MILK AND CREAM

New Zealand Times, Volume LI, Issue 11784, 21 March 1924, Page 5

MILK AND CREAM

WINTER PRICES STATEMENT B Y CHAIRMAN 0 F MILK COMMITTEE. GOING INTO FIGURES, The City Council last night decided that the retail prices of milk and crean> for the ensuing winter season, as from April Ist next to September 30th, bo as follow: —Milk, B£d per quart; cream, 2s 6d per pint. The chairman of the milk commit toe. Councillor \V. H. Bennett, made the following statement of the facts that led to tiie fixing of the retail winter price of milk per quart and cream per pint for the ensuing six months: —‘‘It will be remembered that last winter the basio price of milk "paid to the producer was 19.2 d per lb of butter-fat, plus 100 per cent, and per gallon 1 added value, and the council fixed 7£d pei quart as the selling price. We lost during the five months operations the sum of £BSOO. The committee found that this loss has handicapped theij operations during the summer period in so much as it forced us to charge a high summer price to make up the los* and also to pay the extra cost of purchase this year. In addition, tho committee’s anxieties have been, increased owing to the fact that the high t>rice has led the nearby farmers V> increase their output so as to take advantage of the high prioe ruling, tov although they retail direct from the farm, without any of the overhead charges paid by the council for the protection of the health of the. people, they charge the same retail price, and : therefore are in an exceptionally good position. . “The basic price paid to the producers has risen from 19.2 d to 20d per pound of butter-fat with a further added value of twopence halfpenny per gallon over and above that ever paid before so on investigation we find tha* the ’average price paid for the current season to date is approximately I«Jd p«r gallon. The winter price having been fixed by the arbitrator at 85 per ©ant. rise on the summer price brings a, winter price to the producer 0f21.25d per gallon, being an increase of a.Zoa p*r gallon over the summer period.

A CONTRIBUTING FACTOR. “At the proposed retail price of 84d per quart, the increase over the summer prioe is ljd per quart (equal to 21.4 per cent.), whereas the cost to the corporation is increased by 2.06 d per quart (equal to 61.6 per cent.). One of the contributing factors to loss during the winter season is the surplus milk and cream that must be carried by the department to meet the fluctuating trade conditions. Each delivery cart must carry at least per cent, extra to meet this demand, and provision must also be made for extra supplies to large houses that cater for the travelling public. The same applies to the shipping in port. Another factor is that in our contract with the producers they are allowed to supply a margin of 140 gallons per day, either above or below the contract quantity, before surplus price or penalties for shortage operate. The provision of sufficient milk daily to provide the demand for cream at week-ends is also a problem, as we naturally have to convert a surplus in the early part of the week to other channels. If converted into butter, it shows a large lose, as the difference between ita but-ter-fat value and prioe paid as winter milk is about 2s 6d per lb of butterfat. It is estimated that the daily average quantity separated out of the 4400 gallons purchased for the whole milk supply is about 300 gallons, and the loss under this head is about £450 per month. LONG DISTANCES FOR MILK. “It must be borne in mind that during this winter period we expect to reaoh out anything from 60 to 90 miles to get sufficient supplies, which adds to the heavy transport costs. The margin between cost and selling prices, based upon ruling winter prices, is not greater in Wellington than in other main cities of the Dominion, notwithstanding that we do much in the interests of the consumers that is not done in other centres, the bottling of the milk not being the least. In view of the factß I have endeavoured to set forth, the committee have no option but to recommend that the retail price of milk for the ensuing six months from April Ist he Bfd per quart and 2s 6d per pint for cream. The estimated loss at these prices for the six months’ trading is £3091, and only by spreading the extra cost over the six months can this loss be kept down to this figure. This loss will have to be made up during the next summer period. If the price was fixed at 8d per quart the loss would be £IO,OOO. “It is only fair to state that the above statement is. based on an average price of 20d per pound of butterfat that has obtained when the above figures were got out. The price of butter has fallen 6ince then, and is still falling,' which may help to wipe out the above estimated loss; if so, then so much the better for next summer’s operations. For general information, I may say that the committee have reason to hope that at the end of the financial year, March 31st, the department will come out all square, notwithstanding the heavy financial handicap they had to face gt the commencement of the year.” “VERY SORRY.” Councillor Chapman said he was very sorry to see that the committee had found it necessary to increase the price of milk, as it would weigh heavily upon some of the poorer consumers. He would like to see the prices revised again in three months’ time. He hoped that when the winter shortage C ? mo council would not supply those people who had during Ice summer dealt with the nearby farmeus until all the regular customers were supplied. The Mayor also regretted the need for increasing the prices, but he was sure that it would not havo been done if it could have been avoided. One of tne dangers ho saw in increased prices was that the competition of nearby farmers, who were not under the exof and treating their milk, would he formidable.