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H.—3o.

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, 1937, to 31st July, 1938.

THE RELATION BETWEEN BUTTER-MANUFACTURE AND CHEESE-MANUFACTURE AND DIFFERENTIAL PAYMENTS AND ALLOWANCES. In order to assist the maintenance of cheese-production, the guaranteed purchase prices for butter and cheese have been fixed to allow on the average a differential marginal payment in favour of butterfat supplied for cheesemaking. This differential margin is intended to compensate suppliers to cheese-factory companies for the comparatively lower returns from by-products and for the costs of delivery of milk. The differential margin of l|d. per pound butterfat which was originally fixed has been raised to 2d. per pound butterfat, and there is evidence to support the contention that these price margins have been effective in arresting the steady decline in cheese-production which has been in evidence during the past five years. In this regard the following figures of cheese and butter gradings are of interest:—

Cheese and Butter Gradings.

The foregoing figures show that in the two seasons immediately preceding the introduction of the guaranteed-price procedure the decreases in cheese-production were respectively 10-62 per cent, and 7-68 per cent. In the 1936-37 and the 1937-38 seasons the position is shown to be relatively more favourable. For the 1936-37 season the increase in cheese-production is 3-12 per cent., and for the 1937—38 season the decrease is 3-12 per cent. When it is considered that in respect of butter the decrease for the 1937—38 season is 7*59 per cent., it can fairly be claimed that the present price margin of 2d. per pound butterfat in favour of cheese has assisted to maintain cheese-production. On the general question of cheese-production, the position is that imports of cheese into the main importing countries have shown a steady decline since 1930, in which year the imports into the seventeen main importing countries (including United Kingdom, Germany, United States, Belgium, and France) were 321,650 tons. Each subsequent year showed a decline until in 1935 the quantity was 242,350 tons. In 1936 and 1937 the quantity showed a slight rise, the importations for 1937 being 264,250 tons. This trend is noted in the published statistics. The decline in importations of cheese is evidence either of a lessened consumer demand or of an increase in the production of cheese in the importing countries, necessitating lesser importations. Both factors must be taken into

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To Great Britain. To X)e^Unatton § . Total Exports. Percentage. Grading Ports. — Butter. Cheese. Butter. Cheese. Butter Cheese. Butter. Cheese. Butter. Cheese. Boxes. Crates. | Boxes. Crates. I Boxes. Crates. Boxes. Crates. Boxes .Crates Auckland .. 3,897,705 220,529)86,613 665 1112,268 904 4,096,586 222,092 72-25 18-71 Now Plymouth .. 449,560 228,564 .. .. .. .. 449,560 228,564 7-93 19-26 Patea •• •• 87,089 318,533 87,089 318,533 1-54 26-83 Wanganui .. 112,399 32,718 40 112,399 32,758 1-98 2-76 Wellington .. 606,884 186,292 5,600 .. 1,688 66 614,172 186,358 10-83 15-70 xsborne .. 90,881 1,314 90,881 1,314 1-60 0-11 Napier .. .. 67,912 681 67,912 681 1-20 0-06 North Island totals 5,312,430 998,631 92,213 665 113,956 1,010 5,518,599 990,306 97-33 83-43 Lyttelton .. 92,059 14,033 1 92,059 14,034 1-62 W8 Timaru .. .. 37,820 10,145 37,820 10,145 0-67 0-86 Dunedm.. .. 7,812 23,135 .. .. 90 16 7,902 23,151 0 14 1-95 Blufi •• •• 13,387 149,235 .. .. .. 91 13,387 149,326 0-24 12-58 South Island totals 151,078 196,548 .. .. 90 108 151,168 196,656 2-67 16-57 Dominion totals.. 5,463,508 1,185,179 92,213 065 114,046 1,118 5,669,767 1,186,962 100-00 100-00

Cheese. Butter. Tons Increase or Decrease on T Increase or Decrease on Previous Year. * Previous Year. Per Cent. Per Cent. 1934-35 . . .. .. 92,673 10*62 (decrease) 136,217 2*86 (decrease) 1935-36 .. .. .. 85,555 7*68 (decrease) 146,687 7*69 (increase) 1936-57 .. .. .. 88,222 3* 12 (increase) 154,564 5*37 (increase) 1937-38 .. .. .. 85,470 3-12 (decrease) 142,835 7 • 59 (decrease)