OVER-RUN EXPLAINED.

Hauraki Plains Gazette, Volume XXXII, Issue 4334, 26 October 1921, Page 1

OVER-RUN EXPLAINED.

A PROFITABLE PRODUCT. “What is the over-run ?” This question puzzles many people. The answer was supplied by Mr A. J. Sinclair, assistant manager of the New Zealand Co-op. Dairy Co., Ltd., while in Morrinsville recently. He said that in every 1001 b of butter made 201 b of it consisted of over-run, which cost practically nothing. In a pound of butter there was 16 per cent, of water, t.he maximum' allowed by law, 2% per cent, of salt,, and 1% per-cent, ofi curd and ash. Salt cost £8 per ton, but was sold as over-run at the rate, of £2BO per ton, so that the cost was almost indeflnitismal. There was a theoretical over-run of 23 per cent,, in bu,tter, but actually it was less than that. In every 1001 b of butter packed one pound was added for “the tip of the scale,” in accordance with the custom of t,he trade. Then there were mechanical losses ranging from two to three per cent. With a 20 per cent, over-run in an output such as the New Zealand Dairy Co’s, there was a wide margin of profit. That was why the company could pay 2s 9d per lb butter-fat when butter was sold for Js 6d. The company’s enemies had suggested all sorts of unfair practices, which enabled them to make such a big pay-out, but Mr Sinclair assured his hearers that everything was straight and above-board. The company last year sold 12,6'60 tons of butt.er. Of that amount there was 2532 tons represented: by overrun which cost nothing to make. The value of the over-run to the Company last year was £709,000. Out of this sum the company could well afford to pay a bonus in excess of the amount that was actually received for the butter content only.