FUTURE OF DAIRYING.

Putaruru Press, Volume VIII, Issue 331, 27 March 1930, Page 6

FUTURE OF DAIRYING.

ERA OF FALLING PRICES. j The dairy industry, according to Mr W. Goodfeliow, managing director of the New Zea and Co-operative Dairy Company, with a period of falling pric-*'- ui.ring rue i.exr 1" years. He bases his opinion oii his own ob servations and the statements of the world ’s lead ng economists. Addressing the A stra.ian dairy delegation at a dinner given in their honour at the Hamilton Hotel last week, he spoke at length on marketing conditions and future prospects. In toasting the dairy industry, he stated that the commencement of an improvement in the marketing of New Zealand dairy produce in the United Kingdom dated tack 11 years, when the New Zealand Dairy Association amalgamated with the Waikato Cooperative and Thames Valley Co-opera-tive Dairy Company to form the New Zealand Dairy Company. He then briefly reviewed the progress made by r,he establishment of a London office and the appeiutm.net of Mr J. B. W-right us London manager of the company, not to sell produce, but tor coordinate the work of the company's agents and thereby eliminate unnecessary competition in the company’s goods. Practically every dairy director in New Zealand to-day would agree, stated Mr Goodfeliow, that the policy inaugurated by the New Zealand Dairy Company in fixing prices, auditing account sales and eliminating competition, had undoubtedly resulted in better average prices being obtained by all dairy companies. Mr Goodfeliow then briefly referred to the failure of the Ne w Zealand Dairy Control Board and explained the reason for the subsequent establishment of Amalgamated Dairies. He emphasised the fact that the dairy industry now had adequate representatives on the board of directors of Amalgamated Dairies and it w r as the objecitve of the company during the nrxt seven years to develop a national xrarketing organisation. He stated that they wc-rs now do.ng export business for dairy factories in addition to handling the toial exports for the New Zealand Co-operative Dairy Company, and that the company anticipated consigning and selling upwards of 40,000 tons of New Zealand butter and cheese during the current season. Empire Dairies. Mr Goodfeliow then dealt with the constitution and objective of Empire Dairies, and pointed out that half the capital been subscribed by Amalgamated Dairies and the balance would be held by Australia and other Empire countries. The control, however, would remain in the joint hands of an equal number of directors appointed by Australia and New Zealand and no resolution could be carried without Australia and New Zealand being in agreement and this, ho considered, was an important safeguard for the future of the organisation. Continuing, he stated Amalgamated Dairies marketed its London consignment through six agents in addition, to Empire Dairies and owing to the large quantity of produce to be handled only a limited quantity could be sold by Empire Dairies until the organisation had been developed in London and the outports of the United Kingdom. It would be madness, he added, to force sales of New Zealand produce through Empire Dairies, as such action would result in reduced prices to the producers of both countries. Empire Dairies would be developed and increasing quantities of New Zealand produce would be handled. The speaker stated that the necessity for Amalgamated and Empire Dairies was due to changing conditions of trade. Amalgamated Dairies aimed to eliminate existing harmful competition on the London market by New Zealand Co-operative Companies, while Empire Dairies was designed to eliminate competition in Great Britain between important Empire marketing groups trading in London. The speaker went to .considerable trouble to explain the magnitude of the London multiple shop organisations and mentioned that since Lever Brothers had amalgamated with the Margarine Union, the ordinary capital and reserves of the Margarine Company were approximately £27,000,000. This company, buying for its thousands of shops was now not only the biggest 1 manufacturer of margarine, but. the biggest buyer of imported butter. He pointed out further that the Co-opera-tive Wholesale Society, although an or-

ganisation excellent in principle, was unsigned for the purpose oi selling cheap food to the British worker and was therefore diametrically opposed to the co operative producer, who was anxious to receive a fair market value for his produce. Buying Collectively

Mr Goodfeliow also referred to tho federated grocers’ organisations which had been established in many parts of the United Kingdom for the express purpose of enabling the small grocer to buy collectively in ordor to successfully compete with the multiple shops and co-operative stores. There was no doubt, added the speaker, that the buying the bu-k of New Zealand’s butter and cheese in London was to-day in the hands of a comparatively few people, and the only way for the pro ducers to successfully meet this position was to link up with Amalgamated Dairies. If they could secure sixty per cent, of tho consignment of butter going to the United Kingdom and co operate with other countries through Empire Dairies, they could unquestionably to a large extent counter the advantage gained on a weak market by the buyers. Continuing, the speaker referred to certain propaganda already appearing in the New Zealand country press, to discredit the efforts of Amalgamated Dairies in th© eyes of the producers. This, in his opinion, was only the forerunner of an extensive campaign, whic& would develop as the season advanced and he had no doubt but that similar tactics would be adopted in Australia by interests which were not sympathetic to tho welfare of the dairying industry. j ; W ( Referring to the future, Mr Goodfellow stated that the industry had experienced a period of rapidly rising prices over eight years from 1914 to 1922, and since, eight years of declining values, the latter largely as a result of the return to the gold standard. If economists were correct in their forecasts, a further decline must be anticipated during the next ten years. This problem of falling prices in the past had been more than countered by an increase in production as the result of fertilising and herd-testing. It was estimated that the Auckland Province would produce at the present rate of production a further 50,000 tons of but- | ter in ten years’ time, provided prices remained at a payable figure. Tho J problem from a marketing point of view was where were we to find a profitable market for this ever increasing quantity of butter? It was true -Tew Zealand was shipping approximately 15,000 tons of butter this season to Eastern Canada, but that market could only be regarded as a temporary one and might disappear at short notice if the U.S.A. Government suddenly increased the tariff on the large quantity of milk and cream imported from Canada. If this occurred the Canadian Government would be compelled to shut out Australian and New Zealand butter, as the milk and cream in question would be sufficient, if converted into butter, to supply the total local requirements. Other markets remaining open to us were not capable of development to any extend and the industry therefore had to depend almost entirely on the United Kingdom to purchase the major portion of its exports of butter and cheese. Outlook Not Very Encouraging

The outlook, said Mr Goodfeliow, was certainly not too encouraging, but the position could be eased considerably if Amalgamated Dairies marketed sixty per cent, of the butter and cheese of the Dominion and if at the same time, a determined effort were made to develop markets for our produce in the United Kingdom other than London. Most of the dairy companies failed to appreciate the fact that 92 per cent, of New Zealand and Australian butter and cheese imported into the United Kingdom was shipped to London, whereas as a matter of fact London not only supplied approximately half tho population of the United Kingdom. If this were done it would be possible for New Zealand on a weak market to obtain a price for its butter much more nearly approaching Danish values. Tho same argument applied to Canadian and New Zealand cheese. The only permanent remedy was, in his opinion, the gradual development of freer trade within the Empire. If the Old Country would agree to tax foodstuffs, there was no doubt in his mind but that the producers of both Australia and New Zealand would support a demand for a substantial reduction in the duty of all British manufactured goods. The result of such #a policy would, in the first place, be to discourage foreign importations of dairy pro(Continued in Next Column)