N.Z. BUTTER.

Press, Volume LXVI, Issue 19851, 12 February 1930, Page 14

N.Z. BUTTER.

PROPOSED CANADIAN TARIFF. DANGER OF INCREASE. From a SraoiAL Cobbehpovdint. VANCOUVER, January 22. The Tariff Board was engaged for some days last week hearing pleas by the Canadian dairy industry for increasing the tariff on butter to check importation from Australia, and, particularly, New Zealand. A strong case has been made out by the Canadian Dairy Association, based on the experience of the industry in the years subsequent to the adoption of the tripartite reciprocity treaty on October Ist, 1925. Dairy products exported up to 1926 consisted chiefly of cheese, butter, fluid milk, and cream, and condensed and evaporated milk products. Imports consisted of butter (in the winter) and small quantities of fancy cheese. Export of cheese has declined seriously in recent years. The net butter export has rapidly fallen since 1925 till, after vanishing altogether, it bocame a net import requirement of nearly 30,000,0001b. Export of fluid milk and cream to the United States has been restricted to about 6 per cent, of the former maximum, through stringent import regulations, together with successive increases in the United States tariff. The sevore winter in Canada causes a rise in production costs of about 5d a pound of butter, compared with the summer. This figure assumes a winter production of, say, 60 per cent, of the maximum rate for the year. Under modern conditions it becomes increasingly necessary that the dairyman's capital be employed full time if profit is to result. In other words, winter dairying must be practised. Australia and New Zealand butter reach the Canadian market at the season of short production and high cost, and this factor prevents any equalisation of cost and selling prices. The butter market is the regulator of the entire industry; price levels follow it. The Canadian Dairy Association's complaint usually takes the form of charging the present annual importation of 30,000,0001b as preventing the establishment of 16,000 ten-cow Canadian dairy farms. But it does not get over the obstacle of the higher costs of stall-fed, housed dairy cattle for seven months of the year, in all provinces but British Columbia, compared with butter produced by all-year-round pasturage of cows in the open in Australia and New Zealand. This is the phase of the problem that will undoubtedly weigh with the Tariff Board in its report to Parliament. The cost of moving butter from the Prairies to the chief consuming market of Canada, in Toronto, and Montreal, is greater in many cases than the cost of transport from New Zealand to those markets. Each summer, with the increasing scarcity of supplies from Canadian sources, the price rises until it reaches the offering price of New Zealand in the world markets and remains at that level, although New Zealand butter, despite its superior quality to Canadian—a fact attested by Canadian consumers—usually sells, at the height of the import season, at a halfpenny to three halfpence a pound below the Canadian product. Dairy farm lands in Ontario and Quebec change hands at £8 to £ls an acre, compared with £7O in New Zealand.

In asking for 2d a pound increase in duty, the Canadian Dairy Association is quite prepared to see the price of butter raided by that amount, but they urge that their request is only tlw same as 10 per cent, ad valorem—much less, they claim, than the duty on many other farm products. The present indications are for an import of 40,000,0001b during 1930, and the extinction of the former favourable trade balance in dairy products in three to five years. The ultimate cessation of the export of cheese is anticipated by the leaders of the industry. Evervwhere dairymen are forsaking the production of milk and cheese, or butter-making for the more profitable fluid products trade, or for engaging in dairying only as a sideline during the summer season. The best friend of the treaty in Canada, the Hon. James A. Robb, Minister for Finance and Trade, who helped its drafting and passage, has gone to his fathers. In his place is the Hon. C. A. Dunning. ex-Prime Minister, and member of Saskatchewan, where the opposition to the treaty iq strongest. One is rather afraid that the benefits accruing to Australia and New Zealand from the treaty are in for some whittling down.