Kaitaia Dairy Co.: Suppliers Review 1937-38 Season

Northern Advocate, 9 August 1938, Page 7

Kaitaia Dairy Co.: Suppliers Review 1937-38 Season

IT HE ANNUAL MEETING OF THE KAITAIA CO-OP. DAIRY COMPANY, L,TD.. WAS HELD IN THE PRINCESS THEATRE. KAITAIA. ON FRIDAY. Mr E R. Bird, chairman of directors, presided, and there was a large attendance.

Tiie chairman, in his annual report,! covering fully all the activities ot the company, stated that the output for the season totalled 2125.562 tens, which was an increase ever that of the previous season of 118 tons, or 5.88 per cent. It was interesting to note that, as a result of the operations of the zoning committee and the transfer of supply from the Kaipara and Hikurangi companies to ether neighbouring factories, the company had now the third largest output in Northland. Suppliers Decrease.

offset the increased hourly wage cost and have been the means of saving a considerable sum in overtime and wage costs. Shipping Arrangements, “On March 21, 1932, your directors renewed an agreement with Messrs A. G. Frankham Ltd. for the carriage of butter and goods for a term of 10 years. The schedule of charges included butter at Bjd per box, plus Id per box cartage from ship’s side to cool store. 22/6 per ton of general cargo, and 15/- per ton of fertiliser. The original agreement with Messrs Frankham Ltd. was entered into in order to stabilise lower freight rates to the whole district as well as to our company.

“The number of suppliers for the current season was 639, compared with 649 in 1936 and 663 in 1935.’' continued the chairman. “High operating costs and available work on Public Works jobs has resulted in a number of small suppliers disposing of their herds and going out of dairying. The question of increasing output is very uncertain at the moment and it would appear that any material increase can only bo looked for from the existing established dairy farms.

“During the hot summer of 1937-38 it was revealed .that twice*weekly shipments of our butter were a necessity, both on account of cold storage space at the factory and in order to secure the premiums available under the guaranteed price scheme. These premiums amounted to approximately £BO per week in the flush months of the season. The shipping company was unable to provide two direct shipments per week with the ships then available, but made a proposal to the company that, with a measure of financial assistance, they could guarantee a twice-weekly service by putting another ship into commission. Your directors advanced £1250 to secure this service; the sum to be repaid overtwo years cut of freights. As our own freight accounts!* amount to approximately *£6ooo per annum, the position is sound. Wharf Accommodation.

“Gross realisations for produce sold, including buttermilk, cream used for the manufacture of ice cream, and profit from other activities, amounted to £275,086. Total expenses amounted to £34,417, leaving a net realisation of £240,669. or an average of £377 per supplier. Distribution of Surplus.

“The net surplus as shown in the Appropriation Account, amounts to £41,693 13/3 and represents 2.560 d per lb butterfat, and would provide for the following payments:—Dividend at 3 per cent, per annum, £673; further payment at 2id per lb butterfat, £‘10,706 2/6; transfer trading reserve, £150; income tax and carried forward. £164 10/9.

"The increasing tonnage handled at the company’s wharf has given rise to sex’ious congestion during the last two years. Representations have been made to your board of directors by the local carriers’ association and business houses, asking that steps be taken to increase the storage space and improve the handling facilities. Plans and estimates are at present being drawn up and. we recommend that the work be proceeded with, so as to be in a position to properly deal with the trade during this coming year. Land Purchase, “During the year we have purchased a further 4,j acres of land adjoining the northern boundary of our factory section at Awanui. With the increasing needs of the company, our present space is being used up, and it was considered wise to make provision for future expansion.” Directors Congratulated. Mr H. M. Thompson said the directors were to be congratulated on the way they had conducted the business during the year. Very few factories had paid out more than Kaitaia. The chairman moved that a dividend of three per cent, be paid on share capital. This was seconded by Mr T. Gallagher and carried. Quality of Butter. Mr Craig, the manager, dealing with grading, said that while the average grade had been slightly lower, the percentage of premium grade was higher. Referring to the increased quantity of second grade, Mr Craig said that last season the weather was very hot, and there had been a general decrease in finest with dairy companies. Whangaroa had exceeded Kaitaia’s percentage of finest by two per cent., but with other factories in the North the percentage was 10 to 12 per cent, below Kaitaia. There had been a tendency to grade down butter on account of the quantity of salt, but the question was whether they would not lose more if they cut down the salt. Sufficient use was not made of coolers by farmers, and only 27.7 per cent, availed themselves of this method of improving the quality of their cream. . General Business. Mr W. H. Atkins was reappointed auditor at a fee of 30 guineas. A motion was passed that 6d per ton be donated, for this year only, towards the compensatory price campaign. A donation of £5 was voted to the New Zealand Spanish medical fund, and another of £lO towards the New Zealand Institute for the Blind. On the motion of Mr Saunders, the directors were asked to call a meeting of suppliers in the autumn, prior to the dairy conference, for the purpose of discussing questions of policy. Cream Collection, The chairman intimated that some changes were to be made in the timetable for the lorries transporting cream and these would have in view economy and the greatest good to the greatest number without penalising unnecessarily those in the backblocks. Bobby Calf Pool. Mention was made by the chairman of the petition handed to him with regard to the bobbj* calf pool. This was not for the meeting, but for the committee already appointed to deal with the mattei’. They had been anxious that .the farmers should control their own industry, but if there were to be divisions, the control would have to be left to Mr Nash. Manager’s Work Appreciated. Mr Michlc, in moving that the meeting record its appreciation of the work of the manager during the year-, said that Mr Craig had placed the welfare of the suppliers before his own credit. He might have improved the grade by putting less salt in the butter, but his action had meant a gain to the suppliers of £9OO or £IOOO a year. The motion was seconded by Mr Saunders and carried. Directors Re-elected.

“Your directors have adopted the above recommendation, and the net average payment for butterfat over all grades will be as follows; —Advances. 12,239 d; bonus, 2.500 d: dividend, .041 d; trading rebate. .045 d; total, 14.825 d. Increased Costs.

“Increased costs were recorded under the following headings:—Wages, from £4698 to £5419, or .027 d per lb butterfat; materials and boxes, from £7689 to £9462, or .080 d per lb butterfat; administration, from £1914 to £2243, or .012 d per lb butterfat. “In each case legislative action was responsible. The increase in output, however, had a neutralising effect on the fixed unit increases. The increase in administration was largely brought about by an amendment to the' Standardised Accounts. When compared on the same basis as the previous season, administration costs were lower by .002 d per lb butterfat. The increase in farm gate to f.o.b. costs per lb butter is .047 d, which, converted to a butterfat basis, represents an increase of .053 d. Quality Maintained, “The high quality of butter has been well maintained, the average grade for export being 93.875. The guaranteed prices for the season and including the further payment declared by the Government, were as follows: Premium grade, 13.785 d per lb; standard grade, 13.660 d per lb; 92 to 921 points, 13.5975 d per lb; 90 to 911 points, 13.4100 d per lb. “The total premium earned amounted to £lß6l, or .094 d pef lb. The high return for premium quality is an offset to other high costs peculiar to the geographical position of the company’s factory in relation to the main export centres, and therefore beyond the control of the management. “The quantities and percentages of the various grades of cream received at the company’s factory for the past two seasons were;— “Season 1936-37. —Finest, 6,859,0651b5 ; 73.57 per cent.; first, 2,185,9651b5, 23.45 per cent: second, 277,6831b5. 2.98 per cent. “Season 1937-38.—Finest, 6,076,0891b5, 61.42 per cent.; first, 3.402,0971b5, 34.39 per cent.; second, 414,4591b5. 4.19 per cent. “The quantities and percentages of the various grades of butter sent to store for export during the past two seasons were:—

“Season 1936-37. Finest, 72,440 boxes, 94.31 per cent.; first, 3441 boxes, 4.49 per cent.; second, 928 boxes, 1.20 per cent. "Season 1937-38. Finest, 73,516 boxes, 90.43 per cent.; first, 7027 boxes, 8.64 per cent.; second, 753 boxes, 0.93 per cent. Trading Department. “This, department continues to show a most satisfactory increase in turnover and extension hi scope. The large increase in volume from £ 13,941 tc £18,497 for the current year, indicates the growing popularity of the department and the policy of distributing most of the surplus by way of rebate is no doubt helping to this end. “The profit amounted to £IOOB 10/1 and your directors have decided that it be- dealt with as follows;—Five per rebate on purchases,, £745 2/8; transfer reserve, £150; carried to Appropriation Account, £ll3 7/5. 1 “It is recommended that the policy | of carrying forward the profit on fertilisers to a special reserve account be I continued, so that if opportunity of- | fers in future for participating hi the j erection, of a co-operative fertiliser ' works by Northland dairy companies. | there will be available a substantial ! sum towards our share of the requir- | cd capital without affecting butterfat , payments.. In the meantime, the in- , ternal working of the company benofits from tlio use of this reserve. Lime Trading. I “The contract entered into with 1 Messrs Bellingham and Co., Ltd., has been carried out: 3000 tons of lime have been crushed and delivered to I he sheds, 2754 tons have been taken by farmers, and there is a slock of ap- : proximatcly 250 tons on hand tc meet early demands. The output since the works commenced was 7143 tons. Share Capital. “The number of shares allotted during the year was 3055. and it is anticipated that on an investigation i of the production by individual suoI pliers during the year, a further allotment to existing members will be necessary. Capital expenditure during the year amounted to £2997 8/11. "Additional units installed in the ' factory were necessary in order to

The three retiring directors, Messrs J. C. Marsh. C. S. Puckey and D. Kitchen, were re-elected unopposed. At a subsequent meeting of the directors. Mr E. R. Bird was re-elected chairman.