30 BULLETIN 547, U. S. DEPARTMENT OP AGRICULTURE. 



CREAMERIES AND CHEESE FACTORIES. 



Number and location. — The 1,708 creameries and cheese factories 

 which reported are distributed among 39 States as shown in Table I. 

 Two-thirds of this number are located in the three States, Minnesota, 

 Iowa, and Wisconsin, which States report 624, 301, and 204, respec- 

 tively. New York has 75, Michigan 70, and the rest are widely dis- 

 tributed among 34 States. (See Chart 10.) 



Plan of organization. — Classified according to the plan of organiza- 

 tion as shown in Table II, there are 521 creameries and cheese facto- 

 ries which are operated on a capital stock basis and 1,124 which are 

 cooperative. In many of the organizations operated on the capital 

 stock company plan, the shares are distributed widely among the 

 patrons and the plant is operated principally for their benefit. A 

 much larger proportion of creameries and cheese factories are truly 

 cooperative than is the case with farmers' elevators. This is due to 

 the difference in the method of operation. The elevators pay cash 

 for the grain as it is received, while most of the farmers' creameries 

 make payments covering from 10 to 30 days' deliveries, deduct ex- 

 penses and the necessary amounts for a reserve fund from the 

 receipts of the sale of butter, and distribute the balance among the 

 patrons according to the amount of raw material each has delivered. 

 A creamery which operates on this basis is cooperative in the fullest 

 sense of the word, even though it may never pay patronage dividends. 

 A few of the companies pay the legal rate of interest on stock, charg- 

 ing this amount as an operating expense and deducting it from the 

 returns. 



Some of the creamery and cheese factory associations are formed 

 on the nonstock plan. In such an organization the farmers have 

 borrowed the necessary capital on a joint note signed by the mem- 

 bers, this loan being repaid by assessments on each pound of butter 

 fat or on each 100 pounds of milk delivered. An interesting situa- 

 tion is found at some of the creameries that have followed this method 

 of financing the enterprise in that the debt has been paid but no one 

 "has anything to show that he has any interest in the creamery prop- 

 erty, and as some of these associations are not incorporated it is a 

 question as to v/ho really owns the plant. Some of the organizations 

 have found it desirable to buy in the capital stock of its members in 

 the same manner as outlined above; this makes the creamery the 

 property of all the patrons. Considerable difficulty would bo ex- 

 perienced in liquidating one of these companies if the assets exceeded 

 the liabilities, as ownership could be claimed by all patrons, past and 

 at, who in any way had contributed to the business. 



Business transacted. — The volume of business was reported for 

 the years 1912 to 1915, inclusive, some organizations reporting for 



