BUTTER-FAT INDUSTRY.

Pukekohe & Waiuku Times, Volume 2, Issue 121, 22 August 1913, Page 2

BUTTER-FAT INDUSTRY.

New Zealand Dairy Association. Twelfth Annual Report. Big Meeting in Pukekohe. There were close U|jon 200 people at the annual meeting of shareholders of the New Zealand Dairy Association, held at the Oddfellows' Hall, Pukekohe, yesterday afternoon. The chairman of Directors (Mr Wesley Sprpgg) preside'. ANNUAL REPOKT. The annual report was read as follows: "Your directors have pleasure in presenting the twelfth annual report and balance sheet. "In some respects tte year has been a disappointing one—serious drought curlailed (he milk supply, and the London market has not been up to its early promise. The Association's manufacture, however, hss increased substantially, and quality of the butter supplied has been such as to please oar agents and custoieis both ia London and Canada, which fact is well attested bv the payments which have been received. At one point during the season, the Associations butter upon the London market realised a price equal to that quoted for the beat Danish I utter. In view of the marketing conditions which prevailed at the time, this is a striking tritute to the qaality and popularity of 'Anchor' and 'New Zealand Dairy Association' brandi of butter. There ia prospect (f the Canadian business showing satisfactory expansion this season, and if the tariff adjustment which is contemplated in the United States of America is completed, there ia also promise of a good market in that country. During the past season the Association's business upon the lncal market has been more than maintained. The volume of business for the year has, notwithstanding increased competitiun, been greater than ever before, that for the last mcn'.h in the year (June) being the largest in the history of the Association.

"The butter made during the year was 10,124,«741b5, this bein* an increase ot 904,7951bs oi the previous year's make. The average butter-fat quality of milk was 3.781 percent; the overrun was 1G.2 per cent.; the skim milk test average over all creameries was 0.046 p:r cent.

"In pursuance of a rew policy which was inaugurated during the past season, the advances from

month to month have been much higher than during the preceding season, the average increase being rather more than Id per lb. The Association's high advance has been greatly appreciated by new comers and by persons who desire a speedy reti.rn. The highest quantity bonus gained duri.ig the season was IJd per lb butter-fat.

"The sum of £6BC6 14i 3.1 has been allocated for tha payment of a profit bonus of 3-16 d per lb upon all butter-fat received during the year. "Provision has been made for the payment of a dividand of 6 per ceni. on the capital paid up on Jur.e 30th, upon shares allotted before March 31st last. The directors recommend this payment which will absorb £4179 18s.

"The total payments on a butterfat basis to shareholder suppliers at tha Association's largest creameries average for the year tie verv satisfactory sum of 12.47 d per lb (almost exactly equal to 12Jd), free of deduction for cartage or other account. The shareholder suppliers to the Association's smaller creameries receive proportionately less, according to (he amount of their quantity bonus.

"The unusually large sum of £5746 17s 7d has been expended upon repairs, renewals, and general maintenance for the year; the value of the Company's property has thus been particularly well maintained.

"Depreciation at the rate of 5 per cent, has been provided as usual upon the whole property; this will absorb £4031 12s 9d. "the Self-Insurance Fund at the end of the financial year was £2400. "The Reserve Fund star.d 3at £3213 13s.

"After careful consideration, your directors have decided to commence the manufacture o/' casein, on commercial line?, about October next. The drying station will be alongside the bu.ter factory at Frankton Junction station, and seven precipitating stations will be erected, mostly in proximity theret). Contracts for the necessary buildings and plant have been let The casein business is being undertaken a 9 an extended experiment, and, for tne comiDg year, will be restricted to the small group here local working conditions casein realises expectations the department will be extended. "Your directors have arranged for their chairman (Mr Wesley Spragg) to visit Great Britain, Europe and America, to investigate the marketing of the Association's butter, the influence of margarine upon the future cutter prospects, the marketing and manufacture of casein, the purchase of fertilisers, and the docking and warehousing of New Zealand butter in Great Britain. All being well, Mr Spragg will leave early during the present season."

"Dividend warrant*, with fkal bonus payments, will he sen! out directly after the adoption of this report." MR SPKAGG'S SPEECH.

la moving the adoption of the report Mr Spragjj read a v t ry lengthy speech. As this, if re* ported, would occupy three or four columns of our space we cannot find room for it to-:!ay, but we will make use oi it in future issue?. MOKE INFORMATION WANTED.

Mr McPherson, Pukcno, said the shareholders would like to know exactly what tiny were paying tor and the balance Eheet was not as full as they desired. For instance, there was one item, "salaries, wages, fee 3 and commissions £20,599 lis 2d " These items, they thought, should be shown separately. Applauae, Then as to the overrun, shown at 10.2 p=r cent., that was too high. Hear, hear. If it had been '3, 4, or 5 per cent, it would have been all right, and the Association couldihen make better butter and kecVpts reputation on the London markeTmuch better than

MR SMITH SPEAKS, Mr Smith, Kaipaki, declared that it wouH cost ltss to give the shareholders the information they wanted than a lot of printed stuff about another company that th2 shareholders wr.uld have to pay for. From tbe figures supplied he could not get fat the actual ovsr-run. Besides other particulars the speaker asked for, he wanted to know the co-t of manufacturing, including all chargea but excluding the 6 per cent, interest on share?. This latter had no connection with uutterfat, but was payment for money tha shareholders had taken out of their pockets. Rsfening to Mr Spragg's projected visit Hems he said that whatever informatim wasgotwouli be known to the other,companies within 24 hours, after this Association had spent their good mo ey. More than that, Mr Lovell would tell them til they wanted to know without going horns "and he will get information from channels that you (Mr bpragg) could sever gU at." Applause. Regarding tha casein venture he wanted to know if, in the event of a 1033, the loss was to be borne "all over." , CLASSIFICATION OF CREAMERIES.

Mr Davis, Patumahcs, said he thoug-ht the present system of classification ot creameries had more to do with driving people to home separation than anything else, because they did not get the same price as the local factory. He tSought they should all get the same price. Mr Waugh: That's true co-opera-tion!

Mr HigginsoD, Aka Aka, said if they were all paid the same price Aka Aka would go in for co-opera-tion "on its own."

Mr McNaughton: Why don't ycu start yourself? Mr Smith said the systsm of grading creameries should be overhauled "so a3 to get at this confounded home separation business." Mr Morgan, Pukekohe East, said he had been a hom2 separator and the results from the Association were equal or better than last jear, he had more time to work on the farm, and things had gone along easier. "Don't you think," he asked, "that it is the home separators who have caused the large overrun?" —Luud laughter and applauss. "It is presumed that sines you cannot test the cream exactly this is the explanation of your over-run. —Further merriment The Eist trreamery had to close down and most ot them who were supplying cream were now satisfied except that they shuiild not have to pay for catting the cream, Before the As.ociition paid and it paid for the coal, etc. Now, the suppliers ran their own separating machinery, used their own labour, paid for their own coal, and they thought the Association should pay half. The creamery lost any cream through the machinery going wrong, but the home separators only got paid for the cream they actually supplied. Mr Hayes, Wa'uku, said that he knew that many people were dissatisfied, and although he was a supplier to a large creamery he btlieved in true co-operation and that they should all share alike. Ha favoured home separation but urged that only the very best cream should fce sent in. He ridiculed the suggestion that any cream lojs at a creamery was borne by "the company," whereas a loss in horns separation was borne by the individual. "Who is 'the company?' " he asted. And answered his own question by saying, "the suppliers'!' KEEP IHEM SEPARATE.

Mi McGuinness said that some suppliers of home-s2p3rat d cream were in trouble about (he carting. He failed to see how they coull mike as good butter from the ".little drops of collected cream" as they could from a whole milk supply. He urged that the homeseparated cream shoulj be kept separate and sold separately, the home-separating people to pay their share of manufacturing, etc. If it was found that a better quality article could be turned out from whole milk, then whole milk suppliers should get, more for it.

Another speakei announced himself as the winner of prizes from home-separated, and declared that as good a butter could be made from home-separated cream as from the creamery article—provided it was clean! Mr Spragg: Hear, hear! Mr Codlin was another advocate of all suppliers being paid alike, and instanced one case where a supplier should have gone to Waiuku but he went to Otaua because he could get a little more. Mr Jolly Baid the butter should be made up in pats and it would then fetch Id to 2d per lb more. FACTORY FOR WAIUKU. Mr Hodgkin:on urged that Waiuku was entitled to a factory, which contention was endorsed by another speaker, who said that the next cream contract would b3 50 per cent dearer than the last,

Mr Arthur Hull complained about the management failing tu provide Waiuku cream?ry with proper appliances, whereby great loss of time was occasioned. FEED THE COWS.

A little home truth was told by still another. They had heard, he sail, a good deal about culling and testing, but he thought that feeding the co\V3 waa the main thing. Farmers in Auckland province had absolutely no excuse about the shortage of feed; they could grow maize every year. "Feed and cover are the things," he concluded, "tut feed first every time." Question: "What is the actual cost of putting our butter on the London market per lb'.'

Another wanted to know what was the cost of carting the cream from Aka Aka. One supplier now goes to Waitangi who, if he had gone to Aka Aka, would have got £3O more last year. But it cost the Association more to bring the cream from Aka Aka than it did to bring it form Waitangi. Was Aka Aka cream any better' They were supposed to be a bona ride co-operative company, and he failed to see why one creamery should be paid any more than another.

A supplier: It strikes me some speakers are contusing the words co-operation and charity.—Applause. Mr liwing, Whangarata, considered that the creamery grading was all right. One farmer might live near a station and another two miles away. But the man who had to cart two miles in and out only got the same price for his produce, Each creamery now gct9 exactly the return Irom its butter fat that the

butter brings when sold Ices tlie cost of producing it: that waa true to-

CO-OPERATION IN CARTING, Mr Cummings rejoined that if the farms were run cc-opeiatively there wculd be charge and charge alike. There se.-mcd to be cnly one thing in which this Association wa3 co-operative, and that wa3 in carting the cream! A Mauku representative d:clared it to be tfeir misfortune in his district that they cuuld not git land at less than £3O an sere, but they got less for their cream than others. Mr J. D. Chalmers, Glenbrook, congratulated the Association upon , taving the annual meeting in Puke- , kohe. The butter factory at Waiuku, he said, was a subject which should be considered; the roads tf.at had , now to be traversed were something cruel. In his view true cc-:peratio;i was share ana thare alike, but the Association seemed to have become a joint stock company. Mt tianiball, Waitangi, generally commended the Association. MR PACEY REPLIES. i Mr Pacey, general manager, was . warmly applauded jpun rising to reply to the various questions which had been put. He ocencd hy giving his definition of co-operation—the receiving of profit fjr whatever the individual contributes to the general fund, wh.thar in cash or in kind—--1 as opposed to communism which contemplates equal shares not only of profit but of existing capital. 1 The members of this Association got : the most by helping each other and the individual result was according to the contribution of each. The principle" they adopted was that all cream received at Pukekohe or 1 Ngaruawahia should cost the same to the Association. The cost of carta»e was distributed evenly, eo that when it cams to determining the factory site those fortunate enough in living close to it, and who had nothing to do with its location, should not benefit at tie expense of the others. He recognised that there was a good deal to be said in favour of Waiuku as a central factory. The directots had given this question consideration but new factors had arisen, the Waiuku railway, for instance, and the directors wanted to see what 1 effect that would have. Mr Pacey proceeded to explain that £384 a year was the cost of running a medium creamery, of which £123 was paid for the manager, £9O for cartage, £44 for fuel, £26 general, £3O maintenance, £3O de- : preciation, £36 interest on capital, £5 for man's allowance (butter, fuel, eU.). O.i an average these creameries ran 48 weeks in the year, or £8 Is 4d per week, ana the creameries equalled a weekly supply of 22651bs butter-fat. The working expensed equalled .854 pence per Ih, or neaily Jd. Such a creamery got a quantity bonus of eleven-sixteenths of a penny. If to these sums 9J per lb advance be ad'ed, the total cost would be 10 542J per lb. The delivered-at-factory cost of the cream from the little creameries was 10.8 d, from the medium creameries 10.54 2d, from the big creamnies 10.533 d. The respective butter-fat supplies would be 80U, 2265, and 82501ts per week. In the matter of cartage the big creameries were helping the smaller places along by nearly onefarthing par lb. It was a matter of businc:a prudence to help these little places along, because they had a habit of growing into bix places. He instanced Aka Aka and Otaua Replying 10 Mr McPherson, the manager said the statement of accounts was at leant as complete as any put forward by any co-operative company in the Dominion, and mwre complete than most. They showed that the maximum paid at any place was 12 47d, and the maximum qiantity bonus wai ljd, and with those figures any other creamery could find how they fared in comparison from their own figures. The suggestion had teei nude that some creameries were receiving as low as lid p:r lb; this was not correct. The smallest payment was ll|d per lb, and that creamery only pave IOOIbs butter-fat per day. The directors did not desire to do si, but complied with the wishes of the suppliers to keep it open. Touching the over-run, he wa3 interested in thi suggestion that it was too high; his ambition was that it would get a little higher in the near future. There hai been a general tendency to increase the water content of the butter, and that hr.d increased the over-run. Replying to the question about casein: A promise of an additional lid per lb of butter-fat had been ma'ic to all who would leave their skim milk to te treated for casein; if there was a loss it would be borne by the whole of the company. Mr Morgan might very well have d:ne better by homeseparating as be wa3 supplying a small creamery which could not carry itself, He could not say how much second grade butter had been made, but it was considerably less than one per cent. As to the suggestion that home-separated cream should be manufactured separately, there was a lot to be said in favour of that, but the trouble would be that labour would have to be duplicated, which would multiply the expense. It had bein siid that the Waipou had done extremely well with home separated cream. He entirely agreed that if clean, sweet cream were brought in daily in the summer as at Waipnu they would nmke butter that could hold its own anywhere. In reply to the suggestion that the butter should bisent Hnmi in pats, It has be?n four.d that this did not meet the requiiements of the trade so well as bulk butter, but if Mr Spragg found during hi 3 f'jrth'.oming visit that (litre wa3 now a prospect of doing better with pats than with bulk something in that way would probably be done. The business of the Association, he said, was better consolidated th;»n it had ever been, and the people were never fo enthusiastic or so proud of their own company than they are to-day. After visiting different districts it was his firm opinion that next year the Company would have the biggest supply it had ever handled.—Applause. SHqULD I GO HOME?

At this sta»e Mr Spragg said he would like this big meeting to give the directors an expression of opinion as to whether he should make the projected tour on behalf cf the Compiny. They were sending Home hali'-a-millicn pounds worth of money value and should be bokmg alter it at the other end more closely. Hut he did not want ta go—he had bren Home often enough to satisfy him and the shareholders should express tin ins, 1% ea.

A vjte was taken and an overwhelming number voted that the

DIRECTORS' HONORARIUM Mr Ewing, Whangarata, moved, "That the honorarium of the directors be increased to £SO per annum." Last year, at Hamilton, he moved this resolution and it was then decided to hold it over for a year. There was not one of the directora who had been elected but who had been out of pecket, The last year he was on the directorate h 3 was away from home 47 days on the company's business and haj been paid £25 for it.

A voice: Did jou get expenses? Mr Ewing: Yes, I got expenses. The voice : You did pretty well, then. Mr Makgill warmly supported the resolution, pointing out that the increase would not mean more the n one penny from every 2(>3lbs of butter-fat tl at was produced It was a reflection en the dignity of the company that the directors should receive such a miserable pittance.

Other speakers held that the position was one of honour, that the directors were looking after their own .business, that every man should be prepared to do something for the community without expecting payment, that there were plenty propared to " take the job," that none of the directors seemed anxious to retire because of the sacrifices they were called upon to make but rather that they sought re-election, and so on. Said one speaker : "If you are going to pay anybody more you should start at the other end, with the cream carters and the coal carters," a sentiment which was loudly applauded. A forest of hands wont up against the motion, which was lost,' On tho motion of Mr Makgill the directors, officials and staff were thanked by acclamation for their ex-. cellent services.