1½d lb. RISE IN N.Z. PRICE FOR BUTTERFAT

Grey River Argus, 19 August 1949, Page 4

1½d lb. RISE IN N.Z. PRICE FOR BUTTERFAT

10d. lb. Paid to Producers By Governments HERE AND IN BRITAIN P.A. WELLINGTON, August 18 The chairman of the New Zealand Dairy Products Marketing Commission, Mr W. Marshall, to-day made the following statement about prices for butter and cheese: —The New Zealand Dairy Products Marketing Commission, having had regard to the provisions of Section 16 of the Dairy Products Marketing Commission Act, has fixed the prices to be paid in respect of butter and cheese acquired ■by it, and manufactured in New Zealand from August 1, 1949, to July 31, 1950, as follows:— CREAMERY BUTTER Finest grade, 94 points and over:— 25 point 9944 pence per pound. 93 to 93i points: 25 point 8694 pence per lb. Basic price pence per pound: First grade, 92 to 921 points: 25 point 8065 pence per pound; 90 to 911 points: 25 point 6194 pence per pound. Second grade: 25 point 1194 pence per pound. WHEY BUTTER First grade: 24 point 8694 pence per pound. Second grade: 24 point 3694 pence per pound. CHEESE Finest grade, 94 points and over: 14 point 40,195 pence per pound. 93 to 931 points: 14 point 3707 pence per pound. First grade: 92 to 921 points: 14 point 2457 (basic price) pence per pound. From 91 to 911 points 14 point 1832 pence per pound. Second grade: 13 point 9957 pence per pound. 2s 4Jd FOR BUTTERFAT

"It is estimated that these prices, which include additional allowances to meet increases in factory costs, will enable efficient dairy factory companies to pay to the suppliers 28 point 244 pence per lb for butterfat for butter manufacture, and 30 point 244 pence per lb butter fat for cheese manufacture.

“The structure of the guaranteed price now becomes: —Interest and capital, 3 point 240 pence per lb of butterfat; farm working and maintenance cost, 10 point 199 pence per lb of butterfat. Labour reward, 16 point 345 pence per pound of butterfat—29 point 784 —pence per lb of butterfat. Less standard allowance for pigs: 1 point 540 pence per lb of butterfat. Total: 28 point 240 pence per lb of butterfat.

“The above price represents an increase in the terms of butterfat of 0 point 098 d lb on the amount paid for the period Ist June, 1949, to 31st July, 1949. “This increase is made up of: Point! 020 d for farm working and maintenance costs; and point 078 d (15 per cent.) allowed on the farm owner’s ten shilling margin in the guaranteed price structure for work done at week-ends and on holidays as par+ of the normal week.

“The new price of 28 point 244 d represents an increase of 1 point 493 d on the figure of 26 point 751 d, allowed for the period Ist August, 1948, to 31st May, 1949.

“If there were no subsidy on butter, it would be necessary to have a retail price of 2s 4d per lb in New Zealand, to cover production costs on the basis of the guaranteed price”, said Mr Marshall, when he addressed the Dominion Dairy Conference tod.\y. The new price to the producer would involve a subsidy of lOd per lb if butter was to continue to be sold at Is 6d per lb.

Mr Marshall told the conference that, in Britain, butter is also held at a retail price of Is 6d per lb by means of a Government subsidy. New Zealand butter would have to be retailed at 2s 6d per lb in' Britain to cover the cost of production should th e subsidy be removed. It should be realised that if New Zealand had to dispose of its product without the United Government's subsidy, it would require to sell at 2s 6d per lb in a highly competitive market. New Zealand’s increased costs? had been taking place at a time when world prices generally were falling. When N.Z.’s competitors were being required to accept reductions in their prices, there was danger that, with rising costs of production, New Zealand’s butter might become a luxury article. In a review of overseas production and prices trends, Mr Marshall said there were unmistakeable signs of falling prices. The fact that New Zealand had held its export price below that of comiVJtors, and also had a pool fund, gave the Dominion time to take stock of the situation, but it was clear that it was the duty of all who were in a position of influence to take steps to hold costs and later to reduce them.