BUTTER VERSUS CHEESE.

Pahiatua Herald, Volume XIV, Issue 3312, 4 May 1909, Page 2

BUTTER VERSUS CHEESE.

At the meeting of suppliers to the Ballance co-operative butter factories held at Konini on Friday evening last an address delivered by Mr Gwillam, of the Dairy Division staff, to a meeting of milk suppliers held' in the Wanganui district in February last, was quoted by Mr A. McFarlane, chairman of directors of the Ballanoe Company, and Mr G. Brown, chairman of directors of the Mangaramarama Cheese Company, in support of their respective contentions as to the advisableness or otherwise, of the Ballance Company installing dual plants in their factories. As the question is one of considerable interest to dairy farmers we reproduce Mr Gwillam’s address from the Dairyman of February 20th as follows: Owing to the nature and present position of the dairying industry in this district the question of butter and cheese manufacture deserves your attention. I take it that you are indifferent whether you. . ailk is turned into butter or cheese. , I are willing to make that which i nises to give the more profitable return. BUTTERM AKIN G AND CHEESEMAKING EQUALLY GOOD.

I will say at the outset that I believe butter or cheesemaking is equally good to the milk suppliers when carried out continuously, because the relative market value of butter and cheese always sooner or later closely approximates, and therein is the reason why some people and some countries become, or may become, almost exclusive producers of either butter or cheese, and can afford to be. Therefore, if 1 recommend anything I recommend the exclusive manufacture of one article only, and to stick to the one article. A company may excel in the production of either butter or cheese, but in neither when making occasionally one and then the other.

The key with you as to which to make is the quantity of milk you are likely to get and what value you set on the by-products of the milk. To get at any sort of trustworthy estimate of the probable return, one needs to touch on both the business of making butter and cheese, and the business of its disposal. I will try and make laid reasonable statements, and although speaking generally will avoid vague generalisations, and speak without prejudice to any manufacturing interests here, whether co-operative or proprietary. 1 may mention cooperative affairs frequently because it is from their balance-sheets facts regarding the business are readiest available. THE TEST OF SUCCESS—THE PRICE PAID FOR BI TTER-FAT.

I speak of the value of milk and also the cost of manufacture at so much per lb of butter-fat. It is better than speaking of so much per lb of butter or cheese or per gallon of milk. Practically all milk .received at our factories is paid for by the lb of butter-fat it contains. And you hare perhaps heard the saying that the tost of the success of a company is the price it pays out for butter-fat. If you have not it is as well to know it. THE BY-PRODUCT A DETERMINING FACTOR.

The first oseniial difference to the milk supplier is the by-product returned to him. With buttermaking be gets skim-milk, and with cliecsemaking cheese whey. The quantity is the same, about 9 gallons for every 10 gallons ot whole milk, or, say, 21 gallons for every pound of butter-fat. Now there is a great difference of opinion amongst farmers as to the relative value of these by-products. Some farmers see no difference worth mentioning, others assert that a halfpenny to a penny more per lb buttorlat lor milk lor cheesemaking covers the difference, while some reckon on 2d and a few up to even 3d. To my mind the best and worst that can be said about cheese whey is that it is a good nourishing drink for pigs, and the profit to the farmer from either skim-milk or whey will depend on his intelligence in doing so. However, if yon will accept for argument’s sake Id more foil' butter-fat and the whey, as a fair recompense far the lass of skim-milk, we have something to reason on. TOTAL COST OF MANUFACTURE “F. 0.8.” The balance-sheets of co-operative dairy companies throughout the Dominion give us interesting facts on this head. And here 1 may say that I believe I am well within the mark when 1 state that about 90 pew cent, ol the butter and cheese made, in our factories is made by co-operiitive concerns. With co-operative dairy companies the milk supplier receives the whole el the net proceeds from tho sale { i bis goods, less the working expenses ; and, as the company should never do less or more than this, it is easy to see that a working co-opera-tive dairy company should never bo anything else lint solvent. Tho winking expenses are the total cost of manufacture, which includes all outgoings such as office work, bank intor- < st, labour and materials used in factory, depreciation, railage on goods to cool storage and placing on Itonrd , (free on board) Home steamers. Freight Home is not included, as it is paid by the buyer or deducted’ from Home antes.

SOME COSTS FOR BUTTER-MAK-ING.

Cost of manufacture varies, hence very often big differences in the price paid for butter-fat by different dairy factories. For (purpose of fair comparison 1 have taken from cooperative factories each engaged respectively in butter and cheesemaking and typical of the industry. The figures refer to recent work. The first three butter companies are “one-roof concerns,” i.e., factories without creameries, and the fourth is a big concern operating big creameries with much advantage to itself and its suppliers, whose factory is within easy distance of the creameries. All the factories received about the same price for tlieir butter. All may be said to be doing good work for the milk supplier, all made about the same quantity of butter per pound of but-ter-fat, viz., 1121bs butter per 1001 b fat ini the milk received, except the large concern, which did not make quite as much. The figures are in round figures, but substantially correct. The number of cows are approximate estimates tor the purpose of illustration.

Tons of butter made, 25; No. of cows (approximate), 300; cost of making f.0.b., per lb butter-fat, 3.75 d ; paid out per lb butter-fat, SJd. Tons butter made, 50; No. of cows, 600; cost of making, 2.25 d; paid out, 9JdTons butter made, 120; No. of cows, 600; cost of making, 1.40 d; paid out, lOfd. Tons butter made, over 500; cost of making, 1.40 d; paid out, lOfd. The figures indicate that the net return from the buttermaking largely depends on the amount of milk dealt with, and where the milk is skimmed. For instance, take the third factory. If this factory had three creameries connected with it, and within easy distance for carting the cream to it, and say the four places received one quarter each of the supply of milk, the cost of manufacture would be increased to about 2d per lb. The cost of manufacture is not always everything to the milk supplier, for in many cases it suits well to have tl ■ creamery near the farms, and s forego a halfpenny per ib butter-fa-instead of carting milk long distance to a butter factory. SOME COSTS OF CHEESEMAKING.

The figures 1 have of costs for cheesemaking do not show such wide variation as lor buttermaking. A factory making 150 tons does so at about the same cost as one-half its size or double its size. The explanation is not hard. The amount of materials and labour required is in proportion to the cheese made. With buttermaking. owing to the lesser quantity of produce extracted from the raw material, and machinery available to do it, less labour is required. 11l a butter factory, somethimes, with one or two extra hands, 50 per cent, more butter can be handled. With cheesemaking 50 per cent, milk means 50 per cent, more labour. In my illustration of the working of four cheese factories, each received about an equal price for their cheese, and each made about 2501bs of cheese per lOOlbs of fat in the milk received, except the second one, which made less, lienee largely the difference in the payment for but-ter-fat:— Tons cheese made, 80; No. of cows (approximate), 400; cost of making f.0.b., per lb butter-fat, 1.75 d; paid out per lb butter-fat, 12Jd.

Tons cheese made, 190 ; No. of cows, 950; cost of making, 1.90 d; paid out, 103 d. Tons cheese made, 150 ; No. of cows, 750: cost of making; 2.05 d; paid out, 12id. Tons cheese made, 300; No. of cows, 1500; cost of making, 1.86 d; paid out, 12£d. DUAL PLANTS. With you, 1 think they are out of the question. In theory they tend to defeat the very object they set out to attain. For in periods of legitimate shortage when enhanced values might l>e obtained by regular makers of one article the dual plant owner steps in and spoils the market. THE VALUE OF HI TTER AND CHEESE. No man can forecast the prices of butter or cheese, but if there is any guide to the future, and as it is said that history repeats itself we may at least reflect on what has happened in | the past. One thing is certain, that people must he fed, and another fact is that the world’s population is increasing. THE MARKET FOR BUTTER AND CHEESE. BUTTER 108 s, CHEESE 575. We rely on the British market for the salo of our dairy produce. Now i what sort of a market is itP 1 will 1 give you a few figures of total quantities butter ami cheese imported there with the quantity received from New Zealand, and also the comparative average selling prices for finest colonial butter and cheese. In the cheese figures the importations from Canada are also given.

Average price per cwt. ... 57 5 BUTTER 108 s, CHEESE 575.

I will try and bring the figures to bear on the net returns for butterfat. The process may be a little daring, but is, 1 think, allowable. However, apart from that point, these figures are full of encouragement to the New Zealand dairy-farmer. They indicate what an enormous market is open to him. In that enormous market New Zealand contributed last year six per cent, of the butter and eleven per cent, of the cheese. Small wonder some New Zealanders who go Home don’t see our butter and cheese everywhere.

Five years ago in that enormous market 219,000 tons of butter and 135,000 tons of cheese were imported and at remunerative prices to the producers. Last year only 201,000 tons of butter and 118,000 tons cheese were received. That the United Kingdom has as big a consumptive capacity as five years ago is, I think, evidenced by the extra price paid for lesser quantity she is now only able to obtain.

New Zealand's total supplies of butter and cheese last year do not equal the shortage of imports there of five years ago. As regards cheese, New Zealand’s position is a very favoured one. So long as we have the benericient system of a whole milk delivery to factories, either cheese or butter can be made. Our dairy season being opposite to the Northern Hemisphere’s is also a distinct advantage. For, in addition to being able to cater to a regular trade, New Zealand is the one country in the whole world where, when there is a shortage of cheese production in the Northern Hemisphere, that the United Kingdom can look to with any liope to try to- make up or lessen the shortage. PRICES OF BUTTER AND THE NETT RETURN. BUTTER 10Jd, BUTTER-FAT lOd. Referring to the prices, the average value of butter for the past five years is 108 sld per cwt. It we deduct 10s Od per cwt. for the freight Home and the selling charges, then it Ls equal to 97s 0d here on board steamer at our shipping pint. Say IOJd per lb. What does that mean nett for butterfat to the milk supplier? Now, with 1121bs of butter being made from lOOlbs of butter-fat is the whole milk, and butter worth IOJd per lb, one pound of butter-fat is worth lljd. Taking the butter-making business as a whole, 1 may put the f.o.b. cost of making at equal to ljd per lb butterfat. Deduct this from lljd and the nett return is for butter-fat lOd per lb. PRICES FOR CHEESE AND THE

NETT RETURN. CHESE ojd, BUTTER ll*d. The average of the selling prices of cheese is 57s od per cwt. The expenses for freight Home an<f selling charges there may be put at 8s per cwt., which is equal to 49s 5d on board the Home steamer here. Say sjd per lb. With 250 pounds of cheese made from lOOlbs of butterfat, one pound o( butter tat is worth 13Jd. Say the f.o.b. cost of making cheese is 2d per lb. butter-fat and we have a nett return for butter-fat of lljd. Now. if the milk supplier requires one penny per lb more lor bis butter-fat when supplying a cheese factory, well if you will say one penny and an eighth, my contention that buttermaking and clioesomaking is equally good G demonstrated. It any further proof is necessary, 1 could quote you the net returns for the past seven or eight years of a butter factory and a cheese factory both working on good lines. The net results are that the cheese factory had paid out just about one penny more than the butter factory. And I think 1 can fairly say the butter factory suppliers have quite made up the difference in the profit derived from the skim-milk.

This is übout all 1 have to say on butter v. cheese-making.

(i () () 1) FACTORIES ESS EN T 1 AL. Good factories are essential, and are a. good investment, and you cannot have anything better than a good investment. The day of the anything-will-do-for-a-start factory, which generally continues on for years, is surely past. The least a milk supplier can do after he has produced gocnl milk, is to see that it gets fair treatment, as far as the place to manufacture it in is concerned. Given a good fac-

tory, it is plainly up to the maker to turn out a good article. Trouble with the manufacture can easily be located in a good place. Losses and excuses are too plentiful about a bad place. And now the cost of buildings and plant. COST OF BUTTER FACTORY, £2OOO A good and well-equipped butter factory capable of dealing with the milk of, say, 500 cows, and making 40 tons of butter (the same factory owing to a minimum standard size of building and plant required, would deal with the milk of up to 1000 or 1200 cows), would oost about £2OOO. COST OF CHEESE FACTORY, £IOOO. A good and well-equipped chee.se factory (two vats size), capable of dealing with the milk of, say, 400 to 500 cows, and turning out 80 to 100 tons of cheese, would cost about £IOOO.

IMPORTS OF BUTTER INTO THE UNITED KINGDOM. Total Total reSelling For imports ceived from price the Butter. N.Z. per cwt. Year. Tons. Tons. s. d. 1904 ... 218,943 15 836 99 11 1905 ... 202,897 15,667 104 0 1906 ... 215,493 15,177 109 0 1907 ... 219.277 14,852 108 0 1908 ... 201,134 11,492 119 6 Average *rice per cwt. 108 1 IMPORTS OF CHEESE! INTO THE UNITED KINGDOM. Total Total Total Selling Imports receivprice For ed ed from ed from per the Cheese. Canada. N.Z. cwt. Year. Tons. Tons. Tons s. d. 1904 135,777 98,306 4,111 51 0 1905 122,062 92,308 4,072 50 0 1906 130,062 95,884 5,870 61 0 1907 125,590 90,679 8,597 64 0 1908 118,575 81,428 13,152 62 0