THE DAIRYING INDUSTRY

Otago Daily Times, Issue 23517, 3 June 1938, Page 23

THE DAIRYING INDUSTRY

EFFECTS OF UNFAVOURABLE SEASON DECREASED PRODUCTION IN OTAGO BETTER PRICES IN LONDON The dairying season of 1937-38 in Otago and Southland has fyeen characterised by several unusual factors. Weather conditions seriously affected production, and brought the output of most factories well below the average, and o»i the financial side of the industry the guaranteed price fixed by the Government has been substantially exceeded by the rates ruling for dairy produce on the London market. It is probable, therefore, that better returns may compensate to some extent for smaller production and for the greatly reduced gradings for export at the ports of Dunedin and Bluff. The 1937-38 season was probably one of the most unfavourable in Otago and Southland for a quarter of a century. North Otago alone seems to have escaped the effects of a drought which reduced feed supplies to a minimum during the mid-summer, when dairy farmers can afford no such restriction. It is many years since conditions in South Otago were as dry as during the past summer and autumn. The rainfall recorded in the southern districts and also in Southland between November and March was negligible, and farmers who had been unable to ifeach their peak production in the flush of the year through short feed supplies suffered the additional handicap of a poor back-end to the season, a period which in the past has frequently saved the situation for the dairy farmer in Otago. Root crops and other supplementary fodder supplies were for the most part failures, and with the winter close at hand the situation looked desperate. Late autumn rains came in the nick of time to put a little life into pastures and provide a bite of green feed before the winter weather set in too cold, but such relief came too late to improve the position with respect to dairy production. Butter gradings for the year show a heavy decline in Otago, and the decrease in cheese graded, though not as great as in the case of butter, has also been heavy. LONDON MARKET PRICES Prices for dairy produce on the London market have been much higher this year than was the case last year, however, and with an average of 15s per cwt more for butter over the whole season and 7s to 8s per cwt for cheese, the Government finds itself with a large surplus in the Dairy Industry Account, out of which the guaranteed price is paid. The following table gives the approximate monthly average prices per cwt on the London market for the past two years:—

' THE GUARANTEED PRICE A perusal of the above figures should make it easy to understand why the Minister of Finance was able to state on May 12 that there was a surplus of £530,683 in the Dairy Industry Account—£49l,966 for butter and £38,717 for cheese. With an all-round decline in production this year throughout the whole of New Zealand it is not surprising that dairy farmers are all agog to know what the Government intends to do with the funds it has in hand. The surplus means that, the Government has more, than £500,000 over and above what

has been paid in the form of the guaranteed price to farmers. During the first year of the operation of the guaranteed price scheme the proceeds of dairy produce sold by the Government on behalf of farmers was £300,000 less than the amount paid by the Government to the producer. Farmers have thus been wondering whether this amount is to be left hanging over their heads like a sword of Damocles. The Minister of Finance, however, has set their minds at rest on this point with an assurance that that sum will be transferred to a special account, and will not be held as a charge against the dairying industry. And how, with the disappearance of that disturbing sum into the limbo of special accounts, the only question to be answered is: What will be done with the £530,000 which now stands to the credit of the Dairy Industry Account? The Minister of Finance has stated that it will go back to the farmer, but as yet there has been no definite pronouncement as to the form in which the farmer will receive it. It would appear, therefore, that the dairying industry will have to wait for a while yet before it finds out whether a bonus payment over and above the guaranteed ’price will be forthcoming to compensate for the lower production recorded for the year just closed. It is probable, however, that the period of waiting will not be a long one, as the Minister of Finance has expressed the hope that when the National Dairy Association holds its annual conference at New Plymouth in a few days’ time he will be in a position to announce the Government’s decision in the matter.

WINTER SHOW AND RACING CARNIVAL

Butter'. Cheese. White. Coloured. 1936-37 1937-38 1936-37 1937-38 1936-37 1937-38 May .. 57/72/6 72/June .. 107/6 110/59/6 74/3 59/73/9 July ' .. .. .. 113/113/6 62/72/6 61/6 70/6 August .. 118/116/9 67/71/-. 64/6 69/September .. .. 106/6 117/3 68/6 68/3 66/6 69/3 October 99/6 136/6 69/6 70/9 66/6 69/9 November .. 7V71/9 69/0 70/9 December 99/112/9 62/65/9 62/65/3 January .. 110/54/6 68/9 54/6 69/3 February .. 86/111/9 52/6 69/6. 70/March .. .. .. 95/6 116/9 59/6 69/59/6 69/3 Aprii .. •,, .. 103/6 123/9 68/69/6 70/Average .. 102/2 117/3 62/7 70/4 61/6 69/11