THE BUTTER MARKET.

Taranaki Daily News, 12 January 1922, Page 6

THE BUTTER MARKET.

BETTER DEMAND AT HOME. REDUCTION OF THE SURPLUS. INTERVIEW WITH MR. A. MORTON. The advice from London relative to the improvement in the demand for New Zealand butter and the reduction of stocks, as published in yesterday’s Daily News, lends a brighter tone to the market for this produce. The position was reviewed by the president of the National Dairy Association (Mr. A. Morton) yesterday in the course of an interview, in which he made some interesting observations on the latest development. Mr. Morton explained that the Board of Trade was informed by the Imperial Treasury just prior to the Christmas holidays that the stocks in hand must be sold, and with this end in view the total stocks of 22,000 tons were offered at the respective prices of 100 s per cwt. for New Zealand and 84s per cwt. for Australian. The suggestion was made that the producers of the respective countries, with the assistance of their respective Governments, should take steps to purchase these stocks and control the sale of them in conjunction with the present season’s imports in Great Britain, in order to prevent the possibility of their falling into the hands of someone outside the ordinary butter and cheese importers, who might make use of them to manipulate the market with disastrous results to the producers. A representative gathering of the producers of this Dominion met in Wellington last week and a resolution was carried to the effect that it was advisable for the Dominion producers to purchase the 8000 tons of New Zealand butter.

One apparent result of the move on the part of the producers to purchase those stocks, had been that a greater demand has been experienced by the Imperial Government for those same stocks, showing that it was recognised that if they were purchased on behalf of the producers the result would be that the price at which they would be sold would be considerably increased, compared with that which the Imperial Government had been asking.

IMPROVED PRICES PROBABLE. “It is evident from the cable which has been received from the High Commissioner that there is now no further need for the producers in this Dominion at any rate to take any further steps in regard to the purchase, and they may congratulate themselves upon the fact that the action they had proposed to take had had such good results.”

It was extremely probable that improved prices would very soon be obtained./for the current season, as it had alway.y been found that the demand was slack during the holiday period. “This should be welcome news to the butter producers,” Mr. Morton continued, “more especially as the reports which have been received from Home lately have been anything but encouraging, the actual price realised being very much below the expectations of the factories when the shipments were made. Unfortunately, too, the price which has been realised and which is likely to be realised for a considerable quantity of the butter will probably be very much below the advances received when the butter was shipped, and although it is unlikely that any reclamations will be made upon suppliers in respect to differences arising out of the sale of this butter, yet tbe rates of advance for some time to come must necessarily be kept at such a figure as will enable companies to level up the position. Up to the payment made on December 20 most companies had paid out not less than Is per Jb of butter-fat, but as this rate of advance was one which the price subsequently received for the butter did not warrant, there will doubtless be a substantial reduction in future payments.

INCREASED IMPORTATIONS. However, there is every reason to believe that it may be possible for companies ere long to resume the payment of at least Is per lb as the monthly advance to suppliers.

It is interesting to note that the lower price at which butter is being retailed at Home has brought about the desired remedy—increased consumption. The last figures which are obtainable in respect to imports of butter into Great Britain show that the imports for the nine months prior to September 30, 1921, were 141,000 tons, whereas the total imports into Great Britain during the last two years of the war period were as low as 70,000 to 80.000 tons per annum. It will thus be seen that the consumption is rapidly returning to that which normally prevailed under prewar conditions, when the average annual import was about 210,000 tons. In regard to cheese, Mr. Mortpn said he thought it was probable that the market will be maintained at somewhere about present prices during the month of January, but after that it was extremely likely that, owing to the increased quantity

which would be arriving, a fall would follow. The latest reports available showed that the accumulated stocks did not amount to very .much, and that provided the imports were not largely increased there would be no serious fall in price. While there is no reason at the present time for anticipating a return to anything like the high level of prices which prevailed during the past four years, yet the farmers are entitled to hold a somewhat optimistic view at the present time.

INFLUENCE ON LAND VALUES. “One result of the prices obtained for produce during the past few months will undoubtedly be that land values will become more settled and on a much more reliable basis than has obtained during the past three or four years in particular, and while it is not reasonable to assume that there will be any great decrease in the cost of production for some time to come, the outlook is encouraging. If there is one thing in respect to which the Taranaki farmer should be satisfied it is that he has not been led astray by the dried milk craze, which in the Waikato has led to the expenditure of huge sums of money in the erection and equipment of factories for the production of that commodity, the market price of which to-day is so low that it is questionable if it will return to the factories their cost of production and manufacture.” Mr. Morton added that there had been a boom in Waikato land on accound of the anticipated returns from dried milk. Fortunately Taranaki, or at least the northern portion of it had not suffered much in this respect, and although there had been cases where undoubtedly farm lands had changed hands at much beyond their actual or producing value, yet the great majority of our dairy farmers were in a good position to-day to withstand the effects of low prices for their produce for a season.