CALCULATING DIVIDENDS 124 



ME^THODS OF PAYING FOR MILK AND CREAM. 



While practically all creameries buy milk or cream ac- 

 cording to the amount of fat contained in it, the method of 

 paying for same varies with different creameries. With 

 proprietary whole milk creameries, the usual custom has 

 been to guarantee patrons a certain price for butter 

 based upon some leading market quotation and charge a 

 fixed price for making the butter, say 3J^ cents per 

 pound. All of the butter made belongs to the patrons. 



Cooperative creameries, as a rule, pay for butter fat 

 according to the net returns from the creamery; that is, 

 they deduct from the total gross returns the actual cost 

 of making the butter, plus a small sinking fund, and di- 

 vide the balance on the basis of the amount of butter fat 

 furnished by each. 



Many hand separator creameries, and most of the cen- 

 tralizers, pay for butter fat according to market quota- 

 tions on butter. The price paid averages, as a rule, from 

 one to three cents below the average market price for 

 butter, transportation charges being paid by the creamery. 



AVERAGING TESTS. 



In whole milk creameries, where the amount of milk 

 delivered from day to day and the tests of the same vary 

 but slightly, reasonably accurate results may be obtained 

 by averaging two composite tests, each representing, say, 

 one week's milk. With cream the matter is different. 

 Cream deliveries from the same patron vary considerably 

 in quantity and quality and hence averaging cream tests 

 is almost certain to lead to fallacious results, as may be 

 seen from the following example: 



