THE FULL CREAM CHEESE

Taranaki Daily News, 5 August 1930, Page 6

THE FULL CREAM CHEESE

HAWERA’S preference

I COMMENTS ON STANDARDISATION. COMPANY SHAREHOLDERS’ VIEWS. There was a large attendance at the annual meeting of the Hawera Co-op. Dairy Company yesterday. The chairman of directors, Air. J. R. Corrigan, was in the chair. The directors’ annual report stated: “The pay-out for the 192’8-29 season (including interest and the amount applied in payment of shares) was Is 8 l-16d per lb butter-fat. This figure slightly exceeds the estimate given in the last annual report. This season all cheese has been sold with the exception of 1860 crates, which have been taken in at equal to 7Jd per lb f.o.b. On the basis of the accounts the estimated pay-out for the season will be Is 7d per lb. butter-fat (including the amount applied in payment of shares) and adding share interest the total becomes Is 7.2 d per lb butter-fat. Interest bn shares has been allowed for as usual, qnd absorbs £2343 8s 3d.” The appended statistics, with last year’s figures in parentheses, are:— •Pounds of milk received, 55,988,326 (52,739,570); lbs of butter-fat, 3,780,553 (3,137,269); average test, 4.438 (4.318)'; number of milk suppliers, 219; number of cream suppliers, 302; total 521 (496); butter-fat per, cow, 2651 b; per acre, 1331 b; total charges per lb butter-fat, 3.odd (3.27 d cheese made, 2511 tons 2qr. 141 b. (2540 tons Iqr. 171 b); butter made, 739 tons lOcwt. Iqr. (495 tons ISewt. Iqr. 101 b); lbs of milk for cheese, 52,470,917 ('52.031,588); lbs of milk to lb of cheese, 9.328 (0.144); lbs of butter from ITb of butter-fat. 1.217 (1.216). “The past s&uson from a production point of view has been a good one,” said Mr. Corrigan, “and in so far as price or pay-out is concerned must be regarded as satisfactory. The milk, supply to the company has increased by 9 per cent, compared with the previous season, and butter-fat supplied shows an increase of 6 per cent. The average fat test of the milk again shows an increase, having risen from 4.213 per cent, to 4.321 per cent. Glover Road factory test has reached the high figure of 4.438 per cent, and Whareroa factory 4.421 per cent. There is evidence that our suppliers are going in for more top-dressing, and the company has put through a large number of orders for fertilisers for suppliers. Following a suggestion made at the last annual meeting an attempt was made to ascertain the butter-fat production per acre over the territory served by this company, and the figure works out at 1331 b. Some of the suppliers to the company have very, high average tests, and four taken at random are: 4.99, 4.86, 4.86, 4.69. DIFFICULT YEAR. ‘The season just closed has been a difficult one for directors, in both the manufacturing and marketing departments of our operations. Standardised cheese was made at all factories, but no attempt was made at heavy skimming. The average fat extraction for the season was 11.6- per cent. The increased income from standardisation is between |d and Id per lb butter-£at. The quality of our cheese has been somewhat disappointing, but by care in handling by our agents we have avoided any serious loss. For the coming season every effort will be made to achieve an improvement in quality, and I am sure this can be- done. In the marketing of our produce your directors after consideration felt that sales f.o.b. would likely be more profitable than consignment, and every effort was made to effect sales. This could only be done in small parcels, and the company’s agents did good work in effecting sales of 21,192 crates out of a total make of 3'4,168. This has enabled the company to -pay out very well, indeed in comparison with other factories. The results in the home separation department are quite satisfactory, sales of butter enabling a pay-out of Is 4sd to be made. REDUCING EXTERNAL DEBT; / “Provision is made in the accounts for the issue of fully paid 6 per cent, shares equal to j|d per lb butter-fat, and it is pleasing to note that the company’s external debt, which stood at the figure of £25,000 when the debt reduction scheme was embarked on, is now down to £2572. Thus in one.more year the company should be free from external debt, which will be one year earlier than anticipated when the suppliers were asked to approve the debt reduction scheme. This position is very gratifying, afid your directors desire io express their appreciation of the loyalty of the shareholders in supporting them in the matter.

“During the year just closed attention lias been given to- keeping the factories in good repair. The policy of the directors is to meet year by year all necessary repairs, and not to attempt putting off meeting the expense, which inevitably leads to trouble. Interest on shares has been allowed for’as usual, absorbing £2343 8s 3d. It is interesting to note that >B6 per cent, of this interest is paid to suppliers and only 14 per cent, to dry shareholders. Tims it can be said that this company lias no problem in regard to its dry shareholders.

“It will bo noted that some items in manufacturing and marketing -account show increases over last year. This is accounted for by increased supply. The total charges up to f.o.b. diovv a decrease, but the peculiar situation regarding rates of exchange ruling accounts to some extent for this.

“Your directors would like an expression from the suppliers in regard to the question of the supply by the factories of hot-water, which costs the company a considerable sum each year. The attitude of the directors is that they desire that the company, give the best possible service 'to, the suppliers. and' act for the greatest ..good

for the greatest number. They consider, however, that there are grounds for saying that the supply of hot water is abused in some cases through some suppliers taking too much, and in some cases through suppliers using. the hot water for purposes for which it is unsuitable. NOTE OF WARNING SOUNDED. “It is unwise to attempt any forecast in regard to the coming season, but without being unduly pessimistic it will be prudent for us all to keep our expectations on a conservative basis. It seems that evciy country is in practically the same position. We have produced more goods from tne soil than can be consumed. Only two items are in keen demand, gold and tea. I think it only fair to sound a note of warning: Keep your eye on economy. If you are more thrifty that will tend not only to benefit you but also the Dominion as a whole. “I would like in conclusion to thank the staff for the help they have given the directors during the year, and my fellow directors personally for their assistance and support at all times.” Mr. Bennett: Last year the bank overdraft was included in the liabilities in the balance-sheet. Why is it excluded this year? The chairman: Because we have no overdraft (laughter). Mr. Bennett said it was not satisfactory to know that the company had had to go outside its own employees to get a branch manager. The chairman agreed that it was unfortunate, and assured Mr. Bennett that all deplored the fact. It seemed that when the union came in young men had gradually ceased to take as much interest in their work as formerly. If they used the union as a means of educating themselves the result would be most satisfactory to all concerned. Mr. McKenzie said the unions had proved of great service to the men. As far as the Tawhiti factory was concerned the men were all enthusiastic.. Mr. Corrigan said that he did not want to say anything against the men. He could not explain why they did not take the interest they had done formerly. Mr. Parker asked if the National Dairy Association would demand payment of the company’s promissory, note. Mr. Corrigan said he did not think it would. If they took up shares in tiie new company the promissory note would be returned. On this understanding the Hawera Company would take up shares. Mr. Corrigan added that if they had not had the National Dairy Association in business they would, have had to pay higher prices for then* requisites. VAT,TIE OF STANDARDISATION. Mr. C. H. Washer asked how much butter had been made from the milk skimmed for cheese. The chairman replied that 11.6 per cent, of milk had been skimmed. The butter made from this would account for the lower yield. Mr. Washer: What I am trying to get at is, does standardisation pay? The chairman replied that he had no doubt it did pay. Experiments conducted by Mr. Veale showed that on a basis of Jd per lb for butter, and 80s per cwt. for cheese there was a profit of 1.21 d per lb of butter-fat on the standardised make. There were indications that there might, however, be a premium for full-cream cheese, and they were making this just at present. The trouble was that the test was getting higher and higher, so that it was necessary to do something. As long as factories did not skim past 15 per cent, standardisation would be all right and, in fact, for the first few months. of standardisation the quality had improved. )Mr McKenzie inquired whether the premium for finest would assist in raising the quality. Mr. Corrigan said that he would like to see the premium tried. Mr. Bennett said that they would never get anywhere until dairy companies united. Mr. Corrigan: That is exactly what the pool suggests. It is the end and object. By going into the pool no company is liable to lose much if it makes a good quality article. In reply to a question, Mr. Corrigan said there had always been a controversy as to the system of grading. He was sorry to say that complaints about quality were not coming from interests that would benefit by decrying New Zealand produce. He was certain from what he had-seen that quality was slipping. He was also certain that it was due to the prostitution of standardisation and the race for yield. The supplier was another important factor. Unless they got good quality milk they could not make good cheese. He would impress this on all suppliers, Mr. Russell thought they were on the wrong track. They should encourage the farmers to go in for the right breeds of cattle. They had not heard any more of Mr. Veale’s Tokaora test.

Mr.. Corrigan said that standardisation had been brought in for that purpose. He blamed the Dairy Division for not preventing dairy companies from departing from the correct standardisation formula. No one had any right to order anybody else to go in for a certain breed of cattle.

A supplier pointed out that the quality of milk had been greatly improved. Deterioration had started as far back ao 1911.

• Mr. Ogle inquired why there was an increase in wages.

Mr. Corrigan said that it was due to the increased yield. Mr. A. L. Campbell stated that there was another factor —the union. This had tended to increase wages and disorganise the work.

Mr. S. Bennett asked if interest was being, paid to dry shareholders. The chairman replied that under the debt reduction scheme it had been distinctly understood that interest would be paid on the capital then raised. Mr. Bennett considered that 6 per cent, was too high.

Mr. Corrigan pointed out that if they borrowed money they would have to pay 7 per cent. Mr. Bennett also drew attention to the extra fuel and power that had been consumed. The ' chairman stated that the only

way to assess such charges was on the butter-fat basis. These charges had been reduced from 3.27(1 to 3.06 d per lb. of butter-fat.

The motion for the adoption oj the report and balance-sheet was carried. Messrs Suisted and McKenzie were reappointed auditors. By 65 votes to 9 the meeting decided in favour of continuing the supply of hot water to shareholders.

The retiring directors, Messrs A. L. Campbell, II." E. Johnson and W. H. Reynolds were re-elected, the only other candidate being Mr. S. J. Bennett. Votes of thanks were accorded the chairman, directors and staff,, ■