SOUTH ISLAND DAIRY ASSOCIATION

Otago Daily Times, Issue 21649, 20 May 1932, Page 9

SOUTH ISLAND DAIRY ASSOCIATION

ANNUAL REPORT # The annual report of the South Island Dairy Association of New Zealand for the year ended April 30, to be presented at the annual meeting on June 2, states, inter alia:— Profit and Loss Account. —After making all reasonable provision for depreciation in the value of the association’s assets, this account shows a credit balance for the year of £53 Ss 6d, which we recommend should be transferred to the capital fund account, bringing the latter to £14,030 3s 6d. Membership.—The number of members now stands at 107, which is two fewer than for the previous year. The Staveley Company ceased operations at the end of last season, and the Terauka Company was merged in the Waimate Company. Trading.—We are pleased to state that the business done in supplying factories with their manufacturing materials, etc., was satisfactory. With one or two exceptions, factory companies obtained practically all their requirements through the association. 4 s usual, we had to meet strenuous competition from private trading firms, and it is very encouraging to us to know that, generally speaking, we have the whole-hearted support of the factories in our efforts to reduce their manufacturing costs. 'The work carried out during the year by the machinery department was much less than usual, due principally to the economic conditions influencing factory executives to postpone renewals and repairs to plants for as long ns possible. For portions of the year the staff could not be kept fully employed, and the work offering was rationed among them, this being, we considered, better than dispensing alogether with the services of any particular employee. Notwithstanding x what was done to meet the position, however,- the result of this year’s operations shows a loss, and this explains the small surplus on the profit and loss account This branch was started eight-years ago with the object of bringing about a saving in the cost of factory machinery and plant and their maintenance, and has, we believe, proved of considerable benefit to factories in that respect. ' PRODUCTION.

The following are particulars of the quantities of butter and cheese graded for export at all Dominiom ports for the year ended March 31, 1932,"he figures for 1931 being given in parentheses; — 8utter.—4,083,463 (3,839,283); increase, 244,180 boxes, 6.36 per cent. Cheese. —1,170,213 (1,279,110); decrease, 99,897 crates, 7.81 per cent. For the South Island ports the figures were:—

Bluff.—Butter: 23,245 (10,727); increase, 12,518 boxes. Cheese: 169,878, (165,987); increase, 3891 crates. Dunedin.—Butter, 36,122 (27,042); increase 9080 boxes. Cheese: 30,909 (33,814); decrease, 2905 crates. Timaru.—Butter : 10,693 (16,498); decrease, 5805 boxes. Cheese: 10,661 (13,326); decrease, 2665 crates. Lyttelton.—Butter: 96,954 (85,462); increase, 11,492 boxes. Cheese: 13,127 (15,607); decrease, 2480 crates. Totals for the South Island. —Butter, 167,014 (139,729); increase, 27,285 boxes, 19J per cent. Cheese: 224,575 (228,734); decrease, 4159 crates, 2 per cent. , The above position indicates that in terms of butter-fat there was an increase in the Dominion’s production for export of approximately 24 per cent, over the previous year. This may be considered highly satisfactory, having regard’ to the adverse weather conditions experienced over a lengthy period in some of the important dairying districts. It shows that the dairy farmers are facing their difficulties with courage, and are making a determined effort to cope with the situation in which they find themselves as the result of the serious decline in the value of their products. The South Island statistics show an increase in butter-fat of 11 per cent, over the .previous year. There was, however, a big drop in 1930-31 on account' of unfavourable climatic conditions, and, although the result for the past 12 months is pleasing, it indicates a drop of 3J per cent, compared with two years ago. Southland experienced an excellent season, as"'did also Otago, with the exception of the northern portion. In North Otago and Casterbury a protracted spell of dry weather which continued throughout tint summer pionths seriously affected the pastures, and this is reflected in the large decline in the quantities graded in Timaru. It is surprising under the circumstances that there should be such a substantial rise in the quantity of butter graded at Lyttelton, but an increased production in Westland (shipped through Lyttelton) partly explains this. There was also a larger export surplus available o n account of the falling off in local consumption, this applying not only to Canterbury but to the whole Dominion. QUALITY.

Tlie grading figures for 1931-32 show that there has beep very little variation in the quality of our butter compared with the previous year. An analysis of the Dominion totals gives the following result: — 1930- Finest, 78J per cent.; first, 204 per cent.; second, 1 per cent. 1931- Finest, 77J per cent.; , first, 214 per cent.; second, 1 per cent. Taking the South Island ports, the percentage results for the past year are: 823 finest, 142 first, and 2J second. We had a larger proportion of superfine quality than the North Island, but also a bigger percentage of what is termed second grade. We hope to find the latter position rectified when the time comes to compare the relative results for next season. Last year experiments were being carried out with a view to producing a culture which will impart a flavour to our butter when landed in Britain similar to that of the Danish article. ' We understand that the results are encouraging, and if, as we hope, a full measure of success is achieved without impairing the quality, it should help materially to reduce the disparity which exists between the prices of New Zealand and Danish butter on the Horae market. We regret being unable to record any great improvement in cheese quality during the year. The gradings show the following results: — Whole Dominion —Finest, 214 per cent.; first, 76J per cent.: second, 23 per cent. North Island—Finest, 12 per cent.; first. 854 per cent.: second, 21 per cent. South' Island.— Finest, 012 per- cefit.; first, 37J per cent.; second, 1 per cent. For the South Island grading ports the relative particular are: — Lyttelton.—Finest, 55 per cent.; first, 44 per cent.: second, 1 per cent. Timaru—Finest, 261 per cent.; first, 723 per cent.; second, 1 per cent. Dunedin—Finest, 662 per cent.; first, 331 per cent.; second, —. Bluff.—Finest, 641 per cent.; first, 35 per cent.; second, i 'per cent. We had hoped that with the abolition of “ standardised ” cheese the North Island product would show an appreciable rise in quality, but we find that the percentage of finest grade has gone up only 34 points—from 8J to 12. The South Island percentage of finest has risen from 59 to 612, which, in view of the_ high standard already attained, is distinctly creditable.

A regulation was gazetted in March establishing milk grading. In the case of cheese factories “ first grade ” milk shall be milk which, in the opinion of the grader, will make cheese of not lower than •“ first grade ” quality, and “ second grade ” all milk which fails (o reach that standard. In our opinion there should be three grades—“ finest,” “ first,”, and “ second ” —as with cheese, and we hope this will come later. ,We understand it is the intention of the department, pro* vided the industry signifies approval a,t the forthcoming conferences in June, to make differential payments compulsory as from the commencement of next season. At the last conference a resolution was adopted unanimously recommending the adaption of a national scheme of premium payments for quality cheese, and a request was made to the Dairy Division and the Dairy Produce Board to take the necessary steps to put the scheme into effect. The board expressed itself in favour of the proposal, and asked the department to give consideration to the question.. The department suggested the establishment of a pool in the North Island, and, if desired, a separate pool in the South Island, althoujfb the latter was not recommended.. The board subse-. quently decided that milk grading should be adopted by the industry before giving further consideration to any scheme of quality premiums. . We are greatly disappointed at the result of our representations, because we feel that some strong incentive to lift the quality is urgently necessary. Milk grading, with differential payments, will undoubtedly quickly bring about an improvement in the quality of the milk, but more than that is required. The' practice followed by many factories of paying more attention to yield than to quality, and the rushed methods adopted during the process of manufacture to get the job comflleted at the earliest moment, are, to a. large degree, responsible for so much of our cheese not grading higher. The adoption of a’ system of premium payments would discourage such practices, but to get the best results the scheme would have to embrace the whole Dominion. If it was confined to. the North Island alone tbe incentive to concentrate on quality would be much less, because of the lower, point required to be reached to secure a refund of the levy imposed to meet-Jhe premiums, and consequently in many cases the practice 9! going for yield would be more attractive. If the quality of New Zealand cheese was raised to a higher average level the demand on the Home market would increase, and a correspondingly better return to the producer would follow. The market value of South Island cheese is depreciated because of the much lower standard of the Dominion output, and it cannot be wondered at that we feel we are being unjustly penalised because of the methods adopted by other sections of the industry.' If the position is not rectified soon we demand the right to send our cheese to 'the market under another brand. In -1926-27, when a premium was paid on ‘ finest ” cheese under the Produce Board’s scheme, the percentage of “ finest ” grade for the Dominion was 55.6. It now stands at 21.5, although the South Island can show 61.75. These facts surely are sufficient to warrant the reintroduction of quality premiums. Besides the abolition of “ standardised cheese and the introduction of milk grading, a number of other regulations bearing on quality were brought in during the year. The one which requires that all cans used for tbe conveyance of milk and cream shall .be properly washed and scalded with boiling water is particularly important. Regulations, however, are not of much good unless they are rigidly enforced, and we , are afraid the officers of the division are inclined to adopt a lenient attitude with the persons concerned in many instances when breaches of the regulations are detected. ... j , - MARKET PRICES, -i '

Butter. —There is no indication of any permanent improvement in the butter market. The position to-day is worse than 12 months ago. On May 15 last,, year New Zealand butter on the London market was 108 s per cwt; it is now down to 955. As usual, the price fluctuated.a good deal during the year. . At June 1 it was 113 s to 116 s; September 1. 109 s to 112 s; October 1. 119 s to 1235; December 1,107 s to 110 s; February 1,99 sto 102 s; and, at March 1,108 sto 110 s. On the latter date the British Imports .Duties Bill came into force under which a 10 per cent, duty was imposed on goods entering Britain, including dairy produce. Empire produce was exempted from the fluty, and. we expected that this would have the effect of immediately raising, the value of our butter on the London market. This, however, we are sorry to say, has not eventuated, but on the contrary the price has declined bv about 13s per cwt. The imposition of the tariff apparently caused other countries exporting to Britain to try other outlets with their butter, and the result is that practically every conn-' try in Europe has placed added restrictions on imports from other countries. Consequently foreign butter is being unloaded on the British market in greater volume than ever, and instead of the duty proving of benefit to Dominion producers it has had the opposite effect. The usual method adopted by the countries, mentioned is to restrict importations by the imposition of quotas, and it would .seem that Britain would have tp do likewise if the dominions are to derive anygood from her Protection policy. ’ Cheese. —The position of the cheese market is a little better than a year ago. Today’s price shows an advance of. 7s per cwt on that ruling at the same date last year —57,s as against 50s. The market reached 72s at the beginning of October, but since then the trend has been mostly downward. , As Canada is our only serious competitor on the cheese market the; British tariff has had little effect on values. During most of the year the market has been more favourable for cheese than for butter, and cheese factory suppliers should show a better return than the suppliers to butter factories. Both their positions are unenviable, however, as will be realised by a glance at. the. figures below giving the market prices m 1914 and those ruling to-day:— May, 1914.—Butter, 107 s; cheese, G3s Gd

May' 1932 Butter. 955: cheese. 575. Taken in conjunction with the tremendmis vise 'in production and other costa since 1914, it will be seen that the fall in the value of their products has brought the dairy farmers face to face with a most serious economic problem. There seems little ground for hoping that values will rise to any great extent above their present levels, and the only solution appears to be a reduction of costs'to a point which will leave the farmer with a sufficient margin on which to live. The recent legislation reducing interest and rents will help in that direction, but far more than that is required before daylight can be seen. The welfare of this Dominion is almost wholly dependent on the success of its primary industries, and the fact must be recognised that unless farm production is brought back _ to a profitable basis the whole economic structure of the country will inevitably collapse. EMPIRE PREFERENCE.

Notwithstanding the embarrassing result to butter producers the action of the British Government in exempting Empire produce from the imports tariff was a most generous one, having regard to the unsatisfactory position in Britain’s own agricultural industries. The conference to be held shortly at Ottawa is of vital importance to every unit of the British Empire, and it is earnestly to be hoped that a remedy will be found for the economic ills from which we are at present suffer-

ing. Now that Britain has adopted a protection policy an opportunity is afforded for a reciprocal tariff agreement between all the countries comprising the Empire, and if, as we trust, the at the conference are conducted" in a spirit of co-operation and goodwill the obstacles to its achievement should not prove insurmountable. So far as New Zealand is concerned, we cannot expert to continue to receive preferential treatment from the Mother Country unless we, an turn, are ready and willing to reciprocate. It may be necessary to extend the; preferences, now given to British goods entering our market, but though some of our sdfcondary industries might suffer thereby, the question must be dealt with from a national viewpoint, and it is to our export markets we must look for salvation if this country' is to return to prosperity. Britain’s present export trade with the dominions is negligible compared with her foreign trade, and she' cannot . to sacrifice the latter unless she is assured of being adequately recompensed from within the Empire. The New Zealand delegation to Ottawa will have grave responsibilities, and it is fervently to be hoped that our representatives will display the quality,- of statesmanship which the • occasion demands. There has never been a time in the history of the Dominion when it was more needed. EXCHANGE. The question of exchange has been prominently before the public since December last, when the Government, by Order-in-Council, commandeered all export, exchange from New Zealand. ,The Order took away from the export industries the benefit of a free exchange market, and, in effect, denied the farmers the right to dispose of their goods to the best advantage. New Zealand at that; time was unable to borrow on the London market, and that, with other circumstances, would undoubtedly have brought about a substantial rise in the exchange, premium if a free market'continued to operate. We Consider the action of the Government, besides doing a grave injustice to the primary producers, was at 1 the same time very much opposed to the national interests, and we forwarded a strong, protest to'the Prime Minister. The Meat Board, Dairy Board, Fruit Board, Farmers’ Union, Sheep Owners’ Federation, and other bodies throughout the Dominion, including the Associated Chambers of Commerce, made similar representations. An Economists Committee, subsequently appointed by the Government, also reported in favour, of a free exchange market, but in spite of all that "lax ass of opiniomthe restrictions still continue. The position is intolerable;- and we must keep on repeating our demand for'a free exchange until it is acceded to. SHIPPING. , The facilities provided by the shipping companies for the conveyance of our produce to the overseas markets were satisfactory during the year. The'decline in imports and the increased volume of exports made it necessary to send out a consider able number of vessels from •Britain in ballast to meet the situation. The Produce Board., continues its policy of regulating shipments so as to provide a regular supply of produce to the Britsh market the whole year' round. Though this, no doubt, is of benefit to the industry, it has caused congestion at the Bluff cool stores, and, on three occasions during the season, the factories had to be asked not to send any more cheese .forward until relief was obtained by getting a shipment away. The Cool Stores Company, we understand, ; has arrangements in hand for the provision of additional 'storage,- and' this- should overcome the .difficulty for, a tirfie •' iat least. •"It was thought when tlie company took over the stores from the Bluff Harbour Board nine years ago that the storage then'available was more than sufficient to meet al| requirements for many years to come, but' since then the quantity of cheese passing through the stores in a year has grown by no fewer than 32,000 crates/The period the cheese has to be held in store is also much, longer, and at this date produce which was graded more than two months ago is still awaiting shipment. \. ■ EXPORT OF CALVES. ~ The co-operative scheme fop the disposal of surplus calves which was started f in Southland four years ago >was. continued last season, and although the monetary return 'to the. producers is less-than formerly on account of the slump in\ the values of the various products the result must be considered satisfactory in the circumstanc.es. . The number of calves dealt with in Southland was ,25,080, and in South Canterbury 2550, a total of 27,630,/which exceeds the previous year’s figures by exactly 10(30. , Arrangements could , not be made with. the South Otago Freezing Company, and consequently no operations word carried out last season in that district. In view of this, and also of the fact that a proprietary firm, for the first time, entered the business in Southland, and made a thorough canvass of the district, the number of calves put through the “pool” proves conclusively that the value of this effort in co-operative marketing is appreciated, arid that suppliers are satisfied with past results. Of the total of 27,630 the number of calves rejected by the veterinary officers as unsuitable wap 435. . This is a big improvement on the. previous year, when 860 were rejected ffom a total of 26,630, Thu whole output of veal was sold through the Dominion Federation,, and the hides were disposed of through the same channel, the prices being satisfactory in both cases. The tongues, livers, kidneys, hearts and*. sweetbreads were shipped to London on consignment as usual, and tjiey also show a profitable return. The ' New Zealand Co-operative Rennet Company took the whole of tne veils as in former years. GRADING COMPETITIONS.

The winners of the association’s trophies for the highest average grades for export bntter and cheese respectively for the period from October 1, 1931, to April (30, 1932, are as follow’. — Butter: Mr J. A. M'Callum, Kokatahi Butter Factory, Westland. Average 94,728. ' Cheese: Mr G. Dickson, Edendale Cheese Factory, Southland. Average, 93.699. It is worthy of mention that the average grade secured by Mr M'Calhim this year is the highest for butter since the competition was started 13 years ago, and also that Mr M'Callum was the winner last year. His repeat performance is distinctly creditable. The results in the cheese competition were exceptionally close. They are as follow:—Edendale, 93,699; Barry’s Bay, 93,088; Milton, 93.589; Cam, 93.542; Seaward Downs, 93.524; Mabel, 93,500. Although he has had many distinguished successes with show exhibits, including the championship at the Empire Dairy Show in London on two occasions, this is Mr Dickson’s initial success in this'competition. • Considering the diversified quality of the milk which he must have to deal with in a factory of Edendale’s size, his performance is most praiseworthy. The result shown by Mr Walker, of the Barry’s Bay Factory, is also very creditablq,