Prices received by farmers

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Material Information

Title:
Prices received by farmers
Portion of title:
Prices received by farmers
Physical Description:
v. : ; 28 cm.
Language:
English
Creator:
United States -- Crop Reporting Board
Publisher:
Crop Reporting Board
Place of Publication:
Washington, D.C
Publication Date:
Frequency:
annual
regular

Subjects

Subjects / Keywords:
Milk -- Prices -- Statistics -- Periodicals -- Minnesota   ( lcsh )
Milk -- Prices -- Statistics -- Periodicals -- Wisconsin   ( lcsh )
Genre:
federal government publication   ( marcgt )
statistics   ( marcgt )

Notes

Dates or Sequential Designation:
Ceased with: 1972/1974 (issued July 1975)
General Note:
"Pr 1-4."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
oclc - 700458850
lccn - 2011229170
ocn700458850
System ID:
AA00010656:00001

Related Items

Succeeded by:
Prices received by farmers. Minnesota-Wisconsin manufacturing grade milk price series and final two-state estimates for ..

Full Text
I / f I Le I / I


prices received
l1y farmers


FOR MANUFACTURING
IN MINNESOTA AND


GRADE MILK
WISCONSIN
1969 71


Pr 1-4 (7-72) JULY 1972 CROP REPORTING BOARD
STATISTICAL REPORTING SERVICE.U.S. DEPARTMENT OF AGRICULTURE WASHINGTON, D.C.


5





PRICES RECEIVED BY FARMERS
FOR MANUFACTURING GRADE MILK IN
MINNESOTA AND WISCONSIN, 1969-71


Prepared by the Statistical Reporting Service



The Statistical Reporting Service of theU.S. Department of Agriculture publishes on or
about the 5th of each month estimates of the average price received by farmers and of
the average milkfat test for milk of manufacturing grade for the preceding month for
the two-State, Minnesota-Wisconsin area. For example, the price for August 1972 will
be reported on September 5, 1972.

These two States produce about half (52% in 1971) of the manufacturing grade milk
marketed in the United States. The estimates relate only to manufacturing grade milk
purchased from farmers and do not include Grade A milk diverted to manufacturing uses.
The price concept used is that represented by dividing total dollars paid to producers,
before hauling costs are deducted, by the number of hundredweight of manufacturing
grade milk purchased from farmers. This is an estimate of the average price for all
milk of manufacturing grade delivered in bulk tanks and in cans, f.o.b. plant or
receiving station, before hauling costs are deducted. It includes bulk tank, quantity,
or other premiums paid to producers, but excludes hauling subsidies.

Most of the basic and preliminary data needed for the preparation of the two-State
average price and fat test of manufacturing grade milk are collected by the offices
of the Federal-State Agricultural Statisticians in Minnesota and Wisconsin. These
data come from regularly scheduled monthly reports submitted by plants receiving
manufacturing grade milk.

After these data are summarized and analyzed by the Federal-State Statisticians,
they are forwarded to Washington, D. C. for final U.S. Crop Reporting Board review
and consolidation into the two-State average price and test.

The price and test estimates for a given month are derived from two factors:
(1) the estimated average price and test for the base month, which is the month
preceding that to which the estimate relates, and (2) an estimate of change from the
base month to the month to which the estimate relates.


2 Crop Reporting Board, SRS, USDA


MFG. GRADE MILK PRICES, July 1972





Estimated Price and Test for Base Month


The level for the base month, which is used as the benchmark, is based on
reports from about 230 plants in Wisconsin that purchase approximately 42
percent of all manufacturing grade milk sold by farmers in the State, and
on reports from about 180 plants in Minnesota that purchase approximately
60 percent of all manufacturing grade milk sold by Minnesota farmers. These
reports include information as to total pounds of manufacturing grade milk
received from producers, total pounds of milkfat in such milk and total
dollars paid to producers.

The estimated monthly price and fat test for each State are weighted by the
total quantity of manufacturing grade milk purchased from farmers in that
State. During the first half of any year these weights are based on data for
the same month two years earlier. During the latter half of the year,
weights are based on purchases for the corresponding month in the preceding
year, since later data are available than during the first six months. The
quantity weights, for weighting data for each State in computing the two-
State average price, change each month and vary seasonally. In 1971, the
annual average of the monthly volume weights for Wisconsin was 56 percent of
the two-State total, and for Minnesota, 44 percent.

The 410 plants in the sample are well distributed geographically over both
States, and represent all the major types of manufacturing grade milk pro-
cessing plants. At the end of the year, reports from all manufacturing grade
milk plants in each State indicate close agreement with the monthly prices
derived from the 410 plants.

Estimate of Change from Base Month

The estimate of change from the base month to the month to which the estimate
relates is based primarily on reports from a sample of 110 plants (100 prior
to 1970) distributed in the two States. These plant reports are evaluated in
terms of changes from the base month in wholesale prices of manufactured
dairy products and historic price and fat test relationships. Estimated
changes in price and fat test are applied to the State averages for the base
month to estimate price and fat test for each State for the month to which
the estimates relate.

The sample design for estimating change from the previous month allocated 40
of the 110 plants to Minnesota and 70 to Wisconsin. Plants in each area were
classified according to type of products manufactured, and sample plants were
drawn from each product class in each State. Plants that consolidate or go
out of business are replaced by the same type plant of approximately the same
size in the same general area.

In Minnesota, plants were classified originally into those making (1) butter
and by-products and (2) other dairy products. Because of changing conditions,
a new classification of Minnesota plants was made in 1963. Plants


3 Crop Reporting Board, SRS, USDA


MFG. GRADE MILK PRICES, July 1972






were reclassified into (1) butter and by-products plants; (2) cheese plants;
and (3) varied-products plants. Based on this method of classification, in
1971 the butter category accounted for 54 percent of all manufacturing grade
milk in the State; cheese, 23 percent; and the varied-products group, 23 per-
cent.

In Wisconsin, the plants were divided originally into four major product
groups: (1) cheese; (2) butter and by-products; (3) condenseries; and
(4) varied-products plants. In 1971, plants were reclassified into three
major product groups. The proportion of manufacturing grade milk purchased
in the State by the new classification in 1971 was: (1) cheese, 84 percent;
(2) butter and by-products, 7 percent; and (3) condenseries and varied-
products plants, 9 percent.

In both .Minnesota and Wisconsin, the varied-products groups consist mostly of
those plants which make butter, cheese, or other products in such proportions
that they cannot be clearly classified in any one specific group such as
primarily butter-making plants, primarily cheese-making plants, or condens-
eries.

Thesepercentages are used as weights for combining reported price and milk-
fat test data by product groups for monthly manufacturing grade average price
and milkfat estimates in each State. The percentages are based on final


piant enumerations ror the previous year and are changed once each year,
approximately 5 months after the close of the calendar year, when enumerated
data become available.

Data are collected from the 110-plant sample by a special questionnaire mailed
near the close of each month. This inquiry is designed to obtain from these
plants for the base month and for the first half of the month to which the
estimate relates (1) quantity of manufacturing grade milk purchased, (2) quan-
tity of fat included, (3) dollars paid, if available, (4) average price at
average test, (5) related information such as quantities purchased in bulk and
in cans, and the base price for 3.5 percent milk and point differentials for
fat. Space also is provided on the inquiry for the plant manager's best esti-
mate of the average fat test and milk price for the last half of the month to
which the estimate relates. Quantity and price data for the base month from
Wisconsin condenseries are combined with data from varied-products plants.

Comparison of Current and Final Estimates

The attached table gives a comparison of the Minnesota-Wisconsin manufacturing
grade milk price with the final estimate combined for the two States from 1969
through 1971, together with the corresponding comparison for milkfat percent-
age. The entries in the column headed "Final two-State Estimate" are weighted
averages of the monthly final prices for Minnesota-Wisconsin combined, using
complete monthly marketing for each State as weights.

For the 3 years 1969 through 1971, the latest years for which complete data are
available, the differences between the monthly Minnesota-Wisconsin estimates



MFG. GRADE MILK PRICES, July 1972 4 Crop Reporting Board, SRS, USDA





of price per hundredweight and the final data average about 1 cent; the
differences in milkfat test average four-thousandths of 1 percent.

Since the Minnesota-Wisconsin price for use in Federal milk orders is re-
ported on a 3.5 percent milkfat basis, another table is attached, prepared
by the Dairy Division, AMS, showing the same comparisons converted to a 3.5
percent basis. The price at average milkfat test is converted to a 3.5 per-
cent basis using a milkfat differential per point (1/10 of one percent) that
is calculated by multiplying the average price of Grade A (92-score) butter
at Chicago by 0.120. This is the method specified in Federal milk orders.

Publication

The report on price per hundredweight at the average milkfat test for a given
month is issued about the 5th of the following month from the Wisconsin
office of the Statistical Reporting Service, P.O. Box 5160, Madison, Wisconsin,
53705. This report is available on request. The price series is also
published in the Dairy and Poultry Market News reports issued by several
offices of the Dairy and Poultry Market News Service. In addition, the
Market News Service reports show the price per hundredweight converted to a
3.5 percent basis.


*


5 Crop Reporting Board, SRS, USDA


MFG. GRADE MILK PRICES, July 1972





Comparison of Minnesota-Wisconsin Manufacturing Grade Milk Price
and Milkfat Test with the Two-State Average of Final Estimates,
by Months, 1969-71


Difference between
Year Minnesota-Wisconsin : Final Two-State : Lnal Two-State
and : Series : Estimate : and Minn.-Wis.. Series
month Price : Milkfat : Price : Milkfat : Price : Milkfat
: per cwt.l/: test :per cwt. i/ : test : per cwt. : test
Dollars Percent Dollars Percent Dollars Percent
1969

January : 4.41 3.68 4.41 3.68 0 0
February 4.32 3.61 4.35 3.61 +.03 0
March 4.35 3.59 4.38 3.59 +.03 0
April 4.41 3.59 4.43 3.58 +.02 -.01
May : 4.43 3.58 4.44 3.56 +.01 -.02
June 4.43 3.55 4.44 3.54 +.01 -.01
July 4.46 3.56 4.46 3.55 0 -.01
August 4.48 3.58 4.49 3.55 +.01 -,03
September 4.61 3.64 4.65 3.64 +.04 0
October 4.78 3.74 4.81 3.78 +.03 +.04
November 4.83 3.76 4.86 3.78 +.03 +.02
December : 4.81 3.72 4.85 3.73 +.04 +.01

Simple Average
1969 4.5267 3.6333 4.5475 3.6325 +.0208 -.0008

1970
January 4.81 3.67 4.84 3.67 +.03 0
February 4.74 3.63 4.73 3.63 -.01 0
March 4.67 3.61 4.66 3.61 -.01 0
April 4.67 3.58 4.68 3.59 +.01 +.01
May : 4.65 3.58 4.67 3.58 +.02 0
June 4.65 3.55 4.64 3.53 -.01 -.02
July 4.65 3.56 4.62 3.51 -.03 -.05
August 4.64 3.54 4.65 3.52 +.01 -.02
September 4.79 3.65 4.82 3.66 +.03 +.01
October 4.97 3.74 5.01 3.75 +.04 +.01
November 5.05 3.77 5.07 3.77 +.02 0
December : 5.03 3.74 5.06 3.74 +.03 0

Simple Average
1970 4.7767 3.6350 4.7875 3.6300 +.0108 -.0050

1971
January 4.93 3.67 4.98 3.68 +.05 +.01
February 4.95 3.64 4.97 3.64 +.02 0
March 4.91 3.62 4.91 3.62 0 0
April 4.92 3.61 4.89 3.61 -.03 0
May : 4.84 3.59 4.86 3.58 +.02 -.01
June 4.82 3.58 4.83 3.56 +.01 -.02
July 4.82 3.56 4.82 3.55 0 -.01
August 4.84 3.59 4.85 3.56 +.01 -.03
September 4.94 3.64 4.93 3.64 -.01 0
October 5.02 3.74 5.03 3.74 +.01 0
November 5.07 3.78 5.10 3.78 +.03 0
December 5.13 3.74 5.14 3.74 +.01 0
Simple Average
1971 4.9325 3.6467 4.9425 3.6417 +.0100 -.0050
36 Months : 4.7453 3.6383 4.7592 3.6347 +.0139 -.0036
I/ Average price for milk of average milkfat test.


MFG. GRADE MILK PRICES, July 1972


Crop Reporting Board, SRS, USDA





Comparison of Minnesota-Wisconsin Manufacturing Grade Milk Price
with Final Two-State Estimated Price, for Milk of 3.5 Percent
Milkfat Content, by Months, 1969-71 I/

Year : : Difference between
and Minnesota-Wisconsin Final Two-State : Final Two-State
month : Series Estimate : and Minn.-Wis. Series
Dollars per cwt.
1969
January : 4.27 4.27 0
February 4.23 4.26 +.03
March : 4.28 4.31 +.03
April : 4.34 4.37 +.03
May : 4.37 4.39 +.02
June : 4.39 4.41 +.02
July : 4.41 4.42 +.01
August : 4.42 4.45 +.03
September 4.49 4.53 +.04
October : 4.58 4.58 0
November 4.62 h.63 +.01
December : 4.63 4.66 +.03
Simple Average
1969 : 4.419 4.440 +.021


1970
January 4.67 4.70 +.03
February 4.63 4.62 -.01
March : 4.58 4.57 -.01
April : 4.60 4.60 0
May : 4.58 4.60 +.02
June : 4.61 4.61 0
July 4.60 4.61 +.01
August : 4.61 4.63 +.02
September 4.66 4.68 +.02
October : 4.77 4.80 +.03
November 4.82 4.84 +.02
December : 4.83 4.86 +.03
Simple Average
1970 : 4.663 4.677 +.o14

1971
January 4.79 4.83 +.04
February 4.83 4.85 +.02
March : 4.81 4.81 0
April : 4.83 4.80 -.03
May : 4.77 h.80 +.03
June : 4.76 4.78 +.02
July : 4.77 4.78 +.01
August : 4.77 4.80 +.03
September 4.83 4.82 -.01
October 4.82 4.83 +.01
November 4.84 4.87 +.03
December 4.93 4.94 +.01
Simple Average
1971 : 4.812 4.826 +.014
36 Months : 4.632 4.648 +.016
1/ Prepared by the Dairy Division, AMS, from data in Table 1. Prices have been converted from the average
milkfat test to 3.5 percent using the milkfat differential specified in Federal orders (Chicago Grade A
butter X 0.120).


MFG. GRADE MILK PRICES, July 1972


Crop Reporting Board, SRS, USDA




UNITED STATES DEPARTMENT OF AGRICULTURE
WASHINGTON, D. C. 20250

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