BUTTER PRICE.

Taranaki Daily News, 31 March 1921, Page 4

BUTTER PRICE.

ATTITUDE OF PRODUCERS. COST DURING WINTER. 2s C<l A POUND SUGGESTED. By Telegraph.—Press Association. Palmerston N., Last Night. A thoroughly representative meeting of dairymen concerned with the production of butter for the winter months was held at Palmerston North to-day to consider the question of fixing a reasonable price for butter from April 1, following the termination of the contract with the Imperial Government. The attendance was practically representative of all districts which could undertake the making of butter from April 1, comprising north and south of Auckland, the King Country, Bay of Plenty, Poverty Bay, Hawke’s Bay, Taranaki, Wanganui, Manawatu, Wairarapa, Wellington, Nelson and Westland. The point was stressed that suppliers of milk for butter had the right to expect fair terras by comparison with the returns available from milk supplied for other purposes. Dried milk factories were buying milk on a basis equivalent to 2s 94d per lb of butter-fat, the present London price of cheese at the New Zealand factory The Wellington City Council was making contracts for winter milk at 2s a gallon, which . was equivalent to 4s net per lb of butter-fat at the factory. Reference was made to the widespread misunderstanding of the subsidy paid by the Government for the purpose of enabling the consumers to buy butter during the summer months at fid per lb below the market vqlue. If the Government had not eased the price for consumers by a charge on the general taxpayers the retail price would have been 2s 9d or 2s lOd, and the cessation of the subsidy meant that the consumers would not have this saving of 6d ae a bonus from the consolidated fund.

The feeling of the meeting was that it would meet the public half way. The producers would take the unprecedented course of accepting less for winter butted than for summer butter, but as the consumers would be no longer receiving the benefit of a subsidy the retail price would be higher in winter than in the summer. It was resolved unanimously that an equitable basis of the price for butter as from April 1 would be the one adopted recently by a representative meeting of Auckland producers, 2s 2y 2 d per lb in bulk at factories, or free on board, or free on rail, and 2s 4%d for pats, with id discount for cash. The fixing of the same price for bulk butter free on rail or free on board as at the factory was to facilitate a uniform retail price of approximately 2s fid throughout the Dominion. It was explained that with the cessation of the subsidy scheme the price of 2s 2%d at the factory meant a drop of 3d for the producer. It was estimated that the increase in the cost of production for the winter would be about 25 per cent, equivalent to about fid per lb, and increased charges for storage and interest would add another penny. Thus at 2s 24d the production for winter would show a total drop of lOd per lb by comparison 1 with th(| production for summer.

Brief reference was made to the London parity question raised in various published reports, but the opinion of the meeting was that the London parity Was not a factor at this time of the year, when the export season had closed. The whole question at issue was the production of butter as from April 1 for the local market on a basis reasonable to both the producer and the consumer.

AN OFFICIAL STATEMENT. BY NATIONAL DAIRY ASSOCIATION. The secretary of the National Dairy Association has made the following statement in regard to the position of butter for the local market, as from April 1: “In the first place it is necessary to clear away the misunderstanding which many persons apparently have respecting the ‘subsidy’ of fid per lb which the Government decided to pay on butter sold for local consumption during the term of the contract with the Imperial. Government to March 31. The impression given in a number of published statements is that the ‘subsidy’ was a kind of bonus to the producers. The plain truth is that the ‘subsidy’ has been a bonus to local consumers of butter. The Government justly recognised that producers had a right to the market value of butter, but the Government decided to give New Zealand consumers the privilege of paying less than the market value. Thus the retail price was fixed on a basis which was sixpence a pound below the market value. This sixpence, which was collected from the general taxpayers for the benefit of butter consumers, was used for the purpose of putting suppliers of the local market on the same basis as exporters. It was a round-about way of allowing the producers to obtain the market value for butter consumed in New Zealand

“The Government has now indicated that it cannot continue subsidising consumers of butter, at the charge of the general taxpayers, after March 31. In stead, it has decided to grant the application of the producers for a free market, as from April 1. This means a free market in New Zealand, for the Government is putting an embargo against the export of butter during the winter months. The producers do not object to the refusal of shipping permits until there is a surplus in the spring above the needs of the local market, but they naturally insist that the inducement for winter production should be sufficient. “In consequence of the Government’s willingness to allow .a free market here after March 31, meetings of producers are being held in various parts of the North Island to discuss the question of a fair price for butter sold in New Zealand .from April 1. If farmers are to undertake to keep cows in milk during the winter months for the production of butter, they must be assured an equitable return by comparison with the results obtainable from the supplies of milk for otherjaroducts or milk for domestic consumption. It is a simple case of justice; the supplier of milk for butter should have a fair deal. If he is refused a fail- deal for winter production, he has the option of diverting the milk from butter or of drying off his cows. However,-it is not anticipated that the public will aim at the discour-

| agement of butter production during winter by opposing the payment of a sufficient price to maintain the firstclass service of high quality butter for which New Zealand is noted. It is believed that with a proper understanding of the whole question the people will be pleased to pay the' right price, which the producers will be ready to gnnounca' before April 1.”