Big skim powder stocks

Press, Volume CXV, Issue 33964, 3 October 1975, Page 7

Big skim powder stocks

Like other major producers of skim milk powder New Zealand is at present holding: heavy stocks. A recent report from Europe ruts the European Economic Community’s stocks at one million tons, and Canada and Australia as well as New Zealand are also believed to be holding substantia! stocks. A Daily Board spokesman declined this week to put a figure on New Zealand holdings for commercial reasons, but he said that they would be at their highest point ever at this time of the year. This is also because manufacturing of the product has increased significantly in the last few years as a consequence of prices rising steadily between 1969 and 1974. A report from the West Coast recently'said that up to two months ago the Westland Co-operative Dairy Company had in

storage most of last season’s production, and recently after large sales it was still holding 3500 tonnes and was reported to be looking to obtaining outside storage to cope with the present season’s production. There are apparently two main reasons for the cur, rent glut of skim powder. One is the decline in demand in developing countries, which have been the main market for the product, because of the economic recession. Oil and sugar producing countries are, however, exceptions in this respect. The other factor has been increased production in the European Economic Community, combined with a political decision involving a reduction in the subsidy on the use of the material for stock feeding, closing off a large outlet for the commodity.

In New Zealand action is being taken to reduce skim milk powder production in the present season.

For the first time this season the dairy industry has a price smoothing or guaranteed price scheme covering not only fat but also solids-not-fat. The Dairy Products Prices Authority, apart from setting a fat price, also now sets a benchmark price for solids-not-fat and the Dairy Board then sets the individual prices for solids-not-fat products, the main ones being cheese, skim milk powder and casein, and in this way it can influence the course of production.

In this situation it has set a differential in favour of cheese of 3c per kilogram on a milkfat basis with the aim of obtaining the maximum pro.duction of cheese, which along with butter is at present in strong demand at good prices, and also the objective in the present season is to increase production of casein and whole milk powder, but to reduce skim milk powder production.