BUTTER AND CHEESE

Poverty Bay Herald, Volume LXIV, Issue 19334, 26 May 1937, Page 9

BUTTER AND CHEESE

GUARANTEED PRICES FINDING THE BASIS REPORT OF COMMITTEE (Per Press Association.) WELLINGTON, Inst night. An interim report of the Guaranteed Prices Investigation Committee, which was released to-niglit, stales: — "In working out (he basic guaranteed price of butter for the lSKffi-HT export season, the committee based its calculations on the average overrun of "1.7") per cent and the average factory costs of 2.2!>d a pound of buttcrfat. The estimate of factory costs appeared to have been on the generous side by approximately .2od a pound. It may bo necessary, in view of the increases in factory costs, to adopt the figure of .25(1 a pound of buttcrfat as the measure of increase for the complete 1937-38 season. "On this basis the guaranteed price of butter for the 1037-38 season should make allowance for factory costs at C.2,"d a pound of butterfal and for nn ascertained average run.

"The basic guaranteed juice of cheese for the 193 G-37 export season was calculated on the average cheese yield of 2.!il gross and 2.4fi net and the average factory costs at 2.7.3 d of buttcrfat. The estimate of factory costs was accurto, but in view of the low yields shown by a large number of companies, it may be necessary to revise the yield figure in fixing the basic guaranteed price for the 1037-38 season.

"In view of the increases in the factory costs, the basic guaranteed price of choeso for the 1037-118 season should make allowance for factory costs at 3.2»d a pound of bnttvfu', and possibly for a cheese yield lower than 2.5] gross and 2.45 net.

Marginal Price for Cheese "The committee considered that as all Hie data it required would not be available before .Inly, it should make nn interim report and recommendation regarding the marginal pric I'm cheese, compared with butler.

"The commit tee, alter reviewing I lie various factors concerning the industry, recommended that the basic guaranteed price of cheese for l ho 1937-38 season be lixed at a level thai should enable a cheese manufacturing company that shows a yield not markedly below the standard to make an effective marginal butterfal return ;o, its suppliers of not less than 2d a pound over the buttcrfat return made by a butter manufacturing company, of comparable efficiency, operating under comparable conditions. "On the assumption that Ihe effective butterfal margin thai will be realised by the suppliers of w'bole milk to cheese manufacturing ••oi.ipanies for the current season will be approximately Id, the effect of I lie adoption of the recommended level Will be to inoroasG the Affective but-

terfal; margin'realised by such suppliers for- the 1!>.".7-.'iS season by tit least Id a pound."

CHEESE FACTORIES

MARGINAL PAYMENT 2D PER I/B. MORE TITAN' BUTTER (Per Press Association.) . II AW MR A, last night. "The" intention of the Government. is to fix the prices of butter ami cheese on a basis which will enable an averagely efficient and economic cheese manufacturing company topay its suppliers such an amount, a pound of buttcrfat in excess of the rale paid to the averagely efficient and economic butter manufacturing company, as will stabilise the production of both cheese and butter," said the lion. i\ l-'ruser, acting-Prime Minister, at the opening of the Winter Show to-night.

"The marginal payment in favour of cheese, aimed at for this season, was IJd a pound for butterfal. In view of the urgency id' the matter, the Government requested the committee appointed to make recommendations in regard to prices to give consideration to an appropriate marginal payment in favour of cheese for the coming .season. The committee? had made it recommendation which had been approved by the Government. The Government realised the necessity of maintaining the cheese exports of the Dominion, and knew that cheese interests were apprehensive that there might bo a change-over of supply from cheese factories to butter factories. Need For Stabilisation "The Government have agreed with the committee in stressing the necessity for stabilisation of the production of' cheese in the Dominion, and it considered thai, in order to achieve that object, the basic guaranteed price of cheese, in relation to that of butter, should be so fixed as to provide a marginal payment in favour id' cheese of 2d a pound of butterfal. "This marginal price of 2d a pound is expected to be realised by those cheese uianul'tictiiriiig companies showing a cheese yield ami cost figures which, taken together, give at least the average manufacturing results of the cheese factories throughout the Dominion"; Thus a cheese manufacturing company showing cost figures higher than the average, or a cheese yield lower than the average, might not realise the full marginal payment of 2d a pound."