The Nonpartisan Leader Newspaper, January 5, 1920, Page 3

T L R S T T D SR R R SRR T T In the interest. of a square deal for the farmers VOL. 10, NO. 1 Nonpartigin Rader Official Magazine of the Natmnal Nonpartisan League ST. PAUL, MINNESOTA, JANUARY 5, 1920 A magazine that dares to print the truth WHOLE NUMBER 224 Milk Producers Lose Millions Annually' : A Report on the Investigations of the North Dakota State Dalry BY E. B. FUSSELL VERY one knows there is a tre- mendous waste in retail milk and cream distribution. Re- peated investigations have shown that in every large city five or six or seven milk wagons follow each other’s. routes, when one would do the work. It has become the practice of milk distributors to authorize their drivers to give free milk and cream to proprietors and janitors of apartment houses, so that the drivers might be zllowed to solicit business in the building. The milk companies have argued that when they failed to allow this form of graft, milk bottles had a habit of disappearing and the apartment house rules against agents and solicitors were stringently en- forced. This duplication of service and graft adds’ ‘immensely, of course, to the price that the c1ty con- sumer pays for his milk and cream. This price is ordinarily double the price received by the producer. But the waste in retail milk and cream distribu- tion, about which so much is known, is only a small part of the wasteful marketing in the dairy system. Only a small portion of the milk and cream pro- duced in the United States goes for domestic use; the larger part goes to creameries, cheese factories, ice cream manufacturers and the like. Investigations recently made in North Dakota by J. J. Osterhous, state dairy commissioner, indi- cate that there is just as much waste in the collec- tion and handlmg of milk and cream from the farm as there is in the distribution of milk and cream to retail consumers in the city. In place of six or seven milk wagons, fol- lowing the same route over the city streets when one would do the work, there are as many as seven competing cream stations maintain- ed in localities in which one station could handle the total product. Other wastes are enormous in their totals. BIG WASTE ON SMALL BUSINESS North Dakota, under the farmers’ administra- tion, is making remark- able advances in dairy- ing. The value of its dalry products in 1919 ‘was 100 per cent greater than in 1918. It is still behind many other states and most of the wastes and losses shown by Mr. Osterhous to exist in North Dakota exist in even greater measure in the other states. In a report going into marketing wastes in North Dakota Mr. Oster- hous says: “Four hundred and eighty communities in North - Dakota during 1919 marketed 15,000,000 pounds of butterfat through 853 cream sta- tions. These cream sta- tions are the local buy- - ing agencies for 48 pri- vately owned centralizer creamenes in this and five other states. ‘“An additional 10,000,000 pounds of butterfat are shipped by the producer to these centralizer cream- eries direct, or delivered to 30 local creameries operating within the state.” Of the 480 communities having cream stations, 230 have two or more, thus showing wasteful com- petition. It will be noted that three-fifths of North Dakota butterfat is handled through the cream sta-* tions, instead of going by the more direct route to the centralizers or manufacturing creameries. With but one cream station to each community, 353 use- less buying agencies could be eliminated. Mr. Os- terhous says in his report: “The cost of operating these buying agencies, to- gether with transportation charges on the bulky, delicate and highly perishable raw product amounts to 7 to 10 cents per pound, or $2 to $3 per 10-gallon can. The present cost to the producer for getting his product to the door of the manufacturing plant (considering only the 15,000,000 pounds that goes through the cream stations) exceeds $1,000,000 an- nually. This can be reduced fully 50 per cent, or $600,000.” Much of the expense of collecting this cream, of course, is due to excessive express charges. Ex- press charges on cream and butter probably have been manipulated, with a view toward giving pref- erence to the large centralizers, to a greater extent than with any other commodity. Taking Mr. Osterhous’ minimum figure of a 7- cent collection cost on® 15,000,000 pounds of butter- fat, or $1,050,000. A 1-cent reduction on transpor- Commlssmner——How Can Leaks Be Stopped-" tation charges would amount to a saving of $150,~ 000. If the expense of the cream stations is esti- mated at $1,000 each per year, the elimination of 853 useless stations would mean an additional sav- ing of $353,000 a year, bringing the total savings above Mr. Osterhous’ figures of $500,000. Going on with his report Mr. Osterhous says: “Besides the $500,000 that can be saved in this manner an additional $15,000 now paid in express on water and $50,000 on partly filled cans, can be : eliminated from our marketing costs.” BETTER COLLECTION SYSTEM WOULD ELIMINATE WASTE The express charges on “water” referred to are caused by the shipment of low-test cream or un- skimmed milk. The ‘shipment of partly filled cans is a waste that could, of course, be eliminated by a better collection system. Taking up some bigger losses Mr. Osterhous says: “The centralizer creameries now receiving an- nually 25,000,000 pounds of North Dakota butterfat manufacture the same into 30,000,000 pounds of poor quality butter, which is sold on the wholesale market at a sacrifice of 3 cents or more per pound. This loss to the producer of more than $1,000,000 annually can be entirely saved and the consumer supplied with a better quality of butter at no addi- tional cost.” The fact that North Dakota butter sells below the market is due principally to its varying quality. Much of it is as good as any butter produced any- where, but it is not stable and can not be depended upon by the eastern wholesale buyers._ : Notice also that of the 25,000,000 pounds of but- terfat the manufacturers make 30,000,000 pounds of butter. What. is the other 5,000,000 pounds? Principally water, the government regulations providing that a pound of butter may be one- sixth water to five-sixths of other contents. The water, salt, lime and so forth that are added to the butterfat and that give the excess weight provide what is known technically as the “over- - run.” Of this Mr. Oster- hous says: “The 5,000,000 pounds of butter overrun sold at the low average price of 50 cents per pound yields a gross income of $2,- 500,000 annually, which exceeds .the necessary manufacturing and mar- keting cost by $1,000,000. ‘A considerable amount - of North Dakota butter produced each summer goes or should go into storage for from four to six months. In 1918 and The pioneer creamery of Mor- ton county, at New Salem, N. D., a type of the cream buying sta- tion. Some Hol- stein heifers with which North Da- kota farmers are i .~ again in 1919 butterfat :’:(x’"x:xl\:ngNo:tk ']a;al.' that was bought locally ‘kota, under the 2t 50 cents per pound farn;ers’ admin- V88 made into butter, stored for six months or less and sold on the wholesale market at 64 cents as butter or 80 cents per pound butter- (Continued on page 14) istration, is get- ting more and more purebred stock.