DAIRY INDUSTRY

Manawatu Standard, Volume XLIX, Issue 230, 28 August 1929, Page 8

DAIRY INDUSTRY

CHELTENHAM COMPANY. 36th ANNUAL MEETING. (Special to “Standard.”) FEILDING, Aug. 28. Mr C. G. C. Dormer, chairman of directors, presided over the 36th annual general meeting of shareholders of the Cheltenham Co-operative Dairy Coy., Ltd., at Feilding to-day, there being a good attendance. An apology for absence was received from Mr H. E. Pacey, a director of the company. CHAIRMAN’S ADDRESS. In speaking to the report and bal-ance-sheet (previously published) the chairman sa_id he thought lie could congratulate tho shareholders on the conclusion of a successful year. The season had been particularly good from a climatic point of view, and the export prices also had been excellent and with the exception of one or two of the war years, the period could be looked upon as a record. The output of 2053 tons this season had been a record for the company, and an increase of 218 tons over that of the previous year. The 1927-28 season had shown an increase of 253 tons, or 16 per cent, over the previous season, and therefore the output last season was 473 tons greater than that .of 1926-27. The increase of the last two years had been fairly general throughout the Dominion, although the average increase of 9.27 per cent, in New Zealand was not quite as heavy as the Cheltenham Company’s increase of 12 per cent. This had been brought about mainly by more production individually per farmer. The Dominion’s output of butter for the past season was 81,656 tons of which the Cheltenham Company had produced 2053 tens, about l-40th. of the Dominion’s total, illustrating that the company was lie small factor in the butter output of the country. The average grade of the company had been 93.7 38 points, ito butter ibeing ranked therefore among the highest grading in the Dominion. The average grade for the past season had been slightly higher than in the previous season. PRICES OBTAINED. As regards the prices obtained, Mr Dermer said that the London prices had been very good up to the middle of February and butter on consignment had shown a good, return to factories up to that date, flue highest price in London during that period, viz., from July, 1928, to the middle of February, 1929,’ ranged from 176 s to 188 s per cwt. As 188 s cwt. in London was equal to Is 6Jd per lb. f.0.b., on which price an efficient factory could pay Is 8d per lb. of butter-fat, the prospects looked particularly bright, especially in view of the fact that these satisfactory prices were being obtained during the latter end of December the month of January and early February, a period when much lower prices generally prevailedThe buoyant tone of the market was brought about partly b.y the dry weather in Australia which caused a consequent heavy decline in the output ot that country. During that period a considerable amount of forward buying took place by London houses, probably with a view to providing for the anticipated storage. However Australia had experienced wonderful rainfall during the latter end of February, the drought, broke, prolific growth in the pastures took place, and the production leaped ahead. The London market had weakened and fell as low as 160 s during April and did not rise then ahead of 1665; in May 168 s was obtained, and since then it had remained about 170 s. There had been an improvepient recently, and to-day the quotation was 1755, quiet but firm. During the period of depression, the directors decided to withhold half of the company’s butter from the London market,' and instructions had been, cabled to London accordingly. This butter withdrawn eventually netted at least £d per lb. better than the then market price after allowing for all holding charges. MARKETING ARRANGEMENTS. Mr Dermer then went on to detail tho new marketing arrangements with the object of advertising tho company’s product. The butter was being sold in' London in lib. and Jib. pats, a matter of 2500 cases being used for this purpose. It had been found that when butter was sold in bulk it quickly lost its identity, and the new system provided for the butter being sold direct to the consumer with labels identifying it as the product of the Cheltenham Coy. The London agents had arranged for an extensive advertising campaign and special displays also in the London shops with very good results. The speaker (jointed out that shareholders could assist the company by , arranging to make gifts of the company’s butter to people at Home, the scheme providing for 41bs. of butter being delivered at Home for 9s. AMOUNT OF PAYMENTS. The pay-out of the company was then dealt with by the chairman who stated that the surplus on the season s working was £19903 11s 9d which was available for distribution, and the allocation had been covered in the report. The pay-out for the season averaged Is 6Jd as against Is 6.034 d for the previous season, and the improvement in the company’s produce, together with the increase of 12 per cent, in production, represented an additional cash payment to the suppliers. The cheques for both dividends and bonus would be paid within a " Referring to tho balance-sheet Mr Dermer said that the debenture account was down to £2400, and on November 1, it would be down to £I2OO, this being the only fixed liability against fixed assets of £29,91i( as sd. During the last year there had been 1119 new shares, issued and 205 shares were purchased by the company .The total number of allotted shares at June 30 was 13,587. No calls had been made on shares during the year, as the company found it had no need for additional capital. REDUCTION IN COSTS.

Mr Dermer thought it satisfactory to bo able to report that under efficient organisation the company was able to show a reduction in charges under the heading of cost of management. He could not hold out hopes that such reductions would continue as there was a limit, but the results achieved showed that the directors had closelv investigated all items of expense" and given every attention to the company’s affairs. The total cos t to f.o.b. for the past season was l-s°od per lb. as against 1.6999 d per•lb for the 1927-28 season and of 2.022 d per lb. for the 1926-27 season. The reduction per ton of butter compared with tho previous season totalled £1 is ou and represented £2224 on the company’s output. (Hear, hear). Mr Dermer went- on to refer to export charges on butter and though that the shareholders could look forward to some reduction during trie coming season. From September 1, the ocean freight would be reduced under the Dairy Board’s contract to the extent of 4.2 per cwt, and on the butter exported last season this saving in freight to the company amounted to £627' 6s. It was likely that there would also be a small reduction in marine insurance, and on butter shipped to United Kingdom the _ insurance would be 7s per cent against 7s 3d per cent last year. The

rate .of exchange in London drafts was reduced, on July 26, j. 929, from 12s 6d per cent to 7s Gd per cent .and this would bo a temporary advantage to the company, but' if it continued throughout the season the difference meant a saving of £650 to the company calculated on last year’s export. The total export charges had been 36s 2.34 d per cwt. and the reduction mentioned would bring the cost down to 3.5 4.702 d per cwt, a saving of 9.63 d per cwt and on tlio company’s exportable output it would represent £3250 7s 9d, provided, of course, that the exchange rate remained at 7s Gd per cent. PIG FARM. Mr Dermer then went on to deal with the company’s pig farm and stated that the returns for the year ended were satisfactory, a net profit of £2Ol 2s 6d being shown after writing off £206 7s 7d for depreciation, charging iip interest on capital of £134 3s sd, and £SO for administration. The farm had been established to get rid of the company’s butter milk and had proved to be the most econo nical and efficient method of disposal. Pig farming many difficulties, especially on the scale conducted by the company and losses could not be avoided. Improvements carried out at the factory last year were touched on by the speaker, who said that they had been found necessary to meet the constantly changing conditions and to bring the equipment up-to-date. Tenders had been called for the work, but as these had been considered too high it was decided to do the'work by day labour. Water supply difficulties had also been overcome by the sinking of a well, and a good supply had been obtained at a depth of 400 feet. Mr Dermer referred to the new regulations in regard to cream grading which had recently come into operation and also touched on the satisfactory results derived from the National Dairy Association’s boneless veal industry.. He deplored the fact that more of the company’s suppliers were not availing themselves of the company’s Herd Testing Association as it was only by knowing what his cows were producing that a farmer could progress. In conclusion Mr Dermer referred to the loyal work of the staff for the company and also the manner in which his co-directors had served the company and ho had much pleasure in moving the adoption of the report and balance-sheet, the motion being seconded by Mr J. Batchelar.