EFFECT ON N.Z. POOL

Press, Volume XCVII, Issue 28553, 5 April 1958, Page 14

EFFECT ON N.Z. POOL

Loss May Now Exceed £22m

(New Zealand Press Association) WELLINGTON, April 4. “This latest action by the Danes is a reflection of the pressure that they themselves are suf- , fering as a result of the dumping of butter on the United Kingdom market,” said the General Manager of the Dairy Products Marketing Commission (Mr P. B. Marshall) tonight. The fall, he added, was not unexpected though it was more severe than one would have thought. Mr Marshall said he assessed the price drop as evidence of determination on the part of the Danes to get rid of accumulated stocks of butter. The new season was starting and the Danes had “very substantial” stocks carried over from last summer. Prices at which New Zealand butter had been selling over recent weeks entailed a marked loss of overseas earnings, said Mr Marshall. The latest low figure, if continued, would result in a “grave reduction” in overseas exchange receipts for butter. Estimates of Loss At the start of the 1957-58 dairying season on August 1 last, it was reported that there was about £l5 million in the industry’s reserve fund account. About £l2 million had been disbursed in the previous 12 months to cover the difference between low returns from overseas sales and the guaranteed price to producers. No firm figure of this current season’s losses is available but, on recent'prices it has been variously estimated at between £2O million and £22 million. If butter, therefore remains at this latest low price until the end of the present season on July 31 then a figure of £22 million might not cover the total losses. Unless there is a radical change for the better in dairy prices, it will be inevitable that the present reserve funds will be more than wiped out and the country, and in the first instance the Government, will be faced with deciding what action should be taken to meet the situation. This is one reason why producers were insistent that the Minister of Agriculture (Mr Skinner) should go at once to London.