DANISH BUTTER PRICES.

New Zealand Herald, Volume LXII, Issue 18943, 14 February 1925, Page 11

DANISH BUTTER PRICES.

SYSTEM OF REGULATION. "GENERAL AIM" DETERMINED. OPERATIONS BY MERCHANTS, An account of the methods adopted it Denmark for the regulation of the pricei at which export butter is sold is given ii the report by the overseas delegation o' the New Zealand Dairy Produce Contra Board. The report mentions that, witl a population of 3,000,000, Denmark hai between 200,000 and 300,000 dairy far mers. There are now 1450 co-operative fac tories, practically all of which are en gaged in the manufacture of butter. Tin 250 proprietary factories are mainly occu pied with town milk supply and the manu facture of cheese. Reviewing the management of sales, till report proceeds:—The industry having commenced with production by individual farmers and estate holders, exportation was entirely in tho hands of merchants. With the increase in production and th« establishment of co-operative factories, dissatisfaction with export returns arose with the result that'co-operative export associations were formed, while large British buyers like the Co operative Wholesale Society and Maypole Company established their own agencies in different centres in Denmark to buy direct from tin factories. It is estimated* that these tw« companies now buy 25 per cent, of the amount available for export. The business of the co-operative export associations has steadily developed since their inception. Eleven have now been established, and it is estimated that they handle 40 per cent, of the exports, the remaining 35 per cent, being sold through the export merchants. The basis for purchases made from individual factories, bjj the merchants, and large English houses, is the weekly Copenhagen quotation, certain premiums being paid over the quotation to factories producing high quality. The actual amount of these premiums is usually concealed. Hastily reviewing the presence of three purchasing factors, the English buyer, the export merchant, and the co-operative export association, one may be led to expect an amount of competition that not actually exist. The purchases by tie-: English houses are done* on a quality without reference to the price factor. Selecting their factories they agree tc give a certain premium above the Copenhagen quotation, which is-not declared until all the sales for the week have been made. How then do the other two agencies proceed which do sell on a definite price basis? On Monday morning of each week the secretaries of the Merchants' Association and Export Association confer. Having considered all aspects of the position thev decide what the price level should be for the week. It is then communicated to the individual merchants and export associations. It is not intenoed as an arbitrary figure, but as an indication of the general, aim. Within the three days, during which sales are made, changes 'may take place necessitating a reduction, or suggesting an advance, regarding which each agency uses its own judgment. The sales for the week being completed the quotation committee meets at Copenhagen each Thursday. This consists of five dairy representatives and five merchants. it is not a commercial committee, but more of a judicial one, the primary object, of which," at its establishment, was to determine what price should be. paid to farmers fot their butter-fat, They in- ' spect. all available information regarding I sales brought forward by members on , each ' side well posted with the doings ' of their respective organisations. After being in touch with Denmark we can I easily understand the scrutiny to _ which , details are subjected. The price is then ' declared. All butter-fat payments are ! made by it. Practically all purchases . have been made bearing an agreed rela- " tionship to it, and it becomes more or | {ess the price indicator to the dairy inter* ' ests of the world.