IMPROVEMENT IN QUALITY

Taranaki Daily News, 20 July 1934, Page 12

IMPROVEMENT IN QUALITY

BUTTEIR AND CHEESE MAKING LEPPERTON COMPANY MEETING. CHAIRMAN’S REVIEW OF SEASON. i A further improvement in the quality of butter and cheese, which is now of a very high standard, and a decrease in the cost of production were salient features of the report presented at the 42nd. annual meeting of the Lepperton Co-op. Dairy Company yesterday. Mr. P. A. Openshaw, chairman of directors, presided over an attendance of about sixty suppliers. The annual report stated that weather for dairying during the season had again been excellent. Although there was a drop of 835,4681 b of milk supplied for cheese-making, there was an increase of 364,3421 b of cream supplied for but-ter-making and in butter-fat production for dual manufacture an increase of 115,2461 b. That represented a decrease of 37 tons of cheese and an increase of 78 tons of butter manufactured during the year. From May 1 to July 31, 1933, the manufacturing policy of the company was butter, and from August 1, 1933, to April 30, 1934, cheese was manufactured from the whole milk supply and butter from the supply on separate account. To date the whole of the output ot butter had been shipped to London on open consignment with the exception of the quantity required for local trade, and so far they had received account sales for 3651 boxes, leaving 1662 boxes afloat and 445 boxes in cool store awaiting shipment, all of which had been valued at 6Jd per lb; 75 boxes were also held in cool store for local trade during the winter. All cheese had been shipped on open consignment and at date of balancing, account sales for 1866 crates were received, leaving 1444 crates afloat and 395 crates in cool store awaiting shipment, all of which was valued at 3sd per lb. If the London market retained its present level of prices, very substantial surpluses should be received on the uncleared stocks of both butter and cheese. During the year £22,122 16s Id had been paid to suppliers. Of that amount £13,975 2s represented payment for milk and cream used in buttermaking and was equal to an average payment of 8.19 d per lb butter-fat. For cheese-making £8147 14s Id had been paid to whole milk suppliers, and was equal to an average payment of 7.94 d per lb. butter-fat. After writing off the sum of £3OO 12s 6d for depreciation, there remained a balance of £1216 2s 4d to the credit of profit and loss account. Of that amount £lO6B 9s 3d belonged to butter manufacture and £147 13s Id to cheese manufacture. A dividend of 5 per cent, on share capital paid up to April 30, 1933, amounting to £213 15s 3d, had been authorised, and an additional payment of Id per lb. on butter-fat supplied for butter-making during December and March, 2d per lb on butter-fat supplied during January, and IJd per lb. on butter-fat supplied during February amounting to £969 17s 9d. That would bring the average payment of butterfat for butter-making for the year up to 8.84 d per lb. The directors hope to be in a position to make an additional payment on butter-fat supplied for cheesemaking. THE YEAR’S STATISTICS. Statistics for the year ended 1934 were submitted as follows: — Cheese: Number of suppliers, 26; quantity of milk received, 5,408,1011 b; quantity of butter-fat, 246,2701 b; average test of milk) 4.55 per cent.; quantity of fullcream cheese made, 611,1111 b; quantity of whey butter made, 13,3671 b; lbs. milk to lb. cheese, 8.851 b; cost of manufacture at per lb. butter-fat, 1.73 d; management, .31d; charges to f.o.b. ocean steamer, .20d; depreciation, .12d; total cost, 2.36 d. Butter: Number of suppliers, 55; quantity of cream received, 1,046,2991 b; quantity of butter-fat, 409,1781 b; lbs. butter made, 496,5361 b; average test of cream, 39.11 per cent.; lbs. cream to lb. butter, 2.111 b; cost of manufacture at per lb butter-fat (exclusive of cream cartage at 7-16 d per lb. butter-fat), 1.07 d; management, .37d; charges to f.o.b. ocean steamer, ,10d; depreciation, .10d; total cost, 1.64 d. In moving the adoption of the report and balance-sheet the chairman said there had been a substantial increase in the butter-fat production of the company. Although there was a falling off in milk for cheese-making, the company had increased the butter output considerably, and the total butter-fat handled by the company showed an increase .of 115,2461 b. of butter-fat. The quality of the butter and cheese had been satisfactory, and all the reports received from the London agents and the London agents of the dairy division of the Department of Agriculture had been good. From the general reports received from the London importers, the quality of practically all the New Zealand cheese shipped during the past season had shown a marked improvement. That was a step in the right direction. There was still room for further improvement, and it was only by supplying the London market with superfine quality that they could hope to regain the premier position New Zealand held for many years.

It was the aim and ambition of the manager to make nothing but the finest butter and cheese and with the help of a very competent staff he had been very successful, as the grading proved, continued the chairman. The grading season did not close until the end of July, but the grade to the present averaged 93.498 for cheese, compared with 92.597 for the previous year; "4.613 for butter compared with 94.417; and 89.379 for whey butter compared with 89.474. He read several splendid quality reports from Britain. The manager stated that he had been greatly assisted by the improved average quality of milk and cream supplied by the suppliers, and he hoped for its continuance. During the season milk grading with differential payments had been in force and no doubt proved to be a great success. Cooling of milk was a very important measure in improving the quality, as suppliers who had installed coolers last season had found.

The capacity of the cream vats had been tested to their utmost and it looked as though the company would be faced with great expense if the supply on the butter side continued to increase. However, some of the suppliers had willingly agreed to bring milk instead of cream and so had relieved the position. The overseas market had been a disappointing feature of the industry during the past year. Prices hardened considerably last winter, and the directors were hopeful that the rise would be maintained, and that they were on the eve of more prosperous times. Favourable weather conditions in New Zealand and Australia, however, gave an assurance- of a substantial increase in supply, and in a very short time prices began to depreciate. Although, fluctuations had not been so violent as during the previous year, there had been very little life in either the butter or the cheese markets.

In common with other factories, the company received offers from time to time for small parcels, but the prices offered and the size of the parcels were not very attractive, and the directors considered the best policy to follow was one of open consignment. There was an agreement between the London im-

porters not to buy produce afloats, so that any offers received were for in store goods. Insofar as he could see at present, there did not seem to be much prospect of any difference in the net results for the sale of butter and cheese, and in view of the much improved market for casein they would probably find that some butter factories handling a whole milk supply which had the facilities for making butter and casein, would be in a position to make an average return to their suppliers of lid to HJd a lb butter-fat, as he understood that casein for the past year would return about 2d a lb. butter-fat. If they were to consider that proposition at Lepperton it would necessitate spending a fairly large sum of money on extending the butter plant That would likewise involve structural alterations to the factory building. OVER-SUPPLY OF MARKET. The present unsatisfactory state of the butter market was due almost entirely to the over-supply ta the London market brought about by the exclusion of New Zealand produce from Continental countries. Germany, which was always a large buyer of New Zealand produce, was still in a very unsettled state, and there seemed little prospect of a trade treaty being arranged with her in the near future.

Three years ago he had referred to the effect on the butter market of the competition of margarine and he pointed out that despite the very low prices of butter there was still very heavy competition from margarine. It had been thought that the unprecedented low price of butter would have proved a blessing in disguise by accustoming thousands to butter who had previously only eaten margarine. The consumption of butter had certainly increased very largely under the low prices, more extensive publicity and more attractive marketing, but at the same time the very low prices ruling for copra vegetable oils had enabled margarine to be sold at a lower price than butter. On the other hand he had noticed in a Bolton (Lancashire) paper that it had been decided to substitute butter for margarine on a tender for supplies to Fishpool institutions, though the difference in cost would be about £3O on a three months’ contract. It was pointed out that it would be necessary to obtain the sanction of the Ministry of Health before butter could be substituted for margarine for casuals at the Kingsgate Institute. He could not say what the final aver- 1 age payment for the season would be, but was inclined to think that it would be as good as in the previous year. Since the company closed accounts several shipments of butter and cheese had arrived in London, and cabled results of 728 boxes of butter and 776 crates of cheese enabled the directors to make a further payment to milk suppliers for cheese-making of one penny a lb. but-ter-fat over the months of January to April inclusive. Compared with the previous year, the average test of milk received for cheesemaking had risen from 4.42 per cent, to 4.55 per cent., while there was a fall in the yield. ADDITIONAL PAYMENT.

All the manufacturing costs were included in the balance-sheet, so that all surpluses were profits, and the directors hoped to be in a position to make a further additional payment to both butter and cheese suppliers early. He complimented the manager on having been able to reduce his cost of manufacture of cheese, notwithstanding the fact that during the past year they were saddled with 25 per cent, exchange, on the bulk of materials and with 5 per cent, sales tax. Butter manufacturing costs showed a slight increase, due to the fact that a considerable expenditure was required for repairs to the butter plant. In past years they had set aside a special sum of £3OO to £5OO for repayment of the debt to the bank, whereas, during the year they did not do that, but increased the rate of depreciation by £2OO. It had been a very difficult year, the chairman concluded, but he hoped the Royal Commission set up to report to the Government on the position of the dairy industry would prove of good service in the present critical times. The adoption of th report and bal-

ance-sheet, which was seconded by Mr. J. Crofsky, was carried after some discussion. There were four nominations for the too vacancies on the directorate, Messrs E. Hellier and W. N. Ackland (retiring directors), and E. E. Snowball and A. J. Old. The election resulted in the return of the two retiring directors. Mr. E. P. Webster was re-elected auditor. Some discussion ensued on the policy to be adopted by the company in the future, and it was resolved on the motion of Messrs T. McWhirter and Hunger that the directors go into the matter of installing a casein plant and that when they had collected all available information they call a meeting of shareholders for discussion. The chairman was voted the same honorarium as last year, £5O. Votes of thanks were accorded the chairman and directors, the manager (Mr. A. G. Drake), the secretary (Mr. E. W. Gamer), and the staff for their services. Particular reference was made to the high standard of quality achieved by the manager and staff, who at the same time reduced the cost of production. Mr. A. G. Drake, in acknowledging, said that the staff had worked whole-heartedly with quality as their aim.