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Full text of "Class III milk in the New York milkshed : I. manufacturing operations"

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MARKETING RESEARCH REPORT NO. 379/ 



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CLASS III MILK IN 
THE NEW YORK MILKSHED: 
I- MANUFACTURING OPERATIONS 



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'(^ U. S. DEPAWM-EOT, OF AGRICULTURE 
#•£ Agricultural Marketing Service 



Marketing Economics Research Division 



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Historic, archived document 

Do not assume content reflects current 
scientific knowledge, policies, or practices. 



CONTENTS 



Page 

Summary 4 

Introduction 

Utilization of pool milk supplies, 1940-58 6 

Utilization of Class III milk 6 

Products included in Class III 6 

Changes in utilization, 1940-58 8 

Seasonal changes in utilization, 1954-57 9 

Origin, destination, and utilization of shipments from pool plants 11 



Page 

Relation of feeder plants to manufacturing plants 16 

Feeder plants supplying pool manufacturing plants 16 

Feeder plants supplying nonpool manufacturing plants 16 

Capacity of pool plants in the New York milkshed 25 

Dairy products manufactured by regions 2.1 

Appendix 3 5 

Measurement of equipment capacity 35 

January 1960 




PREFACE 



This report is the , first of a group dealing with Class III milk pricing in the 
New York-New Jersey milkshed. Particular emphasis is given to factors 
affecting the market for Class Illproducts, and to the decisions which handlers 
make about the form in which they will dispose of Class III milk. The project 
under which this group of publications has been developed was carried out 
by the Marketing Economics Research Division, Agricultural Marketing Serv- 
ice. A substantial part of the cost was financed by a grant from the New York- 
New Jersey Milk Market Administrator. 

This report provides in graphic form a summary description of the manu- 
factured dairy products industry in this area. It describes the nature of Class 
III operations, including types and location of products manufactured. Inter- 
regional plant shipments of milk for manufacturing purposes and of manu- 
factured dairy products are analyzed. Regional production patterns for both 
pool plants and the New York State nonpool plants are developed and esti- 
mates are made of the extent to which existing manufacturing capacity is 
utilized. 

This report is based on a summary of statistical information and records 
of plant operation collected and made available by other agencies. The pri- 
mary sources of these data are the New York-New Jersey Milk Market Ad- 
ministrator and the New York State Department of Agriculture and Markets. 
Donald G. Richards assembled most of these data. Anson J. Pollard, Assistant 



Market Administrator, New York-New Jersey Milk Marketing Area, furnished 
the material on nonpool manufacturing plants. 

In the group of reports on "Class III Milk in the New York Milkshed," we 
hope to include an economic description of the manufactured dairy products 
industry and information on costs of manufacturing dairy products, process- 
ing margins, processors' decisions on the utilization of this milk, and 
economic aspects of pricing Class III milk. 

The work on which the reports are based was done by a research team 
composed of Donald B. Agnew, F. W. Cobb, Jr., C. E. McAllister, and T. R. 
Owens, under the general supervision of D. A. Clarke, Jr. Additional assist- 
ance was obtained from Irving Dubov (on leave from the University of 
Tennessee). 

The cooperation of representatives of the dairy industry is gratefully 
acknowledged. R. G. Bressler, Professor of Agricultural Economics, Uni- 
versity of California, and consultant to the Marketing Economics Research 
Division, contributed substantially to the analysis of the problem with which 
the study deals and to the planning of the work. His article, "Pricing Raw 
Product in Complex Milk Markets" (Agr. Econ. Res. 10(4): 113. October 
1958), embodies a part of this contribution. Louis F. Herrmann. Head, Dairy 
Section, Marketing Economics Research Division, contributed both to the 
inception and progress of the project and to the development and prepara- 
tion of substantial parts of the study. 



For sale by the Superintendent of Documents, U. S. Government Printing Office 
Washington 25, D. C. - Price 35 cents 



SUMMARY 



About 3.5 billion pounds of milk per year--roughly 40 percent of the total 
production for the New York -New Jersey pool- -are available for use in 
manufactured dairy products. This is the Class III milk, which is in excess 
of the fluid milk and cream requirements of the market. As Class III, it takes 
the lowest price classification under the concurrent operation of Federal 
Milk Marketing Order No. 27 and New York State Official Order No. 126. 

This Class III milk is used for cream (including storage cream), cheese 
(Cheddar, cream, and other) homogenized mixes (primarily for ice cream), 
butter, plain condensed milk, other concentrated products, candy products! 
evaporated milk, other Class III products, and sweetened condensed milk! 
There is substantial seasonal variation in the quantities of Class III milk' 
total quantities for manufacturing are typically 2-1/2 times greater in May 
than they are in November. 

The seasonal pattern is also reflected in the production of the various 
manufactured dairy products. With the exception of butter, for which produc- 
tion has been quite erratic, there is an amazing uniformity in the production 
for the same months in the years 1954-57. In absolute quantities, the seasonal 
variation is greatest for storage cream and smallest for plain condensed 
milk. 

There is substantial interplant and interregional shipment of both Class III 
milk and manufactured dairy products within the milkshed. Some whole milk 
travels relatively long distances between plants, particularly in the season of 
flush production. There are also considerable differences in the way some of 
these shipments --especially whole milk and cream- -are utilized in the 
periods of high and of low Class III production. In May--the flush season 
large quantities of Cheddar cheese and storage cream are produced at the 
plants of destination. Only small amounts of these shipments are used for 
these purposes during November when Class III milk is in relativelv short 
supply. Similar differences are observed for other products. Large quantities 



of 

c 



f cream, condensed milk, and homogenized mixes --the ingredients for ice 
ream --are shipped to plants in regions outside the milkshed. 

Frequently, several plants which receive milk from producers consolidate 
supplies at a single plant to gain economies in manufacturing. Plants which 
receive and then transship for further manufacturing are called "feeder 
plants." Many more plants operate as feeders during flush production than 
in short production periods. This increase in feeders reflects in part the 
fact that some plants divert whole milk from shipment to the city for fluid 
use to manufacturing plants in the country when supplies are relatively large. 
In many instances, milk bypasses manufacturing plants located near feeder 
plants and goes to relatively distant plants. 

There is no evidence that the production of manufactured dairy products 
in the New York-New Jersey milkshed is limited by the capacity of the 
equipment. Most of the pool manufacturing plants can produce more than one 
product or combination of products. With the possible exception of facilities 
to produce dry skim milk powder, all of the manufacturing equipment in pool 
plants is being used at well below capacity. 

Manufactured dairy products are produced in nearly all regions of the 
milkshed, but the type of products manufactured tends to differ between 
regions. Northern and northeastern New York are important primarily in the 
production of American cheese and butter. On the other hand, the western 
part of the milkshed relies heavily on the production of condensed products 
to dispose of surplus milk. Perhaps the most unusual aspects of the location 
of production is that butter is produced in its largest quantities in southeastern 
New York- -a region adjacent to the metropolitan market area. It is usually 
most economical to produce butter in the more distant regions (since it is 
more highly concentrated in terms of the fat component of milk), and to 
produce the bulky products in relatively nearby regions. 



^CLASS III MILK IN THE NEW YORK MILKSHED. 
I. MANUFACTURING OPERATIONS v- 

By Fields W.lCobb, Jr., and D. A^Clarke, Jr. 1 



The New York-New Jersey milkshed is the area 
which supplies the fluid milk and cream requirements 
of the marketing area defined in Federal Marketing 
Order No. 27. The marketing area consists of the New 
York metropolitan area (including 12 northern New 
Jersey counties) and parts or all of 35 counties in 
southeastern New York. Most of the milk produced in 
the milkshed is included in the New York-New Jersey 
pool. To be in the pool, milk must be delivered to 
certain plants which, under terms of the marketing 
order, are designated as "pool plants"; all other 
plants within the milkshed are "nonpool plants." Pool- 
ing is the arrangement for combining the payments 
made for milk at different class prices, and averaging 
them so that each producer in the group covered by the 
pool receives payment on the same basis. 

The geographic area covered by the milkshed in 1958 
extended throughout the State of New York and parts of 
Pennsylvania, New Jersey, Vermont, Connecticut, Dela- 
ware, and Maryland. The State of New York supplies 
by far the most milk to this market; it delivered about 
72 percent of the total pool volume in 1958. Pennsyl- 
vania is second most important, having supplied ap- 
proximately 19 percent of the 1958 deliveries. Next in 
importance is New Jersey with about 8 percent, and 
then Vermont, Connecticut, Delaware, and Maryland, 
which together contributed about 1 percent of the 1958 
pool deliveries. 

Figure 1 shows the location of milk plants in the New 
York milkshed that had pool plant status on August 1, 
1955. To be a pool plant, a plant must ask to be so 
designated; it must be willing to sell milk for Class 
I-A uses and be able to sell milk for Class I-A. That 
is, it must have approval of a health authority in the 
marketing area and be free from commitments which 
would prevent selling its milk for Class I-A. 

There is some variation from month to month in the 
number of pool plants, but for the most part the num- 
ber of plants remains relatively stable. At the begin- 
ning of 1956, 391 plants had pool status. By May and 
June of that year there were 395, but by August the 
number had decreased to 383. By October, 4 more 
plants had entered the pool, raising the number to 387, 
but by December the number had again dropped to 385. 

iMr. Cobb was formerly with the Agricultural Marketing Service. D. A Clarke 
Jr.. Associate Professor of Agricultural Economics at the University of Cali- 
lornia. was employed by the Agricultural Marketing Service while on leave from 
the University. 



INTRODUCTION 

There was an average of 389 plants in the pool during 
1956. 

As of August 1, 1957, the definition of the marketing 
area was substantially changed. A large number of 
smaller markets in northern New Jersey and upstate 
New York were brought under Order 27. (Many of the 
data used in this report were for periods before the 
change, but since both pool and nonpool plants were 
covered, the results are valid for the present milk- 
shed.) 

The enlargement of the marketing area naturally 
resulted in an increase in the number of plants with 
pool status. According to statistics issued by the 
Market Administrator's office, the number of pool 
plants was 785 in August 1957 (the first month of the 
expanded order). This was an increase of more than 
100 percent from the 3 74 pool plants reported in July 



PLANTS IN NEW YORK 
MILKSHED RECEIVING 
MILK FROM 
PRODUCERS -^ft 



N Y 






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1 ' ' ' . m . r-i* l^-=v 



MASS 



CONN 



PENN 




• Specifically denonoted pool planti 
t Olh»r planti ouliid* the New York marketing or«o 
opproved by marketing oroa h.olth ourhoriti.i 

•akket .d.,h„„.tc,. m„ ,„»« nnornm* .ilk ..««er,„c .«,, 

_. N *G- Illl-Sf ( IO)*C«ICULTut* 



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FIGURE 1 



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1957. The plants that were added to the pool were much 
smaller, on the average, in volume than the plants 
that were previously in the pool. Total deliveries into 
the pool increased by approximately 21 percent, even 
though the number of pool plants more than doubled. 

Most of the pool plants are country receiving and 
milk shipping plants. Part of the milk received at these 
plants is shipped directly to city bottling plants for 
use in meeting the fluid milk demand. A relatively 
small quantity ofmilk is processed in the form of cream, 
sour cream, and milk drinks and shipped to the metro- 
politan New York area for sale to consumers. The rest 
of the milk produced is Class III. Products comprising 
Class III include fluid cream for sale in areas other 
than the metropolitan New York area, cream for storage 
purposes, butter, cheese, condensed milk, frozen 
desserts and homogenized mixtures, evaporated milk, 
and milk used for candy manufacture. 

Products containing only the skim or nonfat solids 
portion of the milk, such as nonfat dry milk and skim 
milk cheeses, are also manufactured in this area, but 
do not enter into the classification of milk under the 
orders. As most of the data relating to utilization and 
shipments of milk and dairy products in this report 
are based on pool plant records, the emphasis in this 
analysis is on the fat -containing products. 

Class III milk is processed in manufacturing plants 
which may or may not have pool status. For example, 
if a manufacturing plant receives its entire supply 
from other plants, rather than directly from producers, 
it cannot become a pool plant. In another category, 
manufacturing plants may receive milk directly from 
producers but be ineligible to supply fluid milk to the 
marketing area because either the plant itself or its 
producers do not operate with approval by marketing 
area health authorities. Finally, some plants elect to 
remain out of the pool, although they receive milk 
from producers and have the necessary health approval. 
In 1956 there were 90 pool manufacturing plants. This 
number includes all pool plants which manufactured 
any dairy products during any of that particular year. 
In addition to these pool manufacturing plants, 263 
nonpool plants in New York State manufactured dairy 
products during 1956.' Of this number, 46 used pool 
milk during May 1957. 



'The relation of pool and nonpool plants will be discussed further in Part n (an 
economic description of the manufactured dairy products industry) of the reports 
on "Class III Milk in the New York Milkshed." 



UTILIZATION OF POOL MILK SUPPLIES, 1940-58 



In accordance with the legislation which underlies 
the Federal milk order program, all regulated milk is 
classified according to use. In the New York-New 
Jersey order three "use classes" have been estab- 
lished. Milk utilized for fluid, or bottling, purposes is 
designated Class I. Milk separated into cream and 
used for fluid cream, sour cream, and some milk 
drinks within the New York metropolitan district is 
designated Class II. All of the remaining milk in the 
pool is included in the Class III designation. 

Total receipts of milk from producers declined 
slightly during the war, but began to increase after 
1948 at a relatively rapid and steady rate (fig. 2). 
Class 1 sales showed some increase during 1940-46, 
then remained relatively constant- -at least through 
1954. In the same way, Class II sales (mainly fluid 
cream within the metropolitan New York area) re- 
mained stable. As a consequence, the increase in total 
milk production was reflected in the quantities of Class 
III available. 

The sharp upturn in Class I sales in 1957 and 1958 
is, in part, explained by the previously mentioned 
change in the geographic coverage of the order. In 
general, the new markets brought under the order 
were relatively higher in Class I sales than was the 
original area. This explains why the increase in Class 
I sales would be expected to be relatively greater than 



the increase in total receipts from producers in the 
pool. Sales of Class I-A milk during the first 7 months 
of 1957 were not appreciably greater than for the same 
period during 1956. 

In 1958, about 10.1 billion pounds of milk were de- 
livered into the New York pool. A little more than 5.5 
billion pounds (or 55 percent) of this amount was uti- 
lized as Class I. About 0.6 billion pounds (or 6 percent) 
went into Class II uses. The remainder of 3.9 billion 
pounds (or 39 percent) was destined for Class III. 

The annual totals do not indicate the seasonal varia- 
tion in production and utilization that exists in this 
market. For this reason, figure 3 shows the same kind 
of information as figure 2 --total receipts and the 
utilization by classes - -by months, for the 5 -year period, 
1954-58. During this period, total receipts from pro- 
ducers in the pool increased slightly. 

The seasonal variation in production during this 
period was typical of the Northeast. Peak production 
was reached in either May or June of each year, and 
the low production usually occurred in November. 
Roughly speaking, the peak production was more than 
50 percent above production during the periods of low 
production. The smallest production was reached in 
November 1954 with about 520 million pounds of milk. 
The highest production (before the change in the 



geographic coverage of the order) was in May 1955 
when approximately 920 million pounds of milk were 
produced. 

Both Class I and Class II sales are relatively stable 
seasonally. The seasonal variation in receipts from 
producers shows up in the Class III utilization. Total 
quantities of Class III supplies are typically 2-1/2 
times as great in May as in November. In general, 
the months of lowest Class III utilization have been 
from August through December and have been at a 
level slightly below 200 million pounds per month. 
In the highest months, Class III milk supplies have 
been more than 500 million pounds of milk. During 
the seasons of high milk production, utilization of 
Class III milk accounts for about 60 percent of the 
total milk delivered into the pool. 

Statistics are available for only a short period since 
the order extending the market area became effective. 
From August through December 1957, total pool re- 
ceipts increased about 27 percent. On the other hand, 
total Class I sales increased much more rapidly--37 
percent over the same 5-month period of the previous 
year. Class II sales were unaffected by the change in 
the order. There seems to be little change in the pattern 
of Class III utilization that can be attributed to the 
expanded scope of the order. 



In order of their importance during 1958, the major 
uses of Class III milk fat were as follows: Cream 
(including storage cream), cheese (including Cheddar, 
cream, and other), butter, frozen desserts and homog- 
enized mixes, plain condensed milk, evaporated milk, 
candy products, other concentrated products, and other 
Class III products. 3 Some of these products, in turn, 
were used for further manufacturing processes, par- 
ticularly the homogenized mixes, plain condensed 
milk, and cream for the manufacture of ice cream. 

Class III cream accounted for one -fourth of the total 
utilization of Class III milk fat in 1958. About three - 
fourths of this cream was sold in areas where fluid 
cream sales do not require Class II designation. Part 
of this fluid cream was destined for upper New York 
State and northern New Jersey markets, and the rest 
went into New England, Pennsylvania, and Maryland. 

The remaining one -fourth of the Class III cream was 
frozen and stored. A large part of the storage cream is 

'The reader is again reminded that the procedures used in accounting for uti- 
lization concern only the fat-containing products. For this reason, products 
containing only the skim milk portion—such as nonfat powder and skim milk 
cheeses-- are not included. 



UTILIZATION OF CLASS HI MILK 
Products Included in Class in 

later manufactured into sour cream. 4 In 1 955, the latest 
period for which such figures were reported by the 
market administrator, slightly more than 50 percent of 
the storage cream was used for sour cream. Ice cream 
manufacture accounted for about 35 percent of the cream 
withdrawn from storage in that year, and the remain- 
ing 15 percent went into the production of reconstituted 
cream and cheese. 5 Only a negligible amount of the 
cream stored was later churned into butter. 

Frozen desserts and homogenized mixes accounted 
for 24 percent of the Class III milk in 1958. In addition, 



* Milk used for cream going into storage is priced at Class III levels. If this 
cream is later utilized for Class II purposes — such as sour cream, half and half, 
or reconstituted cream distributed in the metropolitan district—handlers must then 
make an additional payment into the pool. In 1958 this payment to the producer 
settlement fund amounted to 9 cents per pound of butterfat if the milk was sep- 
arated in the months of March through July, and 10 cents per pound of butterfat 
if the milk was separated in the months of August through February. In either 
case, the total payment for milk for cream which went into storage and was later 
sold as sour cream, half and half, or reconstituted cream (the Class in price 
plus the producer settlement fund adjustment) was less than the established Class 
II price. 

5 Reconstituted cream here includes frozen cream used for soup, whipped topping 
mixtures, candy, eggnog, and other milk drinks; and cheese includes cream cheese 
and other soft cheeses. 



slightly less than 11 percent of the available Class III 
milk supplies was used for plain condensed milk. Both 
of these categories are "intermediate products" in 
the manufacture of ice cream. These intermediate 
products were sold to users 8 in the metropolitan New 
York area as well as in markets in other parts of New 
York State and New Jersey, and in New England. 

Although evaporated milk was an important use of 
Class III milk in the New York-New Jersey milkshed 
in the past, it has accounted for only a relatively small 
amount of the total utilization in recent years. In 1958, 
5.1 percent of the Class III milk fat was manufactured 
into evaporated milk. 

Cheese, including Cheddar cheese, cream cheese, 
and other cheeses, accounted for 17.8 percent of the 
Class III use of fat in 1958. The amount that went into 
Cheddar cheese was 8.0 percent of the Class III use 
of fat. Butter accounted for 15.7 percent of the Class 
III milk fat available in 1958. The remaining products 

«In addition to ice cream manufacturers, "users" would Include candy manu- 
facturers, bakers, and soup manufacturers— firms that use dairy products as an 
intermediate product for further manufacture. 



Annually 

RECEIPTS OF MILK FROM PRODUCERS 
AND UTILIZATION BY CLASSES 

New York Pool 

BIL. LB." 




1940 1945 1950 1955 I960 

SOURCE. REPORTS OF THE MILK MARKET ADMINISTRATOR. FEDERAL ORDER NO. 27. STATE ORDER NO. 126 
^INCLUDES 1-A. J-B, AND J-C WHEN APPLICABLE 
U. S. DEPARTMENT OF AGRICULTURE N EG. 621 7 - 59 ( 10 ) AGRICULTURAL MARKETING SERVICE 



FIGURE 2 



FIGURE 3 



By Months 



RECEIPTS OF MILK FROM PRODUCERS 
AND UTILIZATION BY CLASSES 

New York Poof 



MIL. LB. 



800 



600 
400 
200 




:;CLASS"n:$$ 

^Win^\ViViWiVJiyiViyi 



Total receipts 







.....-.•••• 




1954 



1955 



1956 



1957 



1958 



SOURCE. REPORTS OF THE MILK MARKET ADMINISTRATOR. FEDERAL ORDER NO. 27. STATE ORDER NO. 126. 



INCLUDES J-A, J-B, AND J-C WHEN APPLICABLE 
U. S. DEPARTMENT OF AGRICULTURE 



NEG. 6218-59(10) AGRICULTURAL MARKETING SERVICE 



include sweetened condensed milk, milk chocolate, 
other concentrated products, and other Class III uses. 
In total, this group of products accounted for the re- 
maining 12.8 percent of the Class III use. 

Changes in Utilization, 1940-58 

Figure 4 presents the percentages of total Class III 
utilization, by products, from 1940 to 1958. An attempt 
has been made to indicate in this figure not only the 
final utilization of the milk supplies but, for cream and 
ice cream, the ultimate market destination. For 
example, pool milk used for ice cream has been broken 
down between sales in New York City and sales to other 
markets. Milk used for both "frozen desserts and 
homogenized mixes" and for "plain condensed" have 
been combined for this figure, since the major use of 



both these products is for ice cream. Cream shipments 
to outside markets have also been segregated. This 
figure shows both the relative importance of the alter- 
native uses of Class III milk and the changes in utiliza- 
tion over the 18-year period. 

Utilization of Class III milk was affected by changes 
in the supply of Class III milk during the period. Class 
III milk supplies decreased during the period 1940 to 
1946. In 1949 the total amount of Class III milk in- 
creased substantially, and it continued to increase 
through 1955. Since 1955 the total quantities of milk 
utilized for Class III purposes have leveled off and, to 
some extent, have declined. Milk utilization throughout 
the Nation was greatly affected by wartime restric- 
tions, so that changes preceding 1946 cannot be 
attributed to normal market mechanisms. 



r 



% 
PRINCIPAL USES 20 
OF CLASS m MILK, 
NEW YORK POOL 10 

Percentages of All Milk 
Used in Class EL 




Ice cream 

(FOR OTHER THAN N. Y. CITY) 

I l i I i 



Evap., cond., 
and other class HI 



Storage cream 




Fluid cream 

(for other than n. y. city) 

i i i i 1 i i i i i i i i i i 




1940 



1950 



19601940 



1950 



1960 



SOURCE: REPORTS OF THE MILK MARKET ADMINISTRATOR. FEDERAL ORDER NO. 27, STATE ORDER NO. 126 
U.S. DEPARTMENT OF AGRICULTURE NEC 6219-59(10) AGRICULTURAL MARKETING SERVICE 



FIGURE 4 



In recent years and particularly since the end of 
World War II, the sale of cream to outside markets has 
increased more rapidly than sales of any other product 
of Class III milk fat. While only about 10 percent of the 
total Class III milk fat was sold in the form of fluid 
cream to outside markets in 1947-48, such sales have 
accounted for more than Z0 percent of the total Class 
III usage in the New York-New Jersey pool in more 
recent years. 

The use of Class III milk fat for the manufacture of 
ice cream for sale in New York City was relatively 
low from 1940 through 1945, reflecting the wartime 
shortage and restrictions on cream usage. 7 In 1946, 
however, the relative importance of this outlet for 
Class III milk fat increased substantially. During that 
year, sales of ice cream in New York City accounted 
for nearly ZZ percent of the total Class III milk fat 
available. In 1947 and 1948, however, this outlet de- 
creased rapidly in importance, dropping to about 1Z 
percent in the latter year. In 1949, both the health 
regulations on the use of cream for ice cream and the 
pricing provisions of Order Z7 were changed. In par- 
ticular, the change in the pricing provisions of the 
order made pool cream more attractive to ice cream 
manufacturers and, no doubt, was responsible for the 
increase in the utilization of milk fat for this product 
in 1949. Since 1949, there has been a slight decrease in 
the relative importance of this outlet. 

In addition to providing ingredients for ice cream to 
be consumed in New York City, New York-New Jersey 
pool milk has been an important source of supplies 
for ice cream for distribution in other northeastern 
markets. Ice cream sales in these other markets have 
been increasing in the absolute quantities of milk fat 
involved since 1948. The rate of increase in sales 
through this outlet, however, has been approximately 
the same as the rate of increase in Class III milk 
supplies, with the result that the importance of this 
outlet in the disposition of pool milk supplies has re- 
mained relatively constant. 

The products included in the category "evaporated, 
condensed, and other Class III uses" are: Evaporated 
milk, sweetened condensed milk, candy products (mainly 
for milk chocolate), other concentrated products (pri- 
marily whole milk powder), cream cheese, cheese 
other than Cheddar and cream cheese, and a miscel- 
laneous group of other Class III products. During the 
19-year period, evaporated milk, which had been im- 
portant as a user of Class III milk fat, declined 
drastically. The decline in production of evaporated 
milk was most pronounced from 194Z to 1946. For 
part of the same period, other concentrated products 
were increasing rapidly. But, in 1946, these products 
also dropped rapidly with the result that the importance 
of this whole category was substantially reduced. 
Since that time, increases have occurred in the pro- 
duction of other concentrated products, candy products, 

t The categories involving ice cream include frozen desserts and homogenized 
mixes as well as plain condensed milk, both of which are predominantly used in 
the manufacture of ice cream. 



cream cheese, and cheese other than Cheddar and cream 
cheese, and so the category of "evaporated, condensed, 
and other Class III uses" has again increased in rela- 
tive importance among uses for Class III milk fat. 

Cheddar cheese, butter, and cream for storage have 
been somewhat erratic in their importance in the 
Class III picture. Cheddar cheese production was 
relatively high in 1942 and then it fell; the period of low 
production was reached in 1946. From 1947 to 1951 
cheese production increased. From 1951 to 1955 milk 
utilized for cheese leveled off, amounting to approxi- 
mately one -third of a billion pounds of milk per year. 
In 1956-1957, however, cheese production fell off until 
in 1957 it accounted for the equivalent of about one- 
quarter of a billion pounds of milk. It rose slightly in 
1958. 

Butter production has been even more erratic than 
cheese production. The low period of butter production 
was reached in 1946 to 1948. Output increased in 1949 
and 1950, then fell rapidly in 1951. Production of butter 
again increased rapidly through the period ending 1955. 
In 1955 approximately 700 million pounds of milk were 
used for this purpose. By 1957 the utilization of milk 
for butter had dropped to below half of this rate, but 
by 1958 it returned almost to the 1955 level. 

Storage cream reached its peak as a user of Class 
III pool milk in 1946 when it accounted for over 26 
percent of the total milk in this class. During that year 
the equivalent of 367 million pounds of milk was uti- 
lized in storage cream. While the relative importance 
of this outlet declined in subsequent years, the peak 
in the absolute quantity of cream stored was reached 
in 1951 when the equivalent of 416 million pounds of 
milk was used in this manner. The total amount of 
Class III milk available in 1951, however, was nearly 
93 percent more than in 1946. In more recent years, 
storage cream has accounted for approximately 10 
percent of the total Class III pool milk. 

Ice cream was the largest user of Class III milk 
from the New York-New Jersey pool in 1958. It ac- 
counted for more than 24 percent of the total supplies, 
with about 10 percent going for sale in the New York 
City market and 14 percent in markets other than New 
York City. The combined category of evaporated, 
condensed, and other Class III products accounted for 
nearly 2 5 percent of the total Class III milk fat. The 
sale of fluid cream to outside markets was next in 
importance with approximately 22 percent of the Class 
III milk fat used for this purpose. Storage cream ac- 
counted for 11 percent, butter 9 percent, and Cheddar 
cheese 7 percent of the total usage of New York-New 
Jersey pool Class III milk. 

Seasonal Changes in Utilization, 1954-57 

Figures 5 and 6 show the utilization of Class III milk 
fat for 1954 through 1957, by months, for major uses of 



Class III milk. These include the total Class III cream, 
storage cream, plain condensed milk, frozen desserts 
and homogenized mixes, Cheddar cheese, and butter. 
The most striking feature of these figures is the simi- 
larity from year to year in the pattern of utilization of 
milk for all of these products except butter. 



Use of milk for total Class III cream and for storage 
cream shows a tremendous seasonal variation- -almost 
all of which is explained by the seasonal variation in 
use for storage cream (fig. 5). This variation runs 
between 50 million pounds of milk used for cream in 
the low months to approximately 200 million pounds 
in the peak seasons. The lowest month for total Class 
III cream was February 1955 when only 41 million 
pounds of milk were used for this purpose. The high 
period in use for cream, as well as for storage cream, 
coincides with the months of high total milk receipts 
and high Class III use. The largest quantity of Class 
III milk was used for cream during May of 1957 when 
222 million pounds were used for this purpose. 



The amount of cream going into storage each month 
during the period analyzed has varied from to the 
equivalent of nearly 155 million pounds of milk. Storage 
activity is greatest in March, April, May, and June. 
By July, in each of these years, the amount of milk 
used for storage cream was relatively low. In spite of 
the rather large seasonal variations, both total cream 
usage and the use of cream for storage purposes re- 
main similar from year to year in corresponding 
months. 



The use of Class III milk for frozen desserts and 
homogenized mixes also shows a substantial degree 
of seasonal variation although the variation is not as 
drastic as that for Class III cream (fig. 5). The lowest 
utilization is usually in November and the peak is 
reached in June. Again, there is a substantial corre- 
spondence in the month-by -month utilization between 
these years. 



There is some evidence that homogenized mixes 
are being supplanted by "high-fat" condensed milk. 8 
This high-fat condensed milk is classified as plain 
condensed milk. It is similar in composition to ice 
cream mix, except that it does not contain sugar or 
stabilizer. This evidence, which is by no means con- 
clusive, is the fact that the use of milk in homogenized 
mixes declined from July 1956 to the end of the period 
for which data are available, while production of plain 
condensed milk increased. Reports from the industry 



'The term "high-fat" condensed milk is used to denote a product in which the 
ratio of fat to solids-not-fat is appreciably higher than in normal whole milk. In 
other words, this high-fat condensed product is made by adding cream (or removing 
skim milk) until a desired ratio of fat to nonfat solids is obtained. 



indicated that high-fat condensed milk was replacing 
homogenized mixes in the manufacture of ice cream. 
Utilization of milk for frozen desserts and homogenized 
mixes was higher in October 1957, however, than it was 
in October 1956. 

Utilization of Class III milk for plain condensed 
milk shows small seasonal variation relative to that 
for total cream and for frozen desserts and homog- 
enized mixes (fig. 6). There is a peak, however, which 
is usually reached during July. Converse to the situa- 
tion shown for frozen desserts and homogenized 
mixtures, the amounts of milk used for plain con- 
densed milk apparently increased through these years. 

Utilization of Class III milk for Cheddar cheese 
exhibits a substantial degree of seasonal variation (fig. 
6). Some cheese was manufactured from pool milk dur- 
ing all the months from January 1954 through Decem- 
ber 1957. Production remained low during August 
through February and rose until May. The peak was 
usually reached in May, but in 1956, when total milk 
receipts reached their maximum in June, the peak 
production of cheese was also in June. The total amount 
of Cheddar cheese produced in 1956 in the New York- 
New Jersey pool was substantially less after April 
than it was during the corresponding months of the 
previous years. Production of Cheddar cheese during 
May in both 1956 and 1957 used about 63 million pounds 
of milk compared with over 80 million pounds for the 
same month of 1954 and 1955. In spite of the fact that 
the peak Cheddar cheese production in 1956 occurred 
in June, the total quantity of Class III milk used for 
cheese during that month was below that of June in 
both 1954 and 1955. 



The use of Class III milk for butter shows a more 
erratic pattern than the utilization of milk for the 
products discussed above (fig. 6). The quantity of 
butter produced varies considerably during the same 
months in different years. Although there is a definite 
seasonal variation in the use of milk for butter, the 
pattern changes widely from year to year. The month 
of lowest production of butter ranged from August 
through November. By March, production was at or 
near the seasonal peak each year. The month of 
highest butter production in 1954 was March, but 
in 1955 it was May; in 1956, April; and in 1957, June. 
The highest level of butter production in 1957 was, 
however, substantially below that for 1954. In June 
of 1957, the fat from about 45 million pounds of Class 
III milk was used for butter, whereas in March of 
1954 approximately 135 million pounds of milk went 
for this purpose. Butter production was lowest in 
November 1956, when 5.2 million pounds of milk were 
used in this outlet, and was almost this low (5.5 million 
pounds) in September 1957. The third lowest period of 
butter production occurred during 1954, the same 
year in which the peak occurred; in August of that year 
8.8 million pounds of milk went into butter. 



MIL. LB 



UTILIZATION OF 150 
CLASS IE MILK 

For Specified Products 
New York Pool, 1954-57 50 



.PLAIN CONDENSED MILK_ 



100 



BUTTER 




r~ 1957 



J i 





FIGURE 5 



JAN. 



JULY 



^r. o 



JAN. 



JULY 



SOURCE. REPORTS OF THE MILK MARKET ADMINISTRATOR. FEDERAL ORDER NO. 27, STATE ORDER NO. 126 



U. S. DEPARTMENT OF AGRICULTURE 



NEG. 6220B-58(7) AGRICULTURAL MARKETING SERVICE 



UTILIZATION OF 
CLASS m MILK 

For Specified Products 
New York Pool, 1954-57 50 



MIL. LB. 
150 

100 



FROZEN DESSERTS 
AND 

HOMOGENIZED MIXES 




STORAGE CREAM 



FIGURE 6 




JAN. 



JULY 



JAN. 



JULY 



SOURCE: REPORTS OF THE MILK MARKET ADMINISTRATOR. FEDERAL ORDER NO. 27. STATE ORDER NO. 126 
U.S. DEPARTMENT OF AGRICULTURE NEG. 6220A--S8(7) AGRICULTURAL MARKETING SERVICE 



ORIGIN, DESTINATION, AND UTILIZATION OF SHIPMENTS FROM POOL PLANTS 



Class III products shipped from pool plants include 
whole milk for manufacture at other locations, cream 
(other than for sale as fluid cream in metropolitan New 
York City), condensed milk, homogenized mixes for 
ice cream and candy manufacture, evaporated milk, 
cheeses, butter and sour cream.' These interplant 
shipments may be used in the form of the product 
shipped or further processed into several alternative 
types of manufactured dairy products. 

The origin, destination, and utilization of pool plant 
Class III shipments, by regions, are shown in figures 
7 to 14. To illustrate the seasonal variation, these 
data are given for both November 1956 and May 1957. 
November represents the season of "short* • production, 
while May represents the "flush" season. The milk- 
shed has been broken down into 18 regions. Differences 
in the quantities and types of shipment, in utilization 
patterns, and in seasonal movements are illustrated. 
In general, these 18 regions conform to those used by 
the New York-New Jersey Market Administrator in 
reporting plant and production figures by regions. 
The State of New York is divided into 9 regions. 
Pennsylvania, with the exception of the southwestern 
and southeastern portions (which do not include any 
pool plants), is divided into 4 regions. Northern New 
Jersey is divided into 2 regions. The 3 remaining 
regions are the New England States of Connecticut, 
Massachusetts, and Vermont. These last 3 regions are 
included, not because of their pool manufacturing op- 
erations but because they are important outlets for 
surplus milk from the New York-New Jersey pool. 

Shipments and receipts of the various products are 
indicated by circles which appear in the appropriate 
regions. The relative quantities of product shipped or 
received are indicated by the area of the circle. The 
direction of flow is shown by the arrows which connect 
regional shipments to regional receipts. In regions 
where shipments are made to plants in more than one 
region, the approximate amounts going to each region 
are indicated by the segments of the circles denoting 
shipments. Arrows connecting the circles originate at 
the segment of the shipment circle corresponding to the 
region of receipt, but the segment at which any arrow 
terminates represents the combined receipts from 
all regions for the specified use. Each kind of use is 
shown by distinctive shading. 

The following example illustrates the way these 
maps may be read and interpreted. Figure 7 refers 
to shipments of Class III whole milk in November 
1956. The size of the circle denoting shipments in 
region 4 indicates that the equivalent of approximately 
800,000 pounds of milk fat was shipped in the form 
of whole milk for Class III purposes from pool plants 
located within region 4. Somewhat more than 75 per- 

»In addition to these fat-eontaining proaucts. certain skim milk products are 
also shipped. Since skim milk for manufactured products does not affect classifi- 
cation, no comparable records of shipments of skim products are required by the 
market administrator and so no data on these movements are available 



cent of this milk was received at plants (both pool and 
nonpool) which were also located in region 4. Plants 
in region 2 received the second largest shipments 
(about 15 percent) from pool plants in region 4. Class 
III milk was also shipped from pool plants in region 4 
to plants in region 7, and relatively small amounts 
were shipped from pool plants in region 4 to plants in 
region 6 and in region 3. 

In this map, the circle on utilization of receipts 
shows that about 850,000 pounds of milk fat were re- 
ceived in the form of whole milk shipments by plants 
in region 4. The bulk of this originated in pool plants 
also located in region 4, but the equivalent of more 
than 160,000 pounds of milk fat was received in the 
form of whole milk which originated in pool plants 
located in region 6, adjacent to the north. In addition, 
and in relative order of importance, shipments of whole 
milk were received by plants in region 4 from pool 
plants located in regions 9, 2, 7, and 3. 

The plants located in region 4 which received this 
whole milk, in turn utilized it in various forms. In this 
particular month, the most important use of these milk 
shipments was for "other cheeses" - -here, principally 
cream cheese. A close second, as far as Class III 
milk is concerned, was the category "homogenized 
mixes and whole condensed," of which approximately 
two -thirds was homogenized mixes, and one -third 
was whole condensed milk. Another important user of 
these milk shipments was candy products, which ac- 
counted for approximately one -fourth of all of the 
milk received in this region. Whole milk powder ac- 
counted for a substantial segment of utilization, and 
relatively smaller quantities were utilized as fluid 
cream, butter, and miscellaneous products with vol- 
umes too small to be shown separately. 

Seasonal variation in shipments and in utilization 
patterns can be seen by comparing the "short season" 
and "flush season" maps for the various types of 
products. As would be expected, substantially larger 
quantities of products are shipped in the flush period 
than in the short season. Furthermore, important 
differences occur in the utilization of these shipments. 

During May 1957, substantial quantities of milk were 
shipped between plants to be manufactured into Cheddar 
cheese (fig. 8). This is particularly true of the milk 
shipped to plants located in regions 5 and 6. Very little 
milk was used for this purpose in November 1 956 This 
of course, reflects the fact that most Cheddar cheese 
in this area is made during the flush milk-production 
season. 

The relative importance of storage cream during the 
flush period also is apparent. Only a small amount of 
milk (and this only in region 2) was used for storage 
cream during November 1956. This, again, is a gen- 
eral reflection of the utilization pattern for the milk- 
shed. As will be seen in the discussion of cream 
shipments (figs. 9 and 10), storage is the dominant use 



of cream shipped from pool plants during May, while 
very little cream is shipped for storage in November. 

Whole milk travels relatively long distances between 
plants in this market. In every instance, a part of the 
milk received within a region is shipped as whole 
milk to plants located in other regions. While to some 
extent these interregional shipments are made between 
plants in adjacent regions, in many cases the ship- 
ments are made across regions. This is particularly 
true in the flush season. For example, in May 1957, 
milk was shipped from plants located in region 4, not 
only to plants in the adjacent regions 2, 3, 5, 6, 7, and 9, 
but also to the nonadjacent regions 8, 12, and 13 
(fig. 8). A considerable amount of duplication and 
crosshaul is also involved. During both the May and 
the November periods, milk was shipped from plants 
in region 4 to plants in region 6. At the same time, 
plants in region 6 were making similar shipments to 
plants in region 4. 

Figures 9 and 10 refer to shipments of Class III 
cream which originate from pool plants. These maps 
are constructed in the same way as the maps showing 
milk shipments. The bulk of the cream received from 
pool plants throughout the milkshed was utilized as 
cream in November 1956. In May, cream for storage 
was the dominant utilization of cream shipments. Fluid 
cream sales within region 1 - -metropolitan New York 
City--are designated as Class II use under the terms 
of Order 27, and, therefore, do not show up on these 
maps. Within the metropolitan area, the bulk of the 
Class III cream shipments are used for homogenized 
mixes. 

Class III cream is also shipped from pool plants to 
plants located outside the New York-New Jersey milk- 
shed. In November 1956 such shipments were made to 
plants in Connecticut and Massachusetts, as well as in 
Maryland and in Pittsburgh, Pa. Class III cream was 
also shipped to plants in these areas outside the milk- 
shed in May 1957 and, in addition, some cream was 
shipped from region 9 to plants in Florida. Major 
shipments, however, were made to regions in New 
England. These were to regions 16, 17, and 18, and to 
Maine. The New England markets, particularly those 
in Massachusetts and Connecticut, are fairly substantial 
outlets for New York pool cream supplies on a year- 
round basis. 

As was the case with the flush season shipments of 
milk, storage cream represents a substantial part 
of the total utilization of cream received in nearly all 
sections of the milkshed during May 1957. This again 
reflects the importance of storage of excess milk fat 
produced during the spring months within this milkshed. 

Butter is produced from Class III cream shipments 
from pool plants in regions 7, 8, 12, and 13. While 
some butter was produced in these regions during 
November 1956 as well as in the following May, 
substantially greater quantities were produced during 



11 



SHORT-SEASON SHIPMENTS OF MILK 

Origin, Destination, and Utilization of Class TE Milk Shipped 
by New York Pool Plants, by Regions, November 1956 



KEY 
] Whole milk 
j Fluid cream 
J Storage cream 



yl ■•£=>■■ Homo, mixes and whole cond. 

'.V- y'-.j Dry whole milk 

%%%%! Candy products 

wSSwj Cheddar che 



;!:':':•& Other cheese 

Butler 

Misc. produc 
small to be 



SCALE 

POUNDS OF MIIK FAT 
400.000 




200.000 

100.000 
50.000 
25,000 
3.500 OR IES5 




U. I. OCPARTUCHT or *GBICulTU«€ 



HtC. HFHI1TI «CBICULr U B«i „1„|«1 ICXlCE 



12 



FIGURE 7 



FLUSH-SEASON SHIPMENTS OF MILK 

Origin, Destination, and Utilization of Class HT Milk Shipped 
by New York Pool Plants, by Regions, May 1957 



KEY 
Whole milk 
Fluid cream 






J Sforage cream 

..] Homo, mixes and whole cond. 

Evaporated milk 

Dry whole milk 

Candy products 

Cheddar chees 

Other cheese 

Butler 



Misc. products 
small to be sho 



SCALE 

POUNDS Of Ma»C fAT 
.-— **C ^00,000 



\ 




200,000 
100.000 

SO.000 

25.000 

3.500 o« tess 



u. V OtUQImiiT Of iMlCULTut 




M€C .17]. 11(7, *GPtCULTU0*L M**« CItHC SCO viCt 



FIGURE 8 



13 



SHORT-SEASON SHIPMENTS OF CREAM 

Origin, Destination, and Utilization of Class IE Cream Snipped 
by New York Pool Plants, by Regions, November 1956 



KEY 
Fluid cream 



v^N&J Sforage cream 

Homo, mixes and whole cond. 



7T-) 



:v:':'l$-: ; ° ,her cheese (excludes cheddar cheese) 
(jijij i jiji-j Butler 

I Misc. products with volumes too 
small to be shown separately 



SCALE 

POCNDS OF MILK fAT 
400,000 

200.000 




100,000 
50,000 
25.000 
3.500 O* IESS 



U. 1. Cf'.ilnf-l or aCIICULTUBf 




'""•"'" »0»ICULTI«» l „.««,, ,« „„ K( 



14 



FIGURE 9 



FLUSH-SEASON SHIPMENTS OF CREAM 

Origin, Destination, and Utilization of Class HJ Cream Shipped 
by New York Pool Plants, by Regions, May 1957 



KEY 
Fluid cream 

Storage cream 

Homo, mixes and whole cond. 
Evaporated milk 

Dry whole milk 

Other cheese (excludes cheddar cheese) 

Butter 

Misc. products with volumes too 
small to be shown separately 




SCALE 

POUNDS Of MUKfAT 

400,000 




200,000 
100,000 

50.000 

25,000 

3.500 os less 



u. i. d[».hi,(.[ or ACiicuLiiac 




KCC. • »}• 11 f ' • ID«II UITUIM ■«*»■ ?TI*& If* Vic f 



FIGURE 10 



15 



the flush season. Other cheese (including cream cheese) 
is made from cream shipments in regions 3, 4, and 12. 

Figures 11 and 12 refer to shipments of condensed 
milk and homogenized mixes by pool plants. While the 
ultimate utilization of both of these products is pri- 
marily in ice cream, the reports to the market admin- 
istrator do not require accounting for utilization beyond 
these classifications. The major purpose to be served 
by these maps, therefore, is to show the location of the 
pool plants from which these shipments of ice cream 
ingredients originate, and further to indicate the area 
of destination. As can be seen, the major outlets for 
these two products are metropolitan New York City 
(region 1), southern Pennsylvania (region 15), northern 
New Jersey (regions 10 and 1 1 ), and Connecticut (region 
16), that is, these ingredients are shipped to population 
centers for local ice cream manufacture. In addition 



to these areas, relatively small quantities ofcondensed 
milk are shipped to plants in Rhode Island, Massachu- 
setts, Vermont, and Maine. Plants in Pittsburgh also 
received shipments of condensed milk from pool plants 
during November 1956. In November plants in Con- 
necticut received shipments of homogenized mixes, 
but no condensed milk. On the other hand, shipments 
of homogenized mixes to Connecticut plants were rela- 
tively small in May 1957, while shipments ofcondensed 
milk were substantial. 

Shipments of most of the remaining major manufac- 
tured dairy products are shown on figures 13 and 14. 
These products include butter, sour cream, cream 
cheese, and other cheese (other than Cheddar and 
cream cheese). Data on evaporated milk shipments 
were also available, but plants reporting such ship- 



ments were insufficient to permit including this infor- 
mation on the map. This product was shipped from 
region 8 in November and from both region 8 and 
region 13 in May. As a result, May shipments of this 
product were considerably larger than those inNovem- 
ber 1956. 

In general, the information underlying these two maps 
is not as complete as for the previous ones. For these 
types of products, the market administrator does not 
require specific information on destination nor on final 
utilization. The data primarily show the location of 
plants reporting shipments of these products. In some 
instances, it was possible to trace the destination of 
these products, but where this was not possible, it was 
assumed that shipments were to plants located in the 
same region where shipments originated. 



RELATION OF FEEDER PLANTS TO MANUFACTURING PLANTS 



A large number of plants in the New York milkshed 
receive milk from producers, weigh and test it for 
purposes of accounting to individual farmers, and then 
transship it as whole milk to other plants for final 
disposition. In this sense, these receiving and shipping 
stations operate by "feeding* ' supplies of whole milk to 
other plants. A large proportion of the milk which 
arrives in the metropolitan area for fluid milk sales 
is handled in this fashion but, in addition, some of these 
receiving stations serve manufacturing plants in the 
producing area. 

This section is primarily concerned with the relation 
between feeder plants and manufacturing plants in the 
New York milkshed. There are probably several rea- 
sons why the milkshed has been organized so that 
manufacturing plants supplement, in this manner, the 
supplies received directly from producers. In the first 
place, the size of the investment required in most types 
of modem plants for manufacturing dairy products is 
such that large operations are required for economical 
levels of production. Plants which may be large enough 
to assemble and receive milk efficiently from producers 
may be much too small to be efficient in manufacturing 
products. 10 Therefore, the output of several receiving 
plants may be consolidated for more efficiency in proc- 
essing. 

In addition, as previously mentioned, most of the 
fluid milk and cream for the metropolitan area is 
handled through receiving stations. The market require - 
ments for fluid milk and cream remain relatively 
constant throughout the year. With wide variation in 
seasonal production of milk--and therefore in month - 
by-month receipts - -the number of feeder plants that 
are required to supply the fluid needs of the market 
must vary. A part or all of the supplies at some of 
these plants must be diverted from fluid use to mami- 

"One of the factors leading to relatively small receiving stations is that milk 
in this area must be received before 10 a.m.. which in turn limits the volume that 
can be received direct from producers. 

16 



facturing use from season to season. This is why there 
is a much larger number of feeder plants supplying 
manufacturing plants in May than in November. 

Feeder Plants Supplying Pool Manufacturing Plants 

Pool plants operating as feeder plants serving manu- 
facturing plants supply milk to other pool plants and 
also to nonpool plants. In the following sections, plants 
supplying pool manufacturing plants are considered 
separately from those pool feeder plants servicing 
nonpool manufacturing operations. 

Figures 15 and 16 show the location of pool feeder 
plants relative to pool manufacturing plants for Novem- 
ber 1956 and May 1957, respectively. On these maps, 
a distinction is made between two types of "feeding" 
operations--first, all Class III milk received by a plant 
is shipped out in the form of whole milk; and second, 
a plant ships whole milk but at the same time carries 
on some manufacturing operations. In some cases, 
the manufacturing operations considered here are 
relatively simple, possibly no more than that cream is 
separated and shipped. The difference in the relative 
numbers both of feeder plants and of manufacturing 
plants between the November short-supply season and 
the May flush-supply season is obvious from com- 
paring these two maps. This, of course, is a direct 
reflection of the fact, previously mentioned, that in 
the fall some of these plants (both feeder and manu- 
facturing) ship milk to the fluid market. 

The relationships of feeder plants to manufacturing 
plants can be seen by the lines connecting plants. In 
general, the map for November indicates a relatively 
rational organization; that is, the feeder plants supply 
relatively nearby manufacturing operations and in this 
way the transportation costs of whole milk are kept to 
a minimum. Again, in a broad sense, milk in November 
generally flows from more distant points to points 
closer to market. In May, on the other hand, the milk 



generally travels longer distances from feeder plant to 
manufacturing plant. In many instances, manufacturing 
plants located near feeder plants with excess supplies 
are bypassed, and the milk goes to more distant 
plants. As would be expected, in May, plants located 
relatively close to the market have supplies in excess 
of Class I and Class II requirements and so divert 
milk to manufacturing plants farther from the market. 

Feeder Plants Supplying Nonpool Manufacturing Plants 

The relationship between pool feeder plants and non- 
pool manufacturing plants is shown in figures 1 7 and 
18 which again refer to the short-supply season and 
the flush-supply season, respectively. As indicated, 
the plants which receive and manufacture this milk 
do not have pool status. One or more of the following 
reasons may explain this lack of pool status. 

(l)Some manufacturing plants do not receive milk 
directly from producers, and, therefore, do not meet 
the definition of pool plants specified in Order 2 7. 

(2) Some plants do not supply fluid milk or fluid 
cream u within the marketing area set forth in the 
order. In this case, it is not mandatory that they 
carry pool designation. 

(3) The milk supply of some plants and the producers 
who supply the plants may not carry the approval of 
appropriate health authorities which would permit the 

area. ""^ *" flUld £ ° Tm Wlthin the marketing 

(4) Some plants are eligible for pool status, but 
choose to remain outside the pool for economic 
reasons. 



11 The data on these maps relate to the period before August 1 1957 when the 

liZTelVrZZT,:* "? T 6XPanded t0 inClude addifionai^rri ; r y in u - 
Slants on th^mTh Nev/ J erse y- Ma "y P^nts which are designated as non- 

££ln rarke ZT~ tV^t ^ not SUPPly fluid milk or ««" "earn " che 
original rnarketmg area, were brought into the pool by expansion of the area. 



SHORT-SEASON SHIPMENTS OF CONDENSED 

Origin, Destination, and Utilization of Sh 
by New York Pool Plants, by Regions, Nove 



KEY 
Whole eond. 



;***■**;; Homo, mix 




SCALE 

POUNDS Of MUX FAT 
400.000 

200.000 
100,000 

50.000 

.2.5.000 

3,500 os iess 




U I. 0C»UIyfNT or *CPiCut_T L .e( 



H(0. •>'• - 11 171 AMICUllUttl. a* 



•tetiHo ii»ia I 



FIGURE 11 



17 



FLUSH-SEASON SHIPMENTS OF CONDENSED MILK AND MIXES 

Origin, Desfinafion, and Utilization of Shipm 
by New York Pool Plants, by Regions, May 





KEY 


« » * * *< 
* • 


Homo, mix 








Whole cond 



SCALE 

POUNDS Of MH« FAT 
<00,000 



200.000 




100,000 
50,000 
25.000 
3,500 OR IfSS 



V '.. 0C»»«T"(»T 0' tGtlCULTulC 




NCG. t)».]l |M AC*ICUlTuPAl MAtKCl 



NC ltlvtcf 



FIGURE 12 



18 



SHORT-SEASON SHIPMENTS OF SPECIFIED DAIRY PRODUCTS 

Origin, Destination, and Utilization of Shipments 
by New York Pool Plants, by Regions, November 1956 



KEY 

Butter 

Sour cream 
Cream cheese 



8 Other cheese (excludes cheddar and cream cheese) 
■•■•■•.•■■•■ 



SCALE 

POUNDS OF MtlK FAT 
'00.000 




200.000 
100,000 

50.000 

25,000 
3.500 OB IESS 




U.I. M'll'Uii 0> iciicmlull 



»€C •)»•-)•!', A0KCULTa*«L UIIIIMG IIIVICI 



FIGURE 13 



19 



FLUSH-SEASON SHIPMENTS OF SPECIFIED DAIRY PRODUCTS 

Origin, Destination, and Utilization of Shipments 
by New York Pool Plants, by Regions, May 1957 



_ 



KEY 
Butler 

Sour cream 

Other cheese (excludes cheddar and cream cheese 



SCALE 

POUNDS OF MUX FAT 

400.000 




. I. DtPABTyCMT Of » : o in' ':» C 




200,000 
100,000 
50,000 
25,000 
3,500 OR IESS 



N(C »!J»-ll.:i ACOICUlTuaiL -••■CTIHC '.(OvlCC 



20 



FIGURE 14 



MOVEMENT OF CLASS HI MILK 

TO POOL MANUFACTURING PLANTS, 

NOVEMBER 1956 

From New York Pool Receiving Sfofions 



O Pool manufacturing plants receiving milk from pool "feedor" plants 
9 Pool manufacturing plants which manufactured and shipped whole milk 
• Pool "feeder" plants shipping whole milk to pool manufacturing plants 
— ■ Denotes origin and destination of whole milk shipments 



•»ik ho i»i»«fNti >•( iho«« ro oticmirt r»o. rxfif PKNTI 

THC IMirmlHTl J'f-IDr TO H0NP0OL PUHfli Iff f'C. M* 




( .;l i:iiCi;i'',«'l •»•! I Ting 1I«»iCI 



u V. OCI"»«TyfHT Of »COKuLTu«f 



FIGURE 15 



21 



MOVEMENT OF CLASS m MILK 
TO NONPOOL MANUFACTURING PLANTS, 

MAY 1957 

From New York Pool Receiving Sfofions 



- Nonpool plants 

• Pool feeder plants 

• Pool manufacturing plants shipping whole milk 
— ■ Denotes origin and destination of whole milk shipments 



U. %. OCPAITMMT OF AOIICULTUM 




FIGURE 16 



22 



MOVEMENT OF CLASS EQ MILK 

TO NONPOOL MANUFACTURING PLANTS, 

NOVEMBER 1956 

From New York Pool Receiving Stations 



a Nonpool planls 

• Pool feeder plants 

» Pool manufacturing plants shipping whole milk 

— ■ Denotes origin and destination of whole milk shipments 




ic. iiio-ii i n »c»icuiTu»«i «»«««ti«c iiov.ci 



FIGURE 11 



23 



MOVEMENT OF CLASS IH MILK 

TO POOL MANUFACTURING PLANTS, 

MAY 1957 

From New York Pool Receiving Stations 



Pool manufacturing plants receiving milk from pool "feeder" plants 

• Pool manufacturing plants which manufactured and shipped whole milk 

• Pool " feeder" plants shipping whole milk to pool manufacturing plants 
— ■ — Denotes origin and destination of whole milk shipments 



••»r»f «o i-trmfHTi %m iho*« ioo«iO"«if r<o* tnrjf 'n-rj 
'..» - ,-.fNri *»r «*or ro mo**ooi *l*»«m iff ftc. He 




* :r»ui»iiMT of *c»icuLTcat 



• cs. tiM.ii in •.••cuiii.«»t »4*acri»c lirvici 



FIGURE 18 



24 



The bulk of the milk used by these nonpool plants 
originated from pool plants. The nonpool plants re- 
ceived 65 percent of their total milk supplies from 
pool sources in November 1956 and 67 percent in 
May 1957. 

Nonpool plants were classified into the following 
groups so that the utilization of pool milk through non- 
pool plants could be analyzed further: 

Cheese plants. --Those which manufacture cheese-- 
Italian-type oT~ Cheddar --and which receive no milk 
direct from producers. 

Pool handler plants . --Nonpool manufacturing plants 
operated by handlers who also control pool milk plants. 
Similar to the cheese plants, these manufacturing 
plants receive no milk direct from producers. 

Nonpool fluid milk plants . --Those primarily engaged 
in distributing fluid milk in areas not included in the 
marketing area before August 1957. Most of these 
plants became pool plants with the change in the 
order. 

Unapproved produce r plants . - - Nonpool manufacturing 
plants that receive milk from pool plants, and, in addi- 
tion, receive part of their supply direct from producers 
who are not approved for sale of fluid milk. 

Other manufacturers . --Plants which receive milk 
from both New York-New Jersey pool plants and from 
other plants --some of which are regulated under New 
York State orders in Rochester and Buffalo, and others 
under the Federal Order in Philadelphia. These plants 
receive no milk direct from producers. 

Nearly half of the nonpool plants were classed as 
"cheese plants." Almost all of the milk received at 
these cheese plants was from pool plants. 



Only four of the plants were classified as "pool 
handlers." These also operated almost completely 
on pool milk. 

On the other hand, pool milk (included under Order 
27) accounted for less than half of the milk handled 
by plants classed as "nonpool fluid milk plants" and 
"unapproved producer plants." In the "other manu- 
facturer" group, the five plants which received pool 
milk in November 1956 received only 4 percent of 
their milk from other than pool sources, although the 
six plants of this type included in the May 1957 analysis 
drew over one -third of their total supply from other 
than Order 27 pool plants. 

The seasonal pattern shown in figures 15 and 16 is 
repeated in the feeder plant shipments to nonpool 
manufacturing plants. The number of both feeder 
plants and manufacturing plants is larger in the spring 
flush season than during the fall months. 

To a large extent the location pattern of nonpool 
manufacturing plants is similar to that of the pool 
manufacturing plants. The major difference appears 
to be that a proportion of nonpool manufacturing op- 
erations is carried on relatively close to the market. 
As indicated above, however, this may merely reflect 
the fact that these plants do not receive milk directly 
from producers. 

From figures 15 through 18, it can be seen that 
whole milk is transported over relatively long distances 
from feeder plants to plants operating manufacturing 
facilities. Furthermore, in some instances, milk flow- 
ing from a feeder plant to a manufacturing plant by- 
passes other manufacturing plants located relatively 
near the feeder plant. The reason for this may be found 
in the ownership of the plant and in the business rela- 
tions among different firms operating within the milk- 
shed. On the other hand, the destination of these milk 
shipments may be determined by the availability of 



equipment required to manufacture dairy products 
within the milkshed. 

To the extent that the availability of equipment in the 
market is not a limiting factor, it is apparent that the 
efficiency of the market could be improved." Costs 
could be lowered by reducing the amount of whole milk 
transported. The inefficiencies are demonstrated by 
the fact that milk often bypasses nearby manufacturing 
plants. It is further shown by the backward movement 
of milk supplies; that is, the shipment of milk from 
nearby plants to those farther from the market. Part 
of this may be a more or less natural result of the 
interfirm and interplant relations which have been estab- 
lished over a period of years. In other words, a manu- 
facturing plant needing additional supplies, or con- 
versely, a plant with excess quantities of milk over 
regular requirements, may find its relations rather 
firmly established. In such a case, its operations may 
tend to be limited to transactions with plants owned by 
the same firm or at least restricted to relatively few 
plants of different ownership. 13 

Whatever the reasons for the existing pattern of 
interplant relationships, it is apparent from observa- 
tion of the above maps that the efficiency of the 
market could be improved- -that is, total transporta- 
tion costs reduced — through a reorganization of the 
market. This reorganization, of course, would involve 
the assignment of feeder plants to manufacturing 
plants on a basis that would minimize total transporta- 
tion costs of whole milk. While such a system of 
rationalization of the market would unquestionably 
increase economic efficiency, it is not the purpose of 
this report to explore such a reorganization. It is 
merely to indicate one area in which the market op- 
erates imperfectly and, therefore, to suggest a possible 
way of reducing costs. 

12 The availability of equipment in pool plants is considered in the following 
section. 

"A later report will discuss further the extent to which firm or plant operations 
are limited by ownership and by other relationships within the industry. 



CAPACITY OF POOL PLANTS IN THE NEW YORK MILKSHED M 



The New York-New Jersey Metropolitan Milk Market 
Administrator's office records the type, kind, and size 
of equipment available at plants operating under the 
pool. A list of equipment is compiled by an auditor 
of the Administrator's office when a plant acquires 
pool status. The list is changed as changes occur in 
the plant organization and operations. 

The equipment figures are not necessarily a com- 
plete and accurate inventory for the milkshed at any 
particular time. For the purposes of this report, how- 
ever, these records give an adequate picture of the 
location of manufacturing facilities and the capacity for 
manufacturing dairy products in the market. What is 
perhaps most important, they indicate the degree of 
flexibility in the market- -the extent to which plants 
are physically able to adjust production in reaction to 

"The material in this section was developed by T. R. Owens. 



either a change in Class III prices or a change in the 
prices of manufactured dairy products. 

The data on equipment capacity are summarized in 
figure 19, which shows, by regions, the types and 
quantities of products that can be produced. These 
capacity estimates are based on the output rates 
specified by the manufacturer of the equipment. The 
definition of capacity used here is the production that 
can be accomplished in 30 days with three -shifts per 
day. 15 

As might be expected, more plants were equipped 
to manufacture dairy products than were operating 
these facilities during the period studied. To this 



is For a further discussion of the assumptions involved in compiling these 
capacity estimates, and also of the limitations of the data and the estimates, see 
the Appendix. 



extent the market, as a whole, was oversupplied with 
equipment relative to market requirements. Some of 
this excess capacity of equipment represents an "insur- 
ance" factor. A plant expecting to ship whole milk may 
add a separator and other equipment in anticipation of 
periods during which it may be unable to dispose of its 
supplies of fluid milk satisfactorily. It may also be 
that the possession of equipment for processing milk 
adds to the bargaining power of a plant in negotiating 
its annual contract for the disposal of supplies. 

There are relatively few specialized plants in the 
New York milkshed. The majority of plants have the 
alternative of manufacturing more than one product- - 
or combination of products. Some plants, however, are 
equipped with just a separator, permitting them only 
to separate whole milk into cream. A few other plants 
are equipped to handle only evaporated milk or con- 
densed milk. Some plants have facilities for making 



25 



MONTHLY CAPACITY FOR MANUFACTURING DAIRY PRODUCTS IN POOL PLANTS 

New York Milkshed, by Regions 



MIL LB. 
20 - 





REGION IX 




I 2 3 4 5 6 7 8 9 10 11 



MIL LB. 
30 - 

20 - 

10 - 



REGION VII 



Jl 



■l I'l I'. 



1 2 3 4 5 6 7 8 9 10 11 



MIL. LB. 
30 - 

20 



REGION VIII 



^J\ 



1 2 3 4 5 6 7 8 9 10 11 



MIL LB. 

30 

20 

10 





REGION XIII 



LJii 



1 2 3 4 5 6 7 8 9 10 11 



MIL. LB 



MIL. LB. 



REGION VI 



1. Butter 

2. Cheddar cheese 

3. Cottage cheese 

4. Cond. whole (40%) 

5. Cond. skim (40%) 



KEY TO PRODUCTS 

6. NFDM (roller 

7. NFDM (spray) 

8. Dried whole milk 

9. Evaporated whole milk 
11. Homogenized mixes 



12. Cream (40% b. f . ) 



1 2 3 4 5 6 7 8 9 10 



* LESS 'HAM 50.000 POUKDJ 



MIL. LB. 



REGION V 




1 2 3 4 5 6 7 8 9 10 11 



U. i. OePARTuCNT OF AGRICULTURE 



NEG 62*2-58 Ul AGRICULTURAL UARrETIMG SERVICE 



FIGURE 19 



26 



only homogenized ice cream mixes. Finally, there are 
some specialized Cheddar cheese manufacturing plants 
in this milkshed. These plants are equipped primarily 
to make cheese but may also have equipment that 
enables them to dispose of byproducts (such as whey). 

In figure 19, total capacity in a plant is frequently 
less than the sum of the capacities for the separate 
products. For example, a plant equipped to condense 
milk might have a capacity of 100,000 pounds daily for 
either condensed skim milk or condensed whole milk 
but would not be able to produce 100,000 pounds of 
each. Similarly, a plant equipped to manufacture butter 
might also sell milk fat in the form of cream, but 
could not produce at capacity for both products simul- 
taneously. In this analysis, estimates for each com- 
modity are based on the assumption that all of the 
existing equipment is used for that specific product. 

Pool plant facilities for the manufacture of dairy 
products exist in all 15 regions which make up the 
New York milkshed, with the exception of region 10, 
northeastern New Jersey. No one region is equipped 
to produce all of the types of products indicated on this 
map. The largest number of plants (20) is located in 
region 4, central New York, and, correspondingly, this 
is the region with the largest manufacturing capacity. 
This is also the largest milk production area. Histori- 
cally, more than 25 percent of the total pool receipts 
from producers have been received from this region. 

Cream can be produced in all regions having manu- 
facturing facilities. Condensed milk, either whole or 
skimmed, can be manufactured in 12 regions. Eleven 
regions are equipped to manufacture cottage cheese, 
and the same number can produce homogenized mixes. 
Butter, roller process and spray process nonfat dry 
milk, and dried whole milk can be produced in 10 
regions. Seven regions have the facilities required to 
process Cheddar cheese. On the other hand, evaporated 
whole milk can be produced in only two of the regions. 

A comparison of the estimates of equipment avail- 
ability with peak season production of pool plants 
indicates that for most products, equipment is not a 
limiting factor (table 1). Considering that the equip- 
ment is available for use 24 hours a day, the majority 
of products produced in most regions utilize only a 
small fraction of total capacity. The major exception 



Table 1.-- 


Percen' 


iage of 


capacity 


or poo. 


. manui 


ictunng 


plants i 


sed, by 


region 


s, May 


195b' 








Region 2 


Product 


1 


2 


3 


4 


5 


b 


7 


8 


9-A 


11 


12 


13 


14 & 
15 




Pet. 
2.3 


Pet. 
19.3 


Pet. 
13.5 


Pet. 
9.3 


Pet. 

( 3 ) 


Pet. 
8.4 


Pet. 
( 4 ) 


Pet. 
7.9 


Pet. 
0.4 


Pet. 
( 5 ) 


Pet. 

11.3 


Pet. 
28.9 


Pet. 
( 4 ) 




( 5 ) 


(*) 


41.0 


11.4 


22.2 


35.0 


( 4 ) 


{") 


3.7 


( 5 ) 


(*) 


(*) 


(*} 


Cottage cheese 


( 3 ) 


1.9 


1536.3 


11.0 


( 5 ) 


33.8 


122.2 


1.0 


26.5 


2.3 


18.6 


( 4 ) 


2.8 


Condensed whole milk. 


( 4 ) 


1.9 


2.1 


2.4 


( 5 ) 


0.9 


0.3 


8.7 


( 5 ) 


( 5 ) 


2.3 


29.1 


32.6 


Condensed skim milk. . 


(*) 


6.2 


4.3 


3.7 


( 5 ) 


13.2 


26.6 


25.9 


( 5 ) 


( 5 ) 


4.5 


6.2 


( 5 ) 


Nonfat dry milk 


( 4 ) 

( 4 ) 


83.3 
24.4 

( 5 ) 


71.9 
20.9 

23.6 


94.5 
43.4 

36.6 


( 5 ) 


105.0 
0.3 

( 5 ) 


89.4 
92.6 

( 5 ) 


72.2 
16.6 

( 5 ) 


34.0 

( 5 ) 

81.5 


(*) 

18.5 


75.9 
62.3 

( 5 ) 


67.8 
156.4 

( 5 ) 


( 4 ) 




( 4 ) 




( 4 ) 


Frozen dessert mixes. 


*> 


6.1 


( 5 ) 


1.8 


( 5 ) 


1.2 


7.4 


4.6 


( 4 ) 


( 5 ) 


2.9 


( 5 ) 


2.3 




0.8 


27.6 


19.4 


32.3 


38.2 


25.5 


38.2 


31.3 


23.2 


9.9 


31.2 


25.2 


1.2 







1 Capacity is based on the output rates specified by the manufacturer of the equipment. (See Appendix. ) Also, the 
lists of equipment were not all current, which may account for some of the utilizations exceeding 100 percent. 

2 Regions 9-B and 10 have no pool manufacturing plants. 

3 Some production, but no capacity indicated. 

4 Capacity available, but no production in period. 

5 No production in period. 



to this is the facilities to handle spray process nonfat 
dry milk and dried whole milk. There is evidence that 
the available spray process drying equipment was 
utilized to near capacity during the flush season in 
most regions. On the other hand, spray process equip- 
ment was available in region 5 but was not used during 
May 1956. 

It can be concluded that New York pool plants are 
amply supplied with dairy processing facilities. With 
the possible exception of peak season spray powder 
requirements, desirable shifts between alternative 
products are therefore not precluded by the lack of 
equipment. Furthermore, this equipment is relatively 
well distributed throughout the milkshed, roughly con- 



forming to the pattern of milk receipts. In each region 
there is adequate capacity to process all of the locally 
handled pool milk used for manufacturing purposes. 
For this reason, the relatively long-distance movements 
of milk previously referred to (p. 16) cannot be ex- 
plained by equipment limitations. The shortage of spray 
drying facilities for peak season requirements also 
cannot explain whole milk movements over long 
distances. Before entering the drier the milk is com- 
monly condensed to a minimum of 40 percent total 
solids. Ample equipment for this predrying, condensing 
operation exists in all regions. In most plants where 
drying facilities are not available, the milk can be 
precondensed; thus the weight and bulk of product 
requiring transportation can be minimized. 



DAIRY PRODUCTS MANUFACTURED BY REGIONS 



The New York Department of Agriculture and Markets 
obtains records of receipts and disposition of milk by 
plants licensed to manufacture dairy products within 
the State. Since both pool and nonpool plants are re- 
quired to submit these records, a picture of the entire 
manufactured dairy products industry within this State 
can be obtained. Furthermore, data on production of 
manufactured dairy products within the State of New 



York are available for skim -containing products as 
well as for the fat-containing products. 16 



i»In addition to the data from the New York Department of Agriculture and 
Markets—covering production in New York State plants—similar production data 
have been obtained for pool plants in Pennsylvania and in New Jersey. The records 
to follow, therefore, give a complete production picture for the pool plant manu- 
facturing operations, while data for nonpool plants are shown only for the State of 
New York. 



The records of the quantities of the various dairy 
products manufactured were summarized for May 1956 
and November 1956. For this analysis the data for 
pool plants were summarized separately from those 
for nonpool plants. Also, for this analysis, region 9-- 
western New York--was divided into two subregions. 
The B portion includes the milksheds for the Rochester 
and Niagara-Frontier marketing areas, which operate 
under New York State price regulations. 



27 



The production data described above are shown in 
figures 20, 21, 22 and 23. Figures 20 and 21 refer to 
the products manufactured by pool and nonpool plants 
respectively, for May 1956. Figures 22 and 23 corre- 
spondingly show the products manufactured by these 
plants for November 1956. The purpose of these maps 
is to show the relation of pool to nonpool manufacturing 
operations in New York State, the relative importance 
of each type of product in the various geographic areas 
of the State, and the differences which result from the 
seasonal changes in production. 

The heights of the bars in these diagrams represent 
the production of the several products within the 
various regions. Since some products are more con- 
centrated than others (e.g., a hundredweight of milk 
will produce approximately 10 pounds of cheese while 
the same quantity will yield only 5 pounds of butter), 
the height of the bars does not necessarily represent 
the quantity of whole milk used in each product. 

Some of these data are for individual products; in 
other instances similar products are grouped. Cottage 
cheese is shown as plain curd and as cottage cheese 
with milk fat added. » In "other cheese" (cheese other 
than Cheddar and cottage) a distinction is made between 
hard type, soft type, and other. Roller process and 
spray process nonfat dry milk also are shown sep- 
arately. 

There was a larger number of nonpool plants manu- 
facturing each type of product except the condensed 
and dried products than of pool plants. No nonpool 
plants reported production of dried whole milk. The 
number of pool plants reporting the manufacture of 
roller and spray process nonfat dry milk was sub- 
stantially greater than the number of nonpool plants 
making these products. Roughly twice as many pool 
plants reported condensing operations as did nonpool 
plants. r 

On the other hand, a much larger number of nonpool 
than of pool plants reported the production of cottage 
cheese and cheese other than Cheddar or cream cheese. 
The number of nonpool plants reporting the production 
of butter, Cheddar cheese, cream, frozen dessert mix, 
and 'other" products exceeded the number of pool 
plants. Further, the number of nonpool plants reporting 
production in both November and May varies less than 
the number of pool plants. For example, 50 percent 
more nonpool plants were producing American cheese 
in May than in November. The number of pool plants 
producing American cheese in May was eight times as 
great as in November. 



the much larger number of nonpool plants, the quanti- 
ties of cream produced are greater in the pool plants. 
In both months, nonpool plants produced substantially 
larger quantities of cottage cheese, "other cheeses," 
and "other products" than pool plants. While pool 
plants produced larger quantities of butter and Cheddar 
cheese than the nonpool plants in May, in November the 
nonpool plants produced substantially more than the 
pool plants. 

The seasonal variation in production (as indicated by 
the ratio of May to November) appears to be greater 
for pool than nonpool plant operations, particularly for 
production of butter, cheese, and roller process nonfat 
dry milk. 

The products for which relatively little seasonal 
variation is evidenced include cottage cheese, "other" 
cheeses, condensed whole milk, frozen dessert mix, 
and sour cream. The greatest seasonal variation is in 
production of American cheese. Other products that 
are highly seasonal include roller process nonfat dried 
milk, butter, and spray process dried milk (both nonfat 
and whole milk). The production of cream, frozen 
dessert mixes, and condensed skim milk show relatively 
moderate seasonal variations, with May production 
approximately one and one -half times greater than 
November. 

Plants in region 9-B produced a substantial amount 
of the total dairy products manufactured by the non- 
pool plants. This subregion produced over 85 percent of 
the total condensed skim milk manufactured at nonpool 
plants, more than half of the nonpool cream, and a 
substantial proportion of the total nonpool supplies of 
butter, cheese, condensed whole milk, frozen dessert 
mixes, and- -particularly in November — both roller and 
spray process nonfat dry milk. Region 9-B also pro- 
duced nearly 30 percent of the total cottage cheese 
made by nonpool plants in the State of New York. 

Figure 24 shows the major types of dairy products 
manufactured in each region. In this figure, data on 
production by pool plants and by New York State non- 
pool plants for May 1956 have been combined. For this 
purpose, cream was not considered to be a manu- 
factured product. 



In line with the relative number of plants ope ratine, 

rnn.-V S iT n ^ thC mapS ' the P° o1 P lants P^duced 
considerably more of the condensed and dried products 
than the n onpool plants. On the other hand, in spite of 

■n„",i„ T\ pa " icUlar , instance some . th °"8h Probably not complete, duplication is 
involved A substantial part of the cottage cheese reported as plain curd ?sT« 

dore! d cou a nted. a8ain "^ '" ^ — c "»"»* "» * ^ -~" 
28 



The data were aggregated, by regions, using the 
same regions as in the preceding maps. Since the 
region is the basic unit and the principal dairy products 
manufactured characterize the entire region, two types 
of inferences must be guarded against. First, products 
produced in one part of the region--if in sufficient 
quantities to be the principal product within the region- - 
are attributed to the region as a whole. For example, 
this map shows that Westchester County is in region 
2, a butter manufacturing area, but, in fact, no butter 
was produced in this county during the period studied. 
Second, the manufacture of dairy products, as such, 
is unimportant in some regions. The map indicates 
the predominant type of products manufactured but 
does not show how small the production is in these 
regions compared with the other regions. 



In spite of these limitations, however, this map gives 
a broad picture of differences in the types of production 
in the various areas of the milkshed. It can be seen 
that northern and northeastern New York (regions 5 and 
6) are important primarily in the production of American 
cheese and butter. These are the outlets used in this 
area for disposing of surplus milk. On the other hand, 
the western part of the milkshed, including southwestern 
New York and the pool plants in Pennsylvania (regions 
8, 13, and 14), tend to rely heavily on the production of 
condensed products. 

Central New York (region 4) is an important producer 
of manufactured dairy products. This area is first in 
production of "other cheeses," principally cream 
cheese and Italian cheeses, and of nonfat dry milk 
(including both spray process and roller process). It 
is the second most important region in the production of 
dried whole milk and ranks third in the production of 
condensed whole milk. The products that predominate 
in this region, however, are the other cheeses, dried 
whole milk, and nonfat dry milk. 

Northern New York (region 6) is by far the leading 
region in the production of American cheese, but butter 
production is also important in this area. This region 
ranked second in total butter produced within the milk- 
shed during May 1956. Region 6 also ranked second in 
the production of condensed skim milk and third in the 
production of nonfat dry milk. It led in the production 
of spray process nonfat dry milk in that month. 

Southwestern New York (region 8) ranked first in the 
production of condensed whole milk, condensed skim 
milk, and frozen dessert mix. This region ranked 
second in the production of nonfat dry milk (primarily 
spray process) and also in the production of other 
cheeses. Other cheeses, however, are not shown in 
region 8 in figure 24, since they were not the principal 
product in this region in this period. 

The northwestern part of New York (region 9-B) in- 
cludes the milkshed for the Buffalo and Rochester 
markets. This is a heavy dairy manufacturing area and 
an important producer of several types of products. 
This is also the region which contains the largest 
number of nonpool plants in New York State. This 
region is the second largest producer of cottage cheese 
in the milkshed. It is also second in the produc- 
tion of condensed whole milk and ranks third in the 
manufacture of butter, American cheese, other cheese, 
condensed skim milk, and frozen dessert mix. Region 
9-A, also located in western New York, produced all 
types of manufactured dairy products during May 
1956, with the exception of condensed whole and con- 
densed skim milk. This region was by far the most 
important producer of dried whole milk in the milk- 
shed, and this single product was the principal out- 
let for milk for manufacturing in the region. 

Perhaps the most unusual fact indicated by this map 
is that southeastern New York (region 2) produces 
butter as its principal fat -containing manufactured 
dairy product. In fact, more butter was produced in 



DAIRY PRODUCTS MANUFACTURED BY POOL PLANTS, FLUSH SEASON 

New York-New Jersey Milkshed, by Regions, May 1956 



1 2 3 4 5 6 7 8 9 10 11 12 

KEY TO PRODUCTS 



1. Butter 

2. American cheese 

3. Cottage cheese 

A. Curd 

B. Milkfat added 

4. Other cheese 

A. Hard type 

B. Soft type 
C Other 

5. Condensed whole milk 



6. Condensed skim milk 

7. Nonfat dry milk 

A. Roller 

B. Spray 

8. Dried whole milk 

9. Frozen dessert mix 
10. Cream 

11. Sour cream 

12. Other products 



MIL LB. 



i r 



REGION XIV 1 XV 



1 2 3 4 5 6 7 8 9 10 II 12 



• LEJS TH1M 50.000 POUHOS 



U. I. OEPARTUENT Of AGRICULTURE 



FIGURE 20 



REGION v 




MIL. LB. 



1 - 



REGION XI 



-L-L. 



-EL 



1 2 3 4 5 6 7 8 9 10 11 12 



NEO. 6J9J-51I6) AGRICULTURAL UARrETIMG SERVICE 



29 



DAIRY PRODUCTS MANUFACTURED BY NONPOOL PLANTS, FLUSH SEASON 



MIL. La REGION IX-B 



t 
3 - 

2 - 

1 - 

o. 






to 






1 2 3 4 5 6 7 8 9 10 11 12 



MIL. LB. REGION IX -K 

1 - 



1 2 3 4 5 6 7 8 9 10 11 12 



MIL. LB. REGION VIII 

2 - 



1 



B-BJ 



I' 



1 2 3 4 5 6 7 8 9 10 11 12 



MIL LR REGION VII 

1 " 

B 



1 2 3 4 5 6 7 8 9 10 11 12 



New York State, by Regions, May 1956 



REGION VI 



1. Butter 

2. American cheese 

3. Cottage cheese 

A. Curd 

B. Milkfat added 

4. Other cheese 

A. Hard type 

B. Soft type 

C. Other 

5. Condensed whole milk 



KEY TO PRODUCTS 

6. Condensed skim milk 

7. Nonfat dry milk 

A. Roller 

B. Spray 



8. Dried whole milk 

9. Frozen dessert mix 
10. Cream 

11. Sour cream 

12. Other products 



* LESS THAN 50,000 POUNDS 



U.S. OEPARTUEHT OF AGRICULTURE 



30 



FIGURE 21 




MIL La 

2 

1 



REGION V 



mj-i ' 



1 2 3 4 5 6 7 8 9 10 11 12 



MIL LB. REGION III 

2 



KV 8 

VII / 

l.-J FT] m i \YA 



A 



1 2 3 4 5 6 7 8 9 10 11 12 



MIL LB. REGION II 



r 






-lL 8 






^° m |'J I 



tm. 



1 2 3 4 5 6 7 8 9 10 1112 



MIL LB. 



REGION 



_Q 



a. 



1 2 3 4 5 6 7 8 9 10 11 12 



NEC. «94-5«<«> AGRICULTURAL MARKETING SERVICE 



DAIRY PRODUCTS MANUFACTURED BY POOL PLANTS, SHORT SEASON 

New York-New Jersey Milkshed, by Regions, November 1956 



MIL LB. 



REGION V 




1. Butter 

2. American cheese 

3. Cottage cheese 

A. Curd 

B. Milk-fat added 

4. Other cheeses 

A. Hard type 

B. Soft type 

C. Other 

5. Condensed whole milk 



KEY TO PRODUCTS 

6. Condensed skim milk 

7. Nonfat dry milk 

A. Roller 

B. Spray 

8. Dried whole milk 

9. Frozen dessert mix 
10. Cream 

11. Sour cream 
12. Other products 





REGION XIV 4 XV 


1 




'-> 


— E3__ ,-, 



1 2 3 4 5 6 7 8 9 10 11 12 



*LESJ THAN 50,000 POUNDS 



U.S. DEPARTMENT OF AGRICULTl 



1 2 3 i 5 6 7 B 9 10 11 12 



NEC. 6J9S-5«(6) AGRICULTURAL MARKETING SERVICE 



FIGURE 22 



31 



DAIRY PRODUCTS MANUFACTURED BY NONPOOL PLANTS, SHORT SEASON 

New York State, by Regions, November 1956 



REGION IX B 



2 - 



MIL. LB. 



REGION IV 



REGION VI 



1 

si 



jJilall 



1 ? 3 4 5 6 7 8 9 10 11 12 



KEY TO PRODUCTS 



1. Butter 

2. American cheese 

3. Cottage cheese 

A. Curd 

B. Milkfat added 

4. Other cheese 

A. Hard type 

B. Soft type 

C. Other 

5. Condensed whole 



6. Condensed skim milk 

7. Nonfat dry milk 

A. Roller 

B. Spray 

8. Dried whole milk 

9. Frozen dessert mix 

10. Cream 

11. Sour cream 

12. Other products 



• ilk 



* LESS THAN 50.000 POUNDS 



U.S. DEPARTMENT OF AGRICULTURE 



REGION V 




' 2 3 i 5 6 7 8 9 10 1! 12 



NEC. 4296-51(41 AGRICULTURAL MARKETING SERVICE 



32 



FIGURE 23 



MAJOR TYPES OF DAIRY PRODUCTS 
MANUFACTURED, BY REGION 

New York New Jersey Pool Plants, New York State 
Nonpool Plants, May 1956 



Dry whole milk 
Condensed whole milk 

Condensed whole milk , butler, 
and dried nonfat milk solids 

Other cheese, dry whole milk, 
and dried nonfat milk solids 

Frozen dessert mix, condensed 
whole milk, condensed skim, 
and dried nonfat solids 




Butter, frozen dessert mix, 
American cheese, condensed 
whole milk and cottage cheese 

Frozen dessert mix and cottage cheese 

American cheese and dried nonfat solids 

American cheese, butter, dried nonfat 
milk solids, and condensed skim 

Butter and cottage cheese 

Other products and cottage cheese 



- v [ t ».• '■<-! op aoaiCuiTuil 



0. (MI-MI 71 «01KUVIU«»». •«««!•« «•»'£« 



FIGURE 24 



33 



this near -market location in May 1956 than in any 
other region in the milkshed. This is unusual for a 
region so close to the metropolitan markets. Butter, 
being highly concentrated in terms of the fat component 
of milk, is usually most economically produced in the 
more distant parts of the milkshed and bulkier products 
tend to originate from relatively nearby sources. 

In producing products of skim milk, the areas adjacent 
to markets, such as the metropolitan areas of New 
York-New Jersey, Buffalo-Rochester, and Albany- 
Troy-Schenectady, tend to emphasize cottage cheese. 
On the other hand, the distant areas rely on the more 
concentrated skim products such as nonfat dry milk. 



Southeastern New York (region 2) manufactures butter 
and also ships large quantities of cream and so has 
considerable skim milk for manufacture. This region 
is the most important producer of cottage cheese and, 
in addition, manufactures sizable quantities of nonfat 
dry milk. As mentioned earlier, the area surrounding 
the Buffalo and Rochester markets (region 9-B) ranks 
second in the manufacture of cottage cheese. 

Southwestern New York (region 8), like southeastern 
New York (region 2), ships large quantities of cream 
and so has considerable quantities of skim milk for 
manufacture. Unlike region 2, however, region 8 uti- 
lizes the major part of this skim milk for condensed 



skim, and as previously mentioned, is the principal 
producer of this product. Large quantities of nonfat 
dry milk are also made in this region. 

The regions in which nonfat dry milk is the predomi- 
nant use of skim milk include central New York (region 
4), northeastern New York (region 5), northern New 
York (region 6), northwestern Pennsylvania (region 13), 
and northeastern Pennsylvania (region 12). With the 
exception of region 12, the areas where dried skim 
milk is the major product are those relatively distant 
from the metropolitan markets. 



34 



Theoretical capacities for most of the major products 
were developed on a daily basis and converted to a 30- 
day month. The basic information used was from 
equipment lists furnished by the New York Market 
Administrator. The following assumptions were made 
relative to the daily operating time for each individual 
piece of equipment: 

A. Estimated maximum net time of operation per day : 

1. Separator--ZO hours. 

2. Condensing pan--20 hours. 

3. Spray drier--20 hours. 

4. Roller driers--20 hours. 

5. Homogenizers- -20 hours. 

6. Cottage cheese vats --4 production periods 
during 24 hours. 18 

7. Cheddar cheese vats--3 production periods 
during 24 hours. 

8. Butter churns--9 production periods during 
24 hours. 

B. Other assumptions : 

1. All capacity calculations assumed that milk 
tests 3.6 percent butterfat and 8.6 percent 
nonfat solids, or 12.2 percent total solids. 

2. All cream for shipment is separated to 40 
percent butterfat. 

3. All skim milk is condensed to 40 percent 
total solids. 

4. Whole milk for shipment is condensed to 40 
percent total solids. 

5. Spray boxes are fed with milk or skim milk 
condensed to 40 percent solids for both skim 
and whole milk powder. 

6. Powder rolls are fed with fluid skim milk-- 
8.6 percent solids. 



nJ^ ^° duCtlon period is deflned « a complete cycle of operations in which the 
rcTiod ITkT is K ln v°lved. For example, in making cheese, the production 
period would be from the t.me when one batch of milk entered the cheese vat until 
the vat was ready for another batch of milk. 



APPENDIX 

Measurement of Equipment Capacity 



7. Cheddar cheese yields are 9.5 pounds per 
hundredweight of whole milk. 

8. Cottage cheese yields are 14 pounds per 
hundredweight of skim milk. 

9. Butter is made from 35 percent cream. 

10. Overrun on butter is 22 percent. 

11. Homogenized ice cream mix is composed of 
10.5 percent fat and 10.5 percent nonfat milk 
solids, or 21 percent total milk solids. 

C. The lists of equipment have the following limita- 
tions : 

1. The lists date over a period of approximately 
10 years. Thus, in many instances, the kinds 
and capacities of equipment may have changed 
between the date that a plant was surveyed and 
the time of this study. These changes may 
range from increases in size and type of 
equipment to actual closing of the surveyed 
plant. The market administrator's office has 
tried to incorporate such changes in equipment 
as have occurred, but the lists are still in- 
complete. 

2. Imperfections in the lists themselves were 
as follows : 

a. The capacity of some of the equipment was 
apparently incorrectly stated. For example, 
some equipment items were stated to have 
capacities smaller than the smallest piece 
of equipment manufactured. 

b. In some instances the capacity for certain 
items of equipment was not given. For 
these, capacities were estimated on the 
basis of capacities of related equipment 
in the plant. 

c. Two different forms were used for the 
equipment survey. On one form there was 
no place for recording the capacity of the 
plant for cooling the condensed products. 
Since the condensed product must be cooled 
for shipment, the lack of cooling capacity 
might serve as a bottleneck to the produc- 
tion of either condensed skim milk or 
condensed whole milk. Where the data were 
lacking, it was assumed that adequate 
refrigeration equipment was available. 



D. Other considerations: 

1. It would be possible to manufacture homog- 
enized ice cream mix in any plant with a 
separator, homogenizer, and mixing vat. The 
mixing vat could be either a pasteurizing vat 
or a storage tank. In order to manufacture 
mix with a normal total solids content, it 
would be necessary for such a plant to use 
purchased condensed skim milk or nonfat 
dry milk to achieve the desired concentration 
of nonfat solids. Assuming that a plant could 
purchase the necessary cream and nonfat 
solids in the form of cream and condensed 
skim milk or nonfat dry milk, it would be 
possible to make homogenized mix in prac- 
tically every fluid milk plant. The estimated 
capacities of equipment for homogenized mix 
were based on the assumption that a plant 
must be equipped with a separator, a con- 
densing pan, homogenizer, and a storage tank 
or mixing vat to manufacture mix. 

2. One limitation of these estimates of plant 
capacity is that the capacity for any individual 
product is determined independently of the 
capacity for any other product. For example, 
the separating process may yield 200,000 
pounds of skim milk per day on a 20 -hour 
basis, whereas the condensing pan may have a 
capacity for 300,000 pounds of skim milk in 
a 20-hour period. Thus, in terms of raw ma- 
terial the plant would be short 100,000 pounds 
of skim milk to reach the capacity of the 
condensing pan. Here it is assumed that the 
plant is able to obtain from other plants 
sufficient quantities of skim milk or raw 
cream to achieve capacity in any individual 
production process. 

3. A more important limitation, related to the 
above, is that the capacities for products 
using the same items of equipment are deter- 
mined independently. For example, a spray 
box may be used to dry either whole milk or 
skim milk powder. The separator can be used 
to produce cream for sale or for further 
processing into butter. In these estimates, 
the capacity for one product is determined by 
assuming that all of the equipment is available 
for use in producing that product. The capacity 
for the second type of product is then deter- 
mined, assuming that the same item of equip- 
ment is again completely available for this 
second product. This, of course, means that 



35 



7 



these estimates greatly overstate the capaci- 
ties in terms of pioducing a combination of 
products, all of which use the same equipment. 

4. When the theoretical capacity for each plant 
was estimated, no consideration was given to 
such elements as labor force or availability 
of milk. It was assumed that the plant could 



always obtain a* -mch.bulk milk and as much 
labor as necessary to fulfill its requirements. 

Again, limitations resulting from so-called 
traffic conditions were ignored, since there 
was no information available about the physi- 
cal organization of the plant facilities, and 
their effect on the flow of supplies and on 



product output. Finally, limitations resulting 
from the timeliness or untimeliness of various 
operations were ignored, since it was equally 
impossible to anticipate the schedule under 
which any individual plant would be required 
to operate by external forces beyond its control. 






36 



ft U.S. GOVBRN+»BN-T PRINTING OFFICER- 1910 



O -537814