WINTER MILK PRICES

Dominion, Volume 31, Issue 159, 1 April 1938, Page 8

WINTER MILK PRICES

Statement By Chairman Of Committee TRADING LOSS EXPECTED Reference to an article concerning the winter prices to be charged by the Milk Department of the Wellington City Council for milk and cream, which appeared in “The Dominion” yesterday, and in which criticism of the extent of the increase in price was made by the manager of a Wellington milk drinkvending business, was made by Mr. 1,. W. McKenzie, chairman of the milk committee of the city council, in a statement Issued yesterday. “Comparisons are made between the prices chargeable under past contracts and those chargeable for the ensuing winter season and on the prices quoted the alleged increases certainly appear high,” said Mr. McKenzie. “The statement as to the new price chargeable for milk is, however, incorrect inasmuch as tile discount is Hd. per gallon and not If per cent. “I have also to point out that the contract prices referred to were mean prices, covering both summer and winter seasons, and it is therefore quite unfair io compare these prices with the winter price chargeable, which usually operates for only four months of the year. “A.s the discount allowable under the new method of charging for supplies is approximately the same as the difference between past contract prices and the estimated forward wholesale prices on which the contract rates were based, the. purchasers referred to are in no worse a position than they were formerly, the only difference being that they will be charged higher rates for the winter and lower rates for the summer, us is the ease with retail consumers.

“The increased price for the ensuing winter, is actually 2d. a gallon in excess of the price charged last winter, and this increase is necessary on account of the increased prices payable to the producers and increased working expenses of the department. “The explanation of the higher prices payable to the producers for the ensuing winter season as compared with the prices payable for last winter season is quite simple, being accounted for by the higher butterfat values now current and increased costs of wages, etc., on farms. “The reason for discontinuing the old -method of entering into annual contracts is that it has been found to be too risky., as the council is unable to forecast for a sufficient forward period the prices payable for milk to be obtained, as well as operating-costs. At the prises now payable to the producers, the council is experiencing great difficulty in securing the necessary supplies of milk and cream to meet the requirements of the city, and at the prices chargeable for the ensuing winter season, the milk department, expects to make a substantial trading loss.”