GUARANTEED PRICES

Waikato Independent, Volume XXXVI, Issue 3190, 6 August 1936, Page 5

GUARANTEED PRICES

1/1 A POUND FOR BUTTER

CHEESE RATE OF 1/21.

(By Telegraph—Press Association)

WELLINGTON, Wednesday.

The guaranteed prices to be paid by the Government for the dairy produce taken over as from August 1 were announced in the House of Representatives on Tuesday night by the Minister of Marketing, the Hon. W. Nash.

The basic price for creamery butter will be 117/3 per cwt, or 12 9/lGd per lb, which is equal to about 1/1 per lb butterfat under average factory conditions. For cheese the basic price will be G3/7 per cwt, or 6 13/16d per lb, equivalent to a payout of about l/24d‘per lb butterfat. For future seasons several factors will be considered in arriving at a “sufficient net return” for the farmer, and members of the industry are„being consulted in arriving at this price. The Minister stated that efforts will be directed toward making reciprocal trade agreements with the United Kingdom and other countries. Margins for Grades The basic price will be paid on finest grade creamery butter scoring 93 or 93i points. For other grades the price has been fixed as follows: \ First grade whey butter scoring 88 points and over, 107/11 per cwt or 11 9/16d per lb. First grade cheese scoring 92 or 92s points, 63/7 per cwt, or 6 13/16d per lb. “These prices will remain constant throughout the season and the differential price margins previously announced will apply in respect of produce to which higher or lower grading points are allotted.”

It is known that there is a wide variation in the costs of butter and cheese-making at the various dairy factories throughout the Dominion, so that a fixed f.o.b. purchase price for all butter and cheese will yield a varying butterfat- price to suppliers, as the payout is dependent on manufacturing results and factory costs, said Mr Nash. “The guaranteed price will be paid in full as soon as the produce is delivered to the overseas steamer. If the proceeds of sale in the first year are greater than the amount guaranteed, this surplus will be used' for the benefit of the dairy farmer and the industry after consultation with its representatives. Any deficits will be born by the Government,” continued Mr Nash. “For future years the cost of production, the standard of living of the farmer as compared with other sections of the community, and the stability of the industry will be taken into account in fixing the guaranteed price,” asserted the Minister.

“Our efforts will be directed to making reciprocal trade agreements with Britain,” said Mr Nash, who explained that this dairy prices should be maintained on the London market.

As the relation of fanning costs to guaranteed prices is largely affected by interest and other land the Minister proposes later to set out the policy of the Government for adjusting the mortgage liabilities of the farmer to the guaranteed price.