H,— 3o

Butter and Cheese Exports from 1st August, 1936, to 31st July, 1937.

MARKETING OF BUTTER AND CHEESE. The following review covers the developments during recent years in the marketing of dairy-produce, and outlines the essential features of the system which the Marketing Department operates through the Dairy Sales Division. The methods of sale of New Zealand dairy-produce in the United Kingdom have changed substantially during the post-war period. As the dairy industry increased in importance in New Zealand, and the exports of butter and cheese accounted for an increasingly greater proportion of the national income, certain sections of producers became aware of the necessity of taking a greater interest in the marketing of their produce. Even in pre-war days the National Dairy Association of New Zealand had established an office in London, one of its functions being to establish contact with the Tooley Street merchants who were selling New Zealand dairy-produce. In 1921 the New Zealand Co-operative Dairy Co., Ltd., opened an office in London to supervise sales of the company's butter and cheese by its appointed agents, and in that year also the New Zealand Produce Association came into being with a selling-floor in Tooley Street. Finally, in October, 1927, the New Zealand Co-operative Dairy Co., Ltd., formed a new marketing company —Amalgamated Dairies, Ltd. —which eventually disposed of the whole of the output of the New Zealand Co-operative Dairy Co., Ltd., coming to the United Kingdom. An associated company —Empire Dairies, Ltd. — is used to a great extent by Amalgamated Dairies as the selling-medium, and this associated company also sells substantial quantities of dairy-produce from Australia and other Empire countries. These organizations, of course, represented only a certain section of New Zealand producers, and the rapid fluctuations in prices which occurred in the early years of the post-war period brought about a demand from the leaders of the dairy industry for a greater degree of co-ordination in the methods of sale. As a result, the New Zealand Dairy-produce Control Board came into being in 1924, the Board being established in terms of the Dairy-produce Export Control Act, 1923. In the first two years of its existence the Board confined its activities to arranging contracts for the sea carriage of butter and cheese from New Zealand, marine insurance, regulation of shipments, advertising in the United Kingdom, and investigation of marketing procedure. In 1926, however, the Board took full control of marketing, but the venture was abandoned after less than one year's trial. The Board's control scheme revealed the difficulty of getting within the industry a sufficient measure of unanimity to enable a major proposal to be successfully carried out. After the abandonment of the control scheme, and until 1933, the Board confined its activities to shipping, insurance, and advertising, the dairy-factory companies being left free to sell through or to consign for sale to whom they chose. The disastrous fall in prices which commenced in 1929 and continued in the succeeding years, and the rapid increase in production which added to the difficulties of marketing at this time, again brought into question the existing system of uncontrolled methods of sale, and in 1933 the Dairy Board again assumed a greater degree of control. Dairy companies were still permitted to sell f.o.b. or to consign as they thought fit, but the Board took over the allocation of factory outputs to the various sellingagents in the United Kingdom, who undertook that they would not speculate in New Zealand dairy-produce on their own account. This system did not work very satisfactorily, because it was generally recognized that the Board, not being the owner of the produce, was not in a position satisfactorily to enforce the letter and the spirit of the undertaking. In 1935 the Board, with the approval of the industry, decided to introduce a group-marketing system under which it was hoped that dairy-factory companies in suitable geographical areas in New Zealand would, in time, form co-operative selling organizations under the direction of the Board.

11

To Great Britain. To &^. and Destinartons. TotaI Ex P Mts - Percentage. Grading Ports. —— -—' " Butter. Cheese. Butter. Cheese. Butter Cheese. Batter. Cheese. Butter. Cheese. Boxes. Crates. Boxes. Crates, j Boxes. Crates. Boxes. Crates. Auckland .. 4,020,656 205,491 36,851 1,229 76,546 873 4,134,053 207,593 69-35 17-41 New Plymouth .. 432,142 235,720 .. .. •• •• 432,142 235,720 7-25 19-76 Patea .. .. 102,234 309,334 .. .. .. .. 102,234 309,334 1-71 25-94 Wanganui .. 136,382 33,572 .. .. .. •• 136,382 33,572 2-29 2*81 Wellington .. 669,422 204,880 3,450 4 8,753 82 681,625 204,966 11-44 17-19 Gisborne .. 128,663 1,160 .. .. .. .. 128,663 1,160 2-16 0-10 Napier .. .. 137,515 1,540 137,515 1,540 2-30 0-13 North Island totals 5,627,014 991,697 40,301 1,233 85,299 955 5,752,614 993,885 96-50 83-34 Lyttelton .. 130,760 13,214 1,000 .. 150 .. 131,910 13,214 2-21 1-11 Timaru .. .. 16,709 8,523 16,709 8,523 0-28 0-72 Dunedin.. .. 32,956 29,509 88 32,956 29,597 0-56 2-48 Bluff .. .. 26,806 147,058 .. .. .. 244 26,806 147,302 0-4-5 12-35 South Island totals 207,231 198,304 1,000 .. 150 322 208,381 198,636 3-50 16-66 Dominion totals.. 5,834,245 1,190,001 41,301 1,233 85,449 1,287 5,960,995 1,192,521 100-00 100-00