THE DAIRY INDUSTRY.

Taranaki Daily News, 21 July 1922, Page 8

THE DAIRY INDUSTRY.

THE PATUA COMPANY. SEVENTH ANNUAL MEETING. The seventh annual meeting of shareholders of the Patua Dairy Company was held .«t the factory yesterday, when Mr. W. Honeyfield (chairman of directors) presided over an at-* tendance of about 40 shareholders. The report for the year ending May 31 stated: "It is verj* gratifying to see such a substantial increase in the quantity of milk received. Although the prices received for our produce were considerably less than expectations, the weather conditions have been excellent, and the consequent increaes in our output (nearly 33y 2 per cent.) will in no small measure assist in making up for the reductions in price. •‘The quantity of milk and cream received, and the figures relating to production, are shown hereunder: —Number of suppliers, 45 ; quantity of milk received for cheese-making, 3,882,685 lb;. quantity of milk received for but-ter-making, 4,555,200 lb; quantity of butterfat received. 340,771 lb (cheese 157,815 lb; butter 182,956 lb) ; average test, 4.03 per cent. ; quantity of whey butter made, 8084 lb; quantity of cheese made (factory weight), 411,529 lb; quantity of cheese made per lb butter-fat (factory weight)! 2.60 lb; lbs of milk to lb of cheese. 9.43; quantity of butter made, 221,443 lb; overrun, 21.03 per cent.; lbs of milk to lb of butter, 21.57 lb. “During the year the sum of £17.273 Is 8d has been paid to suppliers, being equal to 12.16 d per Ih of butter-fat. After providing £7l for depreciation, there remains a balance of £755 0s 3d to the credit of profit and loss account. All our cheese has now been shipped, and practically the whole of our butter Manufactured up to May 31, 1922; but as tbcre are still several shipments on the' water. It Will be some months before the account sales are to hand and the final results of the season kncwr. An interim payment will be made at the annual meeting, and the balance will be paid as soon as the results of the last shipment are to hand. Owing to the phenomenal supply of milk during the past season, and also the low prices received for a considerable portion of our produce, the directors have decided not tn request shareholders this year to midßß ttwtr in accordance with the Mevteten of Article 3 of the company's articles association, except in the case of suppliers'who joined th; company during the season." CHAIRMAN’S ADDRESS. In moving th? adoption of the report and balance sheet, the chairman congratulated shareholders on the progress of the company. As a ccr.sldcrr.ble amount of the produce was still on the water, and I’’? result of the shipments would not be available for some time, he could not at the present juncture give reliable information as to what the average payment would be, but he did not think it was likely to exceeO 14d or 14%d. The first seven shipments totalled 2405 boxes of butter. Thif showed a loss of £1378, which had practically all been liquidated by surpluses on subsequent shipments of butter and cheese. The balance to the credit of profit and loss in the balance sheet was n»*.

Throughout th- season both the butter and cheese markets had been so unstable that it had been most difficult for any board of directors to know what to do for the- best. During August and September last, when the new season was opontag, market prospects seemed good, and it was ‘anticipated that belter would net from 1/9 to 2/- per lb buttcr-fEt and cheese between lOd and Is per lb. One or two c.i.f. selling firms were operattflfc. and offers of about lOd per lb for cheese were, he believed, made in some instances for small outputs. In Taranaki, very little businessxresulted at these prices, the idea of value of most boards of directors being about 1/- for cheese an'i 2/- for butter. He understood that quite a number of South Island cheese factories had disposed of their outputs at these prices, and had consequently been in a very good position for the year as compared with consigning factories. At the beginning of the season the prospects for butter looked better than for cheese, and consequently, in company with other dual plant factories, they kept on to butter; but before their first shipment of 108 boxes arrived jn London on November 20 the market had Ipegun to show signs of weakening, and within the next few weeks it became demoralised, the chief cause being the large amount of Imperial stored butter suddenly put on the market.. The directors, who were watching the position very closely and were in constant touch with their Home agent, could see little hope of much improvement in butter during the remainder of the season, and as cheese was at that time holding firmer, they, in common with most factories having dual plants, turned over to the manufacture of cheese. Indeed, several London firms advised their clients to manufacture cheese as quickly as possible, but, unfortunately, th r ■ turned out a wrong one. The low price nf'TuHe- on tlie London market during Dec., ‘■/-■'rini' January caused a very big increase in consumption, and before long a reaction took place and prices had been steadily hardening ever since.

7ir first shipment of cheese (193 crates) was shipped by the lonic early in January last; 6d per lb was drawn against this, and a surplus of £ 124 6s 6d resulted. The next three shipments also averaged out satisfactorily. In regard to shipping space allotments, there had been very little difficulty with butter right through the season; bu the cheese position had been most unsatisfactory since January. Cheese-making had ceased by the end of March, and by the lonic early in June the last 283 crates were shipped. It was hoped the market would remain firm until the shipment was cleaned up. Whilst the season had been a very trying one as regarded marketing, from a production point of view it had been an ideal one, and this had' in no small measure helped to bridge the gap caused by low prices. In concluding, he thanked the directors for their loyal assistance during the most strenuous year he had ever experienced in the dairy pror duce business, and he hoped they could look forward to more settled and prosperous times. This was seconded by Mr. H. Smith. THE DISCUSSION. Mr. Thomas said that he wished to move an amendment, but would wait until he had asked several questions. He wished to know what it cost to manufacture a pound of butter. The secretary stated that where pkrt of the season was butter and the balance cheesemaking, it was difficult to detail. It, however, cost 2.7 d per lb of butter-fat to manufacture both butter and cheese. Mr. Thomas considered that when the directors found out that they had overpaid in September, thej- should at once have adjusted matters. Mr. C.atenby said that the position was that certain suppliers took more butter In th? winter and early spring, and the inference was that they had received more for their butterfat ; but lie pointed out that they only received 1/0 for their July and August butter, which ’ realised 2/oVid. If those suppliers had to refund for September, they Would require an extra 6d for those two months. The secretary stated that he had consulted ■ the company’s solicitors on the question, and their advice was that payments should be made on the value received each month, less , the cost of manufacture. A friendly suit in ► the Supreme Court would be required to de- ’ cide the point. ' The secretary submitted figures showing that ' in September they had paid out 1/6 and in ► October and November 1/-. These three ► months they made butter, the average pay- ' out being 1/2, whilst the average .amount re- ’ ceived over the period was 13.23 d—a loss of * %d. Some of the September butter realised , 17.86 d. » The secretary stressed the difficulty of getf ting out a monthly balance, as the cost of * manufacture varied each month. * I Mr. Thomas said the cost could be taken I over the whole year, say 2.7 d. He moved ’ ! that a committee he appointed of five share»l holders to thoroughly examine every monthly »I payment made to suppliers during last season, * ! with a view to finding out if such payments * ‘ have been made on an equitable basis, failing * | which the committee to have power to adjust I same, so that every supplier will receive his i» just and right payment for milk supplied : also > that all the company’s books be open for ininspection by this committee, and that the sec- £ ' retary be instructed to render any assistance £ I required, and that the committee have the > right to obtain any qualified accountant be- > sides the' company’s secretary to assist them.” ;♦ This was seconded by Mr. Langley. :* The secretary pointed out that it would de- * lay the payment of the bonus and would I* prove a somewhat costly process. 6* i Mr. Gatenby considered that the three winaeate* aUo should b« iacludad, ai th ay

ony received 1/6 when their butter realised 2/6 y 2 d. Mr. Thomas agreed with this, and it was decided that the amendment should Include a proviso that it should cover the whole season. Mr. Langley suggested that suppliers be all paid the average butter-fat payment throughout the year. The amendment was then put and declared carried by 17 votes to 11. The chairman stated that meantime the bonus would have to be held up until legal advice had been obtained on the position., The report and balance sheet were th?n adopted. ELECTION OF DIRECTORS. For the five vacancies on the directorate there were six nominations, viz., the five retiring directors and Mr. A. O. Penwarden. The election resulted: W. H. Honeyfield BG, J. H. Bagley 80, R. H. Gatenby 86, S. J. Candish 68, A. O. Penwarden 66 (elected), and W. Cochran 29. Mr. E. P. Webster was re-elected auditor at the same remuneration as last year. A hearty vote of thanks was accorded the retiring directors. Mr. Thomas intimated that he would give notice to call a special meeting with a view to having nominations returnable on the day of the meeting. GENERAL. A vote of thanks and appreciation was expresesd to the manager (Mr. Young), several speakers paying a tribute to his efficiency. The directors and the secretary were also accorded hearty votes of thanks. In accordance with notice, a special meeting was held to discuss the question of altering the articles of association with a view to altering the basis of allotment of share capital from 61 lb butter-fat to 80 lb of bulter-fat per share. After considerable discussion this was carried by 15 votes to 14, but as it required a three-fourths majority the resolution was declared lost. It was, however, resolved that tlie directors be recommended to leave the allotment of shares on the same basis as 1920-21 supply, this to apply to all but new suppliers. At a subsequent meeting of directors, Mr. W. Honeyfield was re-elected chairman.