In studying the question of how to make the dairy most profitable, two problems are presented for solution. The first off these problems is, how to produce the greatest amount of butter fat at the least cost; the second, how to save all of the fat produced and market it in the form of a high-priced product. Both of these problems are being studied, not only on thousands of dairy farms, but at many experiment stations. During the past nine months we have been devoting especial attention to a study of the loss of fat in the butter-milk in churning, with the hope of ascertaining the causes of the loss, whether it can be avoided, and if so the conditions necessary to secure the best results. This report gives the results of the work we have done so far in this line.