MILK DEPARTMENT’S FINANCES

Dominion, Volume 37, Issue 16, 14 October 1943, Page 3

MILK DEPARTMENT’S FINANCES

Cheaper Rate Earlier This Summer.

A satisfactory position in the municipal milk department as the result of which summer prices will operate this year three weeks earlier than in 1!>1£. giving (he consumers an equivalent concession of £3OOO, was disclosed to the Wellington .-City Council lust night by the milk committee chairman, Cr. M Fraser. Cr. Fraser said that Augiist 3.1. was the end of the real milk year, not March 31, the financial year's end. For the financial year the department bad a £28,700 profit, and after certain provisions, it was left with £21,000 to face the winter. The 10'42 winter loss was £20,000, or 3.105 d. a gallon, but for 1043 it was only £14,512, a reduction iu the loss of J .320(1. a gallon. There were four responsible factors. First a reduction of ,5SOd. a gallon on working expenses. Secondly, the council had to go as far as Tokomaru and up the Wairarapa valley to secure milk. Its policy of paying for quality rather than quantity had resulted in the development of Jersey herds giving niilk of high butterfat content, 'but as the council had purchased further afield it took milk from other herds supplying for cheese factories and other purposes. The result was an overall reduction in butterfat content of from 4.95 to 4.82 per eent., or a saving of .396 d. a gallon. Thirdly, purchase conditions were favourable. Fourthly, less had been paid for milk than in the previous winter because of price negotiations, but when these were finalized there might be an estimated .contingent liability of £BOOO. The milk commission’s report was presented to the Government on August 10. If published the council could not lose. If it was not, the council would be in the same position as now and would, by law, have to proceed by arbitration to have the price decided. Cr. W. H. Stevens said that in terms of ordinarj’ commercial enterprise the milk department was approaching a dangerous position. The committee should consider providing a reserve from profits to meet any great emergency such as earthquake or fire, which would throw the whole organization out of balance. From a business standpoint the reserves were inadequate, considering the huge turnover, the capital expenditure and the responsibilities.' , ' , Cr. Will Appleton replied that while there was much truth in what Cr. Stevens said, the committee tried to run the department without undue profits and to pass on to the consumers such benefit as it could from the profits that were made. It was on the right lines in reducing the price as soon as it could. Due to war conditions, there had been a tremendous increase in turnover, and there was every reason to 'believe this would continue into next year.