Dairy Industry’s Plans To Meet Growing Crisis

Press, Volume XCVI, Issue 28435, 15 November 1957, Page 16

Dairy Industry’s Plans To Meet Growing Crisis

(New Zealand Press Association)

STRATFORD, November 14.

Unless dairy produce prices improved it was possible that the whole of the industry’s reserves would be used up by the end of 1958, said the acting chairman of the New Zealand Dairy Board (Mr. A. Hayward) in an address to the Taranaki ward of the board todav.

It was essential that I gravity of the situation an to ensure the maximum industrv as a whole, he said

the industry recognise the id that its policy should be i possible returns to the

Mr Hayward outlined the Dairy Board’s and the Dairy Products Marketing Commission’s proposals to meet the growing crisis in the dairy industry and these, in the form of seven recommendations to the industry as a whole were approved by the meeting.

There was only one amendment to the seven proposals. It was an addition to the seventh, proposing that the fixing of the ceiling price for casein during the operation of the other six proposals be done by the commission and the board after consultation with a committee consisting of three representatives each of the casein and cheese companies.

Mr Hayward spoke for an hour and a half and Sir Bernard Ashwin. a member of the Dairy Products Marketing Commission, spoke for half an hour to the 360 directors and executives of the province's 54 dairy companies who attended.

Dumping In Britain

New Zealand was trying to compete against dumped supplies and trading by governments of surpluses which were the direct result of high agricultural protection policies in the countries of origin, said Mr Hayward. “It is unthinkable that the United Kingdom, which would certainly invoke its anti-dump-ing legislation if governmentsubsidised industrial goods were flooding into her market, should be unwilling to implement the understanding reached with New Zealand in April,” said Mr Hayward.

After careful consideration, and after taking every possible step to have the present situation corrected, the Dairy Board believed that a reasoned production policy must be continued and that panic action should be avoided, said Mr Hayward.

After close consultation with the Dairy Commission and with a knowledge of market prospects, the board was putting forward the recommendations for action by the industry as a whole. The board believed that this was a time when the industry must stand absolutely united and see that the maximum overall return for dairy produce came to the Dominion.

“We must show the country and the Government, that the decisions we reached were made on the basis of what would give us the greatest financial return, nationally,” he said. “The board’s recommendations are framed with that end in view and it strongly urges the industry to adopt them. Limited Casein Market

“There is a limited—and 1 repeat, limited—additional market available for casein. It is essential that this additional outlet be used, not for the particular benefit of individual dairy companies, but to the advantage of the whole industry.

“If we cannot ourselves agree on a policy along these lines, it will be forced upon us. No Government would provide assistance, nor could it be expected to do so without making certain that the principles we are now recommending to the industry, were carried into effect.”

The delegation now overseas had visited the United States and Canada and had been able to assess the likely additional market for casein there now that the 2? cents per lb duty had been removed, said Mr Hayward. The Dairy Commission had actively prosecuted other overseas markets for casein and the proposals now put forward for the industry’s consideration had been framed to take advantage of these,” said Mr Hayward. It would be senseless to have a wholesale switch-over to casein production for, if that occurred, the price would slump and the industry as a whole would get no advantage. Board’s Recommendations The board, therefore, put forward seven recommendations as a constructive policy and sought the industry’s endorsement of them.

' The recommendations were: 1. Butter companies, including dual companies, to agree not to accept changes from home separation to milk supply either from within or outside their existing supplies unless their factories have already been committed to accept milk supplies and capital expenditures have already been undertaken.

2. The Dairy Board would be asked to protect butter companies which agree with the procedure outlined in the first paragraph in the event of competition in their territory by neighbouring milk collecting companies. 3. A limited number of cheese companies faced with special problems should be encouraged to change over to casein manufacture.

4. Milk powder companies where practicable should direct milk from powder manufacture into casein manufacture where this can be done without undue increased capital expenditure. 5. In general, cheese companies would remain in cheese manufacture except where adequate casein drying facilities exist in nearby factories, and can, with advantage, be used without undue increased capital expenditure and where these .cheese companies could, if desirable, easily change back to cheese manufacture. 6. A campaign would be conducted by the Dairy Products Marketing Commission and by industry organisations to secure the maximum consumption of cheese locally and to encourage diversion of mild cheese supplies from certain nominated companies to local consumption rather than export.

7. Casein-manufacturing companies would agree to a ceiling restriction on payout for casein during the period of preparation of the foregoing policies.

“These recommendations represent a constructive policy to meet the unfortunate situation in which we find ourselves,” said Mr Hayward. “If the policy is to be implemented it must be carried into effect with the full approval of the industry. Its objective is to get stability and the best results for the industry as a whole.

“The board believes that if the policy is carried out the best possible results for the industry will be secured. If uniformity can not be obtained on the recommendations. then it will be necessary to call a conference of the whole industry,’’ said Mr Hayward.