Evening star., 1937-01-06
DAIRY INDUSTRY
CONTINUES CLIMB
Further Gain in Consumer
Demand and Some Rise
in Prices Expected.
BY J. G. DONLEY.


Special Dispatch to The Star.
NEW YORK, January 6.-The dairy
Industry enters 1887 with hopes OF
continued betterment, for the OUT
look is for a further increase IN con-
sumner demand and some rise in prices.
Consumer purchasing poWer-whlch
determines to a large extent the con-
sumption of fluid milk, cream and ice
cream-according to present indica-
tions. is likely to maintain its upward
trend.
According to an estimate by the
Department of Agriculture, the con-
sumption of fluid milk and cream in
cities and villages declined per cent
during the depression period, 1930-34.
In 1885 there was a recovery OF 3 per
cent over 1884, and consumption in
1896 probably increased further.
The use of milk and cream in the
manufacture of ice cream has in
creased approximately 66 per cent from
the low point of 1888, according to
estimates by dairy interests, and the
consumption of cheese and evaporated
milk Is much greater than in 1928.
Cow Prices Higher.
1.-THE outlook for the next several
years." according to the Bureau OF
Agricultural Economics, lis for further
increases in the consumption of fluid
milk and cream and ice cream. The
outlook for the next few years is for
some rise in butter prices in relation
to prices of other commodities, in
Guiding commodities which farmers
buy. Prices of milk COWS will probably
increase materially during the next
few years. and are likely to average
rather high for four or five years.
Nearly half the total production of
milk goes into the manufacture of
butter and cheese. Improved industrial
conditions and decreased output due
to the drought Of 1886 have increased
prices and reduced stocks. Prices of
butter and cheese now average about
rs per cent higher than at the low
points of 1893. On September /,
1936-the date which usually marks
the seasonal peak of storage holdings
of manufactured dairy products-total
stocks of such products were the lowest
for that date since 1928, with the ex-
ceptions of 1881 and 1882, according
to the agricultural bureau. They were
80 per cent less than the large stot Ks
on September !, 1885, and 81 per cent
below the 1859 average.
Various Factors Studied.
When we examine the factors that
cause milk prices to fluctuate. we find
that, roughly, four-fifths of the retail
price of milk goes to farmers and
labor; that is, if we include freight
rates, which are heavily weighted by
railroad wages. The other fifth covers
the cost of bottles, cases, cans. coal,
gasoline, oil. horses, feed. taxes. repairs
and depreciation on plants, vehicles
and equipment advertising and all the
other costs which milk distribution
entails.
Since raw product and labor con-
stitute such large part of the retail
price of milk, any material change in
the cost of either necessarily results
III d CIldIlkC Ill tiIC ICIdlt pll lIC. Ian y
wages declined relatively little during
the depression and are nearly as high
now as in 1929 Milk prices should at
least be sta bilized during 1887 through
the Strengthening of prices for manu-
factured dairy products, for use in the
making of cheese and butter should
keep considerable of the fluid product
from competing with the normal milk
supply sheds.
Fundamentally, the milk situation mas
been greatly strengthened by reduction
in the number of milk COWS on farms,
with an indicated total of approx
mately 25,00O.000 for 1887, which is
some 100000 fewer cows than were
giving milk in 1884. And the total
production from those 25.000.000 COWS
will be affected by any abnormal
weather which may injure pasture
conditions or raise feed prices.
tCoryright. 1937)