New Zealand Dairy Association

Waikato Times, Volume 88, Issue 13575, 1 September 1917, Page 7

New Zealand Dairy Association

The annual meeting of the New Zealand Dairy Association took place in the Premier Hall. Pukckohe, on Thursday. Mr E. Pacey, chairman of directors, presided, and there were about 100 members present. Mr Pacey expressed his pleasure at the satisfactory attendance, which npoke well for the interest taken in the affairs of the Association. Election of Directors arm Auditor. The result of the poll taken for the election of two directors was announced as follows: ..•Per Waikato—Mr Robert J. MfXftey, defeating Mr McNair by a substantial majority Lower Waikato—Mr W. C. Motion (unopposed). Mr Motion returned thanks for his unopposed election for Lower Waikato. He had always done his best for the association, and would continue to do 80. Mr Maisey also expressed his thanks tor the honour done him. He made reference to the suggested amalgamation scheme, of which he was not in favour, It would only mean increased salaries all round. He could not see the use of the South Auckland Dairy Association. Mr McNair thanked his supporters, »d congratulated his opponent. He urged that the ward system be instituted. That would be far more satisfactory, as at present many of the suppliers did not Know the candidates for whom they were called upon to vote, and consequently took little interest in an election. This was evidenced by the fact that only about one-third of the suppliers recorded their votes on the present occasion. Mr Seering H. Matthews was unanimously re-appointed auditor, at a fee of £6O per annum.

over two other factories concerning which negotiations are in progress. The glaxo factories aforesaid are a new and important feature in the association's business. Some of our critics have said that under the glaxo scheme the suppliers do the work, the association finds the money, and the glaxo proprietor takes the profit. In these respects the position is not altogether unusual. Under any dairying system it is the supplier who usually does the work, whether he is milking for butter or cheese; with glaxo it is the same, but the suppliers are glad to do it, for they are assured of a better return for their labours than under any other dairying scheme. They certainly are satisfied with the present arrangement and with the future prospect. It is also true that the association provides the money for the glaxo factories, as it does for its butter and cheese factories: it is the association's willingness and ability to do this which have contributed to its splendid record. The money for the glaxo factory is provided according to the usual co-operative plan; the suppliers will themselves capitalise the scheme by deduction from their butter-fat of id per pound until the cost is covered, while the terms of the contract for the disposal of the output provide the association with suitable maintenance, depreciation and other usual charges, in addition to assuring to the suppliers the payments which have been promised to them. The association also has reason to be satisfied with the arrangement, and the directors expect to undertake further business thereunder. I hope the glaxo proprietors will also get their profit, especially so, as if it is a good one there may be a little more to pass on to the association's

Managing Director'! Address. In moving the adoption of the report' and balance-sheet, Mr Pacey said:— I am glad to be able to congratulate you upon another year of progress and prosperity. Our butter output for the year reached 5,901 tons, as compared with 5,118 tons for the preceding year, "while the cheese output has reached 888 tons, as compared with 522 tons for the year before; thus we have increased our output during the year by 783 tons of butter and 366 tons of cheese, which Aid beyond our most sanguine expectation of a year ago. The Association is now responsible for about one-fourth of the Dominion's butter export and about one-fifth of its butter manufacture, in addition to which its cheese and &laxo interests are • very large. When last season's accumulated stocks have been cleared and realised upon at even conservative rates the total of the year's business will reach £1,284,383 9s 6d. The turnover for the preceding year was £872,375, while the accounts adopted at our annual meeting seven years since showed a turnover of £291,871. Thus the. Association's turnover is practically £1,000,000 actually £992,511 more than it was seven years since. Such increase has added greatly to the labour and responsibility of controlling the business especially with competition of the sort which has confronted us during the whole of that time. The result, however, is highly satisfactory, and is confirmation of the policy which has been followed, and will, I. am sure, be a surce of gratification to the association's shareholders, as it is to its directors. It is a tribute to the past and a prophecy for the future. Auckland's prosperity has become proverbial, and many have enjoyed its increasing wealth without recognising that its source is in the pasture lands of our increasingly fertile province, and that its continued flow is to a considerable extent dependent upon the exertions of the "man on the land." The 2900 farms which have produced butter-fat for the association's organisation have contributed a worthy share towards Auckland prosperity, and without doubt • have made an indelible impression upon the commercial and industrial life of the community. Our suppliers' roll has been bigger during the past season than ever before, while there is prospect of considerable further increase. . This is especially gratifying in view of the fact that we have just passed through a transition period covering several years during which the policy and organisation of the association have been adjusted to meet changed, conditions. The changes made are Justified by the results, and the association faces the future better equipped than ever before, and more strongly entrenched in the loyalty and confidence of its share-holder-suppliers. Had such adjustments not been made the position might have been otherwise. Important Developments. During the year two important developments have taken place: one was the acquisition of the butter factory at Clevedon, which was for many years carried on by the late Jas. McKnight. There are indications in the district that our advent will restore unity there, and we are extending the factory so that it may efficiently and economically deal with the increasing business which is in prospect. The other was the amalgamation of the association's interest with those of the Matangi Cheese Company, Ltd., with a view to the establishment of a milk product factory at Matangi, which promises to be the biggest thing of its kind certainly in the Dominion, if not " in the world. Including these, the association will next season own and control five butter factories, five cheese factories, and two glaxo factories, in addition to running many dozens ol creameries and cream-collecting systems, while the directors have been approached with a view to our takini

suppliers. Certainly they deserve some return for the responsibilities which they have undertaken in contracting for the output for several years; and further, a'l straightforward business deals should leave a margin of advantage for all concerned therein. Those who purchase New Zealand butter and cheese may sometimes make a loss, but on' the average they make a profit, otherwise they would not for long continue to be bur customers. There are also advantages in prospect from glaxo for the suppliers to our butter and cheese factories; larger business will immediately result, which in turn means lower pro rata working expenses, in which all suppliers participate, and as the scheme develops such advantage will increase. Butter-fat Payments. There has been much ado during the autumn on the question of advance payments from, month to month. We have sought to be prudent, and our people, almost without exception, have given us their confidence during the period of unusual conditions, and such confidence was rewarded by the announcement of a further payment of sid per lb butter-fat, making as before a better average return—l believe much better, than has been obtained for the same period from butter by any other company in the Dominion. The laugh of our people comes last, but it is surely best on that account. Our cheese factory payments again average better than do those of any other company in the Waikato, thus showing that the association can do better for its people in this department also than anyone else can do for them. The payment of s£d per pound just referred to is free from deduction on account of butter-fat levy; such levy, by the way, cost the association £34,621 6s 7d, while to the end of June we had received by way of compensation £6545 0s lOd, wfth further sums due of £15,016 17s 4d, making a total of £21,561 18s 2d. Many applications have been made to the Government for refund of the levy payments; there is not much prospect of the whole amount being refunded, but there is a prospect of a substantial liquidating payment when the scheme is wound up. Owing to the congestion due to inadequate shipping facilities, the year has been one of financial testing. The position of few companies has been prejudiced thereby, for they have usually been able to finance either by ordinary banking facilities or by drawing against credits established by British firms, the former, of course, being preferable when practicable. I was amused at hearing of the representative of one dairy company who featured the fact that his company had a British credit against which they could draw which placed it in a beter position than its neighbours. The spectacle was a little grotesque, and reminded me of the two boys who were each seeking to uphold the traditions of their respective families, to which end one declared that they had a tower upon their house. The other promptly replied that that was nothing—they had a mortgage on theirs. Fortunately banking facilities have been open to us and we have come through the year without giving any mortgage or other charge over either property or stock, and the financial strength of the association is better established to-day then *ver before. I would here draw attention to the fact that the association has continued to resume shares in accordance with arrangement, last year the number resumed having reached 4206. We haw been able to keep our engagements ir i this respect without any inconvenience I would here take opportunity o: referring to the work done for th( ! association by its officers and its agents i Our London agents have, as before i been punctilious and successful ii ' f heir attention to the association's in- • .terests. The secretary and other off! i J cers at the head office have bad a ver; t ■ heavy and difficult year, but they havi

T A RECORD YEAR'S TURNOVER. Future Prospects Satisfactory.

served well and faithfully; our organisers have been enthusiastic and tactful, and have contributed their share of the success which has characterised the past season. Our factory managers have each rendered conspicuous service under conditions of difficulty without parallel in earlier years, the difficulties having mostly been due to uncertain labour and irregular transport. Mr Dick, manager of our cheese factory at Orini, came a good second in the grading competition open to all factories in New Zealand, covering all cheese passing through grading stores from September to March, inclusive. Mr Blake, junior butter factory manager, who received his first appointment as factory manager at the beginning of last season, won a third prize in the export class at the Hamilton Winter Show. Mr Parlane, of our Frankton Junction factory, again covered himself with distinctions in both export and local trade classes at the Hamilton Show. He won two first prizes, and at Palmerston three first prizes, two second prizes and one third, the Palmerston success including the best aggregation of points over the four principal events in the butter competition. Mr Parlane secured a 25-guinea challenge cup, two gold medals, and £45 in cash prizes. We are proud of our factory managers, and have good reason to be. The Suppliers Fail. Those distinctions, together with commendations received from agents, customers and others establish the fact that we have easily kept pace with our neighbours in respect of the quality of our products. Even we, however, have not done as well as we shall need to do if we are to uphold the traditions of New

Zealand butter upon the markets of the world. The factory managers will do their very best in this direction, but they need help from the suppliers who, after all, ape more concerned in the ultimate results. During thp past season the cream quality has not been up to the average standard of former seasons, especially during the period, December to March inclusive during which the best butter is usually made. Early in this period some cream showed an active fermentation, and as the period advanced the proportion increased until the trouble at some factories became general to a greater or less degree. This was due to abnormal conditions. Excessive rain fell, humid atmosphere and high temperature produced a rank growth of pasture, and this, in turn, favoured the development of the bacterial organism which produced the yeasty ferments. To overcome this defect I urgently recommend our suppliers to exercise increasing care both during milking and in the dairy also; to see that everything which comes into contact with the milk or cream is absolutely clean, including milking, machines, separator, cans, and other utensils. If, in addition, suppliers will aerate their milk, separate their cream to show not less than 45 per cent butterfat and pass the cream over the water cooler through which, the coolest waiter available is circulated, it will be of immense advantage. In no case should cream from separators be put direct into cans containing cream from earlier separation unless it is first cooled. If care is exercised on these points, and if care of cream is ensured during transit, it will greatly assist our factory managers. As butter made during the coming season may be held up awaiting shipment for much longer than ever before, it is especially important that every possible care be taken, and I earnestly ask the co-operation of our suppliers in this matter. To those who live in town the condition of the weather is a commonplace subject of conversation, but it is a matter of serious consideration to dairy farmers and others who live in the country. The continued rains of the past several months have added to the inconvenience and difficulty of country life, and the coming dairying season—at any rate its commencement—will be greatly influenced thereby. The watery grass of the present day does not contain the usual food value and the butter-fat contents of milk must be less, while these conditions continue. Dairymen will to remember this, otherwise they -may be disappointed when they are confronted with what will, I fear, be the inevitable lower test. Mr Motion and Mr Maisey are the directors to retire this year, and I am pleased to welcome them both back for a further term of service. Mr McNair, who contested the Upper Waikato seat with the retiring director, is a member of the association of many years' standing He has given good help in connection with many local matters, and I should have been glad to have welcomed him also to a seat at our directors' board. Importance of Herd-Testing. The Association's herd testing department continues to do good work, and there are evidences that judicious culling which follows herd-testing, to gether with careful breeding, is improving the dairy herds. I was interested recently in perusing a report bj 1 our herd-testing officer at finding thai 1 during the season 1914-15 the pooresi ; cow tested by him showed an averagi ; yield of fat for the season of .431b pei day. For the season 1915-16 the pooresi cow gave ,561b per day, while for th< [ season 1916-17 the lowest yield per daj was .601b of fat. These figures are ai . indication of improvement. The re r turns of Mr A. J. Melville, of Buck (land, flhwtrate the advantage to be

gained by improving the strain of dairy cowa. His herd last season consisted of 30 cows, which supplied the domestic needs of milk to the two families living upon the farm, after which 9,7221b of fat were supplied to this Association. The supply which we received equals 3241b of fat per cow. The farm consists of 64i acres, and there was fed upon the farm 10 young stock, 4 horses and a bull, in addition to the 30 cows. When farming on these lines becomes general, the production of the Auckland Province will be increased at least threefold. Herd-testing is a step in that direction, and we are glad to be able to help our suppliers in this respect. There has not been much said during the past season about the amalgamation of the dairy companies of South Auckland, but the movement is not by any means dead. There has been much thought, and some discussion which shows that of certain essential interests~TS coming round to recognition that an affiliation of interests will alone ensure the best for the producer and for the industry alike. I repeat the opinion which I expressed last year that it will certainly come. The sooner the better for all concerned, for present conditions are wasteful and harmful in the extreme. Difficulties of Transport. The past season has been characterised by unusual difficulties in connection with transport, while at one time the industry almost reached the end of its available storage. Fortunately cooperative dairying has been linked up with co-operative storage, and it is good for the industry that our storage was entrusted to a farmer company which gave the dairy industry twice the storage which was guaranteed under the extension scheme of a couple of years since. But for this consideration, great loss to butter-fat producers would have resulted, and even with it,'we were within a few days of the end of our resources. Subsequently there have been considerable withdrawals from the stores, and there is not now any immediate danger that the storage will not be sufficient. We shall be in a better position next season than last, as the directors ef the freezing company are making additions to the freezing stores, both at Southdown and Horotiu which will accommodate a further 4000 tons of frozen produce. In addition, they have expressed to the Government their willingness, should necessity arise, to erect a further temporary store at Auckland which would have a holding capacity of 20,000 crates of cheesethus the storage will be quite adequate if we can get only reasonable loadings at Auckland. The province still has considerable quantities of last season's butter and cheese in store. It is understood that the several steamers will arrive which were mentioned by Mr Massey some time since as due to load in September, and we have urgently represented the need of clearance of last season's accumulated stocks. We are hopeful that this will be done, and we are encouraged by Mr Massey's statement that he thinks he will be able to make arrangement! which will enable the industry to carry on without serious difficulty. The future shipping prospect continues to fluctuate somewhat, and at the moment the outlook is not quite as i good as it seemed a short time since. This, doubtless, is partly due to two or three of our New Zealand refrigerated boats having recently been lost. We have every confidence that our Government has done, and will do, its best to secure the service of every available ship, and probably no amount of discussion would improve that position. I, however, think there should be a revision of the order of priority which determines the goods to be shipped from time to time. At present beef, mutton, lamb and meat sundries take precedence over cheese and butter, the position of the latter being somewhat the wgtbF. I appreciate reasons why beef and mutton, v>liich are needed for the army, should take precedence, but as room is found for lnmb nnd sundries which are not used by the army, there should also be found regular proportionate space.for butter, which, for the space occupied is much more valuable, and which concerns the industrial destiny of very manv more people. The improvement in our storage prospect eases up the position very materially, but if the dairy industry is to be placed upon a reasonably satisfactory position for the coming season then a regular space allotment must be made, even though it be only a small allotment. The Board of Agriculture recently gave consideration to this subject, and recommended the Government to allot to butter 6 per cent, of the refrigerated space in the steamers leaving from time to time. If this is agreed to it will materially improve the position. The renuest for a 6 per cent, allotment is a very reasonable one, and is, I think, entitled to more consideration than it appears to have yet received, especiallv in view of the interests which are involved. With a view to easing un this position, and of meeting other difficulties, the Government has suggested the acquisition of the Dominion's butter output. The proposal ha* many elements of advantage, and sub. ject to certain conditions it has been agreed to by a large majority of representatives of dairy companies, and the matter now awaits the decision of Cabinet. If it is found practicable to arrange satisfactorily with the Government it will, without doubt, give confidence to the industry, and will, I think be appreciated by most of the producers. Futurs Prospeott Encouraging. In my address at the last annual meeting I referred to the unproved prospect for butter producers. In the interval the post-war prospect has shown a further very marked improvement. The, production in Denmark has been greatly reduced, and a smaller nroportion of what continues to be produced is finding its way to the British market. Siberian butter is now off the English market—the New Zealand output is? somewhat less than formerly. It will be many years before the world's production of outter will equal the demand, and prices must necessarily rule h'gh. This is further emphasised by the increased consumption of butter amongst the workers of Great Britain since the war has increased their earnings. Probably present-day earnings will not maintain after the war, but there is not any 1 kelihood of their wages reverting to the pre-war standard, and I think it is probable there will be a permanent increase : u the eonsumption ef butter amongst the British workers. Not only is the prospect good for butter, but the value of calves, which are a by-product in the butter business, will also rule higb. A few weeks since the statement was made in the House of Lords by Lord Harcourt that after the war there would be a world's scarcity of meat, almost world-famine. Germany. Belgium and Holland were faced with a postwar deficit of eight million head of cattle. Denmark. Austria, Serbia and Botimania with another eight million. Putter producers would do well to bear these facts in mind—they should continue to increase production as much as possible, and in doing so they will serve national interest and self-in terest alike. I trust before our company meets again in general meeting the' war will have ended; meanwhile, each week brings messages of sorrow to the homes of some members or employees of our company. On your behalf, I take thf > opportunity of expressing sincere sym pathy with those who are bereaved, and who are sorrowing. The .total or Auman suffering was never as great as now. I, however, believe it will help

towards the better day—if so, it will not have been in vain. I move the adoption of the directors' report, the balance-sheet and ether account*; as placed before you. Reduction in Value of Shares. Mr Fulton strongly censured the decision of the directors that when suppliers are surrendering shares only 75 per cent, of their value will be paid uy the association. He thought it a crying shame that this should be done. Several other members spoke in the same strain, one stating that they intended to fight the matter. Mr Ewing thought that if suppliers did not fulfil their obligations they should not object to being penalised. They should be loyal to the association. Mr Pacey asked members to take a reasonable view of the matter. The 25 per cent, reduction referred only to the old creamery issue of shares. The policy of the association was to serve the suppliers as they themselves desired. Many of them desired a homeseparation organisation, and the association had met them in this direction. Consequently several creameries were closed, and to make up the wasted asset it would have been necessary to deduct something from the butter-fat payment or the capital account. The direction* thought it only a fair thing that the original creamery, shares should take

the burden. It would hardly be right for later suppliers to be penalised. Mr Pacey considered that members were hardly loyal to the co-operative system if they took up shares and then pulled out owing to some little disagreement. Replies to Questions. Mr R. T. Wilkinson wanted to know why certain suppliers were leaving the association and joining the Waikato Company? The association, being oldestablished, should be able to pay a better price.—Mr Pacey replied that they were gaining enormously more than they were losing. Nearly every time they lost a supplier they got him back eventually. Suppliers had returned to the association by the dozen. He was prepared to pledge his reputation that unless a certain supplier had received preferential payments he had not got as much as he would have done by supplying the association. Wijh regard to the South Auckland Association, Mr Pacey said ho looked forward to the time when it would exercise a very beneficial influence. They wanted the uniform grading of cream, and concerted action among the companies should ensure that. If the South Auckland Association could secure that it would mean thousands of pounds to the association. In reply to a supplier who wanted to

know why payments were irregular, varying from Is to Is 7d? Mr Pacey said this had been unavoidable. They had not yet received a full settlement from the Government, IX) per.ceht. having beep paid on most of it. The matter depended, largely upon the shipping problem. Replying to Mr Henry, Mr Pacey considered there would be a refund of the levy, but he could not say what the amount would be. Export values hare increased. He thought the refund would be a little less than id per lb. The Ward System. , Mr McLennan thought the time bad arrived when the district should be cut up into wards, say, six. If this were done, it would result in much benefit to the association. Candidates for' office could get into touch with the suppliers. He moved that it be a recommendation to the directors that the ward system be instituted. Mr Banks seconded, and the motion was carried unanimously. Mr Pacey said that he favoured the ward system. The district was .at present divided into two, an effort having been made to have an equal number of. suppliers in each. He recognised that the ward system would be more satisfactory, and he thought the directors would be pleased to give effect to the recommendation.