FARM AND STATION. FREIGHTS ON DAIRY PRODUCE.

Otago Witness, Issue 2671, 24 May 1905, Page 6

FARM AND STATION.

FREIGHTS ON DAIRY PRODUCE.

The necessity for a reduction in the rate of freight on the dairy produce exported to the United Kingdom from Australia and New Zealand has long been apparent to all interested in the dairy industry in both Commonwealth and colony ; but at the same time it is recognised that such a reduction must not be purchased at the sacrifice of either speed or efficiency in the steamer service. The State of Victoria has been the first to lead the way in this matter — largely as the result of the information which Mr Crowe, the Victorian dairy expert, was able to obtain when in this c^ony last year. In fact Mr Crowe does not hesitate to ascribe a considerable amount of the success of his efforts to place the industry in Victoria upon a better footing to the assistance rendered him by the secretary of the New Zealand Dahy Association. Upon his return from New Zealand in July last Mr Cro^o addressed a meeting of representatives of butter factories in Melbourne upon the subject of lower freights and better shipping conditions, in the course of which he cited a number of striking facts. He pointed out that so far a,= Victoria is concerned, at the Jd per lb freight the mail companies were getting £5 10s 3d per ton measurement for the carriage of butter, as against £5 16s 8d 14 years ago, when the export trade began, and when only some 500 tons a year were shipped. Up to the end of the present season just closing, although the quantity of butter now shipped from Victoria exceeds 10,000 tons per annum, the actual - concession only amounts to 6s 5d per ton measurement. In considering this question the increasing competition of other producing countries has ever to be borne in mind, and Mr Crowe -mentioned, by way of illustration, that Denmark gets her butter carried from Copenhagen to London, Newcastle, and Hull at 25s per ton weight, whilst Siberian butter is shipped from Riga under weekly contract to London, Newcastle, and Hull at 24s per ton, as against the £7 per ton paid by Victorian shippers. It is evident that as competition becomes keener the handicap under which shippers from this side of the world labour will hare to be substantially reduced, unless the development of the dairy industry is seriously to suffer. The present contract, under which the mail companies carry butter to London for the Victorian producers at fd per lb, expires in October next, and a new contract has just been arranged between a committee representative of the Victorian butter factories, under which a combination of three well-known steamship lines — the White Star, the Aberdeen, and the Lund Companies — has agreed to carry butter at |d per lb. The saving effected by this reduction in freight will be considerable so far as the actual cash paid is concerned, for the new rate is exactly one-half of that paid to the mail companies for some years past. During the season just closed, when somewhere about 12,000 tons of butter were shipped to London, the freight bill totalled nearly £84,000, &o that there will be a saving on a similar export under new contract rates of no less than £42,000. Nevertheless this "apparent saving is discounted by the fact that the three companies who have undertaken the contract are not able to offer either such a regular or a speedy service as the mail steamers. For instance, although the contract assumes a weekly service, there is the significant provision that in the event of any intervals exceeding ten days occurring in the sailings the exporters shall have the right of shipping by other lines, and the very fact that the steamers call at South African ports — in some instances at Durban and Port Elizabeth, as well as Capetown — necessarily implies a longer period occupied on the voyage. There are peculiar features connected with the trade which render it of the utmost importance that throughout the season the butter should be marketed at the earliest possible moment, for a week's delay may mean a loss in the price realised of from Is to 2s per cwt. It at once appears that if the saving in freight is to be accompanied by a lengthening of the passage the apparent benefit may shrink into comparative nothingness when the season's returns come to be computed. This, then, is the explanation of the recent cable item stating that the Tooley street agents strongly support shipments by the mail boats on account of the regular service and quicker passages, and also of the fact that the offer made in Sydney by the mail companies to the Butter Exporters,' Association of a contract providing for a freight of sevensixteenths ot a penny per lb has* been favourably received in commercial circles. While., however, there cau be

no doubfc as to the superiority of the service offered by the mail companies, the fact remains that in every instance they have declined to make concessions until their hands were practically forced by the action of outside companies. The negotiations now proceeding in the Commonwealth in respect of butter freights have a direct bearing upon the condition of things in New Zealand. The present contract between the National Dairy Association and the direct steam shipping companies, under which butter is carried at f d per lb with a 5 per cent, allowance, has still two years to run, and unless this colony's dairy produce is to be severely handicapped some substantial reduction in this rate is absolutely necessary. It is a safe axiom that as the output increases the freight should proportionately decrease, and there is the gratifying fact to be considered that New Zealand's output of butter for export has practically doubled itself within the last five years, the figures showing 172,583cwt for 1900 and 342,853cwt for 1905. We in nowise desire to undervalue the fortnightly direct service, which has given great satisfaction to both factories and buyers, nor do we overlook the fact that the companies pay coastal freight and incur other expenses in the collection of butter for shipment from the final port of departure. This may be put forward as a reason why the freight reduction cannot be as great as in Australia, but certainly not for withholding a due concession when all the circumstances are taken into account. We are glad to be informed that negotiations are proceeding between the National Dairy Association and the direct steamship companies, which, if carried to a successful issue, will result in "a new contract to take effect from the commencement of next season, providing for a substantial reduction in the freights both on butter and cheese. It is to be hoped that this matter may be satisfactorily aranged prior to the holding of the Dairy Conference in connection with the Winter Show next month. Any untoward hitch in the negotiations might lead to the disarrangement of the regular fortnightly service, and to indignant shippers throwing themselves into the arms of tramp steamers whose tardy passages and irregular sailings would be calculated to work disaster to one of our most important industries. With the exercise of a little tact and common sense on both sides there Should, however, be no difficulty in arriving at an arrangement satisfactory and profitable to both ship-owners and shippers alike, for, after all, their interests are mutual and inseparable.