A TRENCHANT REPORT

Te Awamutu Courier, Volume 81, Issue 7252, 15 September 1950, Page 5

A TRENCHANT REPORT

ANOMALIES IN MEAT SALES AMPLIFIED “ BULK METHOD IS FOOLISH AND HAPHAZARD ” STRONG CRITICISM BY MR B. C. O’CONNOR In an endeavour to amplify and clarify anomalies in the bulk selling of dairy meats to Britain by the New Zealand Meat Board Mr B. C. O’Connor, chairman of Te Awamutu Bobby Ca\f Pool, presented a trenchant analytical report to a Pool Committee meeting yesterday morning. The main anomalies brought to light by Mr O’Connor concerned the fundamental difference in the methods of selling meat to Britain. The Meat Board sold New Zealand meats in bulk, while all other countries trading with Britain sold their various meats as separate and individual items. “ The producer in those countries is aware of what he is credited for,” said Mr O’Connor, “ and he knows that the prices he receives closely conform with world parity. “ Our New Zealand system differs in that the Meat Board, in conjunction with the Treasury, disposes of our meats in the easiest way—so many tons at so much per ton, with a possible percentage variation every year based on prices obtaining in 1939-1940. “ A more foolish and haphazard system one could not visualise,” Mr O’Connor said, “as there are many variations in the value and quantity of different meats from year to year/ z

“For instance,” continued Mr. O’Connor, “boned bobby veal was worthless in 1939-40, but it was calculated on a cost of production basis in 1942 of 51 d per pound, netting 2.216 d. It has .since received the usual periodical percentage increase pari passu with other meats which amounted to a fraction more than the inci eased cost of processing at works. The present net return of 3£d per pound bears no ‘relation to present retail values, as veal is a ‘basic ingredient’ in at least 19 lines of_tinned meats and pastes which sell at luxury figures. Sundries, which include hearts, tongues, livers, etc., have fared even worse as the net price received is the same as in 1939. “It is worthy of mention that all levies, above what is paid out, go into the stabilisation fund. There is no doubt that pool funds would be greatly augmented if we were receiving world parity and the proceeds were not diverted to the Meat Fool Account.” Pig Meats Speaking of pig meats, Mr. O’Connor said that they only concerned calf pools in a relative sense, as suppliers were in many instances pig producers. To give an over-all picture, he intended to discuss them also. “Meat Board representatives claim that pig producers are receiving a slightly greater percentage than other producers,” said Mr. O’Connor, “and on that basis the board is paying out more than it is receiving. “The Board’s official report for 1950, on page 14, claims a yearly loss of £45,000. In view of the fact that the British Government is paying £234.3 per ton for imported bacon and pork, and the New Zealand farmer is receiving about £lO7 per ton per the Meat Board, there is .surely some case for further investigation.” Price Received and Paid Mr. O’Connor presented the following figures which he said were from an authoritative source in Tooley Street and were interesting if placed in juxtaposition with what the New Zealand farmer was paid. For the first six months of 1950, Britain paid as follows for imports: d. Bacon and pork 25i per lb. Boned beef 10 per lb. Lamb and mutton 11 per lb. Frozen beef quarters 10 per lb. The New Zealand farmer was paid as follows: d Bacon and pork 108 per lb. Boned beef 4 per lb. Lamb and mutton 16 per lb. Boned veal 2.216 per lb. “Enquiries are now being made in London to ascertain the price at which veal is invoiced to the wholesale trade by the Ministry of Food,” said Mr. O’Connor. Basis of Apportionment Continuing, he said that it should be emphasised that the Meat Board apportions the realisations of its bulk sales on any basis it thinks fit, as the above figures would indicate, and without legard to the present-day world values. feel that the dairy industry has something here that needs a careful look at. In fact, it appears as if the present system of the handing over of all bulk selling of meats to the Meat Board is disastrous to the dairy industry, and that the dairy man would have been in a much happier position if his own statutory boards had acted for him. It may be pertinent to note that there are nine members of the Meat Board and that nearly all of them are fat lamb producers, only one member representing the dairy farmer. Increased Cost Demand “A recent alteration in the prices which I quoted above is that an increase has been granted by the Meat Board for the proceeds of veal and sundries of Is 2.17 d,” .said Mr. O’Connor. “Unfortunately, an immediate claim for increased cost of processing at the works of Is 1.89 d left a modest sum of .28d for distribution by pools and to meet their increased costs. “A disturbing feature of this is that 9.98 d per calf of the increased return of l.s 2.17 d viitually comes direct from the Stabilisation Funds to meet increased workers’ charges.” Mr. O’Connor detailed the monies • which were not now paid to producers as follows: Skin levy of 2s 6d per calf, .81d pel lb veal or Is 2.6 d per calf, veils Is, rennet subsidy £50,000, tanners £172,000, footwear subsidy. “The export price of veils is l.s s£d. Pools receive a net 3.375 d. In other words, gentlemen,” said Mr. O’Connor cryptically, “the Te Awamutu Bobby Calf Pool is subsidising cheese industry by approximately £2OOO per year. Subsidising Tanners “Tanners are receiving skins at 20d per pound. The Government is paying the difference up to 32d, and the export values are expected to average over 70d. Tanners are allowed to claim 230,000 .skins, therefore the producers’ donation to the footwear industry will exceed £172,000 or 3s 3d for each skin during the 1950 season. “In reference to the skin levy of 2s 6d each,” said Mr. O’Connor, “it is regrettable to have to note that ail

other skins, pelts, etc., have been relieved from the levy, except the bobby calf industry. “The central executive were unfortunate in accepting the help and cooperation of other bodies in its efforts to have this levy removed, and I venture to say that if they had pressed their legitimate claims on their own, greater success would have been achieved,” said Mr. O’Connor in conclusion. COSTS OVERTAKING CHARGES DISTURBING FEATURE OF FARMING INDUSTRY “A disturbing feature of the farming industry is the seriously rising costs of production,” said Mr. B. C. O’Connor, chairman of directors, Te Awamutu Dairy Company, when .speaking at yesterday’s committee meeting of the Te Awamutu Bobby Calf Pool, of which he is also chairman. Continuing, Mr. O’Connor said that this was especially true of processing charges, whether of stock or dairy produce. “The all-in costs of processing calf products now amounts to 7s 4d per calf. This item a few years ago stood at 3s 10d. In addition, no credit is received for such items as bones, unedible offal, glands, dried blood, etc., or the essentiality of the calf industry to the meat works at a time of the season when the works would otherwise be idle. “The difficulty from the viewpoint of works management is the increasing cost of fuel, power, wages, salaries, maintenance and replacements, many of which are beyond their power to rectify or control. For instance, one important item, .slack coal, has increased by 100 per cent, in one leap? (Incidentally, this has caused a rise in the cost of drying milk powder by £5 per ton). Alarming Aspect “The most alarming aspect that I wish to stress is that it is fast becoming uneconomic to process many of our important by-products, also that at a time of apparently peak prices we should be drawing on our reserve funds to pay increased works charges. “It is self evident that the individual farmer and his co-operative processing concerns can do very little in themselves to bring costs back to a reasonable basis. Therefore, in conclusion, I would recommend to you to look at some of the variable factors that have brought this about. I would suggest a close study of the following factors in relation to the country’s economy: “(1) Exchange appreciation 25 per cent. A device for transferring overseas realisations from the country to the city, and from exporters to manufacturers. “(2) Forty-hour, five-day week, which really means higher wages and less production. “(3) Cancelling of national subsidies on basic essentials, designed to offset some of the ill-effects of (1) and (2). “(4) Cheaper interest rates. Compare with other exporting countries that enjoy facilities of an agricultural bank.”