PROSPECT OF SERIOUS SHORTAGE.

Otago Witness, Issue 2814, 19 February 1908, Page 21

PROSPECT OF SERIOUS SHORTAGE.

HIGH PRICES ANTICIPATED. AUCKLAND. February 13. "I ha\e been trying in this wonderful country of 011; s to get a few caccs of butter to send away by &feamer to-day, and although I offered Is Id per lb I could not get that quantity."' Such was , the statement made by a business man in Auckland to-day. and it gnes an indication of the effect of the long-continued <hy weather in this district on one of outmost important industnes. At a time when the price in London has reached such , a high figure it is particularly to be regretted that. Auckland will not have the usual quantity of butter to export this season. Many factories in New Zealand sold their output until March at the beginning of the season, and, of course, in those cases it will be the buyer who gains by tho high price*? now ruling. In some instances even the milled butter was contracted for ahead, and some of those who agreed to deliver a fixed quantity are now trying to buy up here at Id per lb over what they sold off at in order to fill their contracts. Meanwhile the want of rain is causing the pastures to dry xip rapidly, and ! feed is now becoming very scarce all ov er the district. PALMERSTON N.. February 17 In local butter circles it is considered that butter, will ieaeh v l6s per ewt in the Home markets and 2s p°r lb in New Zealand. At present there is no <=erious shortage of water, but there is absolutely no nourishment in the graes, and the irilk yields are still decreasing appreciably. It is considered that unless rain falls iuv soon several creameries and factoiies will have to close down. THE OUTLOOK. (From Our Own Correspondent.) AUCKLAND. February 13. If our dairy farmers, instead of allow1 ing themselves to be depressed by the 1 opinions of people specially interested in keeping down the values of butter in this , country, were to set themselves to the task of placing the disposal of their pro1 duce on a 6ound business basis, it would be much to their advantage (saj-s an article in the Herald). The advice eiven to the factories by the newspapers at the opening of I the reason had the direct effect of forcing ! the buyers' hand to a certain extent, and the contract price went up to lO^d to 10^d , but a panic seemed to seize the factories. Two-thirds of the New Zealand factories sold on contract, fully three-fourths of the Auckland factories falling into line. At a moderate estimate, the buyers throughI out the Dominion collectively must be ; reaping £200.000 on contracts, thus, after I deducting the losses of last season, netting ! £100,000 for the two t-easons. The buyers did not, however, get all their own way in Auckland, and from their piices of 9Ad and 9Jd they were obliged to go up to 10id and 10id. at which tho bulk of tho butter was contracted for. Of course, it must be admitted that the present high prices may not la«t long. Any day may see a drop as the first butter of the Dani«h season comes along. In the present state of the market it is impos.-ible to 6av how prices will go. A fortnight hence they may either rise or drop. There has been a general shortage and unfavourable sea50ns in all butter-producing countries. Denmark has been finding new maikets in i Germany and on the Continent, and every- , where, as was pointed out at the opening of the season, the tendency was for the demand to inurease at a greater rate than tho supply. Then there has been less and j loss butter from Siberia, the war teaching '. the producers to send their butter East 1 instead of West. Most, of the Normandy and Brittany butter has been going to I Paris, while Canada and the United States ' are sending practically nothing^ to London i this season. Thus the main onus of sup"~ 1 plying the market was beginning to fall ' on New Zealand. Australia, and the Argen- I tine. Again, the Home Butter Bill, fixing 1 the proportion of moisture at 16 per cent., 1 has had something to do with the greater < demand, because it checked the u«o of ! New Zealand butter for milliner or mixing purposes. The two largest factories in Auckland stood out from contracts and 1 consigned. They aie now receiving the I full benefit of the high nrices. The < present dry weather i« cutting down tho 1 outputs of all factories, and if present ] conditions continue they will all be prac- ) tically closed down at the cn<\ of ( March. Nearly all of them have their j outputs to the end of March tied up under contracts, so that a somewhat ; serious position is being brought about It ' really becomes a gamble on the weather. ( Pastures are so dried up that there is < little or no hope of their recovering normal ( strength this season, and if the present 1 conditions continue factories will be closing i down when, they have filled contracts, thus ■ leading them no margin of time to make- "] for local winter use, and the factories which have followed the practice of consigning 1 are storing in anticipation of high 1

rdte=. so that they will benefit over again. llca\y rams now would check the threatened shortage, but they could not a\crt high winter piice«. There cannot be the slightest doubt that the South Inland will suffer a very considerable shortage. Southern houses are already frying to buy largely 111 the no>'th. One of the largest southern factories leports that its output has «o decreased even at this stage that it cannot make c\cn its local requirements. It would not surprise tho<=c engaged in the industry to see butter on Auckland's own market going up anj where from Is 6d to 2« per 1b before the winter is over. The prices at Homo aie rather better than Is 2jd, f.o b.. here. The difference between prices on the Homo market to-day and those at which j factories fcold on contract is 4d per Ib. That j means that if the factories had stood out < and consigned they would be receiving 4d \ per lb more for their butter, whereas the ' buyers are getting that as profit. VISIT TO OTHER COUNTRIES. AUCKLAND, February 13. Tn view of the developments taking place . in butter in the great markets of the world. | the New Zealand Dairy Association resolved to commission the managing director (Mr Spragg) to visit England. France. Denmark, and other countries, so as to obtain what is going on in the heart of the trade. • POSITION IN INVERCARGILL. INVERCARGILL, February 13. Following the rise in the price of milk j and in sympathy with tho high market, the wholesale cash price of local brands of butter has be.en increased from lljd to Is o|d per lb for half-pound prints, and from Hid to Is o£d for pounds. I THE DUNEDIN BUTTEP MARKET. The butter market shows" a firming tendency. The quotations are: — Dairy pats and dairy bulk, 7d to 8d : separator nat=, 8d to 9d ; separator bulk. 9d to 9£d ; miled — fif&t grade 83 d, second giade Bid; firot grade factory prints, Is Old ; bulk, A well-known butter exporter, speaking lo one of our representatives yesterday, attributed the firming in the market partly to the filling of forward orders to South Africa, these orders having b°en accepted | in the expectation of a surplus over the requirement'? of the local and Home mar- | ket«. The same authority a!^o states that . a shortage in the North Island output is in some, degree responsible for the firming 1 in the market and the increase in prices. | The total imports of butter into the j United Kingdom from January 1 to the j week ending December 28 for the la?t three years aie as follow: — 1905 4.149.236cwt 1906 4,3-24,672cwt 1907 4 202 277cwt A* indicating the position of the Home market, in so far as Australian and New Zealand butters are concerned, Me-srs R. and W. Davidson. 49 Tooley street London, repoit under date January 2, 1908: — j '" The Australian and New Zealand I steamers discharging this week have fanlv 1 heavy quantities, showing a grand total of 63.000 boxes. — the Ophir having 21.584. tho' Somerset 4834, and tho Rimutaka (from j New Zealand) about 37,000 bows. Ihc market remains steady, although it is re- I ported that Rome importers are slightly j easier in their ideas, and reasonable bids . aie v erv seldom refused." | Mes«r« W. Wcddel and Co., of Tooley "treet, London, reporting a day late(January 3, 1908). states that '"tho demand for Australian and New Zealand butt<M\ which has been strong all tln'« week, is unueual for a holiday period. This i e doubtless due to the «mali arenaU, combined with absence of stocks. Prices o - i 'spot' aio pieftv well maintained, although come holdcio have let their trootK | go at a slightly lower quotation. It ap- I pear 6 that the speculative elcnipnt is re- ' Mving; but in the present case it consists in 'short' sellers of Queensland butter, as .sales arCj being made here for ariival in February and March at lower figures than the goods can be bought for in Queensland. The market for foreign butters continuefirm, and Continental markets arc showing j an advance in prico. Supplies of foreign, | as well as of colonial butters, continue to , be loss than last year, and as America and Canada will have nothine to send us before new -grass butter can bo put on our markets, there seems little prospect of ( lower values for =ome time. All varieties of secondary butter are very .^caice, and Siberian is keeping especially firm." The prolonged spell of dry weather and ' the consequent extreme scarcity of feed has had a ser ; ous effect on the dairying industry. As stated by us a few days ago, a. distinct shortage in returns has been ex penonced practically all over Otago, and matters have reached a rather acute *tage. On ihe 13th the management of the Taiei i and Peninsula Company announced an advance of Id per lb in tho price of butter, j and further increases are not unexpected ■< The milk supply of the Taieri and Peninsula. < Company has been undergoing a gradual 1 diminution, and every week sees a falling 1 off of over 5000 gallons of milk coming to i hand. In the case of the Oamaru factory, i the fallmjy off lia? al-so been most mar k«J j . A director of the company, speaking to aM Times reporter on the 13th. stated that the \ i weather had go affected the/ quantities of i butter coming forward that it was not • known how the company was to supply cus- 1

tomers during the winter. There is n« hope of securing supplies from the North Inland, as the shortage there is very pronounced ; while in Australia conditions art still worse. Where the company is to draw its supplies for the winter trade is a mystery. As to the price of butter and yesterday's advance, the opinion was even \entured that it would cause no great eurpn«p to soe further advances even up to 1 Is 6d per lb.