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Dairy Industry (Profitability)

Volume 655: debated on Thursday 8 March 1962

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asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the profitability of the dairying industry.

Some indication of the profitability of dairy farming is given by the National Investigation into the Economics of Milk Production carried out by the University Departments of Agricultural Economics. The latest results, for 1960–61 as compared with 1956–57, show that the increase in production costs per gallon was negligible but this has been accompanied by a reduction in the pool price due to increased national production. Although the profit margin per gallon has consequently fallen, yields per cow and the average size of the herd in the country generally have risen.

Is the Minister aware that the latest cut of 1d. a gallon in the February price of milk makes it the lowest final average price for milk for this month since decontrol, and what does he intend to do about the unabated flood of milk? Is he aware that the latest available figures show that the profitability of the industry was down by 19 per cent. compared with last year?

I feared that the hon. Member had put down this Question in order to ask what I was proposing to do about it. We are in the middle of the Annual Price Review the results of which I shall be announcing, and it would not be in order to comment on it at present.

Is my right hon. Friend aware that the value of milk in real terms to the farmers is less now than it was twenty-five years ago, and that, relatively, the cost of distribution has increased?

I should like notice of that supplementary question before answering in detail. But I think my hon. Friend would agree that the price fixed for the standard quantity of milk is one which would ensure a very reasonable return to the farmer.