PRICES FOR BUTTER.

New Zealand Herald, Volume LXIII, Issue 19458, 14 October 1926, Page 14

PRICES FOR BUTTER.

LONDON MARKET CONDITIONS FEATURES OF THE SLUMP. A COMPARISON WITH 1922. The present slump in New Zealand butter on tho London market is without precedent in more, respects than one. The outstanding feature of the position is that the pronounced decline in prices has come at a period that in past years has been recognised as one of the peak periods of our butter on the London market. A famine at a period that, usually produces a bounteous harvest is an occurrence that naturally arrests attention and evokes widespread speculation regarding its causes. Exports in the dairying industry are practically agreed that tho chief contributing factor to the market depression in our butter in Britain is opposition to the complete control of marketing methods by the co-operative dairying concerns of New Zealand. This view may be a fairly correct one, but the butter market, as has been shown in past seasons, is influenced materially only by the matter of supply and demand. The worst butter slump on the London market in recent years occurred early in i 922, when de-control of butter supplies by the British Government was announced. The Imperial authorities were left with gre-at accumulations of butter from New Zealand and Australia which had been bought at high prices, and the release of these stocks threatened ruin to the market for the 1921-22 season. Something approaching a panic occurred and New Zealand butter 'was quoted in London durirtg December, 1921, and .January, 1922, at 110s to 130s per cwt. Disposal of Surplus Stocks. The surplus stocks of New Zealand butter held by the British Government were being offered at 100s per cwt. and Australian at 84s. The Now Zealand Government v/as requested to take action to prevent the accumulated stocks of New Zealand butter—approximately BCOO tons • —being placed on the market. Tho Imperial authorities delayed forcing the sale and on January 11 it was announced that the 8000 tons had been reduced to 1000. Prices showed some improvement in February, 1922, but were still at a low level, the quotation early in March being 140s to 1425. Early in April there was a sharp rise in prices and New Zealand butter was quoted at 180s to 188s. During the slump period for New Zealand butter Danish butter remained steady, being quoted from 40s to 45s higher than New Zealand. Conditions in this respect at present are very similar to those of 1922. With New Zealand butter quoted by tho Dairy Board as low as 147s on a falling market, Danish butter is at 182s to 184s. A feature of the market in 1922 was the rapid recovery of New Zealand butter, which in June was quoted 2245. This j was said to bo due to the extra consump- i tive demand created by the low prices. If history is destined to repeat itself in this instance, it should not be long before there is a greatly improved demand for New Zealand butter, which is being retailed at Is 7d per lb., compared with Is 9d for Danish. Comparison of Prices. The following table shows the lowest and highest prices realised on the London market during the seasons from 1922 to 1926: Lowest. Highest. 1921-22 . . January. UOs June, 224 a 1922-23 .. May. 142s July. 224s 1923-24 .. April. 152s December, 222e 1924-25 .. January. 168s October. 228# 1925-26 . . July. 168b October, 234s At the beginning of last season shipments of butter were held up owing to the season's strike. As a result large quantities of butter reached England early in January, and for a time there appeared to be a danger of a panic on -the market. The majority of companies decided to hold portion of their consignments in store and feed the market regularly. This action prevented any serious deciine, and the range of prices during the season was maintained at a remarkably even standard. LATEST LONDON QUOTATIONS. BUTTER VALUES STILL LOWER. New Zealand butter is quoted at 144s to 146s in a cablegram received yesterday from their London office by Joseph Nathan and Co.. Ltd. This advice shows that a further decline has taken place in the London market since October 9, when butter was quoted at 147s to 150s in a cablegram received by tho New Zealand Dairy Produce Board. HOLDING STOCXS A BLUNDER. LOWER RETAIL PRICE SUGGESTED (Received 5.5 p.m.• Sun. LONDON, Oct. 12. Commercial circles in London consider that New Zealand producers have blundered by conserving their supplies of butter in at- attempt to maintain prices. A prominent firm states that it thinks New Zealand should have been satisfied to meet the. market at 155s a cwt. This would have prevented the glut, which has resulted in the present low prices. New Zealand butter is at 144s and Australian at 1425. The firm says the public realise that quantities are available and will only provide for their immediate needs. Therefore a further reduction of Id a lb. retail is likely to be suggested as a remedy. A further -reduction in the retail price might, increase the demand.