DAIRYING INDUSTRY.

New Zealand Herald, Volume LXVIII, Issue 20866, 7 May 1931, Page 12

DAIRYING INDUSTRY.

ENCOURAGING OUTLOOK. BRITISH DEMAND INCREASED. BROADENING OF THE MARKET. NO ACCUMULATION OF STOCKS. An optimistic note was'struck by an authority in the dairy industry ir> an interview yesterday. It was claimed that the industry is still earning money, that the market position is nound, with an increasing consumption that will react very materially to future benefit, and that, while readjustments are necessarily proceeding, tho industry possesses an inherent capacity to surmount all troubles, and do more than its share in restoring prosperity to tho Dominion.

" Too much notice," said this authority, " must not be taken of the actual prices current' to-day on tho London market for New Zealand butter and cheese, because, as a matter of fact, the great bulk of both butter and cheese for tho past season has been sold, and these prices, therefore, arc largely nominal in their innnediato effect upon producers. Tho stock position, in fact, is remarkably healthy. " New Zealand butter in store in London on May 1 was only 5178 tons, comparing with 9950 tons on tho same date last year—approximately half. As the ' average weekly consumption of butter is now 7000 tons, this stock represents about five days' supply. Further, the quantity afloat is no higher than at the same time ]ast year, while tho proportion of the total last season's production still to go forward is negligible. Bonus and Winter Payments. " Careful estimates which have been made show that on tho run of prices ruling throughout tho major part of the season, together with tho premium received by producers in respect of exchange—which amounts to about 10s a cwt., or over Id a lb. —the averago wellrun butter factory should bo able to pay out from Is to Is Id on homeseparated cream. With advances throughout tho season from lOd to IOAd, this leaves a substantial bonus still to c6me for distribution in August and September next. This bonus is estimated on a conservative basis to amount to from £2,000,000 to £2,500,000. In addition, the industry will receive the benefit of production throughout tho autumn and winter months, in respect of which the returns will be at least another £2,000,000, so that approximately £4,000,000 to £4,500,000 of dairy money may bo assessed as coming into thecountry throughout the relatively dead winter period. These figures show that there is still room for optimism in face of tho actual facts.

" In reality/, continued the speaker, it Trill be found that the whole position of the New Zealand butter producer has been immensely strengthened by tho recent course of the market. Less than two years ago Britain's weekly consumption was estimated at 5000 tons. To-day it is over 7000 tons a week. This expansion has been won at the expense of margarine because of (1) the lower prices ruling, and . (2)' the publicity efforts initiated bv tho Empire Marketing Board and the Zealand Dairy Produco Board. Empire Butter Campaign at Home. Britain's consumption of butter per head of population is now per annum, and of margarine New Zealand eats about 301b. of butter per head per annum.' Britain's consumption of margarine represents over 300.000 tons annually, and, if /it could be diverted to butter, it would suffice to keep more than two New Zealands going. The recent lowering of prices for butter has, in point cf fact, achieved two objectives which 'could only have been attained by an abnormally expensivo campaign of propaganda. "Firstly, it enormously increased the consumption of butter in the United KingJlom at the expense of margarine and it las given New Zealand an opportunity, of-entering territories where its butter was formerly unknown. The Empire Marketing Board' assisted materially in this. If appointed six canvassers to work iri the Northern and Midland territories—formerly the stronghold of Danish butter. Official figures just available show that in four weeks theso canvassers received B'l6 definite promises from grocers to stockEmpire buttor, thus doubling the selling points of such butter in the area covered. "The importance of this work cannot be exaggerated, j It involves a definite broadening of oij'r market. The people in these industrial centres of tho Midlands and North are becoming fully alive to the desirability of Empire trading arid untold good will come out of this entry of New Zealand's butter into Northern markets. The consumption of butter has been so stimulated that no accumulation exists; if the present low level of prices is maintained over the next few months, consumption will prevent any accumulation of stocks from Baltic and European countries. Thus New Zealand butter of the next season's make, when it reaches the United Kingdom in quantity about the beginning of November (when supplies from European countries are declining), will find a, clear market, will) a prospective consumptive demand far higher than it has ever been before. Competition with Margarine.

"It. thus becomes in reality a contest between butter and margarine. Butter is the better article and once users of margarine are attracted to it they will stay. It then remains for the New Zealand f;irmer to produce satisfactorily on the new levels. Hero our mild climate, herdtesting progress' and liberal top-dressing policies arc bound to win out.. In the last five years the average butter-fat production per cow has increased from 1801b. to 2201b. Denmark's average to-day is 2701b. Twenty years ago it was at 2201b. —our figure to-day. ''Leaders in (he dairy industry believe that we can bridge that gap of 501b. in fi mm li less period than 20 years, because of our superior conditions. If we to-day were producing that extra 501b. of fat per 'cow it would mean another £5,000,CC0 income per annum. Many herds to-dav are averaging 3001b. of fat per cow and it. is believed the national average can be lifted to that figure. 'l,'litis tlie industry docs possess within itself the possibility of restoring individual and national prosperity. I may say that a recent visitor to North Taranaki recorded his surprise fit. the optimism of farmers there. They Jill still have money to spend, though admittedly less than usual. Adjustments naturally lufve to be made with many who bought at relatively high figures, but a really surprising degree of consideration is being shown by many mortgagees, with resultant benefit t/o fanners and the com munity. In spite of immediate difficulties I therefore think it fair that the definite silver lining to the situation should be set out."