CO-OPERATIVE DAIRYING.

Gisborne Times, Volume VI, Issue 168, 27 July 1901, Page 3

CO-OPERATIVE DAIRYING.

AND ITS ATTENDANT ADVANTAGES

[By AY. Douglas Lysnae.]

NECESSITY OF CO-OPERATION.

Dairying is essentially an industry that is more dependent upon ‘labor than capital; there is a great deal of drudgeryattached to it, and for these as well as other reasons it is only fair and equitable that the whole of the profit should be retained for the farmer and not for the middleman or proprietor, who takes the cream and the farmer the skimmed milk, and unless the farmer and his family are able to get the full benefit of the whole financial gain from his cows the industry does not prove to him a lucrative one, and the immediate consequence of this is that they lose heart and get worried by the drudgery, then get indifferent, and finally abandon the whole thing, with the belief that it is not the game it is cracked up to be. But I think if there are any farmers in this district who have found that they have not made so much out of the in-

dustry here in the past as they expected, and if they will follow the facts and figures I give below, they may see reasons why the industry has not been more profitable to them individually. A fanner who milks, say, 10 cows through the year should obtain at least 2,701bs of butter fat in a season of 10

months per head. To do this be may require, for various reasons, to effect substitutions so as to obtain a fair maximum result from his available resources. Every lOOlbs of butter fat will yield, on an average, about llOlbs of marketable butter, so the 2501bs of butter fat obtained from one cow for the season would yield 27",1bs of marketable butter. Now, I will work the result of this out in two ways. Last season, for the summer months August to April), I understand the local

factories were giving 7d per lb for butter fat, so if the farmer had sold his 2501bs of butter fat for 7d per lb he would have received from the local factories the sum of X 7 ;7s lOd per cow.

I am not taking any- notice of the price in the winter months (May, .Juno, and •Inly), for butter fat, which is 8d per lb, because there is a corresponding increase in the value of the butter produced in the winter months which would moro than counterbalance the extra penny per lb for the winter month included in the above calculation.

Now, let us see how this pans out for the factory owner ; allowing the butter to be worth lOd per lb, if sold locally 2501bs of butter fat will yield

Then let us try to ascertain the net return of this, and to do this we must necessarily have to take an assumed case, and work it out on prudent linos. It must be conceded that a properly equipped factory to handle the milk of 600 cows could be built and equipped for .61800; so if we take this amount as the capital involved it would work out in this way

This gives a net profit to tho factory owner of A 3 Is lOd per cow, after allowing all charges, interest and expenses. Deduct this amount off the A 4 3s 4d for the gross profit to factory owners as noted above, it shows that the total charges and expenses proportioned against each cow would be X' l Is Gd for the season, or in other words the farmer has lost To Is lOd upon every cow he has milked for the season. These figures speak for themselves, and will enable any farmer to see at a glance what he individually lost on each cow by selling their butter fat right out. But if the factory had boon run on co-operative lines, taking a farmer who milked, say 20 cows, ho would have drawn his X 7 3s JOd for tho butter fat at 7d per lb for each cow, and at the end of the season he would have a nice little cheque of A 3 Is lOd per cow to draw in addition, amounting to the modest sum of A6l Ills Bd, which should leave a fair surplus after paying rent for grazing 20 cows.

By these figures it shows that tho farmer obtains a gross return of A 7 5s lOd for his butter fat per cow, out of which he has to pay expenses including rent, run all risks in stock, etc, and stand all the drudgery, while the factory owner who has no risk and no drudgery quietly pockets A 3 Is lOd per cow after allowing for all expenses etc., and A 3 per week for himself as a result of the farmers’ labour. If figures prove anything they show that the dairy farmers of Poverty Bay are doing an injustice to themselves, to their children, and to the district as a wholo by accepting 7d per lb for their butter fat, and instead they should unite and realise tho necessity of starting a co-operative factory of their own, so as to retain to themselves a more equitable proportion of the real profits of their labor.

I have no doubt whatever that these figures I have given will be questioned and challenged by those who are interested in the continuance of the proprietory factories here, but if each individuual farmer will quietly consider them himself, he will come to the conclusion they allow a very big margin for mistakes, and even then will show too much of his hard-earned profit is going to the factory owner, and in making these calculations it is to be noted that they are based upon the moderate estimate of lOd per lb for butter, but if the farmers had a co-operative factory of their own I have little doubt that they would find their profits still greater by taking advantage of Home markets in tho same way as a very large proportion of tho dairy factories do in Taranaki. There the great bulk of tho butter is sold to the representative of Messrs Lovell and Christmas, provision merchants, London, upon the following terms : A cash payment per lb is made on all butter shipped free on board. This cash payment is regulated according to the markets generally. Then the firm gives in addition all profit in excess of the cash payment, after deducting freight, insurance, and 4 per cent, commission, including storage, delivery, etc. By this means the farmer again obtains the full benefit of the Home market for a very modest commission of 4 per cent., the firm on the other hand taking all risk of the butter realising the cash advance. If there is a loss the firm do not come back on the farmer for it,

Mr James Kowiu, the representative of Messrs Lovell and Christmas, in the Taranaki district, informed ine that the first year his firm purchased A 2.000 worth of butter, and six years afterwards they purchased in the Taranaki district during one season A 60.000 worth, and at the time he gave me these figures he said he had that week alone paid A 13,000 in advances for butter. Just imagine what it would be to this district if it only had the A 60,000 paid to the dairy farmers here in one year, and there is no reason why it should not be considerably more, for it must be borne in mind that the figures I have just given are only the payments by one firm alone. What about all the other firms and agencies throughout the Taranaki district ?

275lbs marketable butter at lOd per lb £11 9 2 Less 7d peu lb for 2o01bs butter fat paid to farmers 7 5 10 Gross profit to factory owners for each cow £1 3 4

Interest on 411800, cost of factory and plant, ineluding ‘2 separators, at 6 per cent for 10 months ,£90 0 0 Manager sav Li) per week for JO months 126 0 0 Assistant say .£2 til 0 0 2nd assistant say <£1 ( probably not required) 44 0 0 Fuel 250 0 0 Wear and tear, rates, cartage, etc., say 50 0 0 LG64 0 0 Gross return from GOO cows at £11 9s 2d each .£6875 0 0 Less £7 5s lOd paid to farmers on butler fat from 600 cows 4675 0 0 Less interest on capital and working expenses 644 0 0 5019 0 0 Gross profit to factory owners on 600 cows for a season of 10 months 421856 0 0