H.- 30

ACCOUNTS. The accounts submitted with this report are in terms of New Zealand currency, and they show the operations of the Department in the purchase and sale of export dairy-produce for the 1936-37 season. The accounts cover all export butter and cheese which was manufactured from Ist August, 1936, to 31st July, 1937, the quantities being— 149,810 tons of creamery butter. 1,446 tons of whey butter. 86,708 tons of cheese. The average f.o.b. purchase prices paid or payable for this produce in terms of the Primary Products Marketing Act are as follow :— Creamery butter. . .. .. .. .. 12-6624 d. per pound. Whey butter .. .. .. ~ . . 11-4829 d. per pound. Cheese .. .. .. . . . . . . 7-2 d. per pound. The average approximate f.o.b. realizations for produce (actual and estimated), as shown in the accounts, are as follow :— Creamery butter.. .. .. .. .. 12-261 d. per pound. Whey butter .. .. .. .. .. 11-06 d. per pound. Cheese . . .. .. .. .. . . 7-223 d. per pound. In the compilation of the accounts butter and cheese unsold at balance date were taken in at the following values : — Creamery butter (shipments partially sold) : 115s. per hundredweight sterling gross. Creamery butter (in store awaiting shipment) : 116s. per hundredweight sterling gross. Whey butter (shipments partially sold) : 107s. per hundredweight sterling gross. Whey butter (in store awaiting shipment) : 108s. per hundredweight sterling gross. Cheese (shipments partially sold) : 675. 6d. per hundredweight sterling gross. Cheese (in store awaiting shipment) : 645. per hundredweight sterling gross. The accounts submitted comprise : — (1) Separate Purchase and Sale or " Pool " Accounts for creamery butter, whey butter, and cheese. (2) Administration and General Expenses Account. (3) Dairy Industry Account. (4) Balance-sheet. The Purchase and Sale or " Pool " Accounts show the purchase value of the produce, and the sale-value less selling charges, freight, and insurance. To each Purchase and Sale Account is charged its proportion of the total administration and general expenses, amounting to £174,266 19s. 3d. To the Creamery Butter Purchase and Sale Account is charged the amount of £30,866 17s. due to the Butter-box Pool Account, following the decision of the Government to make a refund of the deductions made from payments to dairy companies which had used the " Saranac" type butter-box for the packing of their butter. To the Creamery Butter Purchase and Sale Account is also charged the sum of £16,000, being the estimated amount due to butter-manufacturing companies to preserve equity in. respect of grading dates of produce payable at thel936-37 and the 1937-38 guaranteed prices. The explanation of this item is that certain dairy companies, complying with the requests of the Department, sent forward for shipment from time to time quantities of butter and cheese for United Kingdom outports and destinations other than London. In so doing these dairy companies, in comparison with other companies, had a greater proportion of their produce payable at the 1936-37 guaranteed prices, and thus suffered the loss of the difference between the 1936-37 and the 1937-38 prices on such excess proportion. The additional payment of £16,000, which has been provided for in the accounts, corrects this disparity in so far as creamery butter is concerned. To the Cheese Purchase and Sale Account is charged the sum of £28,000, being the estimated amount due to cheese-manufacturing companies to preserve equity in respect of grading dates of produce payable at the 1936-37 and the 1937-38 guaranteed prices. The explanation given above of the corresponding item in the Creamery Butter Purchase and Sale Account applies also to this item of £28,000. To the Cheese Purchase and Sale Account is also charged the sum of £165,000, being the sum estimated to provide a further payment of Jd. per pound on all cheese graded up to and including 18th March, 1937, purchased by the Government and exported from New Zealand on or before 31st July, 1937. The effect of this provision is that a further payment of Jd. per pound will be made on all cheese which has been paid for at the 1936-37 season prices. Provision has been made for payment on whey butter to preserve equity (as in the case of creamery butter and cheese) in respect of grading dates of produce payable at the 1936-37 and the 1937-38 guaranteed prices. The amount involved is included in the sum of £28,000 charged to Cheese Purchase and Sale Account. The Administration and General Expenses Account shows the itemized expenses in the United Kingdom and in New Zealand, and the expenses and charges due or accruing on sale of the 1936-37 season produce. After deducting the proportion of the 1935-36 levy to cover the expenses incurred in marketing the balance of the 1935-36 season product, the balance of this account is allocated to the Produce Purchase and Sale Accounts as already mentioned.

36