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Each year more breeders voluntarily place their whole herd on 0.H.T., and for several years it has been the intention of the Department to introduce a rule making it compulsory for any breeder desiring to have his herd tested by the Dairy Division to place on test all sound pedigree cows in the herd. This " all-cow " rule is, however, expected to require an increased staff of Herd Recorders and consequently additional motor-vehicles. Inability to obtain such additional transport has unfortunately necessitated continual postponement of this proposal. Though the testing systems operated by the Dairy Division are undoubtedly rendering excellent and essential service, maximum effectiveness will not be reached until the introduction of the " all-cow " rule is achieved. The monthly visits to the farms of testing breeders now requires a staff of 53 Herd Recorders (previously designated Testing Officers). New appointees before taking up duty are given an intensive training course of up to two weeks under the Field Organizer of Government Herd Recording at Palmerston North. During the year 2 Senior Herd Recorders were appointed and after passing through special training were stationed at Palmerston North and Hamilton. These officers are already filling very useful positions in supervisory and special check testing and inspection work. The difficult staff position in the head office of the Dairy Division has been relieved by decentralization of the figuring and issuing of monthly O.H.T. returns to the Department's offices at Whangarei, Hamilton, Palmerston North, and more recently Christchurch. As a result breeders are now receiving their monthly returns more punctually. This clerical staff relief has also enabled the introduction of a merit register service so that testing breeders may have lifetime production records and other accompanying data of their test cows for herd-management purposes. A considerable number of certificates have already been issued. It is hoped to introduce a sire-survey service during the coming year, but much clerical work remains to be done and the introduction of the service will depend mainly on the clerical staff position. Milk Powder The development of the manufacture of powdered-milk products has now reached industry proportions, and 26 factories are now producing milk powder of one form or another. The greatest interest has been displayed in the manufacture of buttermilk powder by butter companies for the following reasons : (1) That the return from buttermilk, a by-product of butter manufacture, can be very greatly increased, compared with feeding of the liquid buttermilk to pigs ; (2) the United Kingdom Ministry of Food was agreeable to a five-year contract for the powder ; (3) the establishment of roller-drying units is not unduly expensive and becomes part of the operation of a butter-factory. Twenty-one factories are engaged in roller drying of buttermilk, 7 in roller skimmilk powder manufacture, 4 in spray skim-milk powder, and 5 in whole-milk powder, both roller and spray processes. The outputs of the various products for the year are approximately as follow : —- Tons. Whole-milk powder (including baby foods) .. .. 4,900 Skim-milk powder (roller process) .. .. .. 1,140 Skim-milk powder (spray process) .. .. .. 19,500 Buttermilk powder (roller process) .. .. .. 3,770 All of these products, with the exception of whole-milk powder, utilize a by-product of butter manufacture, and therefore, apart from the added financial returns, more effectively utilize valuable food products than in the past.

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