DAIRY PRODUCE OUTLOOK.

Taranaki Daily News, 19 August 1921, Page 5

DAIRY PRODUCE OUTLOOK.

THE PROSPECTS FOR BUTTER. REMOVAL OF RESTRICTIONS. NEARING PRE-WAR CONDITIONS. The outlook in the dairying industry generally was referred to by Mr. A. Morton (chairman of the National Dairy Association) yesterday in addressing shareholders of the Mangorei Dairy Company, of Which he is chairman of directors. At the outset Mr. Morton reviewed the sale of last season’s output to the Imperial Government, and said this deal was effected at a price which was very considerably higher than ever received before in New Zealand for butter. At that time it was apparently expected by the Home Government that there was going to be a shortage, and it was necessary for them to protect the interests of their consumer. They first made an offer of a very much lower price (240 s per cwt.) than that at which the deal was eventually closed. Negotiations proceeded for some time, and finally the representatives of the New Zealand producers accepted 280 s per cwt. f.0.b.. equal to 2s 6d per lb. The term of the contract was suggested in the first place to extend to January 3*l, 1921, but those representing the producers insisted on an extension to March 31, so that two additional months were secured, which subsequently proved very fortunate, as prices had fallen considerably before January 31. A POOR SEASON.

The price was a record one, but unfortunately for the producer, the season was a record one on the low side as regards production. It was exceedingly small, seeing that the price for other products were small, and that a number o-f people had been attracted into dairying. Climatic conditions, however, at all times governed the production. The season last year was, he could safely say, one of the severest they had ever had. The early spring was cold and dry, and the few weeks or really good weather they had was followed by a dry spell, which made the autumn unproductive. Taking the figures for their own company, Mr. Morton remarked that by December they were 26 tons ahead on the output of the previous season. but they lost the whole of that before the year concluded owing to tne bad autumn They came out with 18 boxes ahead instead of 26 tons. He expressed hopes for more favorable conditions this coming season.

Proceeding, Mr. Morton reviewed events after the termination of the contract with the Imperial Government, and the conditions governing export, including the arrangements made by the New Zealand Government to retain a certain quantity of butter for local consumption during the winter month-. The production during this period, however, owing to the exceed’ngly mild nature of the winter, particularly in the North Auckland district, was very heavy, and the calculations of the agricultural division in this respect were somewhat upset. It turned out before the winter was over that there was going to bo a large excess of butter in New Zealand over the amount required for local consumption. Following this development, there wa« a further conference between the producers’ representatives and the Government, with the result that permission was granted in July to export during August, at least 30.000 boxes of the accujmulation on the local market. Mr. Morton also dealt with the fixing of the price for the local sales at what w then deemed to be the export value, of which the Government would contribute 2d. leaving the cost to the consumer not more than 2s 3d. This arrangement was to remain in -force until August 31. FREE MARKET FOR PRODUCE. As the result of recent negotiations j the position now was that from August 1 31 there would be no further control of price, so far as butter was concerned, and factories would be free to obtain whatever price they could. All prohibition in regard to export would be removed, and all restrictions of the local market would also be done away with. Thus they were now facing, at the beginning of this season, what were practically pre-war conditions; there would be no interference by the Government with the sale of butter, or as to the price they should get for it. As he had mentioned, there had been ' considerable production during the winter months, necessitating a further large quantity being exported, but before permission was given to export the position had been so acute with some factories owing to butter accumulating, that prices were being cut in some cases, and butter was actually being sold at below the Government fixed price. That was due to the financial stringency, and to the fact that factories required cash in order to meet their engagements. The termination of the control and the release of the butter would lessen the financial stringency, which had been rather harassing in regard to the conduct of business. Fortunately their own company had been in an exceedingly strong position, and they had not been embarrassed as others had. THE SHIPPING PROBLEM.

Opening out, as they now were, upon a season which would show a recurrence of something like pre-war conditions, one of the most important matters in regard to the export of produce would he the number of boats that would be available to remove produce. In order to get the best price on the Home markets, it was absolutely essential that regular shipments should be made from New Zealand. If ships were held up and several consignments arrived at Home about the same time the result Was a scarcity and then a glut, so that prices fell. There were plenty of boats available, but owing to the ruling conditions the companies had not yet -found it possible to revert to pre-war shipping services, or to avoid the unreasonable delays in regard to loading and unloading, coaling, and labor troubles. He was pleased to say, however, that these wore gradually diminishing, and probably in the near future they would largely disappear. A contract had been arranged with the shipping companies for the carriage of produce for a period of one year as from September 1. Unfortunately the rates were exceedingly high, being 6s per box, as against 2s Gd per box in pre-war times. The shipping companies had been approached not only by the producers, but also by other * interests, With the idea of securing a reduction

in rates, but they contended ft ’was impassible to do so as long as the high running costs cont inued. That was one reason why the contract for carrying produce had not bec-n made for more than a year, as those m charge of producers’ interests believed that within the next twelve months the orefi would fall, and that it would be possible to obtain a better contract twelve months’ hence. He believed that therewould be shipping available sufficient to remove the produce almost immediately when it was ready, and although they would not get the same regularity in despatch as was the case in pre-war days, it would not be long before they got back to the old status. A CONSIGNING YEAR In regard to prospects for the future, Mr. Morton said that recent cables indicated that values were rising all the time. The price of New Zealand butter had gone up again, and was now selling in Loudon at a price which would give to the producers in New Zealand 2s 2d per lb. f.o.b. Notwithstanding the fact that apparently there was still a large quantity of Government butter unsold, the prospects for freshly made butter were improving all the time. It was not possible at the present time to obtain any offers for butter, and further. he did not think it likely that any factories would sell. The next few weeks would disclose more in this direction. The year would be a consigning one, and prospects were exceedingly bright for those factories who consigned.