BUTTER PRICES

Dominion, Volume 14, Issue 4, 30 September 1920, Page 5

BUTTER PRICES

COST OF PRODUCTION PLIGHT OF THE SMALL FARMERS GROCERS AIR THEIR VIEWS The Butter Prices Inquiry Committee of tho Housij ' of Representatives concluded its sittings yesterday. The chairman (Mr. J. A. Nash) presided. C. B. Norwood, oiiairman of tho Municipal Milk Committee, forwarded a lottcr supplementing the evidence ho gave at tho ln6t sitting of the committee. In tho course of this lie stated that tho perincrease in the various n.ilk charges between January. 1919, and August, 1920, were ns follow Coal, CO per cent.; benzine, 23.33; general labour, 23; engine-room staff, 17; motor drivers, 9.50; first assistants, 2G pop cent. Tho mini.mum wage paid <vU thf Wellington" Municipal Millc Depot was M Is., plus an allowance of one quart- of milk per day to each emploveo. Henry D. Bennett, representing tho retail grocers of New Zealand, by whom he was deputed to give evidence, stated that the grocery trad® was a business bearing very little profit. The chairman: I give you that tiv. I got out of it after many years. Witness continued that, during the last four or five years overhead charges in tho grocery business had increased from 14 per cent, to 18 per cent. The goneral rnto of working expenses incurred by tha small shopkeeper—the working owicr— was, however, less than 18 per cent. Mr. Bennett went on to 6tato that now tho war period was ever the grocers desired a fair profit for handling butter. Ho _asked_ the committee to take into consideration the average honsowife's insistence on delivery of parcels—small as well as large—when assessing working charges in the grocery business. Bread and Buttor Lines, Touching profits, witness asked that the retail price should have some rela tion to the co9t cf running the grocery business. Butter formed one-seventh of a grocer s turnover, and sugar was another important line. Both lines at present returned the grocer a vojy small margin of profit. The grocers how suggested that thoir margin of profit on butter should be fen the basis of, roughly, 12id. to 13 per cent, for spot cash and IS to 1G per cent, for booking, or where the butter was delivered. These figures, which wero to be gross, were below the grocers' working expenses. No grocers had asked for less than the ngures he had named; many of them had demanded considerably more. In , Victoria tho grocers' selling prices roturncd a profit of lid. for cash and sd. per lb, when the butter was bootod or delivered. The grooera of INew Zealand'aelred for a margin \>f profit nrtuoh lie had shown to bo less than what was actually required to cover their workmg oxpenses. It was, in short, a very modest request. Mr. Hockly: Do I understand the grocers are prepared to sell buttor at less than what it costs them to handle it? Mr. Bennett explained that butter and sugar were lines whioh the grocers had for many years sold at a lower rate of profit than other commodities. They looked for extra profit on'oertain other lines m order to make up the deficiency. Incidentally, Mr. Bennett asked that tho Board of Trado be empowered to consider the claims of grocers in certain towns lying well.off the beaten path for a slightly bigger .profit than that asked by the majority of tho grocers. The chairman: What is the wagee increase in the grocery trade since 1911? Witnoss: From £i ss. to M 7s. 6d. The chairman: Then you say that unless you get 12{- per cent, profit you would much prefer to have butter taken out of your hands altogether? • | Witness: Yes, wo have arrived at that decision after duo consideration, Cost of Production, E. J. G. I'nnnicliiTe, of Feilding, gavo a goneral statement as a farmer regarding the cost of producing butter. Ho started twenty years ago on a' L.I.P. farm with small capital, and ho had had for a number of years a very hard struggle. In answer to tho chairman,. witness 6aid that his farm was 80 acres in afon. His expenditure last year was .£683 18s. and his receipts ,£977 Is. 7d. Ho had charged only .82122 against tho capital value of his-land, as ho had not converted it to freehold. He estimated,, however, that his laud would bo worth trom ,£l3O to -6140 per acre on the open market. The chairman: You nre in a much better position than tho ordinary farmer, because you got in years ago?—" Yes." Furtlior questioned, witness Tomarkod: I think the committee is only beating the air in taking the evidence of farmers. The onl ( y way to get at the real cost of production is for the Govornment to buy a farm and demonstrate on its own account. Tho chairman: Don't you think a private individual might run it cheaper than the Government?—" Yes." ' To Mr. Hamilton: Butter cost him 16. sd. lb. to produce, but he admitted that in the case of many other farmers who were farming under different conditions and paying interest on high-priced land tl>© cost of production would bo materially higher. " Mr. M Combs: Then all ■ this pricechasing so far as the cost of production is concerned is moonshine?—" Yes, that is exactly my opinion." A Losing Game. Peter Hanseiij of Kauwhata, farmer, was examined with regard to tbs balancesheet no had previously submitted to the committee showing the cost of production to be 3s. 3d. per lb. His farm comprised 62 eicrea, and life hpd valued it in the balance-shcet at ,£IOO, whereas its selling value to-day was from <El2fl to .£l5O. Last year his receipts from the farm, were .€(179 and the expenditure iff'il. The chairman: Then on last year's figures you. are working at a lossP— I "Yes. that is if I allow myself wages and interest on my capital. Tho chairman: Do you think a farmer is ontitled_ to receive the full market price for his butter ?—"Tcs." To Mr. Atmore: His land was valued at .£ls per acre when he took it up 20 years ago. It wis then all in stumps, untrained, and lrad no buildings. The Government valuation was jCIOO per acre. Witness wont _ on _ to elate that the tendency in his district was to go over to cheese. Unless the dairy farmers got a decent price for butter they were determined to supply either Glaxo or chisese factories. He had no hesitation in saying that if tho Government continued/to restrict the price of butter it would become a v;ivy scarce commodity. Tho chairman! It has been suggested that farmers ought to bo patriotic enough to sell thoir butter at tho old price.— "I would be quite agrtpablo to going back to Is. a pound if we could buy ail our requirements at tho old prices. That is thto point." To tlu chairman: He did not favour either an export, tax or an eqi "lisation fund. Thft butter should be Bold on_ an absolutely open market. It was a vicious principle to tax tho farmer by way of an export tax, which would result iu tho wealthy man in tho city reaping tho benefit of the labour of thvj poor man on the land/ Mr. Atmore: Do you know of any farmers having gono bankrupt during tho last five years?—" No." Witness added that they had had to cut their clothes according to their cloth. His "Recreation," Samuel ICnight, of Ongarue, said that he bad been a farmer all his life. Often ho worked 18 hours a day and "then went to a conference liko this" for a little recreation. 110 was farming 319 acres in tho King Country, for which'lio paid .82 ss. per acre. His position in a nutshell was that after meeting all expanses of running tho farm he had .£132 9d. left with wliioh to keep a family of eight, By dint of outside work on the part of his sons he had been ablo to keep going. Ho allowed no wages in his return, and he had deducted only ,C 35 as interest on tho capital value of his land. A member: Do you go to tho pictures ?- "Pictures!—l don't drink, I don't smoke, and I ppuld count on the fingers of one {tWHj nil tho times I have ercr been to

tho piotures, 1 . . I milk throb times a day and get to bed about half-past 1) at night." Fred. William Thomas, of liotorua Hamlet, a small dairy farmer, put in a balance-sheet allowing that last year ho lind incurred a loss of ,£319. He had ttharged up £2SO for tho wages and keep of 0110 hired man, but had allowed nothing for his own labour. At tho present time ho could not live but for the fact tliat ho had means independent of his farm. He had purchased his farm in a practically unimproved state at Jils per acre, and it was valued today at J675 per acre. Hu« had allowed li per cent, on tho present val'iie of his knu. Personally lie worked 13 hours per day on week days and five hours on Sundays. The chairman: .Do you go to church? Witness: los, and' Sunday school, too. (Laughter.) To Mr. Powdrell: Returned soldiers 3vho had gono in for dairy farms would have to walk off their farms with nothing in 18 months' time unless they had an open markot for the butter they produced. He could live at half tiic rate people did in towns and twice as well. An Eltham Farmer. W. T. Blackmore, of Eltham, said he was farming 50 acres which he had .recently refused to sell for £90 per aero. He purchased the farm six years ago for Mi per aero. His incomo from tho farm totalled ,£692, ajid his\expendituro (per balance-sheet produoed) was i!DSI. He was therefore farming at a loss of .£259 per annum. , He had allowed interest on his capital totalling £317, and put down .£201) wages for his son, who ran the farm and worked 13 hours a day. Mr. M'Combs: How would tho man who offered you an acre have got on if you had accepted his offer? Witness: On the present price of butter lie could not have got on at all. At this stage- tho luncheon adjournment was taken. On resumption A. W. Page, master grocer, of Auckland, was given permission to make an explanation on behalf of the rotail grocers of the Dominion. AVitriess stated that Mr. Bennett was speaking merely on his own behalf when he inado the assertion that unless ho , got 12J per cent, profit he would prefer 'to 600 butter taken out of tho hands of grocers altogether. Tho majority of grocers wero desirous of retaining the retail distribution of butter at all costs. . Questioned by members of the committee, witness said lie was of the opinion that the suggested reduction . in price to poorer classes by means of ration tlokets would lead to endless confusion, on the scoro of discrimination. Charles R. Petrie, manager for Smectona Ltd., of Auckland, said that the overhead charges in connection with the I firm J provision department last year were 12.5 per cent. The gross profit was 10.58 per cent., leaving a loss on the turnover. . The Eternal Struggle, James Jamieson, of Horotin, stated that he was farming 181 acres. He produced his fawn books for last year, showing that his receipts had amounted to JGIOIO Bs. 6d.. while his out-goings wero £814 lis. lid. This left him £195 lGs. 7d., out of which ho had to keep himself, his wife, and eleven children. He had not charged any Interest on the capital value of his land, nor had lie made any allowance for labour of himself, his wife, and the two children who worked on the farm. ' A member: What hours do you work? Witness: We all have tea by candlelight, and get up at dawn. I hayo just about ruined tho health of my'wife, my eldest child, and myself. How do yon live?—" Well, I have had one suit or clothes in eight years. The boots I wear I have had for fivo years, and to tell you the truth, tho missus has not got a second change. . . . She makes practically evory stitch of tho children's clothes/' Witness ho would bo bettor off if lio sold his farm and went to work on the roads, putting out his money at 6 per cent. Ho considered he woulA'bo better off and would have mora pleasuro. A member: Why don't you sell out?— Witness replied that lie oould not expect another mail to accomplish what he himslf had failed to do. It was impossible to make the farm pay if it were saddled with a mortgage. To Mr. Hamilton: It was the prospect of what lay ahead in the shapo of unearned increment that carried a farmer on. Before going farming ho was a' miner. Tho chairman: Can,miners earn good wages?—" Yes, if they liko to work. If I wero back in the mine I could earn J2 a day at the present rate of wages." Thomas Parsons (Eketahuna), in tho course of a general statement, said that there were hundreds of settlers just hongin? on waiting' for better prices. His balance-sheet for last year disclosed a deficit of ,£57 6s. on the basis of a 10-cow farm of 160 acrea. - Mr. W. D. Powdrell, a member of tho committee, produced * series of balancosheets in support of his contention that dairy-farmers—ho referred particularly fco share-milkors—were infinitely worse off when it came to a question of remuneration than wharf labourers, carponters, end other citv workers. If the farmer allowed himself and his family deccnt wages, production would only bo carried on at a great loss. This concluded the hearing of evidence and tho committo Tose, and will present its ronort to the House in due course. TEMPORARY SHORTAGE AHEAD THE QUESTION OF PRICE. The Prime Minister sfated recently in tho House that thero was enough butler in store to supply the local market at the old pricia until the end of this month. Mr. &. Mitcholl (Wellington South) asked in the House yesterday how long the supply would last and if tlio price, was to bo varied before the House had been ablft to consider the report of tho Butter Committeo The Prime Minister repUW that ho expected the butter now iv. the stores to supnly the local markot for about one week 'more. Tits dairy farmers were, experiencing a very late spring, with heavy mortality in the dairy herds, and ,he believed that fully three wfcoks must elapse before the production of_ butter would equal the local consumption. He fully j expected that for a week or two, after tlv,. suppliog in tho stores were exhausted, there would be a shortask of butter. Members: What about price? j Mr Massey said that he could not deal with'the question of price until ho rf--1 ccived tty> report of the Butter CommitI tee. He did not think there would be i anv alteration in price in the meantime, but he could not be certain 011 that point. Hn would have to look into the situation.