(Continued from Page C 6) minimum prices for their milk sold in the milk marketing orders. The CCC purchases of dairy products are designed to assure that the M-W price is at least at the level of the target price or desired support price. There are, in effect, three types of demand for dairy products: commercial demand, demand for dairy products by the government, and the artificial demand created by CCC purchases designed to support the price of milk. The commercial demand is simply the amount of milk used in products purchased by consumers and is affected by those factors previously discussed. The government uses dairy pro ducts for the military and in prog rams such as the school milk prog- "Experience And Quality" From Concept... To Design... To Completion... TRIPLE H Construction 430 Springville Road, Ephrata, PA 17522 Custom Builders of Dairy, Hog, Poultry, Horse, Storage, Cablevey - the PROFIT CONVERTER 1.) CABLEVEY Measures Feed By Weight - No other barn feeder on the market actually weighs the amount of feed delivered to each cow. 2.) CABLEVEY Saves Energy -1 motor and 1 system handle many livestock operations. 3.) CABLEVEY Reduces Feed Separation - Unlike flex augers, feed separation is minimal - that means a more uniform ration to all cows 4.) CABLEVEY Keeps Feed Fresh ■ “Trip After Fill” operation means no feed is delivered to the drops until feeding time. 5.) CABLEVEY Takes the Corners - Specially designed 90° corners allow efficient system operation for any barn layout. 6.) CABLEVEY Installs Easily - No need for installing steel beam track to support heavy feed hopper loads. CALL TODAY FOR A NO OBLIGATION "QUICK QUOTE" ASK US ABOUT EQUIPMENT LEASING PROGRAMS! ram, donations to the needy in the United States, and the PL 480 program. The artificial demand is the amount of product needed to be purchased to assure the M-W price is at or near the support price. This demand is often called the milk surplus. In the creation of this artificial demand, the CCC buys butter, cheese and nonfat dry milk which the commercial and government market will not buy. It accomp lishes this by paying prices for these products which have been calculated to enable the manufac turing plants in the Minnesota- Wisconsin area to pay farmers prices that are at or very near the desired support price. In the crea tion of this artificial demand all the milk offered by the producers is Phone:7l7-738-2142 Residential And Commercial Buildini used, either by the commercial and government markets or by the CCC in the form of product purchases. A situation in which the price determination process, similar to the one occurring in an unregu lated market, results in a decrease in the price to the level at which the consumers (or commercial demand) will accept all that is offered will not occur. Purchases are made by the CCC to assure that prices will be very near the target or support price. However, since the price is maintained by creating an artificial demand, the M-W price does not necessarily equal the support price. Because the demand and supply situation is constantly changing, the M-W price also con stantly changes but, even at its lowest, hovers around the support price. In some cases, the M-W falls below, although usually only by a small amount, the support price. At these times, CCC product purch ases are usually quite high since they are needed to assure that the M-W price is near or equals the support price. The M-W prices are lowest and the CCC purchases are highest during the spring and early sum mer months. During these months the supply of milk is the largest. The commercial market is unwill- ing to purchase all of the milk offered and price declines. The CCC purchases the milk that the commercial market is unwilling to buy (in the form of butter, cheese, and nonfat dry milk) at levels necessary to achieve the desired support price. In the fall and winter, the M-W price is usually the highest since One main element in all of these programs was to reduce the sup port price in an effort to reduce the production and supply of milk. These decreases would have a positive impact on consumption as well since retail prices were expected to decrease in conjunc tion with decreases in the farm price ot milk. There were also other elements in these programs that were designed to reduce the milk supply. One of these programs was the Diversion Program. It was fairly successful in the short run (for 1984). CCC purchases, that artifi cial demand, were cut in half in 1984 from 1983 levels. The sup port price was also decreased 50-cents per hundredweight. Commercial consumption increased 3.3 percent from a year earlier as opposed to a previous annual increase in 1983 of 0.3 per cent. This can be attributed, in part, to an increased advertising and promotion campaign as well as the decline in milk prices. This had a very positive impact on farm prices during the year and even with the 50-cent decrease in the support price, the M-W price was only 27-cents lower than the previ ous year. The M-W price responded to the effects of the decreasing artificial demand (CCC purchases) and improving commercial demand and was 43 cents higher in the sec ond half of 1984 than in the first half. During the second half of 1984, the M-W price was 6 cents higher than in the second half of 1983 despite the 50-cent decline in the support price. This illustrates the effects that a strong commercial demand and a smaller artificial demand can have on milk prices, even with a cut in the support If you are. AN ASSESSOR. BARBER COOK. DENTIST ELECTRI CIAN. FIREMAN GOLDSMITH. HAIR STYLIST INSUR ANCE MAN. JANITOR KUMQUAT PICKER. LAWYER MECHANIC. NUMISMATIST OMBUDSMAN. POSTMAN QUARRY WORKER. ROUSTABOUT SALESMAN. TEACHER UNDERCOVER AGENT, VALET WARE HOUSEMAN. XYLOPHONIST YARDMAN, ZOO KEEPER ARTIST BAKER C PA , Elc CUSHION CREPE SOLE FOR COMFORT AVAILABLE IN 130 SIZES & WIDTHS SIZES 6Vj 15 7’2 16 V'7 16 9'i 15 WE VE GOT YOUR SIZE IN STOCK NOW NO WAITING 1 HOURS: Daily Si3o A.M. to A 9.M.; Sri. 'til 9 PM. Wayne’s Dry Goods 271 W. Main St. Kutztown, Pa. Phone (215) 683-7686 w Lancaster Farming, Saturday, July 18, 1987-C7 price. Since the effects of the Diver sion Program along with the cut in the support price were short lived, other steps were necessary to con trol CCC purchases and costs. In the first quarter of 1985, CCC purchases were again at very high levels. In another effort to reduce CCC purchases and costs, the sup port price of milk was reduced $1 per hundredweight in the first half of 1985. However, CCC purchases were still quite high for 1985,57 percent higher than in 1984. As can be expected, the M-W price dropped considerably as a result in the cuts in the support price and averaged 76 cents per hundredweight lower than in 1984. However, commer cial demand increased 3.2 percent for the year, perhaps in response to the accompanying decreases in retail prices and increased adver tising and promotion in the indus try. Without this healthy increase in commercial demand it is quite likely that farm prices would have been even lower than they were. Two things are illustrated in the events of 1985. The first is that the farm price of milk was still too high since it, among other things, encouraged dairy farmers to increase production and offer much more milk than consumers would accept at those given prices. Secondly, the impact of a strongly increasing commercial demand is illustrated since the farm level price did not fall as much as it would probably have with a weaker commercial demand. With the coming of a new year, 1986, another program, the Dairy Termination Program, designed to reduce CCC purchases and costs was initiated. A voluntary supply control program resulted in dairy farmers whose 1985 marketings amounted to 12.2 billion pounds signing up to discontinue milk pro duction for at least five years. The support price was not reduced in 1986 but two 25-cent reductions were scheduled in January and October 1987 with annual cuts up sk The Man Wears Them ilg's your pkSs AR tii, see us!! pijll-on le Pecos 1155 is, by far our best-selling )t For the heel-hugging (it of your life, slip a pair of Pecos boots We ve got your size 1 ’SIZES EEEE S l/ 2 14 Red Wings (Turn to Page C 8) You’ve earned your Wings! RED WING SHOES MAIL ORDERS ACCEPTED «*■ -.HP?,
Significant historical Pennsylvania newspapers