WELLINGTON NOTES.

Hokitika Guardian, 27 January 1925, Page 4

WELLINGTON NOTES.

BUTTER A XT) THE BOARD. (Special to “Guardi-n”.) WELLINGTON, January 23. Tt seems somewhat singular that just when the Dairy Control Board'has got into its stride, as it were, and a delegation from the Board has made a world tour at the expense of the producers, and presumably has acquired a certain amount of information more or less useful, the price of butter should slump. This is not cause and effect, but an illustration of the fact that all the legislation that man can devise cannot upset the eternal law of supply and demand. The butter market is depressed because the supply of butter is greater than the demand. That is all there is in it. Artificial means may bo used tor establishing an equilibrium, but tliat would be expensive and in the long run would prove unavailing. The butter market was not always depressed, for in August and the three following months tho prices were very high. Tt is not the fact that there is a depression in, the market that is troubling those who take an interest in the trade, but whether tho depression is a temporary affair or whether prices go lower and will stav low. There have been such depressions before-thorc was one last year when the price dropped to T.os per cwt. Will the price level fall below that on this occasion? It is a milieu It question to answer, hut from the unknown facts some think that a lower level will be reached, and that the recovery will be slow. This opinion is based" oil the fact that supplies from the Southern Hemisphere are double what thev were a year ago. anil even with tho reduced retail prices the consumption is not equal to absorbing the excess. Retailers realise that with the enormous shipments values must decline further and are therefore boxing in small lots to meet the immediate requirements. From the excess smyiments from New Zealand, Australia and the Argentine a certain quantity is bound to go into cold store oil speculative' account, but the time for the speculator to step in is not yet. Tt tbe quantity in store is large it will prevent prices rising too sharply for with each advance there would he sale's of stored butter by the weaker holders. Tf the European comes on the market early, and that is quite probable and the output promises to he large, tho stored butter will ho thrown on the market and create another depression. The butter market is in a very peculiar position just now. THE CONTROL BOARD'S WORK. Tn its present state the butler market will require very delicate handling. H is a time when New Zealand cannot afford to antagonise any section associated with the trade, whether producer. wholesaler, retailer, speculator or consumer. The Dairy Control Board with all tho powers conferred on it by the Legislature is not the only nobble on the bench and any attempt, of independent action on its part may prove disastrous. Tt is rumoured that the members of the Board arc to-day a very unhappy lot. There is one section anxious to adopt radical, if not drastic methods of meeting fho situation while there is another section which thinks that the Board is not fully conversant with the trade, and cannot acquire a full knowledge . without some years of experience. The drastic action suggested is for the Board to take absolute control of the industry, ami to place an embargo on f.o.b. sales. Such a course of action would irritate, if it did not embitter, a section interested in the trade wlm in the oust have boon very helpful. The middleman may lie condemned, lint he is necessary in the commercial world. II the middleman is eliminated the Board itself must in some way take It is place, and il the Board makes mistakes and losses, who bears Ibe loss? Certainly not the Board, but the producers. Tf the speculator makes a mistake be stands the loss and in the past the speculators have made heavy losses, and can the Board do any better? Perhaps there was no worse time in the history of New Zealand dairying for interference with marketing methods. I* roni Hie statistical point of view the industry is in transition neried. lor we are passing from scarcity to ph’iitv. .Scarcity i a used high prices, and the high orices caused special attention to he called to increase iirodueti|in, and to-day tho production shows a big expansion as compared with only a vear ago. Australia and Argentine. Canada and Siberia are capable of sending very much larger quantities of butter to Britain and Germany will not alwavs lie a buyer of Danish butter regardless of cost. Increase in supplies means drop in prices, and there is no esenoe from that. New Zealand contributes about 25 per cent, of the butter import’d into England, and it is obviously absurd for the Dairy Control Board to imagine that it can with this modest amount of butter control a market like the British. There is an itlmt that X T .Z. butter is so superior jn quality that there will be a keen demand for it. no matter what ibe price, and by curtailing the supply the price must rise. This is a foolish idea and one has merely to look at the prices to realise that other butters are also high in quality and would bo preferred by consumers if New Zealand butter became expensive.