THE OVER-RUN EXPLAINED.

Shannon News, 8 November 1921, Page 2

THE OVER-RUN EXPLAINED.

A PROFITABLE PRODUCT

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 Go., Ltd., while in Morrinsville on Friday evening, says the Star. He said that in every 1001 b of butter made, 201 b of it consisted of over-run, which cost practg cally nothing. In a pound of butter there was 16 per cent of water, the maximum allowed by law, per cent of salt, and 1J per cent of 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 infinitesimal. There was a theoretical over-run of 23 per cent in butter, but actually it was less than that'. In every 1001 bof butter packed, one pound was added for “the tip of the scale” in accordance with the custom of the 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 butterfat when butter was sold for 2s 6d. The companies enemies bad 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 12,660 tons of butter. Of that amount there was 2532 tons represented by over-run, which cost nothing to thalce.’ 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.