THE DISPOSAL OF CHEESE.

Press, Volume XLIX, Issue 14686, 7 June 1913, Page 16

THE DISPOSAL OF CHEESE.

AN INTERESTING CRITICISM

In view of the efforts that aro being made to attribute tho low prices realised, for New Zealand cheese this Eoason to inferior milk through the want of cleanliness in milking machines, tho following article communicated to tho "Otago Daily Times" is interesting :— Circumstances seem to focus the busi-

itess man's attention on cheese at the present time. The shipping season has just closed. The Dairy Associations of both North and South Islands havo just published their annual reports. Iho London market has had the worst slump that has occurred for many years Allegations aro very generally matlo that the business has been very hadly handled from both ends. The volume of exports from tho colony shows the very gratifying increase of over 25 per cent., chiefly from the North Island. On the other hand, the imports into Great Britain from all sources, for the winter six months, were less than in 1910 and 1911, although showing a small increase upon 1912. Good prices might bo looked for in such circumstances, but, on tho contrary the prices have not been good. " Most of the output was marketed at between 58s to 62s in London equal to a return to the factories of about 5Jd f.o.b. Now Zealand ports. What renders this a very poor price is not that it will' not pay the producers, but that there were plenty of buyers in the field at tho opening of the season offering to take up the whole output at prices ranging between 6d and 6*d f.o.b. But tho factories would not sell. They had been getting handsome prices from buyers for tho last few years, but wero fired with a desire to try the London market for themselves. It has cost them something like £200,000, possibly a quarter of a million. When the business man asks the reason for all this he is told that longcontinued good prices made tho tories over-confident. They took up a non-selling attitude, and resolved to consign their cheese to London for salo on their own account. It had been customary for each factory to deal independently with its own cheese. But the Dairy Association, which has been for years dealing successfully with questions of shipping, grading, boxing, and other routine matters, became ambitious of also controlling tho marketing of the cheese, and the factories largely left their outputs in tho Association's hands. It seemed to it perfectly clear that the assentation could, by concentrating tho cheese in few hands, etc., obtain better prices! Now we have tho result: the most disastrous season of recent years! Tlie business man rather wonders that tho association should havo signalised its entry into a most difficult business by a. header into open consignments. Everyone knows that consigning produce to distant markets for sale is a decadent anel out-of-date form of business. Formerly all our produce used to be so consigned. But modern progress has altered all that. In our meat, our grain, our hemp, our grass seeds, our wool, that business is practically extinct, and tho bulk of our wool is now sold beforo shipment, and practically the whole of the other lines named. The business man knows that the transition from a consignment to a selling business, in meat, in hemp, in cocksfoot, in grain, was at the samo timo a transition from a losing to a profitable business. He naturally wonders why the cheese shippers should have made this return to the Old World methods when they were doing so well undor the new. When he asks the reason for the collapse in prices ho gets a variety of answers. The local association says: "The unwholesome rivalry of many selling agents"' is the reason, although tho association was supposed to concentrate shipments and reduce the number of agents! The association's London agent makes tho extraordinary suggestion that short selling was the cause— that is, dealers selling the cheese before they bought it. He says thousands of tons were sold at Otis to 6<s and over, the sellers afterwards-buying the consigned cheese at Gls to C2s. ami rca'ising a large profit in so filling their sales. How that accounts for the Gls to C2s he does not say. The business mau would like to know ho%v. Th 0 North Island Association gives

the same explanation of low prices which explain nothing. It also says that "cheese ought to have been at least 5s per cwt. higher," and that, "agents have hael this year a golden opportunity to return shippers good results." But they did quite the opposite, and again the business man wonders why in a moderately supplied market, with shipments well concentrated through the action of tho Dairy Association, the prievs were had. Can it be that we have jij.st e-ncountercel another instance of tlie folly of consigning goods in quantities for sale? Must not the Mritish cheese trade inevitably work upon such a weak posi- ! tion to its own advantage:-' And is it ; not apparent that a policy ot selling ■ our cheese when we c;in get a fair price ; and letting the buyer get something ; out of it. is a hotter policy than ignori ing the buyer and trying to grasp the i merchant's profit as well as the proj elucer's? j One of the Dairy Association's reI ports mentions that no cheese is con- | signed from Canada for sale. This form of speculation seems nowadays to be I peculiar to New Zealand.