DAIRY PRODUCE

Dominion, Volume 33, Issue 284, 26 August 1940, Page 9

DAIRY PRODUCE

Contracts With United Kingdom OUTPUT FOR SEASON Sale Of New Zealand Butter And Cheese NO ALTERATION IN PRICES New contracts to replace last year’s agreements with the United Kingdom for the sale of New Zealand butter and cheese covering the .Dominion’s exportable surplus for the current production season were announced on Saturday night by the Minister of Marketing, Mr. Nash. Prices for the 1940-41 season’s output are to be the same as those for last year, but the new contracts cover the sale of greater quantities of both butter and cheese.

The United Kingdom Government has agreed to take this season 120,000 tons of butter and 107,000 tons of cheese, compared with 115,000 tons of butter and 84,000 tons of cheese last year. In addition, though it is not embodied in the agreement, an understanding has been reached that the general arrangements for the purchase of New Zealand dairy produce will continue for the duration of the war and a subsequent period to be agreed upon, and that, though specific quantities are named, the Ministry of Food will take as nearly as possible the maximum surplus production of the country. Prices are to be determined by negotiation in May of each year.

Mr. Nash said that tihe new dairy produce agreements were concluded last Thursday after final consultation with the chainman of the New Zealand Dairy Board. They reflected to • a degree the major developments in the war situation that had occurred since the original agreements were announced last November. The German invasion of Denmark and Norway eliminated the supply of dairy produce to the United Kingdom, not only from these two countries but also from Sweden, Esthonia, Latvia and iLthnania. The invasion of the Netherlands and Italy’s subsequent entry into the war further eliminated the only supplies of imported cheese available to the United Kingdom outside the Empire. Empire Supplies. “Thus, in the first six months of this year, approximately 225,000 tons of butter and 15,000 tons of cheese were diverted from the United Kingdom, making it necessary for practically the whole of Britain’s import requirements of dairy produce to be supplied by Empire countries,” the Minister said. “.Fortunately, prior to the outbreak of war, New Zealand, Australia, and Canada between them were already supplying the major proportion of the United Kingdom’s imports of butter and cheese, but after June tins year the necessity for increa.sed supplies from the Dominions was obvious. The need for additional supplies of cheese was particularly urgent, because under war conditions cheese constitutes a highly nutritious and concentrated cheap foodstuff which effectively replaces other more expensive items of diet.

“For this reason there is virtually no limit to the amount of cheese we can export to Britain during the coming season,” Mr. Nash added. He said that many farmers had already responded to his recent appeal for increased cheese production by diverting where practicable supplies of milk from butter to cheese-making.

The Minister recalled that under the general formula agreed upon last year details of existing agreements were open to review each May. The New Zealand Government in April this year suggested to the Australian Government that the two countries should collaborate in discussions. Subsequently, the Director of Export Marketing, Mr. G. A. Duncan, discussed with Australian officials the essentials of the dairy produce agreement, and the two countries decided on an appropriate approach to the United Kingdom in seeking new contracts. Duration of Arrangements.

There were certain important provisions not embodied in the agreements hut recorded in letters exchanged between the United Kingdom and .'New Zealand Governments, Mr. Nash said. These included continuation of general arrangements for the purchase of dairy produce for the period of the war and a subsequent period, and the acceptance by the Ministry of Food of as nearly as possible the maximum exportable quantity, prices being determined by negotiation each May. Other points recorded covered discussions in the event of conditions preventing the United Kingdom carrying out the contract, notification by New Zealand as early as possible of future expansion of butter production, and discussion of marketing arrangements after the war. The Minister said that these points were actually part of the new agreements, though not specifically mentioned in the text.

“On the question of prices, the New Zealand Government had no desire in existing circumstances to exert pressure for increases on the

figures arranged for last season’s

butter and cheese,” Mr. Nash said. "This was also the declared attitude of the Australian Government. It is further known to be the attitude supported by the dairy farmers of both New Zea-, land and Australia. The prices for the 19-10-41 season’s butter and cheese are, therefore, the same as those for last season.” Provision of Shipping.

The Minister said that, commencing with shipments from September 1, 1940, the quantity of butter contracted for was 120,000 tons from the production of the season ending on July 31, .1941. In addition, there was the stipulation by the Ministery of Food that, subject to shipping being available, the Ministry would do its best, to ship additional quantities available for export, within the limit of its re responsibility for providing ships, and tentative shipments schedules for next season had already been arranged. The prices were: — Butter—Creamery finest, 93 points and over, 112/6 sterling per cwt. delivered f.o.b. ocean steamer; creamery first, 90 to 92 j points, 1/3 per cwt. less; creamery second, 5/- per cwt. less; whey, first grade, 8/- a cwt. less; whey, second, 12/- a cwt. less. Cheese—Finest and first grade, 91 points and over, 64/3 sterling per cwt. delivered f.o.b. ocean steamer; second grade, 2/- per cwt. less. “Payment is to be made in London in respect of 90 per cent, as soon as it is placed on ship and in respect of 10 per cent, within 28 days after arrival,” the Minister said. “In the case of the steamer being lost this latter payment

is to be made within 28 days .of the estimated due date of arrival. In the event of delay to shipments owing to the inability of the Ministry to provide ocean-going ships, the Ministry undertakes to make payment on account equal to 50 per cent, of the value of any butter which has had to remain in cold store a month longer than would have been required by shipment schedule. These provisions apply also in respect of the cheese agreement, and that is an advance on last year’s agreement.” Quality and Packing.

The provisions for quality, and packing were the same as those in the previous agreement, he continued. All butter was to be salted. The New Zealand Government was responsible for storing of butter and for placing it aboard ship. Provision was made for the Food Ministry to contribute toward: additional storage costs if butler or cheese had. to be kept, in store in New Zealand unduly long owing to Hie inability of the Ministry to provide ships. The Minister also described details of the insurance scheme. Tlie quantify of cheese contracted fur under the agreement beginning witli shipments from September 1. was 107,000 tons from the production of the season ended July 31, 1941, Mr. Nash added. The Ministry was desirous of obtaining extra quantities if possible. The provisions in regard to quality and packing were the same as those in the previous agreement. “In comparison witii last year’s agreements the now contracts are more advantageous to New Zealand, not. in regard to price but in that they cover the sale of a greater quantity of. both butter and cheese,” the Minister concluded. “In addition the covering letter to the agreements from the Ministry of Food replaces the yearly basis of (lie first agreements with an official recognition flint the general arrangements for the purchase and sale of New Zealand dairy produce to (lie United Kingdom are to continue for the duration of the war and lor a suitable period afterward so that all necessary adjustments can bo made to ensure the smooth return to normal marketing conditions. I again appeal to dairy farmers to maintain their splendid productive efforts which were so manifest last season, to dairy workers to continue to manufacture butter aud cheese of the highest, quality, ami io waterside workers again to ensure f tie prompt dispatch of vessels to the United Kingdom.”