SMALLER DAIRY OUTPUT

Southland Times, Issue 23634, 8 October 1938, Page 20

SMALLER DAIRY OUTPUT

FARMERS LEAVING INDUSTRY TREND OF LEGISLATION BLAMED “Many farmers are definitely convinced that the trend of legislation of recent years has handicapped them and that their only ’ safe course is to try other paths in which they consider there is less risk. Whether they are right or. wrong in their conclusions does not alter the fact that in the meantime they are backing their opinion by slackening off in dairying and going in for something else, and the immediate result is a decrease in dairy output.” This statement was made by Mr John Fisher, chairman of the Farmers’ Dairy Federation, Ltd., at the annual meeting yesterday. There was an attendance of 25 shareholders.

“We do not believe that this departure is of a permanent nature, it may take more than two or three years to adjust itself, but Southland must ultimately be a great dairying area and when expansion qgain takes place we will be in a position to handle every expansion,” said Mr Fisher. “The Primary Products Marketing Department has completed another year’s operations. As far as business association with the department is concerned the relationship with our company has been most cordial and business proceeds with a minimum of friction. The department in its overseas selling activities is carrying out its work with efficiency and this is attributed to the fact that it has brought into operation the principles for which the industry through the Dairy Board fought for years. It has control over its selling agents. It allots produce in quantities as the salesmanship of . any agent warrants supplies. It has its regular audit check of returns. Without calling it price fixing it has, by the adoption of the audit system and report of daily average sales prices, practically fixed prices, because no agent is prepared to cut such revealed average price as his reputation as a selling force would be immediately jeopardized. These and other improved methods have undoubtedly been all to the good in running the department. “The actual return to the dairy man has revealed some interesting phenomena. The monthly regular payment of a fixed rate for butterfat has proved very attractive. The final settling-up of the year has not put him the slightest bit ahead of market conditions; in fact, for the current season his receipts to date have not reached what he would have realized under the same regulated process of sales and his acceptance of market prices. CONTROLLED HANDLING “The/ operations of the department have proved that the system of controlled handling is a distinct advantage and in the interest of the producer and it is unlikely that whatever the fate of political parties that feature of salesmanship will be adhered to, and there will be no return to the rafferty rules of the past. '‘‘The movement of costs is illustrated in the following figures for our own

“During the current season we have been appointed the principal distributing agents for butter in Southland under the Internal Marketing Department and a considerable increase in local sales has resulted. It was well on in the season before this arrangement began, so that a full season’s comparison cannot be made, but sales for the season were 717 tons 10 cwt Oqr 191 b against 569 tons 18 cwt Oqr 131 b for the previous year, an increase of 26 per cent. “Following the extremely dry season in Southland the flow of cream to the factory slackened materially and our intake has been 26 per cent less than in the previous year. The season was only partially responsible for -this drop. A strongly influencing factor was the number of dairy men either going com-pletely-out of dairying or reducing their operations within a compass that eliminated the necessity of labour outside the farmer’s own household. Now whatever may be the underlying motive for this action the fact remains that there has been a falling-off in dairying activ-ity-in Southland and whenever a serious departure from any ..regular course of agriculture takes place it is invariably proved that the .change has been brought about because the particular course has ceased to pay as well as other tried methods or prospective avenues.” The report and balance-sheet were adopted. The importance of more frequent collections of cream to maintain quality was emphasized by several shareholders, and the chairman said this question had received serious consideration, but the increased cost would be greater than the benefit to be obtained.

factory:— 1936 1937 1938 Inward costs .318 .444 .60? Manufacturing 1.407 1.679 1.629 Overhead and general .509 .515 .714 To f.o.b. charges .209 .299 .173 2 443 2.937 3.119