DAIRY PRODUCE NOTES.

Otago Witness, 14 December 1893, Page 22

DAIRY PRODUCE NOTES.

(From Our Special Correspondent.) ZO and 31 Fleet street,

London, October 27.

A good deal of talk has been occasioned by a letter from the secretary of the New Zealand National Dairy Factory virtually to the effect that New Zealand cannot profitably continue to supply colonial cheese and butter in London while freights remain at their present level. He puts it in this way :— Allowing 2£ gallons of milk at 3^d a gallon to a pound of butter, each pound costs B£d, and the cost of making and packing is put at L£d ; while the expenses of freezing and shipping amount to 5-18 d, thus bringing the total expenses up to ll|d a pouud. Only the best of the butter sells at Is to Is Id a pound, aud after deducting for London charges little or nothing would be left for profit ; while most of the butter sells at less than le, and upon this tbere is a los,«. Cbcefc, at one gallon of milk to the pound, cobts 3.J. J a pouud for milk, and other expenses, iucludiuy London charges, briug the tutal up to 51s 4d per cwt, which is quite as much aa the average returns of the last season.

Several provincial papers have commented with joy upon this letter. A Dublin journal says :—": — " The Home producer of cheese aud butter, though certainly nob the consuming public, will derive some satisfaction from the announcement that our enterprising New Zealand competitors have, after a thorough investigation, come to the conclusion that they cannot profitably continue to lay down these important products in London while freights remain at their present level."

It is strictly contended, however, by some authorities that the estimate of 3^d per gallon for milk is unduly high, and that milk can be supplied in practically unlimited quantity to the creameries and with fair profib to the farmer at 3d per gallon. This, even allowing the other charges to stand for the sake of argument, would leave a margin of profit. Ido not pretend to be able to decide the merits of this controversy, which is one for experts. I merely quote for the benefit of your readers interested iv the question the statements made to me by capable and responsible persons.

But people concerned in the dairy trade express great regret at the appearance of this letter, which they characterise as most injudicious and misleading, and is apt to do serious injury to a young and growing trade by instilling doubt and distrust, while unlikely at all to affect the shipping companies, at whom, of course, it is aimed. lam told it has already affected some of the arrangements made in advance. Some intending purchasers have said to importers and commission agents : "It is no use for us to make any arrangements with you as to New Zealand butter this season for we see that your producers say plainly it will not pay them to send it Home. We must have something definite to go upon. As there is so much uncertainty about New Zealand butter we mean to drop it "

That is the way these things work in England. As I have pointed out before, you must have not only excellence but also uniformity of quality and trustworthy regularity of supply. It is a great pity that letter ever appeared. Steps cf that sort ought never to be taken without due consultation. The shipping companies only laugh at a transparent attempt to influence them, but the people who are interested in the trade and who are doing their best to develop ib find their cards unexpectedly trumped and their hand spoiled by the imprudence of one who should be a partner.

At the same time it is quite true that the high freights to and from New Zealand are exciting strong resentment, and that earnest) efforts are being made to arrange for some alternative mode of shipment. The difference between 12s 6d freight to Sydney and 30 i to New Zealand for the same goods is too extreme to be readily acquiesced in.

Mr H. A. Cameron (of Wilson, Cameron, and Co., Balclutha, Ofcago), who recently arrived from New Zealand, has been actively investigating a number of matters interesting to the colony. First he endeavoured to ascertain whether anything practical could be done to meet the feeling prevalent in New Zealand that the colonial produce should be brought into more direct touch with the English consumer. His resulting impressions wtra adverse to any such plan as that of a central distributing store. Such a scheme would involve the investment of a considerable amount of capital which he did not believe the New Zealand farmers would be prepared to subscribe, as there must necessarily be aa independent corupaay to " run the concern."

Nor does Mr Cameron think that anything of the kind is really needed. In his opinion the frozen meat trade, for instance, can safely re3fc on its own merits. New Zealand meat is being largely sold at the stores, at "Whiteley's and elsewhere, expressly as New Zealand mutton, and as such is steadily acquiring a favourable name among consume 's.

Better grading is, however, a very needful reform. Buyers complain that the meat is not of uniform quality, and it ough'oto bo graded both by weight and by quality. These details are of great con&ecjuence in the London markt ts, and a litfcle more care will well repay the producers. It does nol do to hr.ye tbo meat of all sorts and sizes. English buyers lay great stress upon being sure that a wholo purchase will be uniform with its sample. If it prove not to be their distrust and dissatisfaction are engendered, and valuer? are deteriorated.

In the dairy trade Mr Cameron found that to j much butter of the " storekeeper " quality had been shipped. But now that the Govcrn/jioot br,d bteppod in and official dairy experts were instructing the New Zealand producers how to suit the market, while iarge factories were

producing a good uniform article, whose brand guaranteed excellence and evenness of quality, a much better name was being gained and he believes better prices will be obtained henceforward.

New Zealand cheese Mr Cameron found to bear a very good name, and to sell readily in the London market. He noticed that the brand was no guide to the actual consumers, because ib was on the outer cloth, which the retailers always atrip off. So, no matter whence our cheese may come — whether from a celebrated factory or from a mere farm dairy — it is sold simply as " New Zealand cheese." Thus it does not bring such a high price as in some cases it probably would were it known to come from some celebrated source. He thinks the market for New Zealand cheese will be steady, but not at a high price — perhap3 50s to 52^. Ib can hardly go much above this, as mo^t retailers like cheese that they can sell in " sixpenny cuts "—i.c" — i.c , in pounds at 6d each. These are chiefly in demand on the part of the majority of consumers. That, of course, would represent 56s per cwt., which does not leave an excessive margin over 528 for profits and expenses.

Reverting for a moment to the butter question. Mr Cameron said that New Zealand butter stood slighbly behind Victorian in London's estimation, for the reason that New Zealand had been content to send too much mediocre "storekeeper" butter, whereas Victoria had always sent her besb to the London market. She was now reaping her reward in better returns for even equal qualities of butter.

The idea broached in New Zealand that one large retailer might manage to take the whole cheese supply of each New Zealand factory, and so save the intermediate charges of agents, does not seem to be feasible. A large retailer can buy in the London market just what he likes and wants, and can pick and choose as to quality. If he bought in New Zealand he would have to take his chance of the quality turning out good and uniform, and also of damage in carriage of the cheese half round the world. He prefers to await its arrival in London and buy it there.

With regard to frozen meat, Mr Cameron thinks, after careful examination, that there is not an undue margin between wholesale and retail prices, and that little would be gained by any attempt to interfere with the regular course of trade. When the expenses are deducted aud the risks of loss taken into account — including that serious item discolouration — the balance is not a very large one. Ho holds that if prices seem low, producers mu&t make tho best of them, as if they do not pay so well as higher rates they yet give a very fair return.

Grain is conveyed from New Zealand to England more expensively than from America, because in the former case it comes in sacks, which have to be opened and emptied ; whereas American cargoes arrive in bulk and are discharged by a sort of steam dredge, which sccops it out and delivers it by the shoots into the stores. This means much less handling, aud all handling means expense. That is Mr Cameron's verdict after inspecting both processes at the docks. All the wheat is bought from bulk sample, and so every sack has to be emptied before sale.

A. friend writes to me aa follows: — "New Zealand butter is taking a fast hold of the London market, and I predict a good future for the small farmers in this respect. The great thing is to ship only the best quality. Dairy farming is the industry of the future, especially in the rich pastures of the North Island. New Zealand cheese also is comiDg well to the fore." This confirms what I have often written to you on the same subject.