DIFFICULT TIMES

Dominion, Volume 24, Issue 286, 29 August 1931, Page 5

DIFFICULT TIMES

Dairy Farmers’ Year MARKETING PROBLEMS Competition in Britain ■ In 1928-29 the primary products of ths Dominion were valued at approximately £56,000,000 for export and £14,000,000 for local consumption, a total of £70,000,000. It is estimated that for 1930-31 th* pastoral industries will receive about £30,000,000 less than for 1928- and £26,000,000 less than for 1929- It can probably be safely estimated that revenue of dairy producers has fallen by approximately £6,000,000 below that of 1929-30 and £9,000,000 below that of 1928-29. This sujnming-up of the position of New Zealand farmers to-day is contained In the annual report of the Dairy Board, which states that the market conditions during the twelve months ended July 31 were infinitely worse than those of the 1929-30 season, which were described twelve months ago as the wdrst experienced since the end of the war. Referring to the position that has arisen on the local market during the year owing to the lack of organisation among the dairy companies which mainly cater for the local trade in all the principal cities of the Dominion, the report says that at some periods of the year finest grade butter in one lb. pats was being retailed at lid. per pound. “Anything more nonsensical could scarcely be imagined. On a market Where secondary Industries are largely protected by tariffs, thus.increasing the producers’ Cost of production, there ia no reason why the retail price should not be on a basis which, after deducting the cost of selling, would pay the cost of production.” ’ -i Overscan Competitors. The production of dairy produce in Other. countries is showing signs of development, says the report. It was th* “hungry i’eighties” which established the dairy industry In New. Zealand, and it would appear as if this period of depression was having the effect elsewhere. South Africa is turning her attention to the export of dairy produce, and a bounty is being paid on dairy produce exported, with a view to encouragement of overseas trade. A control board has been established, and it is Interesting to note that a similar board has been brought into being in Rhodesia with provision that it must appoint a representative to the South . African board, It would appear that from South Africa, Rhodesia and Kenya there may be a gradually increasing import into Great Britain.

Britain’s imports of butter from the Argentine show a slight increase from 18,373 tons in 1928, and 15,144 tons in 1929, to 20,707 tons in 1930, While reports Indicate a very determined movement to Increase production' of dairy produce in Russia, the actual imports Into Britain from that source have not increased, nor is the quantity very large, being 16,812 tons in 1928, 14,515 tons in. 1929, and 8272 tons in 1930. Denmark’s supplies to Britain are very steady, being 100,802 tons In 1928, 110.201 tons in 1929, and 115,921 in 1930, The position in Denmark is naturally full of interest to ths dairy producers of the Dominion. In a recent official report issued In Denmark the statement occurs; "It seems reason-’ able to believe that with present prices the great majority of the farming community find it hard, if not impossible, to make ends meet." The report goes on to point out that the position would have been much worse had not the prices of the raw material used by the farmer dropped sharply some months prior to the fall of prices of bacon and butter. The steadily increasing exports from the Baltic countries, viz., Sweden, Norway, Latvia, Finland, Esthonia and Poland, are becoming a real factor, having Increased from 45.171 tons In 1927 to 62,927 tons In 1929. The Continental Market. A return Of more prosperous times on the Continent would, however, have tbs' effect of probably considerably reducing the quantities finding their way to the British market In this connection it should be realised that many Continental countries are large importers of'dairy produce. 1928 1929 1930 Tons Tons Tons Belgium imported 1294 4,268 10,006 Switzerland imported 8062 7,432 8,890 Germany imported — 132,251 131,059 France imported 2540 4,354 5,769 It Is interesting to note that even Brazil exported dairy produce during 1930 to the extent of 6099 tons of butter and 8829 tons of cheese. Although It has not been possible to ascertain-ths destination, it was • probably' supplied to the other South American countries. ’ Australia has experienced a year with splendid producing conditions. Further, it is likely that the financial stringency has reduced the local .consumption, which in’ the past has absorbed about two:, thirds of the total butter production of the Commonwealth. Export figures to the British market for th* last three ■years, to end July.' are:— . Exported from Australia to Britain. ■> 1928-29 1929-30 1930-31 Tons Tons Tons Butter ... 39,571 41,400 67,220 On statistics, New Zealand producers are justified in expecting that cheese production should be the "most profitable. Britain's total imports of cheese in recent years were:— 1928 150,317 tons. 1929 149,730 „ 1930 155,620 „ , While butter imports into Britain increased by over 11 per cent., cheese only increased by a little over 3 per cent. Of the quantity of cheese received on the British market Canadian and New Zealand proportions were as follows 1928. 1929. 1930. Canada .... 30%, 24% 21.5% New Zealand . 51.5& 60% 63%

Market Capacity of Britain. Whether Great Britain can continue to absorb the ever growing supplies of dairy produce being shipped there, largely depends on whether she can so adjust her manufacturing costs as to enable her to again take her place in the world’s trade, the report, states, There are signs that adjustments are taking place which will .sooner or later bring about a revival in this connection, and there is reason to believe that when the depression has lifted, as lift it must, the purchasing power of the British nation will be such that reasonable prices ean be expected for all the dairy produce which New Zealand can produce. \ ■ ■ The yearly quantities of butter imported into Britain for the last three years are as follow: — „ • Tons. 12 months ended Dec. 31, 1928 306.043 12 mouths ended Dec. 31, 1929 320,330 12 months ended Dec. 31, 1930 341.422 The increase in three years was 30,3<9 tons, and was not equal to the increased Consumption of recent months. _ Fifty per cent, of the increase of 3a,379 tons was represented by tbe increase of New Zealand butter over the saine period. This again raises the question of oVer-. production of raw materials and food products as one of the root causes of the trade depression. It would be easy, to say that there is abundant proof of this in the low prices being realised by primary producers. Yet on careful .examination the statement is subject to question. There has been no inordinate general increase in production of raw materials and foodstuffs. The percentage increase in recent years is not substantially greater than the percentage increase in pre-war years. The history of slump periods goes to show that apparent overproduction entirely disappears when an era of trade prosperity returns.