CHEESE FOR U.Ķ. Prices Expected To Fall Again

Press, Volume CVIII, Issue 31680, 16 May 1968, Page 1

CHEESE FOR U.Ķ. Prices Expected To Fall Again

The falling cheese prices in Britain may have to come down even further, according to Mr L. D. Hickford, a member of the Dairy Board, said a Press Association message from New Plymouth yesterday.

Farmers should realise that the competition in the cheese market in Britain was very tough at the moment, he said. Other countries were pouring cheese into Britain at lower prices and New Zealand had to conform to be able to sell.

“The fact that a drop was coming is not new to us,” he said. “It is not unexpected.”

Mr Hickford said cheese producers had been told that a stockpile was building up very solidly in Britain and unless prices were brought down New Zealand could face a position very similar to that faced by the wool industry. “We've held on as long as we can before reducing,” said Mr Hickford.

It was the policy to clear one season’s production of cheese before the next came along. Mr Hickford said he hoped there would be no stockpiling of New Zealand cheese, and that New Zealand would be able to continue the policy of “sell as we make.”

The position changed very rapidly. At the beginning of the current season there was every indication that more cheese would be wanted. Now it seemed a reduction m cheese production was necessary. The position was aggravated by unsold New Zealand milk powder and butter and for this reason there was concern for next year. Although farmers would not feel any effect in payouts this year, there would definitely be reductions next year, he said. What was needed was a quota for cheese in Britain which would control the amount each country could sell there. At present Britain was a dumping ground for cheese.

A quota, similar to the butter quota which operated there now, would stop the dumping. There were very few countries now where butter could be dumped. At present there was a world surplus of dairy products, Mr Hickford said. Much was being dumped while underdeveloped countries were unable to buy it. This emphasised the merit of an international scheme for the distribution of dairy products Io those countries which needed them. New Zealand was one of the primary architects of this scheme.

A London message said that British cheese stocks at the end of March were estimated to be about 63,000 tons—about 23,000 tons higher than at the same time last year. Commodity authorities said that the cheese stockpile had grown about 2000 tons between the end of February and March 31. Butter stocks on May 3 amounted to 86,000 tons—about 26,000 tons higher than on May 5 last year. A Commonwealth Secretariat bulletin says, however, that the butter stocks decreased by 2200 tons in the week to May 3. A cablegram from Geneva

said that New Zealand yesterday accused the European Common Market of lack of restraint in the exporting of dairy products while efforts were under way to reach an international agreement on controlling the flooded market.

The charge came at a working group on dairy products set up by G.A.T.T. to thrash out details of an agreement. The New Zealand delegate, Mr M. Norrish, told the group that his country was disappointed that with the damaging nature of the present situation the Common Market was exercising no restraint in its exports of butter and skimmed milk powder. The fall in butter and milk powder prices to what one delegate described as ridiculous levels was generally blamed on over-production and export subsidies by the E.E.C. Officials said that the problem was getting worse fast and becoming ruinous for countries which depended on dairy products for their export earnings. New Zealand exports nearly one seventh of the world’s international trade in skimmed milk powder, excluding trade among the European Six.

The United States, Ireland and Denmark are also worried by the state of the market and keen to have an agreement completed. However, it is generally admitted that no agreement can be reached until the Six have a common policy among themselves, which other delegations hope may be at the end of this month.

Drop No Surprise The substantial drop on the London market for New Zealand and other cheddar cheeses was not unexpected, said the deputy chairman of the Dairy Board (Mr F. L. Onion) in Hamilton yesterday.

He agreed with the Minister of Overseas Trade (Mr Marshall) that it had been evident for some time that developments in the British market would have this effect. Mr Onion said the main reason for the price recession was that other countries, not able to dump their dairy produce in the form of butter, because of the quota, have switched production to cheese, which was not controlled by a quota on the British market.

“The only way we can see to remedy the position is to have cheese put on the same basis as butter—that is, on a quota," he said. New Zealand would be strongly supported by the British fanner in any approach it made to remedy the situation, Mr Onion said. “They are as much concerned as we are because their milk surplus goes into cheese.

“Already, through their milk marketing boards, the British farmers had asked the Government to give them protection, either by anti-dump-ing duties or a cheese quota. Any reduction in cheese manufacture would only increase the amount of butter manufactured and this would worsen the position, Mr Onion said.