GUARANTEED PRICES

Northern Advocate, 30 January 1936, Page 8

GUARANTEED PRICES

FORECAST FIXES PAYOUT ABOUT 12.75 D.

[Special to "Northern Aavucaie WELLINGTON, This Day. Cabinet decision on the Dairy Board’s marketing plans, involving group control of sales in Britain, has been communicated to the board, but publication awaits the

board’s consideration. Its members, after a fah’ly long meeting in Wellington while negotiations were actively in progress, have dispersed fo their homes, and it will not be possible to secure a full meeting until Wednesday, February 5. Though the assessment of a definite figure as the basis of a guaranteed price to the dairy producer is not involved in the Government’s decision relating to the proposed Orders-in-Ccuncil. this is the Government’s part of the plan. On the basis of the Prime Minister’s explanation that guaranteed prices to dairy producers should be based on the average of returns over the last eight or ten years, the opinion is expressed by those closely interested in the industry, that the guaranteed price, stated in terms of butterfat pay-out, would probably be 12.75 d per lb.

This is the average of butterfat returns for eight years. However, if the Government decides to take the tenyear period as the basis of its calculations, the guaranteed price would be appreciably improved, owing to the fact that in the 1925-26 season there was an exceptional return, enabling the average butterfat payment to be 18.16 d per lb. for the whole season. Thus, if the 10-year basis is adopted, the Government would need to guarantee l/l£d per lb. By-products Considered.

Dairy producers’ by-products have also to be taken into consideration in fixing the minimum guaranteed price, as suppliers to cheese factories are unable to utilise milk for pig fattening, whereas butter factory suppliers secure, through pork-rearing, a further advantage, estimated conservatively at Id per lb. on butterfat production. It is, therefore, probable that the Government scheme will recognise the necessity for a differential payment to cheese suppliers to that extent. The organisation of the dairy pools is no new thing for the Dairy Board officials, who carried out this experiment in the season, when there was a cheese pool, which handled nearly 1,000,000 crates. It was found possible to make a prompt advance of 6.6 d per lb., and when the final realisation figures were available, the full payment to butterfat producers reached 7.7 d per lb., representing in cash for the complete poo! £4,885,000. Two butter pools were also conducted in the same period, enabling approximately 2,000,000 boxes to be sold. Advances for these pools amounted to 1/1 per lb., and, on of the pool, the final payments brought the total realisation to 1/31 per lb.