H.—3o.

From the descriptive details given in Table 19 of the Statistical Appendix, it will be seen that the records are grouped in well-defined dairying districts, with a collective grouping for the Auckland Province into North and South Auckland. The main descriptive features are as follows : — (1) Total cows milked, 1933-34 .. .. .. .. 31,636 (2) Total area of farms (acres) .. .. .. .. 68,250 (3) Butterfat per .acre range (in pounds) by groups .. .. 74-93 to 165-91 (4) Average production of butterfat per acre (in pounds) .. 117-73 (5) Butterfat per cow (in pounds) range by groups .. .. 211-3 to 296-6 (6) Average butterfat per cow (in pounds) .. .. .. 254 (7) Cows carried per 100 acres —range by groups .. .. 35-45 to 61-54 (8) Average number of cows carried per 100 acres .. .. 46-35 The figures given above show that the farms under review have herds of above the New Zealand average in production, the Dominion figure for the 1933-34 season being 235 lb. of butterfat per cow over all cows milked. Similarly, the number of milking-cows per 100 acres is considerably above the average. These factors of higher yields and heavier carrying-capacity result in an average per-acre yield approximately 38 per cent, above the estimated Dominion average. These basic facts must be kept in mind when studying the resultant costs hereafter discussed. In the discussion of total expenses connected with dairy-farms, interest charges have been purposely excluded owing to the variations which are found between individual farms. This charge is treated separately in succeeding sections, on the principle that income should first be allocated to the requirements of farm maintenance and labour reward, the surplus being available for interest and/or rent charges. 137. Costs (in Pounds) per Cow, by Districts : Expenses, which are detailed in Table 20a of the Statistical Appendix, are broken into groups under the headings of main working-costs, which cover costs of farm upkeep, and milking-expenses in the shed ; depreciation on plant and buildings ; sundry overhead items, and stock-food purchased. Although, as is to be expected, the total expenses per cow for the various districts do not show great variation from the average for the whole, individual farms within districts vary materially from district averages, and certain districts collectively show fluctuation in certain items or groups of items. 138. Costs (in Pence) per Pound of Butterfat : Total costs per pound of butterfat produced, as detailed in Table 20b of the Statistical Appendix, show somewhat greater variability between districts than do costs per cow, this being a reflection of the variable average per-cow production in different areas. The extreme range of variability between districts is somewhat over Id. per pound of butterfat, with an average cost of 4-093 d. per pound for the 550 farms covered by the investigation. The variability of cost factors can best be studied on a percentage basis as set out in Table 200 of the Statistical Appendix. This table applies to costs per cow and per pound of butterfat as given in Tables 20a and 20b of the Statistical Appendix, and shows the percentage of each item within each main group, and the percentage represented by each group in the total cost. The two major items of main working-costs are shown to be fertilizers and milking-shed power, which account for 53-25 per cent, of the total. The item " fertilizers " shows extreme fluctuations between districts, depending on the locality and on soil type. Any variation in milking-shed-power costs is mainly accounted for by the type of power used, or by different electric-unit costs in different districts. In addition to these two main items, local-body rates represent an important cost which also shows great variability. In most instances this is due to special rates and to drainage rates in particular. 139. Income and Costs per Acre, by Districts : In discussing farmers' income and their ultimate financial position, certain additional factors must be considered, namely : — (1) Value of Butterfat produced.—For the purposes of this discussion, pay-out is taken at a flat rate throughout. This enables any adjustment to be made should the figure used be considered unsuitable for any district. The figure taken is 9-25 d. per pound of butterfat. (2) Returns from Pigs per Pound of Butterfat. —These returns vary by farms and by districts, but a flat return of Id. per pound of butterfat has been selected as reasonably typical. (3) Labour Reward. —Actual costs for casual labour and for contract work on farms are included in working-costs, but reward to permanent labour must be assessed. In these computations an allowance of £100 per annum per male unit permanently employed has been used. (4) Capitalization. —The total capital shown is made up of the Government capital value of land and improvements, plus an assessed value of stock, implements, and plant. The position on a per-acre basis is shown by districts in Table 20d of the Statistical Appendix, the above standards being used in every case. The gross income per acre varies in direct relation to per-acre production, which ultimately affects the balance available to meet interest. This balance capitalized at a given interest rate represents the maximum capitalization which a farm can at any time support. Although Government valuations shown bear some relationship to the interest-earning capacity of farms surveyed in the various districts, in low-production areas capital values are above the capacity of the farms, whereas in high-production areas capital valuations can usually be met.

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