BUTTER 13¼D

New Zealand Herald, Volume LXXIV, Issue 22820, 30 August 1937, Page 8

BUTTER 13¼D

NEW PRICES FIXED 7.54 D FOR CHEESE DECISION ANNOUNCED LONG CABINET SITTING [BY TELEGRAPH —OWN COTtRKSPONDKN'TI ■WELLINGTON, Sunday The Minister of Marketing, the Hon. W. Nash, announced yesterday, after a Cabinet meeting lasting five hours, that the Government had decided to purchase all butter manufactured for export in the current season at 13$ d a pound. Ho said that this price should result in a payout by the average efficient dairy factory of not less than 13.88 d a pound of butterfat supplied for butter. Cheese will be purchased at 7.54 d a pound, which should return the equivalent of not less than 15.88 d a pound of butter-fat supplied for cheese. The cheese differential of 2d a pound is in accord with the policy announced by the Government some two months ago. All other arrangements regarding grading, etc., will be in accord with the procedure at present being followed. It was also announced that a full statement would be made to the newspapers on Monday, and that this would be supplemented by a broadcast oil Monday evening. INCREASE UNDER |D ANALYSIS OF PAYMENTS ADDITIONAL £1,250,000 RATE TO BE RETROSPECTIVE The new basic price for croamciy butter, subject to quality differentials, of 13! d per lb., represents an increase of, 11-16 d over the guaranteed value of 12 9-16 d in the past season. Calculated on last season's exports of 149,000 tons of butter and 85,169 tons of cheese, the increase will result in the distribution approximately of £1,250,000 to the dairy farmers of New Zealand. The rate will be retrospective to August 1, the opening of the export season, and operates until July 31, 1938. The present guaranteed level of 13Jd per lb. is equivalent to approximately 123s per cwt., f.o.b. New Zealand ports, compared with 117s 3d per cwt. in the previous season. The equivalent landed price in Loudon is about 112s per cwt., while that of the past season was 106s Gd. The latest-quotation for choicest salted New Zealand butter in London is 116s per cwt., or 13.z9d per lb., f.0.b., so that the new season has opened well above the guaranteed price. Allowance for Costs According to the Minister's announcement, the new season's price should equal about 13.88 d per lb. of butter-fat under average factory con-ditions,',-while the payment last year. ' was ;eflual; to about Is Id per lb. Ihc ■ Mintstbr.'<:>has obviously made allow-:ance--for- increased farming costs, which " have been estimated as being 20 per cent higher than in past years. A large number of factories, however,' -tookadvantage of the quality differentials by improving the quality of their butter, and in a majority of cases to show an increased income. The differentials last season were as follows: —Finest grade, 94 points and over, 12 11-16 d per lb.; 93 or 93* points, 12 9-lGd; first grade, 92 to 92} points, 12} d; 90 to 91J points, 12 5-16 d; second grade, 11 13-16 d, with a premium of id for un- I salted. The London Quotation Although the ruling price in London is now above the guaranteed level values at this period of the year are generally high. The average over the past season was about 101s per cwt., and if prices during the current season remained at the same figure it would result in a deficit of about £2,000,000 for the Government oil the new purchase price The purchase price for cheeso of 7.54 d per lb. compares with 6.81 d in the past season, an increase of about 2d. There were some fears that farmers were swinging over from cheese to butter, and it was the expressed intention of the Government to increase the differential payment. This now stands at 2d per lb., compared with last season. The cheese purchase price is equal to about 67s per cwt. on the London market, the present price being about 68s, or about 7.70 d per lb., f.o.b. Comments on the new prices appear on pago 11.