THE CHEESE OUTPUT.

Taranaki Daily News, 13 September 1916, Page 3

THE CHEESE OUTPUT.

MAY BE REQUISITIONED DISMAY CAUSED (From Our Own Correspondent.) Wellington, Sept. 11. The announcement that the Imperial Government contemplates taking action to reduce the price of cheese in the United Kingdom has caused- something like dismay among persons connected with the dairying •inuDstry in this country. Two months ago the New Zealand Government was in negotiation with the cheese producer* for the purchase of the whole of the present season's output, on behalf of the Imperial authorities, and at that time many of the men connected with the industry were anxious to sell to the Government But the negotiations fell through, owing to the Government refusing to pay the price asked, and since then the merchants have been buying freely at prices considerably in excess of what the .factories were willing to take for their whole output in July. The fixing of prices by the Imperial Government at the present time cuts right across contracts in which nearly all the. merchants and factories are already involved. Private advices received in Wellington to-day confirm, the cablegram published in the morning papers. The British Board of Trade has annouueed that it is"lonsidering the high price of cheese on the London market and is seeking a remedy. It may decide to "fix a maximum price, or control the whole available supply (by commandeering) or requisition sufficient for army requirements." One private message mentions that "the idea is to check speculation." The price of cheese has been scaring on the London market, and it has been obvious that with the heavy buying of the War Office and the decline in shipments from Holland and Denmark, the market was going to remain strongly in favor of -sellers of ordinary trading conditions were maintained. Tlw difference between London prices and New Zealand prices has indicated that some speculation was proceeding. "The decision of the Imperial authorities undoubtedly is a serious matter for those engaged in the industry," said one business man yesterday. "I was one of those who favored a sale of the season's output to the Government at a fixed price when the matter was discussed two months ago. The roresentatives of the factories were asking B£d per lb at that time, and probably the Government could (have made an arrangement at BM. But the Government offered to take 8000 tons of cheese at Bd, leaving the producers to ship the balance, and this proposition did not appeal to men who were being,, offered 9d per lb by the merchants. The negotiations fell through, aud since then the merchants have been buying at 9Jd and 9%d. Those engaged in the industry have been allowed to sell their goods and enter into business arrangements, and now the Government is proposing to upset those arrangements by an action that, in my opinion, should have been taken two months ago or not at all. The interference of the Government after the cheese has been bought and after supplies have begun to reach the stores is most disconcerting." The opinion expressed in another quarter was that the cheese producers and the "merchants 'had simply over-reached themselves in their effort to secure "speculative prices" for their product. "Last season the Imperial authorities took 15,000 tons of our cheese at per pound, and the producers were very glad indeed to get such a highly profitable price," the reporter was told. "This season the producers demanded B%d, and they would not accept the Sd offered by the Government. They thought, I suppose, that the needs of the Imperial authorities would force the Government to pay their price. Since then factories have been selling their season's output at 9%d per pound, and even higher, 'on the prospect of a shortage in London. These transactions were obviously speculative, and though I dc not say that the prices were not apparently justified on the facts, of the position, I do say that the people who would not take the Government's offer two months ago have no right to complain that the Wa-r.-Of-fice is arranging to protect itself against speculative prices now. That is what the announcement just made amounts to. "I do not think that the cheese producers 'have realised fully their dependence upon the Imperial Government at the present time. There is only one market for New Zealand cheese, and that is the United Kingdom. There is only one way of moving the cheese out of this country, and that is by securing insulated space in steamers that are running under the direction of the Britisih Board of Trade's Tonnage Committee. If the Board of Trade does not provide space, -then this season's cheese will remain in New Zealand. Doubtless arrangements will be made, because the Imperial Government wants the cheese, but the producers are not in a position to dictate terms, and that fact should have been recognised before the present difficulties were created." > The New Zealand Government has not received any instructions .regarding the handling of cheese this season, and it is assumed locally that the Imperial authorities intend to fix the price at the London end, leaving exporters to make their own adjustments in New Zealand. Sales are suspended in this country in the meantime, and the trade will continue in an uncertain state until exact information regarding the intentions of the British Gove'rninent is received. Most of the factories have already sold their season's output. The indications are that New Zealand will produce a record amount of cheese this year, probably from 45.000 to 50,000 tons, and last season's returns show that the dairymen and the dairy companies will be in a happy position even if the price eventually "received is no more than the 8d per pound offered in July by the Government for a portion of the output. The position of exports in relation to contracts already signed may require the attention of the Government. The purchase of the whole of the output of the New Zealand factories by the Imperial Government would relieve the producers of one source of anxiety. The cheese would be bought f.0.b., and the buyer would have to arrange for shipment. The position at present is that the exporters have got to get their cheese to London before they find a market and there are indications that the shipping difficulty may become acute. The new season's cheese has been entering the stores this month, but no ship will be, available to lift it before the "Bth inst., and it is expected that heavy stocks will be accumulated quickly. The outlook from the point of view of the uluppei of cheese is not very bright.