The Evening Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, and Echo. FRIDAY, JULY 31, 1896.

Auckland Star, Volume XXVII, Issue 179, 31 July 1896, Page 4

The Evening Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, and Echo.

FRIDAY, JULY 31, 1896.

For tho cause that lacks assistant's, Tor tha -wrong that ne.cls resistanos, For the faturo in the distance. AM ths good that ya can aa.

The question of the milk supply to creameries is once more a burning one among the farmers of the Waikato and the districts around Pukekohe. Messrs Reynolds and Co. recently published a list of prices for the coming season, which has formed the subject of animated discussion at meetings of suppliers in various parts of the district. It provides for the following payments at creameries receiving a supply of 500 gallons and upwards for milk containing 3*6 of butter fat:—July and August, 3^U; September, 3^d; October, April, May, and June, 3d ; November, 2j_d; December, January, February, and March, 2 1 / _d. This is estimated to give an average of about 2^d per gallon lor the season. At creameries receiving between 250 gallons and 300 gallons, the price's paid will be one.arthing less than the. rates quoted above. Between 300 and 400 gallons, one-eighth less. Mr Spragg, manager of the .New Zealand Dairy Association, has issued the 101 l owing revised cir-

cular :—

Prices for Milk for Coming Season. —- The prices as sec forth in our recent circular will ba revised by exchanging the March and Novomber rates. This will make the average for the eight months 60 be I_d per gallon, aa wm contemplated, skim returned free. Tbe following are the revised prices :—September, ..£d ; October and April, 3d ; November 2__d ; December, January, February, and March, 2_td.

Larger Supplies of Milk.—To encourage reasonably large supplies a bonus of one farthing (|d) additional per gallon will be paid to the suppliers at each creamery which receives an average of (2,000) two thousand gallons of 3.6 per cenfe. quality milk for eaph working' day. This will bring the average price, for the eight months up to (3d) three-pence per gallon, skim returned free. The supply of this quantity is within the power of moat of our districts.

Milk Sampling and Testing.—The Association approves of a recent proposal that the colonial Government be requested to appoint a properly qualified expert to control all milk sampling and testing on behalf of the milk suppliers aad the Association. The experb to be responsible only to the head of tho dairying eorvice. The exponsen of the appointment^and work to be shared equally between the milk auppliers and the Association. Trading'of Produce.-^As this is a question which has given riso to some'discusiiion, tho Association thinks it well to say that ib will continue to manage bhia department of its business in its own way, rind to the bust advantage, as heretofore.

At the Waikato meetings a good deal of discontent was expressed by the suppliers to the smaller creameries with regard to the deductions at small creameries, mode of testing to ascertain the percentages of fat, and also the varying of the price in different months. The following resolution was adopted at a meeting-held at Ohaupo on Tuesday l as t : —"That as a fair price the sappliers accept 2%d for the whole season without any restrictions with a bonus of to all creameries that increased their supply over that of la3t year by 20 per cent." Meetings held at Pukekura and'Pukerimu on Wednesday adopted resolutions in favour of a uniform price of 2^d.

Now, the discontent which prevails among the suppliers with regard to the iowness in the price offered for their milk is not unnatural, but it may be doubted whether the returns from the milk, even at these figures, are not as good as from other products of the farm during the recent years of depression, and the ready cash obtained from the creameries has proved a most valuable source of income to many a farmer. The failure.of the industry now would be a serious calamity to the Auckland dairying interests, The " Waikato Argus" states that if the milk industry were to stop every small farm would drop _£l per acre in value. It is-of .the utmost importance, therefore, that a fair basis of co-operation should be arrived, at between the factory owners and suppliers—the more so as we learn on good authority that there is more danger of some ol the dairy factories being closed than is generally supposed.

The matter resolves itself, into a simple business question. As lar as the purchase of miik on the basis ol the percentage of butter fat is concerned there can manifestly be no departure: from that system. The factories simply buy the butter fat— they return the skim milk to. the supplier—and it would neither be fair to the farmer who improves his herd, nor to the factory owner to make quantity of milk, without reference to quality, the basis of payment. . The plan proposed in the circular of ■ the . New Zealand Dairy Association should remove all discontent as to the testing. In the same way, no reasonable man will expect factory ownersj to keep open small creameries at a loss. Quantity always counts in the assessment of price upon every manufactured article and in every commercial transaction, and it is useless to war. against laws of trade which no individual can set aside; :If it costs more to produce one article than it does to make i,ooo, or if the charges involved in selling 1,000 articles by retail are greater than to sell them in two*, or three lots, it is perfectly idle, as it is also unreasonable'to complain that the manufacturer or the trader regulates his prices* accordingly. He must do so, or he will speedily land inihe Bankruptcy Court. The arrangement for a varying price

in different months throughout the season is, we understand, designed by factory proprietors to ensure continuous supply, and is intended to supersede the plan of inflicting penalties, which led to a great deal of friction and ill-feeling last season. According to the circular of the New Zealand Dairy Association 2%d for the whole season, is the basis on which their scale of prices has been adjusted, and we should suppose that if the matter were represented to them they would guarantee that, should these rates not result in an average of 2_^d. per gallon upon all the milk they receive, the difference would be paid over prorata to their suppliers.

The question of trading locally, which seems to have ; given rise to a good deal of controversy, appears to us to be one quite outside, the province of suppliers. They sell their produce at a fixed price to manufacturers, who must preserve to themselves' the right o. disposing of it [in the best market. JVViih a large provincial supply and Taranaki butter pouring into Auckland auction marts by every steamer, no single supplier could hope to either raise or depress the market price by his individual operations.

There are really only three business questions which need be considered in this controversy : I. Are the factory owners offering* a fair price ? 2. Will it pay the farmer to supply at that price? 3. Can he do better with his milk?

With regard to the first point it cannot be denied that, whether the farmers have or have not derived benefit from supplying milk to the butter factories in past years, the factory owners certainly have made lutfe or no profit, and spme have incurred heavy loss. That this was not. true only of proprietary factories, we know from the co-operative factory established at Whahgarata under the management of suppliers. But iye are not left entirely to local experience in this matter. On the West Coast of the North Island, the "milk suppliers at Mangatoki started a co-operative factory in conjunction with the New Zealand Loan and Mercantile Agency Company. The hasis of payment for. milk tor the seasoh. 1894-95 was fixed at 3d up to January Ist, and 2^4. d from January to "May, with 10 per cent, deducted as a reserve against loss. Not only was the 10 per cent, .absorbed but another i7>_. per cent, was charged, making 27% per cent, discount, so that the average realised by the milk suppliers was under 2d per gallon. At the Nbr mandy co-operative factory last season the prices realised by milk suppliers were : October to March, 2^ ; April i^_d; May to July, 0*935 of a P.enhy. Weight,, }fo]b of milk per gallon; quality, 36 Babcock test, one-sixteenth of a peony being added or deducted for each decimal point above or below that' Standard. . '-■- <••'.- -■>■:■

For the ensuing season, the Crown Dairy, New Plymouth, has arranged for 23^d per gallon, with %.d to be returned in case of the season turning out bad. At the Okaiawa factory, the price agretd upon between the suppliers and factory owners is 2^-_d for 3*3 per cent, quality, which is equivalent to 23^d for 3-7 per cent, butter fat.

These rales, it will be observed, whether as regards the results of last season or the price offered for .milk in the season we are now entering on, are less favourable than those which have been announced by the proprietors of tbe Auckland butter factories. We believe there is no reason to doubt _ that • the proprietors of these factories, in their desire to meet the farmers and to save the capital they have already embarked in the butter factory business, have gone to the extreme limit that they were justified in doing in view of past results or the prospects of the. market during the coming season. It remains for the suppliers to say whether they will go on, or will destroy an industry which has been built up by the expenditure of much capital, labour and thought. In coming .to this decision, apart from the question of tbe permanent loss which might result to theaiselves, some consideration is due to those who have organised the industry on behalf the (arming community, and embarked theircapital in it. Looking at the matter irom a perfectly disinterested point of view,- we think the farmers would commit a fatal blunder if they imperilled the success of the industry by any failure to co-operate heartily with the factory proprietors now. The direction in which the proPts of the industry may be improved is pretty well indicated by tbe additional 3^d per gallon offered by the Dairy Association for supplies of 2,000 gallons and upwards. As supplies increase and the cost of manufacturing and handling the butter is proportionately lessened, the industry will/yield an. increased profit to the producer. This-fact is one which contains elements ot great promise in considering dairying as a permanent industry.