Other formats

    Adobe Portable Document Format file (facsimile images)   TEI XML file   ePub eBook file  


    mail icontwitter iconBlogspot iconrss icon

The Pamphlet Collection of Sir Robert Stout: Volume 69

The Dairy Industry of New Zealand

page break

The Dairy Industry of New Zealand.

Dunedin, Sir,—

I have the honour to submit to you my annual report on the dairying section of your department. I also attach for your information the report of my Assistant Dairy Inspector, Mr. Dons.

Since furnishing you with my official statement of last year I have visited thirty-six dairy-factories and twenty-two private dairies, giving in each case, as far as the time at my disposal would allow, practical demonstration of the best processes for the manufacture of cheese and butter compatible with the appliances and appointments of the various factories. In these factories and dairies I have worked, on an average, four days in each, the maximum period of instruction in any dairy being eight days, and the minimum one. During the same period of time I have also given twenty-five lectures in different centres, eighteen of these addresses being on the benefits of co-operative dairying, three on the manufacture of butter, three on the manufacture of cheese, and one on the influence of food in determining the character of milk of cows. These lectures have invariably been published in the local papers, and I believe they proved of great benefit to the settlers. The lectures have also been copied largely by other newspapers, thus widely diffusing the information given in the first instance to comparatively a few of those most directly interested in the dairy industry.

The names and number of dairy-factories and private factories visited can be seen from an examination of the following schedule, viz.:—
  • Fairfax Dairy-factory, cheese, Southland.
  • Aperuna Dairy-factory, cheese, Southland.
  • Edendale Dairy-factory, cheese and butter, Southland.
  • Owaka Dairy-factory, cheese and butter, Otago.
  • Stirling Dairy-factory, cheese, Otago.
  • Bruce Dairy-factory, cheese, Otago.
  • Henley Dairy factory, butter and cheese, Otago.
  • Cranley Dairy-factory, butter and cheese, Otago.page 4
  • Maungatua Dairy-factory, cheese, Otago.
  • Outram Creamery, butter, Otago.
  • Mosgiel Dairy-factory, butter, Otago.
  • Sawyer's Bay Dairy-factory, butter, Otago.
  • Waikouaiti Dairy-factory, cheese, Otago.
  • Palmerston Dairy-factory, cheese, Otago.
  • Waiareka Dairy-factory, cheese, Otago.
  • Temuka, Dairy-factory, cheese, Canterbury.
  • Geraldine Dairy-factory, cheese, Canterbury.
  • Flemington Dairy-factory, cheese, Canterbury.
  • Longburn Dairy-factory, butter and cheese, Wellington.
  • Okoia Dairy-factory, butter and cheese, Wellington.
  • Woodville Dairy-factory, cheese, Hawke's Bay.
  • Teroti Butter-packing Company, butter, Taranaki.
  • Normanby Dairy-factory, butter, Taranaki.
  • Mr. Chew Chong's Eltham Dairy-factory, butter, Taranaki.
  • Wilkinson's Dairy-factory, butter, Taranaki.
  • Kaponga Dairy-factory, butter, Taranaki.
  • Cardiff Butter-packing Company, butter, Taranaki.
  • Stratford Butter-packing Company, butter, Taranaki.
  • Mr. J. C. George's Tikorangi Dairy-factory, butter, Taranaki.
  • Mr. J. C. George's Pungarehu Dairy-factory, butter, Taranaki.
  • Mr. J. C. George's Opunake Dairy-factory, cheese and butter, Taranaki.
  • Mr. J. C. George's Otakeho Dairy-factory, cheese, Taranaki.
  • Mr. J. C. George's Manaia Dairy-factory, butter, Taranaki.
  • Mr. Breech's Dairy-factory, butter, Taranaki.
  • Banks Farm Dairy-factory, butter, Taranaki.
  • Mr. Bailie's Dairy-factory, butter, Taranaki.
  • Mr. Samson's private dairy, butter, Wellington.
  • Mr. Fitten's private dairy, butter, Taranaki.
  • Mr. White's private dairy, butter, Taranaki.
  • Mr. O'Conor's private dairy, butter, Taranaki.
  • Mr. Simon's private dairy, butter, Taranaki.
  • Mr. Bruce's private dairy, cheese, Canterbury.
  • Mr. Odell's private dairy, cheese, Canterbury.
  • Mr. Chickley's private dairy, cheese, Canterbury.
  • Mr. Wilkie's private dairy, cheese, Canterbury.
  • Mr. Chatfield's private dairy, cheese, Canterbury.
  • Mr. Mackay's private dairy, cheese, Canterbury.
  • Mr. Macdonald's private dairy, cheese, Canterbury.
  • Mr. Reid's private dairy, cheese, Canterbury.
  • Mr. Ferrin's private dairy, cheese, Canterbury.
  • Mr. Scott's private dairy, cheese, Canterbury.
  • Mr. Lyall's private dairy, cheese, Canterbury.
  • Mr. White's private dairy, cheese, Canterbury.
  • Mr. Ashton's private dairy, cheese, Canterbury.page 5
  • Mr. Bennett's private dairy, cheese, Canterbury.
  • Mr. Shuttleworth's private dairy, cheese, Canterbury.
  • Mr. Moore's private dairy, cheese, Canterbury.
  • Mr. Aldridge's private dairy, cheese, Canterbury.

While the dairying industry has not yet developed into anything like the importance it is destined to assume, I think we cannot shut our eyes to the fact that during the past two years a considerable forward movement has been made, more especially during the past year. I have myself been repeatedly complimented from various sources for what was, perhaps undeserved, benefits received from my instruction, not only from dairy-factory operatives, but from merchants dealing in the commodity. Notwithstanding the fact that some of our dairy-factory companies have had to succumb through financial difficulties, and some, through mismanagement, even forced into liquidation, still, the future of our outlook is very hopeful. A more practical acquaintance with the nature and the handling of milk and its products on the part of factory-managers, and a better knowledge of commercial principles on the part of the managing committees of the factories, will inevitably secure our desired ends. This can only be brought about by continued steady instruction, combined with experience attained in the actual working of dairy-factories. The complete revolution necessary in the industry cannot be effected in a day, but changes must be made by degrees. But that the industry is being founded on a more certain basis there can no longer be any room for further doubt.

From communications received from some of the principal London brokers, I learn that they recognise a marked and sustained improvement in the quality of both cheese and butter shipments of recent manufacture; at the same time, they express the opinion that finality in the matter of improvement has not yet been reached. The chief complaint among the London brokers is the absence of uniformity, and this cannot easily be remedied while there is throughout the colony such an extensive system of private dairying at work. Uniformity cannot easily be engendered without the establishment of the factory system. It is worthy of note that several of our dairy-factories have now earned a desirable distinction in the London market for the quality of their products—both butter and cheese. Brands of butter which were last year quoted at from £1 10s. to £2 under the Danish brands have during the past season been quoted at about the highest figures realised on the London market. Cheese from our best factories has successfully competed with the best Canadian brands, which seem to dominate the market. But, unfortunately, this distinction is only earned by a few of our best factories. Towards showing the benefits derived from the factory system as compared with individual dairying, it is satisfactory to note that, out of an even line of three shipments of butter sent Home, the factory brands realised from £5 15s. to £6 3s., while that from page 6 private dairies brought from £4 15s. to £5 15s. The higher quotations must be considered satisfactory.

It is also pleasing to note the rapid development which the dairy industry has undergone during the last ten years. In 1880 the value of our exports of dairy-products was £1,033, while for 1890 the value rose to £207,687, and I am sanguine that the past season's export will show, from the same amount of produce, a considerable increase in pecuniary value. I hope by future efforts to see a still brisker trade established, so that the settlers may derive a benefit, and find some solace for past losses.

As you are already aware, the greater part of my time during the past working season has been devoted to Taranaki Province and Banks Peninsula, Canterbury. With reference to Taranaki as a dairying section, I can speak in the highest terms of praise, and I believe this district is destined to become the principal dairying district in the colony.

It is generally conceded that no country possesses greater natural advantages for dairy pursuits than New Zealand; this, at any rate, is true of Taranaki. Any one acquainted with the large areas of splendid pasture-land in Taranaki must have had the conviction forced upon him that this locality is pre-eminently fitted to become a great centre for manufacturing dairy-products. In soil, climate, seasons, and settlement Taranaki has every natural advantage. Winter pasturage is generally abundant, and so the farmer is to a great extent relieved of the labour and expense of storing up much winter feed. Little or no housing is required for the cattle throughout the winter, and so the farmer can carry on his business under the most favourable circumstances, as very little of the profits of the season are consumed in maintaining the cows from one season to another. At the same time, I have endeavoured to impress upon the farmers of this district the desk-ability of growing a little winter feed; likewise the benefits of some better means of shelter during the cold season. I could see that it was the practice of the farmers there generally to allow the cows to wander over the bare pastures and find what shelter they could get under the lee of a few trees during the cold season. The result of this negligence is that the cows start the season under the most unfavourable circumstances, many of them being nothing but a complete rack of bones. Indeed, in most instances the winter management of dairy cows in Taranaki is conducted in a very primitive manner, no other food being provided than what the cows can pick up by grazing on the cold, bare pastures day and night. Under such a system the largest profits cannot be secured. It is true that every cow has a limit of milk-production, but, at the same time, it lies with the breeders' and milk-producers' skill to obtain that maximum. There is no doubt that the farmers would derive great pecuniary advantage from pursuing a more systematic method of feeding dairy cows during winter. But page 7 all these essentials must be rather the result of time than the efforts of any one individual, and they will not be brought about until a more comprehensive system of co-operative dairying is set going.

Very little cheese is made in Taranaki. Cheese-factories have been erected from time to time, but, through want of skill in management, they have proved failures, and so the attempt to make it has almost been abandoned.

I have seen a few fairly-good cheeses in this district, but none were of superior quality, all of them lacking that nutty, buttery quality which so much characterizes good Cheddar cheese. Towards the end of the past season, however, I am glad to report that a considerable improvement is manifest in the quality of the article, due to the light which has been thrown upon its proper manufacture.

A considerable quantity of good butter is now also being produced which will not, I think, suffer much by comparison—all things considered—with that of Ireland or northern Europe. This only shows what can be done by proper system and skill in manufacture, and even in the best of these dairies and factories there is room for much improvement, especially as regards uniformity.

If the soil and climate of Taranaki were not favourable for cheese making one could understand such an unsatisfactory state of things existing, but, in my opinion, the soil and climate are eminently fitted for the production of first-class cheese. Soil and climate are certainly thoroughly suitable, the district being more favoured with moisture than most parts of New Zealand. This constant supply of moisture from the atmosphere is very favourable to the growth of grasses, and of green crops generally. Most of the soil being of a light friable loam, with the rock not far from the surface, this moisture is just what is required. There is a constant fresh spring of grass, and not many hot days. These circumstances are conducive to the exigencies of cow life, and, in a secondary degree, to the manufacture of butter and cheese. Probably nowhere in the colony can better butter and cheese be produced, coupled at the same time with large flows of milk.

Yet, with all these advantages, much of the butter and cheese produced is of an inferior quality, wholly resulting from the habits of settlers generally. Indeed, in looking at the dairying industry in Taranaki to-day from a certain standpoint, it would be difficult to point to any other branch of human industry of anything like similar magnitude carried on in such a slipshod and slovenly manner. This state of things will continue to exist until closer and more thorough co-operation takes firm root in some parts of the district, and so compel the others to follow on the march to success.

In spite, however, of defects, the lax system of making, and the lack of skill in manufacturing, dairying is the most profitable manner of dealing with the land in Taranaki, and accordingly the number of cows in the district is constantly increasing.

page 8

Towards showing the vast importance of the dairy industry to Taranaki, it is worthy of note that during the six months ending the 31st March last something like 600 tons of butter have been exported. This we can safely estimate as having netted to the exporters 8d. per pound, giving an aggregate value of £44,800; yet the industry there is capable of immense expansion.

The reason why so large a quantity of inferior butter is produced is not far to seek:—
(1.)A large majority of the dairies are too small, except to supply factories, and are therefore compelled to keep their cream far too long before churning.
(2.)Very inferior accommodation for the milk and cream, which applies to most of the factories also.
(3.)A prejudiced inclination to adhere to ancient customs and "rule-of-thumb" methods in manufacture.
(4.)A want of technical knowledge in the treatment of milk and cream suitable to the pastures and climate.
(5.)Want of skill in the selection of packages and the style of packing.
(6.)The want of proper cool-cars on our railways and cool-space on our coasting-steamers.

There are other minor difficulties to be contended with, but these are the principal causes whereby a large percentage of inferior butter gluts our markets, and at the same time interferes with the demand among local consumers. This also, when exported, accounts for ruinous rates being returned to producers, and at the same time acts prejudicially to the sale of good butter in the Home and intercolonial markets.

All these items affecting so much the production of a higher-priced article are receiving due consideration from my hands, although it is a difficult matter to overcome—especially among private makers—the fancied superiority of their skill in the production of fine goods.

Like many other zealous advocates for the extension of dairy farming in New Zealand and reform in dairy practices, I place exclusive reliance upon the establishment of the factory system as being the only means whereby the ultimate success of the industry can be assured. What the refrigerator has done for the grazier cheese-factories and creameries will do for the dairy-fanner if properly carried out. What would the frozen-meat trade be to-day if every farmer could refrigerate his own produce and trifle with it according to his own peculiar notions, as he does at the present time with his dairy-produce? Were there not such a division of labour in the frozen-meat trade it would, in my opinion, very swiftly come to ruin. The dairying industry, like the frozen-meat trade, has many features peculiar to it which seem to characterize it in a general way from almost any other known industry.

It is true that the character of the people engaged in it may be as page 9 varied as in the case of those dependent upon any other industry; but unless some consonance of effort reign among them we cannot hope to reach the highest rung of the ladder.

In order to cause the necessary revolution in dairy practices throughout the colony I have therefore—seeing no other solution of the difficulty—been a persistent advocate of the factory system for cheese-making and the creamery system for butter-making. If these were established on a purely co-operative basis, all shareholders being milk-suppliers, and no outsiders pecuniarily interested, I am of opinion that there would be created among the farming community a spirit of good-will and friendly emulation which would bring about a better state of things. There are certainly a great many obstacles to overcome in carrying this out, but that is always the case in all new departures, and in this instance the difficulties are not insuperable.

Some critics go so far as to say that first-class produce is being made in very few of the factories, and that therefore the factory system in this and other respects has not proved a success. I admit to some extent the correctness of the premise; but to the charge that the factory system has proved itself to be a failure I give a most emphatic denial. Had the old system of "every man his own maker" yet prevailed in New Zealand, I ask, if anything approaching the result which the industry has at present reached would ever have been attained? The results arrived at by many of our dairy-factories during the past two years could not have been produced from a system which was doomed to be a failure. What one factory can do another may do. Results hit hard upon those whom experience fails to educate; and so the failure of some of the factories has been, and is, making itself very unpleasantly felt, for no system can be a success if the known principles upon which success depends are either intentionally or unintentionally violated.

As I have already stated, I believe in all cheese-factories or creameries being operated upon a purely co-operative basis: that means that all shareholders should be milk-suppliers, and the milk of no others but that of shareholders should be admissible into the factory. From former experience of the subject, and the experience gained during my sojourn among the New Zealand factories in my present official capacity, I am of opinion that when established under an adverse foundation factories will seldom work satisfactorily. In this particular I am somewhat self-opinionated. When not operating on a co-operative basis discontent is sure to pursue the shareholders, the non-milk-suppliers claiming their dividends and the milk-suppliers higher prices for their milk. This seems to go on until the milk-suppliers, on whom the success of the venture depends, become disheartened, and a combined desire to see the concern flourish becomes in time totally unknown. Therefore I think it is a cardinal point in the establishment of factories to see that they are floated on page 10 purely co-operative principles. This is a point which has received a great deal of consideration from my hands while advocating the erection of factories and when speaking to meetings of farmers on the subject.

During the year I have not confined myself wholly to districts which contained factories, but visited and lectured in many other sections where there were none. In several of the latter at the present time negotiations are being carried on for the establishment of factories.

At Cardiff a factory is in course of erection, to be operated on a strictly co-operative basis. For this company I suggested and sketched the plans of the buildings, and prepared specifications, articles of association, and by-laws, specifying the conditions under which milk will be received. I also procured for the company the services of a first-class manager.

At the present time I am engaged in securing suitable machinery and plant, so as to start the factory at the minimum of expense. This factory will be capable of dealing with 1,400 gallons of milk daily. The estimated cost, including land, buildings, and plant, is £664 10s. Article No. 9 of this company's constitution states, with reference to dividends and payments to contributors, "Subject to such dividends as may from time to time be declared (as a remuneration to shareholders for the capital paid by them to the company), the whole of the net profits of the company shall be divided amongst and paid to the contributors of milk to the company (such contributors being also shareholders) in proportion to the milk actually contributed or supplied by them to the company."

From this you will gather that all profits accruing from the factory pass directly into the hands of the milk-suppliers, who are the only shareholders.

It is my earnest desire to see similar institutions multiply, being sure that their influence for good will be great. Appended is a copy of by-laws, also estimate of cost of buildings and plant furnished to the Cardiff and other proposed dairy-factory companies for their guidance. These by-laws I have culled from various sources, chiefly from the works of Professor Brown, but I have revised them to suit altered circumstances.

Plans of factory-buildings have been drawn and specifications and other necessary information issued for the establishment of similar institutions in several other sections, which, it is to be hoped, will be in course of erection before long.

What I have stated concerning Taranaki is equally true of Banks Peninsula.

Dairying in this district constitutes a most important object of industry among the farming community, where you occasionally find as many as sixty to seventy cows in one dairy, although the majority do not possess more than from twenty to thirty.

page 11

Here also, as in Taranaki, the winter management of dairy cows is very defective indeed, mainly due to the antiquated method of dairying in vogue. However, I believe of late years more attention has been paid to the winter treatment of cows. About three-fourths of the milk produced in this quarter is made into cheese, the remainder being used for household consumption, or made into butter. About 800 to 900 tons of cheese are produced annually. The most prominent among the evils which exist here at present is the empirical knowledge and "rule-of-thumb" method of cheese-making. That it is the fault of the system that they are making bad produce is not true. Instead of gaining ground in the making of a good article they have gradually been retrograding in their practice by a departure from the primary principles and inattention to details. Little do those engaged in the industry in this district know that they are pursuing a system of manufacture which if carried to its entirety has not yet been improved upon. If they only knew how to reduce into practice the laws which nature has enacted to govern the process they would see it was the only process from which much practical utility can be obtained.

Here every farmer runs his own factory according to his own peculiar notions, and disposes of his produce as he sees fit. While such a system as this is pursued there are many things which leaves the seller comparatively at the mercy of the buyer, and, indeed, such in years past has been the case on Banks Peninsula. No factory system being carried out there, it was necessary for me, in order to effect any improvement in their dairy practices, to call the settlers together at various centres and show them, by ocular demonstration, the manner of reducing the laws of cheese-making into practice. Accordingly, as arranged among themselves, a route was planned out for me so as to distribute the benefits derivable from my instruction evenly over the district. The committee in whose hands I placed my services gave notice each week through the medium of the local Press of the place at which I would impart the necessary instruction the ensuing week, and requesting all interested to attend. By this means it transpired that I was met each working-day by most of the makers from the surrounding section. Towards showing the great interest taken in the work, I may state that the number of people I thus met ranged from sixteen to twenty-seven daily. Many came long distances to watch my movements, to listen to my instructions, and to ask questions bearing upon the work in hand, at my suggestion. Believing, as I did, that very little good would accrue from entering into any lengthy statement of theoretical or technical exposition, I considered it more in keeping with the itinerant system of instruction to place before the public the simplest and most practical instruction to begin with.

This method of instruction in this and other districts furnished me with a very instructive commentary or the system of "every man page 12 his own maker." Among, say, twenty individuals attending a course of instruction during any day I could calculate upon twenty different varieties of produce being made, if it was possible for each individual to have his own way.

Alike in Taranaki and Banks Peninsula is there need for improved dairy-utensils, and more careful treatment of milk, cream, and butter. The dairy accommodation and equipments of the farmer in general may be described as very bad. Sanitary matters are at a very low ebb, pig-styes, manure-heaps, cowsheds, and dairies generally being in far too close proximity to each other. The general surroundings are at the same time anything but conducive to cleanliness. In going about from farm to farm I found great diversity in the kind of dairy appliances used, the most of them being of an obsolete type. The buildings employed for the treatment of the milk were also very primitive, and anything but suitable for the manufacture of cheese and butter. Indeed, I found some of the buildings in a state of absolute dilapidation. The walls of some of the buildings were so open that, when standing in the make-room, one's view was scarcely obstructed in any direction, so open and broken were the walls. It is probable there are days when it is possible to make fine goods in such places, but, in nineteen cases out of twenty the result is failure, and, even if successful, the product is very liable to be spoiled in curing.

That there is a chemical process going on in every well-made cheese, and that this process progresses best under certain atmospheric conditions, is a fact which no farmer I happened to confer with seemed to know. In the use of rennet and other prominent points in the manufacture the makers of Banks Peninsula showed a like want of knowledge. In none of the dairies I visited in this quarter save one did I see what I would term a near approach to a first-class article. In fact, the accumulated results of the cheese industry of this section is one very much calculated to damp the ardour of any sensitive observer in dairy practices.

During the past two years, and since the factory-cheese has begun to dominate the market, the dairymen in this district can perceive that they are being excelled in the manufacture of a good article, and are now starting to look around them for means of regaining their lost ground. During the past season, as a step towards the accomplishment of this result, a dairy association has been formed. Through the agency of this society since its foundation excellent work has been done, and through the same medium I have myself diffused a good amount of information relating to all branches of the business. This body is now resolved that whatever intelligence, perseverance, and money can do in the way of improving their productions shall be done, and, if the observations I made during my stay in the district are correct, their chances of success are excellent.

page 13

In some parts of this section, on account of the rough and hilly nature of the country, the factory system is impracticable, and there a diffusion of a knowledge of the art of cheese- or butter-making among the individual farmers is necessary. In most parts of Banks Peninsula, however, it is possible to introduce the factory system, and to this end I have used persistent efforts, and I have good reason to believe that three or four factories will be established at no distant date. Plans and specifications of buildings, articles of association, by-laws, and other necessary information have, at the request of the association, been forwarded by me.

The advantages of a well-organized system of co-operative dairying, not only to this section, but to all the dairy districts of New Zealand, would be difficult to estimate. Such a system, if properly governed, would, in my opinion, solve many of the difficulties which now beset the small farmer. Co-operative dairying is a matter fraught with considerable benefit to all, and in no less a degree to the farmers of Banks Peninsula, and is a consummation highly to be desired; and I hope neither individual nor local jealousies will be allowed to interfere with the carrying-out of the project, but that all will give it their hearty assistance.

The faulty construction of butter-factories erected in the past, and the absence of some cheap means of cooling, are defects which have caused great destruction to immense quantities of butter; and the matter of cooling is an obstacle not easily solved. The Victorian Government during the past season offered a premium of £300 for the best means of reducing the temperature of butter-factories, without the aid of chemicals or machinery. This offer induced sixty competitors to come forward, but, on examination of designs, the judges did not think any of them of sufficient merit to earn the premium.

As a means of reducing the temperature in butter-factories, I have suggested a process which may now be seen in operation at Messrs. J. and R. Cuddie's factory at Mosgiel. I have examined this method of cooling during the year, and find it both cheap and effective. The system consists of an underground air-drain 200ft. long, from which coiled tin piping is carried to the well. The air is drawn through this drain and coiled pipe inserted in the well by means of a small fan driven by a one-horse-power engine. By this process the air, in passing through the underground drain and coiled pipe, is cooled to near the temperature of the water, which stands at a temperature of about 52°. The cool-chamber is half underground, the walls being double brick, with air-space between. It is well roofed and lined, and a thickness of 2ft. of sawdust is placed on top of the ceiling, so that the building is not affected by the fluctuating temperature of the outside atmosphere. Since the Messrs. Cuddie have introduced this system of cooling the butter-product of the firm has materially improved, and, in my opinion, it has not many page 14 successful rivals at present in New Zealand. The manager in this factory is now also a thorough master of his work. Although this system is practicable at Mosgiel it cannot be introduced in many parts on account of the want of cool spring water.

Wherever it can be successfully adopted I mean now to advocate it. Of course, the want of ice or very cold spring water is a great obstacle against butter-making in New Zealand, especially in the North Island, in the summer time.

However, refrigerating-machines can now be had at a nominal price, and by the creamery system of butter-making, which I advocate, the price would not be a serious item. I am sanguine that some such means must be brought about before the manufacture of butter on a large scale in New Zealand can be conducted successfully and the export made assured. At the present time I am experimenting with another means of cooling butter-factories and creameries, and, if successful, will make it known for the benefit of the industry. During the year I have made experiments with a view of proving the most suitable package for the exportation of butter.

Shipments of mixed packages have been sent Home from several of the factories, with a view to proving the superiority of the packages. I myself sent a small trial shipment consisting of three tawa kegs, three totara kegs, three enamel-lined boxes, and three white-pine boxes lined with vegetable-parchment paper. This was all consigned to William Semple, Esq., 224, Gresham House, London, E.C., and when consigning I requested him to procure the services of two other experts in the line, so as to test thoroughly the quality of the various packages.

In reply, I received the following report, viz.: "White-pine boxes, lined with vegetable-parchment paper, decidedly superior to any of the other packages. Butter sent here in these packages will always command a premium."

In every instance where these packages have been tried replies to the same effect were received, some of the brokers stating that butter sent in such packages would always command from 4s. to 5s. per hundredweight more than the same quality sent in kegs. Since the receipt of this information large numbers of the boxes have been used, with the result that exporters have effected a considerable pecuniary saving. These white-pine boxes, with a capacity of from 56lb. to 60lb., can be obtained wholesale at from 1s. 3d. to 1s. 6d. each, whereas tawa and totara kegs of a similar capacity cost 3s. to 3s. 6d. each, and enamel-lined boxes 4s. to 4s. 6d. each. These white-pine boxes will, in my opinion, yet be universally used, and if so their use will effect a saving to the butter-factories already in operation of from £5,000 to £6,000 annually in the cost of packages only, not to mention the saving in shipping-space, and the higher value on reaching the Home, or other markets. The box is also very page 15 neat and attractive, and, being lined with vegetable parchment, completely prevents soakage. The box, I think, is sure to take in the butter trade.

The much-disputed point of freezing versus chilling butter has been settled during the year in favour of the system which I have always advocated—viz., chilling salted butters, while fresh may be frozen. From repeated experiments during the year I have proved that the lower the temperature of the room in which butter is kept—if that be above freezing-point—the better will the butter keep while there, and the better will it keep when brought into the warmer temperature of stores and warehouses. The same applies to its treatment before shipment and during transit.

During the year, also, two small trial shipments of fresh butter in ½lb. prints have been made to England, the result of which I will make known on receipt of the information. I look forward to being able to establish a large trade in this commodity.

Towards showing the present extent of the factory system, it is gratifying to be able to show that there are now sixty-two large cheese and butter-factories in operation, the buildings and plant showing an aggregate value of upwards of £70,000.

Some of the cheese-factories are now turning out from 100 to 160 tons of cheese annually, and the butter-factories and creameries 50 to 140 tons of butter annually.

I have during the year kept well in touch with most of the managers and managing committees of the dairy-factories throughout the colony by correspondence, it being impossible to personally comply with the demands for my services. In this way a large amount of knowledge has been disseminated.

Being a member of the committee of the South Island Dairy Association, I have made a point of attending, when practicable, meetings of this society, especially when very important business was being considered.

This organization was established last year, full information as to its objects being given in my last annual report.

Although this society has been at work only a short time, yet to it I give the credit of having brought about much of the success which has attended the past season's operations. So sanguine am I of the benefits accruing from such organizations that I hope er? long to see more of such institutions in our midst, as I am sure their influence for good is at present unthought of. By the aid of such societies is solved to a very great extent the difficulty of direct Government intervention; knowledge bearing upon the improvement of the produce is by their means more easily disseminated; better means of transit and disposal are obtained, and the interests generally of the industry better looked after.

Nothing, in my opinion, is better calculated to promote the well-being of the dairying industry than an organization of this character. page 16 Combination among the dairy-factories is the only means whereby the industry may be brought to a speedy and successful issue.

Now that the factory system has been successfully established, and the capabilities of the colony for the production of a good article fairly put to the test, and knowing that the keenness of competition which is now and will be more so experienced in the dairying trade will become quite prejudical to the interests of individual factories, I think the time has arrived when some general move ought to made to organize the dairy-factories.

This seems to me to be a most salient point when considering a solution of the difficulties with which the industry has to contend.

It seems to me that no better and cheaper system of fostering the industry can be brought about. The future prospects of the industry in New Zealand is bright in the extreme if only we initiate and carry out a vigorous and systematic policy of encouraging. If the present method of shipment and distribution in the Home and Australian markets be perpetuated the dairying community cannot expect much improvement on present prices. Neither will the demand largely increase, as it undoubtedly would do if a different means of dealing with it were adopted on arriving at its destination. While the produce floats through so many channels as at present the largest profits cannot be secured. Not only this, but the trade cannot easily be cleared of any impediments, the fluctuations of markets cannot readily be known, nor the causes of detriment so accurately anticipated. This has been graphically illustrated by the success which the Middle Island Dairy Association has met with during the past season, and, if only this and analogous organizations were encouraged, great good would be accomplished.

Something must be done so that the theory of trade can be more looked to. We must seek to extend our markets, and look more to the quality of the article—the condition and style in which it is shipped, adaptability to the English palate, and the ease and facilities with which it can be taken more direct to the consumer. In these considerations lie the main elements of success of the New Zealand dairy-produce trade.

By organizing the industry in this way the factory system is also encouraged, and the shipping and marketing placed in the hands of a business committee—men who have a better knowledge of com-mercial principles than the general run of the managing committees of dairy-factories can possibly have.

The extraordinary prosperity of American and Danish dairying is the result of two influences—viz., the factory system and organized instruction.

The encouragement of factory combinations could, I think, be successfully brought about in the following manner, viz.: On the receipt of information from the secretary of an association formed page 17 to protect the interests of the industry that twenty dairy-factory companies or proprietors (with schedule of names) have federated, and that each factory company or proprietor has paid an annual subscription towards the upkeep of the association of not less than £5, which would constitute a membership of the association for one year, Government give a subsidy of £200 per annum towards the funds of the association. Each cheese-factory joining the association to have an annual output of not less than 35 tons of cheese; each butter-factory an annual output of not less than 20 tons of butter; and each creamery not less than 80 tons of butter.

Definition of Cheese-factory, Butter-factory, and Creamery.—A "cheese-factory" shall mean an establishment where milk is taken in from the surrounding settlers, and manufactured into cheese. A "butter-factory" shall mean an establishment where milk is taken in from surrounding settlers, and the cream separated by mechanical means, and manufactured into butter. A "creamery" shall mean an establishment where cream only, which has been separated by mechanical means, is taken in, and manufactured into butter.

By means of such organizations the much-disputed question of the classification of dairy-produce shipments before leaving the colony could be settled. When a certain standard of excellence and uniformity is reached, then a special brand could be registered, for the purpose of branding and protecting all the cheese and butter manufactured by each cheese-factory, butter-factory, or creamery, to be used only by those joining the association. Such associations could also confer with the Government and professional experts, and, by holding periodical conferences, would be of essential service in promoting the welfare of the industry. In such bodies I am strongly of opinion the Government would find safe guides. This scheme I submit for your careful consideration, in the hope that some practical effort in the direction indicated will be brought about.

I would also suggest for your careful consideration the necessity which exists for some authoritative means being devised for educating and certifying as to the abilities of dairy-factory managers. This might be made one of the functions of an agricultural college; if not so I have no doubt some practical and reliable means could be devised whereby such could be undertaken by whoever may be your dairy instructor.

In my opinion, this is a completion highly to be desired, as, if some authoritative means were contrived, it would greatly assist dairy factory companies and proprietors in the selection of men. In the management within the factory lie the foundation of the industry's success or the chief cause of its failure.

It is not to be thought for a moment that the enthusiasm of promoters of dairy-factories should long outlive the earnestness of purpose which called them into being, and therefore it is necessary something should be done to keep alive in the makers the elements page 18 which insure success. Certainly, when the factory system was first brought into play enthusiasm and consonance of effort was useful and necessary to establish it. Now the novelty has worn off, and, in ray opinion, it is of the utmost importance to keep alive in the makers that steady, methodical, and sustained work, and increasing desire to improve by which alone any movement can be expected to be maintained. No doubt these qualities are found in some of the managers, but unless something in the direction indicated is done the most of them are inclined to grow mechanical and careless.

In Victoria a dairy-school has been established, on a very liberal and practical foundation at least, if not so much scientific as many think desirable. In this school, under the indefatigable guidance of Professor Brown, dairying is taught from a practical, theoretical, and chemical standpoint, and the pupils certified as to their abilities. This is excellent and creditable work; but I am of opinion that it is a costly system, and that an effectual and cheaper method could be devised through your dairy instructor. A scheme for the purpose I am prepared to indicate whenever you so desire.

Assistance has also been rendered to the industry by a frequent correspondence with some of the principal dairy-produce brokers in England and Scotland, who offer inducements to send out representatives for the purpose of buying dairy-produce. Already two large firms are represented, and next season another will, I hope, be in the field. Good has been done in other ways, but which I prefer at present to remain a nebulous entity.

During the year it was found necessary, from the frequent demands for my services, to appoint an assistant, in the person of Mr. Dons. Seeing the importance of the dairy industry to Taranaki, I instructed him to spend the greater part of his time there, and I am pleased to be able to report that on my last visit a considerable improvement was apparent in the industry in that district.

I would also ask that provision be made for the engagement of two assistants for the ensuing working season, as I am sanguine that one cannot, for a few years to come, overtake the work.

In concluding this report on my work during the year, and of the present position of the dairying industry, I must admit that it is a more pleasant duty than what has hitherto fallen to my lot.

Milk-suppliers and factory-men now see that the industry is a progressive one, and that to enable them to climb higher they must recognise unity—that each has a common interest with another, and what will benefit one will do so to the other, and the industry generally. Our leading dairy-factories have now, by a cash demonstration, solved the difficulty of producing an article which, when exported, will return a profitable price.

The industry is now assuming dimensions which justify the belief that we have at last succeeded in establishing it as one of our most important industries. I am of opinion that in a few years hence, page 19 if a systematic course of instruction is pursued, New Zealand, taking all things into consideration, will be as eminent in the manufacture of dairy-produce as any of the American or European nations. I believe it will yet become a successful rival to the frozen-meat and wool trade, and, as a means of employing labour and maintaining a large population, it will be superior to either.

I have, &c.,

John Sawers. The Hon. the Minister of Lands, Wellington.

P.S.—Herewith I attach copy of annual report of New-Zealand Middle Island Dairy Association, to be embodied in this report, and for your information.—J. S.