MARKETING OF PRODUCE

Taranaki Daily News, 12 June 1930, Page 15

MARKETING OF PRODUCE

WORK OF CONTROL BOARD REVIEW BY MR. JAMES HINE. INTEREST SHOWN IN STRATFORD. Although elected unopposed as representative of his ward on the Dairy Control Board, Mr. J. Hine, Tikorangi # considered producers of Central Tarajiaki were entitled to an account of his stewardship and a resume of the operations of the board. To this end he addressed a meeting of directors of dairy companies and producers in Stratford yesterday. Mr. L. E. Hann, chairman of the Stratford Dairy Company, presided. Mr. Hine said be was entirely opposed to the compulsory marketing provisions of the Act, and one of the Dominion’s most urgent problems was to re-establish that confidence and goodwill which had been so serioiisly shaken. Mr. Hine claimed with confidence that the pledges upon which he was originally elected had been carried out, and although his experience on the board durim/his first year of office was somewhat °difficult, the policy he had enunciated and striven for was eventually adopted. . The fact of the marketing policy being discarded had led certain sections to question the value or necessity of the board at all, said Mr. Hine, but he proposed to show as briefly as possible why its continuance as a separate entity elected by the producers was never more necessary than at the pre- . sent time. SHIPPING PROBLEM-6. One of the. most important and difficult functions of the branch was shipping.- The fact that New Zealand was 13,000 miles from its markets and had an extended coast line with many ports added to the complexity of arranging a service that would provide for dairy produce arriving at its destination at regular intervals.- But the energies of tlie board and the shipping companies were directed in efforts to make the service as satisfactory as possible. When this work was taken over by ' the board in the 1923-24 season, efforts •were made not only to improve the service but to secure a reduction in "freights, and as a consequence the rates now paid in comparison with those then ruling showed a saving of £335,596 a year. “Let it be frankly admitted that some of this reduction would probably have been secured in any case by reason of a general fall in prices, but unquestionably the legal powers of the board to make a contract on behalf of the whole industry was a potent factor in securing these results,” Mr. Hine said. The board’s officers inspected and supervised the loading and unloading of practically every vessel, with the result that the handling and transport of dairy produce were on a better basis than ever before. INSURANCE OF PRODUCE, The marine insurance effected was a most comprehensive one, covering as.it did dairy produce from the time milk or cream was received at the factory until 30 days after the manufactured product reached its destination “against every risk ■whatsoever,” and the rate for this finally secured (which had a further two years to run) showed a saving against that of 1923-24 of over £32,000 per year. A condition of the contract was that the board should continue its work of inspection and supervision. It was interesting to note that the insurance rates on some other primary products had increased rather than been reduced. The method of handling New Zealand produce at the various British ports had received attention, with the result • that the board arranged that all pro- . duee should be landed and sorted in cold stores. By a contract made with tho cold storage authorities the goods were now most efficiently handled. The costs had been reduced by approximately £25,000 per year, so that under the various headings enumerated the total ■saving to the industry was £392,596 a year. “We can now definitely say that a further saving of £35,000 per annum ■ —an amount equal to the levy —has been secured in reduction of freights under the new contract which has been arranged,” Mr. Hine added. “Mr. lorns’ journey to London has therefore been more than justified. The negotiations were protracted and difficult and the Industry would appreciate Mr. lorns’ efforts on its behalf.” An extensive advertising campaign was conducted in Britain at a cost of about £15,000 a year, and over £4OOO was allocated to research work in com nection with the Massey College. Thio grant was long overdue, and in view bf the complaints as to quality ho one would cavil at the expenditure. INTELLIGENCE DEPARTMENT. An intelligence department, continued Mr. Hine, had been established whereby any company could have its account sales checked and compared-with others, no names being divulged. Information was also given as to weight and shrinkago and on many other matters upon which information ~'ao desired. The ' whole work of the board was in the interests of every company, and while some of the larger ones could possibly have secured a measure of these advantages, the rank and file would have been left. The strength of the board lay in the fact that the interests of every company, be it great or Gmail, were protected. It had been said that the National Dairy Association could do the work of the board equally well, but it . had to be realised that even the board could not have accomplished what it had except for the statutory powers conferred •upon it. To suggest, as was being done in a remit for the Hamilton conference, that the N.D.A. could undertake the work was an absurdity which disclosed ignorance of the real position. In the face of the keen competition nowadays it was impeiative that the quality of New Zealand goods should 'be of the very best, and while few complaints reached the board in respect of butter, the quality of New Zealand cheese was causing grave concern. Hence any retrogression should not only be stopped but the industry must revert to its previous high standard if disaster were to be avoided. The question was admittedly a one, but Mr. Hine commended a study of Mr. P. O. Veale’s. recent report. Factory manag-- . erk and director#. especially should give

earnest consideration to Mr. Veale’s findings. Mr. Hine said the matter was to be threshed thoroughly at the Hamilton conference, and it was hoped the result of these deliberations would supply a solution to this most important problem. PRICE FIXATION DISASTROUS. “It is unfortunate that the value of our staple products has fallen so low, but let me say at once that in my opinion, no fanciful scheme of price fixation or pooling can overcome the present world-wide depression,” continued Mr. Hine. The board had evidence of the futility of such an attitude in the control fiasco and in the attempt of the Canadians to control the price of their wheat. Mr. Hine stated the results were similar and equally disastrous. Customers merely turned to other sources. For instance in 1928, Britain imported wheat worth £22,000,000 from Canada and £14,000,000 from the Argentine. Last year, as a result of the Canadian attempt to fix prices, Britain’s imports of Canadian wheat fell to £14.000,000, while imports from the Argentine rose to £24,000,000. “Is it not, therefore, the height of follv to endeavour to delude the producer with statements that under different marketing conditions butter, for instance, would not have dropped below 148 s, when we have ample evidence that, in spite of the low price of New Zealand butter sales have been reduced by increased supplies of Irish, Danish and other butter selling at low prices?” Mr. Hine asked.

The matter, could be summed up by saying that at present supply was in excess of the demand, which had been lessened by general financial stringency. Consequently it was imperative that the goodwill of distributors and customers should be cultivated to the utmost extent.

In this connection, Mr. Hine said it was particularly unfortunate that in the April issue of the board’s official journal the editor, in an article eulogising Mr. Goodfellow and the. Amalgamated Dairies, went so far as to charge firms with returning what he termed “padded account, sales.” Mr. Hine said he would not repeat the, paragraph in detail,, but as that, paper was the official organ of the board he took the. opportunity of saying that the board had no authority over, or responsibility for, what appeared in tho paper outside the official section and he much regretted tha t on this occasion the editor’s enthusiasm was allowed to outrun his discretion. HOPE FOR BETTER PRICES. Mr. Hine hoped for better prices in the near future. Even now, he’ >.iid, things were looking a little steadier, and he strongly advised companies to refrain from storing and to accept current prices so as to clear the decks and open, the new season without large quantities of goods still unsold. Mr. Hine said it would have been much more agreeable if he could offer some magic panacea which would lift the prices, but such was impossible and one could only trust that the present cycle of depression would not be of long duration. In conclusion Mr. Hine told those present that the existence of the board was resented in some quarters, but with a full knowledge of. present possibilL ties he assured them that its continuance was absolutely necessary in order to protect the industry from the domination of a particular section. A great many questions were then asked and answered. Mr. R. H. Wickham asked if Mr. Hine did not think New Zealand cheese should be more mature before being placed on the market, and was assured that such undoubtedly should be so. Mr. Hine mentioned that the board’s refrigerating engineer was now keeping cheese at° a slightly higher temperature both on board ship and in cool stores. Mr. H. Johnson;. Gan you explain why there is such a big difference in price between Canadian and New Zealand cheese ? Mr, Hine said he was given io understand that quotations for Canadian cheese published in New Zealand applied only to tho very bast, and the price of tho ‘Tail” was never mentioned. He supposed the higher pri.ee was due to greater maturity in the best Canadian cheeses. Mr. A. W. Budge: Canadian competition is a mere bagatelle to the amount of New Zealand cheese on the London market during the fliish. Mr. Hine: You must also remember when speaking of premiums that English cheese commands an even higher price than the beet of the imported article., ... Mr. Johnson: According to the British farmers, we in New Zealand do not know the. A.B.C. of cheese-making. Mr. Hine: That is ridiculous. Also conditions differ so materially. He had been told that the English cheese was made only from morning’s milk. No doubt low testing milk was better for cheese-making, but if all high testing milk were to be eliminated that would not overcome the difficulty. CAUSES OF TROUBLE. Mr. Johnson: Payment should be made in such a form that it would en> courage the supply of low testing milk. Mr. Hine: Do not get away with the idea that the universal supply of milk having a low fat content will at once solve your eheese-making troubles. I admit it is a factor, but only a factor. In reply to the chairman, Mr: Hine said ho could hardly give credence to the suggestion that top-dressing was one of the causes of openness in New Zealand cheese. He referred at some length to Mr. Veale’s report on the matter to show how many causes were interlinked in creating the effect of openness. Mr. Johnson: There does not appear to be much trouble in Southland from openness of cheese. They have mostly low testing herds there. “Yes,” said Mr. Hine, “but also in Southland they do not experience the close muggy nights of the North Island.” To Mr. Power Mr. Hine said the board had gone to considerable pains to investigate. opinion as to the benefit or otherwise of waxing cheese. The reports received were divided and no definite opinion could be expressed. Personally he had come to the conclusion that if a cheese was badly made or contained too much moisture, waxing was bad, but if the cheese was originally well made, waxing was a useful process. • Mr. T. H. Penn asked if the board had power to inspect books and account sales of wholesalers in England, but received a reply in the negative. “Is the buying, of New Zealand produce in England likely to become concentrated in a few hands?” asked Mr. H. J. Marchant. ..... .h-.’.•• • “I dp not thinki-so/’. waa the irfrply. .... -J, ad - '■

jQg2JER3aB2«3QSV2E3e93SI£CX&KS3SIZDG3&!SEFfIS22Ka3QX3XS£2S9SnS3ESS29QCBEB£i “If it is going to develop into & trial of strength between New’ Zealand and Great Britain, Britain will win, but the board does not encourage propaganda that will foster a spirit of antagonism. It believes in co-operation and goodwill.” In any case Mr, Hine thought the bogey of concentration of buying was rather overdone; the whole position resolved into a question of supply and demand. Mr. H. C. Taylor (Ngaere) commented upon the fact that while wholesale prices appeared to fluctuate greatly, Jlie retail price in Britain remained constant. Mr. A. D. Johnson, Lowgarth, sought information relative to the board’s connection with the paper The Exporter, and was told that the board’s contract with that organ did not expire until August, 1932. Meanwhile the board paid the paper each year about £3509 altogether and had no control over or eay in the matter that appeared outride the board’s particular section. “Becently,” he said, Vit has been hard to imagine that the Exporter is not the official organ of some other interests.” As a matter of fact the board not at all satisfied with the position, more especially as the arrangement provided that the Exporter should have priority in publishing the board’s affairs, and it was useless for reporters of daily newspapers to seek special information. Mr. Hueker (Tariki) raised the question of the advisability of Mr, Veale’s report having been go extensively broadcast. The publication of so minute a scrutiny, he thought, . might tend to injure New Zealand’s standing, and be used for propaganda purposes by competitors. Mr. 11. C. Taylor said in explanation that authority for publications had come from tho federation after careful consideration of the position. The report was by no means a confidential one, but was for the good of the industry generally, and as such it was in the interests of the industry that it should receive wide attention. Next Friday a further conference would be held at Hawera, when the report would bo carefully considered and delegates would go very fully into the causes upon which Mr. Veale based his findings. Mr. Taylor also asked if it would not be possible for the board to arrange that a number of vessels carrying New Zealand produce’ did not arrive together at London. “That has not. happened to any extent this year,” replied Mr. Hine, “and the board is fully cognisant of the position.”

To another questioner Mr. Hine said that as long as the board operated under statutory powers it could hardly be reduced in numbers. Certainly the Government required its nominee and proprietary companies were entitled to representation as long as their operations came under the control of the board.