DAIRY PRODUCE PRICES

King Country Chronicle, Volume XXXI, Issue 4957, 18 February 1937, Page 5

DAIRY PRODUCE PRICES

WHY ARE THEY DOWN? PROVISION TRADE OPINION. A New Zealand merchant house, eliminated from the dairy produce export business through the Government Marketing Scheme, has received from a large importer and dealer in dairy produce in the United Kingdom (not an agent of the Marketing Department of the New Zealand Government in London) a letter dated London, January 28, 1937, received by air mail in New Zealand on February 16, and reading as follows: — 'You no doubt know the trend of the butter market and have noticed the decline which has occurred during the last month or six weeks. In our opinion this has not been due to any statistical situation; we feel that it is almost entirely due to the method of marketing adopted by the New Zealand Government since the Labour Party came into power. It is a most remarkable thing that they seem to think that speculation on their product is detrimental to the interests of the producer, while as a matter of fact there is no possible argument in favour of this opinion. Take cheese for example—to-day New Zealand cheese, which is practically unobtainable here, is selling at 525, after a severe decline from 74s at the time the first arrivals of Government-control-led cheese came to this country. If it were possible for the large Tooley Street interests to speculate in New Zealand cheese, we are certain the price would be at least 60s, and possibly higher, for one reason alone: there is practically none obtainable; but the parties who in the past have sustained the cheese market by speculation and intelligent anticipation are not to-day allowed to speculate in this product. "Canadian cheese is selling at 72s because the buyers of Canadian cheese during the producing season had to purchase this cheese from the producer, and therefore with the situation that is existing here to-day see no reason whatever to do anything but make a profit on their purchases; almost the opposite occurs in New Zealand cheese. "Take Danish butter selling at 120 s to-day, and a good demand. New Zealand butter 89s, with three of the largest importing consignment houses anxious to support the market if they were allowed, not only because they feel that prices are low enough, but because they hold large quantities of Australian and European butter which cost them much higher prices, and on which they will now probably lose quite a lot of money because they cannot support the New Zealand market, which is sagging almost every day.

"Dutch butter which was last summer sold at 12s discount under New Zealand is now at a 4s premium over New Zealand. Polish butter, which this last summer was sold at 20s under New Zealand, is to-day making the same price, and in fact New Zealand butter is the cheapest on the market here to-day with the exception of Argentine. "We have tried to search everywhere for any other reason than the present marketing system adopted by the New Zealand Government, but we are unable to find one.

"We have had extremely bad weather here, practically no winter, and conditions are not at the present time favourable, to a large consumption of butter. Stocks here are much heavier than last year, being 884,000 boxes against 375,000 at the same time last year, but we anticipate a very good demand during April, May and June, owing to the Coronation, and do not think these present stocks are excessive when everything is considered."