THE OVER-RUN EXPLAINED.

Manawatu Herald, Volume XLIII, Issue 2351, 5 November 1921, Page 4

THE 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 on Friday evening, says the Star. He said that in every lOOlbs. of butter made, 201bs. of it consisted of over-run, which cost practically nothing. In a lb. of butter there was 1(1 per cent, of water, the maximum allowed by law, 21 per cent, of salt, and 11 per cent, of curd and ash. Salt cost £8 per ton, hut was sold as overrun at the rate of £2BO per ton, so that the cost was almost infinit esimnl. There was a theoretical over-run of 23 per cent, in butter, but actually it was less than that. In every lOOlbs. of butter packed, one pound was added for “(lie tip of/ the scale” in accordance with the custom of the trade. Then there were mechanical losses ranging from two or 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 2s (id. 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-hoard. The company last year sold 12,660 tons of hill ter. Of that amount there was 2,532 tons represented by over-run, 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 (he amount that was actually received for the butter content only.