DAIRY PRICES

Waikato Times, Volume 121, Issue 20256, 27 July 1937, Page 8

DAIRY PRICES

“COMPULSORY PURCHASE.” AUSTRALIA’S LEAN SEASON. MR. J. E. LEES ON’S ANALYSIS. (By Telegraph.—Special Reporter.) MORRINSVILLE, Tuesday. “ The present system of dairy produce marketing is not a guaranteed price system but compulsory purchase by the State at a price fixed -by the purchaser,” said the chairman, Mr. J. E. Leeson, in a speech to shareholders at the annual meeting of the Morrinsville Co-operative Dairy Company to-day. When the guaranteed price proposal was brought forward, he continued, few realised that it would entail such drastic changes in the industry. It was naturally assumed that the" scheme would take the form of a minimum price guaranteed on a free market with the industry getting any surplus. At one period of the past year it appeared that there would be a considerable deffeit in the Dairy Industry Account owing f,o the low prices but fortunately recently values had risen above the guaranteed price to 106 sGd In London and now If appeared that there would be a surplus in the account.

“ Had dairy produce not been under the control of the Marketing Board,” said Mr. Leeson, ‘‘the price realised In the past season would have been as good or better for butter, os the average quotation has been at. least 10s a cwt. more than for the previous season. Tho cheese producer would undoubtedly have received 2d more under a free market. Returns for Season. It is significant, he said, that Australia with a free market for butter, had never before realised a price so near to New Zealand's as was reached during the period of Government control here. The speaker suggested that the Increase In value for the past season was not due to the marketing system or oontrol but wholly to the fact that Australia had had a lean season. The figures of tonnage and imports into Britain gave the reason for the higher values an-d constituted a warning that should Australia return to a good season the values would again slump. If the Australian exports continued to fall, however, there would be ample prospect of Increased values again accentuated by Britain’s prosperity. The first two months of the season were free marketing months. Then came the guaranteed price period. The net result of the season was an average advance payment of i1.978d; a bonus of 1.585, making 12.564, dividend, .053, trading rebate of .0434, cartage, .285 d—a total of 13,943 d. The actual cash payment average over all grades clear of cartage was 13,6G3d per lb. and in view of the relatively high percentage of finest cream graded and the reasonable overrun the result must be considered very satisfactory. All bonuses had already been paid. The overrun was 21.679 during the season. The butter made averaged 93.28 against. 93.15 for the previous season. Of the cream received 89.95 was graded finest, while of the butter 82.40 was graded finest. Alarming Cost Increases. Mr Leeson aid the most disconcerting feature at present was the alarming increase in the cost of all materials and services needed by the industry. It might be' conceded that the "increase was justified and without the knowledge of the proposed guaranteed price next season, it appeared certain that all costs had risen in much greater proportion than the' values of products. Dealing with factory costs, Mr. Leeson said they had been increased this year by £2 7s 5d per ton in ‘manufacturing the season’s output, the cost rising from £lO 11s 8d to £l2 16s 3d per ton, an Increase of from 1.125 d pel* ib to 1.439 d. The total cost increase to the company was £8137 for the year.