SHRINKAGE IN CHEESE

Poverty Bay Herald, Volume LXIII, Issue 19104, 27 August 1936, Page 4

SHRINKAGE IN CHEESE

ALLOWANCE IN PRICE OFFICIAL EXPLANATION (Per Press Association.) WELLINGTON, this day. In reply to a Taranaki criticism of the shrinkage deduction of per cent on both waxed and unwaxed cheese is made by the acting Director of Marketing, Mr. G. A. Duncan. "The Taranaki criticism seems to arise from a misunderstanding of the position," said Mr. Duncan. The intention of the Government under the guaranteed price plan was to secure that the dairy farmers' pay-out was based on the average ot the past eight to 10 years. When the Cabinet decided what the pay-out for butterfat in milk supplied for cheese-making should be, it became necessary to convert this pay-out figure into the f.o.b. purchase price for cheese. "Directors and officials of dairy companies know that one factor in this conversion formula is the yield of cheese per pound of butterfat, and they know also that, in determining the yield, allowance is made for cheese shrinkage," continued' Mr. Duncan. "Thus, the 2J per cent shrinkage results in a lower net cheese yield than is the case if i per cent, or 1£ per cent, shrinkage is allowed. Consequently, to secure a given pay-out per pound of butterfat the f.o.b. purchase price of cheese will be higher when the cheese shrinkage of 2£ per cent is allowed than will be the case when the shrinkage allowance is li per cent. "I think the foregoing explanation and assurance that the pay-out conversion formula included the 2i per cent shrinkage allowance should convince the Taranaki cheese producers that they suffer no injustice through the deduction of a uniform shrinkage on all cheese. If per cent shrinkage, the allowance on waxed cheese, had been taken, the basic purchase price of cheese would have been lower than 6 13-16 d per lb., but the resulting pay-out to the dairy farmers would have been unaltered.

"It is not desired that all cheese exported should be waxed,, so the position is considered to be fairly met when the Marketing Department defrays the cost of waxing by an allowance of 4£d a crate. This allowance was fixed after consultation jvith the secretaries of several large cheese manufacturing companies, and it adequately covers the cost of waxing for the season just closed."