Farmers to pay more to have stock processed

Press, 30 December 1976, Page 3

Farmers to pay more to have stock processed

Farmers will have to pay more to have their stock processed when killing resumes at Canterbury freezing works on January 5.

A lamb weighing 13.6 kilograms and with a kilogram of wool on it will cost about $4.25 to process under the new charges. At the works of the Canterbury Frozen Meat Company, Ltd, this will represent an increase of about 47c or about 12 per cent. In the case of Waitaki N.Z. Refrigerating, Ltd, whose rates were previously lower than those of C.F.M., the increase will be about 59c or 16 per cent. An industry source said yesterday that except at Picton and Nelson, all works in the South Island would now be working one processing rate for lamb and mutton,

but there would still be slight variations in the case of beef.

A rebate payable in Southland is believed to have been abolished.

Waitaki N.Z. Refrigerating’s charges for beef processing are still below those of C.F.M., but the margin has been narrowed.

For production of quarter beef, for instance, C.F.M. has raised its charge by $2.50 a head to $33.50 a head, while Waitaki N.Z. Refrigerating’s new charge is $32, an increase of $3. Both the general manager of Waitaki N.Z. Refrigerating (Mr H. N. Davis) and the general manager of the Canterbury Frozen Meat Company (Mr D. Morten) confirmed yesterday that their charges would be increased from next week. The increases in the processing charges will necessitate a revision in price schedules to fanners. In the case of lamb, an increase of 40c to 50c in the processing costs amounts to 3c or 4c a kilogram.

For processing sheep, the increase in the charges has been put at between about 55c and 74c a head. Mr Morten said that the necessary application for the increases, giving 28 days notice, had been made to the Ministry of Agriculture. No objection had been made to it.

It is about a year now since the last increase in charges came into effect. C.F.M. last increased its charges on December 8, 1975, and the former New Zealand Refrigerating Company increased its processing rates on January 5 this year.

Mr Morten said that since then, there had been two general increases in wages, and the freezing industry had an award agreement awaiting ratification by the Industrial Commission.

The industry had also faced substantial increases in costs of all forms of fuel — with further increases to come — and also marked increases in the costs of packaging materials and working stores, such as clothing. Returns from by-products are offset against costs in calculating processing and freezing charges in the industry, but movements in these returns have clearly not been sufficient to cover the cost increases.

Mr Morten said that the company had made the best assessment it could of what the markets for by-products would do, but the situation was somewhat mixed. The markets for tallows, meals, and bloods were very buoyant, and the market for casings was also good; but the outlook for edible by-products was somewhat disappointing, and these were unfortunately the products most susceptible to fluctuations in the value of sterling.

Mr Morten said that under the stabilisation regulations, if for some reason the company made a big profit from such products, it could be required at the end of the year to rebate a certain amount of this or else use the surplus as a reduction or holding factor against charges in the next year.

But if the company underestimated the returns, there was no "come-back” for it. The increases were the first of many increases in costs

Iwhich farmers would soon have to bear — they could not pass them on to anyone, said the chairman of the meat and wool section of North Canterbury Federated Farmers (Mr M. R. Barnett) last evening.

Freezing companies had all had a very good year, as their balance-sheets indicated, Mr Barnett said. Those involved in processing alone had made record profits, which would suggest that killing charges must have been adequate. The improved prices this season had already been reduced by the meat stabilisation levy, and now about another 50c a lamb would be removed by the increase in the killing charge, he said. It seemed ridiculous that it costs more to process and ship a lamb to world markets than the farmer received for producing the animal. “I hate to think of what will happen if prices fall,” said Mr Barnett. “We must somehow establish a more efficient meat industry if we are to maintain, long-term viability.” Under the new charges,

both Waitaki N.Z. Refrigerating and C.F.M. will charge $2.44 a lamb carcase for killing and freezing to f.o.r. plus 6c a kilogram. For hoggets and wethers, the charge is $2.87 a carcase plus 6c a kilogram, and for ewes, $3.05 a carcase plus 6c a kilogram. For wool processing, C.F.M. will charge 33c a skin plus 30c a kilogram of wool for lambs, while Waitaki will charge 34c and 29c; but both companies will charge 43c a skin plus 29c a kilogram of wool for processing of the wool on sheep. For pelt curing, the charge is $4.50 a dozen for lambs and $5.28 for sheep.

The rates charged by the two companies for processing cattle will be:

Waitaki N.Z. Refrigerating.— Bone-in quarter beef: g.a.q. and f. ox, heifer and cow, $32 pel’ carcase. Boneless beef: ox, heifer and cow, $39.50 per carcase pins 11c on packed weight; bull, $39.50 per carcase plus 11c on packed weight. Prime beef cuts: $39.50 per carcase plus 12c on packed weight. Hide curing to f.0.r.: $3 each and 73c for green hides. Canterbury Frozen Meat Com-pany.—Bone-in quarter beef: g. and f.a.q., ox, heifer, and cow and boner cow, ox, and bull, $33.50 per head. Boneless beef: ox, heifer, and cow and bull. $4l per head plus 11c per kilogram on packed weight. Beef cuts: $4l per head plus 12c per kilogram on packed weight. Both companies will now charge 0.2 c a kilogram each week for storage after seven weeks.