BUTTER AND CHEESE.

Manawatu Standard, Volume XLV, Issue 284, 4 November 1925, Page 11

BUTTER AND CHEESE.

THE MARKET REVIEWED.

EFFECT OF HOLDING CONSIGNMENTS.

HOW STRIKE WILL OPERATE.

• In tlie course of a brief review of the butter and cheese market, a local expert on export matters touched upon, the effect of holding back consignments to secure higher prices, the need to take measures to arrest any decline in quality of Neiv Zealand butter, and the mixed prospects for the coming season, complicated as they are by the shipping strike. One interesting point which he made in'" the course of an interview with a representative of the “Standard - ’ was that holding consignments off the market with the expectation of realising better prices interrupted the business connection and caused loss of interest in the brands so withheld.

EFFECT OF HOLDING CONSIGNMENTS. “During the past season prices for cheese were fairly well maintained,” lie observed. “The market remained at a good average level and fluctuations were too slight to cause any concern to consigning factories. On the other hand, the butter market showed very considerable fluctuations and when prices showed a marked decline at the start of 1925 quite a number of consigning factories decided to hold their butter off the London market in the expectation of receiving higher places later on. They were not disappointed, although in many eases consignors had to hold their butter many months. “While a direct benefit was derived by holding off the market, the result may be detrimental to the future of New Zealand butter overseas, for it is quite obvious that shops which wore ordinarily supplied with New Zealand butter of certain brands and good quality would be compelled, when the market was starved, to ■ accept other brands. As a consequence the trade interest in tho brands held off the market will to a certain extent he destroyed. “Another feature of holding butter is that tho firms to which it is consigned arc culled iqron to lock up largo amounts of capital which, in the ordinary way of business, would be turned over quite a number of times. Much importers will naturally Jose a deal of their former interest in tho marketing of tile butter which they were instructed to hold off the market. “Generally speaking, the returns received by consigning factories last season enabled satisfactory prices for but-ter-fat to be paid out to the farmers. QUALITY FALLING OFF. “It is important to note that many market reports indicate that the quality of Now Zealand butter has been tailing off and it behoves/ all interested in the manufacture of dairy produce to make every effort to improve tho quality, especially in view of the increased amount being sent into England—which is our main market—by foreign competitors. THE CUE RENT SEASON. “The prospects for the current season were undoubtedly very good, but there is the expectation that, owing to tho strike of British seamen'and its effect on ships running to Australia and New Zealand, it will probably be impossible to get our butter shipped away in time to catch the high prices which are obtaining oil the Home market, due to depletion of stocks. HAPHAZARD DISPATCH OF SHIPS. “Ships are now being dispatched irrespective of intervals and this will result in largo consignments of butter arriving on the London market at intervals of a few days, with the inevitable result that there will he a downward tendency in prices and the expectations for a season of high prices, so far as Now Zealand is concerned, will probably not eventuate. But, in spite of this, there are no serious grounds for fearing any unusually low prices.” CHEESE VALUES MAINTAINED. Dealing briefly with the position as it affected cheese, lie stated that, owing to the large quantities bought by many of the British importing firms at prices ranging from 9d to 9 5-3 d. f.0.b., tor cheese made to the end ot December, it was expected that market values would be well maintained and that consigning factories would reap the benefit.

PACKING OF BUTTER AND CHEESE. Questioned as to methods of packing butter and cheese the expert interviewed stated that many of those concerned with the export trade realised that it was preferable that butter boxes should be wired to prevent splitting, which often resulted from rough handling. The small extra cost of securing butter box ends with wire should not deter factories from endeavouring to insure that their packages would arrive at their destination free from damage. Cheese crates, for many years past, had, generally speaking, been wired at both ends, with the result that there was minimum breaking of battens and splitting of tho ends. Owing to the increasing scarcity of New Zealand white pine and the enhanced cost of butter boxes and cheese crates, quite a number ol lactories were now importing packages from Sweden and they appeared to be quite satisfactory. A statement had recently appeared ill tho press to the effect that a shipload of butter qnd cheese on arrival at London was found to be tainted. Evidence had yet to be obtained, however, that the condition ol the consignment was due to the use of foreign packages. .Reports received by tho "Standard’s” informant were to tho

effect that the Swedish packages were giving satisfaction. MODES OF SELLING. “It has been the general practice in New Zealand for a ’ long time past—ever since the inception of the industry in fact—that butter and cheese should bo sent forward on consignment and sold on arrival. In face of the attractive offers made this season for cheese, however, quite a number of factories have abandoned this policy, perhaps only temporarily. “If absolute marketing control is brought into operation, it will be made quite clear bv the Dairy Control Board that f.o.b. selling will not be permitted,” concluded our informant. A GENERAL RETROSPECT. MESSRS WED DEL AND CO.’S REVIEW. “From a study of the course of market prices and statistics of supply in respect of imported produce during tho twelve months ending June JO last,” state Messrs W. V edtiel and Co., of London, in their review of the dairy produce trade, “the most striking fact . revealed is the surprisingly heavy consumption ot blitter and cheese in this country, at a moderately high level of retail prices, in spite of continued depression in the export trades and a large volume of unemployment. This is borne out more particularly by the imports of butter, which were considerably larger than in any previous year, while the average prices realised, instead of being lower as a result of the heavier supplies, were actually appreciably higher than in 1923-24. it is true that the stocks of butter in store in the United Kingdom at the end of the period were heavier than at the beginning, and that the quantities of re-exported were in excess of those of the preceding year, but nevertheless the volume of butter actually passed into consumption throughout the year was much heavier than ever before. In tho cheese trade similar conditions prevailed, but in this ease the heavier supplies available entailed a small reduction in the average level of wholesale values. As butter is an article of food which is extremely sensitive to fluctuations in the fortunes of tho working classes, and as there seems to have been no corresponding reduction in the sale of margarine, nor any evidence until the last few weeks of a reduction in tiie Homo make of butter, the only inference which can he drawn from these facts is that the general standard of living of the mass of the people was never higher. “Each of the Empire’s sources of supply augmented its output of butter. Australia's capacity for expansion, when that country is blessed with a good rainfall,, was amply demonstrated by a record production both in quantity and in quality, the importations from the Commonwealth showing an increase of 134 per cent over the preceding year. With materially increased shipments from both New Zealand and Canada, the proportion of Empire-produced butter imported last year represented 47 per cent ot the total arrivals into tho United Kingdom, as compared with only 35 per cent in 1923-24. “On the other hand, most of the foreign totals were considerably reduced, the effect of an inclement winter and a heavier demand from Germany being visible in the. smaller supplies from Denmark and Holland, while a severe drought in the Argentine resulted in a temporary check to the growing butter industry in that country. From Russia, however, for the first time since the early years of tlio war, important quantities of butter were received in this country, and there is every indication that before long Siberia in butter will regain the position it formerly held in this market.

“Fortunately, tho groat bulk of our cheese supplies tiro still produced within the British Empire, the proportions being 88 per cent British and 12 per cent foreign. Shipments from Now Zealand showed no increase over the preceding year, hut heavier supplies were received from both Canada and Australia. The totals from the other sources call for little comment, except, perhaps, to direct attention to tho apparently steady growth of tho export trade in Italian cheese. “The most interesting feature of llie butter market quotations for the past year is tlm disparity between the level of the first six months and that of tho second. The average price of Now Zealand butter from July to December, 1924, wars 227 s 9d per cwt, but from January to June, 1925, the average was only 172 s 2d per cwt, the average for the whole year being 189 s 7d per cwt. Danish butter was unusually erratic in its price movements, but on the average it achieved the remarkably high level in comparison with other descriptions of 214 s 5d per cwt over the year.”