LOCAL PRICE OF BUTTER.

New Zealand Herald, Volume LXIII, Issue 19510, 14 December 1926, Page 10

LOCAL PRICE OF BUTTER.

Sir,—l take exception to the statement made by Mr. Goodfellow on Saturday last, that competition on the local market was the cause of the low price now prevailing. Mr. Goodfellow stated that some factories had made arrangements with their agents to sell without retaining the right to fix the price. This does not correctly state the position. In the South, where the agents fix the local price, butter is l£d per lb. higher than the Auckland rate, whereas in Auckland the price is fixed by the New Zealand Go-op. Dairy Co., Ltd., and to-day's price is IJjd below the London parity. My firm draws supplies under contracts from eight different factories in the Auckland district, but each factory is protected by agreement providing that the minimum shall be the price fixed by the New Zealand Co-op. Dairy Co., Ltd-, therefore the factories have ample protection, and under no circumstances can their butter be sold at less than the New Zealand Co op. Dairy Co/s price. In former years London parity and f.o.b. buying were the only factors considered in fixing the local price. This' year, under the control scheme, London f.o.b. sales, are impossible, but Australian purchases have to be reckoned with. I know of no sale to Australia higher than Is 4d f.0.b., but Mr. Goodfellow stated that his company had secured Is sd. Accepting this statement as correct, the local butter factories were prepared to advance • the price 2d, but Mr. Goodfellow insisted that Id advance was sufficient, thus fixing the present low level of l£d per lb. below the London parity. The townspeople may be reaping the benefit,- but the dairy farmers aro surely entitled to the full market value of their butter, whether sold locally or exported. F. H. Leonard.