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and economically than could be done by the private arrangements' of vendors with individual producers. To the producer the presence of a balancing-station ensures that the whole of his milk-supply will be disposed of to the best possible economic advantage. That portion of his milk which is not sent into the metropolitan area for consumption is manufactured into a product which will still return him the greatest possible return per gallon of milk. Location The location of a balancing-station is of very considerable importance and must be carefully considered both in order to ensure centralized collection of milk and its transportation to the metropolitan area in a manner compatible with the greatest efficiency in collection. In Wellington a balancing-station 011 co-operative lines, and owned by the Wellington City Council, is already established at Rahui. It is a matter for future experience, however, as to whether Rahui is situated to the best possible geographical advantage and whether its present basis of organization is the most desirable. In Christchurch suggestions have been put forward that the Cam Dairy Factory be reopened as a fully operative balancing-station. Such a balancing-station would, 110 doubt, be advantageous for operations north of Christchurch. In Dunedin the Momona and other cheese-factories at present operate as balancing-stations and may be reasonably satisfactory for this purpose. In Auckland completely satisfactory facilities exist in the two cheese-factories (Fast lamaki and Drury) owned and operated by the New Zealand Co-operative Dairy Co. and located close to the metropolitan area. The Commission is of opinion that, provided satisfactory arrangements can be made by the Dairy Farmers' Supply Association, whose creation is recommended, with the New Zealand Co-operative Dairy Co. to dispose of all surplus milk (the Supply Association taking up the requisite number of shares), then the existing facilities are quite adequate and satisfactory. The Commission recommends that the Central Authority give early consideration to the provision of adequate and co-operatively-owned balancing-stations, and in the case of Auckland and Wellington recommends that existing facilities be examined with a view to their lullest use compatible with maximum efficiency. Rahui balancing-station could, for instance, be used to a much greater extent than at present, and, indeed, could be examined with a view to its development to maximum capacity in the interests of greatest economy. Note. —There are two alternatives in the location and use of a balancing-station which will need consideration. These are — (1) The balancing-station can be located in the midst of a thickly-populated area of licensed suppliers and can then act as both a bulking-station and a station to deal with the surplus milk : (2) The balancing-station could be located in the municipal area or on the outskirts and could be served by bulking-stations from the country districts. The essential feature of a balancing-station is that it shall dispose of the surplus in the most profitable manner possible, and be situated so as to obtain the maximum advantage through bulking and collection. Facilities in bulking of supplies and organization of transport, can, if necessary, be considered separately, although in some areas it is possible that a combination of bulking and balancing station will be most economical and efficient. Utilization of Surplus If considerable quantities of milk are being separated at the balancing-station, then obviously the need will arise for disposing of the skim-milk to some economic advantage. In Dunedin, and possibly elsewhere, the attempt has been made to run pig-farms attached to the balancing-station in order to dispose of the skim-milk. A suggestion has been made in several areas, however, that consideration should be given to the manufacture of fancy cheese and cottage cheese, &c., for which, at the present time, the American Armed Forces indicate that there is a strong demand. Whether this would be a purely temporary demand, passing with the withdrawal of Allied Forces, it is not easy to say, but the health authorities in evidence have indicated that they would welcome any attempt to extend the use of milk products and that such items of diet as cottage cheese would undoubtedly be a very valuable supplement. The Commission has given careful consideration to the problem of raising the price of cream to icecream manufacturers so that they, too, shall bear their proper share of the cost of producing such cream. It is pointed out, however, and has been stressed in several quarters, that the supply of cream to ice-cream manufacturers depends to a considerable extent on the price to be charged for that cream. If it is too high, then other products such as butter and dried milk will be used. It would be unwise to follow a policy calculated to reduce the quantity of cream being consumed, and the Commission therefore recommends the Central Authority to go fully into the question of adjusting the price of cream to ice-cream manufacturers so that it will not be raised to a point likely to defeat the objective of the economic disposal of surplus milk as cream. Efforts should be made, however, to encourage ice-cream manufacturers to purchase as much as possible of their cream requirements in the summer when the price of cream is low. In the winter all cream should be sold at a price compatible with the value of the milk, because the amount of cream required by the consuming public will probably absorb most of the surplus milk. One of the chocolate-manufacturing concerns in the Dominion indicated to the Commission that it could so organize its manufacturing processes that it would be able to take most of its milk requirements in the summer and would need to depend 011 the city-milk supply for only a very small quantity in the winter. This type of co-operative demand is in the best interests of the producers as a whole, and all possible steps should be taken to encourage such arrangements. However, with the Dairy Farmers' Supply Association taking full responsibility for the organization of supply and for the efficient disposal of all surplus milk it can be safely assumed that all possible steps will be taken to reduce the loss on surplus milk to a minimum. The Central Authority should give favourable consideration to any reasonable request from the producers in their attempt to safeguard the economic disposal of surplus milk. This would include such powers, for instance, as the prevention of heavy purchases of milk or milk products from sources outside the metropolitan supply area by firms or companies (other than dairy-factory companies) manufacturing within the metropolitan supply area. The Commission has already recommended that the Dairy Farmers' Supply Association should, be given sole power to sell milk and cream to the metropolitan area. This would obviate what, in the opinion of the Commission,

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