NEW DAIRY PRICES

Press, Volume LXXXVII, Issue 26514, 31 August 1951, Page 10

NEW DAIRY PRICES

Next Season’s Figures

£750,000 SURPLUS ESTIMATED

(New Zealand Press Association) WELLINGTON, August 30. The guaranteed butter-fat price for the 1951-52 season, announced to-day, provides for an increase of 2.248 d per lb over the existing pay-out to farmers for butter-fat for butter manufacture, and 2.748 d in the payment for butter-fat for cheese manufacture. The basic price to farmers for but-ter-fat for butter becomes 33.655 d per lb, and for cheese 36.115 d per lb. The announcement was made by the chairman of the New Zealand Dairy Products Marketing Commission (Mr W. Marshall) to the annual conference to-day of the New Zealand Dairy Board.

The commission in fixing these prices has taken into account increases in costs of production. It estimates that if all New Zealand export butter and cheese are. sold at the United Kingdom contract price and there is no other increase in pay-out for costs, the net surplus going into the Dairy Industry Account will be £750,000.

Mr Marshall said that the commission had fixed as follows the prices to be paid for all butter and cheese acquired by it and manufactured from milk or cream delivered to a dairy factory in the season starting August 1. 1951. and intended for export:—

Creamery Butter Finest Grade—94 points and over, 30.9316 d per lb; 93 to 931 points, 30.8066 d per lb (basic price). First Grade.—92 to 921 points. 30.7441 d per lb; 90 to 911 points, 30 5566 d per lb. Second Grade.—3o.os66d per lb.

Whey Butter First Grade —29.2521 d per lb Second Grade.—2B.7l44d per lb.

Cheese -Finest Grade.—94 points and over, 17.3125 d per lb; 93 to 931 points, 17.215 d per lb.

First Grade.—92 to 921 points, 17d lb (basic Price); 91 to 911 points. 16 9375 d per lb.

Graded.—BB to 90 points, 16.275 d per lb

Seconds —B7 and under. 15.8 d per lb. Included in these cheese prices was a special allowance of Id per lb Butter-fat which was >W na paid this year to increase the standard differential for cheese compared with butter from 2d to 2.5 d per lb butter-fat. Mr Marshal] said that the increase of 2.248 d per lb butter-fat compared wdh the period from February 15 to July 31, 1951, was made up of ,437 d per lb butter-fat for farm working and maintenance costs, -nd .BUd per It buttey-fat increase in the labour reward allowed for increasing from 15 per cent, to 20 per cent, the amount allowed in consideration of work done at week-ends and on holidays as part of ” normal week.

'‘The new price of 33.655 d represented an increase in terms of butterfat for butter of 3.977 d per lb on the amount fixed as at August 1, 1950. The new price of 36155 d for butter-fat for cheese represented an increase of 4.477 a on the amount fixed at August 1, 1950. “To arrive at the total increase in costs on a butter-fat basis compared with August last season.” he added, “we have to add the increase in factory costs, which are ,464 d per lb for butter, and .719 d per lb for cheese, bringing the total increase to 4.441 d per lb for butter-fat for butter, and 5.196 d per lb of butter-fat for cheese, the respective percentage increases being 13.4 for butter-fat for butterand 13.6 for butter-fat for cheese.” Estimated Surplus Assuming that the total exportable surplus of butter and cheese was sold at the United Kingdom contract prices and that no other increases in costs took place during the year, it was estimated that (irrespective of interest of investments) the approximate net surplus accruing to the Dairy Industry Account for the 1951-52 season would be £750,000. “When it is realised that an increase of 1 per cent, in the labour reward alone, without any other increases in farm and factory costs, is equivalent to about £300,000 under the guaranteed price, it will be seen that it is possible that the time may not be far away when we shall have to draw on our reserves.” Mr Marshall said. *“lt is an arresting and sobering thought that the increase in the guaranteed price in one year is not much less on a percentage basis than two years’ maximum increases obtainable under our long-term contract with the United Kingdom.”