THE BUTTER MARKET.

Putaruru Press, Volume VIII, Issue 339, 22 May 1930, Page 3

THE BUTTER MARKET.

MR. J. E. LESSON’S VIEWS. Effect of World- wide Slump. “ There is no doubt that the season now ending has been one of the most favourable we have ever experienced,” said Mr. J. E. Leeson, chairman of directors of the Morrinsville Co-operative Dairy Company, in his address to a large meeting of suppliers in Morrinsville on Friday afternoon. “ I think,” he added, “ that if we could have arranged the season ourselves we could not have arranged it better. It is a good thing for us that the season has been so favourable, for although Providence has treated us well the markets have not.”

In Consequence of the wonderful season and the effect of increased top-dressing the output of butter for the season to date was 12,000 tons ahead of last season’s corresponding total, or an increase of 11 per cent. Farmers had constantly been told to “ produce more,” and they had produced more this season, but had not received reasonable compensation for tins extra production, because_ of the lower, prices that had been received during recent months. New Zealand had this year sold 18,000 tons of butter to Canada, the largest amount of butter Canada had ever bought from us in a year. This was a very good thing, for if this large amount had gone on to the London market it would have had the effect of further depressing prices. Apparently there had been a favourable season all over the world, for the United States had a surplus of 20,000 tons of butter, which was being stored in America. .The low prices in London had prevented it from being put on the London market. The increase in the Canadian tariff on butter from id to 2d would have an effect on the flourishing export trade to Canada. He thought it was a pity that tariff barriers should be set up to interfere with the free exchange of goods, for Canada had natural advantages for producing wheat, and this country could produce butter more profitably than Canada. “We have only shared in the slump which has set in in the markets for every primary product,” said Mr. Leeson, in giving it as his opinion that the fall in butter prices was only one aspect of world-wide trade conditions. Wheat prices in America had fallen to 4s, 2d a bushel, and the Canadian wheat producers had a surplus of 180,000,000 bushels stored in elevators waiting for the market to improve, while the new season’s supply would soon be coming on to the market. Apparently this world-wide slump was due partly to the financial panic in New York and the Hatry failure in London, which had affected the financial world, for it had been noted in the past that financial crises had been followed by low prices. Mr. Leeson took exception to the statement which had been freely made that if the New Zealand producers had had an efficient co-opera-tive marketing association in Britain their butter would not have shared in this general slump. Even Danish butter, which was marketed under very efficient methods, had shared in the general fall, and had sold as low as 1245. He also disagreed with the opinion that by selling f.o.b. farmers were helping to break the market for butter and allowing speculators to get possession of large stocks. He pointed out that this year a smaller amount of butter than usual had | been sold f.0.b., amounting to only 6 j per cent of the total, compared with 130 per cent last year when prices J were higher.

“ Of course I have nothing to say against voluntary associations for the sale of our butter. I have nothing to say against Amalgamated Dairies,” added Mr. Leeson. The Morrinsville company had always been opposed to absolute control, but if any voluntary marketing association could devise a system which would result in better prices for the company’s butter, they would be into it quick and busy. Recalling that butter prices had fallen from 180 sin September to 130 sin April, Mr. Leeson said the outlook was not too bright, as there were large stocks in England and New Zealand, and the Control Board was rationing the Home market by

delaying shipments. “Of course, this has affected the finances of the companies,” he said. “ Our own company has at present £40,000 worth of butter either in store or afloat.”