WHAT IS BUTTER WORTH?

Dominion, Volume 2, Issue 338, 27 October 1908, Page 5

WHAT IS BUTTER WORTH?

PREPARING FOR A RISE. . A HINT FOR BUTTER MAKERS. ■On several occasions during the outputselling season, The Dominion called attention to the likelihood that so soon as the exporting factories had got their hands tied up by contracts the men who handle the local market would increase tho local price. It was accordingly advised that factory directors should, reserve in the contracts a right to divert a specified part of their output to any other market they might- choose in order to bo able to sharo in tho bigger local prices. Those who acted on this advice are likely soon to have 'their of getting an extra penny per pound for thoir suppliers. There is a stir in tho local market, which' seems to presage a rise. The present wholesale price- charged to • the grocers' in Wellington is Is. in hulk and Is. o|d. in pats: This'butter was, however, bought from the factories, at a price equal to about lljd per pound in bulk landed in Wellington. At tho present prices, therefore, the wholesale middlemen , aTe receiving, a margin of 3s. 6d. per half-cwt. box for the work of handing it in bulk to' tho grocer, and ss. lOd. if pat-; ting is added. If the threatened increasd should happen—doubtless a penny per pound t-o begin with—the wholesale middleman will receive half-a-guinea per box for his labour; This is 60 per cent, more than the grocer gets for retailing the same butter out in quantities of lib. at a time. There is room in this wholesaloman's profit for the factories and their suppliers to take a share. The following figures will show the contrast between London values and the present ruling price in Wellington:— Butter, sold for London,'f.o.b. 11 Jd. "Butter for Wellington grocers, bulk,' 12d. Some calculations appear, to be occasionally based on views of high London values, and these, of course, concern the consignment factories. At present there is a statement being published that London values are rising to 128s. per cwt.- This requires some consideration, and the figure obviously is stated too high. The actual value telegraphed by'the High Commissioner yesterday for New Zealanu butter is 1255., This price is equal to just under 13Jd. f>er lb. If tho expenses of transit, etc., could bC kept down to a penny per pound, there would remain a margin of Jd. per pound over the value for direct local. sale. But the butter now available for Wellington use could not be sold in London much earlier than two months hence. There are some optimists l who will exclaim "Butter, may be still dearerthen!" It will be a good thing for some 1 New Zealand farmers if it is, but there isequally good cause to anticipate a fall. The first of new season s butter always; fetch a specially high price. Last year'the' season opened at' 1235., but a fortnight later, tho price was 118s. ' To" put the argument in a nutshell, there ; may or may not be anything gained by with-: holding,,butter from London, but those factories which-secured the option of diverting; supplies will do well to watch the local developments closely. :-.v