MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (EIGHTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1944

Appendix to the Journals of the House of Representatives, 1945 Session I, H-30

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1944 NEW ZEALAND

MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (EIGHTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1944

Presented to both Houses of the General Assembly pursuant to the provisions of the Marketing Act, 1936

CONTENTS • Accounts — page Balance-sheet .. .. .. .. .. .. .. .. .. 34 Dairy-produce .. .. .. .. .. .. .. .. 29, 30 Hides .. .. .. .. .. .. .. .. .. .. 33 Meat .. .. .. .. .. .. .. .. .. 31, 32 Scheelite .. ' .. .. .. .. .. .. .. .. 33 Tallow .. .. .. .. .. .. .. .. .. .. 33 War Office Contracts .. .. .. .. .. .. .. .. 33 Wool .. .. .. • • . ■ .. .. .. .. .. 32 Woolly Sheep-skins .. .. .. .. .. .. .. .. 34 Contracts between the United Kingdom and New Zealand Governments for the Fifth Year OF WAR, 1943-44 .. .. .. .. .. .. 3 Contracts (Long-Term) between United Kingdom and New Zealand Governments for Purchase of Exportable Surpluses of Butter, Cheese, and Meat for Four Years, 1944-48 .. .. .. .. .. .. .. .. .. .. 3, 4 General .. .. .. .. .. .. .. .. .. .. 28 Reports— Dairy-produce — Accounts .. .. .. .. .. .. .. 12, 29, 30 Bulk Purchase of 1943-44 Season's Butter and Cheese by United Kingdom Government 5 Completed Financial Operations for the 1942-43 Season . . . . . . 5 Contracts (Long-term) between United Kingdom and New Zealand Governments for the Four Years, 1944-48 . . . . .. . . .. . . 6 Costs Allowances, Dairy-factory and Farm, Payable for the— 1943-44 Season .. .. .. .. .. .. .. 7 1944-45 Season .. .. .. .. .. .. .. .. 7, 8 Exports : Quantities of Butter and Cheese exported. .. .. .. 10 Grading® — Premiums for Quality .. .. .. .. .. .. 8 Quantities of Butter and Cheese graded . . . . .. . . 10 Quantities of Butter and Cheese purchased or to be purchased and paid for at Differential Prices .. .. .. .. .. .. 9 Guaranteed Prices — 1943-44 Season .. .. .. .. .. .. .. 6 1944-45 Season .. .. .. .. .. .. .. 7 Payments made by Dairy-factory Companies for Butterfat-supplies .. .. 11 Processed Milk .. . . .. .. .. .. .. 11 Production of Dairy Products in New Zealand Dairy Factories .. .. 10 Publicity in the United Kingdom . . . . . . .. . . 12 Rationing Emergency Regulations, Effect of, as applied to Butter and Clieese .. 10 Stabilization Account .. .. .. .. .. .. .. 12 Hides — Accounts .. .. .. .. .. .. .. .. .. 33 Sale of Hides to Australia .. .. . . .. .. .. 24, 25 Report of.Hides Committee on Operations for Year ended 31st March, 1944 .. 25, 26, 27

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Reports—continued, - Linen Flax— taoe Shipments .. .. .. .. .. .. .. .. 27 Value of Exports .. .. .. .. .. . • .. 27 Meat— Accounts .. .. .. .. .. .. •. 20, 31, 32 Bulk Purchase of 1943-44 Season's Meat by United Kingdom Government .. .. 13 Canned .. . . . . . . .. . . • • •• 18 Completed Operations for 1942-43 Season .. .. .. .. ..12 Contract (Long-term) between United Kingdom and New Zealand Governments for the Four Years, 1944-48 .. .. .. .. .. .. 13 Dehydrated Meat: Contract with United Kingdom Ministry of Food . . 18, 19 Disposal 1943-44 Season's Kill .. .. .. .. .. .. 19 Pig Industry .. .. .. .. .. .. .. . • 19 Pool Account . . . . .. .. . i .. . . . . 16 Prices for 1943-44 Season's Meat purchased for Export . . . . . . 13, 14 Prices, Meat Schedule, to be paid to Farmers by Freezing Companies and Meat Operators at opening 1944-45 Season .. .. .. .. .. .. 14, 15 Prices payable to Freezing Companies and Meat-exporters for the 1944-45 Season 15, 16 Purchase and Sale Procedure, 1943-44 Season . . .. . . .. 13 Ration Emergency Regulations, Effect of, as applied to Meat .. .. .. 20 Shipping . . . . . . .. . . . . . . .. 17 Stabilization Account .. .. .. .. .. .. . . 17 Supplies of Meat to United States Armed Forces .. .. .. .. .. 20 Survey of Season .. .. .. .. .. .. .. 17 Scheelite — Accounts .. .. .. .. .. .. .. .. .. 33 Contract with United Kingdom. Government .. .. .. .. .. 27 Quantity and Provisional Value of Ore purchased by Department for Sale and Shipment to United Kingdom. Ministry of Supply .. .. .. .. .. 27 Tallow — Accounts .. .. .. .. .. .. .. .. 24, 33 Purchases by New Zealand Government of 1943-44 Season's Tallow from New Zealand Manufacturers .. .. .. .. .. .. .. 23 Purchases by United Kingdom Government of— 1943-44 Season's Tallow .. .. .. .. .. .. .. 23 1944-45 Season's Tallow .. .. .. .. .. .. .. 24 Statistics .. .. .. .. .. .. .. .. .. 23 Tahiti, Shipments to — r~ Value of Goods .. .. .. .. .. .. .. .. 28 War Office, Sundry Supplies to— Accounts .. .. .. .. .. .. .. .. 28, 33 Value of Products shipped .. .. .. .. .. .. .. 28 WoolAccounts .. .. .. .. .. .. .. .. 22, 32 Appraisal Procedure .. .. .. .. .. .. .. 21 Bulk Purchase of Wool by United Kingdom Government .. .. .. 20 Payments for Greasy and Slipe Wool sold to the United Kingdom Government .. 21 Purchase of 1943-44 Season's Greasy and Slipe Wool by New Zealand Government .. 21 Quantities and Value of Wool purchased — Greasy .. .. .. .. .. .. .. .. 21 Slipe .. .. .. .. .. .. .. .. 22 Shipping Arrangements and Destination of Wool Exports .. . . . . 22 Scouring and Carbonizing of Wool .. .. .. .. .. .. 22 Woolly Sheep-skins— Accounts .. .. .. .. .. .. .. .. 23, 34 Report of Controller .. .. .. .. .. .. .. 22, 23 Sale to United Kingdom Ministry of Supply .. .. .. .. .. 22 Volume and Value of Sales by the Department of Products for Export for the 28 Twelve Months ended 31st July, 1944 .. .. .. .. .. .. 28

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REPORT I have the honour to submit the annual report and statement of accounts of the Marketing Department (Export Division) for the year ended 31st July, 1944. This report relates to the 1943-44 production season (the fifth year of war), and the transactions in respect of dairy-produce, meat, wool, tallow, woolly sheep-skins, hides, linen flax, and scheelite are reviewed under the appropriate headings. • CONTRACTS BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR THE FIFTH YEAR OF WAR, 1943 44 The contracts of purchase of wool and woolly sheep-skins by the United Kingdom Government run for the period of the war, and include the following season's wool-clip and production of woolly sheep-skins. Contract prices for wool continued at the 1942-4-3 rates. In the case of dairy-produce, increased prices for butter and cheese applied from Ist April, 1943, details of which are revealed in the dairy-produce section of this report. Meat-prices remained unchanged except for an increase in mutton-prices. Tallow-prices also remained unchanged. Details of contract terms and prices for all products handled by the Department are given in the appropriate sections of this report. LONG-TERM CONTRACTS BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF EXPORTABLE SURPLUSES OF BUTTER, CHEESE, AND MEAT FOR FOUR YEARS, 1944-48 The outstanding feature of the Department's activity during the year under review was the initiation by the United Kingdom Government of proposals for long-term contracts to ensure the largest possible supplies of dairy products and meat to Britain and to enable New Zealand primary producers to plan their farming operations in advance. These proposals envisaged the purchase of all supplies of dairy-products and meat which would be available for export from New Zealand up to the end of the 1947-48 production season. The first approach in regard to the proposals is contained in the following cablegrams conveying communications from the United Kingdom Minister of Food to the New Zealand Government through the New Zealand High Commissioner, London : — 7th January, 1944 (being text of letter dated 31st December, 1943, from the United Kingdom Minister of Food to the New Zealand High Commissioner, London) : — My Ministry has boon surveying the meat position with the object of ensuring that supplies may be availablo for a reasonable period ahead. lam told that the production of meat in Now Zealand has not as yet been increased to any great extent (although stops which have been taken may be expected soon to produce results) and that the most effective way to increase it may be to give producers the confidence that would result from a long term arrangement to purchase their exportable surplus. We are accordingly prepared to discuss the purchase of your exportable surplus meat until the end of 1947. If you will let me know that this procedure is acceptable to your Government I shall be glad to arrange for my officers to meet yours with the object of working out details of a mutually satisfactory arrangement. I hope your Government will agree to the course which I propose and that it will be possible to hold these discussions and to bring them to a speedy conclusion. 3rd March, 1944 : — As you know the world supply position for milk products is causing vis some anxiety and I believe your Government views with some concern the steady decline in exports from New Zealand to the United Kingdom and Allied nations. You may consider a long term contract tor a period similar to that suggested for meat about which I wrote you on 31st December last, may not only help to stem this decline but may well stimulate production to an extent that would enable exporting to be resumed on a scale more nearly approaching that of immediato pre-war years. We are therefore prepared to discuss with the representatives of your Government the purchase of your exportable surplus butter and cheese for period ending with your 1947-48 production season. If your Government would care to consider this proposal I shall bo glad to arrange for my officers to discuss with you the details of such an arrangement. The reply of the New Zealand Government to these proposals was to the effect that New Zealand was anxious to provide maximum supplies of meat and dairy products, and that discussions in regard to long-term contracts would be welcomed. The first conversations with the United Kingdom Minister of Food and the Chancellor of the Exchequer were conducted by the Hon. W. Nash, who represented to the United Kingdom authorities that when, at the commencement of the war, the original purchaseprices for New Zealand export products were fixed, we had emphasized that we did not wish to make any profit out of the war, but had merely asked that prices be reasonable in the existing situation. We did, however, make a reservation, the substance of which was repeated from time to timenamely, that returns to New Zealand should be adjusted if the index of export prices in the United Kingdom rose significantly. In particular Mr. Nash referred to the minutes of the meeting on 6th

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November, 1939, between representatives of the two Governments, when the Prime Minister the Right Hon. Peter Fraser, " urged that if, owing to unforeseen circumstances, it became impossible to implement the transaction either by reason of the lack of shipping or owing to a really substantial increase in the price of materials imported from the United Kingdom into New Zealand, then the terms of the agreement should be regarded as open for reconsideration." The United Kingdom Ministers had agreed that in such circumstances the arrangements would have to be regarded as open for discussion, and it was also agreed " to take note of Mr. Eraser's representations regarding the effect on the financial position of New Zealand of a serious increase in the price of materials imported from the United Kingdom." This matter had been again raised on 9th April, 1940, when a cablegram was sent to the Secretary of State for Dominion Affairs concerning the question of renewal, with appropriate adjustments, of the purchase agreements for butter, cheese, and meat which were then current. However, this question was not pressed at that time because of the existing circumstances — namely, the evacuation of Dunkirk and the fall of France. The agreements for the purchase of New Zealand's export products by the United Kingdom were concluded at prices based in general on those ruling before the war. These were accepted as reasonable at the time, with the pruviso that the two Governments would be free to enter into discussions as to the steps to be taken in the case of serious increases in the price of materials imported from the United Kingdom. In subsequent renewals of the export agreements, any price increases accepted were generally due to representations made by other countries and automatically passed on to New Zealand, and we had reserved the question of reimbursement for losses occasioned by the diminishing purchasing-power of our sterling funds. Following the discussions referred to above between the Hon. Walter Nash and United Kingdom Ministers, and certain discussions between Ministry of Food and Treasury officials and New Zealand officials in London, the United Kingdom Government submitted to the New Zealand Government an outline of proposals for the purchase of all export surpluses of meat and dairy products under fouryear contracts, and invited the New Zealand Government, if it thought fit, to agree in principle following which discussions on precise terms and conditions of the contracts could proceed. The Acting Prime Minister, the Hon. D. G. Sullivan, in the absence of the Prime Minister abroad, submitted the tentative proposals to the New Zealand Meat and Dairy Boards, and invited their comment and their acceptance in principle. Both Boards, after discussion and submission of ■representations on certain aspects of the tentative draft, accepted the proposals in principle. Discussions then proceeded in London between the Prime Minister, the Right Hon. Peter Fraser, and United Kingdom Ministers. The discussions embraced all aspects of the long-term contracts, including general production costs in New Zealand, and also the question of reimbursement for losses occasioned by the diminishing purchasing-power of our sterling funds, as referred to above. The Secretary to the Treasury (Mr. B. C. Ash win) and the Director of the Export Division, Marketing Department (Mr. G. A. Duncan), joined the Prime Minister in the full presentation of New Zealand's case which was made. The Government, at the request of the Dairy and Meat Boards, agreed that Messrs. W Goodfellow and N. S. McClumpha (their respective nominees) should be present during the negotiations in an advisory capacity. The details and prices in the four-year contracts for the purchase of meat and dairy products which resulted from these discussions are referred to in the appropriate sections of this report. In general the contract terms follow those current during the period of the war, but prices were substantially increased. The starting prices of the contracts are firm for the first two years of the contract period, with provision for a review for the third and fourth years " on substantial grounds, and in particular on the grounds of substantial changes in the cost of production in New Zealand or in the export prices then current in other supplying countries, or such substantial changes in conditions as may necessitate modifications in the conditions of this agreement." In addition to increased prices for products as referred to above, the Right Hon. the Prime Minister made the following announcement regarding compensation payments : "As compensation to meet the abnormal increase in prices of New Zealand imports from the United Kingdom from 1939 to the present, the United Kingdom Government has agreed to pay a lump sum of £12,000,000 sterling. In addition, the United Kingdom Government has agreed to pay New Zealand a lump-sum payment of £4,000,000 per annum for the period of four years to cover the disparity in prices. The United Kingdom Government has also agreed to payments being suspended under our Memorandum of Security Agreement up to an amount of £18,000,000 sterling till after the war, when the question of payment is to be reconsidered." In announcing the arrangements respecting the four-year contracts for dairy products and meat and the compensation payments to representatives of the meat and dairy industries and the New Zealand Farmers' Union, the Right Hon. the Prime Minister said, " The arrangements which have been made with the United Kingdom Government go a long way towards assisting New Zealand's economic position by providing the overseas funds necessary for our abnormal imports in the post-war period. The question arises, however, as to how the credits in New Zealand for the additional receipts for farmproduce are to be dealt with in the light of the stabilization policy. This problem is one which the Government would not wish to settle except after consultation with the industries concerned. I therefore invite both the dairy and meat industries to set up committees to confer with the Economic Stabilization Commission as to the apportionment of this money in terms of the agreement with the Farmers' Federation " (see Department's annual report for year ended 31st July, 1943, pages 5 and 6). Details of these long-term contracts are given in the dairy-produce and meat sections of this report, pages 6 and 13.

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DAIRY-PRODUCE REVIEW OF COMPLETED FINANCIAL OPERATIONS FOR THE 1942-43 SEASON The accounts presented with the report for the '1942-43 season covered purchases and sales of butter, cheese, and processed milk by the Department up to 31st July, 1943. These purchase and sale transactions showed a surplus of £709,724. The final results of the operations for the complete 1942-43 season were — £ £ £ Surplus on creamery butter .. .. .. 116,117 Surplus on cheese .. .. .. .. 834, 501 Surplus on whey butter .. .. .. 44, 626 Surplus on processed milk .. .. .. 1,437 996,681 Less cheese " change-over " payments .. .. 364,465 632,216 Transfer from Internal Marketing Division (Batter Equalization Account) .. .. .. .. .. .. 100,000 Recoveries from manufacturers of special milk products .. .. 2,441 Net surplus for 1942-43 season .. .. .. .. £734,657 The final accounts for the 1942-43 season are shown in detail on page 29 of this report. BULK PURCHASE OF 1943-44 SEASON'S BUTTER AND CHEESE BY UNITED KINGDOM GOVERNMENT For the 1943-44 season the United Kingdom Government desired New Zealand to aim to make available for shipment to the United Kingdom not less than 85,000 tons of cheese and as much butter as possible. The New Zealand Government replied stating that every effort would be made to meet this request, and that rationing of butter and cheese in New Zealand would be introduced in order to make further quantities available for export to the United Kingdom. Rationing of butter and cheese was introduced on 28th October, 1943, and in response to a specific request for a close estimate of the quantities which would be available, the New Zealand Government stated that after providing for the increased requirements of the United States Armed Forces in New Zealand and the South Pacific Area it was estimated that from 96,000 to 101,000 tons of butter and 85,000 to 90,000 tons of cheese would be available for shipment to the United Kingdom during the 1943-44 season. It should be noted that these figures included the estimated saving of butter through rationing- -namely, 6,000 tons. It should also be noted that arrangements settled between the Governments of the United States, United Kingdom, and New Zealand provided for the release by the United Kingdom of all supplies required by the United States Forces in the South Pacific Area. The quantities of butter and cheese actually exported to the United Kingdom were : butter, 101,068 tons ; cheese, 81,54-4 tons. Conditions and terms of the bulk-purchase contracts were the same as those applying for the 1942-43 season (see annual report for year ended 31st July, 1943, page 7). The prices of butter and cheese applying to these contracts were increased as the result of the London discussions which took place in July, 1944. The purchase-prices paid by the United Kingdom Ministry of Food for the 1943-44 season's butter and cheese are as follows, the previous prices being shown in parentheses Butte e Creamery Finest Grade, 93 points and over : 1435. lfd. sterling per hundredweight delivered f.o.b. ocean steamer (1175.)." Creamery First Grade, 90 to 92| points : 141s. lOid. sterling per hundredweight f.o.b. (115s. 9d.). Creamery Second Grade : 138s. l|d. sterling per hundredweight f.o.b. (1125.). Note. —(1) This price increase for butter of 265. lfd. sterling per hundredweight applied to production for sale to the United Kingdom Government during the period Ist April, 1943, to 31st July, 1944. (2) The price increase was first announced as an increase of 265. 2d. per hundredweight, but later the figure was adjusted (in relation to the increase on cheese) to 265. l|d. per hundredweight. Cheese Finest and First Grade, 9J. points and over : 85s. 6jd; sterling per hundredweight delivered f.o.b. ocean steamer (735.). Second Grade : 83s. 6jd. sterling per hundredweight f.o.b. (715.). (AH cheese to be white and unwaxed.) Note. (1) This price increase for cheese of 12s. 6|d. sterling per hundredweight applied to production for sale to the United Kingdom Government during the period Ist April, 1943, to 31st July, 1944. (2) The price increase was first announced as an increase of 12s. 3d. per hundredweight, but later the figure was adjusted (in relation to the increase on butter) to 12s. 6|d. per hundredweight. During the season under review (1943-44) all whey butter was shipped frozen to the United Kingdom, the dehydration of this butter being discontinued at the request of the United Kingdom Ministry of Food.

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Long-term Contracts between the United Kingdom, and New Zealand Governments for Purchase of the Exportable Surpluses of Butter and Cheese for the Four Years, 1944-48.—0n pages 3 and 4 of this report reference is made to the four-year contracts for purchase of butter and cheese. Whilst agreement on prices.and general terms of the contracts has been reached, there are certain minor conditions which still have to be finally settled between the United Kingdom and the New Zealand Governments. The scope of the four-year agreements can, however, be indicated as follows :— (1) A Government-to-Government sale and purchase arrangement covering the total available supplies of butter and cheese from the production of the season commencing Ist August, 1944, and ending 31st July, 1945, and of the three ensuing twelve-monthly periods ending 31st July, 1948. (2) The prices (which are set out hereunder), terms, and conditions of sale and purchase apply to all shipments from the production seasons 1944—45 and 1945-46. For the final two production seasons, prices, terms, and conditions are subject to review at the instance of either Government on substantial grounds. (Such substantial grounds will be more fully defined in the final agreement.) p . Sterling per Hundredweight I RICES delivered f.o.b. Ocean Butter — Steamer. Creamery—- s. d. Finest Grade, 93 points and over .. . . .. . . 150 6 First Grade, 90 to 92| points .. .. .. .. 149 3 Second Grade .. .. .. .. .. .. 145 6 WheyFirst Grade .. .. .. .. .. .. 142 6 Second Grade .. .. .. .. .. .. 138 6 Cheese— Finest and First Grade, 91 points and over .. . . .. 89 0 Second Grade .. .. .. .. .. .. 87 0 (3) All purchases shall be f.o.b. New Zealand ports, and the responsibility for providing freight shall rest with the United Kingdom Government. Payment to be made in sterling in London as to 97£ per cent, on shipment and as to the remaining 2-| per cent, within twenty-eight days after arrival. If the lifting of available supplies of butter and cheese is unduly delayed, the United Kingdom Government will make interim payments. (4) The proportions of butter and cheese to be shipped from the production of each season to be as nearly as possible in accordance with the requirements of the United Kingdom Government, subject to consultation and agreement between the two Governments, and the manufacture of milk products other than butter and cheese to be maintained at levels not exceeding requirements mutually agreed between the two Governments. (5) In general, conditions of the contracts regarding preparation of butter and cheese for export, grading, storage, and payment and shipping procedure to be on the lines of the wartime contracts between the two Governments. (6) The United Kingdom Government to consult the New Zealand Government as to ways and means of securing an orderly transition to the resumption of private trading if and when the present control is withdrawn or modified, and in particular regarding the appointment of agents for the distribution of New Zealand dairy-produce. Before 31st December, 1947, the two Governments, in the light of conditions then prevailing, to consult as to future arrangements. GUARANTEED PRICES, 1943-44 SEASON The guaranteed purchase-prices paid to dairy companies by the Marketing Department for butter and cheese manufactured during the 1943-44- season and exported were :— Creamery Butter— Finest Grade— d. 94 points and over .. .. .. .. .. 15 • 515 93 to 93| points (basic price) .. .. .. .. 15 • 39 First Grade — 92 to 92| points .. .. .. .. .. .. .. 15-3275 90 to 9U points .. .. .. .. .. .. .. 15-14 Second Grade .. .. .. .. .. .. ~14-64 Whey Butter— First Grade .. .. .. .. .. .. .. ..13-89 Second Grade .. .. . .. .. .. ..13-39 Cheese — Finest Grade— 94 points and over .. .. .. .. .. 8 • 88625 93 to 93§ points .. .. .. .. . . .. 8 ■ 855 First Grade — 92 to 92| points (basic price) .. .. .. .. .. 8-73 91 to 91| points .. .. .. .. .. .. .. 8-6675 Second Grade .. .. . . . . .. . . .. 8-48 Note. —These purchase-prices for butter and cheese are the same as those applying for the previous (1942-43) season.

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DAIRY-FACTORY AND FARM-COSTS ALLOWANCES PAYABLE FOR THE 1943-44 SEASON The report of the Department for the year ended 31st July, 1943, shows at pages 8 and 9 the allowances agreed to be paid for the 1943-44 season after negotiations with representatives of the dairy industry. Full details of the allowances were shown in the previous year's report just referred to, but for ready reference the short details are repeated hereunder To butter-manufacturing companies for period Ist August, 1943, to 31st July, 1944 — Pence per Pound of Butterfat. A farm-costs allowance of .. .. .. .. ..0-767 A factory-costs allowance of .. .. .. .. .. 0-269 Total .. .. .. .. .. .. .. 1-036 To cheese-manufacturing companies for period Ist August, 1943, to 31st July, 1944 — A farm-costs allowance of .. .. .. .. ..0-767 A factory-costs allowance of .. .. .. .. .. 0-299 Total .. .. .. .. .. .. .. 1-066 Recompense to dairy companies for increased wages paid to dairy-factory employees in terms of Arbitration Court award, 29th May, 1943— To butter-manufacturing companies .. .. .. .. 0-022 To cheese-manufacturing companies .. .. .. .. 0-076 In the previous year's report the standard resulting average payments by dairy companies to suppliers for butterfat for the 1943-44 season were estimated to be ] 7-sd. per pound of butterfat for butter-manufacture and 19-sd. per pound of butterfat for cheese-manufacture. The actual resulting average payments were as follows : — Ponce per Pound Butter-manufacture— • of Butterfat. Payment for butterfat supplies . . .. .. .. . . 16-830 Add farm-costs allowance .. .. .. .. .. 0-767 Total .. .. .. .. .. .. 17-597 Cheese-manufacture — Payment for butterfat supplies .. .. .. .. .. 18-888 Add farm-costs allowance .. .. .. .. .. 0-767 Total .. .. .. .. .. .. 19-655 Note.—Guaranteed Prices for 1944-45 Season and Payment of certain Dairy-factory and Farmcosts Allowances : For convenience of reference the following arrangements for the 1944-45 season settled before publication of this report are recorded: — (1) Guaranteed Prices, 1944- 45 Season: The guaranteed purchase-prices to be paid to dairy companies by the Marketing Department for butter and cheese manufactured during the 1944-45 season and exported are the same as the prices quoted above as applying for the 1943-44 season. (2) Dairy-factory and Farm-costs Allowances payable for the 1944-45 Season (Ist August, 1944, to 31st July, 1945) : The following notification was made to the dairy industry of allowances payable for the 1944-45 season (Ist August, 1944, to 31st July, 1945) agreed upon after negotiations between industry representatives and the Government:— " Further to the agreement now announced between the Government and the dairy industry, the following allowances will be paid for the 1944-45 season (Ist August, 1944, to 31st July, 1945): — " To Butter-manufacturing Companies " (1) In respect of— d. " Farm-costs allowance, 1943-44 .. .. ..0-767 " Additional farm-costs allowance, 1944-45 .. .. 0-65 " Farm-labour allowance, 1944-45 .. .. ..1-47 " Making total allowance of .. .. .. 2-887 per pound butterfat in cream or milk supplied to a butter-factory and manufactured into butter. " Note.—(a) That the allowance cannot be claimed in respect of cream or milk used for any purpose other than buttermaking. " (b) That the allowance is claimed by dairy companies on behalf of suppliers, to whom they are required to pass on the payment.

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" (2) In respect of— d. "Factory-costs allowance .. .. .. .. 0-269 " Factory^wages allowance .. .. .. .. 0-022 " Making total allowance of .. .. .. 0-291 per pound butterfat contained in cream or milk supplied to a butter-factory and manufactured into butter in that factory. " Note. —(a) This allowance is also payable on butterfat contained in whey cream used in manufacture of whey butter, and the claim for payment is to be made by the dairy company which manufactures the whey butter. " (b) In the case of supply of cream to a butter company by a milk-powder or processedniilk company, the butter company should not claim the farm-costs allowance on such supply, but should claim for the butter-company-costs allowance. " To Cheese-manufacturing Companies " (1) In respect of — d. " Farm-costs allowance, 1943-44 .. .. .. 0-767 " Additional farm-costs allowances, 1944-45 .. .. 0-65 " Farm-labour allowance, 1944-45 .. .. .. 1- 47 " Making total allowance of .. .. .. 2-887 per pound butterfat in milk received over the factory stage for cheesemaking (no deduction for loss in whey) and manufactured into cheese. " Note.—(a) That the allowance cannot be claimed in respect of milk used for any purpose other than cheese-manufacture. " (b) That the allowance is claimed by dairy companies on behalf of suppliers, to whom they are required to pass on the payment. " (2) In respect of— d. " Factory-costs allowance .. .. .. .. 0-299 " Factory-wages allowance .. .. .. ..0-076 " Making total allowance of .. .. .. 0-375 per pound butterfat contained in milk received over the factory stage for cheesemaking (no deduction for loss in whey) and manuijictured into cheese in that factory." (3) Suppliers' Position for 1944-45 Season in respect of Guaranteed Prices and Farm-costs Allowances : The following summary shows (a) the items (working and maintenance costs ; capital charges ; and labour reward) Which, less return from pigs, comprise the butterfat equivalent of the guaranteed price for butter; (6) the farm-costs allowances granted in 1943-44 and 1944-45 ; and (c) the farm-labour allowance granted in 1944-45 :— Per Pound of Butterfat. d. d. Working and maintenance costs .. .. .. ..5-34 d. Farm-costs allowance, 1943-4-4 .. .. .. 0-767 Farm-costs allowance, 1944-45 .. .. .. 0-65 1-417 — 6-757 Capital charges (interest) .. .. .. .. .. 3-24 Labour reward .. .. .. .. .. .. 9• 45 Farm-labour allowance, 1944-45 .. .. .. ..1-47 10-92 20-917 Less return from pigs .. .. .. .. 1 - 54 Standard average " payout " to suppliers for butterfat for buttermanufacture* .. .. .. .. .. .. 19-377 * In addition to tlie allowances set out above, the dairy-factory-costs allowances granted in 1943-44 of 0-269 d. per pound butterfat for butter and 0-299 d. per pound butterfat for cheese, and also the factory-wages-costs allowances of 0-022 d. per pound butterfat for butter and 0-076 d. per pound butterfat for cheese, are being continued for the 1944-45 season. Taking these allowances into account, it is estimated that the average total " payout " (including farm-costs allowances) received by suppliers for the 1944-45 season will be : for butter-manufacture, 19-6 d. per pound of butterfat; and for cheese-manufacture, 21-6 d. per pound of butterfat. PREMIUMS FOR QUALITY, AND QUANTITIES OF BUTTER AND CHEESE PAID FOR (OR TO BE PAID FOR) AT DIFFERENTIAL PRICES . Under the Dairy-produce Export Prices Order 1939 provision is made for additions to or deductions from the basic purchase-prices for butter and cheese according to quality as disclosed by the grading-points awarded to the dairy-produce. This system of price differentials provides a stimulus to the production of dairy-produce of higher quality.

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The following tables show for the 1943-44 season the quantities of butter and cheese purchased and to be purchased and paid for at the respective differential prices. For comparison purposes the totals for the previous four seasons are also shown : —

Creamery Butter (in Tons): Quantities purchased or to be purchased and paid for at Differential Prices

Whey Butter (in Tons): Quantities purchased or to be purchased and paid for at Differential Prices

Cheese (in Tons): Quantities purchased or to be purchased and paid for at Differential Prices

2—H. 30.

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Finest Grade. First Grade. ■ Total. Second 94 Points 92 to 92| 90 to 9H Grade - and over. (Basic Price ) Points. Points." Tons. Tons. Tons. Tons. Tons. Tons. 1943-44 .. .. .. 98,648 38,821 43,659 9,666 6,320 182 1942-43 .. .. .. 101,696 35,046 47,417 11,464- 7,426 343 1941-42 .. .. .. 100,432 40,497 40,106 9,507 9,043 1,279 1940-41 ... .. .. 133,337 43,569 63,470 14,828 10,757 713 1939-40 .. .. .. 128,274 51,624 51,004 15,437 9,570 639 Percentage of qualities— 1943-44 .." .. .. 100 39-35 44-26 9-80 6-41 0-18 1942-43 .. .. .. 100 34-47 46-63 11-27 7-30 0-33 1941-42 .. .. .. 100 40-32 39-93 9-47 9-00 1-28 1940-41 .. .. .. 100 32-67 47-60 11-12 8-07 0-54 1939-40 .. .. 100 40-25 39-76 12-03 7-46 0-50

Total. First Grade. Second Grade. Tons. Tons. Tons. 1943-44 .. .. .. 2,420 2,256 164 1942-43 .. .. .. 2,257 2,095 7 162 1941-42 .. .. .. 3,123 2,974 149 1940-41 .. .. .. 2,855 2,695 160 1939-40 .. .. .. 2,095 2,063 32 Percentage of qualities — 1943-44 .. .. .. 100 93-22 6-78 1942-43 .. .. .. 100 92-82 7-18 1941-42 .. .. .. 100 ■ 95-23 4-77 1940-41 .. .. .. 100 94-39 5-61 1939-40 .. .. .. 100 98-47 1-53 Butter figures calculated at forty boxes to a ton.

Finest Grade. First Grade. rp nta] * Second 94 Points 03 to 93£ 9 p t ? f 91 to 91J Grade, and over. Points. (Baai ° c Points. Tons. Tons. Tons. Tons. Tons. Tons. 1943-44 .. .. .. 81,544 820 17,768 45,966 13,150 3,840 1942-43 .. .. .. 93,638 660 18,997 56,378 15,274 2,329 1941-42 .. .. .. 150,127 1,051 28,097 69,703 38,676 12,600 1940-41 . .. .. 117,798 901 22,901 67,125 21,278 5,593 1939-40 .. .. .. 92,508 951 16,820 56,071 15,274 3,392 Percentage of qualities—-1943-44 .. .. .. 100 1.-00 21-79 56-37 16-13 4-71 1942-43.. .. .. 100 0-70 20-29 60-21 16-31 2-49 1941-42 .. .. .. 100 0-70 18-72 46-43 25-76 8-39 1940-41 .. .. .. 100 0-76 19-45 56-98 18-06 4-75 1939-40.. .. .. 100 1-03 18-18 60-61 16-51 3-67 Cheese figures calculated at fourteen crates to a ton.

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BUTTER AND CHEESE GRADINGS

Note. —Owing to the diversion of supplies of butter and cheese in 1942 43 and later seasons to the Allied Forces in Pacific Area, a correct comparison between gradings for the 1942-43 and later seasons and gradings in previous seasons is not possible.

QUANTITIES OF BUTTER AND CHEESE EXPORTED The quantities of butter and cheese exported from the various grading ports of the Dominion are shown in the following tabulation : —■

Butter and Cheese Exports from 1st August, 1943, to 31st July, 1944

EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO BUTTER AND CHEESE The following information is supplied by the Food and Rationing Controller:— "Butter Prior to the introduction of butter rationing, sales of butter on the local market through the Internal Marketing Division (less supplies to the United States Joint Purchasing Board) for the year ending 31st July, 1943, were 32,066 tons. Since the introduction of butter rationing on 28th October, 1943, sales for the period from Ist November, .1943, to 31st August, 1944, were .19,018 tons, which is the equivalent of 22,822 tons per annum, a saving of approximately 9,200 tons, or about 30 per cent. The quantity thus saved has been made available for export to Great Britain. " Cheese.—ln terms of the Rationing Regulations, sales of cheese on the local market are restricted to the level of sales in the 1942-43 season." PRODUCTION OF DAIRY PRODUCTS IN NEW ZEALAND DAIRY FACTORIES The following figures are taken from the Census and Statistics Department's publications :—

Total Quantities of Butter and Cheese produced in New Zealand Dairy Factories (Factory Weights)

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Butter (Creamery). Cheese. T o Increase or Decrease on T . Increase or Decrease on Previous Year. on ' Previous Year. Per Cent. Per Cent. 1943-44 .. .. .. 101,992 4.60 (decrease) 85,473 11.735 (decrease) 1942-43 .. .. .. 106,947 3-504 (increase) 96,837 36-738 (decrease) 1941-42 .. .. .. 103,326 25-90 (decrease) 153,074 28-74- (increase) 1940—41 .. .. .. 139,444 4-61 (increase) 118,899 26-90 (increase) 1939-40 .. .. .. 133,303 9-02 (increase) 93,696 14-96 (increase)

Great Britain. Other Destinations. Total. Percentage. Butter. Cheese. Butter. Cheese. Butter. Cheese. Butter. Cheese. 1 Boxes. Crates. Boxes. Crates. Boxes. Crates. North Island .. 4,087,566 941,813 15,860 11,729 4,103,426 953,542 98-90 84-46 South Island .. 45,801 175,453 .. .. 45,801 175,4-53 1-10 15-54 Dominion 4,133,367 1,117,266 15,860 11,729 4,149,2271,128,995 100-00 100-00 totals

Season. Creamery Cheddar Whey J3utter. Cheese. Butter. Tons. Tons. Tons. 1939-40 .. .. .. .. .. 155,190 97,637 2,565 1940-41 .. .. .. .. .. 161,809 122,370 3,355 1941-42 .. .. .. .. .. 129,854 157,659 3,910 1942-43.. .. .. .. .. 139,083 102,846 2,908 1943-44 (estimated) .. .. .. 133,000 91.000 2,500

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Tlie Food and Rationing Controller's Office gives the following figures of total production of processed milk in New Zealand factories for the calendar year 1943 —• Tons. Whole-milk powder .. .. .. .. .. 3,689 Skim-milk powder .. .. .. .. ..7,471 Evaporated Milk (unsweetened) .. .. .. 5,798 Condensed milk (sweetened) .. .. .. .. 2,083 Malted milk .. .. .. .. .. 330 PROCESSED MILK For the 1943-44 season a contract was concluded with the United Kingdom Ministry of Food for New Zealand's normal export of skim-milk powder, the sale price being £42 ss. per ton sterling f.o.b. The equivalent of this price in New Zealand currency was paid to manufacturers, less i per cent, to cover the Department's administrative expenses. The quantity and value exported by the Department for the twelve months ended 31st July, 1944, was :— Cases. Woiglit. Value. Tons. £ Skim-milk powder .. .. 95,051 4,753 240,680 In regard to evaporated milk, the whole of the exportable surplus was released for use of the Allied Forces in the South Pacific Area. PAYMENTS MADE BY DAIRY-FACTORY COMPANIES FOR BUTTER,FAT-SUPPLIES The following tabulation shows the average butterfat-priccs paid to suppliers of butter- and cheese-manufacturing companies. It should l)c borne in mind that when making comparison of butterfat payouts of companies it is necessary to take into consideration the location of the factories and special circumstances pertaining to individual companies, as those factors reflect appreciably on manufacturing and transport costs:— Payments isy Dairy Companies for Butterfat-supplies (In pence per pound of butterfat) New Zealand average— Butter. Cheese. 1943-44 season .. .. .. 16-830 18-888 +0-767* +0-767* __ 17-597 19-655 1942-43 season .. .. .. 16-569 18-577 1941-42 season .. .. .. 16-017 18-025 1940-41 season .. .. .. 16-106 18-043 1939-40 season .. .. .. 16-179 18-091 1938-39 season .. .. .. 16-087 18-060 1937-38 season .. .. .. 14-812 16-389 1936-37 season .. .. .. . 13-558 15-176 * Plus farm-costs allowance of 0-707 d. per pound butterfat from Ist August, 1943 (see annual report, 31st July, 1943, page 8). The following tabulation shows the average costs of butter- and cheese-manufacturing companies for the 1943-44 season. The New Zealand averages for the five previous seasons are also shown:—

Season 1943—44: Costs in Manufacture and Delivery of Butter to f.o.b. Overseas Steamers

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(In pence per pound of butterfat) bp S 3 nd a> -• rj 'tj o PJ 2 . ""d . !•■§ I I I el I* II Total <§! I 11 ir M char « es - 8 1° I IS °l 00 " New Zealand average— 1943-44 season .. .. 0-472 1-109 0-093 0-078 0-391 0-210 2-353 -0-269* 2-084 1942-43 season .. .. 0-440 1-100 0-089 0-068 0-398 0-206 2-301 1941-42 season .. .. 0-438 1-091 0-091 0-084 0-409 0-213 2-306f 1940-41 season .. .. 0-405 1-023 0-077 0-063 0-437 0-192 2-197 1939-40 season .. .. 0-398 0-977 0-084 0-063 0-418 0-187 2-127 1938-39 season .. .. 0-402 1-019 0-085 0-098 0-394 0-208 2-206 1937-38 season .. .. 0-381 0-953 0-075 0-076 0-384 0-178 2-04-7 1936-37 season .. .. 0-352 0-927 0-072 0-088 0-398 0-147 1-984 *Less factory-costs allowance of 0• 269d. per pound butterfat (from 1st August, 1943). fButter-manufacturing costs for the 1941-42 season were increased owing to diversion of milk-supply from butter-manufacture to cheesemanufacture. Compensation payments were made to dairy companies on this account.

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Season 1943-44: Costs in Manufacture and Delivery of Cheese to f.o.b. Overseas Steamers

PUBLICITY IN THE UNITED KINGDOM The Department's annual report for the year ended 31st July, 1943, mentions (page 13) the maintenance during the war years of the nucleus of the advertising section, so that when opportunity offers the merits of New Zealand butter and cheese can be publicised and sale-promotion activities resumed. The determining factor in the resumption of advertising and sales-promotion plans is the cessation of rationing in the United Kingdom. The contract of purchase of butter and cheese by the United Kingdom Ministry of Food provides that when the question of restoration of the branding of butter and margarine arises, the Ministry intends to treat both products in the same way. It is possible that reinstatement of brands might be permitted before the United Kingdom Ministry of Food is in a position to give distribution of butter and cheese by mark or origin. ACCOUNTS The dairy-produce accounts covering the completed operations for the 1942-43 season and the operations for the 1943-44 season arc shown in the accounts section at the end of this report pao-es 29 and 30. The completed operations for the ] 942-43 season are referred to on page sof this report. After sale of the balance of the 1942-43 season's dairy-produce which was in store at 31 st July, 1943, the final result of the operations for the complete 1942-43.season is a surplus of £734,657.

The accounts now presented for the 1943-44 season cover purchases of butter and cheese by the Department up to 31st July, 1944. The following table shows the quantities so purchased, the total season's production for export, and the stocks in store awaiting purchase at 31st July, 1944

The accounts for the 1943-44 season comprise Administration and General Expenses Account Purchase and Sale and Revenue Accounts, Dairy-produce Account, and Dairy Industry Stabilization Account. The circumstances of the establishment of the Dairy Industry Stabilization Account are referred to in a note at the foot of the accounts (see page 30 of this report). It will be observed from the accounts that the Purchase and Sale and Revenue Accounts show a surplus at 31st July, 1944, of £548,282, which is transferred to the Dairy-produce Account. In terms of the arrangements settled with the industry in July, 1943, the net surplus in the Dairy-produce Account £332,378, is transferred to the Dairy Industry Stabilization Account, The Dairy Industry Stabilization Account shows a debit balance of £1,066,599, against which will be set credits for the increases in sale prices of butter (265. Ifd. sterling per hundredweight) and cheese (12s. 6|d. sterling nor hundredweight) which apply for the 1943-44 season, but which were not received at the date of closing the accounts. MEAT REVIEW OF COMPLETED OPERATIONS FOR THE 1942-43 SEASON The contract between the United Kingdom and the New Zealand Governments for the calendar year 1943 (the fourth year of war) provided for the purchase of 328,000 tons of frozen meat. Subsequently, as the result of an improvement in the shipping situation, the United Kingdom Minister of Food notified the New Zealand Government that the Ministry was prepared to buy the whole of the Now Zealand exportable surplus without any limitation as to quantity. Frozen-meat shipments for tho twelve months ended 30th September, 1943, totalled 217,632 tons. In addition to these shipments on account of the Ministry of Food, there were deliveries of frozen meat to tho United States Joint Purchasing Board amounting to 25,878 tons, As a result of this excellent clearance the carry-over of meat m store at the 30th September, 1943, was 36,900 tons, this being the smallest carry-over since the commencement of the war.

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. J-.iv.jj_jxi.KJ X -U ZX J.YJ. XJ XV U (In pence per pound of butterfat) Manu- j Repairs Charges: A , faoturing Depreciation. 1 and Factory to Overhead lotal Charges. Maintenance. f.o.b. Charges. Charges. New Zealand average— 1943-44 season .. 2-660 0-176 0-217 0-636 0-343 4-032 -0-299* 3-733 1942-43 season .. 2-576 0-166 0-216 0-634 0-325 3-917 1941-42 season .. 2-372 0-141 0-170 0-647 0-270 3-600 1940-41 season .. 2.323 0-144 0-184 0-620 0-258 3-529 1939-40 season .. 2-259 0-14-8 0-180 0-624 0-299 3-510 1938-39 season .. 2-289 0-157 0-203 0-617 0-326 3-592 1937-38 season .. 2-151 0-141 0-166 0-589 0-290 3-337 1936-37 season 2-056 0-134 0-146 0-577 0-226 3-139 * Less factory-easts allowance of 0-299d. per pound butterfat (from 1st August, 1943).

Shipped and paid to In Store and paid, In Store and not paid, Total Production for 31st July, 1944. 31st July, 1944. 31st July, 1944. Export Season, 1943-44. Boxes. Boxes. Boxes. Boxes. Creamery butter 3,833,215 43,339 69,370 3 945 924 Whey butter .. 93,336 1,860 1,618 ' 96^814 Crates. Crates. Crates. Crates. Cheese .. 1,074,521 34,933 32,165 1,141,619

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BULK PURCHASE OF 1943-44 SEASON'S MEAT BY UNITED KINGDOM GOVERNMENT For the calendar year 1944 the United Kingdom Ministry of Food undertook to purchase and lift all the meat which New Zealand could make available for export. New Zealand was asked to take all possible steps to increase production, and it was requested that certain classes of meat which had previously been canned or otherwise disposed of (notably ewe mutton) should be shipped in frozen form. Frozen-meat liftings during the early part of 1944 were very small, but later improved substantially with the result that it is now anticipated that the total quantity of frozen meat which will be shipped for the twelve months ended 30th September, 1944, will be approximately 212,617 tons. In addition, deliveries of frozen meat to the United States Joint Purchasing Board are expected to amount to a further 43,390 tons, with a resultant carry-over of meat for export at the 30th September, 1944-, of 62,504 tons. Long-term Contract between the United Kingdom and New Zealand Governments for Purchase of the Exportable Surplus of Meat and Edible Off ah for the Four Years, 1944-48. —On pages 3 and 4- of this report reference is made to the four-year contract for purchase of meat and edible offals. Whilst agreement in principle and agreement in general on terms of the contract have been reached, there are certain aspects regarding prices and conditions which still have to be finally settled between the United Kingdom and the New Zealand Governments. The scope of the four-year agreement can, however, bo indicated as follows :— (1) A Government-to-Government sale and purchase arrangement covering the total available supplies of beef, veal, mutton, and lamb, and the frozen sundries and edible offals thereof. All the products named to be as normally graded for export and available for shipment in the period beginning Ist October, 1944, and ending 30th September, 1948. (2) During the first two years of the agreement—i.e., up to 30th September, 1946 —the quantity of pig-ineat covered by the contract to be the total available supplies. The quantities to be purchased in the third and fourth years of the agreement to be as notified by the United Kingdom Government to the New Zealand Government. (3) The prices as finally settled, and the conditions of the agreement, will apply for the first two years of the contract. For the final two years, prices and conditions are subject to review at the instance of cither Government on substantial grounds. (Such substantial grounds will be more fully defined in the final agreement.) (4) All purchases shall be f.o.b. Now Zealand ports, and the responsibility for providing freight shall rest with the United Kingdom Government. Payment will be made in sterling in London as to 97| per cent, on shipment and as to the remaining 2-| per cent, within twenty-eight days after arrival. If the lifting of available supplies of meat is unduly delayed, the United Kingdom Government will make interim payments. (5) As and when the shipping position permits, the United Kingdom Government will progressively resume the importation of chilled beef from New Zealand. (6) In general, conditions of the contract regarding preparation of meat for export, surveying of meat upon arrival for quality, and payment and shipment procedure are on the lines of the wartime contracts between the two Governments. There will bo appropriate provisions for consultation at all stages, particularly regarding the distribution ol New Zealand moat in the United Kingdom, and the arrangements to apply at the conclusion of the four-year contracts. PURCHASE AND SALE PROCEDURE, 1943-44 SEASON For the 1943-44 season the New Zealand Government again agreed to purchase the normal exportable surplus of meat, and on 25th January, 1944, the Minister of Marketing notified all interested parties in the following terms : — " This will serve to confirm the arrangements which have been completed with the Government, and the New Zealand Meat Producers' Board, freezing companies and operators, whereby freezing companies and operators will carry on the business of buying, slaughtering, and freezing of meat under conditions similar to those which pertained in the 1942-43 season, and under the f.o.b. price schedule notified to companies and exporters on 7th December, 1943, by the Director, Export Division, Marketing Department." In fixing the opening schedules for fat stock, the improved shipping outlook and the United Kingdom Ministry of Food's increased meat requirements were taken into account, and increases were made in the prices of the heavier grades of lamb. The object of these increases was twofold : firstly, to encourage the production of an increased weight of meat, which was urgently required by the United Kingdom; and secondly, to remove an anomaly which had arisen out of the emergency conditions existing in the 1941-42 season and to a lesser extent in the 1942-43 season, when an adjustment had been made in the schedules to give a bias in favour of lighter-weight ranges in lambs. The New Zealand Meat-producers' Board, which was in close consultation with the Government in this matter, undertook to organize a campaign to increase the average weight of sheep and lamb carcasses in order to assist in meeting the needs of the United Kingdom. In addition to' the increases in the prices of heavy-weight lambs, increases were also granted in the prices of ewes and heavy-weight wether mutton, whilst adjustments were made in beef-prices, resulting in increases in prices for the heavier weights of ox and heifer beef. The Marketing Department's f.o.b. buying prices for the 1943-44 season were fixed to enable meat operators to pay tliijse increased prices to farmers. PRICES FOR 1943-44 SEASON'S MEAT PURCHASED BY MARKETING DEPARTMENT FOR EXPORT The f.o.b. (New Zealand currency) purchase-prices payable to freezing companies and meatoxportcrs for the various classes and grades of frozen meat are set out in the Meat Marketing Order 1942, Amendment No. 2. The purchases made by the Marketing Department from freezing companies and exporters for the twelve months ended 31st July, 1944, totalled £19,184,330 (Now Zealand currency). Debits to the United Kingdom Ministry of Food totalled £13,476,640 (Now Zealand currency) for the same period. Debits to the United States Joint Purchasing Board totalled £4,989,549 (New Zealand currency) for the same period.

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The total weight of frozen meat purchased was 293,133 tons, giving an average pay-out to freezing companies and meat-exporters of 6-42 d. per pound for all descriptions of frozen meat and edible offals. The following table shows particulars of meat purchased during the twelve months ended 31st July, 1944, classified under the main descriptions of meat purchased :■ —

Note. —(1) Meat Schedule Prices lo be paid to Farmers by Freezing Companies and Meat Operators at Opening of 1944-45 Season : For convenience of reference the following letter from the Right Hon. the Prime Minister to the Meat Board, written before publication of this report, is quoted. This letter announces the meat schedule prices to be paid to farmers by freezing companies and. meat operators at the opening of the 1944-45 season, and also arrangements regarding the Meat Pool Account and the Meat Industry Stabilization Account: — 20th November, 1944. The Chairman, N.Z. IVteat Producers' Board, Wellington. Deak Sib, — Meat Schedule Phices, 1914-45 This letter will serve to conlirm my previous intimation to the members of your Board that as a result of the agreement reached between the Board and the Economic Stabilization Commission, meat schedule prices to be paid to farmers by freezing companies and meat operators at the opening of the 1944-45 season will be as follows : — Lamb — Prime Down Cross and Prime Canterbury— 23/42 .. .. .. .. .. 9d. 43/50 .. .. .. .. .. Sid. 51/56 .. .. .. .. .. Bd. Prime Cross Bred— 23/42 .. .. .. .. .. Bfd. 43/50 .. .. .. .. .. 8-j-d. 51/56 .. .. .. .. .. 7fd. Seconds— 23/42 .. .. .. B|d. 43/50 .. .. .. .. .. 7|d. Wethers : North Island — Prime — 64/U . . .. .. .. .. s|d. 65/90 .. .. .. .. ..As 641b. @ sfd. —30s. Bd. Seconds — 64/U .. .. .. •. .. 5Jd. 65/72 .. .. .. .. .. As 641b. @ sJd.—2Bs. Wethers : South Island — Prime — 64/U .. .. .. .. .. s|d. 65/90 .. .. .. .. .. As 64 lb. @ 5Jd. —295. 4d. Seconds — 64/U .. .. . • • ■ .. sd. 65/72 .. .. .. .. .. As 641b. @ 5d.—265. Bd. Ewes — 64/U 3fd. 65/90 .. .. .. .. .. .. As 641b. @ 3§d. —19s. 4d. Quarter Beef— Ox — G.A.Q. all weights .. .. .. .. 40s. per 100 lb. F.A.Q. all weights .. .. .. .. 365. per 100 lb. Heifer— G.A.Q. all weights .. .. .. .. 395. per 100 lb. F.A.Q. all weights .. .. .. .. 345. per 100 lb. Cow — G.A.Q. all weights .. .. .. .. 335. 6d. per 100 II). F.A.Q. all weights .. .. .. .. 28s. 6d. per 100 lb. Boner Beef0x....... . . . . . "1 ,^ ull '• '• '• '• '• •• !> 235. per 1001b. Cow .. .. .. .. .. .. j r Heifer .. .. .. .. .. .J The cost of the increases in Marketing Department purchase prices for meat necessary to enable these increased schedule prices to be paid to farmers will be debited to the Moat Industry Stabilization Account. The United Kingdom offer, as you are aware, coyers export meat only, and to avoid the complexity that would arise by a two-price schedule for local and exported meat, it is necessary to base all prices on the export schedule, and to reimburse from the Meat Industry Stabilization Account the sum necessary to maintain local prices to the consumer. The amount of this compensation is estimated to be not more than £400,000 annually, and this amount will be a charge

14

t, , ,, i Average Price . rp Purchase Valuo V, „i Glass ol Meat. Ions. /at 7 (* 'nrrmir>\-'i per Po.und ' tuuenoy). (N . Z , Currency). Frozen— ' £ cl - Lamb 157,771 11,291,673 7-67 Mutton 61,912 2,095,240 3-63 Beef and veal 45,094 1,975,155 4-69 Pig-meats 18,832 1,519,102 8-64 Sundries 9,524 687,815 7-74 Total .. .. .. .. .. 293,133 17,568,985 6'42 Preserved — Canned beef and mutton (including meat and vegetable 14,416 1,359,374 ration) Tongues, &c 1,140 255,971 Total .. .. .. .. .. 15,556 1,615,345 Total, frozen and preserved meat .. .. 308,689 19,184,330

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to the Meat Industry Stabilization Account.* The Government all through the negotiations made it plain that acceptance of the new price schedule was conditional on acceptance of this essential policy decision. I recognize that it was on this basis that the Board agreed to the proposals as a whole. It is considered desirable that both the Meat Pool Account and the Meat Industry Stabilization Account should remain within the Meat Industry Account as at present, but the whole of the proceeds from the recent increase in the prices of meat to be paid by the United Kingdom Government will bo credited to the Meat Industry Stabilization Account and will be conserved exclusively for the industry, subject of course to such debits against the account as are contemplated in the Government's agreement with the Farmers' Federation on the 18th June, 1943. All accretions to the Meat Pool Account will continue as in the past and no charges other than those already operative will be made against it except in agreement with the New Zealand Meat Producers' Board. This arrangement would have to be subject to review, in the event of tho resources of the Meat Industry Stabilization Account being insufficient to meet charges against that account. I would stress again that the balances finally remaining in tho Meat Pool Account and the Meat Industry Stabilization Account belong to and shall bo held for the benefit of the industry. Full information as to the debits it is proposed should be placed against the Dairy and Meat Industry Stabilization Accounts, and also as to the purpose for which lump sum payments have been granted by the United Kingdom, will be made available to tho Joint Committee set up to consider the allocation of debits to the various stabilization accounts. The settlement which has been reached is, I believe, to the benefit of the meat, industry and of tho country as a whole, having regard to the stabilization policy of the Government, and to the best interests of the industry now and in the future. The good will shown by your Board, in the course of negotiations encourages me to ask for its continued co-operation in the important task of securing the greatest possible production of meat for export to Great Britain. I'. Fbakuu, Prime Minister. *Tn a subsequent letter dated I It.h December, 1944, the llight Hon. the Prime Minister informed the. Meat Board as follows : "I note that your lioard has conllnned the statements of the terms of the agreement set out in my letter, with the reservation thai, the annual charge on the Meat Industry Stabilization Account in respect of the subsidy to maintain local meat prices was not to exceed £400,000. I have to advise you that my Government accepts your Board's interpretation of this part of the agreement, and that, therefore, the annual liability of the Meat Industry Stabilization Account in respect of the subsidy to maintain local meat prices is limited to £400,000." (2) Purchase-prices fay able to Freezing Companies and Meat-exporters for the 1944-45 Season.—• The following notification was issued by the Marketing Department on 21st November, 1944 : — Circular No. F.C. 102. Meat Prices Tho complete range of f.o.b. prices for export meat payable by the Marketing Department for tho Season 1944/45 is as follows :—• F. 0.8. Price : Peneo Lamb— per Pound, N.Z. Currency Primo Down Cross 2's (23/30 lb.) toloscopod .. .. .. .. .. 8-425 B's (37/42 lb.) „ .. .. .. .. .. 8-425 4's (43/50 lb.) „ .. .. .. .. .. 7-925 Tegs (51/56 lb.) „ .. .. .. ~ .. 7-425 Prime Canterbury 2's (23/30 lb.) „ .. .. .. .. .. 8-3025 B's (37/421b.) „ .. .. .. .. .. 8-3025 4's (43/50 lb.) „ .. .. .. .. .. 7-8625 Tegs (51/50 lb.) „ . . .. .. .. .. 7-3025 Prime Crossbred 2's (23/36 lb.) „ .. .. .. .. .. 8 • 175 B's (37/42 lb.) „ .. .. .. .. .. 8-175 4's (43/50 lb.) „ .. .. .. .. .. 7-675 Tegs (51/56 lb.) „ .. .. .. .. ~7-175 Second quality (36 and under) „ .. .. .. .. .. 7-675 (37/42 lb.) „ .. .. .. .. .. 7-075 (43/50 lb.) „ .. .. .. .. .. 0-925 (51/50 lb.) „ (as 2nd quality wethers 56/U) .. 5-25 Telescoping allowance .. .. .. .. .. .. .. .. 0-0777 Mutton— Prime wether and maiden ewe I's (48 and undor) telescoped .. .. .. 5-75 7's (49/56 lb.) „ .. .. ..5-75 3's (57/64 lb.) „ .. .. ..5-75 9's (65/72 lb.) „ .. .. .. s's (73/80 lb.) „ .. .. .. )■ 5-75 on 641b. only. o's (81/90 lb.) „ .. .. ..J Second quality .. .. (50 and under) telescoped .. .. .. 5-25 (57/04 lb.) „ .. .. ..5-25 (65/72 lb.) ~ .. .. 5-25 on 64 lb. only. Ewes .. .. .. (64 and under) „ .. .. ..3-75 (65/72 lb.) „ .. .. .. 3-75 on 641b. only. (81/90 lb')/ b°ned for export .. .. .. 4-075 Telescoping allowanco .. .. .. .. .. .. .. .. 0-0777 In tho caso of prime wethers 05/90, second wethers 05/72, and ewes 05/72, the Marketing Dopartmont will pay freezing charges on tho excess weight over 04 lb. Boef — American pack— G.A.Q. ox and heifer .. .. .. ~ .. .. .. 0-5125 F.A.Q. ox and heifer .. .. .. .. .. .. .. 5-95 G.A.Q. cow .. .. .. .. .. .. .. .. 5-73125 F.A.Q. cow .. .. .. .. .. .. .. .. 4-94125 It is expected that all G.A.Q. and F.A.Q. ox, heifer, and oow beef will bo packed according to the United States Joint Purchasing Board specification during the 1944-45 season, but if for 'some particular reason any beef is put up in bone-in quarters, tho following prices will apply:— Bone-in— G.A.Q. ox and hoifor, all weights— Hinds .. .. .. .. .. .. .. .. 6•095 Fores .. .. .. .. .. .. .. .. .. 3-845 F.A.Q. ox and hoifer, all weights— Hinds .. .. .. .. .. .. .. .. .. 4-9075 Fores .. .. .. .. .. .. .. .. .. 3-7825 G.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. .. 4 • 0575 Fores .. .. .. .. .. .. .. .. .. 3-6575 F.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. .. 4■0575 Fores .. .. .. .. .. .. .. .. .. 3-0575 Boneless bull .. .. .. .. .. .. .. .. ..4-25 Boneless bobby veal .. .. .. .. .. .. .. .. 4■ 5 Boneless cow and ox beef—South. Island only .. .. .. .. .. 4-05 The on-trucks prices applicable to the North Island works have beon advisod by the secretary of the North Island Beef Canners' Equalization Pool. This class of beef is to bo boned out for canning during tho current season. Ribs and loins are not to bo saved for the United States Joint Purchasing Board,

15

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F. 0.8. Price': Pence Veal (weight range 75/180) — per Pound, N.Z. Currency. Prime Quality .. .. .. .. .. .. .. 4-5 Second Quality .. .. .. . . .. .. .. 3■ 5 Edible Offals — BeefKidneys .. .. .. .. .. .. .. .. .. 9| Livers (bags or boxes) .. .. .. .. .. .. .. 6^f Tails (min. If- lb.) .. .. .. .. .. .. .. .. S-fo Hearts (sound), bags .. .. .. .. .. . . 4 Cut hearts (bags) ..' .. .. .. .. .. . . 3JCheeks .. .. .. .. .. .. .. .. 3| Throatbreads .. .. .. .. .. .. .. .. 5 Tliick skirts .. .. .. . . .. .. .. .. gj. Thin skirts .. .. .. .. .. .. .. .. 3§ al Tri P° - IS bheep— Hearts (sound) .. .. .. .. .. .. .. sj Cut hearts .. .. .. .. .. .. .. 4f Kidneys (special) .. .. .. .. .. .. .. .. 13f Kidneys (small) .. .. .. .. .. .. .. 13 Livers (pails or rubber bags) . . . . .. .. .. SiLivers (bags or boxes) .. . . .. .. .. .. .. 7-& Livers (cartons) .. .. .. .. .. . . .. .. 8\ Lamb— Throatbreads .. .. .. .. .. .. .. 9-J. Livers (pails or rubber bags) .. .. .. .. .. .. !) jjr Livers (bags or boxes) .. .. .. .. .. .. .. 8 J Livers (cartons) .. .. .. .. .. .. .. .. !| Hearts (sound) .. .. .. .. .. .. .. .. 4X Cut hearts .. .. .. .. .. .. .. .. .. 3§ Pork—■ Hearts (sound) .. .. .. .. .. .. .. .. 4| Cut hearts .. .. .. .. .. .. .. .. 4 Kidneys .. .. .. .. .. .. .. . . . . 7jsr Livers (pails or rubber bags) .. .. .. .. . . .. 7-}J-Livers (bags or boxes) .. .. .. .. .. .. 0J Livers (cartons) .. .. .. .. .. .. .. . . 7f ff Veal—■ Hearts (sound) .. .. .. .. .. .. .. ~ 3$ Cut hearts .. .. .. .. .. .. .. .. .. 3 -jj Livers (bags or boxes) .. .. .. .. .. .. . . 7| Kidneys .. .. .. .. .. .. .. .. .. B^Throatbreads .. .. .. .. .. .. .. . . Q Lobby Veal— Livers (pails or rubber bags) .. .. .. .. .. 11 1 Livers (cartons) .. .. .. .. .. .. .. 11 Hearts (sound) .. .. .. .. .. .. .. .. 4-jfc Cut hearts .. .. .. .. .. .. .. . . .. 3-Jfj-Kidneys u Throatbreads .. .. .. .. .. . . .. .. 6 The following prices are payable for certain edible offals when specially packed for delivery to the United States Joint Purchasing Board and conforming to the United States Joint Purchasing Board specifications :— ■ Pence per Pound. Beef livers (packed in wooden boxes) .. .. .. .. .. .. .. . . 7 Sound trimmed beof hearts— Packed in wooden boxes .. .. . . .. .. .. .. .. .. 5J Packed in cartons .. .. .. .. .. .. .. .. .. Cut trimmed beef hearts— Packed in wooden boxes .. .. .. .. .. .. .. .. .. 5 Packed in cartons .. .. .. .. .. .. .. .. .. 4|Lamb livers — Pails in wooden boxes .. .. .. .. .. .. .. .. 10 Cartons in wooden boxes .. .. .. .. .. .. .. .. 9}jj. Veal livors (packed in wooden boxes) .. .. .. . . .. .. .. .. 8j MEAT POOL ACCOUNT The accounts presented with the report for the 1942-43 season showed the transactions in the Meat Pool Account to 31st July, 1943. At that date there was a surplus in the account of £1,883,547. On page 31 of this report will be found the financial results of the.Meat Pool Account to 31st July, 1944, the surplus at that date being £3,571,105. The constitution of the Meat Pool Account has been fully described in previous annual reports. The substantial surpluses which have resulted from each of the three seasons since the Meat Pool Account was established (at the commencement of the 1941-42 season) have been mainly due to the fact that the anticipated loss in eanning ewe mutton has not eventuated. In addition, the credits to the account from increases in prices received from, the United Kingdom Government have been considerably augmented by increases in the prices of tallow and slipe wool. As in the two previous years, the Meat Pool Account has been debited with a proportion of the capital liability on emergency cool stores and cannery plant and buildings. It is expected that at the end of the emergency period these plants and buildings will have some residual value which will be credited to the Meat Pool Account. Following discussions with the Meat-producers' Board in regard to meat schedule prices for the 1944-45 season, the Government informed the Board that all accretions to the Meat Pool Account would continue as in the past, and 110 charges other than those already operative would be made against it, except in agreement with the Meat Board. It was intimated that this arrangement would have to be subject to review in the event of the resources of the Meat Industry Stabilization Account (see page 15) being insufficient to meet charges against the account. The full text of the letter from the Right Hon. the Prime Minister to the Meat .Board on this subject is quoted 011 pages 14 and 15.

16

H.—3o

MEAT INDUSTRY STABILIZATION ACCOUNT In accordance with the stabilization agreement between the Government and the representatives of the farming industries, referred to on pages 5 and 6 of the annual report for the previous year ended 31st July, 1943, the Meat Industry Stabilization Account has been established (see page 32). The credits to this account are the proceeds of increases in sale prices of meat, edible offals, and tallow, received after 15th December, 1942. The debits 'to the account will be the costs of stabilization in terms of the stabilization agreement' and the cost of the increases in Marketing Department purchaseprices for meat which apply for the 1944-45 season. SURVEY OF SEASON The killings of export-quality meat (luring the season totalled 306,323 tons net, representing a decline of 2-9 per cent, on the previous year. Dry weather conditions in most districts during the early part of the season retarded the fattening of stock and prevented the full realization of the objective of increasing average weights. General rain from March onwards resulted in good autumn growth of pastures, and in some recovery in the numbers of sheep and lambs slaughtered. Mainly for this reason the season has been more prolonged than is usual, killings of sheep and lambs continuing into July. The principal reductions in killings this season have been in lambs and run cattle. The decline in lamb killings amounts to approximately 436,710 carcasses, and in beef killings for export to 32,483 sides, the latter representing the substantial reduction of 11 -58 per cent, on last year. The entire exportable kill of ewes was again purchased by the Marketing Department on a carcassweight basis, and in view of the improvement in the shipping situation and the United Kingdom's need for more meat, no ewes were boned out for canning and all ewes were shipped in frozen telescoped form, except in the case of owes over 72 lb., which were boned for export in accordance with the wishes of the Ministry of Food. As already mentioned, the Meat Pool Account has benefited by the increased return for ewes exported in frozen form compared with their alternative use for canning. Last season's arrangement in regard to the purchase of boner cows was continued this season, but the schedule price was increased from 20s. to 225. per 100 lb. as from the 29th March, 1944. This increase resulted from the decision to supply the United States Joint Purchasing Board with rumps and loins from all boner cows. This cut is more valuable than the over-all value of the carcass, and there is an established value for it on the local market. The balance of the boner-cow carcasses after taking out the rump and loin cut for the United States Joint Purchasing Board has been disposed of to the canners on the same terms and conditions as last year. All bull-beef killings during the season under review have been purchased outright by the Marketing Department at a price which enabled a payment to producers of 20s. per 100 lb. The whole of the boneless bull beef produced was reserved for dehydration. (See reference to dehydration on pages 18 and 19 of this report.) The Government subsidy of 2s. per head on .passed " bobby calves " was continued during the 1943-44 season. As mentioned in the last annual report, the improved shipping position has enabled bobby-calf meat to he saved for export since July, 1942. During the season under erview, instead of shipping bobby veal in frozen form, it has been saved for dehydration. The effect of this, financially, is the same as if the bobby veal had been shipped, as the formula for the dehydrated-meat contract provides for payment by the United Kingdom Government of frozen-schedule prices for meat used for dehydration. The proceeds of the sale of this bobby-calf meat are used in the first instance to recover the cost of the Government subsidy of 2s. per head and the processing and freezing charges attendant upon the packing of this meat for export. By agreement between the Hon. the Minister of Marketing and the New Zealand Bobby Calf Pools Executive, out of the balance remaining in the Bobby Calf Pool Account a bonus of 2s. 9d. per head was paid to producers on all passed calves slaughtered during the twelve months ended 31st May, 1944, which is the end of the bobby-calf season. The subsidy on bobby calves was introduced at a time when the shipment of bobby veal was prohibited, and the carcasses were digested. The particular purpose of the subsidy was to ensure that calves would be sent in to freezingworks to enable the veils to be secured for the making of rennet for the cheese industry. As the boned meat was later saved for both dehydration and export, it was decided, with the approval of the Hon. the Minister of Stabilization, to revert to payment on an f.o.b. basis for the current season and to discontinue the subsidy. From the Ist June, 1944, therefore, the Marketing Department has purchased boneless bobby veal on the same conditions as apply to other classes of meat, at the rate of 4Jd. per pound f.o.b. It is estimated that the average payment for the meat on the above basis will approximate the stabilized level of 4s. 9(1. per passed calf. The balance standing to the credit of the Bobby Calf Pool Account at 31st July is shown on page 32 of this report to be £145,297. During the season, shipping and storage space has again been conserved to the maximum extent by telescoping, de-boning, trimming, and packaging of export meat in accordance with established wartime standards. All ox, heifer, and G.A.Q. cow beef has been prepared in accordance with American specifications. The associated freezing companies have continued during the year to give practical advice and co-operation, which is much appreciated by the Department. SHIPPING The season opened with empty cool stores, duo to the excellent shipping clearances experienced towards the end of the previous season. This circumstance was fortunate, because liftings from January to May were very small. By the end of May, freezing-works' stores were taxed to capacity and once again the value of the emergency cool storage built at the beginning of the war was demonstrated. Deliveries to the United States Joint Purchasing Board of substantial quantities of frozen meat assisted the storage position during this critical period. The Department wishes to record its appreciation of the co-operation extended by the United States Joint Purchasing Board's officers at all times, and particularly during the period mentioned. The Department's thanks are also extended to the Overseas Shipowners' Allotment Committee for their continued assistance in arranging loadings from pressure points. The New Zealand Railways has also been most helpful in their skilful organization of rail transport arrangements.

3— H. 30.

17

H. —30

CANNED MEAT Resulting from the decision to ship all ewes in frozen form this season, canning has been confined to the boner cow and boner ox classes apart from the usual canning of all tongues: The canned-meat requirements of the United States Joint Purchasing Board for 1944 were considerably greater than for the preceding year and exceeded the quantity of meat available for this purpose. It therefore became necessary to organize the production of canned hash and meat and vegetable rations. Both these products contain a proportion of vegetables and are therefore more economical of meat than the straight packs. Hash has not previously been packed in New Zealand, and it is satisfactory to record that the product put up by the canneries has been passed by the United States authorities as fully up to standard. Resulting from this position, very little canned meat has this year been shipped to the United Kingdom Ministry of Pood. Estimated supplies of canned meats to the United States Joint Purchasing Board for the twelve months ending 30th September, 1944, are as follows : — Tons. Corned beef .. .. .. .. .. ..3,254 Corned luncheon meat .. .. . . .. 1,587 Corned hash .. .. .. .. .. .. 3,753 Meat and vegetable rations .. .. .. .. 3,398 Roast beef . . .. .. .. .. .. 86 Tongues .. .. .. .. .. .. .. 240 Sausage .. .. .. .. .. .. .. 51 12,369 The following classes of canned tongues not required by the United States Joint Purchasing Board are being packed during the same period for shipment on account of the United Kingdom Ministry of Pood : — Tons. Sheep and lamb tongues .. .. .. .. .. 541 Bobby-calf tongues .. .. .. • .. .. 91 Pig tongues .. .. .. .. .. .. 45 677 The full range of prices payable by the Marketing Department for canned-meat purchases during the 194-3-44 season is as follows : — Per Dozen f.o.b. Per Dozen, f.o.b. Description (N.Z. Currency.) Description (N.Z. Currency.) £ s. d. £ s. d. Corned beef — Luncheon meat —• 6's— 6's (12 per case) .. .. 214 0 First quality (12 per case) . . 3 3 3| Mutton hash— Second quality (12 per case) ..3 0 2 6's (12 per ease) .. 212 2 (8 per case) .. 3 5 11| sf's (12 per case) .. .. 210 0 sf'S (12 per case) .. ..31 10| 2j's (24 per case) . . ..104 (8 per case) .. .. 3 4 6| 2's (24 per case) .. .. 017 5 12 oz. (soldered) .. 010 6| Chili con carne— 12 oz. (sanitary) .. . . 010 4 2's (24 per ease) .. ..156 Roast beef — Canned sausages— s|'s (8 per case).. .. .. 3 8 6| 2's (24 per case) .. ..14 10| Beef hash - Pork and beef mince— 6's (12 per case) .. ~ 218 1 2's (24- per case) .. ..170 (8 per case) .. ..3 0 9 Ox tongues — s§'s (12 per case) . . .. 217 1 6's (12 per case) .. .. 10 5 0 (8 per case) .. .. 219 9 (6 per case) .. .. 10 7 8 s|'s (8 per case) .. ..3 0 3 Sheep and lamb tongues — 2J's (24 per case) .. ..134 I's (48 per case) .. ..109 Meat and vegetable ration — 12 0z.(48 per case) .. .. 016 8 sf's (6 per case) .. .. 213 7 Pig tongues— s|'s (8 per case) .. .. 214 0 6's (12 per case) .. ..717 2|'s (24 per case) .. .. 019 9 Calf tongues— 2's (24 per case) .. .. 019 4 l's (48 per case) .. ..153 l's (48 per case) .. ..099 DEHYDRATED-MEAT CONTRACT WITH UNITED KINGDOM MINISTRY OF FOOD As recorded in the last annual report, the dehydration plant erected at the request of the United Kingdom Ministry of Food, which came into operation in March, 1943, was intended to supply about 5,000 tons of dehydrated meat per annum when working to full capacity. The contract with the United Kingdom Government provided for the supply of 2,500 tons of dehydrated meat during the calendar year 1943. The requirement for the calendar year 1944 was also fixed at 2,500 tons. The contract arrangements provided that the prices to be paid by the Ministry are to be based on the frozen-schedule prices for export meat, plus costs of processing, and a contribution towards the capital cost of the plant at the rate of 20 per cent, per annum spread over the period of the contract — viz., three years. It has been agreed that if at any time before the expiration of the three years New Zealand is asked to cease production, the United Kingdom will make up its capital contribution to what would have accrued under the three-year contract —viz., 60 per cent. This contribution is, however, not necessarily limited to 60 per cent., since the Ministry would continue to contribute a further 20 per cent, in the event of a contract having to be made for 1946.

18

H.—3o

A feature of this season's production of dehydrated meat has been the marked improvement in the product as the result of extensive research and improvements in technique. The meat is now being packed in 6 lb. cans, for which a special canning plant had to be built and installed. Fat is added to the' requisite content of 40 per cent, and the meat juices are returned to the product. The meat at present being treated is bull beef and bobby veal mixed in equal proportions, with the addition of bestquality edible beef tallow. « After the end of the period covered by this report, but before its publication, a cablegram was received from the United Kingdom Government requesting that New Zealand should cease production of dehydrated meat, as the outlet was now confined to Service requirements, which were covered for 1945 by stocks in sight. Consequently, production stopped on 30th September, 1944, and boneless bull beef and bobby-veal toere released for shipment in frozen form. PIG INDUSTRY The Pig Marketing Emergency Regulations, which were gazetted on the Ist April, 1943, have continued in force during 1944. These regulations fix maximum prices at which pigs may be purchased by operators for slaughter, and prescribe the scale of basic values of frozen pig-meats acquired by the Department. Pursuant to these regulations, the Marketing Department has acquired all frozen pigmeats, the object being to ensure that the available supplies of such pig-meats were distributed in an equitable manner amongst the trade, having regard to the requirements of the Armed Forces and of the civilian trade. The prohibition on the consumption of pork in New Zealand has continued, and the Marketing Department has been the sole buyer of pork since the 20th May, 1943. During the year under review, increases in prices payable to producers of pig-meats have been authorized by the Government and paid by the Marketing Department for the frozen pig-meats acquired by it. The main increases have been as follows : — From Ist October, 1943 : An increase in the price of porker pigs from a top price of 6|d. per pound, "heads off" to 6|d. per pound "heads on." This adjustment was equal to approximately a 10 per cent, increase in producers' returns for this class of meat. From 20th January, 1944: Increases in the prices for heavy-weight baconers, together with an extension of the upper weight limit for heavy-weight baconers from 170 lb. to 200 lb. From Ist May, 1944 : An all-round increase of |d. per pound in the prices payable to producers for all classes of porker and baconer pigs. From Ist .June, 1944 : The seasonal increases for the winter and spring period on the scale established last year, plus the all-round increase of fd. per pound referred to in the preceding paragraph. The Pig-meats Advisory Committee, comprising representatives of the producers, operators, and bacon-curers, has continued to function, and has done excellent work in advising the Government on matters connected with pig-meat supplies and allocations to meet the requirements of the Armed Forces and the civilian trade. The Pig-marketing Emergency Regulations already referred to apply in. the North Island only. In the South Island the. Marketing Department has continued to buy frozen pig-meats from freezing companies for supply to the Armed Forces at prices established by the " on hooks " prices payable to producers in May of 1943. These prices were increased by |d. per pound from the Ist May, 1944, as in the case of the North Island. Note. The Hon. the Minister of Marketing announced on 31st October, 1944, that an increase of |(I. per pound above the summer schedule for porkers and baconers, as sot out in Gazette Notice No. 42, dated 25th May, 1944, would apply for the period 20th November, 1944, to 31st May, 1945, with corresponding adjustments in the winter schedules. This increase also applies to the South Island prices as from 20th November, 1944.

DISPOSAL OF 1943-44 SEASON'S KILL The following statement shows the production and disposal of each class of frozen meat killed for export during the 1943-44 season : —

19

Disposal. auction. lt , Shipments ( ; d „ „ to United N>t . Dehvdra- states e Local Kingdom ™ . . Wright Canning - tio p j01 f Z f land Market. and Total " Weight. Purchas- Army. M;ddle mg Board. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Lambs .. 157,946 .. 7,896 35 12 150,003 157,946 Wethers !' ..15,850 .. .. 1,804 52 21 13,973 15,850 Ewes .. •• 46; 202 99 46,103 46,202 Quarter beef .. .. 28,374 .. .. 25,912 700 .. 1,762 28,374 Boneless — , „ Cow and ox.. .. 19,230 17,048 .. 2,182 19,230 Bull .. .. 3,540 .. 1,548 1,992 3,540 Veal 6 805 .. 650 .. .. 202 5,953 6,805 Veal sides " 975 .. .. 975 975 Baconers . ..10,143 .. .. 3,478 535 3,630 .2,500 10,143 Porkers .. .. 7,084 .. .. 6,969 50 50 15 7,084 Choppers .. •• 684 .. 238 446 684 Offal 9,490 .. .. 2,581 .. 248 6,661 9,490 1 £ —— Total .. 306,323 17,048 "2,198 52,035 1,372 4,708 228,962 306,323

H.—3o

EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO MEAT The following information is supplied by tlie Food and Rationing Controller: " Meat. —Regulations providing for the rationing of meat were introduced on 6th March. 1944. The consumption of meat (beef, mutton, lamb, and veal) in the forty-two abattoir districts of the Dominion during the six months April (the first complete month of rationing) to September, 1944, has been estimated at about 47,000 tons. " During the quarter ended 30th June, 1944, the reduction in killings at rural slaughterhouses was about 9 per cent. " At the present rate of consumption, the annual saving is estimated at about 20,000 tons." SUPPLIES OF MEAT TO THE UNITED STATES ARMED FORCES During the year under review there has been a marked increase in the quantities of frozen and canned meats supplied to the United States Armed Forces. The approval of the United Kingdom Ministry of Food was again sought and obtained for' release of the quantities and kinds of meat required by the United States authorities. The Meat Pool Account continues to receive a credit for the value of the goods supplied to the United States Joint Purchasing Board for shipment overseas as if these goods had been shipped to the United Kingdom. Owing to the reduced killings of cattle it has not been possible this season fully to supply the total requirements of the United States Joint Purchasing Board for this class of meat. Deficiencies have been made up by the diversion from canning of selected cuts and bodies from boner cows. This season all ox, heifer, and G.A.Q. cow beef has been processed in accordance with American specifications, which result in an increased yield from the carcass weights treated of approximately 5 per cent, and without a corresponding sacrifice in stowage capacity, besides giving the American Forces the product in the form desired by them. The Admiralty pack of moulded carton packaged beef has continued in favour with the United Kingdom Ministry of Food and the United States authorities, and regular deliveries have continued to be made during the season. During the year many discussions have again taken place with officers' of the Joint Purchasing Board relative to the availability of particular classes of meat desired by the Board and to the technique of processing, packaging, and delivery in accordance with requirements. The relations between the Department and the executive officers of the Board are entirely satisfactory, and difficulties arising have been met in a spirit of mutual co-operation and understanding. ACCOUNTS The meat accounts shown in the accounts section, pages 31 and 32, comprise (ft) Final Purchase and Sale Account of 1942-43 season's killings, showing transfers of £729,524 to the Meat Pool Account and £106,139 to the Meat Industry Stabilization Account. The circumstances of the establishment of the Meat Industry Stabilization Account are referred to in a note at the foot of the accounts (see page 32 of this report). (b) Purchase and Sale Account of 1943-44 season's killings up to 31st July, 1944, showing transfers of £842,091 to the Meat Pool Account and £640,188 to the Meat Industry Stabilization Account. (c) Administration and General Expenses Account. (d) Meat Pool Account to 31st July, 1944, showing a surplus at that date of £3,571,105. (e) Bobby Calf Pool Account to 31st July, 1944, showing a surplus at that date of £145,297 after transfer of £21,926 to the Bobby Calf Stabilization Account. (/) Meat Industry Stabilization Account showing a surplus of £746,327 at the 31st July, 1944. (g) Meat Account, which shows a credit balance at 31st July, 1944, of £38,918. WOOL BULK PURCHASE OF WOOL BY THE UNITED KINGDOM GOVERNMENT The annual report of the Department for the 1939-40 season gives details of the bulk-purchase arrangements between the United Kingdom and the New Zealand Governments for greasy and slipe wool, and of the agreements between the New Zealand Government and the wool-brokers, wool-buyers, and wool-scourers covering services to be performed by them respectively in the preparation of wool for appraisal, the appraisement of woo], and the scouring of wool selected for that purpose. During the year under review the question arose as to the duration of the contract of purchase of wool by the United Kingdom Government. The substance of the agreement (see publication, Marketing Department, H. 30b, 1.940) was a purchase " during the war in which His Majesty is now (1940) engaged " and for one wool-clip thereafter. Following discussion, the United Kingdom Government agreed that the contract of purchase should relate to the " global war " a-nd one wool-clip thereafter. Ihe New Zealand Government is appreciative oi the action ol the United Kingdom Government in so determining the spirit of the contract arrangements. The purchase-prices of greasy and slipe wool for the 1943-44 season remained unchanged at the 1942-43 season levels, as follows :— Greasy Wool, per Pound. d. Ex-store overall average price (New Zealand currency) .. .. .. 14-0875 Slipo Wool, per Pound. d. F.o.b. overall average price (New Zealand currency) .. .. .. 19 • 523 Notu.- In addition to the prices quoted above, the United Kingdom Government pays on greasy wool 0-872 d. per pound, being brokers' charges 0-625 d., transport and other charges to f.o.b. 0-125 d., and Marketing Department costs, including appraisal, 0-122 d. On slipe wool the additional amount payable is 0125 d. per pound, being Marketing Department costs, including appraisal. The standard of appraisement has been well maintained, and the wool authorities in the United Kingdom have expressed their satisfaction with the results.

20

H.—3o

METHOD OF PAYMENT FOR GREASY AND SLIPE WOOL SOLD TO THE UNITED KINGDOM GOVERNMENT Payment for greasy and slipe wool is made by the United Kingdom Government on the following basis :— (1) On appraisal, payment is made at appraisal prices plus the allowances for handling, &c., referred to above- viz., greasy wool 0-872 d. per pound, and slipe wool 0-125 d. per pound. (2) At the end of the wool year the Marketing Department ascertains — (a) The value of the total wool-clip (wool exported and used locally) at the purchase-prices quoted above ; (b) The difference between that value and the appraisal value ; and (c) The percentage which that difference represents of the appraisal value. The United Kingdom Government then makes an additional payment of the sum which results from the application of the percentage figure referred to in (c) above to the appraisal value of the wool which it has purchased. PURCHASE OF 1943-44 SEASON'S GREASY AND SLIPE WOOL BY NEW ZEALAND GOVERNMENT The following decisions were announced covering purchase by the New Zealand Government from producers of the 1943-44 season's greasy and slipe wool (1) Local manufacturers of woollen goods to be supplied with their requirements of greasy and slipe wool at the 1941-42 season's level of prices. (2) Owners of greasy wool to receive 5 per cent, of the appraisal values of their wool in Government bonds or stock, and the balance of the proceeds of sale in cash. (Note.-— Owners of greasy wool to a total appraisal value of less than £200 are paid in full in cash.) (3) Owners of slipe wool to receive payment on the basis of the 1941—42 season level of prices plus 10 per cent., the balance of the increase in price granted by the United Kingdom Government —viz., £142,758- to be transferred to the Meat Industry Account to the credit of the Meat Pool Account (see page 16 of this report). The Marketing Department procedure in the carrying-out of the foregoing decisions was as follows - (a) Local manufacturers were supplied with wool during the 1943-44 season on the basis mentioned above, and they paid the standard handling charges in addition to the price for wool. The overall average price of the wool supplied to local manufacturers was 13-0136 d. per pound for greasy wool and 13-515 d. per pound for slipe wool. (b) Payment to owners of greasy wool was made as to 90 per cent, of the appraisal values on appraisal. At the end of the wool year 5 per cent, of the appraisal values was paid in Government bonds or stock ; the balance of the purchase-price was distributed in cash as a percentage (8-39659) on the appraisal values.- The effect of the purchase basis outlined is that woolgrowers received (in cash and bonds) for their total 1943-44 season's greasy wool the overall average price of 13-967(1. per pound, which represents an increase of 14-008 per cent, on the overall average price for their total clip for the 1941 42 season. The total amount paid to owners of greasy wool for the 1943 44 season was £15,809,184, which was paid in cash £15,150,337, and in Government bonds and stock £658,847. (c) Payment to owners of slipe wool was made as to 95-6522 per cent, of the appraisal values on appraisal ; at the end of the wool year a further payment was made of 0-858659 per cent, on the amounts already paid to owners. This further payment brought the overall average purchase-price up to 18-6742 d. per pound, being the 1941-42 season overall average purchase-price (16-9766 d.) plus 10 per cent. The total amount paid to owners of slipe wool for the 1943-44 season was £3,457,461. Note. —The purchase and payment arrangements outlined above are covered by the Purchase of Wool Emergency Regulations 1939, with Amendments Nos. 1 to 4. Payment for greasy wool is made to wool-brokers on behalf of wool-growers, and for slipe wool to freezing companies and exporters. For both greasy and slipe wool payment is made fourteen days after date of appraisal. Appraisal values are calculated after allowance for actual tare.

APPRAISAL PROCEDURE The procedure for appraisal of wool outlined in the report for the year ended 31st July, 1941, was followed during the 1913-44 season. The following tables show the quantities and values of wool appraised during the years ended 30th June, 1913 and 1944 :

Greasy Wool

21

Purchased for Sale to United Kingdom Ministry of Supply. . _ „ _ , .. Purchased for Sale to r| , , . . . . —— Local MilIs _ Total Appraisals. Year ended. Shipment in the Grease. For Scouring. l - 1 Bales. Net Pounds. Bales. Net Pounds. Bales. Net Pounds. Bales. Net Pounds, j Value. £ s. d. 30th June, 1944 585,679 196,590,130 157,913 58,419,834 51,426 16,651,367 795,018 271,661,331 15,809,183 11 3 30th Juno, 1943 582,10-' 199,739,970 191,854 70,270,009 56,835 18,682,659 833,791 288,692,638 10,804,827 12 4

H.— 30

Slipe Wool

SCOURING AND CARBONIZING OF WOOL For the year ended 30th June, 1944, 155,259 bales of wool (approximately 57,499,265 Ib.) were allocated for scouring for United Kingdom and Russia. The terms and conditions of the scouring contract remained the same as for the 1941-42 season. The quantity of wool allotted for carbonizing up to 30.h June, 1944 (1943-44 season), was 2,281 bales (812,667 lb.). shipping Arrangements and destination of wool exports The United Kingdom Wool Control released quantities of wool for shipment to the United States of America, Canada, India, Australia, and Russia.

The following tabulation shows the quantities of wool shipped during the year ended 30th June, 1944, and the destination ; —

The quantity of wool held in New Zealand at 30th June, 1944 (659,048 bales), represents the largest accumulation since the inception of the bulk purchase by the United Kingdom Government. The quantity held at 30th June, 1943, was 583,850 bales, but a favourable shipping programme between July and December, 1943, effected a highly satisfactory clearance of this accumulation prior to the commencement of the 1943-44 appraisements. Unfortunately there is no indication of a similar shipping programme this year, and the matter of making provision for storage of present accumulated stocks to enable appraisement of the 1944-45 season clip to proceed has been the subject of numerous conferences, arising out of which arrangements have been completed making available sufficient space to ensure the 1944-45 appraisement requirements. ACCOUNTS The wool accounts are shown in the accounts section at the end of this report, page 32. The accounts cover appraisals of wool up to the close of the wool year (30th June, 1944) and they comprise. Purchase and Sale Account, and Charges, Expenses, and Administration Account. It will be observed from the accounts that the purchase and sale transactions for the year ended 30th June, 1944, show a surplus of £83,363 after allowance has been made for expenses and charges and for the agreed contribution by the United Kingdom Wool Control for abnormal storage and insurance on wool whilst awaiting shipment from New Zealand. The Wool Account shows the transfer to War Expenses Account of £86,006. This sum represents the balance of the allowance made by the United Kingdom Wool Control for the 1942-43 season to the Marketing Department to cover expenses and charges. WOOLLY SHEEP-SKINS The terms of sale to the United Kingdom Ministry of Supply of the exportable surplus of woolly sheep-skins remained as stated in the Department's annual report for the 1941-42 season. The period of the agreement extends to and terminates on the date of termination of the Wool Purchase Agreement— namely, the period of the " global " war and the following season's clip. REPORT OF CONTROLLER " The Hon. the Minister of Marketing. " I beg to report to you on the operations of the Sheep-skin Control for the twelve months ended 30th June, 1944. " Accounts. —A deficit of £8,862 13s. Id. was shown for the year. Less the balance forward of £4,613 14s. 9d., this gave a net deficit of £4,248 18s. 4d. to be transferred to the Reserve Account.

22

U 'tf 18 *° Total Appraisals. year ended. ° f Bales. Net Pounds. Bales. Net Pounds. Bales. Net Pounds; Value. £ s. ci. 30th June, 1944 .. 135,412 44,387,242 148 47,8.54 13(5,560 44,435,096 3,614,214 7 5 30th June, 1943 .. 115,738 38,232,570 217 70,312 115,955 38,302,882 3,115,103 16 7

Destination. Greasy. Scoured. Slipe. Total. Bales. Bales. Bales. Bales. United Kingdom .. .. 422,406 102,853 97,235 622,494 Canada .. .. .. 51,150 21,561 10,541 83,252 U.S.A. .. .. .. 43,899 964 12,415 57,278 Australia .. .. .. 1,790 .. .. 1,790 India .. .. .. 8,618 4,182 .. 12,800 Total, 1943-44 .. 527,863 129,560 120,191 777,614 Total, 1942-43 418,036 97,790 91,139 606,965 Bales. Quantity unshipped or hold for scouring and carbonizing at 30th June, 1944 .. 659,048 Quantity unshipped or held for scouring and carbonizing at 30th June, 1943 . . 583,850 I

H.— 30

" The Reserve Account is derived from the 5-per-cent. retention moneys on the wool content of sheep-skins and, with the concurrence of the New Zealand Meat-producers' Board, on slipe wool derived from skins purchased by the Control. The Reserve Account is nccessary to meet deficits brought about by the maintenance of the Control's buying schedule at the level ruling in 1942 (see annual report, 1943, page 22). " Statistics. —The total skins purchased by the Control during the year were 2,422,520. Of these 1,160,502 went into exports stocks and 1,262,018 went in fellmongered stocks.

" The following table shows the quantities and value of woolly sheep-skins exported, to various destinations on behalf of the- United Kingdom Wool Control for the twelve months ended 31st July, 1944

" The actual number of skins fellmongered was 1,219,469. Of these, 569,568 were abattoir skins fellmongered green. " The slipe wool sold by the Control totalled 4,174,576 lb., and the pickled pelts 97,403 dozens. " The administration expenses show a reduction of £1,341 13s. 5d., from £15,150 10s. for 1943 to £13,808 16s. 7d. for 1944. These expenses are 0-1981 d. per pound of skins handled. This, with the cost of grading and packing and other f.o.b. charges, makes a cost of l'olo6d. for putting export skins to f.o.b. This is still less than what it was costing leading exporters at the outbreak of war. " I am pleased to advise that the Control pickled pelts worked from green skins compare favourably with corresponding pelts worked at freezing-works' follmongeries. " R. C. Burgess, Controller." ACCOUNTS The accounts for the Sheep-skin Control for the year ended 30th June, 1944, are shown in the accounts section at the end of this report, page 34. TALLOW PURCHASES BY UNITED KINGDOM GOVERNMENT OF 1943-44 SEASON'S TALLOW The 1943--44 season production of tallow for export was purchased by the United Kingdom Ministry of Food on the terms and conditions which applied for the previous season—namely, at a range of c. and f. sterling prices which averaged approximately £8 10s. sterling per ton in excess of the 1940-41 season's prices. The total quantity exported was 35,354 tons, representing 21,375 tons shipped to United Kingdom, 7,831 tons shipped to Canada, 5,542 tons shipped to the United States of America, 455 tons shipped on permit to India, and 151 tons shipped on permit to Fiji. PURCHASES BY NEW ZEALAND GOVERNMENT OF 1943-44 SEASON'S TALLOW FROM NEW ZEALAND MANUFACTURERS The f.o.b. (New Zealand currency) purchase-prices payable to manufacturers remained as set out in the schedule attached to the Purchase of Tallow Order 1940. The surplus, or difference between the United Kingdom purchase-prices and the prices paid by the New Zealand Government, is approximately £8 (New Zealand currency) per ton.

STATISTICS The following table shows the quantities of tallow purchased and shipped from Ist August 1943 to 31st July, 1944 :

23

n +■ +■ Number of Number of M , TO . ,, , T ue . , Destination. Dumps. Skins. Net Weight. (New Zealand 1 | Currency). lb. £ s. d. Canada, .. .. .. 2,923 202,565 1,862,806 85,092 19 I U.S.A. .. .. .. 4,558 340,576 2,644,573 119,684 6 4 United Kingdom .. .. 2,370 .148,972 1,366,853 73,700 11 9 9,851 692,113 5,874,232 278,477 17 2

—*— UnitedKingdom. U.S.A. Canada. Tons (Net). Tons (Not). Tons (Not). First- beef .. . . .. 58 First mutton .. .. .. 5,538 1,013 1,306 Good bright prime, mixed . . . . 1,407 263 791 Good colour, mixed .. .. 4,713 1,672 1,406 Fair to good, mixed .. .. 1,280 567 547 Fair colour, mixed .. .. 626 13] 405 Good gut .. .. .. 3,913 1,175 1,370 Medium gut .. .. .. 1,265 421 1,664 Low and no-colour gut .. .. 609 284 342 Stearine, superior . . . . 822 Pig fat, inedible, steam rendered .. 286 Hog grease . . . . .. 183 Hide grease .. .. .. 17 Edible, mixed . . .. .. 658 16 21,375 5,542 7,831

H.— 30

Permits were granted to shippers to overseas countries from Ist August, 1943, to 31st. .Tuly, 1944, as follows :— India. Fiji. Tons (Net). Tons (Net). First mutton .. .. .. .. .. 455 Good colour, mixed .. .. .. .. .. 151 455 151 Note.—-Practically all edible beef tallow has been required for manufacturers in. New Zealand, in addition to considerable quantities of edible mutton tallow. Purchases by United Kingdom, Government of 1944-45 Season's Tallow—A contract was completed between the United Kingdom and the New Zealand Governments, before the publication of this report, for the purchase by the United Kingdom Ministry of Pood of the exportable surplus of the 1914-45 season's tallow. For convenience of reference the letter from the Ministry of Food which constitutes this contract is quoted, as follows : —

We have this day bought of you the exportable surplus of the 1944-45 season production of New Zealand tallow consisting of the following grades and at the prices set against each classification :

Quantity.—3s,ooo tons (estimated). Shipment.—To United Kingdom and/or United States of America and/or Canada at discretion of Ministry. Quality.- -A fair average of the brand and grade as per schedule already agreed. Payment.—By net cash against documents in London on arrival of steamer, or on reported loss of same, or seventy days after the date of the bill of lading, whichever is the earlier. Buyers agree that sellers may raise the question of payment and storage in the event of any undue delay in shipping occurring. Basis of Freight.—l2ss. (id. per ton, plus 15 per cent, sterling. Any variation for buyers' account. Insurance. —Marine and war risk covered by buyers. Safeguard. —In the event of shipment becoming impossible, the contract shall bo suspended until the cause(s) preventing shipment cease to operate. All other conditions as per London Oil and Tallow Trades' Association Contract No. 14, as amended for the firstterm contract. These prices represent an increase of £7 17s. 6d. per ton sterling for all grades over the United Kingdom purchase-prices which applied for the 1943-44 season's purchase. The surplus or difference between these United Kingdom sterling c. and f. purchase-prices and the f.o.b. (New Zealand currency) prices at present paid to manufacturers by the Marketing Department is approximately £17 15s. (New Zealand currency) per ton. ACCOUNTS The tallow accounts are shown in the accounts section at the end of this report, page 33. They comprise Purchase and Sale Account, Revenue Account, and Tallow Account, and cover the purchase and sale of tallow for the year ended 31st July, 1944. After providing £8,839 for administration and handling expenses, the surplus of £297,392, which represents the difference between the purchaseprices and sale-prices, has been transferred to the credit of the Meat Pool Account (page 16). The credit balance of £6,705 in the Tallow Account represents the difference between the Department's administration and handling allowance and the actual charges incurred by the Marketing Department. HIDES The report for the 1939-40 season gave details of the action taken by the Government in regard to control of export of hides, stabilization of prices of hides for local requirements, and equalization of value of hides for local use and for export by a levy on exports to even up the difference between local " standard domestic values " fixed at Ist September, 1939, prices, plus 25 per cent., and export values. This procedure is embodied in the Hides Emergency Regulations 1940, and the administration of the regulations is entrusted to a Hides Committee, which operates under authority conferred on it by the Minister of Marketing. SALE OF HIDES TO AUSTRALIA In October, 1941, arrangements were made between the New Zealand and Australian Governments for sale to the Australian Hide Board for military manufacturing purposes of ox and cow hides of specified weights which were surplus to New Zealand requirements. This arrangement has been continued

24

Price Sterling per Ton C. Key Prario an(1 111 Casks/Drums Letter. with Premium of 5s. per Ton shipped in Barrels. £ s. d. A .. First beef . . . . . . . . .. .. .. . . 44 2 6 B .. Second beef .. ., .. .. .. .. . . .. 39 17 6 C .. First mutton .. .. .. .. .. .. .. .. 42 10 0 J) .. Second mutton .. .. .. .. . .. .. .. 39 17 0 E . . Good bright prime, mixed .. . . .. .. .. .. .. 40 10 0 F .. Good colour, mixed .. .. .. .. .. .. .. 40 2 6 G . . Fair to good colour, mixed . . . . . . . . . . . . .. 39 10 0 H . . Fair colour, mixed .. . . .. . . .. .. .. 38 12 6 I .. Good gut tallow .. .. .. .. .. .. .. .. 37 12 6 J .. Medium gut tallow . . . . .. .. . . . . .. 36 12 6 K .. Low to no-colour tallow .. .. .. .. .. .. .. 34 17 6 M . . Stearine, superior .. .. . . .. . . .. . . .. 44 12 6 N .. Stearine, medium .. . . .. .. .. .. .. .. 43 2 6 O and Q Hog grease/pig fat (basis 1 per cent. FFA) .. .. .. .. .. 43 17 6 P .. Lard,edible .. .. .. .. .. .. .. .. 56 17 6 R .. Hide greaseUnder 1 per cent. FFA .. .. .. .. .. .. .. 37 10 0 1 per cent, to 15 per cent. FFA .. .. .. .. • . .. 36 10 0 Over 15 per cent. FFA . . . . . . . . . . . . . . 35 7 6 S .. Edible, mixed .. .. „ L: 41 15 0

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daring the 1943-44 season, the grades of hides concerned being ox and cow hides, 40 lb. and up. The Marketing Department has purchased these hides on the terms set out in the report of the Hides Committee which follows, and sale is made to the Australian Hide Board at New Zealand standard domestic values. The number of hides shipped to Australia during the 1943-44 season was 85,543. The accounts covering the foregoing transactions are shown in the accounts section at the end of this report, page 33. It will be seen that the deficit for the 1943-44 season was £39,873. REPORT OF HIDES COMMITTEE ON OPERATIONS FOR YEAR ENDED 31st MARCH, 1944 The following report has been submitted to the Hon. the Minister of Marketing on behalf of the Hides Committee by the Chairman, Mr. A. P. O'Shea :— " I have pleasure in submitting the fourth annual report and statement of the Equalization Fund for the year ended 31st March, 1944. " The work of the Committee during the year has been carried on as in the past. " Export Levy.—There has been no change in the rate of levy during the year ended 31st March, 1944. " The current rates of levy are as follows :— " Ox-hides .. .. .. ~ One penny farthing (ljd.) per pound. " Cow-hides .. .. .. .. One penny farthing (1 Jd.) per pound. "Bull-hides ... .. .. .. One penny (Id.) per pound. " Yearlings .. .. .. .. One penny farthing (l|d.) per pound. " Calf-skins (other than freezers) .. Three pence (3d.) per pound. " The amount of levy payable is calculated on the weights invoiced to overseas buyers, and such weights are declared on the Customs export entries. " Sale of Hides to Australia. —The arrangement made between the Governments of New Zealand and Australia continued during the current twelve months. This meant that, as before, there was no overseas sale, and it was necessary to assess a price payable under export conditions. The sub-committee consisting of Messrs. J. Fraser (Chairman), W. V. Watson, J. P. Mackay, and G. A. Duncan, with the Secretary ex officio, continued to function and met monthly.

" The ruling price schedule for Ist April, 1943, was as follows :—

" On the 11th November, 194-3, the sub-committee requested Mr. W. V. Watson and the Secretary to revise the Australian price schedule as follows : —

" The prices remained unchanged to 31st March, 1944. " Claiming of Yearlings by Tanners. —Owing to the large offerings of yearlings, the tanners notified the Committee that they desired to revert to claiming only 66§ per cent, in accordance with the regulations. This was confirmed on 30th July, 1943. " Claiming of Ox-hides.—At the meeting of the Committee held on the 12th May, 1943, a letter was received from the Factory Controller in regard to tanners' requirements of all ox-hides 45 lb. and upwards, and it was agreed to meet the position with the approval of the

4—H. 30.

25

Freezers. Abattoirs. tT ? n Fir f n Seco f d n ™I d Butchers. Country. Country. Country. d. d. d. d. d. d. Ox-hides 40/47 lbs. .. .. 10& 9$ 9A 8§ 8X 7# Ox-hides: 48 lbs. upAverage weight 52 to 54 lb. .. 10-j& 10-& 9$ 9f g 8|| 8& Average weight over 54 to 56 lb. 10f 10J 9-f 9| 8| 8J Average weight over 56 to 58 lb. 10{f 9 J| 8 j§ 8-& Average weight over 58 to 59 lb. 10J 10f 9| 9| 8| 8§ Average weight over 59 to 61 lb. 10j| 9|| 8$ 8-& Average weight 61 lb. up .. 11 lo| 10 9|' 9 8§ Cow-hides: 51 lbs. up .. .. 9jf 8j| 8-f 0 - 7jf Cow-hides 40/50 lbs. .. .. 9|f 8$ 7|f

Freezers. Abattoir. n Kr f n Seo ° nd n Third ±>utoners. Country. Country. Country. d. d. d. d. d. d. Ox-hides 40/47 lb 10& 9 j| 8# 7# Ox-hides : 48 lb. up— Average weight 49/52 lb. .. 10-& 9& 8$- 8^Average weight over 52 to 54 lb. 10 is •' in 8|J- 8^ 6 - Average weight over 54 to 56 lb. lOf 10J 9f 9J 8f 8J Average weight over 56 to 58 lb. lOjf 9 8j| 8-& Average weight over 58 to 59 lb. 10|- 10| 9f 9f 8f 8| Average weight over 59 to 61 lb. 10{| 9|f 8 T^Average weight 61 lb. up .. 11 lo| 10 9J 9 ' 8| Cow-hides: 51 lb. up .. .. 9$ 8}§- 8f ff 7}£ Cow-hides 40 to 50 lb. .. .. 10f ff 9f| 9-& 8-ff 7|f

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Minister of Marketing. It was understood that, if at any time during the current year tanners did not exercise their pre-emptive right to all or any part of the offering of ox-hides 45 lb. and over, the Committee will revert to the terms and conditions of the Hides Emergency Regulations. As there was no competition for ox-hides 45 lb. and upwards, the Committee compiled a schedule of prices as under: —

Poundage Tare: Loose

" This schedule remained in force until the 15th November, 1943, when the New Zealand Tanners' Association intimated that it was not in a position to take 100 per cent, of all ox-hides 45 lb. and upwards, and the Committee agreed to this request. " Financial Report.—The following summary shows the position of the Equalization Fund as at 31st March, 1944 :— £ s. d. " Cash in hand at Ist April, 1943 .. .. .. .. .. 37,988 0 4 " Receipts from levy .. .. .. .. .. .. 84,705 5 8 122,693 6 0 " Less claims paid to tanners, freezing companies and exporters .. 112,468 12 11 10,224 13 1 " Expenses to 31st March, 1944 — £ s. d. " Salaries .. .. .. .. .. 850 0 0 " Sundries (rent, phone, cleaning, &c.) .. .. 59 16 9 " Telegrams, stamps, and petty expenses .. .. 28 19 3 " Audit fee .. .. .. .. 20 0 0 " Bank fee and cheque book .. .. .. 2 10 0 — 961 6 0 9,263 7 1 " Add cash (stabilization payment referred to below) .. .. 35,000 0 0 44,263 7 1 " From this must be deducted claims which were finalized but not paid at 31st March, 1944 .. .. .. .. .. .. 7,976 15 8 36,286 11 5 " To this must be added estimated levy due on hides which have not been shipped or for which payment has not been received from H.M. Customs as at 31st March, 1944 .. .. .. 1.2,964 0 0 " Leaving an estimated surplus in hand of .. .. £49,250 11 5 " Stabilization. —When the scheme was inaugurated it was agreed that hides should be sold at the standard domestic price to tanners for the manufacture of leather for use in New Zealand. " A considerable amount of leather was used in the manufacture of boots for use outside New Zealand, and it was agreed by the consignees of the boots to make a payment to the Hides Equalization Fund equal to the levy which would have accrued had the hides been exported as hides and not as leather.

26

■o r\xr • i. Freezer, First, 4 per Freezer, Second, 4 per Range of Weights. Cent. Tare, f!o.b Cent. Tare, f.ab <1. d. 45/521b. .. .. .. .. 9| 8f 53/58 lb. .. .. .. .. 91 9 59/69 lb. .. .. .. .. 9| 9170 lb. up .. .. .. .. loj 9|

-d f xxT ' Abattoir, Abattoir, t* + i, Farmers, 1 armers, Farmers, Range of Weights. m« < 0 , ' Butchers, Butchers, 1JV , ' « , ' m , • i & b First. Second. j?i TS t ' g econ( i First. Second. Third. d. d. d. d. d. d. d. 45/52 lb. .. 8f 81 8| 7f 7f 7* 6f 53/58 lb. .. 8| 8f 8f 7| 7-| 7f 6| 59/69 lb. .. n 8f 8f 8 J 8J 7f 7* 70 lb. up .. 9f 9| 9J 8| 8|- 8J- 7f

H. no

" However, the Committee was of the opinion that this question was linked with that of stabilization, and after discussing the matter with the Stabilization Commission it was agreed— (a) That the Hides Committee should keep the levy at its present level. (b) The Stabilization Commission to take over the claims of the Committee in respect of leather exported in the form of boots, and to arrange payment to the Hides Committee of an amount sufficient to place the funds of the Committee in the position they were in at 31st January, 1943. " Note. —This is the nearest date to stabilization base date (15th December, 1942) at which there was an audited balance of the Hides Equalization Fund. This is the explanation of the payment of £35,000 included in the accounts above. " (c) The position to be reviewed at 31st January, 1945.

" Statistics.—The following table shows the number of hides claimed by tanners and the number freed for export under the regulations during the year ending 31s't March, 1944 :—

" Grand totals — 1941-42. 1942-43. 1943-44. "Tanners .. .. 414,622 479,009 464,305 Hides and calf-skins. "Exporters .. 420,954 455,055 474,045 Hides and calf-skins. 835,576 934,064 938,350 " Cost of Administration. —The total cost of administering the Hides Equalization Fund for the twelve months ended 31st March, is as follows :— £ s. d. " 31st March, 1941 .. .. .. .. 1,106 7 4 " 31st March, 1942 .. . . .. .. 1,104 6 5 ' 31st March, 1943 .. .. .. .. 1,048 3 231 st '31st March, 1944 .. .. .. .. 961 6 0 " Based on the number of hides handled in terms of the regulations, the cost is under |d. per hide. " General. —I desire to again express my thanks to the members of the Committee, to the Government Departments concerned, and to all sections of the trade for their willing assistance at all times." LINEN FLAX The annual report for 1941 set out the terms of sale to the United Kingdom Ministry of Supply of New Zealand's export production of linen-flax fibre, this covering the period of hostilities between the British Empire and Germany. Shipments from Ist August, 1943, to 31st July, 1944, were as under :— Tons cwt. Linen-flax fibre and reiss .. .. .. .. .. 1,690 0 Tow and pluckings .. .. .. .. .. .. 950 2 2,640 2 The total value f.o.b. (New Zealand currency) of these exports is £480,890. SCHEELITE The present contract with the United Kingdom Government is for a period of nine months ending 31st December, 1944, and the price being paid to the New Zealand Government is as follows : for the first 50 tons of ore produced after the Ist April, 1944, a rate of 120s. sterling per unit per ton , and any quantity in excess of 50 tons at a rate of 100s. sterling per unit per ton. No agreement has yet been made for the supply of ore to the United Kingdom Government after the close of the present contract, but the United Kingdom Government has indicated that a considerable reduction in the above purchase-price is likely.

The quantity and provisional value of ore purchased by the Department for sale and shipment to the United Kingdom Ministry of Supply during the past five years is shown in the following table

5—H. 30.

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Ox. Cows. | Bulls. Yearlings. | Calf-skins. Tanners' claims . . 166,931 233,114 1,466 40,623 22,171 Hides freed for export 25,749 311,020 27,810 38,289 71,177 Totals .. 192,680 544,134 29,276 78,912 93,348

Year ended 31st July, Weight. Value. Tons cwt. £ 1940 .. .. .. 37 6 8,026 1941 .. .. .. 71 1 14,663 1942 .. .. .. 77 16 26,767 1943 .. .. .. 86 8 43,559 1944 .. .. .. 110 7 54,959

H. —30

SHIPMENTS TO TAHITI Since January, 1942, the Department has been purchasing and shipping to Tahiti, on behalf of the Tahiti Administration, sundry goods, mainly canned meats, processed milk, butter, and cheese. The total value c.i.f. Papeete of such goods purchased and shipped for the year ended 31st July, 1944-, was £104,016 (New Zealand currcncy). SUNDRY SUPPLIES FOR WAR OFFICE During the year supplies of food products have been shipped under contract to the War OfficeThe vaiue of the products shipped during the twelve months ended 31st July, 1944, is £1,817,904 (New Zealand currency). The accounts covering the purchase and sale, transactions of the Department in connection with these United Kingdom War Office supplies are shown in the accounts section at the end of this report, page 33. The surplus for the year ended 31st July, 1944, is £3,172.

SUMMARY OF VOLUME AND VALUE OF SALES BY THE DEPARTMENT OF PRODUCTS FOR EXPORT FOR THE TWELVE MONTHS ENDED 31st JULY, 1944

* Totals of wool appraised and sold to United Kingdom for twelve months to 30th June, 1944, at f.o.b. value. (Note. —The volume and value of butter and cheese includes produce paid for but not shipped at 31st July, 1944.) GENERAL In presenting this report covering the operations of the Export Division of the Department for the year ended 31st July, 1944, it is pleasing to record that the arrangements for the 1943-44 season in respect of production, handling, payment, and shipment of the various products have proceeded smoothly, and ail interests concerned have co-operated in meeting the difficulties inherent in the present war situation. I wish to tender the thanks of the Government to the farming industry, the manufacturing interests, the storage and transport interests, the handling and loading interests, and the shipping interests for maintaining so satisfactorily their respective services. I desire again to pay tribute to the officers and men of the Mercantile Marine and the Royal Navy who have been responsible for the transport of the large volume of exports from New Zealand and for the very satisfactory clearances of all export products which have been made. Finally, I wish to mention Government representatives in the United Kingdom and the New Zealand staff of the Export Division of the Marketing Department. They have carried out their increased duties most efficiently, notwithstanding the staff and other difficulties of the present situation. B. ROBERTS, Minister of Marketing.

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7 , , , T7 , Equivalent Net Value f.o.b. r0 uc ' ume. Weight (in Tons). (N.Z. Currency). £ Butter .. .. .. .. 4,042,738 boxes 101,068 14,403,438 Cheese .. .. .. .. 1,141,619 orates 81,544 7,352,775 Frozen meat .. .. .. .. 269,001 17,790,997 Canned meat .. .. .. .. 17,552 2,457,315 Wool* .. .. .. .. 879,004 bales 133,659 20,207,636 Woolly sheep-skins .. .. 692,113 number 2,622 278,478 Tallow .. .. .. .. .. 34,748 1,054,577 Skim-milk powder .. .. 95,051 cases 4,753 240,680 Casein .. .. .. .. 5,778 sacks 440 29,042 Linen-flax fibre .. .. .. .. 2,640 480,890 Scheelite .. .. .. .. 110 54,959 War Office contracts .. .. .. .. 1,817,904 Hides .. .. .. .. 85,543 number .. 137,061 648,137 66,305,752

11.—30

DAIRY-PRODUCE Administration and General Expenses Account for the Year ended 31st July, 1941 United Kingdom. New Zealand. Total. Dr. £ £ £ Or. Salaries .. .. .. .. .. .. 9,805 7,864 17,669 Allocation of expenses to Purchase and Sale Accounts— Office rent, maintenance, cleaning, telephone and sundry expenses 2,130 1,497 3,627 1942-43 season's produce— £ £ Postages, cables, printing, and stationery .. .. 133 983 1.116 Creamery butter .. .. .. .. .. .. .. 320 Travelling-expenses .. .. .. .. .. 137 66 203 Whey butter .. .. .. .. .. • • • • 5 Subscriptions, donations, and entertainment .. .. .. 51 2 53 Cheese .. .. .. .. .. •. • ■ • • 369 Shipping inspection .. .. .. .. .. 1,637 124 1,761 694 Agency expenses: Lyttelton .. .. .. .. .. 225 225 1943-44 season's produceAudit fees .. .. .. .. .. m .. .. 250 250 Creamery butter .. .. .. .. .. .. 29,137 Depreciation .. .. .. .. .. .. 291 247 538 Whey butter .. .. .. .. .. .. .. 652 Cheese .. .. .. .. .. .. ■■ ■■ 13,834 £14,184 £11,258 £25,442 Processed milk .. .. .. .. .. ■■ 665 = 44,288 Advertising in United Kingdom .. .. .. .. .. .. .. 2,416 Miscellaneous expenses .. .. .. .. .. .. .. .. 203 £ Cost of remittances to dairy companies .. .. .. .. 4.640 Interest on overdraft at Reserve Bank .. .. .. .. 12,031 — 16,671 Subsidy, Public Service Superannuation Fund .. .. .. .. .. 250 £44,982 £44,982 Final Purchase and Sale and Revenue Account, 1942-43 Season's Dairy-produce Creamery Whey Creamery Whey Butter. Butter. Cheese. Total. Butter. Butter. Cheese. Total. £ £ £ £ £ £ £ £ Stocks in store at 31st July, 1943 .. .. .. 750,234 6,806 224,550 981,590 Sales net f.o.b. after 31st July, 1943, to United Kingdom .. 895,222 10,659 406,650 1,312,531 Purchase on basis net f.o.b. after 31st July, 1943 .. 142,030 2,337 164,161 308,528 Sales net f.o.b. after 31st July, 1943, to other destinations 102 .. 671 773 Gross surpluses on transactions after 31st July, 1943, carried down .. .. .. .. .. .. 3,060 1,516 18,610 23,186 £895,324 £10,659 £407,321 £1,313,304 £895,324 £10,659 £407,321 £1,313,304 £ £ £ £ Administration and general expenses .. .. .. 320 5 369 694 Gross surpluses on transactions after 31st July, 1943, brought £ £ £ £ Net surpluses on transactions after 31st July, 1943 .. 2,740 1,511 18,241 22,492 down .. .. .. .. .. .. 3,060 1,516 18,610 23,186 £3,060 £1,516 £18,610 £23,186 £3,060 £1,516 £18,610 £23,186 £ £ Balance, being final surplus on purchase and sale of 1942-43, season's production carried to Net surplus on transactions after 31st July, 1943, brought down .. .. .. 22,492 Dairy-produce Account .. .. .. .. .. .. .. 734,657 Net surplus on transactions up to 31st July, 1943 (as shown in accounts for year ended 31st July, 1943) .. .. .. .. .. .. .. .. .. 709,724 Recoveries from manufacturers of special milk products .. .. .. .. 2,441 £734,657 £734,657

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DAIRY-PRODUCE— continued Purchase and Sale and Revenue Accounts, 1943-44 Season's Dairy-produce purchased up to 31st July, 1944 C B«t|r ry jIX. 'm 4 Total. creamery Whey Cheese _ P™d Total . T) J-'l ' X. X £ £ £ CT. £ £ £ £ £ Purchase on basis net f.o.b. .. 13,951,509 312,121 6,623,961 318,364 21,205,955 Sales net f.o.b. to United Kingdom 13,900,983 315,578 6,912 774 31° 881 21 442 ">l6 Gross surpluses carried down .. 130,771 9,037 728,813 3,060 871,681 To other destinations .. 24,193 .! 215.431 .! 239,' 624 Stocks in store awaiting shipment .. 157,104 5,580 224,'569 8,543 395^796 £14,082,280 £321,158 £7,352,774 £321,424 £22,077,636 £14,082,280 £321,158 £7,352,774 £321,424 £22,077,636 . ... £ £ £ £ £ £ £ £ £ £ Administrative and general expenses 29,137 652 13,834 665 44,288 Gross surplus brought down .. 130,771 9,037 728 813 3 060 871 681 Surplus carried down .. .. 101,634 8,385 714,979 2,395 827,393 a/i,b«i £130,7/1 £9.037 £728,813 £3,060 £871,681 £130,771 £9,037 £728,813 £3,060 £871,681 Net Revenue Account £ Suppliers' costs on " change-back" to supply for butter-manufacture •.. .. .. 3,489 Surplus brought down .. 897~Wt Dairy companies capital costs (redundant plant and buildings) 155,622 Transfer from Internal Marketing Division Butter Equalization Account 100^00 Government capital costs (emergency cool storage) .. .. .. .. .. 220,000 .. .. iuu,uuv Net surplus carried to Dairy-produce Account .. .. .. .. .. 54s' 282 £927,393 £927,393

Note. (1) The foregoing dairy-produce purchase and sale accounts represent the purchase of dairy-produce from dairy companies at the guaranteed purchase-prices and returns from the sale of the agreement S the H " T** Ureases in afterfL DecemL, 1942, t tern" "theltltlizatLn agreement between the Government and representatives of the farming industries, to the Dairy Industry Stabilization Account (see last year's annual report, pages 3 to 6).

Dairy-produce Account DT. £ £ ('f Deficit on 1936-37 season's produce .. .. .. .. .. 276,850 Surpluses— £ £ Less payment from Consolidated Fund 276,850 1937-38 season's produce 576 724 Deficit on 1938-39 season's produee o , 14 ' 88q J939-40 seasons produce 62 ; 3 63 T, i "i . "uopuuutc .. .. .. .. .. _ z,014,5»9 1940-41 season s produce .. .. .. .. 151 qeq Balance bemg net surplus from commencement of purchase up to 31st July, 1944, trans- 1941-42 season's produce " " 77Q'059 ferred to Dairy Industry Stabilization Account 332,378 1942-43 season's produce 734, '657 1943-44 season's produce purchased up to 31st July, 1944 .. .. 548 282 2,847,267 £2,847 ,267 £2 > Dairy Industry Stabilization Account : Transactions during the Year ended 31st July, 1944 £ Cr Che^(? f cra°e J q^niVa^u° StS aU ° WanCeS '" " " " " " 1> 493 >°98 Proceeds of increases in sale-prices received after 15th December, 1942 (United States Joint uneese-cra.e stabilization .. .. .. .. .. .. .. 22,389 Purchasing Board) .. .. .. .. .. .. .. .. 116.510 Transferred from Dairy-produce Account .. .. .. . . .. 332, 378 Balance .. .. .. .. .. .. .. .. 1,066^599 £1,510,487 £1,515,487

Xote. (1) The Dairy Industry Stabilization Account was opened in terms of the stabilization agreement between the Government and representatives of the farming industries (see last vear's annual report, pages 3 to 6). The debits to the account will be the costs allowances and other costs of stabilization in terms of the stabilization agreement. The credits to the account are (a) the surplus in the Dairy-produce Account and (6) the proceeds of mcreases m sale-prices received after 15th December, 1942. (2) The proceeds of the increases in sale-prices of butter (265. l|d. sterling per hundredweight) and cheese (12s. 6jd. sterling per hundredweight) which apply for the 1943-44 season, and which are referred to on page 5 of this report, were not received at the date of closing the accounts and consequently will be shown m next year's Dairy Industry Stabilization Account, g accounts, ana

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MEAT Administration and General Expenses Account for the Year ended 31st July, 1944 Dr. £ Or. £ Salaries .. .. .. .. .. .. 7,607 Allowance for administration on sales of 1942-43 season's Olßee rent, maintenance, cleaning, telephones, and sundry meat after 31st July, 1943 .. .. .. 42,032 expenses .. .. .. .. . . 878 Allowance for administration on sales of .1943 season^ Postages, cables, printing, and stationery .. .. 1,164 meat up to 31st July, 1944 .. .. . 43,130' Travelling-expenses .. .. .. .. 08 Allowance for administration on sales of bobby veal .. 1,346 Shipping inspection and refrigeration supervision . . 1,500 Audit fees .. . . .. .. .. 231 Depreciation (office and departmental equipment) .. 96 Kxchange on remittances .. .. .. . . 4,849 Payment to— New Zealand Meat-producers Board .. .. 30,000 Pig Allocation Committees .. .. .. 1,000 Subsidy, Public Service Superannuation Fund .. .. 31 Miscellaneous expenses .. .. .. .. 166 Balance, to Meat Account .. .. .. .. 38,918 £86,508 £86,508 Final Purchase and Sale Account, 1942-43 Season's Killings Dr. £ £ Sales — Purchases— Shipment to United Kingdom after Lamb .. .. .. .. 5,243,408 31st July, 1943— £ £ Wether mutton .. .. .. 549,531 Lamb . .. .. .. 5,382,403 Ewe mutton .. .. .. 388,141 Wether mutton .. .. .. 406,832 Beef and veal .. .. .. 511,965 Ewe mutton .. .. .. 354,384 Boner bull beef .. .. .. 105,561 Beef and veal .. .. .. 166,889 Boner cow beef .. .. .. 231,319 Boner bull beef .. .. .. 14,209 Pig-meat .. .. .. 320,039 Boner cow beef .. .. .. 10,062 Offals .. .. .. .. 178,646 Pig-meats .. .. .. 17,898 7,528,610 Offals .. .. .. .. 154,452 Allowance for administrative and general expenses y 507 12;) (| per cent. 011 sales, £8,406,305) carried to Ad- Local deliveries (including for United ministrative and Goncral Expenses Account .. 42,032 States Armed Forces—— Transfer to Meat Industry Stabilization Account Lamb .. .. .. .. 338,397 (being proceeds of increases in sale-prices of Wether mutton .. .. 201 ,'5ll meat after 15th December, 1942) .. .. 106,139 Ewe mutton .. .. .. 147,010 Surplus on transactions after 31st July, 1943, Beef and veal .. .. .. 529*315 carried to Meat Pool Account .. .. 729,524 Boner bull beef .. .. .. 96,841 Boner cow beef .. .. .. 227,107 Pig-meat .. .. .. 316,149 Offals .. .. .. .. 42,846 1,899,176 £8,406,305 £8,406,305 Purchase and Sale Account, 1943-44 Season's Killings up to 31st July, 1944 Dr. i Or. Purchases, Ist October, 1943, to 31st July, Sales— 1944— £ £ Shipments to United Kingdom to 31st Lamb .. .. .. .. 11,279,187 July, 1944— £ £ Wether mutton .. .. .. 688,587 Lamb .. .. .. .. 4,948,840 Ewe mutton .. .. .. 1,405,160 Wether mutton .. .. .. '229'310 Beef and veal .. .. .. 1,400,220 Ewe mutton .. .. .. 701,479 Boner bull beef .. .. .. 119,927 Beef and veal .. .. .. 67,212 Boner cow beef .. .. .. 415,940 Offals .. .. .. 241,603 Pig-meat .. .. .. .. 1,421,279 Preserved .. .. .. 781,067 Offal? .. .. .. .. 634,651 6,969,511 Preserved .. .. .. 1,983,611 Local deliveries (including for United 19,348,562 States Armed Forces) — Allowance for administrative and general expenses Lamb .. .. .. .. 460,769 (f per cent, on sales, £11,501,434) carried to Ad- Wether mutton .. .. .. 88^821 ministrative and General Expenses Account .. 43,130 Ewe mutton .. .. .. 983 Transfer to Meat Industry Stabilization Account Beef and veal .. .. .. 786,006 (being proceeds of increases in sale-prices of meat Boner bull beef .. .. .. 33,085 after 15th December, 1942) .. 640,188 Boner cow beef .. .. .. 330\338 Surplus on transactions up to 31st July, 1944, Pig-meat .. .. .. 919,391 carried to Meat Pool Account .. .. 842,091 Offals .. .. .. .. 236^282 Preserved .. .. .. 1,676,248 4,531,923 Stocks on hand (including loadings not departed, 31st July, 1944) .. .. .. .. 9,372,537 £20,873,971 £20,873,971 Meat Pool Account to 31st July, 1944 Dr. £ £ Gr. £ Interest .. .. .. .. .. 13,456 Balance at 31st July, 1943 .. .. .. 1,883,547 Insurance on frozen and preserved meat .. 9,776 Surplus on 1942-43 season's killings sold after 31st July, Storage on frozen and preserved meat .. 38,542 1943 .. . . . . .. . . 720 524 48, 318 Surplus on 1943-44 season's killings sold after 31st July, Railage and sundry expenses .. .. 162,957 1944 .. .. .. .. .. 842 091 Less f.o.b. charges not inourred .. .. 92,190 Surplus 011 tallow sales .. .. .. 297,'392 70,767 Surplus on slipe wool .. .. .. .. 142,758 Amount written off capital cost of emergency cool stores, canning plant, and buildings .. .. 191,666 Balance, being surplus to 31st July, 1944 .. .. 3,571,105 £3,895,312 £^,895^312 Note. —On page 16 reference is made to the accretions to, and charges against, the Meat Pool Account.

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M E AT —continued Meat Account Dr. £ Or. £ Payment to War Expenses Account .. .. .. 53,567 Balance at 31st July, 1943 .. .. .. .. 53,567 Balance as at 31st July, 1944 .. .. •• 38,918 Surplus from Administration and General Expenses Account .. .. .. .. .. 38,918 — £92,485 £92,485 Meat Industry Stabilization Account : Transactions during Year ended 31st July, 1944 Dr. £ Or. £ Balance as at 31st July, 1944 .. .. 746,327 Transfer from 1942-43 Purchase and Sale Account .. 106,139 Transfer from 1943-44 Purchase and Sale Account .. 640,188 £746,327 £746,327 Note.—The Meat Industry Stabilization Account was opened in terms of the stabilization agreement between the Government and representatives of the farming industries) (see last year's annual report, pages 3to 6). The debits to the account will be the costs of stabilization in terras of the stabilization agreement, and the cost of the increases in Marketing Department purchase-prices for meat which apply for the 1944-45 season. The credits to the account are the proceeds of increases in sale-prices of meat, edible offals, and tallow received after 15th December, 1942. Bobby Calf Pool Account to 31st July, 1944 Dr. £ Or. £ Payment of 2s. per calf on passed calves killed Ist July, Balance as at 31st July, 1943 .. .. .. 91,782 1943, to 30th June, 1944 .. .. .. 87,616 £ Further payment of 2s. 9d. per calf on passed calves Local sales of bobby veal .. .. .. 18,291 killed Ist June, 1943, to 31st May, 1944 .. .. 122,004 Less charges .. .. .. .. 3,354 Insurance .. .. .. .. •• 228 — 14,937 Allowance for administration and goneral expenses (f per Sales for dehydration .. .. .. 28,717 cent, on sales, £358,864 os. 4d.) carried to Adminis- Less charges .. .. .. .. 4,497 tration and General Expenses Account .. .. 1,346 24,220 Transfer to Bobby Calf Stabilization. Account (being Shipments to United Kingdom .. .. 311,856 proceeds of increases in sale-prices of meat after 15th Less freezing and f.o.b. charges .. .. 68,470 December, 1942) .. .. .. .. 21,926 243,386 Balance as at 31st July, 1944 .. .. .. 145,297 Surplus on sales of export veils .. .. .. 4,092 £378,417 £378,417 Bobby Calf Stabilization Account : Transactions during Year ended 31st July, 1944 Dr. £ Or. £ Balance as at 31st July, 1944 .. .. .. 21,926 Transfer from Bobby Calf Pool Account .. .. 21,926 £21,926 £21,926 WOOL Purchase and Sale Account for the Wool Year ended 30th June, J 944 t. Greasy Slipe Tntnl Clr Greasy Slipe Total ">■ Wool. Wool. lotaL ° r- Wool. Wool. LoWli Purchases — £ £ £ Sales to— £ £ £ Appraisal value .. 15,290,869 3,583,844 18,874,713 United Kingdom Wool Final payment .. 518,315 30,370 548,685 Control .. .. 14,897,180 3,611,520 18,508,700 New Zealand mills .. 912,004 2,694 914,698 £15,809,184 £3,614,214 £19,423,398 £15,809,184 £3,614,214 £19,423,398 Charges, Expenses, and Administration Account for the Wool Year ended 30th June, 1944 Dr. £ Or. £ Brokers' charges .. .. .. .. ■ • 708,226 Allowance in sale-price for charges and expenses and Appraisal costs .. .. .. .. -. 71,612 recoveries, including amount of wool levy .. 1,455,260 Wool levy paid on behalf of growers .. .. 22,644 Special allowance by United Kingdom towards cost of Charges and expenses to f.o.b. .. .. .. 435,555 abnormal storage and insurance .. .. 295,737 Scouring charges .. .. .. 419,128 1,657,165 Balance carried down .. .. .. .. 93,832 £1,750,997 £1,750,997 £ £ Salaries .. .. .. .. .. 7,669 Balance brought down .. .. .. .. 93,832 Office rent, maintenance, cleaning, telephones, and sundry Interest .. .. .. .. .. 6,596 expenses .. .. .. • • • • 1,369 Postage, cables, printing, and stationery .. . . 3,708 Travelling-expenses . . .. .. •. 145 Audit fees .. . . •. • • • • 200 Depreciation .. .. •. • ■ • ■ 96 Cost of remittances to brokers and others .. .. 3,847 Subsidy, Public Service Superannuation Fund .. .. 31 17,065 Met surplus for year .. .. .. •• 83,363 £100,428 £100,428 Wool Account Dr. £ Or. £ Transferred to War Expenses Account .. .. 86,006 Balance at 31st July, 1943 .. .. .. .. 86,006 Balance as at 31st July, 1944 .. .. .. 83,363 Net surplus for 1943-44 soason .. .. .. 83,363 £169,369 £169,369

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TALLOW Purchase and Sale Account fob the Year ended 31st July, 1944 Dr. £ Or. £ Purchases .. .. .. •. - • 748,004 Sales to— Allowances for administration and handling .. 8,839 United Kingdom .. .. .. .. 046,989 Marketing expenses .. .. .. .. 1,750 U.S.A. .. .. .. .. .. 161,185 Meat Pool Account .. .. .. .. 297,392 Canada .. .. .. .. .. 225,424 Other destinations .. .. .. .. 20,979 Interest .. .. .. .. .. 1,408 £1,055,985 £1,055,985 Revenue Account for the Year ended 31st July, 1944 Dr. £ Or. £ Salaries .. .. .. .. •• •• 1,000 Allowance for administration and handling .. .. 8,839 Office rent, maintenance, cleaning, telephones, and sundry i expenses .. .. .. .. •• 226 Postage, cables, printing, and stationery . . . . 300 Travelling-expenses .. .. .. .. . . 35 Audit fees .. .. .. .. .. . • 50 Cost of remittances to manufacturers and others . . 523 Net surplus .. .. .. .. ■ •• 6,705 £8,839 £8,839 Tallow Account Dr. £ Or. £ Transferred to War Expenses Account .. .. 9,657 Net surplus, year ended 31st July, 1943 .. .. 9,657 Balance as at 31st July, 1944 .. .. .. 6,705 Net surplus, year ended 31st July, 1944 .. .. 6,705 £16,362 £16,302 SCHEELITE Purchase and Sale Account for the Year ended 31st July, 1944 Dr. £ Or. £ Purchases .. .. . ■ .. 53,585 Sales . . . . .. .. .. 54,959 Cost of administration .. .. .. 1,374 £54,959 £54,959 WAR OFFICE CONTRACTS Purchase and Sale Account for the Year knded 31st July, 1944 Dr £ Or. £ Purchases 1,815,994 Sales 1,817,904 Gross surplus carried down .. .. ■■ 1,910 £1,817,904 £1,817,904 Revenue Account for the Year ended 31st July, 1944 Dr. £ Or. £ Salaries .. .. .. .. •• 250 Gross surplus brought down .. .. .. .. 1,910 Postage, cables, printing, and stationery . . .. 388 Interest . . .. .. .. . . 2,095 Telephone, rents, sundry expenses .. .. .. 1 69 Cost of remittances to manufacturers and others . . 26 Net surplus.. .. .. .. •• •• 3,1.72 £4,005 £4,005 HIDES Purchase and Sale Account for the Year ended 31st July, 1944 Dr. £ Or. £ Purchases at market prices for sale to Australian Hide Sales to Australian Hide Board at New Zealand domestic Board.. .. .. .. .. .. 176,195 values.. .. .. .. .. .. 137,061 Balance carried down .. .. .. .. 39,134 £176,195 £176,195 Revenue Account for the Year ended 31st July, 1944 Dr. £ Or. £ Balance brought down .. .. .. .. 39,134 Deficit for year ended 31st July, 1944 .. .. 39,873 Salaries .. .. . • • • • • ■ • 150 Postage, cables, printing, and stationery . . .. 66 Travelling-expenses .. . . .. .. 54 Telephones, rents, and sundry expenses .. .. 74 Interest on overdraft at Reserve Bank .. .. 312 Cost of remittances to brokers ...... 83 £39,873 £39,873

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NEW ZEALAND SHEEP-SKIN CONTROL Purchase and Sale and Revenue Account for Twelve Months to 30th June, 1944 Dr. £ Cr. £ Stocks, 30th June, 1943 .. .. .. .. 125,598 Sales .. .. .. 800,420 Purchases .. .. .. .. .. 734,913 Stocks, 30th June, 1944 .. .. .. .. 207'fi9l Working charges and trading expenses .. .. 142,660 Gross surplus .. .. .. .. .. 4,946 £1,008,117 £1,008,117 Administration expenses— £ . £ Salaries .. .. .. .. .. 8,909 Gross surplus .. .. .. .. .. 4,946 Travelling-expenses .. .. .. .. 1,078 Net deficit .. ~ .. .. .. 8,862 Postage and telegrams .. .. .. .. 290 Telephones .. .. .. .. .. 398 Stationery .. .. .. .. .. 469 Exchange .. .. .. . . .. 37 Interest .. .. . . . . . . ], 333 Sundry .. .. .. .. .. 538 Rent .. .. .. .. .. 698 Advertising .. . . .. .. .. '58 £13,808 £13,808 Balance-sheet as at 30th June, 1944 Liabilities £ Assets £ £ Sundry Products Account .. .. .. .. 185,088 Furniture and fittings .. .. .. 598 Sundry creditors .. .. .. .. 27,185 Motor-car .. .. .. 126 Pool Account— £ __ s 724 Balance, 30th June, 1943 .. .. 4,613 Sundry debtors .. .. .. .. .. 37,192 Deficit for year .. .. .. 8,862 Stocks— Skins, wool, pelts .. .. .. 212,024 4,249 Fellmongers' material .. .. .. 2,382 Transfer to Reserve Account .. .. 4,249 214 406 Cash .. .. ~ .. .. .. 220 Reserve Account, being 5 per cent, wool retention .. .. .. .. 44,518 Less pool deficit .. .. .. 4,249 40,269 £252,542 , £252,542 R. C. Burgess, Controller. I hereby certify that the Revenue Account and the Balance-sheet have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby, subject to the following remarks : the value of the stocks has been accepted at a figure fixed by the Sheep-skin Controller. —Cyril Collins, Controller and Auditor-General. MARKETING DEPARTMENT (EXPORT DIVISION) Balance-sheet as at 31st July, 1944 Liabilities Assets £ Reserve Bank of New Zealand £ £ Sundry debtors for produce and amounts accrued due 3,956,361 Dairy Industry Account .. .. 1,756,400 Stocks .. .. .. .. .. 9,867,193 Meat Industry Account .. .. 3,503,273 Investment in Treasury bills .. .. .. 1,000,000 Office and departmental equipment .. .. 8,803 5,259,673 Advances to Sheep-skin Controller .. .. 162,179 Less — £ Farm Products Stabilization AcWool Industry Account 1,415,663 counts— £ SundryProductsAccount 134,745 Dairy Industry Stabilization Account. . 1,060,599 1,550,408 LessMeat Industry Stabiliza- £ 3,709,265 tion Account .. 740,327 Less cash held in London 1,189 Bobby Calf Stabilization 3,708,076 Account .. 21,920 Sundry creditors for accrued charges and sundry credit 768,253 balances.. .. .. .. .. .. 7,776,119 298,346 Meat Pool Account .. .. .. .. 3,571,105 Bobby Calf Pool Account .. .. .. 145,297 Net surpluses on administration allowances— Meat Account .. .. .. 38,918 Wool Account .. .. .. 83,363 Tallow Account .. .. .. 6,705 War Office Contracts Account .. .. 3,172 132,158 Less deficit: Hides Account .. .. 39,873 92,285 £15,292,882 £15,292,882 G. A. Duncan, Director. W. J. Pratley, Accountant. I hereby certify that the several Purchase and Sale and Revenue Accounts, Administrative and General Expenses Accounts, together with the Balance-sheet as at 31st July, 1944, have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.—Cyril Collins, Controller and Auditor-General. »

Approximate Cost of Paper.—Preparation, not given ; printing (1,338 copies), £85.

By Authority: E. Y. Paul, Government Printer, Wellington. —1944.

Price In ]

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.1.945 NE W ZEALAND

MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (NINTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1945 Presented to both Houses of the General Assembly pursuant, to the provisions of the Marketing Act, 1936 CONTENTS Accounts—- page Balance-sheet . . .. . . . . .. . . . . . . 48 Dairy-produce . . . . . . . . . . . . 41, 42, 43 Hides .. .. .. .. .. . . . . . . . . 47 Meat. .. . . . . .. . . .. 44, 45 Scheelite . . . . . . .. . . . . . . . . 47 Tallow . . . . .. .. . . . . .. . . . . 46 War Office Contracts .. . . . . . . . . .. 47 Wool . . . . . . . . . . . . . . .. .. 46 Woolly Sheep-skins . . . . . . . . .. . . 47, 48 Compensation Payments prom United Kingdom Government and Settlement with Dairy and Meat Industry Representatives in Terms of Stabilization Agreement . . . .. . . .. .. . . 3, 4, 5 Contracts between United Kingdom and New Zealand Governments for Sixth Year of War, 1944-45 .. . . . . . . . . . . . . 3 General .. . . .. . . .. . . .. .. .. 40 Reports— Dairy-produce— Accounts . . . . .. . . - .. .. 16, 41, 42, 43 Casein . . . . . . . . . . . . . . 13 Completed Financial Operations for 1943-44 Season . . . . 5 Contracts, Long-term, with United Kingdom Government, 1944-48 . . 6, 7, 8 Costs Allowances— 1944-45 Season . . .. .. .. .. .. 9 1945-46 Season . . . . . . . . .. . . 9, 10 Costs of Butter and Cheese Manufacturing Companies, 1944-45 Season . . 14 Export's: Quantities of Butter and Cheese exported . . . . 12 Grading— Quantities of Butter and Cheese graded . . . . . . 12 Quantities purchased or to he purchased and paid for at Differential Prices 11 Guaranteed Prices-— 1944-45 Season . . . . . . .. .. .. 8 1945-46 Season . . .. .. .. .. . . 9 Imports of Dairy-produce into United Kingdom annually during Years 1938 to 1944 inclusive . . . . . . .. . . . . 15, 16 Payments made by Dairy-factory Companies for Butterfat-supplies . . 13 Processed Milk .. . . . . . . . . .. 13 Production of Dairy-produce in New Zealand Dairy Factories . . 12 Publicity in United Kingdom . . . . .. . . . . 14 Rationing Emergency Regulations as applied to Butter and Cheese, Effect of 12

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Hides— page Accounts . . .. .. . . .. .. .. 37, 47 Sale of to Australia .. . . .. .. .. . . . . 37 Report of Hides Committee on Operations for Year ended 31st March, 1945 .. .. .. .. .. .. ..37,38,39 Linen Flax .. . . . . . . . . . . . . 39 Meat— Accounts .. .. . . . . . . .. .. 29, 44, 45 Acknowledgment . . . . . . . . . . . . 26 Canned Meat . . . . .. . . .. . . . . . . 25 Completed Operations, 1943-44 Season . . . . .. .. . . 17 Contracts, Long-term, with United Kingdom Government, 1944-48 17, 18, 19, 20, 21 22 Disposal, 1944-45 Season Kill . . . . . . .. ~ 25 Freezing Company and Meat-exporters: Subsidy to meet Increased Wagecost .. .. .. . . . . . . , . .. 26 Freezing Company: Consolidated Charges . . . . . . 25, 26 Killings of Meat for Export during Period of War . . . . 26, 27 Pig-meats .. .. . . . . . . . , . . 25 Pool Account . . . . .. . . .. .. .. .. 26 Prices, Opening Schedule paid to Farmers, 1939-40 to 1944-45 .. 27, 28 Prices, Purchase paid to Freezing Companies and Meat-exporters, 1939-40 to 1944-45 .. .. . . .. .. .. 28, 29 Purchase and Sale Procedure and Prices paid for 1944-45 Season Meat purchased by Marketing Department for Export .. .. 22, 23, 24 Rationing Emergency Regulations as applied to Meat, Effect of . . .. 26 Shipping and Storage .. .. .. . . . . . . 25 Stabilization Account . . . . . . . . . . . . 26 Survey of Season . . .. .. . . . . , . . . 24 Scheelite— Accounts . . .. .. .. .. ~ .47 Contract with United Kingdom Government . . . . . . 39 Quantities purchased .... sq Tallow— Accounts .. .. .. .. .. , t 36 46 Purchases by New Zealand Government, 1944-45 Season, from New Zealand' Manufacturers .. .. .. .. ~ 36 Purchases by United Kingdom Government— 1944-45 Season .. . . .. . . qr 1945-46 Season .. . . . . .. ~ 36 Statistics .. .. . . . . '' 36 Tahiti, Shipments to . . . . . . °' '' '' on War Office, Sundry Supplies to— Accounts .. .. . . , , 47 Value of Shipments . . qo Wool— " " " '' '' Accounts .. .. . . . , 34 46 Appraisal Procedure .. .. . . _ _ 33 Bulk Purchase of Wool by United Kingdom Government '!() Disposals Plan .. .. .. _ _ ' ' ' ' 30 3] 32 Payi £r n l *, or J! Greasy and Sli P e w ° ol sold to United Kingdom Government ' ' Method of .. .. ~ _ ' oq PUr( Government' 44-45 Season ' s reas y and Slipe Wool' 'by New' Zealand Scouring and Carbonizing of Wool .'.' " " " "S4 w ,? hi S,? ing f. ITan £ ements and Destination of Wool Exports " "34 Woolly Sheep-skins— '' ' ' Accounts ok 47 Terms of Sale to United Kingdom Government " " " ' ' £ Report of Controller .. .. ' ' ' ' or » • Ot, OO VOL Mon™ JndTS"®™*™ T""™ °* P " ODDCTS * 0 " «* *™«

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REPORT I have the honour to submit the annual report and statement of accounts of the Marketing Department (Export Division) for the year ended 31st July, 1945. This report relates to the 1944-45 production season (the sixth year of war), and the transactions in respect of dairy-produce, meat, wool, tallow, woolly sheep-skins, hides, linen flax, and scheelite are reviewed under the appropriate headings. CONTRACTS BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR THE SIXTH YEAR OF WAR, 1944 45 The contracts of purchase of wool and woolly sheep-skins by the United Kingdom Government run for the period of the war with Japan, and include the following season's wool-clip and production of woolly sheep-skins. The contracts thus terminate with the sale of the 1945-46 season's wool and woolly sheep-skins. Contract prices for wool continued at the 1942-43 season rates. Parallel contract arrangements are current between the United Kingdom Government and the Governments of Australia and South Africa. In the wool section of this report reference is made to representations, in October, 1944, from the United Kingdom Government regarding the problem of accumulated stocks (equal to 3,245,000,0001b. of Dominions' wool, representing two year's consumption), and the suggestion " that the time has now come when the four Governments (United Kingdom, Australia, South Africa, and New Zealand) should jointly make a realistic appreciation of the position which will exist at the time of reopening of the world markets, with a view particularly to the replacement of the present arrangements with a longer term marketing scheme if that should be agreed to be desirable." Details of the discussions which took place, and of the decision that the four Governments should form a Joint Organization to take charge of the marketing of the old wool and support the marketing of current clips throughout the period of disposal of stocks, are given in the wool section of this report. The four-year contract arrangements (1944 to 1948) covering butter, cheese, and meat were referred to in last year's annual report. Full details of the contracts are given in the dairy-produce and meat sections of this report. Details of contract terms and prices for tallow and all other products handled by the Department are given in the appropriate sections of this report. COMPENSATION PAYMENTS FROM UNITED KINGDOM GOVERNMENT, AND SETTLEMENT WITH DAIRY AND MEAT INDUSTRY REPRESENTATIVES REGARDING DISPOSAL OF ADDITIONAL RECEIPTS FOR FARM PRODUCE, IN TERMS OF THE STABILIZATION AGREEMENT In last year's annual report reference was made to the invitation made by the Right Hon. the Prime Minister to the dairy and meat industries to set up a committee to confer with the Economic Stabilization Commission as to the apportionment, in terms of the agreement with the Farmers' Federation, of the moneys received from the United Kingdom Government. The Dairy and Meat Boards set up a joint committee, and the agreement reached is recorded in the following two letters :— Wellington, 24th March, 1945. Mr. B. C. Ashwin, Chairman, Economic Stabilization Commission, Wellington C. 1. Djjjab Sib,— The Committee acknowledge receipt of your letter of 22nd March but in view of subsequent discussions consider there is no need for a formal reply and that it can be regarded, like all other communications which have passed between the Commission and the Committee, as being of an exploratory character. Agreement having been reached in course of discussion, it only remains to record the terms of that agreement, which we understand to be as follows :— Lump Sum Payments. —The Committee are satisfied from the information supplied that the lump sum payment of £12,000,000 is not being paid in respect of produce sold and that it is being granted partly for the purpose of strengthening New Zealand sterling funds and partly towards the costs of Economic Stabilization in New Zealand up to 31st July, 1944. The Committee are also satisfied that the Lump Sum payments of £4 million per annum for the four years commencing Ist August, 1944, are not being paid in respect of produce sold to the United Kingdom but are being paid towards the cost of Economic Stabilization in New Zealand and in recognition of the fact that benefit accrues to the United Kingdom through New Zealand's Economic Stabilization policy. Prom information which has been made available it appears that the cost of such stabilization policy over the four-year period will at least be equal to the aggregate of such payments. Dairy Industry Stabilization Account.—We understand it is agreed that each year the balance of the Dairy Produce Account will be transferred to this Account, and all credits for produce sold to the United Kingdom and the Joint Purchasing Board, above the level of 117s. per cwt. for butter and 735. per cwt. for cheese (sterling) will be paid to this Account. Meat Industry Stabilization Account. —The arrangements respecting the Meat fool Account and the Meat Industry Stabilization Account are set out in the letter addressed by the Rt. Hon. the Prime Minister to the Chairman of the Meat Board dated 20th November, 1944, the appropriate quotation being as follows :— " It is considered desirable that both the Meat Pool Account and the Meat Stabilization Account should remain within the Meat Industry Account as at present, but the whole of the proceeds from the recent increase in the prices of meat to be paid by the United Kingdom Government will be credited to the Meat Industry Stabilization Account and will be conserved exclusively for the Industry, subject of course to such debits

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against the account as are contemplated in the Government's agreement with the Farmers' Federation of the 18th June, 1943. All accretions to the Meat Pool Account will continue as in the past and no charges other than those already operative will be made against it except in agreement with the New Zealand Meat Producers Board. This arrangement would have to be subject to review, in the event of the resources of the Meat Industry Stabilization Account being insufficient to meet charges against that account. I would stress again that the balance finally remaining in the Meat Pool Account and the Meat Industry Stabilization Account belong to and shall be held for the benefit of the Industry." Debits below the " level existing on the determined date ".—lt is agreed that costs incurred under Stabilization below the level existing 011 the determined date are debitable to both the Dairy and Meat Industry Stabilization Accounts in appropriate amounts as agreed upon in the detailed schedules attached hereto as from the Ist April, 1943, to the 31st July, 1946. Increases in Debits above the Unit Rate existing on Ist March, 1945.—1t is agreed that no debits for increases in costs above the unit rate existing at Ist March, 1945, should be charged to the Dairy Industry Stabilization Account except:— (a) Increased allowances to cover increases in farm wages or labour reward to the extent of 0-52 d. per lb. butterfat. (b) Increased allowances for increases in factory costs to the extent of 0-13 d. per lb. butterfat, unless eligible under (d), and in respect of cheese, a figure per lb. of butterfat which corresponds to tlie figure of 0-13(1. per lb. butterfat for butter. 1 (c) Any increase in allowance for interest on capital. (■d) Increases in subsidies or allowances arising out of increased import costs or increased usage of fertilizer or other materials used 011 farms or in factories. («) Generally, any increases on items chargeable under the Agreement with the Farmers' Federation and not arising out of increases in wages in New Zealand since Ist March, 1945. In respect of the Meat Industry Stabilization Account it is agreed that no debits above the unit rate existing at Ist March, 1945, should be debited to the Meat Industry Stabilization Account except:— (1) Additional freezing costs coming to charge after Ist March, 1945, and not arising from wage increases granted after Ist March, 1945. (2) Increases in farm wages to Agricultural Workers on other than dairy farms as fixed by Order under the Agricultural Workers' Act, up to £3/15/0 per week and found. (3) Increases in farm wages above those provided for in (2) up to an aggregate amount of £400,000 per annum. (4) Freezing costs additional to those mentioned in (I.) up to a sum of £475,000 per annum. (5) Any increase in allowance for interest 011 capital. ((5) Increases in subsidies or allowances arising out of increased import costs or increased usage of fertilizer or other materials used on farms or in factories. (7) Generally, any increases 011 items chargeable under the Agreement with the Farmers' Federation and not arising out of increases in wages in New Zealand since Ist March, 1945. Accounting Periods.—lt is agreed that the first accounting period shall run from Ist April, 1943, to 31st July, 1944, and thereafter yearly, ending 31st July, with appropriate adjustments respecting debits and credits at the concluding date, 31st July, 1946. Verification of Amounts Debited and Credited.—lt is agreed that reasonable information will be made available to officers of the Dairy and Meat Boards in respect of amounts debited and credited to the respective Stabilization Accounts, so that the two Boards can give assurances to the producers that such entries are in accordance with the terms of the Agreement here recorded. Arbitration in respect of Dairy Industry Local Market Costs.—Agreement having been reached on all matters except the debits for local market butter and cheese it is agreed that the question of whether the costs above the price realised incurred in holding the retail price of butter and cheese in New Zealand can be debited to the Dairy Industry Stabilization Account under the provision of the Agreement between the Government and the Farmers' Federation should be decided by Arbitration. We should be pleased to be advised if you concur in this record of agreement in order that the endorsement of the Dairy Industry Council can be obtained. Thereafter all that would be necessary would bo discussion on the arrangements for arbitration of the Dairy Industry local market question. The Committee in conclusion desire to convey to yourself and colleagues appreciation for the full information supplied, the frank nature of the discussions, and the measure of agreement that has been reached. Yours faithfully, (Sgd.) W. E. Hale, Chairman, New Zealand Dairy Board. (Sgd.) G. H. Geigg, Chairman, New Zealand Meat Producers Board. , [Enclosures to letter] DAIRY INDUSTRY STABILIZATION ACCOUNT, 1942/43 Debits and Credits Year ended 31st July Debit Credit Butterfat Cost Allowances—as ascertained. By increased prices from United Kingdom and United States Joint Purchasing Board 011 sale of produce. Manures \For the period 15/12/42 to 31/3/43 debits 1942/43. Butter boxes J are limited to increases above the '' level at the determined date," and thereafter for full amount. Note.—lf there are debits in respect of manure, they are to be allocated in the proportion of 55% to Dairy, 19% to Meat, 13% to Wool, and 13% to other industries. Dairy debits are to be reduced by the proportion of subsidy to liquid milk (approximately 10%) and by the proportion of the local market consumption if the Arbitration decision is favourable to the industry. | DAIRY INDUSTRY STABILIZATION ACCOUNT, 1943/44 Butterfat Cost Allowances—as ascertained. By increased prices from United Kingdom and United States Joint Purchasing Board on sale of produce, Manures \ Debits are for the whole year and lor the 1943/44. Butter boxes J full amount, but subject to the same consideration as for liquid milk and local market as in Transfer of credit balance in Dairy Industry Account the 1942/43 account. 1943/44. ' Note.—Manure allocation to be on basis of Dairy 55%, Meat 20%, Wool 13%, other industries 12%.

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DAIRY INDUSTRY STABILIZATION ACCOUNT, 1944/45 Debit Credit Butterfat Cost Allowances as ascertained. To increased prices from United Kingdom and United States Joint Purchasing Board on sale of produce, Manures —Full debit 011 basis of allocation 03% Dairy, 1944/45. 17-5% Meat, 11-5% Wool, 8% other industries. Butter Boxes. Transfer of Credit balance from Dairy Industry Account. Cow Covers. J Above debits to be subject to reduction for liquid milk and local market as stated in previous accounts. Ministry of Supply—debit of £80,000 agreed. It is agreed that all manures shall be grouped and allocated on the basis Bet out in the Dairy and Meat Stabilization Accounts. MEAT STABILIZATION ACCOUNT, 1942/43 Year ending 31st July both Debits and Credits Debit Credit Manures—For the period 16/12/42 to 31/3/43 debits are By Balance when 1942/43 allocations arc debited limited to increases above the " level at the determined date " and thereafter to the full amount. Percentage allocation to Meat, 19%. MEAT STABILIZATION ACCOUNT, 1943/44 Manures Debits are for the whole year and for the full |By increased prices from United Kingdom 1943/44. amount, the percentage allocation for this year being 20%. | ' MEAT STABILIZATION ACCOUNT, 1944/45 Manures Debits are for the whole year and for the full By increased prices from United Kingdom 1944/45 amount, the percentage allocation being 17-50%. ' Stock feed—debit agreed. Ministry of Supply—debit agreed at £35,000. Pig crop subsidy—debit agreed at 50%. Increased prices paid on schedule. Domestic Consumption—subsidy limited to £400,000. Account's agreed tlult aU manures Bllall be grouped and divided on the basis set out in the Dairy and Meat Stabilization Economic Stabilization Commission The Chairman, New Zealand Dairy Board, Wellington. Wellington, C. 1, 12th April, 1945. The Chairman, New Zealand Meat Producers Board, Wellington. Dear Sirs,— I am authorized to advise you that the Government, for its part, endorses the record of aereement as qet nut m your letter of 24th March 1945, as to the debits to be made to the Dairy and Meat Industry Stabilization Accounts It is understood that the exceptions of sub-paragraphs (a) and (b) and sub-paragraphs (2), (3) and (4) under the heading of Increases in debits above the unit rate existing on Ist March, 1945," are not in any way affected by any interpretation of sub-paragraphs (e) and (7) of the same respective paragraphs. I trust 1 m *y bu »dvised at an early date of the endorsement of the agreement by the Dairy Industry Council. Yours faithfully, (Signed) B. C. Ashwin, Chairman. DAIRY-PRODUCE REVIEW OF COMPLETED FINANCIAL OPERATIONS FOR THE 1943-44 SEASON 1 accounts presented with the report for the 1943-44 season covered purchases and sales of butter, cheese, and processed milk by the Department up to 31st July, 1944. These purchase and sale transactions showed a surplus of £548,282. The final results of the operations for the complete 1943-44 season were : - £ £ Surplus on creamery butter .. .. .. _ 106,961 Surplus on cheese .. .. .. . _ _ 735' ggg Surplus 011 whey butter . . .. .. ~ _ _ 9' 345 Surplus on processed milk.. .. .. ~ _ _ 2 444 854,687 LessCheese " change-over" payments .. .. .. 159,111 Contributions towards capital expenditure 011 emergency cool stores .. .. .. .. 220,000 379, in 475 576 Add transfer from Internal Marketing Division (Butter Equalization Account) .. .. .. .. 100 000 Net surplus for 1943-44 season .. £575,576 ' • ——————— dated Ua ' ry ludustl:y Colulcil was convoyed to the Chairman of the Economic Stabilization Commission in a letter

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LONG-TERM CONTRACTS, 1944-48, BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF THE EXPORTABLE SURPLUSES OF BUTTER AND CHEESE FOR THE PRODUCTION PERIOD IST AUGUST, 1944 TO 31ST JULY, 1948 In last year's annual report reference was made to the initiation by the United Kingdom Government of proposals for long-term contracts, to ensure the largest possible supplies of dairy-products to Britain, and to enable New Zealand primary producers to plan their farming operations in advance. Details were also given regarding the subsequent discussions on this subject, which resulted in the completion of the contracts. The terms and conditions of these contracts are as follows : — HEADS OF AGREEMENT For the Purchase by the United Kingdom Government oe Supplies of Butter and Cheese in New Zealand from the Production Period Ist August, 1944, to 31st July, 1948 1. The United Kingdom Government and the New Zealand Government, recognizing the desirability of ensuring the maintenance of and, if possible, an increase in the present volume of production of butter and cheese in New Zealand, agree as follows. 2. The New Zealand Government will sell and the United Kingdom Government will buy the total available supplies of butter and cheese in New Zealand from the production of the season commencing Ist August, 1944, and ending 31st July, 1945 and of the three ensuing twelve-monthly periods ending 31st July, 1948, after providing for : — (A) New Zealand domestic requirements, including those of the New Zealand Forces : (B) Requirements of the United States Forces which the New Zealand Government may, subject to consultation and agreement with the United Kingdom Government, agree to supply from New Zealand : (C) Quantities which the New Zealand Government may provide for Relief requirements after consultation and agreement with the United Kingdom Government: (D) Quantities which the Now Zealand Government, may, subject to consultation and agreemont with the United Kingdom Government, sell to countries other than the United Kingdom— and the New Zealand Government will take all necessary steps to ensuro that the whole of such supplies arc available for shipment in accordance with this agreement. 3. The prices, terms and conditions of sale and purchase shall bo those sot out in Schedules I and II attached. They shall apply to all shipments from the production season commencing Ist August, 1944 and ending 31st July, 1945, and from the season commencing Ist August 1945 and ending 31st July 1946, and shall also apply to shipments of the production of subsequent seasons, unless before Ist May 191ft—in respect of the production season ending 31st July 1947 or before Ist May 1947 —in respect of production season ending 31st July, 1948—either Government shall require reconsideration on substantial grounds, and in particular on the grounds of substantial changes in the cost of production in New Zealand or in the export prices then current in other supplying countries, or such other substantial changes in conditions as may necessitate modifications in the conditions of this agreement. 4. The proportions of butter and cheese to be shipped from the production of each season under this agreement shall be as nearly as possible in accordance with the requirements of the United Kingdom Government, subject to consultation and agreement between the two Governments. 5. It being recognized that the exportable surplus of butter and cheese will bo aifectcd by the quantities of other milk products manufactured in New Zealand, the New Zealand Government agree to take all necessary steps to ensure that the manufacture of milk products other than butter and cheese is maintained at levels not exceeding requirements mutually agreed between the two Governments. 6. The United Kingdom Government undertake during the period of this Agreement, to consult the New Zealand Government as to ways and means of securing an orderly transition to the resumption of private trading if and when the present scheme of control is withdrawn or modified and in particular regarding the appointment of agents for the distribution of New Zealand dairy products. 7. Before 31st December, 1947, the two Governments will, in the light of conditions then prevailing, enter into consultation as to future arrangements. Schedule I.—Terms and Conditions or Sale and Purchase oe New Zealand Butter 1. Freight. The United Kingdom Government accept responsibility for providing ships for the ocean transport of the butter. 2. Subject to freight being available, shipments to be made in accordance with a monthly schedule to be agreed mutually between the two Governments. 3 Payment and Advances. —Payment to be made in sterling in London as to 97| per cent, on shipment and 2£ per cent 60 days after date of last Bill of Lading. 4. In the event of a serious dislocation of shipping, resulting in the United Kingdom Government being unable to provide ocean going ships, the United Kingdom Government undertake on request to make payment to the New Zealand Government: — (a) By way of advance at the rate of 145/- storling per hundredweight on the quantity of butter which has had to remain in coldstorc for a period exceeding 90 days. Such advance to be based on certificates issued by the New Zealand Government. The New Zealand Government undertake to repay such advances as and when the butter is shipped. (b) Covering the consequential additional cost of storage and insurance as certified by the New Zealand Government. _ r) . Sterling per hundred5. -t rice : ( weight delivered F. 0.8. Ocean Steamer. Creamery, Finest Grade, 93 points & over .. .. .. ■ • • • 150/6 „ First Grade, 90 to 92J points .. .. .. .. • • 149/3 „ Second Grade .. .. • • • • • • • • •• 145/6 Whey, First Grade . . .. • • ■ • • • • • • • 142/6 Whev, Second Grade .. .. . • • • • • ■ • • • 138/6 6. Weights and Packages.—Each box shall contain not less than 56 lbs. 2 ounces net of butter. Loss of weight to be calculated on the average of Grader's check weights, as shown on each Grade Note. Payment to be on the basis of 56 lbs. per box less any loss disclosed by Grade Notes. All butter to be packed in export boxes and lined with genuine vegetable parchment in accordance with current New Zealand Government regulations. 7. Salting. All butter to contain salt in accordance with New Zealand Government's regulations with a maximum of 2%. 8. Preservative. Preservative will not be included unless specially ordered by the United Kingdom Government. 9. All butter to be free from adulteration and to contain not more than 16% moisture. 10. Quality. The grading certificates of the New Zealand Government will be accepted as evidence of quality and weight 'it being understood that the pre-war standard of grading is maintained. The New Zealand Government undertake to' maintain a suitable stall' of qualified graders in New Zealand as well as appropriately qualified inspectors in the United Kingdom to deal with any complaints as to quality after arrival. Claims on quality, if not capable oi mutual adjustment to be decided by an independent umpire to he selected by mutual agreement.

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11. Storage:— (A) The New Zealand Government will be responsible for storing butter in suitable stores at suitable temperatures in New Zealand and for placing butter on board steamers for shipment as they become available. (B) Butter to be moved from stores for shipment so far as possible in rotation in accordance with date of grading. 12. Bills of Lading will be prepared showing the shipper as the New Zealand Government and the consignee as the Minister of Food. Grade Notes to be forwarded with Bills of Lading. 13. Loss prior to Ocean Shipment.—(A) Notwithstanding that the price of the butter is based F. 0.8. Ocean Steamer, the United Kingdom Government undertake the risk of loss or damage to butter intended for shipment against this contract to the extent to which such loss or damage would, have been recoverable : — 1. From the time the butter is placed f.o.b. steamer at one of the following ports :— Auckland Wellington Timaru New Plymouth Gisborne Dunedin Wanganui Napier Bluff Patea Lyttelton under the contract of Insurance covering tho period Ist September, 1938 to 31st August 1941 inclusive, held by the Dominion of New Zealand Dairy Sales Division and effected by Willis, Faber & Dumas Ltd., or 2. Between the time of leaving factory and arrival on board ocean steamer under the terms of the War Risks Insurance Office Certificate of Insurance in force at the date of this Agreement. Provided always, however, that should the insurers require additional premiums for these risks, the New Zealand Government shall have the option of paying such additional premiums to the United Kingdom Government or of carrying the risk themselves and in the latter event, the goods shall be at the risk of New Zealand Government until the goods are placed f.o.b. ocean steamer at one of the ports named in paragraph (A) 1 of this clause. (B) Any butter lost or damaged whilst at the risk of tho United Kingdom Government within terms of paragraph (A) of this clause shall be paid for by tho United Kingdom Government as and when such loss is recovered from the Underwriters concerned and to the extent of such recovery, provided always, however, that the United Kingdom Government shall insure all butter at a valuation not less than the contract price. Schedule II. —Terms and Conditions of Sale and Purchase of New Zealand Cheese 1. Freight.—The United Kingdom Government accept responsibility for providing ships for the ocean transport of the cheese. 2. Subject to freight being available, shipments to be made in accordance with a monthly schedule to be agreed mutually between the two Governments. 3. Payment and Advances.—Payment to be made in sterling in London as to 97J% on shipment and 2}% 60 days after date of last Bill of Lading. 4. In the event of a serious dislocation of shipping resulting in the United Kingdom Government being unable to provide ocean going ships, the United Kingdom Government undertake on request to make payment to the New Zealand Government:— (A) By way of advance at the rate of 85/- sterling per hundredweight on the quantity of cheese which has had to remain in store for a period exceeding 90 days. Such advance to be based on certificates issued by tho New Zealand Government. The New Zealand Government undertake to repay such advances as and when the cheese is shipped. (B) Covering the consequential additional cost of storage and insurance as certified by the New Zealand Government. 5. Price :— Sterling per hundredweight delivered F. 0.8. Ocean Steamer. Finest and First Grade, 91 points & over .. .. . . .. 89/Second Grado .. .. .. .. .. . . .. .. 87/— 0. All cheese to be white and unwaxed until mutually agreed. 7. Shrinkage.—Shrinkage at the rate of 2|% will be deducted from the cheeked packed weights of cheese. Should the actual shrinkages, as ascertained in London, in respect of the cheese from any particular dairy company prove to be consistently higher than 2|%, the shrinkage deduction on subsequent shipments will be increased accordingly, unless it is evident that such excess shrinkage arises from abnormal periods of storage. 8. Loss of weight to be calculated on the average of grader's checked weights as shown on each grade note. 9. Quality.—The grading certificates of the New Zealand Government will be accepted as evidence of quality and weight, it being understood that the pre-war standard of grading is maintained. The New Zealand Government undertake to maintain a suitable staff of qualified graders in New Zealand as well as appropriately qualified inspectors in the United Kingdom to deal with any complaints as to quality after arrival. Claims on quality, if not capable of mutual adjustment, to be decided by an independent umpire to be selected by mutual agreement. 10. Storage.—(A) The New Zealand Government will be responsible for storing cheese in suitable stores at suitable temperatures in New Zealand and for placing cheese on board steamers for shipment as they become available. (B) Cheese to be moved from stores for shipment so far as possible in rotation in accordance with date of grading. '11. Bills of Lading will be prepared showing the shipper as the New Zealand Government and the consignee as the Minister of Food. Grado Notes to be forwarded with Bills of Lading. 12. Loss prior to Ocean Shipment.—(A) Notwithstanding that the price of the cheese is based f.o.b. ocean steamer, the United Kingdom Government undertake the risk of loss or damage to cheese intended for shipment against this contract to the extent to which such loss or damage would have been recoverable : — 1. From the time the cheese is placed f.o.b. steamer at one of the following ports : —• Auckland Wellington Timaru New Plymouth Gisborne Dunedin Patea Napier Bluff Wanganui Lyttelton under the contract of Insurance covering the period Ist September, 1938 to 31st August, 1941 inclusive, held by the Dominion of New Zealand Dairy Sales Division and effected by Willis, Faber & Dumas Ltd., or 2. Between the time of leaving factory and arrival on board ocean steamer under the terms of the War Risks Insurance Office Certificate of Insurance in force at the date of this Agreement. Provided always, however, that should the insurers require additional premiums for these risks, the New Zealand Government shall have the option of paying such additional premiums to the United Kingdom Government or of carrying the risk themselves and in the latter event, the goods shall be at the risk of New Zealand Government until the goods are placed f.o.b. ocean steamer at one of tho ports named in paragraph (A) 1 of this clause. (B) Any cheese lost or damaged whilst at the risk of the United Kingdom Government within the terms of paragraph (A) of this clause, shall be paid for by the United Kingdom Government as and when such loss is recovered from the Underwriters concerned and to the extent of such recovery, provided always, however, that the United Kingdom Government shall insure all cheese at a valuation not less than the contract price.

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In informing the United Kingdom Government of the New Zealand Government's acceptance of the four-year contracts, the High Commissioner for New Zealand (London) raised the question of a continuing market for our products, and wrote to the United Kingdom Minister of Food (dated 26th July, 1944) as follows There is a related point not immediately arising, but to which my Government attach importance, and it was mentioned in Mr. Nash's letter to you of 21st March last. It is, of course, difficult for any of us to foresee the conditions that will prevail four years hence and we cannot suggest any precise commitments to apply then. Yet I think we should reiterate that, even at this time, a main concern of New Zealand must be the continuing market for our produce— particularly as present plans are calculated to increase production for export. We hope that the tonnages will be greater in 1948 than to-day, and it would be a serious matter for the Dominion if, having increased our production to meet the urgent needs of the next four years, the principal market were then to be curtailed. May we take it that so far as the future can bo foreseen, we are agreed that this will not be allowed to occur ? The reply of the United Kingdom Minister of Food (dated 27th July, 1944) was as follows : —- Although [ can, of course, give no undertaking as to what the Government of this country may or may not be able and ready to do four years hence, T am sure that this country will not forget all that New Zealand has done at our side throughout the war and it is my hope that we shall act' accordingly. Three additional points in connection with the contracts —namely, allocation of supplies by the Combined Food Board among the United Nations, sale of butter and cheese by brands in the United Kingdom, and markets for butter and cheese in other countries —were the subject of a letter dated 30th September, 1944, from the United Kingdom Minister of Food to the High Commissioner for New Zealand as follows :— I am very pleased that negotiations for a four year contract for the purchase of butter and cheese from New Zealand have been brought to a satisfactory conclusion and I am enclosing two initialled copies of the Heads of Agreement. Would you kindly be good enough to initial and return one copy. Arising out of the discussions, there were a few matters on which it was thought that the intentions of our respective Governments might be expressed by an exchange of letters rather than by direct reference in the Heads of Agreement. In the first reference should be made to the desire of both our countries to facilitate the allocation of supplies by the Combined Pood Board in accordance with the principles agreed upon by the representatives of the United Nations at the Conferences held at Hot Springs in May 1043 and Atlantic City in November 1043. While we expect that the supplies wc shall buy under the Agreement will be allocated to the United Kingdom, we regard them as purchased on behalf of the United Nations and subject to allocation by the Combined Pood Board so long as that body continues to allocate food supplies among the United Nations. In the second place I understand that the New Zealand representatives were concerned that the sale of butter by brands in the United Kingdom should be permitted at the earliest opportunity and not later than the date on which margarine brands were reintroduced. Although the timing of relaxation of the various regulations may create difficulties, when the question of restoration of brands arises, I intend to treat both products in the same way. In the third place the New Zealand representatives were desirous of safeguarding the New Zealand markets for butter and cheese in other countries. While the question of shipping to other countries does not arise at the present time, I appreciate the reasons for your request. I hope that while production in New Zealand remains so far below the pre-war level, the total exportable surplus, as defined in the Heads of Agreement, will come to the U.K., but should circumstances impel your Government to ship certain quantities elsewhere, I should not object to a quantity up to the level of 2£% per annum of tho exportable surplus of butter and cheese, being disposed of in this way to other markets ; any higher percentage to be tho subject of mutual consultation and agreement.* * It should be noted that tho statement "while production in New Zealand remains so far below the pre-war level" is incorrect The appropriate comparative figures are :—

tTo these figures should be added the quantities supplied to the United States Forces in the Pacific area—viz. butter J 2 000 tons ; cheese, 0,000 tons. GUARANTEED PRICES, 1944-45 SEASON The guaranteed purchase-prices paid to dairy companies by the, Marketing Department for butter and cheese manufactured during the 1944-45 season and exported were,:— Creamery Butter — Finest Grade— Pence per Pound. 94 points and over .. .. .. .. 15-515 93 to 931 points (basic price) .. .. .. .. 15 •39 First Grade— 92 to 921 points .. __ __ 15-3275 90 to 91J points .. .. ~ .. .. ..15-14 Second Grade .. .. .. .. .. ..14-64 Whey Butter— First Grade .. .. .. .. .. .. 13-89 Second Grade .. .. .. .. .. ..13-39 Cheese — Finest Grade — 94 points and over . . .. . . .. .. 8 • 88625 93 to 93| points .. .. .. . . .. .. 8 • 855 First Grade— 92 to 92J points (basis price) .. . . . . .. 8-73 91 to 9lf points .. .. .. .. .. .. 8-6675 Second Grade .. .. .. .. .. ... 8-48 Note. These purchase-prices for butter and cheese are the same as those applying for the previous (1943-44) season.

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Total Production. Delivered to United Kingdom. Butter. Cheese. Butter. Cheese. , „„ Tons. Tons. Tons. Tons. 1938-31).. .. .. 148,000 85,000 116,000 80 000 1044-45.. .. .. 156,000 103,000 122,000f S)2,000t

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DAIRY-FACTORY AND FARM-COSTS ALLOWANCES PAYABLE FOR THE 1944-45 SEASON The report of the Department for last year (ended 31st July, 1944) shows at pages 7 and 8 the costs allowances agreed to be paid (in terms of the stabilization procedure) for the 1944-45 season, after negotiations between the representatives of the dairy industry and the Economic Stabilization Commission. Full details of the allowances were shown in the previous year's report just referred to, but for ready reference the short details are repeated hereunder : —■ To butter-manufacturing companies for period Ist August, 1944, to 31st July, 1945 Pence per Pound of Butterfat. A farm-costs allowance of .. .. .. .. .. 1-417 A farm-labour allowance of .. .. .. .. ..1-470 A factory-costs allowance of .. .. .. .. .. 0 • 291 Total 3-178 To cheese-manufacturing companies for period Ist August, 1944, to 31st July, 1945 : — A farm-costs allowance of .. .. .. .. .. 1-417 A farm labour allowance of .. .. .. .. 1 -470 A factory-costs allowance of .. .. .. .. .. 0-375 Total .. .. .. .. .. .. .. 3-262 In addition to the foregoing allowances, the following payments were made as from Ist November, 1944, to compensate dairy companies for additional factory wages costs arising from the Arbitration Court award dated 11th December, 1.944, and subsequent amendments Pence per Pound of Butterfat. To butter-manufacturing companies .. .. .. .. ..0-073 To cheese-manufacturing companies .. .. .. .. .. 0 ■ 350 In the previous year's report the standard resulting average payments by dairy companies to suppliers for butterfat for the 1944-45 season were estimated to be 19-6 d. per pound of butterfat for butter-manufacture and 21-6 d. per pound of butterfat for cheese-manufacture. The actual resulting average payments were as follows :— Pence per Pound of Butter-manufacture — Butterfat. Payment for butterfat supplies .. .. .. .. .. 16-903 Add farm-costs allowance .. .. .. .. .. 2 • 887 Total , 19-790 Cheese-manufacture — Payment for butterfat supplies .. .. .. .. ..19-168 Add farm-costs allowance .. .. .. .. 2 ■ 887 Total 22-055 Note.—Guaranteed Prices for 1945-46 Season and Payment of Dairy-factory and Farm-costs Allowances.—Foe convenience of reference, the following arrangements for the 1945-46 season settled before publication of this report are recorded : — (1) Guaranteed Prices, 1945-46 Season: The guaranteed purchase-prices to be paid to dairy companies by the Marketing Department for butter and cheese manufactured during the 1945-46 season and exported are the same as the prices quoted above as applying for the 1944-45 season. (2) Dairy-factory and Farm-costs Allowances payable for the 1945-46 Season (Ist August, 1945, to 31st July, 1946) : The following notification was made to the dairy industry of allowances payable for the 1945-46 season (Ist August, 1945, to 31st .July, 1946) agreed upon after negotiations between industry representatives and the Economic Stabilization Commission :— Details of the allowances which will be paid for the 1945-46 season (Ist August 1945 to 3l.st July 1946) are as follows :—■ To Butter Manufacturing Companies d. d. Farm Costs Allowance, 1943-44 .. .. .. .. .. ..0-767 Additional Farm Costs Allowance, 1944-45 .. .. .. .. .. 0-650 1945-46 .. .. .. .. .. 0-497 — 1-914 Farm Labour Allowance, 1944-45 .. .. .. .. .. •• 1-470 Additional Farm Labour Allowance, 1945-46 .. .. .. .. .. 0-520 1-990 Making Total Farm Allowances (for 1945/46 season) of .. .. .. 3-904 per lb. of butterfat in cream or milk supplied to a butter factory and manufactured into butter. Factory Costs Allowance, 1943-44 .. .. .. .. .. •• 0-269 Additional Factory Costs Allowance, 1945-46 .. .. .. .. .. 0-047 0-316 Factory Wages Allowance, 1943-44 .. .. .. .. .. •• 0-022 Additional Factory Wages Allowance, 1944-45-46 .. .. •• .. 0-073 0-095 Making Total Factory Allowances (for 1945/46 season) of .. .. .. 0-411 per lb. of butterfat in milk or cream supplied to a butter factory and manufactured into butter in that factory. Note.—(a) The allowances cannot be claimed in respect of cream or milk used for any purpose other than buttermaking.

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(b) The farm costs allowance is claimed by dairy companies on behalf of suppliers to whom they are required to pass on the payment. (c) The factory costs allowance is also payable on whey cream used in the manufacture of whey butter. (d) In the case of supply of cream to a butter company by a milk powder, a processed milk, or a cheese company, the butter company should not claim the farm costs allowance on such supply, but should claim for the butter company factory costs allowance. To Cheese Manufacturing Companies d. d. Farm Costs Allowance, 1943-44 .. .. .. .. 0-767 Additional Farm Costs Allowance, 1944-45 .. .. .. 0-650 Additional Farm Costs Allowance, 1945-46 .. .. .. .. .. 0-497 1-914 Farm Labour Allowance, 1944-45 .. .. .. .. .. .. 1-470 Additional Farm Labour Allowance, 1945-46 .. .. .. .. .. 0-520 1-990 Making Total Farm Allowances (for 1945/46 season) of .. .. .. 3-904 per lb. of butterfat in milk received over the factory stage for cheesemaking (no deduction for loss in whey) and manufactured into cheese. Factory Costs Allowance, 1943-44 .. .. .. .. .. .. 0-299 Additional Factory Costs Allowance, 1945-46 .. .. .. .. .. 0-020 0-319 Factory Wages Allowance, 1943-44 .. .. .. .. .. .. 0-076 Additional Factory Wages Allowances, 1944-45-46 .. .. .. .. 0-350 0-426 Making Total Factory Cost Allowances (for 1945/46 season) of .. .. 0-745 per lb. butterfat contained in milk received over the factory stage for cheesemaking (no deduction for loss in whey) and manufactured into cheese in that factory. Note.—(a) The allowances cannot be claimed in respect of milk used for any purpose other than cheesemaking. (b) The farm costs allowance is claimed by dairy companies on behalf of suppliers to whom they are required to pass on the payment. (c) In the case of a choose company which separates milk and supplies the resultant cream to a butter company, the cheese company should make the claim for the farm costs allowance on the butterfat contained in the milk as received over the factory stage, and the butter company should make the claim for the butter factory costs allowance. Additional Wages Allowance for Small Companies.—ln order to compensate the smaller companies for the loss of certain concessions previously enjoyed by them an extra wages cost allowance of ■ Id. per lb. butterfat will be paid to any company whose output for the season is less than 250 tons of butter or 200 tons of cheese. Thus in the case of these small butter companies the total wages allowance is -195 d. per lb. butterfat, and in the case of these small cheese companies the total wages allowance is -526 d. per lb. of butterfat. (3) Suppliers' Position for 1945-46 Season in respect of Guaranteed Prices and Farm-costs Allowances : The following summary shows (a) the items (working and maintenance costs, capital charges, and labour reward) which, less return from pigs, comprise the butter-fat equivalent of the guaranteed price for butter ; (b) the farm-costs allowances granted in 1943-44, 1914 45, and 1945-46 ; and (c) the farm-labour allowances granted in 1944-45 and 1945-46 :— Per Pound of Butterfat. d. d. d. Working and maintenance costs .. .. .. 5-34 Farm-costs allowance, 1943-44 .. .. .. 0-767 Farm-costs allowance, 1944-45 .. .. .. 0-650 Farm-costs allowance, 1945-46 .. .. .. 0-497 1-914 7-254 Capital charges (interest) .. .. .. .. 3 • 240 Labour reward .. .. .. .. .. 9-45 Farm-labour allowance 1944-45 .. .. 1 -47 Farm-labour allowance 1945-46 .. .. ..0-52 1-99 11-440 21-934 Less return from pigs.. .. .. .. 1 • 540 Standard average "payout" to suppliers for butterfat for 20-394 for butter-manufacture * ...■ — PREMIUMS FOR QUALITY, AND QUANTITIES OF BUTTER AND CHEESE PAID FOR (OR TO BE PAID FOR) AT DIFFERENTIAL PRICES Under the Dairy-produce Export Prices Order 1939 provision is made for additions to or deductions from the basic purchase-prices for butter and cheese according to quality as disclosed by the grading-points awarded to the dairy-produce. This system of price differentials provides a stimulus to the production of dairy-produce of higher quality.

* In assessing the actual estimated average " total payout " (including farm-costs allowances) to be received by suppliers for the 1945-40 season, regard should be had to the fact that the dairy-factory-costs allowances granted in 1943-44 of 0-269 d. per pound of butterfat for butter and 0-299 d. per pound of butterfat for cheese were in recognition of increases in costs which had already taken place between the 1938-39 and the 1943-44 season. Consequently, these payments are reflected in corresponding increases in " payout " to suppliers for the 1943-44 and subsequent seasons. Allowing for this factor, it is estimated that the average total " payout " (including farm-costs allowances) to bo received by suppliers for the 1945-46 season will be : for butter-manufacture, 20-6 d. per pound of butterfat; and for cheesemanufacture, 22-6 d. per pound of butterfat.

10

H.-30

The following tables show for the 1944-45 season the quantities of butter and cheese purchased and to be purchased and paid for at the respective differential prices. For comparison purposes the totals for the previous five seasons are also shown : —

Creamery Butter (in Tons): Quantities purchased or to be purchased and paid for at Differential Prices

Whey Butter (in Tons): Quantities purchased or to be purchased and paid for at Differential Prices

Cheese (in Tons): Quantities purchased or to be purchased and paid for at Differential Prices

11

Finest Grade. First Grade. Second 94 Points 9 p^„ t 9 a 3i 92 to 92£ 90 to 91J Gradeand over. (Basio Points. Points. Tons. Tons. Tons. Tons. Tons. Tons. 1944-45 .. .. .. "119,807 47,906 52,319 12,810 6,654 118 1943-44 .. .. .. 98,648 38,821 43,659 9,666 6,320 182 1942-43 .. .. .. 101,696 35,046 47,417 11,464 7,426 343 1941-42 .. .. .. 100,432 40,497 40,106 9,507 9,043 1,279 1940-41 133,337 43,569 63,470 14,828 10,757 713 1939-40 .. .. .. 128,274 51,624 51,004 15,437 9,570 639 Percentage of qualities— 1944-45 . .. 100 39-99 43-67 10-69 5-55 0-10 1943-44 . .. .. 100 39-35 44-26 9-80 6-41 0-18 J 942-43 . .. .. 100 34-47 46-63 11-27 7-30 0-33 1941-42 .. .. .. 100 40-32 39-93 9-47 9-00 1-28 1940-41 .. .. .. 100 32-67 47-60 11-12 8-07 0-54 1939-40 .. .. .. 100 40-25 39-76 12-03 7-46 0-50

Total. First Grade. Second Grade. Tons. Tons. Tons. 1944-45.. .. .. .. 2,783 2,582 201 1943-44 .. .. .. 2,420 2,256 164 1942-43 2,257 2,095 162 1941-42 .. .. .. 3,123 2,974 149 1940-41 .. .. .. 2,855 2,695 160 1939-40 2,095 2,063 32 Percentage of qualities—-1944-45 .'. .. .. 100 92-78 7-22 1943-44 .. .. .. 100 93-22 6-78 1942-43 .. .. .. 100 92-82 7-18 1941-42 .. .. .. 100 95-23 4-77 1940-41 .. .. .. 100 94-39 5-61 1939-40 .. .. .. 100 98-47 1-53 Butter figures calculated at forty boxes to a ton.

Finest Grade. First Grade. Second ° a ' 94 Points 93 to 93J 9 p„? ? a 2i 9! to 9*i Glade ' and over. Points. (Basic Pr ; ce-) Points. Tons. Tons. Tons. Tons. Tons. Tons. 19*14-45 .. 90,429 1,272 21,840 48,412 14,694 4,211 1943-44 .. .. 81,544 820 17,768 45,966 13,150 3,840 1942-43 .. .. 93,638 660 18,997 56,378 15,274 2,329 1941-42 .. .. 150,127 1,051 28,097 69,703 38,676 12,600 1940-41 .. . 117,798 901 22,901 67,125 21,278 5,593 1939-40 .. .. 92,508 951 16,820 56,071 15,274 3,392 Percentage of qualities — 1944-45 .. 100 1-40 24-15 53-54 16-25 4-66 1943-44 .. 100 1-00 21-79 56-37 16-13 4-71 1942-43 . 100 0-70 20-29 60-21 16-31 2-49 1941-42 . .. 100 0-70 18-72 46-43 25-76 8-39 1940-41 .. .. 100 0-76 19-45 56-98 18-06 4-75 1939-40 .. .. .. 100 1-03 18-18 60-61 16-51 3-67 Cheese figures calculated at fourteen orates to a ton.

H.—SO

BUTTER AND CHEESE GRADINGS

Note. —Owing to the diversion of supplies of butter and cheese in 1942-43 and later seasons to the Allied Forces in Pacific Area, a correct comparison between gradings for the 1942-43 and later seasons and gradings in previous seasons is not possible.

QUANTITIES OF BUTTER AND CHEESE EXPORTED The quantities of butter and cheese exported from the various grading ports of the Dominion are shown in the following tabulation :—

Butter and Cheese Exports from 1st August, 1944, to 31st July, 1945

EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO BUTTER AND CHEESE Butter From 11th June, 1945, the butter ration, which as from 28th October, 1943, had been 8 oz. per head per week, was reduced by 25 per cent, to 6 oz. per head per week. It is estimated that the saving by this reduction will amount to approximately 5,000 tons per annum, which, added to the estimated saving of 9.000 tons per annum under the original rationing basis, makes a total saving by rationing on the new basis of approximately 14,000 tons per annum. The quantity thus saved has been made available for export to the United Kingdom. Cheese Sales of cheese on the local market continue to be restricted to the level of sales in the 1942-43 season. PRODUCTION OF DAIRY PRODUCTS IN NEW ZEALAND DAIRY FACTORIES The following figures are taken from the Census and Statistics Department's publications:—

Total Quantities of Butter and Cheese produced in New Zealand Dairy Factories (Factory Weights)

12

Butter (Creamery). Cheese. m Increase or Decrease on r ., Inorease or Decrease on Previous Year. on8 ' Previous Year. Per Cent. Per Cent. 1944-45 .. .. .. 122,352 19-96 (increase) 95,548 11-787 (inorease) 1943-44 .. .. .. 101,992 4.60 (decrease) 85,473 11.735 (decrease) 1942-43 .. .. .. 106,947 3-504 (increase) 96,837 36-738 (decrease) 1941-42 .. .. .. 103,326 25-90 (decrease) 153,074' 28-74 (increase) 1940-41 .. .. .. 139,444 4-61 (increase) 118,899 26-90 (increase) 1939-40 .. .. .. 133,303 9-02 (increase) 93,696 14-96 (increase)

Great Britain. Other Destinations. Total. Percentage. Butter. Cheese. Butter. Cheese. Butter. Cheese. Butter. Cheese. Boxes. Crates. Boxes. Crates. Boxes. Crates. North Island .. 4,666,9941,086,971 12,502 25,958 4,679,4961,112,929 98-25 86-40 South Island .. 83,509 175,264 .. .. 83,509 175,264 1-75 13-60 Dominion totals 4,750,5031,262,235 12,502 25,958 4,763,0051,288,193 100-00 1-00-00

SfiBmn Creamery Choddar Whey ° eas0n - Butter. Cheeso. Butter. Tons. Tons. Tons. 1939-40 .. .. .. .. .. 155,190 97,637 2,565 1940-41 .. .. .. .. .. 161,809 122,370 3,355 1941-42.. .. .. .. .. 129,854 157,659 3,910 1942-43.. .. .. .. .. 139,083 102,846 2,908 1943-44 .. .. .. .. 133,650 92,149 2,747 1944-45 (estimated) .. .. .. 153,000 103,000 2,900

fit.—3o

The Food and Rationing Controller's Office gives the following figures of total production of processed milk in New Zealand factories for the calendar year 1944 :— Tons. Whole-milk powder .. .. .. ~ .. .. 3,449 Skim-milk powder .. .. .. .. .. ..8,777 Evaporated Milk (unsweetened) .. .. .. .. 5,865 Condensed milk (sweetened) .. .. .. .. .. 2,278 Malted milk .. .. .. .. .. .. 297 PROCESSED MILK Long-term contracts were concluded with the United Kingdom Ministry of Food for the exportable surpluses of skim-milk powder and evaporated milk for the four years, 1944-48, to be concurrent with the butter and cheese long-term contracts ; prices to be fixed for the two years, 1944-45 and 1945-46, thereafter to be subject to annual review up or down according to circumstances then ruling ; terms of payment and general conditions to be on a similar basis to those for butter and cheese, with packing and quality to be maintained on pre-war standards. Skim-milk Powder Prices for 1944-45 and 1945-46, £48 15s. per ton sterling f.o.b. Evaporated Milk Prices for 1944-45 and 1945-46 : British standard, 225. 6d. per case sterling f.o.b. ; American standard, 21s. 9d. per case sterling f.o.b. ; each case containing forty-eight 1 lb. tins. The equivalent of these prices in New Zealand currency is paid to manufacturers, less £ per cent, to cover the Department's administrative expenses. The quantities and value of purchases by the Department for the twelve months ended 31st July, 1945, were :— Cases. Weight. Value. Tons. £ Skim-milk powder .. .. 137,773 6,592 393,747 Evaporated milk .. .. 225,595 4,834* 308,280 Note.- —The bulk of the skim-milk powder has been shipped to India and Ceylon for Service and civilian requirements. The evaporated milk has been used for Service requirements—the British standard in Pacific area, and the American standard in India. CASEIN During the 1942-43 and 1943-44 seasons, contracts were concluded with the United Kingdom Ministry of Supply for the supply of New Zealand's normal export of lactic casein. , For the 1944-45 season the Ministry of Supply agreed that the supply be diverted"'to Australia, and the following were the quantities and value of casein shipped to the Australian Plywoods Board •during the twelve months ended 31st July, 1945 : 7,153 sacks, weighing 550 tons, £38,894. For the 1945-46 season a contract for the exportable surplus has again been concluded with the United Kingdom Ministry of Supply, the sale price being £57 6s. Bd. per ton sterling f.o.b. PAYMENTS MADE BY DAIRY-FACTORY COMPANIES FOR BUTTERFAT-SUPPLIES The following tabulation shows the average butterfat-prices paid to suppliers of butter- and cheese-manufacturing companies. It should be borne in mind that when making comparison of butterfat payouts of companies it is necessary to take into consideration the location of the factories and special circumstances pertaining to individual companies, as those factors reflect appreciably on manufacturing and transport costs : — Payments by Dairy Companies for Butterfat-supplies (In pencc per pound of butterfat) Butter. Cheese. New Zealand average— 1944-45 season .. .. .. 16-903 19-168 +2-887* +2-887* 19-790 22-055 1943-44 season .. .. .. 16-830 18-888 +0-767* +0-767* 17-597 19-655 1942-43 season .. .. .. 16-569 18-577 1941-42 season .. .. .. 16-017 18-025 1940-41 season .. .. .. 16-106 18-043 1939-40 season .. .. .. 16-179 18-091 1938-39 season .. .. .. 16-087 18-060 1937-38 season .. .. .. 14,812 16-389 1936-37 season .. .. .. 13-558 15-176 ♦Plus farm-oosts allowances (see annual report, 31st July, 1944, page 8).

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COSTS OF BUTTER AND CHEESE MANUFACTURING COMPANIES The following tabulation shows the average costs of butter- and cheese-manufacturing companies for the 1944-45 season. The averages for the eight previous seasons are also shown : —

Season 1944-45: Costs in Manufacture and Delivery of Butter to f.o.b. Overseas Steamers

*Less factory-costs allowance of 0-269 d. por pound butterfat (from Ist August, 1943). f Butter-manufacturing costs for the 1941-42 season were increased owing to diversion of milk-supply from butter-manufacture to cheesemanufacture. Compensation payments wero made to dairy companies on this account. • *

Season 1944-45: Costs in Manufacture and Delivery of Cheese to f.o.b. Overseas Steamers

PUBLICITY IN THE UNITED KINGDOM The Department's annual report for the year ended 31st July, 1943, mentions (page 13) the maintenance during the war years of the nucleus of the advertising section so that, when opportunity offers, the merits of New Zealand butter and cheese can be publicized and sale-promotion activities resumed. The determining factor in the extensive resumption of advertising and sales-promotion plans is the cessation of rationing in the United Kingdom. The contract of purchase of butter and cheese by the United Kingdom Ministry of Food provides that, when the question of restoration of the branding of butter and margarine arises, the Ministry intends to treat both products in the same way. It is possible that reinstatement of brands might be permitted before the United Kingdom Ministry of Food is in a position to give distribution of butter and cheese by mark or origin. Although rationing in the United Kingdom still continues, steps arc now being taken to resume advertising and publicity, and a campaign is in progress in the United Kingdom stressing New Zealand's war contribution, particularly in the field of food production and the maintenance of the known high quality of our dairy products, and mentioning that in the near future it is expected that New Zealand butter and cheese will be available under their own brand.

14

(In pence per pound of butterfat) bD pQ d I • § "3 8 -g . 'o 3 ® *43 cS cq c3 <» | '43 o w) .2 m d S)° j§ bp Total || <§ « g "3 ■§ § £> 8 «s Charges. *! ¥ §• |-i «l oS i ° i New Zealand average— 1944-45 season .. .. 0-460 1-042 0-090 0-079 0-397 0-188 2-256 -0-269* — 1-987 1943-44 season .. .. 0-472 1-109 0-093 0-078 0-391 0-210 2-353 -0-269* 2-084 1942-43 season .. .. 0-440 1-100 0-089 0-068 0-398 0-206 2-301 1941-42 season .. .. 0-438 1-091 0-091 0-064 0-409 0-213 2-306f 1940-41 season .. .. 0-405 1-023 0-077 0-063 0-437 0-192 2-197 1939-40 season .. .. 0-398 0-977 0-084 0-063 0-418 0-187 2-127 1938-39 season .. .. 0-402 1-019 0-085 0-098 0-394 0-208 2-206 1937-38 season .. .. 0-381 0-953 0-075 0-076 0-384 0-178 2-047 1936-37 season .. .. 0-352 0-927 0-072 0-088 0-398 0-147 1-984

(In pence per pound of butterfat) I Manu- Repairs Charges: 0verhead Total ! faotunng Depreciation. and Factory to nhmww cWws Charges. Maintenance. f.o.b. Charges. Charges. New Zealand average— 1944-45 season .. 2-454 0-163 0-226 0-626 0-300 3-769 -0-299* s 3-470 1943-44 season .. 2-660 0-176 0-217 0-636 0-343 4-032 —0-299* 3-733 1942-43 season .. 2-576 0-166 0-216 0-634 0-325 3-917 1941-42 season .. 2-372 0-141 0-170 0-647 0-270 3-600 1940-41 season .. 2-323 0-"144 0-184 0-620 0-258 3-529 1939-40 season .. 2-259 0-148 0-180 0-624 0-299 3-510 1938-39 season .. 2-289 0-157 0-203 0-617 0-326 3-592 1937-38 season .. 2-151 0-141 0-166 0-589 0-290 3-337 1936-37 season .. 2-056 0-134 0-146 0-577 0-226 3-139 *Less factory-costs allowance of 0-299(1. per pound butterfat (from 1st August, 1943).

H.—3o

ANNUAL IMPORTS OP DAIRY PRODUCTS INTO UNITED KINGDOM DURING THE YEARS 1938 TO 1944 INCLUSIVE The following tables are of interest, particularly the butter and cheese tables, which show the importance of New Zealand as a supplier to Britain during the vital war years : —

Annual Imports of Butter into United Kingdom

Annual Imports of Cheese into United Kingdom

15

(In tons) Consigned from 1938. 1939. 1940. j 1941. 1942. 1943. 1944. New Zealand .. .. 129,613 104,721 114,739 127,983 93,377 100,385 104,383 Australia .. .. 89,891 98,673 85,440 69,679 40,716 44,013 37,799 Irish.Free State .. 16,330 11,368 12,677 6,122 225 142 28 Union of South Africa .. 1,266 2,998 5,152 2,500 .. 5 Canada.. .. .. 1,501 4,897 J 20 12 3,175 South-west African Territory 1,294 Kenya.. .. .. 707 3,345 2,752 230 6 Other Empire .. .. 37 J Total Empire .. 240,639 226,002 220,761 206,534 134,336 147,720 142,210 Denmark .. .. 118,240 101,568 24,162 Netherlands .. .. 35,595 41,705 8,842 Latvia.. .. .. 16,995 11,864 Sweden .. .. 15,038 11,958 2,556 Lithuania .. .. 11,404 12,375 Estonia .. .. 9,158 7,490 Finland .. .. 10,486 8,091 Poland.. .. .. 9,954 8,129 Argentine .. .. 4,494 5,660 7,837 11,569 18 3,498 10,522 Austria.. .. .. 749 Hungary .. .. 1,023 France . . .. . . 17 Belgium .. .. 249 Norway .. .. 620 Czechoslovakia, .. .. 555 Japan .. . . .. 371 Uruguay .. .. 308 Other foreign .. .. 1 2,006 207 37 225 386 217 Total foreign .. 235,257 210,846 43,604 11,606 243 3,884 10,739 Grand total .. 475,896 436,848 264,365 218,140 134,579 151,604 152,949 Less re-exports 3,952 3,141 368 39 48 78 109 Net imports .. 471,944 433,707 263,997 218,101 134,531 151,526 152,840 1

(Iii tons) New Zealand .. .. 81,970 74,872 89,229 116,440 132,131 91,086 82,299 Canada.. .. .. 33,887 35,743 42,015 39,767 55,855 55,655 55,355 Australia .. .. 11,864 16,277 17,736 11,604 4,906 7,518 3,597 Union of South Africa .. 1,135 Irish Free State .. .. 1,017 Other Empire .. .. .. 2,686 2,365 549 117 Total Empire .. 129,873 129,578 151,345 168,360 193,009 154,859 141,251 Netherlands .. .. 10,124 7,040 3,324 Italy .. .. .. 3,522 2,865 315 Switzerland .. .. 902 910 195 France .. .. .. 571 Denmark .. .. 969 Norway .. .. 63 Finland .. .. 168 Belgium .. .. 2 United States of America.. .. .. .. 34,262 122,181 54,779 110,582 Other foreign .. .. 172 1,923 939 742 3 1 77 Total foreign .. 16,493 12,738 4,773 35,004 122,184 54,780 110,659 Grand total .. 146,366 142,316 156,118 203,364 315,193 209,639* 251,910 Less re-exports 856 621 213 38 ]5 243 321 Net imports 145,510 141,695 155,905 203,326 315,178 209,396 251,589 , * The revised figures issued in 1945 shows total imports for 1943 as 206,993 tons.

H.—3o

Annual Imports of Unsweetened Milk Powder into United Kingdom

Note—Figures in parentheses are revised figures issued in 1945.

Annual Imports of Unsweetened Condensed Milk into United Kingdom

ACCOUNTS The dairy-produce accounts covering the completed operations for the 1943-44 season and the operations for the 1944-45 season are shown in the accounts section at the end of this report, pages 41 and 42. The completed operations for the 1943-44 season are referred to on page 5 of this report. After sale of the balance of the 1943-44 season's dairy-produce which was in store at 31st July, 1944, the final result of the operations for the complete 1943-44 season is a surplus of £575,576.

The accounts now presented for the 1944-45 season cover purchases of butter and cheese by the Department up to 31st July, 1945. The following table shows the quantities so purchased, the total season's production for export, and the stocks in store awaiting purchase at 31st July, 1945 : —

The accounts for the 1944-45 season comprise Administration and General Expenses Account, Purchase and Sale and Revenue Accounts, Dairy-produce Account, and Dairy Industry Stabilization Account. The circumstances of the establishment of the Dairy Industry Stabilization Account are referred to in a note at the foot of the accounts published with last year's annual report (page 30). There is a further reference to the Dairy Industry Stabilization Account on page 3 of this report, and the account itself is shown on page 43. It will be observed from the accounts that the Purchase and Sale and Revenue Accounts show a surplus at 31st July, 1945, of £1,132,426, which is transferred to the Dairy-produce Account. In terms of the arrangements settled with the industry in July, 1943, the net surplus in the Dairy-produce Account, £1,159,720, is transferred to the Dairy Industry Stabilization Account. The Dairy Industry Stabilization Account shows a credit balance of £4,675,446,

16

(In tons) Consigned from 1938. 1939. 1949. 1941. 1942. 1943. 1944. New Zealand .. .. 6,589 6,430 6,818 8,834 7,348 8,310 4,464 Canada.. .. .. 871 "| 372 322 232 Australia .. 2,216 I „ a „ n „ nrQ "1 f 1,059 Eire .. .. .. 562 f 3,850 2,251 2,587 <J 1,267 Other Empire ...... J J 1 United States of America.. 2,776 \ . . AQr 13,506 55,174 72,847 76,165 Other foreign .. .. 4,738 / ' ' .. 3 6 39 Totals— Whole-milk powder .. 4,602 4,257 4,424 5,039 5,403 5,501 4,656 (5,342) (5,462) Skimmed-milk powder 13,150 9,599 9,463 21,241 59,697 78,481 78,339 (21,171) (59,576) (75,629) Buttermilk and whey 1,051 1,675 282 powder Grand total .. 17,752 14,907 15,562 26,562 65,098 83,891 82,995 (26,492) (64,918) (81,091)

(In tons) Canada.. .. .. 8,964 7,083 10,111 8,933 27 8 3 Other British .. .. 2,140 1,745 2,370 1,296 1,423 1,950 837 United States of America.. 4 716 5 175 29 211 J' 124,109 184,677 129,653 86,072 Other foreign .. .. J ' ' ' \ • 1 Total .. .. 15,820 14,003 41,692 j 134,338 186,128 131,611 86,912

Shipped and paid to In Store and paid, In Store and not paid, Total Production for 31st July, 1945. 31st July, 1945. 31st July, 1945. Export Season, 1944-45. Boxes. Boxes. Boxes. Boxes. Creamery butter.. 4,497,484 199,058 95,735 4,792,277 Whey butter .. 108,417 1,278 1,623 111,318 Crates. Crates. Crates. Crates. Cheese.. .. 1,216,433 20,356 29,219 1,266,008

H.—3o

MEAT REVIEW OF COMPLETED OPERATIONS FOR THE 1943-44 SEASON The contract between the United Kingdom and the New Zealand Governments provided for the purchase of the maximum tonnage of meat which could be made available for export. Frozen-meat shipments for the twelve months ended 30th September, 1944, totalled 212,617 tons. In addition to these shipments on account of the United Kingdom Ministry of Food, there were deliveries of frozen meat to the United States Joint Purchasing Board amounting to 43,390 tons, leaving a carryover of 62,504 tons for disposal after the end of the season. LONG-TERM CONTRACT (1944-48) BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF THE EXPORTABLE SURPLUS OF MEAT FOR THE PRODUCTION PERIOD IST OCTOBER, 1944, TO 30TH SEPTEMBER, 1948 In last year's annual report reference was made to the initiation by the United Kingdom Government of proposals for a long-term contract, to ensure the largest possible supplies of meat to Britain and to enable New Zealand primary producers to plan their farming operations in advance. Details were also given regarding the subsequent discussions on this subject which resulted in the completion of the contract. The terms and conditions of this contract are as follows : — HEADS OP AGREEMENT For the Purchase by the United Kingdom Government or Supplies or Meat and Pio Meat in New Zealand por the Period Ist October, 1944 to 30th September, 1948 1. The United Kingdom Government and the Government of New Zealand recognizing the desirability of ensuring the maintenance of and, if possible, the increase of the present rate of production of meat in New Zealand hereby agree as follows :— 2. The New Zealand Government will sell and the United Kingdom Government will buy the total available supplies in New Zealand of beef, veal, mutton and lamb and the frozen sundries and edible offals thereof hereinafter referred to as " meat " and also, as provided in Clause 3 hereunder, of pig meat and the frozen sundries and edible offals thereof hereinafter referred to as " pig meat." All the products named to be as normally graded for export and available for shipment in the period ending 30th September, 1948, after providing for : — (a) Home requirements including those of the New Zealand, Services: (b) Requirements of the United States Forces in areas drawing meat supplies from New Zealand which the New Zealand Government has agreed to supply: (c) Quantities which the New Zealand Government may provide for Relief requirements after consultation and agreement with the United Kingdom Government: (d) Quantities that the two Governments mutually agree shall be supplied to other markets : and the New Zealand Government will take all necessary steps to ensure that the whole of such supplies are available for shipment in accordance with this Agreement. 3. During the first two years of the Agreement, i.e., up to 30th September, 1946, the quantity of pig meat to be purchased by the United Kingdom Government shall be the total available supplies in New Zealand as defined in Clause 2 above. The quantities to be purchased by the United Kingdom Government in the third year of the Agreement shall be the subject of discussions between the two Governments which shall be started before Ist January, 1940. In the light of these discussions and with due regard to representations which may then be made by the New Zealand Government the United Kingdom Government will specify the quantity of pig moat to be purchased from the New Zealand Government in the third year. The quantities for the fourth year wiil be similarly determined following on discussions started before Ist January, 1947. 4. The classes and descriptions of meat and pig meat to bo purchased are those set out in the first and second column of Schedule I and the prices to be paid (in Sterling in London) are those indicated in the second column of that Schedule. If any cut or pack of meat or pig meat is prepared for which Schedule I does not prescribe a price, the price to be paid for such cut or pack shall be mutually agreed between the parties to this Agreement and shall bear a reasonable relationship to other appropriate prices in the Schedule. 5. The United Kingdom Government shall specify, within the limits of the capacity in New Zealand, the proportions of meat and pig meat to be shipped in carcase form (including cuts) or as canned or dehydrated and undertakes that so far as possible the normal pre-war proportions as between carcase and canned will be maintained except in so far as this may be incompatible with shipping conditions (see also paragraphs 6 (6) and 6 (c)) or with exceptional circumstances such as the need for large quantities of canned or dehydrated meat or pig meat for destinations where carcase meat or pig meat cannot conveniently be handled. 6. (a) All purchases shall be f.o.b. subject however to Clauses 7, 8 and 10 below, and the responsibility for providing freight from the following ports of loading shall rest with the United Kingdom Government except that the United Kingdom Government shall not be bound to provide freight in any case where the quantity of meat and pig meat to be lifted at any one port at any one time is less than 10,000 freight carcases: — Opua ' New Plymouth Auckland Picton Tokomaru Bay Nelson Gisborne Lyttelton Waikokopu Timaru Napier Oamaru Wellington Dunedin or Port Chalmers Wanganui Bluff (b) Meat and pig meat purchased by the United Kingdom Government will bo lifted from New Zealand as soon as possible after becoming ready for shipment. In any case where the lifting of available supplies of meat and pig meat is unduly delayed the United Kingdom Government will make interim payments on the basis described in Schedule 11. (c) As and when the shipping position permits the United Kingdom Government will: — (i) Cease the requirement that sheep and lambs should be telescoped ; (ii) Progressively resume the importation of chilled beef, allocating to New Zealand a fair proportion of the suitable chiller space which may become available, the intention being so far as practicable that New Zealand shall be given equal and coincident opportunities with other countries for resuming and increasing shipments of chilled beef. 7. (a) The United Kingdom Government shall have the right to survey meat and pig meat upon arrival for quality, and if any such meat or pig meat is not up to the normal standard of New Zealand grading, surveyors appointed respectively by the United Kingdom Government and the New Zealand Government shall agree upon the amount of allowance to be made. In the event of disagreement, an umpire to be appointed by agreement between the said surveyors shall decide the amount of the allowance, and his decision shall be final. (6) The Surveyors appointed by the United Kingdom Government shall have the right to call for a test weighing of the meat upon arrival. If a loss in excess of one per cent, of the invoiced weight is disclosed, the United Kingdom Government shall be entitled, in effecting payment, to deduct from the purcase price the value of the total loss so disclosed, together with the standard cold store charges incurred in weighing. Under present conditions the weighings shall be in respect of the whole loading of any one commodity On any one steamer, e.g., all sheep (including lambs) or all beef hinds bone-in or all beef fores bone-in or all bags of boneless beef, etc, etc. but the United Kingdom Government reserves the right when conditions permit to weigh to individual shippers brands. 8. Payment to be made in sterling in London as to 97|% on shipment and the remaining 2£% within 28 days after arrival of the vessel or, in the case of the vessel being lost, of the expected due date of arrival.

3—H. 30

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9. The respective Governments agree to share equally all supplementary Bills of Lading representing items in dispute " over-shipped " and all endorsements 011 original Bills of Lading representing items in dispute " short-shipped." 10. Subject to the provisions of Schedule II all meat and pig meat shall i n respect of fire and all other loss or damage be at the risk of the New Zealand Government until it is placed 011 board ocean steamer or coastal vessel at the ports specified in Clause 6 (a) after which it shall be at the risk of the United Kingdom Government. 11. (a) The prices specified in Schedule I and any supplementary prices fixed in accordance with the provisions of Clause 4, together with the various conditions in this Agreement, shall apply to all shipments made after 30th September, 1944, and prior to Ist October, 1946, and shall also apply to subsequent shipments, unless before the Ist May, 1946 in respect of the period after 30th September, 1946 and/or before Ist May, 1947, in respect of the period after 30th September, 1947, either Government shall require reconsideration 011 substantial grounds and in particular on the grounds of substantial changes in the costs of production in New Zealand or in the export prioes then current in other important supplying countries or such other substantial changes in conditions as may necessitate modifications in the conditions of this Agreement. (6) If as a result of such reconsideration amended prices or conditions are agreed they shall apply to all shipments made in vessels that commence loading at first port of loading in New Zealand after 30th September, 1946 and/or 1947 as the case may be. 12. The terms and conditions in relation to the purchases of canned and dehydrated meat and canned and dehydrated pig meat shall be negotiated separately from time to time. 13. The United Kingdom Government undertakes, during the period of this Agreement:— (i) To take after consultation with the New Zealand Government such steps as are reasonable and practicable to secure a mutually agreeable distribution of New Zealand meat and pig meat in the United Kingdom and (ii) If and when the present scheme of control is withdrawn or modified to consult the New Zealand Government as to ways and means of securing an orderly resumption of private trading. 14. Before 3.lst December, 1947, the two Governments will discuss the appropriate arrangements to apply after 30th September, 1948, having regard to conditions then prevailing. Should it bo decided that the Agreement will not continue to operate the New Zealand Government shall during the month of October, 1948, transmit to the United Kingdom Government details of any unshipped balances which at 30th September, 1948, are due to be lifted in accordance witli this Agreement. The details shall include the description of each class of meat and pig meat involved and the approximate weight of each such class.

Schedule I.—Classes and Descriptions of Frozen Meat and Pig Meat and f.o.b. Prices per Lb. in Sterling in London

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Column 1. Column 2. Downs. Canterbury. Crossbred. Seconds. Frozen lamb— 2's 20/36 lb. .. .. .. 6Jd. 6ftd. 6&d. .. 8'b 37/42 lb 0ftd. 0£d. 6|d. .. p , , 4's 43/50 lb 0£d. 6fd. 0Jd. .. / j, 3 JF* Tegs .. .. .. .. 0d. 5Jd. 5fd. .. f lb ' . tele Seconds 30/under \. 8 .. 0Jd. SC0 P m *' „ over 36 lb. .. .. .. .. .. 5fd._ 2nd « uaJlt y WethCTS - 15wes ' Mutton— 48 lb./under .. .. .. 5 id. .. 49/50 lb. .. .. .. 4fd. 57/04 „ .. .. .. 4-fcd. 05/72 „ .. .. .. 4Jd. Over 72 lb. .. .. .. 3|d. . . .. Plus per 56 lb./under .. .. .. .. .. » lb. for teleOver 56 lb. .. .. .. .. 4|d. .. scoping. Merino wethers .. .. .. .. M J < 1. 64 lb./under .. .. .. .. .. 3£d. 65/72 lb. .. .. .. .. .. 3Jd. 72 lb./over .. .. .. .. .. 3Jd._ Ewe legs .. .. .. .. .. 4|d. Mutton : BonelessOver 72 lb. .. .. .. 4^d. Bone-in. Boneless (Ration Quality). GAQ FAQ GAQ FAQ (1st Quality). (2nd Quality). (1st Quality). (2nd Quality). Beef— Ox and heifer— Hinds .. .. .. 4$d. 4d. 6&d. 5Jd. Fores .. .. .. 3£d. 4|d. 4-ftd. Bibs and ponies .. .. 3 jjd. 3fd. 5£d. Cow— Hinds .. .. .. 3-Jfd. 3£d. 5&d. 5Jd. Fores .. .. .. 3d. 2$d. 4Jd. 4^fd. Bibs and ponies ., .. 3fd. 5|d. Sides. Shoulders. Jg'gS*. Briskets. | Shins. Boneless beef: Manufacturing— Ox and heifer .. .. .. 4 1 6 (f d. 3fd. 4 4^-d. Bull .. .. .. 4 1 9 g d. 4-frd. 3|d. 4&d. 3$d. 4ftd. Cow .. .. .. 3|fd. 3||d. 3|d. 4ftd. 3&d. 4-fed.

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Premium of over above prices for all offals moulded to permit stowage with dunnage of maximum 65 cubic feet (livers in containers excepted because premium already included in price).

Schedule ll.—Method of makj.no Payment for Meat and Pig Meat which is stoked foe Three Months or MORE BEFORE BEING LIFTED 1. All parcels will, without exception, be paid for f.o.b. but the following special arrangements will be introduced in respect of the purchase of meat and pig meat which has been in store for three months or more, hereinafter called " excess meat." 2. On the first day of each month the New Zealand Government will certify the weight of " excess meat " then in store, making a nil certificate where appropriate. 3. The United Kingdom Government will pay for the " excess meat " at the provisional price of £50 per ton. 4. The United Kingdom Government will then be in the position of having purchased a weight of " excess meat " without concerning itself as to the identity of what it has purchased. 5. As the owner of the " excess meat " the United Kingdom Government will carry its own insurance and the New Zealand Government should take whatever steps may be necessary to relieve itself of these risks in respect of the " excess meat." 6. The United Kingdom Government will make payments to the New Zealand Government in respect of storage charges incurred beyond three months from the killing date. The payment will be made at the standard rate for each month on the average quantity of " excess meat " held in that month arrived at by taking the average of the commencing and ending " excess meat " stocks. 7. The machinery for effecting the provisional payments under paragraph 3 will be as follows :— («) Upon receipt of the first certificate showing a weight of "excess meat" the United Kingdom Government will make payment at the rate of £50 a ton. (b) When the next certificate is furnished (i.e. on the first day of the following month) the weight of the " excess meat " as declared in (a) may have : — (i) Increased : in which case the United Kingdom Government will pay in sterling in London £50 for each ton by which the weight in (a) has increased. (ii) Decreased to some extent, in which case the High Commissioner's Office will repay £50 for each ton by which the weight in (a) has decreased. (iii) Entirely disappeared : in which case the High Commissioner's Office will repay in sterling in London the whole of the payment made under (a).

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Column 1. Column 2. Quarters or Sides. Boneless. Boneless Bobby Yeal. Veal .. . . .. .. 3f 8 d. 3-Jf fl. . Lanili, Mutton. j Beef. Veal. | Pork. ■ 0 ttals— Livers (in pails/latex bags) .. 8Jd. 7Jd. .. 9&d. (>id. + 5% „ (in cartons) .. .. 8d. 7|d. .. 9&d. 6§d. + 5% „ (in oases or bags) .. .. 7|d. 6Jd. O 6 }|d. 5|d. + 5% Throatbreads .. .. .. .. .. 5 d. S-j^d. Sweetbreads . . .. . . 7Jd. Tongues .. .. .. 6-Jd. 5Jd. 7iVd. 5j-d. + 5% „ roots .. .. .. . . .. 4 4^d. „ short out .. .. .. .. 9-frd- 9id. Hearts .. .. .. 3|d. 4Jd. 3}fd. 3f e d. 3fd. + 5% „ out 3£d. 4|d. 3&d. 3 3Jd- + 5% „ bobby .. . . .. . . .. . . 4-fed. „ ,, out.. .. .. .. .. . • 3ftd. Kidneys .. .. .. .. .. 8-jfc-d. 7--fed. tijd. + 5% „ small .. .. .. .. lOfd. „ special .. .. .. .. ll|d. Tails .. .. .. .. .. .. 5Jj d. Cheeks .. .. .. .. .. 3^d. Skirts (thick) .. .. . . .. . . 4 jfd. „ (thin) .. .. .. .. .. 3-&d. Tripe (raw) .. .. .. .. .. lfd. .. ..

1st Quality, Unsinged. 2nd Quality, Unhinged. Porkers— Carcases (50/120 lb. .. .. 6Jd. + 5% (id. + 5% Full sides 30/60 lb. .. .. 6|d. + 5% 0d. + 5% Choppers 201 lb./ovor — Bone-in .. .. .. 4Jd. + 5% Boneless .. . . .. 5Jd. + 5% Headless sides 25/55 lb. . . .. 6 fed. + 5% 6 •fed. + 5% Shoulders, square out 14/30 lb. .. 4 ||d. + 5% 4|£d. -j- 5% Boston butts .. .. .. 5|d. 4- 5% 5|d. -|- 5% ——• 1st Quality, Singed. 2nd Quality, Singed. Baooners and baconer outs — Carcases 121/200 lb. .. .. 6fed. -f 5% G-fed. + 5% Headless carcases 111/190 lb. .. 6-f-d. +5% 6|d. +5% Headless sides 56/95 lb. .. .. 6|d. -|- 5% 6|d. -|- 5% Wiltshire sides 50/90 lb. . . .. 7|d. -|- 5% 7d. -j- 5% Spencers (flitches) 35/60 lb. .. 6fed. -j- 5% 6fe-d. -j- 5% Middles 26/40 lb. .. .. 7-fed. + 5% 7fed. + 5% *Gamrnons 12/18 lb. .. .. 9-fd. -|- 5% 9fd. -j- 5% Rib backs .. .. .. 7|J-d. -j- 3% 7fed. + 5% Legs long cut .. . . .. 9-Jd. -j- 5% 9d. -j- 5% * Less per lb. if aitch bone left in.

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The " increases " and " decreases " may continue for some months before stage (iii) is reached, i.e. before the whole of the " excess meat " has been lifted and the payments under (a) and any supplementary payments under (6) (i) have been wholly repaid by the New Zealand Government. This stage must, however, be reached in due course because f.o.b. payment is made for all meat and pig meat shipped including that which may have been paid for as " excess meat." 8. The New Zealand Government will take steps to ensure that so far as practicable all meat and pig meat is shipped in order of killing. Prices paid by United Kingdom Government for Meat The f.o.b. prices per pound (sterling) paid by the United Kingdom Government for meat are the prices ruling for the 1-943-44 season. These prices are given in Schedule I, above. In addition, in terms of the four-year contract arrangements, the United Kingdom Government makes supplementary payments in respect of each shipment under the contract of the difference between the sum resulting from calculations at the rates payable under the first (1939-40) wartime contract plus 33J per cent., and the sum resulting from calculations at the rates quoted in Schedule I, above. These supplementary payments are referred to in the letter dated 26th July, 1945, from the United Kingdom Minister of Food to the High Commissioner for New Zealand quoted on page 22 of this report. The net result is that payment by the United Kingdom Government is made on the basis of 1939-40 prices plus 33J per cent. For purpose of reference, the 1939-40 prices are quoted hereunder

Schedule of Prices paid by the United Kingdom Government to the New Zealand Government under Bulk Purchase 1 (1939-40 Season) All prices per lb. sterling f.o.b.

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Downs. Canterbury. Crossbred. Second. "Frozen ltimb— 2's under 30 lb. .. . . .. 6fd. 6 Ad. 6Ad. .. ") 8's 37/42II) 6 *d. 6|d. (i|d. .. . 4's 43/50 lb OJd. 6d. 5fd. .. I 11 ™ P. M Tegs .. .. .. .. 5|d. 5id. 5id. .. | Seconds 36 lb./under .. .. .. .. .. 5'd. scoping „ over 36 lb. .. .. .. .. .. 5^d._ Prime Wethers or 2nd Quality _ Maiden Ewes. Wethers. r^wes. Mutton— l's 48 lb./under .. .. .. .. 4 Ad. "1 7'a 49/56 lb. 3$. ]] " 3's 57/64 lb. .. .. .. .. 3ftd. 9's 65/72 lb. 3id. 5'b 73/80 lb. .. .. .. 3d 0's over 80 lb. .. .. .. .. 3d. " l 1 " 1 " 8 A d - P er lb - 56 lb./under .. .. .. .. . . sjij. |' for telescoping. Over 56 lb. .. .. .. .. .. .. 3|d. Merino wethers .. .. .. .. .. 2|d. 64 lb./under .. ,. ., . . .. ,. 2|d. Over 64 lb. .. .. .. .. . . ,. .. 2fd. Ewe legs .. .. .. .. .. .. ., 3^ Mutton: Boneless Ewes over 72 lb. .. .. 3&d. Bone-in. G.A.Q. F.A.Q. BeefOx and heifer— H inds 4fd. 3 Ad. 1,ores •• •• .. .. 2-ftd. 2Jd. Ribs and ponies .. .. .. .. . . .. 3J-d. 3Ad. Cow— Hinds 3|-d. 3 Ad. ior ®s .. .. .. .. .. 2 Ad. 2id. Ribs and Ponies .. .. .. .. .. 3|d. 3 id. Note.—All above beef prices plus l|d. per lb. boning allowance when shipments made in Boneless form. Special Pack Admiralty Beef plus 1 £d. Boning allowance and packaging costs.

Side*. Shoulders. Mid. Cuts. Briskets. Shins. Boneless beef : Manufacturing— Ox and heifer .. .. 3fd. 3fd. 4Jd. 3|d. 4d. Buii .. .. .. 3|d. 3fd. 2$d. 4d. 3fd. 4d. Cow 3Jd. 3jd. 2 Ad. 3|d. 3d. 4d. Quarters or Sides. Boneless. Bobby Veal. Veal • • • • ■ • • ■ • • 2jd. I 3fd. 4|d.

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Premium of 1/16d. over above prices for all offals moulded to permit stowage with dunnage of maximum 65 cubic feet (livers in containers excepted because premium already included in price).

In informing the United Kingdom Government of the New Zealand Government's acceptance of the four-year contracts, the High Commissioner for New Zealand (London) wrote to the United Kingdom Minister of Food (dated 26th July, 1944) as follows :— There is a related point not immediately arising, but to which my Government attach importance, and it was mentioned in Mr. Nash's letter to you of 21st March last. It is, of course, difficult for any of us to foresee the conditions that will prevail four years hence and we cannot suggest any precise commitments to apply then. Yet I think we should reiterate that, even at this time, a main concern of New Zealand must be the continuing market for our produce— particularly as present plans are calculated to increase production for export. We hope that the tonnages will be greater in 1948 than to-day, and it would be a serious matter for the Dominion if, having increased our production to meet the urgent needs of the next four years, the principal market were then to be curtailed. May we take it that so far as the future can be foreseen we are agreed that this will not be allowed to occur ? The reply of the United Kingdom Minister of Food (dated 27th July, 1944) was as follows :— Although I can, of course, give no undertaking as to what the Government of this country may or may not be able and ready to do four years hence, I am sure that this country will not forget all that New Zealand has done at our side throughout the war and it is my hope that we shall act accordingly. Three additional points in connection with the contracts —namely, allocation of supplies by the Combined Food Board among the United Nations, the pressing need that the exportable surplus should be maintained at the highest possible level, and supplementary payments to bring the actual payments for meat to 33J per cent, above the prices operative under the 1939-40 contract—were the subject of a letter dated 26th July, 1945, from the United Kingdom Minister of Food to the High Commissioner for New Zealand as follows ~ I enclose two copies of the Heads of Agreement covering the purchase of meat by the United Kingdom Government from the New Zealand Government in the four years Ist October, 1944, to 30th September, 1948. 1 have initialled both copies of the Heads of Agreement and should be glad if you would initial one copy and return it to me. I am glad that it has been possible for the difficulties connected with drawing up this Agreement to be overcome so smoothly but naturally in a document of this sort it is quite impossible to reflect every one of the many points which have come up in the course of discussion. Indeed, there were three points where it was specifically agreed that the record should be made by covering letter rather than in the Heads of Agreement. The first of these is the desire of both our countries to facilitate the allocation of supplies by the Combined Food Board, in accordance with the principles agreed upon by the representatives of the United Nations at the Conference held at Hot Springs in May, 1943, and at Atlantic City in November, 1943. While we expect that the meat which is allocated to the United Kingdom by the Combined Food Board will include the supplies we shall buy under the Agreement, we regard them as purchased on behalf of the United Nations and subjoct to allocation by the Combined Food Board so long as that body continues to allocate food supplies among the United Nations. • The next point is that, although the Agreement provides for the purchase of the exportable surplus by the United Kingdom Government it contains no indication of the pressing need that the exportable surplus should be maintained at the highest possible level. Throughout the discussions, however, the representatives of your Government have

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Lamb. Mutton. lieef. Veal. Fork. Offals— Livers (in pails/Latex Bags) .. .. 7fd. 7d. .. 9d. 6Jd. Livers (in cardboard cartons) .. .. 7§d. tijd. . . 8£d. 6jd. Livers (in cases and/or Bags) .. .. 6fd. 6d. 5|d. 6Jd. 5|d. Throatbreads .. .. .. .. .. .. 4Jd. 5d. Sweetbreads .. .. .. .. 7Ad. Tongues .. .. .. .. 5|d. 5d'. 6fd. OJd. 5d. Tongues (roots) .. .. .. .. .. .. 3Jd. 3£d. Tongues (short cut) .. .. .. .. .. 8fd. 8jd. Hearts .. .. .. .. .. 3|d. 4{d. 3Jd. 3{d. 3fd. (bobby) Hearts (cut) .. .. .. .. 3Jd. 3|d. 2Jd. 3|d. 3Jd. (bobby) Kidneys .. .. .. .. .. . . 8d. 6Jd. 6d. Kidneys (small) .. .. .. .. .. 10|d. Kidneys (special) . . .. .. .. .. lid. Tails .. . . 4|d. Cheeks . . .. .. .. .. .. • .. 2|d. Skirts (thick) .. .. .. .. .. .. 4-jd. Skirts (thin) .. .. . . .. .. .. 2fd. Tripe (raw) .. .. .. .. .. .. 1 Jd.

Carcases. Headless Carcases. Headless Sides. Wiltshire Sides. Baconers and curing cuts— 1st quality— Unsinged .. .. .. fid. 6-f 6 -d. 6isd. fifd. Singed .. .. .. .. 6 6fd. 6|d. 6-}| d. 2nd quality— Unsinged .. .. . . .. 5fd. I 6 id. fi|d. Singed .. .. .. .. 5-gd. 6Jd. fife-d. Spencers. Middles. Gammons. Hitches. 1st quality: Singed .. .. .. fiis-d- 7d. 9Jd. 2nd quality: Singed .. . . 5 -JJd. 6|-d. 9Jd. Singed .. .. .. . . .. . . .. fi^dCarcase or Choppers Choppers Sides Heads Shoulders Boston Full Sides. Bone-in. Boneless. off. Sq. Cut. Butts. Porkers — 1st quality .. .. .. .. fid. 4d. 4fd. fi-ijd. 4ftd. 5Jd. 2nd quality .. .. .. 5fd. .. .. 4&d. 5Jd. Flitches (Unsinged). IUb Backs. Legs (long Out). 6d. 7&d. 8|d.

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appreciated the urgency of this need, and the understanding is that, so long as the meat ration in the United Kingdom is low, your Government will take all possible steps to maintain exports to this country at the maximum figure. The third point deals with the prices in Schedule Ito the Agreement. The prices in this schedule are those which operated under Bulk Purchase 4 and these are the prices payable on invoice. Supplementary payments will, however, be made so as to bring the actual payments to 335% above the prices operative under Bulk Purchase I. A list of these prices is enclosed. May I finally take this opportunity to say how much I have appreciated the friendly relationship which has oxisted between us during these difficult year's, and to thank you for all the help you have so willingly given to me. During discussions on the meat contract it was agreed that interpretations on the following points should be covered by letter : arrangements for the purchase of canned meats ; chiller space ; payment for excess meat, including storage ; and defective condition. The interpretations are outlined in the following letter, dated 3rd August, 1945, addressed to Mr. H. E. Davis (Marketing Department, London) by Mr. Harold Jones (of the Meat and Live-stock Division, Ministry of Food, London) : — 1. Colonel Llewellin has sent to Mr. Jordan two initialled copies of the Heads of Agreement covering the purchase of meat by the United Kingdom from the New Zealand Government in the four years 1944 to 1948, and has asked for the duplicate to be initialled and returned. In doing this Colonel Llewellin asked for formal agreement to a few points which were loft to be covered by letter from him to Mr. Jordan. 2. When the outstanding action in (1) has been completed, the main business will have been settled but you will remember that in the course of our discussions we agreed that certain minor matters should be formally recorded by an exchange of letters between you and Meat and Livestock Division. These are dealt with below. 3. Canned Meats. —The Agreement does not cover with any preoision the arrangements for the purchase of canned meats. So far as these are concerned, the discussions have proceeded throughout on the basis that the purchases would be only on a year to year basis. For the first year we have already settled the details of purchase and we agree in principle to purchase canned meats in the second year. At this stage, however, it is not possible to give any assurance of purchase beyond that time and our understanding is that the question whether to make such purchases after 30th September, 1946, and if so, on what terms, should come up for reconsideration under Clause 11 (a) of the Agreement. This clause calls for reconsideration before, Ist May, and in the case of canned meats we will interpret " before " as meaning " before Ist March." 4. Chiller Space.—With reference to the resumption of shipments of chilled beef from any source to the United Kingdom ; we appreciate your desire that shipments from New Zealand should recommence as soon as shipping and other considerations permit and that your position on the United Kingdom market for this commodity shall not be prejudiced in relation to other countries when shipments to the United Kingdom are resumed. Clause 6 (c) (ii) of the contract expresses our intention in this connection but you will appreciate that circumstances may arise, for example, de-control of shipping, in which it may be impossible that we should be able to guarantee an allocation of suitable chiller space to each supplying country, say in proportion to pre-war practice. We shall however use every means available to us at the time in an endeavour to bring this result about and in particular to ensure that when the United Kingdom resumes imports of chilled beef you shall be in at least no worse position in relation to other supplying countries than that which pertained in the immediate pre-war years. 5. Payment for Excess Meat including Storage.—As you know, we wanted to amend Clause 6 (6) of the Agreement so as to limit its operation to our purchases of the production in the two years to the 30th September, 1946. You did not like the idea of doing this, but you will remember that as a compromise we agreed that in respect of shipments after 30th September, 1946, the question of these payments should come up for review under Clause 11 (a) of the Agreement. 6. Defective Condition.—Although no specific reference is made in the Heads of Agreement to liability for defective condition attributable to negligence or circumstances within the control of the shipper before the goods are shipped, it is to be clearly understood between us that: — The Government of New Zealand shall make an allowance in respect of damage on submission of proof by the Ministry that the damage arose from causes within the control of the said Government and prior to tendering of the Meat to overseas or coastal vessel for shipment from New Zealand. The amount of the said allowance shall in default of agreement be decided by an Umpire to be appointed by agreement between the two parties and his decision shall be final. PURCHASE AND SALE PROCEDURE AND PRICES PAID FOR 1944-45 SEASON'S MEAT PURCHASED BY MARKETING DEPARTMENT FOR EXPORT The purchase and sale procedure has remained unchanged during the 1944-45 season. Negotiations between the New Zealand Meat Producers' Board and the Economic Stabilization Commission resulted in an all-round increase in schedule prices to be paid to farmers for fat stock as from the opening of the 1944-45 season. Details of these meat-schedule prices payable to farmers by freezing companies and meat operators, and of the resultant f.o.b. prices for export meat payable to freezing companies and meat operators by the Marketing Department, for the season 1944-45 are given in last year's annual report on pages 14, 15, and 16. The purchases made by the Marketing Department from freezing companies and exporters for the twelve months ended 31st July, 1945, totalled £22,682,252 (New Zealand currency). Debits to the United Kingdom Ministry of Food totalled £23,409,257 (New Zealand currency) for the same period. Debits to the United States Joint Purchasing Board totalled £5,445,342 (New Zealand currency) for the same period.

The following table shows particulars of meat purchased by the Marketing Department from freezing companies and exporters during the twelve months ended 31st July, 1945 : —

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Olass of Meat. Tom. Purchase Value j Avo ™f L £ riCe (N-Z. Currency). | (N . z^urrenoy ,, Frozen— £ d. Lamb .. .. .. .. .. .. 164,952 12,654,856 8-22 Mutton .. .. .. .. .. .. 70,350 2,864,225 4-36 Beef and veal .. .. .. .. .. 72,389 3,743,520 5-54 Pig-meats .. .. .. .. .. 16,24-9 1,4-18,302 9-35 Edible offals .. .. .. .. .. 10,332 751,340 7-79 Totals .. .. .. .. .. 334,272 21,432,243 6-87 Preserved— Canned beef (including mixed packs) .. .. 9,858 1,044,598 Tongues .. .. .. .. .. .. 939 205.411 Totals .. .. .. .. 10,797 1,250,009 Totals, frozen and preserved meat ,. .. 345,069 22,682,252

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Note. —(1) Meat-schedule Prices to be paid to Farmers by Freezing Companies and Meat operators at opening of 1945-46 Season: For convenience of reference the following letter from the Hon. the Minister of Marketing to the New Zealand Meat Producers' Board, written before publication of this report, is quoted. This letter announces the meat-schedule prices to be paid to farmers by freezing companies and meat operators at the opening of the 1945-46 season:— 17th October, 1945. The Chairman, New Zealand Meat Producers' -Board, Wellington. Dear Sir,— Meat Schedule Prices, 1945-40 This letter will serve to confirm the agreement reached between the Board and the Committee appointed by the Government that meat schedule prices to be paid to farmers by freezing companies and meat operators at the opening of the 1945-46 season, will be as follows : — Lamb— Prime Down Cross and Prime Canterbury—■ 23/42 .. .. .. .. .. 9Jd. 43/50 .. . . . . .. .. 9d. 51/56 .. .. .. .. .. B|d. Prime Cross Bred—• 23/42 .. .. .. .. .. 9Jd. 43/50 .. ... .. .. .. Bid. 51/56 .. .. .. .. .. B|d. Seconds—• 23/42 .. .. .. .. .. B|d. 43/50 .. .. .. .. .. Bd. Wethers : North Island— Prime— 64/U .. .. .. .. .. s|d. 65/90 .. .. .. .. .. As 64 lb. @ 5 Jd.—3os. Bd. Seconds— 64/U .. .. .. .. . . 5 Jd. 65/72 .. .. .. .. .. As 641b. @ si-d.—2Bs. Wethers : South Island— Prime— 64/U old. 65/90 .. .. .. .. .. As 64 lb. @ s|d.—29s. 4d. Seconds— 64/U sd. 65/72 .. .. .. .. .. As 641b. @ 5d.—265. Bd. Ewes— 64/U '. 3§d. 65/90 .. .. .. .. .. .. As 64 lb. @ 3fd.—l9s. 4d. Quarter Beef—• Ox— G.A.Q. all weights .. .. .. .. 425. per 100 lb. F.A.Q. all weights .. .. .. .. 375. per 100 lb. Heifer— G.A.Q. all weights .. .. .. . . 41s. per 100 lb. F.A.Q. all weights .. .. .. .. 365. per 100 lb. Cow— G.A.Q. all weights .. .. .. .. 355. 6d. per 100 lb. F.A.Q. all weights .. .. .. .. 30s. 6d. per 100 lb. Boner Beef—• Ox .. .. .. .. .. ... I Pull I cow :: :: :: :: :: ::p*. person,. Heifer .. .. .. .. .. .. J The cost of the increases in the Marketing Department purchase prices for meat to enable these increased schedule prices to be paid to farmers, will be debited to the Meat Industry Stabilization Account. The Government appreciates the good will shown by your Board in the course of the negotiations, and the settlement will, I believe, be of benefit to the meat industry and to the country as a whole. Yours faithfully, B. Roberts, Minister of Marketing. (2) "Purchase Prices payable to Freezing Companies and Meat Exporters for 1945-46 season: In a letter dated 28th September, 1945, addressed to the North and South Island Freezing Companies' Association, the Hon. the Minister of Marketing announced the f.o.b. purchase prices for export meat payable by the Marketing Department to freezing companies and meat exporters for the 1945-46 season. The text of the letter is as follows :— The Chairman, North & South Island Freezing Companies' Associations, C/- Gear Meat Co., Ltd., P.O. Box 164, Wellington. Dear Mr. Maokay,— Consequent upon my recent announcement regarding the increased schedule prices to be paid to Producers for lambs and quarter beef as from the commencement of the 1945-46 season, the following f.o.b. purchase prices will be paid to freezing companies and meat exporters by the Marketing Department, Export Division, for killings on and after the Ist October, 1945 :— 1f.0.8. Price : Pence per Pound, N.Z. Currency. Lamb— Prime Down Cross 2's (23/36 lb.) telescoped .. .. .. .. 8-925 B's (37/42 lb.) „ .. .. .. .. .. 8-925 4's (43/50 lb.) „ .. .. .. .. .. 8-425 Tegs (51/56 lb.) „ .. .. .. .. .. 7-925 Prime Canterbury 2's (23/36 lb.) „ .. .. .. .. .. 8-8625 B's (37/42 lb.) „ .. .. .. .. .. 8-8625 4's (43/50 lb.) „ .. .. .. .. .. 8-3625 Tegs (51/56 lb.) „ .. .. .. .. .. 7-8625 Prime Crossbred 2's (23/36 lb.) „ .. .. .. .. .. 8-675 B's (37/42 lb.) „ .. .. .. .. .. 8-675 4's (43/50 lb.) „ .. .. . . .. .. 8-175 Tegs (51/56 lb.) „ .. .. .. .. .. 7-675 Second Quality (36 and under) „ .. ~ ~ .. .. 8-175 (37/42 lb.) „ .. .. .. ..8-175 (43/50 lb.) „ .. .. .. .. .. 7-425 (51/56 lb.) „ (as 2nd Quality wethers (56/U) .. 5-25 Telescoping allowance ~ ~ ~ .. .. 0-0777

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F. 0.8, Price: Pence per Pound, Mutton— N.Z. Currency. Prime wether and maiden ewes l's (48 and under) telescoped .. .. .. .. 5-75 7's (49/56 lb.) „ .. .. .. .. 5-75 3's (57/041b.) „ .. .. .. ..5-75 9's (65/72 lb.) „ .. .. .. .. -) s's (73/80 lb.) „ .. .. .. .. >5-75 on 64 lb. only. o's (81/90 lb.) „ .. .. .. ..J Second Quality .. .. (56 and under) „ .. .. .. .. 5'25 (57/641b.) „ .. .. .. .. 5'25 (05/72 lb.) „ .. .. .. .. 5•250n 64 lb. only. Ewes .. .. .. (64 and under) „ .. .. .. .. 3'75 (65/72 lb.) „ .. .. .. .. 3-75 on 64 lb. only. (81/90 lb ) f° r e *P°rt .. •• .. 4'675 Telescoping allowance .. .. .. .. .. .. .. .. 0-0777 In the case of prime wethers 65/90, second wethers 65/72 and ewes 65/72, the Marketing Department will pay freezing charges on the excess weight over 64 lb. Beef— Bone-in — G.A.Q. ox and heifer, all weights—■ Hinds .. .. .. .. .. .. .. .. .. 6-335 Pores .. .. .. .. .. .. .. .. .. 4 • 085 P.A.Q. ox and heifer, all weights— Hinds .. .. .. .. .. .. .. .. .. 5-1475 Pores .. .. .. .. .. .. .. .. .. 4 • 0225 G.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. .. .. 4-8975 Pores .. .. .. .. .. .. .. .. 3-8975 P.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. .. .. 4-2975 Pores .. .. .. .. .. .. .. .. .. 3-2975 Boneless bull . . .. .. . . .. .. . . .. .. 4 ■ 25 Boneless bobby veal .. .. .. .. .. .. .. .. 4• 5 Boneless cow and ox beef-South Island only .. .. .. .. ..4-05 The " on trucks " prices applicable to the North Island works are those which have been advised by the Secretary of the North Island Beef Canners' Equalization Pool. Edible OffalsBeef — Kidneys .. .. .. .. .. .. .. .. 9f Livers (bags or boxes) .. .. .. .. .. .. .. 6|J Tails (min. If lb.) .. .. .. .. .. .. .. .. sf ff Hearts (sound), (bags) .. .. .. .. _ .. .. .. 4 Cut hearts (bags) .. .. . . .. .. ' .. .. .. 3J Cheeks .. .. .. .. .. .. . . .. .. 3 j Throatbreads .. .. .. .. .. .. .. .. 5 Thick skirts .. .. .. .. .. .. .. .. .. 5J Thin skirts .. .. .. .. .. .. .. .. .. 3$ Tripe .. .. .. .. . . .. .. .. -. if Sheep— Hearts (sound) .. .. .. .. .. .. .. .. 5-j-Cut hearts .. .. .. . . .. .. .. .. .. 4 j Kidneys (special) . . .. .. .. .. .. .. .. 13| Kidneys (small) .. .. .. .. .. .. .. ..13 Livers (pails or rubber bags) .. .. .. .. .. .. 8f Livers (bags or boxes) .. .. . . .. .. .. .. 7-J-Livers (cartons) .. .. .. .. .. .. .. 8£ Lamb— Throatbreads .. .. .. .. .. .. .. .. 9^ Livers (pails or rubber bags) .. .. .. .. .. .. 9 Livers (bags or boxes) .. .. .. .. .. .. 8f Livers (cartons) .. .. .. .. .. .. .. .. 9^ Hearts (sound) .. .. .. .. .. .. .. .. 4 ftCut hearts .. .. .. .. .. .. .. . . .. 3{§ Pork— Hearts (sound) .. .. .. .. .. .. .. .. 4| Cut hearts .. .. .. .. .. .. .. .. 4 Kidneys .. .. .. .. .. .. .. .. 7^ Livers (pails or rubber bags) .. .. .. .. .. .. .. 7 Livers (bags or boxes) .. .. .. .. .. .. .. 6J Livers (cartons) .. .. .. .. .. .. .. .. 7-& Veal— Hearts (sound) .. .. i. .. .. .. .. .. 3ft Cut hearts .. .. .. . . .. .. .. .. 3 Livers (bags or boxes) .. .. .. .. .. .. .. 7f Kidneys .. .. .. .. .. .. .. .. .. S-jg Throatbreads .. .. .. . . .. .. .. .. 6f 6 - Bobby veal — Livers (pails or rubber bags) .. .. .. .. .. .. 11J Livers (cartons) . . .. .. .. .. . . .. ..11 Hearts (sound) .. .. ... .. .. .. .. .. 4^ Cut hearts .. .. .. .. .. .. .. .. .. 3 Kidneys .. .. .. .. .. .. .. .. .. 8-^ Throatbreads .. .. .. .. .. .. .. .. 6f ff Yours faithfully, B. Roberts, Minister of Marketing. SURVEY OF SEASON The killings of meat returned to the Department as available for export totalled 338,992 tons, representing an increase of 10-67 per cent, on the previous year. Favourable weather conditions were experienced in most districts throughout the season, with the result that average- weights show an increase over last year. Lambs, for instance, have increased from 33-59 lb. to 34-59 lb. per head. Killings have been well spread and shipments satisfactory. The carry-over of 40,650 tons is 21,854 tons (34-96 per cent.) less than at the end of the previous season.

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SHIPPING AND STORAGE The season opened with stores reasonably clear of meat, and with well-spread killings and good liftings early in the season very few storage problems have been experienced. Supplies to the United States Forces have continued, and large quantities of frozen and canned meat and edible offals have been centralized at the United States Joint Purchasing Board stores for their use. CANNED MEAT The canned-meat programme called for the use of all the boner cow and ox beef available. Very little canned meat has been shipped to the United Kingdom. Estimated production for supply to the United States Joint Purchasing Board is as follows :— Tons. Corned beef .. .. .. . . . . .. 200 Roast beef .. .. .. .. .. .. 2,700 Meat and vegetable ration .. .. .. .. .. 6,000 Beef hash .. .. ~ .. .. .. 2,500 Total .. .. .. .. .. .. 11,400 All tongues surplus to local requirements have been canned, ox-tongues for delivery to the United States Joint Purchasing Board, and sheep, lamb, bobby-calf, and pig-tongues for shipment to the United Kingdom. PIG-MEATS The Pig Marketing Emergency Regulations have remained in force during 1945. The Hon. the Minister of Marketing announced on 31st October, 1944, that an increase of |d. per pound above the summer schedule for porkers and baconers, as set out in Gazette Notice No. 42, dated 25th May, 1944, would apply for the period 20th November, 1944, to 31st May, 1945, with corresponding adjustments in the winter schedules. This increase also applied to the South Island prices as from 20th November, 1944. Prohibition of the sale of pork for ordinary civilian consumption in New Zealand has continued, and, after providing for the requirements of hospitals and ships' stores, the whole production of porkers has been supplied to the New Zealand and the United States Forces. Since the above was written, the Pig Meats Advisory Committee (see amnual report, 1944, page 19) has been dissolved, consequent on the cessation of hostilities and the termination of supplies to the United States Forces.

DISPOSAL OF 1944-45 SEASON'S KILL The following statement shows the production and disposal of each class of frozen meat killed for export during the 1944-45 season :—

FREEZING COMPANIES' CONSOLIDATED CHARGES In November, 1944, an application was made by the Freezing Companies' Association for the full value of their by-products and an increase in their scale of charges, to cover increased costs since 1939. After discussion between representatives of the freezing companies and the Economic Stabilization Commission, agreement was reached, the terms of which are given in the following letter addressed by the Commission to the New Zealand Meat Producers' Board :— 29th June, 1945. Following on the agreement reached with the freezing companies' representatives on the 30th May, a subsidy at the rates, and on the conditions, set out hereunder has now been approved by War Cabinet: (1) That a subsidy at the undermentioned rates be paid to freezing companies on export killings of meat, excluding offal, as returned to the Export Marketing Division on returns P.P.M. .109 and 109 a as from Ist October, 1944 :—■ Lamb, wethers, ewes, veal and quarter beef .. .. .. .. '125 d. per lb. Boneless mutton, beef and veal, including partially boned quarter beef .. -1875 d. ~ Baconers, porkers and choppers of export quality—whole and headless carcases -125 d. „ Baconers, porkers and choppers of export quality —sides .. .. ~ -15d. „

4—H. 30

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Production. Disposal. United States Local Market Shipments to J^otal. Net Weight. Canning. Joint (Civilian and United Purchasing Services). Kingdom. Tons. Tons. Tons. Tons. Tons. Tons. Lamb .. .. .. 164,817 .. 9,792 .. 155,025 164,817 Wethers .. .. 20,135 .. 2,482 564 17,089 20,135 Ewes .. .. .. 50,349 .. .. 140 50,209 50,349 Quarter beef .. .. 51,993 .. 37,600 1,206 13,187 51,993 Boneless cow and ox .. 13,920 13,920 .. .. .. 13,920 Boneless bull .. .. 3,952 714 .. .. 3,238 3,952 Boneless bobby veal .. 7,265 .. .. 115 7,150 7,265 Veal sides .. .. 369 .. 358 11 .. 369 Baconers .. .. 10,118 .. 8,189 .. 1,929 10,118 Porkers .. .. 5,247 .. 4,785 272 190 5,247 Choppers .. .. 494 .. 494 .. .. 494 Edible offals .. .. 10,333 .. 3,428 374 6,531 10,333 Totals .. .. 338,992 14,634 67,128 2,682 254,548 338,992

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(2) That payment of the subsidy be conditional on freezing companies' agreeing to limit rebates paid to producers to the rates per unit paid in the 1943-44 season. (3) That the Fat Stock Disposal Order remain operative and be tightened up in the direction of prohibiting buying stock for export "on the hoof" at the farm. The subsidy estimated to cost approximately £400,000 per annum, will be a charge against Meat Industry Stabilization Account in terms of the agreement reached with the Joint Committee of the Meat and Dairy Industries. FREEZING COMPANIES AND MEAT EXPORTERS : SUBSIDY TO MEET INCREASED WAGE COST Following discussions between representatives of the freezing companies and meat exporters and the Economic Stabilization Commission in regard to increases in wages, approval was given for payment of a subsidy in the following terms : — (1) That to compensate freezing companies for increased wages and salaries, a subsidy at the under-mentioned rates be paid on export killings of meat, excluding offal, as returned to the Export Marketing Division on returns P.P.M. 109 and 109 a, as from Ist January, 1945, the estimated annual cost being £400,000 Lambs, wethers, ewes .. .. .. .. .. .. .. -135 d. per lb. Quarter beef and veal in sides .. .. .. .. .. .. -09d. „ Boneless beef and mutton .. ■ .. .. .. .. .. .. -15d. „ Boneless beef, U.5.J.P.8., cut .. .. .. . . .. .. -12d. ~ Boneless bobby veal .. .. .. .. .. .. .. -3d. „ Baconers, porkers and choppers of export quality . . .. .. .. '09d. „ (2) That as from Ist January, 1943, a further subsidy of '015 d. per lb. be paid to freezing companies on the above classes of meat to compensate for increased wages and salaries on the buying, administrative and drafting side of the industry, the estimated annual cost being £43,000. (It will be the function of the freezing companies to distribute the amount due to outside operators.) (3) That the cost, up to a maximum of £475,000 per annum, be a charge to Moat Stabilization Account in terms of the agreement with the Joint Committee of the Meat and Dairy Industries. Any excess over £475,000 would be a charge to War Expenses Account. (4) That the subsidy scheme be administered by the Export Marketing Division. The substance of the foregoing approval was conveyed to the North and South Island Freezing Companies' Association in a letter from the Hon. the Minister in Charge of Stabilization dated 21st September, 1945. EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO MEAT The following information is supplied by the Food and Rationing Controller :— At 31st March, 1945, meat rationing had been in force twelve months and it is estimated that the total saving of meat has been approximately 22,000 tons over the year. A further reduction of 14 per cent, in the domestic ration and 20 per cent, in manufacturing usage from 11th June, 1945, should result in increased savings next season, but has come too late to have any appreciable effect during the current year. ACKNOWLEDGMENT During the season under review the Marketing Department has, as in the past, been greatly assisted by the co-operation of all those with whom it has conducted its business. In particular the Department desires to record its appreciation of the co-operation of the Overseas Shipowners' Allotment Committee, the freezing companies and meat canners, the Railways Department, the United States Joint Purchasing Board, and the various Government Departments with which the Marketing Department has been associated throughout the year. MEAT POOL ACCOUNT AND MEAT INDUSTRY STABILIZATION ACCOUNT The arrangements respecting the Meat Pool Account and the Meat Industry Stabilization Account are set out in a letter addressed by the Right Hon. the Prime Minister to the Chairman of the New Zealand Meat Producers' Board, dated 20th November, 1944, the appropriate quotation being:— It is considered desirable that both the Meat Pool Account and the Meat Industry Stabilization Account should remain within the Meat Industry Account as at present, but the whole of the proceeds from the recent increase in the prices of meat to be paid by the United Kingdom Government will be credited to the Meat Industry Stabilization Acoount and will be conserved exclusively for the industry, subject of course to such debits against the account as are contemplated in the Government's agreement with the Farmers' Federation on the 18th June, 1943. All accretions to the Meat Pool Account will continue as in the past and no charges other than those already operative will be made against it except in agreement with the New Zealand Meat Producers' Board. This arrangement would have to be subject to review, in the event of the resources of the Meat Industry Stabilization Account being insufficient to meet charges against that account. I would stress again that the balances finally remaining in the Meat Pool Account and the Meat Industry Stabilization Account belong to and shall be held for the benefit of the industry. The complete text of the letter referred to above, with the accompanying detailed schedules, is given earlier in this report, page 3. KILLINGS OF MEAT FOR EXPORT DURING THE PERIOD OF THE WAR The following tables show : — (1) Killings of meat for export during the period of the war (Ist October, 1939, to 30th September, 1945). (2) Opening schedule prices paid to farmers by freezing companies and meat operators for the seasons 1939-40 to 1944-45 inclusive. (3) Marketing Department f.o.b. purchase prices paid to freezing companies and meat exporters for the seasons 1939-40 to 1944-45 inclusive.

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(1) Killings of Meat for Export during the Period of the War (1st October, 1939 to 30th September, 1945)

As the method of preparation of quarter beef for export during the past six years has varied from time to time, the bone-in quarter weight of such beef has been used in compiling the above table. All other weights are shipping weights.

(2) Opening Schedule Prices paid to Farmers

27

1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. Total. Average. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Lambs .. .. 155,64] 173,884 169,567 164,027 157,946 164,817 985,882 164,314 Wethers .. ' 31,182 15,145 20,577 14,780 15,850 20,135 117,669 19,612 Ewes.. .. .. 4-6,201 34,844 48,123 42,019 46,202 50,349 267,738 44,623 Quarter beef .. .. 47,023 51,900 49,704 42,148 35,468 64,991 291,234- 48,539 Boneless cow and ox .. 16,566 17,857 24,963 27,310 19,230 13,920 119,846 19,974 Boneless bull .. .. 6,363 3,428 6,000 6,558 3,540 3,952 29,841 4,973 Boneless bobby veal .. 8,203 8,065 8,000 7,351 6,805 7,265 45,689 7,615 Veal sides .. .. .. .. .. 1,027 975 369 2,371 790 Baconers .. .. 20,106 17,332 11,840 6,067 10,143 10,118 75,606 12,601 Porkers .. .. 3,308 8,502 8,160 4,585 7,084 5,247 36,886 6,147 Choppers .. .. 1,134 1,030 .. .. 684 494 3,34-2 835 Edible offals .. .. 11,769 11,000 10,345 10,133 9,490 10,333 63,070 10,512 Totals .. 347,496 342,987 357,279 326,005 313,417 351,990 2,039,174 340,535

(Each war season) Season Season Season Season Season Season 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. LAMBS, WETHERS, AND EWES North Island (Pence per pound) Lambs (woolly)—■ Prime Down Cross— 36/under 8 J 8 8f 8 J 8 J 9 37/42 . . .. 8j 7|- 7-| 8~ 8| 9 43/50 .. .. 7-f 7i 0f 6f 7 J 8| 51/56 .. .. 7-i 7 5J- 5f 74 8" Prime Crossbred— 36/under .. 8 7| 84 84 84 8f 37/42 .. .. 7$ 71 7| 7f SJ 8| 43/50 .. .. 7j 7| 64 6| 74 8J 51/56 6| 64 5 5| 7 7f Seconds— 36/under .. 74 7-£ 7| 7| 7f 84 37/42 .... 7 6?- 6J 7 7f 84 43-50 .. 7 61 5| 5f 7 74 Wethers— Primes— 48/under .. 5| 5 54 5|- 5i 1 49/56 .. .. 41 44 4f 4f 4| V64/U 5| 57/64 .. .. 4f 4J 4| 44 44 J 65/72 .. ..44 4 4-4 44 44 ] 05/90 as 73/80 .. .. 34 3| Si 2| (As = 25/6 j lb. @ 5f = 30/8 Seconds— 56/under .. 4| 44 44 44 44 64/U 54 57/72 .. 4 3f 4| 4| 4| 65/72 as 64 lb. @ 54 = 28/0 Ewes— 64/under .. 34 3 2§ 2f- 34 64/U 3§ Over 64 .. 2-f 65/72 24 24 24 2# "1 aK /nn . 73/80 skin value If If 1J I 615/^ 4s _ only. 81/90 as 80 lb. = 12/6 J b4 lb " ® ~ 19 / 4 South Island — — — —■— — Lambs (woolly)— Prime Canterbury—• 36/under . . 84 84 8g 84 8'- 9 37/42 .. ..84 8 74 8" 8f 9 43-50 .. ..11 7f 6| 64 7 J 84 51/56 .. .. 74 74 54 5f 74 8 Seconds— 36/under .. 74 74 7f 7 J 7f 84 37/42 .... 7 7 6f 7 7f 84 43/50 .... 7 7 5|- 54 7 74 Wethers— Primes— 48/under .. 54 5 5 5 5 1 49/56 .. 4f 44 44 44 . 44 J>64/U 54 57/64 .. .. 41 41 4|. 44 44 I 65/72 .... 44 4 4 4 4 ] /Qn 73 / 80 •• - 3 * 2 * 2 * (A8^> 2 | 24/ - j / «4 1b.@54 = 29/ 4 Seconds— 4f 4J 4J 44 ' ' 44 64/U 5 56/under 4 3|- 3J 3J 3§ 65/72 as 57/72 .... 64 lb. @ 5 = 26/8 Ewes— 64/under ..34 3 2f 2f 34 64/U 3# Over 64 2| 24 65/72 24 24 2f 1 73/80 If If U >■ 'ftYit q S 81/90 as 80 lb. = 12/6 J b4 lb " @ ~ 19 / 4

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(2) Opening Schedule Prices paid to Farmers—continued

(3) Marketing Department f.o.b. (New Zealand Currency) Purchase Prices paid to Freezing Companies and Meat Exporters during the Period of the War

28

Season Season Season Season Season Season 1039-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. BEEF (Per 100 lb.) , Cattle— s. d. s. d. s. d. s. d. s. d. s. d. Ox— G.A.Q.— 840/TJ ... 82 6 34 0 34 0 34 0 34 0 40 0 0/840 .. .. 32 0 32 0 32 0 34 0 40 0 E.A.Q.: All weights 27 0 29 0 29 0 29 0 29 0 35 0 Heifer— G.A.Q. — 840/U .. 32 0 32 6 32 6 33 0 33 0 39 0 0/840 .... .. 30 6 31 0 33 0 39 0 E.A.Q. : All weights 27 6 27 6 27 6 28 0 28 0 34 0 Cow— G.A.Q. ,. .. 25 6 26 6 26 6 27 6 27 6 G.A.Q. 33 6 F.A.Q. 28 6 Boner Beef— Ox .. . . 22 0 25 6 15 6 20 0 *22 0 23 0 Bull . . . . 22 0 23 6 3 0 20 0 20 0 23 0 Cow . . 20 0 21 0 15 6 20 0 *22 0 23 0 Heifer . . . . 22 0 25 6 15 6 20 0 *22 0 23 0 * Includes 2s. increase from 29th March, 1944.

(Pence per pound) 1939-40. 1940-41. 1941-42. 1942-43. 1943-44. 1944-45. Lamb— Prime Down Cross— 2's (23/36 lb.) .. 7J 7J 7| 7-925 (20/36 lb.) 7-925 \ 0 ... 8's (37/42 lb.) .. 7# 7-)| 7J 7-425 7-800 f (20/30 lb.) 8-425 4's (43/50 lb.) .. 7& 61 6-3 7-175 7-925 Tegs (51/56 lb.) .. 6 ft 6 jf 4|- 5-05 6-675 7-425 Prime Canterbury— 2's (23/36 lb.)' .. 7# 7ft 714 7-8625 (20/36 lb.) 7• 8625 \ 8's (37/42 lb.) .. 7ft 7 i|- 7J 7-3 7-675 j (20/36 lb.) 8-3625 4's (43/50 lb.) .. 7ft 7ft- 6 6-175 7-050 7-8625 Tegs (51/56 lb.) .. 6|| 6 § 4f 4-925 6-550 7-3625 Prime Crossbred— 2's (23/36 lb.) .. 7ft 7ft 7£ 7-675 (20/36 lb.) 7-675 \ 8's (37/42 lb.) .. 7ft 7ft 7 7-175 7-550 >= <20/36 lb.) 8-175 4's (43/50 lb.) .. 7J- 7i 5£ 6-050 6-925 7-025 Tegs (51/56 lb.) .. 6| 6J 4} 4-55 6-425 7-175 Second Quality— 36 and under .. 7J 7| 7 7-175 \ _ 17r , 37/42 lb. f 6i 6-425 / 7 ' 175 7 ' b75 43/50 lb. .. W 6 J| 6ft 5| 5-3 6-425 6-925 51/56 lb. .... J L 4-5 4-5 5-25 Telescoping .. .. 0-0777 0-0777 0-0777 0-0777 0-0777 0-0777 Mutton Prime wether and maiden ewe— l's (48 and under) .. 5ft 5-ft- 5J 5-25 5-25 1 7's (49/56 lb.) .. 44# 4| 4-75 4-75 I 5-75 3's (57/64 lb.) .. 4ft 4,% 4f 4-5 4-5 I 9's (65/72 lb.) .. 4 ft- 4 ft- 41 4-25 4-25 i ** ** { 2 ' 75 , (for 72 ft.)* |5-75for641b.only.* Second Quality wether and maiden ewe— 56 and under .. 4ft 4ft 4f 4-5 4-5 5-25 57/64 lb. . . .. "I . , ... , , 65/721b. .. •• / 4-125 4-125 5-25 for 64 lb. only.* Ewes— 48 and under .. "~| 49/56 »> }■ 3# 3f 2ft 2-75 3-25 3-75 57/64 lb. .. ..J 7" " 1 ._ 2 » 2ft 2-25 2-75 3-75 for 64 lb. only.* 81/90 lb! !! !! j* } B °ned 41 | 1 ft" 15 | Boned 3 Boned 4-675 Telescoping .. 0-0777 0-0777 0-0777 0-0777 0-0777 0-0777 * Marketing Department pays freezing charges on the excess weight over 04 lb.

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ACCOUNTS The following is a summary of the meat accounts printed on pages 44 and 45 of this report. (а) Administration and General Expenses Account. (б) Final Purchase and Sale Account of 1943-44 season's killings, showing transfers of £881,807 to the credit of the Meat Pool Account and £960,296 to tlie credit of the Meat Industry Stabilization Account. (c) Purchase and Sale Account, 1944-45 season's killings up to 31st July, 1945, showing transfers of £1,359,903 to the credit of the Meat Pool Account and £2,114,861 to the credit of the Meat Industry Stabilization Account. (d) Meat Pool Account to 31st July, 1945, showing a surplus at that date of £6,245,413. (e) Meat Industry Stabilization Account, showing a surplus of £2,913,671 at the 31st July, 1945. (/) Bobby Calf Pool Account to 31st July, 1945, showing a surplus at that date of £226,934 after transfer of £85,556 to the Bobby Calf Stabilization Account. (g) Bobby-calf Stabilization Account, showing a surplus of £102,941 at the 31st July, 1945. (h) Meat Account, which shows a credit balance of £38,459 at the 31st July, 1945.

29

1939-40. I 1940-41. | 1941-42. | 1942-43. | 1943-44. | 1944-45. Pig-meats-Porkers (unsinged), headless sides— 1st quality .. 7ft 7# 7# 7# 84- 94 2nd quality .. 7| 7| 71 7-J 8J 8» Baconers (singed), Wiltshire sides— 1st quality .. 8ft 8-| 8-| 81 8-$ 9ft 2nd quality ... 8J 8ft 8ft 8ft 81 94 Choppers— Bone-in .. .. 4-$ 4ft .. .. 41 41 Boned .. .. .. 6 ft Beef— Bone-in quarters— GAQ ox and heifer— Hmds .. .. V145/210/q 210and f 54 .. .. All /5f All / (5-095 lores •• ■ • / under .. .. weights \3| weights \ 3-845 Overs and unders, Over 210 lb., i less. J less. FAQ ox and heifer (all weights)— Hinds .... 4i U .. .. 4ft 4-9075 f ,,r s , . .. ;• 3 i 3ft 3.7825 UAy cow (all weights) - Hinds .. .. 4 4 .. .. 3# 4.6575 iores .... 3 3 .. .. 2# 3-6575 FAQ cow (all weights) — Hinds .... .. .. .. .. .. 4-0570 ... * ores V •• •• •• •• -- 3-0575 Boneless quarters— GAQ ox and heifer— Hinds .. .. .. 210and/6fJ 210and/t>-|g 210and/6§f All / 6§g Fores .. .. .. under \4fg under \4fl under \4g| weights \4§1 Over 210 lb., Over 210 lb., Over 210 lb., J loss. I- less. i less. FAQ ox and heifer (all weights)— Hinds .. .. .. 5-18- 5|- 5f; 5J rA F ° res •• . • • •• m m m UAQ cow (all weights)— Hinds ... . . ; .. 5ft 5J 51 51 _ .. 4ft 4 J 4-| 41 \" FAQ cow (all weights)— Hinds .... Fores .... Ribs and ponies (bone-in) GAQ ox .. ... - .. 4 3ft 3ft FAQ ox .... .. .. 3J 3J GAQ eow .... .. 3} 3 ft 3 ft .. American pack, bone-in, eights— GAQ ox and heifer . . .. .. .. .. .. 5 • 1175 FAQ ox and heifer .. .. .. .. .. d-iaioK GAQ cow .. .. .. .. ... .. 4-2925 FAQ cow .. .. .. .. .. .. .. 3.(3925 Partially boned—• GAQ ox and heifer .. .. .. .. ,. 5-6125 6-5125 FAQ ox and heifer .. .. .. .. .. 5-05 5-95" GAQ eow .... .. .. .. .. 4-83125 5-73125 FAQ cow .... .. .. .. .. .. 4-94125 Boneless— Ox ... . 4| 4|- .. .. .. Bull .... 41 41 .. Killings from 3f 4.95 1/12/42, 3f Cow .... 4 4 Veal .... 4 ft 4& .. !. !! Bobby veal .. 5| 5| .. .. .. '' 4 • 5 Bone-in veal— Prime— .... .. .. .. .. 4£ 4 . 5 Second quality .. .. . . .. .. 3 J .j, -

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WOOL BULK PURCHASE OF WOOL BY THE UNITED KINGDOM GOVERNMENT The annual report of the Department for the 1939-40 season gives details of the bulk-purchase arrangements between the United Kingdom and the New Zealand Governments for greasy and slipe wool, and of the agreements between the Now Zealand Government and the wool-brokers, wool-buyers, and wool-scourers covering services to be performed by them respectively in the preparation of wool lor appraisal, the appraisement of wool, and the scouring of wool selected for that purpose. The duration of the contract of purchase of wool by the United Kingdom Government depended on the termination of the " global war," so that, following the cessation of hostilities (V.E. Day, Bth May, 1945, and V.J. Day, 15th August, 1945), the sale of the 1945-46 season's clip marks the end of the contract obligation of the United Kingdom Government, The purchase-prices of greasy and slipe wool for the 1944-45 season remained unchanged at the 1942-43 season levels, as follows :— Greasy Wool, per Pound. d. Ex-store overall average price (New Zealand currency) .. .. .. 14-0875 Slipe Wool, per Pound. d. F.o.b. overall average price (New Zealand currency) .. .. .. 19-523 Note.—ln addition to the prices quoted above, the United Kingdom Government pays on greasy wool 0-872 d. per pound, being brokers' charges 0-625 d., transport and other charges to f.o.b. 0-125 d., and Marketing Department costs, including appraisal, 0-122 d. On slipe wool the additional amount payable is 0-125 d. per pound, being Marketing Department costs, including appraisal. The standard of appraisement has been well maintained, and the wool authorities in the United Kingdom have expressed their satisfaction with the results. PROBLEM CREATED BY STOCKS OF DOMINION WOOL ACCUMULATED IN HANDS OF UNITED KINGDOM GOVERNMENT, AND PLANS FOR DISPOSAL IN CONJUNCTION WITH CURRENT CLIPS In October, 1944, the United Kingdom Government made representations to the Governments of Australia, South Africa, and New Zealand regarding the problem of accumulated stocks of Dominion wool in their hands, and suggested " that the time had now come when the four Governments (United Kingdom, Australia, South Africa, and New Zealand) should jointly make a realistic appreciation of the position which will exist at the time of reopeniifg of the world markets, with a view particularly to the replacement of the present arrangements with a longer-term marketing scheme if that should be agreed to be desirable." The following quotations from cablegrams from the United Kingdom Government indicate the nature of the approach to the problem of wool stocks, and represent the background to the inter-Governmental discussions which subsequently took place : — 12th October, 1944 :— Now that the liberation of Europe is well under way and reopening of continental markets is in prospect we have been giving thought to the best procedure for dealing with the long-term problems likely to arise in connection with the liquidation of the wool surplus now in our hands. As a result of our wartime purchasing arrangements with Dominion Governments we have accumulated surplus stocks which are steadily increasing and will soon be equal to about two years' world consumption of Dominion wool. The disposal of stocks of this magnitude is likely to create a serious problem both for us and for the three Dominions. It may well occupy some ten years and since the carrying charges are substantial is likely to result in considerable financial loss. Moreover if not done with great care in co-ordination with the sale of future Dominion clips it may have serious repercussions on Dominion wool industries after the expiry of our present wartime purchasing arrangements. 2. We feel in these circumstances that it would be very helpful if discussions could take place at an early date in order that the whole future wool position may be surveyed between us and agreement reached on a long-term marketing plan providing for co-ordinated arrangements for the disposal both of the surplus stocks resulting from our wartime arrangements and of the Dominion clips which will come forward before our stocks are disposed of. We suggest that for this purpose a conference of export representatives of the Governments concerned should be held in London as soon as possible. If agreeable to Dominion Governments we would suggest that this conference should open before the ond of November. 3. Our own view is that a matter of this kind which is of common interest to all four Governments would best be handled in partnership through the creation of a joint marketing organization in the direction and financing of which all four Governments would share. We have noticed in recent press reports that opinion in certain of the Dominions has been turning in much the same direction. In preparation for the conference a memorandum has been drawn up here setting out the main facts of the position and indicating our ideas as to the form which a scheme on the above lines might take. Text of the memorandum which we hope would form a convenient starting point for the conference is given in my immediately following telegram. 4. It will be seen that the general connection underlying the scheme suggested is that in the common interest the present wartime purchasing arrangements should be merged as from an early convenient date in a long-term partnership plan extending to such period of years as may be required for the orderly liquidation of the surplus without impairing the stability of Dominion wool industries. It is desired however to make it quite clear that in putting forward this scheme the United Kingdom Government are not seeking in any way to retract from their undertaking to purchase the Dominion wool clips for the period of the global war and one wool year afterwards. It is true that the suggested scheme would if accepted take effect before the ond of that period but if it should prove that instead of a scheme of this kind Dominion Governments would prefer that the present wartime arrangements should be continued for their full duration the United Kingdom Government will of course abide by their undertaking. In that event however the problem would inevitably be made more serious by uncertainty as to the ultimate disposal policy which post-war financial circumstances might force upon us and it is thought that on a realistic survoy of future prospects an orderly long-term scheme on the lines put forward may well be regarded in the general interest as a preferable alternative to the running out of the present short term arrangements. 12th October, 1944:— The nature and magnitude of the problem clearly necessitates joint consideration between the United Kingdom Government and the Dominions concerned. It is suggested that it may bo desirable through the establishment of a •joint organization to handle the disposal of surplus stocks which under the agreement have inevitably accumulated in the hands of the United Kingdom Government in conjunction with arrangements for the marketing of future clips. The policy followed in the disposal of wool in the early post-armistice period will necessarily affect the future. It is also desirable that at the earliest date normal selling procedure should be restored and that direct contacts with markets as they become normal should be re-established. These are the reasons for establishing the joint organization without delay.

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The reply of the New Zealand Government to the representations from the United Kingdom Government referred to above was as follows :— 28th October, 1944 : — His Majesty's Government in New Zealand appreciate the suggestions made by His Majesty's Government in the United Kingdom relative to the long-term problems associated with the liquidation of surplus stocks and the sale of current wool clips which are fully revealed in the cablegrams referred to above. It is agreed that some plan of co-ordinated disposal seems imperative and the New Zealand Government support the proposal that a conference of expert representatives of the Governments conoerned should be held in London at a mutually convenient time. In this regard His Majesty's Government in New Zealand consider it impracticable for the conference to be held as early as November and they propose to discuss with His Majesty's Governments in Australia and South Africa a suitable date and details of composition of delegation to be sent to the conference. A further reply will be sent as soon as possible. The outcome of exchanges between the Dominion Governments themselves, and with the United Kingdom Government, was the decision that representatives of the four Governments (at the official and expert level) should meet in London at a Wool Conference to be held on 16th April, 1945, and that the recommendations of the conference should be reported back by the respective delegations to their Governments, without commitment beforehand. The New Zealand Government representatives appointed to attend the conference were : — Mr. George A. Duncan, Director of Export Division, Marketing Department (Leader). Mr. E. L. Greensmith, Eirst Assistant Secretary, New Zealand Treasury. Mr. N. R. Jameson, Chairman, New Zealand Wool Board. Mr. W. Horrobin, Vice-Chairman, New Zealand Wool Board. Mr. H. M. Christie, Member, New Zealand Wool Board. Mr. C. G. Trotter, President, New Zealand Wool Brokers' Association. Mr. Albert Smith, Vice-President, New Zealand Wool Buyers' Association. Mr. H. E. Davis and Mr. N. S. McClumpha, New Zealand Marketing Department (Export Division), London. Mr. W. M. Wilson, New Zealand Marketing Department (Export Division), (Secretary to delegation). REPORT OF NEW ZEALAND GOVERNMENT DELEGATION TO HON. MINISTER OE MARKETING, AND REPORT AND RECOMMENDATIONS OE WOOL CONFERENCE AS A WHOLE The report of the New Zealand Government delegation, and the report and recommendations of the Wool Conference as a whole, were published as a parliamentary paper (A.-10, 1945) which was presented to both Houses of the General Assembly by leave on 30th August, 1945. For convenience of reference the short details of the recommendations made by the Conference to the four Governments (United Kingdom, Australia, South Africa, and New Zealand) are set out as follows (1) The stocks of wool will in future be held by the United Kingdom and Dominion Governments in partnership, and a Joint Organization will be formed to take charge of the marketing of old wool and to support the marketing of current clips during the disposal of the surplus. The total stocks of United Kingdom owned wool of Dominions' origin at 30th June, 1945, were estimated at 3,245,000,000 lb., comprised of— Pounds (Millions). 63 per cent. Australian .. .. .. .. .. .. 2,060 17 per cent. New Zealand .. .. .. .. .. .. 540 20 per cent. South African .. .. .. .. .. .. 645 100 per cent. 3,245 The Dominions' post-war exportable surpluses are estimated as likely to average— Pounds (Millions). Australia .. .. .. .. .. .. .. .. 910 New Zealand .. .. .. . . .. .. .. 310 South Africa .. .. .. .. .. .. .. 220 1,440 which is, in total, equal to the pre-war exportable surplus, and which may be said to represent the approximate pre-war world consumption of Dominions' wool (exclusive of consumption within the Dominions). On an estimate that consumption of Dominions' wool might increase to a level of 20 per cent, above pre-war, the period required to dispose of existing stocks, alongside new clips, at the estimated rate of future production would be, on average, thirteen years from 30th June, 1945. (2) It is intended that, as soon as conditions permit, current clips shall be offered by growers at auctions as before the war, and that, in addition, the Joint Organization will offer wool from stock at the auctions, with the object of maximizing total sales and turning over stock. The grower shall have the right to withdraw his wool if he regards the price offered as inadequate. Reserve prices will be calculated for the London market, and as soon as practicable growers will be free to forward wool to London for sale there alongside wool from the Organization's stocks. (3) All wool will be offered subject to minimum reserve prices, and the Joint Organization will take up, at reserve prices, such new wool as is not sold at or above these prices. (4) The Joint Organization (a private registered company with a nominal capital of eight shares), to be formed in London to operate from Ist August, 1945, will comprise United Kingdom Government, four shares ; Australian Government, two shares ; South African Government, one share ; and New Zealand Government, one share. (5) The number of Directors of the Joint Organization will correspond with the shareholding as in paragraph (4) above, with an independent Chairman appointed by the four Governments in agreement. In addition, the Chairmen of the three Dominion subsidiaries (referred to in paragraph (6) below) will be ex officio Directors of the principal company without additional voting power. (6) This Joint Organization will have an active subsidiary in each Dominion to conduct the local operations and to act on its behalf.

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(7) The Joint Organization will operate separate "pools" (United Kingdom/Australia, United Kingdom/South Africa, and United Kingdom/New Zealand) on a 50/50 basis of financial responsibility for the wool of the respective Dominions, with determination of selling policy by the Joint Organization. (8) The United Kingdom/New Zealand " pool " will take over present stocks of New Zealand wool at its original cost (including f.o.b. payments), less the amounts accumulated in the divisible profits account. (Note. —The estimated value of the New Zealand opening stock is £32,500,000 sterling and the estimate of divisible profit is £7,000,000 sterling, so that the New Zealand Government's liability on that basis would be approximately £12,750,000 sterling, which would be met in four annual instalments of £3,200,000 sterling.) (9) It is intended that the total current wool clips will be offered by growers for sale at some time during the season, and also a proportion of the old wool stocks as determined by the Joint Organization. Some extension of the selling season in the Dominion will be desirable, and special sales .may be held during the off-season, The cost of buying-in wool not sold at auction at the reserve price or better will be borne equally by the United Kingdom and New Zealand Governments. It is recognized that the trend of wool prices must move in accordance with general world conditions and the need to expand consumption. At the same time, wide price fluctuations will be avoided by the joint measures of adequate offerings and reserve prices. Any substantial variations in the reserve prices (which it is hoped may be fixed for a whole season) will be recommended by the Joint Organization, but they must be approved by the four Governments. (10) The operating-expenses of the Joint Organization will be borne equally by the wool-growers and the Joint Organization itself. The share of the wool-growers will be paid from a contributory charge on all sales of current clip wool at auction or sales to the Joint Organization at reserve prices. The share of the Joint Organization will be met by a deduction from the proceeds of sales of wool held by it. (11) The ultimate balance of profit or loss arising from the transactions of the Joint Organization in the wool of the Dominion will thus be shared equally between the United Kingdom and New Zealand Governments. (12) For the 1945-46 season the wool-clip will be taken up in the same manner as during the war period and at the overall average price at present ruling. The United Kingdom will be reimbursed by the New Zealand Government for one-half of the cost of any part of the 1945-46 clip which may be unsold at the end of the wool year. (13) The plan is to be reviewed at the end of five years. DISCUSSIONS WITH MEMBERS OF WOOL BOARD The proposals of the Wool Conference were discussed by the Hon. the Acting Prime Minister and the Hon. the Minister of Marketing with the members of the Wool Board. The Board approved the proposals on behalf of the wool industry, and wrote to the Hon. the Minister of Agriculture and Marketing as follows : — 29th June, 1945. The Hon. Ministor of Agriculture, Wellington. London Wool Conference Dear Sir,— Following on the conversation which I had with you and the Hon. Acting Prime Minister of the Bth instant, I wish to advise that the New Zealand Wool Board has considered the provisions of the wool disposal plan submitted by the New Zealand delegation and authorizes me to advise you that it unanimously endorses the plan as submitted. The Board has decided that it has the authority to speak for the industry as a whole, and recommends to you, on behalf of the industry, that the New Zealand Government give favourable consideration to the adoption of the plan as submitted. It is understood that further discussions between the Board and the Government will be necessary at a later date to determine the type of domestic structure required, together with the administration machinery of the subsidiary body. In presenting this decision to you the Board wishes me to convey their appreciation of the work of the delegation and of the co-operation of the New Zealand Government, and requests, if possible, that members be supplied with copies of the report, which, I understand, is now in your possession. Yours faithfully, (Sgd.) H. J. Ward ell, Acting Chairman. The following reply was sent by the Hon. the Minister of Agriculture and Marketing 11th July, 1945. The Acting Chairman, New Zealand Wool Board, P.O. Box 248, Wellington. London Wool Conference Dear Sir, — I am in receipt of your letter of 29th June, and note that your Board has accepted on behalf of the industry the proposals outlined by the London Wool Conference, and requests the Now Zealand Government to give favourable consideration to the adoption of the plan. I wish to thank the Board for the expeditious manner in which it has treated this important matter, and have to advise that the Delegation s report will be submitted to Cabinet for consideration. At an early mutually convenient date, after the arrival of your Chairman and other members of the delegation, I will be pleased to arrange a discussion on the proposals between your Board and the Minister of Finance and myself. In the meantime I have pleasure in agreeing to your being supplied with copies of the report, and have requested the Director-General of the Department of Agriculture to make these available to you for members of the Board. Yours faithfully, (Sgd.) B. Roberts, Minister of Agriculture. Following the return of the delegation to New Zealand, further discussions took place between th e Government and the Wool Board. The Government approval of the proposals was conveyed to the Secretary of State for Dominion Affairs in the following cablegram :— 26th July, 1945 : Report and recommendations of Wool Conference. New Zealand Government approves the recommendations of the Wool Conference and agrees to the formation by the four Governments of a Joint Organization which shall take charge of the marketing of the old wool and support the marketing of current clips throughout the period of disposal of stocks. Discussions are proceeding to determine the particular form the New Zealand subsidiary organization should take. The approval of the other Governments—United Kingdom, Australia, and South Africa—has also been given, so that the way is now clear for the implementation of the plans.

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METHOD OF PAYMENT FOR GREASY AND SLIPE WOOL SOLD TO THE UNITED KINGDOM GOVERNMENT Payment for greasy and slipe wool is made by the United Kingdom Government on the following basis :■ — (1) On appraisal, payment is made at appraisal prices plus the allowances for handling, &c., referred to above —viz., greasy w-00l 0-872 d. per pound, and slipe wool 0125 d. per pound. (2) At the end of the wool year the Marketing Department ascertains — (a) The value of the total wool-clip (wool exported and used locally) at the purchase-prices quoted above ; (b) The difference between that value and the appraisal value ; and (c) The percentage which that difference represents of the appraisal value. The United Kingdom Government then makes an additional payment of the sum which results from the application of the percentage figure referred to in (c) above to the appraisal value of the wool which it has purchased. PURCHASE OF 1944-45 SEASON'S GREASY AND SLIPE WOOL BY NEW ZEALAND GOVERNMENT The Marketing Department procedure in regard to the purchase by the New Zealand Government from producers of the 1944-45 season's greasy and slipe wool was as follows : — (a) Local manufacturers of woollen goods were supplied with their requirements of greasy and slipe wool at the 1941-42 season's level of prices, and they paid the standard handling charges in addition to the price for wool. The overall average price of the wool supplied to local manufacturers was 12-998 d. per pound for greasy wool and 15-794 d. per pound for slipe wool. (b) Payment to owners of greasy wool was made as to 90 per cent, of the appraisal values on appraisal. The balance of the purchase-price was paid in cash as a percentage (13458567) on the appraisal values. The effect of the purchase basis outlined is that Wool-growers received in cash for their total 1944-45 season's greasy wool the overall average price of 13-987 d. per pound, which represents an increase of 14-179 per cent, on the overall average price for their total clip for the 1941-42 season. The total amount paid to owners of greasy wool for the 1944-45 season was £17,844,972. (e) Owners of slipe wool were to receive payment on the basis of 1941-42 season's level of prices plus 10 per cent., the balance of the increase in price granted by the United Kingdom Government —namely, £165,052 —being transferred to the Moat Industry Account to the credit of the Meat Pool Account and £15,721 to the credit of the Sheep-skin Account. Payment to owners of slipe wool was made as to 95-6522 per cent, of the appraisal values on appraisal; at the end of the wool year a further payment was made of 1-415095 per cent, on the amounts already paid to owners. This further payment brought the overall average purchase-price up to 18-6742 d. per pound, being the 1941-42 season overall average purchase-price (16-9766 d.) plus 10 per cent. The total amount paid to ownera of slipe wool for the 1944-45 season was £3,989,553. Note.—The purchase and payment arrangements outlined above are covered by the Purchase of Wool Emergency Regulations 1939, with Amendments Nos. Ito 6. Payment for greasy wool is made to wool-brokers on behalf of wool-growers, and for slipe wool to freezing companies and exporters. For both greasy and slipe wool payment is made fourteen days after date of appraisal. Appraisal values are calculated after allowance for actual tare. APPRAISAL PROCEDURE The procedure for appraisal of wool outlined in the report for the year ended 31st July, 1941, was followed during the 1944-45 season. The following tables show the quantities and values of wool apprasied during the years ended 30th June, 1943, 1944, and 1945.

Greasy Wool

Slipe Wool

5—H. 30

33

Purchased for Sale to United, Kingdom Ministry of Supply. Purchased for Sale to Total Annraisals Local Mills. iolal A PP raisa,s - Year ended Ifor Shipment in the Grease. For Scouring. Bales. Net Pounds. Bales. Net Pounds. Bales. Net Pounds. Bales. Net Pounds. Value. f s. d. 30th June, 1945 658,859 224,354,329 174,842 66,123,729 47,780 15,709,888 881,481 306,187,946 17,844,971 16 1 30th June, 1944 585,679 196,590,130 157,913 58,419,834 51,426 16,651,367 795,018 271,661,331 15,809,183 11 3 30th June, 1943 582,102 199,739,970 194,854 70,270,009 56,835 18,682,639 833,791 288,692,638 16,804,827 12 4

Unlted h mnBdom S Ministry PurCl Local MUl^' 6 t0 Total A PP raisals - it 1 1 of Supply. ' Year ended 11 J Bales. Net Pounds. Bales. Net Pounds. Bales. Net Pounds. Value. £ s. d. 30th June, 1945 ' .. 158,015 51,230,505 121 43,004 156,136 51,273,509 4,170,471 16 4 30th June, 1944 .. 135,412 44,387,242 148 47,854 135,560 44,435,096 3,614,214 7 5 30th June, 1943 .. 115,738 38,232,570 217 70,312 115,955 38,302,882 3,115,103 16 7

11.—30

SCOURING AND CARBONIZING OF WOOL For the year ended 30th June, 1945, the following wools were allotted for scouring and carbonizing :

SHIPPING ARRANGEMENTS AND DESTINATION OF WOOL EXPORTS The United Kingdom Wool Control released quantities of wool for shipment to the United States of America, Canada, India, and Australia.

The following tabulation shows the quantities of wool shipped during the year ended 30th June 1945, and the destination :—

ACCOUNTS The wool accounts are shown in the accounts section at the end of this report, page 46. The accounts cover appraisals of wool up to the close of the wool year (30th June, 1945) and they comprise Purchase and Sale Account, and Charges, Expenses, and Administration Account. It will be observed from the accounts that the purchase and sale transactions for the year ended 30th June, 1945, show a surplus of £95,231 after allowance has been made for expenses and charges and for the agreed contribution by the United Kingdom Wool Control for abnormal storage and insurance on wool whilst awaiting shipment from New Zealand. The Wool Account shows the transfer to War Expenses Account of £83,363. This sum represents the balance of the allowance made by the United Kingdom Wool Control for the 1943-44 season to the Marketing Department to cover expenses and charges. WOOLLY SHEEP-SKINS The terms of sale to the United Kingdom Ministry of Supply of the exportable surplus of woolly sheep-skins remained as stated in the Department's annual report for the 1941-42 season. The period of the agreement extends to and terminates on the date of termination of the wool-purchase agreement —- namely, the period of the " global " war and the following season's clip. Thus, the bulk purchase of the exportable surplus for.the 1945-46 season terminates the contract of purchase. REPORT OF CONTROLLER The Hon. Minister of Marketing. I beg to report to you on the operations of the Sheep-skin Control for the twelve months ended 30th June, 1945, Accounts. A deficit of £9,324 12s. 3d. was shown for the year. This has been transferred to the Reserve Account. The Reserve Account balance brought forward was .. .. .. ..40 269 .11 I The addition for the year .. .. .. .. 26' 003 11 6 T , , .. , 66,273 2 7 -Less deficit as above .. .. .. .. 11 9 324 12 3 The balance as per the Balance-sheet .. .. .. .. £56,948 10 4 The source of the Reserve funds, and the reason for the deficit, is explained in last year's report"

34

Scouring, Carbonizing. Bales. Pounds. Bales. Pounds. Ex 1943-44 season .. .. .. 689 223,616 472 165,949 Kx 1941-45 season .. .. .. 172,057 65,126,456 2,447 890,'816 Total 172,746 65,350,072 2,919 1,056,765

Destination. Greasy. Scoured. Slipe. Total. Bales. Bales. Bales. Bales. United Kingdom .. .. 42,720 105,490 37,726 185 936 Canada .. .. .. 9,753 20,149 12,607 42^509 U.S.A. .. .. .. 88,136 8,084 33,947 130,167 Australia .. .. .. 2,993 .. 40 3 033 India ■■ •• •• 15,581 2,931 .. 18^512 Total, 1944-45 .. 159,183 136,654 84,320 380,157 Total, 1943-44 .. 527,863 129,560 120,191 777,614 r\ i- i • Bales. Quantity unshipped or held for scouring and carbonizing at 30th June, 1945 .. 1,243.712 Quantity unshipped or held for scouring and carbonizing at 30th June, 1944 .. 659^048 Quantity unshipped or held for scouring and carbonizing at 30th June, 1943 .. 583,'850

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Statistics.—The total skins purchased by the Control during the year were 2,214,336. The decline in numbers handled, as compared with the previous year, is probably due to meat rationing. Of the skins purchased, 908,765 went into export stock and 1,305,57.1 went into fellmongering stock.

The following table shows the quantities and value of woolly sheep-skins exported to various destinations on behalf of the United Kingdom Wool Control for the twelve months ended 31st July, 1945 : —

The skins fellmongered totalled 1,316,168. In addition, 180,628 freezing-works skins were brought into the pool by appraising adjustments. The slipe wool sold by the Control totalled 4,548,212 lb. and the pickled pelts 104,823 dozens. The administration expenses show an increase of £333 15s. Iod., from £13,808 16s. 7d. to £14,142 12s. sd. Increases were: salaries, £568 os. Bd.; telephones, £40 ss. 3d. ; intersfc, £34.1 ss. 2d. ; rent, £14 2s. Reductions were: stationery, £287 17s. lOd. ; general expenses, £136 15s. lid. ; travelling-expenses, £42 3s. 2d. ; insurance, £70 Bs. 4d. ; advertising, £55 9s. 6d. ; exchange, £28 14s. lOd. ; postages, £8 7s. Bd. I am pleased to advise that the Control has operated smoothly and, as far as I am aware, satisfactorily. R. C. Burgess, Controller. ACCOUNTS The accounts for the Sheep-skin Control for the year ended 30th June, 1945, are shown in the Accounts Section at the end of this report, pages 47 and 48. TALLOW PURCHASES BY UNITED KINGDOM GOVERNMENT OP 1944-45 SEASON'S TALLOW A contract was completed between the United Kingdom and the New Zealand Governments for the purchase by the United Kingdom Ministry of Food for the exportable surplus of the 1944-45 season's tallow. The details of this contract were published in the report for the year ended 31st July, 1944, page 24. For convenience of reference the letter from the Ministry of Food which constitutes this contract is again quoted, as follows : —

We have this day bought of you the exportable surplus of the 1944-45 season production of New Zealand tallow consisting of the following grades and at the prices set against each classification : —

Quantity.'—3s,ooo tons (estimated). Shipment.—To United Kingdom and/or United States of America and/or Canada at discretion of Ministry. Quality.—A fair average of the brand and grade as per schedulo already agreed. Payment.—By net cash against documents in London on arrival of steamer, or on reported loss of same, or seventy days after the date of the bill of lading, whichever is the earlier. Buyers agree that sellers may raise the question of payment and storage in the event of any undue delay in shipping occurring. Basis of Freight 1255. 6d. per ton, plus 15 per cent, sterling. Any variation for buyers' account. Insurance.—Marine and war risk covered by buyers. Safeguard. —In the event of shipment becoming impossible, the contract shall be suspended until the cause(s) preventing shipment cease to operate. All other conditions as per London Oil and Tallow Trades' Association Contract No. 14, as amended for the first-term contract. These prices represent an. increase of £7 17s. 6d. per ton sterling for all grades over the United Kingdom purchase-prices which applied for the 1943-44 season's purchase. The surplus or difference between these United Kingdom sterling c. and f. purchase-prices and the f.o.b. (New Zealand currency) prices at present paid to manufacturers by the Marketing Department is approximately £17 15s. (New Zealand currency) per ton. The total quantity of tallow exported to destinations as below was 28,536 tons.

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Value : Destination. Number of Dumps. Number of Skins. Net Weight. New Zealand Currency. lb. £ s. d. Canada .. .. .. .. 3,934 322,884 2,309,185 108,714 1111 United States of America .. .. 7,647 570,457 4,399,251 197,695 13 0 United Kingdom .. .. .. 1,716 101,253 996,580 54,162 19 8 13,297 994,594 7,705,016 360,573 4 7

Price Sterling per TonC. Key ,, , 1( , ■ and F. in Casks/Drums Letter. waue. wit;h p rem i um 0 f 6a> per Ton shipped in Barrels. £ s. d. A .. First beef .. .. .. .. . . .. .. . . 44 2 6 B . . Second beef .. .. .. . . .. .. . . . . 39 17 6 C .. First mutton .. .. .. . . .. . . .. .. 42 10 0 D .. Second mutton .. .. .. . . .. .. . . . 39 17 6 E .. Good bright prime, mixed .. .. .. .. . . . . . . 40 10 0 F .. Good colour, mixed .. . . . . . . .. . . 40 2 6 G .. Fair to good colour, mixed .. .. .. .. .. .. 39 10 0 H .. Fair colour, mixed . . .. .. .. .. ■■ 38 12 6 I .. Good gut tallow .. .. . . .. .. .. .. 37 12 6 J .. Medium gut tallow . . .. . . . . .. .. . 30 12 6 K .. Low to no-colour tallow . . . . . . .. .. . . 34 17 6 M .. Stearine, superior .. .. . . . . . . .. . . . . 44 12 6 N .. Stearine, medium .. . . . . . . . . .. . . . . 43 2 6 O and Q Hog grease/pig fat (basis 1 per cent. FFA) . . .. . . .. . . 43 17 6 P .. Lard, edible .. .. .. .. . . .. .. .. 56 17 (i R . . Hide grease — Under 1 per cent. FFA .. .. .. .. .. . . . . 37 10 0 1 per cent, to 15 per cent. FFA . . .. .. .. . . 36 10 0 Over 15 per cent. FFA .. .. . . .. . . .. . . 35 7 6 S . . Edible, mixed .. . . .. .. . . .. .. .. 41 15 0

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PURCHASES BY NEW ZEALAND GOVERNMENT OF 1944-45 SEASON'S TALLOW FROM NEW ZEALAND MANUFACTURERS . The f.o.b. (New Zealand currency) purchase-prices payable to manufacturers remained as set out in the Schedule attached to the Purchase of Tallow Order 1940. The surplus, or difference between the United Kingdom purchase-prices and the prices paid by the New Zealand Government, is approximately £17 15s. (New Zealand currency) per ton.

STATISTICS The following table shows the quantities of tallow purchased and shipped from Ist August, 1944, to 31st July, 1945 :—■

Permits wore granted to shippers to overseas countries from Ist August, 1941, to 31st July, 1945, as follows :— India. Fiji. Tons (Net). Tons (Net). First mutton .. .. .. .. 907 Good colour, mixed .. .. .. .. .. 160 907 160 Note. Practically all edible beef tallow has been required for manufacturers in New Zealand, in addition to considerable quantities of edible mutton tallow.. Purchases by United Kingdom Government of 1945-46 Season's Tallow.—A contract was completed between the United Kingdom and the New Zealand Governments, before publication of this report, for the purchase by the United Kingdom Ministry of Food of the exportable surplus of the 1945-46 season's tallow on the same terms, prices, and conditions as applied for the 1944-45 season. ACCOUNTS The tallow accounts are shown in the accounts section at the end of this report, page 46. They comprise Purchase and Sale Account, Revenue Account, and Tallow Account, and cover the purchase and sale of tallow for the year ended 31st July, 1945. After providing £7,134 for administration and handling expenses, the surplus of £415,444, which represents the difference between the purchaseprices and sale-prices, has been transferred as to £235,176 to the credit of the Meat Pool Account and as to £180,268 to the credit of the Meat Industry Stabilization Account (page 45). The credit balance of £4,885 in the Tallow Account represents the difference between the Department's administration and handling allowance and the actual charges incurred by the Marketing Department. HIDES The report for the 1939-40 season gave details of the action taken by the Government in regard to control of export of hides, stabilization of prices of hides for local requirements, and equalization of value of hides for local use and for export by a levy on exports to even up the difference between local " standard domestic values " fixed at Ist September, 1939, prices, plus 25 per cent., and export values. This procedure is embodied in the Hides Emergency Regulations 1940, and the administration of the regulations is entrusted to a Hides Committee, which operates under authority conferred 011 it by the Minister of Marketing. SALE OF HIDES TO AUSTRALIA In October, 1941, arrangements were made between the New Zealand and Australian Governments for sale to the Australian Hide Board for military manufacturing purposes of ox and cow hides of specified weights which were surplus to New Zealand requirements. This arrangement has been continued during the 1944-45 season, the grades of hides concerned being ox and cow hides, 40 11). and up. The Marketing Department has purchased these hides 011 the terms set out in the report of the Hides Committee which follows, and sale is made to the Australian Hide Board at New Zealand standard domestic values. The number of hides shipped to Australia during the 1944-45 season was 112,791.

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United Kingdom. U.S.A. Canada. Tons (Net). Tons (Net). Tons (Net). First beef .. .. .. 44 First mutton .. .. .. 5,198 986 Good bright prime, mixed .. .. 467 442 127 Good colour, mixed .. .. 2,867 3,317 565 Fair to good, mixed . . .. 673 1,209 260 Fair colour, mixed .. .. 196 381 116 Good gut .. .. .. 2,159 2,529 325 Medium gut .. .. .. 1,078 1,480 522 Low and no-colour gut .. .. 465 424 98 Stearine, superior .. . . 573 Stearine, medium .. .. 94 Pig fat, inedible, steam rendered .. 284 Hog grease .. .. .. 251 Hide grease .. .. .. 92 Edible, mixed .. .. .. 183 64 14,624 10,832 2,013

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The accounts covering the foregoing transactions are shown in the accounts section at the end of this report, page 47. It will be seen that the deficit for the 1944-45 season was £47,833. Note.—As from vessels commencing loading for Australia after 9th July, 1945, prices charged to the Australian Hide Board were altered from the basis of New Zealand standard domestic values to the basis of f.o.b. purchase-prices paid to New Zealand exporters by the Marketing .Department. Consequently no loss is incurred on hides shipped to Australia under this amended sale basis. REPORT OF HIDES COMMITTEE ON OPERATIONS FOR YEAR ENDED 31st MARCH, 1945 The following report has been submitted to the Hon. the Minister of Marketing on behalf of the Hides Committee by the Chairman, Mr. A. P. O'Shea :— I have pleasure in submitting the fifth annual report and statement of the Equalization Fund for the year ended 31st March, 1945. The work of the Committee during the year has been carried on as in the past. Export Levy.—There has been no change in the rate of levy during the year ended 31st March, 1945. The current rates of levy are as follows : — Ox-hides .. .. .. .. .. ~ .. One penny farthing (ljd.) per pound. Cow-hides .. .. .. .. .. .. .. One penny farthing (ljd.) per pound. Bull-hides .. .. .. .. .. .. .. One penny (Id.) per pound. Yearlings .. . . .. .. .. .. .. One penny farthing (ljd.) per pound. Calf-skins (other than freezers) .. .. .. . . .. Threepence (3d.) per pound. The amount of levy payable is calculated on the weights invoiced to overseas buyers, and such weights are declared on the Customs export entries. Sales of Hides to Australia.—The arrangement made between the Governments of New Zealand and Australia continued during the current twelve months. This meant that, as before, there was no overseas sale, and it was necessary to assess a price payable under export conditions. The sub-committee, consisting of Messrs. J. Eraser (Chairman), A. P. O'Shea, W. V. Watson, J. P. MacKay, and G. A. Duncan, with the Secretary, continued to function and met monthly.

The ruling price schedule for Ist April, 1944 was as follows :— ;

Claiming of Ox-hides 45 lb. upwards and Cow-hides 40 lb. upwards.—At the request of the Factory Controller and with the approval of the Minister of Marketing, the Committee agreed to give the tanners the right to take 100 per cent, of the offerings of cow-hides 40 lb. upwards and ox-hides 45 lb. upwards. It was understood that if at any time during the current year tanners did not exercise their pre-emptive right to all or any part of the olfering of ox-hides 45 lb. and over and cow-hides 401b. and over, the Committee will revert to the terms and conditions of the Hides Emergency Regulations.

As there was no competition for ox-hides 45 lb. and up and cow-hides 40 lb. and up, the Committee compiled a schedule of prices as under : —

Ox-hide Schedule

Cow-hide Schedule

Ox-hide Schedule (Poundage Tare Loose)

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— "Krppypr Aiiatinir Country First Second Third freezer. Abattoir. Butcher. Country. Country. Country. d. d. d. d. d. d. Oxhides 40/47 lb 104 9# 94 8-j# 84 7|f Ox-hides 48 lb. up— Average weight 49/52 lb. .. .. 10 & 104 94 94 84 84 Average weight over 52 to 54 lb. .. 10 jj 10 4 9ft ' 9* 8ft 84 A verage weight over 54 to 56 lb. . . 10$ 10$- 9$ 9] 8$ 8-J Average weight over 56 to 58 lb. . . 10-]f 104 9-jJ 9 4 8-jf 84 Average weight over 58 to 59 lb. .. 10-| 10$ 9|- 9| 8j' 8J Average weight over 59 to 61 lb. .. 10|jj 104 9ft 94 8# 84 Average weight over 61 lb... .. 11 10| 10 9j 9 8J Cow-hides— lb- "P 104 9ft 94 8ft 84 7$ ±0/50lb. 104 91 94 81- 84 7$

liancp nf Ox Wpichts Freezer, Firsts, Freezer, Seconds, ® 0 vveignts. 4 per Cent. Tare, f.o.b. 4 per Cent. Tare, f.o.t). 45/52 lb. ...... 9-i 8| 53/58 lb. ...... 9J 9 59/69 lb 9f 9-J 70 lb, up . . .. .. 101- 9|

itiiiitre of cow WoitrMs Freezer, Firsts, Freezer, Seconds, g 01 oow WC1 « MS ' 4 per Cent. Tare, f.o.l). 4 per Cent. Tare, f.o.b. 40/50 lb. .. .. .. 9& 8# 51 lb. up .. .. .. 8 ft

Abattoir. Country Butcher. Farmers. Range of Weights. Ox, Firsts. Ox, Seconds. Ox, Firsts. Ox, Seconds. Ox, Firsts. Ox, Seconds. Ox, Thirds. 45/52 lb. .. .. 9|- 8-f 8-| 8J 8J 7f 7£ 53/58 lb. .. .. 9£- 8f 8f 8| 8| 7J 7| 59/69 lb 9f 8| 8} 8f 8# 7} 7} 70 lb. up . . .. 9f 9J 9| 8§ 8| sf 7|

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Cow-hide Schedule (Poundage Tare Loose)

All the foregoing prices for abattoir, country butchers, and farmers' ox-hides 45 lb. up and cow-hides 40 lb. up are loose on floor at Auckland, Wellington, Christchurch, and Dunedin. For other centres the price is Jd. per pound less. All the foregoing prices for freezer ox 45 lb. and upwards and cow-hides 40 lb. up are f.o.b. Auokland, Wellington, Christchurch, and Dunedin. The prices for other centres are }<\. per pound less. Claims will be based on the above schedule. This arrangement-came into force on and after the 10th July, 1944. These schedules remained in force until 3rd October, 1944, when the Tanners' Association notified the Committee that it was not in a position to take 100 per cent, of 59 lb. up ox-hides. This left the ox-hides 45/68 lb. and 40/50 lb. and 51 lb. up cows. Later the New Zealand Tanners' Association intimated that it was not in a position to take 100 per cent, of all ox-hides 45 lb. and over and cow-hides 40 lb. and over, and they desired to revert to claiming in accordance with the regulations. This change operated on and after Monday, 16th October, 1944. Levy on Dry Salted Hides.—The Committee at its meeting on the 27th February, 1945, confirmed that the total lovy on dry salted hides exported from Now Zealand on an after Ist March, 1945, shall be the sum of the levy calculated at the ruling rate applicable to hides and a surcharge equal to 33£ per cent, of the levy so calculated. Financial Report.—The following summary shows the position of the Equalization Fund as at 31st March, 1945 :— £ s. d. Cash in hand at Ist April, 1944 .. .. .. .. .. .. 44,263 7 1 Receipts from levy .. .. .. .. .. .. .. 60,451 18 4 104,715 5 5 Add cash (stabilization payment referred to below) .. .. .. 30,000 0 0 134,715 5 5 Less claims paid to tanners, freezing companies, and exporters .. .. 111,725 0 7 22,990 4 10 Expenses to 31st March, 1945 — £ s. d. Salaries .. .. .. .. .. .. .. 870 0 0 Sundries (rent, phone, cleaning, &c.) .. .. .. .. 52 10 0 Telegrams, stamps, and petty expenses .. .. .. 24 5 5 Audit fee . . . . . . .. . . .. .. 20 0 0 Bank fee and cheque-book .. .. , . .. ~ 2 10 0 Travelling-expenses .. .. . . .. .. 10 8 0 Bureau fees .. .. .. .. .. .. 2 0 3 . 081 13 8 22,008 11 2 From tlii.s must be deducted claims which were finalized but not paid at 31st March, 1945 .. .. .. .. .. .. .. .. 10,343 13 7 11,664 17 7 To this must be added estimated levy due on hides which have not been shipped or on which payment has not been reoovered from H.M. Customs as at 31st March, 1945 19,100 0 0 Leaving an estimated surplus in hand as at 31st March, 1945, of .. .. £30,764 17 7 Stabilization.—ln last year's report reference was made to the decision of the Hon. the Minister in Charge of Stabilization that the Hides Committee should keep the export levy at its " present level," and that to achieve this end payment should be made to the Hides Committee of an amount sufficient to place the funds of the Committee in the position they were in at 31st January, 1943—viz., with a cash balance of £40,000. The sum required to restore the balance of the Hides Equalization Fund at 31st January, 1945, to the agreed figure amounted to £30,000, which was paid to the Hides Committee as shown in the above statement.

Statistics.—The following table shows the number of hides claimed by the tanners and the number freed for export under the regulations during the year ending 31st March, 1945.

Grand totals— 1941-42, 1942-43. 1943-44. 1944-4 S. Tanners .. .. .. .. 414,622 479,009 464,305 453,080 Exporter .. .. .. ..420,954 455,055 474,045 335,765 Cost of Administration.—The total cost of administering the Hides Equalization Fund for the twelve months ended 31st March, 1945, is as follows :— £ s. d. 31st March, 1941 .. .. .. .. .. .. 1,106 7 4 31st March, 1942 .. .. .. .. .. .. .. 6 5 31st March, 1943 .. .. .. .. .. .. .. 1,048 3 2 31st March, 1944 .. .. . . . . .. . . .. 961 fi 0 31st March, 1945 .. .. .. .. .. .. . . 981 13 8 Based on the number of hides handled in terms of the regulations, the cost is under one-third of a penny per hide. General. 1 desire to again express my thanks to the members of the Committee, to the Government Departments concerned, and to all sections of the trade for their willing assistance at all times.

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Abattoir. Country Butcher. Farmers. Range of Weights. — Cow, Firsts. Cow, Seconds. Cow, Firsts. Cow.. Seconds. Cow, Firsts. Cow, Seconds. Cow, Thirds. 40/50 lb. .. .. 9J 8f 8f 8£ 8| 7|- 7i 51 lb. up .. .. 9 8J 8J 8 8 7£ 7

(,x - Cow. Bull. Yearlings. Calf-skins. Tanners'claims .. 142,314 247,175 788 35,315 27,488 Hides freed for export .. 43,411 203,727 22,766 14,619 51,232

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ADDENDUM TO REPORT BY CHAIRMAN Since the compilation of this report, but before its publication, the Committee had the great misfortune to lose its Secretary, Mr. L. McCartney, who died after a short illness. In his position as Secretary since the inception of the scheme, Mr. McCartney had performed his duties with conspicuous ability, and had earned the liking and respect of all the people with whom he came in contact. The loss of Mr. McCartney is a very great one to the Committee, whose sympathy is extended to his relatives in their sad loss. LINEN FLAX The annual report for 1941 set out the terms of sale to the United Kingdom Ministry of Supply of New Zealand's export production of linen-flax fibre, this covering the period of hostilities between the British Empire and Germany. Shipments from Ist August, 1944, to 31st July, .1945, were as under :--- Linen-flax fibre and reiss.. .. .. .. .. 1 019 14 Tow and pluckings .. .. ~ ~ ~ _ _ 545 1 ,565 14 The total value f.o.b. (New Zealand currency) of these exports is £290,015. SCHEELITE The contract with the United Kingdom Government for a period of nine months ending 31st December, 1944 (the price paid to the New Zealand Government being : for the first 50 tons of ore produced after the Ist April, 1944, a rate of 120s. sterling per unit per ton, and any quantity in in excess of 50 tons at a rate of 100s. sterling per unit per ton), was extended to 30th June, 1945, on the basis of 755. pe\r unit for ail ore produced between Ist January and 30th June, 1945. The quantities of ore produced and paid for at the differential prices during the period Ist August, 1944, to 3'Lst July 1945, were :— Tons cwt. 39 6.. .. .. .. .. @ 120s. per unit. 39 5.. .. .. .. .. @ 100s. per unit. 25 7.. .. .. .. .. @ 755. per unit. SHIPMENTS TO TAHITI Since January, 1942, the Department has been purchasing and shipping to Tahiti, on behalf of the Tahiti Administration, sundry goods, mainly canned meats, processed milk, butter, and cheese. The total value c.i.f. Papeete of such goods purchased and shipped for the year ended 31st Julv" 1945, was £131,361 (New Zealand currency). SUNDRY SUPPLIES FOR WAR OFFICE During the year, supplies of food products have been shipped under contract to the War Office. The value of the products shipped during the twelve months ended 31st, July, 1945, is £1 138 864(New Zealand currency). The accounts covering the purchase and sale transactions of the Department in connection with these United Kingdom War Office supplies are shown in the accounts section at the end of this report page 47. The surplus for the year ended 31st July, 1945, is £282.

SUMMARY OF VOLUME AND VALUE OF SALES BY THE DEPARTMENT OF PRODUCTS FOR EXPORT FOR THE TWELVE MONTHS ENDED 31st JULY, 1945

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Product. Volume Equivalent Net Value f.o.b. Weight (in Tons). (N.Z. Currency). £ Gutter .. .. .. 4,722,145 boxes 118,054 21 722 953 Gheese 1,283,553 crates 91,682 9,972'394 Processed cheese .. .. .. 33,654 cases 901 143'253 Frozen meat .. 375,854 28,4341919 Canned meat .. .. .. .. 11,221 1,735,322 Wo°J" •• •• .. 989,716 bales 152,549 23,027,637 Woolly sheep-skins .. .. 994,594 number 3,439 360,573 Tallow .. .. .. .. 28,536 1,027^917 Skim-milk powder .. .. 137,773 cases 6,592 393 747 Evaporated milk .. .. .. 136,172 cases 2,918 179'606 Casern .. .. 7,153 sacks 550 38,'894 Linen-flax fibre .. lj566 270,015 Scheehte .. .. .. .. i0/); 44 924 War Office contracts .... .. I I3,s'gfl4 Hides .. .. .. 112,791 number .. 214,043 793,966 88,705,061 I otals of wool appraised and sold to United Kingdom for twelve months to 30th June, 1945, at f.o.b. value.

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GENERAL This ninth, annual report marks the end of the six years of war. It is appropriate, therefore, that brief reference be made to the work of the Export Division of the Marketing Department as an important link in the chain of activity from production to final delivery in the United Kingdom and elsewhere of the food and materials which have proved such a vital factor in the successful prosecution of the war. The parliamentary paper H.-30b, 1940, presented by the Minister of Marketing, covered the action taken prior to the war and the preliminary plans made against the possibility of hostilities, the action taken immediately upon the outbreak of war when the New Zealand Government offered its full resources to the United Kingdom Government, and the negotiations in respect of supply from New Zealand on a Government-to-Government basis of the total exportable surpluses of dairy-produce, meat, wool, tallow, woolly sheep-skins, hides, linen flax, scheelite, and other lesser products. The plans referred to had envisaged the United Kingdom Government becoming the sole purchaser of imported foodstuffs, and the Export Division of the Marketing Department becoming the authority in New Zealand responsible for the bulk purchase and shipment of the various food and other products. Thus, immediately upon the outbreak of war, the Export Division (which previously had been concerned only with the purchase, handling, and sale of butter and cheese under the guaranteed-prices plan) was ready to undertake its extended duties, and the necessary amendments to the Marketing Act were made giving to the Division the required additional authority. The members of the London staff of the Division who were not eligible for service with the Forces were loaned by the New Zealand Government to the United Kingdom Ministry of Food. It is to the credit of New Zealand that its officials (Government and Produce Board) located in London were selected by the United Kingdom authorities for important offices in their Ministry of Food organization. During the six war years the purchase and sale transactions of the Export Division cover the following total quantities of the major food products : — Butter .. .. .. 28,000,000 boxes .. .. 700,000 tons. Cheese .. .. .. 8,750,000 crates .. .. 625,000 tons. Meat .. .. .. 76,130,000 freight carcasses .. 2,039,000 tons. With the inclusion of smaller quantities of processed milk, the total of the major foodstuffs supplied during the war from New Zealand to Britain and to a small extent elsewhere is 3,400,000 tons. In regard to wool, the total quantity purchased during the war by the United Kingdom Government is 5,400,000 bales or 825,000 tons, of which 4,150,000 bales have been shipped and 1,250,000 bales remain in store. The quantity of tallow supplied during the war was 182,000 tons. With the inclusion of other items, such as woolly sheep-skins, linen, flax, scheelite, hides, and sundry War Office supplies, the total quantity of the supplies from New Zealand during the war through the Export Division is 4,325,000 tons, valued at £417,130,000. The utilization of the Export Division of the Marketing Department as the buying, selling, and shipping medium for these vast quantities of food and other supplies has made for economy in operation. The costs of the Division for salaries, rents, cables, and other administrative items have been £370,000 for the whole period of the war, or slightly under 0-1 per cent, of the total value. The wartime staff of the Division comprised men over age or unfit for active service, plus an excellent female staff. Nineteen members of the United Kingdom staff and twenty-seven members of the New Zealand staff joined the fighting Services. It is with deep regret that I record the death of the following members of the staff on active service—London staff: B. P. Ball and C. E. Harman. New Zealand staff: K. J. Devlin, B. A. Smith, F. Thomas, and D. H. Judd. During the war years the inevitable problems of sea transport and loss of ships through enemy action have led to acute storage difficulties in New Zealand. These difficulties were met by provision, with Government assistance, of emergency stores for frozen and other products, conversion of butter to dry butterfat, manufacture of dehydrated meat, and changes in farming and production practice, notably the change-over from buttermaking to cheesemaking, and subsequent change-back to buttermaking, and the manufacture of greatly increased quantities of canned meat. This brief outline (the full review is given in the annual reports of the Division) indicates the magnitude of New Zealand's contribution to the war effort in the supply of food and other products, and is a tribute to the co-operation in the common cause of all the interests concerned ; the farming industries ; the manufacturing, freezing, packing, and processing interests ; the storage and transport interests ; the handling and loading interests ; and the shipping interests. All have co-operated in maintaining so satisfactorily their respective services. I desire also to thank various trade committees, and personalities, for the fine assistance they have given in organizational and other work undertaken at the request of the Government —in most cases without remuneration. I mention particularly the Hides Committee, the Dairy Industry and Meat Industry Committees, the Pig-meats Advisory Committee, the Sheep-skin Control, and the wool buyers', brokers', and scourers' associations. It is right that a special tribute should be paid to the officers and men of the Mercantile Marine and the Royal Navy, who have been responsible for the transport of the large volume of exports from New Zealand and for the very satisfactory clearances of all export products which have been made. This has only been accomplished at great hazard and with the loss of many lives and many ships. I understand from the overseas shipping companies engaged in the trade that British Empire losses of merchant ships represent approximately 54- per cent, of the total, and that sixty-four ships, representing 631,000 tons gross register, engaged in the New Zealand refrigerated-cargo trade were lost. The number of lives lost in the sinking of these sixty-four ships is estimated at 1,100. It is no exaggeration to say that the Merchant Navy has been the axis round which the war effort of the United Nations has revolved. Finally, I wish to mention Government representatives in the United Kingdom and the New Zealand staff of the Export Division of the Marketing Department. They have carried out their wartime duties most efficiently. B. ROBERTS, Minister of Marketing,

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DAIRY-PRODUCE Administration and Genebal Expenses Account fob the Yeab ended 31st July, 1945 United Kingdom. New Zealand. Total. Cr. D' r - £ £ £ Allocation of expenses to Purchase and Sale Accounts— Salaries .. .. .. .. .. .. .. 11,587 7,967 19,554 1943-44 season's produce—: £ £ Office rent, maintenance, cleaning, telephone, and sundry expenses 2,042 1,850 3,892 Creamery butter .. .. .. .. .. .. .. 513 Postages, cables, printing, and stationery .. .. .. 512 936 1,448 Whey butter .. .. .. .. .. .. .. ..11 Travelling-expenses _..v.. .. .. 100 38 138 Cheese .. .. .. .. !. '' "!! 385 Subscriptions, donations, and entertainment .. .. .. 48 .. 48 Processed milk products -. .. .. .. .. . 19 Shipping inspection .. .. .. .. .. 1,342 481 1,823 928 Agency expenses: Lyttelton .. .. .. .. .. 225 225 1944-45 season's produceAudit fees .. .. .. .. .. .. 265 265 Creamery butter .. .. .. .. .. .. 24,396 Depreciation .. .. .. .. .. .. 299 256 555 Whey butter .. .. .. .. .. .. .. 512 Cheese .. .. .. .. .. .. .. 10,967 £15,930 £12,018 £27,948 Processed milk products .. .. .. .. .. 1,070 ' -i ' 36,945 Advertising in United Kingdom .. .. .. .. .. .. 2,693 Miscellaneous expenses .. .. .. .. .. .. .. .. 218 Cost of remittances to dairy companies .. .. .. .. .. .. 6,748 Subsidy, Public Service Superannuation Pund .. .. .. .. .. 266 £37,873 • £37,873 Final Purchase and Sale and Revenue Account, 194 M —41 Season's Daiby-pkoduce «sr "«• | tse so. »<- 3? £££££[ Sales net f.o.b. after 31st July, 1944, to United £ £ £ £ £ Stocks in store at 31st July, 1944 .. .. 157,104 5,580 224,569 8,543 395,796' Kingdom .. .. ".. .. .. 408,337 11,678 429,962 17,721 867 698 Purchase on basis net f.o.b. after 31st July, 1944 .. 245,393 5,126 184,286 9,110 443,915 Sales net f.o.b. after 31st July, 1944, to other Gross surpluses on transactions after 31st July, 1944, destinations .. .. .. .. .. .. .. 235 .. 235 carried down .. .. .. .. 5,840 972 21,342 68 28,222 " " " II II II 1_ £408,337 £11,678 £430,197 £17,721 £867,933 £408,337 £11,678 £430,197 £17,721 £867,933 - .- — £ £ ££ £ Gross surpluses on transactions after 31st July, 1944, £ £ £ £ £ Administration and general expenses .. .. 513 11 385 19 928 brought down .. .. .. .. 5,840 972 21,342 68 28 222 Net surpluses on transactions after 31st July, 1944 .. 5,327 961 20,957 49 27,294 - ' ' £5,840 £972 £21,842 £68 £28,222 £5,840 £972 £21,342 £68 £28,222 " ' , . £ Net surplus on transactions after 31st July, 1944, brought down .. .. .. 27,294 Ha lance, being final surplus on purchase and sale of 1943-44 season's production, carried to Net surplus on transactions up to 31st July, 1944, {as shown in accounts for year ended 31st Dairy-produce Account .. .. .. .. .. .. .. .. 575,576 July, 1944) .. .. .. .. .. .. .. .. .. 548,282 £575,576 £575,576

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DAIRY-PRODUCE— continued PURCHASE AND SALE AND REVENUE ACCOUNTS, 1944—45 SEASON'S DAIRY-PRODUCE PURCHASED UP TO 31ST JULY, 1945 Creamery Whey Cheese Processed Creamery Whey rhe«e Tntai Butter. Butter. Cheese " Total " Butter. Butter. T ° tal " Dr. ££££.£ Gr. £ £ £ £ £ Purchase on basis net f.o.b. .. 16,904,465 354,774 7,599,934 741,406 25,600,579 Sales net f.o.b. to United Kingdom 20,803,760 477,674 9,662,136 616,625 31,560,195 Transfer to Dairy Industry Stabili- To other destinations .. .. 35,066 .. 322,975 .. 358,041 zation Account (being proceeds of Stocks in store awaiting shipment .. 930,596 5,591 186,714 127,957 1,250,858 increases in sale prices of dairyproduce after 15th December, 1942) .. .. .. 4,705,740 112,246 1,757,379 .. 6,575,365 Gross surpluses carried down .. 159,217 16,245 814,512 3,176 993,150 £21,769,422 £483,265 £10,171,825 £744,582 £33,169,094 £21,769,422 £483,265 £10,171,825 £744,582 £33,169,094 £ £ £ £ £ Administrative and general expenses 24,396 512 10,967 1,070 36,945 £ £ £ £ £ Surplus carried down .. .. 134,821 15,733 803,545 2,106 956,205 Gross surpluses brought down .. 159,217 16,245 814,512 3,176 993,150 £159,217 £16,245 £814,512 £3,176 £993,150 £159,217 £16,245 £814,512 £3,176 £993,150 Net Revenue Account Dr. £ Gr. £ Storage on diary-produce in store in excess of two months .. .. .. .. 3,742 Surplus brought down .. .. .. .. .. .. .. .. 956,205 Net surplus carried to Dairy-produce Account .. .. .. .. .. 1,132,426 Transfer from Internal Marketing Division Butter Equalization Account .. .. 100,000 Interest on investments.. .. .. .. .. .. .. .. 79,963 £1,136,168 £1,136,168 Note.—(1) The foregoing dairy-produce purchase and sale accounts represent the purchase of dairy-produce from dairy companies at the guaranteed purchase-prices. In the case of the final purchase and sale accounts for the 1943-44 season the returns from the sale of the produce are at the level of the prices ruling at the stabilization date, 15th December, 1942. In the case of the purchase and sale accounts for the 1944-45 season the returns from the sale of produce are at the level of the prices ruling in the long-term contracts. (2) The proceeds of increases- in sale-prices received after 15th December, 1942, are credited, in terms of the stabilization agreement between the Government and representatives of the farming industries, to the Dairy Industry Stabilization Account (see annual report for the year 1942-43, pages 3 to 6). Dairy-produce Account Dr. £ £ Gr. Deficit on 1936-37 season's produce .. .. ... .. .. 276,850 Surpluses— £ £ Less payment from Consolidated Fund .. .. .. .. 276,850 1937-38 season's produce .. .. .. .. .. .. 576,724 •• 1939-40 season's produce .. .. .. .. .. .. 62,363 Deficit on 1938-39 season's produce .. .. .. .. .. .-. 2,514,889 1940-41 season's produce .. .. .. .. .. .. 151,989 Balance, being net surplus from commencement of purchase up to 31st July, 1941-42 season's produce .. .. .. .. .. .. 773,252 1945, transferred to Dairy Industry Stabilization Account— 1942-43 season's produce .. .. .. .. .. .. 734,657 Amount transferred in 1943-44 year's accounts .. .. .. 332,378 1943-44 season's produce .. .. .. .. .. .. 575,576 Amount transferred in 1944-45 year's accounts .. .. .. 1,159,720 1944-45 season's produce purchased up to 31st July, 1945 .. .. 1,132,426 1,492,098 4,006,987 £4,006,987 £4,006,987

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Dairy Industry Stabilization Account : Transactions during the Year ended 31st July, 1945 Dr. £ Cr. £ Balance as at 31st July, 1944 .. .. .. .. .. .. .. 1,066,599 Proceeds of increases in sale-prices of 1943-44 season's produce .. .. .. 5,114,399 Dairy-factory and farm-costs allowances .. .. .. .. .. .. 5,076,300 Proceeds of increases in sale-prices of 1944-45 season's produce sold to United States Cheese-crate stabilization .. .. .. .. .. .. .. 76,225 Armed Forces .. .. .. .. .. .. .. .. 811,222 Subsidies on fertilizers, &c. .. .. .. .. .. .. .. 2,766,136 Transferred from 1944— 45 Purchase and Sale Account .. .. .. .. 6,575,365 Balance at 31st July, 1945 .. .. .. .. .. .. 4,675,446 Transferred from Dairy-produce Account, 1944-45 .. .. .. .. 1,159,720 £13,660,706 £13,660,706 Note.—The Dairy Industry Stabilization Account was opened in terms of the stabilization agreement between the Government and representatives of the farming industries (see annual report for 1942-43, pages 3 to 6). The debits to the account will be the costs allowances and other costs of stabilization in terms of the stabilization agreement. The credits to the account are (a) the surplus in the Dairy-produce: Account and (b) the proceeds of increases in sale-prices received after 15th December, 1942.

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MEAT Administration and General Expenses Account for the Year ended 31st July, 1945 Dr. £ cr. £ Salaries .. .. .. .. .. .. 8,018 Allowance for administration on sales of 1943-44 season's Office rent, maintenance, cleaning, telephones, and sundry meat after 3.lst July, 1944 ~ .. .. 39 053 expenses .. .. .. .. 1,026 Allowance for administration on sales of 1944-45 season's Postages, cables, printing, and stationery .. .. 1,061 meat up to 31st July, 1945 .. .. .. 56,073 Travelling-expenses .. .. .. ~ 103 Allowance for administration on sales of bobby veal up to Shipping inspection and refrigeration supervision .. 1,500 31st July, 1945 .. .. .. .. 1,850 Audit fees .. .. .. . . .. 220 Depreciation (office and departmental equipment) .. 114 Exchange on remittances .. .. .. ~ 4,552 Payment to— New Zealand Meat Producers' Board .. .. 40,833 Pig Allocation Committees .. .. .. J., 000 Subsidy, Public Service Superannuation Fund .. .. 37 Miscellaneous expenses .. .. .. ~ 53 Balance to Meat Account .. .. .. .. 38,459 £96,976 £96,976 Einal Purchase and Sale Account, 1943-44 Season's Killings Dr. £ £ Or. £ £ btock on hand and loadings not departed.. 9,372,537 Sales— Less Preserved meat transferred to Shipments to United Kingdom after 1944-45 Purchase and Sale Account.. 74,437 31st July, 1944— 9,298,100 Lamb .. .. .. .. 6,997,725 Purchases— Wether mutton .. .. .. 554,473 Lamb .. .. .. ~ 25,981 Ewe mutton .. .. .. 1,223,856 Wether mutton .. .. .. 3,068 Beef and veal .. .. .. 76,500 Ewe mutton .. .. .. 2,468 Boner bull beef .. .. .. 106,423 Beef and veal .. .. .. 40,835 Pig-meat .. .. .. 183,613 Boner bull beef .. .. .. 3,975 Offals .. .. .. .. 259,762 Boner cow beef .. .. .. 19,932 9,402 352 Pig-meat .. .. .. .. 47,564 Local deliveries (including for United Offal .. .. .. .. 51,239 States Armed Forces) — 195,062 Lamb .. .. .. .. 167,249 Allowance for administrative and general expenses Wether mutton .. .. .. 36,407 (f per cent, on sales, £10,414,022) carried to Ad- Ewe mutton .. .. . . 718 ministrative and General Expenses Account .. 39,053 Beef and veal .. .. .. 1,013 050 Transfer to Meat Industry Stabilization Account Boner bull beef .. .. .. 34,386 (being proceeds of increases in sale-prices of meat Boner cow beef .. ~ .. 193,914 after 15th December, 1942) .. .. .. 960,296 Pig-meats .. .. .. 489^620 Surplus on transactions after 31st July, 1944, Offals .. .. .. .. 36,622 carried to Meat Pool Account .. .. 881,807 - ] 971 ggg £11,374,318 £11,374,318 Purchase and Sale Account, 1944-45 Season's Killings up to 31st July, 1945 Dr. Gr. Purchases: Ist October, 1944, to3lst July, Sales— 1945— £ £ Shipments to United Kingdom to 31st Lamb .. .. .. .. 12,628,875 July, 1945-— £ £ Wether mutton .. .. .. 1,054,420 Lamb .. .. .. .. 10,428,657 Ewe mutton .. .. .. 1,804,269 Wether mutton .. .. .. 740,530 Beef and veal .. .. .. 2,922,726 Ewe mutton .. .. .. 1,487,186 Boner bull beef .. .. .. 152,859 Beef and veal .. .. .. 112,354 Boner cow beef .. .. .. 283,788 Boner bull beef .. .. .. 131,390 Pig-meats .. .. .. 1,370,738 Pig-meat .. .. .. 84,173 Offal .. .. .. .. 676,182 Offal .. ~ .. .. 370,921 Preserved— Preserved .. .. .. 187,870 Stock transferred from 1943-44 Purchase 13 543 ogj and Sale Account .. .. 74,437 Local deliveries (including for United Purchases .. .. 1,250,009 States Armed Forces) — 22,218,303 Lamb .. .. .. .. 600,077 Allowance for Administrative and General expenses Wethers .. . . . . 93 444 (f per cent, on sales, £14,952,745) carried to Ad- _ Ewes .. .. .. .. 1,481 ministrative and General Expenses Account .. 56,073 Beef and veal .. .. . . 1,228 069 Transfer to Meat Industry Stabilization Account— Boner bull beef .. .. . . 19 158 Being net proceeds of increases in sale- Boner cow beef .. .. . . 179 203 prices of meat after 15th December, Pig-meat .. .. 781 037 1942 .. .. .. .. 3,349,593 Offal .. .. .. .. 309^336 Less amount of increase in purchase Preserved .. .. 1,547,452 prices of meat after Ist October, 4 759 257 1944 .. .. .. .. 1,234,732 Stock on hand (including loadings not departed, — 2,114,861 31st July, 1945) .. .. .. .. 7,446,802 Surplus on transactions up to 31st July, 1945, carried to Meat Pool Account .. .. 1,359,903 £25,749,140 £25,749,140

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MEAT—continued Meat Pool Account to 31st July, 1945 Dr. £ £ Or. £ Insurance on frozen and preserved meat .. 17,086 Balance as at 31st July, 1944 .. .. .. 3,571,105 Storage on frozen and preserved meat .. 30,333 Surplus on 1943-44 season's killings sold after 31st 47,419 July, 1944 .. .. .. .. .. 881,807 Amount written off capital cost of emergency cool Surplus on 1944-45 season's killings sold up to 31st stores, canning plant, and buildings .. .. 98,334 July, 1945 .. .. .. .. .. 1,359,903 Balance, being surplus to 31st July, 1945 .. .. 6,245,413 Surplus on tallow sales .. .. .. .. 235,176 Surplus on slipe wool .. .. .. .. 165,052 Interest .. .. .. .. .. 76,587 £ F.o.b. charges not incurred .. .. 221,021 Less railage and sundry expenses .. 119,485 101,536 £6,391,166 £6,391,166 Meat Account Dr. £ Or. £ Payment to War Expenses Account .. .. .. 38,918 Balance as at 31st July, 1944 .. .. .. 38,918 Balance as at 31st July, 1945 .. .. .. 38,459 Surplus from Administration and General Expenses Account .. .. .. .. .. 38,459 £77,377 £77,377 Meat Industry Stabilization Account : Transactions during the Year ended 31st July, 1945 Dr. £ Or. £ Freezing costs subsidy (being additional costs from Balance as at 31st July, 1944 .. . . .. 746,327 Ist October, 1944, other than wages increases)* .. 422,566 Transfer from 1943-44 Purchase and Sale Account .. 960,296 Subsidies— Transfer from 1944-45 Purchase and Sale Account .. 8,349,593 Ministry of Supply .. .. .. .. 35,000 Surplus from increased price on tallow ... .. 180,268 Fertilizers .. .. .. .. .. 888,929 Net retrospective receipts from shipments to the Stock-feed .. . . .. .. .. 9,485 United Kingdom and deliveries to the United States Pig-crop .. .. .. .. .. 50,000 Armed Forces .. .. .. .. .. 617,899 Local market .. .. .. .. 300,000 Schedule purchase-price increase from Ist October, 1944 — £ Frozen .. .. .. .. 1,198,551 Preserved .. .. .. 36,181 1,234,732 Balance as at 31st July, 1945 .. .. .. 2,913,671 £5,854,383 £5,854,383 * Subsidy to freezing companies on account of wages increases up to £475,000 per annum payable from Ist January, 1015, has not yet come to charge (see page 26). Bobby Calf Pool Account to 31st July, 1945 Dr. £ Or. £ Purchases, 1943-44 season's meat after 31st July, 1944.. 211,591 Balance as at 31st July, 1944 .. .. .. 145,297 Purchases, 1944-45 season's meat up to 31st July, 1945 131,733 Local sales and shipments to United Kingdom £ Insurance .. .. .. .. .. 19 (including for dehydration, 1943-44 season) 354,805 Payment to Bobby Calf Pool Executive of surplus on Less charges .. ~ .. .. 8,478 veils, seasons 1942-43 and 1943-44 .. .. 7,068 346,327 Allowance for administrative and general expenses (f per Shipments to United Kingdom of 1944-45 season's meat cent, on sales, £493,585) carried to Administrative and up to 31st July, 1945 .. .. .. .. 133,521 General Expenses Account .. .. .. 1,850 Local deliveries of 1944-45 season's meat up to 31st July, Transfer to Bobby Calf Stabilization Account (being pro- 1945 .. .. .. .. .. .. 5,258 ceeds of increases in sale-prices after 15th December, Stock on hand (including loadings not departed, 31st .1942) .. .. .. .. .. .. 85,556 July, 1945) .. .. .. .. .. 34,348 Balance as at 31st July, 1945 .. .. .. 226,934 £664,751 £664,751 Bobby Calf Stabilization Account : Transactions during the Year ended 31st July, 1945 Dr. £ Or. £ Payment of additional freezing costs, other than wages, Balance as at 31st July, 1944 .. .. .. 21,926 &c., from Ist October, 1944 .. .. .. 4,541 Transfer from Bobby Calf Pool Account .. .. 85,556 Balance as at 31st July, 1945 .. .. .. 102,941 " " £107,482 £107,482

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WOOL Purchase and Sale Account fob the Wool Year ended 30th June, 1945 Greasy Slipe Total Greasy Slips T . . Wool. Wool. J - oral - Wool. Wool. iotal ' , Dr. Cr. Purchases— £ £ £ Sales— £ £ £ Appraisal value .. 17,244,806 4,112,097 21,357,503 To United Kingdom Final payments .. 600,166 57,775 657,941 Wool Control .. 16,994,148 4,167,642 21,161,790 To New Zealand mills .. 850,824 2,830 853,654 £.17,844,972 £4,170,472 £22,015,444 £17,844,972 £4,170,472 £22,015,444 Charges, Expenses, and Administration Account for the Wool Year ended 30th June, 1945 B 1 > £ Cr ~ £ Broker s charges .. .. .. .. 798,137 Allowance in sale-price for charges and expenses and Appraisal costs .. . . .. .. .. 81,194 recoveries, including amount of wool levy .. .. 1,575,364 Wool levy paid on behalf of growers .. .. 26,662 Special allowance by United Kingdom towards cost of Charges and expenses to f.o.b. .. .. .. 517,454 abnormal storage and insurance .. .. .. 374,128 Scouring charges .. .. .. .. 421,669 1,845,116 Balance carried down .. .. . . .. 104,576 £1,949,692 • £1,949,692 £ £ Salaries _.. .. .. ~ .. 7,859 Balance brought down .. .. .. .. 104,576 Office rent, maintenance, cleaning, telephones, and Interest .. .. .. .. ~ 7,908 sundry expenses . . .. , . . . l oyi Postages, cables, printing, and stationery .. .. 3,239 Travelling-expenses .. .. .. .. 258 Audit fees .. .. .. ~ ~ 215 Depreciation .. . . , . . . .. 114 Cost of remittances to brokers and others .. .. 3,844 Subsidy, Public Service Superannuation Fund .. 43 17,253 Net surplus for year .. .. .. .. 95,231 £112,484 £112,484 Wool Account Dr. £ Cr. £ Transferred to War Expenses Account .. .. 83,363 Balance at 31st July, 1944 .. .. ..83,363 Balance as at 31st July, 1945 .. .. .. 95,231 Net surplus for 1944-45 season .. .. .. 95,231 £178,594 £178,594 TALLOW Purchase and Sale Account for the Year ended 31st July, 1945 Dr. £ Cr. £ Purchases .. . . .. .. .. 603,569 Sales to United Kingdom .. .. .. 523,663 Allowances for administration and handling.. .. 7,134 Sales to United States of America .. .. 384,353 Marketing expenses .. .. .. .. 4,488 Sales to Canada .. .. .. .. 76,'060 £ Sales to other destinations .. .. .. 43,841 Meat Pool Account .. .. .. 235,176 Interest .. .. .. .. .. 2,718 Meat Stabilization Account .. .. 180,268 415,444 £1 ~030,635 £1,030,635 Revenue Account for the Year ended 31st July, 1945 Dr. £ Cr. £ Salaries .. .. .. .. .. .. 1,046 Allowance for administration and handling .. .. 7,134 Office rent, maintenance, cleaning, telephones, and sundry expenses .. .. .. .. .. 234 Postage, cables, printing, and stationery .. .. 313 Travelling-expenses .. .. .. .. .. 81 Audit fees .. .. .. .. .. .. 55 Cost of remittances to manufacturers and others .. 520 Net surplus .. .. .. .. .. 4,885 £7,134 £7,134 Tallow Account Dr. £ Cr. £ Transferred to War Expenses Account.. .. .. 6,705 Net surplus, year ended 31st July, 1944 .. .. 6,705 Balance as at 31st July, 1945 .. .. .. 4,885 Net surplus, year ended 31st July, 1945 .. .. 4,885 £11,590 £11,590

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SCHEELITE Purchase anb Sale Account fob the Year ended 31st July, 1945 Dr. £ Or. £ Purchases .. .. .. .. .. 43,801 Sales .. .. .. .. .. .. 44,924 Cost of administration .. .. .. 1,123 £44,924 £44,924 WAR OFFICE CONTRACTS Purchase and Sale Account for the Year ended 31st July, 1945 Dr. £Cr. £ Purchases .. .. .. .. 1,138,113 Sales .. .. .. .. .. .. 1,138,864 Gross surplus carried down . . .. .. 751 £1,138,864 £1,138,864 Revenue Account for the Year ended 31st July, 1945 Dr. £ Cr. £ Salaries .. .. .. .. .. .. 300 Gross surplus brought down .. .. .. 751 Postages, cables, printing, and stationery .. .. 505 Interest .. . . .. .. ~ ~ 4X7 Telephone, rent, and sundry expenses .. .. . . 139 Cost of remittances to manufacturers and others . . 12 Net surplus .. .. .. .. .. 282 £1,238 £1,238 HIDES Purchase and Sale Account for the Year ended 31st July, 1945 Dr. £ | Cr. £ Purchases at market prices for sale to Australian Hide Sales to Australian Hide Board at New Zealand domestic Board.. .. .. .. .. .. 260,796 value .. .. .. .. .. .. 172,086 Sales to Australian Hide Board at New Zealand market value .. .. .. .. .. .. 41,957 Balance carried down .. .. .. .. 46,753 £260,796 £260,796 Revenue Account for the Year ended 31st July, 1945 Dr. £ Cr. £ Balance brought down .. .. .. .. 46,753 Deficit for year ended 31st July, 1945 .. .. 47,833 Salaries .. .. .. .. .. .. 176 Postages, cables, printing, and stationery .. .. 68 Travelling-expenses .. . . .. .. 65 Telephones, rents, and sundry expenses .. .. 118 Interest .. .. .. .. .. .. 519 Cost of remittances to brokers .. .. .. 134 £47,833 £47,833 NEW ZEALAND SHEEP-SKIN CONTROL Purchase, Sale, and Revenue Account for Twelve Months to 30th June, 1945 Dr. £ Cr. £ Stocks, 30th June, 1944 .. .. .. .. 207,691 Sales .. .. .. .. .. .. 846,426 Purchases .. .. .. .. .. 692,021 Stocks, 30th June, 1945 .. .. .. .. 213^645 Working charges and trading expenses . . .. 155,541 Gross surplus .. .. .. .. .. 4,818 £1,060,071 £1,060,071 Administration expenses — £ £ Salaries .. .. .. .. .. 9,478 Gross surplus .. .. .. .. .. 4,818 Travelling-expenses .. .. .. .. 1,036 Net deficit .. .. .. ~ 9,325 Postages and telegrams .. .. ... 281 Telephones .. . . .. . . .. 438 Stationery . . . . .. .. .. 181 Exchange .. .. . . .. .. 9 Interest .. . . .. .. .. 1,674 Sundry .. .. .. . . . . 330 Rent . . .. . . . . . . 713 Advertising . . . , .. . . . . 3 £14,143 £14,143

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NEW ZEALAND SHEEP-SKIN CONTROL—continued. Balance-sheet as at 30th June, 1945 Liabilities £ Assets £ £ Sundry Products Account .. .. .. ..169,794 Furniture and fittings .. .. 805 Sundry creditors .. .. .. .. ..44,795 Motor-car .. .. .. , \ 101 Pool Account— £ ... Deficit for year .. .. .. 9,325 Sundry debtors .. .. ~ . 52 513 Transfer to Reserve Account .. .. 9,325 Stocks— • • Skins, wool, pelts . . ~ , 213 645 Reserve Account (being 5 pec cent, wool Fellmongers' material .. .' '941 retentions) .. .. .. .. 66,273 Retention money on stocks .. ~ 3 312 Less pool deficit .. .. .. 9,825 217 898 — 56,948 Cash .. .. .. .. ~ _ '220 £271,537 £271,537 R. C. Burgess, Controller. I hereby certify that the Revenue Account and the Balance-sheet have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby subject to the following remarks: the value of the stocks has been accepted at a figure fixed by the Sheepskin Controller. —J. P. Rutherford, Controller and Auditor-General. M ARKETING DEPARTMENT (EXPORT DIVISION) Balance-sheet as at 31st July, 1945 Liabilities AssHs Reserve Bank of New Zealand £ £ Sundry debtors for produce and amounts accrued due 4 656 420 Dairy Industry Account .. .. 2,139,970 Stocks .. .. .. ~ 8'798'290 Wool Industry Account .. .. 1,533,203 Investment in Treasury bills and war loans . . 12,200^000 Office and departmental equipment .. .. 3,673,173 Advances to Sheep-skin Controller .. . 187*614 Less — £ » Meat Industry Account.. 28,412 Sundry Products Account 880,761 909,173 2,764,000 Less cash held in London .. 3,038 2,760,962 Sundry creditors for accrued charges and sundry credit balances .. .. .. .. 8,834,891 Farm Products Stabilization Accounts— Dairy Industry Stabilization Account . . 4,675,446 Meat Industry Stabilization Account .. 2,913,671 Bobby Calf Stabilization Account .. 102,940 7,692,057 Meat Pool Account .. .. .. .. 6,245,413 Bobby Calf Pool Account .. . . .. 226,934 Net surpluses on administration allowances— Meat Account .. .. ~ 38,459 Wool Accoynt .. .. .. 95,230 Tallow Account .. .. .. 4,885 War Office Contracts Account .. .. 282 138,856 Less deficit: Hides Account .. 47,832 91,024 £25,851,281 £25,851,281 G. A. Duncan, Director. W. J. Pratley, Accountant. I hereby certify that the several Purchase and Sale and Revenue Accounts, Administration and General Expenses Accounts, together with the Balance-sheet as at 31st July, 1945, have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby. J. P. Rutherford Controller and Auditor-General.

Approximate Cost of Paper .—-Preparation, not given ; printing (1,543 copies). £145,

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