DAIRY CONTROL, AND PRICES

Evening Post, Volume CXI, Issue 154, 30 June 1926, Page 8

DAIRY CONTROL, AND PRICES

(To tin Editor.)

Sir,—My attitude towards the Dairy Control Board has always been a very friendly one, as I realise that it has, and can do, a tremendous amount of. good for our industry. On the question of compulsory marketing, however, I have very grave doubts as to how the board would shape when the Home market becomes glutted with supplies. During last January, for instance, the newspapers told us that there were 30,000 tons of New Zealand, Australian, and Argentine butter put into cold storage at the London end because the market was over supplied. Most of the New Zealand factories, including my own, cabled their agents in London instructing them not to sell any butter under 170s to 175s per'cwt, with the result that the market has not declined below these prices during the past" six months. Mr. Grounds now-tellg'iis that under similar conditions the board would not fix prices, and that it would-be sheer speculation and, wrong in prinaiple for the board to place a large quantity of butter in coild storage to await a better market. He says they will meet the market all the time. If this course had been adopted last January prices would have fallen quickly to 160s per cwt or lower, and would this not have created an opportunity for merchants and others to speculate? This is what used to happen frequently a few years ago until factories found the solution to the problem by putting minimum selling prices on their butter when the market Was over supplied. ' I can quite see Mr. Grounds's point of view that if the board tried to hold up New Zealand butter in cold storage when the market was temporarily glutted, the board would be accused of trying to extract from the consumers higher prices than the market warranted. The pressure brought to bear on the board through the. newspapers would force the board to keep on meeting the market, and down would tumble the prices. This to my mind is a very real danger ahead, and when it came to a battle of wits between the board and the merchants, would the New Zealand factories be likely to benefit?—l am, etc., MANAWATU.