BUTTER EXPORTS

New Zealand Herald, Volume LXX, Issue 21480, 2 May 1933, Page 12

BUTTER EXPORTS

RESTRICTION REJECTED OUTCOME OF CONFERENCE DISCUSSIONS IN SYDNEY f} ' f • OFFICIAL REPORT ISSUED An official report was issued yesterday by the New Zealand Dairy Produce Board of the proceedings at the recent conference in Sydney - between representatives of the board and the Australian Dairy Produce, Export Board regarding the proposal for the restriction of butter exports from New Zealand and the Commonwealth. The Australian board rejected the proposal. The New Zealand; delegation consisted of Mr. Dynes Fulton, acting-chairman, Mr. W. Grounds, a member, and Mr. T. C. Brash, secretary of the New Zealand board. In connection with the proposals for restrictions, tho' position, in conference, was first outlined by the chairman of the Australian Board, Mr, T. F. Plunkett, M.L.A., who recounted the steps which had been taken from the time the first cablegram relative to restrictions had been received, states the report. After Mr. Plunkett had spoken, he asked the New Zealand representatives to state their position. This they did, putting forward clearly the attitude of the New Zealand Board and its reasons. At the same time it was emphasised that the New Zealand representatives were anxious to consider the viewpoint of the Australian Board, and undertook to convey to their board any proposals put forward by the Australian Board. After an exhaustive discussion next day the chairman of the Australian Board indicated that his board would consider the position after the New Zealand representatives had retired, and report the result later: The New Zealand representatives again met the chairman and several members of the Australian Board the following day, when they were advised that the Australian Board had decided to oppose the institution of restrictions. Immediately this decision was known it was reported by cablegram to the office of the New Zealand Board in Wellington and all members were advised of the decision. i Regulation of Shipment Representations were made to the Australian board, states the report, that the New Zealand board's considered opinion was that the regulation of shipment from Nenv Zealand 'was undoubtedly having a steadying effect on the British market for New Zealand dairy produce, and at the same time provided for a continuity of supply, permitting the retailer to sell the New Zealand article all the year round. The following figures relating to the 1932-33 season were submitted as to shipments of butter from New Zealand:—

The Australian representatives submitted that the varying seasons of production throughout the different States not only made it difficult to undertake regulation of shipment, but actually gave a reasonable regulation of shipment, in proof of which they gave the following particulars of butter _ shipments from the Commonwealth in the 1931-32 season: — Tons Percentage , ./ July . .. . 3,083 3A August .. .. 4,538 6.0 Septtmber . „. 5,486 6.1 October .. . 10.111 11.1 November .. -•, 9,778 10.8 December .. .. 11,330 12.6 January -. , . 15,022 ' 16.6 February . * ~ 6,918 7.6 March •. .. 5,785 6.4 ' - April s . .. 6,539 7.2 May s 6.344 7.0 June .9 tk 5,569 6.2 ■<i Total . . .. 90,503 100.0 The report continues: —In the discussion it was shown that whereas Queensland's heavy shipments were made late in the season, Victoria shipped early, having already practically ceased) export for the present season, thus assisting in more regular shipment The members of the Australian Dairy Board expressed keen interest in the method of financing delayed shipments and in the New Zealand Board's shipping work. Nothing of the same nature was done in Australia. Sales in Australia V The Australian board undertook to give careful consideration to regulation of shipment, but were not hopeful of.it being undertaken. The magnitude of the local requirements and their complexities made such a move difficult. , The New Zealand representatives indicated that representations had been made by merchants in London that there was need to undertake preventive measures in this connection and that the question was being investigated. The Australian Board had no power under their Act to make an audit, but the chairman indicated that should this be found necessary he felt certain the power could be obtained. The discussion on f.o.b. and c.i.f. sales brought out the fact that this class of business was fairly popular in Australia and that it was unlikely that it would be eliminated. The restrictions applied to this class of business by the Australian Board were that no butter could be sold before it was graded. In other words, selling for the season, or even portion of the season, was prohibited, and, further, no such sales could be made at a price lower than the price fixed by the Dairy Board, which was done every Friday. The regulation governing this provided that the price fixed by the board should be on the basis of tie London market rate for consignraov j ruling at the time, less the ustii.j charges. It was admitted, however, that other circumstances were takj.i into consideration .when fixing this ; „'ice. Advertising Campaign Considerable discussion took place on the question of advertising and members of the Australian Board were ■unanimously of the opinion that more advertising was necessary, especially featuring the value of butter as a food and also the greater vitamin content of butter from the Commonwealth and the Dominion. It was their opinion that at least £25,000 per annum should be spent by each board in this direction in addition to the present allocation. The following resolution was passed: ■—"That with the view of increasing the consumption of butter in Great Britain and thus endeavouring to bring about an improvement in prices on the world's markets, this conference of the Australian Dairy Produce Export Board and representatives of the New Zealand Dairy Produce Board recommends that an extensive propaganda and advertising campaign 00 started in the United Kingdom,

pointing out tlio high value as a health food of butter compared with all other edible fats."

The Australian Board was concerned regarding the increased use of margarine in the Commonwealth and also considered that some restriction should be placed by Great Britain on the importations of whale oil, which was now largely used for the manufacture, of margarine. It was estimated that Britain imported 250,000 tons a year. Some members who had investigated the problem of cold storage in Britain were personally in favour of the New Zealand Board's cold storage and handling policy. However, they ascertained that tho merchants handling Australian butter did not consider il necessary. In their investigations tliev were advised by Hay's Wharf Authority that if Australia would come into the cold storago contract it would mean a reduction on the present contract rato, the reduction to apply to both New Zealand and Australia. It was felt that the two boards should combino in an effort to get a reduction in cold storage charges. The Australian Board asked for particulars of the contracts held by the New Zealand Board regarding freights and marine insurance. These were freely given. A suggestion was made that the two boards should combine in making a, freight contract, but tho Now Zealand representatives questioned the practicability of the proposal. There was a distinct feelinp; that an effort should bo made to sell Australian butter in Great Britain in pats.

PATTERSON PLAN DIFFICULTIES MET WITH EFFECT ON LOCAL PRICES " Difficulties appear to bo arising in connection with the Patterson Plan, due to the keenness of dairy companies to secure a greater share of local sales, thus making for lower prices," states tho official report of the New Zealand Dairy Produce Board regarding the investigations of its delegates in Australia. The report states that the ever-increas-ing butter export makes the question of equalisation of prices in Australia more difficult. The Patterson Plan was not backed by any legislative authority and there appeared to be a distinct desire in Australia that legal authority should be secured. At a conference, which was attended by the New Zealand delegates, of representatives of tho States to consider the problems of tho local market the following resolutions were passed:— ... (1) This conference is of opinion that the price of butter consumed within tho Commonwealth should be determined on the basis of Australian economic conditions —in other words, that an Australian price should obtain regardless of variations due to economic or other causes in Britain or elsewhere. (2) The conference recognises such an objective cannot be achieved under present conditions which, because of surplus production, of necessity encourage the exploitation of the local market to a point which reduces the local market price to world's parity; the conference therefore is of opinion that to permit of the achievement of its objective the incentive to exploit the local market must be removed and that this is only possible by ensuring that sales of butter, whether effected locally or overseas, will secure the same return to factories. A committee was set up to secure legislative authority for some proposal whereby prices of butter on the local market should be raised to a higher level, which might include the legalisation of the Patterson Plan. It was, understood that legislative authority for the Patterson Plan might be difficult to secure, but it was hoped that some arrangement might be made to provide for a price in keeping with Australian economic conditions. The New Zealand delegation states it conferred with the members of the Australian board regarding a statement to the Australian press, but when the statement appeared a paragraph ha.d been added relating to a levy on production and a bonus on export. These matters, the delegation states, were not mentioned while the New Zealand representatives were in conference with the Australian board.

RESTRICTIONS OPPOSED EFFECT ON SMALL FARMER [from our own correspondent] HAMILTON, Monday The attitude of the directors of the New Zealand Co-operative Dairy Company, Limited, toward the proposal to restrict the export of butter from New Zealand was explained in a statement issued to the suppliers of the company by the general manager, Mr. C. J. Parlanp. Mr. Parlane said certain London importing firms, through their New Zealand agents, had been applying pressure to have restriction agreed to. The directors had unanimously resolved that, so far as the New Zealand Cooperative Dairy Company, Limited, was concerned, it was definitely opposed to the principle of restricting exports. While the restriction suggested was a very small percentage, it was quite conceivable that, once the principle became established, increased percentages would be demanded. It was generally acknowledged that the welfare of New Zealand was dependent on its primary industries. There had been a general reduction in the areas held by individuals, but in the majority of cases these small areas were capable of increased production. Even under present conditions it was practically impossible for these people to receive sufficient returns from these smaller properties to enable them to carry on. . In the event of restricted production being necessary tfhoir position nvould be hopeless, said Mr. Parlane-. r l he small farmer woul,d certainly need safeguarding, and this in turn would obviously mean retarding tho development of unimproved or partly improved land suitable for dairying. Moreover, it would probably be necessary for the Government to exercise some form or control which would perhaps be carried out by licensing dairy farmers, and at their discretion refusing licences for the establishment of herds either on new farms or on farms already deVe Concl'udinr w Mr. Parlane said the restriction of exports would mev ltab '- v mean restricted production and a lower national income. lhere was not the slightest doubt that the temporary increase of a few shillings a hundredweight ivhich would result from a restriction of output could be permanently obtained by the adoption of a businesslike marketing policy.

Percentages of Percentages of total butter total " butter shipments exports which which are grad- are shipped ed each month, each month August . . > 3.4 6.5 September 7.0 4.2 October . 12.0 9.7 / November .. 15.0 12.4 December .. 15.0 8.6 January . i 12.3 9.8 February .. 10.4 9.2 March .. .. 10.4 10.0 April .. .. -6.8 . est. 10.0 May •,. 4.6 est. 7.2 June ., . 3 1.8 est. 6.4 Tuly .. 1.3 est. 6.0 Totals .. 100.0 100.0 Australian Exports