OUTLOOK FOR DAIRY PRODUCE.

Taranaki Daily News, 13 May 1921, Page 4

OUTLOOK FOR DAIRY PRODUCE.

Th® 'big drop in the price of tatter at Home has come at a fortunate time for the New Zealand producer, who disposed of all his season’s make to the Imperial Government at a record price, and is assured of a remunerative price for what he produces during the winter. The position of the Home Government is difficult. It bought the New Zealand output at 280 s cwt., and. still lias some 50,000 tons unsold. Meantime the market has dropped, and the Government, in order to cut its loss, is selling 'at 192 s for New Zealand, 186 s for Australian, and 168 s for Argentine. The price of the New Zealand article is equal to Is BJd per lb, so the Home Government is losing (taking into consideration freight, etc.) over Is per lb on the transaction. In a way the Government has itself to blame. It endeavored, to keep up the high prices when the market was sagging, and now, with the Home spring make available in ever-increasing quantities, and with a restricted purchasing public, due to the strike and unemployment, it finds itself obliged to offer the butter at what appears to be a ruinous price. It is the meat and wool business over again, and once more proves the fallacy and failure of Government control. Things at Home just now are, of course, abnormal. Millions are out of employment as a result of the industrial depression and the coal strike, and the public have not the money with which to buy tatter at high prices when they can obtain margarine (which in taste can be hardly distinguished from butter) at less than half the price. High prices always restrict consumption, just as low prices encourage demand. For that reason it is doubtful if the abnormal prices secured for tatter last year ■will prove other than an ephemeral advantage to New Zealand producers. The indications are that the high prices have greatly reduced the number of butter consumers, who have turned to margarine, to which they have become acoustomed, and from which they will not be easy to wean. The availability of cheap butter again, however, may assist in the weaning process. Unfortunately, the strike is further impoverishing the nation, and it will be a long time ■before things settle down and production' resumed on the old scale. Without production there will be little money for the purchase of butter or anything else. However, New Zealand will not immediately be seriously affected. The lose will be the unfortunate Imperial Government’s. When our next season opens the position is likely to be very much improved. It certainly cannot be worse than it is to-day. At the same time producers would be ill-advised to expect the big prices of the past to continue, and on which land values in so many instances have been based. The fact cannot be ignored that there is a general recession in prices the world over, and dairy produce cannot be expected to escape. We are now passing through a period of adjustment, and new and lower standards of value than have obtained in the last few years are being created. Just where they will settle no one can say or predict with any accuracy. But it is advisable to prepare for the worst and hope for the best. The sharp decline in Taranaki’s staple products at Home is a reminder, if one were needed, that we cannot depend on the permanence of high prices, and that the market for these products, essential as they are, is subject to the same vicissitudes as are the markets for other products.