MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (TENTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1946

Appendix to the Journals of the House of Representatives, 1947 Session I, H-30

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1946 NEW ZEALAND

MARKETING DEPARTMENT (EXPORT DIVISION) ANNUAL REPORT (TENTH) AND ACCOUNTS FOR THE YEAR ENDED 31st JULY, 1946

Presented to both Houses of the General Assembly pursuant to the provisions of the Marketing Act, 1936

CONTENTS Accounts — page Balance-sheet .. .. .. .. .. .. .. .. 56 Dairy-produce .. .. .. .. .. .. .. .. 42-45 Hides .. .. .. .. .. .. .. .. .. .. 53 Meat .. .. .. .. .. .. . .. .. 46-51 Tallow . . .. .. .. .. .. . . .. .. .. 52 War Office Contracts .. .. .. .. .. .. .. .. 53 Woolly Sheep-skins .. .. .. .. .. .. .. 54 Agreement with Dairy and Meat Industries for Year ending 31st July, 1946 .. .. 4-6 Arbitration in respect of Dairy Industry Local Market Costs .. .. 4 Contracts between United Kingdom and New Zealand Governments for First Post-war Year, 1945-46 .. .. .. .. .. .. .. .. 3 General .. .. .. .. .. .. .. .. .. .. 41 Reports— Dairy-produce— Accounts .. .. .. .. .. .. .. .. .. 23 Casein .. .. .. .. .. .. .. .. 16 Completed Financial Operations for 1944-45 Season .. .. .. 7 Contracts, Long-term, with United Kingdom Government, 1944-48, and their extension to 1950 .. .. .. .. .. .. .. 7, 8 Costs Allowances — 1945-46 Season .. .. .. .. .. .. .. 9 1946-47 Season . . .. .. . . .. . . .. .. 10 Costs of Butter and Cheese Manufacturing Companies, 1945-46 Season . . 17, 18 Exports : Quantities of Butter and Cheese exported .. .. .. .. 14 Grading— Quantities of Butter and Cheese graded .. ... .. . . 15 Quantities purchased for Export and paid for at Differential Prices .. 13, 14 Guaranteed Prices—--1945-46 Season .. .. .. .. .. .. .. 9 1946-47 Season . . .. .. .. .. .. .. .. 10 Imports of Dairy-produce into United Kingdom annually during Years 1938 and 1941 to 1946 inclusive .. .. .. .. . . .. .. 21, 22 Payments made by Dairy-factory Companies for Butterfat-supplies .. .. 16, 17 Processed Milk .. . . . . .. .. .. .. 15, 16 Production of Dairy-produce in New Zealand Dairy Factories .. . . 15 Publicity in United Kingdom .. .. .. .. .. .. 18-20 Rationing Emergency Regulations as applied to Butter and Cheese, Effect of 15 Shipments to Markets outside the United Kingdom .. .. .. .. 8, 9

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Reports—continued page Hides— Accounts .. .. .. .. .. .. .. • • 38 Sale of to Australia .. .. .. .. .. .. .. .. 37 Report of Hides Committee on Operations for Year ended 31st March, 1946 38, 39 Linen Max .. .. .. .. .. .. .. . - 39 Meat— Accounts .. .. .. .. - - .. .. • • 33 Acknowledgment .. .. .. .. . . .. . . 33 Canned Meat .. . . .. .. .. .. .. .. .. 31 Contract, Long-term, with United Kingdom Government, 1944-48, and its extension to 1950 .. .. .. . . . . -. • • • • 23-26 Freezing Company : Subsidies .. .. .. .. .. - - 31, 32 Killings for Export, 1945-46 Season .. .. . . . . - . 30 Pig-meats .. .. .. .. .. .. .. . - .. 31 Prices, Opening Schedule paid to Farmers, 1946-47 .. .. .. 26, 27 Prices, Purchase paid to Freezing Companies and Meat-exporters, 1946-47 .. 27-29 Purchase and Sale Procedure and Prices paid for 1945-46 Season Meat purchased by Marketing Department for Export .. .. .. .. . 29 Rationing Emergency Regulations as applied to Meat, Effect of .. .. .. 32 Shipments to United Kingdom, 1939-40 to 1945-46 .. .. .. .. 31 Shipping and Storage .. .. .. .. .. .. .. .. 30 Supplies to United States Armed Forces .. .. .. . . .. .. 32 Survey of Season .. .. .. . . .. .. .. . 30 Scheelite .. .. - .. .. .. .. .. .. 39 Tallow— Accounts .. .. .. .. .. .. .. .. .. 36 Purchases by New Zealand Government, 1945-46 Season, from New Zealand Manufacturers .. .. .. .. .. .. .. 35 Purchases by United Kingdom Government—--1945-46 Season .. .. .. .. .. • ■ ■. .. 35 1946-47 Season .. . . .. .. .. •. . . 36 Statistics .. .. .. .. .. .. .. 35 Tahiti, Shipments to .. . . .... . . .. .. 39 War Office, Sundry Supplies to— Accounts .. .. .. .. .. .. .. .. .. 53 Value of Shipments .. . . .. .. .. .. .. - - 40 WoolBulk Purchase of Wool by United Kingdom Government .. .. .. 33 Purchase of 1945-46 Season's Greasy and Slipe Wool by New Zealand Wool Disposal Commission .. .. .. .. .. .. .. 34 Wool Disposal Commission : Commencement of Operations .. . . 34 Woolly Sheep-skins— Accounts .. .. .. .. .. .. .. .. 37 Terms of Sale to United Kingdom Government .. . . .. .. 36 Report of Controller .. .. .. .. .. .. . . 37 Settlement with Dairy and Meat Industry Representatives in Terms op Stabilization Agreement .. .. .. .. .. .. .. .. 3 Volume and Value of Sales by the Department op Products for Export for Twelve Months ended 31st July, 1946 .. .. .. .. .. .. .. 40

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REPORT I have the honour to submit the animal report and statement of accounts of the Marketing Department (Export Division) for the year ended 31st July, 1946. This report relates to the 1945-46 production season (the first post-war year), and the transactions in respect of dairy-produce, meat, wool, tallow, woolly sheep-skins, hides, linen flax, and scheelite are reviewed under the appropriate headings. CONTRACTS BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR THE FIRST POST-WAR YEAR, 1945-46 In last year's annual report reference was made to the contracts of purchase of wool and woolly sheep-skins by the United Kingdom Government terminating with the sale of the 1945-46 season's wool and woolly sheep-skins and to the decision to form a Joint Organization to take over the marketing of unsold wool stocks. The steps in the necessary procedure as it affected New Zealand are referred to later in this report under the respective headings. Details of the four-year contracts (1944 to 1948) for butter, cheese, and meat were given in last year's annual report. These contracts provided for agreed prices and terms for the 1944-45 and 1945-46 seasons, and that these prices and tefms should continue for the balance of the term of the contracts unless before Ist May, 1946, either Government should require reconsideration on substantial grounds, " and in particular on the grounds of substantial changes in the cost of production in New Zealand or in the export prices then current in other supplying countries, or such substantial changes in conditions as may necessitate modifications in the conditions of this agreement" (refer clause 3 of Heads of Agreement). Due notice was given that the New Zealand Government desired reconsideration of the prices and terms, and discussions were held with the Milk Products Division and Imported Meat Division of the United Kingdom Ministry of Food. In these discussions the Right Honourable Walter Nash, Minister of Finance, was assisted by Mr. B. C. Ashwin, Secretary to the Treasury, Mr. H. E. Davis and Mr. N. S. McClumpha, of the New Zealand Marketing Department (Export Division), London ; and Messrs. G. A. Duncan (Director) and G. M. Pottinger (Deputy Director), of the Export Division of the Marketing Department. The New Zealand Government had agreed that representatives of the meat and dairy industries should be included in the discussions. Mr. G. H. Grigg, Chairman of the New Zealand Meat-producers Board, and Mr. W. E. Hale, Chairman of the New Zealand Dairy Board, ably represented the respective industries, and the Government is indebted to these gentlemen for their co-operation and assistance. Details of the amended prices and terms agreed upon for the 1946-47 season are given in the appropriate sections of this report, as are also the contract prices and terms for tallow and other products handled by the Department. SETTLEMENT WITH DAIRY AND MEAT INDUSTRY REPRESENTATIVES REGARDING DISPOSAL OF ADDITIONAL RECEIPTS FOR FARM-PRODUCE IN TERMS OF THE STABILIZATION AGREEMENT. In last year's annual report a full report was given of the agreement reached with the dairy and meat industry representatives in respect of the disposal of additional receipts for farm-produce in terms of the stabilization agreement for the vear ending 31st July, 1945. 5

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ARBITRATION IN RESPECT OF DAIRY INDUSTRY LOCAL MARKET COSTS In the agreement referred to in the foregoing paragraph the question of whether the costs above the price realized incurred in holding the retail price of butter and cheese in New Zealand can be debited to the Dairy Industry Stabilization Account under the provisions of the agreement between the Government and the Farmers' Federation was agreed to be decided by arbitration. It was later agreed that the matter should be referred to a Commission of Inquiry, and the following Commission was appointed by the Governor-General: the Chief Justice the Right Honourable Sir Michael Myers, G.C.M.G., with the Honourable Mr. Justice Robert Kennedy, and the Honourable Mr. Justice H. F. Johnston. The result of the Commission's findings is set out in a report entitled " Commission of Inquiry to determine whether certain Costs could be debited to the Dairy Industry Stabilization Account " which was printed and presented to Parliament as paper H.-30b, and dated 29th July, 1946. In a majority report signed by the Chief Justice and Mr. Justice Kennedy the Commission reported:— Our answer to the question put by the Commission may be summed up by saying that the Government is entitled by the agreement to debit to the Dairy Industry Stabilization Account the amount represented by both the subsidies and the allowances. Prior to making its final report the Commission had questioned whether the agreement between the Government and the Farmers' Federation was intra vires the Government, and suggested the agreement be validated by Parliament. This validation was duly carried out in section 4 of the Finance Act, 1946. AGREEMENT WITH DAIRY AND MEAT INDUSTRIES FOR YEAR ENDING 31st JULY, 1946 As a result of a meeting between the Economic Stabilization Commission and a joint committee of the Dairy and Meat Boards, an agreement was reached in respect of the disposal of the increased prices received for the 1946-47 season, as recorded in the following letters : E.S.C. 2/10. 30th January, 1947. The Chairman, The Chairman, New Zealand Dairy Board, New Zealand Meat Producers' Bd., Wellington. ' Wellington. Dear Sib, I attach hereto the agreement on debits to be made to the Dairy and Meat Industry Stabilization Accounts for the period ending 31st July, 1947, together with Schedules giving details of the debits to be made against the respective accounts for the year ended 31st July, 1946. I have to inform you that the agreement has been approved by Government. I also wish to confirm our agreement that for the 1946/47 season debits to the stabilization accounts in respect of the item " Road Cartage of Fertilizer " will be limited to the equivalent of subsidy by rail plus 50 per cent, of the excess charge above the rail subsidy. In the penultimate paragraph you will note that Government have agreed to include the term " full information." In accordance with my discussions with representatives of the Dairy Industry I desire to record our understanding that no change in the existing procedure is contemplated. I should be glad if you would convey as soon as may be possible your Board's concurrence in the attached agreement. Yours faithfully, (Sgd.) B. C. Ashwin, Chairman. DAIRY AND MEAT INDUSTRY STABILIZATION AGREEMENT The Agreement covering Dairy and Meat Stabilization Accounts, which was negotiated on 24th March, 1945, between the Economic Stabilization Commission and the Joint Committee of the New Zealand Meat and Dairy Boards, expired on 31st July, 1946. For the year ending 31st July, 1946, debits may be made to the Meat and Dairy Industry Stabilization Accounts as set out in Schedules A and B attached. It is agreed that the following principles will apply for the 1946/47 period :

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Dairy Industry Stabilization Account It is agreed that each year the balance of the Dairy Produce Account will be transferred to the Dairy Industry Stabilization Account and all credits for produce sold to the United Kingdom and to other purchasers above the level of 117/- per cwt. of butter and 73/- per cwt. of cheese (sterling) will be paid to this Account. It is further agreed that for the 1946/47 season the Dairy Industry Stabilization Account will not be charged with dairy cost allowances and subsidies in respect of butter and cheese sold on the local market. It is agreed that the credit for the 1946/47 season in the Butter Equalisation Account will be applied in abatement of the State's liability on account of dairy cost allowances and subsidies in respect of butter and cheese sold on the local market. Meat Industry Stabilization Account The arrangements respecting the Meat Pool and Meat Stabilization Accounts will conform to the principles, set out in the letter addressed by the Right Hon. the Prime Minister to the Chairman of the Meat Board on 20th November, 1944, the appropriate quotation being as follows : " It is considered desirable that both the Meat Pool Account and the Meat Stabilization Account should remain within the Meat Industry Account as at present, but the whole of the proceeds from the recent increase in the prices of meat to be paid by the United Kingdom Government will be credited to the Meat Industry Stabilization Account and will be conserved exclusively for the Industry, subject of course to such debits against the account as are contemplated in the Government's agreement with the Farmers' Federation of the 18th June, 1943. All accretions to the Meat Pool Account will continue as in the past and no charges other than those already operative will be made against it except in agreement with the New Zealand Meat Producers' Board. This arrangement would have to be subject to review, in the event of the resources of the Meat Industry Stabilization Account being insufficient to meet charges against that account. I would stress again that the balance finally remaining in the Meat Pool Account and the Meat Industry Stabilization Account belong to and shall be held for the benefit of the Industry." It is understood that these principles will also apply to increases granted by the United Kingdom •Government for the 1946/47 season, and it is further agreed that no payments will be made out of the Meat Pool Account and Meat Industry Stabilization Account, except in agreement with the New Zealand Meat Producers' Board. It is agreed that for the 1946/47 season the Meat Industry Stabilization Account will not be charged with any allocation in respect of the subsidy paid to retail butchers. Credits arising from the sale of offals, hides, pelts, etc. in respect of meat used for local consumption shall not accrue to the benefit of Meat Industry funds. Debits below the " Level existing on the Determined Date " It is agreed that costs incurred under stabilization below " the level existing on the determined date " are debitable to both Meat and Dairy Industry Stabilization Accounts in appropriate amounts as agreed upon in the detailed schedules attached hereto as from Ist August, 1946, to 31st July, 1947. - Increases in Debits above the Unit Rate It is agreed that no debits for increases in costs above the unit rate existing at Ist March, 1945, •should be charged to the Dairy Industry Stabilization Account except (а) Increased allowances to cover increases in farm wages or labour reward to the extent of 1-664 pence per pound butterfat. (б) Increased allowances for increases in factory costs to the extent of 0-297 pence per pound butterfat unless eligible under (d) and in respect of cheese a figure per pound butterfat which corresponds to the figure of 0-297 pence per pound butterfat for butter. (c) Any increase in dairy costs allowance adjustment for interest on capital. (d) Increases in subsidies or allowances arising out of increased import costs or increased usage of fertilizer or other materials used on farms or factories. (e) Generally, any increase in agreed upon items up to the aggregate amount specifically included in the United Kingdom costs structure. In respect of the Meat Industry Stabilization Account, it is agreed that no debits for increases in costs above the unit rate existing at Ist October, 1946, should be charged to the Meat Industry Stabilization Account, except:— (1) Any increase in allowance for interest on capital. (2) Increases in subsidies or allowances arising out of increased import costs, or increased usage, of fertilizer or other materials used on farms or in factories. (3) Generally, any increases in agreed upon items (including wage increases in New Zealand since Ist October, 1946) chargeable under the agreement with the Farmers' Federation up to an amount not exceeding £625,000.

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Accounting Period It is agreed that the accounting period for this agreement shall run from Ist August, 1946, to 31st July, 1947, with appropriate adjustments respecting debits and credits at the concluding date, 31st July, 1947. Verification op Amounts Debited and Credited It is agreed that full information will be made available to officers of the Dairy and Meat Boards in respect of amounts debited and credited to the respective Stabilization Accounts so that the two Boards can give assurances to the producers that all entries in the Stabilization Accounts are in accordance with the terms of the agreement here recorded. Balance in Stabilization Account It is agreed that the balance in the Meat and Dairy Industry Stabilization Accounts, after debits have been made for items agreed upon between the Government and the Meat and Dairy Industry Joint Committee in terms of this Agreement, will be preserved intact and used for the benefit of, and by agreement with, the respective industries. 8.11.46. Schedule " A." —Allocation of Estimated* Expenditure from War Expenses Account and Consolidated Fund for Period Ist August, 1945, to 31st July, 1946 Subsidy Portion recoverable from A ccount and lndustry C °FuM ated AcSr £ £ 21% Cobalt Sulphate .. .. .. .. .. 178 37 21% Superphosphate (incl. bags) .. .. .. .. 2,096,679 440,303 21% Heskett Basic Slag .. .. .. .. .. 24,000 5,040 21% Lime .. .. .. .. 3,500 735 21% Carriage of Lime .. .. .. .. 230,000 48,300 21% Carriage of Fertilizers .. .. .. .. .. 189,500 39,795 21% Carriage of Fertilizers—Road (Rail Equivalent) .. .. 9,282 50% Pig Crops .. .. .. .. .. .. lX)0,Ot)0 50,000 10% Maize .. .. .. 11,947 1,195 Local Meat .. .. .. .. .. .. 750,000 400,000 £3,450,003 £994,687 * Figures to be adjusted to accord with actual expenditure when known. 8.11.46. Schedule " B."—Allocation of Estimated* Expenditure from the War Expenses Accountand Consolidated Fund for Period Ist August, 1945, to 31st July, 1946 Subsidy Portion Expenditure from War Ettiptisps recoverable from AccounSTnd Consolidated Account Fund. Account, £ £ 49-5% Cobalt Sulphate .. .. .. .. .. 178 88 49-5% Superphosphate (incl. bags) .. .. .. .. 2,096,679 1,037,856 49-5% Heskett Basic Slag .. .. .. .. .. 24,000 11,880 49-5% Lime .. .. .. .. .. .. 3,500 1,733 49*5% Carriage of Lime .. .. .. .. .. 230,000 113,850 49-5% Carriage of Fertilizers .. .. .. .. 189,500 93,803 49-5% Carriage of Fertilizers—Road (Rail Equivalent) .. 44,199 21,879 90% Cow Covers.. .. .. .. .. .. 17,742 15,968 90% Milking Machine Parts .. .. .. .. 13,410 12,069 £2,619,208 £1,309,126 * Figures to be adjusted to accord with actual expenditure when known.

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DAIRY-PRODUCE REVIEW OF COMPLETED FINANCIAL OPERATIONS FOR THE 1944-45 SEASON The accounts presented with the report for the 1944-45 season covered purchases and sales of butter, cheese, and processed milk by the Department up to 31st July, 1945. These purchase and sale transactions showed a surplus of £1,132,426. The final results of the operations for the complete 1944-45 season were — £ £ Surplus on creamery butter .. .. 136,312 Surplus on cheese .. .. .. 822,346 Surplus on whey butter .. .. .. 15,923 Surplus on processed milk .. .. 3,209 977,790 Less excess storage charges .. .. .. 3,742 974,048 Add— Interest on investments .. .. 79,963 Transfer from Internal Marketing Division (Butter Equalization Account) .. 100,000 179,963 Net surplus for 1944-45 season .. .. £1,154,011 LONG-TERM CONTRACTS, 1944-48, BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF THE EXPORTABLE SURPLUSES OF BUTTER AND CHEESE FOR THE PRODUCTION PERIOD IST AUGUST, 1944, TO 31ST JULY, 1948, AND THEIR EXTENSION TO 31ST JULY, 1950 In last year's annual report particulars were given of the agreements for the purchase by the United Kingdom Government of the exportable surpluses of butter and cheese for the seasons 1944-48. In that agreement prices and terms after 31st July, 1946, could be subject to reconsideration. As a result of the discussions in London in June and July, 1946, as referred to on page 3, an agreement in respect of prices and conditions for the season 1946-47 and in respect of an extension of the agreements until 31st July, 1950, was reached in terms of the following letters exchanged between the New Zealand Government and the Ministry of Food : Letter dated 2nd August, 1946, from United Kingdom, Minister of Food to the High Commissioner for New Zealand reads as follows — I am very pleased that the contract negotiations for the purchase of butter and cheese from New Zealand have been satisfactorily concluded. It has been agreed, I understand, that the existing Heads of Agreement should remain in force subject to an exchange of letters between us setting out certain modifications which are to be taken in conjunction with these Heads of Agreement and which I now outline : 1. Price. —It is agreed that in respect of all shipments from the production season commencing on Ist August 1946 and ending on 31st July 1947 the following prices shall be substituted for those in Schedules I and II of the Heads of Agreement:— Sterling per Hundredweight . v delivered f.o.b. (a) Butter — Ocean Steamer. Creamery Finest Grade 93 points and over .. .. .. 1755. -d. Creamery First Grade 90-92£ points .. .. .. .. 1735. 9d. Creamery Second Grade . . .. .. .. .. 170s. -d. Whey First Grade .. .. .. .. .. .. 1675. -d. Whey Second Grade .. .. .. .. .. .. 1635. -d. (b) Cheese— Finest and First Grade 91 points and over .. .. .. 102s. 6d. Second Grade .. . . .. .. .. .. 100s. 6d. and that consequential amendments to the Schedules arising from these revised prices will be arranged between our respective officers.

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2. Period of Contract. —It is understood that the period of the contract shall be extended to 31st July 1950, subject to either party having the continuing right of an annual review for these two years and that we shall confer in 1948 on the desirability of extending the contract for a further period of two years to cover production in New Zealand to 31st July 1952. 3. Reservation of commodities for markets other than the United Kingdom.—lt is agreed, that New Zealand may sell in 1946/47 butter and cheese to countries other than the United Kingdom, including sales for relief, within the allocation programme, and we undertake to review this question again one year from now. 4. Restoration of brands. —We have noted New Zealand's desire for the abolition of the present regulations regarding National butter and for the resumption of sale by origin. The difficulties of taking immediate steps to bring this about have been explained to you, but we are prepared nevertheless to meet your wishes at a date to be agreed between your officials and ours and hope to be able to give effect to the arrangement early in 1947. 5. Change in volume of production of butter and cheese. —Although under the terms of the contract the proportions of butter and cheese to be shipped from the production of each season are to be as nearly as possible in accordance with our requirements, we agree that the maximum notice of change will be given and we accept that no important change in the proportions can be made without a reasonable period of notice. We agree that the respective proportions of butter and cheese made available to us in the 1944/45 season will be the objective for the 1946/47 season. 6. The resumption of distribution through normal channels. —For reasons which we have explained to you, we cannot contemplate now any important departure from the present distributive arrangements. Similarly, our rationing machinery does not permit us to bind ourselves to supply certain organisations with a choice of butter nor to distribute regularly definite proportions of New Zealand butter. We are, however, prepared to look at both of these subjects again one year from now. 7. Cessation of margarine rationing.—We are willing to give such notice as is practicable about the prospects of discontinuance of margarine rationing and to discuss with you the consequences in so far as they may affect butter when that time comes. I understand that further consultations will be held on the arrangements to apply to evaporated milk and skim milk powder purchases ; these will be the subject of a separate letter. In the meantime please accept my personal thanks for the helpful and understanding way in which you have approached our common problems. Reply from High Commissioner for New Zealand dated Bth August, 1946, was as follows, — Thank you for your letter of the 2nd August summarising the agreement between us relating to the price to be paid for- New Zealand butter and cheese exported to you from the production season Ist August 1946 to 31st July 1947, and to the extension of the contract, subject to right of either party to an annual review of prices and conditions, to the end of the 1949/50 production season. It is noted that we shall confer with you in 1948 on the desirability of extending the contract for a further period of two years to cover production in New Zealand to 31st July, 1952. Your letter correctly records the intention of both parties and I should like to express to you the appreciation of my Government of the courtesy and assistance extended to us during our negotiations. SHIPMENTS OF DAIRY PRODUCTS TO MARKETS OUTSIDE THE UNITED KINGDOM In the last year's annual report reference was made to the agreement by the United Kingdom Minister of Food that New Zealand should sell up to 2| per cent, of the exportable surplus of butter and cheese in re-establishing other markets. This was later made subject to the qualification that such quantities would be subject to the allocation procedure of the Combined Food Board, later succeeded by the International Emergency Food Council. In pursuance of this arrangement, allocations of global quantities of butter, cheese, and processed milk, in the supply of which New Zealand could share, were made to the following countries : British Carribean Area, Ceylon, Falkland Islands, Fiji, Gambia, Gold Coast, Gilbert Islands, India, Malta, Mauritius, Aden, Cyprus, Cyrenaica, Egypt, French Somaliland, Iraq, Palestine, Saudi Arabia, Sudan, New Hebrides, Nyasalaud, Nigeria, Northern Rhodesia, Seychelles, Sierra Leone, Solomon Islands, South Africa, Southern Rhodesia, Tanganyika, Tonga, Zanzibar, Reunion, Madagascar, French Cameroons, French Equatorial Africa, Belgian Congo, French West Africa, Philippines, British Borneo, Malaya, Shanghai, Hong Kong, Burma. The qualification for shipment to these countries was that a duly authenticated import licence should be issued by the importing country before an export licence was issued by the supplying country.

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Under these conditions, increasing quantities of butter and cheese have been exported from New Zealand to some of the foregoing countries. The allocation of dairy products by the International Emergency Food Council has now ceased, but, under the Heads of Agreement of the bulk contracts with the United Kingdom Ministry of Food, global quantities that may be imported by the countries mentioned in the foregoing list have been agreed upon, and may be supplied by New Zealand up to the total quantities agreed upon. The limitation of the supply by New Zealand to 2\ per cent, of her exportable surplus has now been removed, and New Zealand may supply up to the total quantities approved of for export into the named countries, subject to the duly substantiated import licences. GUARANTEED PRICES, 1945-46 SEASON The guaranteed purchase-prices paid to dairy companies by the Marketing Department for butter and cheese manufactured during the 1945-46 season and exported were : Creamery Butter — Pence per Finest Grade— Pound. 94 points and over .. .. .. 15 • 515 93 to points (basic price) .. .. 15-39 First Grade — 92 to points .. .. .. .. 15-3275 90 to 91| points .. .. .. ..15-14 Second Grade .. .. .. .. ..14-64 Whey Buttet — First Grade .. .. .. .. ..13-89 Second Grade .. .. .. .. ..13-39 Cheese — Finest Grade — 94 points and over .. .. .. .. 8 • 88625 93 to 93| points .. .. .. .. 8 • 855 First Grade — 92 to 92£ points (basic price) .. .. 8-73 91 to 9l£ points .. .. .. .. 8-6675 Second Grade . . . . .. .. .. 8-48 Note.—These purchase-prices for butter and cheese are the same as those applying for the previous (1944-45) season. DAIRY-FACTORY AND FARM-COSTS ALLOWANCES PAYABLE FOR THE 1945-46 SEASON The report of the Department for last year (ended 31st July, 1945) shows on pages 9 and 10 the costs allowances agreed to be paid (in terms of the stabilization procedure) for the 1945-46 season, after negotiations between the representatives of the dairy industry and the Economic Stabilization Commission. Full details of the allowances were shown in the previous year's report just referred to, but for ready reference the short details are repeated hereunder: — To butter-manufacturing companies for period Ist August, p ence per p oU nd 1945, to 31st July, 1946 .- — of Butterfat. A farm-costs allowance of .. .. .. .. 1-914 A farm-labour allowance of .. .. .. 1 • 990 A factory-costs allowance of .. .. ..0-411 Total .. .. .. .. .. 4*315

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To cheese-manufacturing companies for period Ist August, p ence p er Pound 1945, to 31st July, 1946 : of Butterfat. A farm-costs allowance of .. .. 1-914 A farm-labour allowance of .. .. .. .. 1 • 990 A factory-costs allowance of .. .. .. 0-745 Total .. .. .. .. .. 4-649 In the previous year's report the standard resulting average payments by dairy companies to suppliers for butterfat for the 1945-46 season were estimated to be 20-6 d. per pound of butterfat for butter-manufacture and 22-6 d. per pound of butterfat for cheese-manufacture. The actual resulting average payments were as follows : Pence per Pound Butter-manufacture — of Butterfat. Payment for butterfat supplies .. . . .. 16 • 664 . Add farm-costs allowance .. .. .. 3 • 904 Total .. .. .. .. .. 20-568 Cheese-manufacture — Payment for butterfat supplies .. .. .. 18 • 980 Add farm-costs allowance .. .. .. 3-904 Total .. .. .. 22-884 Note. —Guaranteed Prices for 1946-47 Season and Payment of Dairy-factory and Farm-costs Allowances. —For convenience of reference, the following arrangements for the 1946-47 season settled before publication of this report are recorded:— (1) Guaranteed Prices, 1946-47 Season : The guaranteed purchase-prices to be paid to dairy companies by the Marketing Department for butter and cheese manufactured during the 1946-47 season and exported are the same as the prices quoted above as applying for the 1945-46 season. (2) Dairy-factory and Farm-costs Allowances payable for the 1946-47 Season (Ist August, 1946, to 31st July, 1947) : The following notification was made to the dairy industry of allowances payable for the 1946-47 season (Ist August, 1946, to 31st July, 1947) agreed upon after negotiations between industry representatives and the Economic Stabilization Commission Details of the allowances which will be paid for the 1946-47 season (Ist August 1946 to 31st July 1947) are as follows : To Butter Manufacturing Companies d. d. Farm Costs Allowance, 1943-44 .. .. .. .. 0-767 Additional Farm Costs Allowance, 1944-45 .. .. .. 0-650 1945-46 .. .. .. 0-497 1946-47 .. .. .. 0-761 2-675 Farm Labour Allowance, 1944-45 .. .. .. 1 • 470 Additional Farm Labour Allowance, 1945-46 .. .. .. 0 • 520 1946-47- .. .. .. 0-520 2-510 Making Total Farm Allowances (for 1946/47 season) .. .. 5-185 per lb. of butterfat in cream or milk supplied to a butter factory and ===== manufactured into butter.

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To Butter Manufacturing Companies—continued d. d. Factory Costs Allowance, 1943-44 .. .. .. .. 0-269 Additional Factory Costs Allowance, 1945-46 0-047 O-316 Factory Wages Allowance, 1943-44 .. .. 0-022 Additional Factory Wages Allowance, 1944-45-46 .. 0-073 O-095 Making Total Factory Allowances (for 1946/47 season) .. .. 0-411 per lb. of butterfat in milk or cream supplied to a butter factory and manufactured into butter in that factory. Note. —(a)' The allowances cannot be claimed in respect of cream or milk used for any purpose other than butter-making. (6) The farm costs allowance is claimed by dairy companies on behalf of suppliers to whom they are required to pass on the payment. (c) The factory costs allowance is also payable on whey cream used in the manufacture of whey butter. (d) In the case of supply of cream to a butter company by a milk powder, a processed milk, or a cheese company, the butter company should not claim the farm costs allowance on such supply, but should claim for the butter company factory costs allowance. To Cheese Manufacturing Companies d. d. Farm Costs Allowance, 1943-44 .. .. .. 0-767 Additional Farm Costs Allowance, 1944-45 .. . . . . 0-650 1945-46 .. .. 0-497 1946-47 .. .. 0-761 2-675 Farm Labour Allowance, 1944-45 .. .. .. 1-470 Additional Farm Labour Allowance, 1945-46 .. .. .. 0-520 1946-47 .. 0-520 2-510 Making Total Farm Allowances (for 1946/47 season) .. .. 5-185 per lb. of butterfat in milk received over the factory stage for cheese- == making (no deduction for loss in whey) and manufactured into cheese. Factory Costs Allowance, 1943-44 .. .. .. 0-299 Additional Factory Costs Allowance, 1945-46 .. .. .. 0-020 0-319 Factory Wages Allowance, 1943-44 .. .. .. .. 0-076 Additional Factory Wages Allowances, 1944-45-46 .. .. 0-350 O-426 Making Total Factory Allowances (for 1946/47 season) of 0-745 per lb. butterfat contained in milk received over the factory stage for ™ cheesemaking (no deduction for loss in whey) and manufactured into cheese in that factory. Note. —(a) The allowances cannot be claimed in respect of milk used for any purpose other than cheesemaking. (6) The farm costs allowance is claimed by dairy companies on behalf of suppliers to whom they are required to pass on the payment. (c) In the case of a cheese company which separates milk and supplies the resultant cream to a butter company, the cheese company should make the claim for the farm costs allowance on the butterfat contained in the milk as received over the factory stage, and the butter company should make the claim for the butter factory costs allowance. Additional Wages Allowance for Small Companies.—ln order to compensate the smaller companies for the loss of certain concessions previously enjoyed by them an extra wages cost allowance of -Id. per lb. butterfat will be paid to any company whose output for the season is less than 250 tons of butter or 200 tons of cheese. Thus in the case of these small butter companies the total wages allowance is -195 d. per lb. butterfat, and in the case of these small cheese companies the total wages allowance is •526 d. per lb. of butterfat.

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(3) Suppliers' Position for 1946-47 Season in respect of Guaranteed Prices and Farmcosts Allowances : The following summary shows (a) the items (working and maintenance costs, capital charges, and labour reward) which, less return from pigs, comprise the butter-fat equivalent of the guaranteed price for butter ; (b) the farm-costs allowances granted in 1943-44, 1944-45, 1945-46, and 1946-47 and (c) the farm-labour allowances granted in 1944-45, 1945-46 and 1946-47 Per Pound of Butterfat. d. d. d. "Working and maintenance cftsts .. .. 5-34 Farm-costs allowance, 1943-44 .. 0-767 Farm-costs allowance, 1944-45 .. 0-650 Farm-costs allowance, 1945-46 .. 0-497 Farm-costs allowance, 1946-47 .. 0-761 2-675 B-015 Capital charges (interest) .. .. 3 • 240 Labour reward .. .. .. .. 9-45 Farm-labour allowance, 1944-45 .. 1-47 Farm-labour allowance, 1945-46 .. 0-52 Farm-labour allowance, 1946-47 .. 0-52 2-51 ll-960 23-215 Less return from pigs .. .. .. 1 • 540 Standard average " payout " to suppliers for butterfat for butter-manufacture* .. .. .. .. 21-675 PREMIUMS FOR QUALITY, AND QUANTITIES OF BUTTER AND CHEESE PAID FOR AT DIFFERENTIAL PRICES Under the Dairy-produce Export Prices Order 1939 provision is made for additions to or deductions from the basic purchase-prices for butter and cheese according to quality as disclosed by the grading-points awarded to the dairy-produce. This system of price differentials provides a stimulus to the production of dairy-produce of higher quality. The following tables show for the 1945-46 season the quantities of butter and cheese purchased for export and paid for at the respective differential prices. For comparison purposes the totals for the previous five seasons are also shown.

* In assessing the actual estimated average " total payout " (including farm-costs allowances) to be received by suppliers for the 1945-46 season, regard should be had to the fact that the dairy - factory-costs allowances granted in 1943-44 of 0-269 d. per pound of butterfat for butter and 0-299 d. per pound of butterfat for cheese were in recognition of increases in costs which had already taken place between the 1938-39 and the 1943-44 seasons. Consequently, these payments are reflected in corresponding increases in " payout" to suppliers for the 1943-44 and subsequent seasons. Allowing for this factor, it is estimated that the average total " payout " (including farm-costs allowances) to be received by suppliers for the 1946-47 season will be : for butter-manufacture, 21-Bd. per pound of butterfat; and for cheese-manufacture, 23-Bd. per pound of butterfat.

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Creamery Butter (in Tons): Quantities purchased for Export and Paid for at Differential Prices

Whey Butter (in Tons): Quantities purchased for Export and paid for at Differential Prices

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Finest Grade. First Grade. Grading Ports. Total. 94 Points and over. 93 to 93£ Points. (Basic Price.) 92 to 92J Points. 1 90 to 91£ Points. Second Grade. Tons. Tons. Tons. Tons. Tons. Tons. Auckland 74,526 23,338 34,163 10,098 6,658 269 Bluff 43 13 22 8 Dunedin 64 19 37 8 Gisborne 1,065 573 372 114 6 Lyttelton 1,280 629 527 96 28 Napier 509 116 343 30 20 New Plymouth 8,439 3,427 4,003 628 375 6 Patea 551 100 169 111 170 1 Timaru 405 36630 8 1 Wanganui 1,605 *492 891 182 40 Wellington 11,803 4,709 4,805 1,700 584 5 Grand totals— 1945-46 100,290 33,384 45,658 13,039 7,919 290 1944-45 119,807 47,906 52,319 12,810 6,654 118 1943-44 98,648 38,821 43,659 9,666 6,320 182 1942-43 101,696 35,046 47,417 11,464 7,426 343 1941-42 100,432 40,497 40,106 9,507 9,043 1,279 1940-41 133,337 43,569 63,470 14,828 10,757 713 Percentage of qualities 1945-46 100 33-29 45-52 13-00 7-90 0-29 1944-45 100 39-99 43-67 10-69 5-55 0-10 1943-44 100 39-35 44-26 9-80 6-41 0-18 1942-43 100 34-47 46-63 11-27 7-30 0-33 1941-42 100 40-32 39-93 9-47 9-00 1-28 1940-41 100 32-67 47-60 11-12 8-07 0-54

Grading Ports. Total. First Grade. Second Grade. • Tons. Tons. Tons. Auckland 631 371 260 Bluff .. 168 167 1 Dunedin 35 6 29 Lyttelton 25 24 1 New Plymouth 505 496 9 Patea 788 785 3 Timaru Wellington 406 335 * 71 Grand totals— 1945-46 2,558 2,184 374 1944-45 2,783 2,582 201 1943-44 2,420 2,256 164 1942-43 2,257 2,095 162 1941-42 3,123 2,974 149 1940-41 2,855 2,695 160 Percentage of qualities— 1945-46 100 85-38 14-62 1944-45 100 92-78 7-22 1943-44 100 93-22 6-78 1942-43 .. 100 92-82 7-18 1941-42 100 95-23 4-77 1940-41 100 94-39 5-61 Butter figures calculated at forty boxes to a ton.

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Cheese (in Tons): Quantities purchased for Export and paid for at Differential Prices

Cheese figures calculated at fourteen crates to a ton. It should be noted that the following additional quantities were purchased for export during the 1945-46 season ex stocks from the United States Joint Purchasing Board : butter, 2,636 tons ; cheese, 521 tons. QUANTITIES OF BUTTER AND CHEESE EXPORTED The quantities of butter and cheese exported from the various grading ports of the Dominion are shown in the following tabulation:—

Butter and Cheese Exports from 1st August, 1945, to 31st July, 1946

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Finest Grade. First Grade. Second Grade. Grading Ports. Total. 94 Points and over. 93 to 93| j Points. 92 to 92i Points. (Basic Price.) 91 to Points. Tons. Tons. Tons. Tons. Tons. Tons. Auckland 18,814 58 1,402 9,008 5,274 3,072 Bluff 9,421 426 3,653 5,022 236 84 Dunedin 1,007 39 228 538 199 3 Gisborne 100 1 12 52 29 6 Lyttelton Napier New Plymouth 890 43 19,031 15 - 247 366 1 6,164 487 38 9,518 21 4 2,841 1 261 Patea 22,777 195 5,150 15,147 2,051 234 Timaru 618 13 339 264 2 Wanganui 2,341 226 1,484 592 " 39 Wellington 11,743 146 . 3,290 5,944 2,043 320 Grand totals — 1945-46 86,785 1,140 20,831 47,502 13,292 4,020 1944-45 90,429 ■ 1,272 21,840 48,412 14,694 4,211 1943-44 81,544 820 17,768 45,966 13,150 3,840 1942-43 93,638 660 18,997 56,378 15,274 2,329 1941-42 150,127 1,051 28,097 69,703 38,676 12,600 1940-41 117,798 901 22,901 67,125 21,278 5,593 Percentage of qualities— 1945-46 100 1-31 24-00 54-74 15-32 4-63 1944-45 100 1-40 24-15 53-54 16-25 4-66 1943-44 100 1-00 21-79 56-37 16-13 4-71 1942-43 100 0-70 20-29 60-21 16-31 2-49 1941-42 100 0-70 18-72 46-43 25-76 8-39 1940-41 100 0-76 19-45 56-98 18-06 4-75

Grading Ports. To Great Britain. . To other Destinations. Total Exports. Percentage. Butter. Cheese. Butter. Cheese. Butter. Cheese. Butter. Cheese. Auckland Nefa Plymouth Patea Wanganui Wellington Gisborne Napier North Island totals Lyttelton Timaru Dunedin Bluff South Island totals Dominion totals Boxes. 3,177,785 355,885 52,136 64,026 472,990 52,562 48,058 Crates. 256,765 258,648 337,913 32,617 170,484 1,405 2,127 Boxes. 13,153 Crates. 1,785 Boxes. 3,190,938 355,885 52,136 64,026 472,990 52,562 48,058 Crates. 258,550 258,648 337,913 32,617 170,484 1,405 2,127 73-88 8-24 1-21 1-48 10-95 1-22 1-11 21-01 21-02 27-46 2-65 13-85 0-12 0-17 4,223,442 1,059,959 13,153 1,785 4,236,595 1,061,744 98-09 86-28 57,730 11,998 3,978 8,605 11,581 8,393 14,091 134,795 57,730 11,998 3,978 ■8,605 11,581 8,393 14,091 134,795 1-34 0-28 0-09 0-20 0-94 0-68 1-15 10-95 82,311 168,860 82,311 168,860 1-91 13-72 4,305,753 1,228,819 13,153 1,785 4,318,906 1,230,604 100-00 100-00 Butter : Forty boxes equals 1 ton. Cheese : Fourteen crates equals 1 ton.

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BUTTER AND CHEESE TRADINGS

Note.—Owing to the diversion of supplies of butter and cheese in 1942-43 and later seasons to the Allied Forces in Pacific Area, a correct comparison between gradings for the 1942-43 and later seasons and gradings in previous seasons is not possible. EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO BUTTER AND CHEESE Butter The butter ration has remained unchanged during the year ended 31st July, 1946, consumption being limited to 6 oz. per head per week. The estimated annual saving of 14,000 tons has proved of definite assistance to the people of Great Britain, where the consumption of all fats is still severely restricted by rationing. Cheese Sales of cheese on the local market continue to be restricted to the levels of sales in the 1942-43 season. PRODUCTION OF DAIRY PRODUCTS IN NEW ZEALAND DAIRY FACTORIES The following figures are taken from the Census and Statistics Department's publications :

Total Quantities of Butter and Cheese produced in New Zealand Dairy Factories (Factory Weights)

PROCESSED MILK In last year's annual report reference was made to long-term contracts concluded with the United Kingdom Ministry of Food for the exportable surpluses of skim-milk powder and evaporated milk for the four years 1944-48. Prices were fixed for the two years 1944-45 and 1945-46, and thereafter subject to annual review.

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— Butter (Creamery). Cheese. Tons. Increase or Decrease on Previous Year. Tons. Increase or Decrease on Previous Year. Per Cent. Per Cent. 1945-46 103,977 16-93 (decrease) 88,185 14-048 (decrease) 1944-45 122,352 19-96 (increase) 95,548 11-787 (increase) 1943—44 101,992 4 • 60 (decrease) 85,473 11-735 (decrease) 1942-43 106,947 3-504 (iacrease) 96,837 36-738 (decrease) 1941-42 103,326 25 • 90 (decrease) 153,074 28 • 74 (increase) 1940—41 139,444 4-61 (increase) 118,899 26 • 90 (increase)

Season. 1 Creamery Butter. Cheddar Cheese. Whey Butter. 1945-46 .. 123,972 94,530 2,737 1944^5 151,637 103,675 3,030 1943-44 .. 133,650 .92,149 2,747 .. 139,083 102,846 2,908 .. 129,854 157,659 3,910 .. 161,809 122,370 3,355

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Concurrently with the discussions in London in July, 1946, in respect of butter and cheese, prices and conditions were reviewed, and prices were fixed for the two remaining years of the contracts —namely, 1946-47 and 1947-48 as under: — Shim-milk Powder: £66 10s. sterling per ton f.0.b., subject to the supply of a minimum of 8,000 tons during 1946-47 and 7,000 tons during 1947-48. Evaporated Milk : 245. sterling per case f.o.b. for American standard (each case to contain 48 x 1 lb. tins), subject to the supply of a minimum of 250,000 cases during each of 1946-47 and 1947-48 seasons. The equivalent of the above prices in New Zealand currency is paid to manufacturers less J per cent.> to cover the Department's administrative expenses. The quantities and values of purchases by the Department for the twelve months ended 31st July, 1946, were : Weight. Value. Cases. Tons. £ Skim-milk powder .. .. 159,903 7,225 440,846 Evaporated milk .. .. 281,388 6,030 382,799 Note.—Over half of the skim-milk powder was shipped to India, with lesser quantities to United Kingdom, Egypt, Ceylon, and Italy. Of the evaporated milk, a considerable proportion was shipped to Malaya, with lesser quantities to India, Egypt, and to the British naval base in Australia. The Eood and Rationing Controller's Office gives the following figures of total production of processed milk in New Zealand factories for the calendar year 1945 : Tons. Whole-milk powder .. .. .. .. .. 3,523 Skim-milk powder .. .. .. .. 9,989 Evaporated milk (unsweetened) .. .. .. .. 6,410 Condensed milk (sweetened) .. .. .. .. 2,814 Malted milk .. ... .. .. .. .. 330 Casein The exportable surplus of lactic casein for the 1945-46 season was sold under contract to the United Kingdom Ministry of Supply, and the following were the quantities and value of shipments for the twelve months ended 31st July, 1946 : 8,480 sacks, weighing 552 tons, £39,395. Negotiations have also been concluded for the sale to the United Kingdom Board of Trade of the total exportable surplus of lactic casein available from the seasons 1946-47, 1947-48, and 1948-49. The estimated quantities to be supplied under this contract are : 1946-47 season, 1,700 tons ; 1947-48 season, 1,900 tons ; 1948-49 season, 1,900 tons ; and the sale price is £lOO sterling per ton f.o.b. for each of the three years. PAYMENTS MADE BY DAIRY-FACTORY COMPANIES FOR BUTTERFATSUPPLIES The following tabulation shows the average butterfat-prices paid to suppliers of butter- and cheese-manufacturing companies. It should be borne in mind that when making comparison of butterfat payouts of companies it is necessary to take into consideration the location of the factories and special circumstances pertaining to individual companies, as those factors reflect appreciably on manufacturing and transport costs

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Payments by Dairy Companies for Butterfat-supplies (In pence perjpound of butterfat) New Zealand average— Butter. Cheese. 1945-46 season .. .. ..16-664 18-980 +3-904* +3-904* 2O-568 22-884 1944-45 season .. .. .. 16-903 19-168 +2-887* +2-887* l9-790 22-055 1943-44 season .. .. ..16-830 18-888 +O-767* +O-767* l7-597 19-655 1942-43 season .. .. .. 16-569 18-577 1941-42 season .. .. .. 16-017 18-025 1940-41 season .. .. .. 16-106 18-043 1939-40 season .. .. .. 16-179 18-091 1938-39 season .. .. .. 16-087 18-060 1937-38 season .. .. .. 14-812 16-389 1936-37 season .. .. .. 13-558 15-176 * Farm-costs allowances (see annual report 31st July, 1945, page 9).

COSTS OF BUTTER AND CHEESE MANUFACTURING COMPANIES The following tabulation stows the average costs of butter- and cheese-manufacturing companies for the 1945-46 season. The averages for the nine previous seasons are also shown

Costs in Manufacture and Delivery of Butter to f.o.b. Overseas Steamers

Factory-costs allowances of (1) 0-269 d. per pound butterfat (from Ist August, 1943) in the two seasons 1943-44 and 1944-45 ; (2) 0-312 d. per pound butterfat. f Butter-manufacturing costs for the 1941-42 season were increased owing to diversion of milk-supply from butter-manufacture to cheese-manufacture. Compensation payments were made to dairy companies on this account.

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(In pence per pound of butterfat) _L collection. Manufacturing Charges. Depreciation. Repairs and Maintenance. Charges: Factory to f.o.b. Overhead Charges. Total Charges. New Zealand average — 1945-46 season .. 1944-45 season 1943-44 season 1942-43 season 1941-42 season 1940-41 season 1939-40 season 1938-39 season 1937-38 season 1936-37 season 0-504 0-460 0-472 0-440 0-438 0-405 0-398 0-402 0-381 0-352 1-163 1-042 1-109 1-100 1-091 1-023 0-977 1-019 0-953 0-927 0-095 0-090 0-093 0-089 0-091 0-077 0-084 0-085 0-075 0-072 0-097 0-079 0-078 0-068 0-064 0-063 0-063 0-098 0-076 0-088 0-409 0-397 0-391 0-398 0-409 0-437 0-418 0-394 0-384 0-398 0-235 0-188 0-210 0-206 0-213 0-192 0-187 0-208 0-178 0-147 2-503 -0-312* — 2-191 2-256 -0-269* 1-987 2-353 —0-269* 2-084 2-301 2•306f 2-197 2-127 2-206 2-047 1-984

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Costs in Manufacture and Delivery of Cheese to f.o.b. Overseas Steamers

Note.—In comparing dairy company costs with, previous years the following factory-wage allowances (see page 11), (not included in the figure shown for factorycosts allowances) should be added to the gross figures shown for the 1945-46 season: Butter-factory-wage allowance, 0095 d. per pound; cheese-factory-wage allowance, 0-426 d. per pound. PUBLICITY IN THE UNITED KINGDOM As referred to in last year's annual report, steps were taken to resume advertising and publicity in the United Kingdom of New Zealand products. A campaign was carried on from May to October, 1946, but, as rationing was still in operation, the campaign required to be of a " background " character whereby the stress laid was on New Zealand's contribution to the United Kingdom's needs in the field of food-production and on the maintenance of high-quality products. It was considered that the nature of the campaign especially lent itself to a combined effort by interests representing all New Zealand food-farming interests—namely, meat and dairying and, to a lesser extent, fruit and honey interests. A grant of £45,000 for financing the campaign was allotted from the following sources, — £ Meat Industry Stabilization Account .. .. .. 20,000 Dairy Industry Account .. .. .. .. 20,000 Tourist and Publicity Account .. .. .. 3,500 Fruit Account .. .. .. .. .. 1,000 Honey Account .. .. .. .. .. 500 £45,000 while a committee to arrange the campaign was representative of the New Zealand Meatproducers' Board, Marketing Department, and High Commissioner's Office.

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(In pence per pound of butterfat) Manufacturing Charges. Depreciation. Repairs and Maintenance. Charges: Factory to f.o.b. Overhead Charges. Total Charges. New Zealand average— 1945-46 season 2-584 0 172 0-269 0-638 0-331 3-994 -0-323* 3-671 3-470 3-733 3-917 3-600 3-529 3-510 3-592 3-337 3-139 1944-45 season 2-454 0-163 0-226 0-626 0-300 3-769 -0-299* 1943-44 season 2-660 0-176 0-217 0-636 0-343 4-032 -0-299* 1942-43 season 1941-42 season 1940-41 season 1939-40 season 1938-39 season 1937-38 season 1936-37 season 2-576 2-372 2-323 2-259 2-289 2-151 2-056 0-166 0-141 0-144 0-148 0-157 0-141 0-134 0-216 0-170 0-184 0-180 0-203 0-166 0-146 0-634 0-647 0-620 0-624 0-617 0-589 0-577 0-325 0-270 0-258 0-299 0-326 0-290 0-226 * Factory-costs allowances of (1) 0-299d. per pound butterfat (from 1st August, 1943) in the two seasons 1943-44 and 1944-45 ; (2) 0-323d. per pound butterfat.

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The committee agreed that the campaign should be carried out under the following main headings,— (1) Preparation of a booklet for selective distribution in United Kingdom: (2) Newspaper advertising, including women's publications and trade papers : (3) Posters: (4) Lantern slides in cinemas. Booklet It was considered essential that there should be a survey of the Dominion's development and outlook before and during the war, which would be a comprehensive source of interest and information if presented in the form of an illustrated booklet. Subject matter falls under the following heads : Historical and descriptive. Eesponse of community to demands of war. The Dominion's contribution in fighting men. The Dominion's contribution in food-production. The maintenance of quality. Identification of New Zealand with " Food for Peace." The production of the booklet is now in hand and within the limited number of copies that will be printed, distribution will need to be strictly selective and confined to women's organizations, such as women's guilds, women's institutes, and the co-operative guild. Copies will also be available for distribution to representative trade bodies. Newspaper Advertising Por background purposes it was necessary that the coverage through newspaper advertising should be as national in character as possible, hence all the following groups were used: — (a) National dailies. (b) Provincial evenings. (c) London evenings. (d) National Sundays. (e) Weekly periodicals. (/) Women's journals. (g) Trade press. The total circulation of the above is in the neighbourhood of 45,000,000 copies. The background advertisements appeared four or five times in each. The advertisements themselves were built around two main ideas — (1) Pood for Britain (2) Your rations to-day—your choice in the future both themes being used in each advertisement throughout the series, but presented in different ways. The scheme commenced early in May and continued until mid-October. With very few exceptions, the actual positioning of the advertisements in the newspapers has been highly satisfactory, giving the utmost advantage from the spaces obtainable. The trade has been kept informed of the advertising campaign and its purpose by advertisements in the respective trade papers.

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POSTERS Careful consideration was given to-suitable designs for posters, the message of which linked up directly with the press advertisements. We were fortunate in obtaining suitable central sites for posters in London and in eighteen important provincial cities, and it is felt that the New Zealand message has been brought prominently before the British public. Lantern Slides in Cinemas Effective close support was obtained by the exhibition of a lantern slide on two hundred cinema halls located in the provincial cities, where the sixteen-sheet posters referred to previously were on display. The lantern slide was a reproduction of the poster design, and thus an effective tie-up was obtained between press, poster, and lantern slide in these areas of concentrated population. The exhibition of lantern slides continued until the end of November. Window op High Commissioner's Office, 415 Strand Effective use has been made of this window in making displays which have stressed the part played by New Zealand in producing butter, cheese, and meat in the war years and in providing a considerable share of the rationed foodstuffs of the United Kingdoi^. Programme for 1947-48 The publicity programme for 1947-48 will, so far as background work is concerned, continue to be conducted as a combined effort by the meat and dairy interests and be on similar general lines to the 1946-47 programme. Advertising will, however, be more concentrated on the use of women's publications and suitable trade and technical press, where permissible spaces are larger and continuity of advertisement appearance can be relied on, and less on newspapers, where space is limited and very expensive and continuity cannot be guaranteed. Poster publicity will be extended and arrangements will be made for joint displays at important exhibitions such as ideal homes, British Industries Fair,- and others which are recommencing after the stoppage during the war. Special Dairy Publicity It is also proposed to spend certain sums specially on publicity of butter and cheese when the restorations of brands are permitted, and in re-establishing personal contacts with retail grocery and provision trades by means of the Department's representatives. A visit to New Zealand by the Department's London Advertising Manager has been arranged so that he may procure up-to-date photographs of technical processes in the manufacture of our export foodstuffs and also plan for the later production of a first-class documentary film of these processes.

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ANNUAL IMPORTS OF DAIRY PRODUCTS INTO UNITED KINGDOM DURING THE YEARS 1938 AND 1941 TO 1946 INCLUSIVE The following tables are of interest, particularly the butter and cheese tables, which show the importance of New Zealand as a supplier to Britain during the vital war years, and compare the normal pre-war imports with those of the immediate post-war period.

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Consigned from 1938. 1941. 1942. 1943. 1944. 1945. 1946. Ann New Zealand Australia Irish Free State Union of South Africa .. Canada South-west African toryKenya Other Empire Total Empire .. Denmark Netherlands Latvia Sweden Lithuania Estonia Finland Poland Argentine Austria Hungary France Belgium Norway - Czechoslovakia Japan Uruguay Other foreign Total foreign .. Grand total Less re-exports Net imports * The revise UAL Impoe 129,613 89,891 16,330 1,266 1,501 1,294 707 37 TS OB 1 Bun (Ir 127,983 69,679 6,122 2,500 20 1 j> 230 J CTEE. INTO tons) 93,377 40,716 225 12 6 United E 100,385 44,013 142 5 3,175 JNGDOM 104,383 37,799 28 118,274 45,059 1 1 1 101,190 65,616 3 3 240,639 206,534 134,336 147,720 142,210 163,336 166,812 118,240 35,595 16,995 15,038 11,404 9,158 10,486 9,954 4,494 749 1,023 17 249 620 555 371 308 1 11,569 37 18 *225 1 3 j 498 386 10*522 217 26,114 614 *56 43,537 1 j 102 *37 235,257 11,606 243 3,884 10,739 26,784 44,676 475,896 3,952 218,140 39 134,579 48 151,604 78 152,949* 109 190,120 179 211,488 786 471,944 218,101 134,531 151,526 152,840 189,941 210,702 id figures issi led in 1946 show total im ports for 194 4 as 153,200 tons.

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Consigned from 1938. 1941. 1942. 1943. 1944. 1945. 1946. Ani New Zealand Canada Australia Union of South Africa .. Irish Free State Other Empire Total Empire .. Netherlands Italy Switzerland France Denmark Norway Finland Belgium United States of America Other foreign Total foreign .. Grand total Less re-exports Net imports * The revised figures issued Annual Impob New Zealand Canada Australia Eire Other Empire United States of America Other foreign Totals — Whole-milk powder Skimmed-milk powder Buttermilk and whey powder Grand total Note.—I Annual Imports Canada Other British United States of America Other foreign >tual Impo 81,970 33,887 11,864 1,135 1,017 RTS OP CH (I 116,440 39,767 11,604 549 EESE INTO n tons) 132,131 55,855 4,906 117 United I 91,686 55,655 7,518 Kingdom 82,299 55,355 3,597 83,842 58,509 3,563 *213 82,124 52,628 17,933 53 129,873 168,360 193,009 154,859 141,251 146,127 152,738 10,124 3,522 902 571 969 63 168 2 i72 742 122,181 3 1 77 44,755 361 47,525 3,769 16,493 35,004 122,184 54,780 110,659 45,116 51,294 146,366 856 203,364 38 315,193 15 209,639* 243 251,910* 321 191,243 1,331 204,032 1,589 145,510 203,326 315,178 209,396 251,589 189,912 202,443 in 1946 shoi ,TS OP UNS 6,589 871 2,216 562 2,776 4,738 v total impo 5WEETENEI (II 8,834 372 Y 3,850 13,506 rts for 1943 £ ) Milk-poa i tons) 7,348 322 2,251 55,174 3 is 206,993 to: VDER. INTO 8,310 232 2,587 72,847 6 as, and for 1 United 1 4,464 f 1j 059 t M6 ; 76,165 39 944 as 251,9] VINGDOM 2,974 106 826 1,189 2 24,766 97 L8 tons. 3,530 2,229 1,867 933 28j 624 1 4,602 13,150 5,039 21,241 (21,171) N 282 5,403 (5,342) 59,697 (59,576) 5,501 (5,462) 78,481 (75,629) 4,656 (4,659) 78,339 (78,315) 8,168 21,742 50 5,738 31,186 260 17,752 26,562 (26,492) 65,098 (64,918) 83,891 (81,091) 82,995 (82,974) 29,960 37,184 figures in pai op Unsw: 8,964 2,140 } 4,716 :entheses are EETENED ( (Ir 8,933 1,296 revised figui Condensed i tons) 27 1,423 184,677 1 ■es issued in: i Milk ini 8 1,950 129,653 1945 and 194 'O United 3 837 86,072 :6. Kingdom 2 3,501 56,674 12,791 4,330 69,150 Total .. 15,820 (15,315) 134,338 186,128 131,611 86,912 (86,915) 60,177 86,271 Note. —Figures in parentheses are revised figures issued in 1946.

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ACCOUNTS 4 The dairy-produce accounts covering the completed operations for the 1944-45 season and the operations for the 1945-46 season are shown in the accounts section at the end of this report, pages 42 to 45. The completed operations for the 1944-45 season are referred to on page 7 of this report. After sale of the balance of the 1944-45 season's dairy-produce which was in store at 31st July, 1945, the final result of the operations for the complete 1944-45 season is a surplus of £1,154,011. The accounts now presented for the 1945-46 season cover purchases of butter and cheese by the Department up to 31st July, 1946. The following table shows the quantities so purchased, the total season's production for export, and the stocks in store awaiting purchase at 31st July, 1946 :

The accounts for the 1945-46 season comprise Administration and General Expenses Account, Purchase and Sale and Revenue Accounts, Dairy-produce Account, and Dairy Industry Stabilization Account. The circumstances of the establishment of the Dairy Industry Stabilization Account are referred to in a note at the foot of the accounts published with the 1944 annual report (page 30). There is a further reference to the Dairy Industry Stabilization Account on page 3 of last year's report, and on page 4 of this report. The account itself is shown on page 45. It will be observed from the accounts that the Purchase and Sale and Revenue Accounts show a surplus at 31st July, 1946, of £1,091,761, which is transferred to the Dairy Industry Account. In terms of the arrangements settled with the industry in July, 1943, the net surplus in the Dairy-produce Account, £1,113,346 is transferred to the Dairy Industry Stabilization Account. The Dairy Industry Stabilization Account shows a credit balance of £4,703,240. MEAT LONG-TERM CONTRACTS, 1944-48, BETWEEN THE UNITED KINGDOM AND NEW ZEALAND GOVERNMENTS FOR PURCHASE OF THE EXPORTABLE SURPLUS OF MEAT FOR THE PRODUCTION PERIOD IST OCTOBER, 1944, TO 30TH SEPTEMBER, 1948, AND ITS EXTENSION TO 30th SEPTEMBER, 1950 Details of the long-term contract (1944-48) between the United Kingdom and New Zealand 'Governments for the purchase of the exportable surplus of meat for the production period Ist October, 1944, to 30th September, 1948, were given in last year's annual report. Payment by the United Kingdom Government was on the basis of 1939-40 prices plus 33J per cent. The contracts provided for reconsideration, if desired, of prices and terms after 30th September, 1946. As a result of the discussions held in London in June and July, 1946, as referred to on page 3, an agreement in respect of prices and conditions for the season 1946-47 and in respect of an extension of the

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-—' Shipped and paid to 31st July, 1946. In Store and paid to 31st July, 1946. In Store and not paid to 31st July, 1946. Total production for Export Season, 1945-46. Boxes. Boxes. Boxes. Boxes. Creamery butter 3,878,462 44,300 88,824 4,011,586 Whey butter 101,070 47 1,214 102,331 Crates. Crates. Crates. Crates. Cheese 1,170,796 16,661 27,536 1,214,993

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contracts to 30th September, 1950, was reached in terms of the following extracts from letters exchanged between the New Zealand Government and the United Kingdom Minister of Food : Extract from letter from United Kingdom Minister of Food (dated 19th July, 1946) to the High Commissioner for New Zealand : Ministry of Food Montagu House, Whitehall, London, S.W. 1. 19th July, 1946. Dear Jordan, — Following our talk with Mr. Nash on the 3rd June in connection with the review of the existing contracts for the supply of meat and dairy produce, Mr. H. E. Davis submitted on the 7th June your detailed proposals for meat and these were considered at meetings on 20th June and 3rd July between our respective officers. As a result of the discussion that then took place, I am now able to make the following proposals ; if they are agreeable to you, I think we may then regard the general principles and the more important derails as having been settled between us, leaving the loose ends to be clewed up departmentally. Prices You submitted data showing the movements in costs of meat production since 1939 and on the basis of that data asked for an increase of 43i per cent, on B.P. 1 prices as compared with the increase of 33£ per cent, agreed for the first two years of the current contract. The figures submitted were very comprehensive and no doubt you will realize that without much more information about the conditions in New Zealand we were not able to examine them in any detail. We noted the paragraph at the end of the accountants' covering memorandum about the effect of increased wool prices on increased costs and also the explanation of your officers on this, which was developed further in Mr. H. E. Davis' letter of Ist July to the effect that the increased wool prices should not, for the purposes of our discussion, be regarded as an offset to the increased costs of meat production. We might wish to revert to this question in a subsequent review but for the purposes of the current review we will accept the submitted figures as they stand as evidence of your increased costs. We note that in your submission you mention " a moderate addition to the costs shown in the survey is taken into account " to assist in the replacement, at higher than pre-war costs, of fertility reserves that have been run down during the war. In the discussion between officials, we pointed out that your published accounts showed that certain monies out of the prices wer were paying were being retained by the New Zealand Government for the benefit of the industry and we suggested that this was inconsistent with the present claim that higher prices were required to meet increased costs. Mr. Ashwin explained that these monies were being held for payment to farmers at a later date so that they could undertake essential renewals without inflating prices. It seems to us that we should reserve the right to reconsider this particular aspect of the matter at any future price review. All this notwithstanding, we accept your figures as a basis for the increase in the prices to be paid during the meat year, Ist October, 1946-30 th September, 1947. Either party is, of course, at liberty under the contract to raise the question again next year in respect of the price for supplies in the following meat year, but I would not like, at this stage, to agree that in future reviews we would necessarily follow any further increases in production costs. I think I made it clear at our talk that in my opinion prices must always be the subject of negotiation and that factors other than production costs may have to be taken into account at future price reviews. At the same time I readily agree that changes in the costs of production must always be regarded as an important factor and will always be taken into account. Exceptionally, you asked for a further 5 per cent, increase for pig meat, making a total increase of 48£ per cent, over B.P. 1. We were reluctant to agree to this in today's conditions, having regard to the fact that the pig is generally a competitor for grains which are so urgently needed for direct human consumption. We were told, however, that pigs in your country are fed mainly on dairy factory by-products, which cannot at present be processed for human consumption, and on green feed and roots, and that your request was based mainly on an exceptional increase in the costs of labour in what has proved difficult and uncongenial work. On your assurance that the increased price will not lead to any increase in the consumption by your pig herds of grain which otherwise would be available for human consumption, we are prepared to agree to the increase for which you ask. As regards the prices to be paid for offals, including pig offals, it seemed to us that, as meat offals are a by-product only in the processing of meat, there should be no further increase in these prices and that the extra price to be paid for meat should be regarded as fully satisfying the need for covering your increased meat production costs. In view, however, of the discussion on the 3rd July with your officers on this point, we are agreeable to an increase of 43J per cent, over B.P. 1 prices for all offals, including pig offals, on the distinct understanding that you ship to us the whole of the offals arising from your meat exports. A formula to assess the quantity of offals we should receive under such an arrangement can be left for settlement between our officers.

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Period of Contract At our talk on the sth July I agreed to concede Mr. Nash's request for an extension of the Meat Contract for two farther years to 30th September, 1950, and I assume that you would want these two years to be governed by the terms of the existing agreement subject to annual review as at present. This extension puts meat on all fours with Dairy Products but, as was pointed out in the talks between our officers, it is not yet clear that the shortage of meat will last so long as that for Dairy Products. Quantities to be supplied to other Markets I understand you ask only for some latitude within the I.E.F.C. procedure and I hope that my officers, who are trying to work out some scheme, will be able to reach a solution that will be satisfactory to you and to us. Resumption op Shipments op Bone-in Beep, Chilled Beep and Cessation op Telescoping Mutton and Lamb We are as anxious to receive, as you are to send, meat in the more attractive forms that were usual in peacetime and you may rely on our utmost co-operation. We have explained that it is entirely a matter of the amount of freight available. In our present position any relief in this direction would be at the expense of such other products as apples. You have already been advised about the prospects for telescoping sheep and lambs next sea§pn and, as and when the freight position improves, we will consult with you as to the best method of reverting to more normal practice. Quantities of Pig Meat We are prepared to take your exportable surplus of pig meat during the last two years of the current contract—i.e., up to 30th September, 1948. We do not, however, feel able to commit ourselves beyond that at present but in respect of each of the following two years we shall be prepared to fix the quantities twelve months ahead. Canned Meats You will appreciate our desire to taper off the production of these goods from the high wartime levels to more normal levels; I agree that prices and quantities for the forthcoming and succeeding years shall be discussed departmentally each year with a view to providing for the reasonable maintenance of this adjunct to your meat industry. Payments for Meats held in Store for Excess Periods We are prepared to agree that the existing arrangements continue during the third year of the contract; either party has the right to raise the question again if there is any review next year. General If there are any minor modifications necessary in the Heads of Agreement these can, I suggest, be settled departmentally. Letter from High Commissioner for New Zealand (dated 23rd July, 1946) to United Kingdom Minister of Food : July, 1946. My Dear Minister, — Long-term Contract for the Purchase of New Zealand Meat Thank you for your letter Of the 19th July summarizing agreement between us relating to prices to be paid to us for New Zealand meat exported to you from the production season Ist October, 1946, to 30th September, 1947, and to the extension of the contract —subject to right of either party to an annual review of prices and conditions—to the end of the 1949-1950 production season. There is one point in your communication that I think requires elucidation. On page two the second paragraph reads : "We note that in your submission you mention ' a moderate addition to the costs shown in the survey is taken into account' to assist in the replacement, at higher than pre-war costs, of fertility reserves that have been run down during the war. In the discussion between officials we pointed out that your published accounts showed that certain monies out of the prices we were paying were being retained by the New Zealand Government for the benefit of the industry and we suggested that this was inconsistent with the present claim that higher prices were required to meet increased costs. Mr. Ashwin explained that these monies were being held for payment to farmers at a later date so that they could undertake essential renewals without inflating prices. It seems to us that we should reserve the right to reconsider this particular aspect of the matter at any future price review." The precise purpose of the' New Zealand Meat Stabilization Account is clearly stated in a letter dated 20th November, 1944, from the Prime Minister of New Zealand to the Chairman of the New Zealand Meat Producers' Board, the appropriate quotation being : "It is considered desirable that both the Meat Pool Account and the Meat Industry Stabilization Account should remain within the Meat Industry Account as at present, but the whole of the proceeds from the recent increase in the prices of meat to be paid by the U.K. Government will be credited

25

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to the Meat Industry Stabilization Account and will be conserved exclusively for the industry, subject of course to such debits against the account as are contemplated in the Government's agreement with the Farmers' Federation on the 18th June, 1943. AH accretions to the Meat Pool Account will continue as in the past and no charges other than those already operative will be made against it except in agreement with the New Zealand Meat Producers' Board. This arrangement would have to be subject to review, in the event of the resources of the Meat Industry Stabilization Account being insufficient to meet charges against that account. I would stress again that the balances finally remaining in the Meat Pool Account and the Meat Industry Stabilization Account belong to and shall be held for the benefit of the industry." It will be noted that the funds in the account after providing for agreed debits belong to and are to be held for the benefit of the industry. I shall be grateful if you will note and acknowledge receipt of this more verbally correct explanation of the point Mr. Ashwin referred to in the discussions. With this exception your letter correctly records the intention of both parties and I should like to express to you the appreciation of my Government of the courtesy extended to us during our negotiations. The sterling prices to which, the increases of per cent, for mutton, lamb, beef, and all offals and of 48J per cent, for pork are to apply are set out in the schedule of bulk purchase 1 (1939-40 season) prices printed on pages 20 and 21 of the 1944-45 report. Note. —(1) Meat-schedule Prices to be paid to Farmers by Freezing Companies and Meat operators at opening of 1946 47 Season : For convenience of reference the following letter from the Hon. the Minister of Marketing to the New Zealand Meat Producers' Board, written before publication of this report, is quoted. This letter announces the meat-schedule prices to be paid to farmers by freezing companies and meat operators at the opening of the 1946-47 season — 4th October 1946 The Chairman, New Zealand Meat Producers' Board, P.O. Box 121, Wellington. Dear Sib, — Meat Export Schedule, 1946/47 This will serve to confirm the agreement reached between Government and the Board that the opening schedule prices to be paid by freezing companies and operators for the 1946/47 season will be : Lambs (Woolly) Prime Down Cross and Prime Canterbury— d. 20/36 .. .. .. .. .. ..10 37/42 .. .. .. .. .. .. 9| 43/50 .. .. .. .. .. -• 9f 51/56 .. .. .. .. .. -. 8| Prime Cross-bred—--20/36 .. .. .. .. .. 9£ 37/42 .. .. .. .. .. ..9# 43/50 .. .. .. .. .. .. 9£ 51/56 .. .. .. .. .. .. 8| Seconds — 20/36 .. .. .. .. .. ■■ 9J 37/42 .. .. .. .. .. 9| 43/50 .. .. .. .. .. 8f Wethers— Wethers : North Island — Prime—48U .. .. .. .. 6£ 49/64 .. .. .. .. .. 6£ 65/90 .. .. .. .. .. As 64 lb. @ 6J;d.—33s. 4d. Seconds — 64U .. .. .. .. .. 5f 65/72 .. .. .. .. As 64 lb. @ sfd. —30s. Bd. Wethers : South Island — Prime—48U .. .. .. .. .. 6J 49/64 .. .. .. .. ..6 65/90 .. .. .. .. As 64 lb. @ 6d.—325. Seconds—--64U .. .. .. .. 5£ 65/72 .. .. .. .. .. As 64 lb. @ s£d.—29s. 4d.

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Ewes— d. 64U .. .. .. .. .. .. 4J--65/90 .. .. .. .. .. As 641b. @ 4|d. —225. Quarter Beef— Ox—--6.A.Q. 840/U .. .. .. .. .. 465. per 100 lb. 0/840 .. .. .. .. .. 455. per 100 lb. F.A.Q.; all weights .. .. .. .. 40s. per 100 lb. Heifer— G.A.Q. — 840/U .. .. .. .. .. 455. per 100 lb. 0/840 .. .. .. .. .. 445. per 100 lb. F.A.Q.; all weights .. .. .. .. 395. per 100 lb. Cow— G.A.Q., all weights .. .. .. .. 38s. 6d. per 100 lb. F.A.Q., all weights .. .. .. .. 335. 6d. per 100 lb. Boner Beef— Ox . . .. .. .. .. .. 1 " " • " • " • •" }»26s. per 100 lb. Heifer .. .. .. .. .. .. J The cost of the consequential increases in the Marketing Department purchase prices for meat will be debited to the Meat Industry Stabilization Account. Government appreciates the good will shown by the Board in the course of the negotiations. Yours faithfully, B. Roberts, Minister of Agriculture. (2) Purchase Prices payable to Freezing Companies and Meat Exporters for 1946-47 season : In a letter dated 7th November, 1946, addressed to the North and South Island Freezing Companies' Association, the Hon. the Minister of Marketing announced the f.o.b. purchase prices for export meat payable by the Marketing Department to freezing companies and meat exporters for the 1946-47 season. The text of the letter is as follows : November 7th, 1946 The Chairman, North and South Island Freezing Companies Assn., C/- Gear Meat Co. Ltd., Box 164, Wellington. Dear Mr. Mackay, Consequent upon my recent announcement regarding the increased schedule prices to be paid to Producers for fat stock as from the commencement of the 1946-47 season, the following f.o.b. purchase prices, which I understand were agreed by you at a meeting held in the office of the Primary Industries Controller on Tuesday, sth November, will be paid to freezing companies and meat exporters by the Marketing Department, Export Division, for killings on and after the Ist October 1946 : F.o.b. Price, T , Pence per Pound, Lamb— N.Z. Currency. Prime Down Cross 2's (20/36 lb.) telescoped .. .. ..9-25 B's (37/42 lb.) „ .. .. ..9-125 4's (43/50 lb.) .. .. .. ..8-625 Tegs. (51/56 lb.) .. .. .. ..8-125 Prime Canterbury 2's (20/36 lb.) ~ .. .. .. 9-1875 B's (37/42 lb.) .. .. .. .. 9-0625 4's (43/50 lb.) ~ .. .. .. 8-5625 Tegs. (51/56 lb.) .. .. .. .. 8-0625 Prime Crossbred 2's (20/36 lb.) .. .. ..9-00 B's (37/42 lb.) .. .. .. 8-875 4's (43/50 lb.) ~ .. .. .. 8-375 Tegs. (51/56 lb.) .. .. .. ..7-875 Second Quality (36 and under) ~ .. .. .. 8-375 (37/42 lb.) .. .. .. .. 8-375 (43/50 lb.) .. .. ..7-625 (51/56 lb.) ~ (As 2nd Qual. Wethers 56/U) .. .. 5-625

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Mutton — F.o.b. Price, Pence per Pound, N.Z. Currency. Prime Wether and Maiden Ewe l's (48 and under) telescoped .. 6-375 - 7's (49/56 lb.) ~ .. ..6-125 3's (57/64 lb.) „ .. ..6-125 9's (65/72 lb.)") s's (73/80 lb.) y ~ .. .. 6-125 on 64 lb. only o's (81 /90 lb.) J Second Quality (56 and under) ~ .. .. 5-625 (57/64 lb.) „ .. .. 5-625 (65/72 lb.) . . . . 5-625 on 64 lb. only Ewes (64 and under) ~ .. .. 4-1875 (65/72 lb.) ~ .. .. 4-1875 on 64 lb. only (81/90 lb') j*® onec * f° r Export .. .. .. .. 5-25 Allowance for telescoping lamb and mutton carcasses .. .. 0-0777 In the case of prime wethers 65/90, second wethers 65/72, and ewes 65/72, the Marketing Department will pay freezing charges on the excess weight over 64 lb. F.o.b. Price, t, ~ ~T i Pence per Pound, Beet and Veal — U.z. Currency. G.A.Q. ox and heifer, ex bodies, 840/U — Bone in - Boned. Hinds .. .. .. .. .. .. .. 6-9035 8-9 Fores .. .. .. . . .. . . 4•6535 6•65 G.A.Q. ox and heifer, ex bodies, 0/840 — Hinds .. .. .. .. .. .. .. 6-793 8-75 Pores .. .. .. ..* .. .. .. 4-543 6-5 P.A.Q. ox and heifer, all weights— Hinds .. .. .. .. .. .. .. 5-5075 7-5425 Fores .. .. .. .. .. .. .. 4-3825 6-355 G.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. 5-2575 7-236 Pores .. .. .. .. .. .. .. 4-2575 6-236 F.A.Q. cow, all weights— Hinds .. .. .. .. .. .. .. 4-6575 6-5 Fores .. .. .. .. .. .. .. 3-6575 5-5 Boneless ox, heifer, cow, and bull .. .. .. .. .. .. 4-75 Boneless bobby veal .. .. .. .. .. .. .. 4*5 Veal sides and quarters— First quality .. .. .. .. .. 4■ 5 Second quality .. .. .. .. .. 3• 5 Piemeata — South Island, ° _ ~ , _ North excluding Picton Picton and Headless porker sides, ex carcasses, .60/120 — Island. and Nelson. Nelson. First quality, unsinged .. .. .. ..10-75 10-677 10-765 Second quality, unsinged .. .. .. 10-3125 10-265 10-353 Wiltshire sides — Ex carcasses, 121/175 — First quality, singed .. .. .. 10-9375 11-127 11-219 Second quality, singed .. .. .. 10-4375 10-697 10-789 Ex carcasses, 176/185 — First quality, singed .. .. 10-00 10-00 10-00 Second quality, singed .. .. .. 9 • 5625 9 • 5625 9 • 5625 Headless chopper, sides .. .. .. .. 4-25 4-307 4-395

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Edible Offals

Prices for frozen tongues are under consideration and will be advised later. Yours faithfully, B. Roberts, Minister of Marketing. PURCHASE AND SALE PROCEDURE AND PRICES PAID FOR 1945-46 SEASON'S MEAT PURCHASED BY MARKETING DEPARTMENT FOR EXPORT The purchase and sale procedure has remained unchanged during the 1945-46 season. Negotiations between the New Zealand Meat-producers Board and the Economic Stabilization Commission resulted in increased prices being paid to farmers for fat lambs and cattle as from the opening of the 1945-46 season. Details of the resultant f.o.b. prices are set out in the Meat Marketing Order 1942, Amendment No. 4. The purchases made by the Marketing Department from freezing companies and exporters during the twelve months ended 31st July, 1946, totalled £23,480,749 (N.Z. currency). Debits for shipments to the United Kingdom Ministry of Food and deliveries to the United States Joint Purchasing Board for the same period were £26,108,079 (N.Z. currency) and £1,264,832 (N.Z. currency) respectively. The following table shows particulars of meat purchased by the Marketing Department from freezing companies and exporters during the twelve months ended 31st July, 1946 :

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— Beef. Sheep. Lamb. Pork. I Veal. Bobby Veal. Livers (in pails or rubber bags) 8-625 9-5625 7-6875 11-125 Livers (in cartons) 8-5 9-4375 7•5625 11-0 Livers (in bags or boxes) 6-8i25 7-4375 8-375 6-5 7-75 Throatbreads 5•5625 9-3125 6-1875 6•1875 Heartbreads 8-8125 5-9375 5-9375 Hearts (sound) 4-0 5-25 4-3125 4-5' 3-6875 4-3125 Hearts (cut) 3-5 4-75 3-8125 4-0 3-1875 3-8125 Kidneys 9-875 7-4375 8•0625 ' 8-0625 Kidneys (special) 13-625 Kidneys (small) 13-0 Tails 5-5625 Cheeks 3-125 Skirts (thick) 5-25 Skirts (thin) .. .. 3-375 Tripe (raw) .. .. .. 1-875

Class of Meat. Tons. | Purchase "Value (N.Z. Currency). Average Price per Pound (N.Z. Currency). — Lamb Mutton Beef and veal Pig-meats Edible offals 174,132 79,915 57,497 14,670 10,859 £ 14,136,973 3,174,310 2,947,565 1,307,226 783,197 d. 8-70 4-26 5-49 9:55 7-73 Totals 337,073 22,349,271 7-10 Preserved— Canned beef (including mixed packs) Tongues 8,459 1,076 897,984 233,494 Totals 9,535 1,131,478 Totals, frozen and preserved meat 346,608 23,480,749

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SURVEY OF SEASON The killings of meat returned to the Department during the 1945-46 season as available for export totalled 338,417 tons. On account of the weather and pasture conditions prevailing in the North Island during the early part of this year, and after consulting the United Kingdom Ministry of Food, it was decided to accept for export, stock below normal export standard. This resulted in the purchasing of third-grade lambs, wethers, and ewes. Porkers down to 40 lb. weight were also accepted for export. In spite of the adverse climatic conditions, the lamb and ewe mutton killings both exceeded the previous records by a substantial margin. Lamb and mutton average weights were considerably lower than last year. The comparative figures being —

Details of killings for export month by month throughout the season are shown in the following table.

Frozen Meat Killings for Export, Season 1945-46

SHIPPING AND STORAGE Although, peak killings were earlier than usual, no serious storage problems were encountered owing to the excellent shipping programme during the period of heavy killings. The following table shows particulars of frozen-meat shipments to the United Kingdom Ministry of Food month by month during the twelve months ended 30th September, 1946, together with a record of the shipments each season from 1939-40.

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North Island. South Island. Dominion. 1944-45 1945-46 1944-45 1945-46 1944-45 1945-46 lb. lb. lb. lb. lb. lb. Lambs 34-20 31-39 35-05 34-61 34-59 32-81 Wethers 59*18 54-32 51-02 49-67 58-40 53-86 Ewes 57-14 52-51 53-13 52-83 55-68 52-61

— Lamb. Wether Mutton. Ewe Mutton. Quarter Beef. Yeal. Boneless Bobby Yeal. Boneless Bull Beef. Boneless Cow and Ox Beef. Baconers. Porkers. Choppers. Edible Offal. Total. 1945 Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. October 9 17 100 65 909 137 309 1,009 165 18 212 2,950 November 3,175 381 517 515 372 267 303 1,549 197 25 284 7,585 December 21,855 955 1,211 1,099 191 370 455 1,712 224 20 834 28,926 1946 January 45,737 2,614 5,584 3,157 73 665 555 2,193 837 42 1,866 63,323 February 33,197 4,603 15,041 5,405 '56* 41 741 1,147 810 1,514 28 1,777 64,360March 22,873 4,706 19,160 4,918 204 28 637 1,817 498 1,162 15 1,560 57,578April 14,600 2,304 7,685 3,029 206 33 518 1,723 227 579 15 1,109 32,028 May 23,136 2,257 7,561 6,455 371 70 719 2,953 242 696 13 1,455 45,928 June 8,213 1,016 2,789 5,056 143 87 344 1,577 58 145 4 651 20,083 July 1,094 559 575 2,416 50 1,104 147 678 12 27 2 422 7,086August 371 105 293 698 58 2,482 58 422 19 8 5 389 4,908 September 38 122 352 528 5 1,731 78 448 85 30 13 232 3,662Season total 174,298 19,639 60,868 33,341 1,093 7,121 4,681 12,387 8,414 5,584 200 10,791 338,417

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Record of Frozen-meat Shipments to United Kingdom Ministry of Food

CANNED MEAT With the cessation of supplies to the United States Joint Purchasing Board a canning contract was negotiated with the United Kingdom Ministry of Food for the production of 2,500 tons of canned corned beef during 1946. This quantity has been allocated to the various canneries which had participated in the canning programmes arranged by the Primary Industries Controller over the past few years. PIG-MEATS The Pig Marketing Emergency Regulations 1943 were revoked by the Emergency Regulations Revocation Order No. 2 which came into force on the Ist day of December, 1945. Since this date pig-meats have been purchased on the same terms and conditions as other classes of meat. FREEZING COMPANY SUBSIDIES As a result of discussions between representatives of the freezing companies and the Economic Stabilization Commission regarding the added wage-costs due to the forty-hour week, the following letter was addressed by the Director of Stabilization to the Chairman, Freezing Companies' Committee, dated sth June, 1946 : I have to advise that to meet 40-hour week wage costs, Cabinet has approved of additional subsidy being paid to freezing companies and bacon curers in accordance with Government's undertaking of the 27th February, 1946. The following rates will be payable as from 2nd January, 1946, on net export killings of meat {excluding offal) as returned to the Export Marketing Division on return P.P.M. 109 : Lambs, wethers and ewes .. .. .. .. .. • 0675 d. per lb. Quarter beef and veal in sides .. .. .. .. • 045 d. per lb. Boneless beef and mutton .. .. .. .. .. -075 d. per lb. Boneless bobby veal . . .. .. .. • 15d. per lb. Baconers, porkers and choppers .. .. . . .. • 045 d. per lb. subject to a review being made, at the end of the current season, of the rate per lb. for baconers if such is then agreed to by all parties.

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(during each Twelve Months ending 30th September) — Lamb. Mutton. Quarter Beef and Veal. Boneless "Beef. Boneless Veal. Pig-meats. Edible Offal. Total. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. 1939-40 146,295 71,740 34,378 28, ,220 21,628 10,026 312,287 1940-41 149,458 30,392 37,232 6,483 6,275 27,342 11,468 268,650 1941-42 191,448 40,081 37,390 766 2,350 15,855 9,976 297,866 1942-43 155,139 22,649 22,815 2,248 5,579 728 8,474 217,632 1943-44 141,553 57,334 2,316 266 4,036 948 6,164 i'12,617 1944-45 171,203 76,111 7,747 4,527 7,747 3,278 6,936 277,549 1945 October 1,313 1,592 1,051 193 2,249 1,062 543 8,003 November 1,110 117 2,742 229 775 397 202 5,572 December 3,587 1,091 10,935 250 884 1,413 783 18,943 1946 January 8,666 1,116 3,307 125 595 2,183 619 16,611 February18,939 3,043 130 603 478 2,405 1,446 27,044 March 18,439 6,075 882 290 17 778 1,033 27,514 April 17,514 8,156 5,824 1,985 102 1,624 1,189 36,394 May 37,259 18,468 6,077 1,928 31 1,658 2,299 67,720 June 8,171 7,113 3,945 2 422 32 565 1,161 23,409 July 14,682 5,795 3,474 1 '639 121 583 799 27,093 August 4,670 3,316 2,094 499 409 256 11,244 September 22,544 14,641 6,113 2,638 1,340 274 1,372 48,922 Total, 1945-46 156,894 70,523 46,574 12,801 6,624 13,351 11,702 318,469

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The total subsidies being paid on net export killings of meat (excluding offal) now amount to the following rates per pound (including 0-015 for administration, &c.) : —- Lamb .. .. .. .. .. .. 0-3425 d. Wethers .. .. .. .. .. .. 0-3425 d. Ewes (bone in) .. .. .. .. .. 0-3425 d. Boneless mutton .. . . .. .. .. 0-4275 d. Beef and veal (bone in) .. .. .. .. 0-275 d. Boneless beef .. .. .. .. .. 0-4275 d. Boneless bobby veal .. .. .. .. 0 • 6525 d. Baconer, porker, and chopper sides .. .. .. 0 • 3d. EFFECT OF THE RATIONING EMERGENCY REGULATIONS AS APPLIED TO MEAT The following information is supplied by the Food and Rationing Controller : It is estimated that since the inception of meat rationing in March, 1944, 49,000 tons of meat have been withdrawn from civilian consumption. This figure is exclusive of savings in respect of bacon and ham, which from the introduction of the Bacon and Ham Curing Order in June, 1943, to date has resulted in 142,000 baconer pigs, equivalent to 8,600 tons carcase weight, being withheld from local sales. SUPPLIES OF FROZEN AND CANNED MEAT TO UNITED STATES ARMED FORCES During the period 1942-1945 large quantities of meat, both frozen and canned, were delivered to the United States Joint Purchasing Board for supply to the United States .Armed Forces operating in the Pacific. In the initial stages meat was delivered direct to vessels loading at Auckland, but, as the war in the Pacific progressed, this was found to be cumbersome and impracticable. Various refrigerated stores were then leased to the United States Joint Purchasing Board, and the meat and edible offals, released by the United Kingdom Ministry of Food for use by the United States Armed Forces, was centralized at these stores according to a monthly programme arranged by the procurement officers of the Board and the Marketing Department. Canned meats were delivered to stores either leased by or built for the United States Joint Purchasing Board. Prices debited to the Board were the same as those which would have been debited to the United Kingdom Ministry of Food had the meat been shipped to the United Kingdom, with the addition of an agreed charge to cover the cost of centralization, &c. The following table shows the classes and quantities, in tons, delivered by the Department during the period 1942-45 :—-

In October, 1945, advice was received that no further supplies were required, and subsequently the stocks in store were handed over to the War Assets Realization Board for disposal.

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— 1942. 1943. 1944. 1945. Total. Lamb 163 5,232 6,818 8,495 20,708 Mutton 452 2,843 1,957 1,925 7,177 Beef and veal 3,991 17,756 33,340 27,354 82,441 Pork 1,199 4,485 6,657 3,538 15,879 Offal 87 1,079 2,618 2,835 6,619 Preserved 11,467 10,785 5,911 28,163 Total 5,892 42,862 62,175 50,058 160,987

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The Marketing Department was asked to act as agent for the War Assets Realization Board and make the necessary arrangements with the United Kingdom Ministry of Food to ship the surplus United States Joint Purchasing Board stocks according to instructions received from the Ministry. Details of the surplus stocks, which should be deducted from the table given above to arrive at the net quantity taken for supply to the United States Forces, are as follows: Tons. Lamb .. .. ..' .. 551 Mutton .. .. .. .. 170 Beef and veal .. .. .. 1,460 Pork .. .. .. .. 367 Offal .. .. .. .. 369 Preserved .. .. .. .. 7,124 Total .. .. .. 10,041 ACKNOWLEDGMENT The Marketing Department wishes to record its appreciation of the continued cooperation extended by the Overseas Shipowners Allotment Committee, the United States Joint Purchasing Board, the freezing companies, meat canners and exporters, the New Zealand Meat-producers Board, and the various Government Departments with which the Marketing Department has been 'associated throughout the year. ACCOUNTS The following is a summary of the meat accounts printed on pages 46-51 of this report. (a) Administration and General Expenses Account. (b) Final Purchase and Sale Account of 1944-45 season's killings showing transfers of £668,768 to the credit of the Meat Pool Account and £850,125 to the credit of the Meat Industry Stabilization Account. (c) Purchase and Sale Account, 1945-46 season's killings up to 31st July, 1946, showing transfers of £1,342,026 to the credit of the Meat Pool Account and £1,416,287 to the credit of the Meat Industry Stabilization Account. (d) Meat Pool Account to 31st July, 1946, showing a surplus at that date of £8,931,174. (e) Meat Industry Stabilization Account to 31st July, 1946, showing a surplus at that date of £3,270,754. (/) Bobby Calf Pool Account to 31st July, 1946, showing a surplus at that date of £292,566. (a) Bobbv Calf Stabilization Account to 31st July, 1946, showing a surplus at that date of £145,898. (h) Meat Account, which shows a credit balance of £33,073 at the 31st July, 1946. WOOL BULK PURCHASE OF WOOL BY THE UNITED KINGDOM GOVERNMENT As referred to on page 3, the United Kingdom Government's contracts for the purchase of wool ceased with the sales of the 1944-45 season's clip. During the 1945-46 season the United Kingdom became responsible for the purchase of the clip on the same 2—H 30

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terms, but on behalf of the joint organization which was entrusted with its management and sale in terms of the new wool marketing plans. The contract for the sale of woolly sheep-skins ceased at 30th June, 1946. The whole matter of the disposal of the 1945-46 clip and of the stocks of Dominion wool accumulated in the hands of the United Kingdom Government had beeA the subject of a Wool Conference in London, of which full details were given in the last year's annual report. The recommendations of the Conference, and in especial the setting-up of a Joint Organization representing the Governments of the United Kingdom, Australia, South Africa, and New Zealand to take charge of the marketing of the old wool a*nd support the marketing of current clips throughout the period of disposal of stocks had./ been approved by the New Zealand Government. In terms of the Wool Disposal Act, 1945, the New Zealand Government set up the New Zealand Wool Disposal Commission as the subsidiary in New Zealand of the Joint Organization (United Kingdom - Dominions Wool Disposals, Ltd.). Pursuant to this Act, the Wool Disposal Regulations 1946 were made, setting out the procedure to be followed by the Commission. Mr. G. A. Duncan, Director of the Export Division, was seconded from the Division as Chairman of the Commission and the Assistant Accountant of the Division and other members of the staff were also seconded to form the staff of the Commission. The Commission commenced operations as from Ist January, 1946, and will be making its own report on operations in respect of the 1945-46 season's wool clip By the courtesy of the Commission we record — (1) The prices paid to owners of greasy and slipe wool were on a similar basis to the prices paid during the 1942-43 and subsequent seasons, the actual average prices being — (a) To owners of greasy wool: 13-879 d. per pound. (b) To owners of slipe wool: 18*6742 d. per pound. (2) The total quantities of the 1945-46 clip and the values paid to owners were as follows — (a) Greasy wool: 849,334 bales (£16,886,044). (b) Slipe wool: 172,593 bales (£4,462,971). The disposal of the 1946-47 season's wool clip will be carried out by means of public auctions (as pre-war), but to be offered subject to minimum reserve prices, at which prices the Wool Disposal Commission will take up such wool as is not sold at or above these prices. At this conclusion of the Department's connection with the purchase and shipment of wool I would record my appreciation of the invaluable assistance so freely rendered by Mr. Herbert Hill, chairman of the New Zealand Wool Buyers' Association, by the members and staff of his association, and by the Wool Brokers' and Scourers' Associations. The successful functioning of the Department in this field since the 1939-40 season owes much to the willing co-operation of the men and women included in these organizations with those' members of the Marketing Department staff now seconded to the New Zealand Wool Disposal Commission.

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TALLOW PURCHASE BY UNITED KINGDOM GOVERNMENT OF 1945-46 SEASON'S TALLOW A contract was completed between the United Kingdom and the New Zealand Governments for the purchase by the United Kingdom Ministry of Food of the exportable surplus of the 1945-46 season's tallow. Terms, prices, and conditions of this contract are the same as those applying to the 1944-45 season, the details of which are set out in a letter from the Ministry of Food quoted in the Department's annual report for 1945 (page 35). PURCHASES BY NEW ZEALAND GOVERNMENT OF 1945-46 SEASON'S TALLOW FROM NEW ZEALAND MANUFACTURERS The f.o.b. (New Zealand currency), purchase-prices payable to manufacturers' remained as set out in the Schedule attached to the Purchase of Tallow Order 1940, and subsequent amendment. The surplus, or difference between the United Kingdom purchase-prices and the prices paid by the New Zealand Government, is approximately £l7 15s. (New Zealand currency) per ton. STATISTICS The following table shows the quantities of tallow purchased and shipped from Ist August, 1945, to 31st July, 1946. Total exports amounted to 31,781 tons.

Permits were granted to shippers to overseas countries from Ist August, 1945, to 31st July, 1946, as follows : India. Fiji. Tons (Net). Tons (Net). First mutton .. .. .. .. .. 295 Good colour, mixed .. .. .. .. 161 295 161 In regard to the quantity of 295 tons exported to India it should be mentioned that this represents the balance which was required to complete the 1945 contract quantity. In terms of the agreement with the United Kingdom Ministry of Food, no further shipments are being made to India meanwhile. Note. —Practically all edible beef tallow has been required for manufacturers in New Zealand, in addition to considerable quantities of edible mutton tallow.

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— United Kingdom, j U.S.A. Canada. Tons (Net). Tons (Net). Tons (Net). First beef 151 First mutton 9,636 4 , Good bright prime, mixed 564 320 Good colour, mixed 4,914 521 1,740 Fair to good, mixed 819 836 Fair colour, mixed 178 165 Good gut 4,773 301 959 Medium gut 2,294 121 111 Low and no-colour gut 553 38 410 Stearine, superior 567 Stearine, medium 106 18 Pig fat, inedible, steam rendered 99 82 Hog grease 81 103 Hide grease 35 45 Edible, mixed 124 24,894 981 5,450

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PURCHASE BY UNITED KINGDOM GOVERNMENT OF 1946-47 SEASON'S TALLOW A contract was completed between the United Kingdom and the New Zealand Governments, before publication of this report, for the purchase by the United Kingdom Ministry of Food of the exportable surplus of the 1946-47 season's tallow on the same terms and conditions as applied for the 1945-46 season, but with an increase of prices amounting to 100 per cent, above those ruling for the 1945-46 season. For convenience of reference these prices are quoted hereunder :

Price Schedule for New Zealand Tallow for 1946-47 Season's Productions

ACCOUNTS The tallow accounts are shown in the accounts section at the end of this report, page 52. They comprise Purchase and Sale Account, Revenue Account, and Tallow Account, and cover the purchase and sale of tallow for the year ended 31st July, 1946. After providing £7,946 for administration and handling expenses, the surplus of £623,193? which represents the difference between the purchase-prices and sale-prices, has been transferred as to £289,913 to the credit'of the Meat Pool Account and as to £333,280 to the credit of the Meat Industry Stabilization Account (page 49). The credit balance of £5,705 in the Tallow Account represents the difference between the Department's administration and handling allowance and the actual charges incurred by the Marketing Department. WOOLLY SHEEP-SKINS The terms of sale to the United Kingdom Ministry of Supply of the exportable surplus of woolly sheep-skins remained as stated in the Department's annual report for the 1941-42 season. The bulk purchase agreement with the United Kingdom terminated on the 30th June, 1946, after which date sales through normal trading channels were resumed.

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Key Letter. Grade. Price per Ton Sterling C. and P. in Casks/Drums with Premium of 5s. per Ton shipped in Barrels. £ s. d. A First beef 88 5 0 B Second beef 79 15 0 0 First mutton 85 0 0 D Second mutton 79 15 0 E Good bright prime, mixed 81 0 0 F Good colour, mixed 80 5 0 G Fair to good colour, mixed 79 0 0 H Fair colour, mixed 77 5 0 I Good gut tallow 75 5 0 J Medium gut tallow 73 5 0 K Low to no colour tallow 69 15 0 M Stearine, superior 89 5 0 N Stearine, medium 86 5 0 0 & Q Hog grease/pig fat (FFA basis 1 per cent.) 87 15 0 P Lard edible 113 15 0 R Hide grease— Under 1 per cent. FFA 75 0 0 1 per cent, to 15 per cent. FFA 73 0 0 Over 15 per cent. F.F.A. 70 15 0 S Edible mixed 83 10 0

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REPORT OF CONTROLLER The Hon. the Minister of Marketing. I beg to report to you on the operations of the Sheep-skin Control for the twelve months ended 30th June, 1946. Accounts. —A surplus of £12,387 12s. Id. was shown for the year. This has been transferred to the reserve account. The surplus is largely the result of increased pelt prices and the valuation of closing stocks on the basis of the market prices ruling after 30th June. £ s. d. The Reserve Account balance brought forward was .. 56,948 10 4 The addition for the year .. .. .. 28,307 9 7 84,255 19 11 Plus surplus as above .. .. .. 12,387 12 1 £96,643 12 0 The Control's buying schedule was increased on the Ist April, 1946, by Id. per pound to reflect increased pelt values, due to increases in the American ceiling prices. The total skins purchased by the Control during the year were 2,280,419. Of these, 1,074,686 went into export stock and 1,205,733 went into fellmongering stock. Allowing for the variation in opening and closing stocks, details of the skins sold for export were: — Skins. lb. Local sales .. .. ..160,845 707,262 U.S.A. sales .. .. ..421,865 3,341,959 U.K. sales.. .. .. .. 146,950 1,440,690 Canada sales .. .. ..105,827 701,566 France sales .. .. .. 116,581 599,318 952,068 6,790,795 Skins fellmongered totalled 1,284,343. The slipe wool sold by the Control totalled 5,301,860 lb., and the pickled pelts 112,004 dozen. Administration expenses show an increase of £Bll 6s. 5d., main items of increase being : salaries, £5l 18s. Id. ; telephones, £162 lis. 3d. ; stationery, £lOB 16s. lOd. ; interest, £285 15s. 3d. ; general expenses, £146 6s. 3d. ; rent, £BO 14s. Id. HIDES The report for the 1939-40 season gave details of the action taken by the Government in regard to control of export of hides, stabilization of prices of hides for local requirements, and equalization of value of hides for local use and for export by a levy on exports. This levy serves to balance the difference between local " standard domestic values " fixed at Ist September, 1939, prices, plus 25 per cent., and export values. This procedure is embodied in the Hides Emergency Regulations 1940, and the administration of the regulations is entrusted to a Hides Committee, which operates under authority conferred on it by the Minister of Marketing. SALE OF HIDES TO AUSTRALIA The arrangement between the New Zealand and Australian Governments for the sale of hides to the Australian Hide Board as referred to in last annual report was discontinued in September, 1945.

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REPORT OF HIDES COMMITTEE ON OPERATIONS FOR YEAR ENDED 31st MARCH, 1946 The following report has been submitted to the Hon. the Minister of Marketing on behalf of the Hides Committee by the Chairman, Mr. A. P. O'Shea : I have pleasure in submitting the sixth annual report and statement of the Equalization Fund for the year ended 31st March, 1946. Export Levy.—There has been no change in the rate of levy during the past year. Current rates of levy are as follows : Ox-hides .. .. .. .. .. .. One penny farthing (1-J;d.) per lb. Cow-hides .. .. .. .. .. One penny farthing (lfd.) per lb. Bull-hides .. .. .. .. .. One penny (Id.) per lb. Yearlings .. .. .. .. .. .. One penny farthing (ljd.) per lb. Calf-skins (other than freezers) .. .. .. Threepence (3d.) per lb. Sale of Hides to Australia.—The arrangement made between the Governments of New Zealand and Australia continued at the prices set out in the schedule below until 20th August, 1945, when Australia restricted their purchases to heavy hides in the following classes : Ox-hides .. .. .. .. .. 48 lb. and up (all grades). Cow-hides .. .. .. .. .. 51 lb. and up (all grades). The ruling price schedule as at Ist April, 1945, was as follows :

As previously mentioned, the ox-hides 40/47 lb. and cow-hides 40/50 lb. were deleted from the schedule on 20th August, 1945. On 12th September, 1945, the contract with Australia was cancelled, and shipment of existing stocks as at that date was completed by November, 1945. Statistics.—The following shows the number of hides claimed by the tanners, and the number freed for export under the regulations during the year ending 31st March, 1946 :

Financial Report.—The following summary shows the position of the Equalization Fund as at 31st March, 1946: £ s. d. Bank balance as at Ist April, 1945 .. .. .. .. .. 22,008 11 2 Receipts from levy .. .. .. .. .. .. 83,098 19 4 105,107 10 6 Part payment of subsidy of £40,000 .. .. .. .. .. 35,000 0 0 140,107 10 6 Less claims paid to tanners, freezing companies, and exporters .. 112,925 17 10 27,181 12 8

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— Freezers. Abattoir. Country Butcher. First Country. Second Country. Third Country. Ox-hides 40/47 lb. 10* 9ft 9* 8ft 8* 7ft Ox-hides 48 lb. up — Average weight 49/52 lb. 10* 10* 9* 9* 8* 8* Average weight over 52/54 lb. 10ft 10* 9ft 9* 8ft 8* Average weight over 54/56 lb. 10| 10* 9f 9 i 8| 8i Average weight over 56/58 lb. 10# 10* I0f 9ft 9* 8ft 8* Average weight over 58/59 lb. 10191 9f 8f 8f Average weight over 59/61 lb. 10# 10* 9ft 9^ 8ft 8* Average weight over 61 lb. 11 10£ 10 9£ 9 Cow-hides — 51 lb. up 10* 9# 9fe 8ft 8 w 7ft' 40/50 lb. 10* 9# 9* 8ft 8& 7ft

— Ox. Cows. Bull. Yearlings. Calf-skins. Tanners' claims Freed for export 125,255 113,352 256,619 229,703 1,443 25,429 32,639 11,546 32,606 39,919 Totals 238,607 486,322 26,872 44,185 72,525

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Expenses to 31st March, 1946 £ s. d. £ s. d. Salaries .. .. .. .. .. .. 897 4 5 Rent, phone, &c. .. .. .. .. .. 52 10 0 Postages and petty expenses .. .. .. .. 31116 Audit fee .. .. .. .. .. 20 0 0 Bank fee and cheque-books .. .. .. .. 410 0 Travelling-expenses .. .. .. .. .. 24 5 3 Bureau fees .. .. .. .. .. 1 1 10 1,031 3 0 Bank balance as at 31st March, 1946 .. .. .. .. 26,150 19 8 Less unpaid claims at 31st March, 1946 .. .. .. 13,276 611 12,874 12 9 Plus levy on hides freed for export to 31st March 1946 and unshipped 16,760 0 0 Estimated surplus in Fund .. .. .. £28,634 12 9 Stabilization.—An estimate of the financial position as at 31st January, 1946, revealed that the credit balance was down to £1,161 4s. Id., and a request was made to stabilization for the fund to be restored to £40,000 as previously agreed upon in lieu of raising the export levy. In March £35,000 was duly paid over, and a further £5,000 has since been received owing to the actual position as at 31st January, 1946, showing a debit balance of £939. General.—l desire to again express my thanks to the members of the Committee, the Government Departments concerned, and to all sections of the trade for their willing assistance at all times. LINEN FLAX The annual report for 1941 set out the terms of sale to the United Kingdom Ministry of Supply of New Zealand's export production of linen-flax fibre, this covering the period of hostilities between the British Empire and Germany and one year thereafter. It should be noted that negotiations have since been concluded for the sale of the exportable surplus of fibre from the 1946 crop. Shipments from Ist August, 1945, to 31st July, 1946, were as under : Tons. cwfc. Linen-flax fibre and reiss .. .. .. .. 843 5 Tow and pluckings .. .. .. .. .. 433 17 1,277 2 The total value f.o.b. (New Zealand currency) of these exports was £243,140. SCHEELITE No further extension of contract with the United Kingdom Government was made after the 30th June, 1945. Stocks in store at that date were shipped under the then existing contract, and the figures covering the final transactions are shown in last year's annual report of the Department. SHIPMENTS TO TAHITI Since the close of the year under review (31st July, 1946) the conclusion has been reached of the arrangements whereby the Department has been purchasing and shipping to Tahiti, on behalf of the Administration, miscellaneous supplies in the nature of canned meats, processed milk, butter and cheese, &c. These arrangements

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have continued since January, 1942, and have materially assisted in the maintenance of Tahiti's requirements during the difficult war period. The French authorities have gratefully acknowledged the services rendered l?y the Department, and have now arranged for the resumption of normal peacetime trading. The total value c.i.f. Papeete of goods purchased and shipped for the year ended 31st July, 1946, was £146,042 (New Zealand currency). UNRRA AND CORSO It has been agreed to accept responsibility for shipment of goods on behalf of these organizations, and the Department's shipping officer has been making the necessary applications for space and arranging for shipment of a great variety of products. SUNDRY SUPPLIES FOR WAR OFFICE During the year, supplies of food products have been shipped under contract to the War Office. The value of the products shipped during the twelve months ended 31st July, 1946, is £507,802 (New Zealand currency). The accounts covering the purchase and sale transactions of the Department in connection with these United Kingdom War Office supplies are shown in the accounts section at the end of this report, page 53. The surplus for the year ended 31st July, 1946, is £417.

SUMMARY OF VOLUME OF SALES BY THE DEPARTMENT OF PRODUCTS FOR EXPORT FOR THE TWELVE MONTHS ENDED 31st JULY, 1946

40

Product. Volume. Equivalent Net Weight (in Tons). Value f.o.b. (N.Z. Currency). Butter 4,383,732 boxes 108,820 £ 20,263,744 Cheese 1,242,696 crates 87,811 9,675,646 Processed cheese 92,267 cases 2,348 375,411 Casein 8,480 sacks ■ 552 39,395 Condensed milk 40,000 cases 750 63,431 Evaporated milk 281,388 cases 6,030 382,799 Skim-milk powder 159,903 cases 7,225 440,846 Whole-milk powder 315 cases 7 842 Frozen meat 338,339 27,090,921 Canned meat 8,352 1,289,517 Woolly sheep-skins 791,223 number 2,716 249,407 Tallow 31,781 1,264,159 Linen-flax fibre 1,277 243,140 War Office contracts 507,802 . Hides .. 66,245 number 164,231 £62,051,291

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SECONDMENT OF DIRECTOR—MR. G. A. DUNCAN As it appears that the secondment of the Director of Export Marketing (Mr. G. A. Duncan) to the chairmanship of the New Zealand Wool Disposal Commission is likely to be for a protracted period, I feel it desirable to record here the Government's deep appreciation of Mr. Duncan's services since the inception of the Department in June, 1936. Prior to that date, Mr. Duncan was a member of the Executive Commission of Agriculture, which body performed an invaluable service in carrying through the zoning of dairy companies. Mr. Duncan's wide experience of the dairy industry was of the greatest value in setting up the Marketing Department on sound lines and on the initial and subsequent committees that annually fixed the guaranteed price, also later when war broke out and the Department was called upon to handle frozen meat, wool, and other primary products. His services, too, during frequent visits overseas to take part in price negotiations and in International Conferences were exceedingly helpful to the Government. Edward Cullen, Minister of Marketing.

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DAIRY-PRODUCE Administration and General Expenses Account for the Year ending 31st July, 1946 United New jy r Kingdom, Zealand. Total, Salaries £ Ct* £ «.«• 7,784 njm *^£asssas h "- ,w,A gssKiSSa^- 4 •• '•» 2, i :: - :: :: «? Subscriptions, donations, and entertainment !! !! 13 V oheese 238 Uen P cy expenses?" Lyttelton !! ! 1,780 ||l I >f£ 1945-46 season's produce— 74 ' i-udit fees 225 225 Creamery butter 35 530 )epreciafcion - :: :: "«» lei 111 & uttOT 18 ?°« £16,296 Processed-milk products | ]; ;; __j• • . .00 j 4i7 Ldvertismg in United Kingdom (includes background advertising partly recoverable from other accounts)* . OI o«1 liscellaneous expenses .. .. "" ' • 1«7 lost of remittances to dairy companies !! !! "" " a ail übsidy, Public Service Superannuation Fund |) " ' lg g £57 ' 174 £57,174 £20,000 ™ authorized for on "background" advertising to during calendar year ended 8 1„ Dumber, 1946, bat only a portion bad come tol^

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Final Purchase and Sale and Revenue Account 1944-45 Season's Dairy-produce Creamery Whey Processed Creamery Whey Processed Butter. Butter. Cheese. Milk. Total. Butter. Butter. Cheese. Milk. Total. Dr. £ £ £ £ £ Cr. £ £ £ £ £ Stocks in store at 31st July, 1945 .. 930,596 5,591 186,714 127,957 1,250,858 Sales net f.o.b. after 31«t July, 1945 Purchases on basis net f.o.b. after 31st United Kingdom .. .. 1,382,159 12,613 411,059 129,220 1,935,051 July, 1945 .. .. .. 347,537 5,135 165,000 160 517,832 Transfer to Dairy Industry Stabilization Account (being proceeds of increases in sale prices of dairy-produce after 15th December, 1942) .. .. 102,033 1,690 40,306 .. 144,029 Gross surpluses on transactions after 31st July, 1945, carried down .. 1,993 197 19,039 1,103 22,332 £1,382,159 £12,613 £411,059 £129,220 £1,935,051 £1,382,159 £12,613 £411,059 £129,220 £1,935,051 • £ £ £ £ £ Cross surpluses on transactions after £ £ £ £ £ Administration and general expenses 502 7 238 .. 747 31st July, 1945, brought down .. 1,993 197 19,039 1,103 22,332 Net surpluses on transactions after 31st July, 1945, carried down .. .. 1,491 190 18,801 1,103 21,585 £1,993 £197 £19,039 £1,103 £22,332 £1,993 £197 £19,039 £1,103 £22,332 • £ £ Net surplus on transactions after 31st July, 1945, brought down .. .. 21,585 Balance, being final surplus on purchase and sale of 1944-45 season's production, __ Net surplus on transactions up to 31st July, 1945 (as shown in accounts for year ended carried to Dairy-produce Account .. .. .. .. •• •• 1,154,011 31st July, 1945) .. .. .. .. .. .. 1,132,426 £1,154,011 £1,154,011

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DAIRY-PRODUCE— continued Purchase and Sale and Revenue Accounts, 1945-46 Season's Dairy-produce Purchased up to 31st July, 1946 Creamery "Whey Processed Creamery Whey Processed Butter. Butter. Cheese. Milk. Total. Butter. Butter. Cheese. Milk. Total. Dr. £ £ £ £ £ Gr. £ £ £ £ £ Purchases on basis net f.o.b. .. 14,416,639 327,206 7,358,439 793,592 22,895,876 Sales net f.o.b. to United Transfer to Dairy Industry Kingdom .. .. 17,894,504 447,835 9,412,154 798,092 28,552,585 Stabilization _ Account (being To other destinations .. 526,631 .. 227,845 .. 754,476 proceeds of increases in sale Stocks in store awaiting shipprices of dairy-produce after ment .. .. .. 176,925 .. 155,787 .. 332,712 15th December, 1942) .. 4,043,828 105,700 1,673,940 .. 5,823,468 Gross surpluses carried down .. 137,593 14,929 763,407 4,500 920,429 £18,598,060 £447,835 £9,795,786 £798,092 £29,639,773 £18,598,060 £447,835 £9,795,786 £798,092 £29,039,773 £££££ £ £ £ £ £ Administration and general Gross surpluses, brought down 137,593 14,929 763,407 4,500 920,429 expenses .. .. 35,530 806 18,135 1,956 56,427 Surpluses, carried down .. 102,063 14,123 745,272 2,544 864,002 £137,593. £14,929 £763,407 £4,500 £920,429 - £137,593 £14,929 £763,407 £4,500 £920,429 * Net Revenue Account £ £ Storage on dairy-produce in store in excess of two months .. .. .. 20,444 Surpluses, brought down .. .. .. .. .. .. .. 864,002 Net surplus, carried to Dairy Produce Account .. .. .. .. 1,091,761 Interest on investments .. .. .. .. .. .. .. 108,085 Transfer from Internal Marketing Division Butter Equalization Account .. .. 140,118 £1,112,205 £1,112,205 Dairy-produce Account Dr. £ £ Cr. Deficit on 1936-37 season's produce .. .. .. .. 276,850 Surpluses— £ Less payment from Consolidated Fund .. .. .. .. 276,850 1937-38 season's produce .. .. .. .. .. .. 576,724 .. 1939-40 season's produce .. .. .. .. .. .. 62,363 Deficit on 1938-39 season's produce .. .. .. .. .. 2,514,889 1940-41 season's produce .. .. .. .. .. .. 151,989 Balance, being net surplus from commencement of purchase up to 31st 1941-42 season's produce .. .. .. .. .. .. 773,252 July, 1946, transferred to Dairy Industry Stabilization Account— 1942-43 season's produce .. .. .. .. .. .. 734,657 Amount transferred in previous years'accounts .. ... .. 1,492,098 1943-44 season's produce .. .. .. .. .. .. 575,576 Amount transferred in 1945-46 year's accounts .. .. .. 1,113,346 1944-45 season's produce .. .. .. .. .. .. 1,154,011 2,605,444 1945-46 season's produce purchased up to 31st July, 1946 .. .. .. 1,091,761 £5,120,333 £5,120,333

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Dairy Industry Stabilization Account : Transactions during the Year ended 31st July, 1946 Dr. £ £ Or. £ Additional administration costs, New Zealand Dairy Board.. .. .. 10,500 Balance as at 31st July, 1945 .. .. .. .. .. .. 4,675,446 Dairy-factory and farm-costs allowances .. .. .. .. 5,711,453 Proceeds of increases in sale-prices of produce sold to United States Army .. 68,422 Subsidies on fertilizers, <fec. .. .. .. .. .. 1,290,816 Transferred from Purchase and Sale Account (Final), 1944-45 Season .. .. 144,029 Cheese-crate and butter-box pools stabilization payments to 31st July, Transferred from Purchase and Sale Account, 1945-46 Season .. .. .. 5,823,468 1946 .. .. .. .. .. .. .. 97,536 Transferred from Dairy Produce Account 1945-46 .. .. .. .. 1,113,346 7,099,805 Increased costs of storage, of dairy-factory requisites and of insurance to f.o.b. on increased values of dairy-produce .. .. .. .. 11,166 Balance as at 31st July, 1946 .. .. .. .. .. .. 4,703,240 £11,824,711 £11,824,711 Note.—The Dairy Industry Stabilization Account was opened in terms of the stabilization agreement between the Government and representatives of the farming industries (see annual report for 1942-43, pages 3 to 6). The debits to the account will be the costs allowances and other costs of stabilization in terms of the stabilization agreement. The credits to the account a it (a) the surplus in the Dairy Produce Account and (6) the proceeds of increases in sale-prices received after 15th December, 1942.

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MEAT Administration and General Expenses Account for the Year ended 31st July, 1946 Dr. £ Gr. £ Salaries .. .. .. .. .. .. .. 6,787 Allowance for administration on sales of 1944-45 season's meat after Office rent, maintenance, cleaning, telephones, and sundry expenses 738 31st July, 1945 .. .. .. .. .. .. 28,121 Postages, cables, printing, and stationery .. .. .. 1,069 Allowance for administration on sales of 1945-46 season's meat up Travelling-expenses .. .. .. .. .. 41 to 31st July, 1946 .. .. .. .. .. 57,883 Shipping inspection and refrigeration supervision .. .. 1,500 Allowance for administration on sales of bobby veal up to 31st Audit fees .. .. .. .. .. .. 293 July, 1946 .. .. .. .. .. .. 1,890 Depreciation (office and departmental equipment) .. .. 115 Exchange on remittances .. .. .. .. .. 4,047 Payments to— New Zealand Meat Producers Board .. .. .. 40,000 Pig Allocation Committees .. .. .. .. 193 Subsidy, Public Service Superannuation Fund .. .. 38 Balance to Meat Account .. .. .. .. .. 33,073 £87,894 £87,894

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Final Purchase and Sale Account, 1944-45 Season's Killings Dr. £ £ Cr. £ £ Stock 011 hand and loadings not departed at 31st Sales— July, 1945 .. .. .. 7,446,802 Shipments to United Kingdom after 31st July, Less preserved meat transferred to 1945-46 1945— Purchase and Sale Account .. .. 46,575 Lamb .. .. .. .. .. 4,566,240 7,400,227 Wether mutton .. .. .. 272,176 Purchases after 31st July, 1945— Ewe mutton .. .. .. .. 672,916 Lamb .. .. .. .. .. 17,982 Beef and veal .. .. .. .. 1,428,976 Wether mutton .. .. .. .. 2,038 Boner bull beef .. .. .. .. 60,819 Ewe mutton .. .. .. .. 10,244 Boner cow beef.. .. .. .. 12,658 Beef and veal .. .. .. .. 38,244 Pig-meat .. .. .. .. 384,791 Boner bull beef .. .. .. .. 6,850 Offals .. .. .. .. .. 198,702 Boner cow beef .. .. .. .. 14,424 7,597,278 Pig-meat .. .. .. . . 58,908 Local deliveries (including for United States Offals .. .. .. .. .. 11,840 Armed Forces)— 160,530 Lamb .. .. .. .. .. 237,620 Allowance for administration and general expenses (f per cent. Wether mutton .. .. .. .. 56,108 on Sales, £7,499,034), carried to Administration and General Ewe mutton .. .. .. .. 4,178 Expenses Account .. .. .. .. .. 28,121 Beef and veal .. .. .. .. 773,054 Transfer to Meat Industry Stabilization Account £ Boner bull beef .. .. .. .. 6,291 (being net proceeds of increases in sale prices Boner cow beef .. .. .. .. 113,282 of meat after 15th December, 1942) .. 1,608,737 Pig-meat.. .. .. .. .. 275,087 Less amount of increases in purchase-prices of Offals .. .. ~ 44,873 meat after Ist October, 1944 .. .. 758,612 1,510,493 850,125 Surplus on transactions after 31st July, 1945, carried to Meat Pool Account .. .. .. .. .. 668,768 £9,107,771 £9,107,771

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MEAT— continued Purchase and Sale Account, 1945-46 Season's Killings up to 31st July, 1946 Dr. Cr. Purchases, Ist October, 1945, to 31st July, 1946— £ £ Sales— Lamb .. .. .. .. .. 14,118,991 Shipments to United Kingdom up to 31st Wether mutton .. .. .. 1,026,689 July, 1946— £ £ Ewe mutton .. .. .. .. 2,135,339 Lamb .. .. .. .. 11,554,161 Beef and veal .. .. .. .. 1,952,547 Wether mutton .. .. .. 676,707 Boner bull beef .. .. .. .. 180,272 Ewe mutton .. .. .. .. 1,577,216 Boner cow beef .. .. .. .. 455,146 Beef and veal .. .. .. 1,287,483 Pig-meat .. .. .. .. 1,248,318 Boner bull beef .. .. .. 182,684 Offals .. .. .. .. 703,169 Boner cow beef .. .. .. 242,038 Preserved— Pig-meat .. .. .. .. 739,874 Stock transferred from 1944-45 Purchase and Offals .. .. .. .. 720,568 Sale Account .. .. .. .. 46,575 Preserved .. .. .. .. 1,042,738 Purchases .. .. .. .. 1,131,477 18,023,469 2 2,99 8,523 Local deliveries— Allowance for administration and general expenses (f per cent. Lamb .. .. .. .. .. 604 on sales, £15,435,489), carried to Administration and Wether mutton .. .. .. 7,263 General Expenses Account .. .. .. .. 57,883 Ewe mutton .. .. .. .. 13,281 Transfer to Meat Industry Stabilization £ Beef and veal .. .. .. .. 13,047 Account— Boner bull beef .. .. .. .. 2,133 Proceeds of increases in sale prices of meat Boner cow beef .. .. .. .. 33,940 after 15th December, 1942 .. .. 3,333,068 Pig-meat .. .. .. .. 406,773 Less amount of increases in purchase-prices Offals .. .. .. .. .. 21,268 of meat after Ist October, 1944 .. 1,916,781 Preserved .. .. .. .. 246,779 1,416,287 745,088 Surplus on transactions up to 31st July, 1946, carried to Meat Stock on hand (including loadings not departed at 31st July, Pool Account .. .. .. .. .. 1,342,026 1946) .. .. .. .. .. .. 7,046,162 £25,814,719 £25,814,719

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Meat Pool Account to 31st July, 1946 Dr. £ £ Or. £ Insurance on frozen and preserved meat .. .. 3,666 Balance as at 31st July, 1945 .. .. .. .. 6,245,413 Storage on frozen and preserved meat .. .. 7,781 Surplus on 1944-45 season's killings sold after 31st July, 1945 668,768 11,447 Surplus on 1945-46 season's killings sold up to 31st July, 1946 1,342,026 Marketing expenses .. .. .. .. .. 25,465 Surplus on tallow sales .. .. .. .. ... 289,913 Payment to New Zealand Dairy Board (being surplus on sale of Surplus on slipe wool .. .. .. .. .. 185,431 veils prior to 1942-43 season) .. .. .. .. 2,562 Rent from emergency canning-plant .. .. .. 2,862 Balance, being surplus to 31st July, 1946 .. .. .. 8,931,174 Dehydratedmeat (being Meat Pool portion on raw meat supplied) 54,952 Kakariki Freezing-works (being surplus on transactions) .. 3,447 Interest .. .. .. .. .. .. 177,836 £8,970,648 £8,970,648 Meat Account Dr. £ Or. £ Payment to War Expenses Account .. .. .. .. 38,459 Balance as at 31st July, 1945 .. .. .. .. 38,459 Balance as at 31st July, 1946 .. .. .. .. 33,073 Surplus from Administration and General Expenses Account .. 33,073 £71,532 £71,532

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MEAT—continued Meat Industry Stabilization Account : Transactions during the Year ended 31st July, 1946 Cr. £ Dr. • £ Balance as at 31st July, 1945 .. .. .. .. 2,913,671 Freezing costs subsidy (being additional costs other than wages Transfer from 1944-45 Purchase and Sale Account .. .. 1,608,737 increases), season 1945-46 .. .. .. .. 413,186 Transfer from 1945-46 Purchase and Sale Account .. .. 3,333,068 Freezing costs subsidy (being additional costs from wages Transfer from Tallow Account .. .. .. .. 333,280 increases)— Dehydrated meat (proceeds of increased prices of raw meat Season 1944-45 .. .. .. .. .. 392,616 supplied) .. .. .. .. .. .. 15,472 Season 1945-46 .. .. .. .. .. Freezing costs subsidy (being additional wages costs £ due to the forty-hour week, 2nd January, 1946, to 31st July, 1946) .. .. .. ..179,093 Less amount recouped from War Expenses Account 179,093 Subsidies on fertilizers and stock food .. .. .. 597,455 Subsidy on local market meat .. .. .. .. 400, 000 Schedule purchase-price increases from Ist October, 1944 £ Season 1944-45 .. .. .. .. 758,612 Season 1945-46 .. .. .. .. 1,916,781 2,675,393 Balance as at 31st July, 1946 .. .. .. .. 3,270,754 £8,204,228 £8,204,228 Note.—£20,000 was authorized for expenditure on " background " advertising in United Kingdom for the calendar year ended 31st December, 1946, but no part of this amount had come to charge at 31st July, 1946.

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Bobby Calf Pool Account to 31st July, 1946 Dr. £ Cr. £ Stock on hand and loadings not departed at 31st July, 1945 .. 34,348 Balance as at 31st July, 1945 .. .. .. .. 226,934 Purchases, season 1944-45 .. .. .. .. 217,986 SalesPurchases, season 1945-46 .. .. .. .. 150,284 Shipments to United Kingdom of 1944-45 season's meat after Allowance for administration and general expenses (f per cent, on 31st July, 1945 .. .. .. .. .. 365,818 sales, £504,110), carried to Administration and General Shipments to United Kingdom of 1945-46 season's meat up to Expenses Account .. .. .. .. .. 1,890 31st July, 1946 .. .. .. .. .. 121,514 Transfer to Bobby Calf Stabilization Account (being proceeds of Local deliveries— increases in sale prices after 15th December, 1942)— £ 1944-45 season's meat after 31st July, 1945 .. .. 6,469 Season 1944-45 .. .. .. .. 67,544 1945-46 season's meat up to 31st July, 1946 .. .. 10,309 Season 1945-46 .. .. .. .. 23,090 Stock on hand (including loadings not departed at 31st July, 1946) 56,664 90,634 Balance as at 31st July, 1946 .. .. .. .. 292,566 £787,708 £787,708 Bobby Calf Stabilization Account : Transactions during the Year ended 31st July, 1946 Dr. £ Cr. £ Freezing costs subsidy (being additional costs other than wages Balance as at 31st July, 1945 .. .. .. .. 102,941 increases), season 1945-46 .. .. .. .. 12,134 Transfer from Bobby Calf Pool Account .. .. .. 90,634 Freezing costs subsidy (being additional costs from wages increases)— Season 1944-45 .. .. .. .. .. 12,060 Season 1945-46 .. .. .. .. .. 11,441 Bobby calf-skins subsidy (being difference between domestic price and export parity of freezer calfskins)— £ Season 1944-45 .. .. .. .. .. 12,042 Season 1945-46 ■ .. .. .. 16,622 Less amount recouped from War Expenses Account 16,622 Balance as at 31st July, 1946 .. .. .. .. 145,898 £193,575 £193,575

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TALLOW Purchase and Sale Account for the Year ended 31st July, 1946 Dr. £ £ Cr. £ Purchases .. .. .. .. .. .. 679,889 Sales to.United Kingdom .. .. .. . 999 559 Allowances for administration and handling .. .. 7,946 Sales to United States and Canada .. .. .. 245'554 Marketing expenses .. .. .. .. .. 1,126 Sales to other destinations .. .. .. .. 19' 046 Transfer to Meat Stabilization Account (being proceeds of Interest .. .. .. .. .. '' 4 'ois increases in sale prices of tallow after 15th December, 1942) 333,280 Surcharge on soap exports .. 43*980 Surplus carried to Meat Pool Account .. .. .. 289,913 £1,312,154 £1^312454 Revenue Account for the Year ended 31st July, 1946 „ . Dr% £ Gr. £ Salaries .. .. .. .. .. .. 1,015 Allowance for administration and handling .. .. .. 7,946 Office rent, maintenance, cleaning, telephones, and sundry expenses 231 Postages, cables, printing, and stationery .. .. .. 385 Audit fees .. .. .. .. .. .. 87 Cost of remittances to manufacturers and others .. .. 523 Net surplus .. .. .. .. .. .. 5,705 £7 > 946 £7,946 Tallow Account Dr. £ Gr. £ Payment to War Expenses Account .. .. .. .. 4,885 Balance as at 31st July, 1945 .. .. .. .. 4 885 Balance as at 31st July, 1946 .. .. .. .. 5,705 Net surplus, year ended 31st July, 1946 .. .. .. 5,'705 £ 10 ,590 £10,590

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WAR OFFICE CONTRACTS Purchase and Sale Account for the Year ended 31st July, 1946 _ , Dr - £ Or. £ Purchases .. .. .. .. .. .. 507,582 Sales .. .. .. .. .. .. .. 507,802 Gross surplus, carried down .. .. .. .. 220 £507,802 £507,802 Revenue Account for the Year ended 31st July, 1946 Dr - £ Or. £ ►Salaries .. .. ~ .. ~ .. .. 150 Gross surplus brought down .. .. .. .. 220 Postages, cables, printing, and stationery .. .. .. 348 Interest .. .. .. .. .. .. .. 787 Telephones, rent, and sundry expenses .. .. .. 82 Cost of remittances to manufacturers and others .. .. 10 Net surplus .. .. .. .. .. * .. 417 £1,007 £1,007 HIDES Purchase and Sale Account for the Year ended 31st July, 1946 Dr. £ I Or. £ Purchases .. .. .. .. .. .. 164,231 | Sales .. .. .. .. .. .. .. 164,219 | Balance carried down .. .. .. .. .. 12 £164,231 I £164,231 Revenue Account for the Year ended 31st July, 1946 Dr. £ Or. £ Balance brought down .. .. .. .. 12 Deficit for year ended 31st July, 1946 .. .. .. .. 740 Salaries .. .. .. .. .. .. .. 58 Postages, cables, printing, and stationery .. .. 24 Telephones, rents, and sundry expenses .. .. 50 Interest .. .. .. .. .. .. .. 532 Cost of remittances .. .. .. .. .. 64 £740 £740

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NEW ZEALAND SHEEP-SKIN CONTROL Purchase, Sale, and Revenue Account for the Year ended 30th June, 1946 Dr. £ Or. £ Stocks, 30th June, 1945 .. .. .. •• 213,645 Sales .. .. .. .. .. .. .. 876,184 Purchases .. .. .. .. •• •• 712,848 Stocks, 30th 7 June, 1945 .. .. .. .. 237,646 Working charges and trading expenses .. .. .. 159,995 Gross surplus .. .. .. .. •• •• 27,342 £1,113,830 £1,113,830 Administration expenses— £ » £ Salaries .. .. .. .. •• 9,529 Gross surplus .. .. .. .. .. .. 27,342 Travelling-expenses .. .. .. • • • • 981 Postages and telegrams .. .. . • • • 280 Telephones .. .. . • • • • • • • 601 Stationery .. .. .. • • • • • • 290 Exchange .. .. • • •• • • • • 9 Interest .. .. •• •• •• •• 1,960 Sundry .. .. • • • • • ■ • • 482 Rent •• •• 793 Insurance .. .. x • • • • • • • 29 Net surplus .. .. • • •• •• •• 12,388 £27,342 £27,342

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Balance-sheet as at 30th June, 1946 Liabilities £ Assets £ £ Sundry Products Account .. .. .. .. 140, 224 Furniture and fittings .. .. .. .. 1,055 Sundry creditors .. .. .. . . .. 114,258 Motor-car .. .. .. .. .. 81 Pool Account— £ 1,136 Surplus for year .. .. .. .. 12,388 Sundry debtors .. .. .. .. .. .. 107,730 Transfer to Reserve Account .. .. .. 12,388 Stocks— .. Skins, wool, pelts .. .. .. .. 237,646 Reserve Account (being 5 per cent, wool retentions) .. 84,256 Retention money on stocks .. .. .. 4,389 Plus pool surplus .. .. ..12,388 242,035 96,644 Cash .. .. .. .. .. .. .. 225 £351,126 £351,126 R. 0. Burgess, Controller. I hereby certify that the Revenue Account and the Balance-sheet have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby, subject to the following remark: the value of the stocks has been accepted at a figure fixed by the Sheep-skin Controller.— J. P. Rutherford, Controller and Auditor-General.

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MARKETING DEPARTMENT (EXPORT DIVISION) Balance-sheet as at 31st July, 1946 Liabilities £ Assets £ £ Sundry creditors, accrued charges and sundry credit balances .. .. 9,074,432 Cash held in London .. .. .. .. .. .. 2,373 Farm Products Stabilization Accounts— • £ Cash, Reserve Bank of New Zealand— Dairy Industry Stabilization Account .. .. .. .. 4,703,240 Meat Industry Account .. .. .. .. .. 2,689,252 Meat Industry Stabilization Account .. .. .. .. 3,270,754 Sundry Products Account .. .. .. .. .. 474,971 Bobby Calf Stabilization Account .. .. .. .. 145,898 8,119,892 3,166,596 Meat Pool Account .. .. .. .. .. .. .. 8,931,174 Less Dairy Industry Account .. .. .. .. 103,673 Bobby Calf Pool Account .. .. .. .. .. .. 292,566} 3,062,923 Net surpluses on administration allowances— Sundry debtors for produce and amounts accrued due .. .. .. 1.391,109 Meat Account .. .. .. .. .. .. 33,073 Stocks .. .. .. .. .. .. .. .. 7^623,416 Tallow Account .. .. .. .. .. 5,705 Investments in Treasury bills and war loans .. .. .. .. 14,200,000 War Office Contracts Account .. .. .. .. 417 Office and departmental equipment .. .. .. -.. .. 9,270 Advances to Sheep-skin Controller .. .. .. .. .. 169,801 39,195 Less deficit Hides Account .. .. .. .. .. 740 38,455 £26,456,519 £26,456,519 G. M. Pottinger, Acting Director. W. J. Pratley, Accountant. I hereby certify that the several Purchase and Bale and Revenue Accounts, Administration and General Expenses Accounts, together with the Balance-sheet as at 31st July, 1946, have been examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— J. P. Rutherford, Controller and Auditor-General.

By Authority: E. V. Paul, Government Printer, Wellington.— 1947,

Price Is. 3d. 1

Approximate Cost of Paper.—Preparation, not given; printing (1,458 copies), £l5O.

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