PAPERS READ AT THE WINTER MEETING OF THE BRITISH GRASSLAND SOCIETY IN LONDON ON 10 DECEMBER 1971.

The sharp seasonal difference in the price schedule for milk produced in this country has been a consequence of concentrating the industry on the supply of milk for the liquid market and the wide price-gap existing between milk for the liquid market and milk for manufacture, a result of the free import of dairy products. Seasonal pricing has thus been intimately related to the Government's general policy on the size of the milk industry, and on international trade. The policy framework will change when we enter the EEC. Then the gap between liquid and manufacturing prices will be smaller. The general level of producers' prices will be higher and deliberate policies of restriction on total milk output will have gone. On a reasonably conservative assessment of the likely liquid premium in the UK within the EEC framework, the Milk Marketing Board have concluded that it will be possible to maintain the present absolute level of seasonal price differentials. More doubt is attached to the possibility that there could be any increase in relative winter prices to cover the greater increases in cost that winter producers will suffer from rising prices for concentrates. Switching output from winter to summer raises the cost of manufacturing dairy products, and also increases transport costs. A modest estimate of these additional costs has been calculated to be of the order of £13 per cow if she is transferred from calving in the September- November period to the February-April period, or 1-5 pence per gal of milk transferred. On the farm side, having regard to the evidence of the Milk Costings scheme and other sources, there is some doubt as to whether spring calvers will produce milk sufficiently cheaply to justify the additional marketing cost. Having regard to all the doubts about costs and marketing, the Board have decided to leave the seasonal price schedule unchanged and to make no move in favour of summer production. [ABSTRACT FROM AUTHOR]