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THESIS

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Senior Agricultural Thesis

on

"THE CO-OPERATIVE CREAMERY STATUS IN MICHIGAN,"

by

Otto W. Slayton,

—_—_!

Class of ‘98.

Michigan Arricultural College,

Agricultural College, Mich.
THESIS

24
965
THS

 
THE CO-OPERATIVE CREAMERY STATUS IN MICHIGAN.

This thesis is a brief report of an investigation
of the creameries of Michigan.

The investigation was, for the inmost part, a collection
of statistics on the sreameries of Michigan. In collecting
these statistics reply postal cards were sent to the super-
visors of nearly all the townships south of the red line on
the map of Page 7. Each supervisor was requested to give
the names of the oreameries in his township, cost of Cacr |
creamery, the name of the company that built each, the nun-
ber of cows that each creamery received milk or cream fron,
and to state whether or not trey were co-operative, whether
they were running or failed, and how long they had run.

Though two hundrec fifty of the supervisors failed to
reply, and many answers were incomplete, vet these reports
give us a general survey of the creamery industry in Michigan.

The following are tabulated statements of the result of

this correspondence.

Table No. il.

Co-operative creemeries: not failed . 81
" " failed 35
" " built in spring of 1898 11
Creameries not co-operative 13

Replies from townshivs that contained no creamcries 284
Supervisors that failed to reply 250

Total number of cards sent out 624

103879K
d9

Total cost Average Greatest Least
of cost of cost of cost of
Creameries Creaner- any one any one
Les. Creamery Creamery
Co-operative creamerics not failed G@.22781.00 $3961.00 $7000.00 $1700.
u i" failed 157290.00 4494.00 7000.00 2500.00

Creameries not co-operative 50667.50 3897.50 7500.00 1200.0

Table No. 3.

Average Total Average Least
No, OF No. of No. of No. of

vears in Cows Cows Cows.
operation
Co-operative creameries not failed 3.83 10974 354 150
" tt failed 1.& 9975 235 100
Creameries not co-operative 4.5 7124 548 200

Table No, l shows that of the sixty—six co-operative cream
eriles heard from, and that were built one year or more ago,
thirty—five have failed. An average of over fifty per cent
(53.03 ). Two causes account for the great majority of
these failures, of which both the creamery instigators and
the owners of the creameries are at fault.

‘the creamery companies that put up these creameries
are engaged in their line of work for the same reason that
any company or person is engaged in business —— to make
money. They look after the farmers’ interests just so far
as the farmers' interest is their interest. These creamery
instigators often times go into districts that are not well

adapted to dairying and rhoere the cows are few and far be—
3.

tween; into districts that have a good milk and butter mar-
ket, and, by their stucied art, induce the farmers to invest
their hard earned dollars in a money-making creamery industry,
which ceases to flourish about the tine tic areamery men get
their quota.

To cisseminate knowledge of this sort among farmers
seems a fruitless task. They learn little outside of actual
experience, and these creamery instigators are ever ready,
as long as they are well paid for their trouble, to teach
them lessons about the creamery.

Creameries located as above cited are not the only
ones which fail. Those located in good dairy districts
often fail, the principal cause being mismanagement.

Persons that have been farmers all their lives, and
are rot accustomed to doing business other than that neces—
sary for carrying on their farming, are a stubborn set when
brought under one roof to act in unison. After enjoying
perfect independence for many years, they are inolined not
to acquiesce, each has his own opinions to which he clings,
and in this wider sphere of business they are too often in-
competent. There are plausible reasons for these statements.
The average number of cows to the failed creameries is two
hundred eighty-five whereas some that have been successfully
operated from three to five years have not more than two
hundred to two hundred fifty, and one was reported to have
been running five years with only one hundred fifty cows.

Another reason why farmers are incompetent to manage
a creamery business is because it is something entirely new

to them and the neighborhood. They are beginners without
4.

experience or Knowledge attempting to develop a new industry;
this is evidence enough to prove that they are liable to fail.

Those that are now entering into the creamery business

should not fail to avail themselves of the reports of the
"Wichigan Dairy Association," which contain valuable informa-
tion concerning the starting and operating of a creamery.
In these the best sort of an organization, how to get the
milk routes established and what sort of a butter maker to
employ are fully discussed. These are the vital questions
concerned in the development of a co-operative creamery.

Besides the two causes already cited, there are minor
ones, which often prove to be ‘tthe last straw that breaks the
camel's back.' If the creamery has run only six months or
a@ year wnen some part of the equipment (the boiler or sepa—
rator ) proves inefficient or plays out and mist be rerlaced
by new at an expense of from two hundred to five hundred
dollars, the farmers begin to think that the oreamery is a
dangerous concern, and they are somewhat reluctant in putting
any more money into such an industry. All extra expenses
like these, that swallow up the gains, are very liable to
make farmers that are new adventurers disfusted with such
business.

The reports show that the creameries that have failed
have cost, on the average, $533.00 more than those that have
been successful. This leads us to believe that many co-op-
erative companies start into this creamery business on too
large a scale. A creamery costing not more than one-half or
two-thirds the price of the one built would, in most cases,
have made as mich butter, made as large absolute gains, which,

when divided on the basis of a mich smaller capital, would
5.

have been a mich larger per cent dividend -- a dividend equal
to a high rate of interest. This question is worthy especial
attention, when we consider that most of these creameries are
put under the management of farmers that Know little about
the creamery business and must build up their trade. Their
business will necessarily be on a small scale at first, and
will not pay a high rate of interest on a large sepital.

But a large capital coes not always, perhaps generally
does not, mean tnat the creamery is one of sufficient capac-—
ity to mamifacture butter on a large scale; for, if we can
rely upon the estimations of those that are interested in
co-operative creameries, the creamery companies get from
$800.00 to $1,500.00 more for their oreameries than they cost.
Stated in plain English, the farmers pay $800.00 to $1,600.00
more for their creamery than it is really worth.

The investment of a large capital into a creamery,
whether or not it be worth it, is for the inexperienced
farmers a risky investment, as is proven by the failure of
over fifty per cent of such creamcries. |

Thus far we have dcalt with problems concerning those that
invest capital in co-operative creameries. Now we ask,

"Will it pay a farmer to send his milk to a creamery?" The
farmer will naturally ask, "Will I make as much money by
patronizing a creamery as I would by making my butter at home?"
Facts will answer the question. The price of creamery butter
seldom, if ever, goes below 14 ¢ per pound; and when creamery
butter is worth only 14 6 per pound home made butter is

bringing not more than 8 ¢ or 9 ¢ per pound. Now deduct
from the 14 6 the cost per pound of making and shipping the
8.

creamery butter, which will be between 6 é anda 6 f, 6 @ the
highest, and we get between 8 # and 9 ¢ as the price per
pound, above all expenses, for the creamery butter. This

is as muocn as the home made butter brings, and there is a
rain besides this -— it saves the housewife all the trouble
of making the >utter, and it saves the trouble of marketing
it. We are safe in saying that as far as the dollars and
cents are concerned, as well as the trouble of making and
marketing, that the creamery is equal, if not preferable, to

the home manufacturer.
 
 
  
 
 

   

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represent numocr of creameries

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WI) WAIVE.

represent numbcr of ercemeries not failed in county

Tailed in county.
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