15,000 Cream Producers

Press, Volume CVII, Issue 31409, 30 June 1967, Page 3

15,000 Cream Producers

(New Zealand Press Association) WELLINGTON, June 29. Although the impact of the reduction in the basic price for butterfat would be cushioned to some extent for many dairy farmers by the returns from increasing production of milk powders and other non-fat products there were about 15,000 cream producers who were largely or wholly dependent on this price for their income. To them the decision would come as a sharp blow, the dairy section of Federated Farmers, said in an official statement tonight.

“These are the men who will be hit hard—those whose factories have not yet been able to widen their production. The drop of about £2OO

in gross income for an average producer could cause serious difficulties.

“Many of these fanners are those who have heavily committed themselves to development of land to increase production and so enable their local factory to justify expansion,” said the statement. “This reduction has been made before there has been any apparent checking in the vicious spiral of costs to the farmer: in this way he gets hit from both sides. “The reduction of 5 per cent in the butterfat price will mean, in effect, a reduction of double that size in the farm-

er’s net income. It will be of particular difficulty where factories are being expanded and modernised and where increasing calls are made on suppliers to finance this factory capital work by holding back a proportion of the payout.

“The dairy section of Federated Farmers gives its fullest support to the Dairy Board in its efforts to impress on the Government the need to hold costs, and unless this is achieved we fail to see how the confidence in the industry, so necessary for increased production, can be maintained,” said the statement.