DRIED MILK PROSPECTS

Pukekohe & Waiuku Times, Volume 7, Issue 406, 3 September 1918, Page 1

DRIED MILK PROSPECTS

Mr Pacey's Views

Commenting on the matter of dried milk as affecting the future of the dairying industry, Mr H. £. Pacey (Managing Director of the N. Z. Dairy Association) spoke at the Association's annual meeting at Hamilton last Friday as follows: " During my absence in Queensland, the whole of New Zealand and some parts of Australia too, were in a frenzy of excitement in expectation of extraordinary payments for butterfat from the manufacture of dried siym milk. The expectation has now considerably abated and today the Dominion is readjusting its perspective. Since my return to business I have made two somewhat comprehensive statements on the subject and I do not now deem it necessary to enter upon a detailed statement thereon. I would, however, say that I have not at any time had confidence in the expectation of regular returns of 3s 6d to 4s per lb butterfat from the manufacture of dried skim milk and to-day if any one cherishes such expectation they will be doomed to certain disappointment. During pre-war times skim milk powder was worth from £l6 to £4O per ton and when war influences have passed prices may range for a time at about the latter figure, gradually receding to a normal average The rapidity of the decline in price will depend upon the extent of overproduction which taken place in the interval. These prices, however, would be quite useless to New Zealand. Producers would not receive nett returns therefrom equal to those from feeding the skim milk to calves and pigs or having it manufactured into casein ; such skim milk returns would be much less indeed after the capitalisation charge had been deducted.

" During the war however and specially in recent years prices have occasionally ruled much higher sometimes, owing to .special and temporary causes, a figure has been reached which would return about •'J.I 6J per lb gross for butterfat. As a war proposition, with free markets, these values could not be regularly realised, although encouraging returns could be obtained were reasonable shipping and free markets asMired. The war time prospect however was considered good enough by the people in a few of our districts to justify them in asking us to submit delinito propositions for the estiblishment of skim milk factories ami we have been in close touch with all sources of information re shipping, free markets, etc. so that vse might have reliable information upon which to base a judgment Free markets was so important and at the same time so uncertain that we cabled to Mr Massey in London i 1 the hope of gettiug from him authoritative data. The last two cables which have passed read as follows : To Mr Massey "Can New Zealand manufacturers depend upon free markets iu Britain for skim milk

powder." Mr Massey's reply, dated 23rd August, arrived last Monday morning, and read: " Officially informed during war period import and distribution of milk powder must be controlled by Ministry of Food and price will be fixed accordingly from time to time. As far as shipping can be obtained Food Ministry will endeavour to give New Zealand producers fair share of business if quality and prices are satisfactory." Mr. Massey's reply is a discouragingone. He definitely indicates that the market will not be free but controlled and that New Zealand producers will only have a chance in the business if after building their factories and making the powder, the quality is approved and the price is low enough. As we have submitted definite propositions to erect factories and as we have other reasons for desiring the prosperity of the Dried Milk business, we shall still keep in touch with the Government in the hope of a better definition of the position being reached. w Some of our shareholders have not yet realised that the Association is to-day the largest manufacturer of Dried Milk in the Dominion, the output for the past season from its factories at Matamata and Matangi being 3,550,4411b5. This output was disposed of under the contract which was made before the factories were erected. The contract contains some unusual provisions but it is a good one for the Association and neither the Directors nor the suppliers who are immediately concerned have any regret for the provisions thereof. But for the Association's action in undertaking this business the Dried Milk industry in South Auckland would have passed from Co-operative control, thus we have been able to conserve the Co-operative principle for which our Institution stands and at the same time we have extended and strengthened the Association's business and usefulness to its suppliers. We have also been able to re-unite our district under our Dried Milk scheme, which had been in a state of dis-union for many years. To-day unity reigns there; suppliers are proud of their local institution they are satisfied in that they, with suppliers to similar lactones, will receive for their past season's butter fat the biggest payment ever made in this Dominion, if not indeed in Australasia. They have reasons for their confident expectation that their returns will continue as good as the best, and usually better, especially when free market conditions are restored and when the advantage of connection with an established trade brand will be more certainly demonstrated. Under conditions of Government market control and during great scarcity approaching famine almost anything can be sold at approximately best rates but upon an ordinary competitive market goods sold under an established brand have a great advantage over promiscuous goods of similar sort."