BUTTER SURPLUS.

Taranaki Daily News, 7 January 1922, Page 5

BUTTER SURPLUS.

SCHEME FOR PURCHASE. DETAILS OF THE PROJECT. NEGOTIATIONS WITH AUSTRALIA. PRODUCERS SEE THE PREMIER. (By Wire. —Special to News.) Wellington, Last Night. Some details of the scheme evolved by the conference of butter producers tvhich sat in Wellington on Thursday were disclosed to your correspondent to-day. The object of the producers in both Australia and New Zealand at the present time is, of course, to devise some means of preventing the accumulatd butter stocks which the Imperial Government will shortly sell from having a serious effect on the market for' the present season’s Australasian make. The Australians seem willing to work with the New Zealanders, but there appears to be some difference between the schemes formulated in the two countries. According to the secretary of the New Zealand conference (Mr. T. C. Brash) the Australian producers are suggesting that the re-purchase of the Imperial, Government butter should be made by the producers, with Government backing. They do not suggest that Tooley Street should be a party to the arrangement, while the New Zealand producers do. The Australians hope that their Government will give the Imperial Government a guarantee of payment and that the Imperial Government, will permit the purchase money to be paid in two equal parts, the first part being paid in six months and the second in twelve month. The New Zealand producers hope to have the same terms of payment given to them, but they suggest giving Tooley Street representation on the London committee which would be set up to control the re-sale of the butter and the shipment of the new season’s butter to London.

NEW ZEALAND’S SCHEME. Under the New Zealand scheme the committee would consist otf two representatives of Australia, two representatives of New Zealand and two representatives of Tooley Street. ' The committee would buy the butter from the Imperial Government and the New Zealand and Australian Governments, would guarantee any payment on the due dates. If matters turned out well the committee might be able to re-sell the butter before either of the payments to the Imperial Government was due, but the Government guarantee would be necessary in case the committee had to call on the banks for assistance in making the payments to tim?. It is definitely understood that the producers are undertaking that any loss made on the deal will be borne by them.

At first the Imperial Government was offering the accumulated stocks at a price of 84s for Australian butter and 100 s for New Zealand. Since then, however, the market has somewhat improved, and advice has now been received from the High Commissioner that the Imperial Government retains the right to revise the original price. It was recently reported that a firm outside Tooley Street had offered to buy up the whole of the butter. Both the importers and the producers, Mr. Brash stated to-day, were offering strong objections to the acceptance of this offer, which would enable the firm in question (its identity has never been disclosed) to slaughter the market if it desired to do so.

CONCERTED ACTION NEEDED.

Thursday’s conference considered that the butter, when re-purchased according to its scheme, should be judiciously disposed of through the ordinary trade channels, without any attempt to inflate prices. The idea in the minds of all the delegates was that the price should be kept at a reasonable level in order to encourage consumption. Should the Tooley Street merchants accept liability in connection with the financing of the scheme they would probably require better representation on the committee and this would probably be conceded.

Delegates from Thursday’s conference to-day laid the re-purchase scheme before the Prime Minister. Mr. Massey stated after the interview, which was private, that he could not even put the matter before Cabinet yet, because it was all so indefinite. The difficulty is that if anything is to be done Australia and New Zealand must act in concert. -So far their plans have not been co-ordinated. Mr. Massey is believed to be obtaining as much information as he can about the Commonwealth proposals.

QUESTION OF FINANCE.

PREMIER NON-OOMMTTTAL. By Telegraph.—Press Association. Palmerston N., Jan. 6. Asked to-day if the Government would provide the producers with the necessary financial backing to enable them to purchase the butter stocks of the Imperial Government, Mr. Massey told a Standard reporter that the Government had not yet considered that phase of the situation. Whether or not assistance would be forthcoming he could not say. The result of yesterday’s meeting had not yet been communicated to him, and he was not prepared to promise anything until he knew what the Government was asked to back.

VIEW OF AUSTRALIA.

MEETING AT MELBOURNE. By Telegraph.—Press Assn.—Copyright. Received Jan. 6, 7.20 p.m. Melbourne, Jan. 6. The butter conference was continued to-day. It resolved: “That the time has arrived when a committee representative of the producers should be created with the object of uplifting butter standards and dealing with economic matters affecting the industry.” A committee was appointed to draft proposals in accordance with the resolution, which will be considered by a Federal conference convened for the Ann,

PROPOSAL TO PURCHASE.

OPPOSED BY SOUTH ISLAND. EFFECT ON THE MAJRKET. I Christchurch, List Night. After a conference held here by representatives of the South Islaui butter factories and producers, the following telegram was sent to Mr Massey: “The resolution to purchas* the Imperial butter was defeated a; yesterday’s Wellington conference, bw carried after voting on a tonnage basis* which course was objected to. The ( South Island unanimously opposes purchase and refuses to participate in any levy, believing that the Imperial Government should itself, through the usual channels, dispose of their stocks. Before any Government action in the support of purchase is given we hope you will arrange to hear the South Island representatives and also those otheri present who opposed the purchase.” The report of the South Island delegates to the Wellington conference or Thursday was presented and adopted In this report the delegates say: “W< believe that if any attempt at bolstering up the market is .made the serious position Which exists * to-day will continue over next season, whereas if the butter was sold by the Imperial Government at a cheap rate it will rapidly go into consumption and help more quickly to overcome the present slump that exists in the British markets. The fact must be apparent to everybody that the 22,000 tons of butter is in existence, and it has got to go into consumption, and that any increase in price will simply mean reduced consumption and the carrying over of thousands of tons of butter, and will prejudice the position at the opening of next season. “It is a very difficult position for the people representing the producers of this country to recommend a course of action which will mean a financial crisis to several of the producers at present on the land, yet on the other hand if these producers cannot survive one season of bad times it is logical to assume they will find it more difficult to survive two bad seasons. This season’s market is going to be a poor one, although we believe some improvement will occur jn the near future. It may be as well to point out that there appears very little possibility of the purchase scheme being put into operation, now, as cables from Australia, indicate that the producers there are not willing to hold back half their shipments. The Commonwealth Prime Minister is notj favorable to the -Government providing finance, but in. case these difficulties are overcome your representative wouHi like the matter given careful consideration, so that if the opinion arrivedat in Christchurch and supported by the delegates in Wellington is still held in the south, that representation be made to the Prime Minister intimating our unwillingness to enter into the scheme, or to subject ourselves to any levy.”

THE LONDON MARKET.

A MARKED IMPROVEMENT. RAPID CLEARANCES MADE. By Telegraph.—Press Attn.—CopyrigtL fieceived Jan. 6, 5 G p.m. London, Jan. 5. The butter market has improved dally throughout the w'eek, with a good consumptive demand. Australian arrivals were all cleared. New Zealand cargoes continue to discharge slowly, all selfing as soon as available. To-day’s quotations are: “Free” New Zealand butter, choicest salted, 125 s to 190 s; Australian 114 s to 116 s; unsalted 120 s to 122>. The Board of Trade has agreed td the Australian and New Zealand Governments’ request not to proceed with the sale of the bulk of its stock before January 14. News* from Australia with reference to the contemplated action of Australia and New Zealand concerning the acquisition of butter stimulated speculation to-day. The Board of Trade sold 500 tons of good grade Australian and New Zealand butter at 98s to 10gs, equalling recent weeks’ average sales.—-Aui.-NZ Cable Assn.

THE AMERICAN MARKET.

HOPEFUL PROSPECTS FOR BUTTEK The prospects for New Zealand butte* on the American market were briefly discussed at Auckland on Wednesday by. Mr. D. F. Wilbur, United States Consul* General for New Zealand. He expressed the opinion that a fairly good market could be established in the United States for the highest grade article, notwithstanding that there was a duty on imported butter of 6 cents per lb. The butter had to contain no preservative : and was accepted on the certificate ol the New Zealand graders. The American market was within fairly easy reach of New 'Zealand and the production period in the Dominion coincided with the off season of the United States, This meant that New Zealand butter would reach the American market when home supplies at their lowest. Mr. Wilbur said he had no definite information to give regarding the present con/ dition of the United States market, bur the American people * always demanded the highest quality and were prepared to pay good prices. This was an important fact for producers to remember, as it was a great factor in maintaining market stability. The opinion was also expressed by Mr Wilbur that a market could be established for New Zealand cheese in America, though that country was a large producer of both butter and cheese. Similar conditions prevailed with regard ta both commodities and the seasonal demand in the United States could be met by the New Zealand producers. The duty on cheese imports to the United States was 23 per cent., therefore the article would require to be of the highest grade to insure a reasonable return to the producer.