H.—29.

The Dairy Industry. For the first time in the history of the dairying industry in New Zealand the average grading-points for creamery butter have exceeded 93, and nearly four-fifths of the butter produced has graded finest. Considering that conditions for manufacture have not been uniformly favourable, this achievement on the part of factory-managers merits congratulation. The main characteristics of New Zealand butter are uniformity, mild flavour, and excellent keeping-qualities, and on these it has firmly established its position 011 the British market. As a mild low-acid type New Zealand butter compares more than favourably with that of any of its competitors, but there are clear indications that the British consuming public would give preference to a type intermediate between the high-acid type of Denmark and the low-acid type of New Zealand. If such could be produced without any loss of keeping-quality it would be distinctly advantageous, and the Dairy Division is giving considerable attention to this point. While the quality of New Zealand creamery butter is distinctly showing an upward tendency, the same, unfortunately, cannot be said with regard to the general quality of our cheese. The introduction of standardization, and its subsequent modification in name and percentage of butterfat to dry matter, has resulted quite unsatisfactorily. The British consuming public evidently look to New Zealand to produce a full-cream cheese, and the divergence from this by the part skimming of milk, notwithstanding the fact that the percentage of butterfat to dry matter was high in the finished article created a prejudice against our cheese output. For this reason alone standardization has been unsuccessful. From the Government standpoint standardization was viewed as probably lessening considerably the difficulties attendant on cheesemanufacture from high-butterfat-testing milk, with resulting improvement in quality. After two seasons' trial the grading statistics clearly show that standardized cheese grades on the average lower than does full cream. In other words, standardization under our present knowledge of manufacture tends to lower quality, and therefore the practice must be eliminated if any sincere effort to regain British confidence is made. The elimination of standardization will not, however, of itself put to rights the question of cheese-quality improvement. An impartial view of the cheese situation clearly brings out that there are many factors to be considered and their influence on quality determined before the position can be satisfactorily put into order. Among these the questions of marketing a more mature type of cheese than is at present the practice is perhaps the most important, inasmuch as any definite alteration in this direction will be expensive. Again, the question of a still purer milk-supply is one that must be ultimately connected with quality, and the time is certainly opportune for the introduction of a system of milk-grading under which inferior quality is penalized. A third factor that must be determined definitely before any authoritative statement on how best to improve our general quality can be made is whether or not an increasing butterfat percentage in milk is detrimental to the manufacture of a really superior article. In addition, the questions of certain diseases in their relation to the production of milk unsuitable for cheese-manufacture, and the relation of pasture composition from the viewpoint of top-dressing to milk-quality, also merit consideration. The Fruit Industry. Although orchard-development from an extension point of view has been practically at a standstill for the past few years —new plantings little more than offsetting eliminations —the industry has made substantial progress in practically every other direction. Improvements in the methods of disease-control, cultivation, manuring, and general orchard-management, plus the maturing of existing trees, have led to a substantial increase in production year by year. A sound system of grading, packing, and standardization has led to New Zealand fruit securing first place on. practically all oversea markets; while a very efficient scheme of organization covering the assembling, packing, shipping, and marketing of export fruit has materially improved the prospects of the industry, and has led to a continual extension of oversea markets. Markets served last season (1930) were Great Britain, Argentina, Uruguay, Brazil, British Columbia, Eastern Canada, and several countries on the Continent of Europe. Fortunately for the industry, fruit has not been materially affected by the existing marketing depression. Last season's export was practically a record, approximately one and a half million cases of apples and pears being shipped overseas, the gross value of which was over £750,000. Unfortunately, damage occurred to one shipment of 43,000 cases, which, allegedly due to faulty transportation, arrived in an almost unmarketable condition. This is still the subject of inquiry. The prospects of the industry have been detrimentally affected in one

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