MEAT ACCOUNT

Dominion, Volume 36, Issue 25, 24 October 1942, Page 8

MEAT ACCOUNT

Explanation Of Where Money Went

FUTURE OF EWE MUTTON

A clear analysis and explanation of the Meat Account was supplied to producers at a meeting of the Wairarapa Sheep Owners’ Federation ill Masterton on Thursday. The chairman, Mr. A. McDonald, intimated that it would hear a report from the two Wairarapa representatives on the Electoral College of the Meat Board, Messrs. W. A. lorns and himself, and Mr. lorns would deal with the marketing of meat and in particular with tlfb pool accounts. The assurance was given that there had been a remarkably satisfactory clearance of the past season’s meat

Mr. lorns said that the Minister and the Marketing Department had shown no disposition whatsoever to withhold information. Of necessity, however, the figures to be given had largely to be based upon estimates, in so far as stocks of meat on baud were concerned. Also, all figures given were for the year ended September 30, 1942. The Government acted in a twofold capacity in handling the meat industry, said Mr. lorns, first, as a selling agent for the meat producers, on which basis the Marketing Department received 4 per cent, commission. The sum received by way of commission depended entirely upon the quantity of meat exported. On an export of 300,000 tons, the half per cent, would equal about £52,500, but were only halt that quantity of meat shipped the commissions would earn £41,250 only, and so not meet outgoings. The commission is termed an “Administration Allowance. After payment of the expenses mentioned any surplus over -is transferred to the War Expenses Account. The speaker drew attention to the fact that no charge was made for any work given to this account by the Department of Agriculture, Treasury, Minister’s office or 'High Commissioner’s office. It "was considered that having regard to all the circumstances, this administration allowance on a half per cent, basis, was satisfactory. Tiie Meat Account was quite distinct from the administration allowance. The figures for this were estimates only,, but were believed to be a close approximation to what would be finally determined. These were for the 1941-42 season, as to September 30. The income of the account was (assuming shipments total 300,000 ton?) Of this. £943,000 represented increased prices paid by United kingdom on 22,000 tons at £45/5/- a ton average (just under id. per lb.). The 222,000 tons was arrived at by deducting from 300.000 tons shipped, a carry-over or 78,000 tons which was not eligible for the increased prices. A sum of £412,999 represented receipt from agreed reductions in Marketing Department f.o.b. price schedules. Details of this being: Lamb, 4d lb. on 160.000 tons, £3 <3,333, mutton, 3-l Gd. lb. on 17.000 tons, £29,750; beef, l-16d. lb on 17,000 tons, £9916. Finally was received £49,oBß—being extra allowance from United, kingdom for boning quarters of beef at id. lb. sterling, or &-16 d. N.Z. —on 17,000 tons. All such income to the Account, represented sums that might have been paid out to meat producers, per higher schedules for last season’s export killings. The expenditure from the account totalled £965,627, which left a surplus of £439,952. The major item of expenditure was, lost on canning (ewes and beef) £823,961. This estimate, for such it is, may be substantially reduced as! a re'sult of shipping approximately 450,000 ewe mutton carcases in frozen form, instead of these having to be boned-out and canned, A further off-setting credit that might accrue was the prospect of shipping boneless bull beef. Interest, storage, and insurance on frozen and canned meat was estimated at £50,000. 4 , „ An item of particular interest was that of capital liability. This compris^: (a) Cannery plant and buildings, ±olo,ooo, and (b) emergency cool store £2bo,UOO, a total of £575,000. It had been decided to write out these. capital charges in three annual instalments, and so that to be borne for the past season was £191,666. Mr. lorns explained that freezing companies had to provide at their own expense, cool storage capacity up to 60 per cent, of their seasons killings, and that the emergency cool stores itein charged to the meat account was for storage above- that 60 per cent, limit, He also mentioned that one of the emergency stores-so financed was in the old Kakariki freezing works, fitted for both butter and meat; this store had never been used. The three items of expenditure so stated totalled £1,<W0.627, but offsetting this was a profit of £lOO,OOO under the Government’s commandeer of tallow. . ~ _ . When the war crisis was over the effort would doubtless be made to liquidate the capital liability, by sale to freezing companies of stores, cannery plant, and so forth, but it was improbable that these would realize ■ anything comparable to their cost. Hence the need for writing down this account. Ewe Mutton Future.

In reply to a question as to the prospects for the coming season's schedule, Mr. lorns advised that because of the endeavours of the stabilization committee, plus the Government’s policy, the prospect was for no further advance in price. There might be a change, however, in lor overweight lambs. This was because' last season’s reduced schedule, designed to induce farmers to send in lighter lambs, had not worked out. Mr. lorns said that the most important call upon the meat account had been the cost of stabilizing fat ewe prices last season. He recalled that in the autumn prior to the outbreak pf war, practically 1 000,000 surplus ewe carcases were in store, and that New Zealand had been requested to limit shipments. lhe prospect was then dark for this meat. He had no great faith in maintaining mucn of a price for ewe mutton, whether canned or frozen, when the war was over. So the question of how far it was proper to continue stabilizing ewe mutton at last season’s quite high price should bo considered.