Bay of Plenty Times. TUESDAY, FEBRUARY 21st., 1933. DEPRESSED DAIRY MARKETS.

Bay of Plenty Times, Volume LX, Issue 11046, 21 February 1933, Page 2

Bay of Plenty Times. TUESDAY, FEBRUARY 21st., 1933. DEPRESSED DAIRY MARKETS.

The dairy fanners throughout the world who produce surplus butter for export are faced with a serious crisis. Owing to prohibitive tariffs, practically all the surplus butter of the world has but one market, and that is Britain. The British market is a big one, but the biggest market can become saturated. Perhaps, if Britain had not so large a number unemployed no doubt a great deal more dairy produce would be consumed, but that does not mean that prices also would have hardened. A short three years ago no one would have had the courage to predict that butter would drop to 77s per cwt. for finest, and cheese to 56s per cwt., but those were the prices ruling in London at the time of writing.

The reasons for the depression in prices are quite obvious. • The incomes of the consumers of our dairy produce have been radically reduced, while thousands of would-be consumers have no icicomes whatever. A drop in prices is generally a prelude to a big Increase in consumption. It can be said that there has been a big increase in consumption in Britain, but supplies have poured in at a greater rate than consumption, with the inevitable reaction on prices. The butter imported into Britain during the month of January totalled 37,264 tons, against 35,559 tons in the corresponding month and 1932, and 33,770 tons in 1931. The greatest increase last month was from Australia, while New Zealand and Denmark showed small increases. The imports into Britain of butter from Australia last month was 12,049 tons, against 9,158 tons in January of last year. This is an increase of 18i per cent.l and as Australia has had the benefit of copious rains there is every probability of a further increase in the output. With respect to cheese New Zealand dominated .the market, and the 10,837 tons landed in Britain last month was 1000 tons more than In January in 1932. Now' there appears to be some prospect' of the Canadian market developing trouble. The outlook for dairy produce

seems hopeless, i and the quota system can .alone stop a further recession in prices. Buf while that may be the case the effect bn producers here must be extremely bad. Even with the benefit of 25 per cent, exchange the current local quotation is equal to 96s per cwt., while the retail price locally that is in the cities is about 112 s per cwt. The margin appears wide and is discouraging consumption. It is very evident that consideration will soon have to be given to diversified farming. North Island farmers have apparently placed all their eggs in the one basket, and it is either dairying or lamb production that engages attention. Changes in farming are the probabilities of the near future.