In Todays Complex Marketing System
Milk Pool Insures Equitable Price
In o}ir model n system of mar
keting. milk and other dany
products, the fanner no longer
meets the consumer face to face
as he once did. They aic far
apait, and today's farmer has
no way of knowing how his milk
will be used.
He knows it may reach a
dinner table m some distant
city for drinking. But the farm
er also knows that the amount
of milk consumers want each
day varies ,and that his parti
cular milk may not be packaged
lor drinking.
Some or all of it may be left
on band at the milk plant after
that day’s bottling milk orders
are filled. This left-over milk is
likely to go to a near-by pro
cessing plant to be used in mak
ing ice cream, cheese, or butter.
The- farmer has no control
over how his milk will be used
once it leaves his farm. In fact,
milk from various farms is in
termingled after purchase' by
the handler, and loses its iden
tity with the individual farmer,
i Yet, there is a difference in
the price milk will bring in the
market, keyed to its ultimate
use. Milk distributed for fluid
use commands a higher price
in the market than milk going
into manufactured dairy pro
ducts.
‘ A “milk pool” ensures that
all farmers are paid equitably
for their milk delivered to a
market, or sold to an individual
handler. This “pool” refers to
the value of the milk rather
than to the milk itself. It is
money, not milk that is pooled,
to prorate the value of the milk
among participating dairy
farmers.
MEET THE LANDHANDLER
Nissley Farm Service Grumetli Form Service L. H. Brubaker
Washington Boro, Pa. Quarryville. Pa. Lititz, Pa.
The essence of a maikctwulc
pooling plan is payment of a
unifoirn "blend”, or avciage
price to all dairy farmcis do
hveiing to all dealcis in the
market, no matter how the milk
is used by the particular deal
er A pool can also apply just to
milk handled by each dealer in
dividually.
In either case, the pool oper
ates in conjunction with a milk
use classification and pricing
system.
Various kinds of pooling ar
rangements have been used for
many years. They were first
used in the 1920’s by dairy
farmer cooperatives, to esta
blish and maintain uniform,
marketwide values for milk
based on various uses.
Later, cooperatives sought and
got the help of government
Pools have been an integral
part of federal milk marketing
orders ever since they were
authorized by Congress some 30
years ago.
The federal milk marketing
orders administered by the
Consumer and Marketing Ser
vice of the U S. Department of
Agriculture set minimum
prices which are the least that
milk dealers can pay dairy
farmers for their milk
There are usually two gen
eral milk use designations
Class I for all milk used for
bottling (fluid) purposes, and
Class II for all milk used for
manufactured dairy products
such as ice cream, butter, and
cheese.
This is where the milk pool
comes into play. It brings farm
ers the price benefits of the
overall milk usage by all hand-
In this USDA ailiclc, John
R Hanson, deputy director
of the USDA dairy division,
explains how the milk pool
woiks and how the blend
price or milk price to the
farmer is obtained.
lers in the entire market, or by
one handler only, depending on
the type of pool plan.
Here’s how this works
Suppose that three dairy
farmers each deliver 100
pounds of milk to a dealer do
ing business in a Federal milk
order market. The dealer sells
Alternate AM-PMMilk Test
Results Reported Favorable
Location records and produc
tion aveiages of herds enrolled
in the alternate AM-PM milk
testing plan compare favorably
with herds enrolled in offical
Dairy Herd Improvement test
ing, an Extension daily special
ist at The Pennsylvania State
Univeisity reported recently at
the American Dairy Science
Association annual meeting in
Gainesville, Fla
Herbert C Gilmore, official in
charge of the Pennsylvania
DHIA program, who presented
a paper on factors affecting in
dividual cow weights, pointed
out that under the alternate AM
PM plan, only one milking of
each test period is supervised—
Lancaster Farming. Saturday. August 15,1970
200 pounds of the milk for fluid
oi bottling use, for which the
Class I price is $6 23 a bundled
pounds He uses the other 100
pounds for manufacturing
(Class II) for which the per
hundred-weight order price is
$467.
The handler then owes $l2 46
for 200 pounds at $6 23 a hun
dredweight, and $4 67 for 100
pounds at the Class II price
The pool, or total owed by the
handler is $17.13.
Since all three farmers de
livered the same amount of
milk, they share it equally, each
getting $5.71.
In a real milk order pool, the
AM one month, PM the next morning than in the evening,
month. This reduces the testing Gilmoie added.
cost and is popular because the . ,
regular milking routine is dis- to . ad]USt a , sin f«
lupted for only one milking ml ! k f h" u h nequ ?
■frp, mg intervals have been develop-
The amount of milk produced °, th p - t -rnfMw
at a single milking is influenced ed ’ n pr ® te f or
by the time since the previous said ‘ use of t these facto «
milking,” the dairy specialist va “ r f uce var ‘ atl ° n in mi *
said “The single milk weight is P lodu6tl « n records from month
doubled for the daily total. This to month ; ” ake . tkeae r , ecopds
daily total determines the cal- more useful for daily herd man
culation of production for each agement, and give added rehabil
monthly test period as well as 11 - v to the AM ' PM P lan
the cow’s lactation record and Pennsylvania was the first
yearly average for the herd.” state to offer dairymen the alter-
There is more month to month nate monthly plan as an optional
variation in the daily test day method of testing along with
milk weights for those AM-PM Dairy Herd Improvement Regis
herds that milk later in the tiy, owner sampler, and DHI.
ENTY DIESEL
uniform blend puce is announc
ed foi milk with 3 5 pei cent
butterfat The unifoim price to
the farmers is then adjusted for
milk of varying butterfat, and
also for milk shipping costs
from production to consump
tion areas.
The road to market is a long
one for today’s milk. And milk
goes into a host of different
uses.
But because of “pooling” ar
rangements incorporated into
federal milk marketing orders,
farmers are assured basic, equal
sharing of pool values, no mat
ter how their milk is used.
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B.D. 2
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11