DAIRY PRODUCTION

Southland Times, Issue 21093, 27 May 1930, Page 9

DAIRY PRODUCTION

A FAVOURABLE YEAR. INCREASED OUTPUT REPORTED. AMAZING ADVANCE REVIEWED. 'lt would seem to have become/our perennial duty to record an increase in production over the preceding year,” states the annual report of the South Island Dairy Association. The report continues:— The quantities graded for export- at all Dominion ports for the years ended March - 31, 1929 and 1930, were respectively as follows: — Butter. Cheese. 1930 .. .. 1,881,285 1,699,790 1929 .. .. 1,615,659 1,692,546 262,626Cwt5. 7,244Cwt5. Increase Equals 16 Equals .43 per cent. per cent. The figures for the South Island ports were:— Bluff. 1930 7,587 245.194 1929 .. 6,944 217,609 Increase 643Cwts. Increase 27,585Cwt5. Dunedin. 1930 .. 24,365 43,557 1929 .. 25,552 46,556 Decrease l,lB7Cwts. Increase 2,oolCwts. Timaru. 1930 .. 6,417 • 17,188 1929 .. 7,350 J 8,495 Decrease 933Cwts. Decrease l,3o7Cwts. Lyttelton. 1930 .. 47,391 25.116» 1929 .. 44,481 28,543 Increase 2,9loCwts. • Decrease 427Cwts. Totals For South Island. 1930 .. .. 85,760 . 339,055 .1929 .. .. 84,327 311,203 l,433Cwts 27,852Cwts Increase Equals Equals lj per 9 per cent. cent. When one considers the matter, the rate at which dairy production has increased in this country is simply 1 astounding. It is almost incredible, but nevertheless a fact, that in the comparatively short period of 20 years since 1910 the quantity of butter and cheese exported annually from the Dominion has increased by more than 500 per cent., or in other words has multiplied by five, and for the past 10 years since 1920 the rate of increase has been 275 per cent. It makes one wonder what the conditions wobld be like in New Zealand to-day if the primary industries, and more particularly dairying, had remained at the stage of development which was reached two decades ago. The amazing advance which has taken place speaks volumes for the industry of the people responsible—and the cow. The dairy farmer is exceedingly fortunate in that he has in this animal a loyal servant, unfettered by the restrictions of Arbitration laws, who will to the utmost capacity give him a return commensurate with the wages (feed) which he gives in exchange. If the same conditions could. be made to apply to all branches of industry there would not be the serious problem of unemployment and depression in trade which exists in this and other countries in the world to-day. The question of quality has lately been engaging the attention’ of .those concerned to a greater extent probably than ever before. The position with regard to butter is perfectly satisfactory, and we have the opinion expressed recently by Sir Arbuthnot Lane, an eminent London dietitian, to confirm our belief that, “the very best butter in the world comes' from New Zealand.” Particulars supplied to us by the Dairy Division’show that -of the total quantity graded for export throughout the Dominion during the 12 months ended March 31 last, the percentage of finest grade was 744 and first grade 24, leaving only 11 which graded lower than first. In the South Island the position was even better, the percentages being 814 finest, 16} first, ami 2} lower than first. This is a decided improvement on the results of the two previous years and to a large extent is undoubtedly due to the system of compulsory grading of cream now in force with differential payments to the supplier according to quality. Cheese. With regard to cheese, we are sorry to say the position is not nearly so satisfactory, as will be seen from the particulars undernoted which show the results of the gradings for the same period. For the purpose of comparison we are giving you the figures for the whole Dominion and for the North and South Islands respectively. They are as follows: —

These figures should be of considerable interest to you as they certainly have been to us. You will see at a glance that there is a vast difference between the quality of the cheese manufactured in'the north and that made in the south, with the comparison very much in our favour. You are, of course, fully conscious of the fact, as we are, that the average sets the standard by which the quality of our cheese is judged on the overseas markets. It/is therefore in our own interests to see that the average is raised as high as it possibly can be, and •we must take steps to put a stop to the exploitation which is being carried out at our expense. It is quite evident that a section of the producers in the north, in their desire for yield, have lost all regard for the quality of their product. You will remember that we protested against the introduction, about 18 months ago, of the regulation which legalized the manufacture of cheese from other than whole milk, and that we brought forward at the last annual conference a resolution calling upon the Minister of Agriculture to have the regulation cancelled, which we withdrew when we got the impression that the majority of the delegates present were in favour of the regulation. A large number of factories in the north seized the opportunity which was offered to them to skim the milk, and for the twelve months to March 31 last, the quantity of "standardized” cheese which was graded for export was 597,225 crates or more than one-half of the total quantity of cheese graded in the Dominion. We are pleased that not one factory. in the South Island has adopted* the practice, and we sincerely hope that this position will continue. The following particulars showing how the “standardized” cheese graded are arresting:— Total crates .. .. 597,225 Finest grade (12 per cent.) 71,886 First grade (85 per cent.) .. 508,514 Under first (3. per cent.) .. 16,825 We must demand (1) that the export bf cheese other than full cream be prohibited,'and (2) that a compulsory system of grading milk for cheeee-making be instituted ’ with differential payments on the basis of quality; and we must continue making these demands to the proper authority until they are met with. We are blessed in this country with climatic conditions which for dairy production are not surpassed in any other part of the world,, and we cannot see any reason why our butter and cheese should not command the highest prices in the world’s markets.

Southland Brand. The cheese producers of Southland recently decided to brand their product with the words “Southland Manufacture,” and in view of the position which pertains in the north we are not at all surprised at them taking this action. We think, however, that there should be no distinction made as between the different provinces of the South Island, and we would recommend to you that all cheese made in the South Island be branded with the words “South Island Manufacture.” The Southland producers, we feel sure, would be prepared to fall in with this proposal. We were pleased to note that at the Empire Diary Show held in London some months ago the first three awards in the open class for colonial cheese were all gained by Southland factories—Ryal Bush, Seaward Downs, and Wrights Bush respectively. To secure such distinction in open competition with the whole Empire is exceedingly meritorious and we. offer our congratulations to the managers of the factories concerned on their success. It is no wonder the Southland producers believe their cheese to be unequalled, and that they desire to emphasise their opinion to the British consumer. At the last annual conference a resolution was carried recommending the Dairy Division to convene a conference of experts to consider various matters affecting the welfare of the industry, including the question of cheese quality. The division however, could not see its way to accede to the request, for reasons which the director will no doubt explain to you at the conference, when he will deliver an address on the subject of cheese quality. Professor Riddet, Director of the Dairy Research Institute, has also signified his intention tQ be present at the conference, and will, we are sure, make .known to you the results of the investigations which have been carried out at the institute during the year. 4 Market Values. Prices on the London market have shown "considerable fluctuations during the year and the average realization was l° w than for a number of years. Last month the price declined to 120/- per cwt., which was the lowest point reached since the war, and is equal to only.lljd per lb. f.o.b. New Zealand—no better than prewar value. At the beginning of June the price was 170/-, in October it had advanced to 182/-, theh there was a gradual decline to 152/- at the middle of Feb-

ruary, from which point a sharp drop set in until 120/- was reached, during the second week of April. To-day the quotations are 130/- to 132-. Although the position of the cheese market has not been altogether satisfactory to producers, we have not experienced the serious slump in values which took place in the case of butter. In May the price was 87/-, in June 93/-, in August 89/-, in November 94/-, then a gradual decline to 79/- at the end of March, and a further drop to 72/- at the middle of April. From then there has been an improvement and to-day white is 82/- to 84/-, and coloured 87/- to 88/-. . The imports of butter into the United Kingdom for the year 1929 exceeded that for the previous year by 14,680 tons. Denmark was responsible for 9400 tons of that increase, and New Zealand for 4540 tons. The total receipts from these two countries were 110,200 tons from Denmark, and 65,650 tons from New Zealand. The evidence seems to be clear to us that in the depressed conditions which at present exist in Britain and elsewhere, the world’s production of butter is greater than the consumption requirements.

If the consumptive demand cannot be stimulated, and there appears at the moment to be little prospect of doing so, the only relief to the situation that we can see is a restricted output by the producing countries. To our mind it is unthinkable that we could ever contemplate agreeing to such a course; and the only alternative, so far as this country is concerned, is to endeavour to create in the United Kingdom —which is now practically our ohly outlet —a greater demand for New Zealand butter in preference to that imported from other sources. Our butter is, to say the least, equal in quality to any other butter in the world, and it should command the highest market value. If we take the average disparity between the prices of Danish and New Zealand butters on the London market at £l5 per ton—which we consider is, if anything, on the low side—and by creating an increased demand we can reduce' that difference by only one-half, the extra return to the butter producers of‘ this country, based on last year’s export figures would be no less than £705,000 per annum. Similarly with cheese, if we could wipe out the difference between Canadian and New Zealand —we will take the average at £2. per ton—the extra sum which would go into the cheeee producers’ pockets would be £170,000.

Butter Blending. It may not be generally, known to you that a large proportion of the butter imported into the United Kingdom from this and other countries is blended together, after which methods are adopted to deceive the public into believing that the blended article is the best English butter. It is estimated that 80,000 tons are dealt with in this manner annually. Steps are now being taken with the view of bringing Empire butter used for blending purposes within the Merchandise Marks Act, and we trust they will be successful. Considering the quality of our butter we are quite certain that if sold under its own brand, the resultant return to the producer must be very much greater than when sold for the purpose of blending with butters of an inferior quality. The immediate effect would probably be a diminished outlet but that could very soon be overcome by means of judicious advertising. The practice of coating cheese with paraffin wax has now become firmly established, and the quality so treated during the past year was approximately 860,000 crates, or about 72 per cent, of the whole. There has been no difficulty about placing it on the English market at equal prices with unwaxed cheese, and as a considerable saving in loss of weight is gained by the process it will no doubt very soon be universally adopted. F. 0.8. Sales. You will recollect that about 10 months ago the Dairy Produce Exporters’ Association submitted to the Dairy Produce Board contract forms which it was proposed should be adopted as standard contracts for f.o.b. sales of butter and cheese. As we considered that in a number of particulars the proposed contracts were inimical to the interests of the producers, and very much in favour of the buyers, we protested at the action of the board inapproving of the butter contract, and called upon it to withdraw its acceptance. The board subsequently reconsidered its decision, the butter contract was amended, and-approval was given to the cheese contract, subject to certain alterations specified by the board being agreed to by the exporters. The board, however, assented to the proposal that the basis of the contracts would be finest grade, with a lower price for first and second grades, meaning that offers made to factories would be on the basis of finest grade, and all first and second grade butter or cheese would be paid for at a lower figure. We could not consent to this or

to other clauses dealing with overweights and shrinkages, so decided to draw up fresh contracts of our own for your acceptance. After most careful and mature consideration this was accomplished, and they were then submitted to a meeting of Southland factory representatives and unanimously approved of. Copies have since been circulated to all the association’s members and we would earnestly advise you when negotiating f.o.b. sales not to consider any offers excepting those made under the terms of these contracts and to insist that our contract form is used when sales are being confirmed. The contracts are, in our opinion, perfectly fair to both sellers and buyers.

Finest First Under First Per Per Per cent. cent. cent. Whole Dominion . .. 24 74 2 North Island .. . .. 164 81* 2} South Island .. . .. 55 44 1 The results in 'the several grading districts of the South Island were:— Canterbury and Westland .. .. . .. 311 67} u Otago .. .. .. . .. 69 30 1 Southland .. .. . .. 56J 42} 3