BUTTER BUYING BUSINESS.

Taranaki Daily News, Volume LI, Issue 220, 10 September 1908, Page 4

BUTTER BUYING BUSINESS.

THE SLIDIM; HCALJi A.\U iIOW IT WORKS. A consignment advocate was the other day pointing out the fallacy of the dairy companies policy iu selling butter, and he sidduced strong arguments in lavor ol' the system of open consignment, leaving the butter lo make its full value on the market at Home, without allowing tin' buying linn's margin, for profit. The subject has been worn threadbare in the columns ol' the newspapers of this Dominion, but a new aspect of the buying proposition has been introduced. We reler to the "sliding scale," or tlili'erential prices paid for the various months' , output. Our informant asks why should the dairymen sell their produce months before it is made, and seil it, too, at a smaller price than was obtained last year by companies who consigned their oul-putis to the Home market for distribution to the retailers.. The consignment advocate preaches the gospel that prices on the English market are likely to be bigger this year than ever, owing to cattle shortage in Siberia and Australia, and owing to the increasing demand. Yet the directors would court certain loss to their shareholders by selling their butter forward, even at the riueuhmsly low price of per lb. Worse still, several factories were selling their output on the ••sliding' scale," under whieli the following prices had been accepted:—September butter P ( 'i' lh, October-Xovemb'i' 11 1 /.d, December-January 11 V4d, Februarylid. This, lie said, looked like ll%d per lb the season through, anil some directorates looked upon it in that light. As a -matter of fact, said this agent, the oiler would be found to ;vvork out at about 11 or less, when the varying output was taken into account. "The diU'emit secretaries will l»e able lo prove whether 1 am right notjlmtitis niv aim to protect their interests and to prevent their being led away by this. If they are determined to gamble, why, let thorn gamble, but aren't they taking on a double gamble if they sell under this ingenious plan?'' Of course, lie addled,'the buyer offered the fancy price for the months when there was practically no butter, to cloak the fact that the bulk of the output would be disposed of at much lower .rates. "I don't pirsume to say that directors and secretaries are asleep, but 1 do say that these "how-does-he-do-it" prices are offered to them and they often have not time to go fully into calculations, for they are anxious to announce their decision! to the crowd of agents who the kicking their heels on the doorstep. And the honest offers of IP/id per lb. for the whole output., worth %d per lb more to the company, are being nassed over the clever men's offers. In a word, it is easy to be misled on figures of that kind, k'cause SO per cent, of the butter is made when I the sliding scale huyer is giving the low J price,"

Our representative, before publishing '*[ these figures, searing the wits out of | directors, and letting them in for a rough time at the hands of infuriated shareholders, obtained the figures of one dairy company which may he fairly taken as one of the average in the matter of monthly output proportions. The returns do not altogether tear out our informant's statement, though they do show that a company selling at a 11 %d outright would he better olf than by disposing of their buter on. this ".sliding scale." The company in question manufactured (from September 1 to March 31) 18;i,1801'bs of butler, as follows:—(September 1-U72lbs; October 22,tt0711>5; November 32,3151tb5; December 37,0031b5; January 33,1251b5; February 22,K441h5: March 21,(i211b5. Sold at ll%d per lib, the butter was worth £S(i!l(i lis nd. On the "sliding scale*' if would bring only £8(181, meaning a lo*s of £l3 to the company. Om- other concern in the province'manufactures about m'n times as much butter. Conditions being equal, the loss lo that company would be, roughly. UIOO. So th.it, on the whole, the graduated scale quoted earlier in this article, is equnl, approximately, to i l'Xs'l per pomut the year round.