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Hawera & Normanby Star, Volume X, Issue 1941, 29 May 1888, Page 2

The Star. (PUBLISHED DAILY.) TUESDAY, MAY 29, 1888.

OPUNAKE DAIRY FACTORY.

We have received a copy of the Opunake Dairy Company's annual report and balance-sheet. The report opens with the following ominous sentence : — " Since last reporting to jou, the company having incurred expense without an opportunity of making a profit, the directors regret the company has made a very serious further loss, so much so as to render the future career of th« company, in the directors' opinion, of short duration." After reading the report, we are left a good deal in the dark as. to tho amount per gallon actually paid to suppliers for the milk. But we venture to doubt whether the affairs are nearly so black as they are painted, The company started the year owing .£1468 to milk suppliers on March 31st, 1887. At the close of the year they are set down as owing .£756 to the suppliers, or very little more than half as much as they owed at the beginning of tho year. It is true that an allowance was made of £254; but, inasmuch as the milk was clearly not worth nearly as much as was offered for it, somebody had to bear the loss ; and the milk suppliers are the proper persons, because they stand to share the profits, and should bear any losses which may arise. At present, affairs have come to a deadlock, because Rome of the milk suppliers refuse to agree to a proposal

made to pay them 6s in the •«£ on money owing for milk supplied ; the suppliers to pay 20s in the £ to the company for all goods supplied and calls in arrear. The outcome of the muddle will probably be that the shareholders' property will be sold for a mere song, and some one or two interested parties will make a good thing out of the bargain. The balance sheet shows an apparent balance of assets over liabilities of ,£1414, the paid-up capital of the company being ,£1626. This is nothing vei*y serious in itself. And when one examines the accounts one finds that the astonishing sum of ,£SOO 16s has been written off this year for depreciation of property, buildings, plant, and shelving ; 10 per cent, being written off the latter, much of which appears by the accounts to have been only just erected. We have not the least doubt that by careful management and by the adoption of an honest system of co-operation, milk suppliers could retain possession of a very valuable property. In the past the shareholders' capital has been sacrificed by the directors offering more for milk than it was really worth or than they could afford to pay. They have been worried and harrassed by financial troubles oi' all sorts in consequence. They know they have given their personal security for debts incurred by the company, and expect thanks for their public spirit, and receive instead volumes of abuse, the inevitable result of promising more than they can perform. If they could get a fresh start, with a fair supply of milk to be delivered at one penny per gallon to cover working expenses, the proceeds of sales of dairy produce, over and above the penny, to be divided among the suppliers after factory working expenses, and say, o per cent, interest on capital had been taken out, the company would work on a sound basis. This is the guiding principle in New South Wales where dairy factories have proved a great success ; and has forced itself upon dairy factory directors throughout New Zealand. Let the milk suppliers reckon up what their milk is worth. We will assume for argument sake that 26lbs of milk or say 2^ gallons of milk will produce lib butter. Taking the year through small private dairies throughout the district at a distance from any town have probably not averaged more than 5d per lb for good butter. It is within our knowledge that many, when their output was the greatest, have not realised nearly as much. At this price their milk would be worth less than 2d per gallon when the cost of salt, butter cloth, and kegs, is taken into account. Let us assume further that the cost of delivering the milk at the factory can be set against the labor of setting, skimming, and churning privately. Let shareholders consider these facts, and they may yefc make another effort to keep the company going. We believe that no shareholder in the Opunake Dairy Factory Company would regret his investment, provided it accomplished the establishment of a co-operative dairy factory ; whether any dividend were ever paid or not. But each and all would regret investing their money, if it resulted in some one or two individuals securing a valuable property for a mere song, who might use factory as a means of making large private profits at the expense of the whole body of milk suppliers. The prospects before dairy companies were never brighter than at present