THE DAIRYING OUTLOOK.

Taranaki Daily News, 21 March 1922, Page 7

THE DAIRYING OUTLOOK.

THE MARKETING PROBLEM. MR. GOODFELLOW’S RETURN. THE RECENT SLUMP. Auckland, March 16. Mr. W. Goodfellow, managing director of the New Zealand Co-operative Dairy Company, who has been on a visit to America and Europe, returned by the Ulimaroa, which reached Auckland last evening. He was interviewed by a Times representative on arrival, and gave some interesting information concerning the outlook for dairy produce in England. Mr. Goodfellow said the marketing problem demanded the most serious attention of every producer. An effort must be made to guard against a retpetition of the December slump. The marketing of the country’s produce naturally affected the national income, and any improvement should therefore be welcomed by the whole community. Owing to the combinations of capital, the day of the individual factory marketing was done. There was, he said, far too much speculation in colonial produce in London, which resulted in fluctuating prices. Australian producers had opened a floor in London in conjunction with South Africa, but for lack of capital this venture had so far not been an unqualified success. ORGANISATION OF NO REAL VALUE.

The existing ; New Zealand organisation, in conjunction with the Co-opera-tive Wholesale Society of Manchester, was of no real value to the producers. The intricate distributing system represented by the merchants’ concerns handling produce from all over the world had been built up and perfected

over a 'period of nearly 100 years, and in consequence of their immense turnover produce could be distributed at a very low cost indeed. There were only fractions to be saved in distributing. What was of supreme importance was to get the top price. In this respect he had nq hesitation in saying that the existing New Zealand marketing company was quite missing the mark. Mr. Goodfellow emphasised that an effort must be made to stabilise the markets by establishing effective control of prices in London and elsewhere. Effective price control, in conformity with supply and demand, was needed. For this reason it would, be wise to cooperate with producing interests in Denmark and Australia.

As to the actual manufacture of butler, cheese, casein and milk powder. Mr. poodfellow considered New Zealand had nothing to learn—in -fact, he had not seen any factories so well equipped nor any which gave such close attention to the question of quality. America was ahead of us in scientific theory, but in practice their produce was very poor indeed. This was largely due to competition for supplies by proprietary interests. There was little co-operation in the United States. The Danes-weio ahead of us in dairy science, but were handicaped. by a multitude of small companies. The result was lack of uniformity, which was a most serious defect. Denmark and New Zealand are the only two countries in the world making superfine butter.

RECENT BUTTER SLUMP. The effect of the operations of speculators in dairy produce was referred to by Mr. Goodfellow. Mr. Goodfellow said the chief object of his trip was to open an office in London for his company, and to appoint a European manager to control the sale of the company’s produce in Great Britain and the Continent and in Eastern America. Arrangements were made with Mr. J. B. Wright to accept the position as from July next. During the war Mr. Wright organised the purchase and sale in Britain of local and imported cheese for the Imperial Government. Referring directly to the matter of marketing New Zealand dairy produce, Mr. Goodfellow said that before he left London a definite price-fixing scheme had been established, which, if extended to embrace other co-operative companies, would prevent speculation. Under existing consignment conditions. Mr. Goodfellow stated, London was a speculators’ paradise. The defects in the present methods of shipping produce on consignment were obvious to anyone who had had an opportunity of gaining inside knowledge, and of watching the result of the greatest smash in produce prices ever experienced in the history < of the Dominion. It was an axiom among speculators ] that no money was to be made on a high market, and that, therefore, the first thing to do to make conditions right for speculators’ profits was to smash the market by forcing sales of consignment butter and undercutting the market. It was not -unusual for butter to be sold at from 5s to 10s below the recognised market price, and further reductions were made as the general price fell. There was no doubt some of the record returns obtained by consignment houses this season would be from those firms who broke the market. These people sold out quickly, and let the market down, while those who held on in an endeavor to stay the stampede had ultimately to sell at the lower price. If they had all stood firm, would have realised values greatly in excess of even the highest values secured. A HIGH-GRADE ARTICLE NECESSARY. When prices weakened the Board of Trade became nervous and under permission from the Treasury offered a tremendous quantity o-f butter at 84s a cwt. for Australian and 100 s for New Zealand, and this had a serious effect upon the market. The action of the New Zealand Government In coming to the rescue would have been a good thing and would have enabled a stable market to be fixed, but when it became known privately in London that the New Zealand Government would accept a joint account purchase certain merchants immediately got busy and within three days, before official information arrived, the whole of the remaining 6000 tons of New Zealand butter had been purchased from the Board of Trade at from 110 s to 113 s a cwt. Shortly afterwards the whole of the old Australian stocks were similarly disposed of. Prices advanced rapidly and new season’s butter was soon up to 130 s and 140 s again, but it never regained its true value. In November, Mr. Goodfellow said, the estimated weekly consumption of butter in Great Britain was 2500 tons. The reduced price stimulated the demand, so that early in January the weekly requirements increased to 4500 Mr. Goodfellow said, that the best I

butter would sell at double the price <of margarine in Britain, but best margarine was preferred to inferior butter. This emphasised the necessity of exporting only a high-grade article. He eaid emphatically that the Board of Trade was in no way responsible for the fall in price during December. SECOND TO NONE. “Superfine New Zealand butter is second to none in the world,” said Mr. W. Goodfellow. He said it was a fortunate thing for the producers of this country that the buter exported this season had been so uniformly good. On account of inferior and erratic quality Australia and Argentine had received from 2d to 4d less than the Dominion producers. New Zealand cheese, however, lacked uniformity and did not hold a paramount position on the market, but it was nevertheless fairly good. The Danes secured top market price for their butter almost solely on account of their marketing system. They supplied the British people with butter all the year round in approximately equal weekly shipments. Mr. Goodfellow expressed the opinion that Danish butter should receive a premium of ,f»s a cwt. over New Zealand, and Australia should get from 6s to 10s a cwt. less than New Zealand. “We do not pay sufficient attention to the marketing of our primary products,” said Mr. Goodfellow. “ There was no cause for pessimism regarding the future of the dairy industry. The Auckland province was ideal for this business and exports would continue to increase for many years to come. There was no doubt the producers were having a severe time tending the readjustment of world values. The future was full of promise for those who would economise and hang on a little longer.