The Press FRIDAY, JUNE 28, 1963. Dairy Industry Prices

Press, Volume CII, Issue 30169, 28 June 1963, Page 10

The Press FRIDAY, JUNE 28, 1963. Dairy Industry Prices

Though butter and cheese ■re selling profitably on the London market, the pricefixing authority has wisely ignored suggestions that the basic prices paid in New Zealand for butterfat should be increased for the 1963-4 dairying season. Good reasons support the authority’s caution. An industry that wishes to stand on its own feet must be conscious of its accumulated deficit of more than £6 million. Returns for the two-thirds of the 1962-3 season’s produce that have been sold have reduced the deficit by £400,000; and, if prices hold, sales of the remaining third could further substantially lower the deficit. Even so, the deficit would still be much too large for the comfort of the industry and the nation. It is prudent, therefore, to use a favourable turn in market prices to help stabilise the dairy industry’s economic position. It cannot be overlooked that the improved market prices for butter may not last. Since quotas were imposed on butter entering the British market in the autumn of 1961, the price has risen by 85s a hundredweight. Butter is now returning some 20s a hundredweight more than

the equivalent pay-out price for butterfat. Before the imposition of quotas led to price rises, the pay-out in New Zealand was between 55s and 65s more than the market returns; and future British policy on quotas is uncertain. Finally, it is still essential for the dairy industry to look for greater efficiency and diversification in the use of dairying land. It seems inevitable that the industry must sooner or later adapt itself to changed —and probably more adverse circumstances. Last month, Professor W. Candler, professor of economics at Massey College, warned the dairy industry that its biggest problem during the next 10 years would be the surplus dairy produce amassing in Europe. By 1970, Professor Candler said. Europe and Britain would have a net export surplus of 2 million tons of butter. Dairying is one of New Zealand’s most important basic industries, as figures given by the Minister of Agriculture (Mr Taiboys) emphasise: out of our total export earnings of £330 million in the trade year ending this month, dairy products are likely to provide about £BO million.