THE DROP IN BUTTER

Evening Post, Volume CXII, Issue 55, 2 September 1926, Page 10

THE DROP IN BUTTER

AN UNUSUAL DECLINE "NOT RUI-4NING TRUE TO FORM" MISGIVING IN DAIRY CIRCLES. (By Telegraph.) (Spec^.l to "The Evening Post.") AUCKLAND, This Day. A further decline of 4s per cwt in the price of butter on the London, market was recorded in a cablegram dated 31st August, received yesterday by Dalgety and Company, Ltd.. The latest quotation is 164s to 166s per cwt. On 26th August butter was quoted in London at 170s to 1725, so that in five days there has oeen a decline of 6s. This decline in prices at the present time of the year is viewed with misgiving in dairy circles, because usually butter prices have risen considerably by the end of August, and can generally be expected to continue to harden until November or December. Last year, for instance, butter stood at 19Ss on 27th August, and at 232s on Bth October. In 1924 the market stood at 206s on 28th August, and at 226s on 23rd October. In the present season the remarkable feature has been that the butter market has not shown the usual responsiveness to seasonal influences. Prices have held steadily at about 170s, sometimes ■i little below, but generally a little ibove, that mark. The productive season in the Northern Hemisphere is long past its flush, but still prices, instead of rising, hold stubbornly, about 170s. Tho market is not "running true to form," and now conies a sharp decline when a rise might reasonably bo expected. • ' SOME OF THE FACTORS. "I tell you quite frankly, I cannot explain it, and there is no use in your asking me for an answer to the riddle," said an Auckland dairy expert yesterday; but while the expert declined to be definito as to the cause or causes of the depression, he indicated a number of factors which could well be taken into account. There were first, the largo quantities of butter stored in England; second, the coal strike, which affected the British purchasing power; and third, although this should probably be included in the first factor, there was the extraordinarily favourable dairy season •experienced in the Northern Hemisphere. Taking the statistical position first, the expert quoted the Dairy Produce Board's estimate that there were 1,000,000 boxes, or five weeks' supply, of butter stored in England, of which 650,000 boxes were from New Zealand. To account for that accumulation there was the favourable dairying season in Europe, reduced consumption in Britain owing to the smaller purchasing power caused by the coal strike, and the fact that tariffs in the United 'States and Germany had discouraged imports of Danish butter, so that practically all of Denmark's output looked to Britain for a market. IS IT THE BUYERS' TURN? The expert, said ho could not help feeling that butter had reached the stage at which some other primary commodities had long since arrived. It had enjoyed a great run for years, but now it seemed to him as if the dairy farmers would have to be content to sco butter prices settle on a no t and lower price level. For years, the butter market had favoured the seller; he had been practically dictator; but to-day it seemed as if the buyer's turn had come, and as if ho was going to bo "top dog" for a chango. "However, there is no use in pulling a long face in advance," concluded the expert. "There are so many factors to be considered that forecasts arc extremely difficult. If the coal strike is settled shortly the whole outlor^c will be changed, and we may look for an all-round improvement. There is still time for the market to recover to enable the clearance to be made of stored stocks before the new season's output can arrive in London. There are some people who are willing to put money on the recovery, and it has come to my knowledge that in.the case of butter sold before the advent of control, business was dono at the equivalent of sales at 180s in London. That means that some people anticipate a definite advance in butter prices by the onS of October."