WELLINGTON NEWS

Hokitika Guardian, 14 September 1928, Page 4

WELLINGTON NEWS

DAIRY PRODUCE MARKET. (Special to •’ Guardian.") WELLINGTON, Sept, 12. Tho London market for dairy produce appears to he in a very healthy condition, and it seems reasonable to expect that high prices or tho prices at present ruling will hold for a few weeks longer. This has boon anticipated for some time by Messrs Dhlgety and Co. who in their dairy produce circular dated July 17 say: “Danish and New Zealand are In short supply, home makes are about at their zenith and it- is tho general opinion that the early aqtumn will bo a time of scarcity of butter. Curront arrivals of nil butters lmve passed steadily off the market and It is unlikely'that tho situation will he relieved until the now season’s make from New Zealand begins to arrive in quantity. Unless -any unforeseen factors make their influence felt in tho meantime values should tend to go higher especially if the present hot dry woathcr continues. The retail price however may reach a level which the general public is unable to pay.” A cable message to the papers published during the week states that many traders anticipate that prices will further advance before the. new season's Australia and New Zealand commences to arrive. The consumptive demand in Britain is reported to bo well maintained although retail prices are high. Present prices are profitable to the producers and it is to be hoped that the retailers at Home do not find it necessary to further advance for such a movement is hound to affect the consumption which is being maintained at the current liigh prices. The output both from Austral a and New Zealand gives promise of beiHg on a larger scale than: last season, but no one can make a definite prediction on that, point aitci the experience of last year. The grading figures for August, the first month of tho now season, show that 2852 tons were graded last month against 324 tons in August of last yearan increase of (300 tons Or over 20 per ceiit, which is very satisfactory. Reports from Australia-show that dry wenthor caused a temporary chock to production in Victoria. Nevertheless supplies were considerably heavier than at the corresponding period for a number of yeats. jil Queensland spring weather wfis being experienced and the production of butter was increasing. Seasonable weather was being experienced in New South Wales' and there was a tendency for production to increase South Australia is expected to have ai surplus for export and in Western Australia find Tasmania production was iuefensihg. 'lf the anticipations of increased outputs from Australia and .New ’Zealand are realised what will be the effect on the London market 1 It. would he in the interests of this .pfotiucel's to have undisturbed with aii advance in prices but to have consumption maintained at the present level of prices. From the first of this month the export bounty on butter in Australia under the Paterson plan Of stabilisation was increased to 4d per lb. The levy remains unchanged at lid per lb on all butter made in Australia. The decision of tlio Australian Butter Stabilisation Committee to increase the bounty did not cause surprise to those engaged in tlio industry as circulars were sent to all the butter factories asking whether they would he agreeable to a revision of levy and bounty. Tho factories refused to consider the revision of the. levy payments and the only course open to the Committee if it was to take advantage of tho increased tariff on butter was to increase the bounty to the utmost limit possible without disturbing tho levy. .

Before tho new import duty came into operation an attempt was made to increase the bounty, and 4d pew lb on butter exported was paid in the last three weeks of last year. It was found however, that importation of New Zealand butter increased so greatly that the Committee speedily reverted to the. bounty of 3d a lb. Under cover of the tariff it would be possible for the price in Australia to be Cd a lb above export parity without incurring tile danger ot imports from New Zealand.

Merchants hope that eventually the bounty will be increased still further but that would necessitate a corresponding increase in the. levy on butter manufactured. The immediate effect of the increase in the bounty has been the advance of the price ol butter in all parts of Australia. Consumers are forced to pay 4d per lb more for butter than would be tlic ease if the Paterson plan did not exist. Since the Paterson plan came into force it has meant a gain of about £2,000.0(H) annually to dairy farmers, and under the revised plan the gain will (be increased to about £2,500,000.