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Auckland Star, Volume LXX, Issue 192, 16 August 1939, Page 14

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SEASON'S PAYMENTS.

DECREASE OF 7.96 PER CENT.

GENERAI MANAGER'S ADDRESS

(By Telegraph.—Own Correspondent.)

HAMILTON, thf* day,

In his address to shareholders to-day, Mr. C. J. Parlane, general manager of the New Zealand Co-operative Dairy Company, Limited, said that notwithstanding an increase in the number of suppliers to 12,515, the total produce manufactured was 65,388 tons, or 7.96 per cent less than for the previous year, which could be attributed to unfavourable weather conditions and a redaction in the number of cows milked, due to the difficulty in securing suitable farm labour. It was of national importance that every possible effort should be made to overcome the decline in production experienced during the past two seasons.

In butter manufacture, Te Awamutu factory had the largest output with 4734 tons, and in cheese manufacture Matangi occupied first position with an output of 1431 tons.

The payrrtent for the "finest", quality butterfat for butter-making, including cartage, was 16.6878 d, the average over all grades, also including cartage, being l/4.5831d. The payments at the company's cheese factories varied according to local conditions, the average, excluding East Tamaki, which sold a considerable quantity of milk in the ,Auckland city, being l/6.4406d per lb butterfat. The deferred payment made to butter and cheese suppliers on the 31st July last amounted to £740.130. Evaporated Milk.

Suppliers to the company's evaporated milk factory had also had a verv disappointing year. On account of increased competition in the United Kingdom, juices ranged at a low level, and this, plus heavy increases in the cost of manufacture, resulted in a comparatively low return for butterfat.

It was pleasing to record a slight increase in the percentage of "finest" quality cream received for butter-mak-ing.

Feed flavours were very troublesome during the spring months over a large portion of the company's territory, while in certain areas cress flavour was responsible for the grading down of'a substantial amount of cream. City Milk.

Owing to the dry weather conditions during the late siitinnn and winter, it was necessary for the company to arrange supplies of milk for the Auckland city, otherwise for several months the quantity available would not have l>een anything like sufficient to meet the requirements of the public.

In order to conform to Government regulations, the company discontinued the manufacture of the Saranac butter box as from the Ist November, 1038, since when sub-standard boxes only have beep' used. This entailed the purchase and installation of new plant in the box factory during the busy season, and in consequence the change-over was not made without considerable difficulty and expense.

"The new cheese factory at Ngatea," stated Mr. Parlane. •'commenced operations on September 11. 1938, and had a very successful run throughout the season. Five new cheese factories are now being equipped in districts where casein stations were previously operated, which means we will have 24 cheese factories manufacturing during the current season. In view of the. high cost of buildings and plant, and the uncertainty in regard to markets, we think it very desirable that suppliers should, as far as possible, refrain from changing over from the production of one commodity to another.

Trading, Machinery and Insurance. "The business transacted through <>ur trading, machinery and insurance departments showed a marked increase during the year, an indication tluit suppliers appreciate the service the company is rendering in providing them with their requirements at the lowest possible cost."

The sales at Gien Afton collieries amounted to 259,700 tons, or an increase of 20,400 tons, and were as follow: — Tons. Public 130,600 New Zealand Dairy Co. Suppliers 12,600 New Zenlnnd Dairy Co. Factories 53.300 Hatlwa.vs _ 57,200 The gross value of the turnover was £206,638. compared with £176,272 in 1038. After making adequate provision for repairs, maintenance, depreciation and all outgoings, including income and social security tax amounting to £17,850 and rebates to suppliers and factories of £14.371, the net profit was £16.636, which had been added to the balance brought forward from the previous year. Therefore the total net profit amounted to £31,007. Marketing Outlook.

"In regard to markets, fortunately our butter and cheese still has free entry into the United Kingdom, but we have to face restrictions in connection with the exports of processed milk. From

the Ist July, 1939, the export of dried milk to the United Kingdom has been fixed at 115,000cwt per annum, and of condensed milk at 30,000cwt-. These restrictions are the outcome of the efforts of the National Farmers' Union in England which was- desirous of increasing the price of certain dairy products. However, the disabilities in this regard may to some extent be ofiset by the increase ill price which it is hoped will result from the actioli taken. "We have been advised that the Hon. Walter Nash, Minister of Marketing, did everything possible to obtain an increased quota, and in this lie had the assistance of Mr. Goodfellow, who happened to be in London while negotiations were taking place, but unfortunately the authorities could not be persuaded to make a greater allocation. "It is evident that Australia is increasing her manufacture of cheese, and as Canadian producers are now being paid a bounty of two cents for 94 score cheese and one cent for 93 score, an increase in production is likely in that country also. These facts should not be overlooked by those of our people who contemplate changing over from butter to cheese supply. Only Worth-While Market.

"I desire to repeat, as has been stated ! oil many occasions, that our only worthwhile market for dairy produce is the United Kingdom. Our subsidiary markets, valuable as they are, are relatively unimportant, and it is impossible to point to any country where there is a prospect of finding a substantial alters native outlet for our produce for eome years to come. Therefore it cannot be too strongly emphasised that the national policy of this Dominion should be such as to cultivate the goodwill of our beat customer."