THE BUTTER YEAR

Evening Post, Volume CX, Issue 37, 12 August 1930, Page 12

THE BUTTER YEAR

ORGANISED TRADING

PROBLEMS TO BE FACED

■Evening Post." 12th August

:, The new dairy year has opened in the .Auckland district with an increased production for July.-by.4 per cent: on a but-fter-fat basis, over the production of. July, 1929. According to the "New Zealand ;llcrald" the butter made in Auckland district during July totalled 12,722cwt. This was nearly 85 per cent, of the Dominion's production for the period, which was 15,071cwti .Auckland also produced more than one-third of the cheese made during July, the quantity being 4025cwt, of the ll,Sl4cwt for the Dominion. Reduced to a butter-fat basis, the output of the province for the first mouth of the new seaion was 1,360,0001b, compared with 1,303,----0001b for July of last year, an increase of ! 52,0001b of butter'fat.

. A problem that will require to bo met this coming season on present indications is,the heavy holdings of butter and the, consequent lower prices as compared with returns during the season just closed. How | the market fell away is seen in the following adjustment of advances made by'firms doing.consigning business for their factory' clients: — ''■ .Date. ' Advance ' per pound. ■1929-30 '' ' s d Ist September ...- 1 ■+I.i :. 4th .October ••••. 1 ~' J2th November 1 4 s'thiDeceraber ■ ..-.. 1 :!'i 19th December 1 3 '. 4th January 1 -' 21st February ..' 1 ' : 21st March 1 0 '.. oth April 11

The London 'ppce of butter fell away to jus. low. as 120s for New Zealand salted; other countries' butter likewise. Recovery •was relatively, slow, and 134s to 138s is about to-day's", figure;. ' Butter intended-for sale in Canada was carried on to where prices, were higher and Weddels state that SO,OOO boxes were so carried on to augment London supplies. : However, the 1930-31 New Zealand export season has begun, notwithstanding ithe heavy stock in London and the holding in New Zealand itself (at 31st July) of 2854 tons, compared with* 2010' tons so held at: this time last 'year. ' MASTERY OF MARGARINE. Mr! L. T.M,'Jnijes, Director of Dairying, ■Jfew South Wales, has been looking closely jnto the matter of competition for the British butter trade. He reports that Australia and Ne\v Zealand exporters will Save to take iinto account the powerful niargarine manufacturers' combine, embracing all factories in Europe and Great Britain, with £ 100,000,000 capital; this great organisation .has control of the purchasing and blending of the world's sur-plus.-butter, which goes to London; the blending of butter ■•with vegetable margarirte, and regulation of retail distributing prices by buying a control of 350,000 chain retail shops operating in groups in Europe <&\d Great Britain. These three controls jiave given the margarine monopoly the jriastery of the world's butter trade.

: " TARIFFS AND THEN RESULTS. -'Attention of farmer-exporters is also directed to the effects', of tariff on the future of the butter market. Mr.'Maclnnes refers to the' German tariff oi'V&d per-1b on imports of butter, iniposed in January, .1930. This has to be paid by the producing countries, and has meant a fall in- the world's values for butter to the extent of the tariff, an increase of 12M: per cent, in the butter production of Denmark, Holland, Norway, Sweden., the Baltic States, and Poland to compensate for the 12!£ per cent, fall in values. Siimu- j lation of butter production by the Germans under the protection of the tariff wall will in time make Germany selfsupporting, and divert the quantities'now senKthere to compote with Australia and New Zealand in England, unlesß the Empire Customs - Union is realised. The tariff., increase for dairy produce • imports imposed by the United States of America in June, 1930, has to be borne in mind. Canada has up to now sent 40 per. cent, of the." yields of its dairy herds, principally in the- form of fresh milk and sweet creami to the United SUtes. This trade will now cease, and the Canadians be forced to convert their' milk and cream into butter, there being a shortage of this product in that Dominion. This will displace some 20,000 tons of butter annually imported from New Zealand. 'The raising of tariff S'/ad per lb for butter imports by Canada will prevent New Zealand and Australia'competing on that market,- and will divert some 20,000 tons i>f New Zealand butter to the only available free market, London. "ONE'BIG SELLER." The "trading treaty entered into between the Governments of Great Britain and the. Argentine Republic, whereby the latter is guaranteed all the privileges that arc-now or may be in the future given to the white Dominions of the Empire in resard' to entry and exploitation oE the British market, is most important to Australia and New Zealand, because the Argentine exports butter, to London during the xame months of the year, and with cheaper freights, ■ shorter transport, and cheaper labour, tends to "bear" values on the oversea markets. ■A partial counter to these moves has been the formation of an Australian-New Zealiind co-op -..tive organisation, called "Empire Dairies," to sell surplus dairy produce in Great Britain. This company, | Mr. Maclnnes considers, cannot hope to control marketing, as it will have to sell at or.under the same price as that fixed li'y the margarine combine, but should do much to strengthen our position' otherwise. ' . . ; These outstanding events, the Director of Dairying adds, may have the effect of glutting the British, market, especially as the purchasing power of the people in Britain and Europe has been .'lowered, reducing values, and giving the control of marketing more ■completely into the hands of butter's rival—margarine.