HAWERA DAIRY COMPANY

Taranaki Daily News, 2 August 1932, Page 10

HAWERA DAIRY COMPANY

RETURN BETTER THAN 1931 “DAIRY FARMERS FORTUNATE.” CHAIRMAN ADDRESSES MEETING. An increase of Id. per lb. butterfat in pay-out, which more than compensated for somewhat lower production, was commented on by the chairman, Mr. J. R. Corrigan, at the annual meeting of the Hawera Co-operative Dairy Company yesterday. There was a good attendance of shareholders. The pay-out results of the past season for milk supply represented an increase of Iff. per lb. butterfat in the price, compared to the 1930-31 season, and the increase more than compensated for the somewhat lower production figures which most suppliers showed, said Mr. Corrigan in moving the adoption of the report and balance-sheet. Having regard to the difficult times, and to the world-wide slump in all markets, it could be said that the dairy farmers of New Zealand were fortunate in enjoying during the past season steady markets and a ready sale for their increased quantities of dairy produce at prices which, in comparison with other exports, should be regarded as satisfactory, j There was a stability about dairying which appealed to the farmers and which was the prime motive in the bringing of additional areas of suitable land into dairying. The past season had shown what a wonderful market New Zealand had in Great Britain for her dairy produce. She had no other outlet, and yet increasing quantities had been readily absorbed by shipment to the United Kingdom, which during 1931 imported from all countries 403,500 tons of butter pud 144,000 tons of cheese. In 1927 the figures were: Butter 291,000 tons, cheese 147,000 tons. For the year ended July 31, 1932, New Zealand exported 97,000 tons of butter and 85,000 tons of cheese. The increases of butter imports into Great Britain had been made possible by the increase in butter consumption, aud the displacing of margarine, which as a butter substitute gained favour when butter prices were high. The Tooley Street merchants and other authorities stated that, the Empire products campaign of the Empire Marketing Board and also the publicity efforts of the New Zealand Dairy Produce Board had assisted in promoting the sale of New Zealand butter and cheese. LEAD TO INDUSTRY NEEDED. It was probably correct to say to a degree dairy development, in New Zealand during the past 20 years had been too easy. The.stress of present times, however, had made it abundantly clear that there must be guidance and development of policy in regard to the great industry if New Zealand was to hold, its place in the face of world competition. There was growing realisation of this fact, and an increasing urge for the Dairy Produce Board as head of the industry to give a lead in policy matters and in regard to market outlets for increasing exports. Figures published recently showed that the Australian exports of butter to Great Britain were increasing. Whereas in 1927 Australian exports represented* 8 per cent, of tne total United Kingdom imports, in 1931 the Australian quantity was equal to 19 per cent. The New Zealand increase in butter imported into the United Kingdom was from 22 per cent, in 1927 to 24 per cent, in 1931, and in cheese from 55 per cent, in 1927 to 60 per cent, in 1931. Danish butter imports decreased from, 34 per cent. in 1927 to 31 per cent, in 1931, and Canadian cheese imports decreased from 29 per cent, in 1927 to 25 per cent, in 1931. New Zealand of necessity was greatly interested in the dairy produce export from Australia, as the potential butter output of that, country would have a direct influence on New Zealand prices. The results of the Ottawa Conference might lead to further dairying development in Australia. Although the Hawera company was engaged primarily in ■cheese manufacture, suppliers would realise that butter developments and prices had a direct bearing on the cheese markets.

POSITION BEING MET. Dairy farmers in general, and Hawera suppliers in particular, had had their troubles since the sudden fall in values, but it had been noticeable that the difficulties had been faced with courage, and with a determination to make the best of things and to meet the lower values with an increase in production and a lowering of production costs. With rare exceptions it' could be said that mortgagees, banks, stock firms and lending institutions had met farmers .in a very fair and even generous spirit. . There had been many readjustments,.which had been based on values approximating to the present market prices, and this feature was most encouraging. In his address to the annual meeting of shareholders the general manager of the Farmers’ Co-op. Organisation Society had stated that although the society had accounts with approximately 4500 farmers, in no case had a farmer been sold up or forced to leave his farm.. . That example was typical of the conciliatory spirit between mortgagor and mortgagee. The butterfat in milk supply to the company showed a decrease of 4 per cent, compared to the previous season, and that slight drop was due to the less favourable season which had been experienced. The average fat test of the milk also showed a slight drop. That was seasonal, and was the common experience of most of the factories in the district. The company made a full seasons cheese, whereas for the two previous seasons a change to butter making was made at some time during the normal cheese-making period. Account had. to be taken of this different manufacturing policy in any comparisons which might be made between this year’s figures and those of the two previous seasons. Thus the charges items in this years manufacturing and marketing account showed increases, due entirely to the fact that the company made cheese for the full season, whereas the previous year early in February the milk was separated, and the cream supplied to the butter department, which did the manufacturing. REDUCTION OF COMPANY’S COST. It would be noted that the cost of manufacture and placing of cheese f.o.b. ocean steamer was 2.69 d. per lb. butterfat. This figure represented a drop of 36 per cent, in costs compared to 1922, when the figure was 4.24 d. per lb. butterfat,. The average pay-out to milk suppliers ior the season, was 1& ger lb.

and adding share interest the total became approximately Is. OJd. per lb. butterfat. Having regard to the company’s high butterfat test for milk supply, and corresponding low yield, of, cheese per lb. of butterfat, the pay-out must, in comparison with other factories, be considered satisfactory. The end of season cheese afloat and in store, amounting to approximately 400 tons, was sold f.o.b. at s|d. per lb., and it seemed likely that that price would equal or exceed the consignment realisations. The’ sale had enabled the company to make its final payment for the season on July 20. Interest on shares had been paid as usual in terms of the company’s articles of association, absorbing £2547 os. Bd. The attention of suppliers was drawn to the fact that of the interest 85 J per cent, was payable to supplying shareholders, and only 14J per cent., or £368, to dry shareholders. The shares of dry shareholders were gradually bought up, thus reducing the amount of the dry shareholders’ interest. It could not be said that payment of interest created a hardship or was in any way unfair to the supplying shareholders. The results in the home separation department were satisfactory, sales of butter enabling an average payout of approximately lljd. per lb. butterfat to be made. Reference had been made last year to the discontinuance of the issue of fully paid shares iu terms of, the policy of debt reduction which had been in operation for some years. The shareholders of the company loyally supported the debt reduction scheme and they had the satisfaction to-day of seeing their company almost free of all external debt. The external indebtedness, which at the beginning of the year was £3300, and which in 1922 was £25,000, was now £l9OO. Attention had been given to keeping the factories in good repair. The policy of the directors was to make year by year all necessary repairs, and not to attempt the doubtful expedient of putting off meeting the expense. The practice of postponing necessary expenditure inevitably led to trouble. Mr. C. N. Vickridge secouded the motion. AUDITOR’S REPORT. Shareholders would note, reported the auditor - (Mr. T. F. McKenzie), that the costs of manufacture, including repairs and depreciation up to f.0.b., was 2.69 d. per lb. butterfat, compared with 2.32 d. for. the previous year. In comparing costs with the previous year the fact that the milk was Separated for buttermaking for July, 1930, and for the period February to June, 1931, had to be taken into consideration. For the last season the milk was separated for the months of July and June only. The costs per lb. butterfat for manufacturing butter were considerably lower than for cheesemaking, and as only a small percentage of last year’s milk supply was separated the cost at 2.69 d. had to be considered very satisfactory indeed and would be found to compare more than favourably with the majority of . factories operating in South Taranaki. The excess of liquid liabilities over liquid assets was £l9OO compared with £3304 for the previous year. Shareholders would remember that the reason for the increase in 1931 was the expenditure of £3OOO on new plant and extensions at Whareroa. It would be noted that £5OO had been provided for depreciation as against £l5OO in previous years. In reducing the annual charge for depreciation the directors were guided by the fact that the company’s fixed assets were all in firstclass working order, and were actuated by a desire, in view of the difficult times, to assist suppliers by paying out the maximum amount possible. Taking this and the company’s sound position into account tfie departure from the usual policy was justified. Careful attention had been given to the allocation of expenses in the home separation department, and he was satisfied that it bore a proper share of the manufacturing and management expenses. The usual levy on cream suppliers for the use of plant and buildings yielding £799 4s. Bd., had been credited to the cheese department. Mr. S. J. Bennett said he tool? it there had been cuts in the wages. In the balance-sheet wages were up £lOOO. The chairman explained that this was due to a larger proportion of butter having been made in the previous year. Personally, he was not in favour of any more cutting as he thought they should give their men a decent wage. They had all got to live. There had been a 10 per cent, cut under the awards, and the directors, manager and secretary had had a 12J per cent. cut. Mr. W. McKenzie thought the costs should be reduced. Mr. Corrigan said that if everyone worked for nothing it would not mean as much as Id. per lb. butterfat. They had o-ot to give people enough to live on. They did not want any more paupers on the State. “You can talk about all your monetary systems,” said Mr. M. McKenzie,, “but the only way out is to cut costs.” i Mr. Corrigan said the costs had been I reduced as far as they could be with , efficiency.

increased charges AFTER F. 0.8. Mr. C. H. Washer asked why the charges after f.o.b. had increased by £3OOO. , . , Mr. G. Duncan (secretary) explained that this was all due to the way the output was disposed of.. All the butter made in the previous year wassold f.o.b. so there would be no consignment charges. That was why in comparison of costs they only took charges up to f.o.b. To take costs beyond that point would be most misleading. Actually the rate of consignment charges had been reduced. In reply to Mr. Washer, Air. Duncan said income tax had been paid out of the appropriation account this year because there was a surplus. Income tax was paid only on share interest, butterfat payments being exempt. The rate was about 3s. in £l. Air. W. V. Parker a sked why Eg mon t Box Company shares were shown as assets, z

Mr. Parker’s, question indicated that the. box company shares might not be assets and perhaps he . was right, said Mr. Duncaii. The directors considered the ad vantage, of showing them was that the entry showed how much Ilawera had put into the company, which otherwise might be. forgotten. The directors were neft unmindful that the shares might not be assets. To provide for this on the liabilities side the company had a special reserve of £3261. Mr. Bennett said that if they did not pay share interest they would not have to pay income . taX. Mr. Corrigan said that the companyhad had the benefit, of the money for the- debt reduction scheme. Otherwise they would be paying interest' to the bank. They should, therefore, pay interest on .share capital. “I am afraid in the near future-it will be a serious matter,” said Mr. Bennett. Mr. Corrigan said there was no need to be afraid. They would have had to pay interest on loans, so they should not refuse ip pay it on capital. The company was gradually acquiring the dry shares. If they did not pay interest they would be doing an unjust thing. The company’s debt reduction system had been admired by scores of dairy companies. Mr. Bennett had contributed to debt reduction for ope year, but others had contributed for eight years. Would it not be unfair to divide the interest for the extra seven years on a butterfat basis. Until they were in- the position to get these shares back they were right tb pay interest. Mr. Bennett said that paying interest had, in tax and interest to dry shareholders, cost £753. That was going to grow. ■ Mr Corrigan: How? Mr. Bennett: Income tax is being increased. Mr. Corrigan said they should meet just taxation- and not pass it on to others. . Mr. McKenzie considered the rate of interest paid was too high. Jlr. Corrigan said that the banks had not yet reduced their interest rates, so that the company was not paying too much on share capital. Replying to a questioner, the chairman said the debt reduction levy would not have to be imposed again. . Mr. Russell said he liad not received as much as I?id. Mr. ’ Duncan said every supplier got Is., but the amount over that varied with the proportion of share capital held. ■ • ' DEPRECIATION ALLOWANCE. Mr. Bennett asked whether the directors thought the allowance for depreciation sufficient. The chairmap said the only articles that depreciated greatly were lorries. Out of income the company had kept its machinery up to 100 per cent, efficiency. Mr. W H. Reynolds said that the plant was in better order than it had been at any time since he had sat on the board, namely, 14 years. He paid a tribute to the work of the manager, Mr. C. H. Bowman. Mr. J. E. Campbell said that insurance had been increased by £lOOO, which showed that the buildings had beep kept in good order. The mechanical stokers > had meant that less coal and les ssupervision were required., ■ The retiring directors, Messrs. A. L. Campbell, H. E. Johpson apd W. H. Reynolds were re-elected unopposed. Mr. T. F. McKenzie was re-appointed auditor. A vote of thanks was accorded the chairman, directors, secretary, manager and staff.

GENERAL ITEMS. The opinion that the bobby calf industry was detrimental to the cheesemaker was expressed by Mr. A. J. Hopcroft, manager of the Normanby dairy factory, at the annual meeting of shareholders yesterday. Since the industry had come into being, he said, there .was a- tendency to send milk to the factories when it was too new, apd this affected the cheese in that it would not mature as well.;, ... The feeding of artificial foods such as turnips and mangolds to dairy cow? should 'be done with care, said Mr. A. J. Hopcroft, the manager, of the Normanby dairy factory, at the annual meeting yesterday. ■ He knew that such feeding was necessary, but if it was carried to excess the milk became tainted and the cheese was naturally affected. 1 “I don’t mind vou coming and asking 4 ” »aid Mr. J. R. C?Wga& chair-

man of the Hawera dairy company, after some lively exchanges ; at the annual meeting yesterday. ‘T might look angry, but I am not.” . inew members of the South Taranaki Boys’, and Girls’ Clubs Association were eprolled at the annual meeting of the Hawera. dairy company yesterday as the result of a suggestion made l?y the chairman, Mr. J. R- Corrigan. Robert Gulliver, aged 19 wn? arrested at Manaia on Saturday stable J. Scanned on a of entering the-Commercial Hotel find stealin p £9 from the bar-room Hl l - Abused peared before’Mr. J. J- Meldon, J-P-, and was remanded to appear at the Sprite’. Court. iu -Harrera « August 8. Bail was allowed . ’ Agricultural ; students at the Hawera Technical High School had a lesson last week at; Mr. H. V. Ward s farm, Paora, Road. To-morrow there m to be a pig demonstration at Mr. a. Thomlipson’s farm, South Road. At a meeting of the Patea ral }* e ' lief Committee it was reported th?t there were 20-fewer register at Patea and full-time W this week. The relief depot would be opened only during stand-down week. The sum of Uls was m hand. Routine, business was the executive of the West Coast (NA) Centre of the New Zealand Athletic Association at itsl JJ awe meeting last night. Mr. A. P - sided. Tenders .for. the.rest room were dealt with by a special meeting of the Haweya Borough Council ' last night, when the tehder° of Mr. A. 8. Holloway, Hawera was accepted. The choice of the spot of the tower grounds for th? building was left to the Mayor (Mr. B. A. Pacey j and Cr* G. J. Bayley. In the final for the Abbott Trophy presented recently for competition among members of the Hawera< ‘Golf Club, E. Hammonds beat R. P. Baigent in a. match in the week-end. - * '

INTER-SCHOOL RUGBY MATCH. HAWERA LEAVES FOR FEILDING.' The Hawera Technical High J School first fifteen will leave to-day for Feeding, where the annual match against the Feilding Agricultural High School will be played to-morrow. Mr. H. White* head, the coach, will tpavel with the team, which has been selected a? follows: Full-back, McGlade; three-quar-ters, B. Thomas, P. O’Dea, G. Gibson; five- eighths, J. Fearon (Ist), E. (2nd); half, Graham; forwards. Wills, Moore (hookers), Emmitt, D. o’Dea (capt.), Derrett (lock), Gardner, McMillan ; Hayman (rover).