THE MAIN BENEFIT

Evening Post, Volume CXXII, Issue 32, 6 August 1936, Page 10

THE MAIN BENEFIT

ORDERLY MARKETING

SOUTHERN OPINION

(By Telegraph.) (Special to the "Evening, Post.")

INVERCARGILL, This Day. That the dairy industry in Southland is not at all pleased with the prices fixed for dairy produce was made clear by comments today of men competent to speak on behalf of factory directors and suppliers.

"I am disappointed, and I am afraid dairy farmers will be very much dissatisfied," said Mr. John Fisher, chairman of the Farmers' Dairy Federation, | Ltd. The fixed price is not quite the equivalent of current value on the open market today and sales of the back end of Southland's cheese make were made from 7d to 7sd f.o.b. The average pay-out of Southland factories for the season just ended'was Is to Is o£d on cheese and ltd or perhaps a little better on butter. lam of opinion that increased costs of production will more than iron out any advantages to be gained from the Government's prices.. At the end of this season the supplier ; will be down Slightly in his returns for the past season. Probably Is. lid to Is 2d will be a paying price in Southland for this season;, one and threepence would have meant good times."

Basing his calculations on the costs that have been operating for the past few years, a man very prominent in the cheese industry reckoned that the fixed price would probably have returned to suppliers of factories most fortunately placed in regard to finance and outpu tfrom Is 2£d to Is 2£d, this being calculated on a yield' of 2.64 to 2.65 pounds of cheese per pound of butterfat. "But it had to be remembered that even the soundest dairymen have been working without a profit for a few years," he said, "and the great majority, have probably suffered considerable losses. Prices for the past season ha.ye been satisfactory, but Southland has been handicapped by. a serious falling-away in production."

This man, and others agreed with him, said that production costs would go up by 25 per cent, and the increase would mean that comparatively few Southland factories would be able to pay out much over Is. The greatest benefit from the scheme was the prospect of a higher price level on the British market as the result of- an orderly system of marketing. The exercising of tact in relations with those in control of the channels of distribution could accomplish a great deal. There was no fault to be found in that connection, but no adequate provision had been made for the greater costs o£ manufacture. "The prices are the very least that were expected. Probably expectations were raised by the higher f.o.b. prices ruling for cheese recently. These prices have been obtained, however, while the quantities shipped were on a reduced scale and with the knowledge in Great Britain that shipments would continue to decrease until the new/ season's make came freely on to the .market." ' ' : f