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Farm-to-Retail Price Spreads for Fluid Milk in Chicago

Author

Listed:
  • Herrmann, Louis F.
  • Friend, Lloyd F.

Abstract

Excerpts from the report: The price paid by consumers for milk includes the cost of a wide variety of marketing services in addition to the amount which the farmer receives. Traditionally, the farmer's share and the amount spent for marketing services have been measured by a simple calculation: The farm price per quart was subtracted from the retail price per quart, and the difference equaled the charge for marketing services. One purpose of this study was to learn how the results of a simple calculation of the price spread for milk would compare with a broader measure of the marketing margin on milk in the Chicago market. Another purpose was to describe the agencies involved and the services performed in moving milk from the farm to the consumer, and to measure some of the charges made for such services. The marketing margin for milk goes to a number of kinds of businesses that take part in getting milk from the farm to the consumer's doorstep. Country milk haulers, country milk plants, long-distance haulers, city bottling plants, vendors or subdealers, and retail stores of various kinds all provide needed services. About 59 percent of the consumer's dollar for fresh milk went for such services in Chicago in May 1956.

Suggested Citation

  • Herrmann, Louis F. & Friend, Lloyd F., 1958. "Farm-to-Retail Price Spreads for Fluid Milk in Chicago," Marketing Research Reports 310711, United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program.
    • Handle: RePEc:ags:uamsmr:310711
    DOI: 10.22004/ag.econ.310711
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