MILK POWDER PRICES.

Taranaki Daily News, 1 December 1920, Page 8

MILK POWDER PRICES.

AMERICAN MARKET FAILS, ... MORRINSVILLE PROJECT. OSTPONEMENT OF SCHEME'. important statement in regard to tile dried milk business was made by Mr. W. Goodfellow, managing director of Zealandia Milk Foods, Ltd., at a meeting' of Morrinsvillc farmers. He stated that in view of the unsatisfactory financial position in the United States and in other parts of the world to-day, it would not he advisable to proceed with the project to erect it dried factory at Morrinsville, hut to defer the erection of the factory for 12 months, or until such time as "the position improved. Mr. Goodfellow said the financial position in the United States was veTy much disturbed indeed, and United States banks would not now discount drafts on firms in this and other countries. Some months ago a large quantity of inferior Dutch milk powder had been placed on the London market, and had been sold at '£oo a ton. This factor had adversely affected the market for a time, but the market had since improved, and the price for sprayed milk powder was between £IOO and £l2O a ton. Owing to the serious financial position in the United States, a number of dried milk factories have closed down. A largir quantity of United States dried milk powder had been disposed of in the East, and unless the Eastern impoiters could pay for their goods in advance no delivery would he made. How this state of affairs would affect the British market Mr. Goodfellow could not say, hut the rate of exchange between Britain and the United States was so great that the United States goods did not enter into competition on the British market with goods from the British Dominions. The net return for dried milk, Mr. Goodfellow said, was lg Cd per lb but-ter-fat. It was always to be remembered that the dried milk proposition meant butter plus the by-product, which was made into dried milk powder. Of tlie Is received for dried milk, Cd was deducted for the«liquidation of the share capital. The price was hased on £l2O a ton being the maximum selling prices. The cost of manufacturing dried milk powder at Waharoa, the company's new factory that had been running some two or three months, was 4d delivered on the rail. To get the product on the London market would cost anothor 3d per lb, Id for freight and 2d for dock charges and selling, so that if Is Id were received for the finished article as was expected, there was a margin of fid per lb dried milk powder as a net return to the producer. Waharna was manufacturing four and a half tons of milk powder a day, and would manufacture from 700 to SOO ton.? annually. The! output at W.iitoa factory, which would be in operation next September, was calculated to ho 2000, while that from the Te Awamutu factory would be about "00 tons, making fj, e iota] output from the companies' factories 4000 tons a year. He advised the Morrinsvillc people to complete their guarantee and thus place themselves in the position that when the time was ripe they would be able to proceed with the factory at once. The machinery and plant that had been delivered on the site and ordered could be disposed of at once ftt a profit.

Mr. Goodfellow lafd emphasis on the fact that at present the British market em(Jd lint, absorb unlimited quantities of dried milk powder, and would not do so until the product had been properly introduced there. It was practically a new 'food to Britain, and would have to bo pushed. Owing to the bottom having been knocked out of the United States market the company's alternative market, for dried milk powder has disappeared. The company had hoped to receive from Is Id to Is 3d for the product, in Great. Britain. The United States had offered to take their surplus at Ud. So long as New Zealand had the alternative market they could switch the supply from Britain to the United States immediately there were signs of the former market being full and there was

a prospect of prices falling in that market. But without the alternative market New Zealand had to be very careful not to over-stock the British market. That was why the company WR6 desirous of limiting its production to the demand in Britain. If was resolved that in the opinion of the meeting the guarantee should be completed, jtnd on receiving advire from Mr. Goodfellow a further meeting be called to discuss the matter.