H.—29.

The Dairying Position. The complete figures for the dairying season ended 31st July, 1935, indicate that there is a decrease of 4-813 per cent, in butterfat-production for the twelve months in comparison with the record production for the corresponding period in the 1933-34 season. For the twelve months ended 31st July, 1935, the salted butter graded was 131,270 tons and the unsalted 4,947 tons, a total of 136,217 tons, compared with 135,584 tons, 4,641 tons, and 140,225 tons respectively for the corresponding period of the preceding season —a decrease of 2-86 per cent. The quantities of cheese graded for the twelve months ended July, 1935, were —White, 63,602 tons; coloured, 29,071 tons; a total of 92,673 tons, compared with 69,870 tons, 33,812 tons, and 103,682 tons respectively for the corresponding period of the previous season — a decrease of 10'62 per cent. Despite a falling-off in the amount of butter exported from this Dominion, New Zealand has for the first time supplanted Denmark as the principal source of butter imported by Great Britain. This is accounted for by the fact that while the imports of butter by Britain from New Zealand for the seven months ending July, 1935, were less by 9,781 tons, those from Denmark were less by 13,447 tons. While the decline of imports from Denmark may be of some significance as reflecting the reaction of that country to the market position during recent years, some significance also attaches to the fact that the total imports of butter by Great Britain during the period specified decreased by 17,644 tons. It is noteworthy that this decline appears to be associated with under-consurnption rather than with over-supply: while the consumption of butter was 25-2 lb. per head last year, representing an increased average consumption of 6| lb. per capita since 1930, health authorities state that the average consumption of butter for each individual should approximate 52 lb. per annum as a fairly liberal estimate — each increase of 1 lb. per capita per annum in Britain would absorb approximately 20,000 tons additional butter. New Zealand continues to be by far the biggest supplier of cheese to Britain. The decline of 12,074 tons in the cheese imports by Britain from New Zealand during the seven months ended 31st July, 1935, is associated with a decrease of 8,655 tons in the total cheese imported by Britain during the same period —the discrepancy between the decrease in supplies from New Zealand and that in total supplies is accounted for principally by increased supplies from the Netherlands. As was forecasted in this report last year, the number of dairy cows has increased, but the increase for the year has not been so great as in recent previous years. It is of some practical moment that the decrease in the total amount of butterfat produced has coincided with an increase in the number of dairy cows, the interim total of which was 1,949,505 at 31st, January, 1935, whereas the final total at the same date in 1934 was 1,932,511. The joint effect of the downward movement in total production and the upward movement in the total number of cows is a fairly substantial falling-off in the annual average production of our dairy cows. The direct principal cause of this was the adverse season, due to the dry summer —evidence which shows that our herds are very sensitive to the degree of efficiency in their feeding, and which suggests that any substantial upward trend in average herdproduction must be based upon an improved general standard of feeding. In short, in the future, better breeding without better feeding of our stock does not promise much general advancement in average production per cow. Despite a season which, mainly because of the hot summer weather militated against high quality in dairy-produce, the quality of both butter and cheese forwarded for grading was well maintained. An increase in the proportion of cream delivered daily is considered to have assisted materially in bringing about an increase in the average grade of butter for the year. Although the position in respect to the quality of our dairy-produce has been kept satisfactory, it is well recognized that there is still scope for improvement in the condition in which some of our dairy-produce reaches the consumer, and certain means that would tend to bring about some improvement in this respect are specified in the appended report of the Director of the Dairy Division. Other possible ways of obtaining improvement are the subject of current research. When all aspects of the dairying position are considered it becomes clear that the dairying community deserves congratulation and commendation for the way its difficulties have been dealt with—at the end of a period of stress, production and quality have been well maintained ; by the developments in respect to pig-keeping a source of additional income has been exploited increasingly and still further exploitation of it seems in prospect; and by attention to such matters as pasture-improvement, semi-official testing, and herd-testing, a good deal of building for the future has taken place. Further progress towards the fullest possible efficiency promises

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