Estimated Surplus Of £3,250,000 In Dairy Account

Northern Advocate, 25 May 1938, Page 6

Estimated Surplus Of £3,250,000 In Dairy Account

[Special To “Northern Advocate' i AUCKLAND. This Day. TfASTIMATES' OF THE PROCEEDS FROM NEW ZEALAND BUTTER and CHEESE SOLD OVERSEAS DURING THE NEXT FEW MONTHS REVEAL THAT THE SURPLUS IN THE DAIRY INDUSTRY ACCOUNT AT THE RESERVE BANK WILL BE GREATLY IN EXCESS OF THE FIGURE OF £500,000 DISCLOSED BY THE MINISTER OF MARKETING, THE HON W. NASH, WHO STATED LAST WEEK TH.'VF THE SURPLUS IN THE DAIRY ACCOUNT WAS ABOUT HALF A TRILLION. AND WOULD- BE MORE BEFORE THE END OF THE SEASON. An estimate based on overseas in formation, suggests that the figure will probably exceed £3,250.000. This total is arrived at on Lon don forecasts of the market and estimates of the quantities still to be sold, which are more than half the output for the season. It is pr-edicted that the surplus disclosed by the Minister will be increased by at least £2.750.000 before the sales of the season’s production are completed.

Butter Calculations. The estimated surplus of exported New Zealand butter, including quantities in store overseas a forthight ago, was £550,000, this being the value after allowing for the guaranteed price of 112/ a cwt. Under normal conditions, the market continues to rise during the months of June, July, August and September, and the latest London forecasts indicate that the market will reach 140/ during August, with probably a somewhat higher level for September. Taking all unsold stocks of butter from the middle of May at an average of 135/, the surplus for the remainder of the season is exoected to amount to £1,780,000 in sterling currency. Adding to this the surplus realised so far, the figure is raised, to £2,332,000 on the DonjSnion’s total butter output. Profit on Cheese. On cheese, the profit realised by the Government up to the middle of this month is estimated ?,t £58,000. The profit on the estimated unsokl stocks and production on a basis of 72/6 a cwt is expected to reach £258,000. Thus the surplus for cheese is, on these estimates, £316,000 sterling.

The aggregate estimated surplus lor both butter and cheese, therefore, amount to £2,648,000 sterling, which, when converted into New Zealand currency, is £3,280,000. The quantity estimates on which these calculations have been made show that the amount of butter sold ov.6?seas up to May 14 was 64,530 tons, and the estimated quantity still to be sold is 77,790 tons. This makes a total for the season of 142,320 tons, or about 7000 less for the 1936-37 season. Cheese sold to the middle of May amounted to 35,500 tons, and 46,870 tons, it is stated, remains to be marketed. The total for the season is thus 82,373 tons. The Season Reviewed. In arriving at the figures for quantities, 5 per cent, shrinkage in the exports of both butter and cheese, as compared with the previous season, has been allowed, for. Prices over the past seven months have varied widely. Early in November, the market for the new season’s output opened at 151/- the figure being the highest for six yeai’s. The price fell gradually as the volume of shipments increased, until the last week in January, when New Zealand butter in London was 6/- below the guarantee at 106/-. The third week in February, the level of the guarantee, 112/-, had been regained, and since that time there has been a fairly steady advance. The highest figure reached recently was 134/, from which the market has receded slightly.