Egg Production Increase ‘Unwise’

Press, Volume CIII, Issue 30540, 8 September 1964, Page 16

Egg Production Increase ‘Unwise’

It was clear that until the present surplus of eggs was reduced and production brought back into balance with consumer needs, further production increases were unwise and could only result in lower egg returns for all, says an editorial in “The N.Z. Poultry World," the journal of the New Zealand Poultry Board. “It appears therefore that It would not be unreasonable for the Egg Marketing Authority to ask for the co-operation of all organisations claiming to serve the industry by requesting them not to encourage local production expansion at the expense of the authority and to the disadvantage of the industry as a whole, until it is actually required on a national basis.” says the editorial. “In a few cases licensed distributors encourage production increases to the point of a national surplus with apparent disregard of the liability falling on the Authority. Mash manufacturers encourage further expansion in order to make their units more economic, while they also escape any liability for losses resulting from the build-up in surpluses which they have helped to create (other trading organisations do likewise).

“Surely these actions without due regard to the overall national position is a disservice to the industry as a whole and must affect subsequent pay-outs to producers generally. “The Government has declined the Authority’s request to license the industry for the purpose of placing some curb on unlimited production increases. In any alternative scheme that may be devised to avoid the production of uneconomic surpluses the level of egg prices must play an important part in marketing procedures.” says the editorial.

“Egg prices have been controlled since the Stabilisation Emergency Regulations 1939. During this period an assured market has been provided for any eggs surplus to consumer needs, firstly by the Internal Marketing Division and since December, 1953, by the Egg Marketing Authority. “Egg farmers over the last 23 years have planned their flock sizes for egg supply with little, if any, sense of individual responsibility for the disposal of any accruing surplus. The farmer who supplies all of his eggs to the grading floor leaves the disposal to that organisation, while the fanner who sells most of his eggs direct uses the facilities provided by licensed distributors for the disposal of those eggs which he cannot find a market for by his own efforts. He adopts a similar attitude towards national surpluses. “The Egg Marketing Authority Regulations places a legal obligation on the Authority through its distributors to accept all eggs sent to these organisations and to dispose of them to the best advantage. The Authority is left to face any financial liability incurred in this respect. As no worthwhile export market exists and as the Authority operates within a limited income the losses arising from large surpluses over recent years has caused it to liquidate its reserves, lean on the Reserve Bank for additional overdraft and supplement its funds by levies placed on the industry. “The Authority’s quality drive since 1956 followed by the introduction of the egg quality improvement scheme in 1959 has improved egg quality and aided egg selling within New Zealand, but the placing on the Atuhority of the liability for surplus production over which it has no control could be given further consideration.”