THE FALL IN BUTTER.

Auckland Star, Volume LXIII, Issue 276, 21 November 1932, Page 6

THE FALL IN BUTTER.

The seriousness of the further fall in butter may be illustrated by a reference to the . table of average prices printed in Weddel's latest annual review of the trade. The lowest average top price of butter, during the ten-year period under review, was. 106/, and the highest 191/. These are average top prices, and within the yearly periods a considerable fluctuation takes place—in the season 1931-32 it was 26/ —but one has to go back twenty-five, years to find a price as low as to-day's. The present fall appears to have been brought about mainly by heavy importation of Australian butter and consequent undercutting of price. Australia has become of late : a much more formidable competitor. The expansion of the Australian industry has been enormous. Importations of butter and cheese into Britain rose from 41,000 tons in 1929-30 to 81,000 tons in 1931-32. "Despite the big drop in selling values, or perhaps because of the export bounty," says Weddel's report, "dairying is still the most profitable branch of agriculture in Australia, and many farmers have been ■ turning over from sheep breeding and cattle fattening to dairy farming, especially in Queensland." It is significant that last year, for the first time, West Australia exported locally manufactured butter to Britain. Not only has Australian production increased, but the difference between the prices of the Australian and the New Zealand article on the London market has narrowed. It is reported that the Australians have decided to hold back 20 per cent of their production. The report lacks confirmation, and even if it is - correct, the butter will still be in cold storage in Australia, and the knowledge that it is there must affect the London market. How and when the position will right itself are matters on which no one will care to be positive. Much depends on the purchasing power of the British people, and, as Weddel's report says, it is astonishing that in 4 the economic state of the country Britain has been able to consume such vast quantities of butter. The one consolation to the Dominion producer is tli&t with good butter selling at a shilling a pound, the margnrin - must have been hard hit. The lone obvious lesson for us out here is that we can now afford even less than before to give wtvay one point-in-quality, _