FUTURE OF BUTTER

Evening Post, Volume CXXIX, Issue 63, 14 March 1940, Page 14

FUTURE OF BUTTER

t YEAR OPENS WELL STORAGE AND SUPPLY

MARGARINE COMPETITION

Conditions in the dairy industry of the Dominion are far different from what they were in 1914-18. For one thing the producer is receiving a Government guaranteed return whafrever course the overseas market may take. The local market is also protected against sharp declines in the export trade, whereas the practice had been to base local prices on export values. The British Government is sole purchaser of New Zealand butter from the Dominion Government and it has fixed the retail price for this and all butters sold retail in the United Kingdom at Is 7d per Ib, and supply of butter is rationed. The Government has also fixed the prices of margarine at 8d and 6d per lb according to quality, but this competitor with butter is not rationed.

From private information received from London it would appear that butter is not only rationed but is accumulating in store in larger quantities than it is believed the circumstances warrant, or, at any ru e, than is good for prospects of New Zealand butter after the war. The same thing happened in the last war, with the result that when it was over very large stocks of butter were "flung on to the market," so to speak, depressing the price, although steps' were then taken ,and they partially succeeded, to mitigate the depression, with the result that market prospects improved. At that time the New Zealand industry was Targely in the hands of the producers, who studied the course of the markets day by day. Things are different now. Anything in the nature of a great slump in the British? butter market—as in the wool market —coming immediately after relinquishment of British Government control of produce might not ."directly affect the New Zealand producer; but it would affect him and every other taxpayer in the Dominion if the-Gov-ernment, by its guarantee, was faced with a market severely depressed by liberation of substantial quantities of stored butter. Moreover, while wool by its very nature may not deteriorate in ■ store, butter does not improve by J holding, and refrigerated storage charges are necessarily higher than wool store charges. Long term use of margarine is not likely to improve the demand for butter when the price of it falls below Is 7d retail. As matters stand at present imports of butter by the United Kingdom from Finland, Sweden, and the Baltic generally are not likely to be available for the 1940 spring trade. For twelve months ended June 30, 1939, they were as follows:— Tons., . Finland 9,774 Sweden 11,859 Esthonia 9,817 31,450 "The Post's" London correspondent, February 16, referred to the British Government's butter buying contract which (unlike wool) is to be renewed annually. It was also pointed put that "thousands of people are buying margarine today when a year ago it j would never have occurred to them to do so. They are buying it not only to supplement their butter ration; but because they have found that they like it and also because they regard it as something in the nature of a national duty. Margarine is undoubtedly a more palatable food than it was during the last war. Throughout the war there will be a big percentage of the British public who will acquire a •margarine habit,' and who may be indifferent to buying butter again unless it is at a price that suits them. Competition will undoubtedly be much more severe, and*it is likely that strenuous efforts will have to be made to regain the pre-war market." It is apparent then that the accumulation and holding of large stocks of butter in the United Kingdom and the increased consumption of margarine constitute a post-war economic problem for this Dominion, for which even an increased price above Is 7d retail may not be the solution.