Milk powder for sale at loss

Press, 27 July 1976, Page 5

Milk powder for sale at loss

The price of New Zealand’s milk powder stocks had been reduced below the cost of production, and there could be a loss of up to S9OM, which the dairy farmer would have to stand, the chairman of the dairy section of North Canterbury Federated Farmers, (Mr W. T. Simpson) said. He was replying to the convener of the Corso food group (Dr J. E. Fergusson), who said recently that few people seemed disturbed that New Zealand and countries in the European Economic Community could stockpile milk powder, waiting for a higher price, while twothirds of the world’s people were underfed. “I think that most farmers would disagree with Dr Fergusson’s statement that New Zealand is stockpiling milk powder in order to obtain a higher price later on,” said Mr Simpson. “It is not the policy of the Dairy Board to stockpile powder, as it has a limited keeping life. The reason for the high stock is that we cannot sell it. “About three months

ago the Dairy Board reduced the price of powder to a level below the cost of the production. This would mean that the stocks could be sold at a loss of up to S9OM. We believe that the dairy farmers would stand this loss. “The reason for the large stockpile of powder is the high level of production in the E.E.C., caused by the high subsidies paid to producers in their countries. These subsidies are more than 100 per cent in some cases. “The drought in Europe should reduce this powder stock and allow normal trading conditions to return, but it is not envisaged that New Zealand will export powder to the E.E.C.” Mr Simpson said he would suggest to Dr Fergusson that Corso buy some of the powder while it was so cheap, to send to underdeveloped countries. New Zealand had developed a high-protein milk biscuit, which was specially designed to supplement the diet of undernourished people, he said.