationship fl I ’1 o e—, r-\ a _V O m -. , — rs I 'x a. .fi . '1 ”I v‘fi -. - fl , ‘2‘ . \ , V A w} .— ’» .fi ‘N H -—3 A C , O 1314 TABLE 11.82 REATIONSI‘EEP OF ACRES OPERATED BI FORMER INSPECTED MILK PRODUCERS WHO JomED THE CLEVELAND MILK MARKET, AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING, 1953-1956 . ------- Most important reason ------- Acres Higher Action Conven- Other All Operated Price of Dairy ience Reasons Reasons (N'150) (N-65) (NI-37) (W222) (N-th) ---------- Percent-------'--- 60 " less 0 07 3 01 1.0 08 3 06 3 01 6:1. " 80 1400 1203 1603 501.1. 607 81 - 100 14.00 902 10 08 1107 809 1.01 - 120 503 15 01.]. 2 07 8 01 7 08 121 " 114.0 1.007 707 501.1 801 807 11.11 " 1w 1.5 03 10 07 18 09 12 06 13 07 16.1 "' 180 6 0O 3 01 lO 08 S 01.1 507 181 "' 200 8 00 105 5 01.]. 9 00 7 014. 201 "' 220 6 0O 7 07 - 603 509 221 "’ 21.10 703 ' 602 207 5014 509 21.1.1 '- 260 303 301 207 707 503 261 " 280 607 602 "' 207 1402 281 "' 300 1400 l 05 2 07 2 07 3 00 301 "’ over V 18 0? 12 03 10 08 1103 13 07 Total 100 .0 100 .0 1.00 .0 100 .0 100 .0 Chi-square groupings x2 x2 at .05 d f . All oolurms‘ ' 61 .9 55 .8 39 Col. 1 and all others 26 .1 22 .11 13 Col. 2 and all others 16.3 22 .11 13 did exist, however, when new producers for the combined markets and in the Cleveland market were analyzed. As observed in Table 11.83 , this relationship is primarily the result of; l) a disproportionately high number of producers owning 91 per cent or more of their farm indicating higher price, and r : h L I} 135 2) a disproportionately high number who own none of their farm indicat- ing “farm changed" hands as the most important reason for entering this market. TABLE h.83 REIATIOIBHIP OF THE PER CENT OF ACRES OWNED BY NEW PRODUCERS WHO JOINED 'DIE DETROIT, W, AND TOLEDO MILK MARKETS, AND THE MOST IMPORTANT REASON CIHEY. GAVE FOR JOINING, 1953-1956 . -------Hostimportantreason----F-- Acres Higher Farm Changed Other All Owned Price Hands Reasons Reasons (Per cent) (N-23) (NI-26) (NI-62) (N-lll) I -------- - - Per cent ---------- None 21.7 53 .9 29 .0 33 .3 1 "' 9O 13 01 1105 25 08 19 08 Total 100 .O 100 .O 1.00 .O 100 .O Chi-square groupings x2 x2 at .05 d 1‘ All columns 9-6 905 )4 Column 1 and all others 3.9 6.0 2 Table h.8h indicates a similarly disproportionate distribution in the Cleveland market. Because of the small number of producers in- cluded in this group, these two situations may not be representative. .539 of the Producer. A. significant relationship was not evident when the age of former inspected producers and maxmi‘acturing producers, and the most important reason for joining was analyzed for the combined markets as well as in the three separate markets. Statistically 136 TABLE h.8u muonsnlr OF THE PER CENT OF ACRES OWNED BY NEW PRODUCERS WHO JOINED'JHECIEVEIANDMJIKMARKET,A1®THEMOSTIMPORTANT REASON THEY GAVE FOR JOINING, 1953-1956 ------- Most important reason - - - - - - - Acres Higher Farm Other All Owned Price Changed Hands Reasons Reasons (Per cent) (NI-7) (NI-10) (Nu-26) (Ni-143) ----------Percent---------- None lb. 03 70 00 26 09 3h. 09 l '- 90 ~ " 23 01 111.00 91 " 100 8507 30 00 SO 00 5101 Total 100 .0 100 .O 100 .0 100 .O Chi-square groupings are x2 at .05 d 1' All columns 11.3 9.5 1; Col. 1 and aJl others 14.1 6.0 2 Col. 2 and all others 7.6 6.0 2 significant relationships were observed for the new producer group in the Cleveland market as well as when the three markets were combined (Tables 15.85 and h.86). In each case a large proportion of the producers 29 years of age or less indicated “farm changed hands" as their most important reason for joining. No reason is evident to explain why new producers indi- cated "farm changed hands“ more often than those in the older age groups. The relationship between "higher price" and age was non- significant. 137 TABLE M35 RELATIONSHIP OF 'JHE ACE OF NEW PRODUCERS WHO JOINED EIE DETROIT, CLEVELAND, MUD'IOLEDOMIKMARKETS, ANDTHEMOSTIMPORTANT. REASON THEY GAVE FOR JOINING, 1953-1956 - - - - - - - Most important reason ------- Higher Farm Other All Age Price Changed Hands Reasons Reasons (n-127> ... ----------- Percent---------- 3!. ~21; 27 .3 ALB .3 10 .7 21.3 } 30-39 22 .7 16 .7 2 5 .3 22 .8 LID—Over 22 .7 6.7 141.3 29 .9 Total 100 .0 100 .O 100 .0 100 .0 Chi-square groupings x2 x2 at .O§ d f All columns 21.9 12 .6 6 Col. 1 and all others 0.9 7.8 3 Col. 2 and all others 17 .6 7.8 3 TABLE h.86 REMTIONSHIP OF THE ACE OF NEH PRODUCERS WHO JOINED THE CLEVELAND Em MARKET,.AND THE MOST IMPORTANT REASON 'IHEY CAVE FOR JOINING, 19532-1956 ------- Most important reason - - - - - - - Higher Farm Other All Age Price Changed Hands Reasons Reasons (N-B) (N-lb.) (N-28) (N-SO) ---------- Percent--~------- ‘2‘4 12 05 SO 00 17 08 2600 25—29 12 .5 3S .7 28 .6 28 .0 DD‘OVSI‘ 37 05 " 25 00 20 00 Total 100 .O 100 .0 1.00 .0 100 .0 Chi-square groupings x2 x2 at .05 d f , All columns 11.0 12.6 6 Col. 1 and all others 3.1; 7.8 3 0010 2 and all Others 906 708 3 .... .- — ... _- .— A . - .— "x . . Q . .. - - .— .— .... r_. ,. 138 Size of Herd During Last Twelve Months. The former inspected milk producers in the Detroit market were the onlyr group where the relationship was observed to be significant between the size of the herd during the last twelve months and the most important reason given for joining (Table h.87). TABLE h.87 RELATIONSHIP OF THE SIZE OF HERD DURING THE LAST TWELVE mNTHs INDICATED BI FORMER INSPECTED MILK PRODUCERS EEO JOINED. THE DETROIT MARKET, AND THE MOST IMPORTANT REASON THE! GAVE. FOR JOINING, BSD-1956 . ------- Most important reason - - - - - - - Size of Higher Action Other All Herd Price of Dairy Reasons Reasons (N'70) (N‘ll'?) (N'lB ) (M300) ----------Percent----------- 0-10 21; .3 8 .5 19 .5 l6 .3 1.1—“’15 37 01 32 05 28 03 32 00 16-20 2h.3 31.6 28.3 28 .7 21-25 8 06 12 0O 15 0O 12 03 26-30 h.3 6.9 3 .6 5 .O 31‘0761‘ 1014 8 0S 5 03 5 07 Total 100 .0 100 .0 100 .0 100 .0 Chi-square groupings :2 13 at .05 d 1‘ All columns 16.1; 18 .3 10 Col. 1 and all others 8.9 11.1 5 Col. 2 and all others ll.8 11.1 5 The relationship between higher price and size of the herd was not great enough to be significant at the .05 level. However, a significant relationship was observed when action of the dairy was considered. 139 The data imply that producers with herds of ten cows or less indicated "action of dairy" less often than would be expected if dependency did not exist, while producers with herds of eleven cows or more generally indicated this reason more often. It appears that pro- ducers with small herds, ten cows or less, are more influenced by higher price and other reasons than by "action of dairy.“ Size of Herd Expected Next Twelve Months. A significant relation- ship was Observed in the Cleveland market for former inspected milk producers when the most important reason they gave for joining was ana- lyzed with expected size of herd for a twelve month period (Table h.88). TABLE h.88 RELATIONSHIP OF THE SIZE OF HERD EIPECTE) DURING THE NEXT 12 IDN'LHS INDICATED BI FORMER INSPECTED MILK PRODUCERS WHO JOINED THE . CLEVELAND Hm MET, AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING, 1953-1956 -------Hostimportantreason------- Size Higher Action Other All of Herd Price of Dairy Reasons Reasons . (Ii-163) (Ii-68) (ll-283) (NI-51h) ----------Percent---------- 0.10 1209 509 1308 1205 16-20 30 .6 29 .h 31.1 30 .7 26'30 800 509 708 706 31-35 14.3 1.5 h-9 14.3 36-0761' 8 00 105 2 08 A403 Total 100 .O 100 .O 100 .O 100 .O Chi-square groupings A 12 x2 at .05 d f All columns 22 .7 21.0 12 001. l and all others 9.3 7 l2 .6 6 Col. 2 and all others 1h.3 12 .6 6 1140 Although 163 out of 51).; producers indicated "higher price" as the most important reason they gave for joining, no relationship was evident when this reason was analyzed with the expected size of herd. A dis- proportionately large group of producers with herds of 11 to 15 cows who indicated "action of dairy“ and the relatively low number in the other categories result in the dependency. Four hundred eighty five of the 723 former manufacturing producers in the Detroit market indicated "higler price“ as the most important reason for joining (Table h.89). A significant relationship may be TABLE 14.89 RELATIONSHIP OF THE SIZE OF HERD EXPECTED DURING THE NEXT 12 MONTHS DEDICATED BI FORMER MANUFACTURING Hm: PRODUCERS wHO JOINED THE DETROIT NTIK MARKET, AND THE MOST IMPORTANT REASON THEY GAVE FOR JOINING, 1953-1956 -------Most important reason ----- -- Size of Higher Action Change Other All Herd Price of Dairy Necessary Reasons Reasons (N-h8h) (II-78) (N-39) (II-122) (N-723) ----------Percent---------- 0‘10 13014 1.105 " 1601A 1300 1.1-15 38 02 32 00 All 00 23 08 35 03 16-20 33 .3 35 .9 30 .7 3h -h 33 .6 21‘25 10 06 15 0h 10 03 1105 1102 26-30 2 .9 2 .6 10 .3 8 .2 h .1 31-35 1.0 1.3 - 0.8 1.0 36'0ver 006 103 707 14.09 108 Total 100 .O 100 .O 100 .0 100 .0 100 .0 Chi-square groupings x2 x2 at .05 d f All columns 33.0 21.0 12 Col. 1 and all others 21.14 12.6 6 Col. 2 and all others 2.6 12.6 6 lhl noted between this group and the expected herd size, with a proportion- ately large number of producers who state an expected herd size of 15 cows or less indicating "higher price .“ 1142 Section III Decisions to Join a Market as Related to Price As stated previously in this study, the marketing orders regulat- ing minimum prices processors must pay for milk purchased in the Detroit, Cleveland, and Toledo milk markets have a provision providing a.means of adjusting the price of Class I milk to an over or'under supply of what is considered to be adequate. This provision adjusts the minimum price of Class I milk each month. ‘As a result the price may'vary from month to month because of this “adjuster." It is theorized that if the price is reduced, production will drop due to l) producers not being willing to supply the same amount at a lower price, and 2) fewer producers will supply the market at the reduced price. This section of the study will evaluate the relationship'between the number of former manufacturing producers who joined the three markets and the price differentials between manufacturing milk and Class I milk using the simple regression model, 1" a.+ bx.+ u. l.second group of equations employing the same model are used to evalu- ate the number who Joined relative to the differential between the blend price and the manufacturing price. Former manufacturing producers are used in this analysis since it was felt the average price of 13 midwest plants most closely approximated the price received by this group prior to entering the market. ‘h-——'—““ ‘ r C l. a.‘ _ o :- L a. C , ex A ’N ’ ”‘ -a ,.‘ ,_ ... a I 1h3 Results The equations that were fitted are divided into six major groups based upon the different dependent variables used. The former manu— facturing milk producers from each of the three markets are tabulated in two different ways, thus making the six major dependent variable groupings. The producers from each market were first tabulated. accord- ing to the month they entered the market. These tabulations were then combined into four monthly periods which included the months of December through March, April through July, and August through November. They were thus chosen so as to coincide as nearly as possible with the seasonal price pattern in each market. Various combinations of the independent variable were fitted to each of the six dependent variable groups to determine the relationship between the variables. The results of each group are presented in tabular form and analyzed from the standpoint of relationships indicated by the regression equation. Group I - Detroit Joiners Tabulated by Months The first group of equations are those relative to former manu- facturing milk producers who entered the Detroit milk market. The number of joiners were tabulated each month and the relationships observed between the dependent variable and the various prices (independent vari- ables) are recorded in Table 14.90. The coefficient of‘determination (r2) is the percentage of the number that join each month which can be explained by the independent 1141-1. TABLE h.9o RELATIONSHIP OF VARIOUS INDEPENDENT VARIABLES To THE NUMBER OF FORMER MANUFACTURING MILK PRJDUCERS WHO JOINED THE DETROIT MILK MARKET EACH MONTH, 19Sh-1956 . . Test Equation $153132“ rg/ Statistic (tb12/ Net class I pricey for the 1. month corresponding to that .Ohl 1.09 of the dependent variable. Net class I priceL/for the 2. month previous to that of .138 2.12 the dependent variable. Average net class I pricey for the two months previous 3 ' to that of the dependent '206 2'69 variable. Net blend price-Z/ for the h. month corresponding to that .021; .82 of the dependent variable. ' Net blend price-Z/ for the 5. month previous to that of .003 .27 the dependent variable. Average net class I price-y LL 6 for the two months previous .001 .13—/ ' to that of the dependent variable. yClass I price minus the price of the 13 midwest mfg. plants. 2/ Blend price minus the price of the 13 midwest mfg. plants. "t" value at the 5% level of significance .- 1.70, df :- 28. y Equation is negatively correlated . 11:5 variable. The "t" test statistic is used to determine if the relation- ship is significant at the 5 per cent level. The level of significance for this group is a "t" value of 1.70 which means that the value ob- tained in our test statistic must be 1.70 or greater before the null hypothesis that producers enter a market regardless of the price dif- ferential, will be rejected. Two equations, number 2 and 3 in Table h.90, indicate a relation- ship great enough to reject the null hypothesis. A significant rela- tionship was not evident in the other equations . Approximately 11; per cent of those who joined during a specific month could be explained by the price differential between Detroit Class I and the 13 midwest manu- facturing plants for the previous month. However, the average price differential. for a one and two month lag (equation 3) indicates an even greater relationship with approximately one fifth of the producers joining as a result of the average price differential. Equation number 6 results in a negative correlation. To obtain a negative correlation more producers would have joined becauSe of a lower price which is highly improbable. Since the “t" test indicates no significance we can probably assume this negative relationship is due 130 chance 0 Group II - Cleveland Joiners Tabulated by Months In group two the dependent variable, based on former manufacturing producers who entered the Cleveland market, was tabulated according to the month in which the producer joined. This was tested with the 1h6 various independent variables and the results recorded in Table h.91. The level of significance for this group is 1.68 indicating that all six equations are significant. In this group the price differential between the Cleveland blend and the 13 midwest manufacturing plants appears to explain the joining of more producers than the Cleveland Class I-thirteenrmidwest-plant- price-differential as contrasted to an opposite reaction in the Detroit Market. Although the price differential corresponding to the month the producers joined indicated a relationship, this relationship was not as great as that indicated by price differentials for the previous month or for the average of the two previous months. The conclusion might be drawn that more producers are influenced by the blend price than by Class I prices and that a one to two month price lag is more influential than the current price. group III - Toledo Joiners Tabulated by Months Fbrmer manufacturing milk producers who joined the Toledo market were tabulated according to the month they joined and then compared to price differentials present in the Toledo market to determine what relationship existed. Table h.92 indicates these relationships. All equations with the exception of number h were significant at the 5 per cent level. However, the proportion of the number who joined which can.be explained by various price differentials is very low. Equation.3 TABLE h.91 11L? RELATIONSHIP OF VARIOUS INDEPENDENT VARIABLES TO THE NUMBER OF FORMER.MANUFACTURING MILK PRODUCERS WHO JOINED THE CLEVELAND MILK MARKET EACH MONTH, 1953-1956 L Test Independent 2 Statistic Equation variable r (tb)I2/ Net class I priceé/for the 1. month corresponding to that .165 2.81 of the dependent variable. Net class I pricey for the "“'" 2. month previous to that of .221 3.37 the dependent variable. Average net class I price;/ for the two months previous 3' to that of the dependent 351* 3'69 variable. Net blend priceg/for the h. month corresponding to that .181 2.97 of the dependent variable. Net blend priceg/for the 5. month previous to that of .2h6 3.61 the dependent variable. Average net blend priceg/ 6 for the two months previous 262 3 77 to that of the dependent variable. -;/Class I price minus the average price of the 13 midwest mfg. plants. .2/ "t" value at the 5% level of significance In 1.68, df :- ho. Blend price minus the average price of the 13 midwest mfg. plants. lh8 TABLE 14 .92 RELATIONSHIP OF VARIOUS INDEPENDENT VARIABLES To THE NUMBER OF FORMER MANUFACTURING MILK PRODUCERS WHO JOINED THE TOLEDO MILK MARKET EACH MONTH, 1953-1956 Test Independent 2 Equation Variable r Statistic (tb12/ Net class I priceE/for the 1. month corresponding to that .067 1.70 of the dependent variable. Net class I priceg/for the - 2. month previous to that of .067 1.69 the dependent variable. Average net class I price;/ 3 for the two months previous 09h ' to that of the dependent ° variable 0 ‘ 2.03 Net blend pricey for the h. month corresponding to that .058 1.56 of the dependent Variable. Net blend priceg/for the 5. month previous to that of .066 1.69 the dependent variable. Average net blend priceg/ 6 for the two months previous 08h ' to that of the dependent ' variable. 1.92 -l/Class I price minus the average price of the 13 midwest mfg. plants. Blend price minus the average price of the 13 nddwest mfg. plants. I't" value at the 5% level of significance I 1.68, df In 11,0. lh9 indicates that 9 per cent was the largest proportion of joiners who could be explained by the average price differentials. Group IV - Detroit Joiners Tabulated by Periods In Group IV the dependent variable 'is composed of the number of former manufacturing milk producers who joined the Detroit market during four month periods . The relationships resulting from the various independent variables are recorded in Table h.93. The level of signifi- cance needed to reject the null hypothesis is 1.914.. 1 The negative correlation of equations 2 and 3 would lead to the illogical conclusion that a greater number of producers joined when the price was low. In addition the level of significance in equations 1 and 1; is not great enough to assume other than a chance relationship. There is a lack of proof to substantiate the assumption that producers join this market during a seasonal period of high prices and refrain from joining during a. period of low prices. 93232 I - Cleveland Joiners Tabulated by Periods Identical periods used in the Detroit market were used in formu- lating the dependent variable in the Cleveland market. Former manu- facturing producers were tabulated by these periods and compared with the independent variables to determine the degree of relationship (Table ho9h). In contrast to the Detroit market a significant relationship was observed in equations number 1 and 3. Nearly one-third of those who joined can be explained by the price differential between Cleveland TABLE 1; .9 3 150 RELATIONSHIP OF VARIOUS INDEPENDENT VARIABLES TO THE NUMBER OF FORMER MANUFACTURING MILK PRODUCERS WHO INED THE DETROIT MILK MARKET, 1951L-l956 Test Equation ”$33.85? r2 Statistic (17b 1y Net class I priceg/for the 1. period corresponding to that .0h2 .51 of the dependent variable. Net class I priceg/for the 2. period previous to that .206 1.255/ of the dependent variable. Net blend pricez/ for the 3. period corresponding to that .012 .27 of the dependent variable. Net blend pricey for the 1;. period previous to that .635 3 .23y of the dependent variable. '5/Producer8‘were tabulated according to the period in which they joined. The months making up the periods were: through July, and August through Nevember of each year. December through March; April g/Class I price minus the average price of the 13 midwest mfg. plants. Blend price minus the average price of the 13 midwest mfg. plants. "t" value at the 5% level of significance I 1.9h, df I 6. Equation is negatively correlated. 151 TABLE L91: RELATIONSHIP OF VARIOUS INDEPENDENT VARIABLES TO THE NUMBER OF FORMER MANUFACTURING MILK PRODUCERS, WHO JOINED THE CLEVELAND MILK MARKET, 1953-1956.;/ Test Equation Ingzgiggigt r2 Statistic (15b) y Net class I priceg/for the 1. period corresponding to that .325 2.08 of the dependent variable. Net class I priceg/for the 2. period previous to that .069 .825/ of the dependent variable. Net blend pricey for the 3. period corresponding to that .399 2.hh of the dependent variable. Net blend pricez/for the ‘5/ h. period previous to that .062 .77 of the dependent variable. '3/Producers were tabulated according to the period in which they joined. The months making up the periods were: ADecember through March3.April through July, and August through November, of each year. -g/Class I price minus the average price of the 13 midwest mfg. plants. 'J/Blend price minus the average price of the 13 midwest mfg. plants. "t" value at the 5% IeVel of significance I 1.83, df I'9. Equation is negatively correlated. 152 Class I and the average price of the 13 midwest manufacturing plants for this period . Approximately 10 per cent can be explained by the price differential between the Cleveland blend price and the average price of the 13 midwest plants for the corresponding period. It is interesting to note that the corresponding equations in the Detroit market (Table h.93) indicated only a l per cent and h per cent relation- ship respectively, which was not great enough to be significant. Group VI - Toledo Joiners Tabulated by Periods Former manufacturing producers were tabulated using the same time periods as were used with Detroit and Cleveland. Similar independent variables were used to determine the degree of relationship (Table 1I.95). Although no negative relationships were observed, the test statistic (to) indicates a level far below 1.81 which is required to indicate a significant relationship. Stunner: of Regression Egations It appears from the results of the regression equation that if price is a major factor influencing the entering of producers into a 1 market, it must be the long term advantage rather than a short period of one or two months . In all of the equations where a significant relationship was found to exist the proportion of joiners which could be explained by the various price differentials was small. This indi- cates that apparently factors other than a short term price differ- ential influences the decision of a large majority of the producers. 153 TABLE 11.95 RELATIONSHIP OF VARIOUS INDEPENDENT VARIABLES TO THE NUMBER OF FORMER MANUFACTURING MIIK PRODUCERS WHO JOINED THE TOLEDO MILK MARKET, 1953-19S Test Independent 2 Equation _ Variable r Statistic (ft) .11/ Net class I priceg/for the 1. period corresponding to that .002 .12 of the dependent variable. Net class I priceg/for the 2. period previous to that .026 .h9 of the dependent variable. Net blend pricey for the 3. period corresponding to that .001 .07 of the dependent variable. Net blend priceZ/for the h. period previous to that .019 .h2 of the dependent variable. 'H/ProducerS'were tabulated according to the period in.which they joined. The months making‘up the periods were: DeceMber through March; April through July, and.August through November, of each year. Class I price minus the average price of the 13 midwest mfg. plants. Blend price minus the average price of the 13 midwest mfg. plants. "t" value of the 5% level of significance I 1.83 , df I 9. 1514 When equations were constructed using the number who joined dur- ing the four month time period, little relationship could be found. An exception was observed in the Cleveland market when the number who joined was equated to the price differentials, both Class I and blend, for the corresponding periods. It is difficult to explain why a relationship exists in this particular market and not in the other two. The clue to this irregularity was not apparent in this study. A further study of the economic and institutional factors relating to these inconsistencies between markets would be needed. CHAPTER V SUMMARY AND CONCLUSIONS This thesis reported on a study conducted in the Detroit, Cleveland, and Toledo.milk marketing areas. Mail questionnaires were sent to all producers who entered or left the three markets from January 1, 1953 through July 1, 1956. A total of S967 producers responded. The study attempted to examine factorS'which may have influenced the producer‘s decision to enter Or leave a particular milk market. It was hypothesized that producers decide to enter or leave a particu- . lar market because of price. All producers were tabulated according to the market they joined or left. Those who joined'were examined further according to the dairy product they previouSly marketed, 1.6.3 1) former inspected milk pro- ducers, 2) former manufacturing producers, 3) farm separated cream producers, and h) new producers. In most cases, the former manufactur- ing and farm separated cream producers were combined and analyzed as former manufacturing producers. Producers who left the markets were divided into those who continued to produce and those who discontinued milk production. , In an attempt to discover-factors which might have influenced the producer's decision to enter or leave one of the three markets, com— parisons of the characteristics, actions, and attitudes of producers 155 156 were made between markets, between producer groups, and between the different years included in.the study. Producers with certain characteristics were also compared with the most important reason they gave for joining a market and tested for significance using the chi-square statistic. ‘With the use of the simple regression model Y'- a + bx + u, an attempt was made to determine the relationship of price to the month producers joined the market. The hypothesis of this study was generally supported when producers in the three markets combined indicated the reasons for their devisions. Sixty two and five-tenths per cent of all former inspected milk producers, 87.h per cent of all manufacturing producers, and 3h.6 per cent of all new producers indicated "higher price" as a reason for joining. Thirty seven and three-tenths per cent of the producers who left for other milk markets indicated "higher price" as a reason and 30.7 per cent indicated "best price" as their reason for choosing their present market. Forty one and six-tenths per cent of those who discontinued production indi- cated "cost of production too great--price too low" as a reason. ‘With the exception of new producers who joined the three markets, "higher price" was the most mentioned reason by all groups. However, variations were found to exist between markets. Producers joining the Toledo market mentioned "higher price" more frequently as contrasted to Cleveland joiners who mentioned this reason least often. Producers who continued to produce on another market after they left the Detroit market mentioned price most frequently, while those leaving the Toledo market mentioned it least often. 15 7 The degree of importance with which producers ranked "higher price" was indicated when they were asked to specify the "most im- portant reason" for joining a.market. ‘Again, with the exception of new producers, “higher price" was listed most frequently with all producers and by a majority of manufacturing producers. New producers indicated nfarm changed hands" as the most mentioned reason for joining with “higher price" ranking second. Exceptions to the hypothesis were observed, however, as many pro- ducers did not indicate "higher price'I as a factor in their decision, and many who did, specified some other reason as more important. Former inspected producers rated "action of dairy" second in importance to “higher price" and former manufacturing producers credited reasons relating to the “convenience" of producing Grade A milk as second in importance. 'Inspection trouble“ ranked second to "higher price" as a factor influencing the decision of producers to leave the Detroit and Cleveland markets to produce for another market and ranked first with Toledo producers of this group. However, in the overall analysis, price ranks as the leading determining factor for the majority of producers. - Over 12 per cent of the producers who joined the market expected no increase and 9.14 per cent indicated they expected to receive less. The average price increase expected by former inspected producers was 55 cents per hundredweight. The average manufacturing producer expected to receive an increase of 93 cents per hundredweight. 158 Approximately 70 per cent of the producers leaving the three markets also expected a price increase with Detroit producers expecting the greatest and Toledo producers anticipating the least amount of increase. 'Ihese observations further substantiate the hypothesis that producers enter or leave a market because of price incentives. ‘ Little relationship was observed when the month former manufactur- ing producers joined was correlated with the price differential between manufacturing and Class I, or manufacturing and the blend price in the three markets. The highest coefficient of determination (.2510 was found when a price, obtained by averaging the difference between the Class I price and the manufacturing price for the two months prior to the month the producer joined, was correlated with the number who joined that. month. From these data we might conclude that monthly price fluctuations have little effect on the number of producers who join, and those who join because of price probably look at the long term advantage. All three markets were observed to have expanded geographically, thus indicating a favorable price in peripheral areas of the market. The largest proportion of former inspected producers and new producers who joined the markets were located in Zone I, while the largest proportion of former manufacturing producers were located in Zone II. Those who joined the Detroit market included a majority of manufactur- ing producers, while those who joined the Cleveland and Toledo markets were evenly divided between manufacturing and inspected producers. 159 Former inspected producers generally considered entering the market for a shorter period of time than did former manufacturing producers. The average time involved by all respondents in consider- ing the change was 18 .1 months, indicating the decision to enter a market is generally not the result of a short period of economic gain. Over 60 per cent of the respondents stated they considered no other market than the one they joined, indicating producers have, or exhibit, little choice in the selection of a market. Former inspected producers generally received a larger proportion of their income from milk than did former manufacturing producers. Both inspected and manufacturing producers in Zone I were more highly specialized than producers in Zone II. Detroit producers indicated the largest percentage of income from milk. In general, inspected milk producers tended to operate larger farms. In the inspected group those with larger farm appeared to be the most concerned with higher price. From this it could be concluded that as farm size increases, the proportion of inspected producers will increase. These producers in turn are more influenced by price in their choice of a market. With the exception of the Detroit market, where the results were inconclusive, the data generally substantiated the hypothesis that inspected milk production and the resultant price advantage are associated with farm ownership. The type of milk product marketed was found to be associated with the age of the operator. Former manufacturing producers were observed to be younger than inspected producers which supports the conclusion 160 that the necessary capital investments required for Grade A production are more prevalent among the older age group. Producers who discon- tinued production were generally younger than the average of all dairy farmers in this area. The ages of producers in the Detroit and Cleveland markets were approximately the same, while the Toledo market had a younger age group. Producers 15 years old or less appear to be the most inclined to transfer markets or change to another enterprise 1. " .‘ or occupation. Those who are older are more permanently established _‘T- in dairy production in a particular market and generally lack the quali- fications or interest in starting a new occupation, while younger pro- ducers are generally more mobile. However, younger producers do not appear to change more often because of price. Former inspected producers who joined the markets and producers who continued producing after they left the markets generally had the largest average herd size during the past twelve months. Former manu- facturing producers and those who discontinued production generally had the second largest herds, while new producers were observed to have the smallest herds. The average producer in all groups planned to increase his herd size within twelve months and indicated facilities were available for this expansion. This indicates the expected continuation of a favor- able milk price. Inspected milk producers were observed to be generally associated with farm tenure indicating that as farm tenure increases, more pro- ducers qualify for Grade A production and the higher price associated with it . 161 A similar pattern was observed regarding the years producers had been dairy farming. As the period a producer had been engaged in dairy farming increased, the more prevalent were the qualifications required for inspected milk production and the higher prices associated with it. Sixty seven and eight-tenths per cent of the inspected milk pro- ducers, 92 .3 per cent of the manufactured producers, 95.3 per cent of ~,' the former cream producers, and 77 .5 per cent of the new producers indicated an investment was needed during the past two years to qualify as a producer on the Detroit, Cleveland, or Toledo market. The average amount of investment necessary was $1095 .27 for former inspected pro- ducers, $1401.72 for former manufacturing producers, $1759 .80 for farm separated cream producers and $llhl.h5 for new producers. The amount of investment necessary undoubtedly had an influence on the producer's decision to enter the market. Incentives must be attractive enough in the inspected milk market to encourage producers to acquire the capital for the needed investments if production is to be adequate for the needs of the market. A large majority of the producers who joined the markets indicated they did not intend to adjust their production to a rise or decline in the price of milk. Still others stated they would produce more “if the price declined or less if the price increased. This proposed action, which would be contradictory to the law of supply, might be explained by the need for a fixed income or the fixed assets associated with the dairy enterprise. 162 Over three-fourths of those who continued production after leaving the three markets plan to resume shipping within two years, thus indi- cating relatively high satisfaction towards the three markets. The three markets in the study generally exhibited a price advantage over other markets in the outlying areas of the milkshed as indicated by the expansion of the milkshed; the number who joined or left because of price; and the difference in the expected increase by those who joined or left the market. Producers generally work to become eligible for the premium prices received from inspected production as indicated by factors such as the size of farm; per cent of acres owned; age of the operator; tenure on present farm; size of herd; and the percentage of income derived from milk production. Several significant relationships were observed to exist when pro- ducers with selected characteristics, actions, or attitudes were compared with their "most important“ reason for joining. Fbrmer manufacturing and inspected producers who stated "higher pricen as the most important reason were generally inclined to join the market during the latter half of the year; be located in areas distant from the market; receive from 21 per cent to 60 per cent of their income from milk; operate 261 acres or more; and expected to have a herd size of 15 cows or less during the next 12 months. There was no relationship observed when producers of various ages; withdifferent herd sizes; and different percentage of acres owned were analyzed with those who stated "higxer price ." The inconsistencies in the total ‘ 163 pattern precludes conclusions as to the general characteristics of producers giving "higher price ." Reasons other than “higher price“ were also observed to be sig- nificant when compared with selected characteristics, actions, and attitudes of the producer. Former inspected and manufacturing producers who indicated "action of dairy" as the most important reason for joining were generally in- clined to join the market during the first half of the year and were more apt to be located closer to the market than those who answered “higher price ." They were more inclined to receive 141 per cent or more of their income from milk production; operate 121 acres or more; and have a herd size of ten cows or more at present and expect to have from ll to 15 cows during the next twelve months. On the basis of these relationships it could be concluded that the action of the dairies “is generallymore influential in the decision of those with medium to large dairy farms. New producers who gave the reason nfarm changed hands" were generally located in the areas more distant from the market; received 31 per cent to 60 per cent of their income from milk production; and were 29 years of age or less. The following general conclusions may be drawn on the basis of the analysis or the data included in the study: 1) Price is a major factor in the decisions of producers who join or leave a particular milk market, but various reasons other than price are also influential in their decision. -—-—=.- m "$3 16h 2) The average dairy producer considers joining a market for more than a year and manufacturing producers consider the change for a longer time than do inspected producers. 3) Monthly price fluctuations have little or no effect on the number of producers who join a market each month or on the amount they produce. 1;) Producers who join because of price are influenced by what they consider to be the long term price advantage. 5) The Detroit, Cleveland, and Toledo markets generally exhibit a price advantage over other milk markets in the peripheral 81933. 6) Producers who left the three markets were generally satis- fied with the market as indicated by the number who plan to re-enter. 7) Host milk producers consider an inspected market to be economically advantageous over manufacturing or cream markets and strive to become more specialized. 8) Milk producers in the three market areas have, or exhibit, little choice in the selection of a market. 9) Younger producers are more inclined to transfer to other markets or change to another enterprise or occupation because they are less permanently established in dairy farming and generally have the advantage in other job opportunities. 10) Dairies generally have more influence in the decision of the more specialized producer on the medium to large farms. APPENDHI 165 MAIL QJESTIONNAIRE SENT TO CLEVELAND AND TOLEDO JOINERS Your Name Age County and State in which you live: State 1. Name and address of the company to which you are now shipping your milk Name of Company Address of Plant Receiving Your Milk 2. Name and address of company to which you ship ed your milk before you started shipping to the Cleveland (Toledo Fluid Milk Market. Name of Company Address offiPlant Receiving Your Milk 3. Which 'of the following did you ship to this company? C] Inspected milk for bottling E] Milk for manufacturing [3 Farm-separated cream )4. Would you pleasellist the most important reasons why you joined the Cleveland (Toledo) market. 5. Would you please check any of the following reasons which may have entered into your decision to join the Cleveland (Toledo) Market. If any of these reasons are about the same as your most important reason please check them M1° C] To receive a higher price for my milk. [:1 Representatives of the company to which I am now selling my milk urged me to ship inspected milk to them. [:3 I wanted to sell inspected milk. Cleveland (Toledo) was the only market that would take my milk. 6. DUI] 166 I just took over this farm, or this herd of cows, so I con- tinued to ship to the same company to which the former producer shipped. I wanted the convenience of a milkhouse and other facilities anyway so I decided to produce inspected milk. I decided to change markets because of the milk inspector in 11V former market. [3 I decided to change markets because of the milk dealer in my former market . At the time you selected the Cleveland (Toledo) Market, what other markets did you also consider? Name of Company Address Name of Company Address Name of Company Address If you considered no other markets, please check here. About how nuch more money per hundredweight do you believe you are receiving for your milk now that you have joined the Cleveland (Toledo) Market as compared with your former market? 8 In your present farm operation, how many acres do you own? How many do you rent or share crop? _ About what per cent of your total farm income do you receive from the sale of your milk? %- (Do not include the sale of dairy livestock). On an average, about how many milking cows did you have in your herd during the past 12 months? About how many cows do you plan to have in your milking herd during the next 12 months? About how many cows will your present stanchion space and other facilities accommodate? 167 13. About how long had you been giving serious consideration to shipping your milk to the Cleveland (Toledo) Market? 1h. How long have you been operating your present farm? _Yrs. Months 15. How long have you been a dairy farmer on your own? _Yrs.—Months 16. Would you please estimate how much money you have spent on each of the following items in the past two years for the purpose of qualifying as a Cleveland (Toledo) Fluid Milk Producer. Include any costs of remodeling or repairing which you did in order to meet the inspection requirements. Amount of money spent in the past two years in order to qualify for the Cleveland (Toledo) Market. Barn or milking parlor $______ Plumbing and electrical work it Milk house . . . . . . . . . . . $_______ Other expenses: please list Hot water heater .... . $______ $ MilkCooler...........3______ $ Milk cans and can racks$ 3 17. If the price of inspected milk should happen to rise 50 cents per hundredweight within the next year would you [:1 Produce more milk C] Produceless milk [:1 Make no changes in your production plans 18. If the price of inspected milk should happen to decline 50 cents per hundredweight within the next year would you [:1 Produce more milk [:1 Produce less milk [:1 Make no changes in your production plans [:3 Get out of the milk business and do something else Other comments: 168 MAIL QUESTIONNAIRE SENT TO DETROIT JOINERS Your Name Age 1. Name and address of company to which you are now shipping your milk. Name of Company Address of Receiving Station 2. Name and address of company to which you shipped your milk before you became a producer for the Detroit Fluid Milk Market. Which of the following were you shipping to this company? C] Inspected milk for bottling [:3 Milk for manufacturing C] Fem-separated cream 3. We would like to know why you decided at this time to ship inspected milk to the Detroit Market. Would you please list what you consider to be the most important reason why you joined the market. The most important reason why I joined the market was: )4. Would you please check any of the following reasons that might have contributed to your decision to join the market. If any of these reasons are about the same as your most important reason please check them w. E: To receive a higher price for my milk. [:1 Representatives from the company to which I am now selling urged me to ship inspected milk to them. [:3 I had little expense to equip so I could sell inspected milk. [:3 I had to make some improvements or changes if I was going to keep cows, so I decided to fix up so I could ship inspected milk. 169 I wanted to sell inspected milk. Detroit was the only market that would take my milk. I just took over this farm, or this herd of cows, so I continued to ship to the same company to which the former producer shipped. I wanted the convenience of a milkhouse and the other facilities anyway so I decided to produce inspected milk. I wanted to improve the quality of the milk I was shipping. I decided to change markets because of the milk inspector or milk dealer in my former market. DDDDDD I can make more money shipping inspected milk than in any other form of farm enterprise. 5. If you were producing manufacturing milk before joining the Detroit Market, about how much more money per hundredweight do you believe you will receive for your milk now that you have joined the Detroit Market? 6. would you please estimate how much money you have spent on each of the following items in the last two years for the purpose of qualify- ing as a Detroit Fluid Milk producer. Include any costs of remodel- ing or repairing in order to meet the inspection requirements. Amount of money spent in past two years for purpose of qualifying Barn or milking parlor . . . . . . . . . . . . . . . Milk hmse C O O O O O O O O O O O O O O O O O O O O MjJ-k COOler . . O C 0 C O O C C C O C O O O O O D . Milk cans and can racks . . . . . . . . . . . . . . t t Hot water heater . . . . . . . . . . . . . . . . . . 3 ‘ t t :5 Plumbing and electrical work . . . . . . . . . . . . Other: Please specify 170 7. In your present farm operation how many acres do you own? -. How many do you rent? , How many do you share crop? 8. About what per cent of your total farm income do you receive from the sale of your milk? (Do not include the sale of dairy livestock.) 9. On an average, about how many cows did you have in your milking herd during the past 12 months? 10. About how many cows do you plan to have in your milking herd during the next 12 months? 11. About how many cows will your present stanchion space and other facilities accommodate? 12. About how long had you been giving serious consideration to shipping your milk to the Detroit Market? Years #Months 13. How long have you been operating your present farm? Years Months 11;. If the price of inspected milk should happen to rise 50 cents per hundredweight within the next year would you: [:3 Produce more milk [3 Produce less milk [:3 Make no change in your production plans 15. If the price of inspected milk should happen to decline 50 cents per hundredweight within the next year would you: Produce more milk Produce less milk Make no changes in your production plans DDDD Get out of milk production and do something else Other comments if any: 171 MAIL QJESTIONNAIRE SENT TO PRODUCERS WHO LEFT THE CLEVELAND AND TOLEDO MARKETS Your Name Age County and State in which you live: County State 1. Name and address of the company to which you shipped your milk whfle you were shipping to the, Cleveland Fluid Milk Market. Name of Company Address of Plant Receiving Your Milk 2. Are you still producing milk? [:1 Yes D No If your answer is YES, please complete questions 3 through 16. If your answer is NO, complete questions 17 through 22 on page h. 3. If you are still producing milk, what is the name and address of the company to which you are now shipping your milk? Name of Company Address ofilmt Receiving Your Milk )4. Which of the following are you now shipping? :1 Inspected C] Milk for manufacturing [3 Farm-separated cream 5. Will you please list the most important reasons why you stopped sending milk to the Cleveland Market. 1) 2) 3) 6. At the time you selected your present market, what other markets did you also consider? Name of Company Address Name of Company Address 172 Name of Company Address If you did not consider any other markets please check here. 7. What were your most important reasons for choosing your present market instead of one of the other markets which were available to you? *— 8. If you are producing inspected milk for another fluid milk market how mch more money per hundredweight do you receive for your milk than you would receive by sending it to the Cleveland Market? 9. Do you plan to ship to the Cleveland Fluid Milk Market again in the next two years? [Z] Yes [:1 No 10. On an average, how many milking cows did you have in your herd during the past 12 months? 11. About how many milking cows do you plan to have in your herd during the next 12 months ? 12. In your present farm operation, how many tillable acres do youown? How many do you rent or share crop? 13. About what Be r _<_:___ent of your total income do you receive from the sale of milk? %. (Do not include the sale of dairy livestock.) 1h. How long had you been shipping to the Cleveland Market? ___Yrs. ____Mos. 15. How long have you been operating your present farm? _____Yrs. Mos. 16. How long have you been a dairy farmer on your own? _Yrs. Mos. Other comments: 173 FOR THOSE WHO ARE NOT NOW PRODUCING MILK 17. The most important reasons why I decided to discontinue producing ' milk were: 18. How many cows did you have in your milking herd during the last twelve months you shipped to Cleveland? 19. About what per cent of your total farm income did you receive from dairying? %. (Do not include the sale of your dairy livestock.) 20. How long did you produce milk for the Cleveland Market? Years Months 21. About how long had you been giving serious consideration to stop producing milk? Years Months 22. Do you think you will be producing milk again in the next two years? [I] Yes D No Other comments : 17).) MAIL QUESTIONNAIRE SENT TO PRODUCERS WHO LEFT THE DETROIT MARKET Your Name Age 1. Name and address of company to which you were shipping your milk before leaving the Detroit Fluid Milk Market. Name of Company Address of Receiving Station 2. Are you still producing milk? [:1 Yes [:1 No IF YES, complete questions 3 through 1h. _I_F; _N_Q, complete questions 15 through 20 on page )4. 3. If you are still producing milk, what is the name and address of the company to which you are now shipping your milk? Name of Company Address of Receiving Station Which of the following do you ship: [:1 Inspected milk [:3 Milk for manufacturing [:3 Farm—separated cream. )4. We would like to know why you decided to discontinue shipping inspected milk to the Detroit Market. Would you please list what you consider to be the most important reasons why you withdrew from the market in the space provided. The most important reasons why I decided to discontinue shipping inspected milk to Detroit were: 5. If you are producing inspected milk for another market about how nuch more money per hundredweight do you receive for your milk than you would receive by sending it to the Detroit Market? 35 6. Do you plan to ship to the Detroit Fluid Milk Market again in the next two years? [:1 Yes [:3 No ll. 175 On an average, how many cows did you have in your milking herd during the past 12 months? About how many cows do you plan to have in your milking herd during the next twelve months? In your present farm operation, how many tillable acres do you own? How many do you rent? How many do you —___ share crop? About how many acres do you use for the following purposes: To grow hay and roughage for your cows acres To grow feed grains for your cows acres As pasture for your cows acres To grow other crops acres About what per cent of your total farm income comes from the sale of your milk? %. (Do not include the sale of dairy livestock.) 12. Do you think you will shi your milk to the Detroit Market again in 13 . 114. Other comments if any: l5. l6. 17. the next two years? Yes [3 No How long had you been shipping your milk to the Detroit Market? Years Months How many years have you been operating your present farm? Years Months A If you are not producing milk, would you please list the most important reasons why you discontinued producing milk? The most important reasons why I decided to discontinue producing milk were: About how many cows did you have in your milking herd during the last 12 months you shipped milk? About what per cent of your farm income did you receive from dairy- ing? Z. (Do not include the sale of your dairy livestock.) 176 18. How long did you produce milk for the Detroit Market? ___Yrs. Mos. 19. About how long have you been giving serious consideration to stop producing milk? Years Months. 20. Do you think on will be roducing milk again in the next two years? Yes No Other comments if any: APPENDIX II 177 TABLE 1 PLANT PRICES, 1952-1956 CLASS I PRICES AND THE AVERAGE THIRTEEN MID‘WEST ll 0 e J.m S c .l.m.m o minuol .d -mI -lsw sam 61 ilnu no .t.l J).1 e .2; 030 {uni elm DC AI)/ .t x m m.m.r one 8 attc rrSi simn nnmmmm M“ Month Year and ------------Dollars------------ 222 November December 2252 smhmhhhhssss H149 IDS mumhhuhhhhhm 788 Luejnc January February March April May 112/022 \Mo_.Q/Qc/333 w 66767 9012.)— mm June July August September October November December .un Lao/:JQJLHRU3 Luql ./0HDnlqtvnvlnuA~Lu 13517.. 8 lllzzmu/nd 333333333333 January February March April May June July August September October November December ........ 8 2 AN .nw ..... nw .1uwu 333222233333 cm Wres ammn e nmmmm finermWnunsewc .l.diF"m "M.m.m.m.SAU“N.m 178 TABLE 1 - Continued Average Thirteen > Detroit Cleveland Toledo Year and Mid-west Plant Class I Class I Class I Month Price Price Price Price - - - - f ------- Dollars ------------ 1256 January 3.13 14.60 h-79 14.63 February 3.08 h.hl h.35 h.l8 March 3-0h ho33 h-37 h-lh April 3.03 h.h9 h.h6 h.l2 May 3-0h h-99 5-09 hoéh June 3.0h h.97 5.13 h.7l Source: Compilation of Statistical Material, Federal.Order No. 75, Prepared by the Marketing Administrator, Cleveland, Ohio, October, 1956; Federal.Order No. 2h, Prepared by Marketing Administrator, Detroit, Eflohigan, January 1959; and Federal Order No. 30, Prepared by Marketing Administrator, Toledo, Ohio, November, 1958. 179 Toledo Blend Price Blend Price 5 .33 S .03 Cleveland ‘ ~ - - - - - — — - — - - Dollars - - - - - - - - — - - — TABLE 2 Detroit L Blend Price 5 .03 h.6l PRICES, 1952-1956 Average Thirteen Mid-west Plant Price BLEND PRICES AND THE THIRTEEN MID4WEST PLANT AVERAGE Mbnth November December $25.3. Year and .a2 000000000000 9nl3859717Q/Inw8 8hh8771h688mm in. 81708 2h7935 33220 223h3l hh‘uhhhhhhhhh 7.888 3.5 708 h321muflll 232 Q/QJQJQJQJQJQJQJQJaJQJqJ a rr mm tmamm man eywmwmm maMrynfl wawm JF “MNJMSOND 318857.737h5 O93238h6895 000000000000 3222233333 000000000000 Nevember December .1255 January January February March July August February March April May June July August September October November December June May September October April .22 180 TABLE 2 - Continued Average Thirteen Detroit Cleveland Toledo Year and Nfid-west Plant Blend Blend Blend Month Price Price Price Price ------------ Dollars - - - - - - - - - - - - 1256 Jarmary 3 .13 L30 h M h .ho February 3.08 h.l3 b.08 3.98 Ebrch 3.0h b.03 hJOS 3.96 April 3.03 b.10 h.ll 3.92 May am 14.10 MB mu June 3 .01; h .29 h oh? h .39 Source: Compilation of Statistical Material, Federal.0rder No. 75, Prepared by the Marketing Administrator, Cleveland, Ohio, October, 1956; Federal Order No. 2h, Prepared by Marketing Administrator, Detroit, Nfichigan, January, 1959; and Federal Order No. 30, Prepared by marketing Administrator, Toledo, Ohio, November, 1958. 181 BIBLIOGRAPHY Books Barlowe, Raleigh. Land Resource Economics. Englewood Cliffs, New Jersey, 1958- Dixon,'Nilfred J. and Massey, Frank J. Introduction to Statistical Analysis. New York: mcGraw-Hill Book Co., . Heady, Earl G., Diesslin, Howard G., Jensen, Harold R., and Johnson Glenn L. Agriculture Adjustment Problems in a Growing Economy. Ames, Iowa: Iowa State College Press, 1958. Hicks, J. R. Value and Capital. Oxford: Clarendon Press, l9h6. Leftwich, Richard H. The Price System and Resource Allocation. New York: Rinehart and Co., 1952. Stigler, George J. The Theory of Price. New York: Macmillan and Co., 1951. . Thompson, Frederioh L. and Foote, Richard Jay. Agriculture Prices. New York: MbGraw—Hill Book Co., 1952. United States Department of Agriculture. The Yearbook of Agriculture- Marketing. 'Washington: United States Government Printing Office, 1951; . ‘Halker, Helen M) and Lev, Joseph. Statistical Inference. New York: Henry Holt and Co., 1953. Bulletins and Periodicals Brinegar, George K. "Economic Effects of Regulations and Price Fixing in the Milk Industry." JOurnal of Farm Economics. Vol. 39, 1957. French, Charles E. and Walz, T. c. "Impacts of Technological Develop- ments on the Supply and Utilization of Milk.“ Journal of Farm Economics, Vol. 39, 1957. _ Gaumnitz, E.‘W} "Economic Problems Associated with Milk Marketing Orders." JOurnal of Farm Economics. Vol. 37, 1955. 182 Halvorson, Harlow .H. "The Response of Milk Production to Price." Journal of Farm Economics, Vol. to, 1958. Halvorson, Harlow w. "The Supply Elasticity for Milk in the Short Run." Journal of Farm Economics, Vol. 37, No. 5, 1955. Henderson, Ellen. "Our Changing Fluid Milk Market ." Agriculture Marketin , Vol. h, No. 2, 1959. Jones, E. B. and Quackenbush, G. G. Milk Producers Entering and Leavmgme Detroit Market. Special Bulletin 397. Michigan State College, Agriculture Experiment Station, East Lansing, Michigan. April 1955. McBride, Glynn. "Manufacturing Milk Supplies in Michigan." Qflarterly Bulletin, Vol. Lo, No. 1, Agricultural Experiment Station, Michigan State University, Agriculture Experiment Station, East Lansing, Michigan. August 1957. Nerlove, Marc. "Estimates of the Elasticities of Supply of Selected Agriculture Commodities." Journal of Farm Economics, Vol. 38, ' No. 2, 1956. j .. Wheeler, R. G. "The Impact of Technological Changes on Milk Production." Journal of Farm Economics, Vol. 37: 1955. Public Documents Agriculture Marketing Service. Fluid Milk and Cream Reports. November 1952 through December 1953. The Market Administrator. Compilation of Statistical Materials. Federal Order No. 211,, as amended for the Detroit, Michigan Marketing Area, January 1959. The Market Administrator. Compilation of Statistical Materials. Federal Order No. 30, Toledo, Ohio Marketing Al'ea, November 1958. The Market Administrator. Compilation of Statistical Materials. Federal Order No. 75, Cleveland, Ohio Marketing Area, February 1959- The Market Administrator. Amendments and Suspensions; Effective Since Inception on August 1, l9h6, Cleveland Ohio Milk Marketing Area, Federal Order No. 75. 183 Production and Marketing Administration. Federal Order No. 30 As Amended, Effective April 1, 1953. Production and Marketing Administration. Federal Order No. 21; As Amended, Effective November 1, 1952. United States Census of Agriculture. Size of Operation by Type of Farm. Vol. 3, Part 2. U. S. Government Printing Office, Washington, D. 0., 19514. f Unplb lished Material Bealer, Robert C. "Value Orientations and Behavioral Correlates of Ln Producer-Patrons in Purchasing Cooperatives." Unpublished M. S. '. Thesis. The Pennsylvania State University, State College, Pennsylvania . 1955 . Quackenbush, G. G. "Price Interrelationships in Dairying." Michigan State University, East Lansing, Michigan. (Mimeographed.) Quackenbush, G. G. "Some Marketing Principles: The Perfect Market, Von Thunen's Principle, Fetter's Law of Markets." Michigan State University, East Lansing, Michigan. (Mimeographed.) V ”'iifixifiuiigfiuiluiiiliiijmfii5‘