RUTTER PRICES.

Manawatu Standard, Volume LIII, Issue 6, 5 December 1932, Page 8

RUTTER PRICES.

STABILISATION PLAN. PREMIUM OF 2D PER LB. Proposals have been advanced by Mr A. J. Sinclair, secretary-manager for the Te Awamutu Co-operative Dairy Co., Ltd., under which ho claims that the price of butter on the local market might be stabilised (says the Star). The scheme includes the payment of a premium of 2d a lb over export parity into a stabilisation account, which moneys would be distributed at the end of the season to all butter-making companies in New Zealand. Mr Sinclair has circularised his proposals, and lie asks that they be considered and investigated by the dairy companies. Mr Sinclair states that the Paterson scheme, as in operation in Australia, could not be applied in New Zealand, as it depends for its success on the fact that the consumption of butter in Australia greatly exceeds the quantity exported. The quantity of butter consumed in New Zealand for the 12 months ended July 31, 1932, was 23,1KK) tons ; the quantity exported was 97,000 tons. Butter was being retailed to-day in Auckland other centres at lOd and lid per lb. Cables from Sydney and Melbourne state that the retail price of butter last week was Is 3d to Is 4d per lb. BASIS OF COMPUTATION. The scheme proposes that a committee consisting, say, of Jive/ members of the Dairy Produce Board (including one Government representative) , be set up, to be known as the New Zealand Butter Stabilisation Committee. The committee would meet monthly during the ordinary meetings of the board, but price adjustments for the local market would be made fortnightly by the stabilisation committee. The f.o.b. parity of export bulk butter would be the commencing basis of computation for the local market. With the f.o.b. parity of export butter as the commencing basis of computation, the first charge on butter sold locally should be a premium of 2d per pound. The f.o.b. parity represents the price realised by the producer at the main ports of New Zealand for a butter which has been stored and frozen for a period of three months or more. If it were possible to place New Zealand butter on the British. market, possessing the bloom and freshness which characterise it as it comes from the churn, it is reasonable to contend that it would realise a price on a parity, say, with Danish butter (adds the circular) . DISTRIBUTION OF FUNDS. “The New Zealand consumer gets his butter straight from the churn, and he would be asked under the scheme to pay a slightly higher price than that realised for a frozen butter. Allowing tor a slight decrease in consumption because of the slightly higher price, this premium of 2d a lb. would represent approximately £400,000 per annum. This sum would accrue to the butter industry as a whole. “Every dairy company supplying the local market must be given a fair and reasonable allowance to cover patting and distributing charges from factory to storekeeper. This is suggested tentatively at lfd per lb. This charge would be permanent; it would be fixed by the Butter Stabilisation Committee, and would have to be observed by all dairy companies or their agents catering for the local trade. With export bulk butter at lOd per lb. f.0.b., the wholesale price charged to storekeepers under this scheme would be Is 2d, less id discount for cash, made up as follows: F.o.b. parity, lOd; premium, 2d; allowance for patting and distribution, 2d less Id cash discount. The storekeeper’s "profit of, say, 2d, would therefore make the retail price Is 4d, with an f.o.b. parity at lOd. “The accumulated fund would be distributed at the end of the season to all butter-making companies in New Zealand in proportion to their total output for the year. It is considered that a dairy company supplying the local market should be satisfied with the f.o.b. parity plus a fair and reasonable charge for patting and distribution. The premium of 2d would represent an advantage in which the whole industry would share because of the ability of any butter-making company to place a fresh article on the local market at short notice. This premium would represent approximately £3500 for each 1000 tons of butter made in New Zealand.”