MORRINSVILLE DAIRY COMPANY

Matamata Record, Volume XX, Issue 1855, 2 August 1937, Page 7

MORRINSVILLE DAIRY COMPANY

15th ANNUAL MEETING The Payout for Butter The Morrinsville Co-operative •Dairy Co., Ltd., held its 15th annual meeting in the Civic Theatre on Tuesday afternoon. The chairman of directors, Mr. J. E. Leeson, presided over about a hundred suppliers.

“ i am pleased to see so many of the original suppliers who have been with us since we started the company 15 years ago,” said Mr. Leeson in moving the adoption of the report and balance-sheet. In our first year the output was only 247 tons, but today it is just on 3500 tons.

“In addition to those older suppliers we are pleased to see some new suppliers here, and I take this opportunity of thanking them for coming here in order to hear a review of last season’s balance-sheet and for starting to take an intelligent interest in the company of which they are now suppliers.

DAIRYING AND POLITICS “ Not so long ago we could have a meeting of dairy company suppliers and talk about our business without having to say anything about political matters, but now the Government has interfered so much in our business that we cannot help talking politics occasionally. I do not want to talk politics except in so far as it affects our business. lam an old farmer and I may be out of date, but when I look back 12 or 15 years I do not see that we are muc v better off for Government interierence. We were then getting about 18d per lb of butterfat. We dealt direct with Tooley street through our agents. Then an agitation arose in the dairy industry —for agitators are not confined to the Labour Party. There was an agitation and people began saying that Tooley street was robbing us. Well, we' have been dealing with Tooley street for 50 years, and I have never known of Tooley street robbing us. •

« Ajow we have the dairy companies, the Dairy Produce Board, the Executive Commission of Agriculture, the Primary Products Marketing Board and several more gentlemen with high salaries in London. We ask whether the farmer is any better off with all those highly-paid officials between him and Tooley street. I do not know. THE GUARANTEED PRICE “.When the guaranteed price issue .was before the people at the last election the . dairyfarmer did not know what it was all about,” said Mr. Leeson. “ Few of us. thought that such a drastic change would be made in the dairy industry. We thought the Government would guarantee us to get something in the vicinity of Is per lb., with as much more as we could get. The guaranteed price is a misnomer. It is not a guaranteed price at all, but -a compulsory purchase. We have a speculator in the form of the Government which buys our butter at a price fixed by itself. What say have we in fixing the price the Government decides to give u's for our butter ? Practically no say at all.

“ The price the Government decided to pay us was 12 9-16 d per lb, f.o.b. steamer." For some- time the market for butter was such that it looked as if the Government would be £1,000,000 to £1,500,000 out of pocket. The market improved at the end of the season, and now the price was about 117 s per cwt. It looked as if there would be no deficiency-in the dairy account. Suppliers of cheese factories were not in such a fortunate position, for they would be losing probably 3d per lb as compared with what they would have received under free marketing. This was due to ‘ this one buyer ’ making a real good bargain with the cheese producers.

“It has been suggested that this new system o'f buying our produce has improved the market, but I have strong doubts about it,” continued Mr. Leeson. “ I think that last year, with free marketing and the price we received, the net result was better than this year with a controlled market. The net result to the farmer for the previous season would be better than for the season just concluded, although the farmer has received Id more in payout this season.

“On the average the increase in the price of butter during the season just concluded was 10s more' than last season, and your dairy company could have paid as much under free marketing as you have received under controlled marketing from the Government.”

COMPANY’S LARGE OUTPUT The output for the season was 3432 tons, an increase of li per cent, over 1935-36, when there had been an abnormal increase of over 400 tons. Considering that the season just concluded was not as good as the previous season it was to be understood why the increase in output was not us great as usual. “ Considering the handicaps we have met with in the factory we have done very well this season,” said Mr. Leeson. In the early part of the season the late Mr. Stirling had not been in his usual health, and he died in October. There was an interval until the new manager, Mr. F. P. Walker, was appointed. Towaids the end of the season the work of making butter was interfered with to some extent because of the alterations being carried out at the factory.

In the new manager, Mr. Walker, the Morrinsville company had one of the ablest factory managers to be found anywhere. His appointment should result in every satisfaction to the company and to suppliers. COMPANY’S RESERVE FUND It wouid be seen from the balancesheet that the reserve fund had been drawn on to the extent of £3OOO. This was due to the fact that when the estimated payout for the previous season was fixed the value placed on 500 tons of butter unsold was according to the advice available at the time. However, values declined from 107 s in May to 84s to 90s in July, and consequently the amount realised did not come up to expectations. This year prices had improved during the period from May to July, and butter was now quoted at 117 s. Rather than disappoint suppliers the directors drew on the reserve of the company which had been built up for some years for such a contingency. This year £llOO had been transferred to the reserves. COMPARISON OF BALANCESHEETS There had been an agreement between South Auckland Dairy Companies to make uniform advance payments of Is per lb of butterfat during the season. Under recent regulations all dairy companies had to issue a “ standardised balance-sheet.” The idea was that suppliers would be able to understand it easily and would be able to compare the balance-sheets of various companies. Unfortunately most suppliers did not see the balancesheets of any companies except their own, and so the effect of this standardised balance-sheet was not as good as was anticipated by its authors.

In comparing the payouts of different companies several points had to be taken into consideration, such as the following: Is it the average payout over' all grades and" over the whole season from June i to May 31 ? What is the over-run of the company concerned? What are the relative proportions of cream and butter graded finest and first? A slight difference in the over-rup would make a lot of difference to the payout. Mr. Leeson mentioned a factory in the North which was stated in the press’ to have a good payout, but had only 45 per cent, graded finest. Naturally the payout for finest at this factory would be very good.

PAYOUT FOR SEASON -

The actual cash payout average of all grades, clear of cartage, is 13.66 d per lb, and all bonuses had been paid already. The over-run was 21.679. In view of the relatively high percentage of finest cream graded and the reasonable over-run the result must be considered very satisfactory indeed.

GOOB- GRADING FIGURES The average grade of the company’s butter for the 1937 season was 93.28, as compared with 93.15 for the previous season. * The percentage of cream graded finest was 59.95, and the percentage of butter graded finest was 82.40. ADDITIONS TO FACTORY Mr. Leeson explained that the directors had decided on renovations and additions to the factory after consultation with the officials of the Dairy Division. The directors wished to bring the factory up to date and make it efficient in every way. * In this connection it was. interesting to recall that the late- Mr. Stirling, as manager, had reported in 1934 and 1935 that alterations and additions of a major nature would not be required until the output reached 3500 tons. This stage had now been reached.

Work now being completed at the factory included the building of a larger receiving stage to handle the larger amounts of cream now coming forward, the resurfacing of the floors of the factory, replacing of the south-

western wall, and the construction of concrete tanks holding 5000 gallons of water. The directors had approved these items only after careful consideration, and the money of the shareholders had been used to the best advantage. The work was being financed out of the reserve share subscriptions paid and to be paid, and would not- make the slightest difference to the payout. • New storerooms and offices wore being built to give better service to suppliers in this respect. The company’s store was really an example of co-operative purchasing of supplies for distributing among suppliers. The business had grown to such an extent that more accommodation was. necessary. %■ > .. v^.'V.

DIRECTORS RE-ELECTED The directors retiring by rotation, Messrs. James Brown, B. J. Pirrit and D. T. Davies, were re-elected unopposed, and briefly returned thanks. Mr. T. J. Ryan was reappointed auditor at a fee of £IOO for the ye£r, an increase of £2O in view of increased work that. the .position entails. ' ' \ The recommended a dividend of Sh per ‘ cent, on ' paid-up capital. This .was approved without discussion; • ; . v v. .* i : ' 'n ‘ VOTES OF THANKS - On the motion of ~ the chairman the meeting passed a hearty vote of thanks to the factory, office arid store staff, also to the press. .. Mr. G. H., Pirrit, called for a vote of thanks to the chairman and directors, which was carried by acclamation. MUST ALLOW FOR COSTS After experiencing a year of the guaranteed price of 12 9-16 d per lb for butter, suppliers of the Morrinsville Dairy Company had something to say at the annual meeting regarding the price they hope to receive for next season’s butter.

There was some comment on the way costs on the farms bad risen as a result of legislation, and finally the following resolution was framed and approved: “ That this meeting urges on the Government that all increased costs involved in the production of butterfat on the farms and in the manufacture of butter in the factories be taken into account when the Government is'fixing the guaranteed price for next season.”