RISING COSTS IN DAIRY PRODUCTION.

Timaru Herald, Volume CXLIII, Issue 20782, 17 July 1937, Page 8

RISING COSTS IN DAIRY PRODUCTION.

One of the biggest difficulties confronting the rural industry at the moment, is the rise in costs, and an instance of the effect of the Government’s policy is provided in a report issued by a committee of the New Zealand Farmers’ Union. The committee has computed that the cost of butterfat production has risen 3.385 d. per lb. since the 1935-36 season; moreover, the claim is made that the calculations on which that figure is based, have been conservative, and what is more, that costs are still rising. The estimate obtained, however, bears out the contention expressed by some dairy factory managers for some time, that costs have gone up at least 3d. a lb. Even in the face of the cstmated rise in the expense of production, one manager now considers that the increase in the guaranteed price will be only Id. It is generally agreed, however, that guaranteed prices are useless unless control of costs is also guaranteed. If butterfat were guaranteed at 2/- a lb, its production would not pay if costs rose to 2/1 a lb.; indeed, the simple economic fact that costs once started on a sudden upward tendency might end anywhere, is to-day being proved to the discomfort of primary and secondary producers alike. In its election manifesto, the Labour Party claimed that the farmer, by receiving a guaranteed price, would be able to budget ahead, but the farmer to-day with costs rising higher and higher cannot budget accurately, and another election fallacy is laid bare. Not even the guaranteed price for the coming season is known, and in the North Island at least, a new dairying season is almost at hand, but the essential information to permit the farmer to budget ahead is not available.