Farmers warned of dearer killing rates

Press, 12 April 1984, Page 3

Farmers warned of dearer killing rates

Parliamentary reporter Freezing companies have warned that farmers will probably have to pay higher charges this year as companies are not able to absorb all cost increases.

The companies say they have absorbed cost increases of up to 19 per cent in the last 2¥z years. Although balanced by better returns on by-products, improved efficiencies, and a high throughput last season, companies face “considerably lower” profits. The chairman of the Freezing Companies’ Association, Mr Trevor Gibson, has said in. the association’s latest newsletter that companies will make every effort to minimise the effect of higher costs on the producer. “But it is clear that com-

panies will not be able to continue to absorb all cost increases,” he said.

Mr Gibson promised that attempts would continue to be made to negotiate out-of-line agreements, to introduce automation, and to improve productivity. “However, it must be realised that companies have absorbed increases in costs of items other than wages over the last 2Vz years,” Mr Gibson said. Packaging and processing materials, energy, and repairs and maintenance had ranged from 10 per cent to 19 per cent. Most companies had also carried out extensive capital expenditure programmes, which had resulted in higher interest insurance and depreciation.

This had been balanced by better returns from by-

products, improved efficiencies, and a high throughput last season. However, throughputs had fallen away sharply this season and company profits were likely to be considerably lower, he said.

Companies were expecting significant cost rises from March with the end of the price freeze. Packaging material and energy costs could well be higher and wages had been increased.