Al4—Lancaster Farming, Saturday, December 12,1981 ROSEMONT, 111 - Each in dustry seems to have idiomatic terms that mystify outsiders. The dairy industry is no exception, but it has one variation. Even insiders get confused by parity, milk classifications, minimum price support, federal order markets and the M-W price series, to name a few. M-W means what? It means the Minnesota-Wisconsin (M-W) price series. First adopted in the Chicago Federal Milk Order in September 1961, M-W reflects the prices paid to Minnesota and Wisconsin farmers for manufacturing grade milk. These two states were selected because they are the major producers of manufacturing grade milk (9.9 billion of the 19.1 billion pounds manufacturing milk marketed in 1980). A recent UDIA bulletin points out that two grades of milk are produced on U.S. dairy farms. Grade A is produced under higher farm sanitation standards than Grade B. Only Grade A milk may be sold as a fluid beverage, but either Grade A or B may be used to manufacture cheese, butter and nonfat dry milk. Class I milk (milk used as fluid) PRICE / ROLLBACK ■ IN DECEMBER Plus Waiver or 13.9% APR Financing Forget any reasons you may have for not buying a big new 2-wheel drive tractor nght now Massey-Ferguson has rolled back prices to us in December by 15*/o on every new Massey 2000 Senes tractor on our lot This means some of the biggest savings we ve ever been able to offer to you' Don t wait Come in and buy now because these savings apply only to new equipment purchased m December just in time for year-end tax credits too Choice of financing If you buy now and qualify for financing through Massey-Ferguson. welt make your deal even sweeter with a waiver of finance Hurry! These price rollback savings are good only during December 1981. EXAMPLES OF ROLLBACK PRICES: 205-4 20 H.P. TRACTOR List Price $6,910.00 List Price $11,237.30 15% Roll Back $1036.50 15% Roll Back $1,685.60 Roll Back Price *5,873.50 265 DIESEL MULTIPOWER, 60 H.P. List Price $19,421.90 15% Roll Back $2,913.29 Roll Back Price 16,508.61 Roll Back Price 32,116.40 Plus... Trade In or Straight Sale Discount Plus... Waiver of 13.9% APR Financing LEBANON VALLEY IMPLEMENT CO. INC. Richland, PA Ph: 717-866-7518 Now more than ever, Massey makes seme. prices, under the federal milk marketing order program are set at a fixed differential in each market above the prices paid for Grade B milk in the Minnesota- Wisconsin (M-W) area. Prices paid by milk companies to dairy farmers for milk to be bottled increase as the distance increases from Minnesota and Wisconsin. These states are the nation’s center of milk surplus relative to local demand. Milk can be shipped anywhere from Min nesota or Wisconsin by paying transportation costs. Class I price (fluid milk) throughout the country generally approximate the M-W Class I prices, plus tran sportation and the differential. How is the milk price for a given month determined? The basic formula price for a given month is the M-W manufacturing milk price that reflects supply and demand conditions in the entire dairy in dustry. Producers of Grade A milk are paid a higher price because it costs more to produce. The for mula provides for a two-month lag. So the May M-W price plus the Class I price differential (amount above the manufacturing milk price level) determines the Class I « % charges ti) season of use or 13 9% annual percentage rate financing for two years Its your choice See us now for all the details Waiver dates: Tractors implements mdustnat machines Hay tools Gram combines Com/bean combines Used equipment savings too. Waiver of finance charges and 13 9% financing options are also available to qualified buyers through MF on used machinery and equip ment on our lot Roll Back Price *9,551.70 2675 DIESEL, 100 HP 24 Speed Multipower List Price $37,784.00 15% Roll Back $5,667.60 MF Massey Ferguson M-W means,..? March 1 1982 May 1 1982 August 1 1982 September 1 1982 230 DIESEL 34 H.P. price for milk in July 1981. For example, the M-W price in May was $12.61 per hun dredweight. The Chicago Regional Market Order differential was $1.26. Therefore, the price of Class I milk in July in the Chicago Order will be a minimum of $13.87 per hundredweight. Why is M-W important? The M-W price series is used to set most milk prices throughout the United States. It also mirrors manufacturing grade prices outside Minnesota and Wisconsin. In fact, the reported M-W Price Series closely approximates the final, actual prices paid for manufacturing grade milk in the U.S. The Class I price differential under the federal order program promotes market security and stability in the U.S. milk market. But when set too high, the dif ferential promotes production of Grade A milk beyond that needed for the fluid market. The amount of the differential is based on transportation costs and other factors including an in centive to maintain adequate supplies of fluid milk. When the differential is higher than justified by such costs. Grade B producers are er ' to Grade A production, especially if they have already incurred many of the costs of doing so, such as the installation of bulk handling systems. Grade B producers in stall such equipment to increase their marketing efficiency. However the added Grade A production is not needed for fluid use and rr*'' ct is diverted to Allentown Fair operates in black ALLENTOWW The AUewn town Fair, showcase of the Lehigh County Agricultural Society, did an about-face when it showed a modest profit on its 1981 exposition after several years of financial reverses. Commenting on the $26,712 profit recorded in the annual LCAS report, Edward Charles, executive committee chairman, said, “We now seem to have the proper formula for running a solvent operation.” Comparing the 1981 profit to last year’s fair loss of $60,532, Charles said, “The most important thing is that we had a very successful fair *'3ar.” manufacturing uses, The M-W series has worked efficiently in the past and will continue to stabilize the U.S. milk market until the percentage of Grade B milk in Minnesota and Wisconsin is too low to be a viable economic factor. Then a new system will be needed. The fair turnaround was the brightest spot in a much brighter picture for the society’s over-all operation, the report says. Other areas of the society’s operation recorded deficits resulting in a net loss for 1981 of $35,407 for the society. Last year’s over-all net loss was $128,458. “Although there was a slight increase in attendance, the larger crowds alone did not account for the financial turnaround, Charles said. “The main reasons were the curtailment of expenses, a much more efficient operation and an excellent job done by the entire staff.” 9
Significant historical Pennsylvania newspapers