DAIRY CONTROL

Timaru Herald, Volume CXLIII, Issue 20893, 24 November 1937, Page 7

DAIRY CONTROL

EFFECT OF ZONING SCHEME VIEWS OF LEADING DAIRYMEN Two leading dairymen in South Canterbury, Messrs S. R. Muff and P. M. Downes, expressed themselves as satisfied with the present factory zoning system, when over the week-end, they were interviewed by a representative of "The Timaru Herald” on matters affecting the dairy industry. Both stated that South Canterbury could have owned the central butter factory if the capital had been made available, but the opportunity had not been taken. Talk of Monopoly Mr Muff, of Orari, who is prominently connected with the dairy industry in the South Island, mentioned the fear that one dairy company was obtaining a monopoly of South Canterbury’s butterfat production, and said that owing to obvious restrictions, monopolistic tactics could not coma into operation unless they were tolerated by the Government. When asked about the widespread opinion that the grading regulations were being tightened up so that the guaranteed price payout would be reduced, he said nobody seemed to be sure about the tightening of the regulations, but it looked like it. Mr Downes, of Temuka, who is also well known in connection with the Industry, stated that considerable misunderstanding had evidently grown up around the matter of mono-, polistic control, but he contended that

suppliers would ultimately benefit to a considerable extent.

“There seems to be a lot of discontent about the Ashburton company taking over the monopoly of butter interests In South Canterbury,” Mr Muff said, “and those raising the objections state that they would prefer a central factory in the district. They have that. The word ‘Ashburton’ can be forgotten altogether.” Once the whole scheme was properly under way, he understood that South Canterbury would have representation on the Ashburton board. That in the past, something had been wrong with dairy companies in South Canterbury, was exemplified by the financial difficulties under which many of them had worked. Perhaps that could be accounted for by the number of companies in existence; but whatever the cause, it must have been obvious, that under such conditions, suppliers could not expect full value for their production.

Opportunity to Own a Factory There was still a butter factory in Timaru, Mr Muff continued, and the only "fly in the ointment” was that Ashburton owned it. South Canterbury had had the opportunity to own its factory, but had not taken it. Even yet, however, there did not seem to be any reason why the district could not own the factory provided the money were raised to effect the purchase. He would like to add that he was more conversant with the production of cheese than butter, but generally, he thought the same facts would apply. He would state, therefore, that In his opinion, there would be very little to worry about as soon as the present company's activities were on a proper working basis. It had, in fact, been definitely stated by the Ashburton directors that in transport alone, £2OOO would be saved this year, and a saving of £3OOO would be made in overheads. That would mean a saving of £5OOO in the first year. Such a saving would be to the advantage of suppliers, and they must, as a result, ob. tain the highest return under the guaranteed price. Ashburton should be able to make as good a payout as any factory in the South Island, which, after all, was the main matter concerning suppliers.

As stated in the report of the meeting of the South Canterbury executive of the Farmers’ Union, which appeared in "The Timaru Herald” on Saturday, Mr Muff proceeded, the directors of the Ashburton Company had made no move to meet South Canterbury suppliers. "I cannot see any reason why they should not come down,” he said. "Such a meeting would clear up a lot of misunderstandings.” Mr Muff maintained that monopolistic tactics could not come into operation unless they were tolerated by the Government. Suppliers were safeguarded tn eve: way. Factory management was under strict supervision.

Farmers’ Union Deputation In reply to the accusation that he had, without authority, Invited a deputation from the South Canterbury executive of the Farmers’ Union to meet the Dairy Commission at Temuka, and that as a result, members of the deputation had had to "cool their heels” for two hours, Mr Muff detailed the steps he had taken. tn the first place, he had attended a special meeting of the Temuka branch of the Farmers’ Union held at Orari. and with some of the directors of ills own company, had thought that it would be a good idea to enlist the support of the Union during the Commission's visit. “At that time,” he said, "we thought the Union would carry a bit of weight.” As a result, he had attended the executive meeting in Timaru, and it had been decided to send a deputation to meet the Commission. Later, he raised the r i-

tlon at a combined meeting of five cheese companies, and the point was raised as to whether cheese suppliers required the assistance of the deputation. The meeting ultimately decided that it would be better for the deputation to meet the commission to the interest of butterfat suppliers. So he had advised two members of the deputation of the position. “I met the Commission at Temuka,” he said, "and I was there the whole of the time before the main meeting. During that time, Mr W. Buchan (South Canterbury president of the Farmers' Union) met the Commission, and was Informed that the deputation could not be heard until the cheese companies had been dealt with. I had previously informed Messrs Buchan and J. Macaulay that the cheese companies had decided to meet on their own. The deputation later met the Commission on the butter question, but as I was not concerned, I did not attend.”

Mr Muff said he would like to clarify one or two points which seemed to be causing some suppliers concern. The first affected farmers who desired to change from a butter factory to a cheese factory. There seemed to be an impression that the change had to be made during July and August. But those suppliers who were unable to change over until September could do so if they advised the cheese and butter factories accordingly. Early tn the season, when there was a small quantity of milk available, it would tn many cases be more economical to send cream away. Winter cream suppliers were recognised, and could retain the right to send cream until milk was available for cheese. A further point he would like to add, Mr Muff concluded, was that cheese factories were satisfied with the present position, and did not desire any more limelight. The matter of zoning, as far as they were concerned, had been finished.

“Will Not be Penalised” “The fact that Ashburton interests own the factory in Timaru, does not mean that South Canterbury suppliers will be penalised,” Mr Downes said, when he was interviewed on the question of zoning. The supplier was protected in that his cream was graded by a man under license, and at any time an Inspector had the right to step in an check the figures. The grader, cream tester end buttermaker all held their positions under license. That system came in about two years ago. More than that, every company secretary had to put in a detailed account cf the quantity of butter manufactured and the amount of cream paid for. with Its grade. Up to 500 tons of cream was railed out of the district before the present system come into operation, Mr Downes proceeded, and now the total production went to Timaru, a fact that must be of considerable importance as far as the port was concerned. Whereas one set of lorries collected the cream in his district, there were formerly three, and thal cost must have been thrown back on to the

producer. He agreed that the Ashburton directors should have called a meeting of South Canterbury suppliers to explain the position, and they would eventually have to toe the mark in that connection.

Mr Downes explained that co-opera-tive dairy companies had been floated in South Canterbury for the last 18 or 20 years, and none had really been satisfactory. Moreover, South Canterbury people had had the opportunity to control a central factory themselves, but the money had not been raised. As the money was not raised, therefore Ashburton had solved the problem. A position was reached at which something just had to be done about the number of factories operating in the district. He added f ' the Ashburton directors considered that saving of £25,000 would be effected within five years, and that would clear the cost of zoning.

Criticism of Testing Regulations Some interesting information about testing regulations was given by Mr Downes who said the daily system of testing was out of date, and the tenday system not only resulted in a great saving of costs, but was just as efficient. A supplier might claim, however, that he would not know tor 10 days whether or not he was sending in second grade cream; but, as pointed out by Sir Francis Frazer, second grade cream might have only been supplied over two or three days and mixed with the rest, would not affect a first grade test for the period. The supplier or second grade cream was, to effect, fined id a lb and when dairy research was properly under way, an officer of the Department would go out to a far:- to find the cause, if testing were repeatedly poor. Some people migh’ ask what happened to second grade cream. Usually it was mixed with the rest, and because of quantity, did not affect quality. But if second grade cream became general that could not be done. There had very evidently been a tightening up of the regulations, but even so there was no reason why every producer should not eventuallv obtain “finest.” As far as cheese was concerned, the grading had generally been very high. In the long run high grading would ensure a first quality product.