LONDON BUTTER PRICES.

King Country Chronicle, Volume XXI, Issue 2341, 26 October 1926, Page 5

LONDON BUTTER PRICES.

WHAT CAUSED THE SLUMP? “NOT THE CONTROL BOARD.’* SAYS MR GOODFELLOW. “The knowledge that caicli season’s produce must go into consumption before the next comes along) should prevent any company by its marketing methods holding up supplies for fixing prices.” This is the view expressed by Air W. Goodfellow, and the managing director of the New Zealand Co-operative Dairy Company continued; Many companies throughout New Zealand at the present moment are very seriously disturbed at the recent slump in the market. These companies put fancy limits on their produce, and during tlic past three years this policy had given excellent results. The companies apparently were not aware of the danger they have run each year. AJore by good fortune than good management, however, they have evaded a similar catastrophe in each June or July. On several occasions during the past few years London merchants have frequently predicted just such a slump, and on each occasion 140 s has been the figure indicated—at last it has come! Now these same merchants say, “Control did it.” They and we (know perfectly well control did not do it! The factories which kept the butter off the market for many months caused the slump when they withdrew their limits and a. similar mishap would have ocelli red in the past if the same factories had suddenly removed their limits.. The New Zealand Co-operative Dairy Company’s policy has always been not only to feed the market, but also to keep on selling all the year round, always keeping well in mind the fact that the produce had to be sold before the new season’s goods were available. The present chaotic state of the market is the strongest possible argument in favour of national control, and is due largely to the following) causes in order of importance: (1) The economic position of Great Britain due to the coal strike (2) Heavy summer production in Europe. (3) The release of large stocks in London held at fixed limits by factories. (4) Passive resistance by speculative merchants objecting to control.

You will note that I put control last. If we had had similar strike conditions last year, or the year before, the market would have in all probability gone down to a very low figure. The old stocks must be cleared, and the right thing for the factories to do is to cut their losses and get out. The forward position is sound, and once the market is cleared, .1 quite expect to see the price back to 170 s, where it woJUld he to-day under normal conditions. THE CASE FOR CONTROL. I here is no cause for undue pessimism, concluded Air Goodfellow, and let me repent' that control has very little to do with the low prices now quoted lor last season’s butter. Control only operates from September, and the first shipment of controlled butter lias not yet reached London. If the producers really want to improve upon what admittedly lias been for the past four years a very bad marketing system, let them give the hoard a chance. The system agreed upon has been well tried, and those who are prepared to judge impartially know that it will not only work well hut will for once and for all time place the marketing of New Zealand dairv produce on a highly efficient basis. This one-seller principle is employed by nearly all successful big businesses the world over, and to say that it wont work in the dairy indiistrv is absolutely absurd.