DAIRY MARKETING

Manawatu Standard, Volume LIX, Issue 21, 23 December 1938, Page 9

DAIRY MARKETING

SURPLUS FOR SEASON. ESTIMATED AT £555,185. DEFICIT FOR 1936-37. WELLINGTON, Deo. 23. The annual report and statements of accounts of tlie Primary Products Marketing Department for the year ended July 31, 1938, were issued yesterday by the Minister of Marketing (Hon. W. Nasli). The accounts, which are given in terms of New Zealand currency, show the completed financial operations for tlie 1936-37 season, as well as the operations of the department in the purchase and sale of export dairy produce for the 1937-38 season. Tlie report also deals with the activities of the Internal Marketing Division of the department.

The surplus in the Dairy Industry Account for ‘the 1937-38 season is estimated at £555,185. The surplus on butter is estimated at £443,398, and the surplus on cheese at £IOO,447. Tlie balance of the £555,185 is made up by a surplus of £11,340 on wliev butter. In a statement issued simultaneously with the release of the report, Mr Nash said the estimate had been based on valuations of unsold butter at 110 s a cwt., and unsold cheese at 70s a cwt.

The accounts for tlie 1936-37 season show that in the case of creamery butter and cheese the actual realisations for produce which was unsold at balance date exceeded the estimates. In the case of whey butter the actual realisations were less than the estimates. Tlie net result is that, at the date of closing the accounts (June 21, 1938), the actual deficit for the 193637 season was £272,109. In the accounts published .with last year’s report the deficit for the season was estimated at £548,750. Interest at It per cent is allowed on the deficit of £272,109 from June 21, 1938, to the end of July, bringing the deficit for the 1936-37 season at July 31, 1938, to £272,482.

The accounts of the Internal Marketing Division cover a period of 14 months, and they show a net trading profit of £6804. DETAILS OF ACCOUNTS.

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 ton 6; 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 follow: Creamery' butter, 13.7122 J a pound; whey butter, 12.608 d .a pound; cheese, 7.769 d a pound. The approximate average f.o.b. realisations for produce (actual and estimated) as shown in the accounts are as follow: Creamery butter, 14.0576 d a pound; whey butter, 13.2847 d a pound; cheese. 7.896 d ,a pound. In the compilation of the accounts butter and cheese unsold at balance date were taken in at the following values: Creamery butter (shipments partially sold), 120 s a hundredweight sterling gross. Creamery butter (in store awiaiting shipment): 110 s a hundredweight sterling gross. Whey butter (shipments partially sold): 110 s 6d a hundredweight sterling gross. Whey butter (in store awaiting shipment) : 100 s a hundredweight sterling gross. Cheese (shipments partially sold): 70s 3d a hundredweight sterling gross. Cheese (in store awaiting shipsold) : 70s 3d a hundredweight sterling gross.

The accounts submitted comprise separate purchase and salo or “Pool” accounts for creamery butter, whey butter and cheese; administration and general expenses account; Dairy Industry Account; and balance-sheet. The purchase and sale or “Pool” accounts show the purchase value of the produce, and the sale value less sellingcharges, freight and insurance. To e.ach purchase and sale account is charged its proportion ' of the total administration and general expenses, amounting to £192,141. ADMINISTRATION COSTS. The administration and' general expenses account shows the ‘itemised expenses and charges in the United Kingdom and in New Zealand. It is .stated 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 was not fully organised and staffed at the beginning of that season. In the advertising, publicity and salespromotion section of the 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 and sale accounts as follows: Estimated surplus on creamery butter £443,398 Estimated, surplus on cheese £10Q,447 Plus estimated surplus on whey butter £11,340 Estimated surplus, Dairy Industry Account, 1937-38 season £555,185

The balance-sheet is drawn up in the usual form to show liabilities and assets as at July 31, 1938. SINGLE-UNIT SYSTEM.

“It is pleasing to record that the success of the policy adopted in 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,” states the report, “Merchant-agents, dairy industry officials, and others qualified to judge are in general agreement as to the soundness of the singleunit system of marketing, with general sales instead of sales by individuals 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 fixed and uniform monthly rate of payment for butterfat 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 poliev has worked smoothly, and the administrative procedure has been conducted without a hitch. DIFFERENTIAL PRICES. “The basic guaranteed purchase prices for butter and cheese are subject to additions and deductions according to the quality of the dairy produce as disclosed by the grading points awarded by the Government graders. The experience of the past two years justifies the continuance of the price differentials. They provide an incentive for maintenance and improvement of quality, which is apJireciated by representatives of dairy actory companies.”