BUTTER & CHEESE

Dominion, Volume 14, Issue 265, 3 August 1921, Page 6

BUTTER & CHEESE

EXPORT VALUES MOUNTING OFFERS THAT HAVE BEEN \ RECEIVED QUESTION OF LOCAL PRICE Inquiries that are reaching New Zealand from the United Kingdom for butter and cheese indicate that the tendency of prices is still upwards. Factories could sell next season’s outputs at prices very much higher than seemed probable a few months ago, but it appears tnat they are in no hurry to do business. The severe drought in Britain and in parts of Western Europe is producing conditions that are likely to be very favourable to the New Zealand dairy industry. An offer of roughly 11 jd. per lb. for next season’s ’cheese has reached New Zealand. This is Id. per lb. more than the best price paid by tne Imperial Government during the period of the war contracts, but factories are not being advised to accept it. The price mentioned represents on a parity basis about 1325. per- cwt. in London, where New Zealand cheese has been quoted within the last few days at from 13'2s. to 1345. per cwt. with a tendency upwards. Canadian cheese is quoted at from 1365. to I4os. per owt. In considering these prices, it has to be remembered that the season of maximum production is closing on the other side of the world, and that winter prices will shortly be ruling in Britain. It is not considered likely that New Zealand exporters will make many contracts in the immediate future. They probably will prefer to watch developments. The best offer so far received for butter is stated to have been 25., equivalent to 2s. Id. per lb. f.o.b. for a period ending October 31 next. This offer apparently is based on ’the current London quotation for New Zealand first and second grade, from 2595. to 2625. per cwt. It represents roughly 2s. 4d. per lb. in London. The Imperial Government’s ex store price for butter bought under the contract that expired on March 31 last is at present 2a. 3Jd. per lb., and exporters are of opinion that they can look for a better price for the new season’s butter. A\ reporter who made inquiries on the subject yesterday was informed that the men most closely connected with the butter trade did not believe that 2s. Id. per lb. f.o.b. was the British buyers’ last word. The upward movement in the butter and cheese markets is a very good thing for New Zealand as a whole, since it means that the dairy industry will be able again to counteract to some extent the financial effects of the slump in the wool and meat markets. But the rise in export values is going to involve the local consumers in paying an increased price for butter. The subsidy of 2d. per lb. now being paid by the Government on butter sold for local consumption will not be continued after the end of this month, and the local price will then reefuire to bo fixed on a basis of export value. The offer of 2s. Id. per lb. f.o.b. represents a local retail price, cash over the counter, of not less than 2s. 4d. per lb. The merchants and retailers believe that the margin ought to be larger, and they are likely to renew their agitation on this point as soon as the producer gets a completely free market. The Government will not interfere with export values, but it will retain some control of profits made between the. factory and che consumer within New Zealand.