DAIRY PRODUCE TRADE.

New Zealand Herald, Volume LXIII, Issue 19469, 27 October 1926, Page 11

DAIRY PRODUCE TRADE.

WEDDEL'S ANNUAL REPORT. DISTURBING CONDITIONS. EFFECT OF HIGH RESERVE PRICES The past year in the dairy produce trade was probably not more eventful than some of its predecessors, but many happenings, by their unfamiliarity, seemed to produce results out of proportion to their importance, Messrs. W. Weddel and Company state in their report for the year ended June 30. As an example, the case of the strike of British seamen in overseas ports, which lasted from the beginning of August until the middle of of October, may be cited. For the first few weeks of the strike the stocks of butter on hand were so heavy that no appreciable effect was produced upon the market here by the hold-up of steamers on the other sido; but as the weeks passed without any settlement being reached the market became excited and butter prices soared. That the level to which prices were forced was unwarranted is proved by the collapse which followed when the striko suddenly ended and it became known that there would be no shortage of bntter. All trading suddenly came to a standstill and prices fell to a point which more than discounted the effect of the heavy arrivals of accumulated supplies in January. One very bad result arising from these sudden booms which occur periodically in the butter market is that as soon as the retail price of butter increases beyond a certain point the public begins to economise, the demand falls away and prices have to bo reduced much too drastically to bring back the consumptive demand to its former volume. Efiects of Limiting Prices. The growing practice among New Zealand butter factories of placing limits npon their produce after arrival in this country was much more extensively followed during the season just ended; but, so far, the success attending this policy on previous occasions has not been attained this year. At the end of June, 1926, the quantity of New Zealand butter in cold store in the United Kingdom held up under limit very largely exceeded the stocks m any previous year. As a considerable portion of these stocks had at that date been in cold store for several months, during which time the market prices had 6hown no improvement, it wa3 evident that unless a very considerable appreciation in prices occurred during the autumn months heavy losses would be suffered by those factories who had speculated in this way. But apart from the fact that little financial advantage is likely to be derived from this policy, the restraint on the free marketing of supplies aroused a certain amount of adverse criticism and diverted regular buyers to other sources of supply. Control which ensures uniform Standard of quality is welcomed by the trade, but holding up supplies in the United Kingdom for reserved prices is aptly described in the fourth report of the Imperial Economic Committee as " a very dangorous experiment in mass speculation." Messrs. Weddel express the opinion that it is not in the interests of the New Zealand producers that there should be room for anyone to say that by holding up supplies they are attempting to squeeze the British consumer. A later section of the report suggests that the success of this policy in earlier seasons was partly due to the comparative absence of Siberian butter. Now that prewar conditions as regards the production of Siberian butter aire getting nearer every year, the likelihood of any success attending this policy in future must become more problematical Traders' Losses on Clieese. So far as cheese is concerned, although the average selling values over the ysar were higher than for some years past, it has been a very disappointing season to the many operators who, early in the New Zealand soason, covered their requirements ahead at prices which could not be realised after the goods had been landed. It is estimated that nearly 30,000 tons, or 45 per cent., of the season's make of cheese in New Zealand, was sold forward at prices which averaged the equivalent of 100s c.i.f., whereas the market value of the goods after arrival, except in the. first few weeks, was well under that value. The report remarks that the movements of cheese prices are even more difficult to account for than those of butter, probably due to the fact that the Home make of cheese is a much more important factor in the situation than the Home make of butter. The market quotations for NewZealand and Canadian cheese during the period under review followed more or less closely the movements and fluctuations in the butter market, but to a much more modified extent. Prices rose during the early autumn months of last year in sympathy with the rapid upward movement of butter prices, and tended downwards during the remainder of the period. At no time was there any shortage of cheese sapplies available, and it was only because of the firmness with which stocks were held that lower market prices were not recorded. Regulation of Shipments. With the object of prolonging the shipping season and feeding the market with more regularity, the Dairy Produce Control Board set out to regulate shipments of both butter and cheese from New Zealand, but their policy received an early set-back through the strike of British seamen in August and September, just at the time when it was most important that all possible supplies should be hurried forward. As a result, several heavy shipments of butter reached their destination in close sequence. In the main, however, the object of the board was attained, as at the end of April no less than 9250 tons of butter and 11,500 tons of cheese remained in cool store awaiting shipment. So far as cheese is concerned, it remains to be seen whether the policy is altogether wise, as it will bring the late shipments from New Zealand into serious competition with the Canadian make. DAIRY PRODUCE RATES. BUTTER MARKET SLOW. Joseph Nathan and Co., Ltd., yesterday received the following cablegram from their London house :-~"Butter, 144s to 1465. The market is slow. New Zealand. cheese is being withheld from the market. Canadian cheese, 865." MATAMATA COUNTY LOAN. . £30,000 FROM MELBOURNE. Following out its programme of progressive road wofks, the Matamata County Council has accepted an offer by Messrs. J. B. Were and Son, of Melbourne, of a loan of £30,000 at 5| per cent., with a currency of 36| years and sinking fund of 1 per cent. The programme provides for a total expenditure of £160,000, of which £60,000 was borrowed a year ago and has now been expended. GERMAN RAILWAY BONDS. BRITISH TREASURY'S ATTITUDE. LONDON'. Oct. 15. The British Treasury has given it definitely to bo understood that it will not agree "to placing German railway bonds on the market. The reason is that at the present price of money in the world's market the bonds would be sold at a loss of nearly 30 per cent, of the capital value, and Britain is opposed to this aaorifit'Ci. 1