—Lancaster Farming. Saturday, July 10. 1976
72
Editor’s Note: The following report is based on USDA’s
Dairy Situation Summary for March and May of this year. It
was prepared by James Miller and Charles Shaw of the
Commodity Economics Division.
WASHINGTON, D.C. The American milk cow squeezed
out an average of 10,354 pounds of milk last year in an utterly
exhausting effort to quench America’s thirst for dairy
products.
Few agricultural commodities can match milk in ver
satility of product forms or importance to the American diet
both taste-wise and nutritionally. Last year, each
American consumed an average of 546 pounds of milk in fluid
or processed form.
Yet, moving that milk from the dairy farm to the consumer
m the product form that he demands is no easy task. A
system of production, processing, marketing, and pricing
has evolved that is so complex and delicately balanced that it
may leave many consumers scratching their heads in con
fusion.
Most of this maze lies in that part of the system between
the farmer and the consumer. The producer must accept
returns based on market factors beyond his control, while the
consumer must pay the price marked on the container or
forego the product.
To some degree, the effect of the system is seesawing. As
the farmer receives a stronger financial return, the con
sumer pays more for the product. And, as the consumers
benefit from lower prices, the farmer must accept lower
returns.
The producer must accept returns
based on market factors beyond his
control, while the consumer must pay
the price on the container or forego
the product.
Take 1975 as a good'example. During the first half of the
year, retail prices held steady as the farmer’s production
costs rose with inflation. Thus dairy farmers fared poorly for
a period. Then, in the second half of the year, prices at stores
strengthened sharply to give the farmer a healthy return as
the consumer paid more.
During that first half of 1975, production costs climbed 12
percent above 1974 levels during the comparable period,
while prices dipped five percent in comparison. It takes little
economic knowledge to imagine the farmer’s discomfort.
The seesaw dipped the other way in the second half of the
year, as prices jumped to 15 percent above those in the last
half of 1974, while production costs rose a modest five per
cent. All in all, it proved to be a moderately successful year
for farmers after the sluggish start. Total cash receipts for
farmers rose 4.6 percent above 1974 levels.
m m New scientific dairy
herd record system!
Continuous chart with plexiglass cover lets you
see at a glance all the details and condition of
each individual cow. You can immediately check
for heat, pregnancy, service and gestation. Also
giv'S you a permanent visible health record of
treatment and other important data Write or
telephone for complete information on this
inexpensive new system
nucDuunmu AARON S. GROFF
ELMER M. MARTIN & sqh
RD2, Myerstown, PA
Phone 949 2081
USDA
RD3
Ephrata, PA 17522
Phone 354 0744
Support prices explained
issues dairy
The ups and downs of the year also balanced out for the
consumer, who paid an average of about three percent more
for dairy products in 1975 well below the record 19-percent
price jump in 1974.
While the overall price increases for the year were modest,
much of the increase came m the last three months, when,
retail prices rose six percent. The increases varied con
siderably between product forms. Milk prices edged up four
cents per half gallon in the last four months, but the increase
came after declines earlier in the year. As a result, the pnce
was up only a tenth of a cent for all of 1975.
Since 1967 all food prices advanced
75 percent , whereas dairy prices went
up 57 percent.
Among processed products, American cheese prices
boomed by 26 cents a pound last year, compared with an 8-
cent increase in 1974. Butter prices soared 38 cents a pound in
1975, while its competitor, margarine, declined by 15 cents a
pqynd. In 1974, butter prices rose eight cents a pound, while
margarine increased six cents a pound over 1973 levels.
Consumers who cast a jaundiced eye at the dairy industry
should, however, consider the relative performance of dairy
items with other commodities:
- Average prices for all foods jumped BV2 percent last year,
versus the three percent for dairy products.
- The Consumer Price Index shows that since 1967, all food
prices advanced 75 percent, whereas dairy products went up
57 percent.
As in the case with most agricultural industries, much of
the dairy industry occupies that middle area between
production and consumption, providing a pivot for the price
situation.
Jet-Pak
425
Hand Sprayei
The new SOLO JET-PAK 425 Hand Sprayer is light
weight, remarkably low priced and maintenance free.
The light 8 pound sprayer is made of high impact
plastic with a frame of steel that is molded into the unit
for stability and balance. Padded carrying straps
assure comfortable operation, even by a lady.
The JET-PAK is perfect for private gardens, patios,
nurseries, forestry work, lawn grooming and mosquito
control. On the farm the 425 sprayer disinfects and
whitewashes stables.
LESTER A. SINGER
PHONE 687-6712
Lancaster County's Only Dealer
Specializing in Sprayer Sales & Service
RONKS, PA
outlook
The crux of the system is to move a highly perishable
product in the proper mix of variable forms from the farm to
the consumer.
Because of the seasonal supply fluctuations, the industry
learned long ago that some system was needed to stabilize
prices, if a steady supply was to be attained. Wildly unstable
prices would drive out many producers, and discourage
production to the degree that, in the long run, the consumer
would suffer.
So, with authority from congressional legislation, USDA
has become involved in dairy price stabilization for several
decades.
The USDA’s prime tool in stabilizing prices is the price
[Continued on Page 74]
GOOD
NEWS
FOR CAR BUYERS.
The Friendly First has extended
their new rates and new terms for
car loans through July!
Give us a call when you buy
your car.
HKje First c lljcdiLonja!!. (Bumb
ofa StrvoAbun^
STRASBURG LANCASTER
687-8611 397-4732
WILLOW STREET BUCK
464-3421 284-4175
MILLERSVILLE
872-4686
MEMBER F D I C