Insurance Director on Our Dairy Industry

Northland Age, Volume 3, Issue 31, 4 May 1934, Page 3

Insurance Director on Our Dairy Industry

In his address as New Zealand delegate to the annual meeting of the A.M.P. Society held in Sydney last Friday, Sir Harold Beauchamp referred to the dairy industry in New Zealand.

“With regard to those engaged in the production of butter and cheese,” said Sir Harold, “I regret that I cannot speak in an optimistic spirit, as both of these articles are selling today and have been selling for months past at much below the cost of production. The chief cause of our difficulties, in respect of butter, is the situation in Europe, which contains the world’s largest consuming population. Since the slump, trade conditions in Europe have been so bad that most European countries, in order to keep their trade balance right, have been compelled to largely restrict imports. In this connection, butter has suffered severely, both from very high tariffs and reductions in the quantities that can be imported. For example, Germany, until comparatively recently, imported from 130,000 to 140,000 tons of butter per annum. She has now definitely limited the quantity that can be imported to 40,000 tons. The result of these high duties and restrictions is that, if the Baltic countries which export butter are excluded, that article cannot be bought retail in any European country under, approximately, the equivalent of 2/6 per pound New Zealand money. In Paris, it is understood, the price is the equivalent of 3/ per pound New Zealand money. Under these circumstances, butter is beyond the reach of a large proportion of the European population.

“In England, I may add, the retail price is, roughly, 8d per pound. When trade conditions return to normal I cannot see the consuming population of Europe allowing this state of affairs to continue. If these European restrictions and high tariffs were removed our butter difficulties would rapidly disappear. “As an indication of the manner in which the price factor influences consumption, in 1928 Britain consumed only 15i pounds of butter per head of the population. Since then we have had slump conditions, which one would not expect would help consumption. In 1933, however, the consumption of butter increased to 23 pounds per head of the population, and in the last two months the consumption was greater than in the corresponding months of last year. The consumption of 24 pounds per head will probably be reached by 1934. This means an increased consumption of pounds per capita of the population in six years of bad times. Every pound means 20,000 tons. The increased consumption, therefore, in six years is 170,000 tons, or a great deal more than New Zealand’ l ; total exports. The increase in consumption has been brought about by the price factor alone. If the price is unduly increased, it seems evident that consumption will fall off. “While the present prices are unprofitable in New Zealand, our farmers are getting their costs down, and are learning to make more use of their dairy by-products—skimmed milk and whey—than they formerly did.”