Right Hon. J. G. GARDINER (Minister of Agriculture):
Mr. Speaker, I stated to the house some days ago that I would be prepared to make an announcement with regard to the return on dairy products to go into effect immediately.
In view of the fact that subsidies on butter-fat used in the manufacture of creamery butter and on milk used in the manufacture of cheddar cheese will be discontinued as of tonight and that certain production costs, not-
Dairy Products and Eggs
ably of feeds, have increased, I wish to announce at this time certain arrangements that have been made that will affect returns to producers with respect to butter, cheese, evaporated milk, and eggs.
Butter.-With the concurrence of the Minister of Finance I am authorized to state that the wartime prices and trade board have increased the ceiling price on butter by ten cents per pound effective May 1st, 1947.
From January 1st, 1944, to date, the subsidy paid by the dominion government to producers of milk for the manufacture of creamery butter has been on the basis of ten cents per pound butterfat, equivalent to 8J cents per pound of butter. The new ceiling therefore not only compensates for discontinuance of this subsidy but also provides an extra 1J cents per pound of butter.
Another factor influencing returns to many producers of milk for butter production is an agreement recently negotiated with the British Ministry of Food for the sale of at least eight million pounds of roller skim milk powder, at a price of 13\ cents per pound.
It was announced some time ago that in the event of an increase in. the ceiling price of butter action would be taken to capture the increased inventory value of stocks of butter held at the time the ceiling was changed. This action is being taken by the Commodity Prices Stabilization Corporation Limited.
Cheese-The cheese agreement with the Ministry of Food covering the production year beginning April 1st, 1947, has been amended to incorporate the following prices for export cheese delivered F.O.B. factory shipping point or grading station shipping point: First grade, 25 cents per pound; Second grade, 244 cents per pound; Third grade, 24 cents per pound.
This new price of 25 cents per pound for first grade cheese compares with 23-3 cents per pound which the Ministry of Food had previously agreed to pay.
The returns from the 25-cent price provided under this amended 1947-48 contract represent an increase of 1 * 7 cents per pound of cheese above those available in. the 1946-47 contract year from the 20 cents per pound price for cheese plus the subsidy of thirty cents per hundred! pounds of milk used in the manufacture of cheddar cheese.
Evaporated Milk.-It will be recalled that the subsidy paid by the dominion government on milk used in the manufacture of evaporated milk was discontinued as of September 30, 1946. Effective October 1, the wartime prices and trade board authorized an increase in the ceiling price of evaporated milk sold in Can-
ada so that returns to producers would not be disturbed as a result of the discontinuance of the subsidy. The pack of milk (600,000 cases) for the Ministry of Food under the 1946-47 contract had already been completed by that date.
With respect to the 1947-48 contract, the Ministry of Food has already agreed to purchase 600,000 cases of evaporated milk in the production year beginning April 1, 1947, at a price of $5.25 per case, basis f.o.b. ocean steamers Montreal, Vancouver or New Westminster or, in the event of shipment through some other port, f.o.r. the ports mentioned. This would give producers the same returns for milk as they received in the 1946-47 contract year, when the dominion government paid a subsidy on milk used for this purpose.
In view of the higher returns that have now been provided for cheese and other dairy products, negotiations are now being carried on with a view to amending the 1947-48 contract for evaporated milk at a price to be mutually agreed upon which will keep returns to producers of milk for this purpose in proper relationship with returns for other dairy products.
Eggs.-Prices for eggs under the British contract are to be advanced by 14 cents per dozen effective with eggs purchased or contracted for by the special products board on and after May 5, 1947. An additional increase of 14 cents per dozen will be effective on fresh eggs purchased under the British contract for export in the shell during the months of September, 1947, to January, 1948, inclusive.
These adjustments have been concurred in by the Ministry of Food in order that egg production, and supplies to Britain, will not be curtailed as a result of recent advances in poultry feed costs or of further advances in feed prices which may occur when subsidies on grains are removed.
Whether or not these adjustments will compensate in full for increases in feed prices which have taken place or may take place in the future, the British have made it clear that this is the limit to which they can go under the present contract, which expires on January 31, 1949. It is our opinion that if producers desire stabilization of prices based on contracts with the United Kingdom they should not expect variations in contract prices following every change in costs.
Prior to the latest adjustments, egg prices under the present contract were 14 cents per dozen higher than in 1946 for the period of February to August, inclusive, and 2| cents per dozen higher than in 1946 for fresh eggs
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exported during the period September to January, inclusive. With the present increases, prices from May 5 to the end of August will be 3 cents per dozen higher than in 1946, and fresh export eggs in the September to January period will be 5i cents above 1946.
The immediate increase of 1| cents per dozen will, as already stated, be effective with purchases of eggs from suppliers by the special products board as from May 5. The Ministry of Food have stressed their expectation that the full amount of this increase will be reflected immediately to producers for all eggs delivered at registered egg grading stations for carlot shipment to the special products board.
Subtopic: DISCONTINUANCE OF BUTTER AND MILK SUBSIDIES-ANNOUNCEMENT AS TO PRICES