LOWER BUTTER PRICES.

New Zealand Herald, Volume LXIII, Issue 19512, 16 December 1926, Page 12

LOWER BUTTER PRICES.

DECLINE OF FOUR SHILLINGS. FINEST SELLING AT 1725. HEAVY STORED STOCKS BLAMED MAY BE FURTHER REACTION. A decline of 4s per cwt. in the price of New Zealand butter on the London market is reported in the latest advices received by cablegram by Dalgetv and Co., Ltd. The Dairy Board's new minimum prices are therefore 172s for finest and 170s for first-grade butter. This decline marks the first reaction on the I market sirico the upward movement commenced three weeks ago. The full text of the advice received bv Dalgety's is as follows:—"The butter market is very dull and values are nominal. New Zealand Dairy Board prices have been reduced by 4s. There are stii) heavy stocks in store purchased by market operators, and, in addition, a quantity is still held by New Zealand factories under limits. " There is a considerable quantity afloat, so there may be a reaction from the recent speculative advance, especially as prices are in excess of retail parity. For the moment, buyers are holding back and holders are endeavouring to resell." Stages of Recent Advance. The advance, which the report terms "speculative," commenced on November 23 and in little more than n fortnight the price had been raised by rapid stages from 150s to 176s per cwt. The steps in tlfis ascent were as follow •.--November 23, 150s; November 24, 1545; November 25, 158s; December 3, 1665; December 9, 170s; December 10, 1765. These advances were made by the Dairy Board in sympathy with the keen tone of tho market and reports showed that Australian, Danish and other makes of butter had enjoyed a similar measure of appreciation. Even with the latest reduction the price (1725) is more saisfuctory than could have been reasonably anticipated 011 the reports of a few weeks ;igo. The reference in Dalgety's report to "heavy stocks in store purchased by market operators in addition to a quantity still held by New Zealand factories under limits" will come as a surprise to producers in view of a statement made ou December 6 by the acting-chairman of the Dairy Board, Mr. .T. J!.. Thacker, and tho general belief that it was the board's policy to check speculation by selling only to bona-fido traders. Statement for ..the Board. With respect to stocks, Mr. Thacker stated that "tho whole of the new season's arrivals of butter,' practically 2000 tons, had been cleared and the lonic shipment of 70.000 boxes arriving ou December (>, would meet a market bare of New Zealand supplies. Australian advices showed that her export would probably be light on account of dry weather. This, together with the ending of the British coal strike, improved prospects considerably. The increased consumption oy miners was also improving tho checso outlook." . ... • From, tho • board's .point of view, continued Mr. Thacker,:. the; improvement in , advances and the general .outlook".was ■ satisfactory, as it definitely disproved the mass ,of propaganda and misrepresent;!- , tion with which tho introduction of tho board's marketing policy had beeu met. It was not surprising that sectional opposition and propaganda had confused some producers.. That attitude .had been helped by the circumstances of the strike and tho sustained storage of New Zealand butter, American Speculator^ In connection with this storage information was now available showing that American speculators ■ had be en responsible for the holding up of several hundred thousand boxes of New Zealand prodace as an investment. The blame for this had wholly fallen upon the New Zealand producer, who thus had been beatea with a stick of which be was himself mere* largely the victim than-.the man responsible. These stocks, however, had now been absorbed and Mr. Thacker was. confident that the board's policy would result in normal marketing on a basis which would prevent a repetition of such experiences in the future.