CHEESE SUPPLIERS

Waikato Times, Volume 121, Issue 20259, 30 July 1937, Page 8

CHEESE SUPPLIERS

EFFECT OF FIXED PRICE. OPEN MARKET PREFERABLE. THE BRUNTWOOD COMPANY. (By Telegraph.—Special Reporter.) CAMBRIDGE, Friday. Claiming that the suppliers to cheese factories were considerably worse off under the guaranteed price than they would have been if on the open market during the past season, the chairman of the ’ Bruntwood Co-operative Dairy Company, Ltd., Mr W. N. Perry, at the annual meeting of suppliers in Cambridge to-day issued a warning to the Government that unless a fairer price were fixed next season many cheese suppliers would be turning to the blitter factories. In his opinion the position was acute for the cheese industry.

Giving his personal views on the guaranteed price, Mr Perry said that when the system was first introduced a special committee had been instructed to allow lftd per lb more for butterfat supplied to cheese factories. In assessing the figure, however, the committee had allowed for a manufacturing cost per lb of 2.75 d. Previous to the increased wages and i shorter hours the Bruntwood Com- | pany’s manufacturing costs had been jas much as 2.74 d per lb. to f.o.b. In-

creased wages would make this considerably larger this season. I The promise of lid more for cheese | suppliers could not be honoured un- : less more was allowed for manufacturing costs, he said. This season the Government proposed basing the guaranteed price on the cost of production of the average farmer. However, the committing working on the price was not as representative of cheese manufacturers as it deserved. During the season Just past the increased wages alone had meant a difference of £IBOO to the Bruntwood Company, he added. Position Realised. ” Apparently the Government is realising the position of the cheese industry is acute, for I understand that we are going to receive 2d per lb more than the butter suppliers,” said Mr ; Perry, in challenging the Government | to publish the basis of the new guar- ; anteed price. “If we had been on tho j open market this season we would ; have been able to pay out about Is ; Gd per lb and therefore we are not getting the value of our produce. I , estimate, however, that the new guar- ■ anteed price will be about Is Id per lb.” i Mr Perry saw a fallacy in the grad- ■ ing system. The Bruntwood Company had had 45 per cent, of its output graded finest and 92 per cent, had been above Hie "basic grade. The pay-out, without the bonus, had been only Is 2.7 d, whereas one factory in South Auckland producing a second grade product, had reached almost Is 3d per lb. The reason for this was that tho Bruntwood Company, in striving for quality, had sacrificed yield for test, whereas the other company in getting a bigger yield had been able to put more cheese on the market. Therefore , companies striving for quality were having their returns penalised. This was wrong.

“ The Government will have to take notice of this position or It will find that New Zealand’s cheese product will be gradually becoming second grade,” he added. Penalised During Season. Previous to Government control, cheese factories had been able to reap big returns in the flush season when manufacturing costs were low, Mr Perry went on. In April and May, when the yield was down and costs of manufacturing high, companies were this season ■still receiving the basic rate. The advantages of the flush market were, therefore, not being received. " We are gradually getting to the position where factories merely separate or make casein for four or five months each year, and it should be impressed strongly upon the Government that very shortly the. total cheese production for one year in New Zealand will be falling alarmingly. “ We have the overseas cheese market practically to ourselves, and If we have not enough produce to supply that market England will look somewhere else, and New Zealand will be left out altogether,” said Mr Perry. “If the position occurs that cheese suppliers turn to the butter factories we will have the overseas butter market flooded while the cheese market Is starved and the whole industry will crash.”