The Market Position

Northland Age, Volume 27, Issue 47, 16 November 1927, Page 2

The Market Position

The Chairman's Review

Reviewing the Market Position, Mr Grounds, Chairman of the N Z Dairy Produce Board states :

The steady rise in butter and cheese prices during the past few months and the general market outlook has developed a feeling of optimism extending beyond the industry to all mercantile interests, indicating once again a recognition of the important part the industry plays in the national welfare. It was not to be expected that prices would continue in a steady ascent, or that no recession in price would be expert need lor it must be borne in mind that, notwithstanding how good th.‘ general position may appear, forces are now operating on the world’s markets that do not desire or aid the maintainace of steady prices, so that even in the best of times a certain amount of market movement may be expected under existing conditions. The extraordinary interpretations that find expression under cover ot anonimity in the dailv Press of tnese ccc isional variations in market prices indicate a lack of knowledge and mercurial temperament of the observer, or a predisposition to blame the board for every downward turn the market takes, without any corresponding thought of the board when the market rises. Thus the recent decline, which was occasioned almost certainly by the report of good rains in Australia ano Argentine, was attributed by critics to certain conditions attaching to the export licenses under which all produce is now being shipped ?

The cloak of anonimity used in these cases is usually so meagre that the hoot, if not the general form, of the critic may be readily discerned; eonsequently few will be deceived. Coincident with these observations we have observed that comparisons have been made with last year’s prices, v hich in their simplicity were obviously intended to be significant. If comparisons are to be drawn, the whole picture should be outlined with reasonable accuracy, anu the whole viewed in a steady even light. Under such circumstances we should recall that at this time last year the general strike and the long, drawn out coal strike had so seriously disturbed British industrial operations that the general purchasing power of the people had been setiously diminished. To this we must add the fact that owing to an abnormally fine productive season in the northern hemisphere and the storing policy pursued by many New Zealand lactories, against the repeatedly issued advice ol the board, there was in London cold scores about 900,000 boxes of butter a year ago. This weight of reserve stocks, together w th the unusually depressed conditions prevailing, was unquestionably the major cause for last year’s depression, and led the board to decide later that a repetition must be avoided at all costs, hence the policy it pursued of steadily clearing stocks, To-day’s Favourable Outlook. Compare the position thus outlined with that existing to-day. Our latest intimation of London stocks (October 14) give them as 226,000 boxes, or approximately one quarter of last year’s stocks, w.iile the inflow front competing countries has been seriously curtailed by drought conditions. During July, August, and September, Australia exported 41,000 boxes, as compared with 133,880 boxes in the same months last year. During the same period, Argentina has exported 19,910 cwt, against 79,300 cwt. last year while Canada, during May, June, July and August, exported 3625 boxes of butter against 58.958 bot es, and 390,481 cases of cheese against 587,610 cases last year. It is furthermore computed that during August and September we slipped 60,000 boxes of butter to Australia, as against 2000 in the same months last year, and to Vancouver 12,000 against nil last gear. Sales this year to date tQ

Canada and USA approximate 180,000 boxes. Increased consumption, steady selling, and the recurring drought conditions in competing countries are therefore the main contributing factors to the improved market position. The cheese position appears to be fairly stable, and our London advice is that butter should remain firm until Christmas. (To be Continued)