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