FARM AND DAIRY.

Taranaki Daily News, 28 April 1923, Page 11

FARM AND DAIRY.

THE GOLDEN COW. ‘•BIGGEST IN THE WORLD.” RECORD DAIRYING ORGANISATION. NO. 3. (By A. J. Heighway.) Just as Otago has special advantages for fruit growing in its irrigated areas, and as Canterbury lias for wheat growing and lamb raising on her fertile plains, so Taranaki and Auckland, with their warmth and moisture combined, are pre-eminently fitted for dairying. The rapid development of these two provinces in the last 25 years has been due primarily to the tremendous expan sion of dairying and the cult of the cow. Auckland particularly has swept forward on a tide of butterfat, and to-day her development of dairying activities stands unrivalled anywhere in th a world. This is a big claim to make, but it is the plain truth that the Auckland province is the biggest dairying organisation in the world. Th.s fact is riot sufficiently Known or appreciated throughout New Zealand. Usually it is to America that we look for the development of big business and efficient business, and when the Americans have developed a business of sucn a nature they do not hesitate to let the world know it. Yet for the lasi, four years New Zealand has possessed the biggest dairying organisation in the world, and few people outside the Auckland province have appreciated the significance or the importance of this achievement. A BIG OBJECT LESSON. The development of this huge company was brought about by the operation of economic laws, and its experiences have a very definite lesson for the whole dairying industry of New Zealand. It offers the lifst big object lesson in this country of the application of the principles of big business, and oi modern methods to a primary industry and the experiences gained in these various fields of manufacture, raising the quality of the goods produced and the organised marketing of the product, are likely to prove of paramount importance to every company throughout New Zealand. If this country is to hold the premier position she has won in face of the competition of the future, it will only be by the application of definite business principles to the in dustry, thus conserving and improving upon the natural advantages possessed by the Dominion. The formation of this big company— The New Zealand Co-operative Dairy Company Limited—was brought about by the shareholders of three large companies which had grown up in the South Auckland province—the New Zealand Dairy Association Limited, the Wai’ kato Co-operative Company Limited, and the Thames Valley Dairy Company Limited. The amalgamation was begot’ in 1919 and was completed in 1920. In 1918 the total output of these companies was 8287 tons of buter, and 3236 tons of cheese. The amalgamation took place because it was considered that the collection of supplies over the same territory was being duplicated by the competing companies, thus reducing the return to the supplier, and adding to the cost of manufacture. It was found that competition for supplies had a very serious effect upon the quality of the product being made because no company could exercise any control upon suppliers producing inferior cream or milk. It was considered that the manufacture of butter in small units was uneconomic, and that concentration of supplies to the best natural centra would represent economy, and finally it was believed that the product could be marketed to better advantage by tae concentration of supplies under one control. For these reasons the directors of the companies concerned met, and with far-seeing vision, agreed to co-operate rather than compete, to amalgamate and concentrate their resources instead of disintegrating their activities. A HUGE OUTPUT. The new company was formed in 131.1 with a capital of £300,000, and a directorate of 12 farmer members elected on the ward system. The amai gamation was completed just in time to reap the fullest advantage from the wave of dairying expansion passing over the whole country. That wave begun four years back, and on its crest the company has ridden to a triumphant vindication of the -wisdom of economic concentration. In the foil" years that have passed, its nominal capital has been increased from £3OO, 000 to £1,250,000, this being necessary to provide for the enlargement and increased equipment of «jid factories and the erection of new factories. Its output has grown from 8287 tons a year before the amalgamation to 16,218 tons last year, and this year it is already certain that approximately 22,000 tons of butter will be produced, besides 4,000 tons of cheese, 3200 tons of dried milkpowder, and 800 tons of casein—a total of 30,000 tons of dairy produce with a marketable value of approximately £5,000,000 sterling. This huge output is handled in 13 big centralised butter factories, 10 cheese factories, 22 creameries of which 15 arg casein precipitating stations, three large milkpowder factories, three largo glaxo factories (leased to the manufacturers of glaxo) and one large centra! casein factory. One of the butter factories is the largest and most modern individual co-operative butter factory in the world, and will this year manufacture under one i’oof and with only four churns 2700 tons of butter. On? of the dried milk factories is the largestindividual milk factories is the largest containing five units of the Gray-Jen-sen Spray process, or an equipment equal to the total manufacturing power of the whole of the State of California. It alone handles the product of 11,000 cows, and is capable of dealing with 300,000 lb. of milk daily. I As an adjunct to its business the I company found it advisable to erect its own ‘box factory. This is now in its second season o-f operation, and has, it is claimed, saved £50,000 to the producers in two seasons by lessening tin cost of boxes over outside supply. To reduce the cost for the company’s various factories, a coal field estimated to contain 10.000.000 tons of coal was acquired and will come into productivity ready for next season. It is quite recognised that size itself constitutes no merit unless that size enables certain advantages to be returned to suppliers—the primary producers on the land. If this huge experiment in co-operative concentrauoD

is a success- it may be expected to be followed by a similar concentration in suitable areas in other parts -of New Zealand, provided that local conditions warrant such an advance. LOWERING COSTS. With its fourth year of operation drawing to a close, some estimate may now ’be made as to the three main gains secured by the amalgamation. The cost of manufacture, it has been found, has been reduced because supplies have been concentrated upon their natural centres, and is now claimed to be th? lowest in New Zealand. Processes of manufacture have been standardised in all factories. The ingredients used in the manufacture of butter have been purchased in bulk lines (with wholesale savings) and of a uniform quality, thus tending to standardise the resulting product. The cost of administration has been reduced from over Id per lb. butter fat in the competitive days to less than one-fifth of a penny per lb. The quality of the product has been improved by two main methods —the grading system and educational work by instructors. Whereas 60 per cent, of the total manufacture in 1920 was superfine quality, 91 per cent, of the total manufacture, this year is superfine. Whereas the average grade of ail produce before the amalgamation was S 9 points, the average grade this sea son will approximate 93 points. The cost to the company of this grading system is estimated at less than £5OOO yearly, while the extra return due to the superior quality is conservatively placed at £60,000 for this year alone. To achieve efficient marketing, the company has taken the step of appointing its own London manager, in this way again establishing a record for dairy companies. The company’s London manager works in close supervision of the distributing agents em ployed in the marketing of the product Very definite gains to the producer hav? been secured by this supervision and very valuable experience acquired. It is obvious that there is but little use in manufacturing cheaply an article of good quality unless measures are taken to market it to advantage. The extent to which the cow dominates New Zealand to-day demands that as much attention shall be given to the marketing end of her produce as to the production and manufacture of it. The need for efficient marketing may therefore be said to be the last big lesson to be learned by New Zealand producers. GENERAL ITEMS. A Stratford dealer sold a line of fifty two-year-old in-calf Jersey heifers last week at £l*2 10s per head, which must be reckoned a record price for this season. Their destination is understood to be the Wellington district. There is a strong demand for in-calf heifers of the right type at present.