Dairy Exporters In Doubt if Reserves Will be Drawn On

Grey River Argus, 3 September 1948, Page 5

Dairy Exporters In Doubt if Reserves Will be Drawn On

P.A. WELLINGTON, Sept. 2. Mr. W. E. Hale, chairman, opened the Dominion Dairy Conference. He said it was doubtful if delegates had ever been called together under such confused economic conditions. The Budget announcement depriving the primary producers of the benefit of the whole of the 25 per cent, exchange rate, must hStve left the industry in a state, of bewilderment as to future costs and particularly those for the present season. Most of their manufacturing requisites and machinery has been landed or was in transit to .New Zealand and he understood had been paid for prior to this unjustified and unexpected announcement. He said that their costs committee considered the full effect of the alteration in the exchange rate was not likely to lower producers’ costs by more than about three-farthings per lb. butterfat. It would not be a clear gain to the dairy farmer, because he worked under the guaranteed price system and any reduction in costs have been taken into consideration by the commission in fixing the price for the season. It seemed grossly unfair that the alteration should be timed immediately after negotiations were completed by the Dairy Commission in London for a contract for dairy produce on a seven-year basis. The considerable surplus between the pay-out out in New Zealand and the realisations from the United Kingdom which the industry had agreed to set aside as a cushion against falling prices had been swept away overnight and it might now be necessary to draw on reserves in order to cover this season’s costs.