JOLL DAIRY COMPANY

Taranaki Daily News, 29 August 1935, Page 8

JOLL DAIRY COMPANY

RETURN OVER NINEPENCE HIGH GRADING FIGURES. ONE BRANCH TOP OF PATEA LIST. HOLDING POLICY CRITICISED. At the 27th annual meeting of the T. L. Joll Co-operative Dairy Company, held at Kapuni yesterday, the report stated that the appropriation account showed that the final realisation of produce for the year ended June 30, 1934, exceeded the estimate by £6253 Is. This sum enabled the directors to make a final payment for the 1933-34 season of 9 15-16 d per lb of butter-fat, exclusive of interest on shares. The balance for distribution in the appropriation account at date amounted to £12,068 9s, and after making provision for interest at 4 per cent, on shares that had been fully paid for one year and reduction of building loan, this would bring the average payment to 9.08 d per lb of butter-fat. Produce-stocks had been valued conservatively and this value had been more than justified by account sales since received from London. The profit on the bulk store and garage amounting to £l9l Hs 6d had been placed to reserve.

Factory statistics were: Total milk received, 96,285,5901 b (99,171,8861 b in 1934), total butter-fat 4,172,3491 b (4,358,7181 b average test 4.333 per cent. (4.395), total charges up to f.o.b. at per lb butter-fat 2.48 d (2.51 d

Used for cheese-making: Pounds of milk 92,734,2731 b (95,812,4211 b pounds of butter-fat 4,002,9191 b (4,192,0261 b average test 4.316 per cent. (4.37), cheese made (factory weights, 4543 tons 6cwt 3qr 231 b) 1 10.177,0991 b (10,677,1041 b gross). Used for butter-making: Pounds of milk 3,551,3171 b (3,359,4651 b average test 4.77 per cent. (4.96), pounds of butter-fat from milk 169,4301 b (166,6921 b pounds of butter-fat from home separated cream 12,7901 b (12,3821 b butter made (96 tons 3qr 61b) 215,1301 b (214,6361 b The chairman, Mr. A. C. Johnstone, said the manufacture had been very satisfactory and the grading reflected great credit on the staff. They had graded 62,132 crates, of which 20,085 were finest, 41,581 first and 466 second grade, and if it had not been for one factory striking a patch of mottled colour the second grade would have been much lower. This was a good performance and thanks were due to the managers and their men. The grading positions at Patea of the eight factories were first to fifteenth out of 47 factories. GRADING POSITION. The chairman read a statement of the grading position as follows: Palmer Road, 93.044, Ist; Auroa, 92.312, 4th; Kapuni, 92.282, sth; Otakeho, 92.258, 6th; Tempsky, 92.202, 9th; Mangawhero, 92.09, 12th; Te Ngutu, 92.08, 13th; Okaiawa, 92.06, 15th. The dairy produce grader, Mr. D. Campbell, added congratulations to the company and its employees on the very good -work accomplished during what was considered to be a very difficult cheesemaking year. “The uniformity of the article produced reflects much credit on the management, and I trust that your efforts for the incoming season will be met with equal if not better reward, -the letter stated. “There is no doubt that the quality of the produce of the whole Dominion has improved,” continued the chairman, and once we get past the stigma that attached to our product in former years I hope to see a corresponding improvement in prices. In January the board, in view of the drought and consequent expected decrease in exports, and, strengthened also on information received from various quarters, decided to keep the cheese off the market. A factor ot which they were not informed was the flooding of the market by inferior English cheese, manufactured as a result of the sudden burst of energy on the part of farmers in Britain. In Western Somerset 10,000,000 gallons of milk were produced where dairying had been practically unknown, and this invasion of the market had a serious effect on prices. This in ( - ferior cheese was selling at as low as 3d a pound in the grocers’ shops in the United Kingdom. The British farmer could not have derived much benefit at this price, but there was a probability that they would switch over this year to butter, which should help the position considerably.” At the date of balance the companyhad 35,540 crates of cheese shipped for which no account sales had been rendered. It was extremely difficult to value thus cheese as some unknown charges such as shrinkage, insurance and interest were more or less dependent on the time factor. They had received as an advance on this cheese the equivalent of slightly over 37s per cwt, so that instead of taking the cheese in at market value, then about 44s to 45s per cwt, and endeavouring to calculate the known and unknown charges, the company followed a different procedure. They calculated the maximum charge possible, which came to 6s; this charge they took from the market price and entered the cheese as stock at 38s per cwt net. That estimate was conservative. UNSOLD CHEESE. The cheese in New Zealand, 10,000 crates, was taken at 4?d f.0.b., which represented approximately 45s per cwt at London. From these figures there would be a balance on realisation, providing the market did not slip back again. The auditor, Mr. H. A. Lennon, said the building loan account was a new one which would be liquidated at the rate of £BOO per annum, which would be a charge on butter-fat of l-20d per lb. The cost of the new factory at Mangawhero was £4400, and additions to the Okaiawa curing room cost £640. A new cottage at Palmer Road cost £4BO. Wages and salaries increased by £299 and requisites by £1302.’ Fuel and power decreased £179, while other decreases were freezing and storage £1729, crates £l5O, interest £lO2, repairs and renewals £l5OO. Total working expenses were .03d per lb butter-fat lower than in the previous year. Mr. T. York asked for an explanation of the building loan of £6OOO and the increase in the bank debenture by £4OOO. The auditor explained that the bank account had gone up because there were not the surpluses. The debenture was really the same. The building loan was a Capital account. The bank account went up or down according to the receipt of moneys for the sale of produce. Mr. E. W. Snowdon asked particulars concerning the re-building reserve of £7500.

The auditor explained that this represented the savings the company had made. It was money withheld from

shareholders to meet liabilities. This was not fixed in the matter of shares, and if there were heavy losses a levy on butterfat would otherwise have to be made to pay for these. If reserves had not been made the bank account would have been up by a similar amount. Mr. Lennon urged the writing off of outside companies’ shares, using the reserve fund to achieve this. Mr. Snowdon: Why borrow £6OOO as a building loan when there was £7500 in reserves? The auditor replied that the reserve was not in cash. The reserves amounting to £19,000 were really capital that had not been distributed, and the existing shares were worth so much more in the event of winding up. “A BOOK ENTRY.” Mi'. A. D. Turner: It is really a book entry. Would it not be advisable to cut off these shares in other companies as assets, also the reserves on the other side of the balance-sheet? Then we would have a plain statement we could understand. Mr. Lennon: It could be done. The shares in other companies should not appear on the balance-sheet at all. The retiring directors, Messrs. C. P. Crowley, J. F. Kiley and G. H. Meuli, were re-elected unopposed. Mr. H. A. Lennon was re-appointed auditor. The company’s policy of holding was discussed at length, Mr. T. York asking if it was true that there had been an offer of 5Jd for 1000 tons of cheese. The chairman replied there had been no such offer. He defended the policy of holding and said he felt that it was justified. It was pointed out that the realisations up to the date when holding was commenced had averaged only a little more than the average of realisations made since. The recent improvement in prices would bring up the average returns, but probably there would be a small loss as the result of holding. This was perhaps unfortunate, but it was a mistake that had been made by other companies as well , A motion by Mr. A. D. Turner for the company to accept suppliers’ orders for manure at cost without allowance for handling charges was lost. A motion to put the whole of the output through one firm of agents was lost. Mr. W. A. Johnson raised the question of the cost of installing machinery at the Mangawhero factory. The chairman replied that the work was carried out on the lowest possible basis. In reply to Mr. E. W. Snowdon the chairman said very little premium had been received for finest cheese. The lowest grade appeared to fix the price. However, he urged upon suppliers the necessity of producing only the best article. In reply to Mr. E. Chapman the chairman said there had been no report on waxing. The people in Britain did not appear to be very particular whether cheese was waxed or not, but most of the people who came back from England reported adversely on waxing. He understood the Dairy Board was taking the matter up. Mr. G. Luscombe moved that the services of the farm instructor be dispensed with. Mr. R. C. Treweek opposed the motion, pointing out that a creditable article was being produced. He urged that the. present satisfactory position be not disturbed. The chairman said farm instruction would soon be compulsory. The motion was lost. In reply to Mr. W. A. Johnson the chairman said the Palmer Road factory had the highest yield as well as the highest grade. Mr. Kidner said it was a great achievement to top the Patea grading list, and he moved that the manager be granted a bonus. The motion was lost. In reply to Mr. R. C. Treweek the secretary reported on the progress that was being made in regard to payment for milk on cheese value, stating that a Taranaki factory was proposing to make a “shadow” test this season. The chairman added that probably next season there would be something definite to report. A motion to hold.the annual meeting earlier in the month was lost. A suggestion to hold the meeting at night also met with disfavour. Asked what the position was in regard to “zoning” the chairman replied that it did not effect the district to any extent. A vote of thanks was accorded the manager and staff for their services, also the women who provided lunch. Mr. Johnstone was' re-elected chairman.