MARKETING OF BUTTER

Waikato Times, Volume 112, Issue 18805, 29 November 1932, Page 3

MARKETING OF BUTTER

DOMINION AND DANISH

DISPARITY IN PRICES.

WHY DENMARK IS FAVOURED

The advantage which Danish butter holds over New Zealand produce on the London market so far, as prices are concerned was explained by Rotarian W. Y. Kirkman in an address on the dairying Industry in the two countries, at the Hamilton Rotary Club’s , weekly luncheon in the Wattle Tearooms yesterday. The speaker compared the producing and manufacturing abilities and the marketing facilities of Denmark and New Zealand, and gave a brief history of the industry in both countries. Denmark has not always been a dairying country, he said. Up to the beginning of the last quarter of last century the Danes had concentrated on growing grain, but the low prices for this product, which ruled after the troublous years of war, from 1870, made a change of industry an economic necessity. To meet the changed conditions following'on the wars in which the Continent was involved at this time a commission was set up to determine the best course for Denmark to follow. Denmark was then a free trade country, and was surrounded by countries which had adopted a policy of protection, with increasing tariff walls. The Danes were growing more grain than they could consume, and their market outside was restricted. They set up a tariff commission, but after a heated debate it was decided that free trade should continue. In the face of the prevailing conditions the Danish farmers were compelled to relinquish the ■growing of grain and take up animal husbandry, letting the other countries grow the grain. The fact that Germany annexed two of the best sections of Denmark, Schleswig-Holstein, further impoverished the country, which never forgave Britain for permitting Germany to take this step. Even to-day there was an element of feeling against British visitors. Policy of Best Quality. In the place of grain growing the ■Danes, who saw the prospect of developing’ a market in England for their produce, decided to start dairying. About the same time, in 1878, the power separator came Into existence, and proved Invaluable to the country In furthering its policy to produce the best possible quality of butter, although prior to The advent of the separator the butter was not so, good. They had adhered to this policy throughout. A large proportion of the Danish butter output was exported, and the home consumption of butter was very small compared with the amount of margarine that was used. In 1931 the Danes consumed 19,000,000 kilogrammes of butter and 79,000,000 kilogrammes of margarine. When the price of butter was very' high a few years ago they used praotically none at home, and as a result a peculiar eye trouble, which was found to be caused through the lack of vitamins, became almost universal in Denmark. This was remedied by the use of more butter and less margarine. Britain offered the best market for Denmark's butter, and absorbed 5-6.4 per cent of the exports, while Germany, the next best customer, took 19.9. The imports Into Denmark of British goods were only 14.7 per cent, while Germany contributed 32.9 per cent. “When I was In Denmark a few years ago I remarked on the large number of American cars In the streets,” said Mr Kirkman. “I was struck by the small imports of British goods as compared with the volume of exports to Britain. It was this lack of reciprocity which inspired me to recommend to the British dealers to buy New Zealand butter in preference to Danish. Danish Marketing System. The farm land in Denmark was not good, in fact it was poor in quality, but it was astounding to see what the farmers had done with it. The farms were small, and averaged only about 7 1 cows. The Danes concentrated on high quality in fheir butter, and this involved control not only _ in manufacture, but also in marketing. The Danish butter for export was packed in kegs of 1121 b., and was branded Lur, signifying that it was of export standard. No butter, unless it was the best quality, and carried the Lur brand, was allowed to leave the country, and if any was exported it was recalled. So far as the factories were concerned, the Danish butter was good for Its type, but it was of a totally different character to the New' Zealand product. When it was considered that New /.ealand was 12,000 miles from the Home market and Denmark was within a lew hours, it would be realised that it was impossible for New Zealand to make the same class of butter and compete on the same footing with the Danes. New Zealand conditions prevented the manufacture of the same type of butter as Danish, but the best type made here was equally as good as the best produced in Denmark. The speaker went on to refer to tho psychology of the British buyers where the packing of the butter w-as concerned. He expressed the opinion that the adoption of the 561 b box by New Zealand factories was in some ways a misfortune. Must Come Out of a Keg. He had been assured by some of the English merchants that had this country exported its butter in kegs, the same as did Denmark, New Zealand butter would have made the same price as Danish. It was impossible to overcome the conservative ideas of the English consufners, who took the view that sood butter had to come out of a keg. He explained that New Zealand butter had to be sent in boxes owing to the fact that it was exported In refrigerator storage. The use of barrel? was impracticable. . New Zealand bad started in the dairy industry 'in a small way. The speaker recollected Ihe lime when the prodno- j tion of one ton of butler was a re- | ■markable accomplishment. Great ■ progress had been made since then, j and to-day it was quite a common : practice for one churn to turn nut a . ton and a half of- butter in one churn- . inc. The difference between New ; Zealand and Danish production was . possibly ill the Danes' favour up to the point of delivery of the milk at the ; factory. lie thought that the Danes | had a belter raw product, lull, the ! standard of Ihe New Zealand factories j was higher than the Danish, hotfi in | equipment and the system of handling j and manufacture. _ _ I New Zealand had copied Ihe Danish j co-operative system of factories. The ]

dairying industry was- started in this Dominion as a proprietary concern, and among the pioneers in the Waikato were Messrs H. Reynolds, Wesley Spragg and S. J. Amburv, who realised that the co-operative system had to ■come. In thirty years the industry had developed greatly, and New Zealand was now one of the largest butter producers in the world. Last year the production amounted to about 100,000 tons, and indications pointed to an increase of up to 25 per cent this season.

New Zealand’s Downfall. “In my opinion New Zealand’s downfall on the Home market has been in the system of marketing, 1 ” said Mr Kirkman. “Our butter has been sold by c.l.f. or f.0.b., which has not proved satisfactory. As our output increased some organisation to supervise our ■sales should have been evolved. Had there been no opposition, the Control Board movement would have placed New Zealand in a better position than she is in to-day. The title of the Control Board was-not a good one, but the idea was sound. To-day New Zealand is faced with a breakdown of the marketing system, which was prophesied by the sponsors of the Control Board movement when New Zealand’s increased production was

met by a bumper season in Australia. It is my opinion that we should b&v* some organisation which would have a definite oversight of the marketing in the Old Country, to . prevent unfortunate cutting between' those handling our produce, and the weaker sellers forcing the market down. At the present time it seems evident that due to the exchange advantage whioh favours Australia, ooupled with the Paterson scheme, the Australian producer is able to accept less for his butter, and still receive more for it than the New’ Zealand farmer. Section organisation would show to the English consumer that butter from our pastured cows is better than the Continental butter, which is largely produced from cows fed on grain and other meals.” At the conclusion of hie address A hearty vote of thanks to the speaker, moved by Rotarian James Treloar, was carried by acclamation.