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Outdated Farm Policies policies into Ine with the conceipt of the modern business farm, foe it p>uibMc or private. "Fairm policies predicated o»n the pioneer family-farm concept are no longer valid todiaiy, even though many are still in use." warned Mir. Joss, Meantime, the 1967 m a rket outlook again is clouded by 4 'moire governmental activity and interference" in the dairy industry. Farmers' demands for higher milk prices likely will result in further government sobsidiies, and a probable increase in fresh cheese prices up to 46 cents, the report states, In 1967, this could further complicate reasons for a "noticeable decline" M domestic cheese consumption! noted last year. The United Kingdom, traditional big customer for Canadian dheddiair, maintained a strong demand liasit' year, because am export subsidy was madnitaiincd. "If this export market is expected to be maintained and increased, an increased subsidy will have to be implemented/* claimed Mr. Joiss. "It is unlikely that the United Kingdom buyer will pay very much more for Canadian cheese, especially in view of the weakening world price on cheesie generally." Meaaiitimie, hopes for increased U.S. sales have proven premature, the chairman confessed. Mr, Joss said an unfortunate situation had developed, whel'eby the market has been weakened by surplus. "It is unlikely that an/ imp-rovement in the export situation to that country will! take place during the year. 7 Meantime, company-- policy has been actively pursued to eliminate slow-moving and unprofitable lines, anid introduction of new products to match rapidly-changing demands of the Canadian consumer. Net earnings of the company at $67,126 were slightly under one per cent of galas. "As we pointed out last year, this is about one-half the industry average, and must be considerably improved,'* s»aid Mr. Josis. Production difficulties in midyear led to excessive l o s s through spoilage. Among the year's problems was the discovery that the claims of Canadian packaging suppliers for their material had no*t been borne ooit. Black Diamond subsequently had to switch to American sources for its wrapping material. Other financial statistics produced in the report, with comparisons for 1965 in brackets, included : Net earnings per share, $7.46 ($7.28); cash dividends per share, $2 (unchanged); working capital, 311,400 (312,760) wages, salaries, employee benefits $541,400 ($485,100).