N-Z. DAIRY COMPANY.

Hauraki Plains Gazette, Volume XXXIV, Issue 4529, 19 February 1923, Page 2

N-Z. DAIRY COMPANY.

- SUPPLIERS' MEETINGS. PAEROA. A largely-attended meeting of suppliers to the N.Z. Co-operative Dairy Co. Ltd., was held at Paeroa on Thursday morning, Mr W. F. Johnstone being in the chair. Mr G. Buchanan was also present. Mr W. Goodfellow, managing director, delivered an address uppn the present position of the dairy produce market, and gave an exhaustive statement. of the company’s activities. He pointed out that three seasons ago, when the amalgamation was first completed, the butter production of the company was 94'98 tens. The next season it went to 12,600 tons, the subsequent season 18,218 tons, and

this year the production would be well over 21,000 tons of butter. Last year the company’s production was 75 per cent, of the total production of the Auckland province, and just over one-thi I of the total manufactured in New Zealand. Never m the history of New Zealand h&d anything like such a great expansion taken place in any one district in such a limited space of time. IMPROVING QUALITY. The most pleasing feature of the year was the all-round improvement that had been effected in quality. Whereas four years ago the average grade was round about 8,9 points, it had so improved for this' year that the average grade for all (factories for the month of January was 93.22

points. This was a wonderfully fine improvement, considering the very large quantity of butter that was being handled. The production for January was one million pounds mpre butter than for the same month last year. The effect, upon the market of this improvement in grade would be very considerable indeed. The amalgamation had put out otf existence about 20 brands, and the whole production of the company was now concentrated upon three brands, the principal one. being “ Anchor,” under which brand over 90 per cent, of the total production was being marketed. Particular pains were being taken through, the grading system to establish “Anchor” brand as pre-eminently the finest butter produced in the world. The manufacturing organisation of the company to-day was very nearly perfection, and their equipment was undoubtedly better than that of any other factory or set. of factories in Australasia. This was proved by the grading results obtained. MARKETING PROBLEMS. The most important problem now to be faced was that of export marketing. The position at the present time was that the whole output p< New Zealand was concentrated on one market, namely, London. The company thought the time had come to develop alternative markets, so as ‘o

ease London when that market showed signs of being over supplied. If alternative markets could' be developed to ease the strain upon London in the peak months of production a very beneficial effect would result. Early in December the company, after, consultation with London, sold approximately .120,000 boxes of butter to Ne .v York, and within ten days of that time the price of butter in London increased by 2d per lb., this being largely due to t'he knowledge secured by the London merchants that that huge total of butter had been diverted from the London market. “We are not. satisfied with the present method of disposal in America,’’ said Mr Goodfellow. It is at present sold to speculative buyers, but a start had been made with the introduction of “Anchor” brand butter, which he considered was definitely the best quality of butter that had ever been introduced into New York. Cultivation of this market would inevitably result in increased demand. . The company was also taking steps to develop the Eastern market, and had already established a definitely satisfactory market in Honolulu. Also, market had been opened up in Paris, and the first parcel of 10,000 boxes of butter sent forward early in January.

“We regard this market extension as a very important matter,” said Mr Goodfellow. “It. is not a subject that is being dealt with by any other dairying company in New Zealand, as far as we know. Other companies are simply sending to London and the West of England, as has ’ been the case for the last 20 years, but in our position, as the premier company in New Zealand, it is imperative that we should take the lead and do the pioneering work off developing hew markets in other countries.” NATIONAL DAIRY POOL. Mr Goodfellow said he was sorry to say he did not think there was any possibility off the national pooling scheme being fulfilled. It was undoubtedly the ideal scheme for New Zealand, but tlie propaganda instituted by merchants and interes’tei parties against, it. had been effective. Mr Goodfellow went into details on the question of proprietary dairy companies, as compared with co-opera-tive dairy companies, and demonstrated that proprietary concerns conld not, and would not, attempt, to guarantee the same final payout as an effectively operated co operative com-

pany. The London organisation established by the company had proved most beneficial in regard to watching ail the Home markets and in checking undue falls in price by 'holding firmly when the occasion warranted. The full benefits of this control were not yet realised by the producers*, but t'he speculative elements in Tooley Street were fully alive to the power that was possessed by the degree of control now being exercised 'by the N.Z. Dairy Company, and were actively at work endeavouring to break up that control in order to regain Itheir formerly unassailed position. • This campaign was hot ip the interests of the producer. CENTRALISED FACTORIES. Canada presented a most interesting lesson to producers at the present time. Owing to a turn over in Canada from cheese to butter a large quantity of inferior Canadian butter

was placed on the London market, but the quality was so poor; that it had to be re-exported to Canada and the United States. The Government authorities in the Western provnices at this juncture stepped In and decided to close the small local factories in certain centres, .and concentrate the whole cream of the large districts at certain selected centralised factories, where the cream was graded by Government dairy officials. The system of big centralised factories working on standardised methods of manufacture had. naturally grown up under economic necessity in the South Auckland province, with the result that the producers in this district to-day possessed the most efficient dairying organisation in the world. The producer could also take a most interesting lesson from the condition of dairy farmers in the United States as compared with those in Denmark. In the former country the dairying industry was almost entirely controlled by capitalistic concerns, while in Denmark co-operation was the rule. The result was 1 that in • America the producer received a much lower net return for his labour in similar circumstances than was the case with the co-operative producer of Denmark. There was no ' doubt that if capitalistic interests secured a large measure of control in New Zealand the quality of our manufacture would rapidly deteriorate and the position of the producer be affected. Propretary concerns were mainly desirous of securing a big turnover ' rather than a quality output. FUTURE OUTLOOK GOOD. Mr Goodfellow showed in detail that the cost of manui£)acture of the big centralised factory was definitely lower than that of any one-roof fac- , tpry working oh a small output. The administrative expenses were also much less, so that the producer secured a larger net return. After referring to the economies that had been effected by the Dairy Company by its box-making plant, and the'economies due to be made by the coal mine, which will shortly be in operation, Mr Goodfellow stated that, summing up the position dispassionately, there could be ho doubt that the company, owing to the economies effected by 1 its size and strength, was in a position to show its suppliers a better net return than any other organisation could' possibly do. The suppliers could rest assured that they were getting absolutely every copper that was in the business. VOTE OF CONFIDENCE. After questions had been asked and satisfactorily answered Mr F. F. Johnstone moved: “That this meeting place on record its definite confidence in the N.Z. Co-operative Dairy’ Co., Ltd., and its management, and assures the directors that the members here present will do everything in their power to oppose the establishment o,r a'ny other company in this district.” The farmer, Mr Johnstons stated, would have to pay in any such case, and he was satisfied that no other organisation of any kind coutl improve upon the showing of the Dairy Company. Mr T. P. Vuglar seconded the motion, which. was carried unanimously with loud applause. The meeting concluded with hearty votes of thanks to Mr Goodfellow for his address and to Mr Jonhstpne for presiding.

WAITAKARURU SUPPLIERS. A. meeting of suppliers eg t!he N.Z. Co-operative Dairy Co. was held at Waitakaruru on Friday last, present: Mr W. Goodfellow (managing director), Messrs G. Buchanan and R. SMcKenzie (directors), Mr Heighway (assistant manager), and about 80 suppliers. Mr W. E. Hale occupied the chair, and in opening the meeting said he understood that there was some agitation to start a factory at Waitakaruru, and he was glad-that the. directors of the company had been invited to address the suppliers. A number of men were making it tlheir business to discredit the Dairy Company, but as far as he could see tihe directors were working solely in the interests of the shareholders. Mr Goodfellow said he understood a factory was wanted at Waitakaruru, but whether it would be a NI.Z. CoOperative Dairy Co., a local co-opera-tive, or a proprietary concern was yet to be decided. The proprietary factories made the worst butter in New Zealand, for they aimed at quantity and not quality, and cases weie known where they received cream a week, .and even a fortnight, old'. Although they advertised that they paid out 90 per cent.- of the High Commissioner’s cables, this could be. done by reading down the test and weight, as was proved by several letters received from suppliers who had divided their cream and sent half tp a proprietary factory. The result was a difference in test of .5, and in weight of 61b in favour of the N. Z. Dairy Co. The proprietary concerns must make sufficient profit to pay interest on the capital invested and income tax, whereas a co-operative company paid no interest on share capital and no income tax. Proprietary factdri.es had never paid put as much as the N.Z. Dairy Co., although they sold i big percentage of their output on the good local market. From the Waitakaruru district 330 tons of buttei? fat was now produced, and with the natural increase it would probable rise to 440 tons. Of this 65 tons would be from Hopai Road, 125 from Pipiroa, and ■_ 250 from Waitakaruru. He recognised that a factory woul i be needed in time, but the supply at present did not warrant one. He urged the local suppliers to stick together, and support fhein co-operative Company. The Dairy Company woul-.i consider building a factory when there were 7000 cows in the district. Ngatea factory was at present receiving the supply of about 17,000 cows, of which the Waitakairuru district contained less than a quarter. As far as he could see the only way Waitakaruru would profit by 'having its own factory would be in the boat service. Mr, G. Buchanan, a director, said representations had been made to him suggesting a factory at Waitakaruru.

He had been impressed with the district, and at his suggestipn Mr Goodfellow liad visited and selected a site. When the butter-fat figures on the different cartage routes had been collected they were surprised to see that they were so small. They had included the largest possible area, though it was hardly likely that Hopai and Pipi'roa suppliers would divert their cream to Waitakaruru. He was perfectly sure the company would erect a factory if it was warranted, and assured .them that it would be done. r

Mi A. Vowles, a supplier, said that tihe Hopai settlers would not think of diverting their cream to Waitakaruru. .To test the feeling of the meeting Mr C. W. Harris, a supplier if Waitakaruru, moved : “That in the opinion of the suppliers around Waitakaruru the time was now opportune for the N.Z. Co-opeir.ative Dairy Co. to immediately erect a factory in .the district to meet the immediate needs.” Speaking to the motion, he said that Mr Goodfellow had said that the only benefit to tlie district would be the improvement to the boat service. He pointed out that the roads would not stand up to cream carting, and that when the County Council took over the roa/s from the Government it would cost the settlers more for rates than at present paid\ for cartage on cream. There was also the delay on cream, necessitating i.t standing in the sun waiting for transport. Tjiis caused the cream to lose quality. Cream from Miranda which, now went to Auckland would come to Waitakaruru ; also the whole of the cream from Maramarua and the hack country, some of which now goes to the company’s factories on the maintrunk line. Mr Goodfellow said Mr Harris hail put up a good argument. Regarding roads, he thought ths cost of upkeep would be excessive if it exceeded Id per pound butter-fat. Lorries would not unduly damage the roads if the speed was kept. down. He could not see that the quality was suffering, as the Ngatea factory was grading 93% per cent. There was no guarantee that Miranda would supply a Waitakaruru factory. The Board had been surprised to find that the amount of buttier-fat from the Waitakaruru district was so small. The cost cf manufacture at a local factory woull be excessive, but if the advocates < of a local co-operative factory would continue to supply Ngatea tor a coupD of a factory was put up at Waitakaruru— they were assured of a good payout. Mr Williams, of Waitakaruru, in seconding Mr Harris’ motion, said that no district on the Plains had such prospects as Waitakaruru. The canal was going to be a grand waterway. and many farms Would be opened up along it. Four months ago the road to Ngatea was perfect, but now, owing to the cream cartage, it was and the cost of maintenance if it could.be ascertained from the Department, would be surprisingMr Taylor, of Waeranga, said they were having great difficulty in transportation by rail in his district, and ifpr another farthing a pound they could land 250 tons in Waitakaruru and get superfine grade. Tn reply to Mr C. Hayward Mr Goodfellow said that the Ngatea factory could cope with an increase of 500 tons. Considerable argument then ensued regarding payment for cartage. Mr Goodfellow said the directors had considered this, and had come co the conclusion that the present method was the only fair and equitable one. If all cartage was a charge an the company the local suppliers would be worse off, as in some places cream was carted thirty-odd miles. Mr R. S. McKenzie, a director, said he was prepared to support a local factory as soon as the number of cows were available. '

Mr C. W. Pairfltt, a supplier, said that he could not support Mr Harris’ motion, as the time was inopportune, and there was not likely to be any immediate development. The Ngatea factory was not overloaded, and Pipiroa suppliers would not agree to the company spending money 'on a factory at Waitakaruru.

Mr C. Hayward, after explaining what took place at a recent meeting, moved: “Tliat if the N.Z. Dairy Co. did not favourably consider the erection of a factory in Waitakaruru immediately that steps be taken to consider the advisability of erecting a factory of oulr own.” Mr Levers seconded the amendmen-. After eloquently advocating sticking to the Dairy Company Mr Harris, of Toreliapa, moved as a further amendment : “That a committee be formed to canvass the landowners who at present were not dairying and find out how many cows they were prepared to milk.” This amendment was put to the meeting and was' defeated by a big majority. 4

On Mr Hayward’s amendment being put the voting was 22 for and 16 against. It therefore became the substantive motion, and on being put to the meeting was defeated by 18 to 21Mr Marshall then .moved that the meeting was of an opinion that the Ngatea factory was sufficient for the needs of the district alt the present time. This was seconded' by Mr Parfitt, and on being put was defeated by an overwhelming majority.

The original motion as proposed by Mr C. W. Harris was then put tp the meeting and carried by 26 to 11. A vote of thanks’ to the directors for having attended was proposed by Mr Harris, seconded by Mr Williams, and carried by acclamation.

A vote of confidence in Mr Goodfellow and the other directors was proposed by Mr French, seconded by Mr Parfitt, and carried unanimously.