NOTABLE EFFORT

New Zealand Herald, Volume 78, Issue 24050, 22 August 1941, Page 3

NOTABLE EFFORT

OBSTACLES OVERCOME IMPORTANCE OF QUALITY COSTS AND GUARANTEED PRICE <O.C.) HAMILTON, Thursday "The record production of 84,716 tons of dairy produce during the second year of the war is an achievement of which everyone associated with the company has reason to be justly proud, and bears definite evidence that those responsible for the production and manufacture of this large quantity have given of their best in the war effort," said Mr. C. J. Parlane, general manager, at the annual meeting of the New Zealand Co-opera-tive Dairy Company, Limited, to-day. "Due to the call to military service, labour difficulties on the farm as well as in the factories and offices of the company have been encountered, but by increased effort on the part of those remaining these difficulties have been overcome, but, unfortunately, under existing conditions, it is almost impossible to maintain the desired standard of efficiency. Payments to Suppliers "The cash payment made to suppliers for finest quality butter-fat for buttermaking for supply covered by fully-paid shares was 16.4476 d, while on the same basis the average payment over all grades was 16.30161 d," said Mr. Parlane. "The payments at the company's cheese factories varied according to local conditions, the average, excluding town milk sales, being 18.2453 d. The deferred payment made to suppliers to the various factories on July 31 last amounted to £1,363,052. "Milkpowder and evaporated milk was purchased by the British Government at reasonably satisfactory prices, and at their annual meetings suppliers concerned were given full information regarding the operations of their respective groups. Notwithstanding the substantial increase in production, we were unable to prevent an increase in the cost of manufacture, this being due to increases in the purchase price of manufacturing requisites, plus a general increase in wages. Tendency to Lower Quality "I regret that it is again necessary for me to draw attention lo the matter of quality," the general manager continued. "The percentage of finest cream received at our butter factories is lower than the previous season, while the percentage of finest butter is in line with the cream received. The guaranteed price is based on the pointing of the butter by Government officers and, while we do not agree that the present method of payment is strictly fair, the fact remains that the price paid to the farmer is affected quite substantially by an increase or decrease of half a point in the classification of the butter by the officers of the Dairy Division. "Labour conditions on farms may be to some extent responsible for the tendency to lower quality, but whatever the cause it is essential that every possible effort be made to improve on the present standard. Care on the Farm "In view of the large number of farmers who will this season be delivering milk to cheese factories, 1 would again draw attention to the necessity for the utmost care being taken to ensure that milk delivered to our factories is produced under good conditions—cooled —and is free from added water. I do not suggest that suppliers deliberately add water to their milk, but through a little carelessness in flushing machines or allowing leakage from cooler connections, an undue amount of water can and sometimes does get into the milk, which not only causes Joss in yield, but is also likely to increase manufacturing costs and detrimentally affect quality. "The Waiiaroa cheese factory commenced operations on August 1, and Karapiro should be ready to receive milk on September 11. We cannot at the moment say when factories at other centres will be ready to operate, but the necessary additions to buildings will be completed and plant installed as quickly as possible, and meetings of suppliers in the various districts will be held, when they will be fully advised in ample time of the date of opening. Capital Expenditure

"In respect of all extensions necessary for increasing cheese production, the suppliers will not be called upon to provide any of the capital required for their erection and equipment," Mr. Parlane said. "This in the meantime will be found by the company, and while operating the groups will provide the interest out of revenue at bank rate. Under this arrangement butter shares held by a supplier to the company to which he usually sends his cream will entitle him to the full payment for cheese supply, including what is known as the shareholders' bonus. Depreciation will be provided for at the rate of 10 per cent on plant and up to 3 per cent on buildings annually, and the book value at the conclusion of the period of the emergency will be a matter for adjustment as between the company and the Government. "At the moment the supply of milk cans to suppliers changing over is_ a real difficulty and one which is quite beyond the control of this company. Butter Box Supplies ; "A shortage of dry timber early in the season made it impossible to build up stocks of butter boxes, and in consequence we had to work more overtime than otherwise would have been the ease, this resulting in increased costs," continued Mr. Parlane. "For the same reason we bad to purchase a much larger number of boxes from outside firms than during the previous year.

"Our present timber slocks are quite substantial, but unfortunately a large percentage is sap rimu. which is not proving as satisfactory as white pine. The reports that we have received from nur officers in London make it clear that butter packed in rimu boxes shows more timber taint than when packed in pine boxes. A fibre-board container is really required to meet the difficulty.

Cheese Crates Pool "I regret to state that for this current season we have been compelled to accept a pool for cheese crates which in our opinion is quite unnecessary. In order no doubt to have the pool accepted with as little adverse comment as possible, the Government has decided to .stabilise the price at -s 9d per crate, in some instances this being considerably less than the cost at which they will be manufactured. "Obviously the only way that the cost can be stabilised is by a Government subsidy, which is quite an excellent method of encouraging the farmers to believe that they are obtaining a benefit which does not exist in fact. Subsidies granted from the national purse can only be provided by taxation, and as the farmers provide their full share of taxation through the widespread taxation net tbev inevitably find their proportion of the subsidy, which is supposed to reduce their costs. It would appear that if the Government can find the money to provide subsidies for their so-called stabilising of the prices of commodities which farmers have to purchase, surely the better plan would be to use this money to increase the farmer's price, so that he could himself pay the cost of commodities which it is necessary for him to purchase. Such an arrangement would nave advantage in that the farmer would then know the actual cost of the goods that he is using."-