DAIRY PRODUCE

Hokitika Guardian, 14 September 1926, Page 4

DAIRY PRODUCE

POSITION OF FACTORIES,

ACCKLAND. Sept. 0

I lie present slump in values which has struck the butter market, apart front the factor of decreased income for the dairy producers throughout the Dominion, may have 'direct consequences of an unpleasant nature. It is well known that many factories are still the owners of large quantities of last season’s butter at present stored in London. On these stocks Toolcy Street importers in whose, hands the butter has been placed for sale have advanced Is 3d per lb. The average cost of This butter on that basis, with the added costs of storage and interest, is lG“s Gd per cwt. At the present time its value may be anywhere from 150 s to loos per cwt. According to the present indications there are likely to bo heavy reclamations in connection with these advances, and it is at this point, according to an Auckland merchant. tbit the changed conditions brought about by the Dairy Control Board may involve unfortunate consequences.

In the past, he pointed out, it had been the practice of the London firms to stand hv their c-liont factories, and give them temporary financial assistance to tide them over such a situation as has arisen. Now, however, that the Board has assumed control, the connection between the Toolcy Street importer and the New Zealand factory no longer exists. The goodwill which smoothed over many differences in the past has vanished. If a factory is indebted to a London merchant for £101)0 when last season’s stocks are finally realised, his New Zealand agent will he expected to secure a prompt cash settlement. There can be no question of taking it out in instalments from next season’s output, as this will -be controlled by the hoard.

An Auckland exporter suggested that the Control Board might stand behind the factories in regard to these deficits. He argues that as the hoard lias, by compulsion, removed those factors which, in the ordinary way of trading, afforded reasonable protection in such circumstances as the present, it is m duty bound to furnish assistance. Sumo factories are said to he so far involved through ilie depreciation of the stocks of last season's produce that a compulsory settlement of accounts would mean closing down their factories and liquidation.