With variable intermarket price relationships between Omaha and the outlying market areas, the use of a single adiustment factor for nonpar delivery points will not sŸ improve hedging opportunities. Using the Guymon (OHahoma) point to illustrate, the need for more sophisticated adjustment procedures or consideration of separate contracts is demonstrated.

Changes occurring in the dairy industry necessitate modification of the pricing system for fluid milk. Alterations in the present federal order pricing system, however, will not only affect the level of producer and consumer prices but also have different regional impacts.

Equilibrium in a free market can result in prices and quantities which maximize society welfare for a given resource distribution. Departures from equilibrium of the competitive model will involve changes in net social gains and losses not only for the national economy as an aggregate, but also for particular groups or regions. The trade-offs between groups or regions, in fact, may be much larger than the aggregate changes averaged over all groups.Departures from equilibrium under restricted pricing conditions, such as exist with the federal order marketing system in the fluid milk industry, also will involve social gains and losses on national, regional, and local levels. Given the rapid decline in Grade B or manufacturing grade milk production, the concern about equity, and the evolution of new institutions in the milk market, conditions affecting equilibrium in the fluid milk industry also must change. The nature of these changes can have marked effects on the benefits received by the participants in the industry.

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