Evening star., 1934-01-16
FARMERS MAY BUY
DAIRY HERE TO USE
OWN SURPLUSM|LK
Association Leaders Say
Plan Would Turn Burden
Into Profit.
PROJECT IS SEEN HELP
IN REGULATING PRICES
Disclosures Of Senate Group Lead
to Distributors Considering Own
Manufacture.

AS a solution to the low farm price
problem, organized milk producers on
the Washington market are considering
buying a local independent dairy plant
and going into the business of manu-
featuring milk products from their sur
plus. The Star learned today.
The movement is an outgrowth of
disclosures by the Senate Milk Investi-
eating Committee that large distributors
here have been making money out of
the so-called surplus milk, which is
used for manufacturing purposes and
for which the farmers have been paid
almost nothing
Such plan, in the opinion of several
thoughtful leaders of the MARYLAND
g. Virginia Milk Producers Associa-
ton, would take the improbable bur-
den of the surplus" off the backs of
the farmers and convert it into a
money-making product.
The plan does not involve the dis
tribution of fluid milk and cream by
the association. The present fluid milk
business of the distributor, which the
association is contemplating purchas-
4lAs, WOulQ Oc SOlO W the IllSneSJ DID,
der. The cooperative then would re-
model the dairy plant, install processing
equipment and engage solely in the
business OF manufacturing dairy
products.
Would Fix Price.
BY doing its own manufacturing the
producers association not only would
divert to the pockets of the farmers
the profits now being made by the
National Dairy Products Corporation
subsidiaries, but, in effect. would eS-
tablish single farm price for all
milk
Prior to January l. there had been
three classiflcations under which the
organized producers sold milk-Class !,
the fluid milk; class 2. used for fluid
cream. and class 3, used for manufac-
turing purposes. Glasses 2 and 3 now
are consolidated, and an average of
the former prices paid for all milk not
sold for fluid consumption.
Witnesses before the Senate Commit
tee who represented the dairy combine
testified Chestnut Farms. the largest
local by by-product manufacturer did
not want the surplus milk, and that
any other dairy company in Washing
ton could have it for the asking.
Another benefit to the farmer which
proponents of the dairy-buying plan
foresee is that by owning its own man
ufacturing plant. the producers associ-
alton wields club over the heads of
all distributors in Washington and thus
can force the dairies to pay its price
for fluid milk.
Guarantee Needed
Under the present system. II the as
sociation should say in effect. Pay our
price or We will refuse to deliver your
milk" the distributors could ship as
much milk as they needed into the city
from the West at lower prices than
they are now paying producers on the
local market.
But with its own dairy plant the
association would be in a position to
bottle and deliver fluid milk on "a
hours notice.
The principal need of the farmers. as
shown before the Senate Investigating
Committee, is guarantee of at least
the cost of production. The average
price the farmer receives. the committee
was told, is approximately % to "a cents
per gallon, whereas the cost of produc-
ton was estimated at about 80 cents.
For milk used in fluid distribution the
farmer is being paid 26 cents a gallon,
plus premium for butter-fat content and
barn scores. For class 2 the average
price now is Is cents.
The plan for buying the dairy COM
pany and entering the manufacturing
business contemplates placing the price
for fluid milk and fluid cream at the
same price-the cost Of production, plus
reasonable prof1t-and giving the pro-
ducer the benefit of the retail price for
dairy products.