SOUTH ISLAND DAIRY ASSOCIATION

Otago Daily Times, Issue 23830, 9 June 1939, Page 6

SOUTH ISLAND DAIRY ASSOCIATION

ANNUAL CONFERENCE OPENED

MINISTER OF AGRICULTURE PRESENT

INCREASED GUARANTEED PRICE SOUGHT

The annua! conference of the South Island Dairy Association was opened yesterday b]/ the Minister of Agriculture (Mr W. Lee Martin), who discussed marketing, prices and costs, and told the conference that he was unable yet to give any information concerning the guaranteed price for the coming season. ' ■< T - During the day addresses were delivered by Mr W. E. Hale (chairman of the Dairy Produce Board), Mr W. M. Singleton (Director of the Dairy Division of the Department of Agriculture), Professor W. Ridclett, of Massey College, and Mr A. Morton (chairman of the National Dairy Association). The conference will be continued to-day, when a variety of remits dealing.with the problems of the industry will be discussed by the attendance of more than 100 delegates.

FINANCIAL POSITION EXTREMELY SATISFACTORY OBJECT OF SERVICE TO MEMBERS The financial position of the association was the subject of brief comment by the chairman (Mr H. H. Meredith) when he moved the adoption of the annual report and balance sheet.. The surplus for the year of £l3O 9s might appear a small result for the largo amount ol trading done, he said, but the object of the association was not to make profits, but to supply members’ requirements at the lowest possible cost, and generally to give them service. Expenses had gone up by about £6OO compared with the previous year, Mr Meredith said. The association had to remain in occupation of its old premises in Invercargill until the alterations to the new property were completed, and this entailed additional costs, which would not be recurring. A sum of over £2OO had been written off for depreciation on the Invercargill property, and the Dunedin building had been renovated at a cost of £l6O, these being two new items appearing on the debit side of the profit and loss account. In keeping with the times, the salaries of the staff had also moved upward. The accumulated reserve or capital fund had now reached £15,477, and when it was considered that this was actually a surplus in excess of the: total liabilities:, he was sure it would, be agreed that the financial -position of the association was exceedingly, satisfactory. In a financial sense the well-being of the association depended almost wholly on the result of its trading, he added. In this connection, he was pleased to say that the measure of support from members continued to grow. There were still a few companies, however, who did not co-operate with the association, to the extent that it was considered' they should, and to those he appealed for more loyal consideration. Given the whole-hearted cooperation of all the members, the association could be of much greatervalue to them than is possible without ft. . The motion was seconded by Mr F. G. Farris (Pigeon Bay). The report and balance sheet were adopted without discussion. * Directorate The retiring members of the directorate were Mr W. Hamilton (Western District. Southland). Mr R. Pryde Eastern District. Southland), and Mr A. R. Guild (Temuka). Mr Hamilton and Mr Pryde were eligible for reelection and were re-elected, but Mr Guild was not available again. Mr A. Johnson (Temuka) and Mr S. P. Taylor (Ashburton) were nominated for the vacancy, and Mr Johnson was elected. ■ Mr J. W. Smeaton was re-elected auditor. SOUTHLAND CALVES COMMITTEE Mr G. A. Herron moved the adoption of the report of the Southland Calves Committee for 1938-39 as follows: — “ Some 34,431 calves were handled, which shows a reduction of 3871 on the previous season. Fewer cows were milked and also farmers kept back more heifer calves than formerly. The advance per calf paid to suppliers was Bs, and your committee anticipates a bonus of Is being available for distribution very shortly. We consider the final result for the season under review to be quite satisfactory considering the substantial drop in the value of skins which took place The total amount paid to suppliers of calves (including bonus) will amount to £15.318 16s, as against £ 18,982 10s the previous season. Transport of calves to the works at Makarewa and Mat aura cost your pool £l7lß 12s, or an average of nearly Is per head, an increase of approximately 2d on last year. The usual allowance was paid to the South Island Dairy Association for administering the pool, and I would like to pay a tribute to the capable manner in which their duties were carried out. The work of paying out and remitting advances is indeed a large one when it is, considered that some 1300 cheques and 4000 postal notes were posted. Besides this hundreds of payments were made in cash from the Invercargill office. One suggestion that your committee will consider before next season is that all oayments be made from the S.I.D.A, office in Invercargill, which, besides saving time, will mean that the cost of remitting will be greatly reduced The scheme would have further advantages but it is not necessary to mention them at this stage. “ It will be interesting no doubt for delegates to learn that since the inauguration of the co-operative calf pool in Southland commencing with the 1926-27 season suppliers have received the large amount of £118,497 16s Id for 3281553 calves handled, or an average of 7s 3d per head. We estimate that producers have, received at least £50,000 more than they would have had the pool not been in existence, “ Touching on the percentage of rejects we find that the: quantity ■ rejected as being not fit for export varies for some reason from year to year. For example in-the 1935-36 season 2.45 per cent, were rejected by the works, in 1936-37. 3.32 per cent, 193738, 1.99 per cent, and the current sea son 2.32 per cent. We would again stress the fact that suppliers have the remedy in their own hands and we hope that next season the percentage of rejects will be greatly reduced. “In conclusion, I would like to express the committee’s gratitude for the continued support received from suppliers; to thank the carters who have done excellent work, and the S.I.D.A. for the capable manner in which the year’s operations were carried out. " The report would not be complete without reference having been made to the very able and efficient manner the Southland Frozen Meat Company has handled the business of the Pool since its inception. Without their whole-hearted support I feel sure we could have not made the wonderful progress that we have had.’" Mr John Fisher seconded the motion and congratulated the committee on the year’s work. The organisation

was capable of expansion and might well be extended to embrace pigs. He was convinced that u pig poo] would mean money in the pockets of the farmers. Mr John Dunlop (Southland) moved a vote of thanks to the committee for Its .services during the year, and appreciation was expressed at the low ratio of costs to pay-outs. The motion was carried. GUARANTEED PRICE UNACCEPTABLE The executive submitted the following resolution:— This conference protests against the action of the Minister of Marketing in not accepting the conclusions arrived at unanimously by the 1938 Guaranteed Price Advisory Committee. and in reducing the prices which the committee recommended should be paid to the industry for butter and cheese for the present season. The conference cannot accept the Minister’s suggestion that the prices .fixed by the Government for the 'current season should be continued for the 1939-40 season. It considers that to give effect to the provisions of the Primary Products Marketing Act, and do justice to the producer, the prices to be paid for the 1939-40 season should be the prices recommended by the 1938 Advisory Committee, with the addition of all ascertainable increases in costs since the .committee’s report was presented It is prepared, however, in order to assist the Minister in his efforts to . stabilise costs, to forego the increases in costs and to accept for the 1939-40 season the prices recommended by the Advisory Committee for the 1938-39 season. The chairman, moving the remit, said it needed no explanation. It had been brought forward as a result of the Minister of Marketing’s refusal to approve the recommendations of the Advisory Committee. The Minister of Agriculture had' asked them that morning to believe that costs were not as high as they.were said to be. They, as farmers, however, all knew that costs had risen since the price of dairy produce was fixed 12 months ago. and no one knew what the position would be in the next 12 months. As a conference they must put forward their best efforts to show the Minister that they did not accept his offer. Other people could strike if their demands were not met. but such a course was impossible for dairy farmers. It had been suggested as a way out, but they all knew it was impracticable. and that all that was left to them was to keep on working for a higher price. The motion was seconded by Mr w. Hamilton (Awarua). who said that the Advisory Committee's recommendations should be adhered to. The committee had gone into all the relevant facts and considerations and had reached a well-informed decision.. The remit was carried * CHEESE PRICES Mr W. Bryant (Henley) moved the following remit on behalf of the executive:— This conference considers it cs sential in the interests of the industry that suppliers of milk to cheese factories should receive at least 2d per lb butter-fat more than suppliers of cream to butter factories and requests the Minister of Marketing to fix the guaranteed prices for butter and cheese respectively at such amounts as will enable the average cheese factory to pay its suppliers 2d per lb more than the average butter factory. The mover said that the Minister or Marketing had promised a differential price of 2d for cheese, but unfortunately for cheese suppliers that promise had been broken. In the season 193738 the difference was 1.58 d, .42d below the promised amount, which represented £148.000, which should have gone to cheese suppliers but which had gone to the butter people instead. This year the position was much the same and a similar result could be expected. The only way out for the cheese suppliers was to get the 2d and he hoped the conferencf would adopt the remit. They believed that cheese production should be encouraged, but high costs and recent legislation were having exactly the opposite effect. The decline in cheese production in Britain as a result of a greater milk consumption Vepresented an opportunity for the New Zealand cheese factories, but quite apart from that the price of cheese on a butter-fat basis in England for the past three years had been 3d a pound higher than that for butter That alone would allow of a differentia] of 2id. and it could be regarded as a strong argument for the 2d they were now asking for. He hoped the butter people would support the remit as it was in their interests as well as in the interests of cheese suppliers. . _ . Mr J. McKenzie (Seawood Downs) seconded the motion. Mr Rutledge said it ill-behoved a butter man to oppose the remit, but he had no objection to the cheese factories getting an extra twopence, if only it did not come out of the income butter provided. Butter was not getting very much out of that income as it was. Mr John Fisher (Otautau) suggested that after passing the first remit they were on 'dangerous ground discussing the second/ IF the first place, they the' Advisory Committee's, recommendation upheld, and then within a few minutes they were to be found asking that the committee’s decision in one respect be set aside. The Advisory Committee recommended a difference' of T.sßd after' a careful, study of the whole matter. Were they on safe ground disagreeing with the committee after so urgently quoting it. He was sorry the executive had brought the remit forward at all, and he would prefer it to be withdrawn rather than that it should go to a division, since with so strong a cheese representation it was sure to be carried. Mr W. Lee (Goodwood) said the whole difficulty was that cheese costs had been under-estimated, while butter costs had been decreased as a result of amalgamation and zoning Mr J. Horrell (Tuatapere) said they were only asking the Minister to keep his promise. Assuming that the Government was going to lose about £1,250,000 on the guaranteed price this yegtr, producers were not getting that

money, it was all going in increased costs. He thought the public should know that. The remit was adopted. SECRETARIAL COSTS The Mohotua Dairy Company moved: That steps be taken to have ail secretarial work in connection with the Southland dairy factories operative on co-operative lines. Mr J. W. Kerr, moving the remit, said that the secretarial work of many factories in Southland was costing twice as much as it would under a cooperative system. He thought £3OOO a year could be saved. Mr D. Smellie (Ryal Bush) seconded th© motion.' Mr A. E. Millard (George Road) said that at a recent meeting in Southland it had been agreed that many secretaries were very much underpaid. If that were admitted how could they expect to cut the cost bv half and savt* £3000? Mr T. F. Paul (Mabel. Southland) said the idea had much to commend it. but there were many difficulties > n connection with it. He thought a solution of the difficulty was for factories to concentrate on secretaries who specialised in dairy factory work. Several speakers opposed the remit which was overwhelmingly defeated HERD IMPROVEMENT The conference adopted unanimously a recommendation from the executive that:— This conference approves of the Dairy Board’s Herd Improvement Plan as adopted at the board’s Do minion Conference held last April Mr R. Pryde (Mataura) was in charge of the remit, and he summarised the history of the plan. The Dominion Conference of the Dairy Board last. April authorised the board to proceed with it. provided the Government was prepared to meet its share of the cost The Minister of Agriculture had now notified the board of Cabinet’s approval and acceptance of the plan and it was to be inaugurated from the 1939■4O season The cost was estimated at 9s a cow to be divided equally between the Government and the industry and the industry’s share was to be found by an increase in the Dairv Board’s levy of 1/IOOd per pound on butter and l/200d per pound on cheese, which was expected to return approximately £IB.OOO Once the plan were in operation, it would be safe to assume that the pro : duction of each cow would be raised easily by 101 b. which at present values would represent £1.000.000 According to figures taken by Mr A H Cockayne. Assistant Director-general of Agriculture in October, 1933. over a period of four years, tested cow? produced 301 b of butter-fat more than untested cows. There was no doubt of the soundness of the policy of testing. The seconder was Mr W. Young, of Drummond, who said that if the subsidy had not been made available, the herd-testing associations were in danger of going, out of existence. The remit’was carried without further discussion GRADING OF CHEESE The Edendaie Dairy Company, Ltd., was responsible for a remit reading:— That this conference is of the opinion that the grading of cheese into three separate grades is not in the interests of the industry, and recommends the discontinuance of the finest grade. The remit was moved bv Mr D. Tither (Edendaie), who admitted first that there were grounds for opposition to it. No doubt- finest grade cheese brought something extra, but the fixation of two grades, would bring a truer value. There was no seconder for the remit, and it lapsed. Payment for Produce After some discussion and an explanation of the reason for the present system of payment by the department for dairy produce the following remit from the Clandeboye Dairy Company. Ltd., was withdrawn:— That the, Primary Products Marketing Department be asked to pay for all dairy produce within 30 days after delivery to cool store. It was thought that the effect of this remit would be of assistance to the smaller cheese companies, said Mr J. Donehue, who moved it. It was a hardship lo them now that they had often to wait so long for payment. It was seconded b;, Mr A. Johnson (Temuka), who said it was hardly fair that companies should have to pay long storage dues. The department’s reason for paying against a bill of lading was discussed by Mr G, Pottinger, acting director of the Primary Products Marketing Board. Allowance had been made in the guaranteed price for storage and interest charges up to f.o.b. payment. That system was the most satisfactory for the factories, and the simplest for the department. Mr Pottinger was supported by Mr W. E. Hale, chairman of the Dairy Board. He thought the conference would be well advised to hold the remit over in the meantime. If the remit were adopted by the department, the chairman said, it would simply mean the introduction of a new formula and a lower price. The remit was withdrawn, although Mr Johnson said that there should be some definite limit. The present system was one of those quite right in theory but not satisfactory in practice. Butter and cheese were treated on exactly the same basis, Mr Pottinger said. There had been complaints of a similar nature to this from the North Auckland butter factories. NO INCENTIVE DAIRY PRODUCTION A SERIOUS DECREASE CRITICISM OF GOVERNMENT Comment on the lack of incentive to increase dairy production was made by the chairman of directors of the South Island Dairy Federation (Mild. H. Meredith) when speaking at the annual conference of the association yesterday to the adoption of the annual report. Unless there were a great improvement in conditions, he said, the industry would continue to decline. Speaking of the attitude of the Minister of Marketing toward the findings of the Advisory Committee and his reduction of the prices recommended by the committee, he stated this was proof beyond doubt that the Government was not giving effect to the policy defined by the Act under which the guaranteed price plan was put into operation. “ It is quite evident now," he said, “that the price which the Government is prepared to pay to the industry is governed largely by the estimated market realisations for the produce and not. in accordance with the terms of the Act. ‘ by the standard of living of other sections of the community rendering equal service.!” • Factors in Decrease The drop in production which had occurred In the last two years was a serious matter, not only to the try. but to the whole. Dominion. Mr Meredith said. The quantities graded indicated that the production of butterfat in the South Island had declined in that short period by about 25 per cent. For the whole Dominion the decrease had been about 18 per cent. The unfavourable climatic conditions experienced had been an influencing factor but there were other factors also which had had a considerable bearing on the position, the most important of which in his opinion was the poor reward offered to the dairy farmer for his labour in comparison with the wages and conditions offering in other occupations The incentive to increase production was lacking and unless the present conditions were greatly improved for the farmers the dairying industry in this country would continue to decline. “The action of the Minister of Marketing in refusing to accept the unanimous findings of the Advisory Com-

mittee and reducing the prices which the committee recommended should be paid to the dairy farmers this season as a lust reward for the or services proves beyond all doubt that the Government is not giving effect to the policy defined by the Act under which the guaranteed price plan was put into operation,” he continued. “It is quite evident now that the price which the Government is prepared to pay to the industry is governed largely by the estimated market realisations for the nroduce and not in accordance with the terms of the Act. ‘by the standard of living of other sections of the community rendering equal service ’ Difficulty of Halting Costs “ 1 believe that the principle underlying the guaranteed price plan is a good one and that it would be an excellent thing for the dairy farmer and for the country if his income were stabilised at, a level which would assure for him a reasonable standard of living and offer him some inducement to increase producton; but it is not an earthly bit of good fixing a price for his produce if at the same time his costs are raised to such an extent that the price he receives is reduced so much in value as to make his position worse than before. The Minister of Finance and Marketing has expressed a desire to secure stability of costs in New Zealand, and this industry has offered to co-operate with him so far as it is possible in his endeavour to achieve that objective,” he said “ I am sorry to say, however that all the indications point in the other direction, and it appears that it is not within the Minister’s power to put a stop to the ever-increasing burden of costs which the people of this country are at present experiencing.” ALARMING DECREASE DAIRY BOARD'S CONCERN REDUCED NUMBER OF COWS -NO DECENT PROFIT LEFT" Satisfaction that important remits on the conference Order Paper concerned the so-called guaranteed price was expressed by the chairman of the New Zealand Dairy Board (Mr W. E Hale), who addressed the conference before it began on its Order Paper After listening to the address of the Minister of Agriculture (Mr W Lee Martin), he said he wondered whether the guaranteed price should not be known as a stabilised price He emphasised upon the conference the necessity for unanimity on main issues if the interests of the industry were to be fully served. The Dairy Board had interested itself in the gathering of costs data, and in association with representatives of the South Island Dairy Association, the National Dairy Association and the Farmers’ Union it had requested the Government to alter the original personnel of the Guaranteed Price Regulating Committee. Mr Hale said it was regretted that in the discussion at the last Dominion conference the remit was altered at a late stage to set up an advisory committee to recommend the price that should be paid rather than to fix it. The board appreciated the assistance of the association and the other bodies, and he asked for a continuation of co-operation in that connection. That was the most important matter to the dairv industry to-day. and Mr Hall urged that the conference at least endorse the principle of making representatives available for consultation with the board on any questions as they arose. “ The Other Reason ” The board was greatly concerned with the decrease in the production of the South Island,, which was a very serious matter indeed, and it had been trying to obtain some statistical data on this subject. It had to be admitted that it had’ been a very unsatisfactory season from a climatic point of view. Southland was the only province in the Dominion that could claim anything like a satisfactory productive season. Its investigations were demonstrating to the board that climatic conditions were not solely responsible for the drop in production. On the information that it had been possible to gather, the board estimated that there were between 60,000 and 70,000 fewer cows being milked this year. Dairymen were not allowing any such state of affairs to come about for any reason other than that there was not a decent profit left in the industry. There was a section of which the Minister himself was one representative, which said that there was nothing wrong with the industry. There might be reason for that attitude on well-established forms; but Mr Hall said he would not like to be bringing new land into production to-day. “The price might be all right—if the cost factor were right, he said. DAIRY FACTORY COSTS SOUTH ISLAND’S PROBLEM | AWARD NEGOTIATIONS CASE FOR SMALL FACTORIES The question whether the Otago and Southland dairy companies should form themselves into an industrial union of employers and affiliate with the Employers’ Federation, or whether their negotiations with employees should still be handled through the Awards Committee of the South Island Dairy Association, was a question that was thoroughly discussed at the annual conference of the association | yesterday. It arose out of the report ol the convenor of the committee (Mr G R. Herron, of Pukerau), whose recommendation was that the committee should continue to function. It was decided to retain th. committee, but to reduce it from five members to three—Mr Herron as convenor-expert and two assessors, Messrs S. R. Muff (Orari) and G S. Templeton (Tokonui Valley) . 4 The committees report stated that some very difficult problems had been experienced durinp the year. It reviewed discussions with the Minister of Labour on the subject of mounting costs, award negotiations, and the difficulties of the small cheese companies. At present, Mr Herron said those companies were carrying far too much costs, and he did not see how they could carry on if they were loaded with any further costs. The difficulty of a Dominion award was becoming more apparent every day. “It is to be hoped that all factory directors press for a South Island award. If you don’t get it, your cheese companies are doomed.’ he said Opposition to Dominion Award A question which the conference would have to consider, he continued, was the possibility of joining up with the Employers’ Federation and form ing a dairy factory branch. Canterbury had already formed a branch, and the question was were the comnanies going to pay their levy to that organisation or to the South Island Dairy Association’s Award Committee? Nothing had vet been done by Otago and Southland. The head office of the Employers’ Federation was in Wellington. and there were branch offices in various centres The association had for several years oaid a donation to the federation offices in Dunedin and Invercargill, so that the federation advocate could be used if he wer« required Mr Herron said he had always neen opposed to a Dominion award One of the dangers of affiliation with the federation was that the affairs of the companies in this respect would be handled more or less from Wellington and that consequently the difficulties of the small cheese factories would not get due consideration. His desire was that Otago and Southland should retain the present system.

Costs Statistics To illustrate the difficulties of cheese factory directors and suppliers, Mr Herron quoted that the 56 Southlano companies in 1937-38 produced 9979 tons of cheese from 2098 suppliers and carried in costs £146,252 9s 3d, or an average of over 4d a pound of butterfat in actual costs from the time of acceptance at the factory to shipment at Bluff In Otago, 17691 tons of cheese were made from 334 suppliers with costs £27,095 2s 6d, or 4.295 d per pound butter-fat. South Canterbury made 975 tons from 130 suppliers at a cost of £14,893 11s 2d, or 4.167 d per pound butter-fat. North Canterbury made 935£ tons from 98 suppliers with costs £13,372 3s Id before anything was returned to the suppliers. The South Island total was 13,662 tons of cheese from 2670 sup pliers with costs £201,613 6s, an average of 4.067 d per pound butter-fat. Those figures were for the year 193738, and the 1938-39 costs would be a great deal heavier “ Where is it all getting us to?” he asked. Discussing the question of affiliation with the Employers’ Federation, Mr C. P Agar (Tai Tapu) said that it was a matter of practical politics. If Otago and Southland continued the awards committee system, they would be represented in Wellington by a separate unit asking for special conditions. That unit would be out-voted by the North Island and would lose everything. He suggested the conference should recommend factories to join up with the federation on the distinct understanding that it worked for a South Island award. If that were not agreed to. then all of the South Island should combine to that end. If the whole position were considered on * Dominion basis, Otago and Southland would be a voice in the wilderness Mr Herron: We have already got to that stage. The association has already been paying a donation to the federation so that it can obtain information and use the federation advocate in Wellington. The trend to-day is all toward Dominion awards, and it is impossible at present to get to the stage of a South Island award. The proposal would be quite satisfactory if Otago and Southland could be sure of a guarantee by the federation that it would work for ?. South Island award. Mr W. Young (Drummond) asked by what right had they joined the federation without consulting Otago and Southland How could there be unanimity if that sort of thing were done? Mi* Agar said the company with which he was connected had been a member of the federation for 25 years. Perhaps some companies had joined recently. The Case for Small Factories It was considered by Mr D. F. Rutledge (Invercargill) that it was not wise for the South Island to place its affairs altogether in the hands of the federation. The Awards Committee of the association had done remarkably fine work, and it was necessary that I here should be provision for the slating of the case for the small factories. Mr Agar: Is it possible for Otago and Southland to stay out of a Dominion award? That was not possible, Mr Herron agreed; but the Otago and Southland factory managers had refused ah award, so that there was one unit working on the basis of an Otago and Southland agreement. There was still the hope that the South Island would be made altogether separate. “ Should Fight for Liberty ” A Dominion award was not suitable to Otago and Southland, said Mr John Fisher (Olautau), and it would not be to their advantage to become entangled with a Dominion award. “We should retain what liberty we have as long as we can,” he said. “Even if we have to be thrown overboard ultimately we should fight as long as we can.” Any suggestion that Canterbury had acted behind the backs of Otago and Southland was refuted by Mr F. G. Harris (Okains Bay), who was supported by Mr Herron, Otago and Southland had had similar notice, the latter said, but a decision had been postponed so that the conference could consider it. In reply to a question from Mr W. Muir (Tuturau), the chairman (Mr H. H. Meredith) said there were only four factories in the North Island with outputs below 100 tons. It was moved by Messrs J. Bassett (Tisbury) and J. Walker (Momona) that the Awards Committee of the association should continue to function. In further discussion, the secretary (Mr W G. Wright) said that the cost of the Awards Committee for the past year was about £560. The year bad begun with a deficit of £9O, and £573 had been collected from factories in levies. Of that, about £IBO was contributed by Canterbury factories. Mr Fisher advocated that the services of Mr Herron should be retained The employers had to fight union experts all the time. He moved an amendment that Mr Herron and two assessors should comprise the Awards Committee, instead of the five members of whom it was at present constituted The conclusion of the executive, said the chairman, was that the only way to reduce the expenses of the Awards Committee was to allow Canterbury to stand out and to depute Mr Herron to do the work for Otago and Southland. The amendment was seconded by Mr D. Tither (Edendale). and carried.