MILLIONAIRES IN MILK.

Waipa Post, Volume XIX, Issue 1103, 9 June 1921, Page 5

MILLIONAIRES IN MILK.

TE AWAMUTU SUPPLIERS MEET. > ! REVIEW AND PROPHECIES. DAZZLING FINANCE. With a fluent speaker like Mr A. J. Sinclair assistant manager of the New Zealand Co-operative Dairy Co., and with such a sparkling theme as he handles an aundience can —as the Te Awamutu audience of suppliers on Tuesday did—sit back in its seats content to listen for ever. It was,the annual meeting of local suppliers and was held in the Town Hall, Mr,J. T. Young, a local director being voted, to the chair. ~ How Many Cows have We Got? The chairman said this was nearly the 60th meeting of Mr Sinclair in different districts of the company. Sometime ago he was asked how many cows there were around Te Awamutu —not counting past Ohaupo—and he found there 'were close on 13,000. The extra 4d per > lb. that these suppliers obtained for their butter through the amalgamation meant a sum of £47,000. Favourable arrangements had been made respecting butter boxes, cheese crates, and coal supplies, and Mr Sinclair had good news for them respecting the bonus. The coming season's prospects were "pretty good"— better than they had been led to expect. With reference to dried milk Mr Young said Mr Goodfeljow would come to Te Awamutu and have a special meeting to discuss that side of the business before his departure for England. Therefore if the had any questions with regard to dried milk they might just as well leave them till his visit. A Little Insfeht Into Big Figures. Mr Sinclair said the butter manufactured during th past season put up a record, namely 10,040 tons as against 8,717 in the season before—an increase of 1323 tons. This represented the output of the amalgamation of the New Zealand Dairy Association and the Waikato Dairy Co! But they had now to add the output of the Thames Valley: Dairy Co., which had also amalgamated—namely 2620 tons. This made a grand total output of 12,660 tons of butter. The year's total output of the whole of New Zealand was only 35,000 tons, so that their company made 35 per cent, of the dominion's entire output. They also made 5678 tons of cheese, 485 tons of casein, 500 tons of skimmed milk powder and 2998 tons of glaxo. Their suppliers numbered 6,500, and it was expected to open, the new season with over 7000. Their total turnover in money amounted to 4£ million sterling during the twelve months, and they now had the honour of being the largest co-operative dairy organisation in the world.

Colossal Bargaining for a Price. It was on account of their big output that they were able to treat with the British Food Ministry, and secure the better price for their butter which Mr Young had referred to. The Imperial Government, through the Food Ministry,, offered the New Zealand factories 240/ per Cwt (about 2/2 per lb), and the Australian factories accepted it readily. But the directors of the New Zealand Dairy Co. had a shrewd idea that they ought to get 2/6, and therefore refused the 2/2. The Ministry at Home declined to increase the offer, and a conference of factory representatives was therefore held in Wellington. The New Zealand Dairy Co., 1 there found itself in ; minority of two—themselves and another company in North Auckland 'with an output of 600 tons of butter represented by Mr Bassett. All the others were for accepting 2/2 and the reason was that they had been advancing a veryhigh price to the suppliers and were anxious to make sure of the 240/ offer so as to arrange their finance at once. The New Zealand Co-operative CO., having advanced only a small amount, were not hampered by big overdrafts like the other companies.

Mr Goodfellow Puts Up a Flglit. When the decision to accept 2/2 was announced, Mr Goodfellow immediately objected because it was decided on a show of hands instead of by volume of output, and carried his objection to the Government. Mr Massey upheld the objection, and details of output were then collected, showing their company to have not only 35 per cent, of the total butter made in New Zealand but half of the exportable butter to be sold to the Food Ministry: Mr Goodfellow and Mr Bassett were therefore in a majority, and Mr Massey said under those circumstances he could not possibly cable an acceptance to the Food Ministry. Mr Goodfellow thought they should make a good fight for it, especially as they had not had a fair deal in the former two years when they received only 1/H as against 4/ &nd. 5/ paid to Denmark. A Romance of Fourpence. They therefore got into touch with America and inside of a week sold 1000 tons there at 2/6 f.o.h. Auckland, cash before shipping. A few days later they sold another 1000 tons to America, and an offer to buy all the exportable surplus at the same price. Thus the extra 4d was secured on half of New Zealand's total exportable butter —representing £450,000 or nearly half a million extra to the suppliers of the New Zealand Dairy Co. But it resulted also in the Food Ministry immediately agreeing to pay 2/6 for the whole of the N w Zealand export and 2/51 for, that of Australia—a total gain of 3J millions! That achievement alone justified the amalgamation. Bonus of 6d, or Perliaps 7d. Mr Sinclair went into questions of quality of the butter, the cost of maintaining the staff of instructors, etc., and said a bonus of at least 6d. and probably 7d would be paid out on last season's supplies. This was not obtained without a struggle against those people who held that the people of New Zealand should -get butter cheaper than those in the importing countries. The dispute in this respect was settled after a special commission on the cost of production by a Government subsidy of 6d per lb. This was taken from the consolidated fund— a rather unfair proceeding because 90 per cent, of that fund came from primary producers. The subsidy totalled three-quarters of

a million sterling. When that period ended the Government intended to stop the bonus and fix the retail price at 2/3. The New Zealand Dairy Co. "replied that they would store their butter and ship it to Vancouver, and there were rumours that the Government intended to .etaliate by buying Imperial butter from store at 2/. The company therefore held meetings of suppliers in its 150 centres and bombarded Mr Massey with resolutions of protest. Finally they accepted a Government bonus of 2d plus interest and storage charges up to August 31st next. These negotiations were interesting because this company practically monopolised one-haK of the winter butter supply of New Zealand First Bonus Next August.

The first bonus of 3|d to suppliers would probably be paid at the end of August, and the remainder perhaps 31 d later, on. They could not fix that date because the Government which owed them a very substantial sum, was short of money.

The company was prepared to make advances to suppliers who might be "up against it" on the security of the bonus at bank interest and they would also supply manures, fertilisers, building materials, etc., on credit against the bonus.

Cheaper Boxes, Crates and CoaL They would this year make their own butter boxes and cheese crates, for which they paid last year £IOO,OOO. The prices paid were 2/10 for butter boxes and 4/1 for cheese crates, the highest prices paid in New Zealand, and they used up several million feet of timber. They hoped to make them at lower prices next season, namely 1/111 for butter boxes and 2/10 for cheese crates—a saving of ,£27,009. They had a railwaj. being laid past their coal mine and were starting to mine, coal in small quantities, but would not be at work in earnest for perhaps 18 months. That would halve their codl consumption, whicli now reached 30,000 tons a year and when the dried milk factories were working 50,000 tons. They expected to make 5000 tons of butter more this season—a total of 18,000 tons (whereas Argentine total export output was only 7000 tons). This difficult problem because their factories were already fully taxed. Dried Milk Outlook.

The dried milk market had eased considerably, and the prices for both dried and condensed milk had fallen in America. Their own dried milk was equal to the best on the market. They intended to erect a butter factory alongside every dried milk factory so that as the supplies for dried milk were received twice daily, the cream made from it might produce superfine butter. At the new butter factory at Waharoa they would produce 1500 tons of butter. One would be erected at Te Awamutu in course of time. It was intended later on to erect a small factory in Auckland City on a 2-acre site near Mt. Eden railway station for two very important purposes—city milk supply and city butter supply. They might want to know how the company's operations were financed.' This was done by share capital, and it was necessary for the suppliers to take up shares, the proportion of one £1 share to every 100 lb. of buttertat being about to be raised, with the consent of the shareholders, to one share to every 70 lbs. The payment of this was obtained by means of 5-Sd per lb. deducted from the bonus.

Gauging Next Season's Price. As to the prospects^'for the next year, there was good news to tell. Nobody could prophesy exact figures, but there were certain guiding factors. They assumed that industrial conditions in England would be reasonable, and that the German indemnity would'place considerable mon»y into circulation in Britain in cash. Siberia which used to send 100,000 tons of butter to Britain per year, (enough to knock the bottom out of market to-day) .was' riot ,likely to affect the market again for the next ten years. On this basis they expected to pay 2/ per lb. next year, which would be better (at the lower cost of production) than 2/6 last year. But they should be reasonable and calculate on 1/9 or (if things were bad) at the very lowest —he, hated to name the figure—l/6.—(Laughter)./ But they considered that absolutely rock bottom. A large quantity of their export butter this year was going io be sent to Britain in pound pats labelled as New Zealand butter, which they would be glad to hear.; (Applause).

Question Time and Turnips. Mr Armstrong asked if the Company would advise the farmers as to the best feeds? Mr Sinclair said this would be done. Turnip flavour could not be eliminated by the pasteuriser, and rape was even worse. They were now testing various turnips to find a'variety free from flavour. It was found that wilted turnips, especially if fed with lucerne, etc. ,and immediately after milking, almost escaped bad effects. Mr Kay, Government instructor, said harrowing out turnips/ in breaks of a fortnight helped to avoid the flavour, and especially when accompanied by chaff feeding. The red-paragon turnip had been fed for two hours without taint while superlative could be fed only one hour.

Mr Young said red-paragon was successfully fed at Ohaupo. Mr Ai-mstrong said the Americans used maize silage successfully. Mr Young replied that the labour was the chief objection to this. Mr Tims asked why the Dairy Co., could not sell manures cheaper than other firms? Mr Sinclair said they intended to go into the matter. They indented 2000 tons of basic slag of 17 to 20 per cent. (4-lime phosphate) at £8 10/ per ton. (phosphoric acid) at £8 10/ per tod. and sold at £9 10/, but a further rebate would be paid to suppliers on this slag. They intended to increase Mr F. Quin asked if the dried milk factory would be ready for this season.

Mr Sinclair regretted that information which he expected to have posted to him had not arrived, and they must therefore wait for Mr Goodfellow's meeting here about three weeks hence. Mr Johnson said Mr Goodfellow said about the end of September. Replying to a question, Mr Young

said the company took up 1000 £1 shares in the Hangatiki lime works, whose output they were advised was better than Te Kuiti's and this would ensure them supplies. The New Committeemen. Messrs. Wallace, Johnson and Quin were re-elected committee without opposition. The meeting, on the motion of Messrs. Quin and Armstrong, carried with acclamation, a vote of thanks to Mr Sinclair, and the chairman, and a vote of "supreme confidence in the management of the company." Mr Sinclair: I assure you. a vote like that Will be very much appreciated by Mr Goodfellow. Other Meetings.

Mr Sinclair addressed meetings at Paterangi and Ngaroto on Tuesday, Puahue yesterday morning, and Hairini last evening. He is due at meetings to-day at Pirongia and Te Rore. The iPuahue meeting was held at Mr Park's homestead, and was very successful.