A LESSON TO DAIRYMEN.

Taranaki Daily News, 16 August 1929, Page 12

A LESSON TO DAIRYMEN.

(To the Editor.) Sir—Your digest of the report and balance-sheet of the N.Z. Co-op. Dairy Company is of more interest than usual to Taranaki dairymen, following as it does the recent visit of Messrs. Grounds and Goodfellow, and your correspondent “Searchlight’s” feeling and trenchant remarks thereon. A little more examination and comment may prove enlightening. Last year’s report showed an increase of a little over one per cent, in butter and a decrease of well over 15 per cent, in cheese as compared with the 1926-27 season. This year’s figures show an increase of over 4 per cent, in butter made, and practically 40 per cent, increase in cheese, which fills a very secondary place in the company’s operations as compared with butter. Your figures do not give the actual lbs of butterfat handled, so no reliable comparison can be made with last year’s results. Casein manufactured, however, continues to decrease in each each of the last three years. “All’s- well” will be the triumphant comment of those who love the giant amalgamation, and have only the official figures to base their judgment upon. But is all well? The company’s increase this year is little, if any, more than the average normal increase of the Dominion, and to be all well it should have been very much larger. Why ? Simply because other companies have joined up with tho concern. What has become of their additional supply flowing into the company’s factories? How is "it that independent companies formed and operating right in the heart, home and centre of the big company’s field of operations have increased in a much greater proportion? For instance, Te Awamutu for this last season shows round about 60 per cent, increase, Morrinsville over 38 per cent., and Waikato valley is also well up in the hunt. All these are butter factories right in the Hamilton district, and there are others doing likewise a little farther afield. It looks as if everything is not well; rather the reverse. However, everyone will agree that 27,195 tons of butter made by the big company last season is really a substantial amount, and quite ample for both Mr. Goodfellow and the Amalgamated Dairies to handle efficiently and effectively, and present to admiring and envious outsiders the results of their skill and business acumen. It will be . advisable to include the results of the previous season, 'when 26,072 tons of butter was produced, and be it noted cheese is left out of the succeeding remarks, as the company does not supply any massed data to work upon. Taking as the deciding factor of the quality of the services rendered, the actual cash paid to the suppliers individually, not the salaries paid to officials and heads, and placing no monetary value on the halo of glory which is assumed to rest on the head of members of such a distinguished concern, what do we find? For the 192728 season the company paid to suppliers of superfine butter-fat Is 5.49 d. Nothing was stated as to what was paid for other grades, nor what was the average payout on all grades. For the same year nine co-operative butter factories in the Auckland province, whose statistics are before me, show the following results on the average pay cut on all grades, not that of superfine alone. Five companies showed higher pay-outs, and four a fraction less. On these results it looks as if the average pay-out of the big company covering all grades would compare badly. Your readers will ask why does the N.Z. Dairy Company not show its average pay-out over all grades? Echo answers why? For the last season our big friends‘report an average price of 17.41 d for superfine butter-fat —superfine. Nothing whatever is said as to the average of all grades. The returns of the nine companies quoted above are not all available, but one of them, the Morrinsville Co-op. Dairy Company, hag paid over all grades an average of 18.79 d. There can be no doubt which of the two did best for their suppliers. Where, then, does the brains and ability of “Amalgamated” come into the picture? Striking as the above contrast is on the results of last year’s working, it is emphasised by consideration of various factors affecting each‘company individually. The big company hag all the advantages said to be attached to a big business, which are so often proclaimed from the housetops. Add to this the management of “experts” of the first rank (supermen, some think), and then recall to mind that Morrinsville Co-op. Company was founded by a few dissatisfied suppliers of the big company less than 10 years ago. and, in face of determined opposition from the parent concern, has grown from a small beginning to an financial position. Moreover, it is run and managed by dairy farmers, who, in addition to paying their suppliers a little over Is 63d per lb of butter-fat. also paid 5-J per cent, on paid up capital. The N.Z. Coop. Dairy Company has a paid-up capital of one million and eighty seven thousand pounds sterling, and all the interest the shareholders receive is an indefinite amount of that intangible thing, reflected glory. Now to give a few final touches to this little picture, and to incidentally justify my styling its heads “experts,” which' in their native modesty they might deny, let me add that the. big company makes three distinct claims: (1) That large profits are made from its coal mine and box factory; (2) that the company’s large output makes the manufacturing cost the lowest in New Zealand; and (3) that “Anchor” butter always secures a premium of 2s per cwt over other brands on the London market. If these three claims, which look all right on the face of them, can be substantiated, then they are financially valuable. Add 'hem and the 5.1 per cent, interest paid by Morrinsville to the N.Z. Dairy company’s pay-out of

17.41 d, and the knotty question arises: what should the pay-out be? Reverse the process and subtract the aforesaid ’ items from the Is 5.41 d, and a still more knotty, and appalling question, presents itself. What would the payout be? I don’t pretend to be able to answer either question, nor even to be quite certain whether, addition or subtraction is the correct method. Perhaps, Mr. Editor, you may be willing to undertake the task.

If dairy farmers will think over these facts neither impecators nor an amalgamation of imperators will appeal to them, and they will take good care that their factory directors do not place the handling of their produce in the Grounds and Goodfellow concoction. Morrinsville Co-op. factory figures are given as an example of what can be, and is being, done by small concerns in the big company’s district, and because the writer has the last season’s figures before him. Your readers are well aware that several Taranaki butter factories have done as well, or better, which strengthens my warning. In fairness to Morrinsville it ought to be stated its pay-out of Is 6.79 d is the actual nett pay-out, and that the company collects all cream free of charge.—l am, etc., GEORGE GIBSON. Rahotu, August 14.