DAIRY CONTROL

Hawera Star, Volume XLVII, 26 August 1927, Page 9

DAIRY CONTROL

THE BOARD’S OPERATIONS. ANNUAL REVIEW. JUSTIFYING ITS EXISTENCE. O. The operations of the New Zealand Dairy Produce Control Board for the year ended July 31, 1927, are comprehensively reviewed in the board's third annual report, and published in this month’s issue of’the ‘‘Dairy Produce Exporter.” The most important matters touched on are as follows :

The export levy on butter and cheese yielded £59,960 Is 2d. With £3023 8s 6d, as interest on investments, a total income of £62,983 9s 8d was received. Expenditures exclusive of advertising amounted to £54,416 4s 7d, leaving a credit balance of £8467 5s id. The advertising account indicated that of the £20,000 voted by the board for this purpose £19,667 3s Id had been spent. The net result of the year’s working was that the accumulated funds had been drawn upon to the extent of £11,199 18s. It was decided for the coming season to reduce the levy by one-half to l-32d on butter, and l-64d on cheese. The work at't-he head office has been accomplished with smoothness and precision. The organisation of the accountancy department to handle all factory credits was accomplished without a hitch and, we believe, to the general satisfaction of all factories, while its cost .was much below general outside computation. LONDON OFFICE.

The board’s chairman was in London for a period of three months during* the initiation of the scheme of control marketing, returning te New Zealand in January. Later it was decided to recall the producer members of the London agency to allow of a. full board consideration of general policy. Mr. Paterson, Government -representative on the agency, resigned in April. Messrs. lorns and Motion left London on April 23, after which the London office was in sole charge of Mr. J. B. Wright.

At a subsequent full meeting of the board it was decided to discontinue pooling returns' according to grade', and terminate absolute control. Following this decision, Mr. J. B. Wright tendered his resignation of the London management. This will generally take effect from September 30, although Mr. Wright has agreed to supervise the remaining sales to complete the year’s marketing operations. Lengthy reference is made to the better and cheese pools and to the causes leading up to the abandonment of the policy of absolute control. The report continues :

PRODUCTION. Substantial increase® are revealed bv tlie season’s completed grading records. Butter has increased by 14.6 per cent, and cheese 2.9 per cent, giving a seasonal increase on a butter-fat basis of 10.47 per cent. The favourable season, especially in the Auckland province, has been largely responsible for this, together with the- increased use of fertilisers for top-dressing and the increasing adoption of systems of herd testing, leading to the elimination of unprofitable cows.

QUALITY

A much greater improvement in quality has been -secured during the past year than during any preceding year of the industry’s history. The substantial advancement in quality improvement resulted principally from the incentive offered by the board of a fixed premium for finest grade. With the withdrawal of the board’s original policy of pooling, which enabled a fixed quality premium to be guaranteed, fears have been expressed that relinquished efforts will result in a retrogression. To guard against this the board will endeavour te see that- no groupings are made of different qualities when sales are made by agents, and that the return for each quality is separately given on the account sale, thus securing to each factory the quality premium the market yields for their goods.

During the price control period apremium of 2s butter and Is cheese was fixed for finest quality. Difficulty was experienced at times in securing this premium for cheese, which is not surprising seeing that it was an innovation. Subsequent experience has shown a. justification for the procedure, for while the premium disappeared during the depressed period (immediately following the change of policy in March) a premium for quality soon reasserted itself even under present marketing conditions. During this latter neriod the average weekly premium on finest quality has reached 2s Id on butter and Is 2d on cheese. There appears to lie here a. fruitful fied for investigation as to whether all selling organisation contributed to this average premium, or whether it was principally secured by the efforts of specific distributors.

It is pleasing to record that quality improvement has been achieved in all districts, neither was it confined to cooperative companies alone. Proprietary companies,' stimulated by the "inducements offered, have in some cases displayed commendable seal and secured gratifying results. The table showing the quality percentages shipped by each oort gives Napier pride of place; for quality in butter and Dunedin for cheese. MARKETS. Great Britain continues to be our main market. Taking an 'average of the. four years, 1923-6 inclusive, New Zealand supplied 21.99 per cent, of these imports in butter and 4.49 per cent, in cheese. With an increased .supply of cheese during the past season of 234,410 civt., compared with 1926, she now supplies Britain with 58 pc: cent, of her imports, and thus maintains the steady percentage progress of the past few years. Canada having noticeably fallen back in quantity. In blitter, although showing an increased •supply, amounting to 107,9C6cwt., our percentage falls to 19.59, Denmark having increased her supply to a greater extent than New Zealand. West of England shipments aggregate approximately similar quantities to the previous year. ■IT.S.A.. Canada and Australia; have taken considerable larger quantities than during the previous year.

Business in Eurone has been sluggish; and sales small.

SHIPPING

This work has been carried through without anv serious disturbance. The totaf quantity .shipped during the year by the mint shipping companies to Great Britain and North America, was: Butter 2,536.561 boxes. Cheese 1,068.378 crates.

Tt fs interesting to recall that when the board was established freight rates

were 4s 6d per box for butter and Id per lb for cheese. Under the two succeeding contracts that have been made rates have been reduced to : Butter —4s less 7£ per cent., equal 3s 8 2-sd, saving 9 3-5 d per box. Cheese —|d less . 71-" per cent., equal 4-stlis; saving 2s 8d per oraite. The freight .saving thus effected on -;ne quantities shipped this year amounted to—- £ Butter 101,454 Ohoe.se 142,450 INSURANCE. Approximately £78,000 was paid in insurance premiums during the year. As nothing bevond minor losses have been experienced .a further premium reduction has been secured of Id on butter and 7d on cheese, and 3d on local risks. The new rates will therefore be: — * s d Butter 7 3 Cheese 9 3 Local 1 3 These reductions will represent a further gain of fully £2500 compared with last season’s rates. This was secured as the result of the appointment of an officer in London to supervise discharging and cold storage. This saving will pay the cost of the supervision nearly fourfold and do immeasurable good in the preservation lof quality. It is worthy of note that present insurance rates represent a saving of fully £36,000 _ per annum compared with rates ruling prior to the establishment of the hoard.

COLD STORAGE. It has been thought for some time that the point at which the greatest deterioration in quality was taking place was at the ports of discharge, where delays in sorting in ordinary dock sheds, conveyance by barges and subsequent holding in oftimes indifferent storage, has been a common experience. Mr, F. \Y, Grainger, the board’s shipping supervisor, who is an experienced! (refrigerating engineer, was therefore sent to London during the slack period at the end of the 1925-26 season to make a full professional examination. His reports fully confirmed the opinions that hacl previously been formed .by the board.' It was* therefore arranged that he should return to England early in 1927 to make all necessary arrangements for satisfactory handling and cold storage during the present English summer Mr. Bence, who has been doing supplementary inspection work in New Zealand, being appointed as permanent shipping supervisor in London, Mr. Grainger was empowered to negotiate storage terms with a view to making contracts for cold storage if necessary. The early negotiations were quite satisfactory, and seemed to indicate that satisfactory terms and conditions could be secured With the change of policy in March, readiness to negotiate declined, London interests evidently anticipating that all forms ■of control would end. Present circumstances make it impossible to negotiate a general contract, hut it is the board’s intention to .insist that all produce' must ’be placed in approved storage on arrival, if hot required for immediate distribution. Offens have been made to erect cold stores for New

Zealand dairy produce on certain specified conditions. Mr. Grainger is now returning to New Zealand, when all exxperienees and negotiations will he considered by the hoard. Lengthy reference is also made to the success of the Ixiard’s advertising campaign.