THE DAIRY PRICE

Otago Daily Times, Issue 27447, 21 July 1950, Page 6

THE DAIRY PRICE

It now appears likely that the prediction made recently by our correspondent in London regarding the new season’s dairy price is to be fulfilled. According to the message we printed yesterday the New Zealand negotiators, far from receiving the full 7z per cent, increase for which they asked, were denied any advance at all on the present price, and were actually offered a reduction in the price for the lower grades of butter and cheese. This information, which has not yet received official confirmation, will naturally be disturbing to dairy farmers throughout New Zealand. It was not, of course, altogether unforeseen by those who had watched the British Government’s bill, for food subsidies soaring to unmanageable levels; but in view of the fact that the price for New Zealand dairy produce has been consistently and substantially lower than that paid for British domestic or Danish butter and cheese some warning of the Ministry of Food’s intention might reasonably have been expected. A check in dairy produce rewards while meat prices continue their upward trend will have its impact on farming throughout the Dominion. Until such time as the official record of the negotiations is made public the grounds on which the British Minister of Food adopted what has been described as his “ uncompromising attitude ” will not be clear. New Zealand had a good case to argue. Increased labour rewards and transport costs and, to a lesser extent, the removal of subsidies, have added to the costs of production, and dairy farmers have been expecting a corresponding increase in the guaranteed price. If this increase is not made the Dairy Marketing Commission might be forced into the anomalous position of paying more than it receives for the butter and cheese produced on New Zealand farms. Admittedly the dairy industry has substantial reserves. The amount in the Stabilisation Account is now approximately £ 17,000,000, but this money has been put aside by the farmers to provide protection in hard times, and not to subsidise labour and material costs when prices are at their peak. One important outcome of the negotiations might be a more intensive search for new markets for dairy produce. There appears to be provision in the new contract for New Zealand to increase its exports to other countries, and the prospect of obtaining good prices in other than the British market is one that should be investigated without delay.