Group Title: Bulletin University of Florida. Agricultural Experiment Station
Title: Some trends and characteristics of the dairy industry in Florida
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Permanent Link: http://ufdc.ufl.edu/UF00026446/00001
 Material Information
Title: Some trends and characteristics of the dairy industry in Florida
Series Title: Bulletin University of Florida. Agricultural Experiment Station
Physical Description: 32 p. : ill., maps ; 23 cm.
Language: English
Creator: McPherson, W. K ( William Kenneth ), 1914-
Luckey, R. F
Publisher: University of Florida Agricultural Experiment Station
Place of Publication: Gainesville Fla
Publication Date: 1954
Copyright Date: 1954
 Subjects
Subject: Dairying -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references.
Statement of Responsibility: W.K. McPherson and Robert Floyd Luckey, Jr.
General Note: Cover title.
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Bibliographic ID: UF00026446
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: ltuf - AEN7054
oclc - 18272639
alephbibnum - 000926383

Full Text





HISTORIC NOTE



The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida









Bulletin 539 JUN 8 "54 March 1954

UNIVERSITY OF FLORIDA
AGRICULTURAL EXPERIMENT STATIONS
WILLARD M. FIFIELD, Director
GAINESVILLE, FLORIDA




Some Trends and Characteristics of the

Dairy Industry in Florida


W. K. MCPHERSON and ROBERT FLOYD LUCKEY, JR.



i .46: -Th.S








2. Baker 25. Hardee $7. Okeahaleo ^ ^t l
3. Bay 6 Hedry Orange12
4. Sradford Hernaando 49. Oscaola 9 35
5. Brevard 25. Highlands 5-. Palm leach 6 57
6. Brcward 29. Hillsborough 51. Pacco 27 -
7. Calhoun A-. Holmes 52. Pinellas
8. Charlotte U1. Indian River 53. Pclk 5 -
9. Citrus 3. Jackson 54. Put:ans
10. Clay 23. Jeffers: 55. SaatS Rosa 3
11. Collier 34. lafayettt 56. Saras ta- -
12. Colu.ble SL. ELke e7. Seminole
13. Crre 36. Lee 5 St. S Johan 471
14. De Soto 27. Lesn f9. St. Luce -
15. Dixie 3B .Lre CO. Sunter
16. Dural 3?. Liberty 81. Suw1anee 1 -
17. Zcar.bla 40. Malisou 62. Taylor
18. Flagler 41. Manatee 63. Uulon
19. Franklin 12. Marion 64. 7olusia f50
20. Garden 43. MartLn 65. Wakilla 36
21. Silchrist M4. Mmroe 66. Yalton
22. Glaee 45. Naasaa 67. Vashingtor.
23. Gurlf 1
T'e ecreacas
0-- 243% increase
2 350L 49i la:rease
S5'X 00 749% increase
7 ?3L4 over


Fig. 1.-Percent change in gallons of milk produced per square mile by
counties, 1939 to 1949. (Based on Census of Agriculture, 1940 and 1950,
U. S. Department of Commerce, Bureau of Census, Washington, D. C.



Single copies free to Florida residents upon request to
AGRICULTURAL EXPERIMENT STATION
GAINESVILLE, FLORIDA










BOARD OF CONTROL EDITORIAL
J. Francis Cooper, M.S.A., Editor3
Hollis Rinehart, Chairman, Miami Clyde Beale, A.B.J., Associate Editor
J. Lee Ballard, St. Petersburg William G. Mitchell, A.B.J., Assistant Editor
Fred H. Kent, Jacksonville Samuel L. Burgess, A.B.J., Assistant Editor 3
Wm. H. Dial, Orlando
Mrs. Alfred I. duPont, Jacksonville ENTOMOLOGY
George W. English, Jr., Ft. Lauderdale
W. Glenn Miller, Monticello A. N. Tissot, Ph.D., Entomologist
J. B. Culpepper, Secretary, Tallahassee L. C. Kuitert, Ph.D., Associate
H. E. Bratley, M.S.A., Assistant
EXECUTIVE STAFF F. A. Robinson, M.S., Asst. Apiculturist
J. Wayne Reitz, Ph.D., Provost for Agr. R. E. Waites, Ph.D., Asst. Entomologist
Willard M. Fifield, M.S., Director S. H. Kerr, Ph.D., Asst. Entomologist
J. R. Beckenbach, Ph.D., Asso. Director J. R. Christie, Ph.D., Nematologist
L. O. Gratz, Ph.D., Assistant Director HOME ECONOMICS
Rogers L. Bartley, B.S., Admin. Mgr. HOME CONOM
Geo. R. Freeman, B.S., Farm Superintendent Ouida D. Abbott, Ph.D., Home Econ.1
R. B. French, Ph.D., Biochemist
MAIN STATION, GAINESVILLE HORTICULTURE
AGRICULTURAL ECONOMICS G. H. Blackmon, M.S.A., Horticulturist"
H. G. Hamilton, Ph.D., Agr. Economist R. A. Dennison, Ph.D., Hort. & Interim Head
R. E. L. Greene, Ph.D., Agr. Economist3 F. S. Jamison, Ph.D., Horticulturist'
M. A. Brooker, Ph.D., Agr. Economist Albert P. Lorz, Ph.D., Horticulturist
Zach Savage, M.S.A., Associate R. K. Showalter, M.S., Asso. Hort.
A. H. Spurlock, M.S.A., Agr. Economist R. H. Sharpe, M.S., Asso. Horticulturist
D. E. Alleger, M.S., Associate V. F. Nettles, Ph.D., Asso. Horticulturist
D. L. Brooke, M.S.A., Associate F. S. Lagasse, Ph.D., Horticulturist2
M. R. Godwin, Ph.D., Associate3 R. D. Dickey, M.S.A., Asso..IHort.
W. K. McPherson, M.S., Agr. Economist 3 L. H. Halsey, M.S.A., Asst. Hort.
Eric Thor, M.S., Asso. Agr. Economist C. B. Hall, Ph.D., Asst. Horticulturist
Cecil N. Smith, M.A., Asso. Agr. Economist Austin Griffiths, Jr., B.S., Asst. Hort.
Levi A. Powell, Sr., M.S.A., Assistant S. E. McFadden, Jr., Ph.D., Asst. Hort.
E. D. Smith, Ph.D., Asst. Agr. Economist C. H. VanMiddelem, Ph.D., Asst. Biochemist
N. K. Roberts, M.A., Asst. Agr. Economist Buford D. Thompson, M.S.A., Asst. Hort.
Orlando, Florida (Cooperative USDA) M. W. Hoover, M.S.A., Asst. Hort.
G. Norman Rose, B.S., Asso. Agri. Economist LIBRARY
J. C. Townsend, Jr., B.S.A., Agr. Statistician2
J. B. Owens, B.S.A., Agr. Statistician 2 Ida Keeling Cresap, Librarian
F. T. Calloway, M.S., Agr. Statistician
C. L. Crenshaw, M.S., Asst. Agr. Economist PLANT PATHOLOGY
B. W. Kelly, M.S., Asst. Agr. Economist W. B. Tisdale, Ph.D., Plant Pathologist "
AGRICULTURAL ENGINEERING Phares Decker, Ph.D., Plant Pathologist
AGRICULTURAL ENGINEERING Erdman West, M.S., Botanist & Mycologist'
Frazier Rogers, M.S.A., Agr. Engineer 1 Robert W. Earhart, Ph.D., Plant Path.2
J. M. Myers, M.S.A., Asso. Agr. Engineer Howard N. Miller, Ph.D., Asso. Plant Path.
J. S. Norton, M.S., Asst. Agr. Engineer Lillian E. Arnold, M.S., Asso. Botanist
C. W. Anderson, Ph.D., Asst. Plant Path.
AGRONOMY
Fred H. Hull, Ph.D., Agronomist 1 POULTRY HUSBANDRY
G. B. Killinger, Ph.D., Agronomist
H. C. Harris, Ph.D., Agronomist N. R. Mehrhof, M.Agr., Poultry Husb.1'
R. W. Bledsoe, Ph.D., Agronomist J. C. Driggers, Ph.D., Asso. Poultry Husb.3
W. A. Carver, Ph.D., Agronomist
Fred A. Clark, M.S., Associate 2 SOILS
E. S. Horner, Ph.D., Assistant F. B. Smith, Ph.D., Microbiologist1 3
A. T. Wallace, Ph.D., Assistant Gaylord M. Volk, Ph.D., Soils Chemist
D. E. McCloud, Ph.D., Assistant 3 J. R. Neller, Ph.D., Soils Chemist
G. C. Nutter, Ph.D.. Asst. Agronomist Nathan Gammon, Jr.. Ph.D., Soils Chemist
I. M. Wofford, Ph.D., Asst. Agronomist Ralph G. Leighty, B.S., Asst. Soil Surveyor
E. O. Burt, Ph.D., Asst. Agronomist G. D. Thornton, Ph.D., Microbiologist'
C. F. Eno, Ph.D., Asst. Soils Microbiologist
ANIMAL HUSBANDRY AND NUTRITION H. W. Winsor, B.S.A., Assistant Chemist
T. J. Cunha, Ph.D., Animal Husbandman R. E. Caldwell, Ph.D., Asst. Chemist 3
G. K. Davis, Ph.D., Animal Nutritionist V. W. Carlisle, B.S., Asst. Soil Surveyor
It. L. Shirley, Ph.D., Biochemist J. H. Walker, M.S.A., Asst. Soil Surveyor
A. M- Pearson, Ph.D., Asso. An. Husb.3 William K. Robertson, Ph.D., Asst. Chemist
John P.-Feaster, Ph.D., Asst. An. Nutri. O. E. Cruz, B.S.A., Asst. Soil Surveyor
H. D. Wallace, Ph.D., Asso. An. Husb.3 W. G. Blue, Ph.D., Asst. Biochemist
M. Koger, Ph.D., An. Husbandman 3 J. G. A. Fiskel, Ph.D., Asst. Biochemist a
J. F. Hentges, Jr., Ph.D., Asst. An. Hush. s L. C. Hammond, Ph.D., Asst. Soil Physicist 3
L. R. Arrington, Ph.D., Asst. An. Hush. H. L. Breland, Ph.D., Asst. Soils Chem.
A. C. Warnick, Ph.D., Asst. Physiologist W. L. Pritchett, Ph.D., Soil Technologist

DAIRY SCIENCE VETERINARY SCIENCE
E. L. Fouts, Ph.D., Dairy Technologist's D. A. Sanders, D.V.M., Veterinarian'
R. B. Becker, Ph.D., Dairy Husbandman M. W. Emmel, D.V.M., Veterinarian 3
S. P. Marshall, Ph.D., Asso. Dairy Hush.3 C. F. Simpson, D.V.M., Asso. Veterinarian
W. A. Krienke, M.S., Asso. Dairy Tech.3 L. E. Swanson, D.V.M., Parasitologist
P. T. Dix Arnold, M.S.A., Asso. Dairy iIusb. 3 W. R. Dennis, D.V.M., Asst. Parasitologist
Leon Mull, Ph.D., Asso. Dairy Tech.3 E. W. Swarthout, D.V.M., Asso. Poultry
H. H. Wilkowske, Ph.D., Asst. Dairy Tech.3 Pathologist (Dade City)
James M. Wing, Ph.D., Asst. Dairy Husb. J. D. Sells, B.A., Int. Asst. Parasitologist











BRANCH STATIONS F. T. Boyd, Ph.D., Asso. Agronomist
M. G. Hamilton, Ph.D., Asst. Horticulturist
J. N. Simons, Ph.D., Asst. Virologist
NORTH FLORIDA STATION, QUINCY D. W. Beardsley, M.S., Asst. Animal Husb.
W. C. Rhoades, M.S., Entomologist in Charge R. S. Cox, Ph.D., Asso. Plant Path.
R. R. Kincaid, Ph.D., Plant Pathologist
L. G. Thompson, Jr., Ph.D., Soils Chemist SUB-TROPICAL STATION, HOMESTEAD
W. H. Chapman, M.S., Agronomist
Frank S. Baker, Jr., B.S., Asst. An. Husb. Gee. D. Ruehle, Ph.D., Vice-Dir. in Charge
Frank E. Guthrie, Ph.D., Asst. Entomologist D. Wolfenbarger, Ph.D., Entomologist
Francis B. Lincoln, Ph.D., Horticulturist
Mobile Unit, Monticello Robert A. Conover, Ph.D., Plant Path.
R. W. Wallace, B.S., Associate Agronomist John L. Malcolm, Ph.D., Asso. Soils Chemist
R. W. Harkness, Ph.D., Asst. Chemist
Mobile Unit, Marianna R. Bruce Ledin, Ph.D., Asst. Hort.
J. C. Noonan, M.S., Asst. Hort.
R. W. Lipscomb, M.S., Associate Agronomist M. H. Gallatin, B.S., Soil Conservationist 2
Mobile Unit, Pensacola
R. L. Smith, M.S., Associate Agronomist WEST CENTRAL FLORIDA STATION,
BROOKSVILLE
Mobile Unit, Chipley BROOSVILLE
J. B. White, B.S.A., Associate Agronomist Marian W. Hazen, M.S., Animal Husband-
man in Charge2

CITRUS STATION, LAKE ALFRED RANGE CATTLE STATION, ONA
A. F. Camp, Ph.D., Vice-Director in Charge W. G. Kirk, Ph.D., Vice-Director in Charge
W. L. Thompson, B.S., Entomologist E. M. Hodges, Ph.D., Agronomist
R. F. Suit, Ph.D., Plant Pathologist D. W. Jones, M.S., Asst. Soil Technologist
E. P. Ducharme, Ph.D., Asso. Plant Path. CENTRAL FLORIDA STATION, SANFORD
J. W. Sites, Ph.D., Horticulturist CENTRAL FLORIDA STATION, SANFORD
H. O. Sterling, B.S., Asst. Horticulturist R. W. Ruprecht, Ph.D., Vice-Dir. in Charge
H. J. Reitz, Ph.D., Horticulturist J. W. Wilson, SeD., Entomologist
Francine Fisher, M.S., Asst. Plant Path. J. Westgate, Ph.D., Asso. Hort.
I. W. Wander, Ph.D., Soils Chemist Ben F. Whitner, Jr., B.S.A., Asst. Hort.
J. W. Kesterson, M.S., Asso. Chemist
R. Hendrickson, B.S., Asst. Chemist WEST FLORIDA STATION, JAY
Ivan Stewart, Ph.D., Asst. Biochemist
i. S. Prosser, Jr., B.S., As t. Engineer C. E. Hutton, Ph.D., Vice-Director in Charge
R. W. Olsen, B.S., Biochemist H. W. Lundy, B.S.A., Associate Agronomist
F. W .Wenzel, Jr., Ph.D., Chemist A. L. Jeffers, Ph.D., Asso. Agronomist
Alvin H. Rouse, M.S., Asso. Chemist
H. W. Ford, Ph.D., Asst. Horticulturist SUWANNEE VALLEY STATION,
L. C. Knorr, Ph.D., Asso. Histologist' LIVE OAK
R. M. Pratt, Ph.D., Asso. Ent.-Pathologist
W. A. Simanton, Ph.D., Entomologist G. E. Ritchey, M.S., Agronomist in Charge
E. J. Deszyck, Ph.D., Asso. Horticulturist
C. D. Leonard, Ph.D., Asso. Horticulturist GULF COAST STATION, BRADENTON
W. T. Long, M.S., Asst. Horticulturist
M. H. Muma, Ph.D., Asso. Entomologist E. L. Spencer, Ph.D., Soils Chemist in Charge
F. J. Reynolds, Ph.D., Asso. Hort. E. G. Kelsheimer, Ph.D., Entomologist
W. F. Spencer, Ph.D., Asst. Chem. David G. A. Kelbert, Asso. Horticulturist
R. B. Johnson, Ph.D., Asst. Entomologist Robert O. Magie, Ph.D., Plant Pathologist
W. F. Newhall, Ph.D., Asst. Biochemist J. M. Walter, Ph.D., Plant Pathologist
W. F. Grierson-Jackson, Ph.D., Asst. Chem. S. S. Woltz, Ph.D., Asst. Horticulturist
Roger Patrick, Ph.D., Bacteriologist Donald S. Burgis, M.S.A., Asst. Hort.
M. F. Oberbacher, Ph.D., Asst. Plant Physiol C. M. Geraldson, Ph.D., Asst. Horticulturist
Evert J. Elvin, B.S., Asst. Horticulturist G. Sowell, Jr., Ph.D., Asst. Plant Path.
R. C. J. Koo, Ph.D., Asst. Biochemist
J. R. Kuykendall, Ph.D., Asst. Horticulturist FIELD LABORATORIES
G. J. Edwards, B.A., Asst. Chemist FIELD LABORATORIES
J. J. McBride, Jr., P'h.D., Asst. Chemist
W. C. Price, Ph.D., Virologist Watermelon, Grape, Pasture-Leesburg
J. M. Crall, Ph.D., Asso. Plant Path. in Chg.
C. C. Helms, Jr., B.S., Asst. Agronomist
EVERGLADES STATION, BELLE GLADE L. H. Stover, Assistant in Horticulture
W. T. Forsee, Jr., Ph.D., Chemist in Charge Strawberry-Plant City
R. V. Allison, Ph.D., Fiber Technologist A. N. Brooks, Ph.D., Plant Pathologist
Thomas Bregger, Ph.D., Physiologist
J. W. Randolph, M.S., Agricultural Engr. Vegetables-Hastings
R. W. Kidder, M.S.. Asso. Animal Husb. A. H. Eddins, Ph.D., Plant Path. in Charge
C. C. Seale, Associate Agronomist E. N. McCubbin, Ph.D., Horticulturist
N. C. Hayslip, B.S.A. Asso. Entomologist T. M. Dobrovsky, Ph.D., Asst. Entomologist
E. A. Wolf, M.S., Asst. Horticulturist
W. H. Thames, M.S., Asst. Entomologist Pecans-Monticello
W. G. Genung, M.S., Asst. Entomologist A. M. Phillips, B.S., Asso. Entomologist 2
Robert J. Allen, Ph.D., Asst. Agronomist John R. Large, M.S., Asso. Plant Path.
V. E. Green, Ph.D., Asst. Agronomist Frost Forecasting-Lakeland
J. F. Darby, Ph.D., Asst. Plant Path. Frost Forecasting-Lakeland
V. L. Guzman, Ph.D., Asst. Hort. Warren 0. Johnson, B.S., Meteorologist in
J. C. Stephens, B.S., Drainage Engineer 2 Charge 2
A. E. Kretschmer, Jr., Ph.D., Asst. Soils
Chem. 1 Head of Department
Charles T. Ozaki, Ph.D., Asst. Chemist z In cooperation with U. S.
Thomas L. Meade, Ph.D., Asst. An. Nutri. $ Cooperative, other divisions, U. of I.
U. S. Harrison. M.S., Asst. Agri. Engr. On leave








SUMMARY
In response to an increase in demand for milk in Florida,
farmers increased the volume of milk sold to dealers about 78
percent between 1940 and 1951. As a result of this increase and
the general rise in the price of milk, cash receipts from the sale
of whole milk increased 262 percent during the same period.
Markets for whole milk produced in Florida differ from those
in the nation as a whole in three respects. Florida farmers sell
almost all milk as whole milk, while throughout the nation 19.3
percent is delivered as cream. At least 80 percent of the milk
sold by Florida farmers is distributed as fluid milk, the com-
parable figure in the United States is about 45 percent. Prices
paid for whole milk at the farm are substantially higher than
in the country as a whole because: cost of producing milk in
Florida is generally considered to be higher than in major dairy
states; butterfat content of whole milk is high; and a very large
proportion of the whole milk sold is used as fluid milk.
Much of Florida's milk production is concentrated near cities.
However, farmers in Hendry and Glades counties have increased
the volume of milk produced for sale in metropolitan markets
substantially since 1947. In 1951, 89 percent of the milk pro-
duced in this area was being transported from 50 to more than
100 miles. It may be economically feasible for farmers located
farther away from metropolitan markets to produce and deliver
milk to them. If so, marketing and production problems met
by Glades and Hendry County dairymen may be encountered
also by producers who plan to expand production elsewhere.
Marketing and production problems of particular importance
to producers located away from metropolitan markets are of
three types. First, it is difficult for producers to bargain with
distributors to obtain the best possible blend price for all milk
sold. Under a given Class I price and seasonal distribution, the
average blend price offered on different contracts varied 5.7 cents
per gallon in Hendry and Glades counties in 1951. Secondly,
transportation charges tend to vary inversely with volume. If
minimum transportation costs can be attained in 2,500 gallon
loads, one dairyman must produce at least 1,250 gallons daily
(using every other day delivery) to minimize transportation cost.
Otherwise several producers must use the same facilities to
reduce the cost of transporting milk to market. Third, it may
be possible to maximize net returns by: (a) adjusting the vol-
ume of milk produced to a specific consumption pattern; (b)
reducing the cost of high protein feed; and (c) increasing the
amount of forage and roughage produced on the farm as feed
for dairy cattle.












Some Trends and Characteristics of the

Dairy Industry in Florida

W. K. MCPHERSON and ROBERT F. LUCKEY, JR.1

CONTENTS
Page
Sum m ary .. ... .4... ....... .. .... . ... ...... .. .... ..... ........................ 4
Introduction ................................................--...........-................................................ 5
Growth of Florida's Dairy Industry Since 1940 ........................................................ 6
Number of Farms on Which Milk Is Produced and Sold ................................. 6
N um ber of Cow s M ilked ......... .. ......... .................... ...................................... .... 8
Volume of Milk Produced .................................................. ......................... 9
V olum e of M ilk Sold ...................... ..... ......... ................................................. 10
V alue of M ilk Sold .................. .................... .................. ................................ 12
Characteristics of Markets for Milk Produced in Florida ...................................... 14
Form in W which Milk Is Sold at the Farm ............................................................... 14
Use that Dealers M ake of W hole Milk ........................... ........................... .... 15
Prices of W hole and Fluid M ilk .............................. ........................................ 15
Location of Production and Consumption Areas ............... ...................................... 19
Milk Marketing and Production Problems in Glades and Hendry Counties ......., 23
Bargaining for the Highest Blend Price .... .............- ........................................ 23
Reducing Transportation Casts ---------................... ................ ......... .............. 25
Altering Production Practices ..... ... ..- ----------------------------................ 26

INTRODUCTION

Important changes have taken place in Florida's dairy indus-
try since 1940. Some of these changes clearly show how rapidly
milk production is expanding, while others indicate that prob-
lems are developing within the industry.
Dairies are highly specialized enterprises. Many farmers who
operate dairies concentrate their efforts on managing the herd.
They do not have time to find out much about what dairymen
in other areas are doing. On the other hand, some farmers not
producing milk at present are wondering whether or not they
should establish a dairy.
The purpose of this bulletin is to provide these farmers with
some basic information on the industry as a whole. More
specifically, the analysis consists of an examination of the growth
of Florida's dairy industry since 1940, some general charac-
teristics of the markets for milk, location of production and

SThis bulletin is based on a dissertation entitled, "A Study of the Alterna-
tive Methods of Marketing Milk in Glades and Hendry Counties, Florida",
which Mr. Luckey presented in partial fulfilment of the requirements for
the degree of Master of Science in Agriculture. The authors gratefully
acknowledge the valuable suggestions and constructive criticisms of Dr.
Henry G. Hamilton, Head of the Department of Agricultural Economics,
and L. K. Nickolas, Jr., Administrator, Florida Milk Commission. Ernest
Evan Brown, Field Assistant, and Roy L. Lassiter, Jr., Graduate Assistant,
assisted in the preparation of the manuscript.








6 Florida Agricultural Experiment Stations

consumption areas, and some problems farmers encounter in
establishing dairies in areas not located near the markets for
fluid milk.

GROWTH OF FLORIDA'S DAIRY INDUSTRY SINCE 1940
To a large extent, demand for milk in Florida is determined
by size of population, number of tourists visiting the state, and
income of individuals. During the decade ending in 1950 the
state's population increased 46 percent.2 In 1951 4,800,000
tourists visited the state, 2,300,000 more than in 1945.3
From 1940 to 1950 per capital income payments to Florida resi-
dents increased nearly 242 percent. In the United States as a
whole, the area from which most tourists come, income payments
to individuals increased more than 175 percent on a per-capita
basis during the same period.4
These increases in population, number of tourists and income
payments to individuals have increased demand for milk in the
state. This increase in demand for milk has, in turn, provided
an incentive for increasing the volume of milk produced in the
state. Florida farmers have responded to this incentive.
Number of Farms on which Milk Is Produced and Sold.-Cows
were milked on 26,924 farms in Florida in 1939. Ten years later
milk cows were reported on only 21,617 farms-a decrease of
19.7 percent. During the same period the number of farms on
which cows were milked decreased 22.4 percent in the nation as
a whole (see Figure 2).
On the basis of number of farmers milking cows in 1950,
Florida's dairy industry differs from the industry in the entire
nation in three respects. More than two-thirds of the nation's
farmers milked cows, whereas less than one-half of the farmers
in Florida engaged in this enterprise. Milk was sold from 20.4
percent of the farms in the nation but from only 10 percent of
the farms in Florida. Also, the proportion of farms reporting

United States Bureau of Census, U. S. Census of Population, 1950.
Number of Inhabitants, Vol. 1, Chapter 10, Florida (Washington: U. S.
Government Printing Office, 1951.)
Florida State Chamber of Commerce, "Statistical Measures of Growth",
from Allen Morris, "The Florida Handbook", (Tallahassee: Peninsula
Publishing Company, 1952), p. 35.
SRobert E. Graham, Jr., State Income Payments in 1950, Survey of
Current Business, August 1951, U. S. Department of Commerce: (Washing-
ton, U. S. Government Printing Office.)







Total United States Total Florida
farms farms
11.75 8.6%
Decrease 'Decrease






SDecrease




of Farms report tig
Small farms milk cove
o.0in 1949 919.
S. crease ..

38.0 5
Farms reporting o fr pos
sale of whole milk in 1949
Sfan D ereasee
SD 1, 20.4% Farms reporting sale
oCO of all ai l of whole milk 10.4 r
farms N1,891 1,695 Derease
0s :;':* i 4 ,, S-::1,891 1,695
,. in 1949 3.0%
1939 1949 1939 1949 1939 1949 1939 1949 1939 1949 1939 1949
Fig. .-Changes in number of farms, farms reporting milk cows, and farms selling whole milk, 1939-1949, in the
United States and Florida. (Based on 1950 Census of Agriculture, U. S. Department of Commerce, Bureau of Census,
Washington, D. C., Series A. C. 50-1 (preliminary releases).)









8 Florida Agricultural Experiment Stations


the sale of milk increased in the United States but decreased in
Florida.
Number of Cows Milked.-In 1951 Florida farmers were milk-
ing 137,000 cows-an increase of 35.6 percent over the number
of cows milked in 1940 (see Figure 3). This increase in the
number of cows milked, coupled with the fact that the number
of farms producing milk has decreased, indicates that the aver-
age size of dairies has increased since 1940.
While Florida farmers were increasing the number of cows
milked, Georgia, California, New York and Wisconsin farmers


United States
20,000 -



10,000 -
9,000 -
8,000
7,000
6,000 .
5,000
4,000

o 3,000

-- Wiaconain
2.000


S. N--------------------------- ---ew York

S1,009
900
00

500



230




100i
100_- Florida


1940 41 42 43 44 45 46 47 48 49 50 51
SA RS
Fig. 3.-Average number of milk cows on farms by years in the United
States and selected states, 1940-51. (Compiled from Farm Production,
Disposition, and Income from Milk, 1940-49 (revised estimates by states),
and Ibid. 1950-51. USDA, BAE, Washington, D. C., April 1952.)








Trends and Characteristics of the Dairy Industry 9

held their number of milk cows about the same.5 In the United
States the number of milk cows on farms actually decreased.

175 Florida
/
170 -

165 /
/
160 /

155 /

150 //

146 ,//

S140 /
S/



130 /
/

125 /
12/ oalifornia
120 -/ /' \ .--* Wisconsin

115 / /' \/ N- York

-110 / .. . ......... r

105 / United States

1940 41 42 43 44 45 46 47 48 49 50 51
YEARS
Fig. 4.-Index of volume of milk produced on farms in the United States
and selected states, 1940-1951 (1940 = 100). (Calculated from Farm Pro-
duction, Disposition, and Income from Milk, 1940-49 (revised estimates by
states), and Ibid. 1950-51. USDA, BAE, Washington, D. C., April 1952.)

Volume of Milk Produced.-Between 1940 and 1951 the volume
of milk produced in the state increased from 343 to 603 million
pounds, or approximately 78 percent. On a percentage basis,
this increase was larger than the increase in milk production in
any other state (see Figure 4). However, in 1951 Florida farm-
ers produced only 0.52 percent of all milk produced in the nation,

"These states were selected because: (1) Georgia is a neighboring
state; (2) the climate in California is comparable to that in Florida; and
(3) New York and Wisconsin are two of the leading dairy states in the
nation.








10 Florida Agricultural Experiment Stations

whereas 1.84 percent of the total population of the nation live
within the state. In other words, milk production per capital
in Florida is lower than in any of the other states, except Massa-
chusetts and Rhode Island (see Table 1).

TABLE 1.-MILK PRODUCTION PER CAPITA-1952.

States Pounds States Pounds

Wisconsin ..---.-----.--- -. 4,340 Mississippi .........-......... 639
Vermont ............---- 4,116 Colorado ........................ 604
North Dakota .-.......--- 2,872 New York .................-----..... 590
Minnesota ....... ........... 2,678 Delaware ........................ 586
Iowa ..------............. --................ 2,146 Illinois ........................... 549
South Dakota .............. 1,953 Virginia .......................... 543
Idaho ........... ............... 1,893 Pennsylvania ............... 538
Nebraska ............... ...... 1,534 California ..................... 530
Kansas .................. ..... .. 1,174 M aryland ..................... 518
Missouri ..--.............. ..... 985 Nevada ........................ 489
Utah ............................... 913 Georgia .......................... 428
Indiana ........................... 879 W est Virginia ............ 404
Montana ......................... 846 North Carolina ......... 386
M ichigan .......................... 812 Texas .-........---. .......-........ 386
Kentucky .............----........ .. 798 Alabam a ........................ 335
Oklahoma ........................ 772 Connecticut ................... 331
Oregon ......---..................... .. 749 Arizona ....................... 322
W yoming ...................... 721 New Mexico ................ 290
Tennessee ........................ 710 Louisiana ...........----.. 273
Maine ................................ 697 South Carolina ........... 270
W ashington .................... 679 New Jersey ................... 222
Ohio .................................. 654 Florida .-........ ...--.. ... 196
Arkansas .......................... 648 Rhode Island ............... 165
New Hampshire ......... 641 Massachusetts ...... 163
USDA, BAE Farm Production, Disposition and Income from Milk, 1951-
1952, Washington, April 1953.

The fact that milk production in the state increased more
rapidly than the number of cows milked is due to an increase in
volume of milk produced per cow (see Figure 5). Milk produc-
tion per cow reached a high of 4,400 pounds in 1950 and 1951,
but was still approximately 800 pounds less than the national
average. To a considerable extent the relatively low production
of milk per cow in Florida is due to a tendency of producers to
use the breeds of cows that produce milk with a high butterfat
content, quality of the cows and insufficient amounts of good
pastures and roughage.
Volume of Milk Sold.-The volume of milk and milk products
sold by Florida dairymen annually during the 11-year period-
1940-1951-increased from 260 to 536 million pounds,6 or 107
percent. This increase was larger than the increase of 78 per-
SUSDA, BAE, Farm Production, Disposition and Income from Milk,
Op. cit.








Trends and Characteristics of the Dairy Industry 11




8,000
S ...- "" "alifornia
7,000 .. .. ...Wisconsin
--- New York




- ited
5,000 States


.---- Florida
4,000 -.. /

.... . ..--". .............
'.**G eorgia
.........................
3,000


1,000 I I I I I I I I I
1940 41 42 43 44 45 46 47 48 49 50 51
YEARS

Fig. 5.-Average pounds of milk produced per cow per year in the United
States and selected states, 1940-51 inclusive. (Compiled from Farm Pro-
duction, Disposition, and Income from Milk, 1940-49 (revised estimates by
states), and Ibid. 1950-51. USDA, BAE, Washington, D. C., April 1952.)


TABLE 2.-MILK AND MILK PRODUCTS SOLD AS A PERCENTAGE OF ALL MILK
PRODUCED ON FARMS.*

SUnited 1 New Wis- Cali-
Year i States Florida York consin Georgia fornia
(Percent) (Percent) (Percent) (Percent) (Percent) (Percent)

1940 ........ 80.1 75.8 91.1 92.5 34.4 92.1
1941 ....... 81.1 77.5 91.5 92.9 35.0 92.4
1942 ........ 82.0 81.0 91.8 93.2 37.9 92.8
1943 ........ 82.3 82.4 91.8 93.1 39.3 92.9
1944 ........ 82.5 82.5 91.8 93.5 41.4 93.5
1945 ..-..... 83.0 83.3 92.2 93.7 42.4 93.8
1946 ........ 82.8 83.1 92.0 93.3 43.9 93.8
1947 ........ 83.4 83.9 92.4 93.8 44.6 94.2
1948 ........ 83.6 85.5 92.4 93.5 45.9 94.1
1949 ........ 84.6 87.9 93.4 93.7 50.3 94.4
1950 ........ 85.0 88.5 93.4 93.4 53.1 94.5
1951 ........ 84.8 88.9 93.4 92.9 53.6 94.5


Calculated from data published by USDA, BAE, Farm Production, Disposition and
Income from Milk, 1940-49, and Ibid. 1950-51, Washington, D. C., April 1953.







12 Florida Agricultural Experiment Stations

cent in the total volume of milk produced in the state, because
Florida farmers sold a larger proportion of the milk they pro-
duced in 1951 than in 1940. At the same time, however, the
quantity of milk consumed on farms was increasing. In 1951
Florida farmers sold a larger proportion of the milk they pro-
duced than farmers in Georgia or the nation as a whole, but a
smaller proportion than farmers in California, Wisconsin and
New York (see Table 2).



/ \
/ *- Florida
/.. Georgia
6 ..




SCalifornia
"" / New York
/\ United States













1 40 41 42 43 44 45 46 47 48 49 20
s ......." -\






.f;.' E A.* R- / S




TO AB S
Fig. 6.-Price of milk sold to plants and dealers at wholesale in the
United States and selected states, 1940-1951. (Compiled from Farm Pro-
duction, Disposition, and Income from Milk, 1940-49 (revised estimates by
states), and Ibid. 1950-51. USDA, BAE, Washington, D. C., April 1952.)

Value of Milk Sold.-Cash receipts from marketing of all
milk and cream in Florida (at the farm) increased from
$10,632,000 in 1940 to $38,466,000 in 1951,7 or 262 percent.
About 30 percent of this increase in income was due to increased

SUSDA, BAE, Farm Production, Disposition and Income from Milk,
Op. cit.








Trends and Characteristics of the Dairy Industry 13


production and 70 percent to the increase in price (see Figure 6).
In the United States as a whole, the increase in cash receipts
from farm marketing of all milk, cream and butter was com-
parable with that taking place in Florida (see Figure 7).

The expansion that has taken place in the production phase of
the milk industry since 1940 has focused attention on markets
for milk in Florida. Marketing agencies have expanded their



4.000 United States

3,000


2,000



1,000
900
800
700
600
0\ Wisconsin



00 / California


200 -




100
90
80
70
60
50
40 Georgia
Florida
30


20





1940 41 42 43 44 45 46 47 48 49 50 51
YEARS

Fig. 7.-Value of combined sales of butter, cream and milk in the
United States and selected states, 1940-1951. (Compiled from Farm Pro-
duction, Disposition, and Income from Milk, 1949 (revised estimates by
states), and Ibid. 1950-51. USDA, BAE, Washington, D. C., April 1952.)






14 Florida Agricultural Experiment Stations

facilities to handle the increased volume of milk.., Some.unique
characteristics of markets for milk produced in Florida are
examined below.

CHARACTERISTICS OF MARKETS FOR MILK
PRODUCED IN FLORIDA

Milk is a complex product that can be sold as fluid milk or
manufactured into a variety of dairy products. Consequently,
there are numerous markets for the product, and each has unique
economic characteristics. Generally speaking, the markets for
milk produced in Florida have many of the economic characteris-
tics of milk markets throughout the nation. They differ in
three important respects: (1) form in which milk is sold at the
farm; (2) use that dealers make of whole milk; and (3) prices
of whole and fluid milk.
Form in which Milk Is Sold at -the Farm.-Essentially all of the
milk sold by Florida dairymen leaves the farm as whole or fluid
milk. No cream is sold to dealers, less than 0.7 percent of the
milk sold is in the form of farm-churned butter, and the volume
of cream sold by farmers at retail is low.

TABLE 3.-MILK SOLD OR UTILIZED FOR PREPARATION OF DAIRY PRODUCTS
SOLD FROM FARMS.

For Retail
For Farm- Sales of For Deliveries to
Churned Milk and Plants and Dealers
Year Butter Cream by As As
Sold Farmers Cream Milk
(Percent of (Percent of
S Total) Total) (Percent of Total)
U.S. FlFla U.S. Fla. U.S. Fla. U.S. Fla.
1940 1.6 2.7 7.0 28.8 37.6 2.3 53.8 66.2
1941 1.4 2.4 6.4 26.5 36.4 2.1 55.8 69.0
1942 1.3 1.6 6.0 25.7 32.0 1.9 60.7 70.8
1943 1.1 1.4 6.0 23.1 31.0 1.2 61.9 74.3
1944 1.1 1.4 5.9 22.0 27.0 .5 66.0 76.1
1945 1.1 1.3 5.6 20.5 24.0 .3 69.3 77.9
1946 1.1 1.5 5.5 20.3 21.9 .3 71.5 77.9
1947 1.0 1.4 5.0 19.0 21.5 72.5 79.6
1948 .9 1.1 4.9 17.9 20.9 73.3 81.0
1949 .8 1.0 4.3 15.7 20.3 74.6 83.3
1950 .7 1.0 4.0 14.7 20.4 74.9 84.3
1951 .7 .7 3.9 14.4 19.3 76.1 84.9

Source: Calculated from data presented in Farm Production, Disposition,
and Income from Milk, 1940-49; Revised Estimates, USDA, BAE, April
1952 and Ibid. 1950-51, April 1952.







Trends and Characteristics of the Dairy Industry 15

Florida dairymen sell a smaller proportion of all milk to
dealers than other farmers throughout the nation (see Table 3).
This means that Florida dairymen distribute a larger proportion
of their milk at retail than dairymen in the country as a whole.
Consequently, the number of producer-distributors in Florida is
relatively high. Here it is significant to note that the propor-
tion of the total amount of milk sold by farmers at retail is
declining, in both Florida and the nation as a whole. If this
trend reflects real economy in operating separate production
and distribution enterprises in Florida, the volume of milk sold
by farmers at retail can be expected to decline still further in
competitive markets.
Use that Dealers Make of Whole Milk.-The proportion of
whole milk sold from farms that reach consumers as fluid milk
in Florida is much larger than in the nation. For example, in
the Dade-Broward milk shed in 1951 approximately 86 percent
of all milk sold from farms was distributed as fluid milk and 12
percent for use in the manufacture of ice cream and milk drinks.s
This and quantitative estimates on the use of milk in other sheds
suggests that at least 80 percent of all milk produced in Florida
is sold by distributors as fluid milk. In contrast, only 48.5 per-
cent of all milk produced on farms in the nation was consumed
as fluid milk and cream in 1950. Since the latter figure includes
cream and fluid milk consumed on farms, it is reasonable to
assume that less than 45 percent of all milk sold from farms is
sold to non-farm consumers as fluid milk.9
Prices of Whole and Fluid Milk.-The prices dealers pay for
milk that is used for different purposes are generally determined
by public or quasi-public agencies. In 16 states the price of
milk is established by public agencies in the form of commissions
or boards created by the state legislature. On the other hand,
the price of milk in approximately 48 milk sheds, some of which
are among the largest in the nation, is established by federal
market orders 10 that are administered by quasi-public organiza-
tions (see Figure 8).
In some milk sheds the price of fluid milk at the wholesale
and retail levels is also determined by public or quasi-public
agencies. However, this practice is not followed as extensively
8 Data supplied by Dade County Health Bureau, Miami, Fla. (See also
Figure 11.)
SUSDA, BAE, Dairy Situation, February 1951, p. 12.
"1 These orders are issued by the Secretary of Agriculture under the pro-
visions of the Agricultural Marketing Agreement Act of 1937 as amended.








16 Florida Agricultural Experiment Stations

as is the setting of the price of whole milk to producers on the
basis of the use made of it. In 1949 more than half of the fluid
milk consumed off farms was priced by federal or state regula-
tory agencies.1 Since then, the proportion of all fluid milk
priced in this manner has increased.

















Cities named have Federal
mill marketing orders
which establish minimum \
producer clasaprices.-
JIMinmumP prices to' produc;re
2.4linie-m prices, all level
1cMinlum, maximum, or flied. ail levels

Fig. 8.-Geography of State and Federal fluid milk price regulations.
(Source: USDA Bureau of Agricultural Economics, Dairy Situation, March
and April 1950, p. 1, and Fluid Milk and Cream Report, June 1953.)

In most instances the laws creating agencies that determine
price of milk specify, among other things, that cost of producing
milk and welfare of consumers be considered. Methods used to
determine price vary from milk shed to milk shed and state to
state.
The Florida Milk Commission,2l created in 1933, establishes
the minimum price that dealers in 20 milk sheds, embracing
approximately 27 counties, can pay for whole milk for different
uses and charge for fluid milk at wholesale and retail. Dealers
must pay these prices on the basis of the use each makes of the
milk purchased. No provision is made for market-wide pools.
This agency has established producer prices for Class I whole
milk 18 that are somewhat higher than the average price received
USDA, BAE, Dairy Situation, March and April 1950, p. 1.
"1 Florida Statute 501 as amended.
"1 Class I whole milk is milk sold to consumers as fluid milk.







Trends and Characteristics of the Dairy Industry 17

by producers in other parts of the nation (see Figure 6). The
reasons generally given to explain this price differential are:
1. The current cost of producing milk in Florida is relatively
high on dairy farms supplying the major milk sheds.14 The high
cost of production is partially due to the relatively high cost of
concentrate feeds and roughage in a deficit feed-producing area
and the relatively low volume of milk produced per cow (see
Figure 5). The cost of producing milk on dairy farms with ade-
quate improved pastures and sufficient land to produce rough-
age and a portion of the concentrate feeds needed, has not been
accurately determined. However, the analysis of marketing
problems in Glades and Hendry counties, presented later, sug-
gests that the cost of producing milk under these conditions
may be lower.
2. Milk produced in Florida has a relatively high butterfat
and total solids content. Producer prices are based on a mini-
mum of 4 percent butterfat and generally provide a premium
for milk of higher butterfat content. Standardization by meth-
ods other than blending whole milk is not permitted; hence, the
quality of fluid milk (including solids-not-fat) sold at retail
varies with the quality of the milk delivered to dealers. In
this respect, the quality of the fluid milk sold in Florida is higher
than in most other parts of the nation.
In the past, butterfat has been the most valuable component
of milk. In recent years, however, consumption of butterfat
in the form of butter has been declining,'1 largely because of the
increased consumption of margarine at a lower price (see Figure
9). In Texas, Oklahoma, Missouri and Illinois, vegetable oils
are being substituted for butterfat in the manufacture of frozen
desserts. If these tendencies persist and consumption of butter-
fat continues to fall, one of two things will happen: the supply

A. H. Spurlock, D. L. Brooke, R. E. L. Greene, Cost of Producing Milk
in Selected Areas in Florida, Agricultural Economics Series No. 51-4, Florida
Agricultural Experiment Station, Gainesville, Fla., Jan. 1951. Here it must
be noted that, in a competitive situation, cost of production does not deter-
mine price in the short run and only sets a minimum below which price
cannot fall for an extended period of time in the long run. Under ad-
ministrative pricing such as is used for fluid milk, the cost of production is
used as one indicator of what competitive price would be in the long run.
"1 In recent years, the price of butter has been supported by the govern-
ment. During this time the market value of butter has fallen below the
support price. Consequently, the government has acquired large supplies of
butter that cannot be sold at the support price. If and when these supplies
are placed on the market, the price of butter will fall. In other words, the
true supply and demand price of butter is declining, but dairymen don't
know how much because of the price supports.







18 Florida Agricultural Experiment Stations

and demand price of whole milk will fall if the price of solids-
not-fat remains at present levels; or the supply and demand
price of solids-not-fat must rise to maintain present level of milk
prices. Either of these situations will create problems of special
significance to Florida producers selling some Class II and III
milk 16 because they sell more butterfat per pound of milk than
almost any other group of producers in the nation.




RETAIL PRICES CONSUMPTION*
per l b I ls.
SButter


Butter
50 lo

M e argarineie
It



Margarine
02 ..1.. 1 I I I I I
1920 1930 1940 1950 1920 1930 1940 1950
Per Person


Fig. 9.-Price per pound and per capital consumption of margarine,
1912-1951. (Source: USDA, Bureau of Agricultural Economics, Outlook
Charts, Neg. 47375-XX.)

3. As pointed out earlier, a relatively large proportion of the
whole milk sold by farmers is distributed as fluid milk (see
Table 3). Throughout most of the nation, the price farmers
receive for whole milk sold to dealers is based on the use that
is made of it. Whole milk that is processed and distributed as
fluid milk brings the highest price. Milk that is used primarily
in the production of cream, manufactured dairy products (ice
cream, milk drinks, etc.), condensed and powdered milk, and
cheese brings lower prices.

"1 Class II and III milk is whole milk used for other purposes than dis-
tribution as fluid milk. The definition of class of milk varies from state
to state and milk shed to milk shed.






Trends and Characteristics of the Dairy Industry 19

The following example illustrates how use of milk can affect
the price of whole milk at the farm. The national average price
paid for whole milk for distribution in cities as fluid milk and
cream in 1950 was $4.57 per cwt.; while the average price paid
for whole milk sold to condenseries in the same year was $2.87
per cwt. A farmer selling his entire output for these two uses at
1950 average prices would have received an average or blend
price determined by the percentage of sales made for each use.
If 90 percent of the milk he sold had been used as fluid milk
and 10 percent used in making condensed milk, he would have
received a blend or average price of $4.40 per cwt. On the
other hand, a farmer selling 40 percent of his output for use
as fluid milk and 60 percent to condenseries would have received
an average price of $3.55 per cwt. The difference between
$4.40 and $3.55 illustrates the effect of use on prices farmers
receive for whole milk.
Since Florida distributors sell such a large proportion of the
whole milk purchased as fluid milk, farmers receive a relatively
high price for whole milk. If and when dealers buy a larger
volume of whole milk for use in manufactured dairy products,
the average price received by farmers will fall, even though the
price established by the Florida Milk Commission for the dif-
ferent classes of milk remains the same.
There are indications that Florida farmers will find it profit-
able to produce more milk for manufacture of dairy products
some time in the future. About 10 years ago farmers in north-
western Florida did increase production for condensery markets
in southern Alabama. However, wartime and postwar economic
conditions increased the demand for fluid milk so rapidly that
these farmers now sell their entire output for uses that return
higher farm prices.

LOCATION OF PRODUCTION AND CONSUMPTION
AREAS
Modern transportation equipment and service make it physi-
cally possible to transport whole milk over long distances and
maintain the legal qualities required for processing and dis-
tributing it as fluid milk. Dealers in several Florida milk sheds
have found it necessary to buy whole milk for use as fluid milk
from dealers in the Midwest and Northeastern states during
certain seasons almost every year since World War II. Because
of the high cost of transporting whole milk, these dealers are






20 Florida Agricultural Experiment Stattons

continually seeking to increase the quantity purchased from
farmers located nearer the consuming market.
Distributors in the larger milk sheds, such as New York and
Chicago, purchase milk from producers located as far as 200
or 300 miles from the market. In these cases, either farmers
located near the market find it is more profitable to produce
other commodities, or the cost of production at the more dis-
tant points is low enough to offset transportion costs and pro-
vides as an incentive for dairymen to maintain, and in some
instances, increase production.
In still other milk sheds dairies are located very close to the
consuming area. This is particularly true in Florida, where 66
percent of the whole milk sold by dairymen in the state was pro-
duced in six counties in which 51 percent of the population lives
(see Table 4). As population and per capital income in Florida
increase, demand for fluid milk will increase. This is turn will
stimulate distributors to seek new sources of whole milk that will
meet the sanitary specifications for fluid milk.

TABLE 4.-GALLONS OF MILK SOLD BY PRODUCERS AND POPULATION IN
SELECTED FLORIDA COUNTIES.

County Gallons of Milk Sold Population
Sby Producers
1949 1950
Broward ................................ 9,165,777 83,933
Dade ----.. ..-..........-- ..-.....--.. ... 8,539,132 495,084
Duval ...................-.....-....... 6,330,246 304,029
Hillsborough ....-....---- ....... 5,728,802 249,894
Pinellas --------...---------. 3,201,283 159,249
Orange ........ ..... 3,149,042 114,950
Six-county total ........ 36,114,282 1,407,139
State total ............................. 54,448,108 2,771,305
Six-county total as
percentage of
State total ..................... 66.327 50.775

There is a large amount of land in the state outside Dade,
Broward, Duval, Hillsborough, Pinellas and Orange counties that
is equally and frequently more suitable for the production of
the feedstuffs needed to produce milk. At the same time,
rapid increases in population have increased the value of land
in and near the major milk markets. If this trend continues,
it is possible that milk will be produced in interior Florida at







Trends and Characteristics of the Dairy Industry 21

a cost that will make it possible for dairymen in these areas
to pay the transportation costs to the market and earn a
reasonable return for their effort.












1. Bradenton
2. Clearvater
3. Coral Gables
4. Fort lauderdale 2
5. Tort Myers
6. Fort Pierce 15 10
7. Hialeah
8. Hollywood 6
9. Key West
10. Lakeland
11. Lake Worth
12. Miami
13. Miami Beach .5 1."* *
14. North Miami
15. St. Petersburg 4.
16. Sarasota :
17. ampa 14
18. West Palm Beach 7*' 1



Fig. 10.-Location of Glades and Hendry counties with respect to some of
the larger cities within 150 miles of the area.

As early as 1947 one Miami distributor was seeking a new
source of milk outside the metropolitan area. This firm recog-
nized the potentialities of Glades and Hendry counties as a pro-
ducing area and contracted to buy milk from several producers
in these counties. Now this area is unique in three respects:
(1) milk production is increasing more rapidly than in any
other comparable area in the state 17 (see Figure 1); (2) the
nearest major markets for milk are from 50 to 150 miles away
(see Figure 10); and (3) dairymen in the area plan to ex-

I7 Milk production is increasing equally or more rapidly in Charlotte,
Franklin and Lafayette counties. They are not included in this analysis
because Charlotte County is near the rapidly growing west coast city of
Ft. Myers, and the volume of milk produced in Franklin and Lafayette
counties is still too small to have commercial significance. However, it is
entirely possible that production will expand further in these counties
and that the same type of problems will develop as are now developing
in Hendry-Glades area.







22 Florida Agricultural Experiment Stations

pand their enterprises and increase production (see Table 5);
even though their blend price was well below that of other
producers shipping to the same markets in 1951.

TABLE 5.-TREND IN SIZE OF DAIRY HERDS IN THE GLADES-HENDRY AREA
(1950-1955).
No. of Cows
over 2 Yrs. No. of Cows Milked Planned Herd
Pro- of Age in in February of: Expansion
ducer Herds During
February 1952 1950 1951 1952 1953 1955

1 200 169 185 185
2 204 80 120 85 120 300
3 75 45 45 50 100 100
4 30 20 26 30 50
5 74 50 51 62 108 108
6 27 18 25 19 60 75
7 68 45 45 49 100 100
8 90 45 63 75 75
9 50 40 30 45 60 60
10 58 37 40 70
11 16 5 5 14 12 12
12 85 60 60 60 80 100
13 45 43 75 75
14 14 8 14 20 25
15 40 60 60 "* 100 100

Total 1,076 403 514 736 1,165 1,435
Dairy herd did not exist.
"** Sold all milk cows during November of 1951, expects new herd to be in production
by late 1952.

In 1951 producers in the two counties sold 457,154 gallons
of whole milk. Of this total, 51,210 gallons were sold locally
and 405,944 to distributors in six cities located in other counties.
One Miami distributor purchased 77 percent of all the whole
milk sold by these producers that year."1
Glades and Hendry County farmers encountered many prob-
lems when they began producing more milk than could be
consumed by the people living in those counties. To a large
extent, the problems are typical of the problems any group
of farmers will encounter when they endeavor to enter the dairy
industry in competition with other producers shipping milk
to established dealers in metropolitan milk sheds. For this
reason, a study of the nature of these problems and the al-
ternative methods of solving them was made early in 1952.18

"18 Robert Floyd Luckey, Jr., "A Study of Alternative Method of Market-
ing Milk Produced in Glades and Hendry Counties, Florida." Unpublished
thesis, University of Florida Library, Gainesville, Fla., January 1953.







Trends and Characteristics of the Dairy Industry 23

MILK MARKETING AND PRODUCTION PROBLEMS IN
GLADES AND HENDRY COUNTIES
Marketing and production problems encountered when ex-
panding production are both numerous and diverse. Frequently
the problems are so interrelated that it is necessary to solve
them simultaneously. However, to work out solutions to the
overall problem of producing and marketing milk economically,
it is often helpful to examine the several components of the
problem separately. Hence, this analysis will be focused on
bargaining for the highest blend price, reducing transportation
costs and reducing production costs.
Bargaining for the Highest Blend Price.-Milk producers
bargain with distributors to obtain an outlet for whole milk
which will return them the highest possible average price
throughout the year. Since minimum price for Class I milk
(and in some instances other classes) at the farm, wholesale
and retail levels is established by the Florida Milk Commission,
most of the bargaining between producers and distributors is
on the quantities of each class to be delivered. Prices are
bargained only in cases where prices are not fixed. When a
producer and distributor do reach an agreement, the terms of
sale stand as an oral agreement unless recorded in a written
contract.19
Glades and Hendry producers have found that the average
blend price they receive for milk on different contracts under
a given Class I producer price and seasonal production pattern
varies as much as 5.7 cents per gallon. Hence, the difference
between success or failure in milk production may easily be
determined by whether or not the dairyman can reach an
agreement to sell to a distributor using a large proportion of
the milk bought for distribution as fluid milk.
Producers located considerable distances from the distributor's
plant find it more difficult to bargain for the sale of milk than
those operating dairies nearer distributor headquarters. There
are two reasons for this.
In the first place, the proportion of the several classes of
milk purchased by distributors varies from month to month.
Distributors are reluctant to make firm commitments very far
"19 Oral agreements or contracts which can be terminated within 30 or
60 days by either party have been used frequently, but written contracts
extending over larger periods are sometimes executed. The 1953 Legislature
amended the milk control law to require 90 days notice of the termination
of a contract (written or oral) on the part of either party.







24 Florida Agricultural Experiment Stations

in the future because of the possible changes in demand for
fluid milk and milk products. Since distributors pay for milk
on the basis of use, the proportion of the several classes of
milk they purchase from producers can vary, even within the
terms of a written or oral contract. It is more difficult for
distributors to keep producers familiar with the changes taking
place in supply and demand for milk when the producers live
a considerable distance from the market. Likewise, since these
producers do not have frequent contact with their distributors,
misunderstandings are likely to arise regarding terms of sale.
For this reason, producers in Hendry and Glades counties have
sought and, in some instances entered into, long-term contracts
to deliver fixed quantities of milk over relatively long periods
of time. Formal agreements of this type may be desirable
when producer or market-wide pools are not mandatory. On
the other hand, such rigid arrangements can be detrimental
to the producer, because the distributor is not required to take
larger amounts of the higher classes of milk from contract pro-
ducers when the market for higher class milk is strong. Yet,
producers with contracts may benefit when the demand for
the higher classes of milk is falling.
Secondly, producers located away from the market find it
difficult to bargain with every distributor in the market in-
dividually, because producers large enough to transport the
milk they produce economically over long distances must sell
to large distributors only and the cost of negotiations for the
sale of milk is high, due to the distances involved. Since no
large producers are operating in Hendry and Glades counties,
there is no experience to indicate how difficult this type of
problem is to solve in the southern Florida area.
Producers who cannot transport their own milk to market
economically have the alternative of selling to distributors who
provide transportation facilities. The number of distributors
who are able and willing to do this are limited because they
must be large enough to handle the relatively large volumes
of milk required to minimize the transportation costs. In
Hendry and Glades counties one distributor found it necessary
to obtain 75 percent of the milk produced from approximately
the same percentage of the producers to establish a transporta-
tion rate of approximately 5 cents per gallon in 1951.
A producer can improve his bargaining position by increas-
ing production to a point which enables him to bargain with







Trends and Characteristics of the Dairy Industry 25

distributors as an individual. Also, he may join other pro-
ducers to form a bargaining organization to sell volumes of
milk which may be transported economically. As yet, produc-
tion in Hendry and Glades counties is not sufficiently large to
justify the formation of such an organization. Consequently,
producers are bargaining as individuals, but informally consult
each other and, in some instances, act as an informal group.
Reducing Transportation Costs.-Producers located consider-
able distances from their market are continually confronted
with the problem of reducing transportation costs. The magni-
tude of the problem in Hendry and Glades counties becomes
obvious from the fact that transportation costs averaged about
5 cents per gallon, or approximately 8 percent of the value of
the milk sold in 1951. There are four things producers can
do to reduce transportation costs. Each is closely related to
the bargaining problems outlined in the previous section.
1. Each producer can increase production to a point where it
becomes economically feasible to provide his own transportation
facilities. No detailed studies have been made of the costs of
transporting milk in Florida. However, there is some evidence
that the most economical volume to transport 50 or more miles
may be as much as 2,500 gallons. If this is correct, a dairy that
could minimize transportation costs should produce approxi-
mately 1,250 gallons of milk per day, assuming cooling facilities
were installed to maintain quality on the farm for almost 48
hours.20
As pointed out earlier, no dairy in Hendry or Glades County
produces as much as 1,250 gallons of milk per day. Further-
more, none of them expect to become that large by 1955 (see
Table 5). Obviously then, producers must employ other methods
to minimize transportation charges.
2. Producers operating dairies away from markets can con-
tract with commercial haulers. This method has the advantage
of freeing the producers to bargain with more distributors.
As yet, no commercial milk haulers have offered their services
to producers in Glades and Hendry counties.
3. Producers can agree to sell milk to one distributor who
will provide transportation facilities at reasonable rates. Such
an agreement can be made either formally or informally. To
enter into a formal agreement of this type, an organization
Whole milk must be delivered to dealers within 48 hours of the time it
is drawn from the cows.







26 Florida Agricultural Experiment Stations

would be necessary but would require no capital and incur little
expense unless a salesman were hired. Several of the Glades
and Hendry County producers had an informal (no organiza-
tion) agreement to sell to one distributor from 1949 to 1951.
The distributor maintained a receiving station in Moore Haven.
Producers delivered milk to the receiving station which was, for
all practical purposes, the point of sale.
During the past year some of the producers began selling to
a distributor who picked up milk at the farm in tank trucks. To
maintain quality of milk, producers installed refrigerated holding
tanks. Transportation charges to Miami were 5 cents per gallon.
This method of assembling milk is relatively new, and only two
other distributors in Florida are using it at present.
4. Finally, producers who cannot transport their milk to
market economically because of small volume, may form an
organization and buy transportation facilities. This requires
formal organization, either a cooperative or a corporation. To
use this method effectively there must be a sufficient volume
of milk to transport economically, and the producers forming
the organization must have enough capital to finance the ven-
ture. Until milk producers in Hendry and Glades counties
increase production substantially over the amount they had
anticipated producing in 1953, it is doubtful if such a venture
could be operated profitably.
This analysis suggests that problems of minimizing transpor-
tation costs in production areas away from major markets are
hardest when the industry is new and total volume of produc-
tion low. Unfortunately, this is the time producers need as
wide a margin of profit as possible to build herds and expand
production.
In some instances distributors may be willing to haul milk at
cost to stimulate production in a new area. When this incentive
is not provided, the only way a group of producers can mini-
mize transportation costs as a group (2, 3, or 4 above) is by
individual producers increasing the size of their herds, or en-
couraging new dairymen to enter the industry.
Altering Production Practices.-To operate profitably in an
area located a considerable distance from markets and pay the
cost of transportation to the market, dairymen must produce
milk at lower costs than dairymen operating nearer the market.








Trends and Characteristics of the Dairy Industry 27

The fact that producers in the Hendry-Glades area have ex-
panded production over a five-year period during which trans-
portation costs averaged at least 5 cents per gallon suggests
that production costs in that area are substantially lower
than near the metropolitan area; or producers are willing to
produce at a lower margin of profit. While none of the Hendry-
Glades dairymen had records in sufficient detail over the entire
period to break down the production costs and make separate
estimates of each component, there was substantial agreement
among them that certain cost items could be lowered still fur-
ther. Some were proceeding to do this. The cost items thus
identified are outlined below, together with some of the ideas
Hendry and Glades County dairymen have for reducing them.
1. Adjusting production to demand for Class I milk. Dairymen
in the area are quite aware of the fact that the peak demand
for Class I milk in the Miami milk shed usually occurs during
the last two weeks of February. This differs significantly from
the consumption pattern of fluid milk in markets outside of
Florida (see Figure 11). The milk production pattern for 1951
by months in the Hendry-Glades area is charted in Figure 12,
together with the proportion of that production sold for use
as fluid milk. If all Miami distributors purchased milk accord-
ing to the use pattern in the area, all producers supplying the
shed would endeavor to adjust production to the consumption
pattern for Class I milk and sell some Class II and Class III
milk during the flush season.
As pointed out earlier, there are no market-wide pools in
Florida. Since distributors have different use patterns for
milk, the proportion of the total amount of whole milk pur-
chased by each distributor that is paid for at Class I prices is
different for each distributor. This means that Glades and
Hendry County producers selling into the Miami shed must
adjust production to the seasonal distribution pattern of the
dealer to whom they sell, rather than to the seasonal distribu-
tion pattern for the Miami shed as a whole. Adjusting pro-
duction to a particular use pattern involves somewhat higher
costs than adjusting to the use pattern of an entire milk shed.
This is true because the use pattern of a milk shed is not as
likely to change from year to year as is the use pattern of a
single distributor. However, when increased costs are less
than the increase in returns producers will receive due to the
larger proportion of sales of Class I milk, it is profitable to









28 Florida Agricultural Experiment Stations

incur such costs. Several methods are used to adjust supply
to demand for fluid milk:

120

115

110
Miani rket
105

I 100 _., .- -' ,

95' -

90

85

0T I I I I I I I I ,, I I
Jan. s eb. Mar. Apr. May June July Aug. Sept. Oct, Nov. Dec.

Fig. 11.-Indexes of seasonal variation in fluid milk sales in 32 Federal
Order markets (1950) and the Miami market (1951) by months. (In each
case average monthly sales equal 100. Source: USDA, Bureau of Agri-
cultural Economics, Dairy Statistics and Related Series, June 1951, p. 68,
and data on actual sales supplied by Dade County Health Unit, Miami,
Florida.)

a. Some producers attempt to adjust supply to demand by
buying and selling cows. This method involves considerable
risk because the price of milking cows is higher in January
and February-the months of high demand for milk-than in
the summer when demand for fluid milk is low.
b. Producers endeavor to bring as many cows as possible into
production during the latter part of December and in January
and February. A few producers in the area have been success-
ful in adjusting breeding practices to maximize production in
the latter part of February, but the disease vibriosis has nulli-
fied the efforts of others to accomplish this.
c. Research indicates that it is possible to alter the seasonal
production pattern of milk at least a month by following better
feeding practices.21 If this can be demonstrated in southern

"1 "Factors Affecting Seasonal Milk Production and Their Effect on
Producers' Costs and Returns," Maine Agricultural Experiment Station
Bulletin 459 (April, 1948), p. 15.














\/ /


"" //






Tootal milk production
"\ / / s




Legend -- ......_-- .
S---- Total milk production
Fluid milk sales


Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. ,

Fig. 12.-Indexes of total milk produced by six producers in Glades and Hendry counties and of fluid milk sales under
identical contracts during 1951. (Average monthly production during January and February equals 100.)








30 Florida Agricultural Experiment Stations

Florida, it will provide Glades and Hendry County dairymen
another means of adjusting supply to the seasonal demand for
fluid milk.
The extent to which individual producers have been able to
adjust production to demand, as measured by a contract that
was in effect early in 1951, is shown in Figure 13.22 Here it is
especially important to note that the producer best able to adjust
supply to seasonal variation in demand received an average
or blend price of 54.9 cents. This is in contrast to a blend price
of 50.8 cents received by producers whose production schedule
showed the widest variation from demand, as reflected by the
contract. If the producer who received the highest price did
not expend more than 4.1 cents more per gallon to attain his
production pattern, it was a profitable operation.
2. Reducing the cost of 20 percent dairy feed.23 In 1951
producers in the Hendry-Glades area expended approximately
64 percent of the value of milk sold for feed. About 46 per-
cent of this amount was expended for 20 percent dairy feed
and the balance for snap corn, citrus pulp, hay, molasses, dry
and freshening feed, calf manna, calf developer, etc. The cost
of 20 percent dairy feed represented about 36 percent of the
value of milk sold. Only a portion of the amount of money
Hendry and Glades County dairymen were spending for feed
in 1951 could be properly charged as a cost of producing milk.
Every dairyman raised some calves for replacements and ex-
pansion of herd. Consequently, he was feeding calves and heif-
ers not a part of the milking herd.
Two producers were endeavoring to lower the costs of feed
by producing corn and small grain. If it can be demonstrated
that a substantial portion of dairy feed concentrates can be
produced on the farm at a cost lower than the price of com-
mercially mixed feeds, the cost of producing milk in the area
will be lower than in areas in which concentrates cannot be
produced. While this is, of course, a long-run possibility, there
was no evidence that Glades and Hendry County producers were
actually producing milk at lower cost, as a result of producing
feed concentrates.
The possibility of producers reducing feed costs by buying
commercial feeds at lower prices was more promising in the
short run. The prices paid for 20 percent dairy feed, without

"2 Robert F. Luckey, Jr., op. cit.
"23 20 percent refers to the protein content of the feed.






61 .

59 .-

57

55 / /





/ .\ .o\ o o


= n No. of
47 producer ;


45 4
S 10
43 -....... All

o III I I I I I I
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

Fig. 13.-Average price of all milk sold by each of six G lades and Hendry County producers by months in 1951. c10







32 Florida A', i;,it, ral Experiment Stations

additional services,24 varied from $90 to $94 per ton. A varia-
tion in the price of feed of $1 per ton changes the cost of pro-
ducing milk about 15 hundredths of a cent per gallon.25 Thus,
dairymen paying $90 per ton for feed concentrates were pro-
ducing milk about six-tenths cent per gallon cheaper than
those paying $94 per ton.
Since the cost of 20 percent dairy feed is the largest single
item in the cost of producing milk, the short-run possibilities of
reducing feed costs through bulk purchases are attractive.
These economies can be effected only if the volume of feed pur-
chased by any one dairyman is large enough to be purchased
at wholesale prices, or if two or more producers negotiate a
wholesale contract for feed. As yet, the volume of feed used
in the area is not sufficiently large to justify the organization
of a local purchasing organization for the group.26 If demand
for feed in the area becomes larger, producers will be able to
reduce costs of concentrates and thus reduce costs of production.
3. Reducing cost of forage and roughage. Hendry and Glades
County producers are endeavoring to reduce feed costs by using
pasture forage rather than roughages such as hay. To take ad-
vantage of the relatively long growing season, dairymen are im-
proving pastures and rotating animals on pastures to increase
the amount of feed from this source. They are also using fer-
tilizer to increase the production of pasture grass and substi-
tuting green forage for dried roughage. This enables producers
to reduce the cost of producing milk, largely because of high
costs of transporting bulky hays over long distances.
Two producers are endeavoring to minimize the cost of winter
feeding by harvesting forage. One has erected a silo and another
is using a barn hay drier. If these practices prove to be eco-
nomical, there may be further economies in producing milk in
the area.

"2 Services that. are frequently charged for in the price of feed include
credit, technical assistance, etc.
"2 This estimate is made by assuming: (a) 1 pound of 20 percent dairy
feed is required to produce 3 pounds of milk, or 2.87 pounds of feed per
gallon of milk; (b) the cost of dairy feed at $90 per ton, or 4.5 cents
per pound. Under these conditions the cost of concentrates per gallon of
milk would be 4.5 x 2.87, or 12.91 cents per gallon. An increase of $1 per
ton in the price of concentrate would raise cost per pound to 4.55 cents,
or 13.06 cents per gallon-a difference of 0.15 cents per gallon.
"i" In 1951 14 producers in the area bought about 2,100 tons of 20 percent
dairy feed. The cost of establishing a new organization would exceed the
savings that could be made on bulk purchases.





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