MARKETING OF BUTTER.

New Zealand Herald, Volume LXVII, Issue 20508, 8 March 1930, Page 12

MARKETING OF BUTTER.

ABNORMALLY LOW VALUES

SELLERS IN COMPETITION.

CO-OPERATION URGED.

NEED OF REMEDIAL MEASURES

[BY TELEGRAM.—OWN CORRESPONDENT.] WELLINGTON, Friday.

In commenting upon the present situation of the Loudon dairy market to-day, Mr. W. Goodfellow, managing director of the Now Zealand Co-operative Dairying Company, Limited, said a striking object lesson was being given the New Zealand and Australian' dairy producers of the imperative necessity for better marketing conditions. The present situation on the London market was that while Danish butter was commanding a price of 1625, the situation of New Zealand butter was given as "now stoady at 1405." A cablegram a few days ago stated that the market was demoralised, and the latest information apparently meant that prices had oven gono into the 130's, where they had not been for a number of years. The Dane's consistently* placed upon the market somo 2000 tons of butter every week, and, by the steady demand they had built up, had been enabled to maintain a fair level of price. Thero was no equity in a situation which placed New Zealand produce at over 20s disparity, and producers were forced into recognising the fact thgt their disunited, marketing methods wero out of date.

"I have long predicted," said Mr. Goodfellow, "that as soon as both Australia and Now Zealand had good producing seasonSj the position of- the London market would become serious and our marketing would sutler a sovero strain. That position is obtaining this year." New Zealand's export for the producing season would bo approximately 90,000 tons of and the Australian export, which last year was approximately 40,000 tons, would this year exceed 60,000 tons. Combination of Buyers. In spite of the fact that, fortunately, some 18,000 tons of New Zealand butter had been diverted to Canada, tho London market, having knowledge of the heavy production in the Antipodes, had weakened. This weakening process was markedly accentuated by tho trading conditions now obtaining in London. In place of the numerous buyers who competed against ono another in the past, tho big amalgamations of the present day employed one buyer and 'pooled their stocks as required when it suited them to stand off tho market to bring prices down to the level they desired. Asked what remedies for the situation could be proposed, Sir. Goodfellow said the first lesson to be , learned by the producers was that they must adopt the practice of their opponents and eliminate competition among themselves as sellers, just as the buyers had eliminated competition among themselves. It was futile for 500 independent dairy companies in NewZealand to compete among themselves on the London market. The sensible course was for organisation, with tho ideal, if possible, of a national group controlling at any rate the larger proportion of tho sales of New Zealand produce. In addition to that course, into which producers would practically be forced by economic circumstances, agritation should bo »made on the London market to urge that tho Merchandise Marks Act, passed by tha British Parliament, should bo put into operation, and branding be adopted in respect of all imported butters. This would rectify the position of blended butter. If that regulation could be adopted it would materially improve the position for Empiro producers. Wider Field in Britain. Co-ordinated marketing on the part of producers would also enable efforts to be made to develop tho hitherto unexploited market of northern Britain. At present 92 per cent, of Australian and New Zealand butter going to Britain reached London, which served the food requirements of only 53 per cent, of Britain's population.

Tho present situation emphasised the need more thai} ever of attention being given "to the development of Empire free trade, or at any rato freer Empiro trade. Great Britain was tho only sure market that the New Zealand producer had. While about 18.000 tons of butter had been sold to Canada last year, it was quito uncertain how long that market would remain open, as there were prospects of the United States imposing a tariff against Canadian milk and cream. If that were done that milk and cream would be manufactured in Canada into butter and cheese, and tho Canadian Government would be forced to erect a tariff against New Zealand. While the outlook was not as bright as it had been on occasions, said Mr. Goodfellow, he was by 110 means pessimistic. There certainly existed occasion for serious thought, but tho problem could be seen and steps must be taken to cope with it. Tho first essential was adequate attention to marketing. The producers, which meant tho whole of tho Dominion, were losing millions ot points a year through inefficiency in this field. Tha first step for the producer to take was to copy the tactics of his opponents, which were to amalgamate to effect economy and eliminate unnecessary competition. If the New Zealand producers would work together, and, in turn, co-ope.vate with the Australian producers, then a very great deal could be done for the national advantage in the interests r,f all.