DAIRY PPRODUCE

Hokitika Guardian, 30 March 1922, Page 4

DAIRY PPRODUCE

EFFECT OF HIGHER BUTTER

PRICE. HALF OUTPUT WILL BENEFIT. WELLINGTON, March 27. Greatly improved prices for New .Zealand'butter in England will enable producers to finish the season with infinitely •better returns than progress payments on butter-fat have indicated. Your correspondent inquired of Mr J M’Ewan, a prominent dairy produce merchant, today, how mudh of New Zealand’s season’s output is likely to benefit from the high prices, and was assured that apparently only half of the total production will lie marketed under improved conditions. Air M? - -Ewan was also able to give important information regarding the causes of the buoyancy in the market.

“What hung oyer ns like a wet blanket,” said Mr M’Ewan, “was the unsold balance of 22,000 tons of Imperial shocks;. Prices had. to reach a certain level before the multiple shops in England started buying butter to sell at a price which could put the margarine out of the running. This they achieved', but the consumptive demand became so strong that it is only within the last ten or fourteen days that importers appeared to realise that there was not enough butter in sight. The rise is exceedingly lucky to New Zealand producers, coming at a time when they still have such large quantities to sell. It will materially improve their average returns for this season. The lonic shipment which arrived on February 19, was the last to sell at 140. Then Wiltshire’s consignment sold on March 12 at 190 s to 103 s. Up to the point of the Tonic’s shipment about 20,000 tons of New Zealand butter had been sold at about 120 s, though small earlier shipments got the benefit of n shortage and fetched 170 s to 190 s. Thus it is now evident that half this season's output of but tor will bring prices in excess of 140. Taking an average future price of 1655., this equals at least Is 3d per lb of butter-fat, so that producers may wind up their season with a return »f something like Is 2d on the whole production. The next shipments to be sold will go higher, and if they fetch 180 sit means Is 5d return for butter-fat. This is the cloud with the silver lining, and it is going to make a very decided difference to the prospects of producers.”

Air M’Ewan remarked that nobody outside the trade could realise what a buoyant market meant to producers. There were good signs all round. For instance, he had received information from a very large house in Montreal stating that to meet the Canadian winter demand they had to buy quantities of Now Zealand butter from London. They bought from London at a lower price than New Zealand factories were prepared to take, the fact being that we were asking in N e iv Zealand a price higher than the world’s price. Mr M’Ewan said he had good reason to believe that a large quantity of New Zealand butter had been going to France and Italy, which, with the increasing English demand, accounted for the improved tone of the market. His latest cabled information justified the factories in continuing to consign, despite the high prices now offered.

THE RISE IN BUTTER

AUCKLAND COMMENTS

Tne improved position of the London butter market, as reported in the last cablegram from the High Commissioner is reflected in prices offering in Auckland for butter for export (says the ‘‘New Zealand Herald”). Local butter merchants state that there has been sustained inquiry for butter during the last fortnight on the part of export buyers. An offer received on Thursday of Is 3Jd per lb f.o.b. was refused. This is equal to about 163 s 6d per cwt. on the London market, compared with 150 s quoted in the High Commissioner's cablegram dated March 18, and according to local experts! indicates that New Zealand butter is likely to reach a price considerably higher than was anticipated a few months ago. The increase in offers received in Auckland during the last ten days for butter for export equals UJd per lb., and the highest quntaion received would enable dairy companies to pay to suppliers about Is fid to 13 s£d per lb. butter fat. In view of the improved condition of the London market, bntter for local consumption has been increased in price in some of the southern centres. In Wellington and Palmerston North the price of first grade butter has been fixed at Is 4d per lb. wholesale.

The price in Auckland for first grade butter ranges from Is 2d to Is 3d per lb, he latter figure having been fixed by the Auckland section of the Dominion Butter Committee. The disbanding of the local committee owing to the members being unable to agree in fixing prices for butter for local consumption leaves the matter to the discretion of the dairy companies coni corned. Up to the present, it is stated, only one company is selling at the : lower figure

COMPARISON WITH DANISH,

DISPARITY not WARRANTED

Considerable comment has b ee n caused among dairy farmers and others interested in the butter export trade owing to the low price of this season’s Dominion butter on the London market, compared with the rates quoted for Danish butter.

Correspondence recently received from London by Mr W- W. Bowker, representative in Auckland of A. J. Mills and. Co,, Ltd., a well-known Tooley Street firm of butter importers states that the disparity in price between New Zealand and Danish butter this season is quite unwarranted. Several reasons are assigned for this disparity. It is states that subsequent to the decontrol of prices in Britain fresh Danish butter was placed on the market in competition with New Zealand butter that hod b e en stored for a considerable period and showed signs of deterioration. When fresh New Zealand butter was available supplies arrived irregularly, and the delays in discharging shipments made matters worse. The consequence was that either three or four vessels ' were discharging New Zealand butter together, thus placing large consignments on the market, or there was a perhxl when there were no supplies whatever.

lb is further stated that a large Continental demand for Danish butter this season left only a small quantity of the Danish manufacture for the English market. This was regularly supplied, but was barely sufficient to meet the demand that exists for Danish

It is apparently recognised by the Tooley Street merchants that New Zealand butter should be ranked equal or nearly so with Danish and action is being taken to establish this principle with the British consumers. A cablegram sent to Mr Bowker on .January 31 stated that now that the market was cleared of old stocks a meeting of the principal importers had decided to commence propaganda in favour of New Zealand butter. The High Commissioner in London was being invited to co-operate with the importers in the campaign. In accordance with this decision articles were published in many British newspapers, emphasising the 'High quality of New Zealand butter, and asserting that it is the finest in the world. Tt is also stated that the disparity in price compared with butter of foreign manufacture is unwarranted and is purely artificial.