RISING TIDE OF COSTS

Te Awamutu Courier, Volume 53, Issue 3843, 7 December 1936, Page 5

RISING TIDE OF COSTS

EFFECT OF GUARANTEED PRICES. The question of the dairy farmers’ net income for the current dairying season, which opened on August 1, was discussed by Mr C. J. Parlane, general manager of the New Zealand Co-operative Dairy Company, Limited, in his monthly circular to suppliers of the company. He said a question frequently asked by suppliers was whether they would be any better off under the present guaranteed price scheme than they were previously, when increased costs due to the recent legislation were taken into account. This was a question that was very difficult to answer, said Mr Parlane, for the reason that the full extent to which costs would be increased was not yet known, but the information so far available made it abundantly clear that, in so far as manufacturing costs were concerned, the increase was going to be much greater than many anticipated. It would therefore appear that when these costs ■were added to the increase in farm costs, more particularly as applying to farms who had to employ labour, the indications at the moment were that the net return per pound of but-ter-fat for the current season would be less than it was last season. DEFERRED PAYMENT. The suppliers of the New Zealand Co-operative Dairy Company, Limited, received a very substantial deferred payment at the end of last August, and on account of the guaranteed price, the company had been able to maintain the advance rate of payment for the current season’s supply at a higher level than last year. As the season so far had been reasonably good from a production point of view, it meant that the suppliers had had the advantage of a larger amount of cash than for the same period in recent years. FUTURE COMMITMENTS. Mr Parlane said that at the moment he was unable to state just what the advance rate would be for the remainder of the season, but it was reasonable to assume that it would be considerably higher than it was for the last season, -with the obvious result that thei deferred payment would be considerably less. Probably it would be as well, he thought, for farmers to take into account the possibilitv of the autumn not being as favourable as last season for production, which in turn would affect their income. It would be well for suppliers to conserve as much as possible of the higher income during the flush months to meet commitments next winter and spring. The main increase in manufacturing costs would be with respect to wages, cartage and packages.