FARMERS’ DAIRY FEDERATION

Southland Times, Issue 22999, 19 September 1936, Page 14

FARMERS’ DAIRY FEDERATION

ANNUAL REPORT CAPITAL INDEBTEDNESS PAID OFF The annual report of the directors of the Farmers’ Dairy Federation, Ltd., is as follows:—The past season has been a momentous one in the history of the dairy industry, as it marks the closing of the old order of marketing by the factories. The federation output of butter dropped 3 per cent, as against the previous year, a very small shrinkage compared with that experienced by the majority of cheese factories throughout the province. The selling value of the products, however, increased from £96,895 12/9 to £114,181 6/9. The statistics of produce passing through the Southland Cool Stores, Ltd., show a shrinkage on cheese of 19 per cent, and butter 10 per cent., or expressed in tons 2360 of cheese and 67 of butter. The early spring months of the season were most unfavourable for dairying, while a short dry spell about the peak period further interfered with production, and these forces combined more than counteracted the favourable fall months. It has been a particularly difficult season to maintain grading and our finest grading dropped by 5.3 per cent, compared with 1935. Intake has a direct bearing upon cost of production. In 1927 when intake into individual factories was small it was costing suppliers in Southland £35 a ton to put butter f.0.b.; by 1934 we had reduced this to under £2O a ton. This year with a smaller quantity manufactured the cost is £22 16/-. The average advance payment throughout the year has been for full cream 9.678 d and for whey cream 8.003 d. The factory has contributed towards cartage of cream .386 d per lb butterfat, and since the close of the financial year a bonus of 2/1.5d over the whole season has been paid suppliers, making the all-over payment for the year 12.264 d for full cream and 10.589 d for whey. These prices are net after making the usual provision for depreciation and replacement reserve.

It is with pleasure that the directors report that the large capital indebtedness, £29,000, to the Natonal Bank by way of overdraft, incurred in the early years of the company’s activities, principally for the purchase of competitive factories, has been paid off and has disappeared from the company s bajancesheet. The company’s undertaking _ is now free of debt. Prior to completing this payment an extensive readjustment of share capital was made. In the 1935 balance-sheet £BllB 14/3 represented the total paid-up capital. The present balance-sheet shows the paid-up capital as £15,729 17/1. The company purchased 5765 shares from dry shareholders and re-issued them to present day suppliers.

The general election of November 27 returning to power the first New Zealand Labour Government brought all negotiations for group marketing upstanding in view of the platform undertaking during the election that it returned the Labour Government would institute a guaranteed price This promise has now materialized and factories from August 1, 1936, aie to receive for the 1936-37 season 12 9-16c> per lb f.o.b. for butter and 6 13-16 d per lb for cheese. The prices are fixed on the basis of providing that cheese factories will pay out per lb more for butterfat than butter factories to compensate for extra costs and loss of byproducts. From the prices named the factories are to pay their manufacturing and transport costs and this company should be in a position to pay out a slightly better price next year than for the current year unless increased cost of production, principally by readjustment of wages to not less than 1931 level, absorbs the difference in the price received. Increased costs within the factory seem, however, inevitable in view of recent industrial legislation.

The company has at present on order the most modern type of patting machine procurable and this will be installed during the present summer. The capacity of this machine should meet all requirements for many years ahead. Following this installation it is contemplated procuring other improved butter making machinery, as the only course to follow to keep down expenditure on production costs. Reference was made in last year’s report to the serious position arising in many districts by overlapping both in milk and cream collection. Steps have been taken in some northern centres to improve matters and various amalgamations have been brought about that will affect savings. So far no action has been taken in the south. The new transport regulations are going to have farreaching influences on both milk and cream carriage, as the system hitherto prevailing of farmers transporting neighbours’ supplies is apparently to be prohibited. Intimation has just been made by the Southland Calf Pool Committee that 8/6 a head advance uayment is to be made for bobby calves at the roadside. A further bonus is also contemplated. The federation suppliers are recommended to give every support to this co-opera-tive calf pool and also to the co-opera-tive pig collection by the Pig Marketing Association. The directors retiring are Messrs John Dunlop (factory representative) and R. S. Tait (home separator representative) both of whom are eligible and have offered themselves for re-election.