SOUTH ISLAND DAIRY ASSOCIATION

Otago Daily Times, Issue 23203, 29 May 1937, Page 3

SOUTH ISLAND DAIRY ASSOCIATION

REVIEW OF YEAR'S WORK STRONG FINANCIAL POSITION The annual report of the South Island Dairy Association for the year 1936-37 states, inter alia:— PROFIT AND LOSS ACCOUNT After making all reasonable provision for depreciation in the value of goods in stock and other assets, this account shows a credit balance for the year of £628 3s 6d. It is recommended that this surplus be transferred to the capital fund, which will then amount to £15,125 14s 7d. The capital fund now exceeds £15,000. It is considered an achievement of some note to have accumulated such a substantial sum in a comparatively short period without the aid of any subscribed capital, and in that respect the association occupies a rather unique and enviable position. A great deal of the success which has attended the association's activities and placed it in its present satisfactory financial position is undoubtedly due to the loyal manner in which the members generally have supported it and appreciation is accordingly expressed. There are 102 factory companies on the register, being two fewer than the previous year. Two small butter companies in Canterbury, the Mount Hutt Company, at Methven, and the Akaroa Company, on the Banks Peninsula, were absorbed by the Ashburton and Tai Tapu Companies -respectively. TRADING The business transacted in the supply of factory requisites and other goods was considerably larger than the previous year, and the turnover exceeded that for a number of vears. The result is reflected in the profit and loss account, the surplus from which is greater than for any year since 1930. There has been the usual keen competition to secure the business. Though the result of the year's operations may appear, satisfactory, • nevertheless it could have shown a better result still were it not, for circumstances outside our control. The majority of the factory companies obtain all their requirements from the association, but there are a number who make it a practice of giving us only a share of their business and dividing the remainder between private traders in opposition to us. INVERCARGILL PROPERTY

We have just completed the purchase of a two-storey brick building in Don street, Invercargill. It is our intention to carry out alterations to the property to meet the requirements of the association's expanding business in Southland and to install modern offices for letting purposes in the portion of the building surplus to our own needs. The premises in Invercargill which we now occupy on lease are too small for our present requirements, and we were fortunate in securing, on most favourable terms, a property which will prove to be a most valuable asset to the association. CREAM COLLECTION The Executive Commission of Agriculture has accomplished some good work in connection with the problem arising from the overlapping of cream collection by butter factories. With the assistance of the commission, the factories in a number of districts have succeeded in solving their difficulties, and this will be all to the good of the industry. The pernicious system (which was largely brought into being as the result of the tremendous improvement in methods of transport in recent years) of butter factories competing against each other for cream supplies regardless of the cost of collection, has cost the industry millions of pounds, and that, too, in an industry which was founded and built up on co-operative principles. In Canterbury, a number of small factories that have become redundant are being closed down; zoning of the Southland territory has been carried out; and negotiations are taking place with the view of effecting the amalgamation, of certain companies in the Otago district. In the North Island, where the position has been more acute, considerable progress has been made towards adjustment. INDUSTRIAL LEGISLATION

As a result of the Government legislation passed last year, there has been a considerable increase in the cost of labour in the dairy factories, and also on the farms. So far as labour in the factories is concerned, the cheese factories have been affected to a much greater extent than the butter fac,no:„es - The Factories Amendment Act, 1936, provides that no worker shall be employed in a dairy factory on more than six days of the week. (Factories in which not more than two workers are employed are exempted from this provision.) Cheese factories must of necessity carry on their operations on all seven days of the week, and consequently provision has to be made for additional labour to allow the workers to have a day off. Butter factories are in a position which enables them to close on Sunday The Act provides that for work done on holidays and on Sundays doubletime rates of wages shall be paid, but this was later modified to time and one-half for the dairy and certain other industries.

Application was made to the Arbitration Court for an extension of the 40-hour week, for which provision was also made in the Act, and your Awards Committee arranged for the preparation and submission of evidence to the court in support of the application. The court subsequently fixed the weekly hours in cheese factories at 52, and in butter factories at 48, for the greater portion of the year, reductions being made for certain periods when the supply is short. The judgment issued by the court stated that the hours fixed may be worked over any six days of the week. In view of this, factory executives formed the opinion that, provided the weekly hours were not exceeded, the workers were not required to receive payment at the rate of time and one-half for Saturday afternoon (a statutory halfholiday under the Act). The Labour Department did not agree with that view, and to test the position it was arranged that the department would take action against a particular Southland company. The view is also held by factory executives that, as the workers are now receiving a weekly holiday and have also been granted eight statutory holidays during the year, they are not entitled to the annual holiday allowance provided for in the 1935 award. (This provision was undoubtedly embodied in past awards to compensate the workers for the long hours they were employed.) It was accordingly arranged with the Labour Department to test this position also.

The two cases were dealt with by the magistrate in Invercargill recently, and ia both instances his decisions were in favour of the department. We understand that an appeal is being lodged against the decision concerning the holiday allowance. (In a similar case dealt with in Taranaki the magistrate decided in favour of the employers.) The finance Act provided that all wages were to be restored as from July 1 last to the rates ruling prior to May, 1931, and this, of course/ has meant a further substantial increase in production costs. We have information that some cheese factories, through a misunderstanding of the position, have been paying their employees higher wages than they are legally entitled to. Although the Finance Act restored the rates of wages to those payable in 1931, we understand the conditions other than wages and weekly hours, as set out in the 1935 award, are still applicable.

BOBBY CALVES The Co-operative Pool in Southland handled last season a total of 36,575 calves. The committee made contracts with carriers for collecting the calves at the farms and delivering them to the Mataura and Makarewa freezing works. It was arranged with the Southland Frozen Meat Company that the company would attend to the marketing of the skins, veal, and other products, as was done the previous year, the whole of the proceeds to be handed over to the committee for distribution to the suppliers of the calves. An advance payment of 8s 6d per calf was made to suppliers, and the committee has decided to make a bonus payment of Is per calf, making the return to the farmers 9s 6d, which we consider is very satisfactory. Last year the suppliers received 6s lOd per calf. The increase in the value is due to the greater demand for the skins. The collection and killing of these surplus calves for export was commenced in Southland 11 years ago. The scheme has proved of great benefit to dairy farmers. The cash returns from the calves has been very materially increased compared with what the farmers received previously when the calves were slaughtered by the farmers themselves and only a small sum was obtained from the sale of the skins. The farmers are also saved the time and labour required to slaughter the animals., remove the skins and bury the carcasses, which in itself is a decided boon to' them. The business provides also a supply of veils for the manufacture of rennet in the Dominion, and this has enabled the New Zealand Co-operative Rennet Company to supply the cheese industry with rennet of the highest quality at a much lower cost than obtained previously. This also is a direct benefit to dairy farmers. The following are particulars of the cash disbursements made in connection with last season's operations in Southland:—

Payments to suppliers .. .. £17,108 Collecting and delivering calves to works 1.436

Killing, freezing, and other works charges, and overseas freight and insurance.. 7,819 Administration and other charges 922

£27,285 In South Canterbury a local committee attended to the operations in that district. A total of 3936 calves were collected and disposed of to the New Zealand Refrigerating Company at their Smithfield works. Satisfactory prices were secured by the committee, and the average return to the suppliers was about 9s lid per calf. BUTTER BOX SUPPLIES In the North Island difficulty was experienced at the beginning of the present season in obtaining an adequate supply of butter boxes to meet the requirements of the industry. As a consequence the Government took the matter in hand, and what is called an equalisation pool was brought into operation through the agency of the Dairy Board. It is proposed to continue with this pooling scheme, and last month regulations were gazetted by Order-in-Council regularising the scheme. The regulations provide that the owners of butter factories brought under the scheme are forbidden to purchase export boxes except through the board as their agent. The price to be paid to the box-maker or sawmiller will be fixed by the Minister of Agriculture and the Dairy Board shall, in consultation with the Director of Forestry, fix the price to be paid by the factories. The box-makers or sawmillers must be licensed by the board. The board is given discretion to permit the owners of butter factories to obtain boxes outside the pool if, in the opinion of the board, the owners of butter factories in any portion of New Zealand to be defined by the board should be exempted from the operation of the regulations. We have been advised by the Dairy Board that it is not intended to apply the scheme to the South Island, and we are pleased to have that assurance. The factories in this territory have had no trouble in regard to supplies, and are quite satisfied with the present arrangements. DIRECTORATE The two retiring directors this year are Mr A. R. Guild (Milford, Canterbury) and Mr H. H. Meredith (Waimate, Canterbury), both of whom are eligible for re-election. Another Canterbury seat has become vacant through the resignation of Mr William Stalker (Rangiora), and there is also a vacancy in Otago caused by the death of Mr H. C. Anderson (Stirling). For the three vacancies in Canterbury, nominations have been received in favour of the two retiring directors (Messrs Guild and Meredith) and Mr F. G. Harris (O'Kains Bay). There are three candidates for the Otago seat: Mr A. P. Fleming (Otokia), Mr A. A. Jensen (Stirling), and Mr W. Lee (Goodwood). Mr James W. Smeaton again' offers his services as auditor Mr W. Stalker has been compelled, for health reasons, to resign his seat on the directorate. Mr Stalker has been a director of the association for 13 years, having been elected in 1924. He has rendered excellent service as a member of the executive, and his presence at the board table will be greatly missed. We sincerely trust that his health will soon be restored

OBITUARY The death of Mr H. J. Middleton. which occurred some months ago at his home in Invercargill, removed one of the most outstanding men who have been associated with the dairying industry in New Zealand. He was a member of this executive for 19 years, and occupied the position of chairman for 16 years until his retirement in 1934. His high sense of duty, wide general knowledge, and conspicuous ability, together with the deep regard he had for the welfare of the association and the industry generally, made his services invaluable. His work will be long remembered. Mr H. C. Anderson, whose home was at Stirling, died in August last after a short illness. He was elected a director of the association in June, 1935. He took a keen interest in the association's affairs and matters pertaining to the industry generally.