SOUTH ISLAND DAIRY ASSOCIATION.

Otago Daily Times, Issue 20725, 24 May 1929, Page 6

SOUTH ISLAND DAIRY ASSOCIATION.

ANNUAL REPORT. SUCCESSFUL YEAR’S WORKING. The annual report of the South Island Dairy Association, which will be submitted at the annual meeting on June 6, states that, after making reasonable provision lor any decrease in the value of the associations assets, the profit and loss account showed a credit balance lor the .leal ol £,38 11s 3d, which the executive recommended should be transferred to tlic capital fund account, bringing the latter to £13,101 15s lid. The number ot members on the roll stood at 109, which was the same as the previous year. it wag very pleasing to record that the volume ot business transacted with factories had been greater than in any previous year. Although prices were on a somewhat lower level, and the competition from other firms to secure the business, was most keen, the turnover showed an increase of over 20 per cent, compared with the previous year. This was clear evidence that the members were appreciating the benefits to be gained by placing, their business with their own organisation, and that the more support received from them the easier it would be tor the association to reduce still further its manufacturing costs. The Machinery Department continued to show progress, and was fully justifying its existence. The staff was kept fully employed throughout the year on repair work and the installation of new machinery and plant. It was most apparent that the association’s advent into this .particular branch had not met with the approbation of its competitors, and that they were making every endeavour to force it to abandon the idea of assisting its members in this direction. The executive was confident, however, that factory directorates were fully alive to the position, and that.they would see to it that the footing, secured would be strengthened by continuing to give all the support they possibly £ould. The manufacture of milk and cream cans had been commenced, and the association was in a position to supply its members with cans of first-class quality at bedrock prices. '

As- South Island agents for the New Zealand Producers’ Marketing Association, the turnover for produce handled during the year amounted to just under £400,000. representing, in the case of purchases, the f.o.b. sale price; and on consignments, the f.o.b. advance, plus freight, export levy, and exchange. On behalf of its principals, the association purchased a number of factories’ cheese outputs to the end of December' at 9Jd and 9 9-16 d per lb, f.0.b.. and the whole season's outputs of two cheese factories at 9Jd per lb. It also made several purchases of butter, and put through large quantities of butter and cheese on consignment. The total quantity of cheese handled was 61,000 crates, or approximately 30 per cent, of the total export. In consequence of the Control Board haying taken over the shipping work itself, as from the beginning of October last, it was impossible to supply particulars of . the. year’s . shipments, which were previously given in the association's reports. . Prior to the Control Board coming into being, the association attended to the shipping or produce from all South Island ports on behalf of its members. That was one of the prime objects for which the association was established. Before then each individual factory. had to apply to the shipping companies for space for the export of its own produce, as it, became available, and the result was that the larger factories secured most of the space offering, and tne factories with small outputs found it very difficult to get their produce away to the overseas markets. The ■establishment of the association made it possible to arrange with the shipping companies for bulk space as required, and the space was then allotted by the association to the various factories in proportion to the quantities they "had ready for shipment, and the amount of space available on each particular steamer. The adoption of this system was of great benefit to the factories' and also' to the shipping companies. The factory companies had no longer to concern themselves about getting their produce shipped, and the shipping companies, instead of receiving applications for space from about 100 different companies, and allotting it out accordingly, had to deal with one application only, which, of course, reduced their work to a minimum. For carrying out the work the factories agreed to pay an annual subscription to the association based on their respective outputs, and the shipping companies paid the association an annual subsidy, in consideration for the work and expense which they were saved. The same method was .followed in the North Island, with the National Dairy Association carrying out. tlio work for _ its members, ami during all the years it existed the system gave complete satisfaction to everyone concerned. It. was possible, also, for the two associations acting conjointly to arrange freight contracts with the shipping companies on behalf of their members, and this was done from time to time. The association was entitled to claim that, as the result of its combined efforts, it had be6n the means of saving to the industry many thousands of pounds in freight charges in the same way as the board was taking credit for the freight reductions secured under the contracts arranged by them with the shipping companies.

Since the Dairy Produce Control Bill was placed on the Statute, in 1924, until September last, the association continued to attend to the shipping work, as agent for the board. Under the Act this function was taken out of the hands of the association and placed in the hands of the board. The Act also empowered the board, in order to meet its expenses, to impose a levy not exceeding one-eighth of a penny per pound on all butter, and one-sixteenth of a penny per pound on all cheese exported to the United Kingdom, and certain other countries. For the five years ended January 31 last, the sum paid by the industry on account of this levy lias amounted to approximately £250,000, or £50,000 per annum. For the year commencing on May 1. 1924 the board paid the association £2OOO for attending to the shipping from the South Island ports; for 1925-26, it received £1650; and for the year 1926-27, when the board assumed absolute control of the produce and the work was enormously increased, £3BOO. The board estimated that, under absolute control, it would cost it £OOOO per annum to undertake the work nt the South Island ports itself, or £3IOO more than was paid to the association. For the year 1927-28, after absolute control had been abandoned, the association carried out the work for £1750. In August last the board decided to itself undertake the work carried out by the two associations and to establish its own offices in Dunedin, Now Plymouth, and Auckland, at an estimated annual cost of £3160. This decision was arrived at on the casting vote of the chairman and in spite of the fact that the association offered to do the work for £2OOO. Three of the South Island members on the board supported the resolution, which meant a loss to the industry of over £IOOO per year. Tlie ; association’s reason for referring to this matter so fully was in order to refute the assertion which had been made that it was overcharging, for the sendees rendered by it. Members would bo able to judge from the facts and figures given if there wore any justification for such a charge The quantities of butter and cheese graded lor export at nil the Dominion ports for the year ended March 31, 1929, were as follows, the figures for the’previous year being given in parenthoscfi:— Butter, 1,618.659 cwt (1.504,404 cwt) ; cheese. 1,692,54Ccwt (1.506.298 cwt) ; the increase being 7 per cent, for butter and 'll per cent for cheese. The figures for the South Island ports were as follow: Bluff—butter. 6944 cwt (11,743cwt)cheese. 217,609 cwt (209.222 cwt), Dunedin—butter, 25.552 cwt (29,528 c wt; cheese, 46,556 cwt (41,061 cwt). Timnvu —butter. 7350 cwt (7336 cwt); cheese. 18,495 cwt (14,174 cwt). Lyttelton—-butter, 44,481 cwt (37,928 cwt); cheese, 28,543ewt (2C,3l3cwt). The totals for the South Island were: Butter, 84,327 cwt (86,589 cwt); cheese, 311,203ewt (290,770cwtl giving a decrease of 2.6 per cent, in the export of butter and an increase of 7 per cent, in cheese. Although there had been a steady increase in the production of butter over the whole of the Dominion, there, had been a marked decline in the South Island figures for the past voav or 'two, especially in Otago and Southland. That was due. it was believed, principally to the better market prices ruling for cheese, and suppliers changing over from butter to -cheese factories. The production of cheese jn the South Island had

more than made up for the decrease in butter, the increase of the past five years being approximately 25 per cent. The climatic conditions had generally been favourable for dairying throughout the year. The practice of top-dressing with suitable fertilisers, which had been more generally followed in recent years, had undoubtedly been a big factor in increasing production, and the advance which had been made in herd testing had also helped to a very considerable extent. The subsidy which the Government had granted for the further development of the herdtesting movement would be of great benefit to the industry and the country generally.

The Government graders’ certificates indicated that the quality of butter and cheese was being maintained in the South Island. Some criticism had been made lately by persons interested in the marketing of the association’s produce with regard to the alleged deterioration in the quality of New Zealand butter and cheese. It had been said that as the result of over-neutralisation the butter lost flavour and the cheese had a tendency to crack on being cut. Every effort was being made to improve the standard, and the interests of the industry demanded that efforts in that direction must not be relaxed. Market values for both butter and cheese had again showed,the usual fluctuations and stability of prices would seem to be as far away as ever. At the beginning of May, 1928, the London market price tor New Zealand butter was, 165 s per cwt; at the end of Jujy it had advanced to 183 s; at the beginning of November it was 180 s; and it-was now at 166 s to 168 s. Cheese was 97s in April, 1928; 105 s in June, 112 s in September, 98s in December, 90s in March; and 87s to 88s to date. A number of cheese factories sold their outputs to the end of December at prices ranging from 9tf to 9 9-16 d per ,10, f.0.b,, and two factories at least disposed of their season’s output at 9Jd. The market subsequently went against the buyers, and the sales effected at the prices mentioned turned out to be very much in favour of the sellers. A number of f.o.b. sales of butter were made during the year at satisfactory prices. A number of factories in the south had adopted the process of coating their cheese with paraffin wax. When proper methods were followed the quality of the cheese did not appear to be in any way impaired, and a considerable saving in shrinkage was certainly effected. On a consignment of 140 crates from a Southland factory a few months ago the loss through shrinkage amounted to. only 651 b on the factory weight of 20,4391 b, which worked out at under one-third per cent. There had been no difficulty experienced in disposing of waxed cheese on the London market at full market values, and there was no valid, reason why the system should not be acceptable to the trade provided the process was carried out efficiently. In December last a conference convened by the Federation of Taranaki Dairy Factories was held in Wellington to discuss the question of the increasingly high butter-fat content of milk used for cheese-making, in New Zealand. Following on the decisions arrived at regulations were gazetted almost immediately providing for the manufacture and export of cheese made from partly skimmed milk, to be known as “standardised milk cheese.” The cheese must not contain less than 50 per cent, of fat in the dry matter when' manufactured during the months of August to February following, and not less than 52 per cent, for the months of March to July/ inclusive. The executiye was not apprised of the regulations prior to their enactment, and as it considered the matter was of vital importance to the producers in the South Island, it passed a resolution in January last requesting the Minister of Agriculture to suspend the regulations until the whole industry had had an opportunity .of considering same. The Minister, following on representations made by deputations which waited upon him, agreed not to enforce the regulations so far as the South Island was concerned until after the annual conference of the association in Juno. The demand for the legal right to make “ standardised ” cheese emanated from certain* districts ‘in the North Island where high-testing breeds of cows predominate. Under the present method of paying for milk on a butter-fat basis, a system of standardisation would unquestionably be a considerable gain to the owners of high-testing herds, in that they would receive extra pecuniary profit from the sale of the cream extracted from the whole mirk. The association had, of course, not the slightest objection to that, as the dairy farmer was entitled to all the profit he can get out of his business, just as other people were. What it was concerned about was the effect which standardised cheese would have on the markets, and it very much feared that the result would be a prejudice against New Zealand cheese oh thq part of consumers, and a lowering in values not only for the standardised article, but for “ full cream ” cheese, also. It was hoped that these fears were groundless, but if they should prove to be justified the resultant loss to the industry, and indirectly to the country, would be incalculable, and the small monetary gain to the,section of producers, which had. been mentioned, would, be infinitesimal in comparison. The reputation which New Zealand cheese had attained had been built up on the full cream brand, and , the association was firmly of the opinion that any departure therefrom was a retrograde step. It would be infinitely better in its view, if. instead of permitting the skimming of milk for cheese making, strong efforts were made in the direction of devising a system of payment which would be equitable to all suppliers by paying them for their milk according to its veilding capacity and quality. An opportunity" would be afforded for a full discussion on the whole matter at the conference in June. . The recent enforcement of .the regulations with regard to check-testing and the testing of milk three times monthly, instead of twice as formerly, had occasioned some controversy and recommendations on these and other matters which' had been forwarded to the association by a* Southland Committee would be sub l mitted. for consideration at the conference.

Tho success of the experiment carried out in. Southland last year induced other districts to try out the same scheme for the disposal of surplus calves, and this year there were three separate “ pools ” Southland, South Otago, and South Canla Southland 22,233 calves were dealt with, in South Otago 1604, and in South Canterbury 3988. Satisfactory arrangements were made with the Southland Frozen Meat Company, the South Otago Freezing Company, and the New Zealand Refrigerating Company to handle the killing and freezing operations in the respective districts. The Southland Committee looked after the interests , of the South Otago pool, in addition to their own. and a local committee was appointed in South Canterbury to carry out the scheme in that district. The result of the year’s operations had been that the suppliers of calves to the Southland pool would receive 10s per head, those in the South Otago pool 9s 9d, and in South Canterbury 9s, subject in the two latter cases to certain deductions on account of the extra cost of transport of. calves from districts far removed from the freezing works; and which had to be conveyed by rail. Included in the South Canterbury pool were 97 calves from the West Coast, the suppliers of which had received 7s per head, and 1058 from tho Ashburton, Stavclqy, and Sheffield districts returning 8s 6d per head. In the South Otago pool there were 526 calves from the Tnieri districts on which 9s per head Would be paid out. Shortly after the commencement of the season, the Southland Committee decided. on account of the number of calves which were being rejected, to institute a tagging system, by moans of which the owners of calves rejected by tho veterinary officer could be identified, all such rejects to bo paid for at the rate of 6s per head and excluded from the pool. The system had been carried out successfully and was to be adopted in future in other districts throughout tho Dominion where similar schemes were in operation Tenders were called for the purchase of the hides, and were sold to the highest bidders at satisfactory prices. The veils were disposed of to the New Zealand Rennet Company; and tho veal and offal were forwarded on consignment to the New Zealand Produce Association, London. The Southland Committee decided to reserve 3d per head out of the proceeds of the Southland and South Otago pools to reimburse factory companies for tlu extra work done by the factory managers and secretaries in connection with’ the business. This would be paid out on an early date along with the bonus due to the suppliers. The following particulars showing the amount of cash disbursed locally in connection with the schemes would indicate the importance of the business to the dairy farmer and to the country generally:—Payment to suppliers, £14,021; transport of calves to 1

works, £1117; freezing works charges, £s793;—total. £20,931. In addition, there was the overseas freight on the veal, etc;, and the administration expenses which raised the total to over £24,000. Another aspect of the business which should not be overlooked wag that it had made available locally an ample supply of yells for the manufacture of the Dominion’s requirements in rennet, which previously had to be imported, and had enabled the New Zealand Rennet Company to reduce the cost of rennet to the cheese factories by 25 per cent. The winners of the association’s butter and cheese trophies this year were:— Butter maker: Mr Ward Bennitt, Arahura butter factory, Westland, with an average grade of 94.361. Cheese maker: Mr J. Begg, Milton cheese factory, Otago, with an average grade of 94.267. This being the third occasion on which Mr Begg had succeeded in winning the cheese trophy, the shield now became his own property, and it. would be presented to him at the annual conference on June 6, together with a gold medal. A gold medal would also be presented to Mr Bennitt, this being his first success. It was worthy of mention that the average grade secured by Mr Begg this year was tliq, highest since the competition was started. 10 years ago, and that the two next highest averages with which the trophy had been won were those which Mr Begg secured when he was successful in 1926 and 1927. The trophy presented by Mr T. M. Timpany. of Woodlands, had been awarded to Mr E. Harriott, of the Little Akaroa Cheese Factory, Akaroa, whoso average grade 194.229) was the second highest in the South Island, and was only a small fraction behind that of the winner of the association’s trophy.