DIARY PRODUCE TRADE.

Dominion, Volume 2, Issue 321, 7 October 1908, Page 5

DIARY PRODUCE TRADE.

WEODEL'S REVIEW. ' THE FAST AND THE FUTURE. There is interesting reading ill Messrs. W. Wcddel and Co.'s annual dairy produco report, just issued. A Three Years' Set-back. The review of the.year's operations up to June 30 last points out that the regular and substantial increaso in the quantity of butter imported into the United Kingdom which has taken placo year by year for the last quarter of a century' (except in 1005, when the imports fell oil'by-.15,000 tons) has in 1908 received a more serious check, tho year s imports of this article having declined to the extent of 18,143 tons, or.Bl per cent. The increase for the ten years prior to 1908 averaged 6000 tons annually, so, that there is a set-back of three average years to overtake. The total quantity of butter imported for tho year just ended was 201,134 tons, consisting of IGSj3S4 tons of foreign and 35,750 tons of colonial. Where the Shortage Occurred. The reduction occurred altogether in the colonial division, and amounted to - 21,345 tons,' whereas the foreign .showed an increase of 3202 tons. This increase in foreign butter is spread somewhat irregularly over tho ten countries which supply tho English markets. Denmark and France, despite their high state of development, were the only countries showing a substantial increaso. Even Russia and the United States wero un- , able to maintain their export, notwitlfttanding their vast territories. The colonial.deficiency of 21,345 tons arose chiefly in Australia, whose shortage reached 11,627 tons. The Canadian supply showed a deficiency of 6358 tens, and Now Zealand arrivals were reduced by 3360 tqnj. Over a Third Less. The most distinguishing feature of tho colonial dairy produce trade for tho year was the very serious-falling off in supplies, amounting to 21,345 tons, which was a decrease of over 37 per cent, from the previous year. and. nearly. 9f per. cent. .of the total supplies from all sources. For the three previous years the supplies of colonial butter had shown an.average of 55,500 tons, but for the year under review they, reached, only 35,750 tons. , This surprising/shortage was brought about by droughts in Australia, New Zealand, and Canada. Thus the strange phenomenon was presented of - every source of colonial supply being simultaneously ■ afflicted by adverse climatic conditions, which were injurious alike to the colonial producers and British consumers.

Foreigners' Feeble Effort. Consumers in the Mother Country suffered by having to pay more for their butter, as the foreign supply alone was not nearly sufficient to- meet the sudden demand to " fill the placo of colonial, and consequently prices in the United Kingdom, and ■in Europe generally, were higher than they had teen'for over twenty years. ■ The total contribution foreign butter-makers were able to - make towards this colonial deficiency of over 21,000 tons wa3 only 3200 tons. Margarine Stepped In. Tho riso in prices ought to havo compensated colonial butter-makers. by an increase in, v'alue for the loss caused by the short supply, and might have done so had there been no butter substitutes to interfere with this. Prices of butter, however, rose to such an extent that margarine and other cheap substitutes stepped :in ; and supplied the general public with a nutritive commodity, in many eases far. more palatable than much of the low quality of'butter which was offered to consumers at very high prices; and the consequenco was that prices of butter were brought down to a. level which, prevented the colonial producers reaping- in v value :what they lost in quantity. ; .Notwithstanding this reduction, high prices formed the second great featuro of the past year. Not since the year ISB3 had butter in tho United Kingdom sold' at such a high level of value, and foreign ■ butter-makers reaped an excellent harvest out of tho scarcity of colonial supplies. England Depends on Her Colonies. On looking broadly at the year under review it appears to establish definitely a new condition which has gradually arisen during the past decade regarding tho supply of butter in the winter months, namely, England's great and growing dependency on the ' colonies for butter during that period. It is surprising with all the advantages of l suitable andicheap transit now provided, that tho foreign butter-makers did not increaso their contribution to the needs of Britain by more than a mere 3000 tons, which was not quito 2 per cejit. over tho supply of tho previous year. It is true that Siberia was afflicted like tho colonies by a droughty season, and sent about 2000 tons less; but with all the attractions of a very dear market in the United Kingdom 'it was reasonable to, suppose that other foreign supplies would have been able to make good any deficiency of colonial butter in our markets, yet tho result has definitely established the contrary. Australia's Recuperative Powers. From the year 1903—the worst and last yearof -tlje great drought—to'l9o7, Australia Lad a run of very fertile seasons, and the supplies of buttor sent to, Home year by year mado great advances, the annual increases being 17,602 tons, 3713 tons, 3582 tons, and 7073 tons respectively.. The recovery in the first year was .'enormous, and showed the great recuperative powers of tho Commonwealth; and in the last of these years another great development was exhibited, due in some degree to the'results of the policy of " closer settlement" so extensively''going on during the last few years. This policy has been interrupted by tho drought experienced with great severity during tho past season in Victoria, and also to a less extent in New South Wales, the two great dairying States of Australia. This climatic calamity resulted in a reduction in the export of Australian butter to tho extent of 11,627 tons. As soon as favourable seasons resume their sway exports of Australian butter will again make rapid and extensive strides. Reduced New Zealand Supplies. The greatest reduction in supplies of Now Zoaland butter ever known on the English markets was experienced during tho year just ended. For tho four previous years the imports had gradually declined, but the shrinkage had been only small, amounting altogether to 1000 tons for tho whole period, against a deficiency of 3360 tons in tho past year. This groat change'was due to two distinct causes, one unfortunate, and the other in its immediate offects profitable, whatever the ultimate ' results may bo. Two Causos. The undesirable event was brought about by the rare phenomenon of a partial drought extending over a month or two, which in some districts, especially in tho North Island, reduced the milk' production very seriously. , Tho other cause reducing tho export of butter was the largo expansion 'in tho manufacture of cheese, which drew largo quantities of milk away, from the butter industry. Tho year just ended will be long, remembered as that which resulted in tho highest record for prices over reached by Australian and Now Zealand' butter in British markets'. ' Tho record was a double one. Not' only did tho prices for. a weok or two - touch absolutely the highest, figure ever obtained for both tads, but-tho averago price for the six months, October to March inclusivo, was also a record achievement. The Panic Period, During the panic which existed in February last, both Australian and New Zealand butters were sold up to 150s. per cwt. in largo lines, while even 1525. to 1545. were obtained in many instancos for small lots.- The crisis both classAs of butter, foreicn as

well as colonial, and it is necessary to go back to tho year 1883 to find equally high prices for foreign. This was before Australasian butters appeared on tho English markets. Denmark the Obstacle. Agents wero powerless to increase their selling prices of colonial owing to tho predominanco of Danish butter, which controls and regulates tho general values of butter in English markets. Supplies from Denmark during November, December, and January, were only 122 tons more than in tho previous year. Danish prices in tho middle of November wero 1235. per ewt., and they made an advance of Is. in December, and another Is,, in January. At last tho demand for colonial broke 1 through the dead weight of Danish' predominancy that had for weeks prevented the rise in prices of, colonial. Accumulated Pressure and the Sequel. Tho ordinary law of supply and demand would have adjusted prices on a fair basis, but the accumulation of pressure carried it to extremes, and the prices of Danish and all other butters wero suddenly carried by the unfilled demand for colonial to extreme levels. The inevitable collapse followed, and colonial and foreign butter prices tumbled down headlong. Prospects for Next Season. Tho uncertainty attaching to tho supplies of butter for the coming winter are much greater than usual. The high prices which have this summer ruled overyraere in the Northern Hemisphere havo resulted in very much less than tho usual amount of butter going into cold storo, and during tho coming winter this company will be more dependent than ever on supplies from Australasia. Regarding Australian butter less will bo shipped from Victoria, but considerably more from. New South Wales, and from Queensland somo "increaso is expected. ' .New Zealand will send, increased supplies of both butter and choose provided the season is not unfavourable. Bad Trade, Less Butter Eaten. The bad condition of trado in America, Canada, Europo, and . tho United Kingdom will greatly diminish tho purchasing power of tho mass of x:onsumors, and thus tend to reduce the demand. Tho amount of fodder is so abundant in Europo and America that •the herds for milking will most probably, be larger than they were last winter. The uncertainty mentioned about supplies of butter attaches equally to 11 those of cheese. In Canada the "make" of this summer is' dependent on the weather, which at the present timo in some districts has become dry, and thus changed for the worse.. The amount' of cheese made will to yime extent depend upon tho permanency or temporary character of this change.