Evening star., 1939-11-20
Milk Relief
Plan Praised
AT Hearing
Low-Cost Program
Would Aid Farmers,
Derrick Says
BY BLAIR BOLLES,
Star staff Correspondent.

Star staff Correspondent.
WARRENTON, Va, Nov. 20.-All
the farmers supplying milk to WASH
ington would benefit from the insti-
tuition of a program of low-price
milk sales to relief clients and low
income groups in Washington, B. B.
Derrick, secretary of the Maryland
and Virginia Milk Producers Asso-
citation, said in the courthouse here
today.
Mr.. Derrick was the first witness
at the public hearing called by the
Agriculture Department on the asso-
cations proposal for the re-estab-
lishment of Federal supervision of
WaShingtonS milk shed with a
schedule of minimum prices to be
paid by the dairies to the farmers
producing milk for consumption in
the District area
The present lack of uniformity of
price scale will mean disaster for
the farmers in the Washington shed,
Mr.. Derrick said The proposed
scale is:
Three dollars seventeen cents Q
hundredWeight for milk produced
for fluid consumption by farmer,
holding District Health Department
permits.
Two dollars and seventy-one cents
hundredWeight for milk sold in
| the Washington suburban area by
| distributors lacking District permits.
Two dollars and seventy-one cents
hundredWeight for milk to be sold
at an especially low retail price to
low income groups.
Five Cities Have Special Price.
Mr.. Derrick observed that the spe-
cial relief price is in force in New
York, Kansas City. New Orleans,
| Chicago and Cincinnati, which are
among the cities where Federal milk
supervision has already been set Up
through the sort of milk marketing
agreement and order that Mr.. Der.
! rick's association seeks.
On the matter of relief milk, Mr..
Derrick said
1T is generally considered that
| the demand for milk is relatively
| inelastic; that is. price changes
| do not have as much effect on con-
| sumption as is true with many other
commodities. However, surveys have
demonstrated that this relative in
elasticity does not apply in the very
low income groups.
For example, recent survey in
North Atlantic cities revealed that
families with S4.30 to spend for food
per week per adult consumer con-
sumed IS per cent more milk than
families with only s1.60 week per
adult consumer.
The association feels that the
relief clients are now buying very
little fresh milk, but if milk could
be gotten to them at much lower
price that they probably would con-
sumo substantial amount.
( 1T is felt that aside from human
itarian implications of such a pro-
gram. the farmer will derive sub
| Stantial benefit. For example, if
cheap milk were made available to
these relief clinetS, it would tend to
cause them and their children to
acquire the milk drinking habit, and
when they found themselves in more
fortunate financial circumstances
they would no doubt continue to be
good milk consumers"
Market "Overly Competitive"
The farmers in the association,
Mr.. Derrick said. supply more than
30 per cent of the milk used in the
Washington area--which extends
beyond the District line well into
Montgomery and Prince Georges
Counties as far in one direction
as Frultland and in another as
Wheaton.
Mr.. Derrick said that while asso-
citation members-scattered 1900
strong throughout Virginia. Mary
land, West Virginia and Pennsyl-
vanla-sell their milk in three class
lflcatlons on varied price schedules,
the dairies buying from unorganized
producers buy on a fiat rate, which
gives the independent farmer less
than the association farmer. The
result, he said, is an unstable mar
ket, overly competitive.
Mr.. Derrick observed:
Such condition is disastrous to
a milk market and is seriously i'm.
pairing income of farmers in this
shed. If the local market is to be
Kept on sound basis the cost of
milk to all handlers should be the
same"
Glass l milk is milk for fluid use,
Glass 2 is milk for consumption as
cream, cream buttermilk, cottage
cheese and all milk not in class or
class 3. The price proposed in the
suggested marketing agreement and
order is sl.98 hundredweight.
Glass 3 milk is milk for ice cream.
The proposed price is to be based
on a formula dependent on the
price of butter.
Complex Provisions.
The schedule includes also a num-
ber of complex provisions for rais-
ing the prices set in the basic scale
OF minimum prices.
MIR. Derrick pointed out that as
As cents differential is proposed for
suburban dairies selling milk not
produced under District health regu-
lations because the cost of produce
ton in meeting the District require
ments is high. The non-District
producers supply about 1900 gallons
a day sold in the Maryland subur-
ban area. Eight thousand gallons
90 into that area from dairies buying
from farmers meeting the District
regulations.
The Warrenton court house was
crowded with dairy representatives
and farmers and Washington con.