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Bulletin

Abstract

1. The business side of buttermaking comes under the direction of the manager, who, in a cooperative creamery, is concerned with getting the highest possible returns for producers. Assuming a given net selling price for butter, the price that can be paid producers for butterfat depends on (1) the costs of processing and (2) the value of the overrun.

2. Most attention has been given to variations in the costs of processing as a factor in producer prices. These costs are revealed by the financial records of creameries. The financial records also permit an appraisal of the creameries’ financial status.

3. Costs of operation tend to be lower in creameries handling a large volume. Because of lower costs, large cooperative creameries usually retain a smaller percentage of total income than small creameries and still leave a small undistributed balance in the business. Thus the immediate returns to producers and the financial status of the creamery tend to become more favorable as volume increases. This does not mean that many small creameries are unsuccessful nor that some large ones have not expanded beyond the point of most economical operation.

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