THE DAIRY INDUSTRY

Waipa Post, Volume 37, Issue 2227, 27 October 1928, Page 5

THE DAIRY INDUSTRY

N.Z. CO-OPERATIVE DAIRY COMPANY. REVIEW OF BUTTER DEPARTMENT. (In N.Z. Dairyman..) ' At least a dozen requests have reached “ Calculus ” from suppliers—and' others—for a review of the bal-ance-sheet of the New Zealand Go-op-erative Dairy Company, Limited, at Hamilton, but in view of the vast and somewhat involved ramifications ox this company’s affairs and the accumulation of many other balance-sheets it has so far impracticable to accede to these wishes. However, a brief review of the company s butter department id (here given, land a review of the various cheiees factories and other departments will follow as time and space permit. The profit and loss account of the butter department shows no special features, and the results, are very much on thf* fines of the average New Zealand creamery—no better and no worse. In a review a couple of years ago “ Calculus ” was able to state that the manufacturing cost of this company was the lowest of any creamery in New Zealand, but from this year s statement it is evident that it has lost its pride of place, aa, to the writer s knowledge, several much smaller factories during the last year not only showed a smaller manufacturing cost but also placed their.ibutter f.0.b.. at a smaller figure than the big Waikato concern. This dogs not say, of course, that the costs have gone up, but simply that costs were not reduced at the slamo rate as -with some of the smaller comapnies . The price realised for the finished product was a fair average, but was also improved upon by a number of other factories, which is somewhat remarkable in view of the better organisation claimed and the advanced prices generally quoted for “ Anchor ” butter on the London market. However, a table on a per lb butterfat basis will enable' those interested to make their own comparison:— Marketing and Conversion Account.

Total outgoings ... £3,980,954 19.74 The price realised'per lb butter-fat is in reality slightly less, as included in it is the butter made from the whey ere,am purchased (£11,185), unless the whey butter is included in the total quantity. In any case, the difference either way is quite negligible, lhe price realised (19.75 d per lb butterfat) has been slightly exceeded by several other companies, such as the Hokianga, Ohura Valley, Shannon and Canterbury Central factories. Considering the quantity of butter handled, the manufacturing cost is by no means as low as it might be. Quite a numb Or- of factories kept below 1.22 d per lb, the Maungatapere factory, for instance,, with an output of 519 tons, manufacturing at I.OOd per lb butter-fat. Including depreciation, the cost of thq New Zealand Co-foper-ative Dairy Company stands at l.Jld per lb butter-fat; which, in the writer s opinion, is too Ihigh. ... ... In connection with this item, this company hlas adopted a peculiar way of compiling the various amounts comprising manufacturing dost. Burchases ’’—which in ordinary dairy factory parlance is understood to mean advances made to suppliers for butterfat only—the New Zealand Co-opera-tive Dairy Company, in addition to such advances, 'also includes the purchase of whey cream, manufacturing requisites, and packages, the latter item being apparently butter boxes. Although these items may be purchases,” this is, tio» say the least, la very unusual way of showing them. With the exception of whey cream, they are manufacturing charges, and, although “Calculus” has seien some very strange things m connection with dairy company balance-sheets, he has never seen these _ items lumped witn advances to suppliers. , , The general expenses and 1.0.0. charges are about on a plar with other factories, while the total charges from farm to free on board (inclusive ot cream cartage), at 2.28 d per lb fat, are better than the average, although the W'aitara Dairy Company placed its 384 tons of butter f.o.b. at 2.031 d per lb butter-fat, inclusive of cream C One of our correspondents tells us that the statement whs made, at the company’s annual meeting that the total charges to -f.o.b. for butter amounted to £ls 10s lid, and he wants to know how this amount is made up. “Calculus” thinks that there must be 'a mistake somewfhere. The total charges (without cream carting) are 2.08 d per lb butteh fat, or 1.73 d per lb butter. On a tonnage basis this would work out at £l6 Is 7d per ton of butter. The writer cannot see. how the amount of £ls 10s lid was arrived at. A reply to several other questions relating to butter pay-outs, etc will be found in the figures and statements already given above. On the whole, “ Calculus thinks that the Waikato company should be able to manufacture and market its butter 'a,tl a less dost than it is doing at present. There are dozens ot cremeries in New Zealand to-day with an output of 300, 400, and 500 tons ot butter with just as good, if not better, results and bettqr returns to suppliers, which seems to indicate that the best use is not made of the tremendous advantages lat the command of this large concern. ,

Per lb b.-fiat £ d 48,394,021 lbs but19.74 ter-fat realised.. 3,980,954 Total realisation .. £3,980,954 19.74 Per lb b.-fat £ d Paid suppliers Balance, available . Cream cartage Whey err earn purchased Manufacturing ex3,070,548 426,981 39,594 11,185 15.24 2.11 .20 .05 245,812 1.22 Depreciation 17,543 .09 .21 General expenses . 43,b29 Charges to f.o.b. .. To reserve 102,479 23,183 .51 .11