Higher Dairy Prices

Manawatu Times, Volume 62, Issue 258, 30 October 1937, Page 9

Higher Dairy Prices

With butter quoted on the London market at 34s sterling per cwt. (42s 6d in Now Zealand currency) above the guaranteed price, dairy farmers are bound to ask themselves whether the overseas market is going to outbid the Government’s figure. The final answer cannot be given for another twelve months, its nature depending on the average price made by the season’s - produce. All that farmers can bo sure of meanwhile is that with free marketing they would at present be receiving higher pay-outs, because London prices for butter and cheese have consistently exceeded the guarantee for the past three months. On the other hand, the taxpayer can accept the firmer market cheerfully. To the extent that old season’s produce has sold at the higher prices, the estimated deficit of £650,000 in the Dairy Industry Account will have been reduced. Mr. Nash should shortly be able to disclose the final result. Moreover, the premium being earned at present on new season’s produce should fortify the account financially against any subsequent market recession below 112 s, the British landed equivalent of the butter guarantee. Present values are said to be firmly based on the stock position and are expected to hold at a high level until larger stocks are available in London at the end of November. An important factor in reducing stocks has been larger imports by Germany—another example of the influence the Reich could exert on primary markets if she could and would buy more freely. While New Zealand has everything to gain by higher prices if they can be maintained, the turn of the market should be accepted with caution. Dearer butter last year caused a slight reduction in Britain’s per capita consumption and a rise in margarine purchases. A steady market at reasonably payable prices is to be preferred to wide fluctuations, which usually bring reactions.