ELLINGTON NEWS

Hokitika Guardian, 14 March 1930, Page 2

ELLINGTON NEWS

MARKETS DEMORALISED.

(Special Correspondent.)

"WELLINGTON, March 12.

■lie cable messages received at the Ik-cnd with respect to the London Iry produce- business make rather leful reading. Messrs Dalgety and Is stated that the butter market lj demoralised and that the cheese Irket was very depressed, and the ■ssago received by Mr Thos. Gray l.tod: “The market continues in a 1-y depressed state. Outlook, it Iro is no improvement in demand, ■is anticipated that prices will go ■ver.” Against these wo have the ■'timistic reports of Amalgamated Buries, Ltd., of which Mr W. GoodBlow is the chairman. ■The message received' by this com■lll3' roads: “Butter market sligbtij leadicr round 14Qs, while tlie otlrei Ivo reports releered to alooi e gi'e ■ie ([notation for. New., Zealand sult■l butter at’ 138s'to 140 s which would liake the. middle price, 1305., against Ills Od in the previous week, I The divergence -in the reports is In new hat. significant and it lias been I feature of these reports that the Amalgamated Dairies, Ltd., quotes ■lightly- higher prices. It is well to [emembar that the quotations cabled Ip New Zealand are those compiled Ly the London provision trade and [ire based on actual sales made by members of the trade during the Leek, They are equivalent to the r‘range of prices”, issued by the woolprokers after every sale and are official. The trend of the market, however, is individual opinion. Mr Good follow is. obsessed with the idea that he is a Napoleon of the dairy produce trade and can control the market. r \ his gentleman and others who believe that the dairy produce market can be controlled will vet discover that all their efforts at -jj-iee stabilisation are futile when arrayed against the law of supply and denand.

Mr Goodfcllow, who was interviewed by a Wellington journalist a" few days’ ago, stated that the 'present situation bn the London -market was that while Danish Ibuttcr : was commanding a price of l()2s tlie position of New - Zealand butter was given as “now steady at 1405.”

The question naturally ‘ arises why this disparity ? Danish butter has a market of its’own in England and is not affected by the quotations ol other imported butters and ’ proof of this dies 'in the fact that last year on one •'occasion' Danish butter was actually lower'than New Zealand. Danish butter is not yet at; its peak production and probably in : the course of two 'or three months it will decline in value.

Last -year at about tlio corresponding date' Danish' butter was quoted at 197 s and ' Z-eakmU'at >l7ls, a difference of 16s as against 22s now, not- so great ..margin all things considered. Mr Gpodfellow informed the interviewer/ that . s,o -soon as the posi-tion-.arose,, that. both ..Australia ..and New Zealand had. good producing seasons the position of the London market,would..become.serious and our marketing, would >suffor a serious strain. ' That position is obtaining this year,” •

This statement is embalmed as a “prediction” whereas it is a more reiteration of the law of supply and demand which has be.en in existence for countless ..years. ( The .supply of dairy produce Thom Australia ah cl Neu Zealand is greater than last year cud the price has fallen in consequence. The imports of butter into Britain have shown increases in the past two years, and "a substantial increase in the current year seems inevitable. Increased supplies and stabilised prices are incompatible. The pool scheme is no doubt very attractive to the producers and pos sibly Messrs Goodfellow, Grounds and (the others will achieve their purposes of founding a pool, hut these who enter the poo! in the, hope ol seeing prices established at round about the present level of 14Cs ate likely to meet with disappointment. Canada and the United States furnish tip, hulk of the world’s wheat, in both countries efforts of a strenuous character are being made to hold up wheat, and that too with the aid of government funds, but the price refuses to become staibilished in the face of supplies being in excess of the demand. What is meant by Mr Goodfellow's co-ordinated marketing is n.n effort to break through the unbreakable law ot supply and demand. It may he tampered with hut can. ’never be broken and it is positively mischievious to lead the producer to believe that any organisation (if human endeavour can overcome the national law. To maintain prices..- or to improve them production must decrease, or in the alternative demand must he increased . .

Tim misleading of the producers is reprehensible for it is diverting their attention from the other efforts they should m-'kc to clear a profit. It is the profit that counts and not the price. . It, seems that not alone in the dairy industry, hut also in other industries costs of production, for according to 31r G. siiirtcliff, a well known budjmssnian, price stabilisation is not possible just yet. For he says: “In my judgment the price for primary products will only he stabilised ill the vicinity of pre-war levels” and “it iLs quite certain that tins country cannot continue on the basis of prewar prices for commodities produced at post-war costs.” That is the point to ponder over and not to chase after ■wild cat schemes. The pre-war price of New Zealand butter was lids and