THE DAIRY INDUSTRY.

Auckland Star, Volume XXV, Issue 102, 30 April 1894, Page 2

THE DAIRY INDUSTRY.

A paragraph of a discouraging character came from, London with other Prose Association messages on the 22nd mat. It read, " Butter merchants expect lower prices next season." This opinion, ib will be noticed, comes from " butter merchants," whose aim is. naturally enough, to pass a large bulk of goods through their hands, bo that they may receive theirfixed commission upon large sales. They cannot be expected to have a very keen appreciate of tho position of either dairy farmers or of tho manufacturing associations which como into contact with the farmers. They are not affected by the coat of production, and a fixed commission upon a large turnover is better for thorn than restricted sale at higher rates. A recent visitor to Auckland, a representative of a large London firm of " batter merchants," was interviewed by one of our reporters. He declared thab New Zealand butter irmsb be landed and sold in London ab 90s per cwt, and that to find sufficient sale it must compete in price with the better classes of oleomargarine. 1b is needlens to say that anyone who could advocate the production of first-class butter ab such a price was unpopular in Auckland. The feeling which existed was thab for some purpose of his own he was engaged in an attempt to " bear " the market. The cable mebsage which prefaces this article, howevet, compels an inquiry into the representation then made, especially as ib is asserted thab much butter of commondod 'quality baa been sold, even during the season now closing, at the rate he mentioned. An inquiry into what 90s per cwb, as sale price in London, really means is instructive. The charges againsb it after free on board the ocean steamer are said to include cosb of freight in cool chamber, English dock charges, discounts, insurances, commission*, cartages, railages, weighings, and perhaps most irksome of all, deductions for shortages which, to say the least), ought) nob to exist; and then on this side there are railages, coastal freights and cosb of packagoa—a formidable list truly which totals variously from twenty Co twentyI five per cent. Ninety shillings per cwb subjected 'to these deductions leaves about sevenpence three fnthings per Ib at the dairy door, out of which would have to be taken the cost of manufacture and interest upon plant, say one penny farthing, or leaving withoub deductions for risk in trading or consideration for profits or even for depreciation, a neb sum of sixpence halfpenny per pound !

The question is: Will prices recede seriously for the coming season ? because, if so, it may be anticipatod that the prices for milk will a\eo fall. The Government dairy oxperb has informed dairy people that there is practically an unlimited market in England for butter of choice quality. Perhaps there is, but if thab unlimited markeb can only be kepb open at margarine rates for poor butter, then it will be bub a qualified advantage to New Zealand. Judging from reports of various kinds which are just now to hand, the tendenoy of English pricen must be downward. A recenb correspondent of the New Zealand " Times " finds reason for a little mild selfgratulation on tho fact that the productive powers of Australasia are such that thus early in its history as a dairying district it has in the seven short months of this present), season sehb to the Old Country eleven thousand tons of bukter of a value of more than a million sterling. He says this should be a splendid lesson to English investors, and so is is, and New Zealand has causa for pride in its shard of the giving of this lesson.

But see what the influence of this is. In the first,place, we learn that " this immense quantity lias forced out of the market a luree amount of Danish and French butter." '" But," we are informed, " the quantity so turned away is in no way equal to the Australasian imports." Next we learn that tho excessive supply "has brought about increased corisumption, the reßultof popular prices. The housewife has not needed to. ro«trict consumption nor to fly to margarine, jam or marmalade." This would bo excellent if it were not that "popular prices" for the consumer are most unpopular with the producer. A tendency so evident was nob so likely to escape the notice of Mr David Wilson, the Victorian dairy expert. In his annual report just furnished to the Minister for Agriculture for bis colony, Mr Wilson points out that competition upon the English markeb "is becoming more and more keen, and aa the inevitable result of increased production we must begin to prepare ourselves to occasionally accept lower prices for our produce. How to meet lower prices and make the business of dairying pay is a problem dairy farmers will shortly be called upon to solve."

Ac a matter of fact, the "problem" is already before Victorian dairymen. The average price paid for milk in Victoria thin sotisoi) has been estimated at 2£d per gallon. This includes remote creameries as well aa those nearer to Melbourne. Now, two pence half-penny is a sharp contrast to the " boom " prices plus Government bonus of a couple of years ago, and the Victorian who does not appreciate the " problem" must be dull indeed.

An attempt to understand the true position of affairs leads to the conclusion that while we must discount the more sanguine expectations which we might chorinh, wo need not, therefore, fear that the bottom is dropping out of the dairy business. Unquestionably there will be greater need for care and economy all round. Mr Wilson indicates that cheaper railway and ocean freights are needed. As regards the influence of railway freights upon the dairy bunineas, New Zealand is, by comparison with Victoria, in a very bad way indeed. " But," Mr Wilson goes on to say, " producers should not buoy themselves up with the hope that cheaper freights will remove their trouble?. If lower prices are inevitable, then farmers inußb learn to produce at lower cost."

The question which will interest all concerned is. What is that lowor cost at which the farmer muatlearn to produce? A drop in the price of butter from 112s to 90s per cwt is a difference of a little over 2£d a pound. Ib in hardly likely that a general fall of this magnitude will be experienced. A fall to 100s would represent a reduction of one penny farthing per pound, and from appearances it looks as if the farmer is likely to be called upon to bear his share of a drop of something like thie sum. Need the dairy farmer despair? Evidently Mr Wilson thinks nob, for he proceeds to show how the principle of making two blades of grass grow where only one grew before will more than make up the deficiency. He pleads for better cows, a better system of tillage, and a more regular method of feeding dairy herds. He says: "If with judicious selection of cowh and proper attention to the feeding of them 1001b of butter can be produced in the season ab r.iie same money that 751 be are coer>ing now, then if we do have to sell our butter at a reduction of twenty-five per cent, we shall be making exactly the same profit as ab present." Mr Wilson is himsolf a successful dairy farmer, and should know what he is recommending to his class. His suggestions are worthy of the consideration of New Zealand farmers. Factory owners must also learn bo economise in their work. They must bear their share of the trouble. They must perfect their methoas of marketing the butter when made, and they musb be content with smaller profits. The dairy industry has now assumed such important) proportions that we cannot; allow trifles or even " considerable trifles " to interfere with its existence 'and progress. Here, in the North, with so many of our special products under a cloud, as is the

case with kauri gum, flax, etc.; as well as some kinds of farmers' produce, ibis plainly desirable thab our natural business of dairying should suffer no check.