EXPORT OPERATIONS

Evening Post, Volume CXXVI, Issue 151, 23 December 1938, Page 15

EXPORT OPERATIONS

SUMMARY OF POSITION

The accounts for' the 1937-38 season cover all export butter and cheese which was manufactured from August 1, 1937, to July 31, 1938, the quantities being:—Creamery butter, 137,542 tons; whey butter, 1796 tons; cheese. 83,078 tons.

The approximate average f.o.b. purchase prices paid or payable for this produce in terms of the Primary Products Marketing Act are as follows: — Creamery butter, 13.7122 d per lb; whey butter. 12.608 d per lb; cheese, 7.769 d >er lb.

The approximate average f.o.b. realisations for produce (actual and estimated) as shown in the accounts are as follows:—Creamery butter, 14.0576 d per 1b; whey butter, 13.2847 d per "lb; cheese, 7.8986 d per lb.

In the compilation ol the accounts butter and cheese unsold at balance date were taken in at the following values: —Creamery butter (shipments partially, sold), 120s per hundredweight sterling gross; creamery butter (in store awaiting shipment), 110s per hundredweight sterling gross; whey butter (shipments partially sold), 110s 6d per hundredweight sterling gross; whey butter (in store awaiting shipment), 100s per hundredweight sterling gross; cheese (shipments partially sold), 70s 3d per hundredweight sterling gross; cheese (in store awaiting shipment), j 70s per hundredweight sterling gross. The accounts submitted comprise:— (1) Separate purchase and sale or "pool" accounts for creamery butter, whey butter, and cheese; (2) administration and general expenses account; (3) dairy industry account; (4) balancesheet. The purchase and sale or "pool" accounts show the purchase value of the produce, and the sale value less selling-charges, freight, and insurance. To each purchase and sale account is charged its proportion of the total administration and general expenses, amounting to £192,141. The administration and general expenses account shows the itemised expenses and charges in the United Kingdom and in New Zealand. It should be noted (says the report) that the itemised expenses for the 1937-38 season are not comparable with the corresponding items in the accounts for the 1936-37 season, because the Department vas not fully, organised and staffed at the beginning of that season. In the advertising, publicity, and sales-promotion section of this report reference is made to the increase in the financial allocation for these activities, the expenditure being £81,259, compared with £39,049 for the 1936-37 season." "The Dairy Industry Account shows the position of the produce purchase arid sale,accounts as follows: — '".■' s. £ Estimated surplus on creamery butter 443.398 Estimated surplus on cheese 100,447 Plus estimated surplus on whey butter 11,340 111,787 Estimated surplus, Dairy Industry Account, 1937-38 season £555,155 THE SECOND ¥EAR. "This report marks the completion j ol the second year of the operations ot the Department. It is pleasing to J r «w-H th" +. the success of the policy!

adopted in regard to the marketing of butter and cheese, which was clearly indicated in the first year after the inauguration of the new procedure, has been fully maintained," says the report. "Merchant-agents, dairy industry officials, and others qualified to judge are in general agreement as to the soundness of the single-unit system of marketing, with general sales instead of sales by individual dairy factory companies, and with consignment selling in place of the mixed consignment and f.o.b. and c.i.f. selling, which was a disturbing feature in the marketing system of the past. The distribution of butter and cheese in the United Kingdom has been widened by means of a better direct shipment service to the main ports. The new marketing procedure has resulted in savings in costs of marketing amounting to approximately £200,000 per annum. The marketing operations for the 1937-38 season are fully reviewed under separate appropriate headings in this report "The payment ol guaranteed prices for butter and cheese has given dairy farmers stability and security by protecting them from the effects of fluctuations in market prices for dairy produce. The fixed and uniform monthly rate of payment for butter-fat that dairy factory companies have been able to maintain enables dairy farmers to budget with certainty for their farming and domestic expenditure. The guaranteed price policy has worked smoothly, and the administrative Procedure has been conducted without a hitch. SYSTEM OF MARKEHNCL "The system of marketing in the United Kingdom outlined in the report of the Department for the 1936-37 season has been continued during the 1937-38 season. The number of selling agents employed has been reduced to twenty, with whom the closest contact is maintained, While unnecessary competition to clear stocks has been eliminated, the regular requirements of wholesale and retail buyers are, and must always be. the first consideration. Save on a few occasions, when the arrival of incoming ships has been delayed, adequate supplies of New Zealand butter and cheese have been regularly available, meeting a steady demand, which has prevented undue accumulation of unsold stocks at any period during the year. "The distribution of butter and cheese in the United Kingdom has been widened by means of direct shipments to the main United Kingdom ports. In particular, regular shipments have been commenced to Cardiff, Southampton Hull, and Newcastle-on-Tyne. Over one-third of the Dominion's butter and cheese is now distributed from ports other than London. "The price level of New Zealand butter and cheese has improved substantially during the year in relation to the produce of competing countries, and disturbing fluctuations in price during short periods have been minimised." . It was estimated when the report was compiled that the season, which closed in September, would close with total stocks from 12,000 tons to 14,000 tons higher than at the same date in 1937, and also in excess of that of tne two previous years.