OVERRUN IN BUTTER FACTORIES.

Shannon News, 5 December 1924, Page 3

OVERRUN IN BUTTER FACTORIES.

meaning of term— importance TO SUPPLIERS. The expression of "overrun,” although familiar to suppliers of dairy companies, is hardly ever properly understood by the man in the street The .expression itself seems to convey something in the na/ure of a loss,, something going to waste, while as a matter of fact, the overrun of a butter factory is exactly the opposite. It represents in a sense a gain or a profit, which reflects on the working of a factory to the same extent as that gain is large or small. Meaning of Overrun.

To understand the meaning of overrun, it is first of all essential to understand the difference between butter and butterfat. While “fat” is the sole component of butterfat, butter is not all fat. On the other hand, while the factory pays its suppliers per lb. of butterfat contained m his milk or cream, it sells the product from such raw material per lb. of butter. The difference, therefore, between butterfat and butter—both in quantity and value —represents the "over-run." After separating the cream from the milk and churning the cream, we obtain what is commonly called “butter,” but which is really butterfat curd and moisture. The relative proportions of butterfat and moisture, unless properly controlled, are subject to great vacations and for this reason, laws, have been passed in the various countries governing the proportion of butterfat arid moisture in commercial butter. In New Zealand commercial butter must contain not less than 80 per cent of fat and not more than 16 per cent of moisture. Butter factories selling or exporting butter below or above these percentages are subject to heavy fines. Theoretical and Practical Overrun. Theoretically ©therefore, 801bs. of butterfat would produce lOOlbs. of commercial butter. The difference between butterfat and butter represents 20lbs. being one fourth of the amount of butterfat or 26 per cent. It is this difference which is called “overrun:’’ Converting this quantity into monetary value, and, assuming that the dairy company paid 1/6 per lb. butterfat to the suppliers, and sold the butter at the same price, the factory would have a margin or overrun of 30/- on every 80xbs. of butterfat bought or every lOOlbs. of butter sold. In other words, a butter factory is in a position to pay the suppliers the same amount per lb. of butterfat as it actually received for the butter made; it can further pay all its manufacturing cost and selling expenses out of the overrun arid still have a substantial margin in hand. In practice, however, no factory can honestly , obtain an overrun of 25 per cent. In the- first place there are many unavoidable losses in the handling and manufactui’ing of the raw material. Secoridly, no factory can so control the component parts* of commercial; butter as to profit by the utmost limits of the standard of butterfat and moisture. The average commercial butter manufactured by New Zealand factories consists approximately of the following parts:— Butterfat , 82 per cent. Moisture 15 per cent. - Salt 2 per cent. Curd * 1 per cent. A factory making butter with such proportions could show an overrun of 22 per cent, were it not for the unavoidable losses in handling the raw material already mentioned. Many butter factories are in a position, however, by means of modern and effcieht machinery, to work closer to the legal limits of fat and moisture than shown above and an overrun of 22 per cent is by no means uncommon with an up-to-date butter factory. Unavoidable Liosses.

There are of course many causes — both mechanical and otherwise —affecting a factory’s overrun, in fact, so much so that the expression of “overrun” is a word to be conjured with among the suppliers of a butter factory. The first and biggest loss is made when separating the cream from the milk. Where a factory handles cream only, this loss is incurred on the farm, but where whole milk is supplied the loss is made by the factory. It is obvious, therefore, that a factory collecting and receiving cream only will avoid this loss, and in con"sequence is in position to obtain a | bigger overrun than a factory that is handling whole milk. The difference of overrun in such a case may be anything from 2J to 3 per cent, in favour of a factory handling cream. Small losses occur right through the process of manufacture. There is the loss in cans, tanks, pasteurisers, coolers and vats. The greatest loss during manufacture, however, takes plase in the churn by- way of fat lost in the buttermilk. / Although all these losses are more or less unavoidable, ; they may vary very much with different factories, principally due to careless handling and inefficient plant and machinery. It is On account of “avoidable” losses that the different factories show such a big differentiation in their overrun. Manipulating Tests. I There exists a mistaken idea in the } minds of many suppliers of dairy j companies that the amount of overrun I is more or less regulated and govern■l e'd by the man in charge of the testi ing. As the supplier is paid according' to the butterfat content of his j millcr-which in turn is ascertained by j a recognised methocf of testing, it will I be seen that the amount of overrun * could easily be increased by reducing the suppliers test. The ambition of every factory manager of showing an overrun as high as possible and the simplicity and facility of manipulating the suppliers test, have had the effect of convincing every supplier who is not satisfied with his particular test that such is actually being done. It must, however, be said in honour of 5 the factory managers of New Zealand, - that in ho country has the Industry a class of more conscientious and

fairer-minded men in charge of its dairy factories. In order to overcome existing prejudices and allay any suspicion in this direction, many factories have appointed * independent testers, > men who have ho other connection with the factory. In other factories, suppliers are welcome, and encouraged, to take their own samples of milk and cream in order to test themselves or have them tested by outside experts. Value of Overrun, The value of overrun to the average butter factory is very considerable and of vital importance. An average size factory making say, 100 boxes a day, turns out approximately 76 tons of butter a .month. Basing our calculation on a 20 per cent, overrun, and butter on present-day value, 1/8 lb., the overrun of such a factory would be worth £3240 a month. From these figures may easily be judged the important part played by the overrun in a factory’s work for the 'Season. Variations in overrun and fluctuations in values of any kind may mean thousands of pounds during the month to the suppliers of our larger size factories which are manufacturing butter and cheese in ton! weights every day.