DAIRYING COSTS

Hawke's Bay Herald-Tribune, Issue 204, 14 September 1937, Page 13

DAIRYING COSTS

— Press Assooiation.)

Farmers' Union Explains p§timates THE GUARANTEED PRICE

(By Telegraph

WELLINGTON, Last Night. Roferring to-day to the difforeuce of opinion with Hon. W. Nash, Minister of Marketing, with regard to the cost of production of butterfat, Mr. A. P. O'Shea, Dominion. secretary of the New Zealand Farmers' Union, stated that the Farmers' Union had made no claim in the statement presented to the Guaranteed Price Committee to put forward any estimate of the cost of production of butterfat. The position was that the ' union had endeavoured to put forward estimates of the increases in dairy farm costs on a per lb. butterfat basis from October 1, 1936, to June 1, 1937. The union had taken the latest authoritative figure available, the figures of the Commission of 1934, and had worked on their costs as a base. The union, however, had expressly sta.^d that it had taken the North Island average costs as shown by the Dairy Commission report and, consequently, the increases were probably more than those stated. To use the words of the statement, the procedure which has been followed has been to take the North Island costs of the Dairy Commission report and add to 1 those the percentage of increase which we have been able to ascertain (from comparisons with price lists and personal knowledge) has taken place in the last year. This would appear to be a practicai method for comparison, but as prices had risen from 1934 to October, 1936, the caleulation must be conservative. It will be seen from this quotation that there was no intention of considering that 1934 costs were identical with the costs of 1936. "When the report was put forward," said Mr. O'Shea, "Mr. Nash endeavoured to couvey to the deputation that the implication of our statement was that the Dairy Commission report costs ,(4.003d per lb, butterfat) should have added to them .55d, which was our estimate of the increase in farm costs and that the resulting figure would be our estimate of the present costs of production. It should be quite plain that, if a cost of production figure is to be arrived at, the 1934 figures should be brought into line with 1936 prices, and the increase of .55d then added. It will also be seen that, had the Dairy Commission report figures been brought into line with 1936 prices, the increase would have been greater. "It should be quite clear, therefore, that there was no question of the Farmers' Union putting forward any figure for the cost per lb. of the production o£ butterfat, and further that the figure of 4.64d referred to by Mr. Nash had no place in the Farmers' Union statement."