PROBABLE DEVELOPMENTS IN N.Z. DAIRY INDUSTRY

Shannon News, 13 January 1925, Page 4

PROBABLE DEVELOPMENTS IN N.Z. DAIRY INDUSTRY

DURING 1925. Addressing the Pohangina Valley branch members of the Dairy Far “" ers’ Union, Mr O. W. Williams gave a comprehensive review of the most important questions, likely to a®®® l the New Zealand dairy industry duiing the year 1925. ** ■ In a short retrospect of the year just ended, the speaker, said, that premier place in the events of the New Zealand dairy industry was taken by the Dairy Control Board, which held its first meeting in February last, when it decided to send a delegation on a world’s tour, to study methods and condtions of producers and consumers in other countries. During their absence, the activities of the wp.vfi necessarily some what re-

stricted, the two main events being the making of a new shipping contract and.the completion of a new insurance scheme for both butter and cheese. Both these contracts will result in a great saving to the producers as, compared for instance with freight and insurance rates in Australia, the difference is approximately £200,000 in favour of New Zealand. Such results, Mr Williams said, most conclusively proves the advantages of co-operation and co-ordination in making contracts for the transport and insurance etc., of our produce. 1925 Starts With a Handicap. The year 1925 starts with a serious handicap for the butter industry ot New Zealand, continued the speaker, Canada and America are holding exceptionally heavy stores of butter stores over 50 per cent higher than I usual-' —and-up to Christmas have been exporting butter to Great Britain. I New Zealand landed about 4,000 tons just after the holidays and will land an additional 11,000 tons during January. Australia also is record quantities as a result of a* record season and Argentina is making up for a severe drought earlier in the season. As a matter of fact, there are 1,000,000 boxes of butter afloat to-day, as a.result of which the London butter market has shown a decline in values of 40/ per cwt. in a fortnight. Looking somewhat ahead, it is no exaggeration to say, that the imports of butter into Great Britain during the present year may easily amount to. 300,000 tons, while 200,000 is a normal quantity that will give the producer a reasonable return for is labour. The All Importance of Quality. It is well for the New Zealand producers to remember, continued Mr Williams, that in the coming struggle for existence, “quality” will be the determining factor in the produce of any competing country. The butter imported into Great Britain consisted of two distinct classes, namely good and inferior qualities. Denmark and New eZaland are the main suppliers of the choice qualities of butter on the English market, although Australia is making great and successful efforts in improving her butter. The

competition in medium to inferior qualities, however, is of the keenest. Australia, Argentina, Siberia, Latvia, Esthonia, Canada, etc. are all pouring ever increasing quantities on the London market, with the result that their inferior butter can be bought at anything from 20/- to 50/- per cwt. below, say, Danish prices. New Zealand producers must therefore realise, that although there is a certain amount of room at the top, they will be liopelesly crowded out at the bottom. Compulsory Cream Grading. If it therefore becomes a question of quality, we will naturally asks our- ' selves, how we .can best and quickest bring our an improvement that will put us on a par with any country, we may have to compete with. There are very few producers to-day, who are not prepared to admit -that this improvement must start with farm and v\ ith the production and preparation of the raw material. It is safe to say that several members, if not a major-

ity of the Dairy Control Board, are convinced that in order to bring about an improvement In the quality of our raw material and incidentally in our butter and cheese, a universal scheme of grading all milk and cream according to a fixed and recognised standards is absolutely essential. It is therefore highly probable that legislation will be introduced during the 1925 session with this object in view. Research Laboratory.

Improvements in the process of manufacture will be the natural sequence to the improvement of the raw material, continued the speaker. The establishment pf a National Research Laboratory for the dairy industry cf New Zealand has been advocated for a number of years, and of late it lias been repeatedly suggested that the scheme should be taken up by the Dairy Control Board. In reply to a deputation of Taranaki dairy farmers, as well as to representations made by the executive of the Dairy Farmers’ Union,, the Prime Minister concurred Avith the opinion expressed by the deputations . and willingly promised his support. It only remains therefore for some authoritative organisation to take up this matter, and as the Overeas Delegation no doubt returns Avith the strongest conviption on this subject and Avith a full knowledge Avhat other countries have achieved in this direction, the current year will no doubt see the creation of a Research Laboratory for the New Zealand dairy industry. Preservatives in Butter.

The use of preservatives is an old and long established custom in the manufacture of New Zealand butter, said Mr Williams, It dates back to a time when refrigeration, pasteurisation and neutralisation were practically unknown and had persisted in spite of the technical and mechanical improvements introduced in the manufacture of our butter. It was almost certain that legislation would shortly be introduced by the Imperial Government, prohibiting the importation of preserved foodstuffs into Great Britain mainly on account of health reasons. Apart from this question, however, New Zealand producers should realise, that the use of preservatives in butter, restricts the markets for that article entirely to Great Britain, as practically every other country had already prohibited the import of preserved butter. Seeing that the necessity of additional markets for our produce was becoming more marked every day, this aspect of the question was most important. It is therefore quite possible that the year 1925 will end the use of boric acid in New Zealand butter. Exchange Problem. . After dealing with the questions of additional markets and the probable co.operation with Australia and

Canada, Mr Williams pointed out the severe tax a producer is caused by the present heavy rate of exchange. Estimating the exports of produce for the year at £58,000,000 and the imports at £45,000,000, and taking our average exchange rate of 50/- per £IOO, the New Zealand producers were paying an annual tax of £1,450,000 — £500,000 of which was contributed by the dairy farmers alone. According to , present exchange rates, the commercial community of New Zealand is profiting at the rate of £450,000 annually at the expense of the producers. while the balance of £I,OOO, 000 is distributed among the various New Zealand banking institutions. This is certainly a heavy burden for. the producers to carry, seeing that they have no means of passing on even a fraction of this large amount. Absolute Control.

After dealing with the questions of a “National Brand” for New Zealand Dairy Produce and a regular all* year-round supply for the English market, the speaker emphasised the fact that all these questions were or great importance to the New Zealand, dairy industry, and therefore were most likely to engage the attention of the members of the Dairy Control Board. In order to carry out the conditions of the new shipping and insurance contracts, the Board has already assumed partial or limited control over the New Zealand dairy exports. Now that the overseas delegation has returned and a definite policy is most likely to* be adopted, speculation is ripe as to whether the Board will, institute “absolute con- - trol.” The result of such action would of course, be that the whole of New Zealand butter and cheese would be pooled, shipped and sold under the direct supervision and direction of the Board. While it is known, that some members of the Board hold the opinion that the various measures and improvements enumerated by the speaker could not be brought about unless and until the Board assumes absolute control, other members f eei hardly inclined to interfere, and revolutionise exisiting channels of distribution and marketing. Much> how. ever, would depend in the speaker's opinion, on the report of the overseas delegation regarding the conditions and requirements in other countries. Butter and Cheese. In conclusion, Mr Williams stated that, under present conditions the production of butter for 1925 was certainly far ahead of consumption, ana the imports through the present channels into Great Britain might well exceed requirements by 75,000 tons. The only remedies for such a position were to “ stimulate consumption” or reduce production. As no country was likely to voluntarily adopt the latter, the whole matter resolved itself into a question of stim. ulating consumption! America, which had achieved wonderful results m this direction had shown u s what* could be done by thorough and systematic propaganda. It may. however, be accepted as an economic fact that the first essential in stimulating consumption, is either to reduce value or Improve the economic conditions of the consumer. As far as Great Britain is concerned, there as an enormous field for increasing' consumption. In addition to consuming approximately 4000 tons of butter weekly, Great Britain consumes 4000 tong of mar. gerine as well. This large and ever increasing consumption of a butter substitute is due to an intensive advertising campaign and the wonderful improvement made in this commodity. Margerine has become a serious competitor to the butter producer, and constitutes a menace hardly ever realised or taken into consideration by the average dairy farmer. Margerine in most cases, is not eaten from choice, but from necessity, and here lies a field which the word’s butter producers will in mere self defence have to tackle sooner or later. On the other hand, the speaker con. eluded, the cheese ■ position for New Zealand was much 'sounder. The total import of cheese into Great Britain has been remarkably steady in the • neighbourhood of 140,000 tons annually, and had rather a declining than increasing tendency. Of this quantity, New Zealand was now contributing over 50 per cent, while Canada, with an ever declining export was the only competitor worth noting. The speaker predicted that as far as the present season was jooncerned* there would be very little difference in the returns to suppliers of butter ana cheese factories, and that in years to come, the manufacture of cheese would be the predominating factor in the dairy industry of New Zealand.