DAIRY PRODUCE

Otago Daily Times, Issue 24910, 8 May 1942, Page 4

DAIRY PRODUCE

GUARANTEED PRICE WAR COST ALLOWANCES NEW RATES TO SUPPLIERS (F.0.P.R.) WELLINGTON, May 7. A war cost allowance of id per lb for creamery butter and .31d a lb for cheese was announced by the Minister of Marketing, Mr J. G. Barclay in the House of Representatives to-night. Appropriate increases are to be made in the wages of dairy farm workers. The retail prices of butter and cheese will remain unchanged. The Minister said that as the result of conferences the Government and the industry had reached a satisfactory agreement for the payment on all butter and cheese manufactured from milk and cream delivered to dairy factories from August 1 until July 31, 1943, of a war cost allowance as follows: On creamery butter’ —id per lb representing ,61d per lb of butter-fat, of which ,44d per lb of butter-fat is 5 per cent, on the labour reward factor (8.84 d) in the guaranteed price compilation, leaving ,17d per lb butter-fat to offset the other costs incurred. On cheese—.3ld per lb, representing .76d per lb of butter-fat, of which ,44d per lb of butter-fat is 5 per cent, on the labour reward as in the case of butter and .17d per lb of butter-fat is allowed for the other costs incurred. The remaining amount of .15d per lb of butter-fat represents an increase in the allowance for cheese factory costs from 3.5 d to 3.65 d per lb of butter-fat. This adjustment has been made to maintain the 2d differential payment on a butter-fat basis between butter and cheese suppliei’s. As a result of these increases the basic purchase prices for the 1942-43 season are: Creamery butter .. 15.39 d per lb Cheese 8.73 d per lb These purchase prices represent on the standard conversion formula payments to suppliers of 16.49 d per lb for butter-fat for but-ter-making and 18.49 d per lb for butter-fat for cheese-making. The Minister said it was also agreed that the special account created last year by the increased price of 5s 9d sterling for cheese granted by the United Kingdom Government should now be merged with the Dairy Industry Account, and that the specific items of expenditure now being charged against the special account for liability incurred both by the industry and the Government would be met from the Dairy Industry Account. The merging of the special account was a more satisfactory method than an attempt to aggregate the reorganisation of costs associated with the changeover to cheese. It was as yet impossible to assess the full costs and find the relation between the receipts and from the increase in the price of cheese granted by the British Ministry of Food and the payments which would have to be met, but it was hoped that the increases in, purchase prices now announced could be met without a. further increase in the debit balance in the Dairy Industry Account. The minimum wages of dairy farm workers were fixed on the basis of the butter-fat pay-out of dairy companies and an appropriate increase in wage rates would follow the rise in prices.

The Minister said that details of the •’agreement reached with the industry had been submitted to the Price Tribunal to consider the implications on the local market. Aftet a discussion with the tribunal, he could announce that the retail prices of butter and cheese would remain unchanged. The increase in the price of butter would apply to quantities sold for local consumption by dairy companies, this increase being absorbed by the Internal Marketing Division. The dairy companies were entitled to the equivalent of the export prices for cheese sold for local consumption. While the retail price would remain unchanged, the tribunal would, if necessary, investigate the incidence of this increase in the payment to cheese producers on the local sale of cheese.

Mr Barclay added that it had been agreed that the 2s subsidy on bobby calves to compensate for the loss of veal meat would again be made available to the industry this ,year on the same terms as last year. The ■ Minister referred to the somewhat more favourable trend recently indicated concerning butter and cheese exports. While it was impossible to .forecast for the future, the general position of refrigerated shipping had shown no marked deterioration, and this, combined with the completion of a contract for the export in nonrcfrigerated space of 10,000 tons of pure butter-fat, encouraged him to say that butter and cheese suppliers should within the physical limits possible try to maintain their output as near as they could to normal.