GUARANTEED PRICES

Stratford Evening Post, Volume IV, Issue 223, 1 September 1936, Page 5

GUARANTEED PRICES

INCENTIVE TO QUALITY SWELLING RETURNS. Government's Task Made Light By Better Conditions CARDIFF MEETING, "Since our iast annual meeting we have had a 'fange of Government tind cor:?equently a change in policy, one of the planks of Which is guaranteed prices to dairy farmers for their pTocluce, and the price to ihe cheese (J ro ducers is 6.13-16 d pen lh. of cheese f.o.b. ocean steamer, and taking all things into account, this must be considered a fair price. This, computed in terms of butterfat, should mean a return to cheese companies of 1s 2.58 d based on a 2.50 gross yield and grading and all costs included up to ocean steamer at 2.75 d per lb. of buiterfat," said Mr C. A. Marchant, the chciirman, at, the annual meeting of shareholders of the Cardiff Cooperative Dairy Company, last night.

"If gradings are in excess of 82| a premium is payable of 1/9 per crate up to 93L and of 2/11$ per crate for 1 all produce grading in excess of 931 points. To those companies manufacturing finest quality cheese these premiums will help to swell their returns. I hesitate to think what the results would have been without this incentive to higher qualities. Cheese Yield. "Regarding the question of yield of cheese per lb. of butt erf at, taken as a basis for the establishment of the guaranteed prices, the Dominion aver, age of 2.55 was taken as well as the Dominion average of 2.75 d.

"If a company's costs were above 2.75 d and its yi»-ui below 2.55, Llia return to the cheese producer was go'eg to be lessened. These two factors were going to have an economic effect which would close the gap be•■ween the guaranteed price of butter and that for cheese. In many cases the margin ol difference of lj|d would ho considerably reduced; if on the other hand the yield was above 2.53 and the costs below 2.75 d, then those companies in this fortunate position ■flould bo able to pay in excess of the guaranteed prices, thus placing a premium on efficiency. "In some, cases I am afraid, the price return to ihe cheese producer will be less than to the butter producer on a straight pound of butterfat. Mads Light. "Reverting to the general policy' of guaranteed prices, whilst I am not a politician, I think it is obvious that the task and responsibility of the Government has been made the lighter by the improved conditions referred to previously, whilst the success of the scheme will depend.

1). On the price received for New Zealand produce on the London market as Indicating, the liability or otherwise" of the G»vemment to the country. (2). Increased costs in the factory, and on the farm in relation to increased wages for production, (3). Increasing taxation. (4). A higher cost of living.

"Summing up Numbers 2, ."> and I means the net return to the farmer* Behind these latter questions lies the agitation for a compensated price, on the basis of increased costs, and it is pleasing to note that the Minister of Marketing, the Hon. Walter Nash has set up a committee of investigation so as to place on record the proven facts in relation to increased costs of production and manufacture.

"With the introduction of guaranteed prices we come to a different system of marketing, which in many material respects follows the scheme of group marketing devised by the New Zealand Dairy Board in consultation with its London manager and other officials and endorsed by elected representatives of the industry. I think it can be said that the new system will prove distinctly advantageous to the marketing of our produce, removing many of the imperfections existing in the past. Marketing can be divided into (1). Salesmanship. , (2). Distribution. >■ it No Cnt:cism>;.~. •''Perhaps no great: ori.tH'ism could have been levelled at the salesmanship factor, but it was in regard to the distribution factor which was so little understood that the greatest weakness is shown up. "It seems to me the industry owes a deep debt to thess London import, ers who attempted to distribute our gcods under such unsatisfactory conditions. •^ / '? , l?iM "I sometimes wonder what the dairy companies of Now Zealand would have said once, having placed their orders lor indent of manufactur-

ing requirements with certain merchants, found, after commencing to manufacture, that a fairly large proportion of their orders had been sold ' over their heads, and that they were ■<« forced to go on to the. open>-market to fill their needs. "It would have happened just once; jet we asked our distributors to" dq what Ave would not stand for ourselves. The old order passeth and what ever may be the outcome of the policy! of guaranteed prices, I sincerely trust the policy of orderly and sane marketing will remain so as to build upi a tangible goodwill, which is practically non-existent to-day for Newj Zealand's dairy produce. Waxing Cheese. | v "With reference to the criticism regarding waxing of cheese, I think when it is realised that the payment for our produce takes into account ths benefits the industry has received during the past from this' sources ' the sooner the criticism will die. One' ! of the objects attained by the guaranteed prices is to remove the inter-* factory advantage gained by such' sources as these and place companies on a definite co-operative level." i