Pricing Milk to Farmers at Butter- Nonfat Dry Milk Plants

Scott A. Walker

Journal of Agricultural Economics Research, 1953, vol. 05, issue 4, 2

Abstract: A new method of pricing milk to farmers at butter-nonfat milk plants that will reflect accurately and equitably the true net farm values of milk of various fat contents is urgently needed. On completion of a regional research study on the costs and efficiencies of 12 specialized butter-powder plants in the Pacific Northwest it became apparent to the author of this paper that such an accurate, equitable, and feasible producer pricing system could be devised.' The study was conducted in cooperation with the Bureau of Agricultural Economics and the Farm Credit Administration. This paper describes and analyzes the pricing plan that was developed from a detailed analysis of the physical and monetary input-output relationships in these plants. This plan is a simple and logical approach to the joint-cost problem that is so often a source of confusion in marketing studies. Essentially, it provides a formula for evaluating the differential in net farm value of milk, delivered to butterpowder plants, corresponding to differences in butterfat tests of milk. It does this in a way that gives a valid reflection of the differences in net returns from milk without involving allocations of overhead costs between the joint products. The paper is published with the approval of the Director of the Idaho Agricultural Experiment Station as Research Paper No. 368.

Keywords: Agribusiness; Livestock Production/Industries (search for similar items in EconPapers)
Date: 1953
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/144049/files/4Walker_5_4.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uersja:144049

DOI: 10.22004/ag.econ.144049

Access Statistics for this article

More articles in Journal of Agricultural Economics Research from United States Department of Agriculture, Economic Research Service Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().