DAIRY PRODUCE

New Zealand Times, Volume LI, Issue 12021, 26 December 1924, Page 12

DAIRY PRODUCE

SOME ASPECTS OF INTERNATIONAL TRADE

ITS DEVELOPMENT IN NEW ZEALAND / (By John A. Ruddick, Dairy Commissioner, Ottawa, Canada, formerly Dairy Commissioner for New Zealand.) ARTICLE NO. I.

There has been an international tratltj in dairy products within the Northern Hemisphere. for many years, but climatic and transportation conditions prevented any important movement of butter and cheese across the Equator until about 40 years agowas a momentous event m the dairy world when on January l/th lbHi, the steamship Protos landed 100 tons ot Australian butter in London in gpoo condition. This successful application of mechanical refrigeration m the overseas transport of butter and oheese openod tho markets of the Northern Hemisphere to the products of the extensive pasture lands of New Zealand, Australia, Argentina, amd bouth AJrica, and thus placed the dairy-pro-due# market on a world*® basis. _ Not only did tho advent of refrigeration improve tho transport of such perishables as butter and choese, but bv providing facilities for safe storage over lengthened periods, markets wore expanded in point of time as -well as distance. Furthermore the better preservation of the quality in buttei induced a much greater consumption and thus enlarged the market in that sense also.

PROFOUND CHANGES.. ' The development of the dairy industry in the Southern Hemisphere was rather slow at first, hut within toe last 10 years the growth of the exports of butter and cheese from New Zealand Australia, and the Argentine have been so large as to make profound changes in the direction and volume of the streams of dairy produce which supply the world's demand. There is a considerable movement of daiiv products, and always will be, between many <fciffere*n't countries, tor geographical and seasonal reasons, or to supplv particular tastes- hut as these pretty nearly balance themselves l have, in preparing this paper, confined myself largely to an analysis of the imports of butter and cheese into the United Kingdom of Great Britain. Tho United Kingdom is not the only international market for dairy products, but it is the principal one, as it absorbs much more butter and oheese than all the other countries in the world combined. During the years immediately preceding the war, Germany, next to the United Kingdom, was the largest importer of butter, but received only 16 per cent, of the world’s total exports, as against 67 per cent, received by the United Kingdom. Belgium came neixt to Germany in that period as an importer of butter, but the total quantity amounted ,to only 2 per cent, of the world’s trade. In the case of cheese the trade was somewhat more distributed before the war. The United Kingdom absorbed about 50 per cent, of the world’s exports, France and Germany something like 9 per cent, each, United States a little over S per cent., and Belgium 5 per cent., and so on. SIGNIFICANT CHANGES.

It may bo of interest to note the changes in the imports of butter and cheese into the United Kingdom by countries during the last 20 years. In 1903 Denmark supplied 45 per cent, of the total imports of butter. Russia came second with 12 per cent., then followed France, Holland, Canada, Sweden, i nd New Zealand in the order named, the laitter supplying only 5 per cent. Italy and the Argentine came next with 2 per cent, each, and the United States with 1 per cent. In 1914 Russia had' increased her quota to 14 per cent, and Denmark was re duced to 41 per cent. Australia took third place in that year with 12 per oeit., and New Zealand advanced to fourth place with 7 per cent. In 1922, the imports from Denmark v/ere only 35 per cent, of the whole, while Australia claimed 27 per cent., New Zealand 23 per cent., and the Argentine became an important factor for the first time with 9 per cent. For the year rnding June 30th, 1923, Denmark again supplied 35 per cent., New Zealand followed with 27 per cent., and Australia was down lo 13 per cent., tho exportable surplus being reduced by rhirkatia conditions. The Argentine Republic’s contribution was up to 10 ior cent., and Canadian shipments were also increased to 3 per cent, of the total. The United States, Sweden, France, and all other countries combined supplied 10 per cent. In 1903 Canada supplied 68 per cent, of the total cheese imported into the United Kingdom, United States 14 per cent., Holland 13 per cent., and all other countries combined 5 per cent. In 1914 Canada’s contribution was reduced to 51 per cent, and New Zealand jumped to second place with 28 per cent. HcUand .again supplied 13 per cent., Italy 4 per cent., United States and Australia each X per cent., and all other countries combined 2 per cent. In 1022 New Zealand took the lead in cheese with 60 per cent, of the total, Canada 39 per cent., Australia . and - Holland each 4 per cent.. United States 1 per cent., Italy South Africa, and Switzerland together 1 per cent., all other countries 1 per cent. In 1923 New Zealand supplied 52 per cent., Canada 32 per cent., Holland 7 per cent., Italy 3 per cent., Australia 2 per cent., United States 1 per cent., and all other countries 3 per cent. (Further details on this point will he found in Tablo I.)/ Table I.—Percentage imports of cheese and butter into the United Kingdom, by countries. ' "r 1903. Country from which Imported. CHEESE.

The most striking feature of these figures is the rapid increase in the exports from New Zealand. That country is now the largest exporter of cheese, and if the exports of butter show the same increase in 1923-24 as they did in 1922-23 they will then exceed those of Denmark, and New Zealand will be the largest exported of both butter and cheese of any country in the world. The export trade in dairy products from New Zealand began in a very small way about the year 1883. In 1904, at the end of ten years, the quantities exported were 35,000,000 pounds of butter and 9j000,000 pounds of cheese. For the year ending March 31st, 1923, the exports were 142,000,000 pounds of butter and 145,000,000 pounds of cheese. RUSSIA AND GERMANY. In 1914 Russia exported 118,000,000 pounds of butter. At the present time, S 3 far as figures are available, Russia is a very unimportant factor in the international butter trade. As an offset to the disappearance of the Russian exports, it may he pointed out that in 1914 Germany imported 111,000,000 pounds of butter, and as far as I am aware very little is being imported at the present time. These tyo items, the decrease in the exports from Russia and the decrease in the imports Into Germany just about balance each other. _ (For. the total imports, by years, see Table II.) Table ,11.—-Total imports of butter and cheese into United Kingdom for years ended June 30th:— Year * Cheese. Butter. Pounds. Pounds. 12*4 264,756,860 ; 478,092,160 ■: 310,083,200 422,859,440 lxa 316,945,786 529,338,096 Another view of the international trade shows the remarkable development of the exports from the Sbuthem Hemisphere since 1903. In that year the butter imported into the United Kingdom from south of the Equator was only i m P f I \ Cent ' of the total imports. In 1914 the proportion had risen to 21 ner cent. In 1923 it was 14 per cent The proportional as well as the absolute increare m the imports of cheese from the Southern Hemisphere is even more’ striking. In 1903 only 2 per cent, of toe imports of cheese came from that S^,. 0 l o h ® wor M; in 1914 the south supplied 29 per cent., and in 1923 as much as 55 per cent, (dee Table ITT.) Table lll.—lmports of butter and cheesq into the United Kingdom from the orthern and southern hemispheres:— Butter. Ohcccc S tromT n I w rtherD Southern Northern Homi- Hemi- Hemi- HemiYear P • BpW 6phere ’ ®PWe. 1903’ ... 7 93 2 9fl 1914 ... 21 70 4 n No. 11. ■ T k? r ? } 3 Bt iH another view that may be of interest, and that is the proportion of imports into the United Kingdom of butter and cheese, which are of foreign as compared with that of Briorigin In 1903 only 12 per cent, of the butter came from British dominions, while 88 per cent, was of foreign pngin. In 1914 British countries “® he . d 20 P® l- cent., and 80 per cent. 2®" 1 ? foreign countries. In 1923 we find that 44 per cent, was of British T an *i. only 66 per cent - wa « foreign In the case of cheese 30 per cent t'B !£ w., 87 p * r ■«>«.: TABLH IV. Gutter and cheese into pared with BritTsh Year. Fo^Brit.

As a result of the war some of the streams which make up the international trade in dairy 'products have been mmimshed, if not wholly dried up, while others have been greatly increased, and' still others have been diverted into new channels. The indus-

try suffered by actual loss of cattle and through the difficulty, if uot impossi bility, of securing sufficient supplies of concentrates for feeding in many European countries. Outside of Europe, however, the high prices generally stimulated production. In New Zealand the rapid natural inoi ease was accelerated very considerably, and there is no question as to the present volume of production anil exports being maintained and further increased. Tho manufacture of butter evidently received a big impetus from the war demand in the Argentine, as the imports from that country into the United l Kingdom were increased fro». 5,281,920 pounds in 1914 to 37.679.040 pounds in 1922. It remains to be seen to what extent this increase from the Argentine will be continued. An instance of the diversion of trade since the war is to be seen in the case of Holland, who now finds hor principal markets in Belgium, France, and Spain, rather than in Germany, Austria, and the United Kingdom. The vagaries of the exchange market have also influenced the direction and volume of the streams of dairy produce to some extent. I do not pretend to say when we may expect the international market for butter and cheese to reach the same state of equilibrium thait it had before the war. One thing is certain, that the Southern Hemisphere will play a much bigger part in the international trade in the future than it has in the past. In New Zealand the climatic conditions are on the whole favourable only to pastoral industry. The rainfall is abundant, and with only slight frosts at any time of the year the oattle run on pasture the year 1 round without stabling. Oattle raising for the frozen meat industry has become Unprofitable in that country, and sheep farming is checked by the high price of land Dairying seems to be the natural and almost the only line open for further agricultural development. Well-in-formed New Zealanders expect to see an increase of 100 per cent, in dairy exports in the next 10 years. New Zealand, in common with other dairying . countries of the Southern Hemisphere, has a relatively small industrial population, and therefore a small home market. The proportion of the total production available for export is comparatively large in all the countries of the Southern Hemisphere. - In parts of Australia considerable further development of the industry is expected, especially in the State of Queensland. With modern appliances, including refrigerating machines, a aemrtroipical or even tropical, climate is no longer considered inimical to the growth of the dairying industry. Even in such an unlikely place as the Fiji Islands the creamery industry has already been established. There are millions of acres in the two main islands alone that are capable of carrying very nearly one cow to the acre the year round. The average temperature m Fiji is about $2 degrees F., with heavy rainfall. The growth of such tropical grasses as para, paspalum, mission, etc., would'amaze a temperate zone farmer. Alfalfa may be cut 10 or 1 i times a year. From personal knowledge of _ the country, I am satisfied that initiative and enterprise are all that are lacking for the building up of a sucosssful industry on quite a large scale, but these are important, and I mention Fiji more as a possibility than a probability for the present.

Many parts of South Africa seem to offer good opportunities for dairying. Cheddar oheese from East Griquatand won first prize at the Royal Dairy Show in London last year. There is every reason to believe thaJt the exports of both butter and oheese from New Zealand, Australia, South Africa, and possibly the Argentine will show important increases in the future, especially those from New Zealand. Canada has for many years i been an important factor in the international trade. The’exports of butter reached the high point of 34.128,944 pounds in, 1903, and those of cheese reached the maximum of 233,980,716 pounds in 1904. ; In the years that followed the increase. of population was greater than the increase of production, and shipments of both butter and cheese have decreased. For the fiscal year ending March 31st last, the exports were 114,518,900 pounds of cheese, and 21,994.576 pounds of butter. The exports of cheese from Canada will probably not show any large increase in the immediate future. The production of creamery butter has been steadily increasing in every province for some years, and larger exports of butter may be expected in the years to come. The dairying industry is well established in every province of Can nda, but outside the provinces of Ontario and Quebec the production isonly, a fraction of what it may he in the future. There are vast areas well adapted for dairying in -which the industry only awaits development. The dairy industry has been so fully developed throughout Scandinavia and in Holland, France, and northern Italy. 4hat any further expansion of the industry is not .likely to be very large. In Switzerland there has been a tendency of late years to divert milk formerly used for cbeese nicking to the raising of calves. The Swiss have found good markets abroad for young cows, raised at high altitudes in the alps. • The meet encouraging feature of the outlook for the international trade in butter and oheese lies in the greatly increased consumption of milk and its products. Prohibition in some countries and the advertising campaigns based oi. tho newer knowledge of nutrition, have bad a very important influence in increasing the consumption of dairy products. Few realise how much a very slight increase in the per capita eonsumiption affects the total supply and A calculation based on the recently published figures of the total production of milk in these United States shows that if the home consumption of milk and its products was increased by only 1 per oent. it would mean the equivalent of 100,000,000 pounds of cheese, or nearly 50,000,000 pounds of butter a year.

The possibilities of increased markets through greater consumption are enormous, and what applies to the United Btates will apply in other oountries according to population and per capita consumption. A more widespread knowledge as to the value of milk and milk products in the diet, and' a higher appreciation of milk ae a food rather than as a beverage, will yet exert a very large influence on the quantity consumed. If I were writing that to-day, instead of several weeks or months ago, I should have probably placed a little more emphasis on the- importance of the Baltic States in the future. From information which has come to me re oently, it appears evident that Finland, Latvia, Esthonia, and those other states around the Baltic are likely to increase their exports of butter and some cheese, to a very large extent in the near future. I heard a prediction from a good authority not very long ago that he thought tlie&e states (known now as the Baltic States) would probably export more dairv produce than the whole of Scandinavia, in a very few years. I don’t know whether this is correct or not, hut I would place more emphasis on the importance of these countries than I have done in this paper if I were writing to-day.

Canfla Per cent. Holland Other countries — BUTTER Country from which Imported. Denmark Russia , Per cent. 45 12 12 9 e & 5 2 2 Prance Holland , Canada Sweden New Zealand! Italy Argentine Norway and Australia Other countries 1914. 1 100 Country from which Imported. CHEESE. Canada Per cent. 51 23 13 4 1 New Zealand Holland Italy Unlforl States Australia Other countries 2 100

Country from which Imported. BUTTER. Per cent. Donmarh Russia Australia Sweden New Zoaland France Holland Argentine Nonray Canada 100 1922. Country from which Imported. Per cent. CHEESEl New Zealand Canada Australia Holland United States 1 South Africa and Switzerland 1 Other oountries 100 BUTTER. Country from which Imported. Per cent Denmark 35 Australia Now Zealand Argentina Finland and Bussia .. 3 Holland i Canada i South Africa, Sweden, France and Norway 100 1923. Country from which Imported.^ Per cent. CHEESEl New Zealand 52 Canada 32 Holland Italy Australia United States Other countries 100 Country from which Imported. Per cent. BUTTER. Denmark 35 New Zealand .. 27 Australia 13 Argentina .. 10 Canada .. 3 Holland . 2 United JStates. Finlan< . Sweden, France and othertries 100

1803 p.C. p.C. 30 70 10 01 13 87 1014 1923 Tt>