DAIRY PRODUCE.

Otago Witness, Issue 3833, 30 August 1927, Page 14

DAIRY PRODUCE.

WORK OF THE BOARD. ADDRESS BY MR GROUNDS. Mr W. Grounds, chairman of the New Zealand Dairy Produce Board, gave am address in the Neu Zealand Express Company's board room in Bond street on Thursday afternoon. There were about 30 gentlemen present. Mr W. Bryant, who occupied the chair„ said that when it was learned that MrGrounds was about to pass through Dunedin to Invercargill it was decided to request him to give an address in Dunedin. He was glad to see different factories represented, but he would hare liked to see representatives from many more factories. , , Mr Grounds, who was well received, referred to the death of the lion. Bollard, Minister of Internal Affairs. Mr Bollard was not well known in the south, but as a farmers’ representative, who had been in Parliament for many years, he had done yeoman service in the interests of farmers generally. Proceeding,. Mr Grounds said he had had opportunities on previous occasions of speaking in Dunedin on the control movement. While he was not satisfied with the result of the board's work, he was easy in mind regarding all he had done and said, either in this place or any other centre, lhere was nothing he could recall that he would not do again under the same circumstances. and there was nothing he had

said that he would not say again under the same circumstances. Possibly, with the experience gathered since, he would have given greater force to the observations he had made, and, if possible, put greater effort into the course he intended t take. But, judging the course taken, he was satisfied it was in the best interests of the producers, and although it had not been nearly as successful as he desired he believed it was the course that should have been taken. . In referring to interpretations he set upon recent experiences, he said the position had been considerably changed ot late and it was rather kaleidoscopic even to-diiv. and he could see possibilities ot difficulties as a result of various recent actions. Thev all knew of the contention ami the misgiving and general dissatisiaet’on that had been m the minds ot dairy farmers in the last few months, and ho did not wonder at it, because of the apparently contradictory position of various forces connected with the board and outside it. This had led to confusion in the minds' of dairy farmers. Unfortunately, the end of the contention was not in si"ht, because they saw a tendency for some to say that the board shomd be scrapped, or to make suggestions that, it adopted by the board, would finally lead to a declaration of its impotence. Those who thought the board should leave the whole of its marketing to those outside the board could find no justification tor tlieir contention in actual facts. While he was convinced that the best inforests of the producer would be served : f the old policy had been proceeded w'th, yet, seeing that circumstances were too strong to enable that to be done, the board still bad a large amount of useful work that could be carried out in the way of improving the market in the interests <f producers generally. The idea that the industry could bo split up into segments was a mistaken idea Group marketing was an impracticable proposition in many of the smaller districts. The cost of supervision of such a thing would make it uneconomical and

impracticable, and it was the duty of the board to watch the interests of the smaller factories which could not economically organise a group. lie was convinced they must organise from a central basis, and more or less as a unit, if the best results were to be secured.

Many people opposed the board because of the price-fixing. How came it that the suggestion of price-fixing could be regarded as antagonistic to the interests of the producers? In the matter of price-fixing, 'he hoard simply decided that all the agents handling its products should sell on the same level at the same time. All business organisations worked on the same method. If a house, engaged agents, would it send them out to do business at the price at which they could do business? No ; all the agents had the price fixed for them. If they found they could not find business because others were giving better conditions, they must refer the position to (he head in order to ascertain what further concessions could be given. That was the position of the Control Board. New Zealand never expected to be able to control -he London market, but it expected to • ontrol the level at which its produce, should to sold, keeping it in harmony with the price at which similar produce was being sold from other countries. That, he submwte 1. was a business-like procedure, and he believed that sooner or later the iudmery must be established on a basis of that sort so far as selling was concerned. The board also had the difficulty of battling agaii.st a metropolitan press, which had connections, through ownership and from contact, w itb merchants. It was hard to ray how far the position was seriously prejucided by the suppression of views or by the alteration of contributions forwarded ri tin, press.

In regard to the work undertaken in London, he recognised it was not 100 per cent, efficient. It was a new organisation, and covered a wide field of effort, and he believed that, if its system had been allowed to proceed, full provision would have been made for alterations in minor matters where clearly there were inequalities. For one thing, provision could have been made for the inclusion of more distributors than were in the scheme at the beginning. Then there was the difficulty of the reason. Mr Grounds recounted the circumstances the board had to face—accumulated stores of butter with more coming forward shortly. A price was fixed in order to clear out the stored butter. He believed if the board had not taken control the da-ry farmers would have experienced a decline much more serious than they did. There was no anxiety about the cheese; the anxiety was in regard to the butter, on account of the storage. Immediately the price of butter was set, the trade bought heavily, though it had been standing off previously. They took it in preference to the new season’s butter, which came to hand later. The board would not further reduce the price, and as a result of holding firm to the figure set prices began to go up, and gradually rose from 150 s to 176 s on December 8.

The stampede created in March was sufficient to cause the board to change its policy. For himself, he thought if the board had stood firmly by its policy at that time, as it did in November, it would have seen the matter definitely through, and he believed that when the history of the movement came to be written the writer would say that, having begun, the board should have gone straight on, if not. it should not have commenced. Based on later-day experiences, there had been a call for economy in the board's work. He would at all times oppose reckless expenditure, but it was a mistake to think that economy meant only the preventing of money being spent. With the idea of economy had come a suggestion that the Dairy Board should appoint the Meat Board manager in London as its manager also. It was said this would secure a saving of money. But a saving of money did not necessarily represent economy, and, in his opinion the dairy industry could afford to maintain a representative in London who would give his whole time to the supervision and general advancement of the interests of the industry. It would be false economy to have half a man to look after the board’s interests in London. Mr Grounds went on to refer to matters of expenditure by the board, and quoted items from the balance sheet which he said, would shortly be in the bauds of suppliers. The levy collected last year was about £59,000. and £3OOO came from interest on accumulated funds, or a total of about £62,000. The expenditure was about £54.000, exclusive of advertising leaving a balance of about £BOOO. In regard to prices, he said that for the past season s output finest butter would return to the factories Is 3RI; first grade Is 2g, second grade Is I’d, and cheese / £u.

Another important work was that of shipping. The board had been trying to i emoi e difficulties and to effect improvements, such as provision for protective arrangements and other matters The saving effected by the board in shipping charges, under the contracts entered into amounted last season to £101.454 on butter and to £142,450 on cheese. Reductions had also been secured in insurance to the extent of £36.000 a year, and commission had been reduced to the extent of £90,000. These were direct savings effected last year, making a total of £369,000. Mr Grounds inferred to lessons to be learned in the matter of marketing, which called for the supervision of the board. He spoke of the necessity tor opening up markets in the Midland Counties of England. In regard to cold storage, he said that next year the produce must go into cold storage if it ■was not going immediately into distribution. , Touching on quality, he complimented the south on its achievements, especially in the matter of cheese. Dunedin had the highest, grade of cheese among the exporting ports. Advertising last year cost £19,600. The best results were obtained by shop window displays by retailers, who were constantly in touch with the consumers. No fewer- than 3700 shopkeepers in one area and 3300 in another had made displays last year. In closing, Mr Grounds made a strong appeal to producers to ... anise.

Several of the audience made comments on the address, and a number of questions were asked.

One of the questioners asked Mr Grounds if he did not think they might be selling their butter at tne wrong end.

Wool, he said, was sold locally under the hammer, and dairy produce might be treated in the same way. Mr Grounds said he did not agree with the idea. Dairy produce was not comparable with wool. Wool was not perishable, like butter and cheese. It had to be remembered that New Zealand was the main producer of crossbred wool. When the main production of a commodity came from one country, that country could insist on its own selling conditions, as India could with jute. In butter and cheese our most active competitor was Denmark, which was right alongside England. Again, there was considerable fluctuation in the dairy produce market, and as a consequence persons buying in New Zealand would, as a matter of business, have to take precautions against those variations and provide the necessary margin in their operations. We as the producers were interested in the maintenance of the quality of our produce. There was practically no deterioration in the quality of' wool in transportation. But there might be a serious decline in quality on the carriage of dairy produce. New Zealand had suffered already in the matter of deterioration of its produce, because there had not been sufficient supervision over the various phases of the handling of it between this country and the market.

The questioner remarked that meat was a perishable product, yet a large quantity of it was sold in New Zealand. Air Grounds said he did not think there were many of our dairy farmers who would like to sec the dairy produce in the few hands that the meat was. A vote of thanks was accorded Mr Grounds for his address.

THIRD ANNUAL REPORT. WELLINGTON, August 25. The third- annual report of the New Zealand Dairy Produce Export Board shows that the export levy on butter and cheese yielded £59,960 Is 2d. With £3025 8s 6d as interest on investments a total income cf £62,983 9s 8d was received. The expenditure, exclusive of advertising, amounted to £54,416 4s 7d, leaving a credit balance of £8467 5s Id. The advertising, account indicates that of the £20.000 voted by the board for this purpose £19,667 3s Id has been spent, the net result of the year's working beingthat the accumulated funds have been drawn upon to the extent of £11,199 18s. It was decided for the coming season to reduce the levy by one half to l-32d on butter, and l-64d on cheese.

At the first meeting of the new board Mr AV. Grounds was re-elected chairman

The report stated that it was pleasing to record that quality improvement had been achieved in all the districts. Neither was it confined to co-operative companies alone. Proprietary companies, stimulated by the inducements offered, had in some cases displayed commendable zeal and secured gratifying results. A table sho>v ing the quality percentages shipped by each port gave Napier pride of place for quality in butter and Dunedin for cheese The markets in Great Britain continue! to be the main market. Taking an average of the four years, 1923 to 1926, inclusive, New Zealand supplied 21.99 per cent, of the imports in butter and 4.19 per cent, in cheese. With an increased supply of cheese during the past .easin of 234,410 cwt, compared with 1926, she now supplied Britain with 51.88 per Cent, of her imports, and thus maintained the steady percentage progress of the past few vears.