LEPPERTON DAIRY CO.

Taranaki Daily News, 25 July 1930, Page 15

LEPPERTON DAIRY CO.

THIRTY-EIGHTH MEETING IX,CREASED PRODUCTION RECORDED DIFFICULTIES OF THE SEASON. A substantial increase in production was again noted at the thirty-eighth annual meeting of the Lepperton Dairy Company at the Lepperton Hall yesterday, when Mr. H. B. Lepper, chairman of directors, presided over an attendance of over 50 suppliers. , The report stated that during the season weather conditions for dairying were excellent, and both butter and cheesemaking departments showed a very increase in butter-fat production, the° former 45,0391 b and the latter 9185 lb, making a total of 54,2241 b. Butter only was manufactured from May 1, 1929, to July 31, 1929, and from August 1, 1029, to April 30, 1930, butter and cheese were manufactured on separate account, the average payments to date being 15.89 d to milk suppliers and 15.36 d to cream suppliers. After writing off the sum of £250 12s 7d for depreciation there remained a balance of £3394 13s 3d to the credit of the profit and loss account, of which £667 3s 9d belonged to butter manufacture - and £2727 9s 6d to cheese manufacture. The results of all butter shipped, up to and including the s.s. Port Denison, covering the make up to January 31, 1930, and cheese shipped by the s.s. Mahana, covering the make up to December I'o, 1929, had. been taken into account in the balance-sheet. Uno thousand nine hundred and sixty-six crates of cheese and 589 boxes of butter were still on the water, and 944 crates of cheese and 238 boxes of butter were awaiting shipment. All . butter, and cheese not yet marketed had been valued at a very conservative price, and should show a substantial surplus on realisation. Additional payments to both milk and cream suppliers would be made as soon as a few more shipments on the water' were realised and the unshipped stocks were afloat. DETAILS OF PRODUCTION. Statistics for the year were: — Cheese.- —Quantity of milk received, 3,73-5,2591 b; quantity of butter-fat, 374,6361 b; average test of milk, 4.29 per cent.; quantity of whey butter made, 19,6161 b; quantity of cheese made (factory weight—from 311,2311 b butter-fat), 904,9911 b; quantity of cheese made per lb butter-fat, 2.901 b; cost of manufacture at per lb butter-fat, 2.04 d; management .73d, charges f.o.b. ocean steamer .20d; depreciation .10d;’ total cost, 3.07 d. \-‘ Butter Quantity of cream received (includes skimmings 113,1521 b), 548,852 lb; quantity of butter-fat (includes skimmings, 63,4051 b), 234,9971 b; average test of cream (suppliers’), 39.38 per cent.; quantity of butter made, 286,4511 b; over-run, 21.80 per cent; lbs cream to lb butter, 1.921 b; cost of manufacture at per lb butter-fat for twelve months (exclusive of cream cartage at Jd per lb butter-fat) 1.22 d; management .5-ld, charges to f.o.b. ocean steamer .13d; depreciation .10d; total cost 1.99 d. The balance-sheet showed that the receipts had totalled £50,845, the principal items being cheese sales and in stock £31,461, butter sales and in stock £18,145, whey butter sales and stock £1214, a total of £24,813, had been paid to milk suppliers on account of cheese and £15,041 to cream suppliers on account of butter. Wages and salaries for butter totalled £397 and for cheese £1295. Other working expenses for butter were £lll9, ’and for cheese £l9Ol. On April 30 there was a balance carried to profit and loss on account of butter totalling £lll9 and on account of cheese £4665. In moving the adoption of the report and balance-sheet the chairman said he thought all the directors were pleased when the season had come to an end, as in addition to the worries over the low prices ruling on the market for theiy produce they were also faced with STANDARDISATION AND WAXING standardisation and waxing, However, with the bonus paid that day cheese suppliers would have received 17.14 d per lb butter-fat and cream suppliers IG.Oad, including the allowance .for the cost of cartage. Indeed, he thought that when the season was completely wound up • it would be found that both for cheese and butter the Lepperton company had done as well as any. INCREASE IN OUTPUT. Mr. Lepper congratulated the suppliers on another substantial increase in supply of both milk and cream. The substantial difference in the increase in butter-fat for cheese-making and buttermaking was due to some extent through the company manufacturing standardised cheese during the whole . cheesemaking season, but the total increase ■ in butter-fat production of the company was 54,2241 b, which showed the steady progress of the district and the improved methods of farming now being adopted. * . If they compared other factories bal-ance-sheets over the same period, he thought they would be found the same, if not a great rate of increased production, and it seemed to him that the productiveness of the province had not yet nearly reached its maximum. A substantial increase in production each year did to some extent compensate for lower prices*. Looking back over the many years he had been connected with the dairy industry and with Lepperton in particular, he had always found both butter and cheese markets to be very sensitive, and it was only by steady increased production that dairy farmers could successfully negotiate the serious slumps in market prices that took place from time to time. The slump during the season just closed had probably been the worst for nearly thirty years, but he felt sure that blighter times were ahead, although recovery might be slow. They might have to face a lower level of prices for some years, but increased production and, if possible, a reduction in manufacturing costs would enable dairy farmers to stay on their land and make their business a payable one. FALL IN THE MARKETS. At the beginning of last season the butter-market was in a fairly buoyant state and everything pointed to a season of good prices. The directors were unable to sell the output in one conj tract but continued their policy of e.i.f. I sales on short contract at prices around

Is 5d per lb until the end of October make. Then came the American financial crash followed by financial depression in England and Europe, and the butter market “broke” and soon became demoralised. Whoever dreamed that butter would fall in price from 180 s per cwt to 122 s per cwt in a few weeks? The speculator disappeared and they were compelled to risk consignments. Luckily they were supplying a fair quantity of their butter to the local market, and although local retail prices declined in sympathy with London prices they showed a slightly better return than London consignments. At the time of balancing they had 827 boxes of last year’s make of buttei' not yet marketed and these were' valued at Is 2d for 47 boxes, Is Id for 241 boxes, Is for 89 boxes and the remaining 480 boxes at lid. The market had now shown a considerable advancement and he thought prices would be more stabilised for some time, consequently there should be a fail' surplus coming when all these butters were marketed. That would probably permit of a further small payment to cream suppliers. Butter had risen during the past four days 4s and cheese had also risen. Although cheese prices during the season declined in sympathy with butter and all other foodstuff’s, the fall had not been so severe. They had not had the same, competition on the English market from other countries in regard to production. arid the statistical position throughout the season, had been fairly good. To date the average payment to milk suppliers was 17.14 d and as they still had a very large amount of stock to market which had been taken into the balance-sheet at 6£d per rib, if there were no serious decline in the cheese market during the next few months that should , show a substantial surplus. He was hopeful that the average payment to milk suppliers for the season would be at least Is 6d per lb. butter-fat. , VALUE OF STANDARDISATION They commenced the manufacture of standardised cheese on August 1 and continued to the end of the season — April 30. Owing to the serious drop in the butter market the extra profits from standardising had been greatly reduced, but he was still of the opinion that it had been a good proposition to the suppliers. They had not had any adverse reports from the London agents regarding quality; in.fact their remarks 1 in that connection had been quite satisfactory and apparently they had no difficulty in finding a ready market for the product. The manager had used the greatest cai-e in the manufacture of cheese and during the whole season they had not had a single crate classified as modified or second grade (applause). At the present time he was not in a position to state the exact saving in shrinkage by waxing, but it was- very considerable. During the year it had been found necessary to build a manager’s residence as the old one was badly out of date, having lasted for 35 years. In view of the small difference in cost the directors had decided to build in concrete at a. cost of £1240. He contradicted the rumour that a large amount had been spent in extras and that the directors had been over-liberal in authorising internal adornments and laboursaving conveniences. The policy of the board had been economy combined with comfort and stability. The past year had been probably one of the heaviest years experienced for a long time in regard to repairs and renewals. The cost of the waxing plant was £ll3 3s 2d, the installation of the standardising plant and new cheese hoops £165 10s 4d, lagging of all steam pipes in the factory £6l Gs 3d, alteration to bathroom and office £4O 16s. Very heavy expenditure in general overhauls of the whole of the plant were charged in that account. The total difference in general expenses between the past and the previous year was £582 13s 3d. He pointed out that the new plant, costing about £5OO, might perhaps have been charged to capital account instead of being charged to repairs and renewals and paid for, out of the year’s working. GOOD WORK OF MANAGER. Mr. Lepper paid a tribute to the work of the manager, Mr. A. G. Drake, who had been chosen from 67 applicants to succeed Mr. Tones. Mr. Drake had been with them six and d-half months and his work showed’that tihe directors had chosen wisely. His average' grade for cheese, including 'standardised, was 92.123, higher than '.the previous year, when all full-cream cheese was manufactured. The average grade for butter had been 94.563 up to June 30, which was remarkably good. He thought it would prove the highest average grade for the season closing July 31 at the Moturoa works. The average moisture content of the butter .'had been 15.50. Referring to the output ho showed that they had manufactured this year 404 tons of cheese as '424 tons the previous year, ]27 tops bi butter against 68 tons, 8 tons of whey butter against 10J tons. The chairman’s rn.ot.ion. was seconded by Mr. E. Hellier. i ' l '” Some diseussibn took', place over the action of the directors in. granting a supply of water to a shareholder. The chairman said the shareholder had a .claim against the factory for pollution of the water in the stream which watered his stock. He had agreed to find the necessary pipes, troughs, etc., and to do the necessary work provided the company gave him the water. As that meant only' a cost of say 10 s per annum for electrical power he thought the suggestion a good one. He recognised that it set up a precedent but he considered the. ..directors would be prepared to treat, any supplier similarly provided he had a similar claim. Replying to Mr. E. Snowball, the chairman said they never had an offer of BJd for their ehceise at the beginning of the season. Mr. E. Snowball said, one of the directors had told him that if the directors wished they could have received Bid. The chairman; Well, I .don't remember it. Mr. 11. E. Blyde: We are all in the dark. Who was the director? Mr. gnow’ull named a director, and ho called on Mr. Oliver' to confirm it. Mr. Oliver said that . was what he understood. . , . , FLAT DENIAL GIVEN. The director named flatly denied it and said that the best interpretation he could put on the incident was that there had been a misunderstanding. He might have said that they might be able to get BJd, but he had never stated that they had an offer of Bid. Mr. Cartwright also stated that ho had been informed by the same director that they cou'ld get BJd, but that he was holding out for'‘B|d.

- The chairman ruled the discussion out of order. They had never received such an offer, he said. Mr. Ackland said that at the worst the director had been optimistic and the "optimism had not come off.” Mr. McWhirter held that the company should not have charged for the.manufacture of cheese to butter on May 1 without consulting the suppliers. He asked whether it was done to bolster, up the local butter supply, and if so did the cheese suppliers have bo bear any loss on bad debts over the sale of local butter? He ueld that there was sufficient milk to have enabled them to manufacture cheese economically till the end of May. The chairman stated that by a resolution of the suppliers passed at the annual meeting in 1928 the supply of whole milk at the factory was to cease at April 30 and suppliers had installed separators. Last year by resolution o,f the directors, owing to the abnormal autumn supply the ; cheese-making period had been extended a fortnight, but that had not been the case. Replying + o further the secretary stated that local sales were profitable to' the company but there were times in the winter when they were in short supply. Mr.' Wellington understood that some big suppliers took their milk elsewhere in the winter and an endeavour should be made to hold them. Another supplier considered that the April supply was sufficient to have made cheese an economical proposition. Mr. Shrimpton said that from long experience as a cheesemaker he had proved that after April it was more profitable to make butter than cheese. It was very difficult to make first grade cliecsc. Replying to Mr. J. Cloke the .secretary stated that all their cheese had been shipped. Since the balance-sheet had Closed three or four shipments had arrived at Home-and there were seven or., eight others io arrive. The market was showing on upward tendency.' , A supplier asked that arrangements be made to separate milk for the larger suppliers at the factory for a while after the cheese-making season closed. The manager said that could be done. Mr. A. Old gave notice of motion with a view to rescinding the resolution closing the manufacture of cheese on April 30. Mr. Snowball said there had been a good deal of discussion over the house among the whole of the milk suppliers and he would like the total cost, including architect’s fees, stone wall and water supply. The chairman said the total cost was £134-3 9s, including' the stone wall, which had cQst £39. MANAGER’S NEW HOUSE. Mr. Snowball considered that for a factory such as Lepperton it was far too much. Even .as an. act of courtesy alone the directors should have placed the matter before shareholders before expending so much money. A live hedge costing £2 IPs would have done as well ae the £3O stone wall. Moreover, there were unessentials such as china cupboards with glass fronts built in that added to the expense. He thought no luxuries should have been provided. He also asked whether a plan .for a cheaper house had not been' supplied' by. the architects/'' ’’ .i .

The chairman said that suppliers had nlaccd the directors in the position to do the best in the interests of the. suppliers and the manager. By erecting a •concrete building they eliminated maintenance costs and in addition made their manager comfortable. The manager was their best friend. ' r A voice: The house is there for all time (applause). Mr. Snowball said he wanted the manager to be comfortable but he still thought a cheaper house could have sufficed and that, he thought, was the opinion of the milk suppliers. . Some years ago the chairman called the suppliers together before purchasing scales valued at £- 6; now they treated the suppliers with contempt over an expenditure of £1409. Mr. D. B. McKee; If there’s no more business I’m going home. Mr. McWhirter said he took no exception whatever to the house, blit he wished to know how it was proposed to pay for it. The chairman ~said it was proposed to pay for the house in three years in accordance with arrangements made with the bank, but he agreed the payment should be spread over a longer term, The report and balance-sheet were adopted. • ■ - . The retiring directors, Messrs H. B. Lepper and E. Old, were returned unopposed. Mr. E. P. Webster was re-elected auditor. A vote of thanks was accorded the manager (Mr. A. G. Drake) and staff, the mover, Mr. H. E. Blyde, stating that the manager was keeping down the costs remarkably well whilst the quality of the produce was very high. He also paid a tribute to the butter market. .< • A vote of thanks was accorded the directors, Mr. Jennings remarking that under the circumstances they had done remarkably well; . It was unanimously ■ resoived to vote a bonus .of £5 5s to Mr. R. Smith, second assistant for some years, who had recently resigned to take up a position as first assistant at the Kaimiro factory. Eulogistic references were made to his services.