A WORLD-WIDE PROBLEM.

Matamata Record, Volume VII, Issue 580, 10 November 1924, Page 7

A WORLD-WIDE PROBLEM.

UNFAIR OVERRUN COMPETITION It is evident that New Zealand dairy factories are not the only ones up against an unfair overrun competition. The Twin City, Minnesota, Milk Producers' Bulletin, gives 'the following good discussion of the unfair competition put up by creameries that claim excessive overrun.

"The most difficult thing we have to deal with in the butter part of our business is unfair competition from creameries that are paying more than it is consistently possible to pay. Take, for instance, the month of June, in which we paid 45 cents for butter fat. Some creameries paid more than this. Now here are the figures. The average for 92 score butter in New York for the entire month of June was *1.4 cents. The average overrun which it is possible to receive, according to the Alberton Lea State creamery, is about 22 per cent. Adding 22 per cent to 41.4 cents we have a total of 50.5 cents, which is the highest possible price Under actual creamery conditions that could be received for butter fat in the form of extra butter delivered New York. The average transportation charge from our creameries to the market is 1.8 cents. The making, which includes the running of the factory, tubs, power, etc., costs 3£ cents per pound and there is a selling charge of I cent per pound. This makes a total charge of 5.55 cents per pound of butter made and delivered on the market. Subtract this from 50.0 cents the average price paid for good butter, and you have 44.95 cents. "This assumes that there is no mechanical loss in separating milk, and it is a well known fact that all skim milk contains, at least 1-100 per cent fat when it is properly tested. This . also assumes that every pound of the butter is 92 score and that it is all 1 delivered in car load lots at the lowj est possible rate under ideal condi- ; tions.

"We were able to pay the 45 cents only because part of our butter sold at a premium over 92 score butterSome of our butter scored 93 and some 94, and on this we had a premium which allowed us to pay 45 cents.

"If any creamery paid more than this, it must have had a better outIt t for butter than was afforded by t 1 e Minnesota Co-operative Creameries Association, representing over 400 creameries, or else it secured an abnormal overrun by improper weighing and testing. Many butter makers brag about securing from 25 to 30 per (•••nt overrun. It appears that the .American farmer likes to be bunc ed. He is looking for the highest p-ice regardless of honest dealings, on 1- ih milk and cream, and there is :i.turally a great temptation to give him what he wants.

"Our average overrun for the entire year will be just about 22 per cent. We know that if it is less we are inefficient, and if it is much greater then there is something wrong with out methods."