THE BUTTER OUTLOOK

Hokitika Guardian, 4 February 1925, Page 4

THE BUTTER OUTLOOK

The sharp fall in price which set in at the beginning of the year is naturally drawing pointed attention to thepresent methods of nmrketilng New Zealand butter, there being practically a consensus of opinion that tho decline is not connected in any way with any defects ill quality (says the “New Zealand Herald”), The extraordinary feature ili the position is. that whereas in the -early part of November there was a difference of only 4s to 14s between the price of New Zealand and Danish butter, the difference since the middle of December lias been in tbe neighbourhood of 80s to 40s per ewt. -Danish butter also experienced a substantial advance from the end of November until Christmas, the period of heaviest demand in England, in which New Zealand butter only participated to a very moderate degree. This -clearly supports the contention that the Danish producers control their output according to the London market, and it is well known that when they find the British market unable to 'absorb what they have available at any given period, they sell their surplus to Germany, or to any market where it will not disturb London prices. New Zealand butter, on the other hand, is unable to stand up to the demoralising effect of large shipments arriving in -London during the flush of the season, when only a certain proportion is controlled, and the -rest is rushed on the market, tc get the host price obtainable. The latter policy appears to he often jlis- • tilled hy the consideration that those who intensify the slump, by rushing their produce oil the market, actuall- . obtain better returns than those who take n long view of the position, and minimise the slump- by feeding the

market with the required quantity, instead of flooding it on falling prices i with huge quantities which would only make -those prices all the worse. Tt really moans, however, that hy thispolicy, in -order to secure a small temporary advantage, the whole season’s produce of tlic -Dominion is jeopardised. These are the -considerations that have so greatly i’ncreased the interest in the Dnirv Control Board, ami the action it proposes to take in regard to formulating a definite policy over f.o.h. sales, ns well as other important -matters. The hoard met in Wellington on Wednesday, -when the report ol Hie delegates was to be considered, and the outcome of the meeting is being awaited with considerable interest in dairying circles. Tt is not expected that the Control Board will lie able to entirely eliminate the slumping tendency of the market at this time of the year, for Australian produce is an important factor in irillueneing prices, especially i„ a reason like the present one, when jni abundant rainfall has greatly increased the output. Bui in view of the approval of the Australian Dairy Export Produce Control measure, and the possibility of co-ordination in Australia „ n( l New Zealand control activities, it seems probable tnat in future the slump may be lessened to a much greater decree than if New Zealand were acting alone in adopting controlled marketing.