S. I. DAIRY ASSOCIATION.

Dominion, Volume 6, Issue 1755, 21 May 1913, Page 10

S. I. DAIRY ASSOCIATION.

' ANNUAL KEPORT. A BE VIEW 01' THE SEASON. Tlie annual report of the South Island Dairy Association of New Zealand, Ltd., for the year ending May 31, states that tlie increase of cheese exported to Great Britain from the Dominion is about -lit per cent, (from this must be deducted about 11,000 crates lost in the Turakina, which brings it down to 22J per cent., to land in London), and there is a decreaso in the butter exported to Britain from tho Dominion of about 8J per cent. The increase in the export ot putter to Vancouver and South Africa, however, more than makes up for this decrease to the United Kingdom. The association sold locally this year cheese to the value of <£12,000 at. from 7d. down to 53d., for the market has been a dragging one, with a downward tendency up tilt now, but owing, to the small supply of cheese now ill sight, owing to the very many large factories turning on to butter-making, or separating the milk for some other factory, the probability is, the report adds, that wo shall see improved prices for local cheese ere long.

The Home Market. Referring to the Home market, the report says that the market both for cheeso and butter has been a great disappointment to ali in New Zealand, more especially the cheese market. . . . Butter has had severafl adverso conditions against it. The unusual mildness of the autumn and winter on the Continent and in Britain caused increased production of butter. The large quantity of secondary quality butters constantly landing from Australia had a, depressing influence. Here, it may be noted, that Australian butter generally (a few choice Western District factories oiiiy excepted) has ruled Gs. to Bs. per cwt. lower than tho average of New Zealand. Tho inferiority of much, of tho Australian butter,pulls the market down for their own best butter, and affects New Zealand as well. Then butter has a formidable antagonist in margarine.

Cheeso this timo last year was 735. to 71s. per cwt.; this year it is about 5Ss. Of course,tt last season Britain, suffered from a drought, and this season the make of cheese in Britain would be greater, bfit probably not above normal. The position as to the imports of Canadian and New Zealand cheese for the past five years is given in tho following table during the four months from November to February, which shows that the' illcrease in New Zealand imports is about counter-balanced by the decrease in Canadian cheeso, and also shows that during these months this season the New Zealand and Canadian imports combined are los 3 than t'liey were ill the three previous seasons:—

Here, says the report, it may bo stated t.liat Canada's export of cheese goes steadily down year by year, mainly due to her rapidly-increasing population consuming a greater quantity year by year. It does not, therefore, appear that the statistical position of the cheese market warrants such a big drop in prices as has occurred 'this year. It appears thcra are other reasons, some of which are given in the following extracts from letters received from competent people connected with the trade whose opinions are valuable. But it may be confidently said that prices have suffered from tlm multiplicity of agents employed 'to sell our cheese, many, of whom are only on tho fringe of the cheese and butter trade, and employ brokers to sell their goods in Tooley Street' and elsewhere as quickly as possißle. Writing under date London Mr. Ellison, representative of tho National Dairy Association, says:—"The short selling of cheese has, to my mind, largely been accountable for the low price ( this season, which I feel is inseparable from the guaranteed advance system adopted by so many of rccent years. Tho anxiety of firms to protect themselves against probable losses compels 'them to sell to cover themselves; the.v will get the best price they can over and above their guarantee, and 'then so long as they can keep the market just above their guaranteed price they let it remain there. For instance, this season . thero lias been thousands of tons of clreeso sold at 6Gs., fi7s., and in soma instance at higher prices; these orders can be filled this season, at Gls. to G2s. A profit of is. to, Cs. per cwt. is very nice for those doing this business, and the evil of the thing is that those samo firms are selling consignments from some of our leading factories. Fancy the retailers who are paying 675. and up to GOs. for New Zealand chleese under contract, who on the open market could buy at GOs. to Gls.,- wliat kind of interest have they in our cheese? Their feelings will bo anything but friendly. The G.W.R. in principle is bad, and can, and docs, lead only to short selling and koeping down the prices. It should, as a policy, bo objected to by our factories; to ask a firm to give a guarantee of this nature is asking it to commit commercial suicide, unless at the samo time it has tho right to sell forward or short, and no firm doing this can, strictly speaking, have the individual interest of the producer at heart. "Commission goods should bo sold by commission houses; we should support two or three firms who would guarantee to eliminate all these fancy guarantees, and try to support a natural market. Wo can get what wo want, but only if we aro united; the N.D.A. can guarantee through its agents to return the highest prices made, I mean bv this legitimate market prices and not faked returns given to mislead factories for a season. This being so, surely wo would bo consulting our best interests by working together. Tho G.W.R. system is only practised in connection with the New Zealand business; no other country except our own adopts it. Personally I would 'prefer to see our cheese sold outright in place of this system, 'the purchaser would then in his own interest try and keep tho market as high as possible."

Filling 'these Wis., 675. contracts with cheese now at 58s. is nice business. Is it wonderful that no honest united attempt was mado to raise price;, when many of .those handling our cheese were in this happy position of ■ having sold forward ? Several attempts were made to stop the downward trend of prices, for by February, the short selling on ton of the forward selling, had completely demoralised the market, and the fact is the market has been controlled by the short sellers, and even those who had sold forward Uigely i.:em to have become alarmed and anxious to "stop the rot"; and some of them wero anxious to bring agents together and confer about keeping prices up. It was only when Jlv. Ellison, tlie National Dairy Association representative, stepped :n nnd called a meeting of those handling New Zealand cheese, that anything was attempted. . Several conferences were held. It was agreed to sell at-a. minimum of. (Ms., but now the market is down to 5Ss. The distrust of each other, and the divided interests of those who had sold forward and thos? who had not, was apparent at all these conferences, and there was no real unanimity—the results, prove this.

After quoting other correspondence from Home, the report goes on as follows:— These samples of a multitude of letters r-eeived. all giving similar opinions and blaming "the other fellow," will give some idea of the position.

The association-have put forward various schemes I'm- uniting to improve matters, and the National Dairy Association have done the same, but no good, has conif of tliPin because factories did not anything like come inlo these scheme-. "Home Knie" government pievail- at mo-l factories, and it. is not; surprising that directors of factories like to manage their own affairs and deal with their own produce ns they please. Now. the C|i(jostioii, for consideration is—should anything more be attempted bv this association in the interests of those consigning <'hoe-e? It is a most difficult matter. If it were possible for all factories ill i\"';w Zealand lo combine—Norlh ai.il South Island to»etliei —and consign their i-becsH only to four of the strongest and bc<t houses ill London for -ale. «onii' good would '-nrliiilily cnni" nf it. Or if • I he .V.H'lh and Hand Irgetlier agrt "d In sell monthly or even fortnightly, at one centre oi tw.Oj $6 cheese shipments foi^

the month, listed on the lines of the- wool sales, some good would bo done, as eventually a largo number of British houses would have agents here to bu.r what they inquired. Factories in Canada consign nothing, but sell everything about monthly.

[£ we could really unite on. either of the above schemes freod- might be done. But the "if" is a very big one. Factories no doubt -will consider the matter. 'II may be hero said that there is 110 man or body of directors capable of safely forecasting the future of the cheese market, and deciding whether to sell or consign: nor is there any man in J.omlon who could do so. We can all be wise after tho event, and this year our lale-come wisdom does not help v,=, but it is annoying to meet tlfc> "I told you 'so man." who never know more than the ro.-l of us ac any time.

Kvidentl.v some of Hie best firms in London hart faith in the future of the cheest? market, for they offered in September from GJd. to (i o-Bd. for the season's output of cheese, and up to Is. Ad. for butter outputs. It is fortunate for them, but bad for u?, that they scoured .so little.

Canadian. N.Z. Total. 19(18-9 18,098 5,977 2-1,077 1909-10 21,700 8,337 30,037 1910-11 18,119 7,81(i 2D,965 1911-12 15,802 9,514 25,316 1912-13 13,829 11,367 25.19G