WELLINGTON NEWS

Hokitika Guardian, 20 January 1928, Page 4

WELLINGTON NEWS

THE RUTTER MARKET

(Special to “ Guardian

WELLINGTON, Jan. 17. Tile London quotation for Now Zealand butter was last week lofis per cwt for salted as compared with 161 s on the 6th instant, and the same price in the previous week. This represents a decline of 8s per cwt, and the market is reported quiet. This, says a Palmerston North paper, is very puzzling just now. It is stated that offers have been received from London houses to purchase February and Alarlt shipments at Is 3Jd. which is equivalent to the lamdon price. From this out it would appear that some London houses expect the market to improve. It is doubtful, however, whether an improvement is probable. Messrs AVeddel and Co Ltd, in a communication to their representative state that a variety of circumstances is responsible for the drop; viz. (1) a reduced Home consumption; (2) rapid recovery of Australian production, with offers of “Kangaroo'’ brand at Id Is c.i.f., which is made possible by the increased bounty paid for export under the Paterson scheme; (3. heavy shipments of New Zealand butter to arrive and to be shipped during Dccomber-January; (4) increased production from the Continent, owing to a long season there and in Ireland.

The worst feature in this is the drop in the home consumption, and it is evident flint the wholesale price will go lower as soon as the supplies increase. Tt has been reported that at the lower level now current the large multiple shops purchased heavily, and it is obvious* too that importers are endeavouring to secure supplies. The Australian output is beginning to shrink again, but it is doubtful whether much will be sold in that country. .Referring to the Paterson scheme the “Melbourne Argus” says: “Disappointment will lie expressed by the dairymen of Australia that a bounty of Id per lb on butter the production of the Commonwealth cannot be paid because of the decision of New Zealand to retain until June the benefit of its Customs Treaty with Australia. Time now will be given to the industry to consider further the extent to which it should impose a charge upon the users of butter in Australia. The Paterson plan as enforced hitherto has drawn £2,000,000 from the consumer into the pockets o 1 the dairymen. It speaks well for the prosperity of Australia that such a charge has been borne without grumbling by purchasers of butter, and without any material reduction in tie quantity consumed.. In justification of the levy, it is held by leaders in the dairying industry that as secondary industries have the tariff to protec! them, no reason exists why an arrangement should not lie entered into among the dairymen of the country to protect themselves in the home market. This is done under the Paterson plan in the hope that the income from dairying will so increase as to lie adequate to the producer. The problem to he solved is whether a method of the kind may. not in the end prove destructive. In Queensland the temporary exceptional prosperity of the sugar industry induced a large number of men to engage in it. Now the cry of excess production is heard. If it were not for the embargo on importations planters would have to settle down to norma! conditions. In the end no doubt the.\ will have to fare-tho.se conditions.. II it is thought that the Paterson plan assures .substant.nl profits in dairying the number of people engaged m the industry will increase, and a state o r affairs comparable to that of sugar may arise.”

Messrs Oalgety and Coy, Ltd. in their circular dated November 22, referring to the fluctuations of all descriptions of butter, point out that buyers made provision against the unexpected shortage from overseas, and there have been other definite factors, which have prevented the market advance in values which might otherwise have been expected. The policy adopted by the trade naturally accounts for stocks being available in cold store. With respect to New Zealand production the grading figures to the end of December, that is for live months, shows that 41.488 tons,has been graded, which contrasts with 36,fi10 tons graded in the corresponding five months in 1026 and 32,750 tons in 1920. Compared with last year there is an increase of 16.5 per cent. The cheese graded in the five months totalled 35.109 tons as compared with 33,839 tons in 1926 and 33.450 tons in 1.925. The increase in cheese compared with last year totals 3.7 per cent., reducing the figures into butter-fat equivalent there is an increase of 12.60 per cent in butter-fat production for the five months as compared with the corresponding period of the previous year. The market for cheese is quiet and New Zealand white is quoted at 90s and coloured at 89s Gd as compared with 94s the previous week. It is interesting to note the fall in Canadian cheese during their last season, estimated at fully 300,000 cheeses, the reason being given that both milk and cream are being used in other directions—milk in the condensories and cream in the manufacture of ice cream, whilst a large quantity of both milk and cream is being transported over the borden to the United States of America. This shortage favourably affected the values of New Zealand cheese and was to some extent responsible for the steady market experienced in November, but with the heavier arrivals from New Zealand since f:cui has considerably weakened the market. The retail price has fallen to Is per lb and this should help to maintain the market, hut much depends on the purchasing power of the consumers, j In tlieir annual report .Messrs AVeddel and Co. Ltd. warn the producers that it would be safer to reduce cost of production than to look for improving market values, and they expressed that view because production in all exporting countries were steadily expanding.