MONEY IN MILK.

Taranaki Daily News, 26 August 1916, Page 3

MONEY IN MILK.

PRICES FOR CHEESE AND BUTTER. POSITION IN NEW ZEALAND. WHY THE IMPERIAL OFFER WAS DECLINED. The man who sells milk in the form of butter and cheese to-day is in for a wood tiling. At the moment all over the Dominion buyers for British houses are offering prices for both butter and cheese that would have seemed like a dream before the war. At this moment, too, New Zealand butter is quoted wholesale in London at IBos per cwt. and eheese at £4 15s to £i 18s pel cwt. I Cheese reached higher prices than that last year, but an average of £4 159 for cheese should give the farmer a return I that ought to satisfy him. It does not, fliowev?r, not because he is any more insatiable than other human beings, but because, as a matter of business, he feel 5 he is justified in obtaining the highest price for his produce that the market is able to pay. In taking advantage of the high prices the farmer is not singular, everyone else does the same. It is only those who must ultimately have to pay them who complain. They can make their protest fel* in one way only—by*going without. This is technically called reduced demand or diminished consumption, and, combined with over-production or supply, is the only agency known for cheapening the prices of any commodity. There artother expedients for bringing down prices, such as State intervention in distribution, which is still in its experimental stage, However alluring it may appear, the fact, remains that, while this ir.twvention may materially assist in keeping prices within bounds, it is handicapped by its inability (at the. present time) to compel holders to sell (except to the State) and to make producers produce,

REQUISITION PROPOSALS. The ehcesemakers of the Dominion have proved this. The Imperial Government required cheese for the troops. The good offices of the Dominion. Government were utilised to secure onethird of last season's output for the whole Dominion at 7Jd per pound. Prior to that it was suggested that the Dominion Government, for the Imperial Government, should obtain the cheese at Old per lb. The eheesemaker? did not see it quite in that light, so the price of was assented to. In the meantime cheese reached hitherto unheard-of prices, but, omitting these, which lasted for hut a short while, the average market price (including the third part oi ttie, cheese produced) was £4 10s per cwt. For five years, from 100S to 1912. the price of cheese in London averaged out for the whole period £0 2s (id per cwt., and a good average it was considered, too. In 1013 the' price improved, in 1014 it ranged from £3 2s to ■£3 (Is up to August 1 of that year. The war. broke out on August 4. On Angir.t S New Zealand cheese was quoted at ;C3 18s to £4. It fell a few shillings in price, but soon mounted up to a price that made the £3 and £3 10s o f other days look ridiculous. When, therefore, the Imperial Government's counter offer to buy the best part of the Nev: Zealand output of cheese at Sd per pound was made known a few days ago the cheesemakers were astounded. There was no business; everything was "off." The recent history of the negotiations is interesting, and is here recorded. A conference, arising out of meetings held in various dairying localities during June and July, met in Wellington -on July 14. "Those present at that conference were delegated by the meetings referred to. They represented the two islands, and were: Messrs, Pacey (South Island), Powdrell, Allen, Wise, and Jewell (North Island). In a body representative of cheesemakers they went to the Prime Minister, offering the whole of the cheese to be made in New Zealand at B|d per pound. Had this offer been accepted, they stood to lose, so they argued, €2,10,000 to £300,000 on the deal on the average of £4 10s per cwt., excluding the extreme rriccs and including the 7jd per pound 'requisitioned" cheesp.

tVI-IY THIS SACRIFICE? It was asked of one concerned in those negotiations why the cheese makers were prepared to lose between £250,000 to £300,000 on the transaction ? The reply was to the effect that in selling the cheese at BJd per pound it was being parted with to the Government at well below iis prospective market value, and that the loss took the form of a patriotic gift, and was regarded as such. It wa s explained to the Post on behalf of the cheesemakers that there was a considerable- time between the making of this offer and the receipt of the Imperial counter offer. It was not stated, hut it was understood, that, providing equal treatment in the matter of furnishing shipping space was accorded, to one half the cheese made, the other moeity would be available at 8d per pound. In the interim, buying agents for British houses were active, making substantial purchases at higher prices than lhe_ cheesemakers offered to sell to the Government, subject, of course, to the cheese being tiuvequisitioned. Finally the Imperial Government notified the Dominion Government that its ideas of the value of the cheese was 8d per pound, and that not for the whole season but for November, I7»cemr|or, January, and February shipments, at the, rati of 2000 tons a 'month, 8000 tons in all.

These months are considered by the cheese makers as the pick of the season so far as the market is concerned, for the new Canadian and English makes come in afterwards, and the English cheese is a most important factor in the situation, the make being very large. EAGER BUYERS The offer of 8d was accordingly respectfully but summarily declined. Today it is reported that private firms are paying as high as !).id and f)Jd per pound for cheese for export. There may lie extreme prices, but fld is considered to be a quite conservative estimate of the value of cheese for the whole season through, and if these buying gentlemen are prepaid to pay 9d or Old and even (ISd to-day, what is the actual market price of 'cheese going to be? Many cheese-makers, or rather suppliers of milk to factories, are thinking very bard on this matter just now. The price of Od per pound makes the butter-fat worth Is IOSd per pound. As butter prices are soaring also, the disparity between the returns from butter and cliesse that was so marked last year and the year before will not be so pronounced, but it will be seen that the milk I flow of thb Dominion turned into gold has become a great, stream of wealth, '

Justification for their attitude in adhering, to BJd to tlie. Government when they can easily obtain over !)d per pound for their product i 3 'ofl'ered by the cheese makers. They point to the increased cost of everything associated with export dairying in New, Zealand to-day-cows, land, wages, appliances, and 'requisites. Everything of this kind going up—nothing coming down. For the old established men, who got in early and bought their places at cCIO and £l*2 an acre it is one thing, but for the man who pays (as compared with them) £ls to £2O a head for his cows and £tc to £SO and even .COO for hi s acres, it is altogether different. Any suggestion of being over reaching is repudiated without qualification of any sort. The position is taken up that Od toO'd for cheese and Is 4id to Is 5d for butter are ths fair market rallies of those products ,today The cheese pr9duetion is worth over £5,000,000, and while : ]d or U per pound one way or the other may seem small, .spread over the whole output, it is argued that it amounts to a considerable loss or gain io the man with the milk to sell,whether he forfeits or pockets the fraction. The above is a reasonably fair statement of the position from the producers' point of view, possibly omitting some details which if set dowii would not make the matter much clearer.—Evening Tost.