THE DAIRY DIRECTORS' DILEMMA

Taranaki Daily News, Volume LI, Issue 223, 14 September 1908, Page 4

THE DAIRY DIRECTORS' DILEMMA

| SALE v. CONSIGNMENT. The " Dominion" quoted portions of our article dealing with the sliding scale system of purchasing- butter output, i.e., offering varying prices for the butter produced iu different months. The scale under which some factories liawsold is as follows:—September butter, lsi'/sdper lb.; October-November, ll'/od;. December-January, 11 '/j d; FebruaryMarch, lid, and this is generally reckoned to be equal to a straight-out offer of ll%d per lb. The Dominion pointed out that our calculations were based on the (monthly quantities of last sea-, son, which were, of course, exceptionally weak towards the close, and urged that this mode of basing the calculation rather exaggerates the prospects. Just in those months (toward the end of the season) when the prices in the sliding scale are lowest, the quantities last season fell off considerably in most factories. In an ordinary season Inuch more butter would be produced after the price fell ibelow 11 '/.d, and thi ri circumstance would greatly reduce the net return per pound. Bearing in mind, however, the necessity for basing calculations on the relative quantities of < an average season, or the season that farmers expect the present season to be, directors and secretaries will be quite alble to put a fair value on the sliding scale." We have since obtained the 1900-7 figures from the secretary of the company whose workings were quoted. The output wa s as follows: lbs. September .. .. J1,7:J8 October 23,71111 November .. .. 30.719 December ~ ~ 30,23!) January 33,7!11) February .. .. 28,288 March 27,820 1»2,370 llad this 1D2.375 lbs. of butter bt-en sold oil the sliding scale it wouTd have brought £!)07.3 10s 4'/ 2 d. At a straightout sale the returns, would have lieen .-Cill-17 15s Od, a difference of £42 3s l'/od. The sliding scale, therefore, was not quite as good as ll%d per lb. all round, but still the offer is better than the ll'/sd quoted by the agent whose remarks gave rise to the investigation. A straight-out sale of produce at 11 v 4 d would have produced only ,C8!I17 7s Bd. The pleadings of the consignment agent, and the carefully-planned offer of the buyer are certainly matters that must give directors of dairy compapies grave concern, but there seems now to lie an inclination towards selling at a little better figure than the sliding scale quoted above.