A CORNER IN BUTTER.

Dominion, Volume 1, Issue 155, 25 March 1908, Page 2

A CORNER IN BUTTER.

10 IT FEASIBLE? AN UNWIELDY TASK. Our Wairarapa correspondent states that an impression prevails in his. district that somebody in New Zealand-is operating with tho object of cornering the butter market after March 31, when tho companies will not be required to make aiiy further shipments to Great Britain. No reasons, however, are Given for the belief. -We do not agree with our Mast-erton friends in their anxiety that a corner in i\ew-Zealand butter rqay .be effected. The task would he too stupendous. Is' there a hrm m Now Zealand that possesses enough ready cash, for such a coup? And one cannot at this moment think of any. combination of, firms that possess enough courage, or, we might almost say, stupidity, to attempt it. A New Zealand butter corner would be an expansive thing to effect; it would bo easily broken at short notico by foreigners; and even if thefcß difficulties did not exist, the übvious delicacy of the task of securing tho supplies, tho certainty of an angry outcry ' from tho people when the corner became exposed, and, finally, the speclro of " legislative interference " m the background, would make any man- whose thoughts were of corners shrink from tho undertaking. .

Tho Maliiri£ of a Corner. What are the necessary steps towards a corner in butter? First, the operator would have to Control practically all the supplies. If tiie corner were aimed at the winter supplies, covering, say, livo or. six months, the operator would have, to buy about 80,000 boxes of butter, for New Zealand consumes about 90,000 or 100,000 boxes during that' period. A box of butter, contains 561b5., and the lowest sales lately reported of factories to merchants have been at thirteen ponce. Much more money than this, however, would have to bo paid to complete a corner probably an average of fourtocnpenco or fifteen-penco. 'At 14|d. tho initial cost of the cornered supplies would be' £236,666. . . ' ■ Cash in advance, or'at least-on delivery, would have to be tho basis of the purchases, for dairy farmers have a deep-seated objection to waiting for-their'money.' Deferred pay-' ment-3 would necessitate bigger prices. What firm is there, in Wellington, or in New Zealand, that could pay out over,a quarter of a million of money for butter that would have to bo sold again. on credit? Could Merchants Combine? , A combination ? Thero were talks of com* binatious at the time when the contracts were being made early in the season—a timo when all the evidencb revealed a pretty .keen.'degree- of rivalry among the buyers. Still, itwould be riskv to rely on merchants' inability to combine in a move in .which there was money out." Assume, there-" fore, a combination' of three or four firms operating in Auckland, Wellington, Christchurch and Dune,-lin. They would partition New Zealand,' each- buying, without serious competition, in its allotted sobere. Assume that eighty thousand boxes" of butter are safely secured or tied up by contracts— which, it is estimated, will l)o nearly the ivholo'- of New Zealand's output till next September. Cornerers in a Corner. If ■ this stago of ' the undertaking were successfully reached, it would .be but ...the beginning of, the task,. It 'would be simply the at which the cornorers would havo got • themselves into' a corner, and all tho work' of getting themselves out would v havo yet to be done. What- would bo their plight if foreigners began dumping supplies into New Zealand?- Tho.-whole.suc-cess, of-a corner would depend ;pn : !i maintenance of high prices throughout,the winter. A forpigu influx of butter could compel them to sell at about .cost ji-ice.. ,If they bought at W.Jd., and. could not sell for at least 16d., the corner lyould not.be .worth effecting, because merchants could ,do just as well by .ordinary straight dealing.

CuppKos from Australia. ■. But the impossibility of getting more than 14 id. from tho grocers through the winter is obvious, for' Reveral reasons.. A strong reason is-that -butter is- reported ,to' bo fairly plentiful just now in Victoria' and' New South "Wales, the factories; selling at. IOJ-d. These factories could export to New Zealand at the following costs: — , s. d. Prico at factory, per lb. . ... 0 10} .., Freight to New Zealand, per 1V.... -D • Of Import duty at 20 per cent., say, per lb. " .u!. ... ... 0 2 Total landed cost, per lb. ... 1;1 Even Danish or Argentine butter could be put upon our markets'at a cost of 3sd. per lb. over Home prices; and margarine, dripping, and, that item, the small farmers' uncoriiered butter, would becomq immensely fashionable. ' L •". Anti-Trust .Legislation. But a still more certain event would.be an appeal from the people to Parliament' to lift tho import duty. Australian butter then would bo available in New Zealand at about Is. o}d. P®r lb. retail. ■ And if it were urged that a corner, held the New Zealand supplies, it is not likely that Parliament would hesitate to take the step' asked W. ' Furthermore, it has still to lie ascertained that the New Zc-aland, output during the winter will not exceed the estimated ' eighty thousand' boxes. : On tho whole, for the' sake of the dairy farmer, who has not i f dt- much cut of the big prices so far, while we would.like to see some wealthy gentleman, buying, up all their butter at 14Jd., to be ; retailed azain at the same price, or at the old familiar onc-and-a-penny, to tho now luitter-starved citizens, wo don't think there is much hone.. -