DAIRY INDUSTRY.

Hauraki Plains Gazette, Volume XXXIV, Issue 4564, 16 May 1923, Page 4

DAIRY INDUSTRY.

LONDON MARKET IMPROVING. MR GOODFELLOW’S COMMENTS. “Yes, the London market has improved somewhat,” said Mr W. Goodfellow, managing director - of the N.Z. Co-op Dairy Co. .Ltd., in an interview recently. “The latest advice reports superfine at 1525, first grade at' 150 s, uivalted with preservative 154 s and without preservative 1525. The maiket is reported to he quiet, with ordinary first grade butter offering freely at 144 s and Danish at 150 s f.o.h. In cheese both white and coloured are quiet at 98s, but the market is regarded as weak, “The cabled information to hand,” added Mr Goodfellow,, “also enables us to review the factors influencing the recent slump, and assess the probable course of future events. The fact of. our selling 120,000 boxes of December, ;January,, and February's make to America necessarily left the shipments sent forward by us for those months, and due to reach the London market in April, on the light side. On this basis our London manager, Mr J. B. Wright, therefore explains that the primary reason for the butter slump was the small quantity of butter in, our hand in April, which rendered effective control impossible. At the same time the diverted butter from America arrive! and was dumped on the English market where it met a declining price because of increased arrivals from the new season’s make in the Northern Hemisphere. The American-owned New Zealand butter was held by weak holders and was sacrificed upon a falling market. Many importers endeavoured to stem the fall at different points, but failed owing to lack of cohesion, this causing them enormous losses. Other minor reasons contributed to the position, notably the absence of continental demand for Danish butter, and also the arrival of large quantities of colonial and Argentine produce. These factors warranted a fall in price,, but :io collapse of the market. Weak holders endeavoured to press sales by dropping their price 20s at a time, but without effecting sales, and the same quantities could have been sold with a market held at 1665. The entire trade lost heavily—a drop was expecred, but not a slump such as Was experienced. The whole incident, Mr Wright states, offers a conclusive demonstration of the value of our system of stabilised prices, as fixed when we are in the position of controlling big holdings on the market. In the circumstances of April this guidance of the market was absent, and the market simply reverted to that level which the weakest holder would accept. It will take time to re-establish uniformity and the stability formerly exercised by us‘•The whole position, therefore, may be taken as being the very best possible argument, for the New Zealand producers to combine and market their produce in unity rather than in competition. There are two main classes of operators in Tooley Stree: —tne general distributor, .who does a legitimate consignment business, and whose services are of definite value to the industry, and the speculative interests, who are as ready to raid the butter market as any .other market offering a profit. While it is to the interests of distributors workins' on a commission basis to maintain a fair level of prices, it is to the interests of the speculators to depress values to their lowest possible value and then, buying in, store the goods preliminary to feeding them out to the market at a later date,, when it had recovered. The experience of the NZ. Co-op. Dairy Co., Ltd., with its marketing agreement, with four prin-. cipal distributors, by which one-third of the whole of New Zealand’s butter is judiciously marketed at controlled prices,: shows that splendid service

can be rendered the producer by such regulation. What happened in the past month was simply the normal course of events in the absence of judicious control: the speculators took charge in the face of heavy uncontrolled and unregulated ariivals and depressed the market at their will. Had the whole of the New Zealand butter due to arrive been under some control a legitimate lower level would have been reached without, an absolute slump. As it is, the genuine distributors endeavoured to arrest the fall, but in the absence of cohesion and united direction they failed, as they always will fail, until the whole of New Zealand produce is marketed in unity and not in competition. So far the whole expense of the London organisation has bee.: borne by the N.Z. Co-op. Dairy Co., Ltd., but in the good this service has rendered its suppliers the whole t>f ! New Zealand dairymen have shared without cost. The procedure of April with its demonstration of the normal course of unregulated marketing may be expected to constitute a further argument tpwards the development cf a spirit of unity for mutual good. “In the light of the actual market condition and the expectation that it wiH take to the middle of June for an appreciable improvement to be effected. the directors have been obliged I to reduce the advance payment from the level of last month,, and the fol- | lowing rates have been fixed: Butter, I superfine direct delivery Is 3%d, casein 2d over the butter basis, and cheese Is 3d per lb. These prices are up to the full market value, and in view of the fact that about a quarter of the yeafi’s output yet remains to be sold it is considered advisable to proceed with caution. Sb far the slump has not affected the company s> position very much, because ten days back there were only 23,000 boxes in stock in London and one half of this quantity has been sold at 1525. Up to date it is estimated that approximately 75 per cent, of the present season’s output has been quitted. Vessels due to arrive in London In the next eight weeks carry approximately 500 tons of the company’s butter, but this will be marketed carefully and not sacrificed at slump figures, although the quantity is so great that it will not, be possible to hold the whole of this quantity over until July. August, and September, when the prices are likely to be considerable higher.‘Tn connection with cheese, the present. fall in price is not, because of I any surplus supply on the Home marI ket, but is due to the anticipated early arrival of heavy. supplies of Canadiai cheese. The shipments sent forward by the N.Z. Co-op. Dairy Co.. Ltd., Lave been sold up to a stage representing the manufacture to about the middle of last January. Although the delay which was experienced in shipping, cheese from New Zealand earlier in the season resulted in inflated prices for a short period, the result of those inflated prices will not be very satisfactory to the producer, as the quantity sold at, these figures was comparatively small, and the delay has involved a much lower level for the later shipments. Regular shipments would undoubtedly have led to a higher average range if prices being received, and,, further, a larger quantity of cheese would have gone into consumption prior to the arrival of the new season’s supply from Canada. This constitutes another argument for the necessity of rigid export control to facilitate shipping.” '