The Daily News. FRIDAY, NOVEMBER 19, 1526. DAIRY PRODUCE REVIEW.

Taranaki Daily News, 19 November 1926, Page 6

The Daily News. FRIDAY, NOVEMBER 19, 1526. DAIRY PRODUCE REVIEW.

There are several features in Weddel and Co.’s review of the imported dairy produce trade, published elsewhere in this issue, which will prove interesting and enlightening to the dairymen of this Dominion. One is that boom prices, caused by strikes and holds-up, react detrimentally on the producers, for as soon as the retail price of butter increases beyond a certain point the public begins to economise, the demand falls away, and prices have to be reduced drastically in order to restore the demand to its former, volume. Thus the high prices obtaining for dairy produce in England about this time last year were a bane and not a blessing to the producers. Another point touched upon in the Review is the practice of New Zealand factories placing limits upon this produce after arrival in England. In previous seasons some of the factories indulging in this policy had greatly benefited. Others followed, until the stocks accumulated considerably. On this occasion this “mass speculation” failed, and ever since the accumulations have had a most adverse effect upon the market, already antagonistic to New Zealaud produce by reason of the tactics of the Control Board. The Review points out that apart from the little financial advantage likely to be derived from this policy “the restraint on the free marketing of supplies aroused a certain amount of adverse criticism and diverted regular buyers to other sources of supply.” Control ensuring uniform standard of quality is welcomed, but holding up supplies in the United Kingdom for reserved prices is regarded as ‘‘a very dangerous experiment in mass speculation.” The Review emphasises that it is not in the interests of the New Zealand producers that there should be room for anyone to say that by holding up supplies they are attempting to squeeze the British consumer. The- Control Board, of course, was not in control of last season s produce, though shipping space allotment was in its hands, so that the individual factories were primarily responsible for the accumulations. At the same time it is part of the Settled policy of the Control Board to store a proportion of supplies in order to feed the Home markets in the lean periods of the year. Whether it will modify it in the light of the present disastrous experience remains to be seen. It does not seem to have learned much from its past egregious errors of judgment and tactics, and one cannot therefore be very hopeful of it profiting from this lesson. There are directions, however, in which the board can perform valuable service. It ean emulate the Danes in improving quality and grading. Already its efforts in this respect have been attended with success. Quality, and quality only, counts at Home, and it is the only thing that will ensure remunerative returns. Every producing country is improving the quality of its produce, and organised efforts to this end naturally meet with the approval of Weddell’s Report. But this Dominion has gone a step further and decided to direct the marketing at the English end. “This experiment in collective marketing will be watched with interest by everyone connected with the trade,” the Report quietly remarks. We already have a good idea of how the experiment will turn out. The' board fixed the prices, and the

trade simply ignored the New Zealand article. Siberian butter that used to sell at 20s to 30s below New Zealand was commanding 1445. or only Is below New Zealand, whilst large quantities of our stored butter had to be sacrificed at 138 s and 140 s or 4s to 6s below Siberian. Danish butter has been selling freely at 35s to 40s above New Zealand, whilst even Argentine is realising a premium on New Zealand butter, and Australian and Canadian, previously much below New Zealand, are now practically on a par. The importers have ignored our produce because its price was controlled and confined their attentions to the “free” butter of our competitors. This has been facilitated by the restricted demand for butter arising from the economic conditions prevailing, traders being quite independent of supplies from this Dominion. The Control Board could hardly have chosen a more unsuitable period in which to try out its experiment. Prudence should have dictated caution in introducing such a radical change in marketing conditions, but then prudence has not been a conspicuous element in the board’s administration so far. Even now the board seems unable to appreciate the magnitude and the impossibility of the task it has created for itself by its own blundering, or it would change its policy immediately and work in with, instead of against, the Home importers. Already, with prices for butter only equivalent to Siberian and Argentine values, the experiment of controlling prices has cost the producers of this country tens of thousands of pounds, and unless the goodwill of the Home interests arc soon regained, possibly only by an alteration in policy, the loss is likely to run into millions of pounds by the time the season is over.