4 MANAGEMENT OF DAIRY PLANTS 



Miscellaneous expenses $ -5° 



8 per cent interest on a $4,000 investment 89 



Annual depreciation of 10 per cent i.ii 



Freight on 373.3 lbs. butter at i cent per lb 3.73 



Commission of 5 per cent on 373.3 lbs. butter at 27 cents . . . 5.04 



$101.16 



Credits 



373.3 lbs. butter at 27 cents $100.79 



1,000 lbs. buttermilk at 10 cents per cwt i.oo $101.79 



Total Profit 0.63 



From the above it is evident that a creamery receiving the 

 cream from only 400 cows will not be able to pay for butter fat 

 within one cent of the price received for its butter. When 

 meeting competition from a larger plant, its strength will be 

 reduced. It also appears as if Creamery No. 2 should be able 

 to pay for butter fat within a fraction of a cent of the price it 

 receives for butter. 



In using the above tables, however, it should be considered 

 that a certain amount of milk and cream will be used on the 

 farm. In reality, therefore, if the stockholders sign up for 800 

 cows, we should not depend on receiving the cream from more 

 than 600 cows. 



Competition. — Competition should be considered in the 

 purchase of raw material as well as in the sale of finished product. 

 In the matter of purchase, study the character of the competi- 

 tion, the methods adopted by competitors, the nature of their 

 business, their costs for collecting raw material and for produc- 

 ing finished output, and their facilities for marketing. If the 

 competitor is a man of clean habits and of sound business prin- 

 ciples, then he wiU have the best people of the community work- 

 ing with him. If he is less honest in his deaUngs, his competi- 

 tion may be disagreeable for a time but will eventually lose out 

 against a strong rival. A proprietary plant cannot prosper in 

 the same town where a successful cooperative creamery is in 



