BUTTER EXPORTS

Hokitika Guardian, 5 April 1933, Page 8

BUTTER EXPORTS

THE PROPOSED IUfiSTIiICTIOXS. STATEMENT BY BOARD C’H All* MAN. HAMILTON April 1.

Mr Dynes Fulton, acting-chairman of the New Zealand ■ Dairy Produce Board, issued the following statement to the Press Association to-day:— “In view, of the criticisms levelled against the board, and the side-issues that have been .raised, it is .desirable that I’ should restate the problem, which New. Zealand has to face in connection with the proposed restrict tion of butter shipments. Under the proposed restrictions New Zealand •viJI he the most adversely affected of’ ill the countries supplying dairy produce to Great Britain, and should the restriction be enforced, the whole dairy industry will be. hamstrung . ‘‘lt would naturally follow that there would be no further land settlemsnt. It would be unsafe for dary farmers to seek to improve their farms a any way which would increase production, either by using fertiliser, or mproving the herds by herd testing.

‘.‘The proposal submitted to New Zealand is that taking the imports into Ireat Britain for the year ending lune 30, 1933, there should be a reduction made of 6 per cent. • from that quantity, and that this reduced quantity would represent the New Zealand butter which would he imported nto Great Britain for the year endng June 30, 1934. f The 1932-33 quantty is likely to be in the vicinity cf 120,000 tons, and reducing this by 1 per cent would leave approximately 1.12,800 tons. It is true, however, that for many years there has been an annual increase in production of iot less than 10 per cent. If this normal increase were to. continue for he 1933-34 season it would make the quantity available for export' 132,000 tons.

THE SURPLUS. “As New Zealand would be committed to ship not more than 112,800 tons :here would be a surplus left in New Zealand of nearly 20,000 tons, representing approximately 16 per cent or lie whole, output available for export. How is New Zealand to absorb or dispose of this 20,000 tons? “Our present, local consumption of ipproximately 401 b a head a year is the highest in the world, and absorbs xbout 26,000 tons of butter. This butter is selling retail, at 9d per lh and it is extremely unlikely that the local consumption would be increased to iny extent even if . the retail price .vere■ .only 6d. However, assuming that the local consumption was ,inireased by 10 per cent., which would be approximately 2600 tons, if the restriction were in operation ..the price on the. local market for milk would naturally , fall, and there might be a further consumption -of milk, representing about 200 .tons,* of butter. These are assumptions which are, of course, but even if correct .it would still leave 15,000 tons >f butter to dispose of. “New Zealand had no market other

than Great Britain and Canada, and the United States has shut its

doors against us hy tariffs. Small quantities are going to Honolulu, the iSast, and the Pacific islands, amounting to,about 1250 tons, but, assuming .hat these, could be doubled—which is /cry unlikely—we are still left with 13,750 tons to get rid of. “The manufacture of cheese cannot be increased, as it has been clearly' indicated that if a. restriction applies to butter it will also apply to cheese. As car as Australia is concerned, if the restrictions were applied to the suggested basis, provided there is no very 'reat , increase next .season, it .would ave more than 6000 tons surplus to lispose of, and, with the population of 3,500,000 people, this could probably be absorbed in increased milk and butter consumption. Denmark in 1931 exported) 168,000 tons of butter, : of .which 122,000 tons went to England; 10,000 to Germany; and 17,000 to other countries.

DANISH BUTTER. “In 1932, owing to Germany shutting! out. 50,000 tons, the Danish exports to that country were only 13,000. tons, and the quantity going to Great Britain rose to 127,000 tons. Danish butter, under the proposed restriction if 12 per cent., would require to find other markets for 15,000 tons of butter, or less than the New Zealand quantity. Denmark is already disposing of seme of her surplus by shipping it as cream to Belgium, France, and Itary. The Denmark local consumption is at present only 121 b a head per annum, which represents approximately . 19,000 tons. “If the local consumption rose equal to. New Zealand’s the Danish people would absorb 40,000 tons, which is far more than the total quantity carried over by reason of the proposed restriction. It should be noted that Denmark actually imported 350 tons of butter in 1932 from Finland, Latvia, and Esthonia.

It has been said that New Zealand will make' more money under the restricted quantity than she would by exporting the - hole quantity available. Let us examine the statement. On an unrestricted market Ne.v Zealand would export approximately 132,000 tons, say at 70s, amounting to £9,240,000 (sterling) worth. A restricted quantity of 128,00 tons at 70s would realise £7,896,000, (sterling). , “Let us assume that there would be a rise of 10 per cent in the price—-

and even the greatest optimists among the exporters have'never suggested such a rise will take place, With this 10 per cent'added, the total sum gifieu l 0 New Zealand .would be £9,475,200 (sterling). “There would remain to bo disposed of approximately 20,000 tons of butter, either by forced sale or destruction. There might even] be a loss in the handling of this b.utter, to say nothing of the fact that it would ruin the local market, and have - the effect of materially reducing the price of milk being supplied to consumers iu this country.

r PROBABLE RESULTS. (•" “It is quite impossible to prove that New Zealand’s adherence to the restriction would do anything except assist the prices for English dairy farmers and foreign producers, and it is only natural to expect that if the prices of dairy produce were to rise in Great Britain the quantity produced there would! also rise and there would be a call for further restriction. Once restrictions are agreed to in principle, it is almost eertau that the demand would grow for a further restriction. As a matter of fact, already cablegrams are being received in New' Zealand in connection with other products, indicating that a movement is already on foot in Great Britain in ‘ this direction. Exporters are reported to say that the Hairy Board is not facing the position. Let it be definitely stated that-the Hairy Board is vitally concerned with the future of the New Zealand dairying . industry, and not for the benefit of any exporters. It would be guilty of a breach of trust if it glibly agreed to restrictions which the London Importers’ Association and its New Zealand representatives seem to- 'ipiagine' would be such a simple master.

“While the. press messages would give. an indication that the importers in Great Britain are unanimous in recommending the producer to agree to restriction, already cablegrams have been received from important Tooley Street merchants who entirely disagree with the suggested restrictions and consider that fliey are only palliative and would not bring about any permanent improvement. That it wo.:ld be a distinct financial advantage to some of the merchants goes without saying, as fairly large quantities of butter have.been purchased on an f.o.b basis for shipment during the next three months, which must of necessity, at, present prices,, prove a loss to the hual buyers. 1 make bold to say that a great deal of the propaganda, that has come to this country from Tooley street has b n en influenced in this wav. In conclusion, *let me assure the industry, that pur own organisation in London is watching the position very carefully, and keeps us fully posted almost daily.” .