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What Producers are Doing to Conform Milk Production to the Needs of the Chicago Market

Pure Milk Association, Chicago

ABSTRACT

In order to clearly understand the problems facing the market and the possible means of solution, it would be well to first examine the basis of pricing under the Federal Order, without going into all the details and ramifications. Simply, the order provides for prices to producers on a use basis. Although there are several specific classes of milk, depending not on quality but on use, these classes can be segregated into two general categories.

First, there are the milk and cream in fluid uses, requiring by ordinance a Grade A supply, which commands a higher price than milk used for manufacturing. This higher price, in the Chicago market, is related to and based on the price for manufacturing milk. This is the only portion of the milk for which the producer receives additional payment for producing Grade A milk.

Secondly, there is the milk used for nonfluid or manufacturing purposes, which is priced at the level of non-Grade A milk used for butter, milk powder, cheese, and evaporated milk. For this portion of the milk no additional payment is made for the production of Grade A milk.