Estimating the “Market Value” of Milk Distributing Business

Excerpts from the report: There is a definite trend toward fewer and larger milk distributing businesses in this country. While market supply areas continue to increase in size rather steadily, distribution areas are expanding rapidly. These developments have resulted in a tremendous change in the marketing environments of most milk distributing organizations. Some rather inefficient concerns, able to operate successfully in the past, must now either increase efficiency, effect major operating changes, or go out of business. An ever-increasing number of small organizations are discontinuing their bottling operations to specialize in the distribution of products packaged by large businesses. These in turn may serve specialized distributing concerns in cities other than the city where its processing plant is located. The managements of many existing cooperative and noncooperative organizations soon will need to decide whether to purchase other milk distributing businesses or to sell their own. It is the purpose of this report to assist the managements of farmers' cooperatives to make such decisions wisely. While the report emphasizes market values of milk distributing businesses, much of its information is also adaptable to dairy manufacturing enterprises. Furthermore, much of the discussion here will be useful to managements of all small dairy businesses -- non-cooperative organizations as well as cooperatives.