Table Of ContentThe Pennsylvania State College
The Graduate School
Department of Agricultural Economics
and Rural Sociology
DISTRIBUTOR, PRODUCER, AND CONSUMER KNOWLEDGE AND OPINION
OF THE PENNSYLVANIA MILK CONTROL COMMISSION AND
ITS REGULATORY FUNCTIONS
A Thesis
by
HOMER JAMES PRESTON
Submitted in partial fulfillm ent
of the requirements
for the degree of
Doctor of Philosophy
June 19^0
Approved:
7 7
Associate Professor of
Farm Management
Head of Department
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ACKNOWLEDGEMENT
This study was conducted with the advice and suggestions
of Dr. C. W. Pierce. In the analysis of data Dr. W. L. Barr gave
many valuable suggestions. On problems of statistical validity
Dr. G. W. Brandow gave much helpful advice. To them the author
wishes to express his appreciation for making this study possible.
The writer also wishes to express his appreciation to the
enumerators who obtained the information and to the interviewees who
cooperated in giving the information.
Appreciation is also expressed to other members of the
Department of Agricultural Economics and Rural Sociology and to the
clerical staff who made the tabulation of the data.
3437 30
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CONTENTS
INTRODUCTION..........................................................................................................
PURPOSE OF THE STUDY............................................................................................
SAMPLING......................................................................................................................
APPLICABILITY OF THE METHODS USED IN OBTAINING INFORMATION.............
DESCRIPTION OF THE DISTRIBUTOR GROUP...........................................................
Location of D istributors.......................................................................
Characteristics of the Milk Distribution Business.....................
Size.........................................................................................................
Methods for U tilizing Surplus Milk.........................................
Type of Container..............................................................................
Organization of the Dairy Industry........................................
Operating Experience.........................................................
Characteristics of the Interview ee..............................................
Position of the Interviewee. .............................................
Experience of the Representative Interviewed.....................
Formal Education of the Interviewee........................................
Public Relations Policies of Distributors .......................
Methods of Disseminating Information.....................................
Distributor Knowledge and Participation
in Pricing Processes. ..................................................................
Knowledge of Marketing Area. ......................................
Knowledge of Place and Time of Hearing.................................
Participation in Pricing Processes..........................
OPINIONS OF DISTRIBUTORS...................................................................................
Opinion Toward Government Control and Specific Functions....
Conclusions....................................................................................
Opinion Towards Pricing Policies.........................................................
Opinion Towards Actual Bases Used for
Establishing Prices. ........................................................
Opinion Towards Bases that Should Be Used
for Establishing Prices.................................................................
Opinion of Supplementary Bases that Should Be Used
Opinion of the Method for Computing the Cost Bases.........
Opinion Towards the Amount of Representation.....................
Methods of Increasing the Amount of
Representation.................................................................
Conclusions......................................................................................
Opinion Towards Increasing the Scope
of Government Control......................................................................
Opinion Towards Maximum Pricing...................
Opinion Towards Control of the
Number of Distributors.........................................................
Opinion Toward Minimum Production Standards. .
Conclusions on Increasing Government Control......
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Opinion of the General Effect of Control on
the Dairy Industry......................................................................... 65
Opinion of the Advantages of Government Control... 65
Distributor Opinion of the Disadvantages
of C ontrol..,.................................................................. 66
Conclusions of Distributor Opinion of the Value of
Government Control.................... 66
Analysis of the Opinions of Distributors Opposed to
Government Control............................ , ........................................ 66
D istributor Opinion of Desirable Changes in
Government Control................ 67
Opinion Towards Control During Abnormal Economic
Conditions. ................ 67
Opinion Towards Bases for Establishing Producer Prices. 68
Opinion Towards Basis for Establishing Consumer Prices, 69
Conclusions................ 69
Opinion Towards Establishing A Seasonal Pricing P la n ........ 70
Opinion Towards Seasonal Pricing.............................................. 70
Opinion Towards the Seasonal Flan............................................. 71
Conclusions of Opinion Towards Seasonal Pricing............... 71
Analysis of Differences Between Distributors Favoring and
Those Opposed or Undecided Towards a Seasonal Pricing Flan., 72
Effect of Volume of Business .............. 73
Effect of Position of the Interviewees................. 73
Effect of the Interviewees Experience in
Their Present P osition..................... 75
Effect of Interviewee Farm Experience................ 76
Effect of the Formal Education of Interviewees 77
Effect of Method of Utilizing Milk............... 78
Effect of Interviewees Participation in Dealer
Organization............................... 79
Conclusions.............................................. 81
Opinion Towards Formula Pricing of Milk........................................... 81
Detailed Analysis of Basis For Distributor Opinion
Towards Formula Pricing........................................................................... 83
Volume of Business .................... 83
Position of the Interviewees............... 85
Experience in the Present Position................. 85
Experience in the Dairy Distribution Business.................... 86
Farm Experience of the Interviewee.......................................... 87
Education of the Interviewees... ............................................ 88
Interviewees Participation in Dealer Organization...... 89
Conclusion. ............ 89
Analysis of the Factors Affecting Distributors* Opinions
Towards Government C ontrol................................................. 90
Experience of the Interviewee.................................................... 90
Knowledge of the Interviewees................................................... 92
Participation in the Formulation of Pricing Policies... 92
Position of Interviewee............................................................ 93
Size of Business................................................................................ 94
Profit Position of Distributors................................................. 94
Conclusions.................... 96
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SUMMARY OF THE DISTRIBUTOR ANALYSIS............................................................. 98
ANALYSIS OF PRODUCERSISTRIBUTOR OPINION
TOWARDS GOVERNMENT CONTROL.............................................. 100
Conclusion of Producer-Distrlbutor O pinions.............................102
DESCRIPTION OF THE PRODUCER SAMPLE........................................................... 104
Characteristics of the Farm Organization........................................ 104.
Size of the Farm B usiness..... ................................ 104
Size of the Dairy Enterprise. ..............................................105
Relative Importance of the Dairy Enterprise................... 106
Characteristics of the Producer ........................................... 107
Relationship of the Producer to the Farm Business 107
Age of the Producer ..................................... 107
Formal Education of the Producers......................................... 108
Producer Experience in the Production of Milk................. 108
Physical Facilities for Producer Contact With the
Non-farm Environment. ...................................................................... 109
Availability of Newspapers, Magazines and
Special Publications..................................................................... 110
Availability of Other Means of C ontact.......................... 110
Participation in Dairy Organizations...................... I ll
Description of the Producers’ Milk Market........................ 112
Place of Sale............................................ ..1 1 3
Stability of the Supply of Milk Between Dealers..................114
PRODUCERS* KNOWLEDGE OF MILK MARKETING............................................. 134
Knowledge of Prices...................................................... 3JL4
Knowledge of the Class I Price................... 115
Knowledge of the Blend Price for Milk............................................... 115
Knowledge of Butterfat D ifferential................................................... 116
Conclusions in Regards to Producer Knowledge of P rices...... 118
Producer Knowledge of Present Pricing Methods.................... 119
Producer Knowledge of Government C ontrol................... 120
Knowledge of the Pricing Procedure.............. 120
Conclusions as to Producer Knowledge of Pricing Procedure... 121
PRODUCER OPINION TOWARD DAIRY MARKETING PROBLEMS.................................122
Producer Opinion of Prices...................................................................122
Conclusions from Producer Opinion of Prices.. .......... 124
Producer Opinion of D istributors’ Relative P ro fits.... 125
Opinion of Distributors' Costs............................. 326
Producer Opinion of D istributors’ Profits ............. 327
Conclusions..................... . 327
Analysis of Informed Producers' Opinions of
Marketing Problems............................... 327
Opinion Towards Bases for Establishing the Minimum
Producer Prices. .......................................... 3-2$
Producer Concept of Cost of Production... ......... 129
Producer Opinion of Factors that Would Justify a
Reduction in the Producer Prices. .................. 329
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Conclusions on Producer Opinion of Pricing Bases.. 130
Opinion Towards Basis for Establishing Minimum
Besale Prices...................................................................................... 131
Producer Concept of Cost of Distribution................. 131
Conclusions on the Producers' Opinion of the
Besale Pricing Basis ........................................................... 131
Producer Opinion of Seasonal Pricing............................................. 132
Conclusion................................................................................................. 133
Producer Opinions Towards Bepresentation. .............................. 134-
Methods of Obtaining More Bepresentation.............................. 135
Producer Opinion of Acceptable Bepresentation ............... 135
Producer Opinions of the Advantages of the
Milk Control Commission........................................................................ 136
Producer Opinion of Government Control..................... 138
Informed Producers' Opinion Towards the Various
Functions of Government Control .................................. 139
Informed Producers' Opinion Towards Increasing
Government Control. ...................................................................... 1A0
ANALYSIS OF UNINFORMED PBODUCEB OPINION TOWABDS
MARKETING PBOBLEMS................................................................................................. H I
Opinion Towards a Possible Method for Pricing Milk.......... 141
Opinion Towards Government Control. ............. 142
Factors Conditioning Producer Opinions and
Knowledge Toward Dairy Marketing Problems...................................... H3
Association with Formal Education. .......................... 143
Association with Age.............................................................. H5
Association with the Size of Farm B u sin e ss............. H5
Association with the Size of the Dairy E nterprise...... H7
Association with Location............................................................. H7
Association Between Knowledge of Government Control
and Knowledge of Other Marketing Information. ......................... H9
Effect of Herd Butterfat Test.......................................................... 150
Association with Land Grade............................................................. 151
Producer Knowledge as Associated with Land Grade 153
Analysis of Differences Between Producers in
Northwestern Pennsylvania and All Other Producers. 153
Association with Producers' Knowledge of
Price Information.............................................................................. 153
Association with Formal Education. ............... 155
Association with Age. ............................................................ 155
Association with Participation. ............................. 157
Association with Size of the Farm Business. ................... 157
Association with the Size of the Dairy E nterprise,,.,.. 159
Association with the Belative Importance of the
Dairy E nterprise.... ................................................. 159
Association with Producer Knowledge of Prices................... 161
Conclusions on the Differences Between Northwestern
Producers and All Other Producers. .................................... 161
SUMMART OF THE PRODUCER ANALISIS.................................................................... 163
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DESCRIPTION OF THE CONSUMER GROUP.................................................................. 166
Characteristics of the Interviewees................................................, 166
Income............................................................................. 167
S e x ....................................................................................... 170
Age............................................................................................... 170
Nationality and Racial Characteristics.......................... 172
Occupation......................................................... 174
Formal Educational Attainment. .............................................. 176
Experience....................................................... 178
Number of Persons in the Household. ..................179
Weekly Milk Consumption. ......................................................... 180
Consumer Methods of Purchasing M ilk..................................................183
CONSUMER OPINION TOWARD DAIRY MARKETING PRACTICES...................................188
Opinion Toward Frequency of Milk Deliveries.....................................188
Opinion of Store D iffe re n tia ls......................................... 191
Conclusion on Store D ifferen tials...................................... 192
Opinion of Seasonal P ricing................................................................ 194
Consumer Opinion of P ro fits..... .................................... 196
Opinion of Distributor P ro fits.,............................................... 196
Opinion of Producer Prices ..................................... 197
Conclusion on Consumer Opinion of Profits..................... 198
CONSUMER KNOWLEDGE OF DAIRY MARKETING.................. 198
Knowledge of Current Milk Prices ................ 198
Knowledge of Government Control. .......................... 202
OPINION AND KNOWLEDGE OF INFORMED CONSUMERS................. 203
Knowledge of the Length of Time the Government
had Controlled Milk Prices .......... 203
Knowledge of Price Hearings. .......................................................... 204
Knowledge of Place of Hearings................ 205
Knowledge of the Month of the Last Price Hearing....... 206
Conclusion of Informed Consumer Knowledge of
Price Hearings. .......... 207
Opinion of Representation at Hearings......................................... 207
Opinion of Type of Representation at Hearings. ............208
Informed Consumers Opinion of the Adequacy of
Opportunity to Influence Prices.............. 209
Conclusion on Informed Consumer Opinion
of Representation.. ............................... 210
Informed Consumer Opinion Toward Pricing P o licies.....» ..••• 211
Factors That Should be Considered.............. 211
Factors That are Being Considered at the
Present T im e ,.,..,................... 212
Opinion Toward the Price of Milk Relative
to What it Should be........................................................................ 213
Consumer Opinion of Government Objectives..................... 215
Consumer Opinion of the Value of Government Control......... 216
Consumer Opinion of A d v a n t a g e s , •»•••••.. 216
Consumer Opinion of Disadvantages.••••• ................ 218
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Consumer Opinion Toward Control.. 219
Analysis of Factors Associated with Consumer
Knowledge of C o n tro l....................... 220
Association with Place of Purchasing M ilk. ................ 220
Association with S ex ................................................................. 222
Association with Age........................=,............... 222
Association with Occupation... .................................... 224
Association with Labor Union.. . .......... 224
Association with Nationality. ............................................... 226
Association with Racial Characteristics................................ 227
Association with Education ............................................. 228
Association with Milk Consumption .......... 228
Consumer Opinion Toward Control...................... 232
Association with S ex ...,................................................................ 235
Association with Weekly Milk Consumption..... 235
Association with Racial Characteristics......................... 235
Association with Age................................................................ 238
Association with Nationality.............. 240
Association with O ccupation................................................ 240
Association with Formal E ducation*,,..,...................... 240
Conclusion..........................................................,.................. 244
SUMMAEH OF THE CONSUMER ANALYSIS.................................................................. 244
APPENDIX A.................................................................................................................. 247
Distributor Q uestionnaire............................. i
Producer Q uestionnaire................................... vi
Consumer Q uestionnaire....... ................................................... x
APPENDIX B............................................................... 248
Summary of the Field Work Procedure, ................... i
APPENDIX C.................................................................................................................. 249
Sample Areas Selected................... i
APPENDIX D.................................................................................................................. 250
APPENDIX E................................... 251
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LIST OF TABLES
Table Page
1 Location of Distributors On the Basis of Population of the
Urban Centers and Total Population Included In the Sample,
87 Distributors, Pennsylvania, 194#............. . . . . . • • 24
2 Comparison Between Size of Distribution Businesses and
Methods for Disposing of the Milk Purchases, 87
Distributors*, Pennsylvania, 1943............................................. • 30
3 Comparison of Weekly Wages Paid in 72 Milk Plants*,
Pennsylvania, 1943* •. •«••••• ...................... . . . . . . . . . 33
4 Comparison Between Size of Distribution Businesses and
Amount of Unionization, 87 Distributors*, Pennsylvania,
1943.«,'«...................................................................... 34
5 Comparison Between Size of Distributor Businesses and
Participation in Distributor Organization, 87
Distributors*, Pennsylvania, 1943................................... 39
6 Comparison Between Size of Distribution Business and
Position Held by Interviewee, 87 Distributors*,
Pennsylvania, 1943*.................................................... 41
7 Comparison Between Size of Distribution Businesses and
Experience of Interviewee, 87 Distributors*,
Pennsylvania, 1943*. .....................................•........................ 44
8 Comparison Between Size of Distribution Businesses and
Method of Disseminating Information to Consumers,
87 Distributors*, Pennsylvania, 1943...o«o............................... 47
9 Attitude of Distribution Towards the Milk Control
Commission and to Its Specific Functions, 87
Distributors*, Pennsylvania, 1943. ......................... 51
10 Comparison of D istributors1 Opinion of the Actual Bases
the Milk Control Commission Used for Establishing
Minimum Producer Prices and Minimum Resale Prices,
77 Milk D istributors, Pennsylvania, 1943......................................... 56
11 Comparison of D istributors1 Opinion of the Method that
Should be Used in Computing Costs as the Basis for
Establishing the Minimum Producer and Resale Prices,
75 Distributors, Pennsylvania, 1 9 4 3 o ................................ 53
12 Comparisons of the Opinions Expressed for Increasing the
Function to Include Setting Maximum Producer and Maximum
Resale Prices, 79 Distributors, Pennsylvania, 1943.................. 61
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Table Page
13 Comparison of Volume of Business Between Those Favoring
and Those Opposed or Undecided Towards a Seasonal
Pricing Plan, 79 Distributors*, Pennsylvania, 1948. .................. 74
14 Comparison of Positions Held as Associated With Opinion
Towards Seasonal Pricing Plan, 79 Distributors,
Pennsylvania, 1948*................................................................................ 75
15 Comparison of the Representatives* Experience in Present
Position Held Between Those Favoring and Those Opposed or
Undecided Towards a Seasonal Pricing Plan, 79
Distributors, Pennsylvania, 1948., ..................................................... 75
16 Comparison of the Representatives* Experience in the
Dairy Industry Between Those Favoring and Those Opposed
or Undecided Toward a Seasonal Pricing Plan, 79
Distributors, Pennsylvania, 1948*.........«..................................... 76
17 Comparison of the Representatives* Formal Education
Between Those Favoring and Those Opposed or Undecided
Toward a Seasonal Pricing Plan, 79 Distributors,
Pennsylvania, 1948.••••..•............................................................ 77
18 Comparison of Distributor Opinion Toward a Seasonal
Pricing Plan as Influenced by Formal Education, 79
Distributors, Pennsylvania, 1948.................................................... 78
19 Comparison of the Method For Using Purchased Milk
Between the Distributors Favoring and Those Opposed or
Undecided Toward a Seasonal Pricing Plan, 79 Distributors,
Pennsylvania, 1948...................................................................... 79
20 Comparison of Distributor Participation in Dealer
Organizations Between Those Favoring and Those
Opposed or Undecided Towards A Seasonal Pricing
Plan, 79 Distributors, Pennsylvania, 1948 • • 80
21 Comparison of Opinion Towards Automatio Pricing with
Volume of Business, 79 Distributors*, Pennsylvania, 1948*• 84
22 Comparison of Position Held With Opinion Towards
Automatic Pricing, 79 D istributors, Pennsylvania, 1948*.•• • 85
23 Comparison of the Experience of the Interviewees in
Their Present Positions With Their Opinion Towards
Automatic Pricing, 79 D istributors, Pennsylvania, 1948...• 86
24 Comparison of the Interviewees* Experience in the Dairy
Distribution Business With Their Opinions Towards Auto
matic Pricing of Milk, 79 D istributors, Pennsylvania,
1948................................................................................................... 87
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