THE DAIRY INDUSTRY

Taranaki Daily News, 1 August 1930, Page 15

THE DAIRY INDUSTRY

PATUA DAIRY COMPANY FIFTEENTH ANNUAL MEETING. INCREASED PRODUCTION SHOWN. Increased production was again reported at the fifteenth annual meeting of the Patua Dairy Company. Sines the inception of the company 15 ye-irs ago there has been noted a consistently steady increase in production, the out put having risen nearly SOO-per cent, in 15 years. Mr. W. Honeyfield, chairman of directors, presided over an attendance of over 30 suppliers. The report stated that the weather conditions for dairying were again favourable, and although they had one supplier less during the year, they showed an increase of 30,6341 b. of butterfat in comparison with the previous year. The quantity of milk received and the figures relating to production were:— Cheese. —Number of suppliers, 44; quantity of milk received, 12,977,3631 b.; quantity of butterfat received (includes skimmings —58,6851 b.), 561,2911 b.; average test of milk, 4.42'per cent.; quantity of whey butter made, 25,1021 b.; quantity of cheese made (from 502,6061 b. butterfat), 1,355,3541 b.; quantity of cheese made (full cream—379,s2olb. from 143,9321 b. butterfat), 2.631 b.; quantity of cheese made (standardised —975,8341 b. from 358,6741 b. butterfat)y 2.721 b.; cost of manufacture at per lb. butterfat, 2.08 d.; management .50d.; charges to f.0.b., .25d.; depreciation .13d.; total cost 2.96 d.

Butter. —Quantity of butterfat received for butter, 72,1561 b.; quantity of butter made, 87,4841 b.; over-run, 21.24 per cent.

Butter only was made during the months of June and July, and cheese and butter were made from August 1, 1929, to May 31, 1930. On November 1, 1929, the company commenced the manufacture of “standardised” cheese. During the year the sum of £38,333 10s. 7d. had been paid to suppliers, the average payment being equal to Is. 4d. per lb. butterfat. After writing off £313 15s. for depreciation there remained a balance of £2342 os. lid. to the credit of profit and loss account. A further payment Would be made to suppliers at the annual meeting, and the results of the year’s working would bo finalised when aeopunt sales for all last season’s produce were to hand. FORECAST DIFFICULT. So far the results of the cheese market have fallen ■ short of expectations, and it is exceedingly difficult to give any reliable forecast at the present time as to how the season will average. There were 1764 crates of cheese, 304 boxes of creamery butter and 52 boxes ojf whey butter afloat, and 1136 crates of cheese, 19 boxes of whey butter and 253 boxes of creamery butter in cool store, awaiting shipment. These had all been valued at a very conservative price, and should show a substantial surplus on realisa tion. The balance-sheet showed that receipts had totalled &47,756 Ils. 5d., the principal items being cheese sales and stock £41,378 19s. GcL, whey butter sales and stocks £1349 9s. 6d., butter sales £4822 Is. 9d., exchange £192 10s. Bd. Wages and salaries totalled £2041 3s. Bd., other expenses £4121 65., the export charges £604 9s. 3d., depreciation £313 15s. The sum of £38,333 16s. 7<L had been advanced to suppliers, and thero was a balance of £2342 os. lid. In moving the adopton of the arinual report and balance-sheet, Mr. Honeyfield expressed pleasure at the further increase of 30,6341 b. in the butterfat production. Twelve months ago he wa,s afraid the milk handled during the Season just closed would show a considerable reduction, as two large suppliers had decided to give up dairying,, and another had considerably reduced his herd. However, it was very gratifying to note that they still continued to progress without any new suppliers. During the 15 years of existence as a cheese factory there had been very little change in the number of suppliers, and yet production had risen from 207,579 lb. butiprfat to 561,2911 b. butterfat (nearly’ 300 per cent.). On November ; 1 they commenced making standardised cheese and continued throughout the sea- ■ son. In View of the serious drop in the butter market the extra profits from standardising had been reduced, but he was of opinion that it had been a pay- , able proposition to the supplier. Some publicity had been given of late to the deterioration of the quality of New Zealand cheese through standardisation hud other causes, but they had not received r any adverse reports from the London agents regarding tho quality of their cheese. In fact, almost every letter had been very complimentary, and apparently they have experienced no difficulty in selling the cheese at the highest market price. He was satisfied that their con- I signment returns would compare fav- j ourably with those of any other com- | -pany. BREAK IN MARKET. They commenced standardising just when the butter market “broke,” and consequently had no opportunity of making a c.i.f. sale at anything like the prices that were paid during the earlier part of the season. They made a sale of tho whole of their creamery butter from the S.s. ’Taranaki shipment covering their make from March 20 at Is. 2{d. per lb. finest and Is. 2d. per lb. first grade net f.o.b. ocean steamer, and in regard to cheese they had made a sale of tho balance of the output commencing from the s.s. Hororata covering the make from about the middle of March at 7sd. per lb. less 1 per cent, f.o.b. ocean steamer. Mr. Honeyfleld complimented the manager on tho great care exercised in the manufacture of standardised cheese. He had not had a single, crate classed as “modified.” To date tho. shrinkages had been satisfactory, and when the season was finished he thought the average would be slightly under 14 per cent. Up to the present the average payment to suppliers was Is. sd. per lb. butterfat, and as soon as the in connection with the recent sale of the balance of the butter and cheese were to hand they would be able to finalise accounts. Two or three shipments had arrived in London since the balancing of the books. - In view of the low price ruling for butter on the London market at tho end of May tho directors decided that it would be just as profitable to make cheese during the months of June and : July, consequently they had continued Cheese manufacture .for the whole year.

The butter market had since improved very considerably, and it might have been better to cease cheese making during those two winter months. However, it was impossible to foresee that at the time. During the season the directors departed from their usual custom and consigned the output to two firms in equal shares, and so far the results were about equal. REDUCTION IN COSTS. There was ft slight reduction in the total cost of manufacture. The whole of the saving was made through a substantial reduction in repairs and renewals of plant. Shipping and cool store charges to f.o.b. rose from .22 of a penny to id. per lb. owing to the slower shipment of cheese by the Control Board. On some shipments they had to pay three ; onths’ storage and marine insurance, and two months’ charges on practically the whole of the remainder. Mr. Honeyfield’s motion was seconded by Mr. T. W. Morris. Mr. W. Evans asked why the directors had stopped shareholders from obtaining their supplies through the' factory. The chairman said that since the introduction of standardising the manager’s time was fully occupied otherwise. They had, however, arranged with a firm to supply benzine and oil On a six months’ contract. Mr. S. E. Hawke said he did not think the directors had done right in tying the suppliers to one firm. The chairman said that by signing an order suppliers could procure their supplies through the company from any firm they wished. They had, however, endeavoured to secure the best price for suppliers. Mr. Hawke considered the directors should confine themselves to the disposal of cheese And butter. The suppliers could make their own contracts, for goods. The chairman said it was purely optional with suppliers where they procured their supplies. Replying to Mr. V. Shotter, the manager stated that standardisation had accounted for about £135 of the extra wages, the balance being accounted for by the increased output. Though fuel showed an increase there was actually a reduction of .OOGd. per: lb. of butter-' fat. Mr. Shotter asked whether the new burner had made the saving On fuel that was expected, and the chairman said that the burner was all right, but it would have been better had they installed a more expensive one, which wbuld have saved labour also. Replying to Mr. Morris, tho secretary Stated that the increased freezing charges were duo to the produce being hold in store a little longer owing to the desire of tho Dairy Produce Board to regulate the shipments of produce. Mr. Evans asked whether it was true that the directors had been offered a good price early in the seasotf. OFFERS CONSIDERED. The chairman said they had a lot of requests to place their output under firm offer, the best being Bfd. to the end of January and BAd. for the whole season, but these had not materialised. They had put the produce under firm offer to one firm at 9d. to the end of January, and f;r 9 7-Sd. for the whdio season. Had that materialised it would have been all right for the company, but, unfortunately, it had not. Mr. Hawke: Why did you not place it under offer for 8 7-Bd.l The chairman: We thought we would have secured more, I suppose. The offer included standardised cheese. The Secretary said that on the results of tho shipments then coming to hand directors Were justified in considering 8!d. a fair price to expect for the season. Unfortunately, the financial crash'came. Had they been able to forsee that they might have been able to secure 6tl. Mr. Shotter asked what profit had been made from standard'&ing. The chairman said there was a profit, but it was possible that it might be made at the expense of quality. He thought the Government should increase the fat content by 2 per cent., making it 52 per.cent. That would stop a lot of the trouble With which they were faced in South Taranaki.

Replying to Mr. Shotter, the manager stated that the factory had sent 8374 crates of cheeso to the grading store. Of that amount 49.52 per cent, had been graded superfine, 50.48 per Cent, first grade and 17 crates had been second grade. The average grade had been 92.805 for full cream cheese and 92.360 for standardised cheese, the average over the lot being 92.483. He pointed out that the 17 crates of second grade had all been manufactured in the first three days of the season. There had not been a crate of second grade since. (Applause.) » : Mr. Shotter: TVe have done that without a farm dairy instructor. ! - A supplier pointed out that standardised cheese graded lower than full cream, but the manager said it must be remembered that standardised cheese had been manufactured ftll through the winter, when they were working only on alternate days. Some discussion took place over the erection of the new cottage, which had eost about £650, Including architect’s fees. Some suppliers held that there was no necessity to have engaged an architect as the plans! supplied by Mr. A. O. Penwarden were satisfactory. dr. Pen warden said he had aßvayS advocated trie work being carried out on a 10 per cent, basis, erd as the successful tenderer he now convinced that the 10 per cent. Las is was. the better proposition for the company. The report and balance-sheet were adopted. THE ELECTION OF DIRECTORS. For tho five vacancies on the directorate there were eight nominations —- the five retiring directors, and Messrs. A. O. Penwarden, S. E. Hawke and P. fl. Knight. The election resulted as follows:-—W. Honeyfield 84, D. M. Harvey 60, C. E. Smith 57, A. O. Penwarden 51, I. IT. Bagley 48, V/. Thomas 48, S. E. Hawke 30, and P. G. Knight 24. There was thus a tie for fifth place between Messrs. Bagley and Thoriias. Each was desirous of withdrawing in favour of the other, but the meeting decided on another ballot, which resulted: J. H. Bagley 42, W. Thomas 39. On the election being declared, Mr. Bagley at cnee resigned, and Mr. Thomas declined to stand again. Messrs. Hawke and Knight were then nominated, the election resulting: Mr. Hawke 45, Mr. Knight 24, The directorate therefore Comprises Messrs. Honeyfield, Harvey, Smith, P.enwardcn and Hawke. Mr. C. 11. Wynyard was re-elected auditor. The chairman urged on all suppliers the necessity for supplying good milk. He pointed "out that there was probability of a farm .dairy, instnictbif

being appointed by the Government. There was also the possibility of milk trading being introduced, and he sug °ested°that during the coming year the manager should grade the milk jn order to get suppliers used to the. position. Mr. Penwarden considered that after tlie manager had taken tests for water the results should be displayed at the factory the same as was done with the butterfat tests.

Mr. Knight pointed out that one company had done that and it had cost that company £l2OO. Suppliers considered the manager should notify a supplier when water was found in the milk. Another supplier remarked that the supplier probably knew already. It was resolved that hot water be supplied to any supplier who dg&ired to wash his cans at the factory. It was pointed out that the supply of hot water at the factory for suppliers to take home had been discontinued because it was recognised that the water was not sufficiently hot by the time it reached the farm to do its work efficiently. As a result there was a danger of the quality of the produce deteriorating. Mr. Knight gave notice to move that the basis of allotment of share capital be altered from 601 b. of butterfat to 1001 b. The directors were recommended to take up the minimum number of shares in the reconstructed National Dairy Association'. ■ '• ■ The chairman asked for an opinion on the question of forming a cheese pool. His opinion was that the- fat percentage should be increased to 52 per cent, for the whole year. He agreed that standardising was satisfactory, provided it was not overdonei Pooling would be satisfactory if it would keep the other fellow honest, but there was the danger that' while Patua and other companies went for quality, some would still go for quantity. Asked by the chairman for a show of hands on the question, the meeting was unanimously opposed to the formation of a pool. It was resolved that it be a recommendation to the Dairy Division to raise the standard of fat percentage in cheese to 52 per cent, in the summer and 54 per cent, in the winter. Luncheon was dispensed by tlie ladies, comprising Mesdames W. J. Honeyfield, D. M. Harvey, W. Thomas, W< Young and Miss Thomas. They were accorded a vote of thanks.