DAIRY PRODUCE

Hawera Star, Volume XLVI, 22 November 1926, Page 8

DAIRY PRODUCE

THE BRITISH TRADE. LAST SEASON REVIEWED. WED DEL ’ S AN N U A.L REPORT. ’ Now to hand from the firm’s New Zealand representatives, Messrs A. H. Turnbull and Co., Ltd., Christchurch, is Messrs tV • Weddel and Co.’s thirty-second annual review of imported (to Britain) dairy produce trade covering the year ended June of), 1926. The report is too long for publication all at once; but the section devoted to general retrospect is printed below, and the balance will follow in convenient instalments. Readers interested are recommended ‘to save the several sections, so that they may, if they wish, re-read the review as a whole. The past year in the dairy produce trade was probably n<j>t more eventful than some of its predecessors, but many happenings, by their unfannliarity. seemed to produce results out of proportion to their importance. As an example, the case of the strike of British seamen in • overseas ports, which lasted from the beginning oi \uo*ust until the middle of October, mav he cited. For the first few weeks of 'the strike the stocks of butter < n hand were so heavy that no appreciable effect was produced upon the market here by the hold-up of steamers on the other side: but as the weeks passed without any. settlement being arrived at the market became excited and butter prices soared. That the level to which prices were forced was unwarranted is proved by the collapse which followed when the strike suddenly ended, and it became known that there would he no shortage of butter. All trading suddenly come to. a standstill and prices fell to a point which more than discounted the effect of the heavy arrivals of accumulated supplies in January. One very bad result arising from these sudden booms which occur periodically in the butter market is the fact that as soon as the retail price of butter increases beyond a certain point the public begins to economise. the demand falls away. and prices have to be reduced rmch too drasticallv jn order to bring hack f he consumptive demand to its former value.

The growing practice amongst New Zealand butter 'factories of placing limits upon their produce after arrival in this country was much more extensively followed during the season just ended; but. so far. the success attending this policy on previous occasions has not eventuated this year. <\t the end of .Tune. 1926, the quantity of New Zealand butter in cold store in the United "Kingdom held up under limit very largely exceeded the stocks in any previous year. As a considerable portion of these stocks had at that date been in cold store for several months, during which time the market prices had shown no improvement, it is evident that unless a very considerable appreciation in prices takes' place during*the autumn months heavy losses will he suffered by those factories' who have speculated in this way. But apart from the fact that little financial advantage is likely to he derived from this policy, the restraint on the free marketing of supplies aroused a certain amount of adverse criticism and diverted regular buyers to other sources of supply. Control which ensures uniform standard of quality is. welcomed by the trade, hut holding up supplies in the United Kingdom for reserved prices is aptly described in the fourth report of the Imperial Economic Committee as “a very* dangerous experiment in mass speculation.” We venture to snv that it is not in the interests of the New Zealand producers that there should he room for anyone to say that by holding up supplies they are attempting to squeeze the British consumer. The same report points out that , within the next few years competition in the United Kingdom market will become move severe and that foreign countries are making' -’niidde’-ahlo «ffort« to ifw and improve imon the relative position Which thov held before the war. The committee add a warning that .preparation must he made to meet the cutting of prices that will come from increased competition by the adoption of more efficient and cheaper methods of production, mainly hv increase of output without any great increase in cost.

So far as cheese is concerned, although the average selling values' over the year were higher than for some years past, it has been a very disappointing season to the many ooerntors who early in the New Zealand season covered their requirements ahead at prices which could not he realised after the goods had been landed. It is estimated that nearly 30,000 tons, or 45 per cent, of the season’s make of cheese in New Zealand was sold forward at prices which averaged the equivalent of 100 s e.i.f., whereas the market value of .the goods after arrival. except in the first few weeks, was well under 100 s e.i.f. Coal Strike.—The coal strike of coal miners in Great Britain commenced on Mav 1. and at the time of writing is still unsettled.. Its effect upon the dairy produce trade as well as upon every other industrial activity in the country becomes more serious with every week of its existence. It cannot be said that the butter and cheese markets up to the end of June were verv materially affected. hut undoubtedly if there had been no industrial troubles the general trade of the country during those two months would have been verv considerably better than it was. the consumption of hotter and cheese would have been greater, and even if market prr-es had not ruled higher, at least the accumulation of stocks in store at the end of •Tune would have been much smaller. G-unoi-al strike.—On Sa turd av. Mav 1. 1926. a general, strike was pro-

'•laim«d throughout Great Britain hr fT,o TVqdo T T )iion Congress. to tal-r. gffor.) from midnigH of ''lav fl. Thjc

w>i«s i It, rrentott industrial unhea val that Ir’d occurred in (lie historv of our roll'd rr FortllTUltolv the measurestaken -hv the Government, and hv n'-i----vnte organisations, to maintain- the 'distribution of essential foodstuffs were so successful that within a fortnight of its declaration the strike had come to an end hv the uneoodition.nl surrender r 1 J ’-e t'-ade unionists. To common with most other industries the dairv produce trade, immediate! v the strike- became operative organised a system of distribution by means of voluntary labour. None of the butter or cheese on hoard the steamers in London or at any of the other norts was discharged during the period, hut considerable quantities were taken out of the cold stores and warehouses and delivered throughout the country hv means of motor transport. An executive committee, acting in conitmMion with the Board of Trade, was appointed by the London Pi-ovi-

sion Exchange to organise tlie distribution of supplies and generally control the business while the strike was on. This commtitee, with the unanimous consent of the whole trade, fixed maximum prices' for both butter arid cheese on the 'basis of the official quotations recorded by the exchange on Friday, April 30. These prices were rigidly adhered to throughout the emergency. Owing to the shortness of the period during which the general strike was effective, and the success which attended the voluntary efforts to distribute supplies, very few cases of scarcity occurred in any district. Supplies. —As a result of reductions in the Australian and New Zealand outputs, the total importations of butter into the United Kingdom last year failed to reach the “record” total established in 1924-25. The supplies of Danish and Argentine butter were slightly heavier, as also were the shipments from most of the smaller foreign sources of supply, so that the proportion of. foreign butter imported, amounting to 61 per cent, showed an increase over the preceding year. It was perhaps too much, to expect the Dominions to maintain the heavy volume of supplies shipped in 1924-25. when Australia exported the unusually large total of 56.193 tons ; hut it is to be hoped that the set-back received last year may be only temporary. Imports' of cheese during the period established a further high “record” in volume, a reduction in the supply of New Zealand cheese having been more than counter-balanced by an increase in Canadian. The proportion of cheese imported into this country from British possessions was 87.4 per cent, of the •total.

Prices.—-The butter market of this country bus a, lojig way to go. before anything approaching stability is reached. There are few commodities which exhibit so much violent fluctuation. It is interesting to note that the market fluctuations for the past year are strikingly similar to; those shown for the year 1924/25. In each year prices started at a moderate level. ro.se until the middle of October, and then dropped rapidly until the end of the year, when there was a partial recovery. followed by a period of moderate fluctuation during the spring •months. The average prices of the various descriptions of butter for the past year were mostly lower than in 1924/25, but are still 60 per cent, above the pre-war level.

The .movements oF cheese prices are even more difficult to account for than those of butter, probably due to the fact that the Home make of cheese is a much more important factor in the situation than the Home make of butter. The market quotations for New Zealand and Canadian cheese during the period under review followed more or less closely the movements and fluctuation,;? in the butter market, but to a .much more modified extent. Prices rose during the early autumn months of last year in sympathy with the rapid upward movement "of butter prices, and tended downwards during the remainder of the period. At noi time was there any shortage of cheese supplies available" and it was only because of the firmness with which stocks were held that lower market prices were not recorded.

Cbntroi.—Having regard to the unusual prosperity which the daily produce trade in exporting countries has enjoyed during the past 10 years, it i.s not surprising to an onlooker to observe the -strong tendency that has manifested itself in practically every country of production towards the establishment of official control over the production and grading of butter and cheese. The movement began in the first place many yeans ago in Denmark, when the various co-operative societies joined forces and organised a system of inspection, under Government auspices, of all buttejf intended for export to this country. No doubt the success of the Danish methods lias inspired producers in other parts of the world to emulate their methods, but in certain cases the pupil is seeking to out-strip the teacher. In Ireland, Canada, Australia, and the Argentine Republic this movement towards stricter official control over production and grading has made considerable progress within the past year or two. The lines upon which the various countries are working differ from each other according to local conditions; but the object's aimed at is more or less tlie- same, viz,, to do everything possible- to produce an article of uniformly excellent quality. In New Zealand, however, a. majority of the producers have decided that their control of the business shall be extended to include the sale of the product on this market through the usual agents. Commencing on September 1, 1926, this experiment in collective marketing will be watched with interest by everyone connected with the trade.