20 BULLETIN 1095, TJ. S. DEPARTMENT OF AGRICULTUEE. 



PROBLEMS IN OPERATING MILK-DISTRIBUTING PLANTS. 



The foregoing statement regarding the duties and responsibilities 

 of a milk-plant manager indicates that he may have many problems 

 with which to deal. For the purpose of separate discussion of the 

 more important phases of each, they will be considered under the fol- 

 lowing classification : 



(1) The securing of an adequate and proper milk supply. 



(2) Efficient and economical plant operation. 



(3) Sales policies and methods of market distribution. 



As consideration is given to each of these, it is well to keep in mind 

 that the manager is responsible to the board of directors, and he 

 should cooperate with it on all matters involving business policies and 

 seek to obtain counsel and advice in formulating them. 



THE SECURING OF AN ADEQUATE AND PROPER MILK SUPPLY. 



Three problems arise in every milk plant, in obtaining a milk sup- 

 ply. These are (1) source of an adequate supply, (2) maintaining 

 proper quality in the supplies received, and (3) determining upon an 

 operating policy which largely eliminates financial risks and losses. 



In cooperative plants, the larger part of the supply is usually re- 

 ceived from the patron members, but usually not to the entire exclu- 

 sion of the product of nonmembers. A closed organization against 

 nonmembers is often not desirable, even though patron members may 

 be able to furnish an adequate supply. By providing a satisfactory 

 market for dairy products, ths establishing of competing plants is 

 discouraged and production is encouraged. In practically every 

 plant it is necessary to operate a by-products department, in which 

 the surplus supplies may be manufactured into butter, cottage cheese, 

 and other products. Although by-products may be sold ordinarily 

 at lower net prices and on narrower margins than market milk, the 

 overhead costs of the plant may be reduced by increasing the volume 

 of product handled. Also, the handling of a surplus allows op- 

 portunity for expansion of sales in the milk department. 



To obtain adequate supplies of milk of highest quality, .country 

 collecting routes are often employed in reaching patrons in neighbor- 

 ing sections, and receiving and cooling stations are operated at points 

 from which delivery is made by rail or by motor truck. Certain ad- 

 vantages are often obtained by the operation of collecting routes, for 

 the milk is picked up at the farm and needless duplication in delivery 

 by individual producers is eliminated. 



The ordinary charge for collecting, which includes the return of 

 empty cans, may range from 1 to 5 cents per gallon, depending upon 

 local conditions. 



