PRODUCE EXPORT

Te Aroha News, Volume XLI, Issue 6440, 19 January 1924, Page 8

PRODUCE EXPORT

CONSIGNMENT OF F. 0.8. SYSTEMS COMPARED WORK OF CONTROL BOARD Dealing with the subjects of markets and the Dairy Control Board at the opening of the new cheese factory at Eureka on Wednesday, Mr W. Goodfellow, managing director of the New Zealand Co-operative Dairy Co., said there were two systems of selling their produce, one, cash, f.0.b., and the other consignment. The advantage of selling f.o.b. was that the factory got cash without taking any risks. They were thus .enabled to pay out higher advance payments monthly. The disadvantage of selling f.o.b. was that the factory invariably had to sell at less than the value, while the seller lost control of his goods. The advantage of the consignment system was that the suppliers got the full value of the goods, while retaining control. The disadvantage of consignment was that the seller only obtained an advance against the produce, and had, in consequence, to make slightly lower advance payments. New Zealand was unlike Canada and Denmark being situated too far from the market to make satisfactory f.o.b. sales. The buyer took considerable risks in purchasing butter and cheese two months before it was delivered, and consequently, the payment was invariably less than that realised on goods which were shipped on consignment. The New Zealand Co-operative Dairy Company had consistently stuck to the consignment policy, which was calculated to get the maximum return to the producer.

In conclusion the speaker strongly advised the suppliers, now that they had gone in for cheese, to stick loyally together and make a great success of their venture.