BUTTER & CHEESE

Ashburton Guardian, Volume 60, Issue 33, 18 November 1939, Page 6

BUTTER & CHEESE

THE EXPORTABLE SURPLUS. PURCHASE BY BRITAIN. ARRANGEMENTS FINALISED. (Per Press Association). WELLINGTON, November 17. Arrangements made between the New Zealand Government and the British Government for the purchase of the .Dominion’s export surplus of butter and cheese were announced by the Minister of Marketing (the. Hon. W. Nash) ip a broadcast address tonight. The United Kingdom Government is to purchase f.0.b., New Zealand ports, and thus -assumes responsibility for the provision of ships, freight and other relevant charges. An undertaking has been given by the British authorities to make payment on account in the event of delay in shipment because of inability to provide ocean-going ships. After quoting the schedule of prices, Mr Nash said thajt in general the result should be that the United Kingdom purchaso prices for butter and cheese taken together may just coyer the guaranteed pricel paid to dairy companies. A comparison with prices to be paid for Australian dairy produce shows that substantial margins favour New Zealand both as regards butter and cheese.

Prices Enumerated. Prices are:— Butter, New Zealand finest grade, 93 points and oyer, 112 s 6d cwt sterling, f.o.b. This price, which is for the finest grade would, after allowing for deductions for lower grades, be equal to an overall average price of approximately 112 s 3d cwt sterling f.0.b., or 139 s 7Jd cwt in New Zealand currency. Stated at the price per lb f.0.b., in New Zealand currency, the figure is 1 approximately Is 3d. First grade butter, 90-92£ points, is purchased at Is 3d a cwt less, creanir ery second grade at 6s a cwt less, whey first grade at 8s a cwt less and whey second grade at 12s a cwt less. ■Cheese: New Zealand finest and first grade, 91 points and over, 64s 3d a cwt sterling f.o.b. This price which is for finest and first grade would, after allowing for deductions for second grade, be equal to an overall average price of approximately 64s 2d a cwt sterling f.0.b., or 79s 9d a cwt in New Zealand currency. Stated at a price a lb f.0.b., in New Zealand currency, the figure is approximately B|d. Second grade cheese is purchased at 2s a cwt less. , Period of the Arrangement. “Arrangements are intended to cover the period of the war, and probably a suitable period thereafter, during which a readjustment from wav conditions to normal trading conditions can be brought about,” said Mr Nash. “The quantities of dairy produce included in the contract are likely to be export surpluses of butter and cheese available for shipment after New Zealand requirements, and the requirements of certain other regular markets have been met, but in respect of production of butter and ■ cheese for the season ending July 31, 1940, the United Kingdom Government has undertaken, in the case of butter, commencing with shipments from October 1, 1939, to purchase 115,000 tons at agreed sterling f.o.b. prices, and in the case of cheese, commencing With arrivals after November 20, 1939, to purchase 84,000 tons at agreed sterling f.o.b. prices. When to these quantities is added the quantity of the 1939-1940 season’s butter and cheese which was shipped before the dates mentioned the total quantity • will, it is estimated,, cover the full season’s manufacture. In addition the United Kingdom Government has agreed, subject to freight being available, that it will use its best endeavours to ship additional quantities available for export within the limits of its requirements. Such quantities would bo paid for in accordance with the terms of the agreement. Tho United Kingdom Government will purchase butter and cheese at f.o.b. New Zealand ports, and thus assumes responsibility for the provisions of ships and for freight, insurance and other charges accruing after the butter and cheese has been placed on .board overseas steamers.”

Payments to Companies. “The intention is that if possible the shipment programme will cover monthly quantities very much in line with monthly' shipment quantities for the past season,” said Mr Nash. “'Payments by the Department to dairy companies for butter and cheese will, of course, be made as usual at the guaranteed prices which have been fixed for the 1939-40' season. In general the result should be that the United' Kingdom Government purchase prices for butter and cheese, taken together, may just cover the guaranteed prices paid to dairy companies. The United Kingdom Government pays the New Zealand Government the sterling f.o.b. price already quoted, the moneys being placed to the credit of the dairy industry account at the Bank of England. The payment arrangement is to provide for 90 per cent, of the price to be paid on ship and 10 per cent, within '2B days after arrival in the United Kingdom, or in the case of a steamer being lost, of the estimated due date of arrival. However, whatever happens, payment to dairy companies at guaranteed prices will be made in full at the time of shipment. In the event of delay in shipment owing to the inability of the United Kingdom Government to provide ocean-going ships, the United Kingdom Government undertakes to make payment on account amounting to 50 per cent, of the value of any butter and cheese which had had to remain- in cold store for more than two months by reason of.the inability of the United Kingdom Government to adhere to shipping programme which has been referred to.” Mr Nash said he thought it would be agreed that from many points of view the arrangement made was satisfactory. For the period of the war the director of the Dairy Sales Division in. London (Mr H. E. Davies) had been made director of the distribution of butter and cheese for the whole of the United Kingdom and Mr

J. W. Rpddcn, his assistant, had been made deputy-director, while the marketing staff had been co-opted by the Food Ministry. Thus the experience gained by Mr Davis in administering New Zealand dairy produce was proving of value to Great Britain in times of crisis.