NEW SYSTEM OF PAYMENT

Taranaki Daily News, 28 July 1932, Page 3

NEW SYSTEM OF PAYMENT

DAIRY FACTORY EXPERIMENT MILK FOR PRODUCTION OF CHEESE TRIAL BY THE RAHOTU COMPANY Acting in co-operation with the dairy laboratory at Hawera, the Rahotu Cooperative Company is to try for a year a new system of payment for milk used for cheese-making. It was described by Mr. P. O- Veale, the scientist, at the twenty-fifth annual meeting yesterday as ‘‘not a method of payment for fat plus casein, but payment for butter-fat on its cheese-producing capacity, which is determined by the ratio of casein to fat in the milk.” Mr. W. C. Green presided over an attendance of over 50.

The report expressed the regret of the directors that prices for cheese through the season had been on the low side and the results of consignments disappointing.. The unsold, consignments of cheese had been valued at a conservative figure and the balance to credit of the profit and loss account on closing the books was £9676 8s 4d, and after providing £426' for interest on shares and £430 15s Id for depreciation of the factory, plant and residences, there remained £8719 13s 3d. The directors proposed a payment of 2d per lb. butter-fat over the year to be made at the annual meeting, which would absorb £6926 4s 2d, and leave another id per lb. to be paid as proceeds of consignments still upsold were realised. The payments already made equalled over 9.64 d per lb. of butter-fat, and with the final payment over Is per lb. butter-fat for the year would have been pqid, iu addition to interest on shares. Statistics for the year ended May 31 were given as follow: Milk received, for butter-making 933,8001 b., for cheese-

making 18,153,1091 b., total 19,086,9091 b.; butter-fat in milk, butter-making 44,684.221 b., cheese-making 769,320.341 b., total 814,004.561 b.; average test, 4.26; cream received, 43,4041 b.; butter-fat in cream, 17,138.601 b.; average test, 39.46; cheese made (factory weights), 1,994,6791 b.; lbs. of milk to lb. of cheese (factory weights), 9.1; lbs. of cheese per lb. of butter-fat used for cheese-making, 2.59271 b.; whey butter made, 56,6721 b.; creamery butter made, 72,5561 b.; average advance per lb. of butter-fat, 9.64 d; average grade, cheese, Rahotu 91.549, Ranana 91.521; average grade, creamery butter, 90.943; average grade, whey butter, 89.171. The weight of butter made from each pound of fat was 1.17361 b. and the weight of cheese made from each pound of fat was 2.59271 b.

THANKFUL FOR WHAT RECEIVED.

They had a year no better than anticipated, said the chairman. Some had thought that this year might have turned out better than last, but prices had not been as good as hoped for. However, with the prices that had ruled during the year the shareholders should be thankful for what they had received. He did not think the company was very much behind other companies in the results achieved. He had taken note of the reports of other companies along the coast and throughout Taranaki and he had not seen where‘a company had done better.

He did not think it possible to predict what the market would be next year but he hoped it would be better tlian it was this year. The company had. spent a good deal of money in keeping the factory up-to-date. The directors had spent money on improvements, particularly on the water supply, which had been a problem in the past, the river supply not being satisfactory. A well had been sunk and it seemed certain that a certain amount of good water would be obtained, if not for butter-making, for other purposes in the factory. The cottages had been repaired and most of the factory plant had been kept up-to-date. A fair amount had been spent on repairs and renewals. The chairman said it was realised the time would, arrive when they would have to spend more ph the plant. If the supply went on increasing as it had. it was only a question of time when they would have to build a new factory or extend the present one. Today the department insisted on the making of better butter and cheese and in order that an improvement might be achieved the directors expected, suppliers to bring a better quality of milk. They were pleased, that the manager had. been able to say the milk was improving in quality and had been for some years. The mana,ger had been trying to turn that milk into first-class articles, and he had. succeeded.

“WASH-OUT” FEARED. The question of the method of payment had been exercising the minds of many, continued the chairman when mentioning the point whether loy or high-teetiiig cows were better for cheesemaking. The directors had decided this year to go into, the question more thoroughly and Mr. P. O. Veale, of the Hawera laboratory, had been brought into the matter. The directors had decided for the coming year to permit the testing of the whole of the milk for casein content, the cost being low, £5O. for the whole of the season—-and they were going to make payment on casein and butter-fat content to test the matter. The scheme would be watched by other factories, and if anything were found to be in it no doubt they would also adopt the system. Perhaps he was a pessimist, but he had an idea that after this year it would be found to be a "wash-out” and that the low-testing cow was not the asset imagined. Comparing the pay-out this season with that of 1930, the chairmap said the present sum dispersed was £16,000 less, though 70 tons more cheese was made. The total cost of manufacture and charges f.o.b. was 2.52 d. per lb. of fat. He did not think any other factory could show a more satisfactory result. He thanked the manager (Mr. T. C. Farquhar) and staff for work accomplished and paid a special tribute to the secretary (Mr. H. Baily), who was untiring in the interests of the company. The manager in reply to a question said the proportion of finest cheese for the season was five per cent., the rest being first grade.

DAIRY INSTRUCTION VALUABLE.

In reply to a question whether it was intended to continue the services of a dairy instructor if differential payments were adopted, the chairman said that personally he thought the instructor should be retained. The system of instructors was one of the finest things introduced to the dairy industry. The detection of one dirty yard and its cleaning was worth the services of the instructor alone. They w-ere performing a valuable service and he would certainly recommend maintaining their services.

The position of the Eltham Box Company was criticised by Mr. G. Gibson when referring to a document marked ‘‘confidential” issued to dairy company directors. The chairman also referred to the matter and said the whole question would be reviewed at the’forthcoming annual meeting of shareholding companies. Mr. Gibson considered sufficient Press publicity had not been given to the affairs of the company and the chairman endorsed that opinion, saying that had full publicity been • given to the affairs of the Box Company two years ago it would have been better for all concerned.

Messrs. Green and G. Gibson were re-elected unopposed to the directorate. Mr. D. Pennington was elected to the seat vacated by Mr. V. 8. Tyrrell, who has left the district. Unsuccessful candidates were Messrs. L- F. Fischer and C. E. Field.

Mr. Veale attended the meeting to explain the new system of payment to be tried by the company for a year. “The idea is to obtain a better system of payment for milk used for cheese-making,” he said. “At present you are paid for fat, but it is not fat you sell.” Once, he continued, it was the custom to base payment for milk for cheese-making on the gallon of milk, but it was found that system was open to serious abuse. Then the system of payment according to butter-fat was introduced, and for a time this was considered satisfactory, but it was now contended that this system of payment was not strictly fair, as the amount of fat in the milk did not indicate the amount of cheese that could be produced from that milk. The quantities of casein present varied in different milks, and this had a bearing oh the cheese-making qualities. RECEIVE MORE THAN DUE. Under the system of payment by fat test some men supplying milk for cheese might be receiving more than they were entitled to, while others received less than they were entitled to. That was not fair. Therefore a scheme to pay according to the amount of cheese produced from milk would be beneficial. In the past all plans had failed where they were based on the fat content of milk. This scheme was to test the milk for casein as well as fat, and from this test it was simple to decide what amount of cheese could

he made from milk. It might be that milk was producing 2.31 b. of cheese to 11b. of fat or 2.81 b. to lib. of fat. Under the plan to be introduced, the factory manager would, test the milk for fat exactly as in the past and. milk samples would be tested, at Hawera for casein as well, from tables in the possession of the laboratory it would then be simple to show the yield of cheese from eaeh sample of milk. In this way they would give a trial to a system of payment strictly according to _ th# cheese-producing capacity of the different milks. If a man had a high cheeseproducing milk it was. only fair that he should be paid according to its value for that purpose. After all it was the cheese the factory sold, and not the butter-fat.

In the past casein test systems had not been put into operation because there was not a simple enough test for a factory manager to undertake, ae. with" butter ; fat, but as the Hawera laboratory was available the matter was simplified. The Rahotu director! had. therefore decided, as pioneers, to give the system a trial for 12 months, paying each supplier according to th# cheese-producing qualities of his milk. Mr. T. Wilcox said Mr. Veale had assumed butter-fat was of no value. How did he square that with the opinions held by world-wide experts for many years ? They had, said, that the high-testing cow and high-testing jnilk were tjie best for cheese-making. He had been informed New Zealand, made the best cheese in February.and March./ Mr. Veale denied that he had meant butter-fat was of no value. This system proposed, to pay each supplier for the cheese his milk produced, whether his milk were high or low-testing. New Zealand cheese had a fat content in the dry matter of 58 to 60 per cent,, compared with 52 to 53 per cent, in Canadian and 49 to 51 in English farmers?. If New Zealand were right the prices for the Dominion product should be going up, whereas they tended, to go down. There was no idea of continually advocating lower-testing milk . for cheesemaking. They were advocating 52 to 53 per cent, of fat in the dry matter, similar to the best Canadian. They might elect to go in for higher and higher-testing milk, but they certainly would not get more and more money for their cheese. He mentioned aij experiment recently carried out at Wisconsin by experts, this indicating that cheese with 52 to 53 per cent, of fat in the dry matter graded highest, while cheese with the highest fat content in the dry matter scored lowest. Cheese containing a moderate amount of fat in the dry matter scored highest right through. But whether the cheese had a high or low fat content did not matter very much if they were going to consider the question from the aspect of fair play or honest dealing. If a man’s milk produced more cheese, then that of another, it was only fair to pay him for the cheese his milk produced. LOW AND HIGH-TESTING. Mr. Field asked whether it was not possible that a low-grade milk- would not produce good cheese and that it required to be mixed with higher-testing milk to bring the cheese up to the. best quality. Mr. Veale said that if they went to extremes in low-testing milk it might be possible to produce a cheese so low in fat that it would not be a good article, but he. would say. that no milk t of that kind was being produced In / Taranaki to-day, even from recognised low-testing herds. Three per cent, milk would produce slightly more than 50 per cent, of fat in the dry matter of cheese. Under the system l , he proposed there would be no encouragement io produce milk lower end lower in fat content. A limit would be 3.S or 3.9 par cent, making, up to 52 dr,53 per cent. • of fat in the cheese, equal to Canadian and higher than English farmers’, both of which gained higher prices than New Zealand.

In reply, to Mr. Pennington, who asked what would be the result, of ekimming 1 the milk to a 3 per cent, j test, Mr. Veele said it would be equivalent to standardisation. The system proposed would enable the detection of such a practice and it would then bo for the directors to fake what action they saw fit, as in the case of the adding of water. There was a difference between machine separating and skimming by hand, as done by the English farmer. The system of testing , advocated was the fairest yet devised and was proof against playing about with the milk. > '■ ’ -

The chairman said the directors had decided to give the system a trial for a year. His own feeling was that the man with the low-testing milk would be found to be the lower receiver. Mr. Wilcox «aid Mr. Veale had refer ted tb the better prices obtained for Canadian cheese and English farmers’, ■New Zealand’s chief competitors. He suggested New Zealand failed in regard to the proper maturing of its cheese. They put it in crates and sent it away. Might not the advantages obtained by the Canadian and the English farmers be duo to their superior methods of maturing? Mr. Veals said he was prepared to admit there might be a great deal in that. New Zealand supplied well over 60 per cent, of the British market. Ho was certain that if they improved the V

quality all, round there would be,an improvement in prices. In answer' to another question he said the method of payment under his system was not fat plus casein, but payment for- buttdrfat on its cheese-producing capacity, which was determined by the ratio of casein to fat in the milk. . /■'

Mr. Waswo asked if the underfeeding of high-testing cattle would produce a drop in the test. Mr. Veale said underfeeding would only result in a drop in production, with comparatively little difference in the analytical properties of the . milk. Ji was very difficult indeed to alter th# qualities of a milk. , Mr. Veale was accorded & vote <■ thanks. '

Mr. M. Hill moved that differential payment be made Jd a lb. less fee second quality milk. The motion was lost. Mr. Green was re-elected chairman a subsequent meeting of directors.