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LIBRARY 

CURREST SERIAl (SCORS! 



AUG 2 019' 




MOBILE FEED MILLING 
by Cooperatives in 
Michigan and Wisconsin 



by Arno J. Hangas 



Farmer Cooperative Service General Report 63 

U. S. Department of Agriculture August 1959 



FARMER COOPERATIVE SERVICE 

U. S. DEPARTMENT OF AGRICULTURE 

WASfflNGTON 25, D. C. 

Joseph G. Knapp, Administrator 



The Farmer Cooperative Service conducts research studies 
and service activities of assistance to farmers in connection 
with cooperatives engaged in marketing farm products, 
purchasing farm supplies, and suppljdng business services. 
The work of the Service relates to problems of manage- 
ment, organization, policies, merchandising, product quality, 
costs, efficiency, financing, and membership. 

The Service publishes the results of such studies; confers 
and advises with officials of farmer cooperatives; and 
works with educational agencies, cooperatives, and others 
in the dissemination of information relating to cooperative 
principles and practices. 



This study was conducted under authority of the Agricultural 
Marketing Act of 19-16 (RMA, Titie H). 



Contents 



Page 



Summary — - — — ---^ — - — iii 

Purpose and method of study 1 

Part I. Analysis of mobile milling operations and services 2 

Mobile versus stationary mills 3 

Reasons for acquiring mobile mills 3 

Why farmers use mobile mill services--- -_-- 3 

Patrons best suited to mobile mill — -■ • 4 

Relative location of patrons 4 

Quality of mixing by mobile mills 6 

Type and description of equipment 6 

Volume and types of service 7 

Patrons serviced and volume mixed 7 

Types of feed mixed 8 

Kind of grain ground and ingredients mixed 8 

Area served and distance traveled 10 

Practices followed ■ 10 

Ingredient purchasing and delivery 10 

Scheduling service to patrons 11 

Method of unloading 12 

Nutritional service 12 

Selling feed and promoting the service 12 

Labor requirements 13 

One-man and two-man operations 13 

Variations in labor and time requirements 13 

Help received from patrons 14 

Advance arrangements by patrons 15 

Rates charged and credit extended 16 

Pay plans used for operators and helpers 18 

Operating problems 20 

Problems encountered at start of service 20 

Maintenance and mechanical problems 21 

Seasonal variations in volume 22 

Time lost because of inclement weather 23 

Continuing problems 23 

Analysis of operating receipts and e3q)enses 26 

Break- even points 27 

Part II. Case studies of individual mobile milling operations — 29 

One-man, single-mill operations 30 

Two-man, single-mill operations 39 

Two-man, multiple-mill operations 44 



Summary 



This is a case study of mobile feed 
milling operations of 11 cooperatives 
operating 15 mills in Michigan and 
Wisconsin in their 1957-58 operating 
year. The main objectives of the study 
were: (1) To find the policies and prac- 
tices used and the problems involved in 
their operation, and (2) to obtain income, 
expense, and other operating information 
that may be of use to others operating, 
or planning to operate, similar units. 

Principal findings of the study now 
follow. 

General Description and Com- 
parison with Stationary Service 

1. Each of the 11 associations had 
operated a mobile mill for 3 to 6 years. 
Most of them had one mill each but the 
group did include two 2 -mill and one 
3 -mill operations. 

2. Most of the units were the first 
in their area. They were established 
because managements of the coopera- 
tives believed that they would either 
increase feed volume, provide service in 
outlying areas, or help them get into the 
feed business. 

3. Convenience and saving in time 
and physical effort were the main rea- 
sons given by managers for farmers' 
use of mobile millii^ service. They 
stated that such a service was best 
adapted for the larger dairy farmer and 
the more distant patron. 

4. Mobile milling is a way of ex- 
tending the operating territory of a retail 



feed store or a custom mill. On an 
average, locations of mobile mill patrons 
were farther from the mill or office 
than the patrons of the stationary mill 
in all nine associations which operated 
both types of mills. 

5. On the whole, the grinding and 
mixing done by the mobile units was 
considered fully equivalent to that in the 
stationary mills of the nine associations 
that operated both types of mills. 

Volume and Type of Service 

1. The 11 associations serviced a 
total of 1,020 patrons with a total of 
42,689 tons of grinding and mixing, or 
2,846 tons a mill during their 1957-58 
year. Most of the associations operated 
within a 20-mile radius, and 80 percent 
of the feed mixed was dairy feed. 

2. Of the materials ground and 
mixed 84.6 percent were home-grown 
items and 15.4 percent were purchased 
ingredients. Fifty- eight percent of the 
home-grown materials was corn; 31 
percent, oats; 7.5 percent, hay; and 3.5 
percent was miscellaneous materials. 
Purchased items consisted of molasses, 
concentrates, and straight ingredients. 

Operating Practices 

1. Nine of the associations delivered 
ingredients separately on regular routes. 
In one association the ingredients were 
delivered with a concentrate truck which 
accompanied the mill, and in another 
case 90 percent of the ingredients were 
delivered by the mobile unit. Seven of 



the associations made no charge for 
delivery. Two charged $2 a ton and two 
charged $3 a ton. 

2. Three-fourths or more of the 
patrons in all the associations and all 
the patrons in five associations were 
serviced on regular routes, either 
weekly or at 2-week intervals. Special 
orders in most cases were serviced off 
the regular routes. 

3. In some associations most of the 
feed was "bagged off" while in others 
most of it was unloaded in bulk. On the 
average, 55 percent was unloaded in 
bulk. 



Service Charges and 
Compensation Plans 

1. Grinding and mixing charges 
ranged from $3.60 to $4.75 a batch or 
from $3.36 to $4.50 a ton. Some asso- 
ciations made an additional charge for 
fine grinding, sacked unloading, or if 
the patron did not help. Others gave 
discounts on the grinding and mixing 
fees for supplements purchased. Min- 
imum charges for a stop ranged from 
$1.50 to $4.50. The credit policy in all 
cases was the same for both the mobile 
mill and other feed customers. On the 
average, 72 percent of the mobile mill 
business was done on credit. 



4. Most mobile mill operators did 
relatively little nutritional or sales 
work. In most cases this phase of the 
work was handled from the office. 

5. Time required in mixing a batch 
averaged 33 minutes, and batches aver- 
aged 2,327 pounds. In all associations a 
wide variation existed in the time re- 
quired per batch on different farms. The 
main reasons were: (1) Number of times 
the mill had to be moved, (2) number of 
operators used, (3) method of unloading, 
whether sacked or bulk, (4) type of mate- 
rial ground, and especially the moisture 
content of the grains ground, and (5) 
amount of help received from the patron 
in the one-man operated mills. 

6. The associations reported a wide 
range in the number of times the mill 
had to be moved on different farms. The 
difference was due to the number of 
locations at which materials had to be 
picked up in processing a batch. Some 
managers had been able to reduce the 
movir^ required by training patrons to 
get the materials ready at one spot. 
Others could have improved their oper- 
ating efficiency by training more patrons 
to make such arrangements. 



2. The 11 associations used a variety 
of pay plans for compensating operators 
and helpers. Three paid a straight wage 
or salary, three paid straight commis- 
sions, and five used a combination of 
base pay and commissions. The method 
of compensation was considered less of 
a factor in the success of the operation 
than the inherent ability of the operator. 

Factors Affecting Operations 

1. Ability of the operator was im- 
portant in the widely differing operating 
results among the associations. In fact 
managers listed the selection of a good 
operator as the number one problem in 
a mobile milling operation. 

2. Managers and operators were 
generally satisfied with the type of 
equipment they had. The major mechan- 
ical problem was the power plant. 
Several had been replaced and most had 
required considerable repair and over- 
haul. 

3. Volume of grinding and mixing 
varied considerably from the busy 
winter months to the slow summer 
months. On the average the volume in 



IV 



the smallest week was only 58 percent 
of the high-w€^k tonnage. Operators and 
helpers were in most cases transferred 
to work in the warehouse during the 
slack periods. 

Costs and Returns 

1. The grinding and mixing revenue 
alone failed to cover operating expenses 
in any of the operations. At the charges 
used, income from molasses or ingredient 
sales was needed to meet expenses -- 
even in the better managed operations. 
Grinding and mixing revenue averaged 
$3.73 a ton. Molasses sales brought in 
an average gross margin of $1.20, 
making a total operating margin for 
grinding, mixing, and molasses sales 
of $4.93 a ton of feed mixed. Operating 
expenses averaged $5.15 a ton, thus 
exceeding the service and molasses 
margin by 22 cents a ton. 

2. A mill operating at the average 
costs and returns of this group would 
need an annual volume of about 3,190 
tons to break even with the molasses 
income added to the service (grinding 
and mixing) revenue; or about 2,280 tons 
to break even if both the molasses and 
ingredient margin were added to the 
service revenue. 



3. Six associations operated with 
two men and five with one man per mill. 
Volume averaged 3,208 tons in the two- 
man and 2,122 in the one-man mills. 
The one-man mills had lower labor 
costs but higher total costs than the 
two-man mills. The latter made better 
use of their fixed investment because of 
the larger volume per mill. 

4. Operation of a mobile milling 
service on a paying basis with the fees 
that these associations used requires 
aggressive promotion of the service 
and a real program of feed merchan- 
dising. Since part of the margin must 
come from molasses and feed sales of 
concentrates and ingredients, customers 
must be sold on the benefits of a com- 
plete mixing program rather than merely 
the grinding and mixing service. 



Management recommendations and 
suggestions as to advisability of coop- 
eratives providing mobile milling service 
have not been included in this initial 
report because of the limited area and 
small number of mills studied. They 
have been deferred until studies of other 
mills in other areas provide a broader 
basis for developing such recommenda- 
tions and suggestions. 



Mobile Feed Milling by Cooperatives 
in Michigan and Wisconsin 



by Arno J. Hangas 

Farm Supplies Branch 
Purchasing Division 



On-the-farm milling of home-grown 
grains into balanced feeds, although 
a relatively new development in feed 
manufacturing, is increasing in im- 
portance in many grain-livestock sec- 
tions. A number of cooperatives are 
now^ operating units in many scattered 
areas of the country. 



The portable grinders that were used 
only to grind farmers' grain have now 
been replaced by complete grinding and 
mixing units. The first portable mills 
were made about 10 years ago. They 
have gradually been improved and now 
do an effective grinding, mixing and 
molasses blend-job. Such feed milling 
units are now being made by at least 
12 manufacturers. With use of proper 
concentrates and the farmers own 
grains, feeds equal to those mixed in 
stationary custom and central mills can 
now be mixed right on the farm. 



Purpose and Method of Study 



The purpose of this study was to make 
an initial analysis of mobile feed mills 
for these reasons: (1) To find the 
policies and practices used and problems 
involved in their operation, (2) to find 
out how these policies and practices fit 
in with existing feed outlets and stationary 
custom mills, and (3) to obtain income, 
expense, and other operating information 
that may be of help to other present and 
potential operators of these units. 



to operate on a paying basis. They are 
an off-the-premises operation where 
the operator is largely on his own and 
cannot be easily supervised. For this 
reason some operators have even been 
forced to discontinue their mobile mill 
businesses. This study was made to 
help cooperatives and others operating 
mobile feed milling units improve their 
operations and thus provide more efficient 
service to farmers. 



Farmer cooperatives and other oper- Operations of 11 cooperatives oper- 

ators depending onhired labor frequently ating 15 mills in Michigan and Wisconsin 
have found mobile mills rather difficult were studied for their 1957-58 operating 



Note: The author expresses appreciation to officials of the farmer cooperatives who provided informa- 
tion on their mobile milling operations, and to J. Warren Mather, Chief, Farm Supplies Branch, Farmer 
Cooperative Service, for substantial assistance in planning and developing this study. 




A typical mobile feed mill used by feed cooperat ives to grind and mix feed on patrons' farms. 



year. Each of the 11 associations had 
operated a mill for a period of 3 to 6 
years. Eight associations operated one 
mill each, two operated two mills each, 
and one association operated three 
mobile mills. 

The better operations were selected 
in one area and in the other all those 
available were included. The group 
studied should therefore be slightly 
better than average even though it in- 



cludes some less efficient operations. 
Usually the manager of the association 
was interviewed. In some cases infor- 
mation had to be obtained from some 
one other than the manager because the 
latter was on vacation or was new at the 
location. Considerable information had 
to be estimated as very little cost data 
and certain other types of information 
were kept separately for the mobile 
milling operation by any of the asso- 
ciations. 



PART I. 
Analysis of Mobile Milling Operations and Services 



Part I compares mobile and sta- 
tionary mills; describes types of equip- 
ment used in mobile mills, volume 
and types of service, practices fol- 
lowed, labor requirements, rates 



charged and credit extended, pay plans 
used for operators and helpers, and 
operating problems; and makes a brief 
analysis of operating receipts and 
expenses. 



obile Versus Stationary Miils 



This section discusses the place of 
the mobile mill in providing patrons 
with custom mixing services -- why they 
were added, why patrons use their 
services, and the relation of the mobile 
milling operation to the stationary 
custom mill. 

Reason for Acquiring Mobile Mills 



Most of the associations in the study 
added mobile milling units because man- 
agement believed they would increase 
feed volume and improve services. The 
types of reasons given were: 



1. Five associations thought 
mills would increase feed volume; 



such 



2. Five added them to provide better 
service to outlying areas; 

3. Three believed they would aid the 
association in getting into the feed busi- 
ness; and 

4. Two cooperatives mentioned 
farmer demand as one of the reasons 
for adding the service, although it was 
not the main reason in either case. In 
some cases the interest of the local's 
regional wholesale cooperative in in- 
creasing feed volume was a factor in the 
decision. 

Ten of the eleven cooperatives were 
the first in their area with a mobile 
milling service. One started after two 
other units were already operating in 
its territory, but patron demand and 
pressure from competing firms were 
not the reasons for starting the service 
even in this case. Instead, the mill was 
bought to serve the more distant patrons 
because the nearer ones were gradually 



going out of business as the city expanded 
into the farming area. 

Although all but one of the associa- 
tions were the first with mobile service 
in their area, 10 of the 11 had one or 
more competing mills by the time this 
study was made» One reported as many 
as six other mills operating within its 
territory. 

Why Farmers Use Mobile 
Mill Services 

Managers were asked to give reasons 
why they thought farmers used mobile 
milling services. The response was as 
follows: 



Response 

Saves time and labor 
Convenience 

Farmer is sure his own 
grain was used 



Numbe r 
responding 

10 
7 



Thus, nearly all considered con- 
venience and the saving in time and 
labor as the main reasons for changing 
to mobile service. Patrons do not have 
to load grain on their trucks, take it to 
the mill, and wait in line to be serviced. 
Instead, the mill comes to the farm and 
does its work in one-half to one-quarter 
of the time it formerly took the farmer 
to take his grain to town to be ground 
and mixed. A chore that used to take half 
a day of the farmer's time is now com- 
pleted in an hour without the patron 
leaving the farm. 

Out-of-pocket costs ran higher but 
farmers using the mobile service con- 
sidered the service cheaper in the long 



run because of saving in time, truck use, 
and physical effort. 

Patrons Best Suited to Mobile Mill 

Most managers and operators con- 
sidered the large dairy farmer as the 
best candidate for mobile feed milling 
(table 1). They and beef operators with 
pen-type housing and bulk-feed facilities 
especially desired on-the-farm mixing 
because the savings in labor due to bulk 
handling were greater on these larger 
farms. 

Because none of these mills carried 
a sheller, the service was not as well 
suited for the hog grower or poultryman. 
None of the associations had added a 
sheller because hog and poultry enter- 
prises were minor sideline operations 
with most patrons in this area. 

Mixing at stationary mills was con- 
sidered best adapted for farmers with 
poultry and hog enterprises, smaller 
feeders, and those nearest the mill 
(table 2). 

Distance from the mill enters into a 
farmer's decision between use of mobile 

Table 1. - Managers' opinions on type of 
farmers for whom mobile feed mil ling serv- 
ice is best adapted in 11 associat ions 
operat ing 15 mobile mills in Michigan 
and Wisconsin , 1957-58 



Type of farmer 


Number 
responding 


Larger operator 






10 


Dairy farmer 






8 


More distant patron 






5 


Large beef feeders 






2 


Farmers who are conscious 


of 


value 




of their time 






2 


Larger operators who use bulk feed 


1 


Larger hog growers and pou 


It 


rymen 




vho have shellers but no 


g 


rinders 


1 



Table 2. - Managers' ovinions on type of 
farmers for whom stat ionary mill service 
is best adapted in nine associat ions 
operat ing both mobile and stat ionary cus- 
tom mills in Michigan and Wisconsin , 
1957-58 



Type o f farmer 



Number 
responding 



Snail operator 5 

Poultry and hog grower 4 

Patrons nearest mill 4 
Patrons vho have time to take their 

grain to stationary custom mills 2 

Patrons \\ho have trucks 2 
Larger dairymen with small hog 

and poultry enterprises 1 
Fanners \iho have run out of 

home- grown grain 1 
Farmers who do not carry a sufficient 

reserve of feed 1 

or stationary feed milling service. One 
manager indicated that farmers more 
than 10 miles away from the mill will 
not bring their grain in for grinding. 

Relative Location of Patrons 

Nine of the 11 mobile operations 
were owned by cooperatives that also 
operated stationary mills. In all cases 
more of the mobile mill patrons were 
farther from the mill than the patrons 
of the association's stationary mill were 
(figure 1). 

Nine of the associations estimated 
their stationary mill patrons were nearly 
all within 15 miles, and two estimated 
their patrons were all within 10 miles 
of the mill. But in 9 individual associa- 
tions, 8 to 56 percent of the mobile 
mill patrons were over 15 miles from 
the mill. 

All association officials were satis- 
fied that the addition of the mobile mill 
had increased the number of patrons and 
enlarged their operating territory. De- 
tailed information on area served and 



Figure 1 

PROPORTION OF STATIONARY AND MOBILE MILL PATRONS LOCATED AT 

DIFFERENT DISTANCES FROM STATIONARY MILLS OF NINE ASSOCIATIONS 

OPERATING BOTH TYPE MILLS, MICHIGAN AND WISCONSIN, 1957-58 



DISTANCE 1 

IN MILES 



Over 20 



E 



15-20 



10-15 



5-10 



Under 5 




50 50 



50 50 50 

PERCENT OF PATRONS 



50 



distances traveled by these mills is 
discussed later in this report. 

Quality of Mixing 
by Mobile Mills 

Most managers and operators be- 
lieved that the quality of grinding and 
mixing with the mobile mill compared 
favorably with the same job done in a 
stationary mill. In most cases grinding 
was considered as good as, or better 
than, that done by their own stationary 
unit. All stated that the molasses - 
blending job done by their mobile units 
was satisfactory in every respect. 

None of the associations had any 
patrons change from mobile service 
back to stationary mill service. Some 
mobile mill customers occasionally 
patronized these mills when they ran 
out of grain; or in the slack season when 



they fed but little grain; but none had 
changed back because of dissatisfaction 
with the service or quality of work. 

Some managers brought out the fact 
that although its work was mechanically 
as good, the mobile mill was not as 
economical to operate. Therefore, 
better labor efficiency with less expense 
and less upkeep would be possible in a 
stationary mill. One considered the 
mobile mill t" slow for the finer grind- 
ing needed lor hog feed, but he was 
comparing its grinding capacity with a 
larger 18-inch, 100 hp. hammermill in 
the stationary mill. 

In associations in Michigan where 
hay grinding in stationary feed mills was 
prohibited by insurance regulations the 
mobile mill had an advantage in serving 
those patrons who wanted hay ground 
with their mixes. 



Type and Description of Equipment 



All 15 mills operated by the 11 asso- 
ciations were factory assembled package 
units with a hammermill, mixer, and 
molasses-blending equipment, all oper- 
ated by a separate diesel engine. Ten 
units were mounted on 2-ton chassis and 
one on a l|-ton truck. Fourteen of the 

15 units had 75 cu. ft. mixers, and 

16 in. hammermills driven by 100 hp. 
oil-burning diesel engines. One unit had 
a 100 cu. ft. mixer with a 12 in. hammer- 
mill driven by a 170 hp. diesel engine 
fueled with liquified petroleum (LP) gas. 
Molasses tanks had capacities ranging 
from about 1,700 to 3,000 pounds. 

Six associations, operating 10 mills, 
had their mills equipped with auger con- 
veyors for unloading in bulk. Five 
associations operating five mills did not 
have unloading augers, but three of these 



carried portable aluminum conveyors 
for bulk unloading. The other two used 
patron-owned conveyors, when available, 
for unloading in bulk. 

Five mills were rented from the re- 
gional association with which the local 
cooperative was affiliated, and 10 mills 
were owned by the associations operating 
the units. Of the latter mills, the cost 
for the new unit and truck complete 
ranged from $14,929 to $18,263 and 
averaged $15,713. Cost of all 15 mills, 
owned and rented, ranged from $12,719 
to $18,736, and averaged $16,720. 

Weight of the units ranged from 
15,000 to 19, 000 pounds empty and 17,500 
to 21,000 pounds with the usual load. 
The average weights were 16,104 pounds 
and 18,412 pounds, respectively. In 



f^~W 




Here the patron has ingredients for grinding and mixing ready on a trailer when the mobile mill 

arr ives . 



most cases the weight crowded the 
maximum legal load limit in the spring, 
and in some cases weights had to be 
controlled by reducing the amount of 
molasses carried. 

None of the imits carried corn 
shellers. Since poultry and hog feeds 
were not an important item, shellers 
were not seriously needed on any of 
these mills. Neither could shellers be 
considered on any of the units because 
of the additional weight. 

All the men interviewed said they 



were satisfied that the type of units they 
had were suited to their needs. One 
manager said he would prefer one with 
space for concentrate and ingredient 
bags but that otherwise the unit was 
satisfactory. In one association with 
two mills, each with a different size 
mixer, the manager would rather have 
had both units the same size for oper- 
ating reasons and preferably of the 
larger size. In another association with 
the unit on a l^-ton instead of a 2 -ton 
truck the chassis was considered too small 
for the job and was to be replaced with a 
2-ton size when a new truck was bought. 



Volume and Types of Service 



This part of the report examines the 
type of service by area covered, volumes 
milled and types of feeds ground and 
mixed. 



Patrons Serviced and 
Volume Mixed 

The 11 associations, operating 15 
mills, serviced a total of 1,020 patrons 



or an average of 93 per association or 68 
per mill during their 1957-58 year 
(table 3). 

The volume of grinding and mixing 
totaled 42,689 tons, an average of 3,881 
tons per association or 2,846 tons per 
mill. Volumes varied by associations 
from 1,170 tons for the smallest single 
mill operation to 10,000 tons for the 
one three-mill operation. 

Types of Feed Mixed 

Most of the feed mixed was dairy 
feed. It ranged from 59 to 98 percent 
of the total volume (table 4). Hog feed 
was second in importance and raided 
from none in one association to 28 per- 
cent in another. Beef cattle feeds were 
third in importance and ranged from 
none in four associations to 30 percent 
in one association. Poultry feeds were 
a minor item, three associations re- 
porting none and the rest reporting 



them to be from 1 to 5 percent of the 
total. 

Kind of Grain Ground 
and Ingredients Mixed 

Home-grown materials accounted 
for 84. 6 percent and purchased materials 
for 15.4 percent of the total ingredients 
ground and mixed (table 5). Corn was 
the main grain ground but oats were an 
important item in every association, in 
one case exceeding corn in importance. 
As a percentage of the total feed ground 
and mixed corn ranged from 30 to 68 
percent and oats from 10 to 42 percent 
of the volume. Only four associations 
reported grinding barley with it ranging 
from 2 to 15 percent of the total volume 
ground and mixed. 

Of the home-grown grains corn re- 
presented 58 percent, oats 31 percent, 
hay 7. 5 percent and miscellaneous mate- 
rials 3.5 percent of the total. The 



Table 3. - Size of mobile milling operations of 11 cooperatives , in Michigan and 
Wisconsin, 1957-58 



Association 


Number 


Men 


Patrons 


Vo lume 


code 


of mi 1 1 s 


per mill 


serviced 


in tons 


1 






45 


1,170 


2 






60 


1,963 


3 






70 


2,400 


4 






75 


2,400 


5 






85 


2,676 


6 




2 


70 


3,350 


7 




2 


100 


3,500 


8 




2 


100 


3,600 


9 


. 2 


2 


110 


5,800 


10 


2 


2 


115 


5, 830 


11 


3 
15 


2 


190 


10,000 


Total 


1,020 


42,689 


Average per 






- 




association 


- 


- 


93 


3,881 


Average per mill 


- 


- 


68 


2,846 



Table 4. - Proportion of different feeds mixed by 11 cooperative mobile feed willing 
operat ions in Michigan and Wisconsin , 1957-58 



Associ ation 






Type 


of 


feed 


mixed 








code 


Dai ry 


Hog 


Poult 


ry 




Beef 


Sheep 


Total 












Pe 


rcent 










1 


94 


1 


1_ 






5 


- . 


100 




2 


90 


3 


5 






2 


- 


100 




3 


95 


1 


1 






3 


- 


100 




4 


98 


- 


2 






- 


- 


100 




5 


59 


4 


3 






30 


4 


100 




6 


70 


28 


2 






- 


- 


100 




7 


80 


15 


5 






- 


- 


100 




8 


90 


10 


- 






- 


- 


100 




9 


80 


10 


- 






10 


- 


100 




10 


70 


15 


5 






10 


- 


100 




11 


75 


15 


5 






5 


- 


100 






— 


— 


— 






— 


— 






Average 


79 


12 


3 






6 


-■ 


100 





Dashes Indicate none or less than 0.5 percent. 

purchased ingredients consisted of 29 
percent molasses, 36 percent concen- 
trates and 35 percent straight ingredients. 

All 11 associations used molasses. 
Its use varied from 3 to 7 percent of the 



total feed mixed. All associations also 
reported grinding hay to be mixed with 
the rations. The proportion ranged from 
less than 1 percent to 20 percent of the 
total volume, but in 9 of the 11 associa- 
tions hay ground represented between 1 



Table 5. - Proport ion of different ingredients ground and mixed in 11 cooperat ive mobile 
feed milling operat ions in Michigan and Wisconsin , 1957-58 



Associ a- 


Ingredient 


tion 

code 

number 


Corn 


Oats 


Barley 


Hay 


Com 
cob 


Molasses 


Concen- 
trates 


St rai ght 
ingred- 
ients 


Total 












Percent 










1 


64 


10 


5 


10 


(1) 


4 


5 


2 


100 


2 


60 


22 


- 


1 


- 


4 


6 


7 


100 


3 


50 


41 


- 


- 


- 


3 


3 


3 


100 


4 


43 


28 


15 


2 


- 


4 


5 


3 


100 


5 


68 


16 


5 


2 


- 


4 


4 


1 


100 


6 


58 


23 


2 


1 


- 


4 


8 


4 ■ 


100 


7 


38 


38 


- 


5 


- 


• 5 


5 


9 


100 


8 


35 


42 


- 


3 


- 


5 


6 


9 


100 


9 


67 


15 


- 


5 


- 


4 


5 


4 


100 


10 


30 


18 


- 


20 


10 


7 


5 


10 


100 


11 


50 


30 


- 


7 


- 


3 


6 


4 


100 


Average 


49 


26 


2 


6 


1 


5 


6 


5 


100 



Dashes Indicate none or less than 0.5 percent. 



and 10 percent of the total feed ground 
and mixed. 

The proportion of high protein con- 
centrates varied from an estimated 3 to 
8 percent of the total feed groimd and 
mixed. On the average, the 11 associa- 
tions used almost as much straight 
ingredients as mill-mixed concentrates. 
Three associations reported using more 
straight ingredients than concentrates 
and one of them used twice as much. 

Area Served and Distance Traveled 



Most associations operated within a 
20-mile radius and all but one within a 
25-mile radius. The most compact area 
was served by an association with 110 
patrons located within a 10-mile radius. 
Another association, operating consider- 
ably under capacity, had the most 
scattered territory with patrons as far 
as 54 miles away. Some associations 
had lopsided territories because their 
operations were limited to a county 
while the base of operations was on one 
side of the county. 

Distance driven each year ranged 
from 9,600 to 22,000 miles per mill. 
However, all but one were within a 9,600- 



Table 6. - Average distance traveled per 
day and per year by 15 mobile feed mills 
operated by 11 cooperatives in Michigan 
and Wisconsin, 1957-58 



Average number 


Numbe r o f 


Percent 


of mi 1 es 




mi lis 


of total 


Per day: 








Less than 30 




1 


7 


30-39 




2 


13 


40-49 




3 


20 


50-59 




7 


47 


60-69 




2 


13 


Per year: 








Less than 10, 


000 


1 


7 


10-12.000 




1 


7 


12-14,000 




8 


53 


14-16,000 




2 


13 


16- 18, 000 




2 


13 


18, 000 and 


up 


1 


7 



to 17,000-mile range (table 6). The one 
unit averaging 22,000 miles per year 
was a mill in a two-unit operation which 
served the distant end of a county where 
the association's home office was 
located at the edge of the territory. 

Average daily mileage ranged from 
25 to 65 miles a mill. Ten of the 15 
mills averaged from 40 to 57 miles of 
travel a day and 7 averaged from 50 to 
57 miles a day. 



Practices Followed 



Operating practices have an im- 
portant bearing on the relative success 
of a mobile milling operation. Some of the 
differences in operating practices used 
are discussed in this section of the report. 

Ingredient Purchasing 
and Delivery 

In nearly all cases the cooperatives 
purchased ingredients in carload quan- 
tities. One association, short of storage 



space and off the railroad, had to buy 
part of its concentrates and ingredients 
in smaller lots. 

In all cases the cooperatives pur- 
chased molasses in 14- to 20-ton tank 
truck loads and put it in storage tanks 
from which it was usually pumped daily 
into the mobile mill molasses tarik. 

All except 1 of the 11 associations 
made separate deliveries of ingredients. 



10 



One single unit, one-man operation took 
care of 90 percent of the concentrate 
delivery with its mobile mill unit. Of 
the 10 delivering ingredients separately, 
1 used a concentrate truck which ac- 
companied its mobile mill. In this case 
the operator drove the mobile mill 
truck and the helper followed with the 
ii^redient truck. The nine other asso- 
ciations had the mobile mill ingredients 
delivered on their regular feed delivery 
routes. 

Seven associations did not charge 
for delivery of ingredients. Two asso- 
ciations charged $2 a ton and two charged 
$ 3 a ton for delivery. 

Scheduling Service to Patrons 

All 11 associations serviced three- 
fourths or more of their patrons on the 
basis of regularly scheduled stops. Ten 
serviced 90 percent or more of their 
patrons and four serviced all patrons on 
a regular schedule (table 7). 

Frequency of service to regular 
customers was about equally split 
between weekly and every-other-week 
delivery. Only one association reported 
twice a week delivery of about 2 percent 

Table 7. - Proport ion of patrons serviced 
on regular schedules by 11 cooperat ive 
mobile milling operat ions in M ichigan 
and Wisconsin , 1957-58 



Percent of patrons 

serviced on 

regular schedules 


Number of 
associations 




100 


4 






99 


1 


7 




95 


2 






92 


1 






90 


2 






75 


1 




Total or 








average 


94 


11 





of its total volume. It provided twice a 
week service because of extremely wet 
corn or lack of sufficient bulk storage 
space on several farms with large feed- 
ing operations. 

All associations required advance 
notice from patrons serviced on an 
order basis. Some serviced these orders 
off the nearest regular route and within 
a week if possible. Others serviced 
them individually, usually requiring 1- 
day notice. None serviced enough patrons 
on an order basis to consider routing 
these orders separately. 

Four associations, operating on a 
2-week schedule, had each mill territory 
divided into 10 or 12 routes. The few 
weekly customers were serviced off the 
nearest route. The other seven associa- 
tions had each mill territory divided into 
five routes for weekly service and got 
the every-other-week customers off the 
nearest weekly route. 

Among the main problems mentioned 
in scheduling service to patrons were 
these: 

1. Operators got behind schedule in 
case of breakdowns. This was especially 
true of the single-unit operations. 

2. High moisture corn and small bin 
storage on some farms where feed was 
unloaded in bulk made frequent service 
trips necessary. 

3. Patrons did not all run out of feed 
at the same time, thus making it difficult 
to maintain regular schedules. 

One association in which patrons 
were expected to help with the milling 
operation reduced its operating week 
from 5 to 4 to 3 days as volume dropped 
during the summer. It reported ob- 
jections from one patron because he 



could not plan on a definite time when the 
mill would be at his farm. Another had 
no particular problems in scheduling 
service because the mill was not oper- 
ating to capacity. It would have expected 
problems during breakdowns, however, 
had it been on a full schedule. 

Method of Unloading 

Some associations unloaded mostly 
into sacks, others mostly in bulk. The 
proportion of feed unloaded in bulk 
raided from 5 to 95 percent (table 8). 

Six of the 11 associations had their 
units equipped with unloading augers 
and unloaded 50 to 95 percent in bulk. 
In three of the five associations with 
mills without unloading augers, the oper- 
ators carried portable aluminum con- 
veyors for unloading in bulk. One 
association unloaded 60 percent this 
way. Bulk unloading in the four others 
ranged from 5 to 25 percent of their 
totals. In some cases the patron's own 
portable conveyor was used. 

Nutritional Service 

Of the 11 associations, 7 reported 
that their patrons discussed makeup of 

Table 8. - Proport ion of ground and mixed 
materials unloaded in bulk in 11 asso- 
ciations operat ing mobile mills in 
Michigan and Wisconsin , 1957-58 



Table 9. - Proport ion of patrons who ask 
for nutritional advice from operator in 
11 associations operat ing mobile mills 
in Michigan and Wisconsin, 1957-58 



Percent 
unloaded 


of feed 
in bulk 


Number 
associat 


of 
ions 




95 




1 






90 




1 






70 




1 


J 




60 




2 






50 




2 






25 




1 






10 




1 






5 




2 




Total or 










average 


55 




11 





Percent of patrons 

who ask for 
advice on formulas 


Number of 
associations 


75 




1 


50 




1 


40 




1 


25 




1 


20 




2 


5 




1 


None 




4 


Total 




11 



rations with the operator, but in only 2 
did half or more of the patrons consult 
the operator on their mixes (table 9). In 
four associations, patrons were trained 
to get nutritional advice from the office 
rather than the operator. 

Some managers who had operators 
discuss formulas with patrons still 
believed they did not do enough contact 
work on formulas. One manager stated 
that his men did not do enough nutritional 
and selling work, even though he believed 
it was impossible for operators to do a 
complete selling job. 

The concentrate program and nutri- 
tional service the locals received from 
their regional associations was con- 
sidered adequate in every case. All 
those interviewed believed that the ser- 
vice available on type of concentrates, 
nutritional information, field service, 
and the like fully met their needs. All 
recognized that any weaknesses in nutri- 
tional or sales work were on the local level. 

Selling Feed and 
Promoting the Service 

Operation of a mobile milling service 
requires selling concentrates and 



12 



ingredients and promoting the service in 
addition to the actual grinding and mixing 
work. In most cases, the office handled 
sales and promot.'or work. Few oper- 
ators were also feed salesmen. Only two 
managers considered that their operators 
did any amount of selling of either 
mobile service or other feeds. In five 
associations operators did sell some 



feeds other than the ingredients used 
with the mobile service. Two associa- 
tions employed separate feed salesmen 
and did not expect any selling from their 
mobile mill operators. Operators called 
on prospective customers during the 
slow season in five associations and 
during the busy season in four of the 
same associations. 



Labor Requirements 



Time spent in grinding and mixing 
per farm or per batch has an important 
effect on labor costs of mobile milling 
operations. This section of the report 
discusses differences found in time spent 
in grindir^ and mixing and some of the 
reasons for these differences. 



One-Man and 
T>vo-Man Operations 



Variations in Labor and 
Time Requirements 

Estimates by operators and man- 
agers indicated that 9 of the 15 mills 
spent an average of 1 hour at each farm. 
Average time spent per stop ranged 
from 30 minutes to 75 minutes, but 



Of the 11 associations, five operated 
with one man and six with two men per 
mill. In all the one-man operations, the 
patron was expected to help the operator. 
No help was expected from the patron 
in any of the two-man operations but a 
few patrons did help. 

In all the two-man operations, the 
operator drove the truck and tpok charge 
of the equipment. The helper assisted 
in shoveling grain, dumping concentrates, 
feeding hay, and removing the bags. In 
one of the six associations using two men 
per mill, the helper drove a separate 
concentrate truck which was used aloi^- 
side the mobile unit for delivery of 
ingredients for the mill. When the men 
arrived at a farm, the helper usually 
unloaded the supplement while the oper- 
ator drove the mill to the corn crib to 
start grinding corn. 




These two operators are feeding baled hay 

and bagged oats and corn into the mobile 

mill. 



13 



average time per farm for four-fifths of 
the mills was between 45 and 60 minutes. 
The average amount of time spent on each 
farm was: 





Number of 


Minutes 


mills 


30 


1 


45 


3 


60 


9 


67 


1 


75 


1 



The majority of the mills made about 
1-1/2 batches per farm and most batches 
were from 2,000 to 2,400 pounds with the 
average of 2,327 pounds. The average 
number of batches ground and mixed per 
farm was: 



Number of 
batches 

1 1/4 
1 1/3 

1 1/2 
2 

2 1/2 



Number of 
mills 

2 

1 
8 
3 

1 



The number of mills with specified 
sizes of batches were: 



Pounds 

1,900 
2,000 
2,200 
2,300 
2,400 
2,600 
3,500 



Number of 
mills 

1 

4 

1 
1 
6 
1 
1 



Time required per batch on different 
farms varied greatly in each association 
depending on the number of moves re- 
quired, number of operators used, 
moisture content of the grain ground, 
method of unloading, and other factors. 
Help of the patron was also a factor in 
some of the one-man operations. Aver- 



age time per batch ranged from 30 to 60 
minutes for the 15 mills with 11 in a 30- 
to 45- minute range. The number of 
mills spending specified amounts of 
time per batch were: 



Minutes 

Less than 30 
30 to 40 
40 and over 



Number of 
mills 

2 

11 

2 



Managers or operators in each case 
were asked to estimate the least time 
and the most time required per batch. 
Grinding and mixing of a batch of feed 
on some farms took 3 or 4 times as long 
as the same size batch mixed on another 
farm where things were more con- 
veniently arranged. In most cases, the 
major factors causing this additional 
time were controllable items such as 
number of points where grain or hay had 
to be picked up, where unloaded, and 
whether sacked or bulk. 

The least variation in grinding and 
mixing time per batch was reported by 
an association which had its patrons 
trained to have the grain ready at one 
point so the mill made only one stop. Its 
manager estimated that the least time 
required per batch was 20 minutes and 
the most was 40 minutes. In another 
association averaging five moves per 
farm, the least time per batch was also 
20 minutes but some farms took 1-1/2 
hours per batch. Time spent in moving 
the mill accounted for most of this dif- 
ference. 

Help Received from Patrons 

In the five one-man operations, from 
80 to 90 percent of the patrons helped 
the operator and contributed on the 
average from 6 to 25 hours of time a 
week (table 10). Without this help it 
would have taken the operators that 



14 



Table 10. - Help contributed by patrons in 11 cooperative mobile feed milling opera- 
tions in Michigan and Wisconsin , 1957-58 



Association 
code number 


Number of 
mi lis 


Nunfcer of 
operators 
per mill 


Percent of farmers 

who helped mill 

operators 


Hou 


rs contributed 
by patrons 
per week 


1 






85 










20 


1 2 






90 










8 


' 3 

I 






90 










17 


4 






90 










25 


1 5 






80 










6 


6 




2 
















7 




2 


25 










2 


8 




2 


(1) 













9 


2 


2 


2 













10 


2 


2 


1 













11 


3 


2 


(1) 














1, 



Less than 1 percent. 



much longer each week. Four of the five 
charged extra if the patron was not on 
hand to help. In three associations, this 
additional charge was $1 and in one it 
was 50 cents a batch. One manager, 
however, estimated that the $1 additional 
charge a batch where no help was given 
by the patron did not nearly begin to 
cover the extra labor and mill use re- 
quired. 

Patrons who helped usually shoveled 
grain into the feeder conveyor and took 
bagged feed away from the mill. In a 
few cases they also helped bag off. 

Advance Arrangements by Patrons 

In all 10 associations, patrons made 
some advance arrangements that helped 
save the mill operator's time. These 
arrangements usually involved getting 
the hay down and bagging the oats in 
order to have both ready -- either near 
the corn or else in the barn where the 
feed was to be unloaded. In some cases 
farm trailers were used to accumulate 
items to be ground. Corn, oats, hay, or 
supplement was loaded on the trailer 



and then fed into the mill without much 
lifting of bags or hay. 

Besides such week-to-week arrange- 
ments as bagging the grain before the 
mill arrived, some patrons also made 
such permanent installations as bulk 
bins, spouting for oats, and slides at the 
bottom of corn cribs -- all of which 
saved the mill operator's time. 

These advance arrangements had 
considerable effect on the time required 
for grinding and mixing on a particular 
farm, especially in the number of times 
the mill had to be moved in performing 
its work. In one association where 
patrons had been trained to have all their 
grain ready at one point, the milling was 
done on nearly all farms without moving 
the mill. On the other hand, 5 associa- 
tions had 1 or more farms requiring 
as many as 10 to 19 moves per farm. 

Based on estimates of operators or 
managers, the mills had to be moved 
2.6 times at an average stop or 1.6 
times for an average batch. Six associa- 
tions estimated an average of three 



15 



moves per farm. The average number 
of moves per stop was: 



Number 


Numb 


er of 


of moves 


associations 


0.1 




1 


1.5 




1 


2.0 




2 


3.0 




6 


5.0 




1 



Some associations had been more 
successful than others in training patrons 
to get things ready. More patrons made 
these preliminary arrangements in the 
associations with one-man operations 
than in those with two men per mill. 
Two associations with two-man opera- 
tions reported that all patrons had the 
hay bales ready for grinding and another 
reported that a large part of them did 
this. Patrons did very little else in the 
way of advance arrangements in the 
two-man operations. 



The associations with one-man oper- 
ations reported that 40 to 95 percent of 
their patrons had oats and barley bagged 
at the right spot. In the group of five 
one-man operations, in which most 
patrons had their grain ready before 
the mill arrived, two managers estimated 
10 hours a week and three estimated 5 
hours a week saving in the operator's 
time and mill use as a result of these 
advance arrangements by patrons. 

In one case 95 percent of the patrons 
had all the grain and hay collected at 
one point and ready for grinding when 
the mill arrived. Through a 2-year 
educational campaign, this association 
had been able to get nearly all patrons 
to have their grain ready at one point. 
Now all are required to do so. Getting 
the patrons to have all items to be 
ground and mixed at one spot has saved 
the association an estimated 10 hours a 
week in operating time and mill use. 



Rates Charged and Credit Extended 



Rates charged for grinding and mix- 
ing ranged from $4 to $4.75 a batch 
and the estimated size of batches varied 
from 1,900 to 2,400 pounds (table 11). 
Converting the rates from batches to 
tons, the basic rates ranged from $3.36 
to $4.50 a ton. Some associations made 
an additional charge for fine grinding, 
sacked unloading (sacking feed as it was 
ground, mixed, and unloaded), or if the 
patron did not help. Some gave discounts 
on the grinding and mixing fee for supple- 
ments purchased. 

Six associations charged the same 
rate regardless of fineness of grind. 
Five associations based the rate on a 
coarse or dairy grind and charged extra 
for fine grind. One charged an additional 



40 cents and three charged 50 cents 
more per batch for fine grind. One 
association charged 75 cents more for 
medium grind and an additional 50 cents 
or $1.25 for fine grind. 

Seven of the associations had the 
same rate for bulk or sacked unloading. 
Four based their fees on bulk unloading 
and charged 50 cents a batch more if 
unloaded in sacks. 

As already mentioned, in the six 
associations operating with two men per 
mill, no help was expected from the 
patron. The patron, however, was ex- 
pected to help in the five associations 
operating with one man per mill. Four 
of these charged extra if the patron 



16 



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17 



made a habit of not being on hand to 
help -- one charging 50 cents and three 
charging $ 1 additional per batch. 

Five associations granted discounts 
on feed ingredients, with four limiting 
the discount to branded feeds. One limited 
the discount to 50 cents a batch; another 
limited it to 45 cents a batch; and three 
gave volume discounts only for ingredients 
purchased in 5-, 10-, or 20-bag lots. 

Two associations offered volume dis- 
counts on molasses, one gave l/2-cent 
a pound and the other gave 1 cent a 
pound for 100 pounds or more. Four 
associations gave no discounts on in- 
gredients or molasses. 

All but one association had a minimum 
charge for a stop at a farm. Such charges 
ranged from $1.50 to $4.50, with those 
of seven associations in the $3 to $4 
group. The number of associations with 
specified minimum charges for a farm 
stop were: 



for grinding as for grinding and mixing, 
and three had separate rates slightly 
lower than for grinding and mixing. Only 
two had a separate rate for mixing 
alone, which in both cases was $1 a ton. 

All associations had a uniform credit 
policy for both mobile and stationary 
mill patrons and other feed customers. 
All did 50 percent or more of their 
mobile mill business on credit. The 
range among the group was from 50 to 
95 percent, with the average 72 percent. 
The number of associations with esti- 
mated specified proportions of mobile 
milling operations on credit were: 



Percent of 


■ volume 


Number of 


on ere 


dit 


associations 


95 




- 2 


90 


' ' . 


1 


85 




1 


80 


- . . .. 


1 


75 




1 


70 




1 


50 




4 



Minimum 


Number of 


charge 


associations 


S4.50 


1 


4.00 


2 


3.50 


1 


3.00 


4 


2.50 


1 


1.50 


1 


None 


1 



Five associations reported doing no 
grinding separately from mixing, and 
only a few had separate grinding and 
mixing rates. Three had the same rates 



Terms called for payment on either 
the 10th, 15th, 20th or at the end of the 
month following the date of purchase. 
Five associations charged interest at 
6 percent on past-due accounts. One 
had this policy but did not enforce it. 
Five charged no interest even if the 
accounts became past due. 

Only one of the 11 associations 
offered a discount for cash. It gave a 
1 percent discount, and 50 percent of its 
sales were cash. 



Pay Plans Used for Operators and Helpers 



The 11 associations included in this 
study used a variety of pay plans for 
compensating the mobile mill operators 
and helpers. Hourly, weekly, and monthly 
pay plans with and without additional 



commissions, and straight commission 
plans were all used. 

Two associations paid their mill 
operators and assistants on a straight 



18 



hourly basis with overtime after 40 hours 
and one used a straight weekly salary. 
Five used a weekly or monthly base pay 
plan with an additional commission 
based on a share of the net grinding 
revenue, molasses gross margin, con- 
centrate sold, or on new customers ob- 
tained. 

Three associations with one-man 
operations paid the operators straight 
commissions based on a share of the 
grinding revenue and molasses gross 
margin plus a fixed amount per ton for 
concentrate sold (table 12). This straight 
commission basis had a minimum weekly 
guarantee with vacation and sick-leave 
allowances. Two of these three also 
made a $4.50 weekly allowance for time 
spent in maintenance of the unit. 

Managers and operators were gen- 
erally satisfied with the pay plans in 
use; thus only a few had any changes to 
suggest in their plan. In the association 



with operators and helpers paid on a 
weekly salary and a molasses commis- 
sion going only to the operators, the 
manager would rather have shared the 
commission between operators and 
helpers. He said the operators were 
doing well as far as earnir^s were con- 
cerned and were satisfied, but helper 
turnover was high. The plan had been 
established, however, before the man- 
ager took charge, and he had not been 
able to change it because operators 
would have been dissatisfied. 

In another association where an 
operator was being paid on an hourly 
basis and doing an effective job, he would 
rather have been on a commission basis. 
The manager had not favored this plan 
because he believed that under it oper- 
ators would not take care of their equip- 
ment as well. 

In still another association with the 
operator on a commission basis, the 



Table 12. - Methods of compensat ing operators and helpers in 11 mobile feed grinding 
and mixing operat ions , Michigan and Wisconsin , 1957-58 



Type of pay pl;in 



One-man 
operation 



Two-man 
operation 



Total 



1. Hourly wage, no commission "' 2 

2. Weekly wage, no commission ' 

3. Weekly wage plus new customer commission shared 

equally by operator and helper 

4. Weekly wage plus molasses commission for operator only 

5. Monthly wage plus grinding and molasses commission 

for operator only ' 

6. Monthly wage plus grinding and molasses corrmission 

shared by operator and helper, three to one 

respectively 

7. Straight commission based on grinding revenue and 

molasses and concentrate sales with minimum 

weekly guarantee 3 

Total number f- 5 



Number 


.1 

1 
2 




6 



2 
1 

1 
2 



3 
11 



manager was not satisfied with the 
results he was getting, but believed that 
the fault was not in the pay plan but in 
the operator. 

Of the associations using a base 
salary plus commission, two paid a 
molasses commission to the operator 
only -- one paying 1/3 cent and one 1/2 



cent a pound. Two others, using a base 
salary plus commission, based the com- 
mission on a combination of molasses 
gross margin and grinding revenue. The 
three on a commission with a minimum 
weekly guarantee based the commission 
on one-third of all grinding revenue, one- 
half cent a pound on molasses sold, and 
10 cents a bag on all branded feeds sold. 



Operating Problems 



This part of the report examines 
special problems these associations 
encoimtered in starting and operating 
their mobile milling services. 

Problems Encountered 
at Start of Service 

Getting patrons was the main problem 
encountered in starting a mobile milling 
service. Employing a good operator 
was listed as next in importance, fol- 
lowed by setting up routes to reduce 
travel and proper maintenance of the 
unit. Other problems mentioned are 
shown in table 13. 

Since 10 of the 11 associations were 
the first in their area to start mobile 
milling, getting farmers to accept the 
service required a lot of travel, demon- 
strations, and promotional work. Some 
managers reported a lot of skepticism 
in mobile milling in their area at first. 
Many farmers thought that the mill was 
just another portable grinder and would 
not even accept a free grinding and 
mixing job to see what it could do. Until 
a sufficient number of patrons were 
acquired, service had to be on an order 
basis and required a lot of driving and 
time in travel. 

How well the operation was started 
depended to a large degree on the t5T3e 



of operator hired to run the mobile mill. 
Those who could promote business 
as well as handle the mill helped to 
get the operation going better than 
operators who merely ran the mill and 
left the office force the job of finding 
patrons and promoting the grinding 
service. 



Training 
maintenance 



operators in preventive 
of the mill was another 



Table 13. -Problems encountered in start- 
ing mobile milling service in 11 asso- 
ciations in Michigan, and Wisconsin , 
1957-58 



Problems encountered 


Number of 
respondents 


Getting farmers to accept 




the service 


5 


Getting good operators 


3 


Setting up routes to reduce travel 


2 


Maintenance problems, especially 




with diesel engines 


2 


Servicing patrons during breakdowi 




of mil 1 s 




Summer commitments in excess of 




winter capacity 




Beginning with too- low grinding 




charges 




Did not start with a program 




to sell feed 




Lost some stationary mil 1 customers 




because mobile mill gave service 




to all vho wanted it 





20 



problem in starting the service. The 
importance of proper maintenance had 
to be learned through costly breakdowns, 
which disrupted the grinding and mixing 
schedule on the farm and resulted in 
customer dissatisfaction. Lack of 
familiarity with the diesel engine was 
the main reason for breakdowns. 

One association said a service charge 
that was too low and the lack of a program 
to sell concentrates and ingredients in 
addition to grinding and mixing feed were 
the chief errors in starting its mobile 
milling operation. Grinding was at first 
accepted from any patron regardless of 
where he bought his supplements or 
whether he bought any molasses. The 
association soon learned, however, that 
even if the revenue from grinding, mix- 
ing, and selling molasses did pay oper- 
ating costs of that operation, ingredients 
and concentrates would have to be sold 
to realize savings on the total opera- 
tion. 



operator, either weekly on Saturday 
morning or according to the manu- 
facturer's recommendations. 

Good maintenance made a difference 
on repair costs. In the association 
operating three mills, one of the mobile 
mill operators was also the maintenance 
mechanic for all the mobile mills and 
trucks. According to the manager, the 
mechanic's diesel engine was still in 
good operating condition long after the 
diesels on the other two units had to be 
replaced. 

Most of the association managers 
stated that the major mechanical trouble 
on the imits occurred with the engine 
supplying the power to the mill. Six of 
these had been replaced, and several of 
the others had been overhauled. 



Another cooperative, anxious to build 
up its mobile mill volume, found the 
mobile unit taking a number of patrons 
from its stationary mill. Later, this 
association emphasized finding patrons 
who were not already patronizing the 
stationary mill. 

Maintenance and 
Mechanical Problems 

A good preventive maintenance pro- 
gram is important in the proper opera- 
tion of mobile milling units as with any 
involved piece of equipment. Each of 
the 11 associations reported using a 
regular schedule of maintenance with 
daily or weekly greasing of the mill by 
the operator. Truck lubrication and oil 
changing was done in some cases by the 
operator and in others by the local 
garage. Unit lubrication was done by the 






Bagged cob corn is fed into the mobile mill. 

Baled hay is also ready on the trailer to 

go into the mixed feed. 



21 



Gear boxes on the units, truck rear 
ends and axles, and feed table trans- 
missions were also mentioned as main- 
tenance problems. 

Seasonal Variations 
in Volume 

As would be expected in dairy areas 
such as Michigan and Wisconsin, the 
winter months of October through March 
were generally the season of highest 
volume and the summer months of May 
through August the period when mobile 
milling volume was the lightest. All 
associations indicated this same general 
pattern although the lengths of the peak 
and the low-volume periods differed. 

Volume and hours worked varied con- 
siderably in each association between 
the busy and the slow season. The low- 
est weekly tonnage in the 11 associations 
ranged from 38 to 77 percent of the 
volume of their peak week (table 14). 



Table 14. - Seasonal variation in time and 
volume of 15 mobile mills operated by 11 
associations in Michigan and Wisconsin , 
1957-58 



Table 15. - Proportion of time spent in 
various act iv it ies during busy and slack 
seasons by operators and assistants of 
15 mobile mills operated by 11 associa- 
tions in Michigan and Wisconsin , 1957-58 



Association 
code number 


Sm 


allest week as a 
of the largest 


percentage 
week 


Volume 


Ti 


me 


spent 








Percent 






1 




38 






37 


2 




50 






59 


3 




72 






74 


4 




75 






82 


5 




51 






57 


6 




v50 






64 


7 




47 






70 


8 




50 






71 


9 




66 






89 


- 10 




77 






67 


11 




66 






84 


Average 




59 






73 



Acti vi ty 


Busy 
season 


Slow 
season 




Percent 


In office 


1.9 


2.1 


Lo ad i n g 


1.8 


1.9 


Traveling 


21.3 


22.2 


Getting instructions 






at farm 


1.4 


1.5 


Collecting accounts 


.9 


1.0 


Discussing formulas 


.9 


1.0 


Grinding and mixing 


62.4 


44.2 


Servicing equipment 


7.6 


8.5 


Calling on new customers 


.4 


.7 


Working in warehouse 


1.4 


16.9 




100.0 


100.0 



Comparing labor requirements in the 
same way, the hours required during the 
slowest week averaged from 37 percent 
to 89 percent of the time spent during 
the peak volume week. 

Time spent in actual grinding and 
mixing in the 11 associations averaged 
about 62 percent of the total time of the 
mill operators in the winter months and 
44 percent in the summer months 
(table 15). Time in travel required a 
little over one-fifth of the total and did 
not change much from the busy to the 
slow season. 

As volume slackened during the 
summer months the proportion of time 
spentin the warehouse increased --from 
an average of only 1 percent of the total 
time in the winter to 17 percent in the 
summer. Operators and assistants 
helped in the warehouse during the slack 
season in 7 of the 11 associations. In 
three associations, as much as 37 per- 
cent of their time was spent in the 
warehouse during the off season. In 



22 



only a few cases did operators increase 
their effort to try to get new customers. 
Neither did they spend any more time 
in discussing formulas with existing 
patrons. 



Time Lost Because of 
Inclement Weather 

To determine the effect of unfavor- 
able weather on mobile milling opera- 
tions, the managers were asked to 
estimate the number of days lost per 
year because of heavy rain, other incle- 
ment weather, or unfavorable travel 
conditions. Six of the 11 said the oper- 
ator ground and mixed every day and 
reported no time lost because of weather 
conditions. Some said the operators 
might get behind in their work because 
of slow going in heavy rain or snow but 
they did not stop. 

In the five associations reporting 
time lost because of bad weather, esti- 
mates ranged from one-half day to 12 
days a year per mill (table 16). Only 
two, however, exceeded 3 days per year. 
Where operators did not grind and mix 
because of poor weather, those on 
straight or base pay usually were shifted 



Table 17. - Cont inuing problems in oper- 
ating mobile willing service in 11 asso- 
ciations with 15 mobile mills in Michigan 
and Wisconsin, 1957-58 



Problems 


Number o f 
respondents 


Finding and keeping good operators 


3 


Breakdo\wis during busy season 


2 


Supervision required to keep 




operators busy 




Credit control difficult because 




manager does not see patrons 




Need for more year-round patrons 




and business 




Keeping patrons using 




recommended rations 




Need for more patrons 




None 


2 



to unloading cars or housekeeping duties. 
Among operators on straight or part 
commission, one did repair and main- 
tenance work on the mill. Another tried 
to select farms where he could grind 
under cover. In still a third association 
time lost was only a few hours at a time 
during the worst of the storm and no 
attempt was made to find other work for 
the operator. 

Continuing Problems 



Table 16. - Time lost per mill because of 
unfavorable weather or travel conditions 
in 11 associations operat ing mobile feed 
mills in Michigan and Wisconsin , 1957-58 



Days lost 


Number of 


per year 


associations 


None 


6 


1/2 day 




1 1/2 days 




3 days 




10 days 




12 days 





Finding and keeping good operators 
rated first among problems still con- 
tinuing with these associations in their 
mobile mill operations. This was 
especially true with the associations 
operating more than one mill and where 
the managers had some measure of 
relative performance by operators. 

Falling behind schedule when break- 
downs occurred was second among 
problems which still plagued operations. 
Other unsolved problems mentioned are 
indicated in table 17. 



23 



Table 18. - Condensed operating statements of mobile milling operations of 11 



Associa- 


Number 

o f 
mills 


Men per 
mill 


Volume 
tons 


Grinding 


and mixing 


revenue 


Molasses gross margin 


tion 


Amount 


Per ton 


Percent 


Amount 


Per ton 


Percent 


1 






1, 170 


$4,972 


$4.25 


83 


$1,000 


$0.85 


17 


2 






1,963 


7,143 


3.64 


69 


3,165 


1.61 


31 


3 






2,400 


9,989 


4.16 


77 


3,045 


1.27 


23 


4 






2,400 


8,344 


3.47 


65 


4,400 


1.83 


35 


5 






2,676 


10,694 


3.99 


77 


3,240 


1.21 


23 


6 




2 


• 3,350 


11,276 


3.36 


82 


2,419 


.72 


18 


7 




2 


3,500 


13,557 


3.87 


70 


5,850 


1.67 


30 


8 




2 


3,600 


13,326 


3.70 


77 


4,050 


1.13 


23 


9 


2 


2 


5,800 


23,204 


4.00 


76 


7,475 


1. 29 


24 


10 


2 


2 


5,830 


21,013 


3.60 


76 


6,500 


1. 12 


24 


11 


3 
15 


2 
17 


10,000 


35,844 


3.58 


78 


10 , 247 


1.02 


22 


Total 


42,689 


159,362 


- 


51,391 


- 


- 


Average 


- 


- 


3,881 


14,487 


3.73 


76 


4,672 


1.20 


24 



Tllll number i was a part-time operation. If omitted, the margin from grinding, mixing and molasses sales would 
have averaged $4.92 a ton and total operating costs would have averaged $5.08 a ton thus reducing the loss from 
22 cents to 16 cents a ton. 



Table 19. - Operating costs per ton of feed ground and mixed in 11 associat ions 



Associa- Volume 


Labor 


Rent 


Depreciation 


Interest 


Insurance 


tion tons 


Per ton 


Percait 


Per ton 


Percent 


Per ton 


Percent 


Per ton 


Percent 


Per ton 


Percent 



1 


1,170 


$2.45 


32. 1 


(1) 


- 




$2.78 


36.5 


$0.38 


5.0 


$0.07 


.9 


2 


1,963 


2.06 


34.2 


- 


- 




1.78 


29.5 


.22 


3.6 


.05 


.8 


3 


2,400 


1.89 


39.6 


- 


- 




1.28 


26.7 


. 19 


3.9 


.03 


.7 


4 


2,400 


2.09 


39.9 


- 


- 




1.45 


27.8 


. 19 


3.6 


.05 


.9 


5 


2,676 


2.08 


38.2 


- 


- 




1.05 


19.3 


.16 


2.9 


.04 


.7 


6 


3,350 


1.86 


38.9 


$1.36 


28 


5 


- 


- 


- 


- 


.09 


1.8 


7 


3,500 


2.64 


53.3 


1.20 


24 


3 


- 


- 


- 


- 


.07 


1.5 


8 


3,600 


2. 18 


50.2 


1.17 


26 


8 


- 


- 


- 


- 


.07 


1.6 


9 


5,800 


2.76 


52.3 


.76 


14 


4 


.52 


9.8 


.06 


1.2 


.05 


.9 


10 


5,830 


2.84 


52.1 


.52 


9 


4 


.37 


6.6 


.05 


1.0 


.07 


1.2 


11 


10,000 


2.81 


57.1 


- 


- 




.93 


18.9 


.13 


2.6 


. 10 


2.0 



Average 



3,881 2.48 48.2 



.48 



'9.3 



.71 ^13.9 



10 



1.9 



.07 



1.3 



Average omitting 

association l'* 3,774 2.49 48.8 



.49 



9.7 



.66 12.9 



.09 



1.8 



,07 



1.3 



-Dashes indicate none or not applicable. 

Average rent based only on those paying rent was $1.26 a ton or 25.4 percent. 
^Average depreciation based only on those with depreciation was $1.15 a ton or 21.8 percent. 

On basis that It was a part-time operation. 



24 



cooperat ives in Michigan and Wisconsin, 1957-58 



Associa- 


Grinding, mixing and 
molasses margin 


Operating expenses 


Net margin 


tion 


Anount 


Per ton 


Amount 


Per ton 


Amount 


Per ton 



1 


$5,972 


$5.10 


$8,931 


$7.63 


-$2,959 


-$2.53 


2 


10,308 


5.25 


11.844 


6.03 


-1,536 


-.78 


3 


13,034 


5.43 


11,441 


4.77 


1,593 


.66 


4 


12,744 


5.30 


12,570 


5.23 


174 


.07 


5 


13,934 


5.20 


14,568 


5.44 


-634 


-.24 


6 


13,695 


4.08 


16,052 


4.79 


-2,357 


-.71 


7 


19.407 


5.54 


17,326 


4.95 


2,081 


.59 


8 


17,376 


4.83 


15,649 


4.35 


1,727 


.48 


9 


30,679 


5.29 


30,621 


5.28 


58 


.01 


10 


27,513 


4.72 


31,998 


5. 48 


-4,485 


-.76 


11 


46,091 


4.61 


49,237 


4.92 


-3,146 


-.31 


Total 


210,753 


- 


220,237 


- 


-9,484 


- 


Average 


19,159 


^4.93 


20,022 


-^5.15 


- 


-^-0.22 



operating 15 mills in Michigan and Wisconsin, 1957-58 



Associa- 
tion 



Personal 
property tax 



Per ton Percent 



Repair, upkeep, 
gas, oi 1 and 
diesel fuel 



Per ton Percent 



License fees 



Per ton Percent 



Miscel Ian ecus 



Per ton Percent 



Total operating 
costs 



Per ton Percent 



1 


$0.18 


2.4 


$1.69 


22. 1 


$0.05 


0.6 


$0.03 


0.4 


$7.63 


100.0 


2 


.10 


1.6 


1.67 


27.7 


.03 


.5 


.12 


2.1 


6.03 


100.0 


3 


.05 


1. 2 


1.22 


25.6 


.02 


.5 


.09 


1.8 


4.77 


100.0 


4 


.04 


.8 


1.21 


23.1 


.02 


.5 


.18 


3.4 


5.23 


100.0 


5 


.08 


1.5 


1.87 


34.3 


.02 


.4 


.14 


2.7 


5.44 


100.0 


6 


.03 


.5 


1.24 


25.7 


.06 


1.3 


. 15 


3.3 


4.79 


100.0 


7 


.05 


1.0 


.91 


18.3 


.06 


1.2 


.02 


.4 


4.95 


100.0 


8 


- 


- 


.78 


17.9 


.05 


1.2 


.10 


2.3 


4.35 


100.0 


9 


- 


- 


1.02 


19.4 


.07 


1.3 


.04 


.7 


5.28 


100.0 


10 


.02 


.5 


1.44 


26.1 


.06 


1.1 


. 11 


2.0 


5.48 


100.0 


11 


.03 


.7 


.80 


16.3 


.06 


1.2 


.06 


1.2 


4.92 


100.0 



Average 



.04 



1.14 



22.0 



.05 



1.0 



,08 



1.7 



5.15 



100.0 



Average omitting 
association 1 



.03 



1.12 



22.1 



.05 



1.0 



.08 



1.7 



5.08 



100.0 



25 



Analysis of Operating Receipts and Expenses 



Part II of this report presents indi- 
vidually the mobile milling operating 
statements of each of the 11 cooperatives 
included in this study. For purposes of 
comparison the principal items from 
these statements are assembled in 
tables 18 and 19. The former shows the in- 
come items less total operating expenses 
to arrive at the net margin from grinding 
and molasses sales. The latter shows 
the detailed items making up the oper- 
ating expenses. 

Grinding and mixing service revenue 
alone did not cover expenses in any of 
the operations. Income from molasses 
sales was needed to cover all operating 
expenses even in the better managed 
operations. With the molasses gross 
margin added to the grinding and mixing 
revenue, the combined net operating 
margin still failed to fully cover all 
expenses in over half the associations. 

Grinding and mixing revenue aver- 
aged $3.73 a ton. The molasses sales 
brought in an average gross margin of 
$1.20 a ton, making a total gross mar- 
gin from grinding and mixing and 
molasses sales of $4.93 a ton of feed 
mixed. Operating expenses, on the other 
hand, averaged $5.15 a ton, thus ex- 
ceeding the service and molasses margin 
by 22 cents a ton. 



Labor was by far the most important 
cost item in the operation of a mobile 
mill, averaging 48 percent of the total 
cost in this group of mills. Rent, de- 
preciation, and interest together aver- 
aged 25 percent. Repairs, upkeep, gas, 
oil, and diesel fuel represented another 
22 percent. Licenses, insurance, and 
other miscellaneous costs made up 
the remaining 5 percent of the total 
costs. 

Three of the associations rented all 
their units, six owned all theirs, and two 
rented some and owned other units. 
Therefore, some had a rental charge 
and others a charge for depreciation 
and interest in their operating expenses. 
Depreciation was based largely on major- 
ity practice in the area which was a 5- to 
6-year depreciation schedule. The 
mills may last longer but they will be 
partly obsolescent before then. 

Upkeep and fuel are grouped together 
in this summary because a few associa- 
tions did not have this information 
separately. These items, however, 
appear separately in the individual oper- 
ating statements for the associations 
having such data. 

All the units were adequately pro- 
tected by insurance, including collision, 



Table 20. - Summary of costs per ton by one-man and two-man mobile feedmill operations- 
of 11 cooperative associations in Michigan and Wisconsin, 1957-58 





Tons ground and mixed 




Average 


cost 


per ton 




Type of 
operation 


Total 


Average 
per mill 


Fixed 


Op 


erat 


ing 


Total 




Labor 


Other 


Ten t\vo-man mills 
Five one-man mills 


32,080 
10,609 


3,208 
2,122 


$1.31 
1.88 


$2.61 
2.07 




$1.09 
1.64 


$5.01 
5.59 


All mills 


42,689 


2,846 


1.45 


2.48 






1.22 


5. 15 



26 



comprehensive fire and theft, and auto- 
mobile liability coverage. Operating 
hazards were protected by public liability 
policies covering all operations of the 
associations including the mobile mills. 
Premiums on the public liability policies 
were on a payroll basis. 

Five of these units operated with 1 
man and 10 with 2 men per mill. In 
table 20 costs are summarized on the 
basis of one-man and two-man opera- 
tions. The one-man operated mills 
had 54 cents a ton lower labor costs 
but 57 cents a ton higher fixed costs 
and 55 cents a ton higher other oper- 
ating costs. Thus total costs were 57 
cents a ton higher for the one-man 
than the two-man mills. The latter 
made better use of their fixed invest- 
ment because of the larger volume per 
mill. 



When grouped according to volume 
per mill, total operating costs per ton 
averaged $4.80 for the six mills with 
over 3,000 tons of grinding and mixing 
a year compared with $5. 30 a ton for the 
seven mills with 2,000 to 3,000 tons per 
year and $6. 63 for the two with less than 
2,000 tons a year (table 21). Costs 
other than labor declined from $3.42 a 
ton for the two mills with less than 
2,000 tons of volume to $2.29 a ton for 
those with over 3,000 tons a year. 

Labor costs were influenced less by 
volume than by other factors such as 
number of operators per mill. Employ- 
ment of one operator on a commission 
basis and transfer of the other operator 
to other work when there was no grind- 
ing and mixing to be done also partly 
accounted for the slightly lower labor 
costs for the two small-volume mills. 



Table 21. - Costs per ton by volume per mill in 11 cooperative mobile feed milling 
operat ions in Michigan and Wisconsin , 1957-58 



Volume per mi 


11 


Number 


of 


Average 

volume 

per mill 




Avera 


ge cost per ton 




(Tons) 


Associations 


Mills 


Labor 


Other-^ 


Total 


Less than 2,000 
2,000 to 3,000 
Over 3,000 




2 
5 
4 


2 
7 
6 


1,566 
2,729 
3,408 


$2.22 
2.49 
2.51 




$3.42 
2.80 
2.29 




$6.63 
5.30 
4.80 


Average 


- 




2,846 


2.48 






2.69 


5.15 



Includes fixed costs and operating costs other than labor. 



Break-Even Points 



A volume of 3,190 tons of grinding 
and mixing a year will be needed to 
break even at the average grinding and 
mixing service charge and molasses 
gross margin obtained by these mills. 
Figure 2 — based on income and cost 
information from table 18 — shows this. 
If margins for ingredients other than 
molasses are also included, approxi- 



mately 2,280 tons of grinding and mixing 
would be needed to break even after pay- 
ing for the ingredient delivery and 
warehousing. 

Line X shows costs at various 
volumes. It is a trend line fitted to the 
cost data of the 11 associations operating 
at different volumes. 



27 



Figure 2 

COMPARISON OF GROSS MARGINS AND OPERATING COSTS, 

AVERAGE OF 11 MOBILE MILLING OPERATIONS IN 

MICHIGAN AND WISCONSIN, 1957-58 

$ PER YEAR (THOUS.) 



19 - 



17 



15 



13 



11 



/ -^ 

Grinding & mixing revenue plus Y 

molasses & ingredient margin / / 

/ 




Grinding & mixing revenue 



Grinding & mixing revenue 
plus molasses margin 



X- 







800 



1,600 2,400 3,200 4,000 4,800 

TONS PER YEAR PER MILL 



28 



Line A shows grinding and mixing 
service revenue at various volumes 
applying average service charges used 
by these associations. It is evident that 
grinding and mixing revenue alone 
(line A) will not equal operating costs 
(line X) at any practical volume. 

Line B adds the average molasses 
gross margin to the grinding and mixing 
service revenue shown by line A. It 
meets cost line X at about 3,190 tons. 

Line C adds the gross margin from 
concentrate and ingredient sales to the 
grinding and mixing service revenue 
and molasses margin. In addition to the 
molasses, all associations sold con- 
centrates and other ingredients required 
in performing mobile milling services. 



The gross margin from these averaged 
$1.28 a ton of grinding and mixing. 

Line Y adds the ingredient delivery 
costs and warehousing labor to the other 
operating costs shown in line X. These 
additional costs averaged 67 cents a ton 
of grinding and mixing. 

Considering the concentrate and in- 
gredient income and the added delivery 
costs and warehousing labor, the average 
mill would break even at about 2,280 
tons per year (line C compared with line 
Y). That is, a mill operating at this 
volume under average conditions would 
pay for all operating costs of the mill, 
the delivery of the ingredients to the 
farm, and the labor costs of warehousing 
the ingredients. 



PART II. 
Case Studies of Individual Mobile Milling Operations 



This section presents the individual 
operating statements for each of the 11 
mobile feed milling operations with the 
detailed income and expense items 
available in each case. All the mills 
operated in conjunction with other farm 
supply services and many of the expense 
and other items had to be estimated be- 
cause only a few had kept such data 
separately on their mobile milling 
operations. 

The statements cover operations for 
the 1957-58 operating year. The indi- 
vidual operating statements have not 
been condensed because it was assumed 
that operators of mobile units may be 
interested in detailed income and expense 
items for comparison with their own 
operations. Some of the operating state- 
ments include items of overhead costs 
while others do not because this infor- 



mation was not available. For this 
reason, the reader should not compare 
the final margins without close attention 
to the deductions from, or additions to, 
the net margin from grinding, mixing, 
and sale of molasses. 

A brief description of each milling 
operation gives background information 
to help interpret the operating results. 
By considering volume, number of oper- 
ators, and other factors, some idea can 
be obtained of the conditions under 
which these mills were operated. 

The mills may be grouped roughly 
into three classes: 

1. One man, single-mill operations. 
Mills 1, 2, 3, 4, and 5 were all single- 
unit operations with one man on each 
mill. 



29 



2. Two-man, single-mill opera- 
tions. Mills 6, 7, and 8 were all single 
unit operations with two men on each 
mill. 



3. Two- man, multiple- mill opera- 
tions. Mills 9, 10, and 11 were 2-unit 
and 3-unit operations with two men on 
each mill. 



One-Man, Single-Mill Operations 



First to be considered are the five 
mills that fell into this category. 

Mobile Milling Operation 
Number 1 

Mill number 1 was a one-man single 
unit, operating under a part-time load. 
It started mobile service in 1952 and 
was the first such service in its area. 

This mill served 45 patrons with a 
total volume of 1,170 tons in 1957-58. 
Volume was down 380 tons from the year 
before because farmers had less grain 
to grind and the association reported 
serving more patrons from the stationary 
mill than the year before. 

The original mobile mill with a 75 
cu. ft. mixer was still in use, but the 
100 hp. engine had been replaced in 1955. 
The truck was also replaced late in 1957. 
The unit carried no unloading auger and 
75 percent of the feed was sacked. Ten 
patrons who had their own portable con- 
veyors unloaded their feed in bulk from 
the mill. 

Of the total volume, 94 percent was 
dairy feed, 6 percent, beef cattle feed, 
and about 1 percent hog feed. Sixty-three 
percent of the volume was cob corn, 10 
percent oats, 5 percent barley, 10 per- 
cent hay, 4 percent molasses, 5 percent 
concentrate, and 3 percent was protein 
meals, minerals, and low-protein in- 
gredients. 

Ninety-two percent of the volume 
was milled on a regular schedule -- about 



half of it weekly and the other half every 
other week. The 8 percent of the volume 
serviced on an order basis represented 
mostly patrons near the mill who were 
serviced individually, usually within a 
day of the order. During the winter 
months the area was divided into five 
weekly routes, but this was reduced to 
four and then to three weekly routes as 
the volume declined in the summer 
months. 

The grinding and mixing rate was 
$4. 50 a batch which averaged 1 ton. This 
was for any grind unloaded in sacks. A 
discount of 50 cents a batch was given 
if unloaded in bulk but this applied only 
to the first batch. Another discount of 
50 cents a batch was given if more than 
one batch was mixed. 

Patrons were expected to help the 
mill operator and 85 percent of them 
helped by shoveling grain or carrying 
the bags away from the mill. Where the 
patron was regularly absent, 50 cents 
additional was charged per batch. In 
cases where less than a full batch was 
mixed, a minimum fee of $3 was charged 
for a farm stop. 

The operator received an hourly 
wage subject to overtime after 40 hours. 
During the summer when the mill did 
not furnish a full week's work, the oper- 
ator worked in other departments of the 
association. 

This milling operation proved highly 
unprofitable because of the very low 
volume in relation to the fixed costs of 



30 



the mobile mill. Grinding and mixing 
revenue and molasses margins together 
failed by $2,959 of paying operating 
expenses. Estimated gross margin on 
ingredients was only $1,898 which no 
more than covered the direct warehousing 
and delivery costs. 

Following is the operating statement 
of mobile mill number 1 for its oper- 
ating year 1957-58: 



mobile unit within a 50-mile area. There 
was no shortage, however, of stationary 
custom mills in the territory. Lack of 
a molasses blender at the stationary 
mill was one of the main reasons re- 
ported for adding the portable unit. A 
molasses mixer, however, has been 
added since then at the stationary mill. 

The original mobile mill with a 75 
cubic foot mixer was still in use, but 



Mill Number 1 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $3,200 

Total milling revenue and 
molasses margin 



Expenses 
Wages 

Payroll costs 
Depreciation 
Repair and upkeep 
Gas, oil, and diesel fuel 
Insurance 
License 

Personal property taxes 
Travel 
Advertising 
Telephone 
Interest on average investment 

Total operating expenses 



Net margin from grinding, mixing, 

and molasses sales 
Gross margin on ingredient sales 

of $11,054 
Margins available to pay for delivery 

and warehousing of ingredients and 

for other overhead items 



$4,97 2 
1,000 

5,972 



$4.25 
.85 



5.10 





2,700 


2.30 




173 


.15 




3,262 


2.78 




960 


.82 




1,012 


.87 




77 


.07 




56 


.05 




216 


.18 




12 


.01 




13 


.01 




10 


.01 


5 percent 


440 


.38 




8,931 


7.63 




-2,959 


-2.53 




1,898 


1.62 



-1,061 



-.91 



Mobile Milling Operation 
Number 2 

Mill number 2 was a single-unit, 
one-man mill owned by an association 
with a stationary mill. It started early 
in 1952, the first and still the only 



the 100 hp. engine was replaced after 
3| years of use and the truck after 4 1/3 
years. The unit does not have an un- 
loading auger, but the operator carries 
a portable aluminum conveyor and un- 
loads about 60 percent of the volume in 
bulk. 



31 




Here a mobile feed mill is ready to leave cooperative headquarters accompanied by a truck carrying 
concentrates and other ingredients . The operator' s helper drives the ingredients truck. 



The association serviced 60 cus- 
tomers during the 1957-58 year with 
1,963 tons of feed. Of the total volume, 
90 percent was estimated to be dairy 
feed, 5 percent poultry feed, and 2.5 
percent each hog and beef cattle feeds. 
Home grown feeds ground were corn, 
oats, and hay. They represented 60, 
21.5, and 1 percent, respectively, of the 
total volume. Balance of the ingredients 
consisted of 6.5 percent high-protein 
concentrates, 4.5 percent molasses, and 
6.5 percent protein meals and low- 
protein ingredients. 

All but 5 percent of the volume was 
serviced on regularly scheduled stops, 
75 percent of them weekly and 25 per- 
cent every other week. The 5 percent of 
volume delivered on order was serviced 
within the week off the nearest route. 
No special trips were made to serve any 
of these orders. Ingredients were 



delivered separately by regular feed 
delivery truck. Only emergency in- 
gredient orders were delivered on the 
mill. 

Grinding and mixing rates charged 
were $4 a batch, averaging about 2,200 
pounds. The rate did not vary for fine- 
ness of grind or method of unloading. A 
discount of 5 cents was given if supple- 
ment was bought in 500-pound lots and 
10 cents if in ton lots. The patron was 
expected to help the operator and 90 
percent of them did help, but no extra 
charge had been made if the patron did 
not cooperate. The minimum rate for a 
farm stop was $3 when less than a 
batch was ground and mixed. 

The operator was paid on a com- 
mission basis -- getting one-third of the 
grinding and mixing revenue, one-half 
cent a pound on all molasses, and $2 a 



32 



ton for all branded concentrates sold 
on the machine. In addition, he was 
guaranteed $60 a week and got 2 
weeks vacation at full pay, 10 days 
a year sick leave at $10 a day, and 
$4.50 a week for equipment mainten- 
ance. Commissions had not fallen 
below the $60 minimum for the past 
3 years. 



A margin of $1,419 above delivery costs 
was left from ingredient sales. Com- 
bining these two figures left a loss of 
$117 from grinding, mixing, molasses, 
and ingredient sales, after paying for 
direct operating e3q3enses and costs of 
ingredient delivery, but not including 
ingredient warehousing costs or other 
overhead costs. 



Grinding and mixing revenue and 
molasses gross margin failed by $1,536 
of paying for total operating expenses. 



Following is the operating statement 
of mobile mill number 2 for its oper- 
ating year 1957-58: 



Mill Number 2 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $6,664 

Total milling revenue and 
molasses margin 



$7,143 
3,165 

10,308 



$3.64 
1.61 

5.25 



Expenses 
Wages 

Commissions 
Payroll costs 
Depreciation 
Repair and upkeep 
Gas, oil, and diesel fuel 
Insurance 
License 

Personal property taxes 
Travel 
Telephone 

Office supplies and postage 
Interest on average investment 

Total operating expenses 



Net margin from grinding, mixing, 

and molasses sales 
Gross margin on ingredient sales 

of $22,471 

Less: Labor and truck use 
delivering ingredients 
Margin on feed ingredients after 

delivery costs 
Net margin from grinding, mixing, 

molasses and ingredient sales after 

paying for operating expenses and 

delivery of ingredients 





3,120 


1.60 




677 


.34 




243 


.12 




3,502 


1.78 




1,790 


.91 




1,494 


.76 




98 


.05 




60 


.03 




192 


.10 




124 


.06 




72 


.04 




48 


.02 


5 percent 


424 
11,844 


.22 




6.03 




-1,536 


-.78 




2,962 


1.51 




1,543 


.79 




1,419 


.72 



-117 



-.06 



33 



Mobile Milling Operation 
Number 3 

Mill number 3 was a one-man, 
single-unit operation started in 1953 to 
supplement the association's stationary 
custom mill. One other mill has been 
operating in the area for the last 2 years. 

The mill has a 75 cu. ft. mixer and 
100 hp. diesel engine. The mill was not 
equipped with an unloading auger; there- 
fore all feed was sacked except about 
5 percent of the total for three cus- 
tomers who have their own conveyors 
for moving feed to bins. The original 
engine on the mill gave a lot of mechan- 
ical trouble and was replaced after 2 
years with a new one of the same size 
but another make. 

About 70 customers were serviced 
during 1957- 58 with a total of 2,400 tons. 
The operator delivered about 90 percent 
of the ingredients on the mill. Farmers 
picked up about half of the remainder, 
and the other half was delivered on the 
regular feed delivery routes. 

Ninety-five percent of the feed 
ground and mixed was for dairy cattle, 
3 percent for steers, and 1 percent 
each for hogs and poultry. Farm grains 
ground were corn and oats representing 
50 percent and 41 percent respectively 
of the total tonnage. The remainder of 
the ingredients consisted of 3 percent 
molasses, 3 percent high protein con- 
centrate, 2 percent protein meals, and 1 
percent minerals, hay, and low-protein 
ingredients. Very little hay was in- 
corporated into feeds in this area as 
only about 5 tons were ground during 
the year. 

All patrons were serviced on a 
regular schedule, 90 percent of them 
every other week and 10 percent weekly. 
The weekly customers were serviced 



off the nearest routes that regularly 
served customers on a biweekly basis. 

The grinding and mixing charge was 
$4 a batch, which usually was about 
2,000 pounds. This was for a dairy 
grind, and an additional charge of 50 
cents a batch was made for fine grind. 
Since this was a one-man milling oper- 
ation, the patrons were expected to 
help. About 90 percent of them did help 
the operator by shoveling grain onto the 
feeder and taking feed bags away from 
the mill. Some also helped to bag feed. 
An additional $1 a batch was charged 
patrons who made it a habit to be away 
when the mill was scheduled to arrive 
at their farm. The minimum rate for a 
farm stop was $3 for less than a full 
batch. The rate at the association's 
stationary mill was 12 cents a bag for 
feed brought in for milling. 

The manager estimated that the 
patrons contributed about 16 hours a 
week, thus reducing the operator's time 
that much in an average week. In addi- 
tion, about 60 percent of the 70 patrons 
bagged their oats and had it ready at 
the granary. This saved the operator 
another 5 hours a week. The managers 
believed that another 20 percent could 
bag their oats which would save another 
1^ hours of the operator's time. 

The average number of moves the 
mill made on farms was 1^. About 50 
percent of the farms required one move. 

The operator was on a commission 
basis and received one-third of all 
grinding revenue, one-half cent a pound 
on molasses, and $2 a ton on branded 
feeds used in the mix. In addition he 
received 2 weeks vacation at $60 a week 
and up to 12 days sick leave at $10 a 
day. He was guaranteed a minimum of 
$60 a week but his commissions had 
never been below the guarantee. 



34 



Receipts from grinding and mixing 
revenue and from molasses sales left 
a net margin of $1,593 after all oper- 
ating expenses. Expenses included cost 
of delivering 90 percent of all the in- 
gredients hauled by the operator on the 
mill truck. Ingredient sales of $13,194 
grossed $1,839, which was available to 
apply against warehousing expenses and 
delivery costs of the 5 percent of in- 
gredients delivered on the regular feed 
routes. 

Following is the operating statement 
of mobile mill number 3 for its oper- 
ating year 1957-58: 



Mobile Milling Operation 
Number 4 

Mill number 4 was a one-man, 
single-unit operation started in the fall 
of 1953. The association had a stationary 
custom mill and the mobile unit was 
added to try to gain additional feed 
volume. It was the first mobile unit in 
the area. Two competing units were 
operating in the association's trade area 
at the time of the study. 

The original mill, equipped with a 
75 cu. ft. mixer, was still in use; but the 
truck was replaced in 1955 and the 100 



Mill Number 3 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $6,960 

Total milling revenue and 
molasses margin 



$9,989 
3,045 

13,034 



$4.16 
1.27 



5.43 



Expenses 

Wages . 

Commissions 

Payroll costs 

Depreciation 

Repair and upkeep 

Gas, oil, and diesel fuel 

Insurance 

License ' ' ■ . 

Personal property taxes . ;. 

Travel 

Advertising 

Office supplies and postage 

Bad debts 

Interest 

Total operating expenses 

Net margin from grinding, mixing, 

and molasses 
Gross margin on ingredient sales of 

$13,194 (90 percent delivered on 

mobile unit) 
Margins available to pay for delivery 

and warehousing of ingredients and 

for other overhead items 



3,120 


1.30 


1,191 


. .50 


218 


.09 


3,061 


1.28 


924 


.38 


2,010 


.84 


75 


.03 


57 


.02 


131 


.05 


20 


.01 


17 


.01 


70 


.03 


100 


.04 


447 


.19 


11,441 


4.77 


1,593 


.66 


1,834 


.76 



3,427 



1.42 



35 



hp. engine was replaced in 1957 by the 
same size engine of another make. The 
unit had no unloading auger, but the 
operator carried a portable aluminum 
conveyor for unloading the 10 percent of 
the volume unloaded in bulk. 

The unit ground and mixed feed for 
about 75 patrons during 1957-58 and 
volume totaled 2,400 tons. Ninety-eight 
percent of the volume was dairy and 
steer feed and about 2 percent was 
poultry feed. Ingredients that made up 
the volume were cob corn, 1,030 tons; 
oats, 665 tons; barley, 362 tons; molasses, 
110 tons; concentrate, 110 tons; hay, 40 
tons; minerals, 40 tons; high protein 
meals, 36 tons; and wheat byproducts, 
7 tons. 

All the patrons were serviced on a 
regular schedule, 90 percent of them 
weekly and 10 percent every other week. 
Except for special orders, feed in- 
gredients were all delivered separately 
on the regular feed delivery routes. 
Grinding and mixing charge was $4 a 
batch estimated to average 2,300 pounds. 
This was for either bulk or sacked feed 
and no extra charge was made for fine 
grinding on the theory that the patrons 
used more supplements when the feed 
was ground fine. The manager believed 
they used up to 1,000 pounds of pur- 
chased feed compared with 200 pounds a 
batch when the feed was coarse ground. 
The patron was ejqjected to help the 
operator and an extra $1 a batch was 
charged if the patron regularly did not 
help. A minimum charge of $3.50 a 
batch was made for processing less than 
a full batch. 

The one operator was paid a straight 
hourly salary with time-and-a-half 
over 40 hours. An hourly pay plan was 
in use because management believed that 
operators on a straight commission 
would not take proper care of their 



equipment. The manager was satisfied 
with the pay plan, but the operator would 
rather have been on a commission basis. 

The mill's operation for 1957-58 
netted $174 from the grinding and 
mixing revenue and the molasses mar- 
gin after paying all operating expenses. 
Ingredient sales, other than molasses, 
totaled $24,947 and grossed $3,701, but 
no cost information was available on 
delivery or warehousing expenses. A 
$2 charge was made for ingredient 
delivery but this was recognized as in- 
adequate to cover actual costs. 

The operating statement of mobile 
mill number 4 for its operating year 
1957-58 is at the top of page 37. 

Mobile Milling Operation 
Number 5 

Mill number 5 was a single-unit, 
one-man mill which had been in service 
since the fall of 1952. The original 
truck and mill with a 75 cu. ft. mixer 
were still in use, but the 100 hp. engine 
had been replaced early in 1957 when it 
was ready for its third overhaul. 

The association's mill was the third 
unit in the area. It was added because 
nearby dairymen were gradually selling 
out as the city ejqjanded into the farm 
area and it appeared evident that most of 
the remaining patrons would eventually 
be too far from the association's 
stationary mill. The nearest patrons 
were from 4 to 6 miles from the ware- 
house, and in one direction the nearest 
patron was 12 miles away. There were 
six competitors operating six mills 
within the association's trade territory 
at the time of this study. 

The mill serviced 85 patrons during 
the year with a total of 2,676 tons of 
feed, 95 percent of it unloaded in sacks. 



36 



Mill Number 4 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $8,800 

Total milling revenue and 
molasses margin 



$8,344 
4,400 

12,744 



$3.47 
1.83 



5.30 



penses 








Wages 


4 


,760 


1.98 


Payroll costs 




255 


.11 


Depreciation 


3 


498 


1.45 


Repair and upkeep 


1 


,654 


.69 


Gas, oil, and diesel fuel 


1 


,247 


.52 


Insurance 




111 


.05 


License 




56 


.02 


Personal property taxes 




97 


.04 


Travel 




50 


.02 


Heat 




90 


.04 


Advertising 




20 


.01 


Telephone 




75 


.03 


Office supplies and postage 




100 


.04 


Bad debts 




100 


.04 


Interest on average investment @ 5 percent 




457 


.19 


Total operating expenses 


12 


,570 


5.23 



Net margin from grinding, mixing, 

and molasses 
Gross margin on ingredient sales 

of $24,947 
Margins available to pay for delivery 

and warehousing of ingredients and 

for other overhead items 



174 



3,701 



3,875 



.07 



1.54 



1.61 



The operator carried a portable aluminum 
conveyor for unloading the 5 percent of 
the feed unloaded in bulk. About 59 per- 
cent of the volume was dairy, 30 percent 
beef cattle, 4 percent hog, 4 percent 
sheep, and 3 percent was poultry feed. 
Farm feeds ground were corn, oats, 
barley, and hay -- representing 68, 16, 
5, and 2.2 percent, respectively, of the 
total volume. Of the nonfarm ingredi- 
ents, molasses represented 4 percent, 
concentrates 3.4 percent, and other 
ingredients 1.4 percent of the total 
volume. 

Ninety-five percent of the patrons 
were serviced on regular routes, 60 



percent of them weekly and 40 percent 
every 2 weeks. The territory was 
divided into five routes, and the operator 
picked up half of the biweekly accounts 
in each area each week. The 5 percent 
on an order basis were serviced off the 
regular routes when the truck was in 
the area. No special runs were made to 
service these orders. 

Patrons had learned to have all the 
grain ready at one spot. This had re- 
duced moving the mill to only 1 move in 
100 stops and had saved about 10 hours 
a week of the operator's time. The help 
received from patrons in feeding in- 
gredients into the mill and removing the 



37 




^ 



This mobile feed will is backed up to a farmer's corn crib ready to grind cob corn. 



bags saved another 6 hours a week of 
the operator's time. 

Ingredients were delivered separately 
on regular feed delivery routes twice a 
week. A $3 delivery fee was charged 
per ton. 

The rate for grinding and mixing a 
dairy grind was $4.50 a batch, sacked 
or bulk. An additional 50 cents was 
charged for material to be ground fine, 
and a discount of 50 cents was given if 
a minimum of 100 pounds of supplement 
was purchased. Molasses was priced at 
one-half cent a pound less for orders of 
100 pounds or more. 

Patrons were expected to help the 
operator and 80 percent did help feed the 
mill and take the feed away. Those who 
were regularly away when the mill was 
due were charged $1 additional per 
batch. A minimum fee of $4 a batch 



was charged when less than a full batch 
was ground and mixed. 

The operator was paid on a com- 
mission basis, getting one-third of the 
grinding and mixing revenue, one-half 
cent a pound for all molasses, and 10 
cents a bag for all branded feeds sold. 
In addition, he received $4.50 a week 
allowance for maintenance of the unit, 
and was allowed 2 weeks vacation and a 
maximum of 12 days sick leave, both 
based on average earnings per week. 
He was guaranteed a minimum of $ 60 a 
week, but commissions had not dropped 
below the minimum during the year. 

The mixing revenue and molasses 
gross margin together came within 
$634 of paying for all operating expenses. 
In addition, ingredient sales brought a 
gross margin of $1,946, but warehousing 
and any delivery costs not covered by 
the regular $3 a ton delivery fee had to 



38 



be covered before any of that margin 
could be applied on the loss from the 
mobile mill operation. 

Mill Number 5 



Following is the operating statement 
of mobile mill number 5 for its oper- 
ating year 1957-58: 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $8,640 

Total milling revenue and 
molasses margin 



Expenses 
Wages 

Commissions 
Payroll costs 
Depreciation 
Repair, upkeep, gas, oil, 

and diesel fuel 
Insurance 
License 

Personal property taxes 
Travel 
Advertising 
Telephone 

Office supplies axid postage 
Interest on average investment 

Total operating expenses 



Net margin from grinding, mixing, 

and molasses 
Gross margin on ingredient sales 

of $15,845 
Margins available to pay for delivery 

and warehousing of ingredients and 

for other overhead items 



$10,694 
3,240 

13,934 



$3.99 
1.21 

5.20 





3 


,120 


1 


.17 




1 


,964 

478 




.73 
.18 




2 


,812 


1 


.05 




5 


,000 


1 


.87 






98 

56 
221 

40 
100 

40 
200 




.04 
.02 
.08 
.02 
.04 
.01 
.07 


5 percent 




43 9 




.16 



14,568 


5.44 


-634 
1,946 


-.24 
.73 



1,312 



.49 



Two-Mail; Single-Mill Operations 



This section covers the three single- 
unit mills operating with two men per 
mill. 

Mobile Milling Operation 
Number 6 

Mill number 6 was a two-man, 
single-unit operation that started in the 
fall of 1952. It was the first unit in the 



area and preceded the association's 
stationary mill. Later the cooperative 
added a second mobile mill but sold it 
in 1955 when it installed a stationary 
mill. 

This mill serviced about 70 patrons 
and ground and mixed a total estimated 
volume of 3,350 tons in 1957-58. Seventy 
percent of the volume was dairy feed, 



39 



28 percent hog feed, and 2 percent 
poultry feed. Approximately 90 percent 
of the volume was unloaded in bulk. 

Rate charged was $4.50 a batch if 
unloaded in bulk, plus 50 cents more if 
unloaded in sacks. Batches averaged 
2,600 pounds. A discount of 20 cents a 
bag of supplement bought was granted 
up to a maximum of 50 cents a batch. 
No variation in rate was made for fine- 
ness of grind. The minimum charge for 
a stop was $4.50. Rates charged at the 
stationary mill were 10, 12, and 14 
cents a bag, respectively, for coarse, 
medium, and fine grind. Bags brought 
in ranged from 50 to 100 pounds in 
size. 

Ingredients were delivered separately 
on regular routes, and the delivery 
charge was $2 a ton. Ninety percent of 
the grinding service was done on the 
basis of regularly scheduled stops. 

The operator and helper were both 
on a monthly salary. In addition, the 
operator received a combined grinding 
and molasses commission which ranged 
from 10 to 40 percent of the grinding 
revenue and from 10 to 15 percent of the 
molasses gross margin. The grinding 
commission started at 10 percent of all 
grinding revenue above $250 a week and 
went up to 40 percent of all that above 
$400 a week. The molasses commis- 
sion began at 10 percent of the molasses 
gross margin ranging between $600 and 
$800 a week and 15 percent of all that 
above $800 a week. 

Total grinding and mixing revenue 
plus molasses margin was $2,357 less 
than total operating expenses. It was 
estimated that a gross margin of about 
$4,736 was made on the $40,140 of 
ingredient sales through the mobile 
mill. Deducting the loss on the mobile 
operation, left a margin of $2,352 to 



apply on delivery and warehousing of 
the ingredients. 

This association suffered from lack 
of sales effort. Some volume had been 
lost to the former operator of the asso- 
ciation's second mill who now operated 
a mobile milling business of his own in 
the association's territory. The asso- 
ciation's present operator did no selling 
and the office had not done enough. The 
new manager, who was employed at the 
end of the 1958 fiscal year, was aware 
of the problems and was trying to pro- 
mote volume and concentrate sales. 

The operating statement of mobile 
mill number 6 for its operating year 
1957-58 is at the top of page 41. 

Mobile Milling Operation 
Number 7 

Mill number 7 was a two- man, 
single-unit operation started in January 
1954. The original mill -- equipped with 
a bulk unloading auger, 75 cu. ft. mixer, 
16 in. hammermill, and 100 hp. diesel 
engine -- was still in use. A second 
unit had later been added but was not 
replaced when it burned because the 
association lacked sufficient patrons to 
operate two units efficiently. 

The mill serviced approximately 100 
patrons during 1957-58 and volume 
totaled 3,500 tons, half of it unloaded in 
bulk. Estimates indicated that 80 per- 
cent was dairy feed, 15 percent hog 
feed, and 5 percent was poultry feed. 
Of the ingredients ground and mixed, 
38 percent was cob corn, 38 percent 
oats, 5 percent hay, 5 percent molasses, 
and 14 percent consisted of concentrates, 
protein meals, and low-proteinb5rproduct 
feeds. 

Rates charged were $4 a batch for 
dairy grind unloaded in bulk. Batches 



40 



Mill Number 6 



Amount 



Per ton 



Income 

Grinding and mixing charges 
Molasses margin on sales of $6,459 

Total milling revenue and 
molasses margin 

Expenses 
Labor 

Commissions 
Payroll costs 

Rental of mobile mill euid truck 
Repair, upkeep, gas, and oil 
Diesel fuel 
Insurance 

Personal property taxes 
License fees 
Heat 

Office supplies and postage 
Advertising 
Telephone 
Bad debts expense 
Miscellaneous supplies 

Total operating expenses 

Net margin from grinding, mixing, 

and molasses 
Gross margin on feed ingredient 

sales of $40,140 
Margins available to pay for delivery 

and warehousing of ingredients ajid 

for other overhead items 



$11,276 
2,419 

13,695 



$3.36 

.72 



4.08 



5,822 


1.74 


110 


.03 


303 


.09 


4,570 


1.36 


3,105 


.93 


1,028 


.31 


292 


.09 


85 


.03 


215 


.06 


42 


.01 


150 


.04 


123 


.04 


76 


.02 


72 


.02 


59 


.02 


16,052 


4.79 


-2,357 


-.71 


4,736 


1.41 



2,379 



.70 



were estimated to average 1,900 pounds. 
An additional charge of 50 cents a batch 
was made for fine grind and another 50 
cents if unloaded in sacks. Also a 
15- cent discount had been given on the 
grinding and mixing charge for each bag 
of branded concentrate purchased, but 
it had been discontinued at the time of 
this study. 

The operator's helper drove a sepa- 
rate concentrate truck to accompany the 
mill and deliver ingredients. About 60 
percent of this truck's time was devoted 
to this particular service. 

Operators were both on a weekly 
salary. In addition, the operator re- 



ceived a molasses bonus of one-third 
cent a pound on all molasses sold. All 
patrons had service on a route basis 
every 2 weeks. Volume varied from a 
peak of 85' tons a week in the winter to 
a low of 40 tons a week in the summer 
months. 

Net margins from grinding, mixing, 
and molasses was $2,081, or 59 cents 
a ton. In addition an estimated net 
margin of $3,096 was made on $39,765 
of ingredient sales after allowing for use 
of truck and warehousing labor. No 
separate delivery labor was involved 
since the helper drove the delivery 
truck. Adding the net of $2,081 from 
mixing and molasses sales to the net of 



41 



$3,096 from ingredient sales gave a 
total of $5,177 net savings before over- 
head costs. 

Following is the operating statement 
of mobile mill number 7 for its oper- 
ating year 1957-58: 

Mill Number 7 



Mobile Milling Operation 
Number 8 

This two-man mobile onlt was added 
to an existing stationary niill operation 
in the fall of 1953. It was the first unit 



Income 

Grinding and mixing charges 
Molasses margin on sales of $13,000 

Total milling revenue and 
molasses margin 

Expenses 
Labor 

Commissions 
Payroll costs 
Rent of mobile unit 
Repair and upkeep of mill 
Repairs on truck 
Fuel oil for mill 
Gas and oil for truck 
Insurance 
License 

Personal property taxes 
Office supplies 
Telephone 
Miscellaneous 

Total operating expenses 

Net margin for grinding, mixing, 
and molasses 

Gross margin on feed ingredient 
sales of $39,765 
Less: Use of truck and 
warehousing labor 

Margin on ingredients after delivery 
and warehousing 

Net margin from mixing, molasses, and 
ingredient sales (after allowing for 
use of delivery truck and warehousing 
labor but no overhead items) 



Amount 

$13,557 
5,850 

19,407 



17,326 

2.081 
5,813 
2,717 
3,096 

5,177 



Per 


ton 


$3 


.87 


1 


.67 



5.54 



7,540 


2.16 


1,100 


.31 


598 


.17 


4,200 


1.20 


1,000 


.29 


600 


.17 


1,054 


.30 


520 


.15 


257 


.07 


215 


.06 


180 


.05 


22 


.01 


26 


.01 


14 


1 1 ) 



4.95 

.59 
1.66 

.77 
.89 

1.48 



"l^ess than i cent. 



in the area. An estimated 100 patrons 
were serviced with a total volume of 
3,600 tons of mixed feeds in 1957-58. 
About 90 percent of the volume was dairy 
and 10 percent was hog feed. Corn, 



oats, and hay were the farm-grown 
items ground and represented 35 per- 
cent, 42 percent, and 3 percent of the 
total volume, respectively. Molasses 
made up 5 percent of the total, high 



42 



protein concentrate 6 percent, 
protein meals 9 percent. 



and 



The original unit, equipped with an 
unloading auger, was still in use but the 
truck chassis had been replaced with a 
larger size within 2 years. 

Grinding rates were $4 a batch, 
estimated to average a ton in size. The 
same rate applied on fine or coarse 
ground, or bulk or sacked unloaded feed. 
The only variaticn made in the rate was 
a discount of 15 cents for each bag of 
branded concentrate bought. The rate 

Mill Number 8 



at the stationary mill was 10 cents a 
hundredweight for all materials brought 
in for grinding. 

All the ingredients, except those for a 
few special orders, were delivered sepa- 
rately on regular feed delivery routes. 
All the patrons were serviced on regular 
routes, with 95 percent serviced every 
other week and 5 percent serviced weekly. 
The mill was moved an average of about 
5 times per farm. Volume varied from 
100 tons a week during the peak season 
in the winter months to a low of 50 tons 
a week in the summer months. 



Income 

Grinding and mixing charges 
Molasses margin on sale of $10,658 

Total milling revenue and 
molasses margin 

Expenses 
Labor 

Commissions 
Payroll costs 

Rental of mobile mill and truck 
Repair and upkeep 
Gas and oil 
Diesel fuel 
Insurance 
License 
Advertising 
Telephone 

Office supplies and postage 
Miscellaneous 

Total operating expenses 

Net margin from grinding, mixing, 

and molasses 
Gross margin on feed ingredient 

sales of $35,144 

Less: Use of truck for delivery 
Labor delivering and 
warehousing 
Margin on feed ingredients above cost 

of delivery and warehousing labor 
Net margin from grinding, mixing, and 

ingredient sales after allowing for 

cost of delivery and warehousing 

labor but no overhead items 



Amount 

$13,326 
4,050 

17,376 



Per ton 



$3.70 
1.13 



4.83 





6,687 


1.86 




692 


.19 




455 


.13 




4,200 


1.17 




974 


.27 




872 


.24 




965 


.27 




248 


.07 




190 


.05 




75 


.02 




43 


.01 




70 


.02 




178 


.05 




15 , 649 


4.35 




1,727 
5,832 


.48 




1.62 


$500 






$4,000 


4,500 


1.25 




1,332 


.37 



3,059 



,85 



43 



The operator and his helper were 
both on a monthly salary plus a share 
of the net mill and molasses revenue. 
The operator was paid 15 percent and the 
helper 5 percent of both the molasses 
margin and the net grinding and mixing 
revenue after allowing for all direct 
expenses including rental of the truck 
and unit. 

This operation left a net margin of 
$1,727 from grinding and molasses 
revenue after allowing for all operating 
expenses in 1957-58. In addition, an 



estimated net of $1,332 was realized on 
the sale of 540 tons of feed ingredients 
above the cost of delivery and ware- 
housing labor. The two margins to- 
gether left $2,641 from the grinding and 
mixing operation and the sale of molasses 
and ingredients. In other words, this 
amount was available from the mobile 
milling operation exclusive of its share of 
general overhead costs of the cooperative. 

The operating statement of mobile 
mill number 8 for its operating year 
1957-58 is at the bottom of page 43. 



Two-Man, Multiple-Mill Operations 



This section covers the three mills 
with either 2-unit or 3-unit operations 
and with two men to each unit. 

Mobile Milling Operations 
Number 9 

This two-mill operation -- number 
9 -- in a very intensive dairy area, 
started with one mill in 1952 and added 
the second unit 2 years later. Each mill 
used two operators. This association 
was the first with mobile service in the 
area, but at the time of the study four 
other firms were operating a total of 
eight mills within this association's 
territory. The association does not 
have a stationary mill or elevator. 

Each mill had a 75 cu. ft. mixer, a 
100 hp. diesel power plant and an un- 
loading auger. All but 5 percent of the 
total volume was unloaded in bulk. 

An estimated 100 patrons were 
serviced with 5,800 tons of mixed feed 
in 1957-58. Eighty percent was dairy 
feed, 10 percent steer feed, and 10 per- 
cent was hog feed. Of the materials 



ground and mixed, 67 percent was corn, 
15 percent oats, 4.5 percent hay, 4.5 
percent molasses, 5 percent concentrates, 
2 percent protein meals, and 2 percent 
was low-protein ingredients. 

The base rate for grinding and 
mixing was $4.75 a batch for dairy 
grind unloaded in bulk. Batches aver- 
aged 2,400 pounds so the ton rate was 
about $3.95. An additional 75 cents a 
batch was charged for a medium grind 
for hogs and 50 cents above that or 
$1.25 for a fine grind for poultry feeds. 
Fifty cents more was charged if the feed 
had to be sacked. In addition to the 
above adjustments, a discount of 15 cents 
a bag was given for each bag of branded 
feeds that was used in the mix up to a 
maximum of 45 cents a batch. 

The minimum rate for a stop was 
$2.50, but this was no problem as all 
patrons either had a full batch mixed, 
or else were scheduled every 2 weeks. 
Ninety percent of the patrons were 
serviced on the basis of regularly 
scheduled stops. Of these, 95 percent 
were serviced weekly, 2 percent twice 
a week, and 3 percent every other week. 



44 



The association paid all operators 
and helpers a straight weekly salary. 

Total mixing revenue and molasses 
gross margin lacked $57 of covering 
total operating expenses in 1957-58. 
An estimated gross margin of $2,302 
was realized from ingredient sales above 
delivery costs. Combining the two 
figures left an operating margin of 
$2,245 from the mobile milling opera- 



tion and ingredient sales after paying all 
operating costs and delivery of in- 
gredients. This amount was left from 
the year's operation to pay for in- 
gredient warehousing, the manager's 
and the salesman's salaries, and other 
overhead costs. 

Following is the operating statement 
of mobile mill number 9 for its oper- 
ating year 1957-58: 



Mill Number 9 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $13,281 

Total milling revenue and 
molasses margin 

Expenses 
Wages 

Payroll costs 
Rental of mobile unit 
Depreciation 
Repair and upkeep 
Gas and oil 
Diesel fuel 
Insurance 
License fees 
Travel 
Heat 

Telephone 

Office supplies and postage 
Interest on average investment i§ 5 percent 

Total operating expenses 

Net margin from grinding, mixing, 

and molasses 
Gross margin on ingredient sales of $40,992 

Less: Labor and truck use for 
delivering ingredients 
Margin on ingredients above delivery costs 
Net margin from grinding, mixing, molasses 

and ingredient sales after paying 

operating expenses and delivery 

of ingredients 

"T^ess than 1 cent. 



$23,204 
7,475 

30,679 



$4.00 
1.29 



2,245 



5.29 



15,058 


2.59 


960 


.17 


4,424 


.76 


2,985 


.52 


1,896 


.33 


2,051 


.35 


1,984 


.34 


280 


.05 


405 


.07 


60 


.01 


36 


.01 


20 


1 1 ) 


90 


.02 


373 


.06 


30,622 


5.28 


57 


.01 


5,442 


.94 


3 , 140 


.54 


2,302 


.40 



.39 



45 



Mobile Milling Operation 
Number 10 

This 2-mill operation — number 10 -- 
had two operators on each mill. The 
original unit was acquired in 1952 to get 
into the feed business in the area and 
was the first portable unit in the territory. 
A second mill was added early in 1954 
and a stationary custom mill was in- 
stalled in 1955. 

The original unit, now mounted on a 
new chassis, has a 75 cu. ft. mixer and 
100 hp, diesel engine. The second unit 
carries a 100 cu. ft. mixer with a 170 
hp. LP gas-operated diesel engine. 
Power plants on both units have been 
replaced, the first within 4 years and 
the second within 3 years of the original 
purchase. The two different size mixing 
units are a problem whenever one mill 
has to be used on a route usually handled 
by the other. Batches mixed with the 
two units averaged 2,400 and 3,400 
pounds respectively, for the 75 and 100 
cu. ft. mixers. 

A total of 115 patrons were serviced 
with grinding and mixing during the 
1957-58 year. Volume was estimated 
at 5,830 tons, 70 percent of it unloaded 
in bulk. Some corn cobs and other mis- 
cellaneous items were ground for 
approximately 25 other patrons. 

About 70 percent of the feed mixed 
was dairy cattle feed, 15 percent hog 
feed, 10 percent steer feed, and 5 per- 
cent poultry feed. Farm-grown feed- 
stuffs ground included corn, oats, hay, 
and corn cobs. They represented 30, 
18, 20, and 10 percent, respectively, of 
the total volume. About 7 percent of the 
total was molasses, 5 percent high- 
protein concentrates, 5 percent protein 
meals, and 5 percent was low-protein 
ingredients. 



Grinding and mixing rates were 
$4.75 a batch, estimated to average 
about 2,400 lbs. The only variation 
made from this rate was a discount of 
15 cents a bag for ingredients purchased. 

Operators and helpers were on a 
straight weekly salary and a $5 bonus 
was paid both the operator and the helper 
for each new patron retained for a month 
or more. A molasses bonus had been 
tried for a period and had increased 
molasses sales but was discontinued as 
soon as the molasses sales again leveled 
off. 

Grinding and mixing revenue and 
molasses margin together totaled 
$4,485 less than the operating expenses, 
but ingredient sales netted $7,932 above 
delivery costs and warehousing labor. 
This left a net margin of $3,447 from 
grinding, mixing, molasses, and in- 
gredients. The manager estimated that 
about $1,100 of his time and $884 of the 
bookkeeper's time was chargeable to 
the mobile milling operation. Subtract- 
ing these two items left a net of $1,239 
from the mobile milling operation after 
paying all operating ejqjenses, ingredient 
delivery, warehousing labor, and a share 
of the manager's and the bookkeeper's 
time. It can therefore be assumed that 
the mobile milling operation added 
$1,239 to the association's net savings 
because the other overhead items were 
considered unavoidable and would con- 
tinue even if the mobile milling opera- 
tion was discontinued. 

The operating statement of mobile 
mill number 10 for its operating year 
1957-58 is at the top of page 47. 

Mobile Milling Operation 
Number 11 

This three-mill operation -- number 
11 — had two men on each mill. This 



46 



Mill Number 10 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $14,850 

Total milling revenue and 
molasses margin 



; 21, 013 
6,500 

27,513 



$3.60 
1.12 



4.72 



Expenses 
Wages 

Payroll costs 
Rent of mobile unit 
Depreciation on mobile unit 
Repair and upkeep 
Gas and oil 
Diesel fuel 
Insurance 
License fees 
Personal property taxes 
Travel 
Telephone 

Office supplies and postage 
Collection expenses 
Interest on average investment 

Total operating expenses 



15 


,570 


2.67 




981 


.17 


3 


,032 


.52 


2 


,133 


.37 


5 


,078 


.87 


1 


,276 


.22 


2 


,051 


.35 




397 


.07 




360 


.06 


- 


150 


.02 




200 


.03 




245 


.04 




100 


.02 




100 


.02 


5 percent 


325 


.05 



31,998 



Net margin from grinding, mixing, 

and molasses -4,485 

Gross margin on ingredient 

sales of $59,292 10,220 

Less: Labor and truck use for 

delivering ingredients 2,288 

Margin on feed ingredients after 

delivery costs and warehousing labor 7,932 

Net margin on mixing molasses and 

ingredients after paying for operating 
costs, ingredient delivery and ware- 
housing labor 3 ,447 
Less: Share of manager's time $1,100 

Share of bookkeeper's time $884 1,984 

Net from grinding, mixing, molasses 

and ingredients after operating expenses, 

ingredient delivery, warehousing labor, 

and share of manager's and bookkeeper's 

time 1,463 



5.48 



.76 



1.75 

.39 

1.36 



.60 
.34 



.26 



association purchased the original unit 
early in 1952 in order to offer custom 
mixing service to feed patrons since it 
did not operate a stationary mill. The 
unit was the first mobile mill in the 
area. A second mobile mill was added 
later the same year and a third unit 



within 2 years after the first one. There 
were three other operators, each with 
a single unit, operating on the fringes 
of the association's territory. 

All three mills of the cooperative 
were the same size, with 75 cu. ft. mixers 



47 



and 100 hp. diesel engines. Each had an 
unloading auger for unloading in bulk. 
The original equipment was still in use 
on each unit except that the original 
chassis on the oldest unit had been re- 
placed and two of the power plants had 
been overhauled. 



Grinding and mixing fees were 18 
cents per 100 pounds for coarse ground 
material and 20 cents per 100 pounds 
if the material was fine ground. The 
minimum charge for a farm stop was 
$1.50, but very few stops were for less 
than a full batch. 



The association serviced 190 patrons 
during 1957-58 and ground and mixed 
about 10,000 tons of mixed feeds. 
Approximately 60 percent of the volume 
was unloaded in bulk. An estimated 75 
percent was dairy feed, 15 percent hog 
feed, and 5 percent each was steer and 
poultry feed. Of the material ground, 
50 percent was corn, 30 percent oats, 
7 percent hay, 3 percent molasses, and 
10 percent was concentrates and other 
bagged ingredients. 



The mill operators and helpers re- 
ceived a straight weekly salary. In addi- 
tion, the operators, but not the helpers, 
received a molasses commission of one- 
half cent a pound for each pound of 
molasses sold. With the molasses 
commissions, the operators were earn- 
ing good wages but helper turnover was 
high. The manager would have liked to 
split the bonus with the helpers but felt 
he could not change the practice without 
making the operators dissatisfied. 




The mobile mill is grinding cob corn for blending with concentrates and other grains. 

feed will be bulk loaded into the patron's trailer. 



The mixed 



48 



This three-unit operation incurred 
a loss of $3,146 from the milling and 
molasses sales after allowing for all 
operating expenses. It made an esti- 
mated margin of $4,742 on concentrate 
and ingredient sales after allowing for 
delivery charges of $4 a ton. Combining 



these two figures left a net margin of 
$1,597 available to cover ingredient, 
warehousing, and other overhead costs. 

Following is the operating statement 
of mobile mill number 11 for its oper- 
ating year 1957-58: 



Mill Number 11 



Amount 



Per ton 



Income 

Grinding and mixing revenue 
Molasses margin on sales of $21,215 

Total milling revenue and 
molasses margin 



$35,844 
10,247 

46,091 



1.03 



4.61 



Expenses 
Wages 

Commissions 
Payroll costs 
Depreciation 

Repair, upkeep, gas, oil diesel fuel 
Insurance 
Licenses 

Personal property taxes 
Heat : 
Advertising 
Telephone 

Office supplies and postage 
Collection expenses 
Bad debts 
Interest on average investment 

Total operating expenses 

Net margin from grinding, mixing, 

and molasses 
Gross margin on ingredient 

sales of $72,550 

Less: Delivery cost @ $4 a ton 
Margin on ingredients after allowing 

for cost of delivery 
Net margin from grinding, mixing, molasses, 

and ingredient sales after allowing for 

operating costs and delivery of 

ingredients 





23,981 


2.40 




2,577 


.26 




1,53 2 


.15 




9,315 


.93 


uel 


8,009 


.80 




954 


.10 




600 


.06 




350 


.03 




223 


.02 




173 


.02 




25 


- 




22 


- 




35 


- 




157 


.02 


5 percent 


1,284 


.13 



49,237 



-3,146 

10,282 
5,540 

4,742 



1,596 



4.92 



-.31 

1.02 
.55 



.47 



16 



49 



us GOVERNMENT PRINTING OFFICE 1959 O — 51 t 287