INCREASED PRODUCTION

Taranaki Daily News, 18 July 1933, Page 11

INCREASED PRODUCTION

MIDHIRST DAIRY SEASON BUTTER AND CASEIN RESULTS. STRONG POSITION DISCLOSED. Increases, of 89 tons of butter and of 137 tons of casein in the year’s output were recorded at the thirty-eighth annual meeting of the Midhirst Dairy Company yesterday. A feature mentioned was the revival of the casein market, which with reduced costs had enabled the company to pay lid per pound butter-fat J for skim milk left for casein-making. Mr. W. J. Wellington presided over an attendance of about 200 suppliers. The report showed that milk received had totalled 52,586,0861 b. (last year 49,607,6311 b.), the test was 4.57 (4.52), fat 2,405,1351 b., and cream 87,2421 b., a total of 2,514,7191 b. (fat 2,241,8901 b., cream 87,2421 b., total 2,329,1321 b.), and butter made 3,031,6651 b. (2,830,6951b.)'. Butter manufactured totalled 1353 tons Scwt. 491b® an increase for the season of 89 tons 14cwt. 491 b. The end of the season’s butter was sold in small parcels at figures from 9 l-8d per lb. to 10|d per lb., leaving butter shipped on consignment on six boats, to be taken into account on estimate, and on that estimate the balance-sheet showed a surplus due to suppliers of £9149 7s 7d, which when distributed would make the average payment for butter 8.773 d per lb. butter-fat for the season. The surplus had been allocated as follows: Payment to suppliers of Id per lb. for fat supplied from November 1, 1932, to May 31, 1933; payment of preference share capital, approximately £lOOO. The cost of manufacture was 1.151 d per lb. butter (last year, 1.275 d). The total costs to f.o.b. 1.481 d per 1 lb. butter (last year 1.587 d). The sum of £1469 4s 3d had been written off the butter account in depreciation. CASEIN MANUFACTURE. Casein manufactured totalled 576 tons, an increase for the season of -137 tons. The directors appreciated the support given by shareholders to the casein department, and the increase of 137 tons for the season had very materially assisted in bringing about a reduction in costs of manufacture. Suppliers had received an advance throughout the year of id per lb. butter-fat on casein account, and the surplus of £6002 7s lOd jaxjpmj e &rat[ddns Xad o; aogjns pjnoM Jd per lb. over the whole season, making a final payment of IJd per lb. casein butter-fat (equivalent to 6.12 d per 1001 b. of milk left for casein-making). That equivalent id further payment had been allocated as follows: Interest on share capital absorbing l-16d; and further payment of U-16d over the whole season.

' Casein statistics were: Cost of manufacture and to f.0.b., £ll 3s 6d; required to pay id per lb. butter-fat, £7 10s 6d; total required to pay id per lb. butterfat, £lB 14s. The sum of £575 17s lOd had been written off in depreciation. The store department had another successful year, and in spite of the keenness of competition had‘ shown a profit on its operations, which had been allocated as follows: Rebates'to shareholders, £914 15s 3d; profit transfer to butter account, £356 18s 2d; reserve for taxation, etc., £143 13s 6d; total profit, £1415 6s lid. The engineering department ! had shown a profit of £l2l 18s 8d for the season, which was considered satisfactory in view of the fact that the department was run for the purpose of rendering service to the factory and its shareholders, with profits as a secondary consideration. A review of previous balance-sheets would indicate that the company was showing a big reduction in its factory repairs account, much of which could be attributed to the savings created by the workshop, PLEASURE AND REGRETL The chairman expressed pleasure at seeing such a large attendance of shareholders, which showed the interest taken in the affairs of the company. It was with mixed feelings of pleasure and regret that he moved the adoption of the report—of pleasure in the knowledge that the balance-sheet showed a splendid position as far as the company was concerned, and of regret in the fact that world conditions remained such that farmers throughout the Dominion were ' still living through the worst trading conditions of their* time. There were signs to-day of an improvement in all commodity prices, with the exception, perhaps, of butter and cheese, but it was well to remember that those two commodities were the last to be affected by the depression, and it was his hope that the slight improvement show might be of a permanent nature, and that prosperity would slowly but surely return. One must, however, face the position that until international agreement and world-wide prosperity returned they could not secure a permanent improvement in the Dominion, and it was therefore necessary that they face the future with even greater fortitude than had already been displayed. In so far as the dairy industry was concerned, they commenced the season with what appeared to be better ruling prices for produce, particularly when butter was sold at per lb. f.0.b., but with the increased production which soon made itself evident and other causes over which they had had no control, the market declined very seriously until suppliers received the lowest payments ever experienced. . Suppliers’ confidence in the casein department had been shown by the increased production of 137 tons, and that confidence had been justified by the returns to shareholders of IJd per lb. but-ter-fat. It was pleasing to state that by concentration on marketing not one penny of storage or overseas interest had been incurred, all sales having been made c.i.f.e. or f.0.b., while the manufacture had been carried out in the most economical manner without sacrifice to quality. The directors believed that their casein was now firmly established on the market, and it was anticipated they would receive their full share of the business offering. Shareholders and even the general public had heard in the past that the company had sacrificed its butter pay-out to bolster its casein department. That had never been the case, as the balance-sheets over a period showed, and a review of the present sheet should definitely set at rest such a suggestion, there again being" a substantial reduction in costs, both of butter and casein. It must be realised that casein would always be a speculative business, and it was impossible to forecast its future, but it could be said that if the new season opened as it appeared it should at the moment, suppliers could be confidently recommended to further support the department by leaving the maximum amount of skim milk available. Mr. B. Richmond asked what was the reduction in the cost of manufacture of casein. He had heard rumours that several adjoining companies were desirous that Midhirst should treat their casein. If that could be arranged it should considerably reduce the cost of production as the plant was capable of handling a great deal more. The chairman said the reduction in costs amounted to (£2 5s lOd per ton. The directors were alive to the position mentioned by Mr. Richmond. That was all that he could say at present.

The secretary gave details of the decreased costs of manufacture of casein, stating that the main reason was the increased output. Replying to Mr. W. V. Vestey, the secretary stated that the total cost of the office was £7lO. Mr. Vestey asked whether it would not be possible to do away with the shareholders’ deposit account of £3936 now that they had a reserve account of £13,321. The secretary explained that the reserve account was not a liquid account but would be available in the event of liquidation. To Mr. Vestey the secretary said that the interest paid on the share deposit account was a half per cent, less than the bank interest. Replying to a shareholder, the secretary said that the amount owing to the bank on the casein loan had been decreased by £lOOO. Owing to the depreciation that had been written, off they owed only £6400 on the casein building and plant. Mr. Vestey considered the company

should revert, to the old system of appointing a committee of. three directors to control the store. He understood the present system was for the nine directors to control the store. The chairman said that was a matter for the directors to decide. Mr. W. Somers said he could not see the necessity for appointing any committee. The manager should be capable of running the store. Mr. M. Davis congratulated the suppliers on the result of the casein operations. Mo -e than the payment Was the maimer in which the farmers had stuck to the casein undertaking during a very serious time. That was one of the bright spots in Taranaki. It would be noted that they had paid IJd, whereas in the best of times when casein was worth £62 per ton, they had been able to pay only 1 3-Bd. That was due to reducing costs. It had been suggested that they had been robbing butter to pay on casein, but since 1925-26 they had raised the price of precipitation and had charged that ever since. The success of the casein operations was a

tribute to the fact that farmers could successfully control a co-operative concern. Mr. Davis paid tribute to the faithful service given by the staff. . ELECTION OF DIRECTORS. For the three vacancies on the directorate there were nine nominations, including two of the retiring directors, Messrs. W. J. Wellington and J. Browning. Owing; to ill-health the third director, Mr. W. V. Hosking, did not seek re-election. Each candidate addressed the suppliers. The election resulted: W. J. Wellington 1404, J. Browning 1132, J. H. Kirkby 699 (elected), A. Uhlenberg 690, J. D. A. Mackay 566, P. R. Paul 398, J. Graham 355, S. A. Signal 304, C. L. Vickers 285. Mr. T. Harry Penn was re-elected auditor. Mr. Strack drew attention to the unreliability of the present system of delivery of skim milk. He moved that the present machines be scrapped and that machines be installed which worth! weigh the milk accurately. Another

supplier referred to the difficulty over The chairman stated that the directors would give the matters attention with a view to finding a remedy.