Dairymen’s lews Vary On New Price

Northern Advocate, 16 July 1948, Page 3

Dairymen’s lews Vary On New Price

Until they know how much of the new price l'or butter is actually going to be received them, and how much will be diverted for stabilisation purposes, most Northland dairymen are reluctant to express an opinion on the new price of 235/- per cwt for butter. The new price for cheese is 133/per cwt. , • •

This was the general opinion of farmers who were approached this morning with a view to ascertaining their ideas on the new bulk purchase agreement between the Dominion and the United Kingdom. More than one dairyman said the price received by farmers in the 194748 season had been very satisfactory from every viewpoint, and, if present returns were maintained, farmers would have little to complain about. This view, however, was not shared by others who considered that United Kingdom negotiators had driven a hard bargain by comparison with the Danish price of 321/6 per cwt, and when the question of purchasing power was taken into account. The broad principles of the agreement, allowing for fluctuations of up to 7A per cent in price, and annual revisions of quantities if necessary, were favoured in most quarters. It was pointed out that the new season's price would probably be announced early in August, and until that time dairymen would not know how much they would receive for the 1948-49 season's oroduce.

BASED ON COSTS Under the existing price of 205/per cwt, the farmers received 179/-, this figure being based on costs. To obain a higher basic price, it would be necessary to prove that the costs of production had risen. There was some scepticism as to how much of the 30/- per cwt increase would be passed on to the farmer, but it was not possible to get an estimate on this point. The chairman of the Whangarei Coop. Dairy Co. Ltd (Mr E. S. Tremaine) said that, while on the surface of things, the agreement might suggest a hard bargain on the part of the British negotiators, subsequent events which are now on the horizon might prove the value of a long-term agreement in the interests of the Empire in troubled times. The Dominion’s negotiators probably had this in mind when coming to an agreement with the United Kingdom. In reality, the position is that our export values have increased by more than 100 per cent since one year before the war, but our import' values from the same source have increased by more than 150 per cent. In the interests of producers and the country as a whole New Zealand should look for a parity between import and export values. FURTHER DETAILS ~ Further details of the agreement, the outline of which was announced yesterday afternoon, show that the quantity to be made available from the 1948-49 season, on a butterfat basis, will be 97 per cent of the exportable surplus, compared with 97i per cent for the previous agreement. A condition of the new agreement is that the quantity is to be reviewed annually and at any time, if necessary, for the procurement of essential commodities from other countries.

By the increase of about 3d sterling per lb. for butter and cheese, the Dominion’s sterling income will increase by about £0,000,000 on the average season.

Since 1939, when the first of the bulk purchase agreements was entered into between the Dominion and Britain, price increases of £6/2/6 sterling per cwt have been secured for the New Zealand dairymen. The sterling prices for New Zealand creamery butter and finest cheese paid by Britain under the contract bulk purchase system since its inception are:

Butter Cheese Stg. Stg. Season. per cwt per cwt sd s d 1939- 112 6 64 3 1940- 112 6 64 3 1941- 112 6 70 0 1942- 117 0 73 0 1943- (Ap.-Jul.) 143 II 85 6.1 1944- 150 6 89 0 1945- 175 0 102 6 1946- ..7 175 0 102 6 1947- ' 205 0 118 0 1948- 235 0 133 0

N.Z. AT DISADVANTAGE In terms of trade, based on pre-war price levels, the new contract prices for dairy produce still leave New Zealand at a disadvantage in her exchange of commodities and services with the United Kingdom. It is estimated from a study of the latest British export price indices that the Dominion would have to receive 244/- sterling per cwt for butter (against the 235/- agreed upon) to enable her to buy from Britain the same volume of goods from the proceeds of an equal amount of butter in 1939. 1939 PRICES Under the present price Britain is paying 2/1 sterling per lb for New Zealand butter. In July 1939, New Zealand butter was quoted on the London market at 126/- per cwt, equal to 15.13 d per lb, f.o.b. New Zealand ports. Retail prices in London at that time were 1/2 to 1/3 per lb. The prices which are paid to dairy farmers for their produce are determined under the guaranteed price system and are now fixed by the Dairy Products Marketing Commission. The basic rate for the season from August 1, 1947, to July 31, 1948, was 23.852 d per lb for creamery butter and 13.062 d for cheese. It is estimated that these prices should enable efficient factories to pay suppliers 25.907 d per lb for butter-fat supplied for butter manufacture and 27.907 d for cheese manufacture.

The Auckland Diocesan Synod of the Church of England will be attended from Monday to Friday next week by Archdeacon A. E. Prebble, the Rev. R. K. Dobson and the Rev. K. J. Mackie, of Whangarei. Messrs Marsden Woods and S. Oldcorn will also attend as representatives of the parish.