GRADING OF BUTTER

Waikato Argus, Volume XXXV, Issue 5626, 4 June 1914, Page 2

GRADING OF BUTTER

CONFERENCE OF DAIRY COMPANIES' REPRESENTATIVES.

A DEADLOCK IN WAIKATO. "WHEELS WITHIN WHEELS." A conference of representatives of the dairying companies of the Auckland province was held last night in the old Borough Chambers, Hamilton, for the purpose of discussing the marketing and grading of dairy produce. Mr A. Morton, chairman of the National Dairy Association of New Zealand, was voted to the chair. There a large attendance. Representatives of all companies were allowed to take part in the discussion on grading. The chairman said the conference had been convened by the Thames Valley Dairy Company for the purpose of discussing the marketing proposals drafted at Hawera on 29th April, and the advisability ot adopting a uniform method of dealing with milk and cream supplies of an inferior quality. Mr Hubbard, of the Thames Valley Company, said it was self-evident that steps would have to be taken not only to maintain the quality of the produce, but to enhance it. He did not see why the Waikato and South Auckland should not follow the lead of North Auckland. The, chairman then read the following resolution, passed by the North Auckland conference: "That it is in the best interests of dairying that the northern factories adopt a system of cream and milk grading, with payment according to purity and butter-fat content." A second resolution had been passed, resulting in an agreement, binding the companies together, which he then read.

Continuing, the chairman said the tendency of the present marketing conditions was such that the proportion of second-grade was, unfortunately, increasing, so that the companies in this district would be wise if they considered this matter carefully. The following companies represented at the conference were then enrolled;—Te Aroha Dairy Company, Thames Valley, Cambridge, Te Kuiti, N.Z. Dairy Association, Waikato Dairy Company, Rotorua, Opotiki, I'iopio, Bay of Plenty, Katikati, Aria, Standard Dairy Company, Waimana Cheese Company, and Norfolk Dairy Company. It was intimated that the chairman of the Eureka Company had intended to be present.

Mr Martin Butler, Cambridge, was appointed secretary of the conference. Mr Strange said the Waikato companies had discussed this matter, out had not arrived at anything definite. They were in competition with margarine, and' if they were to compete successfully thev must raise the standard of their .produce. If the companies could not enforce their suppliers to supply a good article, they could not maintain their position in the London market. He, therefore, proposed a resolution similar to that given above. Mr Boddie, Te Kuiti, seconded. Mr Pacey, of the New Zealand Dairy Company, supported the motion, and said the proceedings at this time were likely to be of lasting importance to the dairying industry. The motion was unanimously agreed to. The various clauses of the North Auckland agreement were then gtne over seriatim. The first, allowing three open months, May, June and July, was agreed to unanimously, after some discussion. A DEADLOCK.

The second clause, as carried by North Auckland representatives, lan as follows:—"The companies, parties hereto, will at all times, unless with the consent of the other com pany affected, refuse to accept cream or milk during the currency of any season from any supplier who has during such season, supplied cream or milk to any associated company, and has had his cream or milk reduced in grade or refused by such company, by reason of being unlit for the manufacture of first-class butter or cheese, or wishes to change to other company for any other reason; and will refuse to allot shares to such supplier until the conclusion of such season, except as provided in clause 3 hereof, nor until such supplier shall have fulfilled all financial obligations to the company from which he proposes to secede." Mr Goodfellow, of the Waikato Company, while agreeing that cream returned should not be admitted, objected to the prohibition of secondgrade cream and to suppliers not being allowed to change factories during the course of the season. Mr" Pacey, of the New Zealand Dairy Association, held that if Mr Goodfellow maintained that attitude they might as well abandon the whole position.

Mr Boadie regretted the attitude assumed by Mr Goodfeliow. Their attitude to the grading of cream was the crux of the whole question. Mr Hubbard said he was also disappointed at the turn the discussion was taking. His company would not be prepared to receive supplies from any supplier who had ins milk or cream returned. Mr Goodfeliow said what they wanted was some definite actiun. His company were not satisfied to take the grading of some of their competitors. As far as they were concerned, they did not want any agreement. They hud introduced the home-separator method into Waikato with success, and they were quite able to maintain the standard of qua'ity they desired. The whole thing could be regulated by the price. Individual factories should have backbone, and grade the cream second. If the supplier did not like it, let him go. It was a great mistake to suppose that his company did not send back any cream to the suppliers. They sent back a considerable quantity during the past season, while they graded a good deal second. There were wheels within wheels in the Waikato dairying industry, and it was impossible lor them to sign the agreement as drafted. It would tie their own company up in a knot, and he could quite understand it would simplify matters very much for their competitors.

Mr Pacey said there was one fundamental error in that statement, which assumed that they would be depending on the grading of competitors. That was not so. Each company graded for itself and no one else. The purpose of the agreement was to ensure loyalty from the supplier in connection with the grading of his own company. Mr Goodfellow would be entitled to have quite a different standard, but they must have loyalty to the standard they mutually adopted. Mr Goodfellow: All you have to do is to return a man's cream, and he is fixed for the season.

Mr Hume: Would it not be possible for a manager to victimise a supplier by returning his cream? The chairman: If your managers are capable of doing that, they are are not worthy of your confidence. Mr Strange regretted the tone of the discussion. He had Deen hopeful thai, they would succeed incoming to an amicable understanding. Their back-bone would be shown by coming forward and signing the agreement, which was undoubtedly to the advantage of every company in New Zealand. It would also show back-bone on the part of the companies to refuse cream which had been graded second by any other company.

Mr Bassett, of North Auckland, said if they signed that agreement they would not be signing their death sentence. Under the agreement notice cculd be given by a company to retire from it.

Mr Dempster, dairy {instructor, Hamilton, was grieved to see the turn the meeting had taken and he thought the companies represented were looking at it in the wrong light altogether. Each dairy company starting the season with a certain number of suppliers would at least have as large a supply as they had in the past year, without allowing lor the natural increase, which was going to be very great throughout the Waikato. The suggestion of returning a man's cream was \wt worthy of tons\dttf&tioT\. Mr Morris said if anyone wanted to stand out let him stand out. It always grieved him to see any retrogression. Mr Hubbard trusted that the opinion expressed by the meeting would convince Mr Goodfellow personally that he and his directors were holding wrong views on this matter.

The chairman said it was unfortunate that they should have arrived at that position. Practically all the dairy companies in South Auckland had discussed the matter, which was one very materially attecting their welfare, and pertaining solely to the improvement of the manufactured article, and he really thought Mr Goodfellow or his directors had misunderstood the matter. He could not understand how any reasonable man, having regard to his own interests and the interests of the industry in which so mu>:h capital was sunk—freezing companies, etc., were going to be affected—should come to such a decision as Mr Goodfellow had indicated, and he really thought it was solely due to misunderstanding in regard to the actual position. He wished he could get an assurance from Mr Goodfellow that his directors would re-consider the matter, but it seemed to him they could not go any further unless he was prepared to resile from the position which he had taken up.

Mr Goodfellow said there was no misunderstanding. uis directors had spent a considerable time in discussing that very subject. From their point of view they considered that the chairman and others who did not live in the district misunderstood the position of the dairy industry of Waikato. As they were situated there, competing with a great many creamery concerns, it would be absolutely impossible for them to sign the agreement suggested. So far as their company was concerned, if they were to sign the agreement they would gain nothing. They had a business thoroughly well organised, the best men in the home separation business in South Auckland province—("question") and they believed they could put out a first-class article. They were convinced that rules and regulations would not do much unless they touched the farmers' pocket. In other words they believed they could attain satisfactory quality by grading the cream and paying for the grade according to the quality received. Therefore, ho did not think he could hold out any hope that their directors would reconsider the matter. They were one and all keen to do anything in their power to improve the dairy conditions of Waikato. They all recognised that the London market had seen its best day, that owing to the competition with margarine there was no market in London today for second grade butter, and that the party that put out an inferior article would very soon be on the scrap heap. So far as their own business was concerned they had no concern with regard to the future. They believed that by the use of the system under which they were working they could put out a highly satisfactory article, and could pay their suppliers highly satisfactory prices, and with the slight revision they would introduce this year, making a penny difference between the two grades, they believed also that they would be in a position to put out butter from their factories seond to none in South Auckland province.

Mr Pacey said it was the duty of the meeting to affirm the desirability of that to which most of their, were prepared to assent. 'lt would be for Mr Goodfeliow finally to decide whether he was able to assent. There was a reason why Mr Goodfeliow and others should object to the inclusion of trie words "for any other reason." As far as Waikato conditions were concerned the reference to shareholding was not important, indeed it was irrelevant. With those exceptions the clause referred entirely to quality matters, and he moved on those lines. They might as well declare the concensus of opinion as to the requirements of the industry and he thought that would serve the purpose. Mr Hubbard seconded. Mr Strange supported the resolution.

Mr Singleton, on behalf of the Dairy Division of the Department of Agriculture,said they were believers in the co-operation of factories along the lines of the agreement, which had worked well elsewhere. So long as the minority of inferior suppliers could snap their fingers at the manager who said their quality was inferior, there was not much chance of getting them into line and keeping them from depreciating the value of their neighbours' produce With regard to the suggestion that perhaps a factory manager might design to treat a supplier unfairly, so far as that "Was concerned in connection with the grading of cream in North Auckland, they as a Dairy Division were prepared to give every assistance to managers in carrying out that work in a way which would be satisfactory to the great majority of suppliers. They realised that it could not be undertaken in a rash spirit at a start They must do a certain amount of educational work for a time and perhaps the most effective way of doing it was through the suppliers' pockets He hoped matters would rectify themselves in Waikato, so that its produce would be on as good a footing as that of any other part of the country. The output of any district had a bearing on the reputation of the whole, and they hoped to see their New Zealand butter and cheese taking a stand on the British market, which would leave nothing to be desired. Applause. Mr Van Veen said he would advise his managing director to allow him to sign the agreement as far as grading of cream was concerned. It would be commercial suicide to sign it with the words included as in the original. They fully sympathised with the movement.

The .clause, leaving out the latter portion from the words "or wishing to change," was then put to the meeting and adopted mem. con. Mr lioddie saiu\ he understood the motion was only to be an allirmation of the principle. Mr Pacey: As the motion was carried unanimously 1 had hope Mr Goodfellow's position had changed. Mr Goodfellow: J did not vote, Mr Pacey. Mr Pacey then suggested that the meeting might pass a resolution asking Mr Goodfellow to put the matter before his directors again. Mr Goodfellow: Absolutely useless. The Remainder of the agreement was then read over, and the representatives of the following twelve companies agreed to sign it:—Te

Aroha, Thames Valley, Cambridge, Te Kuiti, New Zealand Dairy, Opotiki, Pio Pio, Bay of Plenty, Katikati, Aria, Waimane and Norfolk Co-operative. The following representatives agreed to recommend their directors to sign:—Rotorua and Standard. Waikato Dairy Association representatives declined. THE AGREEMENT.

Ihe North Auckland agreement, as amended and adopted by the majority, runs as follows:

In pursuance of agreement arrived at by a meeting of delegates of dairy companies in the North of Auckland held on the Ist day of June, 1914, with a view to improving the quality of milk and cream delivered to the factories in the district, and to preclude the moving of suppliers from one factory to another during the currency of any season, it is mutually agreed as follows: -

1. For the purposes of this agreement the- annual "season" shall be deemed to be the period commencing on the first day of August in one year and continuing until the next succeeding 31st day of May. 2, The companies, parties hereto will at all times unless with the consent of the other company affected refuse to accept cream or milk during the currency of any season, from any supplier who has during such season supplied cream or milk to any associated company and has had his cream or milk reduced in grade or refused by such company by reason of being unfit for the manufacture of first class butter or cheese.

3. Any company may allot shares to and accept cream or milk from any supplier changing his residence during any season to a residence closer or more convenient to a factory of such company. 4. The associated companies agree that they will make payments to all suppliers upon the following graded scale as to butter-fat content and quality, the stoppage stated being a minimum deduction, it being optional

with companies to increase the penalties if desirable. [Schedule.] Standard Butter-fat Content, 35 per cent. All cream testing below 35 per lent, of butter-fat to be paid for at one halfpenny per pound below standard price. Upon quality:— First grade cream or milk to be a good sound and clean cream or milk, free from feedy or animal flavours or taint. Second grade cream or milk to be paid for at one halfpenny per pound of butter-fat below the price paid for first-grade, provided that any supplier shall be entitled to receive one warning before the penalty is enforced. 5. Provided that nothing in this agreement shall preclude suppliers from at any time disposing of milk for household consumption. This agreement to be continuous and remain in force from season to season as between the associated companies except that any company can, by written notice to the other associated companies in the month of June in any year, withdraw as at that date. 7. In the event of any dispute arising between any of the associated companies on the interpretation of this agreement, the question shall be submittsd to the arbitration of the executive of the National Dairy Association, whose decision shall be final and binding. MARKETING. The report of the committee on marketing conditions was then considered in private by the South Auckland representatives, others being excluded.