BIG STOCKS IN DAIRY STORES

Southland Times, Issue 23512, 19 May 1938, Page 4

BIG STOCKS IN DAIRY STORES

COMPANIES FORCED TO BORROW MONEY FINANCING OF MONTHLY PAY-OUTS (United Press Association) AUCKLAND,, May 18. Dairy companies are seriously perturbed at the heavy accumulation of produce in store awaiting shipment, according to Mr A. J. Sinclair, secretarymanager of the Te Awamutu Co-oper-erative Dairy Co. Ltd., in an address to the Nev/ Zealand Society of Accountants. For some years, he said, it had been the established policy to spread shipments over the flush months, but either this policy was being carried out more drastically than usual or shipping had been very erratic. “Many dairy companies of medium size,” he said, “are paying interest today at 4i per cent, on overdrafts of over £20,000 to finance their monthly pay-outs, and heavy bills for storage must be met when the produce is ultimately shipped. There is a provision in the Act which enables the Government to take over the produce at any time and as credit is obtained through the Reserve Bank at 1-J per cent., the dairy companies contend that the Government should pay for the produce after, say, six weeks in store, as the Government gets the surpluses which accrue from this policy. If the surpluses are ultimately paid to the farmer, this grievance would be minimized, but it is one of the minor difficulties which the Government could easily adjust, thus making for the smoother running of the guaranteed price scheme.”