DAIRY INDUSTRY

Wanganui Chronicle, Volume 80, Issue 135, 9 June 1937, Page 8

DAIRY INDUSTRY

GUARANTEED PRICE FIRST FACTORY FIGURES [Per Prase Asaoclat.inn] WHANGAREI, June 8. The first provisional dairy factory figures released in New Zealand showing operation under the guaranteed prices are those of the Hikurangi Cooperative Dairy Company, Ltd. Subject to audit, the average all-grade payment per lb. of« butter-fat at the farm gate is approximately 13id, compared with a pay-out of 12.26 d last season. The total charges, including repairs and depreciation, at the farm fate f.o.b. are 1.908 d, a surprisingly small increase on last year’s costs, which were 1.841 d. The factory output was 2122 tons, compared with 1935 tons last year. The factory wages were £3367, an increase of £371. EFFECT OF RISING COSTS MR A. MORTON’S COMMENT “The basis of the first year’s prices was definitely laid down in the Act, and although the immediate reaction of the industry to the announcement of the prices was not altogether favourable, it had to be admitted on reflection that the Government, had carried out its undertaking, as expressed in the Act, in a reasonable manner,” states the president of the National Dairy Association, Mr A. Morton, of Egmont Village, commenting on the Government’s policy of fixed prices for butter-fat, in his annual report to be presented at the dairy conference at Hamilton. His report states: “Probably a large measure of the dissatisfaction expressed was due to the fact that at the time the announcement was made the London market for both butter and cheese was extremely buoyant, and prices were then in excess of those represented by the price guaranteed to producers. “We believe that, had it been possible to keep production costs down to approximately the same level as the previous season, the majority of the producers would have regarded the price as satisfactory, but the continuous rise in expenditure both in the factory and on the farm, due to the Government’s policy, has given rise to very grave ana justified dissatisfaction. “Tn announcing the Government’s price, the Minister of Marketing claimed that a liberal interpretation of the Act had been given and. for good measure, half a million pounds had been added to compensate for any anticipated increase in production costs. This figure represents approximately .3d per lb. butterfat, and will barely cover increases in the factory, without taking into account the much heavier increases that have taken place on the farm. There is every justification for the strong demand that the Government should now take this factor into consideration, and make a retrospective payment to compensate for the heavy increase in farming costs. “The local market has been a serious problem to the industry for many years, and the absence of orderly marketing methods has without question lost the producers many thousands of pounds. Any scheme which obviates cut-throat competition between the co-operative dairy companies must be sound from a co-operative point of view, and the operation of the present regulations will be watched with critical interest by dairy companies in general. The problem of changing over from the old haphazard methods is by no means a simple one, and no doubt the Government recognises the magnitude and delicacy of the task it has set itself.’’