CAMBRIDGE DAIRYING

Waikato Times, Volume 118, Issue 19639, 27 July 1935, Page 3

CAMBRIDGE DAIRYING

COMPANY’S TRYING YEAR. QUESTION OF MANAGEMENT. “PROBLEMS IN MARKETING. . (Times Special Reporter). CAMBRIDGE, Friday. A year’s activity in which many problems from both marketing and production angles were faced, was reviewed at the annual meeting of the Cambrid.se Co-operative Dairy Company, Limited, in the Cambridge Town Hall to-day. The chairman, Mr W. Harbutt, presided over an attendance Of 200 suppliers. Associated with him were the six directors, Messrs F. H. Anderson. J. W. Garland, W. F. Duncan, T. Robinson, M. Wells and R. D. Fisher, the manager, Mr iP. C. H. Petersen, and the secretary, Mr E. J. F. Kennedy.

'Dealing with the activities of the company" Mr Harbutt said/ that the board of directors had experienced a frying year. The policy of the board had been to render as much assistance as possible consistent with safety. After protracted negotiations with the Railways Department the directors had been able to secure a reduction in the rate of 2s per ton for the carriage of butter and cheese to Auckland, but the full benefits of the concession would not be seen until the next year’s accounts as the reduction only operated from March 1, 1935. “In the throes of the drought the production of the company suffered ■heavily, the decline being as much as 21 per cent for January v and nearly 27 per cent for February,” explained the chairman. “Happily, with the breaking of [he drought., the produc-

tion of butterfat recovered quickly with the net result of the decrease for . the season being 8.28 per cent. Poor Outlook for Cheese. j "With the outlook for the cheese * market appearing unfavourable the directors decided to stop cheese-mak-ing a month earlier than last year, ’ which contributed in no small measure to the heavy decrease in cheese manufactured during the year. Whereas in 1934 the output was 3504, in 1935 it was 2821 tons —a decrease of 653 tons. This action was all the more opportune to suppliers as the ! butter market wms holding well and j they would also have the benefit of their skim milk for pigs,” said the chairman. Mr Harbutt contended that the indications were that the 'butter market would continue firm until September, when the trend of prices might be influenced by special world conditions, the principle of which would be the i progress of production in those countries supplying the United Kingdom market. The prospects of the cheese market were most unfavour- i able, due mainly to the tremendous in- j crease in the milk supply of Britain under the subsidised scheme of the j Milk Marketing Board. The bulk ol j this increase could only go into • cheese-making with the result that English factory cheese was being offered by llie Milk Marketing Board at prices from 36s to 38s per cwt, These | cheap offerings were naturally having a depressing "effect upon the demand for New Zealand cheese.

Marketlng Prospects.

The board had given serious consideration to the future prospects of the markets and had decided, tentatively, to postpone the commencement of manufacturing / cheese in the new season until September 1. For the same reason the board had decided to withhold the payment of the cheese bonus for the time being, being anxious to see if there would be any improvement. Should 'the market dc-

I - • Cline it was only too apparent that the cheese account would disappear, a fall of only Is per cwt on stocks alone involving a sum of £1075. Mr Harbutt said that the expenditure under the heading of dried milk property and expenditure had now been eliminated. The remaining assets .under this beading were all valued and taken into their respective accounts at their present day values and the balance of the expenditure was written off. The balance sheet now showed only the true assets of the company and was not overloaded with expenditure on behalf of dried milk which had long since disappeared. “The future position of the industry •is very critical,” declared Mr Harbutt. In Canada the cheese pay-outs were ■subsidised to the extent of over td per lb and a similar system would be very advantageous to the New Zealand producers. Most of the farmers were on the water-line and unless conditions were altered a great many would be forced out of business. The Final Adjustment Act was not so beneficial as it would appear. It might be termed “gentlemanly” bankruptcy and to bis mind the only way in /which the country was to 'Obtain a “cleanup” of mortgages was through the medium of the old Bankruptcy Act. This was the quickest and simplest mediqm.of cleaning the whole mess.

Methods Cause Criticism.

•Some discussion centred on the selling methods adopted during the year, •several shareholders alleging that good sales opportunities, neglected by the directors, had been fully exploited by other companies. Mr J. T. Fisher expressed the opinion that there seemed : to be a lack of supervision in the company’s affairs. Some years ago he had semotion urging the appointment of a managing-director. However, it was, he considered, easy to be, wise after the event and be felt that congratulations were due to Mr Harbutt for the valuable work lie bad performed' during his first year of office. ’

Mr W. R. Laurent questioned Wie efficiency of the advice lent by selling agents. The recommendations given by them during the year had proved ill-founded and, as a result, the directors «had failed to realise on the highest markets.

In reply to Mr W. 'C. Wallace, the chairman said that the weakness in the marketing machinery lay in the system of selling at the London end. Before the Executive Commission of Agriculture had been set up, he had •suggested to the Hon. J. 'G. Coates that, even at a cost of £IO,OOO or £15,000 a year for salary, it would be beneficial to the New Zealand producers if an expert or a board of experts were established in London to control sales and distribute the produce to the agents. ‘ .By this means the weak sellers, who demoralised the market, would be eliminated, “Our directors are competent farmers but not trained businessmen,” commented Mr F. S. Veale. “To appoint a capable general-manager 0£ managing-director would offer the •Cambridge Company ia service similar to the Dominion’s biggest companies.” Directors Given their Best. “The directors have given us their best but they are pitted against longexperienced and trained businessmen in the selling of the produce," observed Mr-H/’P. Hewitt, in moving a recommendation to the directorate that the appointment of a managing-director should be considered and a special meeting of suppliers convened to consider the proposal. "It is a very old problem and it was as early as 1919 that the question was first mooted by Mr W. Brown,” •explained Mr Anderson, a former •chairman of directors .of the company. “I consider that this company is big enough to warrant the services of'a trained business man at its head. However, cost has to be weighed against the added efficiency that would bo gained.” Mr M. Wells thought that under the present situation of controlled export when-f.o.b produce went out of the company’s hands after leaving the Dominion, it would, perhaps, be wise to defer any appointment of a manager for several years. An amendment that the question of •of appointing a managing director should ho considered by the hoard and brought before the next annual meeting of suppliers was carried. Votes' of thanks were accorded the directorate and the staff. Messrs Sanson and O’Meara, of Hamilton, were re-appointed auditors, and Messrs \V. Ilarbutt, J. W. Garland and R. u. Fisher were re-elected directors. The honorarium of th.e chairman and directors was fixed at £320. On the recommendation of the directorate ft was decided to pay no interest • on share 'capital on the past year.