DAIRY MARKET

Dominion, Volume 23, Issue 139, 8 March 1930, Page 12

DAIRY MARKET

DOMINION’S INFERIOR POSITION BETTER MARKETING METHOD URGED MR. W. GOODFELLOW ON THE SITUATION “A striking object lesson Is now being given the New Zealand and Australian dairy producers of the imperative necessity for better marketing conditions,” said Mr. W. Goodfellow, managing director of Amalgamated Dairies, Ltd., in commenting upon the present situation of the London dairy market to a ‘‘Dominion” reporter yesterday. The present situation on the London market, he continued, was that, while Danish butter was commanding a price of 162/-, the position of New Zealand butter was given as “now steady at 140/-.” A cablegram a few days ago stated that the market then was “demoralised.” and the latest information apparently meant that prices had even gone into the 130’s, where they had not been for a number of years. The Danes consistently placed upon the market some 2000 tons of butter every week, and by the steady demand they had built up, had been enabled to maintain a fair level of price. There was no equity in a situation which placed. New Zealand produce at over 20/- disparity, and producers were forced into recognising the fact that their disunited marketing methods were out of date.

A Prediction. "I have long predicted,” said Mr. Goodfellow, “that so soon as the position arose that both Australia and New Zealand had good producing seasons, the position of the London market would become serious, and our marketing would suffer a severe strain. That position is’obtaining this year.” New Zealand’s export for the producing season would be approximately 90,000 tons of butter, and Australian export, which last year was approximately 45.000 tons, would this year exceed 60,000 tons, in spite of the fact that fortunately about 18,000 tons of New Zealand butter had been diverted to Canada, the London market, having knowledge of the heavy production in the Antipodes, had weakened. This weakening process was markedly accentuated by the trading conditions now obtaining in London. In place of the numerous buyers who competed against one another in the past, the big amalgamations employed one buyer, and pooled their stocks as required-when it suited them to stand off the market to bring prices down to the level they desired.

Possible Remedies. Asked what remedies for the situation now existing could be proposed, Mr. Goodfellow said that the first lesson to be learned by the producers was that they must adopt the practice of their opponents and eliminate competition amongst themselves as sellers, just the same as the buyers had eliminated competition amongst themselves. It was futile for 500 independent dairy companies in New Zealand, to compete amongst themselves on the London market. The sensible course was for organisation to be effected, with the ideal of, if possible, a national group controlling, at any rate, the larger proportion of New Zealand produce for sales purposes. In addition to that course, into which producers would practically be forced by economic circumstances, agitation should be entered into to urge that the Merchandise Marks Act, passed by the British Parliament some years back, should be put into operation, and branding be adopted in respect of all imported butters. This would rectify the position of blended butter. Some 80,000 tons of imported butter were used annually for blending purposes, of which only some 16.000 tons were of Empire origin This blended butter was wrapped under labels leading the consumer to imagine, by suggestion, that it was fresh English butter, whereas in poiut of actual fact it was largely of. foreign origin. If that regulation could be adopted, it would materially improve the position for Empire producers. New Markets. Co-ordinated marketing on the part of producers would also enable efforts to be made to develop the hitherto unexploited market of Northern Britain. At present 92 per cent, of Australian and New Zealand butter going to Britain reached London, which served the . foo f d R r ments of only 53 per cent, of Britainis total population. By co-ordinated effo t the Northern markets could be developed. That constituted one ofi the Empire Dairies, the organisation wh eb had P been instituted in order to provide nriehinerv for co-ordinated action bcmen Australia and New Zealand producers. Under the machinery proposed the fullest degree of co-operation was providedl fo? in the mutual interests of the producers of both countries. The Aus tralians’ tour had had that objec . Empire “Freer” Trade. The present situation, continued Mr. While «m>. IS.OOO to t s ,t4™ " ™ would Tj n jt- e( ] States imposing protect their own producers. It that came about, the only market opeii t the dairy producer would bo Ure.it Britain This was a further reason why producer interests should give serious thought to their marketing prob em• t was an outstanding need cf the■ time, more particularly so. if. tie • • production which had obf-ine< ovil '• last four rears continued, as Him likely. No Need for Pessimism. While the outlook was not as‘bright •is it had been on occasions in the p.i. r. M,x Goodfellow said he was by no means pessimistic. There certainly existed oi casion for serious thought but the pioblem could be seen ami steps must e taken to cope with the situation. lie first essential was adequate attention to marketing. The producers which meant the whole Dominion, were losing milliomannually through inefficiency in th s field. The recent drastic drop in butti r prices meant a loss of a very large sum to tlie Dominion. The Danes, with an even larger production than ours, were suffering nowhere near the same loss, and were maintaining a far greater relative superiority in time of depression than on a normal market. This showed that the position could be handled by proper business methods. The first step for the producer to take was to copy the tactics of his opponents, winch was to nnmlg.inrnte to effect economy and eliminate unnecessary competition. It New Zealand producers would. work togethei, and in turn co-operate with Australian producers. then a very great, deal could b. done for the national advantage in the interests of aIL