BUTTER MARKET.

Taranaki Daily News, 17 March 1921, Page 5

BUTTER MARKET.

FREE SALES NEXT MONTH, FUTURE RETAIL AN INCREASE / - (By Wire.—Special to News.)’ , Wellington, Last Night. Matters in connection with the fixing of the price of the new season’s butter in the Dominion have reached an interesting stage. To-day a reporter made enquiries in well-informed circles with the object of gauging £he future movements of the local market, and ascertained that the Government have advised the Butter Committee that the market will be free as from March 31. Recently the committee asked the Prime Minister for an entirely free market or for the continuance of the present arrangement by which the .Government subsidises those companies which supply the New Zealand market to the extent of 6d per lb, by means of which subsidy a retail price of 2s 3d has been made possible. SUBISDY TO GEASE. Mr. Massey informed the committee that they could not have an entirely free market and that the subsidy as at present constituted must cease, but at the same time Mr. / Massey intimated that he was prepared to consider any reasonable proposal put before him. The committee met again later and unanimously decided to recommend that after March 31 the wholesale price of bulk butter be 2s per lb f.o.b. or f.o.r. at buyers’ option, 2s 3d at the grocers in pats, and 2s 5d retail, and. that a subsidy of 3d per lb be paid to manufacturers from the consolidated revenue to enable butter to be sold at these prices.

In reply the committee has received the following letter from Dr. Reakes, Director-General of Agriculture: “I duly received your letter of the 11th inst. covering a copy of a resolution passed by the committee. This has been submitted to the Government and carefully considered, and I am now directed to inform you that it is greatly regretted that the proposals as to prices and subsidy contained in the resolution cannot be accented, as the Government considers that in view of all the circumstances, especially the trend of the overseas markets, the retail price to the consumer should not exceed the present price of 2s 3d per lb. lam directed to further state that having regard to the circumstances at present existing as set out above the Government would be willing to offer a free market for butter within the Dominion as from the 31st inst” REDUCTION UNLIKELY. The Butter Committee, after consultation with, the Government, agreed that it would not be necessary to withhold the shipment of any butter made prior to March 31, as £he make after that date would be sufficient for local requirements. It was agreed also that it would be necessary to prohibit th® shipment of butter made as from April 1 to July 31, but otherwise the local market will be entirely free.

Speculation is being indulged in as to what the retail price of butter will be after March 31 when the Government discontinue the subsidy and a free market is at the disposal of factories. From enquiries made it would appear that there is not much likelihood of the price being reduced to the New Zealand consumer, and those closely in touch with the industry predict a slight increase in the retail price. “The position in a nutshell is this,” remarked a representative of one distributing house to a reporter. “The present ideas of the factories on the subject are such that it will mean a retail price of about 2s Bd. The present maximum retail cash price which may be charged is 2s 3d. What attitude will the Government take up if the factories put their price up to 2s Sd? What will the Government do? They have yet to make the position clear.” NO EXPORT PARITY. In justification of the suggested price of 2s 8d it was pointed out that the summer price for export has been 2s 6d f.0.b., and the equivalent on the local market was 2s 9d retail, but the Government, to enable the consumer to get butter at 2s 3d, paid a subsidy of sixpence'. In the natural course of events it would be expected that producers would be entitled to higher prices for winter manufacture, but, as a matter of fact, if the retail price were made 2s 8d they would get Id per lb less for butter made in winter than they secured for butter made in the summer time.

“It has been suggested,” remarked one official, “that the factories should get an export parity on the local market, when, as a matter of fact, there is no such thing as an export parity as from April 1. If butter were shipped in April it would be delivered in England in the middle summer, whereas under ordinary trading conditions any surplus for export in April there would be held until July to enable such shipment to secure the best market in England. To speak, therefore, of an export parity during our winter and the English summer is out of the question. In pre-war times the prices of butter in winter in New Zealand was always very much higher than the price ruling in England during their (the English) summer.”