WEDDELL'S REVIEW ON N.Z. DAIRY CONTROL

Shannon News, 1 November 1927, Page 4

WEDDELL'S REVIEW ON N.Z. DAIRY CONTROL

Silent Battle Between Bayers and Sellers SPECULATION LIFE OF , MARKET , "Starting with an oveinvhelming accumulation of stocks hanging over a market paralysed by the effects of the most disastrous strike in the history of this country, state W. Weddell and Co., in their 33rd. Annual Review of the imported dairy produce trade; and continuing under an attempt by the New Zealand Control Board to maintain prices at an artificial level, the year dragged its weary way to the end in an unbroken succession of disappointments for everybody concerned. "In theory, the control scheme was undoubtedly attractive to people unfamiliar with conditions in this country, but its promoters overlooked the human factor in their calculations. They failed to realise until it was too late what the psychological effect of their actions was likely to be upon the general body of buyers, whose instinct had always been deeply antagonistic to anything savouring of interference with their freedom of action. v ,

"A Silent Battle."

"The affair simply developed into a silent battle between the ' buyers on the one hand, and the Control Board on the other. All speculative activity was stopped, and a policy of hand-to-mouth trading, with a distinct tendency to avoid dealing in New Zealand butter or cheese, if any other suitable description was available, was pursued. The result was a foregone conclusion. Price control can only be successful; if it is complete, Any attempt to control even an important section of a trade in face of strong opposition is doomed to failure. By the middle of March the Control ' Board were compelled to surrender, and admit that its scheme had failed." In views of the exceptionally heavy supplies of butter that arrived from the Continental sources during the summer of 1927, Weddels hold that, "if price control had not come to an end when it did, the position would

have undoubtedly been more serious for the New Zealand farmer." Element of Speculation. New Zealand producers are reminded of the enormous advantages which they have derived in the past from the speculative element in the British market, and of the many occasions on which they have been able to sell their butter for forward shipment at prices far, in advance of its ultimate value on arrival. ' "Time and again it has been found that speculation was the only thing that could kindle a spark of life in a dead marlret. If a buyer takes a view of the future and is prepared to back his opinion by taking a risk, there w T ould seem to be nothing in his action necessarily against the interests of the producer who is at liberty to sell or not as he thinks fit. . Ultimately the only factor that governs a free market like that of butter and cheese, is the law of supply and demand. Any other influence can have only a temporary effect." The reason given for low prices during 1926-27 was reduced consumption of butter as a result of the coal strike; but the position was complicated by others factors, chief amongst which was the bad feeling engendered amongst buyers by the action of the New Zealand Dairy Produce Control Board. < Proof of the unpopularity of New Zealand butter is only ,too clearly shown in its average price for the. year, which was 24s 2d per ewt. lower than that in the preceding year, showing that New Zealand butter suffered more severely than any other description." -